Sitting of 16 February 1970

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

    Dee Estuary
    Mr. Tilneyasked the Secretary of State for Wales (1) if he will make a further statement on the effect of a nuclear power station at Connah's Quay on the amenities of the Dee Estuary;
    (2) what progress has been made in consultations regarding the plans for the reclamation of the Dee Estuary.
    The Minister of State, Welsh Office (Mrs. Eirene White): Preliminary engineering studies have established the feasibility of a multi-purpose crossing of the Dee Estuary. Further studies are now in hand to establish the best place for such a crossing. The implications of the possible location of a nuclear power station at Connah's Quay are being taken into account in these studies, and there is
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    close and continuous consultation with the local planning authorities and the river authority.
    Mr. Tilney: Would not the building of a nuclear power station wreck the chances of a multi-purpose reclamation scheme so beneficial to the North-West?
    Mrs. White: At this stage, one could not possibly prejudge the advice which my right hon. Friend may receive from the planning consultants to whom this matter has been referred.
    Mr. Gibson-Watt: Will the right hon. Lady admit that the first part of her Answer was known to us about three years ago? Were the reasons for the delays in carrying out a feasibility study purely economic?
    Mrs. White: Not at all. This is a very complex matter. As the hon. Gentleman will appreciate, there are many factors to be taken into account—planning, engineering, water conservation, land reclamation, general social consequences, and, not least, relations between the populations on either side of the river.
    Mr. Brooks: In view of the probability that any improvement in transport links across the Dee will lead to a great acceleration of population growth in North-East Wales, would not my right hon. Friend agree that any decisions arising from the Merseyside Land Use and Transportation Study should not be taken until the implications of this scheme also have been considered?
    Mrs. White: I would not presume to judge what is best for Merseyside. All I am concerned about is that we in North Wales are left alone to make our own decisions.

    Water Pollution
    Mr. Hooleyasked the Secretary of State for Wales what special schemes for dealing with water pollution in Wales are planned during 1970.
    Mrs. White: Out of this year's record level of investment of between £8 million and £9 million in new sewerage and sewage disposal works in Wales, a substantial proportion will be designed to improve the standard of effluent discharged into river courses and estuaries.

    Derelict Land
    Mr. Hooleyasked the Secretary of State for Wales what estimate he has made of the amount of derelict land which will be cleared or restored in Wales during 1970; and how this compares with 1969 and 1968.
    The Secretary of State for Wales (Mr. George Thomas): About 1,000 acres. The comparable figures for 1969 and 1968 are 335 and 329, respectively.
    Mr. Hooley: Is not this a somewhat leisurely approach to a serious and difficult problem? Could my right hon. Friend, perhaps, use his influence to accelerate the effort of those who are responsible on the ground for carrying it out?
    Mr. Thomas: When England is able to move at the same pace as Wales, it will be time enough for observations of that kind from my hon. Friend. The figures I gave are superlative and splendid, and we are very proud of them.

    Y Cymro and Y Faner (Advertisements)
    Mr. William Edwardsasked the Secretary of State for Wales what is the total amount of money spent upon advertising in Y Cymro and Y Faner; and what is the basis upon which his Department allocates advertising.
    Mr. George Thomas: In 1969, £395 was spent by the Welsh Office on advertisements in Y Cymro and £197 in
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    Y Faner. Welsh language advertisements are inserted in these newspapers when a national coverage is needed or where there is no local Welsh language newspaper.
    Mr. Edwards: Is my right hon. Friend aware that the publishers of these newspapers greatly appreciate the fact that he strikes a fine balance between partiality and impartiality in granting advertisements to these papers? Though the editors of the papers concerned do not express the appreciation which is due to my right hon. Friend, people in Wales appreciate the support given to these papers.
    Mr. Thomas: I am much obliged to my hon. Friend. He is a little mistaken, because I have received from the Editor of Y Faner a very kind and appreciative letter about the part I am playing.
    Mr. Gwynfor Evans: Is the Secretary of State aware that the total amount spent by the Government in the Welsh language is disgracefully small?
    Mr. Thomas: I am aware that in the hon. Gentleman's eyes anything we do is wrong.

    Road Schemes
    Mr. Gowerasked the Secretary of State for Wales what is the value of road schemes for Wales which are now in the preparation pool.
    The Under-Secretary of State for Wales (Mr. Edward Rowlands): £78½ million.
    Mr. Gower: I thank the hon. Gentleman for that reply. Does he appreciate that there is a fairly widespread feeling that the need in parts of Wales is so great that the Government's objective should be to exceed the figures now contemplated?
    Mr. Rowlands: Yes, but a very large proportion of the schemes in the preparation pool will be completed by the mid-1970s. Unlike hon. Members opposite, we are not saying that we shall cut public expenditure but still build miles and miles of road.
    Mr. Gibson-Watt: When we had responsibility for these matters, did we not adopt a different system? We had the rolling system, which was very successful and which this Government have

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    abandoned. What percentage of the amount now in the preparation pool will be completed by the date the hon. Gentleman has mentioned?
    Mr. Rowlands: I do not know the exact percentage. It is a very large proportion. We shall have about 23 miles of motorway and about 45 miles of dual carriageway completed by the mid-1970s. This is an impressive record. The whole purpose of the preparation pool is to prevent the programme's falling back, which is what happened when the part of the motorway that came into Wales was completed. Our system is better.

    Agriculture (Advisory Officials)
    Mr. Gibson-Wattasked the Secretary of State for Wales how many officials in the Welsh Office have full-time responsibility for advising him on agriculture.
    Mr. George Thomas: None. Under arrangements made following the Transfer of Functions (Wales) Order 1969, I look primarily to the Welsh Secretary of the Ministry of Agriculture at Aberystwyth for advice on agricultural matters in Wales.
    Mr. Gibson-Watt: Has not this situation become a farce? The right hon. Gentleman, the Home Secretary and the Minister of Agriculture, Fisheries and Food all take part in the Price Review. Would it not be much better if he and the Home Secretary, particularly in view of his remarks last week, got out of it and left it to the Minister of Agriculture?
    Mr. Thomas: I am surprised at the hon. Gentleman, who is usually very sensible. Welsh agricultural interests are now aware that they have a voice specifically devoted to them and their interests in the negotiations on farm prices. I believe that there would be considerable harm if such an advantage were lost.

    Nurses
    Mr. Gowerasked the Secretary of State for Wales how many hospitals in Wales are not fully operative owing to shortages of nursing staffs; and what steps he is taking to solve these difficulties.
    Mrs. White: Almost every hospital could make good use of additional nurses, but there are two, Sully and
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    Morriston where the problem is particularly acute. At Sully, work is to start this year on a creche and improved residential accommodation. At Morriston, where the shortage is of student nurses, the nurse training school is to be amalgamated with that of Singleton Hospital and improvements are to be made to the nurses home.
    Mr. Gower: I appreciate the difficulties faced by Ministers in the Welsh Office and by the hospital board. Does the hon. Lady appreciate that this is a far bigger problem than her reply indicates and that most of the resident physician superintendents and matrons to whom I have spoken consider that the problem is likely to get larger during the years ahead? It is not likely to be solved. Will the hon. Gentleman treat it much more urgently?
    Mrs. White: Among other things, a very significant addition has been proposed to nurses' pay, which will help with recruitment. The kind of action which I am indicating as being carried out in these two hospitals is a very intelligent way of meeting difficulties which vary greatly from one hospital to another.
    Mr. Alec Jones: What effect is the shortage of nurses having on long-term hospitals dealing with mentally sick?
    Mrs. White: I cannot give a general answer to that question because the position varies from place to place. If my hon. Friend has a particular hospital in mind, I shall be happy to reply to a question.
    Mr. Gibson-Wattasked the Secretary of State for Wales what is the total establishment of all grades of nursing staff in hospitals administered by the Welsh Hospital Board: and by what percentage the present number of nurses falls short of establishment.
    Mrs. White: There is no generally accepted basis for determining an establishment for nurses, but the Welsh Hospital Board now employ, in terms of whole-time equivalents, about 13,700 nurses.
    Mr. Gibson-Watt: About how much is this under strength? We appreciate the problems that this sphere gives to the country at present.
    Mrs. White: If I am not able to give a precise establishment figure, obviously I cannot say by how much we shall fall short of it. This is a complicated matter. It has been referred to by the Public Accounts Committee. If the hon. Gentleman would care to talk to me about it afterwards, I should be happy to see him.

    Straying Animals
    Mr. Probertasked the Secretary of State for Wales whether he will set up a working party to consider the problems caused by straying %animals and to make proposals thereon.
    Mr. George Thomas: I am considering my hon. Friend's suggestion in consultation with my colleagues concerned.
    Mr. Probert: Is my right hon. Friend aware that this Answer was given to me as long ago as June, 1968? Is not the only solution to the problem, apart from the legislation now going through the House, greater co-operation and co-ordination between the farming community and local authorities?
    Mr. Thomas: I am very anxious that there should be such co-ordination, but I thought it better to await reactions following the introduction of the Animals Bill.

    House Demolition (Protection of Adjacent Properties)
    Mr. Probertasked the Secretary of State for Wales if he will take steps to remedy the hardship caused to householders by liability to make weatherproof the exposed pine ends of their houses on the demolition of adjacent properties.
    Mr. E. Rowlands: Where owners demolish properties which leave adjacent houses exposed, local authorities have power, under the Public Health Act, 1961, to serve notices requiring those owners to weatherproof surfaces exposed by the demolition. If properties are demolished by the local authority, they have power to carry out weatherproofing if they think it right to do so. My right hon. Friend will be writing to my hon. Friend, setting out the position in greater detail.
    Mr. Probert: I thank my hon. Friend for that reply. Could not relief of this hardship, which exists not only in Wales
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    but in many other parts of the United Kingdom, be tackled under the provisions of the Housing Act, 1969?
    Mr. Rowlands: It would be possible to consider the question of a grant under the improvement grant system set up by the 1969 Act if it was part of an improvement scheme. Also, under the 1969 Act, local authorities can make loans to house-owners on terms providing for interest only to be paid, the capital being recovered later. This could help those on very low incomes and those suffering from financial hardship.
    Mr. Gower: Except in extraordinary cases, should not local authorities always make up finance in this way where they are responsible for demolition, otherwise it is a great hardship to the individual?
    Mr. Rowlands: Local authorities can do this if they demolish the property, but they are not bound by law to do so.

    Buildings of Architectural and Historic Interest (Grants)
    Mr. Andersonasked the Secretary of State for Wales how many buildings of outstanding architectural or historic interest in Wales have been awarded grants towards the cost of repairs under the Historic Buildings and Ancient Monuments Act 1953; what is the total value of the grants; how many buildings were awarded grants in 1966–67, 1967–68, 1968–69 and 1969–70; and what were the total amounts of such grants.
    Mr. George Thomas: 95 Buildings have been awarded grants amounting to £590,065 under the 1953 Act. The numbers of buildings awarded grants in 1966–67, 1967–68 and 1968–69 were 18, 11 and 22, respectively, and the amounts £38,563, £17,527 and £64,570. In the current financial year 15 buildings have so far been awarded grants to the value of £27,524.
    Mr. Anderson: This is a substantial and welcome increase. In assessing the claims for grants, to what extent are the benefits of tourism taken into account?
    Mr. Thomas: We have very wide considerations in reaching these decisions. Those referred to by my hon. Friend are taken into account.

    Road Safety Unit
    Mr. Andersonasked the Secretary of State for Wales what assistance his Road Safety Unit has given to local high-way authorities since it was formed on 1st April, 1968?
    Mr. E. Rowlands: Forty-one separate local accident studies have been or are being carried out with the co-operation of the police and local authorities mainly in South Wales since approximately two-thirds of the accidents in the Principality occur in Glamorgan and Monmouthshire. A report on the causes of fatal road accidents involving children was issued during 1969.
    Mr. Anderson: Is not a first-rate example of such work that at Cwmbran in Monmouthshire? What attempt is made to follow up this analysis of the causes of accidents?
    Mr. Rowlands: It is the job of the Road Safety Unit, in conjunction with local authorities, to offer effective remedies for accidents. As it takes one or two years to see how well they are working out, we have not yet had a follow_up investigation. We intend that there shall be one.

    Councillors (Financial Loss Allowance)
    Mr. Roy Hughesasked the Secretary of State for Wales what plans he has to protect the interests of councillors who suffer financial loss as a result of service on local authorities; and if he will make a statement.
    Mrs. White: Regulations which came into force on 6th February prescribed new maximum amounts for the financial loss allowance to which members of local authorities are entitled in respect of the performance of their duties. For the longer term, we have recently announced that it is intended to work out, in consultation with the local authority bodies, substantial improvements in allowances.
    Mr. Hughes: Does my right hon. Friend appreciate that there is a need to attract many more industrial workers, particularly younger ones, into local government service, but that they are deterred from going into local government service
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    by financial penalties? As a custodian of the local government service in Wales, will my right hon. Friend's Department ensure that this situation is remedied?
    Mrs. White: I have much sympathy with what my hon. Friend says, but I would refer him to paragraph 80 of the recently published White Paper on the Reform of Local Government.

    Welsh-speaking People
    Mr. E. Hudson Daviesasked the Secretary of State for Wales what discussions he has now had with the Registrar-General about the possibility of making provision on census forms for obtaining information about the number of people born in Wales, but living outside Wales, who are Welsh-speaking; and what was the outcome of such discussions.
    Mr. George Thomas: The possibility has been carefully considered by the Registrar-General; but I understand that he has concluded that it would not be practicable.
    Mr. Davies: Is my right hon. Friend aware that many people in Wales will view his Answer as being very unsatisfactory in view of the usefulness of information about Welsh-speaking people in England, particularly in assessing the potential audience for television programmes in the Welsh language which, as my right hon. Friend knows, are transmitted in England?
    Mr. Thomas: It would be interesting to have the information to which my hon. Friend refers, but to add further questions to those in the 13 million census forms which will go out on this matter is not justified.

