Sitting of 27 April 1970

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

    Concorde
    Mr. Martenasked the Minister of Technology if he will make a further statement about Concorde costs.
    Mr. Sheldonasked the Minister of Technology if he will make a further statement on the Concorde.
    Mr. Onslowasked the Minister of Technology if he will make a further statement on the progress of the Concorde programme.
    Mr. Moonmanasked the Minister of Technology if he will make a further statement on the Concorde project.
    Mr. Ellisasked the Minister of Technology if he will make a further statement on the progress of the Concorde programme.
    The Minister of Technology (Mr. Anthony Wedgwood Benn): Prototype 002 is being fitted with the engines to the higher standard necessary for flight tests at cruising speed. The results of recent tests on 002, which have included flights at Mach numbers up to 1·35, have continued to be satisfactory. The basic estimate of development costs remains £730 million.
    Mr. Marten: The Minister has mentioned £730 million. Will he in future go out of his way—I am sure that he
    846
    will when he can—to tell the public what is the British share of the Concorde costs, because, by showing the total overall costs, it is sometimes misleading to the uninitiated?
    Mr. Bean: Yes. I am sorry if I did not give the hon. Gentleman the Answer that he would like. We have always given a total figure. The division between the French and ourselves is complex because, with devaluations one way and the other, there have been various amendments. However, I will write to the hon. Gentleman giving the exact figures.
    Mr. Sheldon: Will my right hon. Friend tell us the next decision which will involve the allocation of money and when he anticipates it?
    Mr. Benn: Money is being spent on the basis of the existing programme. I shall be meeting the French Minister, M. Mondon, on 11th June, when we will consider the programme according to the stage that it has then reached. As the House knows, some of the orders for the production aircraft have had to be placed, but the major decision will depend on the orders.
    Mr. Onslow: Will the Minister confirm that we have now passed the stage where money spent from this point on is confidently expected to be recovered on sales if the aircraft proves to be the success that the manufacturers anticipate?
    Mr. Benn: It is difficult to forecast what the return will be until we know what the orders and the sales will be. There is bound to be some uncertainty about it. A substantial part of the estimated expenditure has already been spent.
    Mr. Ellis: How does my right hon. Friend see the programme now that it has gone a considerable way on the flight testing programme? Is his confidence still as great as ever? Have any technical innovations been drawn to his attention which may result in spending extra money to make it an even better aircraft?
    Mr. Benn: The flight tests have been successful. As they proceed the number of variables diminish and we get greater certainty. The aircraft is being modified, as is normal in a development programme. But, until we have converted

    847
    options for it into orders, it will not be possible to say that our problems are behind us.
    Mr. Nott: The Minister will be aware of the Order under the Civil Aviation Act which is to be debated tonight. As the Order removes the ability of individuals who could be harmed by the sonic booms of Concorde to receive compensation through the courts and makes the Minister judge and jury in his own case in this respect, will he assure me that he will be present tonight when the Order is debated and will he—
    Mr. Speaker: Order. This Question is about Concorde costs.
    Mr. Corfield: Will the right hon. Gentleman confirm whether he has been approached by the United States Government to slow down the Concorde programme and that he has refused? If so, I assure him that he has our full support.
    Mr. Benn: I think that there is another Question on that matter. I was not approached, I did not refuse. If I had been approached. I would have refused. I am grateful to the hon. Gentleman for his support.

  BAC3-11
  Mr. Martenasked the Minister of Technology if he will make a further statement about the BAC3-11 proposal.
  Mr. Onslowasked the Minister of Technology when he will reach a decision on the BAC3-11 project.
  Mr. Hastingsasked the Minister of Technology whether he will now make a statement about the BAC3-11 project.
  Mr. Benn: Discussions with the manufacturers are continuing, and a decision will be taken as soon as possible.
  Mr. Marten: In the meantime, can the Minister give any estimate of the possible world market, including B.E.A., and, secondly, which countries have shown an interest in being partners in this project?
  Mr. Benn: Offhand, I cannot give a satisfactory answer. There is a world market for a variety of aircraft which would come into this category. No one has ever doubted this. The extent to which any model would capture any particular market is a subject that we are
  848
  discussing. Every major international airline in the world is potentially in the market for this type of aircraft.
  Mr. Onslow: Will the Minister at least confirm that the board of B.E.A. has communicated to him its strong support for this project?
  Mr. Benn: The hon. Gentleman knows as well as anybody that the airlines deal with the President of the Board of Trade. I am not responsible for such comments as they may make.
  Mr. Hastings: Will the Minister bear in mind the financial burden on the company the longer this decision is delayed?
  Mr. Benn: I recognise this; but I am being asked for about £100 million of the taxpayers' money for the airframe alone, regardless of such money as might be needed for the engine. I think it right to satisfy myself that there is a market for this aircraft. I cannot apologise for assessing it very carefully before reaching a view.
  Mr. Robert Howarth: Will my right hon. Friend confirm that his decision on this aircraft depends primarily upon his decision upon the support costs for the Rolls-Royce RB211–50?
  Mr. Benn: All these questions are inter-connected, and I am bound to take the engines decision into account in considering the airframe.
  Sir A. V. Harvey: I appreciate that this matter is taking a long time to consider in view of the amount involved, but can the right hon. Gentleman say approximately when he expects to come to a decision, because it must delay the company's programme and affect prospective buyers if they do not know what the future holds.
  Mr. Benn: I understand the hon. Gentleman's point, but I must be acquitted of delay here. There is no United States competitor for a twinengined aircraft of this kind. Various configurations are possible with -50 and -22 engines, and I believe that I must be allowed to wait until the thing gels before I reach a firm decision about it. Meanwhile, the company is funding it, that is recognised, but it is appropriate that it should fund the project until the Government decide that it is appropriate to provide launching aid.

  Regional Employment Premium
  Mr. Sheldonasked the Minister of Technology if he will now carry out an inquiry into the working of the regional employment premium; and if he will publish the results.
  The Minister of State, Ministry of Technology (Mr. Eric Varley): I have nothing to add to my answer of 26th January to the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis).[Vol. 794, c. 983–4.]
  Mr. Sheldon: Would not my hon. Friend agree that, to test the efficacy of some of the incentive schemes which presuppose that people will act in a certain way in which they would not otherwise act, it is necessary to carry out a survey to make sure that they are acting in the way suggested? Will my hon. Friend look at this again and try to copy the system for investment grants, where a study is being made?
  Mr. Varley: We want to consider the form of the study. All experience shows that changes in regional policy take several years to become fully effective, but we shall bear in mind the point made by my hon. Friend.
  Mr. Hall-Davis: Is it not reasonable that, when the new system has been operating for some time, there should be a published study of the discrimination against service industries compared with manufacturing industries, and whether experience has shown that this is sound?
  Mr. Varley: We are considering the form of the study. As he knows, guarantees were given for seven years on R.E.P. We shall consider the hon. Gentleman's question on the study when the form of it has been decided.
  Sir K. Joseph: Will the hon. Gentleman confirm that as things stand the R.E.P. terminates in 1974?
  Mr. Varley: An undertaking was given to the House that it would continue for seven years. Whether it will continue after that period I cannot say.
  Mr. Blenkinsop: Will my hon. Friend give an absolute assurance that no action will be taken which will in any way
  850
  endanger the position of some of our development areas which are dependent on R.E.P.?
  Mr. Varley: I agree that it would be disastrous for the regions if we were to cut back on the full range of incentives available now.

  Scotland (Contracts)
  Mr. William Hamiltonasked the Minister of Technology what was the total value of contracts placed in Scotland by his Department in each of the last eight years; and what was the figure expressed as a percentage of the total United Kingdom figure.
  Mr. Varley: The average total value of contracts over the last eight years has been £21·273 million, 4·5 per cent. of the total United Kingdom figure. I am circulating a breakdown in the OFFICIAL REPORT.
  Mr. Hamilton: Can my hon. Friend say whether he and his Department are satisfied that Scotland is getting its fair share of these contracts? If not, can he give the House the reason why it is not doing so?
  Mr. Varley: We are restricted to some extent in placing contracts in Scotland because they sometimes involve specialised and advanced technology. As the Scottish economy gets stronger and more soundly based, this factor ought not to remain a barrier. My hon. Friend will be interested to know that the Scottish development area is covered by the Government's contracts preference scheme, and that we shall urge main contractors to give every consideration to development areas.
  Mr. Edward M. Taylor: Does the hon. Gentleman agree that this is a deplorably low figure, even on a population basis? Will he try to make this good to Scotland by using his influence with the Steel Board to make sure that we get an ore terminal on Clydeside with the minimum delay?
  Mr. Varley: The ore terminal issue does not arise on the Question. The British Steel Corporation takes regional considerations into account and has a

  851
  large proportion of its production in development areas.
  Following is the information
  The figures related to net values are:—

  Year

  £000s

  Percentage

  1962–63

  24,518

  5·7

  1963–64

  26,846

  5·7

  1964–65

  25,704

  5·8

  1965–66

  13,250

  2·6

  1966–67

  22,779

  4·3

  1967–68

  21,089

  4·9

  1968–69

  17,122

  3·4

  1969–70 (first ten months)*

  15,735

  4·2

  * Complete figures for 1969–70 are not yet available.

  Machine Tools
  Mr. Tom Boardmanasked the Minister of Technology what percentage of the machine tools in use by British industry is less than 10 years old; and what, according to information available to him from international sources, is the comparable percentage in West Germany and in Japan.
  The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Ernest A. Davies): A census of metal working machine tools, published by " Metal Working Production " in 1966, showed that 38 per cent. of all machine tools in this country were less than 10 years old. There is no comparable information for West Germany and Japan.
  Mr. Tom Boardman: Is the hon. Gentleman aware that the Question did not relate only to metal-working machine tools? Is it not a fact that fewer than 40 per cent. of all machine tools in this country are less than 10 years old, compared with more than 50 per cent. in Germany, and 64 per cent. in Japan? Does not that show that the Government's policy towards industry is putting us at a grave disadvantage in world markets?
  Dr. Davies: I am sure that the report of my right hon. Friend the Chancellor of the Exchequer to the House on Budget day is sufficient answer to the hon. Gentleman's question about our general economic strength. It is generally understood that the term machine tools applies to metal working. If the hon. Gentleman wishes to have information on all manufacturing machinery, I refer him to the Answer given by my right hon. Friend to the hon. Member for Meriden (Mr. Speed) on 26th January.
  Mr. Ridleyasked the Minister of Technology what has been the annual average increase in the volume of investment in machine tools in the United Kingdom since 1964.
  Dr. Ernest A. Davies: The average annual increase in investment in machine tools in the United Kingdom between 1964 and 1969 was at the rate of 4½ per cent., which in money terms is £5½ million per annum at current prices.
  Mr. Ridley: Is the Minister aware that that is nearly the same proportion of the gross domestic product and that there has been no real increase in what has been put into machine tools? Why was the Minister of Technology so complacent about the machine tool industry when he made his speech in the debate on the Address?
  Dr. Davies: In putting that point, the hon. Member leaves completely out of account the fact that what we are interested in is increasing the productivity of machine tools and that simply to consider the matter in money values is not sufficient. We have to look at the rapidly increasing proportion of machines that are numerically controlled and have an output from four to ten times greater than conventional ones.

  Manufacturing Industry (Investment)
  Mr. Boardmanasked the Minister of Technology what is his latest estimate of the trend of investment by manufacturing industry in 1970.
  Mr. Michael Shawasked the Minister of Technology what is his estimate of the effect of recent increases in costs on the capital investment plans of manufacturing industry.
  Mr. Kenneth Bakerasked the Minister of Technology what is his latest assessment of the increase in investment by manufacturing industry in 1970.
  The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams): I would refer the hon. Members to the reply I gave to the hon. Members for Horsham (Mr. Hordern), Harwich (Mr. Ridsdale), Blackpool, South (Mr. Blaker), and Meriden (Mr. Speed) on 23rd March.—[Vol. 798, c. 952.]
  Mr. Boardman: Will the hon. Gentleman bear in mind that, at constant 1963 prices, investment in 1969 was less than in 1968, which in turn was less than in 1967? Do not the indications of intentions show that this downward trend is continuing?
  Mr. Williams: The indications from all sources are that investment is still on the increase. In relation to investment in manufacturing, at constant prices, between 1964 and 1969 the average rate of increase was about 3·7 per cent. compared with 1·9 per cent. between 1960 and 1964—virtually double the level of increase when right hon. and hon. Gentlemen opposite were in office.
  Mr. Shaw: Is the hon. Gentleman aware that he did not answer my Question? Are not the Government altogether too optimistic about the investment intentions of manufacturing and service industries for 1970?
  Mr. Williams: I do not think that we are too optimistic. Both the C.B.I.'s and our own investigations have shown an increase. Any point of dispute is about the degree of that increase, and I said on the last occasion when I answered Questions on this subject that the C.B.I.'s figures do not seem to be consistent with the information already known in relation to chemicals and metals.
  Mr. Baker: Does not the hon. Gentleman think that he is one of the last optimists in this field? Is not an average increase of 3·7 per cent. to satisfy 10 per cent. optimistic? Will he accord to the rest of British industry the privileges now being extended to the textile industry by his Department, namely, writing off capital expenditure in a period of four years? Does not he think that this would be more effective than the whole of the investment grant system?
  Mr. Williams: The effectiveness of the system has been shown in the last year, and will be shown in the current year. As regards being optimistic in speaking of a 10 per cent. increase, I refer the hon. Gentleman to the increase which took place last year, which was of that order.
  Mr. Ronald Atkins: Would not my hon. Friend agree that the prime responsibility for investment in private industry is by private investors, and that if British
  854
  investors show a lack of enterprise in this way it is they who should be criticised and not the Government?
  Mr. Williams: My hon. Friend is correct. When investment is bad the Opposition immediately blame the Government for it. If it is good they hold it up as a tribute to the achievements of private enterprise.
  Sir K. Joseph: Will the hon. Gentleman recognise that though private enterprise has a responsibility for the initiative, it is the Government who create the climate, and would he agree that the rises in interest rates under this Government have exceeded in the last four years the total of investment grants paid to manufacturing industry?
  Mr. Williams: The right hon. Gentleman should bear in mind that when he and his hon. Friends were in office—
  Hon. Members: Answer the question.
  Mr. Williams: I am answering it. When they were in office they set the climate of confidence. The level of increase in manufacturing investment since we have been in office has been double what it was in the period from 1960, and therefore both the confidence factor and the relevance of our measures are proven.

  World Shipbuilding Orders
  Mr. Ridleyasked the Minister of Technology what has been for each year since 1958 the percentage of total world merchant shipbuilding orders obtained by United Kingdom yards.
  Mr. Fletcher-Cookeasked the Minister of Technology why the average percentage of world orders obtained by United Kingdom shipyards fell from 10·4 in the years 1960 to 1964 to 7·2 in the years 1965 to 1969; and if he will make a statement.
  Dr. Ernest A. Davies: I will circulate in the OFFICIAL REPORT a table showing the United Kingdom share of world orders in terms of gross tonnage. The percentages quoted in Question No. 24 arise as follows.
  Over the period 1960–64 world orders averaged 9·5 million tons gross per annum, of which United Kingdom yards secured orders averaging 1 million tons gross per annum, whereas over the five

  855
  year period 1965–69 the corresponding figures were 22·7 million tons gross per annum and 1·64 million tons gross per annum respectively These figures show an increase of more than 50 per cent. in the volume of orders secured by the United Kingdom yards over the two periods.
  Mr. Ridley: Is the Minister aware that our percentage share of world orders was 11 per cent. in the last five Tory years but has fallen to 8 per cent. in the five years that this Government have been pouring money into the industry? Can the Minister say why we are not getting a better return for the great investment that we are making in this industry?
  Dr. Davies: First, the hon. Gentleman should get his percentage figures in agreement with those of his hon. Friend. The basic answer is that in the last year when the party opposite was in office British yards secured only 0·95 million tons gross of orders compared with 2·07 million tons in the last year of the present period. That is a sufficient answer.
  Mr. Fletcher-Cooke: Does the Minister attribute the decline in the British share to the fact that our competitors subsidise shipbuilding more than we do? If not, what other reasons can the Minister give?
  Dr. Davies: United Kingdom shipyards have benefited greatly from the measures, put into effect by this Government under the Shipbuilding Industry Act 1967, as a result of which the industry has been able to double its orders as compared with the position when the party opposite was in office.
  Mr. Lawson: Can my hon. Friend tell the House whether it is not a fact that many of our shipbuilding companies did not even know the cost of the ships for which they were tendering? What will he do now to give them some education about the way in which to run their own businesses?
  Dr. Davies: The Shipbuilding Industry Board is available under the Shipbuilding Industry Act, 1967 to help the shipbuilding industry. It has taken considerable measures to that end. There have been some suspicions of the inability of some companies to follow their busi-
  856
  nesses—in the way referred to by my hon. Friend—but we hope that this situation has now been remedied.
  Sir K. Joseph: We take not one scrap of pleasure about the troubles afflicting some shipyards at the moment, but will the Minister answer the point raised by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), namely, that in a time of world boom, after devaluation, there has been a sharp fall in the proportion of world shipbuilding orders received by our shipbuilding industry, despite the Government's new subsidy? What is the Government's explanation?
  Dr. Davies: I have already given the reason why the percentage has fallen. Hon. Members opposite and the right hon. Gentleman who has just spoken cannot wrap up the success that has been achieved over the last five years by hiding the facts behind percentages. The plain fact is that the United Kingdom industry has now doubled its orders as compared with the period when the party opposite was in office.
  Following is the information:
  The United Kingdom's share of net new world orders in gross tonnage is as follows. Figures are not available for 1958–59.

  United Kingdom as percentage of World

  Year

  United Kingdom (Million gross tons)

  World (Million gross tons)

  1960

  10·6

  1·04

  9·8

  1961

  8·7

  0·80

  9·5

  1962

  16·9

  0·79

  4·7

  1963

  10·7

  1·35

  12·6

  1964

  8·6

  0·95

  11·1

  1965

  11·2

  2·05

  18·3

  1966

  2·2

  0·40

  18·3

  1967

  5·5

  1·19

  21·8

  1968

  9·8

  2·49

  25·4

  1969

  7·0

  2·07

  29·5

  Numerically Controlled Machine Tools
  Mr. Blakerasked the Minister of Technology why the official scheme for encouraging manufacturers to buy numerically controlled machine tools is to end.
  Dr. Ernest A. Davies: It has been decided with the concurrence of the N.R.D.C. to end the scheme, primarily because industry has made little use of it during the four years—and particularly

  857
  in the last twelve months—that it has been operating.
  Mr. Blaker: Can the Minister say how many machine tools were bought under this scheme in the four years that it was in operation? Is it true that the figure was only about 20? To what does the Minister attribute this disappointing result?
  Dr. Davies: Without prior notice, I cannot give detailed figures of the ordering over a period of four years. One of the reasons why the scheme has now fallen into disuse is that normal commercial channels have taken over, and that numerically controlled tools are being increasingly purchased in the normal way.
  Mr. J. H. Osbornasked the Minister of Technology what was the value of deliveries and sales of numerically controlled machine tools in each quarter of 1969 and in total; how these figures compare with 1968; and what trends the figures for the first quarter of 1970 indicate.
  Dr. Ernest A. Davies: Quarterly values of the deliveries of numerically controlled machine tools are available to the third quarter of 1969 and, with permission, I will circulate a detailed table in the OFFICIAL REPORT. Deliveries in the first three quarters of 1969 are 20 per cent. up on the corresponding period in 1968. No figures for the first quarter of 1970 are yet available.
  Mr. Osborn: Is it not a fact that there has been a fall of 17 per cent. in new orders for use in home markets? Has not this occurred because of pressure on profits as a result of deliberate Government policy and difficulties caused by the long time-scale involved in introducing numerically controlled machine tools, this at a time of immense credit squeeze and financial difficulty?
  Dr. Davies: I could not go the whole way with the hon. Gentleman's observations, but certainly there has been some change in the level of ordering. It is well known that machine tool ordering has a cyclical element. However, if one tries to put the matter in its proper perspective and considers the longer-term
  858
  trends, one sees that the numerically controlled population, as it were, is growing at the rate of between 30 per cent. and 40 per cent. per annum, which is a very satisfactory rate of growth.
  Following is the table:

  UNITED KINGDOM DELIVERIES OF NUMERICIALLY CONTROLLED MACHINE TOOLS

  1968

  1969

  £m.

  £m.

  1st quarter

  3·3

  3·0

  2nd quarter

  2·0

  4·0

  3rd quarter

  3·0

  3·0

  4th quarter

  3·6

  Not yet available

  Total

  11·9

  Ships Built Overseas
  Mr. Blakerasked the Minister of Technology by how much the value of ships built overseas for United Kingdom registration exceeded the value of ships built in the United Kingdom yards for registration overseas in each of the years 1967, 1968 and 1969.
  Dr. Ernest A. Davies: For 1967 this is estimated at £19 million and for 1968 and 1969 £78 million and £150 million respectively. This calculation excludes naval vessels.
  Mr. Maker: Is that not an astonishing deterioration in the figures from our point of view? When the right hon. Gentleman the Minister is rightly extolling the industry for increasing its exports, should he not also point out that imports have risen even faster than exports have?
  Dr. Davies: The hon. Member is drawing this comparison between imports and exports no doubt with the balance of payments benefit in mind. I want to make one or two points in that connection. First, the operation of a ship has also to be taken into account, which means that the hon. Member's kind of simple comparison is not entirely valid. Secondly, many ships purchased by United Kingdom companies abroad are of a specialised nature—especially large tankers. Finally, the trend in this direction is favourable to the United Kingdom.
  Mr. Ridley: How can the Minister say that it is favourable when the balance

  859
  of payments loss has risen from £17 million to £150 million? Can he also explain why the Minister referred to this as a balance of payments benefit?
  Dr. Davies: I must correct the hon. Gentleman; I did not say that it was a balance of payments benefit.
  Mr. Ridley: I meant the Minister of Technology.
  Dr. Davies: I said that the hon. Member asking the supplementary question no doubt asked it with a balance of payments benefit in mind. I pointed out that ship operation comes into the question. As for the trends—the trend for 1970 is to show an improvement, in the sense that more ships for United Kingdom registration will be ordered in this country.
  Mr. Blenkinsop: Does my hon. Friend regard these interesting attacks upon shipping and the shipbuilding industry as a new and encouraging change of view towards the need for the nationalisation of the industry?
  Dr. Davies: The Government have already taken substantial steps to encourage the industry to be more effective, and the industry is responding to that. It is a great pity that hon. Members opposite seem to choose this period to attack the efforts of the Government in encouraging the shipbuilding industry.
  Mr. Michael Shawasked the Minister of Technology what has been for each year since 1962 the estimated value of merchant ships for United Kingdom registration built overseas and in United Kingdom commercial yards, respectively.
  Dr. Ernest A. Davies: With permission, I will circulate estimates of the value of ships completed in the OFFICIAL REPORT.
  Mr. Shaw: Would the Minister tell us what is the proportion of ships built at home for United Kingdom owners now as compared with earlier years?
  Dr. Davies: It would take rather a long time to read out the table. I will see that it is put in the OFFICIAL REPORT.
  Following is the information:

  Shipp completed for United Kingdom registration

  Built in United Kingdom£m.

  Built yards abroad£m.

  Total completion in United Kingdom (merchant vessels) for home and export£m.

  1962

  115

  19

  140

  1963

  110

  44

  138

  1964

  87

  31

  102

  1965

  119

  28

  136

  1966

  106

  24

  140

  1967

  101

  73

  155

  1968

  65

  129

  116

  1969

  99

  188

  137

  Industrial Plant (Design and Completion)
  Mr. Hall-Davisasked the Minister of Technology what is the usual interval between the completion of design stage and commissioning of major plants in the principal categories of process and manufacturing industry for which he is responsible.
  Dr. Ernest A. Davies: One or more years.
  Mr. Hall-Davis: Would the hon. Gentleman not accept that it is much nearer two years than one year and does not this mean that our ability to expand output this year and next is already limited by the investment decisions of last year and the year before and that those decisions were taken in conditions of cash squeeze and flat demand?
  Dr. Davies: I can quite understand that the non-availability of plant is bound to be a constraint upon production. It is quite impossible to be more helpful to the hon. Gentleman because there are so many factors that affect the length of time it takes to build any particular plant. From one to three years is usual. In the case of generating stations, for instance, it is five years.

  Plant Capacity
  Mr. Hall-Davisasked the Minister of Technology which industries he has identified will find their output limited by plant capacity in the next six months.
  Mr. Alan Williams: In manufacturing over the next six months output may be limited by plant capacity in steel and certain parts of the chemical industry.
  Mr. Hall-Davis: Is not the information with which the Minister supplies himself in this direction woefully inadequate? Should he not be taking action to establish how much investment is replacing existing capacity and how much is adding to productive capacity?
  Mr. Williams: We analyse the patterns of investment as fully as possible. The information I have is, I believe, the best available to any Government.

  United States Motor Car Manufacturers
  Mr. Gwilym Robertsasked the Minister of Technology what study he has made of the evidence supplied to him by the hon. Member for Bedfordshire, South, that the United States motor manufacturers are to stop putting money into the expansion of the British car industry because of the squeeze on sales; what action he intends to take; and if he will make a statement.
  The Paymaster-General (Mr. Harold Lever): This evidence consisted of a newspaper article which I am satisfied had no basis.
  Mr. Roberts: Would my right hon. Friend accept that I agree entirely with him that this front page newspaper article was rubbish? Would he also accept that there is a need to help industrial relations in that industry by assuring the workers that a British Labour Government will always ensure growth and employment, irrespective of the mutterings of Tory newspapers or Tory politicians or the whims of certain motor manufacturers?
  Mr. Lever: Yes, Sir.

  Imperial Chemical Industries (Viyella)
  Mr. Barnettasked the Minister of Technology what representations he has received following his decision on the Imperial Chemical Industries' take-over bid for Viyella; and if he will make a further statement.
  Mr. Harold Lever: I have received no representations on this matter; and I have nothing to add at present to my statement of 25th March.—[Vol. 798, c. 1432–41.]
  Mr. Barnett: Would my right hon. Friend clarify the position? Does the
  862
  standstill still apply? In other words, is it still in operation as against other bids either from inside the country or outside, and what is the size criteria in terms of the standstill?
  Mr. Lever: The standstill operates as before, subject to the rather complex modifications referred to in my statement, that is to say subject to the variations which comply with the conditions set out in the rather lengthy statement I made.
  Mr. Kenneth Baker: What will be the cost in a year of the special investment concessions the right hon. Gentleman gave to the textile industry, namely writing off capital expenditure within four years? Can he also say whether firms which get this will also benefit from investment grant?
  Mr. Lever: I would require notice of that question.

  Hovercraft
  Mr. Barnettasked the Minister of Technology if he will make a statement on discussions he has had about the possible provision of public finance for the commercial development of a hovercraft.
  The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Neil Carmichael): There is a continuous dialogue between the Department, N.R.D.C., and the hovercraft companies. N.R.D.C. normally takes a lead in commercial development and applies proper commercial criteria. The Department leads on technical and scientific matters. Present discussions are concentrated on the SRN4 and VT1.
  Mr. Barnett: If, as seems likely, there will not be private capital available to take the risks needed in this area, is there any reason why the Government, if they are to put up all the money, should not go rather further and run the industry completely?
  Mr. Carmichael: The recent studies carried out on the SRN4, gathering data dealing with the possibility of showing where improvements can be made, and maintenance costs lowered may give considerable encouragement to private capital, a great deal of which has been put into the development of the hovercraft.
  Mr. Woodnutt: Will the hon. Gentleman correct the statement that has been made by his hon. Friend and say that the Government do not provide most of the money? Is it not right that the Government provide 50 per cent. of research and development which is matched by the manufacturers? Does he not think that he has to do more research and development to maintain our world lead?
  Mr. Carmichael: The amount spent on research and development must be related to the benefits likely to be got from it. There has been a great deal done not only by the Department extramurally but intra-murally with the National Physical Laboratory on some of the fundamentals. A great deal of basic research has been done internally by the Department and extra-murally in conjunction with the industry.
  Mr. David Price: Can the Minister tell the House how much work, in the view of the Department, has to be done on the SRN4 to bring it to a commercial success, and will he relate that to statements in the Press that the figure is between £5 million and £10 million—a figure which many of us find difficult to believe?
  Mr. Carmichael: It is too early to put a figure on it. The question of commercial success appears, with the cross-channel services, to be just round the corner. It is a question of getting the maintenance costs a bit lower and the reliability, which has been improving consistently, a bit higher. The results of tests carried out on the SRN4 over the last few months are not yet fully available for evaluation.

  Intermediate Areas (Advertisements)
  Mr. Huntasked the Minister of Technology whether he will institute a Departmental inquiry into the errors and omissions in various advertisements relating to the intermediate areas recently published by his Department in national newspapers.
  Mr. Varley: This matter has already been investigated.
  Mr. Hunt: Since these advertisements contain maps showing parts of the southwest enjoying railway facilities, of which they have long been deprived, and show
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  ing the town of Derby with no rail communications of any kind, should not the £6,640 which these abortive advertisements cost the taxpayer be surcharged on the Ministers responsible for the publication of these expensive fantasies?
  Mr. Varley: The hon. Member is slow off the mark, because a number of hon. Members from both sides of the House pursued this Question early in March and answers were given then. It is to be regretted that these advertisements appeared in that way and we of course take responsibility. We have to keep this in perspective. The advertisements were designed to popularise the intermediate areas and the response was most encouraging. We had something like 600 inquiries as a result of them which is quite good.

  Investment Grants
  Mr. Fletcher-Cookeasked the Minister of Technology whether he will instruct the committee which is considering the effectiveness of the investment grant scheme to advance the date of its report to July, 1970.
  Mr. Varley: No, Sir. The study will be completed as soon as is practicable, but it would be unrealistic to set such a time limit.
  Mr. Fletcher-Cooke: Since millions of pounds are being spent on these grants, is it not essential to have this report at the earliest possible moment, as on previous figures it looks as though investment in the distributive trades, which do not get the same advantage, is much more buoyant than in the manufacturing industries?
  Mr. Varley: I am sorry that it is not possible to get the study out earlier, as I explained when we last answered questions. I hope that the study will be completed by the end of the year.
  Mr. Maclennan: Is my hon. Friend aware that the C.B.I. has produced a report which suggests that the difficulties the proposed petro-chemical complex in Invergordon is having in raising finance are due to uncertainties about the future of the investment grant scheme and that the principal uncertainty in the minds of industrialists is due to the possibility of the Conservative Party being

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  returned to power, which Heaven for-fend? Is he aware that a major industry, aiding the development of the Highlands, is being threatened by the language of hon. Gentlemen opposite, particularly by that of the hon. Member for South Angus (Mr. Bruce-Gardyne)?
  Mr. Varley: I do not think that British industry need fear a change of Government and therefore I think it ought to plan on the basis that we shall still be in charge of these matters. I have not seen the C.B.I. report to which my hon. Friend refers. I will get a copy of it.

  Power Stations (Fuelling)
  Mr. Palmerasked the Minister of Technology what directions he has given to the Central Electricity Generating Board in the choice of fuels for power stations.
  Mr. Harold Lever: None, Sir. The C.E.G.B. makes its own proposals, but in deciding whether to give consent the Government take account of wider considerations.
  Mr. Palmer: Surely my right hon. Friend would not deny that he gives considerable guidance to the Central Electricity Generating Board in this matter. In these circumstances, will he make available in the Library a list of the considerations which he takes into account in making his decisions?
  Mr. Lever: I will readily put in the Library, if it is of assistance to my hon. Friend and other hon. Members, details of the policy basis for making decisions. A rather more comprehensive document would be required to include all the principles that guide Ministers in giving guidance.
  Mr. Lubbock: Would not the right hon. Gentleman agree that where he has refused consent to the C.E.G.B. to convert from solid fuel firing to oil or natural gas, additional costs are imposed on electricity consumers? Bearing this in mind, does not the right hon. Gentleman think that the Coal Industry Act, 1967, and its successor, which is now in course of consideration, should be extended to enable him to pay compensation to the C.E.G.B. where these additional costs are incurred?
  Mr. Lever: We have powers for compensating and the hon. Member will, no doubt, now see that in appropriate cases we have power and that the policy on this matter is set out in Cmnd. 3437, which goes into some detail on it.
  Mr. Eadie: Is my right hon. Friend aware that we often listen to the problems of the C.E.G.B. as against coal in the matter of cost such as has been mentioned from the benches opposite? Is he aware that many miners believe that this defamation of the coal industry seems to be an attempt to cover up some of the financial problems of the C.E.G.B.?
  Mr. Lever: We should not see these questions as arising from a desire to defame the coal industry. The Government are bound to take into account wider considerations than the mere immediate cost of a particular station in the interests not merely of the coal industry but of the electricity industry.