    Forestry (Surface Water Drainage)
    Mr. E. Hudson Daviesasked the Secretary of State for Wales what representations he has had from local authorities on Circular 97/69 regarding surface water run-off; if he is aware of the dangerously increased volume of water carried by streams in the Betws-y-Coed area as a result of Forestry Commission drainage in the vicinity of Elsie Lake; and what steps he proposes to take in the matter.
    Mr. E. Rowlands: My right hon. Friend has had representations from one

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    local authority, Betws-y-Coed Urban District Council. He is not aware that the volume of water draining from Forestry Commission land in the area has dangerously increased. My right hon. Friend understands that, after consultation between the Commission, the Conway Valley Water Board, the Urban District Council and local proprietors, the level of the lake during the winter months has been lowered and the main watercourse leading from it has been deepened.
    Mr. Davies: Is my hon. Friend aware that, in the case of Elsie Lake, recent afforestation has led to a considerable number of extra acres falling within the catchment area of streams passing through the village of Betws-y-Coed, with a great deal of resultant damage? Is he not unhappy that the Forestry Commission is not legally responsible for the effect on land owners of drainage schemes which the Commission undertakes?
    Mr. Rowlands: I understand that cases are to hand, and it would not be proper for me to comment on the matter at present. The Forestry Commission suggests that it is not liable, and that is for the courts to work out.
    Mr. Gibson-Watt: The Secretary of State is responsible for forestry in Wales. Will he make certain that, wherever possible, both state and private forestry concerns, when doing forestry draining, go in for contour draining, which is what is required?
    Mr. Rowlands: I will consider that interesting suggestion.

    Gunnery Range (Carmarthenshire)
    Mr. Gwynfor Evansasked the Secretary of State for Wales what representations he has received in regard to the proposal to move the Shoeburyness gunnery range to the sand beaches of Carmarthenshire.
    Mr. George Thomas: I have received about 330 objections from individuals together with representations from over 30 organisations and authorities, including the local planning authority, Carmarthenshire County Council.
    Mr. Evans: Is the right hon. Gentleman aware of the strength and determination of opposition in the area to this project, which could sterilise the area in-
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    dustrially? Is he also aware that this opposition is nowhere found more strongly than among the so-called weaker sex, where the spirit of Gwenllian is now very much alive? Will the Government ride roughshod over the opposition, as they did at Tryweryn?
    Mr. Thomas: The hon. Gentleman received from the Ministry of Defence two notices informing him and my right hon. Friend the Member for Llanelly (Mr. James Griffiths) of this proposal. My right hon. Friend the Member for Llanelly has made representations to the Ministry of Defence. The hon. Gentleman has been completely silent; he has made no representations whatsoever to the Ministry of Defence. I can assure the people of Pembrey and district that there is no intention to ride roughshod over anyone. There will be the fullest possible inquiry.
    Mr. Gibson-Watt: I was glad to hear the Minister's last sentence. Does it mean that he is agreeing personally to the inquiry which he has been asked to instigate by the protesting association?
    Mr. Thomas: Arrangements about the form of the inquiry are now under consideration. I can give the assurance that every opportunity will be given for all points of view to be thoroughly aired at the inquiry.
    Mr. Arthur Lewis: Is the Secretary of State aware that those in and around the Shoeburyness area who have had the doubtful privilege of having this gunnery range in their area for many years are only too pleased to go in for fair shares for all and to let Wales have it for a few years? We are glad to get rid of it.
    Mr. Thomas: My hon. Friend has a Welsh name, but that is his only link with us.

    Welsh Language
    Mr. Gwynfor Evansasked the Secretary of State for Wales if he will now seek to raise the Welsh language in Wales to a status of equality with English in Wales.
    Mr. George Thomas: The Government have already raised the legal status of the Welsh language in Wales to that of equality with English.
    Mr. Evans: Is the Secretary of State aware that some people may admire the lion-hearted way in which he has stood up, with nothing more formidable than the British Government behind him, to the great bully the Welsh Language Society and the way in which he is resisting any advance in Wales to national status? Is he also aware that I am not among his admirers?
    Mr. Thomas: I feel heartbroken by the hon. Gentleman's last remark. I am well aware that the hon. Gentleman does what he can to stir up members of the Welsh Language Society to indulge in the sort of hooligan exercises which we
    have recently witnessed. I share the opinion of Lord Justice Arthian Davies that they can do nothing but bring shame and disgrace to Wales.
    Mr. William Edwards: Is my right hon. Friend aware that the implicit misrepresentation about the status of the Welsh language in that supplementary question is typical of the kind of misrepresentation taking place in Wales by people who should be more responsible and which is leading young people who are misrepresented to take unjustifiable and unwise actions?
    Mr. Thomas: My hon. Friend speaks for a very wide representation of opinion in the Principality. Major constructive steps have been taken in an endeavour to succour the Welsh language, and no good at all will ensue from the sort of militant action of which the hon. Member for Carmarthen (Mr. Gwynfor Evans) is so proud.

    Local Government Reform
    Mr. Birchasked the Secretary of State for Wales when he intends to announce his further proposals for the reform of local government in Wales.
    Mr. George Thomas: I hope to do so next month.
    Mr. Speaker: Mr. Arthur Lewis.
    Mr. Gibson-Watt: On a point of order I wished to put a supplementary question on Question No. 19, Mr. Speaker.
    Mr. Speaker: I know; but no original supplementary question was asked.

    SHIPPING (CUBE-CUTTING)
    Mr. Arthur Lewisasked the Attorney-General why it is taking so long for a decision to be made in connection with the investigation into matters connected with the practice known as cube-cutting; whether prosecutions are under; and whether he will make a statement.
    The Attorney-General (Sir Elwyn Jones): As my hon. Friend is aware, the police investigation into these complicated matters has involved the examination of the circumstances of many hundreds of different transactions and documents involving a large number of companies. Although substantial progress has been made with this investigation, it will be at least three months before the papers can finally be submitted to the Director of Public Prosecutions.
    Mr. Lewis: I thank my right hon. and learned Friend for that reply, which was more positive than others I have received. Is he aware that, through going on for so long, some of these cases cause difficulty when they eventually reach the courts, such as the John Bloom case, which I had to raise here for years before action was taken?
    The Attorney-General: I appreciate the difficulties which delay causes, but instant prosecution is not desirable.

    POLISH OFFICIALS (INADMISSIBLE ACTIVITIES)
    Mr. Goodhewasked the Attorney-General if he will institute proceedings against those British subjects who passed secret information to the Polish diplomats recently expelled for inadmissible activities.
    The Attorney-General: Although the Polish officials in question were engaged in inadmissible activities, no evidence has been supplied to me which would justify proceedings under the Official Secrets Acts against the persons approached by those officials. This may be attributed to the timely action of the Security authorities.
    Mr. Goodhew: Is the right hon. and learned Gentleman telling the House that

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    the inadmissible activities of those diplomats were merely to approach people who were potential traitors, or people who might have passed them information, or is he saying that nothing has been done to make quite certain that no information was passed to them because they had no access to it themselves?
    The Attorney-General: I am saying that these unauthorised activities were nipped in the bud.

    MAGISTRATES (PROCEEDINGS IN OTHER COURTS)
    Mr. Boyd-Carpenterasked the Attorney-General what guidance is given by the Lord Chancellor to magistrates with regard to their actions outside their courts which impinge on the proceedings of other magistrates' courts.
    The Attorney-General: Magistrates should not engage upon such actions. This is or should be well understood and my noble Friend, the Lord Chancellor, does not consider that any general guidance to magistrates on this subject is required.
    Mr. Boyd-Carpenter: Is the Attorney-General aware of a recent case in which 21 Welsh magistrates combined publicly to pay a fine imposed by another bench of Welsh magistrates? When magistrates act publicly to nullify penalties imposed by other magistrates, does it not undermine the authority of the courts?
    The Attorney-General: The right hon. Gentleman said that they acted publicly, but the names of those concerned are not known to my noble Friend.
    Mr. Anderson: Both today and in his reply last Friday, my right hon. and learned Friend has said that the names of the magistrates concerned in that recent case are not known. In fact, they are now known, as several of these people have confessed; they have come out from underneath their stone. What further action, in the light of this, does my right hon. and learned Friend intend to take?
    The Attorney-General: If my lion. Friend has information to that effect, I shall be very glad to receive it. No one is obliged to accept a judicial appointment, but if he does he must accept it
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    with all that the appointment entails. Those who accept office as magistrates must not become actively involved in controversial matters which may suggest a bias in favour of one section of the community or against another section. They must see that their conduct does not bring the administration of justice into disrepute. I think that I made this clear in answer to an earlier question last week.
    Sir P. Rawlinson: If the Attorney-General receives the names of the magistrates, will he ensure that they are passed forthwith to his noble Friend the Lord Chancellor with an expression that action should be taken?
    The Attorney-General: I assure the right hon. and learned Gentleman that the names will be passed on, and that the matter will be considered by my noble Friend.

    OFFENSIVE LITERATURE
    Mr. Dudley Smithasked the Attorney-General if he will refer to the Director of Public Prosecutions the offensive literature which was sent, unsolicited, by the Odalesque Press of 70 South Audley Street, London, W.1, to a citizen of Warwick.
    The Attorney-General: This matter has already been referred to the Director of Public Prosecutions who has arranged for it to be investigated.
    Mr. Smith: Could not the Attorney-General use his undoubted influence to bring about action to stop the indiscriminate posting of salacious and highly offensive material to very respectable citizens? Is he aware of the growing anger of the recipients of this material, who regard this as a complete exploitation of the permissive society?
    The Attorney-General: I am very well aware of the anxiety, and action is being taken.

  POSTS AND TELECOMMUNICATIONS

    Telephone Conversations (Recording)
    Mr. David Watkinsasked the Minister of Posts and Telecommunications if he will give a general direction

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    to the Post Office requiring the installation of equipment to give a warning to telephone users to detect that their conversation is being recorded.
    The Parliamentary Secretary to the Ministry of Posts and Telecommunications (Mr. Norman Pentland): No, Sir.
    Mr. Watkins: Is my hon. Friend aware that in the United States of America this is standard practice? Therefore, presumably the equipment is not difficult to install. Since there is evidence that there is an increasing recording of telephone conversations without the person at the other end being aware of it, should not we consider introducing this here?
    Mr. Pentland: I take my hon. Friend's point, but it was announced on 23rd January that my right hon. Friend the Home Secretary would set up a Committee of Inquiry into the law on personal privacy under the chairmanship of Mr. Kenneth Younger. I think that we should await the findings of that Committee.
    Mr. Shinwell: What are the criteria which justify detection of this sort, or are we to understand that anybody can be made a victim of this kind of detection? What sort of protection is available to the ordinary person in the street?
    Mr. Pentland: All attachments to the telephone require Post Office approval. Without that approval the service can be withdrawn immediately.

    Decimalisation (Stamp Prices)
    Mr. Kenneth Bakerasked the Minister of Posts and Telecommunications whether he will ensure that the price of stamps for the first class and second class post when the decimal currency is introduced comply with the Government's prices and incomes policy.
    The Minister of Posts and Telecommunications (Mr. John Stonehouse): Yes, Sir.
    Mr. Baker: Does that mean that there will be no increase in the cost of sending a letter on decimalisation, or shall we move to a system of having one standard 5d. stamp for first- and second-class mail, or to a two-tier 5d. second-class and about 7½d. first-class service?
    Mr. Stonehouse: The hon. Gentleman should not jump to any of those conclusions. I am discussing with the Post Office certain proposals that have been put to me. It would be premature for any announcement to be made.
    Mr. Bryan: As, consequent on the recent pay awards, the tariff is bound to go up, will the right hon. Gentleman tell us whether this will be at the same time as the changes owing to decimalisation or before?
    Mr. Stonehouse: I would not like to anticipate the results of the consideration I am now giving to the proposals that have been put to me.

    Independent Television (Levy)
    Mr. Stratton Millsasked the Minister of Posts and Telecommunications if he will now reduce the levy on independent television companies; and if he will make a statement.
    Mr. Mawbyasked the Minister of Posts and Telecommunications if he has yet made a decision on the independent television levy; and if he will make a statement.
    Mr. Robert Cookeasked the Minister of Posts and Telecommunications in view of the effect of the levy upon independent television and the smaller programme companies in particular, what steps he now proposes to take to enable the programme companies to find the resources to improve their services and prepare for colour transmissions.
    Mr. James Davidsonasked the Minister of Posts and Telecommunications arising from his consideration of the levy, what steps he is taking to encourage the production of a higher proportion of locally-produced television programmes by independent television contractors.
    Mr. Stonehouse: I have nothing to add to my reply to my hon. Friend the Member for Carlisle (Mr. Ron Lewis) and to the hon. Member for Belfast, North (Mr. Stratton Mills) on 19th January. —(Vol. 794, c. 21.]
    Mr. Stratton Mills: Is the Minister aware that he has now had the Cooper Brothers report for exactly a month? This is an intolerable delay, since the

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    independent television companies face a considerable crisis and there has been a drop in standards. Is it not clear that the Government are much slower to reduce taxation than to increase it?
    Mr. Stonehouse: I do not agree at all that there has been an intolerable delay. It is a very detailed and complex report, and it is very important that my officials and I should have enough time to go into it in detail with the I.T.A. I have already met the Chairman of the I.T.A. to discuss it, and I shall see him again. There is a large number of questions that must be investigated. Nor do I agree that programme standards are being reduced.
    Mr. Mawby: Will the Minister make as much haste as possible, because there is a danger that if the decision is left for a long period there will be a deterioration of programme standards or a reduction in staff, because these will be the only ways in which the companies can cover their costs?
    Mr. Stonehouse: I think that the wish of the House would be that we find the right solution to the matter. It is not just a question of the actions of my right hon. Friend the Chancellor of the Exchequer. The industry has been suffering from a reduction of income and increased costs at the same time.
    Mr. Cooke: Will the Minister bear in mind that the present rate of levy will very soon lead to unemployment, and that as each day goes by more and more longterm damage is being done to the industry, particularly to the smaller companies? Will he also bear in mind that the Authority itself is finding that it cannot press on with improved coverage and so on because of a starvation of funds?
    Mr. Stonehouse: I am very well aware of the effect that the general situation has had, but the full blame for this must not he put on the Government Front Bench.
    Mr. Bryan: Is the Minister aware that it was last June that he said he would be ready to reconsider the situation if the worst fears of the television companies were realised? Those worst fears have obviously been realised. We are grateful to him for telling us the progress so far, but can the right hon. Gentleman say when the companies are likely to know
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    the decision? Is this a Budget matter, or is it after or before the Budget that we shall know?
    Mr. Stonehouse: It would be unwise for me to anticipate when a decision will be arrived at on the matter until after our consideration and the results of the further inquires we have made to the I.T.A. became known.
    Mr. Stratton Mills: In view of the very unsatisfactory nature of the reply, I beg to give notice that I will raise the matter on the Adjournment.
    Mr. Alfred Morrisasked the Minister of Posts and Telecommunications if he will make a statement on his discussions with the leaders of the unions organising workers in the entertainment industry with regard to the effects of the Government's levy on independent television.
    Mr. Stonehouse: I had discussions with representatives of the E.T.U., A.C.T.T. and Equity on 23rd January and with representatives of the Writers' Guild on 3rd February. I was interested to have their views on the present situation in the industry, which will be taken into account.
    Mr. Morris: Will my right hon. Friend say a little more about the views of these organisations and give an undertaking that he will keep in touch with them about developments?
    Mr. Stonehouse: I am, of course, always pleased to meet representatives of the trade unions involved, and if they desire to see me again at another stage I will consider this request sympathetically.
    Mr. Stratton Mills: Will the right hon. Gentleman confirm that the trade unions in the industry believe that programme standards have fallen because of the levy?
    Mr. Stonehouse: I would not say that that is a unanimous view; there are more than two views about this. We are anxious to ensure that there is no risk that the programme standards will be reduced. It is yet to be seen that they have been.

    First-Class Postal Service
    Mr. Kenneth Bakerasked the Minister of Posts and Telecommunications what representations he has received

    21
    from the Post Office Users Council on the reliability of the first-class postal service.
    Mr. Stonehouse: None, Sir.
    Mr. Baker: Is not the Minister concerned about the declining standards of the postal service? Has he seen the survey by Aims of Industry—[HON. MEMBERS: "Oh."]—which is fully supported by complaints from my own constituents, to the effect that 10 per cent. of first-class letters go astray and are not delivered on time?
    Mr. Stonehouse: I think the House would be ill-advised to allow the survey of Aims of Industry, which is a political body, to guide it rather than objectivity. I would prefer to advise the House to look at the survey conducted by the Evening Standard, which came to the conclusion that the postal service was doing and is doing a good job.
    Mr. Bryan: Is the right hon. Gentleman saying that the survey of Aims of Industry is dishonest?
    Mr. Stonehouse: I am not suggesting that at all, but everybody knows that the Aims of Industry organisation is a political organisation sponsored by supporters of the Conservative Party. It is doing its best to embarrass this great public service by introducing political controversy into it, and that is why I would advise the House to look at some of the other surveys, in particular the Evening Standard survey, before jumping to any conclusions.
    Mr. Maudling: This is not good enough. Is the Minister saying that the Aims of Industry survey is dishonest, or is he not saying it?
    Mr. Stonehouse: I am advising the House not to be guided by any particular survey. I am anxious that the House should come to a reasonable conclusion and take into account other objective surveys which have been conducted.

    Second Commercial Television Channel
    Mr. Stratton Millsasked the Minister of Posts and Telecommunications if he will now authorise a second commercial television channel.
    Mr. Stonehouse: No, Sir.
    Mr. Stratton Mills: Can the right hon. Gentleman say whether the Government are considering a second channel for Independent Television? Would he make reference to the simultaneous reports which appeared which suggested that the Government are aiming at giving a second commercial channel to the present contractors without competition? Would he comment on this?
    Mr. Stonehouse: There are various proposals made to me from time to time and, of course, I have to consider them, but it is too soon for any decision to be made on the subject. I think we must digest the proposals which the I.T.A. has made before we move on to the next thing.

    Medium-Wave Frequencies (Local Radio Stations)
    Mr. Bryanasked the Minister of Posts and Telecommunications in what respects circumstances have changed since 7th March, 1968, so as to enable him to authorise the use of medium-wave frequencies for local radio, in view of the Ministerial conclusion reached at that time that such use was impracticable.
    Mr. Stonehouse: The B.B.C. is to stop broadcasting the English Regional versions on Radio 4. Frequencies now used for this purpose can then be redeployed to provide a supporting service for local radio stations.
    Mr. Bryan: Is the right hon. Gentleman first of all saying that, therefore, the statement by his predecessor on 7th March, 1968, when he said that
    "the use of medium wavelengths …is not On"—[OFFICIAL REPORT, 7th March, 1968; Vol. 760, c. 641.]
    was incorrect? Secondly, is he saying that his own speech on 15th March last was wrong, when he must have had some idea of what the programme was to be with the B.B.C. but he poured scorn on the use of medium-waves? Was he wrong then?
    Mr. Stonehouse: I think the statement by my right hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Edward Short), and mine of last year, were quite correct. The position is that the number of medium frequencies required by the B.B.C. for its regional programmes has been reduced, and it is

    23
    these medium frequencies it is now going to use in the extension of its service. There is no question of the original statements being incorrect.
    Captain Orr: Would the Minister say to what extent this redeployment of medium-wave frequencies requires the consent of the European Telecommunications Convention or whatever it calls itself? In making representations to that body will he consult the Frequency Advisory Committee first?
    Mr. Stonehouse: We do not have to invite approval as these frequencies are already assigned for United Kingdom use.
    Mr. Mawbyasked the Minister of Posts and Telecommunications if, in the light of his approval of the use of medium wave for British Broadcasting Corporation local broadcasting, there is any technical reason for refusing other broadcasting stations on medium wave.
    Mr. Stonehouse: The use of medium frequencies at the B.B.C.'s local radio stations does not preclude the use of medium frequencies at other broadcasting stations. I am considering how the B.B.C. can best employ them.
    Mr. Mawby: Does the right hon. Gentleman realise that all the Answers which he has given me only result in confusion about the use of medium-wave bands? Is he aware that there are already 12 stations broadcasting different programmes on 202 metres, yet apparently one station does not interfere with another? This does not seem to be consistent with his replies to me earlier that we cannot operate more than one station on a particular wave-band.
    Mr. Stonehouse: I did not say that. What I said was that if we continued to use medium-wave frequencies during the hours of darkness there would be severe interference not only with our own stations but also with those elsewhere in Europe.

    Local Broadcasting Councils
    Mr. McNamaraasked the Minister of Posts and Telecommunications if the members of the local broadcasting councils will be appointed in a representative capacity.
    Mr. Blenkinsopasked the Minister of Posts and Telecommunications what
    24
    arrangements he proposes to make for a local broadcasting council to have access to him in the event of a dispute with the British Broadcasting Corporation on the management of the local broadcasting service.
    Mrs. Renée Shortasked the Minister of Posts and Telecommunications what steps he is taking to ensure the independence of the local radio councils in each of the towns where local broadcasting is to take place under the ægis of the British Broadcasting Corporation.
    Mr. Stonehouse: I am appointing council members not as representatives of any particular organisation but for the individual contribution they can make to the work of the councils. To ensure the independence of the councils they will have access to me as a final resort on matters of principle.
    Mr. McNamara: Is my right hon. Friend aware that his Answer to that Question, particularly the latter part, will be very much welcomed, because it is important that these local councils shah represent as wide a range of views and opinion, and represent as many sections of society, as possible?
    Mr. Stonehouse: I am grateful for that expression of view. We are very anxious that the local councils should be able to play a very fruitful, useful and energetic part in the development of this service.
    Mr. Blenkinsop: While welcoming my right hon. Friend's answer, may I ask whether he can also assure us that there will be complete independence in the administrative functions of the station managers?
    Mr. Stonehouse: The day-to-day operations will, of course, be the responsibility of the B.B.C., and there is no intention that the councils should attempt to do this job.
    Mr. Scott-Hopkins: Can the Minister say, following his letter to me, and, I think to various other hon. Members, exactly what functions the councils will have and what their powers will be? Because these are the questions being asked by people who may possibly serve on this type of council, and we must know how he envisages the councils will work. It is very important to know this before one can recommend suitable names.
    Mr. Stonehouse: I envisage that a council would meet at least four times a year, but the way in which it arranges its business will be for the council to decide. It will have a very lively part to play in assisting the B.B.C. staff in the way the programmes are presented, and ensuring that there is close contact with the community it serves.

    Local Broadcasting Stations
    Mr. Ellisasked the Minister of Posts and Telecommunications when he expects local broadcasting services to be established in Bristol.
    Mr. R. C. Mitchellasked the Minister of Posts and Telecommunications when he expects the local broadcasting service to be established in Southampton.
    Mr. Alfred Morrisasked the Minister of Posts and Telecommunications when he expects local radio to open in Manchester; and what area it will cover.
    Mr. Arthur Davidsonasked the Minister of Posts and Telecommunications when the local broadcasting service will be established in Blackburn.
    Mr. Pentland: All these stations will open in the latter half of this year. The B.B.C. has not yet decided the opening dates nor the precise areas to be served.
    Mr. Ellis: Would my right hon. Friend say whether the staffing needs will be met from the present staff or will extra staff be taken on at Bristol? Or will he write to me and give me more information about the technical aspects of this?
    Mr. Pentland: Yes, I can write to my hon. Friend, and, indeed, the B.B.C. will take note of what he has said this afternoon, but the B.B.C. is making sure that staff and equipment are ready, and it also wants to take into account certain local factors before the starting dates for the stations. This will take some time yet.
    Mr. Morris: While welcoming my hon. Friend's statement, having regard to the betrayal of those who wanted Manchester to have the first public service local broadcasting stations, may I ask my hon. Friend whether he can at least assure me that those who serve on the
    26
    Council will at least believe in local public service broadcasting?
    Mr. Pentland: Yes, I hope so. That is the intention of the local council.

    Subscriber Trunk Dialling
    Mr. John Leeasked the Minister of Posts and Telecommunications if he will issue a general direction to the Post Office to speed up the development of Subscriber trunk dialling.
    Mr. Stonehouse: No. The development of subscriber trunk dialling is very satisfactory; it is now available to 61 million subscribers.
    Mr. Lee: While accepting that progress has been pretty satisfactory over the last few years, may I ask my right hon. Friend whether he can say that this programme is gathering momentum, or whether he thinks it is carrying on at the same level of progress as in the last few years?
    Mr. Stonehouse: The Post Office tells me that it is proposing to extend the S.T.D. service so that some 86 per cent. of subscribers will be able to use it by the end of this year. So the momentum is going on, and there is no doubt that, increasingly, business subscribers, and subscribers generally, appreciate it.
    Mr. Scott-Hopkins: Is the Minister aware that only very unsatisfactory progress is being made in Derbyshire, and that I have made representations to him about the Parwich exchange which is still in the old-fashioned style? Can he give me any idea when it will be converted to S.T.D., and the hope that it will be soon?
    Mr. Stonehouse: I cannot say off the cuff whether this one is being converted this year, but I will make inquiries and ask the Post Office to let the hon. Member know.

    Pay Awards and Post Office Charges
    Mr. Bryanasked the Minister of Posts and Telecommunications if he will give a general direction that no increase in charges proposed by the Post Office consequent on the current pay claim shall be made without consultation with him.
    Mr. Stonehouse: No, Sir; the Post Office is already consulting me fully. It

    27
    has, moreover, a statutory duty to refer any major proposal of this kind to the Post Office Users' National Council, which can report to me if it wishes.
    Mr. Bryan: Does the right hon. Gentleman agree that the recent pay settlement will put the Post Office in debt to about £30 million in a year? Secondly, will he tell us for how long he is willing to let the Post Office get into debt?
    Mr. Stonehouse: As I said in answer to an earlier Question, I am now considering with the Post Office the consequences of the recent pay awards, but I am not yet in a position to make any announcement about this consideration.
    Mr. Bryan: The figure of £30 million is right?
    Mr. Lubbock: The right hon. Gentleman, in answer to an earlier Question, said that he was not yet in a position to make a definite statement about an adjustment in charges consequent upon the introduction of decimal currency next year. Is he at least able to say, in the light of the recent pay award, whether, in particular, the 4d. and 5d. letter charges will go up or down?
    Mr. Stonehouse: As I said, I am not yet in a position to do so. I think it would be unwise for me at this stage, when I am consulting the Post Office about certain proposals that have been made, to me to make any statement.

    International Subscriber Dialling
    Mr. Ronald Atkinsasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to increase the development of International Subscriber Dialling.
    Mr. Stonehouse: This is a matter for the Post Office in collaboration with overseas administrations and companies, but I think the Post Office is to be congratulated on the current improvements in International Subscriber Dialling.
    Mr. Atkins: I congratulate my hon. Friend on continuing the progressive work of the Labour Government in developing the Post Office and enabling it to be one of the foremost Post Office services in the world.
    Mr. Stonehouse: I am grateful for that observation. There is no doubt that I.S.D. is helping business very considerably in ensuring quick communications with firms abroad.

    Mail Services (Northern Ireland)
    Mr. Pounderasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office Board to improve the delivery of first-and second-class mail between Great Britain and Northern Ireland.
    Mr. Pentland: No, Sir.
    Mr. Pounder: Will the Parliamentary Secretary reconsider this and use his good offices to see if some improvement can be made in the postal service across the Irish Sea, which has been deteriorating to the point where second-class mail takes three or four days and first-class mail two or more days?
    Mr. Pentland: I am advised that second-class mail is being flown to Northern Ireland, as well as first-class mail. The Post Office informs me that there have been no particular difficulties about Great Britain-Northern Ireland mail except that, as in other places, the 'flu epidemic had a passing effect.