  Smokeless Fuels
  Mr. Palmerasked the Minister of Technology if he will make a statement on the latest position regarding the shortage of smokeless fuel and the arrangements made for the distribution of available supplies.
  Mr. Laneasked the Minister of Technology whether he will make a further statement on the latest prospects for solid smokeless fuel supplies next winter.
  Mr. Frank Allaunasked the Minister of Technology if he will make a further statement on the smokeless fuel situation and the arrangements for distribution of supplies.
  Mr. Harold Lever: With permission, I will answer this Question and Nos. 37 and 76 together.
  In general, I have nothing to add to the statement I made in the debate on 9th April.
  We are reviewing with the producers all possible steps to improve solid smokeless fuel supplies and are also asking public authorities if they can reduce their call on the available supplies by stepping up the conversion of public buildings to other fuels.—[Vol. 799, c. 760–880.]
  Mr. Palmer: Will my right hon. Friend say something to remove the impression, probably mistaken, in the public mind that there is a certain attitude of complacency by the Department to this question, and probably also on the part of the National Coal Board?
  Mr. Lever: I am not able to judge what the public reaction is to the exaggerated and little-founded predictions about what will happen next winter. I can only say that, far from the Government being complacent, they are taking every possible step open to them, both on the supply side and on the demand side, to deal with any danger of more than a tight situation next winter.
  Mr. Lane: Does not all this amount to a shocking failure of forward planning and co-ordination by the Department? What estimate has the right hon. Gentleman made of the cost of the crash changeovers which are being forced on public authorities and others as a result of this failure?
  Mr. Lever: The crash changeover to which the hon. Member refers is no more than a hastening of what would have been inevitable if we were to cease the antiquated process of carbonising coal to produce gas. The elimination of coke for that reason would, in any event, have compelled a changeover, and many may think that this changeover has been neglected by some of the authorities concerned.
  Sir J. Eden: Is it not a fact that we have had to drag from the Minister the admission that there is a serious gap? What is his estimate of the developing situation for next year? Will he answer the question put to him by my hon. Friend the Member for Cambridge (Mr. Lane): what is the cost of this total operation, and who is to pay for it?
  Mr. Lever: The hon. Member should not flatter himself in claiming to have dragged from me that there will be a serious gap. As far as my recollection goes, he has not yet had that success, nor do I think that he is likely to have it. There may well be a tight situation next winter, and no more. Its extent will depend upon the weather, the amount of conversion that takes place and many other factors relating to the supply situa
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  tion. I could not possibly give the cost of conversions until they had been completed. All I can say is that it is no good the hon. Gentleman and his friends seeking to capitalise on the necessary changeover from burning coke, which will not be available in any event if we are to have a modern gas system, to burning smokeless fuel.
  Mr. Allaun: Will my right hon. Friend now temporarily reprieve further gasworks beyond the three already announced? Would not this provide the coke needed for next winter, even if at additional cost to the Gas Council?
  Mr. Lever: I have already asked the Gas Council to review its programme and a modest contribution may be expected from the slowing-up of the closure of gasworks.
  Mr. Speaker: Mr. John Osborn, Question No. 28.
  Dr. Winstanley: On a point of order. In answering the last Question, No. 27, from his hon. Friend the Member for Bristol, Central (Mr. Palmer), the Minister grouped with it Question No. 76 from his hon. Friend the Member for Salford, East (Mr. Frank Allaun). As you will see from the Order Paper, Mr. Speaker, I have put down a similar Question, No. 47, and there are other hon. Members whose Questions on the same subject come earlier than No. 76.
  My point of order is to ask whether it is in order for the right hon. Gentleman to select the Questions which he wishes to group together in such a way as to ensure that supplementary questions come rather from his own side of the House than from the Opposition side.
  Mr. Speaker: I have on earlier occasions expressed the hope that points of order on Questions will be raised at the end of Question Time. The grouping of Questions is a matter for the Minister and not for me.
  Mr. R. W. Elliott: Further to the point of order. May I point out, Mr. Speaker, that my Question No. 75 also clearly relates to the same topic? We are in a state of great chaos concerning smokeless fuel in Newcastle-upon-Tyne. Could not my Question have been answered also?
  Mr. Speaker: Whether it could or could not have been answered is a matter for the Minister and not for me.
  Mr. Scott-Hopkins: Further to the point of order. My Question No. 48 deals with exactly the same point as the Minister has answered. It is monstrous that he should group Questions in such a way as to avoid supplementary questions being asked from this side of the House. I ask for your protection in this malpractice, Mr. Speaker.
  Mr. Speaker: Mr. Speaker protects both sides of the House. I repeat that the raising of points of order during Question Time can cost other hon. Members their Questions.
  Sir A. V. Harvey: May I say with great respect, Mr. Speaker, that although you have given a Ruling on this matter, the situation is still rather vague? If you rule in favour of the point made by my hon. Friends, will you allow their Questions to be taken at the end of Question Time?
  Mr. Speaker: I have ruled that the grouping of Questions is a matter for the Minister and not for Mr. Speaker.
  Mr. Lever: Further to the point of order. Will you permit me briefly to say, Mr. Speaker, that I never see the grouping of Questions until the very last moment? [HON. MEMBERS: " You should."] The suggestion that this is engineered is complete balderdash.
  Sir J. Eden: Further to the point of order. Is it not clear from a study of the Questions on the Order Paper that those which have been selected for grouping together and others dealing with the same subject are identical, and that they could easily all have been taken in a single group, but that the Minister seems to have picked only those tabled by his hon. Friends? [HON. MEMBERS: " That is not true."] May I give notice, Mr. Speaker, that we shall pursue this matter at the end of Questions, as you suggest?
  Mr. Speaker: There is nothing to prevent the hon. Member pursuing the matter then. This, however, is not a matter for the Chair, and Question Time is being wasted.
  Mr. Corfield: Further to the point of order. With respect, Mr. Speaker, is not
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  the fair answer to allow supplementary questions to be put by hon. Members who have put down identical Questions?
  Mr. Speaker: The Chair has moved on to the next Question. Mr. John Osborn, No. 28.
  Mr. Scott-Hopkins: Further to the point of order. Have you not ruled, Mr. Speaker, that Questions put down late on the Order Paper would not be called by you in favour of Questions which are put down earlier? In this case, there seems to have been a change in the priorities which you have laid down.
  Mr. Speaker: Order. The Chair goes from side to side. I have said on earlier occasions that late Questions are not automatically called for answer. This one happened to be so.
  Sir C. Taylor: On a point of order. In view of the very unsatisfactory nature of the reply, I wish to give notice that I will raise this matter on the Adjournment at the earliest possible moment.
  Mr. Hastings: As I understood him, Mr. Speaker, the Minister said at the Dispatch Box that he was not responsible for the grouping of Question and had not seen them. If he is not responsible, may we know who is?
  Mr. Speaker: Order. Again, that is not a point of order for the Chair. By raising points of order at this stage, hon. Members are preventing other hon. Members from being given Answers to their Questions which they put down a long time ago.

  Manufacturing Stocks
  Mr. J. H. Osbornasked the Minister of Technology whether he is satisfied with the adequacy of official figures about stock accumulation in manufacturing industry, and how the ratio of raw materials, work in progress, and finished stocks, respectively, and in total to production in 1969 compare with previous recent years in this country and what statistics he receives from international sources on comparable information in other countries.
  Mr. Alan Williams: There are considerable statistical difficulties in obtaining precise estimates of stock changes, especially quarterly, but I am satisfied that the official statistics are reasonably

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  adequate and provide a valuable indication of manufacturers' stock accumulation. The stock-production ratios were much lower in 1969 than in recent years, except for finished goods, where the ratio was near the average. International sources do not provide comparable information.
  Mr. Osborn: Is it not a fact that manufacturers are having to increase their stocks to maintain continuity of sales and service and that this is resulting in funds being deflected away from investment purposes, simply so that manufacturers may retain the necessary rate of distribution to overcome the credit squeeze?
  Mr. Williams: That is an interpretation which the hon. Gentleman is perfectly free to make, but the fact of the matter is that improved methods of stock control have been introduced in this country. Of course, ratios depend very much on the stage of the cycle.
  Mr. Barnett: What examination has my hon. Friend carried out into the way in which we in this country carry a high ratio of stocks compared with ratios carried in other countries?
  Mr. Williams: One of the difficulties in this sphere is that international information of a particularly reliable kind is not available. One factor, for example, is in relation to raw materials. where ratios may be different because we import more of our raw materials than, say, the Americans. We therefore keep a higher stock ratio to ensure greater reliability of supplies.

  Motor Cars (Home Sales and Exports)
  Sir G. Nabarroasked the Minister of Technology, in view of the declining motor-car exports, if he will now take steps to stimulate total production and to recover the drop of 10 per cent. in export figures, increase home-market sales above the rate of 1 million motor-cars annually, and to prevent further price rises affecting all markets; and whether he will make a post-Budget statement on the prospects of the industry.
  Mr. Harold Lever: Car exports in 1969 were at record levels Exports in the first three months of 190 were higher in value than in the corresponding months of 1969. Home market sales show some
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  improvement over 1969 and I expect the 1970 total to be appreciably above 1 million vehicles.
  Sir G. Nabarro: Is it not a fact that the reaction of the motor industry to the Chancellor's Budget Statement was wholly bad and that the industry has condemned it? Is the right hon. Gentleman aware that the motor industry has estimated that to resume the growth of exports it will require a home market of British manufactured cars totalling 1· 25 million, whereas the present rate is less than 1 million? Will he enjoin the Chancellor greatly to expand the home market for British cars?
  Mr. Lever: I agree with the hon. gentleman in that any unjust criticism of the Chancellor's Budget must be described as bad. It is understandable that this industry wishes to press its case. As for exports, if the hon. Gentleman acquaints himself with the remarkable annual increase that has taken place in exports over the last two or three years, he will see that the extent of the home market does not preclude a most rapid increase in exports.
  Mr. Howie: Has my right hon. Friend noticed that the more satisfactory figures which he has mentioned include, however, a further increase in the proportion of the home market being won by our foreign competitors? Is not one of our problems the fact that our home industry has not quite been able to fight off these other people?
  Mr. Lever: This is a matter for free competition. We of course have every opportunity in our home market to beat these other countries. It is the duty of manufacturers to try to secure the orders which foreign competitors are securing even in our home market. On the other hand, we should never lose sight of the record level of our invasion into other markets for motor cars.
  Sir K. Joseph: Does the right hon. Gentleman recall that the " Little Neddy " report on the motor industry predicted that unless home manufacture exceeded 1·1 million units this year, investment would be jeopardised in this industry for the next few years? Does he believe that home production will exceed the minimum figure set down by the " Little Neddy? "
  Mr. Lever: Yes, Sir. I believe that there is every prospect of that figure being exceeded.
  Sir G. Nabarroasked the Minister of Technology whether he is aware that agencies in California for sale of favourite British sports cars, details of which have been sent to him, and similar British Leyland Motor Corporation models have been cancelled due to delivery times often exceeding six months, caused by strikes and other stoppages and disturbances; if he will now take steps to prevent further losses in overseas markets and harmonise relations in the motor and allied industries; and whether he will make a statement.
  Mr. Harold Lever: I am aware that delivery delays are being experienced for some British cars. These delays arise partly from labour disputes; and partly from heavy demands for some models exceeding available capacity. Manufacturers are aware of the problem and have assured me that they are doing all they can about it.
  Sir G. Nabarro: Why does the right hon. Gentleman continue to whitewash the gross indiscipline which exists in certain quarters? Is he aware that this painstakingly built up market for certain British sports cars in America is now prejudiced by cancellations through agencies coast to coast in America because British cars are not being delivered owing to strikes in Coventry and elsewhere? Will he come to Coventry to learn the facts of motor car life?
  Mr. Lever: Only the hon. Gentleman would pronounce confidently on all the labour disputes in the motor industry and the appropriate area for directing responsibility in a supplementary question. I fear that I could not do so.
  Mr. Edelman: Is not the truth of the matter the fact that these delays in supply are due to the unprecedented demand for these superb and popular motor cars, most of which are made in my constituency? Is it not deplorable that the hon. Gentleman should, by this Question which will undoubtedly get the publicity which his Questions usually receive talk down the British motor industry in this way?
  Mr. Lever: The answer is, " Yes, Sir " to both parts of my hon. Friend's supplementary question.
  Mr. Ridley: What effect does the right hon. Gentleman think it would have had on the labour disputes in this industry if the White Paper entitled " In Place of Strife " had been implemented?
  Mr. Lever: It would no doubt have been helpful, which is more than can be said of some of the lucubrations on the subject made public by hon. Gentlemen opposite.

  Scottish Steel Industry (Coking Coal Supplies)
  Mr. Eadieasked the Minister of Technology what reply he has sent to representations made to him by the Scottish area of the National Union of Mineworkers regarding the availability of coking coal for the steel industry in Scotland.
  Mr. Harold Lever: We have received no such representations.
  Mr. Eadie: Is my right hon. Friend aware that at its area conference the N.U.M. passed a resolution—it later held a Press conference on the subject—condemning any idea that coal or coking coal should be imported? Is he also aware that had the advice of British steel bosses been taken we would now have a lot less coking coal than we have?
  Mr. Lever: The answer to the first part of my hon. Friend's supplementary question is that I have explained to the House on previous occasions that reserves of high quality coking coal in this country are dwindling and that there is no doubt that, in certain circumstances, it would be helpful to the coal mining industry if one considered imports of some minor kinds of coal for blending, which is a technical matter and does not immediately arise.
  In answering the second part, I assure my hon. Friend that I have on many occasions said that there will be no importation whatever of coking coal except with a view to strengthening our domestic position, and that includes the mining industry.

  Deep-Mined Coal (Scotland)
  Mr. Eadieasked the Minister of Technology what total of deep-mined coal he estimates will be produced in Scotland in 1970; and what manpower will be employed.
  Mr. Harold Lever: About 12 million tons with an average manpower of about 29,000.
  Mr. Eadie: Is my right hon. Friend aware that it would be helpful if he gave a categoric assurance that there will be no pit closures, except in respect of exhaustion? Does he realise that the morale of our miners would be greatly helped if he made such a statement today? In other words, will he state clearly that all the coal that the miners can produce will be used?
  Mr. Lever: I am expecting in the coming year relatively few closures, including those due to exhaustion. On present information, I doubt whether any closure will take place in Scotland.

  Steel Industry
  Mr. Laneasked the Minister of Technology what will be the financial target for the steel industry in 1970–71.
  Mr. Harold Lever: I cannot yet add to the answer given to the hon. Gentleman on 16th February.—Vol. 796, c. 8.
  Mr. Lane: Is not it taking an unconscionable time to decide? Can the right hon. Gentleman tell us, when he finally makes an announcement, how many other years apart from the current year the announcement is likely to cover?
  Mr. Lever: It is better to take a little time and get it right. It is not a small matter which is being decided. I cannot tell the hon. Gentleman how many years the announcement will cover when it is made.

QUESTIONS TO MINISTERS
Mr. Blaker: On a point of order, Mr. Speaker. I should like to return to the subject of the grouping of Questions by Ministers, which is, I think, a point of considerable substance, and in regard to which I detect a deterioration in Ministerial practice in recent months.
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The Paymaster-General today has declined to take with the Question he was answering a number of other Questions, some of which, I understand, were put down on the first day when Questions were open for today, although he took a Question from his own side which was, I think, No. 76.
It will be within your recollection that last Tuesday the Prime Minister took Questions Nos. 09 and Q 10 which were put down by his hon. Friends, not on the first day when Questions were opened for that day, with an earlier Question he was answering. That, I understand, is contrary to the practice which the Prime Minister had told the House earlier he would be following.
I would suggest, Mr. Speaker, that in view of this recent trend it might be possible for you to have a word with the Leader of the House to see whether a system could be adopted which would be fair to all hon. Members on both sides of the House.
Several Hon. Members rose—
Mr. Speaker: Order. Let me deal with each point as it is put.
As the House knows, I deprecate the raising of points of order during Question Time for one reason: I seek to protect hon. Members who have put down the Question, which they think of some importance and to which they want to get an Answer.
The hon. Member for Blackpool, South (Mr. Blaker) has raised the point of grouping by Ministers. It has been ruled over and over again from the Chair —as the hon. Gentleman will see if he turns up the last Report of the Select Committee on Procedure—that grouping is not a matter for the Chair. No doubt the House and the Government will take notice of the criticisms which are being made.
Mr. Boyd-Carpenter: On that point of order, Mr. Speaker. With respect, I fully understand your Ruling as to the selection of Questions to be answered lying with Ministers, but there is surely also a matter for you.
If a Minister exercises his choice and selects particular Questions to answer with the Question called, the practical consequence of that practice is likely to

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be that those hon. Members whose Questions are selected will catch your eye for the asking of a supplementary question.
But in view of your general duty—which, if I may say so with great respect, you discharge so conscientiously—of protecting hon. Members generally, if it appears to you that a Question low down on the list has been selected and an earlier Question has not been selected by a Minister, might not any possible injustice to the Member concerned be prevented if you decided, in the exercise of your discretion, to call also those hon. Members whose Questions had not been selected but which were earlier on the Order Paper?
Mr. Speaker: From time to time the Chair does that, as the right hon. Gentleman knows. In this case, the next Question to be called had to be from the other side of the House, and the fact that an hon. Member's Question has a late number on the Order Paper does not prevent his being called in the general running. But grouping is not a matter for me.
The Paymaster-General (Mr. Harold Lever): Further to that point of order, Mr. Speaker. Perhaps I may take the opportunity to point out that the three Questions selected were all Questions asking for a statement. The other Questions asked for particular points of information. Two out the three Questions came, as it happened, from hon. Members on my side of the House, and one of them from the other side of the House
Preparation of Answers is done in line with those obvious commonsense rules, and are only submitted to me some time before, although, of course, I take responsibility for them. But the simple rule is for the convenience of the House. If hon. Members prefer to have a miscellany of seven or eight Questions all lumped together, I will try to meet their wishes. But I do not think that they will be advantaged by it.
Sir J. Eden: Further to that point of order, Mr. Speaker. Are there not two distinct points involved? One point concerns the question of Ministers' responsibility. It was surprising to every hon. Member, I think, that, initially, the Paymaster-General said that he did not
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accept responsibility and had no knowledge.
Secondly, there is the point of Questions put down late on the list; the matter, for instance, of the similarity of Questions No. 75 in the name of my hon. Friend the Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott). He has been waiting, I understand, for an Answer from the Department since 3rd April on the subject of the acute shortage of solid smokeless fuel in the City of Newcastle-upon-Tyne. I understand that supplies there have run out this morning. It would surely have been appropriate for that Question to have been called.
Is it the case, Sir, that you would not normally wish to call a Question which appeared later than No. 50 on the Order Paper? If that is your Ruling, it places many of us in very great difficulty, particularly with the substantial grouping of subjects under the heading. Ministry of Technology ". That heading covers a very wide range, as this afternoon's Questions can show.
Mr. Speaker: The hon. Gentleman is raising the subject of late-numbered Questions. I have said from time to time from the Chair that I do not automatically call a late-numbered Question if it is answered with a Question which is earlier in number, for the very reason which has been pointed out in the points of order, that late-numbered Questions probably, in almost certainty, are put down later than lower-numbered Questions. But I must emphasise again that the matter of the grouping of Questions is not one with which Mr. Speaker can interfere in any way. He has to take the Order Paper as it comes.
Dr. Winstanley: Further to that point of order, Mr. Speaker. The point is not so much, as has been suggested by the right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), which Questions are selected but which Questions are not selected. Whereas my Question No. 47 was tabled on the first possible day, the reason given by the right hon. Gentleman for his not selecting it was that it did not ask for a statement, but it does ask for information, for which the other Questions also asked.

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You have ruled, and I accept your Ruling, of course, that the matter of the selection of Questions, and their grouping, is within a Minister's discretion, but where there is any possibility that that discretion may be used, as it were, in a negative sense—to fail to select certain Questions which might otherwise have been expected to be answered—is there not a good case for this subject to be looked at once again by the Select Committee on Procedure?
Mr. Speaker: I am sure that the House is looking carefully at what are very substantial points of order being raised at the moment. The Chair, however, has never been responsible for grouping.
Mr. Crouch: Further to that point of order, Mr. Speaker. The House is very jealous of its opportunity to question Ministers, particularly on matters pertaining to the nationalised industries. They have the opportunity to write to the chairmen of the nationalised industries, but they very much value Question Time, which is infrequent enough, when they can put Questions on the nationalised industries and supplies to the public to the Ministers concerned.
The Questions to the Paymaster-General were on a very sensitive subject which arouses considerable concern throughout the country. It is felt, certainly by me, that the right hon. Gentleman did not do justice to the sensitivity of the Questions in not grouping them with other Questions relating to them.
Mr. Speaker: These are points of value, but they are not points for the Chair.
Mr. Lawson: As one who has had very considerable experience, Mr. Speaker, in grouping Questions and having Questions grouped, may I ask you yourself to study the Questions? You will see that there are two distinct sets of Questions. The Question which was called distinctly asked for a statement on the present position and how the future position will be handled. Each of the Questions not reached asked for information about the amount of fuel available, or what the amount of fuel available in future will be. They are two distinct sets of Questions, and I certainly would have objected to having them grouped together.
Mr. Speaker: Order. This is one of the difficulties. From time to time hon. Members complain that too many Questions are grouped together and today they complain that too few have been grouped together. This is not a matter for the Chair.
Mr. Lubbock: Further to that point of order, Mr. Speaker. Is it not clear that you are being put into a very difficult position indeed in that hon. Members are addressing points of order to you on something over which you have no jurisdiction? You have explained to the House on a number of occasions that you have no say in the selection of Questions to be grouped. Nevertheless, at least a dozen hon. Members have been putting points of order about the discretion exercised by the Paymaster-General in connection with this group of Questions.
It is not the first time in recent months that this matter has been raised with you. I believe that it was raised the other day in connection with Prime Minister's Questions. We know that you are very keen to defend the interests of back benchers. Anything which you could do in this respect you certainly would do within the extent of your powers. So I am appealing to you to ask the Paymaster-General and other Ministers, who. clearly, have not been selecting Questions in the manner the House would wish, to set out for the guidance of hon. Members just how they are exercising this power.
It is perfectly clear, in the case which we have discussed this afternoon, that it is on the legalistic question whether or not someone has asked for a statement. Many other Questions, not only those which have been mentioned, but Questions Nos. 47, 58, 68 and 75 were all closely connected with this subject, yet the Paymaster-General refused to select them on the semantic ground that they do not ask for a statement. If Ministers would set out for the guidance of hon. Members exactly the criteria they are using, in future we could devise the manner of Questions which would not be ruled out under the rule whereby hon. Members who come in very much later might not be called. If you took this step it would be of great assistance not only to the House, but to you in the exercise of your discretion.
Mr. Speaker: In his preamble the hon. Member said that this matter is one for which Mr. Speaker has no responsibility. No doubt observations that have been made today will have been noted by the House and interpreted in the way which hon. Members think fair.
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): I will look into this matter very carefully. I know that there are arguments about it, but I will examine it and report back to the House.
Mr. Scott-Hopkins: On a point of order. I thank the Leader of the House very much for his words on the point which has been put, through you, Mr. Speaker, to him.
A point which is also worrying hon. Members is that when a number of Questions are selected for grouping, which is not in your discretion, earlier Questions on the same subject do not get answered. This is an easy way of dodging having to answer a particular Question.
Mr. Speaker: This is a point which has been made before. As a general rule, I do not call the late-numbered Questions.

MALTA (AID)
The Minister of Overseas Development (Mrs. Judith Hart): I would like to make a statement about the present position concerning aid to Malta.
I will deal, first, with the substance of the offer we have now reaffirmed. Britain's capital aid to Malta is made available in accordance with the Agreeinent on Financial Assistance concluded between our two countries in 1964, in order to assist the development of the economy of Malta. Under that agreement, £51 m. was made available for the 10-year period beginning 1 April, 1964. For the first five years the agreement specified that 75 per cent. should be drawn in the form of grant and 25 per cent. by loans. As regards the second five years, the agreement did not provide for any fixed proportion between grants and loans, but required this division to be the subject of future discussion.
Discussions accordingly took place in Malta in December, 1968, against an economic background which was much
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more favourable than had seemed likely in 1964. Great strides had been made in the development of tourism and industry. Economic growth had been outstanding, and foreign exchange reserves per head were among the highest in the world. Unemployment had been much reduced.
Taking into account all the special circumstances, the British Government proposed that 25 per cent. of the balance of £23m. should be made available in grant form and 75 per cent. by loan. These terms were more favourable to Malta than those which we have applied to any other country in similar economic circumstances.
The Maltese were unable to accept this offer and after representations by Dr. Borg Olivier, in January, 1969, the British Government revised the offer to one of 50 per cent. loan and 50 per cent. grant. The Prime Minister of Malta still found the offer unacceptable, but the British Government did not feel that any more generous terms would be justified since the Malta economy was continuing to grow at an exceptional and very satisfactory rate—9 per cent.
Meanwhile, it was not possible for further aid to be made available to Malta under the agreement after March, 1969. The British Government accordingly proposed temporary arrangements within the limits of their offer to enable aid to flow until the dispute was settled. But this, also, was not accepted.
I come to our information about the continuation of talks. Our position was restated by our new High Commissioner in Valletta to the Prime Minister of Malta on 13th and 17th April. Dr. Borg Olivier said that it was impossible for him to accept our terms, but he did not then in any way suggest that the discussions were at an end. This was the position as I knew it when I gave my Answer in the House on 23rd April.
After I left the Chamber I learnt of a telephone message from the High Commissioner that the Malta Prime Minister was intending to say that the talks had been discontinued, and I heard on Friday afternoon that a statement had been issued in Malta on the Thursday evening to this effect.
Dr. Borg Olivier made a statement to his House of Representatives on Friday

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evening that, consequent on my reply, he regarded discussion at an end.
Her Majesty's Government very much regret that Dr. Borg Olivier has felt obliged to take this view. We regard our offer as fair and so far as we are concerned it still remains open; and if there were any new considerations we should be happy to take them into account. I hope that further discussions can take place, possibly on the basis of the £5·6 million available in grant form which is so far undrawn for the period 1969–71.
Sir Alec Douglas-Home: If I may deal with the last part of the right hon. Lady's statement first, it seems very extraordinary that she appears to be about the only person who did not know on Friday afternoon that the talks had been broken off.
Am I right in thinking that the money in dispute is 25 per cent. of £23 million and, therefore, £1 million each year for five years?
The right hon. Lady made no mention of defence, which is very extraordinary because she and the Government must know that the 1964 arrangement was a mutual one whereby aid was given to Malta and Malta gave defence services to the United Kingdom.
This being so, I must ask the right hon. Lady to confer with the Foreign Secretary and the Leader of the House, because I think that the Government ought to give time for a debate on this matter.
Mrs. Hart: The amount under discussion is £.6¾ million. This is not a small sum. What must be borne in mind are our general conditions on grant as against loan in developing countries, our general aid policy, and the facts I have given about the very happy growth of the Maltese economy.
On defence, there is no provision in either Agreement for any unilateral abrogation. Indeed, the defence arrangements are continuing, and we have had no official notification on this aspect over the last year.
The somewhat extraordinary feature about the timing is that it was after I had left the Chamber when, unfortunately, the hon. Member for Haltemprice (Mr. Wall) had not been in his place to
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ask his Question for Oral Answer—I suppose that it would have been reached at 2.40—that I had a fifth-hand telephone message.
I did not think it right to make any change in the Answer from the Oral Answer the hon. Gentleman would have received had he been in his place and the Answer that then went to him in written form; I did not think that that would be right in House of Commons terms. Nor would I in any case have thought it right to act in terms of what was a fifth-hand message.
Mr. Wall: On a point of order. Mr. Speaker. Concerning the point about the Written Answer, the Table Office will know that I was not able to be here that afternoon. I downgraded the Question to one for Written Answer before Question Time.
Mrs. Hart: With respect, inquiries were made at the Table Office and our understanding, which may be right or wrong, was that the Question was still to be answered orally.
Sir F. Bennett: It may or may not be right that the right hon. Lady did not learn until later Thursday afternoon that a statement had been issued that morning in Malta. Can she now explain why, when she came to the House on Friday morning, she was adopting the attitude that her Answer to my hon. Friend the Member for Haltemprice (Mr. Wall) had been right and that she even then did not know about it, although it is now admitted that the High Commissioner was informed on Thursday morning that the talks were at an end?
As the argument is not so much about amount, but whether it is a grant or loan over 25 years, what is the net difference over 25 years for which we are putting at peril our whole defence arrangements in the Mediterranean?
Mrs. HartI certainly would not accept for one moment that the Government of Malta would take the attitude that the N.A.T.O. defence arrangements in the Mediterranean were to be put at risk because of this disagreement. It is not just a question of the amount that is involved as between grant and loan. It is a matter of the relationship between giving grant in the particular circumstances of the country in relation to our

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general principles governing these matters.
The hon. Gentleman was a little ungenerous in what he said in the first part of his supplementary question. I do not know whether he was suggesting that I did know before I answered the Question in the House, If he is suggesting that, perhaps he would say so and then I could deal with it in the way it demands.
Sir F. Bennett: As I am asked to say something, I will do so. All I can say is that the right hon. Lady's High Commissioner in Malta did know on Thursday morning. If he did not telephone her, that is his fault, not mine.
Mrs. Hart: As all of us in the House recognise, the hon. Gentleman is extremely fortunate in his vary rapid communications with Malta. The message that our High Commissioner in Malta received was received by him after lunch as a private secretary message in Malta. By the time it reached me in the House of Commons I had already given my Oral Answer. Indeed, I remember speaking to the hon. Member for Essex, South-East (Mr. Braine). At that time, I had not received this fifth-hand telephone message.
Sir F. Bennett: What about Friday?
Mr. Moorman: To return to the main substance of the problem, does not my right hon. Friend, whilst recognising the changing economic circumstances in Malta, also recognise that, although tourism and trade have grown, they are still highly vulnerable and that, therefore-it would be very helpful, because this is a very distressing matter to have arisen, if she would in say what initiatives she proposes to take now to resolve this very difficult matter?
Mrs. Hart: What I very much hope will happen—this is why I very much regret what Dr. Borg Olivier said to his House of Representatives on Friday—is that there can be a continuation of discussions. So far as we are concerned, discussions can continue. Clearly, it is only on the basis of discussions that we can find a satisfactory solution.
If I may add to my reply to the hon. Member for Torquay (Sir F. Bennett), I had to wait for official information. I could not act on the basis of Press
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reports indicating what a Government spokesman had said. Our first information was Friday after 11 o'clock, when we heard of the official statement from Malta.
Mr. Wall: The Government have been arguing with the Maltese Government for the past year about whether 50 per cent. should be grant or loan. As the right hon. Lady has said, there has been no argument about the other 50 per cent. Therefore, why cannot the other 50 per cent. of grant be paid to Malta so that she can get on with her reconstruction programme? Does the right hon. Lady appreciate that this is becoming a matter of party politics in Malta, which is putting Britain in a very awkward situation?
Mrs. Hart: I appreciate that whenever an issue of this kind arises it is bound to be a matter of domestic discussion in the country concerned, but we do not believe that it would be right, in the circumstances which I have described of Malta having a 9 per cent. growth rate and some of the best foreign exchange reserves in the world, to make such a departure from what is our normal aid policy on development grants.
Mr. Cronin: Returning to the main substance of my right hon. Friend's statement, will she bear in mind that with the large increase in travel allowances it is unlikely that the Maltese economy will continue its 9 per cent. growth rate? Will she bear in mind, also, that Britain has quite strong moral obligations to Malta?
Mrs. Hart: Indeed. One of the features of the whole matter that is most regrettable is that the Government of Malta do not find it possible to draw on the £5·6 million grant that is now due to them from the period 1969–71, which, clearly, would be of great assistance to them.
Sir Alec Douglas-Home: Was not the whole point of the 1964 agreement to increase the rate of growth of the Maltese economy, and is not this a very satisfying thing? Ought it not to go on for at any rate some years longer? The right hon. Lady is very complacent when she says, in effect, that this is enough. Is it not true that not a single payment has been made to the Maltese Government for one year—in other words, from April, 1969?
Mrs. Hart: The last statement is true, but this is not our fault. This is because the Maltese Government have chosen not to draw down what is available to them.
It is a matter of immense satisfaction to all of us that the economy of Malta is now doing so well. We are not talking about the total amount available to Malta to increase its rate of growth and encourage its further development. We are talking about the difference between grant and loan. In our view, the offer we have made in terms of grant and loan is extremely reasonable.
Mr. Dickens: To return to economic reality, will my right hon. Friend remind the House that Malta receives from Britain about £20 per head per annum in economic aid against 1s. 7d. per head per annum in the case of India? Is it not about time that Her Majesty's Government insisted that the Maltese Government drew more heavily upon the financial resources of the Maltese rich and the wealthy British residents in Malta who are living in a tax-free paradise at the expense—in part at least—of our constituents?
Mrs. Hart: The latter part of my hon. Friend's supplementary question is entirely a matter for the Government of Malta.
In making his first point, he put his finger on our dilemma. Clearly, in terms of our very special relationship and friendship with Malta we need to extend as many concessions as possible; but when this comes so sharply into conflict with the developmental needs from our restricted aid budget we are bound to consider what is the right figure to arrive at. We have felt that this is the right figure.
Sir A. V. Harvey: Will the right hon. Lady remind her hon. Friend the Member for Lewisham, West (Mr. Dickens) that for three years the civilian population of Malta had one meal a day out of the soup kitchen?
Is the right hon. Lady aware that one of the reasons given a year ago for not increasing the grant was Britain's economic difficulties? As our economic conditions have now been improved, could that matter be looked at afresh?
Is the right hon. Lady also aware that I have asked her right hon. Friend the
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Prime Minister twice this year if he will pay a visit to Malta and discuss this matter as Prime Minister to Prime Minister, and that he said that he would give it his full consideration? Can anything be done on that matter?
Mrs. Hart: I cannot at this moment say what are the views of my right hon. Friend the Prime Minister on that proposition.
In answer to the first part of the question, it is because we recognise the tremendous contribution that Malta made during the war that we have wanted to give this special assistance, but one cannot go beyond a certain point in terms of the merits of development and in terms of the demands on Britain's money. After all, it is hon. Members opposite who always seek to cut public expenditure. They cannot have it both ways. We think that we have reached a fair settlement, taking into account the special contribution of Malta and its own resources.
Mr. David Steel: Could the right hon. Lady say whether at any time during the past year there has been any doubt in the minds of the Maltese as to our right to renegotiate the second half of this agreement? I assume that there never have been any such doubts.
Secondly, bearing in mind our total overseas aid commitments and the needs of other countries, is it not perhaps more relevant that in 1970 there are parts of the world where people get less than one meal per day from a soup kitchen?
Mrs. Hart: In reply to the first question, there has been no reason for such doubt. The Malta Government have been satisfied about this aspect of the matter; at least, I trust that they are satisfied—unless I find that this is suddenly denied.
On the second point, we had to take into account how far we should make the right kind of compromise between the needs of people in other parts of the world and our special loyalty to Malta.
Mr. Wallace: Is my right hon. Friend aware that there are many people in Malta who are not British residents and whose need for housing has been affected by the tourist boom? Is she further aware that the Government's actions, so widely applauded in this country, in

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cutting away travel and currency restrictions, will possibly affect the Maltese very seriously indeed?
Mrs. Hart: This could conceivably be so. All I can say is that any effect of the changes in our allowances for foreign travel will be taken into account developmentally.
Mr. Hastings: When the right hon. Lady says that she wishes discussions with the Malta Government to continue, is she implying that she is prepared to improve her offer? What other point could there be in continuing the discussions? Does the right hon. Lady accept that many of us on both sides of the House believe that her present attitude is both ungracious and short-sighted?
Mrs. Hart: No doubt, that is the hon. Gentleman's point of view. I do not know how widely it is shared. When I say that I hope that discussions can continue, may I remind the hon. Gentleman what I said in my statement, that if there are any new considerations we shall be happy to take them into account. In the meantime, £5·6 million remains undrawn in grant form which could readily he available to the Maltese Government if they chose to draw it.
Mr. Speaker: Sir Alec Douglas-Home
Sir Alec Douglas-Home Sir Alec Douglas-Home rose—
Mr. Hugh Jenkins: On a point of order, Mr. Speaker. Is it not your custom to call Members from one side of the House and then from the other?
Mr. Speaker: It is normal for the Speaker to call from one side of the House and then the other, but one extends certain courtesies to certain right hon. Gentlemen. This is one of those occasions. Sir Alec Douglas-Home.
Sir Alec Douglas-Home: Would one of the assurances that the right hon. Lady felt it possible to give be that foreign policy and the defence aspect are not lost sight of by the Government in connection with the money which should go to Malta?
Mrs. Hart: I can give that complete assurance. It is our assumption that the degree of responsibility of Malta is such that this would not arise.
Mr. Hugh Jenkins: Is not the cause of this trouble almost solely the responsibility of the Malta Government? Is not this fact recognised inside Malta, particularly by the Malta Labour Party, and would it not be fruitful for that discussion to take place in Malta because the Malta Labour Party is likely to be the next Government of Malta and will reach an agreement on this subject without any difficulty?
Mrs. Hart: I am sure my hon. Friend will appreciate it when I say that the British Government are anxious and eager to continue discussions and to arrive at a satisfactory settlement with Malta. Therefore, it might be best if I did not give detailed comments on this matter.
Several Hon. Members rose>—
Mr. Speaker: Order. I must protect the business of the House.

BUSINESS OF THE HOUSE
Ordered,
That at this day's Sitting the Proceedings on the Motion relating to Ways and Means and on the Guyana Republic Bill [Lords] may he entered upon and proceeded with at any hour, though opposed, and that the Proceedings on the Motion relating to Civil Aviation may be entered upon and proceeded with at any hour during a period of one and a half hours after Ten o'clock, though opposed.—[Mr. Pearl.]

CONSTRUCTION INDUSTRY CONTRACTS BILL
Order for Second Reading read.
4.6 p.m.
The Minister of Public Building and Works (Mr. John Silken): I beg to move, That the Bill be now read a Second time.
I think that it would be of advantage to the House if I gave a fairly brief indication of the history of this Bill. The Bill follows up the analysis of the Phelps Brown Committee on the practice of labour-only sub-contracting in the construction industry. The committee was set up following discussions in April, 1966, at the then Minister of Labour's National Joint Advisory Council which expressed growing concern at development of abuses in the field of labour-only sub-contracting.
Labour-only sub-contracting is an arrangement whereby a main contractor himself provides the materials and most of the equipment required for a task and pays a sub-contractor to supply the labour and be responsible to the main contractor for the performance of the work. The sub-contractor may himself employ and pay work people, or he may be a self-employed person working under a contract for services. It is by no means a new phenomenon in the construction industry. Most of the canals in the country were built by gang masters who were the labour-only sub-contractors of their day, and the T.U.C. was interested and affected by the abuses in this form of sub-contracting as long ago as the 1890s.
Despite this long history, the fact is that the subject had never been fully investigated before the Phelps Brown Committee reported. The committee's report was published in July, 1968. Comments from the industry were received in February, 1969 and a working party of officials was set up to consult further with the industry and to produce detailed proposals for action.
I wish to pay a tribute to the work of the Phelps Brown Committee. Under its able chairman, it worked under considerable difficulties, but with considerable lucidity. For the first time, it clearly distiguished two separate forms of labour-only sub-contracting. The first was
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labour-only sub-contracting by firms properly established on an employer-employee basis. The second was labour-only sub-contracting by men who, while operating basically as if they were employed, laid claim to self-employed status.
The distinction between these two forms is crucial. Summing up its conclusions on labour-only sub-contracting, the Phelps Brown Committee said—and I entirely agree:
" Where it works best, labour-only subcontracting combines the contribution of the specialist sub-contractor to the organisation of production and the continuity of employment of the worker, with a simple and effective form of wage incentive…At its worst, labour-only sub-contracting produces faulty work by irresponsible men concerned only with wresting the greatest possible gains from the industry in the short run, and unrestrained by their own standards or by the control of management."
It was an admirable analysis of the situation. Different forms of labour-only subcontracting were clearly identified for the first time, and the crucial difficulties of enforcing possible solutions to the problem were revealed.
The purpose of the Bill is to deal with problems liable to arise in the industry when labour-only sub-contracting in the form of self-employment is in competition with normally-employed labour. The growth of self-employment is disruptive of the industry's normal working arrangements and of provisions made by Parliament for taxation and national insurance. First, collective agreements are undermined, and this creates an atmosphere of industrial unrest which all of us must deplore. Second, training arrangements are inevitably weakened. The system of labour-only sub-contracting is damaging to the apprenticeship system. Third, the progress of industry is inevitably stunted by casual employment.
The industry always has needed a more stable structure for development of longterm improvements, for productivity, better site management and effective collective bargaining. In addition, the system encourages the avoidance of tax liabilities and other liabilities to which the rest, the reputable part of the industry, are liable. This is inevitably another source of resentment. The existence of itinerant gangs on this sort of basis militates against safety and endangers the life and in many cases the health of other workers. Finally, there is the question of workmanship, which has been commented on

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by many people. There was a considerable weight of evidence to Professor Phelps Brown's Committee on the amount of bad workmanship, shoddy workmanship, resulting from the practice.
The committee identified certain substantial advantages associated with labour-only sub-contracting. The Bill therefore does not aim at abolishing the practice as such, but deals with the abuses which have grown up in the self-employed sector. What are these abuses?
Current pressures to adopt self-employed status are mainly of a financial kind. Charges avoided by an employer if his men assume self-employed status include S.E.T., the employer's share of National Insurance and National Health Service contributions, redundancy fund contributions, and payment for annual and public holidays. He is also relieved of the necessity of obtaining employers' liability insurance cover, of contributing to redundancy payments if redundancy occurs, of making wages up to a guaranteed weekly minimum under the national working rules, or paying sick pay. The self-employed man's own National Insurance contribution is, of course, lower than that of an employee. In addition to these legitimate avoidance factors, there is under the self-employed system an opportunity for the unscrupulous to evade income tax.
There are many ways of dealing with these questions. One of them was to impose criminal sanctions. However, we decided at a very early stage in our thinking to exclude the introduction of new criminal sanctions. This would be an inappropriate way of dealing with abuses of this nature, and would inevitably, have placed an intolerable burden upon the police and the courts.
The Phelps Brown Committee's answer to the problem of abuses in the self-employed sphere was to deem self-employed labour-only men to be the employees of the contractors who engaged them. I decided, for reasons which I shall explain later, that a better and less confusing approach was to take steps to induce these men to become employees. Since current pressures to adopt self-employment are, as I have described, largely financial, it seemed to me that any measure to reverse these pressures should operate in the same way.
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It was also evident that enforcement should be implemented through existing machinery and would, therefore, have to be concentrated on the person who engages the self-employed sub-contractor, since only he is accessible to the enforcement authorities.
The problems of income tax evasion fall appropriately to be dealt with in the Finance Bill, and my right hon. Friend the Chancellor of the Exchequer, outlined in his Budget speech, the steps he proposed to take for dealing with this. These measure are, of course, intimately related with the proposals in the Bill for dealing with avoidance of liabilities, and it was appropriate that the Bill should be presented at about the same time as the Budget speech was made. This determined the timing of this legislation.
It is not intended that contracts undertaken directly with private clients—I am thinking of the householder—should be affected. The Bill's provisions have been very carefully framed to avoid this. What we are really dealing with is an abuse in a system of work involving labour-only sub-contracting and the main contractor in that relationship. It does not affect the ordinary householder.
The first problem was to identify the people concerned. The Phelps Brown Committee argued the need to identify those who were genuinely in business in the industry, and suggested that a voluntary register of such people should be created. It would not be possible to draw a distinction on the basis of whether a sub-contractor provided labour only, as it would be possible to avoid the intentions of the legislation simply by arranging for a negligible quantity of materials to be supplied. If I, as a labour-only sub-contractor, am asked to provide, say, 50 men and wish to evade the terms of the Bill it would have been possible for me to say, " I will supply 50 men and a yard of plasterboard ", or whatever quantity I wished.
I decided, therefore that the first qualification for admission to the register should be that of being an employer. This seemed to me to identify those contractors who had a genuine stake in the industry. Moreover, anyone who operates as an employer is known to the enforcement authorities, since he is required to make regular returns during the course of his business.

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The Phelps Brown Committee proposed that the register should also include self-employed men who were
" genuinely in business on their own account."
Hard thought was given to this in consultation with the industry, but the conclusion was reached that no definition could be framed which did not in the last resort involve a purely subjective assessment of the genuineness of a man's business. For example, one test might be whether such a man possessed a builder's yard, but I had the feeling that on the day of registration, unless we were very careful, we might find seven or eight of the more devious members of the industry all owning the same yard. The yard might be said to exist in Blackpool, or Edinburgh when the registration was being made in London, and it would be a matter of considerable difficulty and considerable value judgment to identify the yard. That is only an example. I do not believe in value judgments by officials in a register of this sort. They should simply put down the facts. That was why I decided that no self-employed men should be admitted to the register.
The effectiveness of the legislation rested on this exclusion. The size of the possible problem created by this decision should be significantly limited, however, by the Phelps Brown Committee's own findings, with which we agree, that the genuinely self-employed spend most of their time working directly for clients. In such cases, of course, they would be totally unaffected by the provisions of the Bill.
Self-employed men will, therefore, be unable to obtain registration, and any contractor employing them will incur the liabilities prescribed. This does not mean that self-employment in the construction industry has been outlawed. From now on, it is craft skill and not avoidance of financial liabilities which will be the guiding factor for contractors in the employment of such people.
The second qualification for registration is based on insurance requirements. All those wishing to register will have to be adequately insured against both employers' and public liability, and their public liability insurance will be required to extend to self-employed men working for them.
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There are two objectives in requiring this insurance. First, because the premiums will not be negligible, it should go a long way towards ensuring that only those who are genuinely in business in the industry will apply for registration. Second, and most important, it will help to close the " liability gap ". It must be admitted that the Bill does not completely fulfil the recommendations of the Phelps Brown Committee, but it will do much towards ensuring that construction workers are as well able to obtain redress as workers in other industries. It will also ensure that members of the public who suffer injury as a result of construction industry operations will be able to obtain damages.
One of the difficulties that we saw was that these qualifications for registration could not be fulfilled by somebody setting up in business for the first time. For this reason, the Bill will enable a system of provisional registration to be introduced. Great care has been taken to ensure that this will not provide a loophole for evasion.
Registration for a probationary period is to be granted to individuals who wish to operate as sub-contractors in the construction industry, who have, therefore, taken out the required employer's and public liability insurance cover, but who have not yet had an opportunity to fulfil the requirement of having employed somebody. Those who have failed to satisfy the conditions for obtaining full registration at the end of the prescribed period of provisional registration will not be able to register provisionally again for a period of two years. I realise that this seems harsh, but it is intended to prevent contractors from operating on the basis of a series of provisional registrations.
The fee for provisional registration will be substantially higher than that for full registration. But arrangements will be made for contractors to move on to the main register as soon as they are able to do so. I might say, in passing, that there are special provisions for partnerships in Clause 3.
The qualifications for registration are designed to be easily administered and fulfilled by any reputable employer, and that is the test. In most cases, at any rate, they should not incur any new responsibilities. Registration will be

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simple. It will be done via the regional offices of my Department. Applications to go on the register will normally be made by post, and the register will be maintained centrally. But information and advice will also be available at the Ministry's regional offices, in Scotland and in Wales, so that, if any difficulties arise, contractors and other interested parties will be able to deal with them locally. Regional offices will also be able to help with requests for information about entries in the register. As with the Companies Register, members of the public will be able to obtain information about entries in the register on payment of a small fee.
The purpose of the register is to identify those contractors who have a genuine stake in the industry, are known to the enforcement authorities and are properly insured. It is this basis on which the register has been set up and for this reason alone.
We now come to the problem of the levy. The proposal of the Phelps Brown Committee for dealing with the problems of unregistered contractors—mostly self-employed men—was to deem these men to be the employees of the contractors who engaged them. This appeared at first sight to be an attractive approach since the truth of the matter in fact, if not in law, is that these labour-only sub-contractors are employed in a short-term basis by the contractors who engage them.
It seemed reasonable to operate the enforcement provisions through the contractors, who are accessible to the enforcement authorities. But detailed examination revealed certain deficiencies in the deeming approach. In the first place, I thought that it was unreasonable to deem men to be something which clearly they were not. One may by law deem a moth to be a butterfly, but any lepidopterist knows the difference. In National Insurance, for example, persons with few if any of the attributes of employees would be placed in Class 1. In the construction industry alone, entitlement to unemployment and industrial injury benefits would be dependent only on the class of the National Insurance contributions paid and not on the nature of the contract under which a person worked. Similarly, liabilities would be imposed on the contractors who had none of the rights or attributes of employers.
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Apart from these points of principle, deeming would also have led to serious problems of enforcement. One has only to think of the unregistered man who—and this is by no means unusual—would he perpetually shifting into and out of the various categories. If, for example, a carpenter works for three weeks, let us say, directly for a house owner, there is no difficulty. He is in Class 2. If then he works as an employee of a registered contractor, he becomes Class 1. If he then becomes an unregistered sub-contractor, self-employed, again he is Class 1. The variations in his class of contributions increase, change and cause considerable difficulty.
Another method was sought, therefore, to implement the basic recommendations of the Phelps Brown Committee. The most effective measure, without distorting the true situation and the status of men, is to exert pressures which induce men who are not genuinely in business on their own account to move into employment.
It was finally decided to achieve enforcement through the imposition of a levy on any payment for construction work made to unregistered contractors. The rate of levy will be calculated, within an adequate upper limit of 20 per cent., to offset fully any benefits at present obtained from avoidance of the following costs of employment: S.E.T.; C.I.T.B. levy; National Insurance contributions; redundancy funds contributions and payments for annual and public holidays. Since the levy is a proportion, and the benefits of avoidance are virtually fixed, the levy will become progressively harsher as a self-employed sub-contractor earns more.
It is easy to collect since the administrative arrangements will be linked to the normal machinery for collection of contractors' taxes. Moreover, as I have mentioned, the problem of income tax evasion will be covered by the measures to be taken by my right hon. Friend the Chancellor of the Exchequer in the Finance Bill. As the House is aware, the income tax retention is recoverable provided that proof is given. The levy is irrecoverable.
It is intended that the combination of the levy and the tax deduction scheme should make the use of unregistered men

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as sub-contractors unattractive by comparison with the use of employed labour. The effect should be such that all contractors who are able to do so will wish to register, although I must stress—there has, I think, been a little confusion on this—that there is no compulsion for them to go on the register.
I should, perhaps, at this stage deal with the effect of sub-contracting as it goes down the line, what is known as the cascade effect. The levy is intended to apply to certain classes of contract, not to classes of persons. Its principal application will be to sub-contracts—that is, contracts where the principal party is himself under contract to another party to do the work. The levy, however, will apply at all levels.
If the main contractor, A, engages a sub-contractor, B, who is unregistered, the main contractor will be liable for levy. If, however, the sub-contractor, B, is registered and himself engages an unregistered sub-contractor to help him, the work of B will still be liable for levy, and so on right down the line.
To prevent evasion through contractual devices, the levy will apply whether the contract is to do work, to provide labour to do work or to supervise the doing of work. Main contracts with a client who is also a developer appeared to create opportunities for evasion. For that reason, I decided that it would apply to main contracts—that is, contracts directly with a developer for the work—in cases where it is meaningless to draw a distinction between the developer and the main contractor.
An example of that is the speculative house builder who operates both as developer and as contractor for a building scheme, or a developer who makes a business of promoting buildings for sale or lease and not for his own use or occupation. In such cases, contracts which in normal circumstances would be subcontracts are really main contracts, since the principal party is the developer.
The same situation applies in the case of certain public bodies who operate in exactly the same way—for example, in public housing—and these are also covered by the Bill.
Mr. Eric S. Helfer: Can my right hon. Friend explain
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why the developer who builds a house for his own use or houses for his workmen is not in any way affected? I cannot understand this and I should like to have it explained.
Mr. Silkin: The question arises of what is the normal business of the person in connection with the building which he proposes to erect. I was trying to avoid the situation where a person who builds, say, a housing estate says, " I am not in the construction industry. I will. therefore, give theoretically main contracts to what in normal circumstances would be a contractor and a number of sub-contractors." Of course, he would be caught by this provision.
I did not want to penalise the ordinary householder who wanted repairs done on his own house, or who wanted a house built especially for himself, although it is fair to point out that he will employ a builder who, under this legislation, becomes a main contractor and who will, therefore, fall within the provisions of the Bill.
Mr. Nicholas Ridley: Why should an ordinary individual who gets somebody who is self-employed to paint his house or do a small job be allowed this means of escaping National Insurance, tax and retention simply because it happens to be done by a private householder rather than a company?
Mr. Silkin: The evidence of the Phelps Brown Committee was that most self-employed people in this situation were genuine and paid their various dues and obligations. What we are trying to counter is a particular abuse. It is in sub-contracting of the sort that I have described that this kind of abuse arises. It does not arise in any such form in connection with maintenance.
Mr. Michael Shaw: I understand the point made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and the answer to it, namely, that the householder is not in business and that it is the businessman whom it is sought to catch. For clarification, however, may put a practical example? It concerns the heating and ventilating industry.

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The main contractor will probably be the builder. Then there is the heating and ventilating manufacturer, or the engineers to whom the heating and ventilating is sub-contracted by the main contractor. They will sub-contract to, say, the ducting manufacturer, who may himself employ a body of men, whom we are trying to get at, to erect the ducting on the site. Presumably, the ducting manufacturer would be caught by this because he is responsible for engaging the labour-only force to put in the ducting.
Do I understand from what the Minister is saying that the heating and ventilating engineer—in other words, the man higher up—is also caught and has a responsibility as well as the ducting manufacturer?
Mr. Silkin: A point arises which should be made clear. Provided that the next person down the scale with whom one is dealing can produce a registration certificate, one is automatically cleared from looking any further. If A employs B, A does not have to worry about whom B employs. B, on the other hand, is caught in his relations with C, whom he employs, and so on, further down the scale.
To sum up, the levy will be payable by anyone operating regularly in the construction industry and who engages an unregistered constructor to do the construction work.
Sir Douglas Glover: It is important to get this clear. Is it right to say that wherever one is on the scale, the man below must present a certificate to show that he is all right? If the man below can do this, one is all right?
Mr. Silkin: That is more or less correct.
I do not intend the fees for the register to be high. I expect that, inevitably, there will be a surplus after the cost of administering the scheme has been met. I do not intend that this net revenue should be retained. Powers are taken in the Bill to pay over any such surplus for the benefit of the industry. The Construction Industry Training Board is named in the Bill as the possible recipient, but I have no firm views on this and I would rather consult the industry about the ultimate destination of any surplus.
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I do not expect the levy to be large. In a way, the more effective the scheme, the less levy will there be, since the aim is that the industry should employ registered and not unregistered sub-contractors. But any receipts from this source will be paid directly into the Consolidated Fund. The reason is that it is the Revenue which is losing as a result of this practice and it seems right that it should be reimbursed.
It will be clearly essential to have the advice of industry itself on detailed questions of implementation such, for example, as the level of cover to be required under the insurance qualifications. I am glad to say that the unions and the employers' associations have offered their help in dealing with these questions. I have already set up an advisory panel and I am glad to be able to tell the House that it will be meeting for the first time tomorrow morning.
This panel will continue the process of full consultation which has taken place on this issue between my officials, myself and both sides of the construction industry over the past two years. It may be interesting for the House to know that since 25th February of this year 11 groups from the industry, including, if he will allow me to so describe him, Professor Phelps Brown himself, have been consulted within a matter of two or three weeks.
Mr. James Allason: Can the right hon. Gentleman say whether insurance interests are included in the advisory panel?
Mr. Silkin: No, they have not yet been included because I have not yet had full advice from the industry generally as to what sort of insurance they would deem to be the minimum adequate insurance.
The aim of my panel is to keep it as informal as possible. A number of members were invited by me and one or two others asked to be allowed to come along. I do not want it to be a formal panel. I want it to be an informal, helpful constructive panel. But I have no doubt that insurance interests will come in later as we progress.
The aim of the Bill is to create a new climate in the industry. I do not expect that the abuses of labour-only

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sub-contracting will be eradicated overnight. It would be foolish to think so. But this arrangement will no longer afford unfair and unintended advantages over normal forms of employment. I believe that it is up to the industry now to work and to co-operate to ensure the effectiveness of the legislation by encouraging contractors to obtain registration and by working to make it a success.
It is in that spirit that I commend the Bill to the House.
4.35 p.m.
Mr. R. Chichester-Clark:I can safely begin by joining the Minister in his tribute to the Phelps Brown Committee for the hard and skilful work which it put in on this subject.
If those hon. Members who have left the Chamber have left for reasons of mental indigestion that is in no sense a reflection on the Minister's presentation, because I am sure that the House is grateful to him not only for his history but for his detailed explanation of the Bill, and the more so because of the immense complexity of many of its proposals.
Indeed, the industry itself, I am told, is having a good deal of difficulty in probing these complexities despite the fact that it applies to it and it alone. This is a serious matter if Parliament is to continue to pass Bills of this nature, which are so complex that even the experts in the industries concerned find them very hard to understand.
That thought leads me directly to one unsatisfactory feature—or what appears to be an unsatisfactory feature—of the Bill. It is that when the Minister was questioned on 12th November last by the hon. Member for Liverpool, Walton (Mr. Heller) he was asked what discussion he was likely to have with the trade unions and the employers before the Bill was published and he replied:
" I hope to have discussions with all responsible sections of the building industry." [OFFICIAL REPORT, 12th November, 1969; Vol. 791, c. 388.]
It was a fair enough reply by any standard. But the guidance that the right hon. Gentleman gave to the Press the
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day that the Bill was published, on 16th April, last, in his Ministry's Press notice, was:
" The measures in the Bill have been discussed in outline with representatives of the construction industry unions and employers' associations and the T.U.C. and C.B.I. All those consulted approved the form of the legislation proposed and the construction industry organisations have offered their support and assistance in working out the details of implementation."
There is absolutely nothing untrue about that statement, but it might be what the moral theologians would call an economy. This ought to be cleared up because, as I understand, the employers' associations, at any rate, were never shown anything on paper at all. They were not sent any draft consultative documents and when they asked for one it was refused them. As I understand, their leaders were told in outline of the Government's proposals shortly before the Bill was published, but it seems, perhaps—and most of us have seen Mr. Pearce's statement—a little misleading to suggest that they " approved the form of the legislation proposed " because the details which they received were very sparse.
Mr. John Silkin: I have seen only garbled reports of what Mr. Pearce is alleged to have said and I am sure that he has been misreported. I have the notes of the interview I had with him with me. I said earlier that I had discussed the matter with 11 groups of people. I obviously could not give them a document in advance of the Bill coming before the House. In answer to a Question from the hon. Member for Maidstone (Mr. John Wells), some months ago, I said that could not possibly show them the Bill. but the general proposals were very well argued and they were informed about them.
Equally, I could not tell them what was to be in the Budget. The hon. Member would not have asked me to do so. However, looking at the notes of the meeting I find that Mr. Pearce made a number of helpful and constructive suggestions, some of which I propose to embody in the regulations when the time comes.
Mr. Chichester-Clark: I am very glad that the Minister has made that intervention. To some extent it probably clears up the situation. I appreciate the

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difficulties about very detailed consultations in Bills of this kind. But I have what is perhaps a personal yearning to see a little more in general, on other kinds of Bills, a situation in which Departments, as far as they can without discourtesy to the House, send out consultative documents, as is done now, for example, to the T.U.C. and the C.B.I., because this, in the end, makes our work here less long and a good deal easier. We have more detail and facts at our disposal.
Mr. W. S. Hilton:I do not want there to be any misapprehension. The hon. Member referred to employers' organisations which protested and said that their leaders had not been consulted. Would he agree that the Federation of Master Builders was not one of them, because that body. with myself as an executive, is very delighted at the co-operation of the Minister and the Department in consulting us before the Bill was drafted?
Mr. Chichester-Clark: The hon. Gentleman is right in saying that I did not mention his organisation by name. He often protests about this and that, but he certainly did not protest on this issue. Having made that point, which I think has largely disposed of the issue in a non-partisan spirit, I shall deal with the Bill as a whole before pinpointing a few of its weaknesses.
My first comment on the Bill is that it does nothing—I am not disparaging it —to help the industry directly. There is no pretence that it will do so, and I do not think that the Minister presented it in that way. It is a Bill designed to stop tax evasion, and none the worse for that, since we all accept that tax evasion is wrong and unfair to taxpayers. None the less, it should be realised that we have the Bill before us because the Revenue has been unable to collect taxes from an unknown number of building workers.
I say " an unknown number " advisedly, for, although we have a rough total for self-employment of about 245,000, and we know that the number has grown sharply in recent years, we do not know how many of those persons pay their taxes under Schedule D and how many do not. But, be that as it may, because the collector of taxes was
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unable to fulfil his statutory duty to collect taxes, we now have a Bill which imposes the tax on someone else.
In effect, the Bill says that because lump worker A—I use the Minister's own terminology—has not paid up and cannot be taxed, employer B must pay A's taxes instead. I am not resisting that proposal since there is a loophole here which must be stopped. but it is as well to make clear here and now that that is the intention of the Bill, and, to put it mildly, it is a somewhat novel and rather bizarre proposal. The Bill is a tax evasion Measure, as will be the parallel proposal for a 32 per cent. tax deduction outlined by the Chancellor, which, presumably, we shall see in the Finance Bill.
The accusations and criticisms against self-employment in this industry in the past—as the Minister did, I draw from the Phelps Brown definition a distinction between the bona fide labour-only subcontractor covered by National Working Rule 8 and the gangs of self-employed men—have related also to bad workmanship, to safety problems—this is uppermost in most of our minds—to the decline in numbers as it affects the trade unions, and also to the lack of discipline on sites. For the life of me, I cannot see how the Bill will make a great difference to any of those problems.
Perhaps I may give a specific example. I shall do it rather carefully because, like the Minister, I do not want to put ideas for further tax evasion into anyone's mind. Let us suppose, as the case is now on about 60 per cent. of speculative housing sites in the South of England, that a developer is accustomed to using self-employed labour for, say, his bricklaying work. The men come in on a lump-sum basis, they do the job, and then off they go to the next site.
Under the Bill, it seems to me, the developer will have to take on the responsibility of paying their taxes and contributions by means of the 20 per cent. construction contract levy and the 32 per cent. Finance Bill levy, or not employ them at all; or he can demand that they join a registered sub-contracting firm or form one of their own and get on the register. I think that that is a fair summary of the situation.

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The first choice, to shell out, as it were, would obviously be bad economically for the developer, but in an area of desperate labour shortage like the South-East, and because of the declining number of craftsmen, I fear that he may be unable to resist it. The second choice, that of not taking them on at all, may not be open to the developer concerned if he has a job which must be done quickly, and if there is no one else in the area to do it for him. I shall come back to the third choice in a moment. The fourth would take a good deal of time. It may be followed by many old-established gangs, but, although it is possible that they may do it, if they had not been inclined to join unions or if they had not been inclined to work competently as self-employed persons, I find it hard to see why they should do so as a registered firm or partnership working on their own account. Therefore I do not think that the Bill makes much difference there.
Presumably, what the Government hope for is the third choice, that is, that all lumpers will join recognised sub-contracting firms as direct employees. Perhaps they will. Perhaps they will not. But even those who do will still be responsible to site managers and so on just as they were before, although the foreman's authority will, naturally, be somewhat increased, though, perhaps, only marginally. Therefore, safety and good workmanship will not necessarily be improved. It rather depends on the foreman.
As regards unionisation, most established firms are already well known to the district organisers of the unions, and a large number of their direct employees are not unionised now. I doubt that the unions will be much more successful under the Bill than they are numerically now. Men join unions for economic reasons and to defend their interests. Whether these reasons will seem any more compelling after the passing of the Bill, I am not sure. That remains to be seen.
I come now to certain other facets of the Bill which are not wholly satisfactory. First, the question of the register. Obviously, this is a point to which we shall return in Committee, but it is worth starting to consider it now. Phelps Brown sug
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gested a register, and I support it, but it would be beneficial if we began to think about another name for it. I say that because, as the Minister knows, the Forbes Committee on quality registration is now sitting and is to report, I believe, early next year.
It is proposed that the register under the Bill will be set up in October. I fear that there may well be some confusion in the public mind between the two, and clients may tend quite naturally to think that this register will be a list of good builders, whereas it will be nothing of the kind. This cannot be too strongly emphasised. It will be a list of builders and sub-contractors who have satisfied minimum qualifications in regard to insurance and tax payments. It will say nothing about quality of work. I hope that this will be made clear, if it is not clear already to the general public, when the Parliamentary Secretary winds up.
Now, the proposed fee for the register. The rumour was, certainly until today—I am not sure that the Minister did not say something about it at his Press conference —that it would cost £5 per firm, and registration would have to be renewed annually at a further cost of £5. I suspect that the Minister is open-minded about this, but we should like to hear more about it.
The cost of establishing the register is stated in the Explanatory and Financial Memorandum to be £80,000. If there are about 60,000 organisations on the C.I.T.B. register at present, and assuming that they all join the Minister's register, about £350,000 or more will be raised in fees. Clause 10(3) provides that any surplus may be paid over by the Minister to the C.I.T.B. or " to other specified purposes "—those are the words in the Bill, though at present they are unspecified—and we want to hear a little more about that.
As the register is, in effect, a statutory licence to trade, I see no reason why a firm should have to pay to join it. I hope that the Minister will consider that. If a fee is to be Paid, it should be sufficient to pay for the administration of the thing and, perhaps, no more. Employers already pay large sums to the C.I.T.B. by way of levy, and I imagine that they will not thank the Minister for a second indirect levy of this kind, particularly in the present atmosphere when

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there has been a certain crisis of confidence in the C.I.T.B. itself. I hope, therefore, that the Minister will look at that point again.
One difficulty in framing legislation of this kind is how to deal with the genuine self-employed tradesman, the local jobbing carpenter, for example, who is in business on his own account. He has, after all, an absolutely essential part to play in society. He is vital in domestic maintenance, and he is already in over-short supply.
The proposal in Clause 2 is that he can get on to the register provisionally, provided that he has a reference supported by an " authorised person ". This may be a Committee point, but it is again a matter where thought should be given now to what an " authorised person " is. Will it be another contractor? Will it be a J.P. or local councillor or anyone who knows the man?
The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Charles Loughlin): His bank manager.
Mr. Chichester-Clark: The hon. Gentleman says that it will be his bank manager. I am not sure whether that is an official or an off the cuff reply, but we must know about that.
Many of these people do not belong to any kind of trade federation. There will be the problem of letting them know about the procedure for registration and the need to apply. That is a fairly urgent matter, because the register is to open on 1st October.
I want next to deal with the appointed day for the tax deduction proposals to come into effect. This is stated to be no earlier than 1st April next year. Between 1st October, 1970, and 1st April, 1971, the 30 civil servants—let it not be thought that I am asking for more—engaged on this job will have to register 60,000 building firms. I wonder whether that period is long enough. Can it and will it be done in that time?
I want to know what is to happen to those firms—there must be thousands of them—who are now on fixed price contracts and who will not, without very great difficulty—I do not see how they will do it at the moment—get rid of their self-employed labour between now and
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April next year. The Minister may say, " Bad luck. You should never have taken them on." But I think that, on reflection, he will appreciate that in many areas there is no choice. That is an anomaly that we shall have to explore carefully in Committee.
One proposal in Clause 2 (1) which is unsatisfactory is that, when the Government are examining whether an applicant to join the register has really paid his tax, they can have details of his tax affairs sent from the Revenue to the Ministry. This may be inevitable— I know that there are precedents—but I believe that it is a feature which should be examined carefully. It is, after all, a kind of invasion of privacy which we should think about very carefully before we finally let it go. I am sure that the Minister will agree with me on that point.
It is clear from Clause 3, especially subsection (2)(b), that a partnership of men cannot be registered unless it also employs the same number of men as there are partners. That clearly seems designed to stop any labour-only gangs registering. While I appreciate the logic of that requirement, I think that it needs to be considered rather carefully.
I understand from builders, whose judgment both the Minister and I know and trust, that there are many old-established gangs working on housing in particular who pay their taxes under Schedule D and their self-employed contributions. I think that where an old-established partnership or gang can substantiate that they have fulfilled all their obligations and can satisfy the Revenue that they are genuinely self-employed and entitled to be taxed under Schedule D, it is at least open to question whether they should still be excluded from the register altogether. The Bill is, after all, concerned with tax evasion, not altering the employment pattern of the industry. Therefore, perhaps we can have a look at that particular matter.
In conclusion, the Government have, in my view, acted a little later than I had hoped—I appreciate the point about it, and I am not going to play party politics over the lateness of their action to deal with a problem which is at worst a danger to the public, at best an irritant to the taxpayer and the Revenue, an

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embarrassment to one of our great industries, and a source of weakness to the trade unions. To some extent the Government must face the fact that they are, as it were, dressing a self-inflicted wound, because no one can deny that there has been a trend towards self-employment and that what was a trickle has become a stream and is in danger of turning into a flood through the imposition of the self-employment tax.
One way to diminish this problem would be to relieve the industry of S.E.T., of which it pays a quarter of the yield, or at least to reduce the burden of tax falling upon it which is having so many other serious and long-term effects upon an industry which was willing and eager to put to the test the truth of the Prime Minister's pre-election assertion that housing in the new Britain came first. Of course, the industry was never given a chance to do its job. The Government's action over S.E.T. in particular has weakened the industry now and affected its long-term prospects by the fall in the intake of apprentices and built up the problem which we are discussing today.
The Bill may do something to prevent tax evasion, and that is very welcome indeed, but whether it will do much to reduce the danger from bad workmanship or prevent erosion numerically in the trade unions remains to be seen. So far as it goes, we welcome it and will do everything that we can to improve it in Committee.
5.7 p.m.
Mr. W. S. Hilton:I am happy to declare an interest. About three years ago I first asked in this House that a register of builders be established in the construction industry. I am also an executive of the Federation of Master Builders, which welcomes the Bill in principle and will try to do what it can, in consultation with the Minister, to ensure that finally it brings about equity and justice for the best elements in the construction industry.
After the Phelps Brown Report there was pressure in this House for much quicker introduction of the Bill than we have had. The industry in general has wanted registration along the lines of the recommendation in the Phelps Brown Report to be introduced as quickly as possible to control the situation.
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The Bill has come before the House rather like a reluctant debutante, but nevertheless we welcome it. I know that there have been difficulties in drafting. The simplicity of some of the provisions in the Bill shows that a great deal of work has been involved. The Minister has consulted a number of organisations, and this has taken time. I thank the Minister, on behalf of the Federation of Master Builders, for his courtesy and the consideration that he has given to its proposals put forward to him both personally and through correspondence.
Tributes have been paid to Phelps Brown for the report upon which this legislation is based. It would be remiss of the House not to pay tribute to the Minister and to the various officials in the Ministry who have produced the legislation arising from that report. It must have been at least as difficult to produce the legislation as to collate the facts outlined in the original Report.
The hon. Member for Londonderry (Mr. Chichester-Clark) has instanced the great difficulties that the industry has faced through labour-only sub-contracting and self-employed. I am pleased to echo his sentiments and to say that he perhaps underplayed on this occasion some of those difficulties. I believe that the growth of labour-only sub-contracting and self-employed has almost destroyed the traditional structural fabric of the construction industry. It is not possible to take an estimated 250,000 men out of normal direct employment and put them into these other forms of employment without weakening the direction of the genuine builder and the structure of the trade union movement. The growth of labour only sub-contracting was a great disadvantage for both the operatives and to genuine employers.
Without wishing to be dramatic, I felt that the growth of those forms of employment might be the major twentieth century problem if we took no action to curb it. I could not see why, if avoidance of financial responsibility was to be allowed legally, a genuine employer should remain in existence, or genuine operatives who were willing to accept their responsibilities should continue to do so when great financial advantages were to be gained from not doing so. The example of the construction industry was being followed by manufacturing and