  CIVIL SERVICE

    Statutory Occupational Pension Schemes
    Sir B. Rhys Williamsasked the Minister for the Civil Service what steps he will take to protect the value of rights preserved in statutory occupational pension schemes.
    The Minister without Portfolio and Deputy Leader of the House of Commons (Mr. Peter Shore): Preserved pensions are increased under the Pensions (Increase) Acts in line with the increases payable on pensions already in payment.
    Sir B. Rhys Williams: Is it intended that the pensions should increase in accordance with the earnings index or the cost of living index?
    Mr. Shore: There is a review going on at the present time. I think we should wait until it has been completed.
    Sir B. Rhys Williamsasked the Minister for the Civil Service if he will make a statement of his intentions in regard to post-retirement increases in annuities payable under statutory occupational pension schemes.
    Mr. Shore: Future arrangements for increasing public service and Armed Forces pensions are still under examination and the Government are not yet ready to make a statement of their intentions.
    Sir B. Rhys Williams: Will the question not arise also in regard to Civil Service pensions? Will the Government not be more specific?
    Mr. Shore: I am sure that the Government will be only too pleased to be specific when these matters, which are complex, have been studied thoroughly.

    MAUD COMMISSION REPORT (LANCASHIRE)
    Mr. Brooksasked the Chancellor of the Duchy of Lancaster whether he will make a statement on his policy on the proposal of the Maud Commission to abolish Lancashire.
    Hon. Members: Where is the Chancellor of the Duchy?
    Mr. Brooks: On a point of order. May I inquire whether the Chancellor has already abolished himself?
    At the end of Questions:
    The Chancellor of the Duchy of Lancaster (Mr. George Thomson): I would express my apologies to you, Mr. Speaker, and to the House for having failed to be in my place when this Question was originally asked.
    I have no policy other than the policy of Her Majesty's Government. My responsibility is for the Duchy of Lancaster.
    Mr. Brooks: But would not my right hon. Friend not agree that he has very special responsibilities to this ancient county palatine? Before he is prepared to see a thousand years of history disappeal into SELNEC or some other outlandish name, can he not possibly find some way to ensure that the name will survive?
    Mr. Thomson: It is rash for any hon. Member who is a Member for a Cheshire constituency, as it is for a Scottish Chancellor of the Duchy of Lancaster, to talk about the abolition of the County of Lancashire. What is an issue here concerns local government reform, on which questions must be addressed to my right hon. Friend the Secretary of State for Local Government and Regional Planning. But there is no question of abolition of Lancashire at this moment.
    Sir Frank Pearson: In order that the people of Lancashire should be in no doubt as to where the Chancellor stands on this issue, will he now in specific terms say that he entirely agrees with the abolition of, as we know it today, the county council of Lancashire?
    Mr. Thomson: The proposals for local government reform do not fall within my responsibility and Questions on this matter should be directed to the Secretary of State. The county council has done an excellent job, and nobody knows this better than the Chancellor of the Duchy of Lancaster. But I do not think even the members of the County Council of Lancashire would claim that the County of Lancashire has the same meaning as the county council of Lancashire.

  TECHNOLOGY

    Vehicle Exports
    Sir G. Nabarroasked the Minister of Technology what further steps he now proposes to take to assist vehicles' exports, in view of the 11 per cent. to 13 per cent. proposed price increase for steel and the lowest level of home sales for cars since 1962; and whether he will make a statement.
    The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Ernest A. Davies): The full range of Government assistance to exporters is available to the vehicle manufacturers. Exports of cars have increased by 44 per cent. and of commercial vehicles by 33·3 per cent. over the last two years. No further assistance seems necessary at this stage.
    Sir G. Nabarro: In view of the continued decline of the home market for motor cars and the further increases in

    31
    wages settled during last weekend, is it not evident that export expansion is now threatened further, especially with the proposed 20 per cent. increase in car prices on the home market? What efforts are being made to offset this decline?
    Dr. Davies: If one looks at the situation in the overseas market, there is no evidence to suggest that the British motor car industry is not capable of maintaining its competitive position. On the question of the relation between exports and the home market, I remind the hon. Member that my right hon. Friend, in the debate on this subject, said that he intended to invite the main manufacturers to hold more detailed discussions into this problem.
    Mr. Ronald Atkins: Does not my hon. Friend agree that the price which foreign car manufacturers pay for foreign steel is higher than that which British manufacturers pay for British steel?
    Dr. Davies: This is indeed the case and is one of the reasons why I was able to say that I was sure that British manufacturers would maintain their competitive edge in foreign markets.

    Smokeless Fuels
    Sir G. Nabarroasked the Minister of Technology whether he is aware that clean air policy is being retarded by impossibility of obtaining solid smokeless fuels in certain areas; and what measures he now proposes to assist in this situation, as a result of his consideration of the matter.
    Mr. Laneasked the Minister of Technology whether he will make a further statement on the current supply position of smokeless fuels.
    The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams): I have nothing to add to what my right hon. Friend said in the debate on 3rd February.—[Vol. 795, c. 344.]
    Sir G. Nabarro: Will the Minister observe that there have been very disquieting statements since then by the heads of nationalised boards who have forecast that next winter whole areas of
    32
    this country, as the result of conversion to North Sea gas, will be without smokeless fuel altogether? What steps are the Government taking to increase the overall supply of smokeless fuel, both for the remainder of this winter and under their long-term planning arrangements for next winter? Stop mumbling. I am asking the Parliamentary Secretary.
    Mr. Speaker: Order. The hon. Gentleman must not interrupt himself.
    Sir G. Nabarro: That is a very old parliamentary tag, but I was being interrupted by the Deputy Leader of the House who was mumbling at me throughout my supplementary question. Mr. Speaker, should you not seek to improve the right hon. Gentleman's parliamentary manner?
    Mr. Speaker: Order. The hon. Gentleman must get back to his question.
    Mr. Williams: This matter was dealt with fully by my right hon. Friend during the debate. The Coal Board and private producers have plans to increase production during the forthcoming year. As yet it is impossible to predict the demand level because, for example, we do not know what will be the impact of price on demand.
    Mr. Lane: But is not the Parliamentary Secretary aware that the debate last week left a great deal of anxiety? Do not the Government consider that the Gas Council would be wise to slow up both conversion to natural gas and the closing down of gas manufacturing plant?
    Mr. Williams: I appreciate this, but the point about the slowing down of gas conversion is counter-productive in terms of clean air since natural gas is good clean-air fuel. Secondly, on the point of slowing-down of closures of existing traditional gas plants, we have looked at the costings and in some cases it would have meant an extra price increase of £14 a ton on any coke produced.
    Mr. Maudling: My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) referred to statements made since the debate and the prospects for next winter. The Parliamentary Secretary answered it by referring only to the debate which had taken place earlier. Will he now answer my hon. Friend's question?
    Mr. Williams: With due respect to the right hon. Gentleman, I indicated that there were increases in the pipeline from the private and public sector, and I indicated the uncertainties of predicting at this stage the demand level next winter.

    Smokeless Fuels

      WELSH AFFAIRS
      Ordered,
      That the matter of the Welsh Language, being a matter relating exclusively to Wales and Monmouthshire, be referred to the Welsh Grand Committee for their consideration.—[Mr. Peart.]

      SUPPLY
      [12TH ALLOTTED DAY]—considered.

BUILDING AND CONSTRUCTION INDUSTRIES
3.34 p.m.
Mr. R. Chichester-Clark: I beg to move,
That this House deplores the effect of Her Majesty's Government's policies on the building and construction industries.
Our debate this afternoon takes place in the gravest crisis for the building industry since the Second World War. It would be almost impossible to exaggerate the seriousness of the present situation. Reputable builders are going to the wall. Output is slumping and costs are rising—a remarkable combination. Unemployment is appallingly high, without being caused by bad weather.
The mood of builders is becoming ugly. The right hon. Gentleman meets them, so do I, and I have never heard from the rank and file of the industry such an overwhelming combination of disgust and despair as there is among them at present. I do not think that any Government have ever been the object of such contempt from the industry as this one, irrespective of the personal relationships and courtesies which now exist between their leaders and the Minister himself.
When we reach a situation in which the president of the N.F.B.T.E. must take advantage of a purely social occasion, namely, a dinner-dance, on 3rd February, to tell the Minister that the very existence of the industry is imperilled unless prompt action is taken, it emphasises the exceptional severity of the crisis and the unique responsibility of the Government to act at once.
We condemn the Government for a failure of control and guidance at the highest political level. Because the economic conditions created by the Government have caused a collapse of confidence in the industry, the Prime Minister, the Cabinet and the right hon. Gentleman himself, as Labour's fourth Minister of Public Building and Works, must take full responsibility. We also condemn individual Ministers, including the right hon. Gentleman, for their complacency and incompetence and for reducing the booming industry which

35
they took over in 1964 to a state where, to quote its leaders:
"… the industry is passing through a recession as severe as any since the 'thirties."
Even now the Government are distorting the words of outside bodies. On two occasions in the House, on 29th January and 3rd February, the Minister of Housing has had the temerity to suggest that the house-builders seem to be more "optimistic". Yet he knows that their report, published jointly with the report of the N.F.B.T.E., opens with the words:
"… most of the economic indicators of the contracting industry have been pointing downwards during 1969 and, at the end of the year, there appeared to be little hope of an early improvement in total construction activity."
A few lines later, speaking specifically of housing, the report says:
"It is impossible at this stage to take an optimistic view of the prospects of the industry in 1970. Unless there is an early relaxation of the credit squeeze, housing seems likely to see a further decline of up to 10 per cent. on 1969, mainly in the public sector."
And that would be some decline.
So that is the Minister's "optimistic view"? Does he really understand the meaning of words? When I want to know the mood of the industry, I do not listen to the Minister of Housing. I listen to the builders whose livelihood is involved, a livelihood which they see falling into ruins. Some builders have a name for the right hon. Gentleman the Minister of Housing. They call him King Log. He sits there, listens to them woodenly and does nothing at the end.
We have six main charges to make against the Minister of Public Building and Works. Our first and gravest charge is that he has done nothing to avert the decline in the state of trade in the industry. For a very long time now the warning signals have been out. We on these benches have not hesitated to make them clear. Ever since the state of trade inquiry of the N.F.B.T.E. in August, 1968, which reflected the builders' views in April of that year, there have been continuous quarterly warnings, both by the builders generally and by the house builders in particular, that order books were falling and that the work load was unsatisfactory.
The latest state of trade inquiry of the N.F.B.T.E. is so serious that the House should take note of its contents. It re-
36
ferred to early January, and the feeling which I have received from the builders since then is that the situation has got worse rather than better. At that time, 663 firms, a fair cross-section of the industry, were questioned. Half of them said that they had fewer inquiries for work than last October, well over half that they had less work in hand, and 375 that they had less work to start. More than halt expect to do less work in 1970 than they did in 1969, despite the fact that 1969 was just about the worst year since the war.
The inquiry revealed that the decline is general throughout the country, although, of course, it goes without saying that the North-West Region is the worst hit. It also rightly makes the point that smaller and medium-sized firms—which are the overwhelming proportion of the industry —are the most seriously affected. The house-builders are exceptionally hard hit. The November-December state of trade inquiry by the Federation found that 226 firms out of 367 had fewer applicants for house purchase than in September with only a pathetic 32 having more, and that 200 had fewer houses under construction. This year will be worse than 1969.
If that is not enough, I will give four other indications to wake up the Minister. The Ministry, in the tiniest Press notice I have ever seen, coyly announced on 23rd January that private house-builders expected to start about 165,000 houses in 1970. If that is the outcome this will be the worst year since 1968, and the fall in starts in 1969 and 1970 will be the worst since the war. Incidentally, private house-building starts have fallen only twice under the "wicked Tories", and then only by small amounts. Under Labour, private housing starts have fallen every year except 1967.
The Royal Institute of British Architects, in a notice of great importance and gravity, on 4th January, showed a 17 per cent. drop in architects' commissions in the third quarter of last year, which was a record decline. Since this is usually a good indicator of the work load 18 months ahead, it reflects the likelihood of a long, hard slump over the next year or more unless action is taken now. This is particularly serious for architects because if they start cutting back that leads to a break-up of design teams and students' training may also suffer. The

37
Ministry's own orders for new construction are also very bad. The fall in November, 1959 was exceptionally sharp with a total decline on 2 per cent., and on housing alone a catastrophic drop of 17 per cent.
Builders' merchants, who are an essential link in the building process, told the Minister on 21st January that the trend is for the decline in work to get worse. All the indications are of a recession each worse than the last and each showing that the position is deteriorating. In these circumstances, what did the right hon. Gentleman do? Last week at Question Time, flushed with pride or, at any rate, flushed—he said that he had called the industry's spokesmen to see him. One would think that he never saw them and that there was something meritorious about saying that now. He did not promise them much. He did not promise a cut in S.E.T., easier credit, help with unemployment, or swift action to stimulate work load.
What the right hon. Gentleman promised was to have a chat with the Chancellor of the Exchequer. He did not say that his predecessor, the Patronage Secretary, made precisely the same promise on 22nd April, 1969, and that nothing came of it—nothing that we could see, at any rate. I attach little importance to a chat with the Chancellor. I was rather surprised to hear that, but it is lamentable that the Chancellor apparently refused to discuss the memorandum which the building industry has put forward with reference to the Budget. This is possibly the first time that has ever happened. We are dealing with an industry which pays 25 per cent. of the total yield of S.E.T., yet the Government refused to discuss it.
If we condemn the Minister for failing to heed these warnings, we condemn him even more for failing to halt the decline in output. The industry's output, both at current and at constant prices, normally rises every year. At current prices, of course, it rises automatically, because they do not exclude inflationary factors. Thus, if labour or materials costs rise, so does current output. So it was quite absurd for the Minister to say on 17th December that current prices output in 1968 was £4,567 million and in 1959 was £2,399 million. Of course it was.
38
The right hon. Gentleman did not say that in 1949 it was £1,250 million; and in 1979 it will be higher than in 1969. So perhaps we could be spared that sort of special pleading this afternoon.
Sir Gerald Nabarro: My hon. Friend said that the building and construction industries combined contributed a quarter of the retained part of selective employment tax. Would he quantify that and confirm that it amounts to one-quarter of £615 million this year and is, therefore, £153¾ million from these industries?
Mr. Chichester-Clark: My hon. Friend is very keen on these matters. He will find that I shall come to that figure. I would make it a round figure of £155 million.
Sir G. Nabarro: Jolly good.
Mr. Chichester-Clark: Let us look at the real figure of output which is at constant prices and which excludes inflationary factors. Last year, output dropped by about 2 per cent. The last time output fell, in real terms at constant prices, was 1951. Those are facts and the Minister knows them to be true. He must admit it. When output at constant prices falls that means real trouble. Why deny it?
What has been the Government's attitude? On 3rd December, 1968, the Minister's predecessor, the Patronage Secretary, said, with all the statistical authority at his command:
"The output of the building and construction industries has risen every year. This year"—
the right hon. Gentleman meant 1968—
"it will rise by another 4 per cent., I think, and I expect it to rise next year"—
he meant by 1969—
"by between 4 per cent. and 5 per cent. This happens to be the view that the Department holds, and we have said so to the P.I.B."—[OFFICIAL REPORT, 3rd December, 1968 Vol. 774, c. 1230–1.]
That was the official prediction from the Minister at the Dispatch Box. Output rises every year, he said. So it does, except under this Government. He said that it would rise in 1969 by between 4 per cent. and 5 per cent., but it actually fell by only 2 per cent. Here was a forecaster. Whence comes there such another? The Patronage Secretary has new responsibilities now, among them,