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other industries, and there might have been a real crisis in industry generally. Something had to be done to stop the rot. It is well we are starting with an industry in which the worst evils have arisen, but I think that if we had not taken action similar circumstances would have arisen in other industries.
The only way in which we can have a constructive industry, be it the building industry or any other, is by supporting genuine employers' organisations and operatives' unions which have a responsibility towards the industry and are prepared to uphold its best traditions. If we destroy the fabric of the industry by making it financially rewarding not to be responsible it will be a great blow, and all genuine people in the industry will accuse the House of allowing a bad practice to continue instead of passing legislation to stop it.
The hon. Member for Londonderry was impatient about the delay in introducing this legislation to the extent of introducing his Private Bill. If he has precipitated the introduction of this Measure by that action, I convey my thanks to him. As I said earlier, I know that there have been great difficulties in drafting the Bill, and I think that we all accept that.
It may seem suspicious to continue this kind of policy link between the Opposition Front Bench spokesman and myself, but I give the greatest weight to the hon. Gentleman's view that we do not want merely a negative Bill which seeks merely to gather taxes and impose levies. If we do not follow the hon. Gentleman's line of reason and make this a positive Bill which will affect the industry beneficially we shall have missed a great opportunity. Most people in the industry, both employers and unions, may conclude that the Bill is designed solely to help the Chancellor of the Exchequer. They must be assured that it is designed to help the industry itself by stopping the rot that has occurred through the malpractices of a considerable section of the industry.
To take up another point made by the hon. Gentleman, I think that the registration fee could be a psychological barrier to which the good firms would object. It must be understood that the registration fee will not be levied only on
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people who have never accepted their responsibilities. It will be paid by all those who come on to the register, and I assure my right hon. Friend that my federation's view is that the builders who have always paid taxes and levies will be the first to register. This figure of £5 could, therefore, be looked upon as another tax on people who have always fulfilled their responsibilities. I think that the by-products of registration will be so vast that in the interests of getting the industry going, we should ensure that the registration fee is not a psychological barrier.
An example of what I have in mind on the fee, to which perhaps I might draw the Minister's attention is now developing in the gas industry. The Gas Bill, which is now going through the House, provides for a register to help the industry to improve standards, a kind of quality register which the hon. Member for Londonderry thought it would be good for the building industry. It was decided that something had to be done to ensure that there were good standards of gas installation. Therefore there was created the Confederation of Registered Gas Installers, appropriately named C.O.R.G.I. for short.
The ramifications of C.O.R.G.I. will be far more widespread than this register, and it will cost the gas industry a great deal of money. There will be a national council of C.O.R.G.I. and also regional councils upon which there will be representatives of employers and other bodies interested in gas installation. However, because the need for safety and better standards in gas installation services is the first consideration, no fee is payable for registration.
If that can be done for the gas industry, I think that the Government should think again about the proposed registration fee in the Bill, especially as there are provisions for levy payments in any event.
Still on the question of barriers, let me put to my right hon. Friend one which has been raised by a powerful organisldon in the construction industry. He may have had notice of it already. It is claimed that employers in the construction industry are generally opposed to the Bill because it will make them act as tax and levy gatherers on behalf of the Government. The Federation of

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Master Builders is the largest employers' organisation, and that kind of opposition is not forthcoming from it. The short answer to that allegation is that this legislation will fail if employers become tax gatherers. The real intention of the Bill must surely be to make every employer want to register and to pay his financial responsibilities direct.
I am rather disappointed that a major organisation should have made such an allegation, because it implies two things. First, that employers will have to continue collecting the levy from unregistered sub-contractors; second, that employers will be prepared to use these subcontractors. I hope that, if anything is achieved by the Bill, it is that genuine employers will want to register.
Mr. Chichester-Clark: I am not sure what the hon. Gentleman is saying. Who made that allegation?
Mr. Hilton: I understand that Mr. Pearce, the National President of the N.F.B.T.E, said that employers were opposed to the Bill because they would have to act as tax and levy gatherers for the Government The simple answer to any major contractor who is feeling apprehensive about this is that he can avoid all the form filling and the gathering of the levy and the surcharge by dealing only with registered sub-contractors Certainly the members of my federation will take that line where possible
One thing about the Bill which pleases me is the possibility of making payments to the Construction Industry Training Board. The board has undergone a great deal of criticism recently and it may be no secret that my organisation has been most vociferous in criticising the levy demanded by the board. That does not mean that we oppose the basic principles of the C.I.T.B. We do not. We support them, but the best way to do this is by being constructive where we can. With so many operatives in the industry avoiding any contribution to the Construction Industry Training Board the onus for supporting the Board has been placed upon the genuine employer, and we are very happy that the Bill will in some way redress the balance while assisting the C.I.T.B.
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I want to make one comment, which I hope will be helpful, on the operations covered by Schedule 1. If we are legitimately to collect contributions for the Training Board, Schedule I should cause the same operations as the C.I.T.B., but I see no reference in that Schedule to painting and decorating, whereas in the training board's own schedule of operations these are covered. If we arc to collect levies for the training board we must ensure that those from whom we collect are the people who should be paying the levy.
The major concern of most builders with whom I have been associated—and I have gone round the country in the last few weeks, trying to collect their views so that I can appropriately represent them to the Minister—is that no loopholes should exist. This weekend I went to the Eastern Counties Annual Conference of the Federation of Master Builders and it was made plain at that Conference that while the Federation supported the Bill in principle it wanted to make sure that it bit on the entire industry as much as possible—that there were no evasions through weaknesses in the Bill. If there were loopholes the genuine builder and the genuinely employed operatives might suffer even more because of the extra responsibilities placed upon them by the Bill.
At that meeting it was explained that to some extent a registered builder is having the balance redressed in his favour. He cannot be undercut by " moonlighters " or " gypsies " doing work for local authorities and public bodies, because Clause 11 (3) ensures that anybody working for local and public authorities must be registered. May I add a few other suggestions for tightening up the provisions of the Bill?
Under the 1969 Housing Act the amount of improvement grant allowed to private persons to improve their own housing has been increased from £400 to £1000. That could mean an expenditure of £2,000 in work done on any private house, half the expenditure being covered by public money. I hope that the Government, in conjunction with local authorities, will ensure that this considerable amount of money devoted to repairs and maintenance will be payable only to work done by builders registered under this Bill.

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The National House-builders Registration Council scheme attempts to ensure the employment of reasonable methods of house construction, by making certain arrangements, in conjunction with building societies, which have the blessing of the Ministry of Housing and Local Government. Could the position be looked at further, so that only registered builders are employed under the N.H.B.R.C. scheme? Perhaps the Minister will go further, and invite building societies to consider the advance of second mortgages to private clients for the purpose of repairing, renovating or improving buildings, on the understanding that registered builders are employed for the work.
Some hon. Members opposite have hinted that, even if people are self-employed, the Bill should affect them. I believe that their comments are justified. Members of the public require greater protection than do local authorities, who have architects and others to protect them. The private client has generally nobody to protect him. My organisation has said, in evidence to the Forbes Committee on registration, that the private client must be given protection and that the registered builder is at least a step in the right direction. We should also realise it is not only the self-employed one-man band who caters for private clients. Under the Bill at the moment a firm with 20, 40 or 1,000 men doing work for a private client would be exempt from the necessity to register, so long as it does not sub-contract.
If the Minister cannot overcome this problem, will he at least indulge in a publicity campaign, explaining to the people that their interests will be better served if their work is done by registered builders, who would have their various insurance policies and carry out their other responsibilities?
I must stress here that people in the building industry do not avoid taxes legally just because they are labour-only sub-contractors. There is no legal avoidance for such a sub-contractor. He may be a moonlighter, with no fixed address. He may simply dodge his taxation altogether. But there is no legal way in which he can do so. The way in which tax avoidance and the avoidance of other levies takes place is through
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self-employment. That is the only legal way in which it can be done. Therefore, labour-only sub-contractors work individually as self-employed persons or in working partnerships as self-employed persons, to avoid taxation legally. If we do not bring these people within the ramifications of this Bill and make them responsible for taxes and levies a serious loophole will still exist.
Clause 2(4) and (5) specifically exempts the self-employed from registration. I take it that the Minister means that, having excluded them from registration, they are to be treated as unregistered, and that the main contractors collect from them their various commitments. I understood that that was the intention of the Bill. I question the legality of this and shall be grateful if the Minister will comment. Does the Bill give a person the right to do something which apparently is not legally justified? Does the Bill give a main contractor the right to extract S.E.T., and other levies from self-employed people?
The Chancellor and the training board have said that they are not liable to pay S.E.T. or the levy in certain cases. Secondly, if that is the position I should like to see the Chancellor make these people responsible for certain taxation and a change in the Industrial Training Act, to make these people responsible for paying the training levy. If we do not do that they will be exempt from S.E.T. and the Industrial Training Act will exempt some of them from paying any training levy. Yet we have the Bill treating them as unregistered and allowing main contractors to extract such payments from them. I hope that some explanation will be given on this point because it is of major importance.
I do not sympathise with the approach to the self-employed. At one time the self-employed man in the construction industry was represented by the 30,000 or 40,000 one-man businesses, painting and decorating or doing bits of handiwork. Today " self-employed " means mainly those working on building sites, sub-contracting to main contractors and who would never do this unless it was a way of legally avoiding their obligations.
Two ways in which they have avoided their obligations have been to do with the training levy and S.E.T. Government

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argument has justified their exemption here. As to the training levy it has been said that a self-employed man has no one to employ and therefore is not liable for the training levy. This great construction industry trains the man who becomes self-employed, and his replacement. I do not see how any man should be able to extract himself from a financial commitment for training his replacement simply by the device of becoming self-employed. I have always thought that they all ought to pay the levy.
Mr. Keith Speed: My understanding is that at the moment labour-only sub-contractors pay aper capita levy, through the main contractor to the C.I.T.B. I do not know whether it is enforced. The hon. Gentleman is arguing that there is complete evasion, but if there is this per capita payment by the main contractor where labour-only sub-contracting is employed then it is not so.
Mr. Hilton: That is reasonably accurate. This is recent " legislation " by the Construction Industry Training Board but this is only partially trackling the problem. Any self-employed person who does no sub-contract work is still exempt. There are many who cater directly for a client. The small and medium size builder faces his main opposition from those doing work for the small house-builder and he is saying that the loophole for the self-employed must be stopped if genuine builders are to remain profitably in the business.
Then there is S.E.T. The hon. Member for Londonderry described it as " self-employment tax ". I was hoping that it was a Freudian slip—
Mr. Chichester-Clark: I hope that HANSARD did not hear it in the way the hon. Member did.
Mr. Hilton: I can assure the hon. Gentleman that I was concentrating upon his thought. There was a telepathy going between us that was perhaps causing him to say certain things! The Government have exempted the self-employed person from selective employment tax on the basis that they do not employ anyone and are unable to meet one of the main philosophies behind the tax, which is the achieving of efficiency within manpower.
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I have made my position clear, as regards the building industry, and as a Labour Co-operative M.P. I do not think that S.E.T. should apply within the construction industry. It has been discriminately applied only to the genuine builders in the industry. Others have avoided it and it has offended against the best people of the industry, in the interests of the worst elements. Let me take the Government's point of view, because it is important that the nettle of the self-employed is grasped once and for all. True they do not employ anyone and cannot achieve efficiency with those whom they manage, but each self-employed man is still a unit of labour and he could perhaps be using his own unit more efficiently if he were with a firm of contractors, working with a team.
He ought to have S.E.T. levied on him and then he can decide whether he could be more efficiently employed within the team. At present within the industry the tax instead of being a premium to ensure productivity is a premium against it. There can be a builder with operatives who refuse to adopt legal avoidance and therefore are all genuinely employed. His overheads, through taxes and levies, is £6 to £7 per man. They may produce £4 or £5 more in output per week than the self-employed person. Yet the self-employed person, because he does not pay his taxes and levies, has a financial advantage over the more efficient team. He is still £1 or £2 better off than the genuine team. This situation has to be tackled if this Bill is to be effective.
Builders and unions whom I know welcome the Bill because they believe it will help the industry regain the stability that it has lost and will bring an end to the worst elements in the industry profiting at the expense of those who are the backbone. I hope that the debate will show that the House is not basically divided on the Bill but is trying to discover the best methods of ironing out some of the anomalies, so that ultimately there will be equity in the industry helping those who for too long now have had to suffer penalties while the worst elements were increasingly favoured. If this House can send out a signal to the genuine people in the industry that it has decided the time is right to redress the balance it will have the support of the construction

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industry in bringing about the required results and for the first time in many years we will have an industry in which employers and unions who have been seeking to do the best for construction will find their efforts beginning to be rewarded.
5.35 p.m.
Mr. Christopher Ward: Hon. and right hon. Gentlemen on both sides of the House have stressed the ill which is occurring in the construction industry as a result of the practices which this Bill seeks to cure. There is probably not much to be gained by going over that ground. The Bill not so much seeks to plug a loophole which has appeared as to mend a gap in the fences which surround the compartment in which most of us live our lives and pay our taxes and our National Insurance contributions as employed citizens.
It is a gap which has allowed many people to flood through into a nearby compartment where the self-employed exist, those who pay rather less contributions and get less benefit from the Welfare State. It is a compartment which unfortunately has rather weaker fences so that those who seek to abuse the provisions and get away without paying anything at all can do so. Let me consider the position of the person who is genuinely an independent contractor. He has his disadvantages—a lack of security a lack of sick pay or occupational pension. The larger income which he can obtain by being in this category he desperately needs if he is to make proper provision for retirement, sickness and accident comparable with the provisions of the Welfare State.
Thus he is not necessarily financially better off because he has a bigger income at the end of the week or month than others. One of the troubles is that many self-employed persons are imprudent enough not to make the sort of provision which would be made for them if they were employed. Nor do they provide for the consequences of their negligence. The self-employed cover is a very wide class. On the one hand, they can be the poorest casual workers, perhaps not working all the time, but on the other hand they can be the highly-paid craftsmen who will remain self-employed, and perhaps even labour-only self-employed under some
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circumstances despite the provisions of the Bill. In other walks of life, some of the highest paid in the country, whether consultant surgeons or Queen's Counsel, are also in this status of the self-employed. So this status probably stretches from one end to the other of prosperity, and it will do so despite the provisions of the Bill.
Mr. Speed: Does my hon. Friend appreciate that as Members of Parliament we are technically self-employed?
Mr. Ward: This is an interesting question. I came to the House slightly more recently than my hon. Friend and I was told that I could elect to have contributions paid in one way or another, and so I elected to pay them as an employee. [HON. MEMBERS: " Oh."]
Mr. Heffer: I hope that the hon. Gentleman will let me into the secret; I have been misled.
Mr. Ward: Perhaps I am confusing the position slightly. The answer may lie in the fact that I have another employment outside the House—[HON. MEMBERS: " Ah."]—from which I am grudgingly granted a few pennies and in which I am technically employed. My own case may therefore be slightly different from that of other hon. Members and I will not place too much reliance on that. The fact that hon. Members are self-employed only goes to enhance the reputation of the self-employed or independent contractor as a category.
Mr. John Ellis: No; quite the opposite.
Mr. Ward: I let hon. Members speak for themselves.
Perhaps one of the troubles is that our so-called National Insurance Scheme is not a national insurance scheme but an employment insurance scheme. It applies to people who are working in employment, but those who are self-employed within its terms are not covered by it. Not for them the heaven of being unemployed under the present Government, because the) are materially worse off if they are not working for the moment; not for them industrial injuries benefits or earnings-related supplements to other benefits; and not for them redundancy payments if they are no

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longer needed. None of these things accrues to them. The hon. Member for Liverpool, Walton (Mr. Heller) may be interested in the redundancy point; I hope that he is.
Mr. Heffer: So will the hon. Member be.
Mr. Ward: Because the independent contractor does not get these benefits, he pays lower contributions and the Phelps Brown Report stressed how much he could save each week. On the other hand, although he pays lower contributions and is entitled to less benefits, he has a wider range of choice, because he may make private provision if he wishes.
All this being in or out of the Welfare State. being able to choose or not one's benefits, depends on the distinction between employment and self-employment, a distinction which is confused and narrow, a distinction which is set out in a whole schedule to the Phelps Brown Report—I ploughed through it this morning and was still very little the wiser—a distinction which it is often difficult to draw in particular cases.
It may or may not be right to allow people to choose to contract in or out of the Welfare State by being employed or self-employed. It may or may not be right to allow people to be in or out of selective employment tax by choosing to be in a category. But what cannot be right is that the choice between being in or out should depend on so fine a distinction between what in essence are different forms of employment rather than different kinds of category.
If it is right that people should be able to choose whether to pay higher contributions for better State benefits, that is a choice which should be open to all, and if it is wrong that they should be allowed to choose, nobody should be allowed to do so, or perhaps only those who certainly will provide for their retirement or sickness or injury. In other words, the window cleaner and the plumber need industrial injuries benefit more and not less than the bank employee, and construction workers in all categories need unemployment benefit more not less than many classes of shop assistants. Yet the distinction as to whether they get it depends on the very narrow division between employment and
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self-employment rather than upon whether they work in an industry where they are likely to need the benefit in question.
It is for that reason that I regret that the " deemed " approach was not found more practicable by the Ministry. Perhaps more progress will be made with that in future years. Although entitlements and all these benefits stem not from any idea of social justice or reason, because of them the self-employed under the Welfare State are second-class citizens. They become even more second class under the Bill, because, as the Minister said, the Bill is intended to make the status of employment advantageous against the status of self-employment. Yet I question whether this is the right approach when all sides admit that the category of self-employed will continue to contain highly-skilled craftsmen and other people who must remain independent in the industry.
Surely the right way in which to deal with the situation in the round—and I appreciate that it may not be immediately possible—is to bring into the full ambit of the Welfare State those categories of men, of craftsmen, who will remain self-employed, but who nevertheless should have the benefit of all our Welfare State provisions and not remain second class citizens outside its provisions. Surely the way in which to deal with the ill is to remove the basic distortions which have caused it, and not just stick our finger in the little hole in the dyke and hope that that will mend it, but rather to relieve the pressures which are giving rise to the escaping water.
If that were done, the Minister would not have to distinguish between the various narrow categories, as in the Bill, not between work for contractors and work for private individuals. He would be dealing instead with an industry in which whether a man was technically an independent contractor or technically an employee, the same contributions would be paid and there would be entitlement to the same benefits, and in which, therefore, the category would not depend at all upon the contributions, but on the most advantageous method of work. This is an approach which I commend to the Minister for future consideration.
The Bill treats the symptoms rather than the cause of the ill in the industry.

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In so far as it treates the symptoms and is likely to be successful, I welcome it and regard it as a great step forward in the direction I want to go, but not until we can think of a more fundamental approach to the whole area over which we extend our Welfare State will we have a lessening of artificial self-employment in this and other industries.
5.47 p.m.
Mr. Eric S. Heller: I should like first to compliment my right hon. Friend on introducing the Bill. He did so modestly and moderately, but in a way which may not have spelled out the problem which has been facing the building industry for the past decade. The hon. Member for Londonderry (Mr. Chichester-Clark) was also guilty of this fault.
I do not take so pessimistic a view of the Bill as the hon. Member for Londonderry takes. I do not believe that labour-only sub-contracting will automatically be wiped out and, over the years, we may have to block some of the loopholes which will be found. But the Bill is an immense step forward. I share the view of my hon. Friend the Member for Bethnal Green (Mr. Hilton) that it should go from the House that it is not merely a question of dealing with tax evaders, but that this is dealing with a most important problem as a system within the industry. This is an historic Bill and it is an historic day for the industry. The Bill needs strengthening in certain respects, and later I will make some proposals to this end.
It is obvious that we in the construction industry are faced, in the labour-only system, with what I can only described as an evil curse. It has been with us for too long and, in particularly the last decade, it has grown greatly. What the hon. Member for Swindon (Mr. Christopher Ward) proposes would in no way solve the labour-only evil, which needs much more drastic treatment.
I am a member of the Amalgamated Society of Woodworkers, and since the only other building operative in the House happens to be a member of the Government, I will probably be the only true building operative to participate in the debate. My counterpart, representing a Government Department not directly concerned with the Bill, will obviously
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not be taking part. My union has about 120,000 members. The National Federation of Building Trade Operatives, with which my union is affiliated, contains a total membership of about 409,000. When one realises that there are well over one million workers in the industry, it is obvious that the trade unions still have a long way to go before they have solved the problem of organisation for this industry.
Mr. Hilton: To be more accurate there are about one million workers in the private construction industry, but, adding to them those who work in other construction concerns, the total is about 1½ million.
Mr. Heffer: I said there were well over one million employed in the industry. I will be dealing more closely with statistics later.
There are some other unions in the industry which are not affiliated to the N.F.B.T.O. but they are so unimportant numerically that I shall not refer to them. It is important to realise that the trade union movement is a powerful force in the industry, particularly among craftsmen, and that in terms of representation and organisation, it has a definite point of view on the labour-only aspect. In their evidence to the Phelps Brown Committee, the construction unions pointed out:
" Fundamentally, our objection to labour-only sub-contracting and self-employment is that by its very nature it corrupts, leads to indiscipline, destroys morale and fragments the construction processes to the point where management techniques become impossible to implement, and this leads to inefficiency and high costs which, in the long run, are an unnecessary strain on the economy of the country as a whole."
What, in practice, does this pernicious system of labour-only mean? It cheats on holiday-with-pay stamps, National Insurance contributions are not paid—thus depriving the Revenue—income tax is not paid—depriving the Revenue even more greatly—S.E.T. is not paid, and also the C.I.T.B. does not get its proper share in levy payments. Labour-only also leads to inefficiency and had workmanship.
Most important, the labour-only system neglects safety. A worker in Liverpool who was engaged on a demolition project fell from the top of the building

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that was being demolished and was killed. This sort of thing happens regularly in the building industry. In this case we discovered that he was a labour-only worker and his widow was immediately faced with trying to discover against whom to claim.
I took the matter up long before being elected to this place. I was able to get something done about the safety regulations and the firm in question was dealt with from that angle. However, I was not able to help the widow, who did not receive any compensation. This is just one example of what labour-only means.
It also means negligence in health and welfare matters. In the industry there are not only regulations dealing with health and welfare but standards which the trade unions insist should be applied. This is not done under the labour-only system. Further, labour-only makes an utter mockery of organised industrial negotiations and is destructive to the trade union movement.
Mr. Christopher Ward: Would the hon. Gentleman agree that all the points he has listed, with perhaps the exception of the last one, apply only to abuses of the independent contractor system but would not apply to an independent contractor who was properly insured and who engaged in proper contracts? In other words, is not the hon. Gentleman criticising the system when it is abuses of the system that he should be criticising?
Mr. Heffer: Of course, I am criticising abuses of the system. That is what the Bill is all about. We are dealing with facts, not with high-falutin' theoretical possibilities of dealing with this problem. Let us consider concrete facts and decide how to deal with them.
Hon. Members may be interested to learn of the sort of things that are at present going on in the industry. For example, the labour for the brickwork of a £3½ million power station was contracted out to a company which had precisely £100 capital, and the two men in the firm were Irish joiners. Under the labour-only system, that firm was able to win a contract of that nature. Unfortunately, when a trade union tried to drive this labour-only firm off the
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site, the National Federation of Building Trade Employers financed the court proceedings on behalf of the two joiners and it was argued that the union was sabotaging the national effort by its action in trying to get these " cowboys " off the job.
Another point was brought home to me at the weekend when I was talking to a bricklayer in my constituency. He said that he had gone to a job near Liverpool which was fairly well manned, there being about 150 operatives on the site. He found that on Thursday and Friday afternoons he was practically on his own. The site was a sort of desert. Everyone disappeared. When he asked where they had all gone, he was told that they had gone to draw their dole. His figures may be exaggerated, but he pinpointed the problem.
That is what has been happening. I have been as great a critic as anyone else of the Government's unemployment policy, but the unemployment figures are inflated because, with the labour-only system, some people have been drawing unemployment benefit whilst at the same time carrying on with labour-only work. We must end that abuse as soon as possible, not only in the interests of the Treasury and of the trade union movement but in the interests of every person who pays his proper taxes.
Today, I asked the Merseyside district secretary of the National Federation of Construction Workers whether in the last period there had been a continuation in the growth of labour-only sub-contracting on Merseyside, and he told me that there had been.
That fact brings me to a very important point in the Phelps Brown Report, because that report, unfortunately, in one respect does not show a proper understanding of what is going on. It points out, for example, that in those areas where there is a high incidence of unemployment, labour-only sub-contracting is very low. The fact is that even in areas of relatively high unemployment we get a growth in this type of work. Unemployment is no longer a deterrent to the growth of labour-only sub-contracting. I understand that on Merseyside certain firms now pay £18 for 1,000 bricks laid. Gangs operate in this way, consisting of two bricklayers to one labourer or four

929
bricklayers to two labourers. That is an indication of the kind of payment that is being made.
The Phelps Brown Report said that between 165,000 and 200,000 operatives were involved, but the figures published in the Employment and Productivity Gazette for March, 1970 shows a register of 1,263,000 male construction workers. Taking the two sets of figures together, they show that one-sixth of the operatives are engaged on labour-only sub-contracting. That is a very significant figure, and one that we must make certain does not increase.
Paragraph 335 of the report refers to
"…a Ministry of Social Security Survey on sites in the South-East and North-West late in 1967 which found only 13 labour-only sub-contracting employers altogether, all with fewer than 20 employees, but about 700 self-employed persons who were not employers —though not all of these were necessarily labour-only."
that finding underlines the nature of the problem we face.
Paragraph 330 states:
" Our own Survey's findings on the extent of labour-only sub-contracting are set out in chapters 5 and 6…The usage varied according to the size and scale of operation of the firm, and was greatest among medium and large firms, half of which were using labour-only at the time of the Survey. Among the firms with more than 300 employees, the proportion using labour-only was about 60 per cent."
A few years ago the trade union movement discussed with employers the problem of the growth of labour-only subcontracting, and from those discussions there emerged working Rule No. 8. That does not mean that the trade union movement was very happy about that working rule—the unions wanted it to go much further—but it was the end product of those discussions.
Many hon. Members who say that they are speaking more or less on behalf of the employers, or expressing their views, tell us, holding the it hands to their hearts, " We are not in "avour of labour-only." If that is the case. why do the employers use labour-only? Why did not that 60 per cent. of employers using labour-only refuse to continue with that form of subcontracting?
Only today I have heard that John Laing, one of our biggest contractors, a firm which has th Runcorn development
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contract, has only recently dismissed its bona fide employees and gone over to labour-only. The Merseyside trade unions are to discuss that matter with those employers next Wednesday. I tell the big employers, " You, too, have a responsibility, and that responsibility is not to indulge in this practice." A very important lead could be given by those firms.
The trade union movement welcomes the Bill, as it did the proposals in the Phelps Brown Report. I want to quote a circular on the Phelps Brown Report sent out by the N.F.B.T.O. to all affiliated unions in January, 1969. It says:
"These proposals are aimed at eliminating the worst features of the present anarchical situation. They will make it impossible for the more lawless forms of labour-only subcontracting to be carried on and they will probably have the effect of making it somewhat more difficult for individual workmen to set themselves up as such contractors. It may well be that in the long run it will be in the public interest for the number of small building contractors to be reduced."
This is what I emphasise:
" we should make it clear that we fully accept that (i) legislation must be so framed as not to damage the genuine established, specialist trade sub-contractor; but (ii) though we remain fundamentally opposed to the practice of labour-only sub-contracting we recognise that in the present situation the national economy requires that there should be a strenuous effort made to meet the building programme—above all the Government's house-building programme—and we are prepared to accept that in the short term some amount of labour-only sub-contraction under carefully controlled conditions may be a necessary evil."
I have quoted that because I think it important for the country to know that the trade union movement is not being irresponsible on this question. It recognises that there is a problem and that we have to deal with it.
I come to one or two aspects of the Bill itself. The provisions dealing with insurance are excellent. I gave the example of the widow who was left unable to claim compensation. I still think there is some danger in the Bill because on occasion it may be difficult to determine liability. There is still an element of doubt about this. There should be some sort of fund available in the event of people not being able definitely to determine liability. They should be able to claim from that fund.

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This is an important point which I hope will be taken into consideration.
I do not agree with my hon. Friend the Member for Bethnal Green that we should not have a registration fee, but I agree with him in one sense. If the fee is paid only by decent builders, once again those who genuinely carry out their obligations will be paying and those who do not carry out their obligations will not pay. Therefore, the register should be compulsory. Then it would take in every building contractor of any size. We should make it compulsory for those involved in any way in building work.
Apart from giving definite aid to the C.I.T.B., two other things should be considered. Some of the money gained from registration fees should help to set up an industrial relations school for the industry. This school could take representatives of the work people, shop stewards, trade union officials and representatives of management. It would be of the kind which is highly developed in the United States of America. It could be associated with one of the universities. Perhaps there could be two such schools, one in the North and one in the South. I put this forward as a positive proposal for one way of using some of the money which will come from the fees. Also, selected groups of workers from the trade union side and representatives from management could go to various other countries from time to time to study building methods there, to learn from them and apply them in this country.
Certificates of registration should be made available on all sites on which a registered builder is working. Copies should be available in the main office, at the main works, and on sites. If that were done, it would help to enforce payment of the levy.
Why do we exempt Northern Ireland? I do not say that the hon. Member for Londonderry should not have spoken in this debate, but it seems strange that he should be speaking officially on behalf of the Opposition when the Bill does not apply to Northern Ireland. In Committee I hope that this provision will be eliminated and the Bill will be made to apply to the whole country.
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The Bill is a very important step forward. It is not the last word in dealing with the problem of labour-only and it is not the final answer, but it is an important step. It is a necessary step, not only to deal with tax evasion, with holiday stamps and so on, but to ensure that in the industry we may have a proper negotiating machine and know that when negotiations take place it will cater for the whole industry, not merely a part of it. This Bill will help to end the chaos and anarchy which exist in the industry. I think that in the long run it will help towards efficiency in the industry. No one can tell me that labour-only is an efficient way of building houses and other premises. It is the very opposite.
I stress that we should make the register compulsory although that should not be an alternative to the levy. We should have a compulsory register and a levy to deal with those who in some way or other manage to get through the net. A firm could mushroom, as they do in this industry, for a short period and do a particular job. Then by the time the Revenue caught up with it it would have liquidated and gone out of existence. That is one of the dangers with which unfortunately I do not think the Bill deals. A compulsory register would help in that problem.
Mr. Loughlin: My hon. Friend will appreciate, of course, that a firm which wants to be registered has to take out an insurance policy. Therefore, mushrooming for a short period would be very doubtful.
Mr. Haffer: I agree. Even so, loopholes will be found. I do not criticise the Bill. I hope that it achieves its worthy aim, but I believe it is important to voice my doubts and say where I believe the weaknesses are. During the war builders in Britain were registered under the Defence Regulations. Many other non-professional bodies are registered. The trade union movement is keen on the compulsory registration of building employers.
I welcome the Bill. It is a great step forward. I hope that it will be strengthened during its passage through the House. I hope, too, that we shall not hear from certain employers that they are

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all in favour of labour-only subcontracting being dealt with and then afterwards learn that those same employers employ the maximum number of labour-only sub-contractors.
6.21 p.m.
Mr. David Steel: My speech will not be as long or detailed as that of the hon. Member for Liverpool, Walton (Mr. Heller) for the good reason that my knowledge of this subject is not as extensive as his is. The hon. Gentleman's speech was an excellent example of how the House is helped by hon. Members bringing a wealth of their outside experience to debates.
On behalf of the Liberal Party I welcome the Bill, the debate on which has produced an atmosphere of almost uncomfortable amity throughout the House. This is a matter which has concerned my party for some time. We were pleased to hear of the coming of the legislation. Now that it has arrived we support it.
Like the hon. Member for Walton, I hope that the fact that the Chancellor has taken such a great interest in the Measure will not lead people to get a warped view of its purpose. Although it is important to eliminate tax and National Insurance evasion, equally important are the other two matters which the Bill sets out to deal with. The first is the fact that people employed in labour-only contracting organisations may not be properly insured when working and, further, that members of the public are not adequately covered in cases of accidents resulting from the activities of such organisations. The second factor is the comparatively low standard of work which can result from shifting groups of people outside the proper control of management or the trade union structure.
The hon. Member for Walton made an important point about benefits accruing to those who suffer loss, either the loss of a relative or personal loss from working in labour-only concerns. As to minor loss, we have reached the point where there is sometimes a direct incentive for men to opt out of employment in favour of self-employment in fairly unorganised gangs, because the supplementary benefit which can be drawn should hard times arise, even though the stamp may not have been
934
paid, may be just as much as the amount which can be drawn by a more law-abiding citizen who has paid his National Insurance contributions over a period of years.
I disagreed with the stricture which the hon. Member for Walton made on employers for their use of labour-only sub-contracting. The reason for their using such labour is not hard to find. In recent years the impost on employers has greatly increased in terms of the poll tax, which the National Insurance contribution regrettably now is, and the selective employment tax. Therefore, there is a direct temptation for the shortsighted employer to sign on self-employed men and people for whom he has no responsibility in terms of S.E.T. or the employer's share of National Insurance contributions. The increased costs of this in relation to the wages bill must be the reason why employers are tempted to indulge in recruiting such people.
Mr. Heffer: Did not the Phelps Brown Report make it clear that of the sample of employers taken seven had increased their numbers of labour-only people because of S.E.T., two said they had not, and 30 to 40 said that it had made no difference?
Mr. Steel: I qualified my remark by referring to the short-sighted employer. I do not say that it is a particularly worthy reason, and I am not sure that it is one which would be given in answer to a questionnaire or to probing. However, I put it forward seriously as one of the reasons for this increase in recent years.
The Minister is one of those Government members who is very fair-minded in presenting a case, but he was open-minded almost to a fault on the question of likely costs to the industry. What are likely to be the administrative costs on the industry? Can we be given a more precise idea of what the Government have in mind as to the registration costs? The industry accepted the Construction Industry Training Board and the levy on a different cost structure from that now prevailing. Some firms, although they welcome the Bill in principle, are a little worried about the possible costs.
I hope that the Bill will have a useful effect on regularising the operation of building firms themselves. Regarding S.E.T., I agree with the hon. Member for

935
Bethnal Green (Mr. Hilton). The Liberal Party has always thought it illogical that the selective employment tax should have been applied to the building industry. In Scotland—and, I believe, over the country as a whole—there are grounds for concern about the number of firms that have gone into liquidation. In Scotland two large firms—Arnott Macleod and Duncan Logan—went into liquidation recently. If the Bill helps to improve effieciency and labour relations, it will be of benefit to the whole public.
Lastly, why have the Government drawn the Bill in such a narrow way? As the Chancellor of the Exchequer has shown such an interest, presumably this is a Bill in which the Government as a whole had an interest. Is it not advisable to end labour-only sub-contracting in all walks of life? Although its biggest manifestation is in the building industry, it is by no means confined to the building industry.
When the Government announced their intention of introducing a Bill such as this, I believe that some of the electricity boards announced that they would abandon the practice of labour-only subcontracting. I know that the Minister has no direct responsibility for other industries, but presumably he was involved in consultations on the type of Bill to be produced. Why will not the Government discourage the Forestry Commission from continuing this practice? I was in correspondence with the Department of Employment and Productivity on this before the Bill was published.
Although I welcome the Bill, I express some disappointment at the fact that it does not extend beyond the narrow confines of Schedule 1. The Government have missed an opportunity to introduce the excellent principle of controlling the spread of labour-only contracting in an industry such as forestry, where it has bad social consequences and where all the arguments which have been advanced in relation to the building industry apply equally forcibly.
6.30 p.m.
Mr. Douglas Houghton: This is substantially an anti-evasion Measure—evasion of income tax, of selective employment tax, of social security payments and of conditions of
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work. From an income tax point of view, this Bill is years overdue but I imagine that the Government have not felt able to erect this rather elaborate anti-evasion apparatus until the need for it went quite beyond the stopping of income tax evasion.
I think it was my hon. Friend the Member for Bethnal Green (Mr. Hilton) who said that he hoped this Bill would not be regarded as principally for the benefit of the Inland Revenue. I think it is desirable that it should be regarded as being for the benefit of the industry as well as for the benefit of the health of taxation and social security administration.
Also, if we are to look at the anti-evasion aspect of the matter, it would be a bad thing if the House were to hound tax evasion higher up the scale and allowed this to continue unabated over a fairly wide area. There is no doubt that there has been a great deal of tax evasion by this system of labour subcontracting. Wherever one or two Inland Revenue people have met together, this point of scandal—for it has been no less—has been freely condemned. I suppose that income tax people tend to be a little cynical—it is an occupational disease—and they frequently say that there are two forms of taxation—pay-asyou-earn and pay-if-you-like. There is no doubt that a great many people involved in this tax evasion operation have not liked to pay and have not paid.
A point which interested me appeared in the Explanatory Memorandum about the effect on staffing which this Bill is likely to have. I see that the estimated staff requirements for administration of the register and the levy in the case of the Inland Revenue Department are 95 in the first year, 90 in the second year and 65 in the third and subsequent years. This, I assume—in fact, I feel sure—relates only to the staff required to operate the register and collect the levy. We may have to wait for the Finance Bill to tell us what the additions to staff will be for the Inland Revenue to deal with the hundreds of thousands of additional tax liabilities. There is no doubt that many people will come into the tax net who have not been there before. That, indeed, is part of the purpose of the whole exercise.

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I am a little conscious of the staffing of the Inland Revenue Department, not because I have any direct interest any longer but because I am constantly nettled when I hear people say that Chancellors of the Exchequer have introduced certain proposals in their Budget statements for the benefit of the Inland Revenue. No Chancellor of the Exchequer has ever done any such thing. This Bill and its counterpart in the Finance Bill will certainly impose additional work on the Inland Revenue.
My final point relates to Clause 2, and it was referred to by the hon. Member for Londonderry (Mr. Chichester-Clark). My recollection may be at fault, but I do not remember ever having seen in any Bill before a provision similar to that on the top of page 4 of the Bill which relieves the Inland Revenue of any obligations of secrecy in relation to taxpayers' affairs for the purposes of this Bill, if called upon by an authorised officer of the Minister for information.
One can have different views about the secrecy which the Inland Revenue should observe in matters entrusted to it by taxpayers. One point of view may be that the Inland Revenue should be an all-seeing eye and that other Government Departments should be all-seeing eyes, that anything within the framework of public administration should be freely interchangeable, that information may be passed from one Department to another, and that information supplied for one purpose should be used for another. That is one extreme point of view, that anything which comes within the purview of the State should be used by the State for its legitimate and statutory purposes.
That is not the view that has been taken up till now. Indeed, I believe I am right in saying that even when it would have helped the Inland Revenue to know when people began to draw their retirement pensions so that the Inland Revenue could get busy on bringing them within the tax liability for the year, instead of these matters being left until the subsequent tax year with probably tax arrears attaching to them, difficulties were raised by the Ministry concerned about disclosing to the Inland Revenue information which was in its hands as the responsible Department for the social security schemes.
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I believe also—my right hon. Friend the Minister of Public Building and Works will correct me if I am wrong—that various proposals have been made at different times to the effect that details of all Government contracts should be disclosed to the Inland Revenue Department so that the Inland Revenue could keep a tag on contractors who were in substantial business relationship with the Ministry of Public Building and Works, and, indeed, with any other public Departments responsible for contracts, including the Post Office. I believe that all those overtures to be put in possession of knowledge of these affairs have been rejected.
It has been a cardinal principle of public administration that information compulsorily given to one Department should not be used for purposes other than those for which it was given. That has kept everything in watertight compartments—the Inland Revenue never disclosing, and other Departments not disclosing to the Inland Revenue. Indeed, I believe that at the present time if a deserted wife writes to the Department of Health and Social Security asking for the address of her husband, even if the Department is in possession of the address it will not disclose the information, so fastidious are Departments in this respect.
If we look at the top of page 4 it will be seen that to check whether a sub-contractor has been operating a "pay-as you-earn " scheme for a year or more the Inland Revenue may be called upon to disclose the facts. I should have thought that in a matter of this kind, as in similar matters, a declaration, with a penalty for a false statement, would have been enough. It may be that the Minister thinks he is not dealing with people of the highest standards of integrity, and since in many cases he has been cheated on the one hand he fears that he may be cheated on the other and, therefore some kind of discipline must be imposed upon these people which would be resented by more worthy citizens.
I will not associate myself with any implied vote of no confidence in subcontractors but as a principle it is important. The hon. Member for Londonderry thought at first that it might be a Committee point. Then he thought that it was of sufficient importance to mention

939
on Second Reading. I certainly think it is. This is not incidental to the purpose of the Bill; it is a new principle introduced to police the main proposals in the Bill.
Mr. A. P. Costain: The right hon. Gentleman is such an expert in these matters that perhaps he could help me. Does the Inland Revenue staff have any degree of security different from any other civil servants'?
Mr. Houghton: They are forbidden to pass information on to any other civil servant. There is no inter-communication of this kind at all. The fact that each of them may be within the restraints of the Official Secrets Act, or, in the case of the Inland Revenue, a declaration of secrecy, does not give them any licence to disclose information elsewhere. I have made the point and it will have to be justified. A breach of this principle is to be regretted, and if it is to be justified because the type of person we are dealing with may be a little less reliable than the normal range of taxpayers I could give my right hon. Friend a list of other candidates. There are plenty about, and it is astonishing how they exist in groups as though there were a psychological or some other condition attached to particular vocations.
Generally, the Bill is to be desired and is long overdue. Probably its late appearance is due only to the build-up necessary to make it more justifiable than it would have been had it been mainly or only for income tax purposes. Certainly the financial inducements to continue with this type of arrangement have mounted year by year until they are now quite substantial. It will clean up a good deal of the irregularities in this industry. From that and other points of view it is to be welcomed.
6.43 p.m.
Mr. James Allason: The House and the industry fully accept the principles of the Phelps Brown Committee and there is no approval for the worst excesses of labour-only subcontracting. At the same time I did not go the whole way with the hon. Member for Liverpool, Walton (Mr. Heller), who termed the whole of labour-only sub-contracting as an evil curse. While the Minister expressed disapproval of the
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avoidance of any employers' obligations, the Government have rather forced this on themselves.
This flows partly from the taxation system and partly from S.E.T. For example, in the taxation system there are great differences between the tax position, as regards allowances, of a self-employed man and an employed man, because treatment under Schedules D and E is different. This disposes people to try to become self-employed. The Government have deliberately organised the system in that way. It is not for them to complain if people wish to be self-employed.
Then there is the failure to follow up those who have succeeded in avoiding tax. It is not possible to blame the Inland Revenue for this because the Government have placed such a heavy burden upon it over the last few years and we know that it is fully stretched. In a perfect society it should not be possible for people to be able to moonlight on their income tax obligations.
However, firms are entitled to arrange their affairs so as to make life as easy as possible, within the law. The right hon. Member for Sowerby (Mr. Houghton) spoke of the evasion of S.E.T. and income tax. I think that he was wrong.
Mr. Houghton: I should have said "avoidance ".
Mr. Allason: Quite proper avoidance. The Government have deliberately said that those who are self-employed need not pay S.E.T., and have, therefore, encouraged self-employment. There is also the matter of the overheads of a firm on the P.A.Y.E. system. It is a heavy burden, particularly for the single employer.
It is not only in the building industry that the labour-only sub-contracting situation arises. It also takes place in the secretarial world. Single employers who wish to employ a secretary frequently find that they avoid a great deal of effort in labour, and incidentally S.E.T., if they employ a self-employed secretary. Life is much easier for them. This touches upon the point raised by the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) about the wider implications of this practice.

941
Turning to my objections to the Bill, I will deal first with the question of the fee charged for registration. It seems that this is solely to assist the Inland Revenue which will be involved in extra effort.
Mr. John Silkin Mr. John Silkin indicated dissent.
Mr. Allason: I see the Minister shaking his head. Of course there are 30 civil servants in his own Ministry. It is principally to meet their costs.
I feel that this is a dangerous precedent for all taxpayers. What is being said is that for a person to achieve the ability to say that he is not required to pay some special and overwhelming liability he has to register and pay a fee for the registration. I accept the registration, but I believe that the fee is an offensive innovation. After all, registration does not imply any warranty of competence. I am not sure whether it implies any protection to the public by way of insurance, though certainly it implies that the firm concerned has taken out an insurance policy approved by the Minister. But does the Minister intend to assume responsibility to the public in the event of something going wrong with that insurance? This is a matter which will have to be considered in Committee, because the insurance elements in the Bill have been rather skated over, in my opinion.
The Minister said that he was not proposing at this early stage to bring any of the insurance interests into consultation, and it occurs to me to ask how much consultation has taken place so far. He said, fairly lightheartedly, that he would take powers to prescribe the limits of insurance; but I think that he will find that difficult. The high peak of third-party insurance on the very big firm will not be identical with that of the small jobbing firm with two or three employees. The Minister will be in difficulty in trying to judge the right limit of insurance, because it will have to be done on the basis of the type of work undertaken. It is obvious that a scaffolding firm will face greater dangers to both its employees and the public than, say, a firm which is engaged on foundation work. The Minister said that he had not been able to cover the insurance gap. He has had a year in which to find a way to do it, and I am surprised that he has not been able
942
to by now. In my view, he should have more consultation with the insurance interests than he has had in the past.
I. am concerned about the genuine self-employed man. I think that the effect of this Bill will be to drive him out of the construction side of the building industry. I have in mind the man who is engaged in carrying out repairs for private householders and is directly employed by them. If he goes near the construction industry, he will find that he has to become an employee of a contractor. I do not believe that he will want to dodge into employment and then out again to self-employment. The result will be that he will not go near the industry again.
Under the Bill a single self-employed individual is not allowed to register. I think that the Minister should consider removing that disability and so allow a single self-employed man to register, with all the disadvantages of registration. That will not encourage a member of the lump, but it will encourage the skilled craftsman to take his part in the construction industry.
The Bill is an awkward way of dealing with a difficult problem. It would have been better if, alongside this solution, S.E.T. had been abolished from the construction industry. In that way, many of the troubles which have been discussed today would disappear.
6.55 p.m.
Mr. John Golding:I support the Bill wholeheartedly, but I want to draw attention to one or two matters in Schedule 1, which defines the scope of the Bill.
My concern arises from the fact that the Post Office has been putting out work to contract which was formerly done by direct labour and that these contracts are being fufilled by labour-only sub-contractors. Where as Post Office employees are opposed to such work being put out to contract, they are even more opposed to the work being undertaken by men who are virtually working at cut rates.
There is a great deal of unfair competition in the lump system which arises from tax evasion and tax avoidance. Post Office employees pay their taxes and insurance contributions only to see work taken from them by men who seem to be able to avoid and evade these responsibilities.

943
However, that is not the only concern of Post Office employees, because in many cases lump labour leads to dangerous and shoddy work. In the case of the Post Office contracts, it can be argued that the use of labour-only sub-contracting has led to shoddy workmanship and the possibility of danger. Among the work being put out to contract by the Post Office is the building of boxes underneath pavements and roads to house cables. Two disadvantages have been found when the work has been put out to contract. In many cases the boxes are built badly; they leak, and damage can occur to cables. More importantly, in the boxes there are anchor irons which are used to anchor the pulleys for drawing in long lengths of cable. It has been discovered that anchor irons fitted by lump labour come out too readily and create a hazard for the gangs who have to pull in the heavy cable.
I will not dwell upon the point, because it appears that such work will be covered by the Bill. However, I would have preferred to see telephone cable and equipment specially mentioned in Schedule 1 as work forming " part of the land ". I have no doubt that such work is covered, but it would have been better if it had been recognised.
I would also draw attention to the need to add telephone fitting to the third paragraph of Schedule 1. Increasingly, the telephone must be given equal importance to lighting, air conditioning, ventilation, power supply and water supply when one considers the services to be installed in a modern building. I hope that the Minister will consider adding a provision to Schedule 1 to make it clear to Post Office employees that not only cable and box building but all telephone installations in newly-constructed buildings are covered.
7.0 p.m.
Mr. Keith Speed:I give two if not three cheers to the Bill. We all know the truth of many of the examples given by the hon. Member for Liverpool, Walton (Mr. Heffer) about the various excesses on building sites. I know of sites adjacent to my constituency in Coventry, where I live, about which I had correspondence with the D.E.P. and the Ministry
944
of Social Security 18 months or two years ago and where widescale strafes were carried out by Ministry officers on certain building sites where gentlemen were climbing up trees and jumping over walls and so on. Undoubtedly there has been widespread abuse, apparently in the Midlands and on Merseyside and in London.
I remember that a constituent came to see me in great secrecy in the Central Lobby shortly after my election to tell me of the lump on London building sites and to say that the going rate for a National Insurance card was £5—I think it has now gone up—and that I could have as many insurance cards as I liked at £5 a time. Anything that can cut out such people is good not only for the industry itself but for the vast majority of taxpayers and National Insurance payers. I say in passing that it was one and three-quarter years ago that the Phelps Brown Report was produced. I do not think anyone can accuse the Ministry of rushing into the Bill. Nevertheless, here it is, and we can now have a look at it.
Basically, my first reaction on reading the Bill, and I must confess that it is still partly my second reaction, is that this is a tax revenue enforcement Measure. It will not add some of the positive benefits for the construction industry which I should have liked. One could almost argue that many of these provisions could have been introduced by the Treasury as part of the Finance Bill which we are shortly to see. Be that as it may, there are some aspects of the Bill which ought to be carefully considered in Committee.
I should like to refer first to the registration of firms. As my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) said, there may be wide misconception in the country about the use of the word " registration ". There is already a National House-builders Registration Council, and the Forbes Committee on the subject is sitting. When the hon. Member for Bethnal Green (Mr. Hilton) was speaking, he reinforced this point, because, having said that registration was valuable, he himself fell into the trap by arguing that certain companies and certain sub-contractors doing repairing work should be registered, presumably under the Bill. All that registration under the Bill would mean would be that certain conditions—mostly legal

945
conditions—were satisfied, that the contractor was basically a nice guy and paid his taxes and his National Insurance contributions and so on and had undertaken one or two insurance obligations to outside parties; and the Minister admitted that those obligations might not go far enough.
There is a great danger that many people, not aware of all the nuances and probably not knowing what the lump is, or thinking it something different from what hon. Members know it to be, will become completely confused. One foresees advertisements in the local, provincial, or evening Press to say, " Registered builder, registration number so-and-so, registered with the Ministry of Public Building and Works." This will have a cachet, some sort of guarantee. In fact, such a builder may be the worst in the city and fall far short of the standards demanded by the National Federation of Building Trades Employers. As hon. Members themselves have become confused on the subject, I hope that this is something that will be sorted out in Committee.
Clause 2 deals with the registration fee. I am glad that my hon. Friend the Member for Londonderry, the hon. Member for Bethnal Green and I are in accord about this subject, even though the hon. Member for Walton disagrees with us. If there is to be a registration fee it should do no more at the most than cover the actual costs of registration. In this sort of situation we want positively to encourage good firms, and even those which have not been so good—because in this connection one conversion is worth all sorts of other things—to become registered.
The fee of £5, or whatever the Minister may decide, is not large and will not cripple any firm and no one would argue that it would, but there is one important point of principle the hon. Member for Bethnal Green said that this registration was similar to that proposed in the gas industry. I do not entirely agree, because registration in the gas industry will have much more of an implication of quality than registration under this Bill.
The Minister suggested that a bank manager could be an " authorised person ". This is a matter which will
946
have to be cleared up. An authorised person will be in a position of some responsibility having to justify that a company is abona fide company, has been in business for a certain time, and so on.
I should like to emphasise the importance of a comment made by my hon. Friend the Member for Londonderry, although I appreciate that it could strike at the core of the Bill. Clause 3 will include partnerships of self-employed persons even if they have been in existence for many years—and the Minister said that labour-only subcontracting was a historical feature of the industry, not always to the disadvantage of the industry or the country—and had clearly paid their taxes and other dues. It would be a great pity if such partnerships could not even be considered and apparently had to be penalised and equated with the fly-by-night firms, the lump, which we all know about.
There is an aspect of Clause 5 which will require investigation in Committee. I am surprised that no time limit is spelled out in the Bill for the sending of a certificate of registration when an application has been approved. If an application is made to the Ministry it should be approved within a certain time. Individual companies and people could be involved in all sorts of financial loss if they had to wait a long time for a certificate. No doubt that is a matter to be pursued in Committee.
The hon. Member for Newcastle-under-Lyme (Mr. Golding) remarked that the Post Office was mentioned in Schedule 1. The hon. Member for Bethnal Green, with whom I find myself in great agreement, mentioned the absence from Schedule 1 of a reference to maintenance, painting, decorating and so on. The Minister touched on the subject, but it seemed a rather extraordinary omission. I hope that the Parliamentary Secretary will enlarge on that, because some abuses in my part of the world, not all, have involved maintenance, using " maintenance " in the widest sense.
There have been only one or two comments about selective employment tax, and this is not a subject which we should allow to go by default. The hon.

947
Member for Walton gave us some interesting figures about the great increase in labour-only sub-contracting over the past few years. The Phelps Brown Report said that in the five years from 1961 to 1966 it increased by 58 per cent. It is clear from the up-to-date figures given by the hon. Member for Walton that the figures must now be about 158 per cent., and still rising. One of the reasons why we have the Bill at all, not the only reason, is that labour-only subcontracting has been increasing over the past decade or more.
One has only to read what is said in the Phelps Brown Report. Paragraph 399 says:
" Our own inquiry showed that rather more large firms had used labour-only sub-contractors for the first time in the year following the imposition of Selective Employment Tax than in previous years. On the whole it seems probable that the previous trend towards self-employment was at least maintained throughout 1966–67, and this is significant at a time when unemployment in construction rose from 2½ to 5 per cent., so that the loss of security involved in a move into self-employment would have come to count for more. We are therefore concerned at the prospect of the inducement to move being further raised by the increase of Selective Employment Tax in September 1968."
That was written in the summer of 1968 at a time when the selective employment tax was 25s. a week and at a time when unemployment in the industry was nothing like as large as now. Since then we have seen selective employment tax go up from 25s. to 48s. a week and unemployment rise substantially.
We can certainly call in aid Phelps Brown to show that up to 1968 selective employment tax certainly had an effect, and the marked increase in the incidence of labour-only sub-contracting since then —notwithstanding that we have had consistently high unemployment in the construction industry over the last year—must fall very largely at the door of the Chancellor of the Exchequer and his predecessor, the present Home Secretary, because they are the real villains of the piece skulking behind the scenes who have largely brought this present situation about.
Certainly, if construction had been treated as manufacturing there would not have been the same high incidence of labour-only sub-contracting, and certainly if selective employment tax
948
were abolished—I do not say it would solve the problem because it would not —that would certainly make the work of the Minister and his Department a lot easier. One remembers arguing this not only with the present Minister but with his predecessor. They had apparently made their various gestures and suggestions to successive Chancellors, so far without effect. One of the reasons why we are debating this issue tonight is that these protestations and messages passed on over the past two years have not been heeded by their right hon. Friends.
The construction industry is going through a very difficult time at the moment. No one would deny that. One has seen output declining in real terms, and the industry has been hit by the general economic measures which the country is facing. It has been hit by a shortage of credit. The smaller builders and construction people have been hit by high interest rates. The operatives—and many of them are highly skilled men—in Merseyside and other parts of the country where there is a desperate need for housing have faced unemployment on a high level.
We have also seen something which should concern all hon. Members—it certainly concerned the hon. Member for Liverpool, Walton—and that is the decline in influence, power and authority of the unions within the construction industry. This is something which concerns me very much. I take the hon. Gentleman's point absolutely. If one wants good collective agreements, productivity bargains and all the rest in an industry which is almost by definition fragmented—as the building industry is—one needs sound and strong management and strong and sound unions. Clearly, over the past few years this changeover to labour-only sub-contracting has hit the unions hard. I wish I could see more in the Bill which would reinforce the unions and bring them back to the strength in which I should like to see them in the construction industry.
I cannot think that the Bill will greatly help the industry. We know it cannot give long-term confidence to the industry, and I also doubt that it can solve the problems of the unions at the moment or perhaps the problems of bad quality workmanship which has been associated with labour-only sub-contracting.

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But we must hope that it will, and we must try in Committee and elsewhere to strengthen and improve the Bill because the building and construction industry is one of the great industries in the country. It has been suffering under this evil—the excesses of labour-only sub-contracting are certainly evil—and I commend the Minister for at least, even at this late stage, introducing a Measure to curb those excesses.
7.15 p.m.
Mr. Tim Fortescue: The House will remember that last week the Minister firmly rejected any suggestion that there should be a tax amnesty for labour-only tax dodgers. He said that such an amnesty would not be acceptable to the country and I am sure that he is right. Since then, however, the Secretary of the Amalgamated Slaters, Tilers and Roofing Operatives said he thinks that unless something is done to deal with the situation which will arise when the Bill becomes law—as I am sure it will with the support of both sides of the House—then up to 100,000 men, and that is his figure, will be lost to the building industry. They will be unable to register under the terms of the Bill because of their fear of being caught by tax inspectors, Ministry of Social Security special investigators or fraud inspectors from the Supplementary Benefits Corn-mission.
This would create a very serious position in the industry which, as we all know, is not as prosperous as it might be. If these 100,000 building operatives were to be lost, many people would wonder what would happen to the industry as a whole.
I want to make what I hope will be a practical suggestion how this serious situation might be avoided.
Mr. Ellis: Has not the hon. Gentleman come across any of the real tragedies—as I have in my constituency—of men who have taken part in labour-only subcontracting, perhaps for two years and have come to the point where they have been caught up with by various people'? Surely we do not condone a situation where there has been wholesale evasion such as this? That is a problem which has always been there, and it has worried many people.
Mr. Fortescue: I am grateful to the hon. Gentleman, because he has taken the words out of my mouth. I do not want to condone it. This is not my object. A tax amnesty is not desirable—and I thought this was obvious from what I said—simply because it would be condoning malpractices which have been going on for many years. But undoubtedly a difficult situation will arise once the Bill becomes law and, without seeking to condone the practice, I should like to offer a practical solution of how it could be dealt with. If the tax inspectors and the special investigators were to attempt to follow up the intricacies of evasion, which have been going on for many years in some cases, with men on construction sites who have been working on a labour-only basis, they would practically go mad.
Mr. Houghton: If a worker has been evading his tax liability under this system and leaves the industry and goes somewhere else, if he becomes an employed worker then clearly the Inland Revenue will ask him where he last worked. He will not have a P 45 to present and therefore the catching up process begins. He can keep out of the clutches of the Inland Revenue only if he continues being self-employed somewhere else.
Mr. Fortescue: This is precisely my point. The right hon. Member for Sowerby (Mr. Houghton) has a great knowledge of these matters and I greatly respect his opinion. But I am worried about the very large number of people employed now under the lump who under the Bill will be greatly discouraged from being self-employed, because the advantages of self-employment will no longer accrue to them. What will happen to those men? They nearly all owe large sums of money to the State and the debt which will hang round their necks and will be a millstone for many years to come. They will be afraid to register in case the various inspectors catch up with them and they will be unable to take employment elsewhere, because they will not have a P 45 and if they have not got one no one will have them. If someone takes them on the tax inspector will catch up with them.

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But I have a practical suggestion for solving this dilemma which hon. Gentlemen are so anxious about and I am grateful for their help. If each case has to be examined—the 100,000 is not my figure, but there may well be that number—this will take a long time and a great many man-hours in the already overworked offices of tax inspectors and National Insurance inspectors. If, instead of having a detailed investigation of each man's case with all its intricacies, it were possible to devise a scheme under which each man who has been working on the lump were entitled to make a simple declaration that he had been working on the lump for so many years, on that basis his debt to the State could be assessed at so much per year, and this sum could become his debt to the State. If the matter were tackled in that way, instead of each individual sum having to be intricately calculated, and if a man could be told what his debt was and that everything else could be forgiven to him, he could take up employment again from the start, with that debt to be paid off out of future wages.
At present, the 100,000, or whatever the number be, are faced with no alternative because, as I have tried to show, they cannot take regular employment. There is nothing for them, so they will exist on the State in some way or other. If they cannot get supplementary benefit for themselves, their wives and children will be able to do so under our system. But if the debt could be assessed in the way I suggest, the man concerned being told, " You owe that to the State. Nothing else will be held against you, but that debt must be paid off regularly over the years ", the problem facing the industry of being in danger of losing a large number of workers might be greatly ameliorated. I suggest in all humility that something of that sort will be necessary if the work force of the construction industry is not to disappear before our eyes.
7.22 p.m.
Mr. A. P. Costain: In the tradition of the House, I should first declare my interest. I am at present a non-executive director of an international firm of civil engineers and building contractors, and I am a non
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executive director of a middle-size building company in the North-West.
Having spent 40 years in the building industry—and 10 of them in the House—I fully understand the problem which we are considering. I see it with great clarity, but I see the difficulties, too. One does not have to be long in this place to appreciate some of the problems in framing legislation to deal with difficulties which are none the less clearly recognised. I had the advantage also of being Parliamentary Private Secretary to a Minister of Works, during which time I saw the industry—which I had been in, man and boy—in a rather different light, and, as I say, I appreciated the difficulty of putting into legislative form measures to deal with something which seems simple in industrial life. In that respect, the Minister has my sympathy today.
It is noteworthy that the only two Bills dealing with the construction industry introduced by this Government have been, first, one for building control and licensing and, second, the Bill now before us, which, it is generally agreed, will make no great impact on the industry but is more a tax collecting Measure.
During the passage of the earlier Bill for building control, we on this side stressed how unnecessary it was, and the very fact that it has now been abandoned is proof of that. We warned at that time that the passage of such a Bill would lead to depression in the industry. I blame the Government to a large extent for the 1,000 million bricks at present in stock and the high unemployment and depression in the building industry, for the simple reason that architects during that time just did not get on with designs. We are suffering from that now. The industry considers that the present Government have been deliberately increasing taxation through the special S.E.T. imposed upon it, which, in turn, has increased the problem of labour-only subcontracting.
My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) has stated my party's attitude to the Bill. We do not wish to do anything to stop the collection of taxes. In our view, every citizen should pay his proper share of taxation. But this is a Measure primarily designed—it is so referred to in the various technical publications—as a Bill to deal with labour-only sub-contracting.

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The Minister himself referred to it as a Bill primarily to deal with labour-only subcontractors. I hope that the Parliamentary Secretary will tell us why that should be so. I can find no reference to labour-only sub-contractors in the Bill. In Schedule 1 there is clearly set out a division of operations in the construction industry, stating what is included and what is not, and I hope that the hon. Gentleman will tell us more about that.
There has been general agreement in the debate on the need for the Bill, although there has been a difference of opinion apparent on the benches opposite. The hon. Member for Bethnal Green (Mr. Hilton) said that the National Federation of Building Trades Employers took an attitude different from that of his own Federation. We have heard that the president of the National Federation made noises which the hon. Gentleman did not like. I have here the Press hand-out of Mr. Pearce's speech, given, I am informed, at a meeting of the Federation of Painting Contractors at the Kensington Palace Hotel on Thursday, 23rd April. All he said was—I think that this must be the remark to which the hon. Member for Bethnal Green referred—that as presented
"…the Bill is purely a measure to ease the task of taxation officials in carrying out their statutory duties, and what is particularly objectionable is that it imposes a fee on all employers in the industry for putting their names on a register which has no object other than of assisting tax collection."
I am not much of a historian, but I recall that there was a time when people paid funds to the Government for the right to collect taxes, though then they were allowed the profit from the tax which they collected.
I believe the general attitude of the National Federation on this matter is that, if the Government want a register of contractors, they ought not to impose on the industry the cost of preparing it.
The hon. Gentleman the Member for Liverpool, Walton (Mr. Heifer) takes an attitude which is really pre-Phelps Brown. In his view, the Government should abolish labour-only sub-contracting altogether, and he is disappointed that the Bill does not go far enough. Several hon. Members have quoted the passage in the Phelps Brown Report which makes clear that there is a role for the labour
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only sub-contractor, and I shall have a little more to say about that later.
My hon. Friend the Member for Swindon (Mr. Christopher Ward) made an interesting point on the question of the self-employed. The contribution from the Liberal Party was of interest, too, showing that it would support the Bill, though the remark of the hon. Gentleman the Member for Roxburgh, Selkirk and Peebles (Mr. David Steel), that forestry sub-contractors should come under the Bill, was, I thought, a little wide of the mark. Perhaps I might say in passing that, if he studies the Schedules, he will see that if a forest is adjoining a building or a house, it will be caught under Schedule 1. However, the question is one of degree as to how far the forest is related to the house or building.
Mr. David Steel: The forests I have in mind are rather extensive and nowhere near built-up areas.
Mr. Costain: I appreciate that. I was merely pointing to the difficulty of defining particular operations in this context.
My hon. Friend the Member for Hemel Hempstead (Mr. Allason) came back, very properly, to the question of insurance rates and how the size of a firm could affect them. He will readily understand that it is not only the size of the firm, but also the type of work which has a great bearing on insurance rates.
My hon. Friend the Member for Meriden (Mr. Speed) made a most important point, as did my hon. Friend the Member for Londonderry (Mr. Chichester-Clark), on what is meant by " registered builder ". Hon. Members will recall that we have made many attempts in this House to introduce legislation primarily to increase house-building standards. The last debate on the subject was on 25th November, 1966. Arising from, and encouraged by, that debate, the house-building industry introduced the House-building Registration Council which has made tremendous strides in overcoming any remaining fragments of ferry building.
By its own initiative the industry has introduced a 10-year guarantee on any house by a registered house builder. Many people in the industry are worried

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because they have no legal right to call themselves registered house builders, but if the Bill becomes law there will be a legal right for anyone who is registered to call himself a " registered " builder. To the general public he could be looked upon as a house builder, " registered ". If so, we would have an anomaly in that one- and two-man organisations, which can be set up under the Bill, would have a greater right to call themselves registered builders than a registered house builder who was able to give a 10-year guarantee covered by insurance. I suggest that it is necessary, between now and Committee stage, for some thought to be given to whether a term other than " register " could be incorporated. If the Bill is to deal with the unscrupulous—it is generally agreed that we are dealing with the unscrupulous—how easy it will be for them to register and become registered house builders. We need to think of another name.
We have had references to labour-only sub-contracting and other forms of subcontracting. It would take too long for me to describe to the House the many forms of sub-contracting which have generally been accepted in the building industry. Those who are anti-labouronly sub-contracting take the view that it creates shoddy workmanship. But the labour-only sub-contractor, particularly in house building, is an essential part of the industry.
The greatest number of houses are built by small- or medium-sized firms. Such a firm could not possibly keep on its staff a permanent glazier. It would not have enough houses to build to keep a glazier full time. It could not possibly keep on its staff a tiler, because there is not enough work. It could not build enough houses in the course of a year to employ such people full time. This is how the subcontracting business started. I am certain that people who are not familiar with the industry cannot appreciate the need for it.
I will tell the House a true story within my recollection concerning something that can be seen by any hon. Member who goes on to the Terrace. The group with which I am connected was to build the exhibition buildings for the Festival of Britain in 1951. One problem was to
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rebuild the wall from Westminster Bridge to Charing Cross Bridge. There are very few masons left in this country who have had experience of that work. We found, employing four or five different masons, that, because they had not been regularly employed on that type of work, the joints were not perfect. In the end they had to be laid by one man. There was an outstanding mason on that contract. He said that the only way to get the work done in time for the Festival of Britain and of the quality that such a fine structure demanded was to do it himself, which he did. If any hon. Member is interested enough to look at the wall, he will find that it is one of the best constructed in this country. So we must not assume that a labour-only sub-contractor is necessarily a man who would do a shoddy job.
Mr. Hilton: I find it hard to follow the hon. Gentleman. There seems to be confusion here. The hon. Gentleman has mentioned sub-contracting as a form of contracting to a main contractor.Bona fide sub-contractors—glaziers or any other tradesmen—have been in existence for years, and they have a good part to play in the industry. Everybody justifies their existence by their efficiency. I cannot see why the hon. Gentleman is using that situation to distinguish labour-only sub-contractors. What is the connection?
Mr. Costain: I told the story about the wall because it was directly labour-only sub-contracting. The mason did not supply anything else.
The first point that I want to make on the Bill is that the Minister says that it is primarily to deal with labour-only subcontractors. I am probably quite wrong, but I refer to what the Bill says in Clause 1(2):
" References to construction operations are to be taken
(a) except where the context otherwise requires, as including references to the work of individuals participating in the carrying out of such operations "
as set out in Part I of Schedule 1, which sets out in some detail to describe the construction industry.
Reference has been made to the wartime regulations—56 A B, I think they were called—which specified precisely what were construction operations. The Bill starts with a similar preamble, but