39
presumably, forecasting majorities in this House. He had better get a new slide rule, or the Prime Minister will be losing sleep after all.
The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I am not doing so badly at the moment.
Mr. Chichester-Clark: The new Minister was better at it.
We condemn the Minister and the Government for the fact that output in the industry has risen more slowly overall under Labour than under the Tories and their costs have risen more sharply. The facts are these and the Minister had to admit them last Tuesday. Production actually rose by 22 points at constant prices in the last five years of Conservative government compared with 7 points under Labour, showing more purposive planning.
Next, I come to costs. I shall be as helpful as I can be to the Government. I will leave out 1959, because they will say that it was an election year. We find that in the first four years of Labour government construction costs rose by 16 points compared with 11 points in the last four years of Tory government. If I added 1959 and 1969, things would appear even worse to the Government. The Government have produced a uniquely appalling combination. Productivity has slowed down and output has actually dropped. Meanwhile, costs have soared. Yet more "purposive" planning.
We condemn the Government for S.E.T. What more can I say about it than that it raises about £155 million per year from the industry, almost 25 per cent. of the total yield? That it adds a crippling 4 per cent. to construction costs? That it puts up the price of a house by about £125 and that a succession of Labour Ministers of Works have done nothing to ease the industry's burden. They have clucked sympathetically, while the tax rate doubled.
The facts have had a serious effect on apprentices, but the Government have done nothing and so the new intake of boys to the industry is dropping seriously. The effect on self-employment has been serious, but they have done nothing. It now costs about £6 per week per man to get a man on to a building site before
40
he lays a brick, yet the Government has done nothing. The £6 is not my figure, but the industry's and the industry has repeated it today. The Minister had better heed the industry, because the industry has to find that £6.
The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Charles Loughlin): I should like to put the record straight. The £125 to which the hon. Gentleman refers relates to a house costing £4,750.
Mr. Chichester-Clark: No doubt the Minister will continue to make that point to some effect when he replies to the debate. I do not see the purpose of the interruption.
Mr. A. P. Costain: I think that it is also fair to point out that before the Socialists came into power that same house cost a little over £3,000.
Mr. Chichester-Clark: That is a fair point to make. My hon. Friend has great knowledge of these matters, and I respect his judgment.
We condemn the Minister for his sloth over labour-only subcontracting—the notorious "lump" system. The Phelps Brown Committee reported in July, 1968. During 1968 and 1969 the Minister did nothing. Then, on 28th October, 1969, the Prime Minister promised a Bill to deal with this menace, which he described as "necessary". On 12th November, the Minister promised
"discussions with all responsible sections of the building industry."—[OFFICIAL REPORT, 12th November, 1969; Vol. 790, c. 388.]
I understand that those discussions have not even begun. Perhaps the Minister will tell us whether they have.
I must ask the Minister to stop messing around. The "lump" is ruining the industry. It is bad for workmanship and discipline on sites, it can be unsafe, and it is catastrophic for the trade union movement. The N.F.C.U. is already too weak. So are its constituent members. The new wages settlement—which the Government did not block this time as they did in December, 1968—gives a chance to the N.J.C. to establish some control over real earnings and plus rates. If the unions get any weaker they will be unable to speak for organised labour in this industry.

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So let us have Phelps Brown before Easter, and, for goodness sake, let us have no more S.E.T. That would be intolerable to the industry. It would also be an outrage if we had it before discussing the Bill and the Phelps Brown Report.
Mr. Arthur Lewis: I think that both sides agree with almost every word about the "lump". But can the hon. Gentleman assure the Government that if they do get on with this and bring in a Bill—and I think that this side of the House would welcome it—then, as far as possible, the two sides will agree, through the usual channels, to give it a speedy passage through the House? The usual argument is that there is not time. As it appears that we are in agreement, we should be able to get it through quickly.
Mr. Chichester-Clark: We must see the Bill. But I can assure the hon. Gentleman that we on this side are as keen to see something done as he may be.
We condemn the Government for the deplorable state of unemployment in the industry, which is not, as in the winter of 1962–63, caused by bad weather—do not let us have that excuse today—but by the low work load. There were, at the end of December, well over 115,000 unemployed in the building industryone-fifth of the total unemployed of the country. That is a bad record. I do not know whether the Minister thinks that the discussions which he has promised with the building industry leaders will do them any good now. Unfortunately, many of these people have been lost to the industry for ever.
I wish that I could pass over the brick fiasco in total silence, but I cannot. In 1964, the Prime Minister promised that
"Labour would plan the bricks."
Since he said that, and since the right hon. Member for Leeds, West (Mr. C. Pannell) called for much more brick output and promised that all the bricks produced would be used, there has been a continuous stop-go situation in the industry. Production is down on 1964, deliveries are down on 1964, bankruptcies are worse than ever, stocks are higher, and morale in the industry is lower than it has ever been. That is how Labour plans the bricks. I do not know whether the Minister would care to get
42
up now and tell us whether the Prime Minister's election promise to "plan the bricks" has been fulfilled or broken. If I were him, I would be rather hard of hearing at this point. So this Labour Government will leave office, just as the last one did, presiding over a slump in the industry of considerable proportions. The situation is so urgent that there must be a change of policy for the industry now.
Apart from the specific pledges on housing made by my hon. Friends the Member for Worcester (Mr. Peter Walker) and the Member for Crosby (Mr. Graham Page) which are on record and which I do not want to go into again, let me say what the next Conservative Government will do to save the industry, which needs help quickly
"if its efficiency—and indeed, its very existence—is not to be imperilled"—
to use the words of the President of the N.F.B.T.E. We will act to relieve the industry of the burden of S.E.T., which, as has been said many times, is a crushing and senseless burden which damages confidence and output.
We will give builders priority bank loans. They have made out their case very well. It is clear from the state of their trade inquiries that credit is a difficulty, if not the crucial difficulty. Without credit, they cannot build. It is as easy as that. We will act to reduce the cost of borrowing money. It is far too dear at present, and is a tremendous shackle on our housing and building programme. We will act speedily to deal with the menace of "the lump."
Mr. Eric Lubbock: The hon. Gentleman referred to reducing the cost of borrowing money. I am interested in this. Will there be preferential rates of interest for borrowers in the building industry?
Mr. Chichester-Clark: If we are being criticised for making that kind of promise, I can only say that the Prime Minister was not so backward about it, because I recall his making a speech on 16th September, 1964, in which he said:
"We shall cheapen the cost of housing by our interest rates policy".
We will keep our noses out of wage settlements reached by the industry. The scars of the "builders' penny" fiasco and the bitterness that it caused are still with

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the industry long after the First Secretary has doubtless forgotten it. We will seek to maintain and increase the authority of the N.J.C., not sabotage it by blocking democratically bargained wage settlements.
We will call together the leaders of the industry on both sides to set out a new rehabilitation industry to undertake a coherent and massive drive of house modernisation. We will seek to get the big firms, with all their management skill, to work on this. We will seek to merge the Agrement Board and the Building Research Station. We will examine carefully all the functions, staff and budget of the N.B.A. and see that Government money for research and development is better directed and spent. We will speed up the drive for dimensional co-ordination and we will set an early target date by which the total standardisation of components will be achieved.
We will keep the housing cost yardsticks and the schools cost limits under continuous and realistic review. For example, on Thursday I had an Answer which revealed that building costs had risen by 15 per cent. since July, 1966, during which time the Government have done nothing to raise cost limits for school building. Is it any wonder that the system building part of the industry is operating at only 25 per cent. of capacity?
We will examine ruthlessly the functions and purpose of the Ministry of Works standing advisory committees—all 38 of them—and their 83 Departmental committees and their six joint committees with other Departments to see when they last reported, what they are doing, and whether they should be wound up. Anyone can see that there are obviously far too many committees. We will look particularly carefully at bodies such as the Economic Development Committees on which builders serve. If we find them to be mere talking shops we will shut them down. Builders should get on with building, not making up numbers on Government committees.
We will reduce the demand that there is seemingly in the industry for Government statistics which are being asked of builders. The builders are half strangled with red tape. One big firm recently
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calculated that it spent 564 man days a year filling up Government forms. At present, there are three ministries requiring figures of employment from the industry, three more want details of earnings, and two others require details of output. It must be possible to break down and perhaps end altogether this tedious time wasting nonsense now.
Above all, we will take steps to win back the confidence of the industry. It will know that it will have a Government who believe in private enterprise and want to see it expand, as it should have expanded over these years. It will have a Government who realise that building, with its 1½ million employees and massive output, is one of the greatest industries in the country. We will, once again, have a Ministry responsible for the industry——
Mr. Gordon A. T. Bagier Mr. Gordon A. T. Bagier (Sunderland, South) rose——
Mr. Chichester-Clark: I am just about to finish.
Finally, we will see that, once again, there is a Department responsible for this industry to which builders can turn and know that some action will come from turning to it. Hon. Members opposite sometimes suggest that the industry we are discussing is slow to meet change. However that may be, there is one change which at present the whole of the building and construction industry will welcome—a change of Government.
4.0 p.m.
The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Charles Loughlin): My right hon. Friend and I welcome the opportunity to debate the interests of what is the largest single industry in the country. We deplore the terms of the Motion. It seems that right hon. and hon. Gentlemen opposite have made the obvious mistake in the reference to the industry. I do not quibble about this, but I assume that they mean the building and civil engineering industries.
My task is really to set the scene so that the House may have a reasonable debate. I say a "reasonable debate" because I do not think that it is in the interests of the industries to indulge in the sort of exaggerated language which

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we have had from the hon. Member for Londonderry (Mr. Chichester-Clark). When my right hon. Friend winds up the debate he will dot the i's and cross the t's.
As the terms of the Motion are so wide, I want to make a survey of the industries as a whole. As I expected, the hon. Gentleman concentrated his fire on the housing aspects of the industry. I accept that housing is an important sector, but it really is only one part of the industry. The hon. Gentleman emphasised the impact of certain aspects of Government policy—money supply, high interest rates, and S.E.T. It is true that these aspects of policy has had an impact on the building industry, and no doubt my right hon. Friend will deal with this later on, but they are not the whole of the Government's policies.
It would, I submit, be very difficult totally to isolate one industry from the effects of any Government's general economic policy, and, in any case, taken as a whole the industry has benefited from the policies which this Government have pursued.
First, let us look at the total picture. The hon. Gentleman made some play with the decline, as he called it, in total output in 1969. Output of all new work in 1969—and here I am using constant —1963—prices as the base—is likely to have been worth £2,780 million, or about £235 million more than the Tory election boom of 1964. The fall from 1968's record level was accounted for by housing which, again at constant prices, was worth £1,060 million in 1969, compared with £1,023 million in the election period of 1964, and other sectors of the industries are performing well, as we shall see.
Mr. Chichester-Clark: Will the hon. Gentleman answer this question, "Yes" or "No"? Is it, or is it not, a fact that output fell for the first time since 1951, despite the prediction of the former Minister, now the Patronage Secretary, that it would rise?
Mr. Loughlin: I think that I have made clear what the position was. I said that I accepted that there had been a decline from the record level of 1968. I shall rub it in for the hon. Gentleman if he likes.
Even though there was this so-called decline from 1968 to 1969—and the hon.
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Gentleman quoted a figure of 2 per cent.. although the actual figure is not available—in 1969, housing was worth £1,060 million compared with £1,023 million in 1964. If there was a decline, it was a decline not from what the Tories achieved, but from the record figure achieved as a result of the present Government's policies.
Mr. Chichester-Clark Mr. Chichester-Clark rose——
Mr Loughlin: No. Perhaps the hon. Gentleman will allow me to develop my speech. After all, I intervened only once when he was speaking, and that was to get clarification, although some of his hon. Friends did not realise what the clarification was.
There is such a wide variation in the range of prices that it is essential, when referring to the total cost of S.E.T. in relation to a house, to link it with the price of the house.
I want to consider, first, the public non-housing sector. Here we are dealing with roads, schools, public utilities, and other enterprises which provide the infrastructure and future strength of the economy. Let us look at the road programme to see the effect of the Government's policies on civil engineering. We find that the road construction industry is particularly buoyant. Road spending has doubled since 1964–65. This year, more than £330 million will be spent on new and improved roads in Great Britain. There are at present more than 350 miles of motorway under construction. When hon. Gentlemen opposite talk about what their policies did for this industry, they should remember that the 350 miles of motorway under construction are nearly three times as much as were under construction when they were in power. Urban road construction is running at well over £100 million a year.
If we look at this sector as a whole, judged on figures available for the first nine months of 1969 it has been performing as strongly as in the peak year of 1968, when output was running at 7 per cent. higher than in 1967, which, in turn, was 11 per cent. higher than in 1966. The public corporations have admittedly been running at a lower level of investment than before, but this has been fully offset by buoyancy in education, harbour, and sewerage programmes, together with the exceptional performance on roads.