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it seems to have got altered in the course of time. As I read it, every contractor who is operating, or likely to operate, as a sub-contractor, be it labour-only or labour and materials, is required, if he wants to avoid the penalties laid down in the Bill to be registered. Is that clear?
Mr. John Silkin Mr. John Silkin indicated assent.
Mr. Costain: I am grateful to the Minister. However, it gets queerer and queerer, because on page 15, line 21, we get this extraordinary statement, considering what has to be registered:
" Operations which form an integral part of, or are preparatory to, or are for rendering complete, such operations as are previously described in this Schedule ".
That, to my mind, clearly defines the work of an architect—preparatory to. Are we then to assume that every architect has to register?
Mr. Ellis: Oh, no.
Mr. Costain: The hon. Gentleman says " Oh " something. I am asking the Minister to tell me whether he has or has not got to register. One can think also of the quantity surveyor, the heating engineer, the structural engineer, and all the professional services. I do not see any exemptions. Clause 2 is alleged to exempt, but those people are not exempt under its provisions. Why, therefore, are they not included in the Bill?
There are a number of specialist contractors who come to the industry from time to time. I recall an artist, Mr. Edward Halliday, who had the honour of painting Mr. Speaker's predecessor. He and a small team of his staff painted a mural in a building. Are we to assume that we have to ask a painter whether he is a registered building contractor? If he is not, the building contractor has to deduct the levy because he is working on the site.
Mr. Heffer: The hon. Gentleman's point has some validity, but let us consider his example of a painter. Surely, the painting of a mural is not essential for the construction of the building? It is done after the building is complete. It is not part and parcel of the structure. It is a different matter altogether.
Mr. Costain: The hon. Gentleman has probably seen the building of a town
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hall. Surely he is not saying that the mural in such a building is not painted until the building is complete? All I am asking the Minister to do is to tell me where I find these exemptions. One goes on to find references to people hanging curtains. It includes people laying carpets, and doing other ancillary work. The difficulty is that the definition has been too loosely drawn.
The Minister keeps on saying that the Bill refers only to sub-contractors. I cannot find this in the Bill. Perhaps the Parliamentary Secretary will tell us where it is. It has not been considered in that way by members of the Press. It is considered by many people that any firm employing one or two people is liable to be registered. That means that firms with up to 100,000 employees should register.
The Bill properly exempts firms which are operating overseas, but what is meant by " operating overseas "? When a civil engineering or building company is operating overseas it has some men operating in this country to deal with supplies, planning, and so on. Are they to be registered under the Bill?
At the other end of the spectrum there is the sub-contractor who comes from overseas. Hon. Members know that some American firms will allow their equipment to be installed only by an American company. What will be the taxing position of an American firm if we deduct 32 per cent. and 20 per cent? What will be the realistic result? This is a monopoly matter, and the firm will simply add 52 per cent. to the cost.
My hon. Friend the Member for Meriden referred to the secrecy of income tax matters. My hon. Friend is an expert on these matters and I was delighted that he drew this to the attention of the House. This is a worrying aspect of the Bill and seems to be a fundamental departure from established practice. It seems wrong that an employing authority should have the right to ask the Inland Revenue to pass on information which is fundamental to the contract. It is not only a breach of secrecy in the ordinary way, but in a particular way, because it relates to an employing authority.
Then we come to the question of partnerships. Clause 3 presents us with a

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most interesting situation. It is the most marvellous bit of drafting that I have read. The hon. Member for Liverpool, Walton has heard of dead men on building sites. Does he appreciate that one part of the Bill is designed specially to deal with a partnership which could lead to dead men? Clause 3(6) says:
" Where a person…ceases to be a partner…then, for the purpose of determining whether the condition set out in section 2(5) of this Act is fulfilled in the case of the firm, any person employed by the firm as constituted immediately before the date on which that person…ceased to be, a partner shall be treated as having been employed by the firm as constituted on that date."
How can he be " employed " before the date on which he ceased to be a partner? And if he can, why count him as an employee on the date he ceases to be a partner? Will this be so in all circumstances? He may have died. What is the purpose of that subsection?
The House has taken the view that the Bill ought to go through fairly quickly, but a number of realistic Amendments are necessary. My hon. Friend has offered the Government a quick passage for the Bill provided that they are prepared to see the reasonableness of our arguments and accept the Amendments which we shall put forward in Committee.
7.47 p.m.
The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Charles Loughlin): I think that we have had a very good debate, with little political content in the speeches. The hon. Member for Folkestone and Hythe (Mr. Costain) seemed to put up a number of Aunt Sallies, simply to knock them down again. If there is any validity in any of the points that he made I think that they would be better debated in Committee, rather than today.
Before dealing with the general debate may I refer to the point raised by my right hon. Friend the Member for Sowerby (Mr. Houghton) and some hon. Gentlemen opposite. I have in mind the 'reference to the Inland Revenue and the question raised by Clause 2(9), which says:
" No obligation as to secrecy imposed by Statute ".
The Bill does not create a precedent. The Inland Revenue keeps the affairs of tax
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payers secret except where discovery is permitted by an Act of Parliament. I have in mind the Charities Act, disclosure to the Charity Commissioners, the National Insurance Act, 1965, disclosure to foreign Governments where double taxation is involved, and so on. We shall consider this provision again, but I do not think that it creates a precedent.
One or two attempts have been made to make a little political capital out of the effect on the lump system of the introduction of S.E.T. I exonerate the hon. Member for Londonderry (Mr. Chichester-Clark). I can understand his trying to twist our tails a little at the end of his speech.
I concede that there may be grounds for assuming that S.E.T. may have accelerated the nominally self-employed categories in the building industry, but my right hon. Friend made it clear in his statement introducing the Bill that that was certainly not a new problem to the construction industry, and bearing in mind that the whole of the data on which the Phelps Brown Committee Report was based was collated prior to September, 1966, when selective employment tax was introduced, one can hardly ascribe the rise in the nominally self-employed as being consequent upon the introduction of S.E.T.
Mr. Chichester-Clark: I would not expect the hon. Member to know the answer at the moment, but it would be interesting to know what the speed of growth of this problem was from 1964—when Working Rule No. 8 came into effect—to the time of the introduction of S.E.T., compared with the period from 1961 to 1964, before Working Rule No. 8 came into existence.
Mr. Loughlin: That would be very difficult. We do a lot of estimating. My right hon. Friend has made some estimates. I concede that there may be grounds for assuming that there has been an acceleration consequent to the introduction of S.E.T., but not necessarily consequent upon it. This is not a problem that stems primarily from the introduction of S.E.T.; it was there for a considerable time before that tax was introduced.
I want to try to answer the points that have been made, but it will be difficult for me to deal with them as

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separate items, because they have been made rather extensively. The argument was raised about the danger of introducing a register. It was said that people may get wrong ideas and will assume that because a builder, a contractor or a sub-contractor is on the register it has a particular significance. It is said that people will assume that the fact of being on the register has a quality content.
As the hon. Member knows, the Forbes Committee is now considering whether it is desirable to have a quality register of this kind in the building industry. We would hope that all contractors and subcontractors will be on the register. That is the primary purpose of the Bill. In that sense there cannot be any confusion. If everybody is a registered builder it cannot be suggested that there is any quality requirement about it. I do not know how we can have a register—do not let us be under any illusion; the Phelps Brown Committee proposed a register—without calling it a register. I do not know what else it could be called. Perhaps we might call it a " Silkin "; but really we cannot call it anything but a register.
The hon. Member for Londonderry asked about the person who would give the reference. He will recall that I said that it could be a bank manager. He asked why we wanted the reference. All we want to establish is that the person making the application to go on the register is a person of reasonable repute. I should have thought that the simple provision made in respect of an application for a passport would be as good as anything else. It is simply a question of the establishment of the repute of the individual—making sure that he lives at a given address, and so on. If we adopt the same principle here as we adopt in respect of an application for a passport I can see no objection. The person giving the reference can be a bank manager, a solicitor, or a person in a similar position.
Figures have been suggested for the registration fee. I can assure hon. Members that in the Minister's view no definite fee has been fixed for either permanent or provisional registration. We require an application fee simply to cover the administrative costs, and in the case of provisional registration we might be inclined to consider a higher figure as
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part of a sanctions system against a frivolous application for provisional registration.
We propose to set a figure for the registration fee after consulation with the advisory panel that will be formed from members of both sides of the industry and possibly one or two other people. There is no question of our trying to set up a register and impose fees that would be burdensome to the industry. We merely want to cover the cost of administration. Any moneys over and above the administrative costs will be set aside for the benefit of the industry—whether they go to the Construction Industry Training Board or to some other organisation or purpose that the advisory panel suggests.
Mr. Houghton: Why should a charge be made for the cost of administration when that administration is 98 per cent. for the benefit of the tax-gatherer? We might just as well charge the taxpayer the administrative cost of sending in his tax return.
Mr. Loughlin: Whatever the percentage, it is also true to say that it will not only be for the benefit of the taxpayer; we are hoping that the Bill will be for the benefit of the industry—for both the workpeople's side and the management's side.
My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked whether a certificate of registration should be made available on the site. That question can be discussed with the advisory panel, and if the panel makes a recommendation on it I see no reason why it should not be carried out.
There is a little difficulty about making the Bill apply to Northern Ireland. We shall examine the situation, but we must accept that we could not impose this legislation on Northern Ireland because it might infringe on the rights of the Stormont Government. We should have to have discussions with Stormont before we could make the Bill apply to Northern Ireland.
I accept the point made by the hon. Member for Folkestone and Hythe and the hon. Member for Hemel Hempstead (Mr. Allason) about insurance premiums and the level that they will be set at, in relation not only to the size of the

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firm but to the size of the job. We have already asked both sides of industry to give us guidance on this. This can be done without any difficulty. With the experience and advice available we shall be able to fix the insurance cover in such a way that there is neither too much nor too little cover for the job we seek to do.
Mr. Heffer: Can my hon. Friend answer the point I raised about the firms which are not registered and which have working for them a workman who is injured or killed and a claim then arises through his widow? This is not covered by the Bill. We are talking strictly in terms of the registered firms.
Mr. Loughlin: I will spend a little time dealing with vicarious liability and insurance cover, but I wanted to deal with one specific point. It is all right saying that provision is made in the Bill, but it was the practical difficulties which were illustrated and I wanted to make it absolutely clear that we are not setting ourselves up as insurance experts but will be taking the requisite advice from both sides of the industry.
Mr. Allason: Does the hon. Gentleman not recognise that an insurance underwriter who has to settle these claims has probably far greater experience than those in the industry, who merely pass the claims on?
Mr. Loughlin: This may be so, but there will also be some experience on the part of employers. If we feel that there is any reason why we should consult insurance interests to get advice, then I do not see why we should not do so.
The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) asked why this Bill was restricted to the construction industry instead of applying to other industries where there was a similar problem. We are dealing with this industry because we really know some of the answers. I accept that there are other industries where it appears that labour-only sub-contracting is becoming a problem and representations have been made to the Government by various organisations. I hope that once this legislation is on the Statute Book it will constitute a good guide to what should
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be done in other industries, although I accept that there are difficulties because no industry is identical with another.
Mr. David Steel: Would the hon. Gentleman put this to his colleagues. I am dealing with the Forestry Commission, which is a public body. There is no need for a Bill because the Government are the main employers. It is something that Government policy ought to extend across the range of industry.
Mr. Loughlin: I will certainly draw the attention of my right hon. Friends to those remarks.
The hon. Member for Liverpool, Garston (Mr. Fortescue) raised the question of a tax amnesty. However, these people have to go somewhere, and if they leave the building industry they are caught anyway. Since the building industry is their industry there is every reason why they should remain there because they may as well remain in the industry where they can earn some money.
Mr. Fortescue: I am anxious for them to be caught but what I am not anxious should happen is that the procedure of catching them and calculating their liabilities should drag on and on for years, as I fear it will do owing to the intricacy of the problems that are set.
Mr. Loughlin: The Inland Revenue is pretty wise as to how far it can go and to how long an investigation can take. I do not think it will allow things to go on too long.
A good deal of the discussion has concentrated on the mechanics to be adopted for controlling labour-only subcontracting by the self-employed. The principle that something must be done to deal with the situation and with abuses of the present system is well accepted. It is only to be expected that there will be some reservations about the methods to be used in specific cases. The House is entitled to know where we have departed from the recommendations of the Phelps Brown Committee. The report was a thorough and well-considered study, and we have departed from it only for very good reasons and after a full examination of the issues involved.
The differences between the proposals of the Phelps Brown Committee and the measures put forward here are differences

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of execution rather than of intention. As my right hon. Friend said, we fully accept the analysis of the problem in the committee's report and the broad outline of solutions proposed. In some circumstances we are obliged to depart from the detailed recommendations.
The first departure arose on the question of admitting to the register as self-employed men who are, to quote the report:
" generally in business on their own account ".
This crucial question was raised a number of times this afternoon. Our view is that if any self-employed man were admitted to the register it would have to be on some basis which would not leave loopholes for men who were only nominally self-employed to gain admission. If they could gain admission the whole purpose of the legislation would be defeated.
Several ways of approaching the problem were suggested, and after detailed and careful consideration and discussion with the trade unions and employers' organisations, it became clear that no single test and no combination of tests could provide a clear method of deciding whether a man was genuinely in business. The only possible solution would be to set up a panel to consider each case, with presentation of evidence, investigation by the panel and a determination by the panel in the light of that investigation.
The only direction that could be given to the panel was that it should use its discretion in reaching a decision. This would have meant that the panel would have had to operate rather like a court of law, and it is obviously difficult to accept that sort of arrangement. Not only would it have needed presentation of evidence and investigation but there would have had to be some appeals machinery. We could not have had a panel of this nature, given discretion and an arbitrary power, without allowing the right of appeal. Any other method would, by opening the door to the nominally self-employed, have made effective legislation impossible. It was against this background that the decision was taken to restrict the register to employers.
It is true that that decision may seem harsh, but the consequences for the
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genuinely self-employed man are worth considering. First, the Phelps Brown Committee found that these men normally work directly for clients. In these circumstances, they would be unaffected by this legislation. Secondly, many self-employed men who are genuinely running a business will, no doubt, find it possible to arrange their affairs in such a way that they can meet the employer qualification. Nominally self-employed men, on the other hand, will not be able to do so. If neither of these circumstances applies and self-employed men wish to work for a contractor, the contractor will either have to take them on as employees or pay a levy of probably about 15 per cent. of payments to them.
My hon. Friend the Member for Bethnal Green (Mr. Hilton) asked whether a contractor would have the right to deduct levy from the payments made to the self-employed man in question. This will be up to the contractor. We do not give him permission to deduct anything. We say that if contractors employ self-employed men in these circumstances, the contractor or sub-contractor will pay the levy himself.
I do not think that there will be any distortion of competition, because every contractor who employs self-employed men will be under the same penalty for so doing. My guess would be that contractors would be prepared to pay the slightly additional amount for genuine craftsmen with specialist skills. I would guess that in these instances the contractor would be prepared to pay the 20 per cent., but not in any other instance.
Mr. Hilton: I am not reassured by my hon. Friend's explanation, because nowhere in the Bill do I find such a provision as that to which he has referred. I simply deduce from the Bill that if a man is unregistered, the contractor who employs him will have certain liabilities for payment but that these will be taken even from self-employed men, and that the levy upon them is to meet certain other taxes and items which people have been dodging but for which I do not find them at present legally liable. That was the point I was trying to clear up.
Mr. Loughlin: I am sorry if I did not make myself clear. I referred to the statement by my hon. Friend that

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it appeared that we were giving permission to contractors to deduct money from self-employed men. The Bill does not say that. It provides that if contractors or sub-contractors employ nonregistered self-employed men in this sense, the contractor or sub-contractor must pay a levy to the Government for so doing. Whether the contractor collects from a self-employed man would be a matter for him, but in that event he would, I think, be in difficulty under certain statutes. We say that a contractor or sub-contractor who employs self-employed men must pay the levy, whatever it may be.
The hon. Member for Hemel Hempstead referred to insurance. This is another matter in which we are not following the recommendation of the Phelps Brown Report. We found that it has not been possible to implement the recommendation of the Phelps Brown Committee to lay employer's liability vicariously on a main contractor in respect of all those working under subcontract to him. This was intended to deal with the case where the employees of several sub-contractors are working on a site and one of them causes an accident.
Unless it can be established which of the men is responsible, it might prove impossible to obtain damages. If the recommendation on vicarious liability were adopted, liability for damages would fall vicariously on the main contractor for whom all the sub-contractors were working as though he were the employer of the sub-contractors and their men. This would apply whether the person who suffered the accident was employed on the site or was a member of the public.
I am advised that vicarious liability in this form is a new legal and insurance concept. Its implications go beyond the construction industry, and detailed study will be required. Some basic problems still need to be resolved; for example, it often happens that there is more than one main contractor working on a site. Indeed, on many jobs which are done in phases there are often a number of main contractors on the site. I am advised that this is a difficulty which we have not yet been able to overcome.
My hon. Friend the Member for Liverpool, Walton asked me to refer to the
968
insurance qualification. While the insurance qualification required for legislation will not completely solve the problems of liability, I think that it will go a long way towards curing some of the deficiencies of insurance in the construction industry. Every contractor who wishes to register—this means virtually all contractors—will be required to take out employer's and third-party liability insurance, and the third-party insurance will also cover the acts of self-employed men who may be working for him. Thus, where self-employed men are working on a site for a sub-contractor, he will be obliged to take out such insurance as to ensure that the actions of those self-employed men are covered by his insurance.
Although the recommendation on vicarious liability is important, I do not think that it is crucial to the success of a scheme designed to deal with the abuses of labour-only sub-contracting by the self-employed. In the circumstances, it has been thought better to go ahead on the present basis rather than delay the introduction of the Bill, and leave the further implications of the vicarious liability proposals to be considered separately by the Departments of State which are involved.
There has been some argument about the possibility of an increase in building costs. Those suggestions are based on misconception of the way in which the legislation will operate. It has been suggested that the administrative expenses of contractors in operating the tax deductions and paying the levy will be considerable. The answer is straightforward. If registered contractors are engaged, there is no liability for levy, there is no liability for deduction of tax and, therefore, there is no administrative cost in this respect. It is our view that, once the Bill is in operation, employment of unregistered sub-contractors will be the exception rather than the rule.
The other possible source of additional cost is the expense of obtaining registration—not simply the fee itself, but the administrative cost entailed even in submitting an application for registration. I assure the House that great care has been taken to ensure that the clerical procedures involved are simple and inexpensive. The fee will be small, and we shall do whatever we can to meet the needs

969
of the necessary administrative costs without imposing too great a burden on the people in the industry.
On the question of insurance, much has been said about the need for contractors to be insured, and I have been asked whether this will place an onerous burden on contractors who will need to carry additional insurance. The insurance that we are demanding for those who go on the register will be of the type in respect of which premiums are already paid by reputable contractors.
On the question of building costs, we should not ignore the positive contribution which the Bill will make. My right hon. Friend has already indicated the wide range of quality of labour-only subcontracting in construction—at its best, a valuable contribution to the industry's working arrangements, but at its worst, in the words of Phelps Brown
" faulty work by irresponsible men concerned only with wresting the greatest possible gains from the industry in the short run, and more strained by their own standards or by the control of management."
A number of hon. Members have referred to the National House-builders Registration Council. I have the greatest respect for the work of the council and the improved standards it is creating. I would not have been surprised if there had been, in consequence of the nominally self-employed persons in the building industry, a high percentage of gerrybuilding in this section of the industry.
By preserving the best and eliminating the worst, this legislation will raise the standard of workmanship in the industry and give management an opportunity to improve its organisation and productivity.
The enforcement measures in the Bill will operate through the normal channels for the collection of taxes, and the implementation of these measures will be based on the tax year. This will allow a period for adjustment before the levy, and the tax collection measures announced in the Budget speech will be brought into effect from 6th April of next year. This period should be ample for most contractors to make any necessary arrangements, but those who cannot do so in time will be able to obtain an additional period of grace by applying for provisional registration.
This has been a good debate, although there have been some legitimate
970
criticisms. When everybody is saying that this is election year, I would not have been surprised had there been a more " vicious " attack on my hon. Friends and the Bill. However, most hon. Members have indicated that while they may have some reservations about certain aspects of the Measure they, like the industry generally, welcome it. Both sides of the industry have welcomed the Bill. Both sides of the House have welcomed it. I hope that we shall have the same degree of co-operation in Committee to ensure that the Bill becomes law as quickly as possible.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

CONSTRUCTION INDUSTRY CONTRACTS [MONEY]
Queen's Recommendation, having been signified—
Resolved,
That for the purposes of any Act of the present Session to make provision for the registration of persons undertaking work in the construction industry, it is expedient to authorise the payment out of moneys provided by Parliament of any administrative expenses incurred by a Minister of the Crown or government department in carrying the Act into effect.—[Mr. John Silkin.]

WAYS AND MEANS

  CONSTRUCTON INDUSTRY CONTRACTS
  Resolved,
  That any Act of the present Session making provision for the registration of persons undertaking work in the construction industry may—

  (a)require the payment of such fees in respect of registration as may be prescribed by regulations of the Minister of Public Building and Works;

  (b)provide for the fees to be paid into a Special Fund, established by the said Minister under the Act, with power for the Treasury to direct payments out of the Special Fund into the Consolidated Fund;

  (c)charge a levy in respect of payments made under contracts for the carrying out of work in the construction industry in cases where contractors are not registered, the levy chargeable in respect of any payment not to exceed 20 per cent. of the amount of the payment less so much (if any) as represents the direct costs of materials; and

  (d)provide for the levy to be collected by the Commissioners of Inland Revenue and paid by them into the Consolidated Fund.—[Mr. John Silkin.]

GUYANA REPUBLIC BILL [Lords]
Order for Second Reading read.
8.25 p.m.
The Joint Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Maurice Foley): I beg to move, That the Bill be now read a Second time.
This short Bill is a technical Measure which substantively follows the lines of previous legislation in parallel cases. I trust, therefore, that hon. Members will accept the Bill as being non-controversial.
On 23rd February of this year Guyana became a Republic. According to convention, the Governor of Guyana sought the agreement of other Commonwealth Governments to her remaining in the Commonwealth after the change to a republican Constitution. As the Cornmon wealth Secretary-General announced on 17th September, 1969, all the Heads of Government of the Commonwealth indicated that they would welcome Guyana's continuing membership of the Commonwealth. Guayana has, therefore, become the fourteenth State within the Commonwealth to have opted for republican status.
Guyana's change of status was anticipated during the preparations for its independence. As hon. Members will be aware, the Guyana Independence Act, 1966—and the Guyana Independence Order made under it—provided for Guyana to become a republic on the passing of a resolution by its National Assembly not earlier than 1st April, 1969. Such a resolution was passed by an overwhelming majority in August, 1969.
The Bill before the House provides that the law of the United Kingdom—and the law of the Channel Islands and the Isle of Man—as it applies to Guyana, will not be affected by the fact that Guyana is now a republic. The Bill will not apply generally to the law of Dependent Territories of the United Kingdom but only to Acts of the British Parliament and Orders in Council applying such Acts which extend to such territories. This is the common-form provision in such cases.
I am sure that hon. Members will join me in wishing the Republic of Guyana and its people continuing peace and pro-
972
gress for the future under their first President, Mr. Arthur Chung.
8.28 p.m.
Mr. Bernard Braine: I thank the Joint Under-Secretary for explaining this non-controversial Bill in his customary lucid and courteous fashion. I begin by joining with him in extending the good wishes of my hon. Friends on this side of the House to the new republic. We are glad that Guyana has elected to remain in the Commonwealth.
It is a good many years since I was last in that fascinating country. Here we have a new nation composed of six different races; a microcosm of the Commonwealth itself. It has faced extraordinary difficulties in the past and it faces many challenging problems in the future. It occupies a unique position in South America. Indeed, it was a Guyanese scholar who summed up his country's political and social isolation from its Latin American neighbours by describing it as an island almost entirely surrounded by land. Happily, these difficulties have at last produced a robust leadership which augurs well for the future of this new State.
I must express some surprise that although the new Republic was formally proclaimed on 23rd February two months should have elapsed before the Bill comes to the House. We should like an explanation, and some assurance that any future legislation of this kind will be dealt with more expeditiously. I cannot see why it should take two months from the declaration of the republic for what is purely a consequential Measure to be brought here.
As the Bill touches on the relationship between Guyana and Britain, I have three questions of substance to which I should like answers. The first concerns the provision in the 1966 independence Constitution for appeals from the High Court of Guyana to Her Majesty in Council in cases relating to the enforcement of fundamental rights or the interpretation of the Constitution. This provision seems to me to be anomalous now that Guyana is a republic. It will, presumably, be changed, but there is no reference to that in the Bill.
My second question concerns the long drawn-out border dispute between

973
Guyana and Venezuela. Venezuela claims over half the territory of Guyana. She maintains that an agreement reached between Britain and herself in 1899 is invalid. In February, 1966, a mixed commission was set up to seek a solution to the dispute. It was decided that if the commissioners were unable to find an answer fully by 1970 they should refer the outstanding questions to the two Governments concerned, which should then choose one of the means of peaceful settlement set out in Article 33 of the United Nations Charter. If the two countries are unable to do this the matter of the choice of the means of settlement is referred to an " appropriate international organ " on which they both agree or, failing agreement on this point, to the Secretary-General of the United Nations.
On 28th February, 1966, the right hon. Gentleman the Foreign and Commonwealth Secretary told the House:
" I believe that this agreement has dispelled the cloud which threatened to overshadow the independence of British Guiana, and I hope that it paves the way for a friendly relationship between independent Guyana and Venezuela."—[OFFICIAL REPORT, 28th February, 1966; Vol. 725, c. 895.]
Our country is not a party to the mixed commission, but it did sign the agreement which brought it into existence.
I raise this point now because no agreement has been reached on the border dispute, and the matter remains very much as it was in 1966. I believe that the mixed commission is expected to produce its final report in a few months' time. Unhappily, its setting up did not bring a cessation of border clashes. This is not the occasion to go into the matter in detail and I shall not detain the House on it, but it raises an important question in regard to our own country's relations with Guyana.
As I understand it, we have not undertaken any formal or contractual obligation in regard to Guyana's defence. However, on 18th July, 1967, the Prime Minister told the House:
" Her Majesty's Government would take all appropriate action to help any fellow member of the Commonwealth which was the victim of unprovoked aggression."—[OFFICIAL REPORT, 18th July, 1967; Vol. 750, c. 1711.]
Exactly what does this mean in the context of any difficulties which may arise in regard to Guyana in the future? Is there
974
or is there not an undertaking on defence? The House should be told.
My third question concerns our present and future relations with Guyana in the economic sphere. I believe that since independence trade relations between our two countries have developed smoothly, and that is good. Britain is an important buyer of Guyana's main currency earner, sugar, but we are providing aid to Guyana which is currently running, I believe, at about £;2 million a year, mainly in the form of loans. Thus, we have a close interest in seeing that Guyana's economic development is encouraged, and that nothing happens to diminish or injure her trade with our country or with the rest of the world.
I understand that under the Commonwealth Sugar Agreement producers, of whom Guyana is one, are paid between £;43 10s. and £;47 10s. a ton for their sugar. In the European Economic Community, the comparable overseas producers receive about £;79 a ton. It therefore follows that if Britain were to adopt the common agricultural policy of the Community without adjustment the Commonwealth Sugar Agreement would disappear, consumers in this country would pay considerably more for their sugar, and Commonwealth producers, or many of them, would be ruined.
I do not take a pessimistic view of this matter, since an enlarged European Community would be deficient in sugar supplies, and there should be room for Commonwealth producers without detriment to the existing European Community. I seem to recall that the French were very successful in getting special arrangements for their own overseas territories.
This is not the occasion to argue the matter in detail, and I do not propose to do so, but it would be helpful if the hon. Gentleman were able to give an assurance that in the negotiations with the Community which lie ahead, the interests of a sugar producing country like Guyana will be borne in mind, and that we will seek to secure the best possible terms for her.
I thought it right to ask these questions because they all touch on future relations between the new Republic of Guyana and Britain. Hon. and right hon. Members on both sides hope that those relations will be cordial, and that

975
our two countries will grow in understanding in the years ahead. For these reasons, we are very glad to support the Bill.
8.38 p.m.
Mr. Bert Oram: Introducing the Second Reading of this Bill, my hon. Friend the Under-Secretary said that it follows the conventional lines of a series of Bills which have taken account over the years of territories which have opted to become republics. This Bill does that, but there is an unusual and to me a most welcome feature of Guyana's declaration to which I call attention.
The Prime Minister of Guyana, when declaring his Government's intention to become a republic, dubbed it the cooperative Republic of Guyana. That is very welcome to me and to a number of my hon. Friends who have the privilege of serving in this House with the support of the British co-operative Movement. If had any criticism to offer of the Bill it would have been that I hoped the title would have included that unique name which the Prime Minister of Guyana has chosen for his republic.
I can say, I think on behalf of those hon. Friends who share the co-operative philosophy, and the British Co-operative Movement and many millions of cooperators throughout the world, that we very much welcome that the Government of Guyana have taken this unique path. I am glad that the Guyana High Commission has made available in London the text of the speech which the Hon. Shirley Field Ridley, Minister of Education in the Guyana Government, made on the occasion of their Assembly's decision that Guyana should be a republic. It warmed my heart to read such a forthright declaration of the co-operative philosophy for a country embarking on an exciting new era in its life.
I look back on five years' service in the Ministry of Overseas Development. During that period I came to know more intimately than before I took that office the very great importance of co-operative societies of all kinds for the economic development of developing countries. Therefore, I take the opportunity of wishing Guyana well in embracing this philo-
976
sophy so clearly as the basis of its new move forward. The International Cooperative Movement, through the International Co-operative Alliance, has recently declared its intention of operating an enhanced programme of activity in developing countries in the next 10 years to form part of the United Nations Second Development Decade. I look forward to the people and Government of Guyana making a commendable contribution within that 10-year programme of development of co-operative societies in the developing world.
I welcome the Bill, not just for the conventional reasons which have been adequately voiced from both Front Benches, but for the rather unusual and special reasons which relate to the cooperative philosophy which I have very much at heart and which I am glad to find that the Guyana Government also have at heart. I believe, as they appear to believe, that co-operative societies of all varieties are an important means of establishing economic viability on a democratic basis for a new country. I wish them well in this vast experiment upon which they are embarking. I hope that they will regard this new republic not merely as a new way of exercising political suffrage, but as a way of exercising economic suffrage through a practical application, in the building up of the many co-operative societies which the Hon. Shirley Field Ridley mentioned, of the co-operative philosophy they have espoused. I warmly support the Bill.
8.44 p.m.
Mr. Edwin Brooks: I am sure the whole House will endorse the remarks made by previous contributors to this short debate, particularly with reference to the hopes which we share in a new phase of our relationship, with an interesting and valuable member of the British Commonwealth.
Guyana is a country I recently had the privilege of visiting for an all-toobrief stay. Like all who have been able to visit this outlier of Anglo-America in the heart of Latin America, I came away with a strong sense of a vivid culture and enormous economic and political potential. Nevertheless, as I think the hon. Member for Essex, South-East (Mr. Braine) pointed out, there are several problems which it is perhaps appropriate

977
to raise, if somewhat fleetingly, this evening, as they seem to involve one or two problems of interpretation of the Bill.
First, as I understand the comments made by Lord Shepherd in the other place, there is some discretion available to the Guyanese Government as to whether they wish to avail themeselves of the right of appeal to the Privy Council. The noble Lord said in the debate in the other place:
" I believe it is the intention of the Guyanese Government to withdraw from the ambit of the Privy Council; they will be taking the necessary action."—[OFFICIAL REPORT,House of Lords,26th March, 1970; Vol. 308, c. 1506.]
If I interpret those words correctly, they seem to imply that there is discretionary power available to the Guyanese Government and that they are not necessarily bound so to withdraw.
I should be grateful for the comments of my hon. Friend the Joint Under-Secretary on this point, because it touches upon a problem which gave me some concern when I was in Guyana. It is the problem of a country which has had a somewhat stormy history of racial tensions. At a moment like this, when we are only too painfully aware of the fragile peace in the Caribbean in this respect, it is appropriate to clarify what the future holds, particularly for some of the small minority groups.
I refer especially to the position of the Amerindian population of Guyana which shows, as does the Amerindian population throughout the whole of South and Central America, grave problems of adjustment to the modern world. About 15 months ago there was an uprising in the interior of Guyana which led to 48 hours of bloodshed and attempted secession from the State. This uprising in the Rupununi Savannahs was—so we understand—engineered and led by some of the ranchers who have over some generations opened up this cattle country, but it inevitably involved the Amerindian population, who form the great bulk of the inhabitants of Guyana's almost unpopulated hinterland.
Since the uprising in Lethem, which was speedily crushed by the Guyanese defence forces, there have been reports, some of which I am confident have been grotesquely distorted and exaggerated, about the treatment of the Amerindian
978
population by the Guyanese Government. Having myself been able to visit the Rupununi last October, I was able to satisfy myself about the exaggeration included in those reports.
Nevertheless, a population of relatively primitive peoples in a maelstrom of complex racial tensions is bound to be anxious about a change such as that which we are discussing, which might entail their no longer having the opportunity to take their grievances, legitimate as they no doubt would see them, to a higher court elsewhere. It would be helpful if my hon. Friend were to say a little about this aspect of what I am sure causes some of these people anxiety, however misplaced.
My second and final point has also been touched upon by the hon. Member for Essex, South-East. I refer to the rather curious position which Guyana finds herself in following her independence. No other Commonwealth country which has gained her independence has done so shadowed by a territorial anxiety on the scale which faces Guyana. It is a large country, of about 80,000 sq. miles, inhabited by a population about the size of and about as hetero-genous as that of Liverpool, of which 50,000 sq. miles have been traditionally claimed by Venezuela. Further, in recent months, Guyana has been involved in some frontier disputation with Surinarn; and, although I understand from recent reports that this dispute is well on the way to peaceful reconciliation, the same cannot as yet be said, unfortunately, for the much more serious dispute with Venezuela.
The position in effect is that in 1966 when Guyana became independent, her future territorial integrity was not safeguarded in the same secure fashion as that which we would normally like to bequeath to former dependencies. The Geneva Treaty attempted to set up some machinery for ending this ancient and, in so many ways, fruitless dispute. It is nevertheless a dispute which awakens deep echoes going back into the middle of the 19th century and beyond, and anyone who has read, as I have tried to do recently, something of the intricate diplomatic history of the 1880s and the 1890s will understand how sensitive Venezuela is on this matter.