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Hon. Members will have seen the recent White Paper on Public Expenditure 1968–69 to 1973–74, and this has already been debated in the House. This, for the first time, provides the construction industry with a reasonably firm basis on which to plan to meet demand in the public non-housing sector. I hope that the industry will study it with care. On the basis of the forecasts which it contains, together with the latest figures available from other sources, we forecast for this sector an appreciable increase in demand this year, followed by a further increase in 1971. I have mentioned some promising programmes already—roads, education, harbours and sewerage—and we are also hopeful of the gas industry, air transport, and Post Office programmes.
I come, now, to the private non-housing sector. In speaking of this sector it is always necessary to stress the importance of confidence, and confidence is exactly what private industry now seems to possess. Output of industrial building has been rising steadily since mid-1968. The figure for the first three-quarters of 1969 was 11 per cent. higher than for the corresponding period of 1968. Orders last year were 10 per cent. higher than in 1968.
We now have the results of the investment intentions inquiry made by the Ministry of Technology at the end of last year. These are always interpreted with caution, but we see no reason to doubt the firmness of plans for some time ahead. We expect a worth-while further increase in demand this year. I suggest that this performance has fully vindicated the Government's policy of sustaining controlled growth in essential programmes in spite of the parallel urgency of correcting the external account.
Private non-industrial building is a sector which I know to have caused the architectural profession in particular some concern. We are talking about shops, garages and offices. I admit at once that these have not had the highest priority in our minds when so much else was to be done, although I recognise the importance of certain projects to policies such as urban renewal and the distribution of industry. Figures of output for three-quarters of 1969, however, suggest that an earlier decline is being arrested. Orders for the whole of that year have
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risen a full 8 per cent. above 1968. Orders for offices and shops have increased substantially, and we may expect some increase in demand both this year and next. So far there seems little to deplore and much to praise in the effect of the Government's policies on the industry.
I turn now to housing. There is no gainsaying that housing is the sector that is disturbing the output of the industry, though in terms of achievement right hon. and hon. Members opposite should remember that the number of completions last year was still markedly higher than in any year up to 1964.
I do not want to repeat the substance of the case that my right hon. Friend the Minister of Housing has given in recent debates—I hope that hon. Members will remember that this is not a housing debate; it is a debate on the construction and building and civil engineering industries—but I want to emphasise two important ways in which the prospects for the coming year can be improved. The first is the increase in funds which the Government have made available for local authority mortgages from £55 million to £100 million with effect from 1st April. This would enable the purchase of perhaps 20,000 houses by those who could not otherwise afford to purchase them. The second is the facility, under the 1969 Housing Act, for the improvement of old houses, of which I hope that greatly increased use can be made in the coming year. Generous grants for improvement are also available, and loans can be made to householders who cannot afford the remainder of the outlay.
The social importance of this cannot be over-emphasised, and my right hon. Friend the Minister of Housing is planning to give greater publicity to this scheme. The hon. Member referred to the difficulties of some of the small people in the industry. This is the kind of work particularly well-suited to the small and medium-sized building firm, which is more likely to have been affected by the economic situation from which we are now emerging.
Before I conclude I want to say something about the value of exports to the construction industry, which, particularly at a time like the present, my Department and I personally are actively encouraging. The larger construction

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firms are making a most useful contribution to the balance of payments, and as a result of their energetic search for work overseas they have been remarkably successful. Thus, total earning from overseas contracts rose from £11·3 million in 1964 to £30·4 million in 1968.
The export of building materials, components and fixments is also rising fast. In 1965, exports totalled about £119 million, since when they have risen by a total of 42 per cent. Last year, the increase was a record of £30 million, to the encouraging total of £170 million.
Mr. Costain: I appreciate what the hon. Member says about the building and civil engineering industries doing so much for export. Can he explain why he should be able to praise them and yet they are not allowed to compete for the Queen's Award?
Mr. Loughlin: I do not want to spend a great deal of time on that point, but I think that each aspect of the industry will agree that during the time I have been in the Department I have done everything I can, in concert with them, to help exports.
I was referring to the total of exports of £170 million. This may be small in relation to the industry's total consumption of materials in this country, but it is a useful additional outlet which I know the producers are keen to exploit, and the Government are giving them ready help.
Finally, I turn to the total prospect at home for the coming year. Taking all four sectors—public and private, housing and non-housing—together, we fully expect the total level of output to be maintained this year. I recognise that in an industry with such a favourable record of rising output per head the absence of increasing demand entails some surplus of resources, but I would encourage the industry to take the long view of these problems.
It has the assurance of the Government that there are firm plans for a steady growth of investment in the public sector generally, backed up by a number of successful rolling programmes. These are popular with the industry and we are looking at ways of adding to them. There is also the express intention of private industry to continue and expand its investment, much of which will, in
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accordance with Government policy, benefit the areas where the construction industry needs it most.
I appreciate that many of my hon. Friends are concerned—and I know that this applies to the hon. Member—about the level of unemployment in the construction industries and the future job opportunities. I know that they will accept that with increased productivity, redeployment in the industry can often be difficult. I can assure them that my right hon. Friend and myself are very conscious of the human problems involved in unemployment. They will probably accept that we are as concerned as anyone else. We certainly wish to see building trade operatives in jobs, and we are not ignoring this very real problem.
The industry will need a highly skilled and compact labour force, well abreast of new techniques and equipped to match the best of world practice. It will need management to match. Some firms, not all of them among the giants of the industry, are getting there already, and the results are showing in their profits.
I end as I began, by saying that the prospects for the industries are by no means as bleak as speeches by the Opposition would suggest. The Opposition are doing the industry a disservice in using the kind of exaggerated language that they constantly use. I know that the industries have the ability to respond quickly to an upturn in the economy.
Mr. Lubbock Mr. Lubbock rose——
Mr. Loughlin: I am sorry. This is a short debate.
The prosperity of the industry is tied with the solution of Britain's economic problems. Now that the economy is improving, affluence will increase and the industry will benefit accordingly. I ask the House to reject the Motion.
4.20 p.m.
Mr. Keith Speed: This debate is almost a facsimile of our debate on the motor industry last week. A great industry, the building and construction industry, is facing a crisis, and we have had a stream of placebos from the Minister, just as last week we had a stream of placebos from the Ministry of Technology.
It is all very well for the Parliamentary Secretary to say that the industry should

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take a long view. I agree with him if he means that by 6th May, 1971, there will have been a change of Government and we shall all be filled with optimism and confidence. However, many of the remarks of my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) have come from the industry. The situation in which the building industry finds itself has not been dreamed up by members of the Opposition, or by hon. Members opposite who have great knowledge and experience of it.
After nearly five and a half years of this Government, the building industry, the motor industry, the agricultural industry and the teaching profession are facing crises largely as a result of the Government's measures. When we compare the strong but true statement of the N.F.B.T.E. in its annual report that the building industry is facing a recession as severe as any since the 1930s with the remarks which we have heard today from the Government Front Bench, either the N.F.B.T.E. or the Ministry of Public Building and Works is living in cloud-cuckoo-land. The N.F.B.T.E. has to deal with these problems day by day, and should the Ministry. It is difficult to reconcile the extremely complacent remarks of the Parliamentary Secretary with the deep concern voiced by members of the industry.
From this side of the House and, to be fair, from the benches below the Gangway opposite, time and again the Government have been warned about the crisis which the building industry faces. When Ministers at the Ministry of Public Building and Works have answered Questions at Question Time, we have warned them, as we have warned the Minister of Housing and Local Government, about the situation. There have been deputations to the Minister about the matter. In spite of these warnings, the industry now finds itself in its present critical state.
There have been remarks about the false optimism of the right hon. Gentleman who is now the Patronage Secretary. He made encouraging noises in December, 1968, which I remember very well. But the fact remains—and even today the Parliamentary Secretary refused to confirm it in exact terms—that the output of the construction industry last year, at
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constant prices, fell for the first time since 1951.
What have the Government done to help the industry? We have had selective employment tax, the Land Commission, devaluation, import deposits, high interest rates and the credit squeeze, and, by way of makeweight, the Government have thrown in British Standard Time. This is a fantastic shopping list of things which are supposed to help one of our great industries.
I should like to deal briefly with the bricks situation, because it is essential to the building and construction industry. There are brickworks in my constituency, as there are in many others. The brick situation is extremely interesting. In recent weeks, two large brick companies have closed down—the Marston Valley brickworks and the National Coal Board brickworks at Desford. Elsewhere, production has been dramatically cut back.
It is interesting to note that 1969 was the first time in 10 years that the production of bricks was below 7,000 million. It was the first time for 11 years that deliveries of bricks were below 6,500 million. At the end of 1969, stocks of bricks stood at 871 million, the highest figure for decades with the sole exception of 1966 which, I appreciate, was before the term of office of the Minister but during the period of office of the Government.
With the cut-back in production and the closure of plants, it is interesting to look, perhaps in some detail, at what the Prime Minister said in his famous broadcast on B.B.C. television on 23rd September, 1964. Perhaps it is not appreciated that in the previous Labour Government, between 1945 and 1951, the Prime Minister was concerned with the Ministry of Works. He was one of the predecessors of the Minister and the Parliamentary Secretary. He said:
"Two years ago the brick manufacturers couldn't sell their bricks. This is why we insist on the need for planning, why we insist on the need for steady expansion, so that the industries concerned, the bottleneck industries if you like, can make plans with out help, with our encouragement. to see that they are producing all that's needed, whether for the housing programme, exports, or anything else."
The right hon. Gentleman claimed that the Conservative Government had not planned brick production. I outlined

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earlier the record over the last 10 years on brick production and sales.
The Prime Minister went on to say:
"But may I say that in 1945, when I was in the Ministry of Works, we had exactly the same problem. We had a housing programme. We had no bricks."
Now we have plenty of bricks, but no housing programme. The right hon. Gentleman continued:
"I had to spend months going round the brick works, going up to the Fletton country to give them the confidence to increase the number of kilns. We shall have to do it again".
Would the right hon. Gentleman be prepared to go to the Marston Valley works, to the N.C.B. works, to the Fletton works in the Peterborough and Bedfordshire areas, or to brickworks in my constituency and make the same speech now?
What did the National Plan have to say about the brick problem? In 1965, it forecast that the demand for bricks by this year, 1970, would be 9,400 million. That is 50 per cent. out on the 1969 figure and 50 per cent. out on the figure we are likely to reach this year. A 50 per cent. error of this magnitude—optimism to the extent of 50 per cent.—is disgraceful. We know that the National Plan was dead long ago, together with the Prime Minister's pledge of 500,000 houses.
Brickworks cannot be built overnight. By definition, they have to be built in or near the clay field areas. They take time to build. I used to live near a number of brickworks. To add a personal note, for a time my wife worked with the London Brick Co. My sister-in-law worked with the Marston Valley Brick Co. Fortunately, she is not working with it now because she is raising a family, otherwise she would be out of a job since the works is closing down as a result of the Government's policy.
As in so many other fields, the Government's promises to the electorate and to the industry—many people in the industry believed them in 1964 and even in 1966—have been sadly let down by their dismal performance. This has led to the fact that in 1969 an average of 10·2 per cent. of the men in the industry were unemployed. I suspect that as of this moment—and the hon. Member for Liverpool, Walton (Mr. Heffer) may have the figures—the situation is even worse.
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This is human misery for those engaged in the industry and those who had the expectation of getting houses which have not been built. There is frustration for the brickmakers, builders and others looking ahead and hoping that their investment plans will be realised. The industry has been hit very hard indeed largely as a result of the Government's actions and policies.
I agree with the Parliamentary Secretary on one point. I hope that the industry will take a long view, because it is a great and important industry which will be essential in building and rebuilding our towns and cities, motorways, hospitals and schools. But unless there is much more action from the Government, and unless the industry receives promises of action from the Ministry which it has not had today, it will have to wait not more than 14 months, I hope, for the return of a Conservative Government, when it can resume the progress which it was making up to 1964.
4.30 p.m.
Dr. M. S. Miller: It ill behoves hon. Members opposite to put forward Motions criticising the Government for their housing and construction industry progress.
I want to deal mainly with housing, and particularly with housing in Scotland, where, during the five years from October, 1964 to the end of September, 1969, more houses were built than during previous five years. A total of 195,000 were built during that period compared with 142,000 in the previous five years, an increase of 37 per cent.
In each of the past three years a new record for house building has been set up in Scotland. Therefore, contrary to the position in England and Wales, Scotland built more houses last year than in the year before. In 1968, 41,988 were built in Scotland, 33,269 in the public sector and 8,719 in the private sector—and that was a record in itself. But in 1969 this was increased to 42,629–34,302 in the public sector and 8,327 in the private sector.
I am not satisfied even with the pro-press which has been made in housing in Scotland. [HON. MEMBERS: "Hear, hear."] It is all very well for hon. Members opposite to say "Hear, hear", but they reached nothing like the figures

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which have been reached in the past few years.
I believe that something is wrong with our priorities when one of the richest democratic countries in the world has a housing problem of our magnitude. In Scotland, 250,000 dwellings are more than 85 years old, representing 15 per cent. of the total. Thirteen per cent. of our dwellings have no inside W.C., and in Glasgow the figure is 22 per cent. In Scotland, 21 per cent. of our houses have no fixed bath or shower, while in Glasgow the proportion is 30 per cent.
When we come to overcrowding, we find that almost 10 per cent. of the people of Scotland live at densities of more than 1½ persons per room. The figures for some of the higher densities in England are: Tyneside, 4·3 per cent.; West Yorkshire, 3 per cent.; Merseyside, 4·2 per cent.; and Greater London, 4 per cent. In England and Wales as a whole the figure is 2·5 per cent. In the United Kingdom it is 3·2 per cent., and in Central Clydeside it is almost 15 per cent.
One-third of the houses in the City of Glasgow are sub-standard, and it is a deplorable fact that house-building in Glasgow at this crucial time is actually dropping in numbers. For example, in 1954, 6,700 houses were built in the city, but last year the figure had dropped to 4,780, for the public and private sectors combined. In the private sector in the past four years, an average of only 107 houses per year were built—and this for a city of 1 million people.
What has to be done to try to bring about the adequate and proper rehousing of our people? A priority should be made of modern housing of a high standard. There are three ways in which this problem should be tackled vigorously. First, there is the promotion of new building in the public sector. I suggest that Scotland be divided into regions, each building about 2,000 houses per year. This suggestion could also be applied to areas of England. The administration of public sector houses should be decentralised. Glasgow, for example, has to administer 150,000 municipal houses, which is too big a task for a single local authority to tackle in a centralised way.
Local authorities should receive more than mere encouragement to build houses.
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There are all kinds of arguments about finance, but they are a little unconvincing. I know that it is a platitude, but we cannot afford not to build houses. It is essential to house the people of our country adequately. I am not all that much concerned about how the finance is secured; the houses must be built, and money should not be a barrier to their adequate provision.
Turning to the private sector, I must declare an interest, because I am an adviser to a construction firm. It is very disappointing that of the expected 12,000 to 13,000 houses per year from the private sector in Scotland we are getting only about 8,000. This perhaps results from the idea long held that Scottish people were not interested in owner-occupation. An Opinion Research Centre poll taken in late 1965 found that in answer to the question, "What type of accommodation would you prefer if you moved from your present house, if you could get it?", 75 per cent. of people in England opted for house ownership while in Scotland the percentage was only 54 per cent. But even that is a much greater proportion than one would have thought.
Encouragement should be given to people to own their own homes, perhaps by some kind of direct subsidy. In Ireland, for example, the Government there provide grants of £275 to purchasers of new houses in some areas—50 per cent. at roof stage and the remainder on completion. There is also a supplementary grant of £206 for low wage earners. When I received these figures about three or four months ago, low wage earners were considered to be people earning under £20 a week.
Between 1919 and 1939, from the end of the First World War to the outbreak of the Second World War, 72 per cent. of the houses built in England and Wales were built in the private sector, while in Scotland the figure was 31 per cent. In the post-war period between 1945 and 1967, in England and Wales, 45 per cent. of houses built were in the private sector and in Scotland only 14 per cent. Scotland has perhaps the dubious distinction of having a lower proportion of owner-occupied houses than any European country west of Russia for which statistics are available, according to Professor J. B. Cullingworth.
I will not bother the House now with the figures of owner-occupation, but they

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vary from 62 per cent. of the population in the United States to 25 per cent. in Scotland and 44 per cent. in the United Kingdom. There is no good reason for such a significant difference between the number of potential home owners in Scotland compared with those in England and Wales. There should be little difference in the pattern.
A third means of providing adequate housing accommodation is rehabilitation of some of the older houses. Scotland has a very large stock of such dwellings, which are structurally sound but which require to be brought up to modern standards. I am not convinced by the arguments of those who advise that the quickest way of providing houses is to demolish and rebuild. In my experience that method is neither cheaper nor quicker. In the older houses the fabric, the services and the roads are there, which all saves money.
But more important is the fact that at least five years elapse from the time the decision is taken to demolish and rebuild to the first brick being laid. That period can be reduced to half or even less by rehabilitation of properties of various descriptions.
We should be bold and imaginative in this kind of reconstruction. Many hon. and right hon. Members know that in Glasgow and many other parts of Scotland we depend to a large extent on tenement buildings. These buildings present a very dreary and sombre appearance and are very often dilapidated, but the fabric of many of them is sound. Much can be done by bold and imaginative frontage treatment. Paint can be used. A building can be cleaned. One close may be made where formerly there were three. The tenement building can be joined up inside, providing modern facilities within the block. One increases the size of the houses. Obviously, houses are lost in the process, but this method would solve to a very great extent one of our biggest problems.
A fact that my right hon. Friend might like to convey to our right hon. Friend the Secretary of State for Scotland is that, particularly in the bigger cities of Scotland, we face a tremendous shortage of temporary accommodation. Key workers, skilled workers, executives, find it almost impossible to obtain accommodation for the two, three, four or five
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years for which they will require it. The period is too short to justify them buying a house, and it is impossible for them to rent a house from the municipal authorities. Houses should be provided for people coming to Scottish cities. We need people to come to them, we need the flexibility of people moving from city to city, and this cannot be done under the present set-up.
Sir Douglas Glover: As the hon. Member perhaps knows, I am very interested in building houses exactly on that basis, but does he realise that under the present Government one cannot get any finance to build them?
Dr. Miller: I appreciate what the hon. Gentleman says, but I know that there are schemes available in Scotland which local authorities ought to be encouraged to use. The schemes are there. In recent correspondence, my local authority has agreed that there are possibilities present for the rehabilitation of older houses, but the action so far taken has been minimal. Nevertheless, some action is being taken, and I want my right hon. Friend to try to push this kind of solution with the Secretary of State for Scotland.
I was very pleased when figures were given last year showing that for the first time in our history we were spending a higher proportion of the national income on education than on defence. I suggest that we must look at the provision of houses for our people in Scotland in exactly the same light as we look at the provision of education and health facilities. We must avoid too great an obsession with some of our other commitments. Perhaps I tread on difficult ground when I talk of the balance of payments problem, but we must not allow it to become an obsession. If we build up a vast surplus in our overseas trading, it will do us no good if we must have it behind the doors of slums.
4.45 p.m.
Mr. Christopher Ward: The Parliamentary Secrtary reminded us that this is not a housing debate. I suppose that he hoped that we would not talk about housing, and I am not at all surprised at his hopes. I am sorry that the hon. Gentleman is no longer in his place, and that the Parliamentary Secretary to the Ministry of Housing and

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Local Government has also had to leave us, because he is interested in this question.
The hon. Member for Glasgow, Kelvingrove (Dr. Miller) expressed disquiet about the length of time it takes to build a house. It takes a year or even two years to build a house—it may take a similar period to plan it—so that at no time is the level of completions in the housing market an indication of the state of the building industry. One has to go back to the time when the house was started, or even before.
That means that a high level of completions in 1965 or 1966 would reflect and did reflect, the very high state of confidence prevailing in the building industry in 1963 and 1964. The high figure of housing completions of which hon. and right hon. Members opposite boast about in our housing debates, and have again boasted about today, are the result of the building industry's confidence under a Conservative Government.
Because we are interested in the state of the building industry, I shall not now refer in detail to housing completions, which are very relevant to a housing debate. But let us look at housing starts. Perhaps the right hon. Gentleman will say whether I am right in saying that the number of houses started in Great Britain rose every year between 1960 and 1964—beginning with 309,000 and finishing with 426,000. Those figures show a remarkable degree of soundly based expansion in the building industry.
It was the momentum that we imparted to the industry during those years which helped to sustain the high level of completions for a few years after that, and which gives the lie to the statement so often made by the party opposite that the high level of completions in 1964 was an election boom. It was not an election boom at all, but a sustained boom which had lasted from 1960. It was a planned increase in housing which could have reached z million by 1970 if hon. and right hon. Members opposite had not come along to spoil things.
I shall not annoy hon. Members opposite by repeating the Prime Minister's pledge to increase the number of houses to ½ million a year, because I know that
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hon. Members opposite think it funny. It was not thought funny at that time. People believed it, and many voted for the party opposite as a result. Only in retrospect does it seem funny that anyone should have promised anything like that at all. Instead, I want to quote what the Prime Minister said immediately before he gave that pledge—and perhaps the hon. Gentleman does not have this statement burnt on his memory in the same way.
The hon. Gentleman then said:
"We have embarked therefore on a massive expansion of the housing programme."
When the Prime Minister said that he should have known that the housing programme was not expanding at all, because the number of houses started had fallen in every year from 1964 right to the time when he made that statement. The figure in 1964 was 426,000. In 1965, it was 392,000. In 1966, it was 379,000.
The rot set in straight away when right hon. and hon. Gentlemen opposite came to office and continued when the Prime Minister made that statement. That had been established by the pattern of the Government's policy for the industry.
Mr. Loughlin: Would the hon. Gentleman tell us what the starts were in 1967?
Mr. Ward: I shall come to that very shortly, because one of the Government's policies for the industry was the betterment levy. Hon. Gentlemen opposite will themselves remember that that was intended to reduce the price of land and make it easier for all of us. In fact, it pushed the price up by about £900 a house. It came into force in 1967 and the Government, who had seen these falling housing starts and who were no doubt alarmed by them, told the building industry that it could evade a certain amount of levy by starting houses before a certain date in 1967.
That had the effect of pushing up the number of houses started in 1967 to a very high figure purely because the builders rushed around the country going to every site that they could to dig trenches in order to begin houses. Hon. Gentlemen made statements about it. That is the answer to the question about the 1967 figure. What the Parliamentary Secretary will realise—because he is looking over his right hon. Friend's shoulder at the list

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—is that the year after 1967, starts dropped again by over 50,000. That shows what a freak year 1967 was.
The betterment levy was not the only thing that the Government produced allegedly to help the building industry. The other thing they produced was selective employment tax. I do not think that they ever said that that would bring down the cost of houses and I do not think that they could have. It put the cost up by about £125 a house. It produced a vast increase in the practice of labour-only subcontracting. It redeployed men, and I was interested to hear the Parliamentary Secretary say that he recognised that the redeployment of labour in the building industry was difficult. I hope that in replying, the Minister will meet the point that selective employment tax was not only intended to redeploy men within an industry, but to redeploy labour between the so-called service industries and the so-called manufacturing industries.
In leaving building out of the favoured industry areas, surely the policy must have been to redeploy men out of the building industry and into what the Government regard as production. Why should this distinction remain because this redeployment out of building, which we have seen, has resulted in about 115,000 building operatives being out of work at the moment? Presumably they have been redeployed out of building, but have not yet been redeployed into anything else.
The Government's next policy for the building industry was the credit sqeeze. The right hon. Gentleman knows that builders have to borrow money to build houses. Builders do not have vast sums of capital lying around and so, if they have to pay 15 per cent.or 16 per cent. interest on some of the capital they borrow, as they do, that puts up the cost of houses. If they cannot borrow at all then they have to build fewer houses, so the effect of the credit squeeze was once again to strike at the building industry and particularly the house building industry. [interruption.] What wants changing is the Government. There would be a quicker result from that than from anything else.
Lending money, from the bankers' point of view, is a question of priorities, because the Government have told them that some people are to have higher
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priorities than others. Here again, this is a matter of deliberate Government policy—that house building should have a lower priority than other sectors which are favoured.
The next factor in Government policy was devaluation. Here again, I am not suggesting that this was planned deliberately against the building industry, but it had the effect of putting up the price of a lot of building raw material and the import deposit scheme produced other difficulties for the industry.
Let us return to the housing starts position, because the combined impact of all these Government policies on housing starts was striking. We had reached the 1967 figure which the Parliamentary Secretary was kind enough to ask about and that was 447,000. The following year the figure was 394,000 and last year it was 344,000. The combining by the Government of all their efforts produced a drop of 50.000 starts each year. What will the position be next year? Will the right hon. Gentleman when he replies give his prediction for the number of housing starts next year and say how the Government's policies will affect these?
In the immediate future the prospect for house-builders is bleak because the number of starts made last year reflects the number of houses which can be completed in the near future to help overcome the housing difficulties. With the figures as low as these the prospect is gloomy.
We can go into the medium term from the short term, because the N.F.B.T.E., which makes quarterly surveys of the industry, says this about its January survey:
"Compared with August/September when the position was already very serious the majority of firms report even fewer enquiries, fewer houses sold and fewer houses under construction. The high number of purchase cancellations also continues"
So next year's starts are likely to be even lower. If we prefer we can take the Parliamentary Secretary's long view of the problem which he wants builders to take. Is there more satisfaction for them from it? Even farther back in the pipeline one can go to the architect whose work reflects the level of activity there will be for 18 months or two years time. Their workload dropped last quarter by more than in any quarter since records started back in 1964. There is a danger, which