979
Nevertheless, there is no doubt that the Venezuelan and Guyanese Governments are sincerely trying to find some peaceful solution to what has become a festering sore which can do no good to anyone, least of all to the two countries concerned. Such an outcome, if it can be achieved, can presage a new and happy relationship between two countries which have got so much to give to one another. Therefore, it will be appropriate if my hon. Friend the Joint Under-Secretary of State will say a little about how Her Majesty's Government see the eventual outcome of these continuing uncertainties along Guyana's western frontier.
Having asked these two questions, I reiterate how much I hope that, after our long and somewhat stormy but nevertheless basically friendly links with this fascinating country in South America, although tonight we are bringing down the curtain on one phase of our history we shall tomorrow night be opening another Act which will contain much of mutual interest and of hope to both sides.
8.52 p.m.
Mr. Foley: With your permission, Mr. Deputy Speaker, and that of the House, I should like to reply to the points which have been raised in this debate.
The hon. Member for Essex, South-East (Mr. Braine) and my hon. Friend the Member for Bebington (Mr. Brooks) raised the question of appeals to the Privy Council. It is true that the Guyana Government have indicated their intention eventually to abolish all appeals to the Privy Council. I apologise if there was some delay in bringing the Bill before the House. We were trying to get clarification on this point, and that is the reason for the slight delay. Those appeals which were pending to the Privy Council on 23rd February will continue, and so will others from Guyana. The provisions of the 1966 Act will still apply until the Guyana Government introduce legislation which is passed by a two-thirds majority to alter the system.
It will be well known, too, that at the meeting earlier this month of Heads of Government of the Commonwealth Caribbean countries there was some discussion about establishing a Caribbean court of appeal and machinery for its further con-
980
sideration. In this context, the general but not unanimous view was expressed that it would be desirable that the Commonwealth Caribbean countries should move towards the termination of appeals to the Judicial Committee of the Privy Council. But at the moment appeals are still available to the Privy Council, and until the Guyana Government introduce this legislation, this will continue to be the situation.
My hon. Friend the Member for Bebington has referred to the Guyana-Venezuela border dispute, as did the hon. Member for Essex, South-East. The hon. Member has certainly done his homework, and there is no point in my recapitulating the history of the setting up of this mixed commission and our involvement in the agreement, even though we are not participants. We all share a measure of anxiety that so far it has failed to produce a conclusive, final report on its deliberations.
It is our sincere hope that the problems between the two parties will be solved peacefully by the two independent countries concerned, as provided for in the Geneva Agreement. It imposed obligations on both sides. It established the procedure which they should follow if they failed to agree. They are still discussing, so we must hope that they will reach agreement or otherwise follow the procedure in the agreement as outlined by the hon. Member for Essex, South-East. I did not share the hon. Gentleman's pessimism, although we should like to feel much more optimistic. The commission has been discussing the matter for almost four years, and there must be a measure of anxiety.
This leads me on to the hon. Gentleman's question about defence. He rightly said that there have been statements in the House by my right hon. Friend the Prime Minister and other Ministers, in answer to Questions, on our relationship in defence matters with the Government of Guyana. I want to make it clear that we have no defence agreement with the Government of Guyana. This is in accordance with our practice not to conclude defence agreements with countries in which we have no direct defence interest. But a military attack against Guayana would naturally be a matter of serious concern to Britain. The action that Her Majesty's Government might

981
take in such an event would be determined in the light of all the circumstances prevailing at the time. I am reiterating what has been publicly stated in the House. This is still our policy, and will continue to be so.
The hon. Gentleman also raised the question of Guayana being a new country with a precarious economy trying to get on its feet, and the importance of aid and technical assistance, and the implications to her of the Commonwealth Sugar Agreement because of her primary produce. Our capital aid to Guyana is running at about £;2 million a year, and in addition there is the development and technical assistance of which we are all aware. Naturally, Guyana, like many other Commonwealth countries which are primary producers of sugar are anxious about what will happen to the Commonwealth Sugar Agreement.
The contractual commitment is not due to end until 1974. Nevertheless, all these countries are, and must be, concerned about the implications for them of Britain's move towards joining the European Economic Communities. That is why as far back as 1967, at the time of our application, the then Foreign Secretary made it quite clear in a speech at Western European Union that we had a firm commitment to Commonwealth contries, particularly under the Commonwealth Sugar Agreement. So if there is to be discussion and ultimate agreement with the E.E.C. it must take into consideration the implications for the primary producers, particularly those which are parties to the Commonwealth Sugar Agreement. Guyana is a member of the Caribbean Free Trade Association, the Council of which has only recently had discussions at an official level with the E.E.C. Commission on matters relating to Britain's entry to the Common Market and what it would mean to its members.
My hon. Friend the Member for Bebington, with his enormous experience in Guyana, referred to the problem
982
of the Amerindians. He is probably more aware than anyone else of how complex are the problems in that part of the world of small ethnic groups differing from one another, and the anxieties that might be caused by an apparent change in their security as a result of the change. I believe that the Guyanans themselves are sensitive to these problems and are making considerable and enlightened efforts to overcome them. It is a measure of their success that in February of this year the Amerindian leaders reaffirmed their loyalty to the Government and State of Guyana and accepted the main recommendations of the Amerindian Lands Commission, which had recently reported on the difficult problems of land titles for a people who traditionally utilised vast tracts of land. This is a most encouraging and healthy development in terms of their history and prospects for the future.
My hon. Friend the Member for East Ham, South (Mr. Oram), with his vast knowledge and experience of the cooperatives, rightly drew our attention to the emphasis placed by the Prime Minister of Guyana on the development of co-operative institutions and the vital and increasing role that they would play in the country's development programme. I am sure that we all support the stated aim of the co-operatives in Guyana, which is to make the small man a real man. In Guyana, as elsewhere in the world, they will be judged by what they achieve.
People in all parts of the world will watch developments with interest. From the expressions of opinion from all sides of the House, it is clear that we wish the Guyana Government well in their venture.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Committee of the whole House.—[Mr. E. Armstrong.]
Committee Tomorrow.

IMMUNITIES AND PRIVILEGES
9.1 p.m.
The Joint Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Maurice Foley): I beg to move,
That the Diplomatic Privileges (Citizens of the United Kingdom and Colonies) (Amendment) Order 1970, a draft of which was laid before this House on 9th April, be approved.
Mr. Deputy Speaker, with your permission, I will deal with this Order and the next Order together.
Mr. Deputy Speaker (Mr. Harry Gourlay): I think that that will be for the convenience of the House.
Mr. Foley: The purpose of both Orders is to add the names of newly-independent members of the Commonwealth to existing legislation dealing with the privileges and immunities of diplomatic and other representatives in this country of independent Commonwealth countries. Neither Order raises any new question of principle in regard to privileges and immunities. They merely make adjustments consequential to the attainment of independence by new Commonwealth countries.
The Commonwealth Countries and Republic of Ireland (Immunities) Order adds Nauru to the list of Commonwealth members in Section 1(6) of the Diplomatic Immunities (Commonwealth Countries and Republic of Ireland) Act, 1952. Nauru has appointed a representative in the United Kingdom who will perform functions of a broadly consular character. This Order will enable a further Order to be made to confer immunities on him. Because he is a United Kingdom citizen, he will, in fact, receive only inviolability and immunity from the jurisdiction of our courts in regard to acts performed in the exercise of his functions.
The Diplomatic Privileges (Citizens of the United Kingdom and Colonies) (Amendment) Order, 1970, adds Mauritius, Nauru and Swaziland to the list of countries in the Diplomatic Privileges (Citizens of the United Kingdom and Colonies) Order, 1964. The 1964 Order makes special provision for members of Commonwealth missions in the United Kingdom who are dual nationals in that they are citizens of the sending country and also citizens of the
984
United Kingdom and Colonies. Prior to 1964 diplomats and members of their staff were not denied privileges and immunities on the ground that they were citizens of the United Kingdom. The Diplomatic Privileges Act, 1964, took away privileges and immunities from United Kingdom citizens in diplomatic missions of other countries, but, because of the large numbers of dual citizens involved and because of consideration for the special Commonwealth relationship, it was decided to make an exception in the case of dual citizens serving in Commonwealth missions.
The 1964 Order is amended from time to time as new countries join the Commonwealth. This is the third amending Order to be laid. We are not aware of any dual citizens in the missions of Swaziland or Mauritius, and Nauru has as yet no diplomatic mission in this country, and so the Order will, in fact, have no immediate practical effect.
9.5 p.m.
Mr. Bernard Braine: I thank the Under-Secretary for his explanation of these Orders which extend diplomatic immunity to the representatives of Nauru, Swaziland and Mauritius, all of which, I understand, attained their independence in 1968. I should like to begin by saying that I am somewhat puzzled by the fact that while all these countries have enjoyed political independence for some time, it is only now that these Orders have been laid.
That leads me to ask what has been the position about diplomatic immunity for the representatives of Mauritius and Swaziland between independence and now. The situation about Nauru was explained. For example, has the High Commissioner for Mauritius, who is well known to most of us, enjoyed full diplomatic privileges during this time? When that question was asked in another place, our spokesman was told that the answer would be sent to him in writing. That was perfectly fair, but the Commons is entitled to know, too, and I hope that we will have an answer tonight.
Whatever the answer, these consequential Orders should be brought before Parliament more speedily when they relate to friendly countries. I hope that due note will be taken of this. The Under-Secretary had a good answer to explain the delay on the Bill which we have just

985
discussed, and I hope that he has a good explanation of the delay with these Orders. However, we welcome them and are delighted that all three countries elected after independence to remain part of the Commonwealth.
9.7 p.m.
Mr. John Page: I, too, welcome the orders which herald the arrival of these new members to full diplomatic status in this country. Their continued association with members of Parliament and with Whitehall will produce a two-way flow of ideas which, I am certain, will be of great value to this country and I hope that in a reciprocal way they will receive value from their association with us.
It is in a spirit of true friendship and respect for these delegations that I remind them that British citizens, and particularly residents of the capital city of London, are concerned about what they regard as abuses of diplomatic privileges which seem to have come to light recently and which seem to be on the increase.
On 26th November, last year, there was an excellent leader in The Times headed " Abuse of privilege ". It included this paragraph:
" The Foreign Office must take firmer action to ensure observance of the law by diplomatic and other embassy staff, who—and this tends to be forgotten—have a duty to respect the law. Their privileges do not give them immunity from legal liability but only from the exercise of the local jurisdiction. The principle of diplomatic immunity is that it exists for the independence of sovereign states, not for the benefit of individuals."
In mentioning this in connection with these Orders, I emphasise that I do not intend in any way to be offensive to the three countries to which the orders refer, but it would be fair to put the orders against the background that in the 10 months to October, 1969, it was found that there were 26,000 parking fines which diplomats had failed to pay. There were also 146 possible prosecutions for more serious offences which were not pursued because of diplomatic immunity, and I hope that the offenders in those cases are no longer accredited here.
I mention this only to suggest not only to those countries mentioned in the Order but to the heads of other delegations that it would be helpful for good social relations between their country and this coun-
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try that these minor requirements of the law, which are a great trial to the ordinary citizen, should wherever possible be observed by the countries concerned.
On 1st December last the Under-Secretary of State said that the whole problem of diplomats and parking tickets was being examined as a special problem—
Mr. Deputy Speaker: Order. I hesitate to interrupt the hon. Gentleman, but he is going a little wide of the Order. We cannot on this Order debate the actions of other missions.
Mr. Page: I accept that, Mr. Deputy Speaker, and I was only trying to put it in as a background. In the particular context of this Order, I wonder whether there is any news of the special study which has taken place.
9.12 p.m.
Mr. John Ellis: I agree with all the remarks which have been made about how we welcome these nations in, as it were. I think the hon. Member for Essex, South-East (Mr. Braine) mentioned that he hoped these things could be done more speedily. I have often found, when it comes to matters like immunities and privileges, that it is always in some ways harder to deal with one's friends and near relations, as it were, than with people with whom one is not so close. This is part of the problem, and I hope we shall learn something about it from my hon. Friend.
In passing, I want to make a point about these nations which are recognised and which join us with regard to what the hon. Member for Harrow, West (Mr. John Page) said. He made a good point, and I hope that my hon. Friend will refer to it. We for our part have delegations operating in foreign countries. When it comes to immunities and privileges that are not specifically connected with the job, as it were—we have heard a graphic illustration—I hope our representatives abroad set a good example. My hon. Friend might wish to take up with those foreign embassies the question of immunities and privileges and whether we can look at the whole position of whether those people can fall in line with our practices. I hope that we shall learn—and I am sure that we shall—that our representatives have a good record in regard to this. I am sure that they have.

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But we should make it quite clear to these people whom we are pleased to see. and to whom we offer immunities and privileges to do their job, that they should behave, as I hope our representatives do, in following the customs and practices of the people in whose country they are living.
9.15 p.m.
Mr. Foley: I hope that the House will agree with my understanding that, although there has been reference to abuses, the fact that the names of these three countries are before us in no sense means that we are directing our attention at them in this respect.
Mr. John Page: I accept that, of course.
Mr. Foley: It is important to have that perfectly clear. Our representatives abroad will no doubt read their HANSARDS with interest, and if they need to mend their ways they might take heed of the remarks of my hon. Friend the Member for Bristol, North-West (Mr. Ellis).
We are talking about a subject which, perhaps, calls for a little clarification. Representatives from foreign countries coming here or representatives from this country who go abroad have diplomatic status as soon as they arrive. I wish to dispel any impression that, somehow, our friends from Swaziland or Mauritius who have been here for a number of years have been operating, so to speak, in a state of suspended animation. This is not so. They are here as of right, and we welcome them.
This Order is concerned with the question of dual nationality, which is a different phenomenon altogether. We try to bring Orders of this kind every two years or so, as changes come about. The reason for these Orders now including two countries which have been independent for some time is that the third one. Nauru, only recently indicated that it wished to send a representative. We have, therefore, taken the three together rather than bring separate Orders before the House every few months. No one is upset in the process. Neither Swaziland nor Mauritius has any personnel on its staff enjoying dual nationality, so there has been no problem. The problem is
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raised now in the context of the representative from Nauru. This is a convenient moment to bring the three together in line with other Commonwealth countries, and that is the motivation behind the two Orders.
Question put and agreed to.
Resolved,
That the Diplomatic Privileges (Citizens of the United Kingdom and Colonies) (Amendment) Order 1970, a draft of which was laid before this House on 9th April, be approved.
Resolved,
That the Commonwealth Countries and Republic of Ireland (Immunities) Order 1970, a draft of which was laid before this House on 9th April, be approved.—[Mr. Foley.]

CIVIL AVIATION (CROWN AIRCRAFT)
9.16 p.m.
Mr. F. V. Corfield: I beg to move,
That the Civil Aviation (Crown Aircraft) Order 1970 (S.I., 1970, No. 289), dated 25th February, 1970, a copy of which was laid before this House on 3rd March, be withdrawn.
It is one of the peculiarities of our procedure that one sometimes has to move for action in theory which might embarrass one if it were carried out in practice. I find myself in that position tonight. It is to the advantage of everyone, particularly the general public, that the right hon. Gentleman the Minister of State should have an opportunity to explain in greater detail what this Order does and its likely effect. I understand that a Motion that the Order be withdrawn is the only means we have of providing that opportunity.
Although it makes no mention of Concorde at all, I understand that the Order is designed to bring the Concorde prototypes and, no doubt, some of the pre-production models which will follow within the provisions of Section 40 of the Civil Aviation Act, 1949, in effect, to cover the test flying. Once a production model, or even a pre-production model, actually passes to an airline, it must cease to be an aircraft belonging to or exclusively employed in the service of Her Majesty.
The flight testing of Concorde, particularly at supersonic speeds, is, rightly

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and naturally, a matter of considerable concern to the public at large, especially to that section of the public likely to be immediately affected in the forthcoming tests of Concorde 002 at speeds substantially over Mach 1. The problem arises mainly because no one can at this stage know the precise effects of the so-called sonic boom. It is essential, therefore, that the House of Commons, and the Government in particular, should so far as possible insure the public against the effects, even if they turn out to be more or less than foreseen.
The aspect of the Order with which I am mainly concerned is the question of compensation. The Explanatory Note tells us that the Order
" applies the provisions of section 40 of the Civil Aviation Act 1949 to civil aircraft belonging to or exclusively employed in the service of the Crown. Subsection (1) of section 40 precludes actions for trespass or nuisance by reason only of the flight of aircraft over property at a height above the ground which is reasonable in the circumstances or the ordinary incidents of such flight, so long as the provisions referred to in the subsection are complied with. Subsection (2) of that section imposes liability without proof of negligence, intention, or other cause of action, on the owner of the aircraft for material loss or damage caused to any person or property on land or water by, or by a person in, or an article or person falling from, an aircraft in flight."
That is all very well concerning subsection (2), but when we turn to subsection (1), which says that as a general rule no action shall lie for what is, in effect, trespass over air space, we find that that is dependent upon compliance with the provisions, or other provisions, of Part II of the Act and of Part IV, which includes Section 40. The first impression, therefore, is that, by bringing these aircraft within the provisions of Section 40, we are also bringing in the other relevant provisions of Part IV.
One of the relevant provisions of Part IV is Section 42, which places a financial limit on the liability for damage. I have little doubt that the effect of the Order is not to bring in that financial limitation. Nevertheless, there is a school of thought—perhaps not very expert, but one which has as much right as anybody else to be concerned—which is worried that this might not be so. So, if we achieve nothing else tonight but to give the right hon. Gentleman an opportunity to make abundantly clear that if there is damage
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caused by the flight of Concorde there will be no financial limitation other than the cost of replacing the damage, that will have been worth doing.
The second problem, which again I believe is more imagined than real, is that there has been no precedent in the courts of a claim under this subsection where the damage is alleged to have been caused by the aircraft in flight. All the cases that have been brought concern damage either by the aircraft falling or things falling from the aircraft, or perhaps damage on the ground. However that may be, it seems that the section clearly applies to damage caused by the aircraft in flight.
In that interpretation we are assisted, unusually, by the fact that we have some relatively grammatical punctuation in the section. Reading it as an ordinary bit of English, it is clear that it is intended to apply to damage caused to any person or property on land or water by an aircraft while in flight and, indeed, taking off or landing, and so on. Therefore, despite the lack of precedent, I hope that the Minister will be able to assure us that his legal advice coincides with mine and that damage caused, for example, by the sonic boom is clearly covered by the section.
My third point, which is more difficult, refers to the later part of subsection (1) which, in effect, says that damage shall be recoverable without proof of negligence unless the person who complains of the damage has contributed towards it. In other words, it can be a defence to say that there was contributory negligence of some kind. This matter deserves to be dwelt upon for a moment when we think of the kind of damage which can reasonably be anticipated as a result of the Concorde boom.
The obvious and most vulnerable thing is a window. Collectively the most vulnerable thing is probably a horticultural glasshouse with acres of glass. For example, I understand that a glasshouse in an absolutely slap up condition of repair is likely to be less vulnerable than one which has some loose panes in it. It is important to establish that we are not going to have arguments, when people put in claims, that some of the panes were a little loose and that is contributory negligence, and therefore no damages are payable. Obviously there will be degrees of defective repair, and

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although I am not advocating that the Government should do a lot of free repairs on the basis that things were about to fall down anyhow, and fell down when the Concorde went over, it is important that we should avoid as far as possible endless arguments over claims of this sort, leading perhaps to expensive arbitrations, all of which will leave behind a feeling of resentment and probably injustice.
I, and I know that many hon. Members to, regard the Concorde as a great achievement, both in advanced technology and in air transport. I believe, too, that it has an exciting commercial potential, most of which has the advantage that it will be in the form of current exchange. It is an achievement of which we can be proud. I hope that the British people will be proud of that achievement, but it will be a tragedy if that justifiable pride is marred by damage to individuals, however minor, becoming the source of resentment and leading to a sense of injustice.
Mr. John Ellis: The hon. Gentleman has obviously studied these cases, and he knows more about this subject than I do. He has stressed that damage will be paid for, and that the Minister will not be niggling about it. If compensation is to be paid, why does he think it is necessary for the Minister to have this Order? I find this baffling. Presumably the Minister will tell us, but I should be grateful for the hon. Gentleman's opinion.
Mr. Corfield: The aircraft is owned by the right hon. Gentleman's Ministry, and therefore in law it is owned by the Crown. Unfortunately, there are difficulties in bringing an action against the Crown even if it is represented by Government Departments. I take it that the reason for this Order is to make it abundantly clear that a person injured has the same rights as if it was not a Crown aircraft. I expect that the Minister will elaborate on that, but that is my assumption about the need for the Order.
That brings me to another question on which I think it would be useful if the right hon. Gentleman could expand a
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little. How will people be instructed to prepare their claims, to whom will they be invited to present them, and what machinery will be set up for settling disputes? Human nature being what it is, there will be disputes. People are apt to put a rather higher figure on their damages than is always justified, and obviously some machinery of this sort will be necessary.
I hope that the Minister will be able to give us some information about what the French experience has been with the flight testing of 001, admittedly up to Mach 1·5, which is lower than the speed which is about to be achieved, we trust, by 002, but nevertheless one at which a considerable over-pressure is created. As I understand it, it is over-pressure which creates the boom. It would be helpful if we could be told what sort of claims have been made, both in numbers and extent, to the French authorities, and the general sort of reaction which has been manifest in France to the boom and any other effects of Concorde.
Obviously that will not be a complete guide, because one of the many variables on which this over-pressure depends is speed. If we see the speed accelerating to Mach 2, or later to the aimed operational speed of Mach 2·2, clearly the boom may be of a somewhat different nature, and presumably it will produce a higher over-pressure. Figures of 2 lb. per sq. ft. have been mentioned. I have heard it suggested in certain technical quarters that the effects of the sonic boom can be cumulative—in other words, that although the first two, three or perhaps a dozen flights may produce no visible damage to a piece of property they can nevertheless produce a weakening, which can result in the damage occurring perhaps on the thirteenth or fourteenth flight, even though that flight is at a much lower speed, therefore producing a much lower over-pressure.
According to that school of thought the cumulative effect could be such that even the pressure produced by a strong gale could be the last straw that breaks the camel's back, the weakening having occurred invisibly and undetectably as a result of flights carried out previously. If that is true we shall obviously face some difficult problems of adjudication. It will not be easy to say, in any one case,

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what is the cause of the damage. If I remember my law on this subject correctly we are in the difficult area of distinguishing the causa causans from the causa sine qua non.
I hope that the Minister can tell us what is known about the possibilities of the cumulative effect of a series of supersonic bangs—produced by Concorde or any other aircraft—and that he will also be able to assure us that in view of the immense onus of proof that would rest upon a claimant if he were required to prove beyond all reasonable doubt that this cumulative effect had taken place, even though the final damage had occurred in a gale, all claims under this head will be received sympathetically and treated generously, without demanding too rigorous a standard of proof—because that could nullify the whole objective of the Order, which is to ensure that the individual shall be properly compensated if damage can reasonably be said to have been caused by the flight of Concorde.
I shall also be grateful if the Minister can assure us that any legal or surveying costs that may be incurred by the claimant in preparing his claim and, if necessary, arguing it, will also be covered by the compensation.
I repeat my belief that this is a great technological break-through, of which we can be proud, and that we can have high hopes of its success as a commercial aircraft. Nevertheless, we have to face the fact that its development has highlighted the proper concern of people for the effects on the environment that started with the transfer to jets, has continued with the growing number and size of jet aircraft and the controversy about the third London Airport, and is now something of which we have rightly to take account. We shall certainly not secure the full benefits of our technological achievement in the production of Concorde, let alone such further exciting development that I believe are within our grasp—such as V.T.O.L. aircraft—unless we accept the corollary, that the effect out environment of the many is no less important than the benefit to the few.
9.35 p.m.
Mr. John Ellis: Earlier I intervened to ask a question because I must admit that, having studied this Explanatory Note, it seemed that the
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Order precluded actions for trespass and nuisance and that subsection (2), having precluded people who had suffered damage from sonic booms from their full rights of action in respect of trespass or nuisance, then gave it back in a limited from. When I put the point to the hon. Member for Gloucestershire, South (Mr. Corfield) he seemed to think that the Order was advantageous to people and that somehow, because these aircraft were Crown property, there was an immunity from responsibility for damage caused by them as the Crown has immunity in other respects. I may have it wrong, and I will willingly give way to the hon. Gentleman if he wishes to correct me.
Mr. Corfield: If the hon. Gentleman reads subsection (1) he will see that there is no mention at all of the word " damage ". It simply says that no action shall lie in respect of trespass etc. by reason only of the flight of the aircraft over any property. Subsection (2) goes on to say that if that flight causes damage then there is an action provided that there is no contributory negligence.
Mr. Ellis: It also mentions nuisance. I am still far from clear whether the aggrieved person—who has perhaps had his glasshouse damaged by a sonic boom —has his absolute rights restricted by the Order. Is he in a worse or a better position as a result of the Order? From my reading it seems that a person is in a less advantageous position to pursue his rights for damage or nuisance by reason of the Order.
I have heard the hon. Member for Gloucestershire, West putting questions on the subject from the Opposition Front Bench, and I disagree with some of his statements. I represent many workers who work on Concorde, too. It is a great project and I want it to be a success, but we must solve the technical problem of the sonic boom so that it does not inconvenience people. There is evidence that it causes serious damage. If this project is to be the great success it deserves to be we must solve these technical questions. I do not go along with the hon. Gentleman when he says that people might expect to be inconvenienced and should accept it
Mr. Corfield: I am sure the hon. Gentleman will accept that we cannot tell

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whether people will be inconvenienced until we have had some test flying. This is the problem. My interpretation of the Order—and although I am delighted to help the right hon. Gentleman I will leave him to defend it for the rest of the evening—is that it can apply only while the aircraft are owned by the Crown and that will happen only for flying purposes while they are testing. This is what we are concerned about tonight. I accept the hon. Gentleman's point that, if as a result of these tests it is shown that there is danger and damage or intolerable nuisance in terms of noise and that sort of thing, we have to see about the operating procedures. But people who say that we should assume the worst and never give the people who have made this aircraft a chance to fly, or alternatively say that it must happen over the sea so that if anything happens there will be no hope of saving the pilot, are wrong.
Mr. Speaker: Order. Interventions must be reasonably brief.
Mr. Ellis: I can go along with a lot of what the hon. Gentleman says, but an Order like this is assuming the worst and that is why we are discussing it. I read in my paper that certain insurance companies are refusing to insure people.
Mr. John Nott: The hon. Gentleman must be right. Otherwise why would the Government lay the Order at all if it were not for the risks that he suggests?
Mr. Ellis: We are discussing this Order which foresees a situation which may not develop. Reassurances will be given to the critics of the programme and there are critics in this House. They express the worst fears and take a pessimistic view about the amount of money spent on the Concorde and the damage it will do. They are the real enemies. It is a pity that some of them are not here tonight, because—
Mr. Speaker: Order. If they were here, they would not be able to discuss the Concorde programme.
Mr. Ellis: I take the point, Mr. Speaker. We are very much discussing the damage that might result from sonic tests. If those hon. Members were here,
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they might make very different noises to the one that I am making.
Nevertheless, we should not let the point go without saying that this is an imaginative project, that we believe in it and that we think it will do a great deal for the country, but that as we go into the test programme people who may be affected with problems of damage or noise should be covered by the law and that there should be no exception to this. In the event of something unforeseeable, which is what a test programme is all about, they should be entirely covered and the community as a whole must make good their loss.
We have had limited experience in this country when we had sonic tests over certain cities. I understand that various claims were made and that the business of paying out was done expeditiously. It certainly did not come to my attention that people were being over-compensated. Nevertheless, it also seemed to go smoothly without an Order like this. I therefore question the need for it.
The hon. Member for Gloucestershire, South has presented a very different light and applied a gloss that certainly deserves a little more explanation—and that is being charitable about it. I hope, therefore, that when my right hon. Friend replies, he will make quite clear where we stand. I would like him to say that we believe in the Concorde project, that we believe it should go forward and that we hope and believe that it will be a great success, but that any—
Mr. Speaker: Order. We are not discussing the Concorde project. We are discussing the application of Section 40 of the Act to certain aircraft, which include the Concorde.
Mr. Ellis: Yes, Mr. Speaker. The Explanatory Note at the foot of the Order, which states
" would include Concorde aircraft falling within those categories "—
specifically refers to the Concorde. My contention would be that the problem of sonic booms and damage arising is germane to the reason why the Order is before us tonight. Naturally, I shall follow your wishes, Mr. Speaker, but I would find myself in difficulty in not referring to Concorde.
Mr. Speaker: Order. I am not preventing the hon. Member from referring to Concorde. But the question of whether we have a Concorde or not is not the subject of this debate.
Mr. Ellis: Yes, Mr. Speaker, but the fact that we have a Concorde and that it is capable of making a sonic boom is one of the material reasons for the Order and is what worries me about it.
However, I have made the point that I wish the aircraft well. A lot of my constituents work on it. Nevertheless, I am jealous also that people who live in my constituency and throughout the country shall not suffer damage or inconvenience by reason of the test programme. It is important to make clear from this House tonight that the passing of the Order, if we agree to it, will not in any way prejudice any rights to compensation that people may have had in the past, that those rights will continue to apply and that we say to those concerned that we must overcome the technical problem so that people are not incommoded. I hope that my right hon. Friend will be able to reply forcibly to that effect.
9.45 p.m.
Mr. John Nott: I have listened with interest to the speeches of the two hon. Members who represent Bristol constituencies, my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) and the hon. Member for Bristol, North-West (Mr. Ellis). Both have a large number of constituents who work on the Concorde project. Without in any way wishing to offend my hon. Friend, I agree more with the slant put on the debate by the hon. Member for Bristol, North-West than with the view of my hon. Friend, but I will come to that later.
We are discussing the interpretation which one might put on the underlying reason for the Government laying this Order. It seems to me—and here I wholly agree with the hon. Member for Bristol, North-West—that people who might suffer damage as the result of Concorde will be worse off as a result of this Order than they would have been had it not been laid. I will give the reasons for this view shortly.
I wish at the outset to make it absolutely clear that I am making no judg-
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ment whatever on the Concorde project. I am an agnostic on the issue, although I am a militant opponent of the Order. Every so often a Statutory Instrument is presented to the House—often it is debated late at night—which could—I put it no higher because I have not heard the Minister's answer—offend against the traditional conception of British justice. We are here to protect the rights of the individual against arbitrary action by the Crown. We must ensure that Instruments do not override the rule of law.
I define the rule of law in this context as the right of every citizen to have an impartial hearing and consideration of his claims and an opportunity of appeal against any compensation which may be awarded against him. Under this Order the Minister of Technology, who, we agree, has a vested political and personal interest—I am not making any unreasonable charges against him—in the success of Concorde, may be effectively removing the right of the individual to sue for damages against harm to his person or property. [Interruption]I have no experience of the law. I am giving my interpretation of the legal aspects of the Order. It is possible that the Minister is setting himself up as judge and jury, without any sort of civil appeal, in the settlement of eligibility and degree of compensation for those whom he has already admitted could possibly be harmed.
The Government will probably say, in their innocence, or pretended innocence, that they are merely seeking the same protection for Concorde as exists for other private owners, airlines or State corporations. In other words, they may say that as under the Civil Aviation Act there is protection for ordinary airlines. State corporations and private owners, the same protection should exist for the Crown, in this case specifically Concorde. Although this may be the case legally, the Civil Aviation Act, 1949, was never intended to give immunity against damage caused by sonic booms. The Minister knows that; I know that; the country knows that.
The Civil Aviation Act, 1968, includes specific new provisions to enable the Government to ban civil supersonic flying over land. I therefore make the practical point that the Civil Aviation

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Act, to which the Order relates, was never intended to protect people from damage against supersonic booms. The supersonic boom was not contemplated. The reference is to the Act of 1949. We are dealing with entirely new circumstances, so I hope that the right hon. Gentleman will not seek a legalistic interpretation and say that he is merely claiming Crown immunity under Section 40(1) because private airlines have immunity now.
The Minister has on one or two occasions written very excellent letters to me in which he has said that the United States Administration has said that it will ban commercial supersonic flying over land in the United States. I do not here refer to testing. It seems to me to stretch imagination or horror too far to think that the Government will say that they will allow the protection of the Civil Aviation Act for airlines flying commercial supersonic aircraft over the British Isles. Surely that is not contemplated. The Government have taken power in the 1968 Act to exclude it, so I do not think that it is contemplated. The prospect would be horrific.
We have heard from hon. Members who represent constituencies where the Concorde is being manufactured, but I represent a constituency over which it will fly. I have no constituents who work on the project, but over my constituency at certain times of the day and night there is a constant stream of foreign aircraft passing across the Atlantic. I can see them on a clear day. The Government cannot contemplate allowing supersonic aircraft, with this sonic boom, to have the immunity of this Act, and they cannot claim immunity for the Crown should there ever be Crown aircraft flying constantly over Cornwall.
I may have dwelt on that point rather too long, but I have to make it as I shall not have an opportunity to answer the Minister should he say " We are merely seeking what civil airlines have now." These airlines are not flying supersonically over the country at this time. The Government have repeatedly claimed that the fears expressed by individuals are exaggerated and that little damage will result from the testing of Concorde. If that is so, why do the Government
1000
seek to limit or stifle or amend in any way at all individual rights to sue through the courts. I do not understand it.
The Minister will probably refer to subsection (2) of Section 40 and tell us that that subsection does not remove immunity. Section 40 is headed
" Liability of aircraft in respect of trespass, nuisance and surface damage ".
What legal opinion I have had is that subsection (2) of Section 40 has never been tested in the courts. As the hon. Member for Bristol, North-West has rightly said, it is subsection (1) that we are discussing because that relates to a global immunity given to the Crown through the Order in respect of trespass, nuisance and surface damage. Subsection (2) has never been tested in the courts, but I believe that it would be interpreted by the courts as applying to aircraft falling from the sky or objects falling from aircraft.
If there is unlikelihod of damage from Concorde, one has to ask why the British Insurance Association, which represents all the principal insurance companies, has said:
"…the majority of B.J.A. members have decided that cover against this risk (i.e. sonic booms) will be excluded from most clauses of new policies and from most classes of existing policies as they become due for renewal after a given date."
Is the British insurance industry in capable of assessing risks? I suggest not.
Again I pose a question which was posed by the hon. Member for Bristol, North-West. Are individuals in my constituency better off and more able to sue through the civil courts for damage done to their persons and property than if the Order had not be laid?
On 26th January in answer to a Question by my hon. Friend the Member for Honiton (Mr. Emery) the Parliamentary Secretary said:
" buildings over the test route in an unsafe condition should be attended to."—[OFFICIAL REPORT, 26th January, 1970; Vol. 794, c. 997.]
Some of these buildings are in my constituency. I have an old house, and I have been told by the Parliamentary Secretary that my old house " should be attended to ". That is kind of him. The Government are to be the dispenser of compensation under the Crown immunity

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of Section 40(1) provided by this Order. Are they to be the judge of whether buildings were or were not in an unsafe condition prior to test flights of Concorde? Will compensation be refused, reduced or denied to those who cannot prove that their property was well maintained? On whom does the burden of proof rest? On whom does it rest in the case of Crown immunity? How will " good maintenance " be defined?
This is a matter of enormous importance to my constituency, and this is the first opportunity I have had of debating it. I have in my possession regulations issued through the National Farmers Union to livestock owners and producers in Cornwall for claiming compensation from the Crown. The one extract which I take refers to horses.
Section A deals with abortions, and says that if an abortion is the result of a supersonic boom:
" (1) A veterinary surgeon should be consulted immediately.
(2) Where an X-ray is produced or an aborted foetus it should be sent to the equine research station at Newmarket in a polythene bag."
Then this official publication of the National Farmers Union in Cornwall says that the
" veterinary surgeon's report must contain precise details of the identity of the mare with breed or type, name and registration number, age, height and bodily condition and that if a foal or foetus is concerned the sire of the foal should be clearly identified and the date of the last service given."
In the case of Section B, injury or death, it is stated that
" where injury has occurred the veterinary surgeon should take steps to examine the horse without loss of time and have it treated and, if necessary, diagnostic procedures should be carried out."
Will the Ministry deny liability where no X-ray is produced or an aborted foetus is not despatched in a polythene bag to the equine research station at Newmarket? I want to know the answers, because I represent a constituency which has more intensive livestock production than any other in the United Kingdom.
If the Government are justified in obtaining Crown immunity under Section 40(1), why at the O.E.C.D. meeting in Paris on 3rd February, 1970, which for all I know the right hon. Gentleman may
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have attended, did Sweden, Norway, Holland, West Germany and Switzerland all claim that they were banning supersonic overflying over their countries?
The Minister may say that we are talking only about testing. It makes no difference to my constituents whether Concorde is only tested or flown commercially over my constituency. If there are to be 50 tests, it is just as bad for my constituents as its being flown commercially. The Swedish delegation at the O.E.C.D. meeting stated that sonic bangs exceeding 0·2 lb./sq. ft.
" must be judged intolerable to people living underneath."
Concorde's booms may be up to 10 times the intensity of 0·2 lb./sq. ft. I know that there is an argument about what they will be; they may be 1·5 lb. The Swedes have great experience in this matter: they have carried out the most intensive research.
Mr. Speaker: Order. Passing or rejecting this Order will not decide whether Concorde flies.
Mr. Nott: I respectfully agree, Mr. Speaker.
I fear that Concorde—these are the implied answers I have had from the Government up to now—has become a sort of symbol of British patriotism. I have said that I am an agnostic about its future. So much money has been spent on Concorde that I hope that it succeeds so that we can get some of the money back, but it has become a sort of symbol of British patriotism and of the Government's technological virility. The implied answer to my previous complaints about Crown immunity is that I am being rather tedious and unreasonable when so much national prestige and money are at stake.
Not a word has been heard from the Secretary of State for Local Government and Regional Planning, who is responsible for the pollution of the environment, about supersonic overflying and this Order. It is he who has classified noise as a major element in the pollution of the environment. The Civil Aviation Act was never intended to protect, or provide benefits for that matter for any aircraft by whomsoever owned against claims for damages for injury caused by supersonic booms. Certainly it was

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never intended to give Crown immunity under Section 40(1) of the Civil Aviation Act without any right of appeal in the courts for the testing of an aircraft whose sonic booms are of unknown intensity and kind.
I claim that the Order, if my interpretation is correct, is stifling individuals' rights, and I do not understand how a Government with an allegedly democratic system of social priorities can allow it to be laid.
10.4 p.m.
Mr. Michael McNair-Wilson: I have two questions to pose to the Minister. What height is reasonable? After all, it is on this point that the individual loses his right of legal redress. By the same token, what wind strength and what weather conditions are acceptable? We are not told these things. It is important that we should be given this information, because, obviously, if the aircraft flies below what is considered to be a reasonable height, presumably an individual has the right of legal redress against noise nuisance by the aircraft.
Secondly, I wish to touch on the question of negligence. No reference is made to negligence in the Order. The Explanatory Note claims to give a brief account of Section 40 of the Civil Aviation Act. It may be that that section has been amended since I last read the Act but if it has not, negligence is written clearly into that section and this, therefore, raises the question: what is negligence? This is obviously a crucial matter.
If a man owns a glasshouse and, through his leaving several windows open, the glasshouse is more likely to be destroyed by sonic boom, is that negligence? If it is, should not instructions be issued to the owners of such property to let them know that this is a danger against which they should take action?
I wish to come to the point raised by my hon. Friend the Member for St. Ives (Mr. Nott) about insurance. The glasshouse produce committee of the N.F.U. is concerned about compensation and what owners of glasshouses should insure against. The members of that committee have asked why insurance companies
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have been referring to adding sonic boom cover to policies. If this Order provides all the right to compensation that is necessary, why is a particular insurance premium needed for this risk? Whet: we are subjecting people to all sorts of noise nuisances and the risk of damage to their property, it is important that they should know that we in this House are concerned about the damage to themselves and to their property and that we are not trying to find a way out of giving them the compensation to which they have a right and which we have the duty to see they get.
Mr. Corfield: If I may interrupt my hon. Friend, it is abundantly clear that if I thought for a moment that we were taking away rights, I would be against this Order. I am convinced that we are doing the reverse. [Interruption.]
Mr. Speaker: Order. We cannot have two interventions at the same time.
Mr. McNair-Wilson: The next point I wish to make—it was also raised by the glasshouse produce committee of the N.F.U.—is that of compensation for sonic boom damage as a permanent liability on all those who fly supersonic aircraft. The question of cumulative damage is crucial. The Minister of Technology has suggested that some of the cumulative damage and vibrational stress would be no greater than that caused by a cathedral bell tolling out. What a way out that would be for denying a reasonable claim. It is difficult to assess cumulative damage. Boom after boom over a three-year test period—how can we be sure that we know what we are talking about? May I also ask about the limits of compensation that will be paid? Is the sky the limit or have we to decide a figure that we consider is fair?
I should like to refer to one other point, which was raised by the Welsh National Farmers' Union, which said that it thought that some sort of seismographic equipment should be installed to give a clear impression of what has happened during a test flight. It were left to the impression of one man or another, one can imagine the sorts of argument that would arise and the endless litigation as well. Therefore, we should set up testing equipment to back any claim that is made either one way or the other.

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By the same token, should we make a special allowance for the Concorde when manoeuvring because I believe a sonic boom can be focussed to a greater extent when the aircraft is manoeuvring than when it is over-flying? I have raised the question of height because it is important. The British Aircraft Corporation has said that if Concorde flies above 35,000 ft. there may be no sonic boom. What a welcome relief that would be to all those people who think that their lives will be made hell during the next two or three years.
Can we know whether that is the reasonable height? Whatever it is, let us write the rules clearly for people to know, so that if their lives are to be made miserable by the aircraft, no matter how important it may be to Britain's technology and future, they will receive adequate redress.
10.10 p.m.
The Minister of State, Board of Trade (Mr. Goronwy Roberts): I have listened with great interest and respect to everything that has been said in this important debate, and particularly to the opening speech of the hon. Member for Gloucestershire, South (Mr. Corfield). Perhaps it would be helpful to the House if I first explain the purpose and effect of the Order before going on to answer as many of the questions raised as I can.
The purpose of the Order is to introduce a small but useful reform in civil aviation law. Despite the limited nature of its effect, it makes an important change; but one which should not give rise to any misgivings. Nearly all aircraft other than Service aircraft of the Ministry of Defence are already covered by the provisions of Section 40 of the Civil Aviation Act, 1949. It has perhaps been anomalous that, hitherto, the very small number of Crown civil aircraft have not been covered by these provisions. The Order simply remedies this situation. It does so by extending to Crown civil aircraft the same protection against actions for trespass or nuisance that is already afforded to other civil aircraft by Section 40(1). The Order also provides, by virtue of the application of Section 40(2), a statutory basis for claims in respect of material loss or damage caused by Crown civil aircraft, without proof of negligence.
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Military aircraft—aircraft belonging to the naval, military or air forces of any country; there are friendly countries that rightly use our skies and ground establishments—remain outside the relevant provisions of the Act.
The Crown civil aircraft to which section 40 will now apply are defined in the Order as
" aircraft belonging to or exclusively employed in the service of Her Majesty ".
These include aircraft of the Board of Trade's Civil Aviation Flying Unit and other aircraft which the Board of Trade and the Ministry of Technology may have from time to time for research and similar purposes, such as the aircraft of the Blind Landing Experimental Unit.
Mr. Michael McNair-Wilson: Is the Minister saying that what I said seems to be in the Act is not in it, and there is not a question of negligence?
Mr. Roberts: I appreciate the importance attached to the question of negligence by hon. Members, and shall come to it a little later. The question of whether Concorde pre-production aircraft come within the definition of Crown aircraft is a matter of some doubt, which would in the last resort be for the courts to resolve. It is one of the purposes of the Order to put it beyond doubt that Section 40 applies to Concorde test aircraft. The position is that if these Concorde aircraft are Crown aircraft—they are certainly civil aircraft—the Order will apply the provision of Section 40 to them. If, on the other hand, these Concordes are not Crown aircraft, then Section 40 applies irrespective of the provisions of the Order. That is the two possible circumstances regarding ownership which are both covered.
The practical effects of the Order are twofold. As the law previously stood, it was open to any person to bring an action under common law against the owner of a Crown civil aircraft for trespass or nuisance, although it was not possible to do so against the owner of other civil aircraft. At least in theory, therefore, the public's right of redress has been removed to this very limited extent. On the other hand, it has been widened in regard to loss or damage.
Of greater practical significance is the second consequence of the Order. Hitherto, there has been no statutory

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basis on which a member of the public was entitled to bring actions seeking compensation in respect of material loss or injury caused by Crown civil aircraft. The application, by means of the Order of Section 40(2), provides a statutory basis for compensation, without proof of negligence, where loss or damage is caused. That would include, in relation to individuals, injury or loss of life.
Mr. Corfield: One would have great difficulty in mounting an action against the Crown for trespass and, even if it were successful, one could not get anything out of it unless one proved damage.
Mr. Roberts: The hon. Gentleman has put it precisely. I said that in theory, there was a limited removal of the right of redress. In fact, as the hon. Gentleman says, there is almost nothing to it in practice. On the other hand, we are providing what he is most concerned about, which is a claim in respect of a material loss or injury.
The significance of subsection (2) in relation to Concorde test aircraft may be inferred from the statement in the House by my right hon. Friend the Minister of Technology on 17th February in which he explained the arrangements for certain test flying over some western areas of the United Kingdom and dealt with the question of claims for compensation for any damage that might be caused by sonic booms.
Mr. Noft: Are we to take it that there is nothing to prevent an individual whose property, person or cattle are damaged suing the Crown in a court of law, and that this Order makes it easier for him to do it than before? In other words, now he does not have to prove negligence, whereas before he had to. Is that correct?
Mr. Roberts: I think that the hon. Gentleman has put the position correctly. The effect of the Order is to make it possible for a person to make a claim and, if he is still aggrieved, to have recourse to the courts in respect of loss or injury.
Mr. Noft: I understand that, if necessary, I can divide the House on this. Before deciding whether to do so, and bearing in mind that the individual
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could always sue for negligence in the courts and did not need this Order, is the Minister saying that Section 40(2) makes it easier for an individual to sue the Crown than was the position before the laying of the Order?
Mr. Roberts: I think that I follow the hon. Gentleman's point, and that I can give that assurance. The effect of the Order is to enlarge and not diminish the possibility of an ordinary citizen moving in whatever way he chooses in relation to any loss or injury he may suffer. If I may proceed—
Mr. Ellis: I hope that my right hon. Friend will not be impatient, but this matter is crucial. I want to take him one stage further.
Mr. Speaker: I hope that the hon. Member for Bristol, North-West (Mr. Ellis) will intervene briefly; he has made a speech.
Mr. Ellis: Yes, Mr. Speaker. May we have an assurance that by passing the Order we shall not in any way reduce a man's rights, that it will not be a question of roundabouts and swings, of losing here and gaining there, that a man will not lose anything?
Mr. Roberts: My hon. Friend will have heard my statement and that of the hon. Member for Gloucestershire, South with which I instantly agreed. Subject to the point of theory which we both made, the answer to my hon. Friend is clearly, " Yes ".
The statement of 17th February referred to certain test flying over some western areas of the United Kingdom and dealt with claims for compensation for any damage which might be caused by sonic booms—hon. Members wanted an assurance that this statement referred to sonic booms. The statement made that perfectly clear. I assure the House that careful consideration has been given to what damage might be caused by sonic booms. I stress that personal injury is not expected to occur, although, of course, it would be open to anyone who believed that he had suffered personal injury to take the matter to the courts by virtue of the clear statutory rights in Section 40(2). Typically, the damage which may unfortunately but inevitably result from supersonic test flying would be some broken glass. That is the advice which

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I have. It is the view of my right hon. Friend the Minister of Technology and my right hon. Friend the President of the Board of Trade.
As my right hon. Friend the Minister of Technology has announced, notice will be given of Concorde supersonic test flights over the United Kingdom and the flights will be strictly limited so as to ensure that there is as little disturbance as possible to the public. Full arrangements have been made by my right hon. Friend for claims of compensation for any damage caused by sonic booms. Such claims should be made to the Concorde Division of the Ministry of Technology.
I was asked for a description of how this would work. I cannot give the mechanics at the moment, but no doubt they will be made absolutely clear by my right hon. Friend the Minister of Technology, who will be concerned with dealing with the claims, but I take this opportunity to state that a claim giving details of the nature of the damage and the time and the circumstances in which the damage occurred should be forwarded to the Ministry of Technology, Concorde Branch, St. Giles Court, 1–13, St. Giles High Street, London, W.C.2. If necessary, an inspector will visit the site of the damage.
More than one hon. Member raised the subject of the procedure for any appeals. As Section 40 of the Civil Aviation Act, 1949, is by virtue of the Order being extended to cover Crown civil aircraft, it will be open to anyone who feels that an offer of compensation is inadequate, or whose claim has been refused, to have recourse to the courts of law against the decision. This is the appeal procedure which hon. Members want—an assertion that recourse to the courts is open to the aggrieved person who feels that the amount is inadequate, or who has been refused any compensation at all.
The hon. Member for Gloucestershire, South, if I may say so without presumption, asked the right questions and I hope that I may cover at least the most important. He asked, for example, about the limit on liability. There is no limit on the amount of compensation which may be paid in consequence of a claim under Section 40(2), whether in respect of damage caused by supersonic flights during the Concorde test programme or
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otherwise. When I say " otherwise ", I carry the hon. Gentleman with me in saying that whether commercial supersonic flights shall be permitted or restricted has yet to be decided.
I shall now address myself to the question raised by the hon. Member for St. Ives (Mr. Nott) about the position in the United States. We ought to have this clear. I am not sure whether the hon. Gentleman was quoting from a letter of mine. Perhaps he issued a somewhat unauthorised version. We already have power to regulate or prohibit commercial flights over land, and we are considering to what extent we should use these powers. As has been said, is it right and sensible that we should engage in the proper kind of test before coming to a conclusion on the matter. I understand the position in the United States to be that draft regulations have been introduced for consideration and comment by interested persons, but no ban is yet in force.
The attitudes in European countries are as the hon. Gentleman indicated them, but I have no evidence that these have been promulgated. It may well be that this has by now happened. The general approach is much like the British, namely, to have power to restrict or prohibit, and to decide in the light of experience, our own experience and experience of what happens in other tests.
That brings me to the question of the French experience in this matter. We have not much evidence of the position in France so far. However I would wish to comment on reports in the Press that a number of deaths occurred at the time of tests in France which were in some quarters attributed to those tests. My information is that none of the deaths which happened at the time of the tests in France were directly caused by boom. But we are keeping in close touch with our French colleagues and partners in this matter to learn from their experience, as they are with us.
As to French experience in dealing with claims, their policy is one of exgratia procedure. With every respect to our French friends, I do not think that we can learn much from that. I hasten to give the further assurance that my right hon. Friend the Minister of Technology will organise and carry on the

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procedures for considering claims—I use the phrase which has been used in the debate—as sympathetically and generously as possible. I fear that it is not possible tonight to set out in detail how this will be organised. However the House and the country have a right to expect that it will be set out in fair detail and be made widely available through the public media and in other ways so that people in all parts of the country, and particularly in the test areas, so to call them—including my own constituency—will know exactly where they stand. All the other points on questions of negligence and so forth will also be made clear.
Mr. Nott: The Minister would leave me completely happy as a result of the debate—because I am satisfied with what he has said so far—if he would say that the surest and quickest way of ensuring that there will not be any claims for compensation, either through the Crown or through the courts, is that should damage be caused to buildings and property in the test areas then the Minister of Technology will forthwith give an order that Concorde will not in future fly over inhabited areas of the British Isles. Will he say that?
Mr. Roberts: The hon. Gentleman really does not expect me to go that far
Mr. Nott: Why not?
Mr. Roberts: —but he is right to expect me to say that, in the light of our experience of these tests and what we learn from abroad, we shall be coming to a decision as to how far we shall avail ourselves of Section 19 of the 1968 Act to restrict and possibly to prohibit commercial flying of the Concorde.
Mr. Nott: And testing?
Mr. Roberts: That will no doubt affect future testing. The decision whether to proceed with further tests will rest partly on the experience of the results of completed tests. The hon. Gentleman's question was addressed to the long term commercial position.
Mr. Nott: May 1 clarify the point? The Minister is being generous and I hope that I am not presuming on his generosity. My point is that the Order
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would not be required apropos Concorde and the immunities and benefits of the Civil Aviation Act would not be required either. If, should the first test cause substantial damage to property or to people or to livestock, the Minister of Technology would say that further tests will not take place over inhabited areas, I should be satisfied. This is not asking a lot, is it?
Mr. Roberts: Obviously in any circumstances a decision on what to do in future will have to be taken. Really I could not go beyond that, and I do not think that the hon. Gentleman expects me to do so.
The hon. Member for Gloucestershire, South asked a number of other questions which I am anxious to try to answer. I hope that he will forgive me if I do not cover every point. Perhaps he will prompt me if there is one in particular that I have left out.
Mr. Corfield: The cumulative effect is the most important problem.
Mr. Roberts: Our minds move on remarkably parallel lines. I have in fact spotted the point on cumulative effect. The evidence to date is contained in the results of the work done by Southampton University. In its report it says that numerous isolated bangs will have no immediate effect on substantial buildings, such as cathedrals, and that even 25 bangs per day might have little or no effect on major structures. We shall be studying very carefully what Southampton University or any other research agency will be telling us about this matter in the next few weeks and months.
I do not want to put this too high—I do not wish to mislead the House or myself, because I have a constituency interest—but so far it is pretty clear that the cumulative effect will be, not nonexistent, but minimal. My right hon. Friend may have to qualify this later, but this is the state of our information at the moment.
Another point raised was whether the costs of preparing a claim to be considered would be taken into account in assessing the claim. A very simple procedure will be operated, calling for only the essential information. The claim will necessarily have to be described by the claimant. While there will be forms, they

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will be as simple as possible, so that the need for expert assistance in preparing a claim need scarcely arise. I do not think, therefore, that this rather difficult question whether costs in preparing a claim will affect the final settlement of the claim will arise.
Mr. Corfield: I am sure the Minister will accept that, on occasions, one may need an architect's assessment of damage to a building, and that would have to be paid for.
Mr. Roberts: As I understand it, it is my right hon. Friend's intention to deal with claims as sympathetically and generously as possible. I should not rule out a submission by a claimant that in making his claim he had been involved is probable expense of that kind. I hope that I am not committing my right hon. Friend unduly. I think probably that, because of the approach which my right hon. Friend will adopt to these claims,
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such submissions will not be ruled out. Legal costs could be awarded in the event of successful recourse to the courts.
I believe I have now covered practically all the points which were raised during the debate, even if not in the order in which they were raised. If hon. Members feel that I have omitted any point and would like me to deal with it, I shall be glad to try to do so.
Mr. Corfield: In view of the purpose of the debate from my point of view, and of the right hon. Gentleman's answers, I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.

TEACHING COUNCIL (SCOTLAND) BILL
Order for Second Reading read.
Bill referred to the Scottish Grand Committee.—[Mr. Millan.]

LUTON AIRPORT (AIRCRAFT NOISE)
Motion made, and Question proposed,That this House do now adjourn.—[Mr. loan L. Evans.]
10.37 p.m.
Mr. James Allason: Luton operated a municipal airport for many years without ill effects, but then, two years ago, jet aircraft were introduced and the effect was appalling. I first met the effect two years ago at 3.20 a.m. when, suddenly, there was a shattering roar apparently a few feet above the ceiling of my room and a jet aircraft passed low overhead. It was a most astonishing and ghastly experience, but I had to learn to live with it.
Since the arrival of those first early jets there has been a steady build up of aircraft at Luton Airport, and the intention is that this summer night flights will increase to as many as 56 per week, which I calculate is just sufficient to allow one flight per hour throughout the hours of darkness, thus ensuring that anyone living under the flight path gets no sleep at all.
The aircraft from Luton have to fly at a maximum height of 3,000 ft. because of the rules of London Airport. This ensures that even 10 miles away from the airport the noise is still bad. Anyone who lives under the flight paths has had a rotten time during the last two years. I have tried to express this on a number of occasions in the House and to the Board of Trade, both verbally and by letter. The indignation is on two grounds. The first is that aircraft are given immunity in respect of noise, so that it is not possible to sue on that ground alone. Secondly, at Luton we have a municipal airport operated for the financial benefit of the ratepayers. No one pretends that it is to help the town in providing essential services for its citizens. It is for the benefit of people coming from many miles away. It is operated at the cost and discomfort of people living in an entirely different county, who have no means of influencing Luton Corporation.
Over the years we have seen the formation of Luton and District Association for the Control of Aircraft Noise, which has done great work in the past two years in protesting about the actions of
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Luton Corporation. We have had an Airport Consultative Committee formed which has tried to influence the corporation and has succeeded this year in persuading it to reduce the number of night flights from the 70s to 56. Even that is not satisfactory. A public inquiry held by the Minister of Housing and Local Government into objections to a small expansion scheme for the airport has just been held. This was welcome because those who wished to object had the chance to state their case to this small scheme, knowing that around the corner much bigger schemes were in preparation by the corporation.
This inquiry was just being concluded when the news came of a change of aircraft flights. On 3rd and 10th March the Board of Trade issued what is called, in the laughing jargon of the Board of Trade, a Minimum Noise Routeing. Anyone who tries to sleep on a minimum noise route knows the effect. The route was changed with effect from 2nd April to disturb 100,000 people in my constituency. Instead of flying in a fairly straight line from Luton Airport and then directly over the towns of Tring and Wendover, the new flight path involves a change so that there is swing of 45 degrees and the aircraft heads directly towards Hemel Hempstead. There is then another swing of 55 degrees and the aircraft flies just short of Hemel Hempstead, over the towns of Berkhamsted and Tring.
Although the notification came out on 3rd and 10th March this change was not published. No information that I can discover was given to anyone concerned. The Town Clerk of Hemel Hempstead was informed five days before 2nd April.
As the Member for Parliament who had been active in this matter, I was not informed at all. There was no consultation with the local authorities, as far as I can make out. I would not expect that there was any with the Airport Consultative Committee, because it, in turn, appears to have taken no action. The significant feature is that coming as it did at the close of the public inquiry it ensured that these extra 100,000 people affected by aircraft noise were unable to register their protest.
I shall be grateful if the Minister of State will tell us the reasons for the

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change of route. It is alleged to be because of the success of those who have been living under the flight path and who have protested, but that is not what the Minister has told me. He said that it was because of the introduction of special rules at Luton. I have not seen details of the special rule zone. I understand that it has something to do with flying at Dunstable Downs airfield.
Last year, I suggested to the Board of Trade that it was reasonable that Dunstable Downs airfield should be entitled to continue its flying and should not be put out of business by Luton. This may have something to do with it. Dunstable Downs airfield, however, is concerned mainly with gliding, which does not operate at night. We are, therefore, unable to understand why the new routeing has been designed to disturb so many more people, particularly at night. I could understand it if there were a day route and a night route. It might then be more intelligible.
Public reaction during the past month has been very strong. Although the flight path as shown does not go over Hemel Hempstead, nevertheless the aircraft are somehow flying over Hemel Hempstead and make an appalling noise. To people accustomed to living in the silent countryside, a sudden roar is far worse than only a slight increase in noise for those living in a city, where there is a steady background of noise all the time. Those who are meeting this noise for the first time are shattered. How much worse will it be at the height of the tourist season?
I shall be grateful, therefore, if the Minister will tell us what can be done about it. First, where should complaints go? It has been suggested that people who are disturbed in the middle of the night should telephone the duty officer at the Board of Trade and let the Department know that this nuisance is occurring. Alternatively, it might be that one should telephone the Luton Corporation.
One constituent has found a new system of telephoning a ratepayer of Luton, whose name is chosen at random, and saying, " If I cannot sleep at half-past three in the morning, I do not see why you should, either." The first Luton ratepayer whom he telephoned was extremely sympathetic and said, " I entirely see your point. I am always
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happy to see my rate bill going down because of the operations of Luton Airport, but now, I understand, we are making a thorough nuisance of ourselves somewhere else, and I apologise."
The change of route will cause severe discomfort to the majority of my constituents. It has been introduced without consultation. I ask the Minister of State to come forward with new proposals, after due consultation, which will avoid the severe effects of the present routeing.
10.48 p.m.
The Minister of State, Board of Trade (Mr. Goronwy Roberts): I do not think that the constituents of the hon. Member for Hemel Hempstead (Mr. Allason) can complain about the manner in which he has represented their interests in the House tonight. He has put forward very fairly and firmly views which, I know, must be shared by many of them.
I entirely agree with the hon. Member on the subject of noise. Aircraft noise disturbance causes many people most acute distress in many parts of the country, and I for one am in no doubt that there is need for an effective, collaborative effort between all the bodies, public and private, that can contribute towards alleviating the problem. The hon. Member will recall that last week I had the privilege of moving an aircraft noise Order by means of which we definitely look forward, quite soon, to tackling this problem at the source, namely, in providing new aircraft with quieter mechanisms.
At the level of Government action. we have shown—not least by the introduction of that Order—that we are determined to take all practicable measures to control the problem of aircraft noise. The Luton Airport authorities, through the various noise abatement measures they have introduced at the airport, have shown a clear awareness of the need to protect the amenity of the surrounding countryside.
I should, perhaps, clarify one question, namely, which authority is responsible for what measures at Luton Airport. In practice, of course, my officials work very closely with Luton Corporation, which owns the airport. But it often happens that misunderstandings arise because the Government—the Board of Trade do not have the same powers to take

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measures to protect amenity as we have at British Airports Authority airports, such as Heathrow and Gatwick.
We have clear statutory powers and responsibilities for matters affecting aviation safety, but not for the control of noise disturbance at municipal airports such as Luton. Hence the establishment of minimum noise routes and the other noise abatement measures at Luton, which are matters on which the Board of Trade advises but which are the ultimate responsibility of Luton Corporation.
It may be helpful if I outline the background leading up to the change in the minimum noise route for aircraft taking off from Luton Airport—the change in the westerly flight path from Luton—which is the central issue which the hon. Gentleman has raised tonight.
It had been known for some time that the growth of aviation activity in the northern part of the London terminal area, beneath which Luton Airport is situated, would eventually reach the scale when greater airspace protection would be needed for public transport operations into and out of Luton Airport. Last summer, anxieties were expressed about safety; and safety in the air is necessarily and rightly a matter on which there must be no compromise.
Accordingly, when the scale of air traffic indicated that the time was approaching for new safety arrangements to be introduced, the Board of Trade carried out a study of the route structure of the North London complex. This study also had to take into account the gliding activity to which the hon. Gentleman referred and which takes place nearby at Dunstable, and, the effect of traffic and routes into and out of Heathrow and Gatwick.
The outcome of this study was a recommendation in favour of creating a "special rules zone" around Luton Airport, and adjacent "special rules areas" Within the special zone and special areas, no aircraft may fly, unless authorised exceptionally, without obtaining permission from Luton air traffic control, thereby ensuring that use of the airspace in question is supervised in one place. While in the special zone and special areas the commander of the aircraft must remain in constant touch with Luton air
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traffic control and comply with any instructions given.
Hon. Members will appreciate that these arrangements had to be discussed with various aviation interests before they could finally be settled. Once having been settled, it was important to bring them into effect as quickly as possible. This was done on 2nd April. I am sorry that the hon. Gentleman could not be informed about this beforehand, but as he will see from the NOTAM which sets out the new arrangements, account has been taken of the points he put to my predecessor in correspondence last year.
As part of the essential safety arrangements which are now called for it became necessary that westerly departures from Luton Airport should be rerouted further south so as to ensure that aircraft kept within the London T.M.A. and remained well clear of gliding activities at Dunstable. This entailed a revision of the minimum noise routes which was agreed by the Luton authorities. These changes, which I have already notified to the hon. Member, had to come into effect on the same day as the setting up of the special rules zone and special rules area, i.e. 2nd April.
Because of the speed with which these changes had to be agreed and put into effect, I understand that the Luton authorities had no opportunity to consult local interests. However, speedy action was called for, and, in fact, the nature of the constraints upon the new route structure is such that there is no practicable alternative. The narrow limitations of the Dunstable gliding area to the north, and the location of the heavily built-up areas of Berkhamsted and Hemel Hempstead to the south left no room within which to find alternative routes to those now being followed.
I would stress that the new routes avoid putting the flight paths over built-up areas. The whole object of minimum noise routes is to avoid those areas to the greatest extent possible, and I believe that this is what has been accomplished. We cannot avoid all populated areas, but only the densely populated areas where more people would be disturbed. The new route comprises a 20-degree left turn shortly after take-off which is designed to avoid the southern tip of Luton itself;

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there is a further 20 degree left turn a mile or so further on, on reaching the M1 motorway, so as to avoid Markyate; and then there is a subsequent right turn about four miles further on to route aircraft in the direction of Beacon Hill.
I am sure that the hon. Member will appreciate that this series of manoeuvres, all during the difficult and exacting takeoff phase of flight, are manoeuvres which put a heavy burden on to pilots. However, they are imposed for the benefit of people on the ground. The last right-hand turn which I mentioned is designed to take place over a mile to the north of Hemel Hempstead, but the subsequent flight path may just touch the northern tip of Berkhamsted. But it is not possible to make the turn earlier because, whereas the two previous left hand turns can be made from visual aids, the next stage of the route depends on following guidance from a beacon at Bovingdon until picking up a radial from Garston when the right-hand turn is to be made.
I can only express my sincere and deep regret that the new minimum noise route will cause some additional disturbance to some of Berkhamsted's inhabitants But it is fair also to state that the change should bring substantial benefit to Tring and Little Gaddesden, which, as the hon. Gentleman knows, have been the source of many complaints in the past, and which, I well know, have been pressed by him.
It may be, however, that some of the anxieties about flights over built-up areas have been due to reports that have appeared in local newspapers about a possible new route towards the south between Berkhamsted and Hemel Hempstead. There is a misunderstanding here which I shall attempt to explain. I think that it is clear that if an aircraft can climb steeply over open country after take-off, before reaching built-up areas, this is one of the best forms of noise abatement procedure. For air traffic control reasons, however, this is not always possible; in the case of Luton Airport this would mean entering the busy London terminal area, the base of which commences at 2,500 feet.
However, whenever traffic conditions allow, aircraft are permitted by the London Air Traffic Control Centre to
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climb as rapidly as possible over the fairly open country between the M1 and Hemel Hempstead; and, once they have reached a height of approximately 3,000 feet, are allowed to continue due south on a flight path that would take them between Berkhamsted and Hemel Hempstead. At this point, they should be at a height of at least 5,000 feet. If, however, there is too much traffic in the London T.M.A. the aircraft would follow the minimum noise route previously mentioned at a lower height.
I should like to make it clear that these arrangements for continuing flights to the south were in existence before the minimum noise route was changed; the latter route is the only recent change affecting the hon. Member's constituency.
I would be the first to agree that my reasons are geographical and technical, but I know that the hon. Gentleman wants them on record so that he can study and discuss them with his constituents. I hope that my explanation of the reasons why Luton was not able to have local consultations is acceptable to him. I am satisfied that it was necessary to move quickly.
Luton has a good record of local consultation. The hon. Gentleman himself mentioned the way in which the number of night jet flights was reduced from about 70 to 56. This was an earnest of the readiness to listen to local representations.
I also hope that the hon. Gentleman will accept my assurance that no discourtesy was intended in not sending him a copy of the NOTAM. This was due to a mechanical defect which I would be glad to put right if I did not know that the hon. Gentleman has been assiduous enough to put it right himself.
I want to pay tribute to the hon. Gentleman for his constant argument on behalf of his constituents. I hope that he will agree, on reflection, that, while some of his constituents may be adversely affected by this necessary change of route, a large number of others will benefit.
Question put and agreed to.
Adjourned accordingly at two minutes past Eleven o'clock.

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