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hon. Gentlemen opposite should recognise, and that is that the decline in the building industry has gone too far for there to be a rapid resumption of work when policies change.
The President of the Royal Institute of British Architects said:
"Practices cannot react swiftly to economic pressures without endangering their future capability.
Only the very largest firm can cut back on staff without breaking up established design teams and once these are disrupted they cannot be quickly built up again.
This makes it difficult for the profession to respond effectively to an expanding workload."
It is no good the Minister calling meetings of builders to tell them of the position for the "umpteenth" time in a few months. Action is necessary. As an emergency measure, the Government should abolish selective employment tax on the building industry and give them priority for credit so that it can borrow the money it desperately needs to buy the materials to build houses. It may already be too late. It takes two or three years for the industry to pick up momentum again and for completions to start coming off the pipeline.
The Government must not say that they have fallen short only of their own high standards. That was the excuse put forward in the housing debate a short while ago. The Government said that the only thing which they had fallen short of was their own high standards. But the word "standards" must not be used in this context. The Government never achieved any. What the Government fell short of was their promises which were based upon a healthy house building industry when they took office. What they failed to do was to predict accurately the disastrous effect of their policies on the building industry once those policies began to take effect.
It is no good the Government talking about an increased level of activity when all that is happening is that the level of activity is dying down as the momentum of Conservative policies slowly dissipates. Right hon. and hon. Gentlemen opposite should realise that the decline in the building industry has been planned. It has been planned because it results directly from Government policies which
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have operated and have always been intended to operate on the building industry.
The planned extra cost to the industry of the selective employment tax; the planned shortage of money for the builders in the credit squeeze; the planned unemployment in the industry arising from the selective employment tax, which was always intended to ensure that people would be put out of work in industries it operated on so that they could go to jobs in industries on which it did not operate—because of all these planned policies affecting the industry, there has predictably been a decline.
The conclusion we are forced to is that the Government also planned, or at least were prepared to tolerate, the additional measure of misery among those who are homeless or who are living in sub-standard accommodation and whose plight has not been eased by these policies. This is why we are censuring the Government.
Mr. Cyril Bence: It seems from what the hon. Gentleman is saying that for 13 years someone was planning to leave the housing situation in the state in which it was in 1964.
Mr. Ward: The hon. Gentleman is absolutely right, because the housing situation in 1964 was that the highest number of houses had been constructed, the highest number was under constructiond and had been begun that year——
Mr. Bence: And the highest number of people were homeless.
Mr. Ward: The number of starts, which was a record, had gone up each year for five consecutive years. Under the hon. Gentleman's Government the number of houses started has gone down every year, except in the betterment levy freak year. The hon. Gentleman was perfectly correct in his intervention. I wish he would make the same remark when the Minister is speaking.
The best hope we can offer to the homeless is that within a few months the policies will be changed—not by right hon. and hon. Members opposite, but by my right hon. Friends and hon. Friends coming to power.
5.2 p.m.
Mr. James Boyden: Obviously hon. Members opposite have not read the warning in today's Daily Telegraph to the right hon. Member for Bexley (Mr. Heath). The Daily Telegraph says that the right hon. Gentleman
"may be right in his determination to keep the initiative but he must ponder the dangers of over-stating any case, however strong"
Today the case that right hon. and hon. Members opposite are putting forward is not at all strong. The hon. Member for Londonderry (Mr. Chichester-Clark) was flushed with "phoney" records which I at first thought might have come from the Tory Central Office; but I decided after a little while that they must have come from Alice in Wonderland. I propose to give the House the actual figures.
In 1961 the output of new works was £2,002 million. In 1962 it was £2,034 million. In 1963, which was a bad year, it was £2,008 million. Adding the output for repairs and maintenance, which in those three years was running at over £800 million, the total figures are—£2,845 million for 1961, £2,855 million for 1962, and £2,835 million for 1963.
Mr. Chichester-Clark: We concede that the industry is in a much worse state now than it was before the hon. Gentleman left office. On what basis are these figures?
Mr. Boyden: These are M.P.B.W. figures. If the hon. Gentleman does not like M.P.B.W. figures, he can have N.E.D.C. figures. The N.E.D.C.says:
"Changes in output and manpower for 1961–63 were negligible and productivity was constant"
If the hon. Gentleman does not believe N.E.D.C., let him believe the builders. I quote two sentences from the annual report of the N.F.B.T.E.:
"The record in 1963. From the point of view of construction output 1963 can be regarded as a somewhat disappointing year, in that the industry has not been able to achieve the rate of growth adumbrated by N.E.D.C. Indeed, total output for the year may in fact prove to have been marginally lower than in 1962"
So N.E.D.C., N.F.B.T.E. and M.P.B.W. figures prove that the hon. Gentleman is certainly guilty of inaccuracy.
Mr. Costain Mr. Costain rose——
Mr. Chichester-Clark Mr. Chichester-Clark rose——
Mr. Boyden: I will not give way. I am giving figures now. The figures for the present Government, at 1963 prices, are these. I am giving the whole totals for these years, and I propose to give the totals for the building and construction industry for a solid period so that at least the size of it can be seen.
In 1967 the total output—new work and repairs and maintenance—of the building industry was £3,706 million. In 1968 it was £3,786 million. I have not had access to the very latest figures that the Parliamentary Secretary had, but I have the figures for the first nine months of 1969. I find that my own calculation corresponds very closely to the up-to-date figures. In other words, the provisional figure for 1969 is £3,500 million.
What the Tory Party is arguing about today is a 7 per cent. drop on a 33⅓ per cent. rise. I did it myself on education when Lord Eccles was Minister of Education. The Opposition say that a retardation on the rate of rise is a decline. The fact is that comparing 1961, 1962 and 1963 with the last three years of the Labour Government, there has been a substantial increase under Labour in the total amount of building and construction.
Captain Walter Elliot: Does the hon. Gentleman consider that the figure of 125,000 unemployed in the building industry is a decline or a rise?
Mr. Boyden: The hon. and gallant Gentleman is exaggerating. Anyway, the figure for 1963 was ¼million.
Mr. Chichester-Clark Mr. Chichester-Clark rose——
Mr. Boyden: I will not give way. If the Tory Party want some more figures, I will give indices of production with 1963 as 100. In 1966 on new work it was 121. In 1967 it was 127. In 1968 it was 132. My estimate is that for the current year it is 130.
I want to address some of my remarks to the fact that there has been a slight decline, because I am worried about part of the decline. I want to put the shortfall in its proper perspective. The hon. Gentleman completely distorted the figure, for purely party reasons.
I turn for illustrative purposes to my own Northern Region, where I have been

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doing a study, assisted by my right hon. Friend the Minister. This shows that the level of activity for the Northern Region for building and construction is very high indeed. The weakness in the activity is in housing. In 1965 and 1966 the total building contracts placed in the first nine months of each year were £132 million, or 6 per cent. of the national cake. During the first nine months of 1967 the total was £172 million. During the first nine months of 1968 it was £166 million. In the first nine months of 1969 it was £153 million, or 6·4 per cent. of the national cake. In other words, the North was getting rather more than it had in 1965 and 1966. The figures I have given are for the first nine months of the year, so that, although they are not annual totals, they are strictly comparable.
The reason for the difference between £153 million in 1969 and £166 million in 1968 is largely the fall in council house building. The figure in the first nine months of 1969 for the placing of contracts has fallen by £15½ million compared with 1968—the first nine months. For the first nine months of 1968.the value of contracts placed was £29 million. The present placings are only £14½ million. One of the reasons, undoubtedly, is that Tory-controlled authorities such as Darlington and Sunderland are cutting back in the placing of contracts.
In fact, as is well known, the number of council houses completed under the Labour Government is infinitely superior to that under the Tory Government. In 1961, there were 112,000 houses completed in Great Britain by local authorities. In 1962, 124,000. In 1963, 118,000. In 1966, there were 170.000 completed. In 1967, 192.000. In 1968, 180,000. In the year which I have been criticising, that is, 1969, there were 124,000 completed in the first nine months, which is not good enough, but it is a great deal better than the Tory output of council houses in 1961, 1962 and 1963.
I give hon. Members opposite a nice easy figure for them to remember. Their deficit on the balance of trade of £800 million is about the same as the extra amount of building activity year by year in this country since there has been a Labour Government. Hon. Members opposite ignore the balance of payments,
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and they make no comment on the contribution from the building industry. I was pleased that my hon. Friend the Parliamentary Secretary referred to it. Here again, the Labour Government's record in the exporting of building materials and fitments is far superior to that of the Conservatives. From 1958 to 1962, the average annual export of building materials was about £60 million. In the first nine months of 1969, it was £120 million. The export of building fitments and components from 1958 to 1962 was about £40 million a year, and in the first nine months of 1969 it was £52 million. In other words, as my hon. Friend the Parliamentary Secretary said, there has been a big leap forward in the export of building materials and building fitments, as well as in the winning of building contracts overseas.
However, I make a plea that my right hon. Friend should make representations to the Chancellor about the credit squeeze. It is not usually realised, I think, that the builders are bankers to the rest of the community to the tune of about £500 million a year. I think that the hon. Member for Folkestone and Hythe (Mr. Costain) may bear me out in that. One of the anomalies which needs putting straight is that the builder has to wait for his full amount of money, and the client retains something against faults. Equally, a number of public authorities and private clients do not pay fast enough. There is, therefore, need for a considerable change in the method of paying building bills, and a need for public authorities to pay quickly.
I am glad that my right hon. Friend the Minister of Public Building and Works has insisted that his Department shall pay promptly, and, generally speaking, I hear nothing but praise for the promptness with which the M.B.P.W. pays its bills. But more should be done. I had a letter from my hon. Friend the Minister of State who deals with regional development in which he answered a point I had made in a previous debate about regional credit. He tells me that the banks have instructions to take notice of Government regional policy. I wish that it were spelled out to the banks that builders, and particularly small builders, who are in much more serious difficulty than the big firms, should have much readier access to bank credit.

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I make the further plea that my right hon. Friend should do more administratively for the small firm. In the days when I was at the Ministry of Public Building and Works, small builders usually had only one successful contract out of seven tenders, but where efficient small builders got together and maintained a central tendering force, with several firms combining together, they managed to bring the ratio down to one in three. I should like my right hon. Friend to look again at this problem to see whether he can do more to improve the efficiency of small-firm tendering. True, there has been a big development in the move over to selective tendering, negotiated tenders, running tenders—call them what one will—so that the amount of wasted tendering is now less than it was, but it is still too high. I should like my right hon. Friend the Minister of Housing and Local Government to make a real drive through the local authorities to cut out much of the open competitive tendering which is a waste to everyone.
Now, another thought which I hope my right hon. Friend will find constructive. I have put down Questions and made a speech about the need for a national building plan so that builders may know where they are. My right hon. Friend has knocked the idea down somewhat, and he says that his Ministry has a plan. Perhaps I have not made myself clear. What is needed is to bring down the national look-forward of the building industry to terms of contracts, identifiable projects. My right hon. Friend tells me that his staff can do that quite easily. The important need is for this then to be turned into a regional plan which fits into the regional activities of the builders.
The areas of M.P.B.W. administration are not suitable for the breaking down of the plan in such a way that local builders can take advantage of it, for the simple reason that the average local builder operates on about a 25-mile radius, and the regional areas and administrative areas are too big. Therefore, I repeat my plea—I hope that my right hon. Friend will take some notice of it—that the Department should draw up a detailed national strategy in the way I suggest, almost firm for two years and fairly firm for the third year, and that this should be broken down to identifiable projects so that builders may plan their work
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accordingly. He has implied that this is already done, but I can tell him of three sections in which it is not working. There is no plan for water; there is no plan for sewerage construction—the building projects here come forward in quite a chaotic manner, and the look-forward in council housing is equally unsatisfactory.
1 know that my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government has been touring the country to try to persuade reluctant authorities to go forward with their housing plans, and I hope that he now has in his office some useful information about that. However, the contribution which I have suggested would add stability to the building industry, stability which it very much needs. I agree with the hon. Gentleman the Member for Londonderry when he points out that building particularly is affected by fluctuations. Anything that can be done to give stability is more important in the building industry than in any other, for the reasons which have been advanced. Planning is a long process. If variations are made in a contract, the consequences can be almost disastrous for builder and client, and very expensive.
While entirely repudiating the bogus figures thrown at us by the Opposition, I make those constructive suggestions for action by my right hon. Friend. Over the years, the Tories have had a bad record in building. Today, they have put a grossly exaggerated case. If this is a foretaste of their pre-election antics, they should sack their architects.
5.19 p.m.
Mr. A. P. Costain: The hon. Member for Bishop Auckland (Mr. Boyden) put across the most remarkable set of figures to which I have ever listened. My hon. Friend the Member for Londonderry (Mr. Chichester-Clark) tried to interrupt him, but he would not be interrupted because his mind was made up and he did not want to be confused with the facts. He even introduced that hairy old horse, the £800 million deficit, which the Prime Minister knows is "phoney" but has repeated it so often that he has even "kidded" hon. Members opposite that there is some truth in it. Then the hon. Gentleman left his Transport House brief and the extraordinary figures, which

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I cannot reconcile with any figures which I have seen, and came to the facts about the building industry, and we realised that he had had a very creditable career at the Ministry of Public Building and Works.
On 3rd November, 1964, I was fortunate in catching Mr. Speaker's eye in the first debate, which was on the Gracious Speech, which we had under the Socialist Government in the last Parliament. We were promised, in that wonderful twilight period between the two elections, 400,000 houses.I said:
"I rose to speak for a few moments about a subject on which I can claim some specialist knowledge. I need hardly declare my interest, because everyone knows it … I congratulate the new Minister of Public Building and Works on the magnificent organisation which he is taking over"—
and then the Minister laughed, because I went on to say:
"The Government laugh about this … I can tell the House quite genuinely that the progress of the Ministry under Geoffrey Rippon was outstanding … If anyone has any doubts about that, he should read the technical Press—the Architects' Journal, the Builders' Journal, and so on—when he will find tremendous praise for his work."— [0mciAL REPORT, 3rd November, 1964; Vol. 701, c. 149.]
From that day to this, the Parliamentary Secretary and his predecessors have been accusing my hon. Friends and I of exaggerating the situation. Is it not right that, having referred in 1964 to the congratulatory articles in the Press about the work of the former Minister of Public Parliamentary Private Secretary who sits Building and Works—[Laughter.] The in the place which I occupied in those days laughs. Let me take the smile off his face by referring to those journals and to what they said about the building industry. The Financial Times referred to "Builders' plight for Silkin on Thursday "The Guardian said Building aid could shake foundations". It will shake the foundations of this Government if they do not do something about it. The Financial Times also referred to "A bad year for builders". Another article said,
"How I could knock £700 off a £6,000 House"
The Guardian said, "Builders plead hardship" The Times said,
"Architects tell Government of crisis fears."
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Of all the statistics which have been presented, it is the figure of architects' forward work which worries me most.
The Parliamentary Secretary and the previous Parliamentary Secretary have carefully and conveniently forgotten a Measure which came before the House twice, the Building Control Bill. Do hon. Members opposite forget it because their memories are short, or are they ashamed of it, as they should be? It came up during the 1964 Parliament and again during the 1966 Parliament. My hon. Friends and I fought it and pointed out that it would stop the building industry preparing plans for the future. Now we are reaping the harvest. This is one of the reasons why we cannot rapidly turn on the tap in the building industry and reduce the fantastic unemployment figure. I know that the hon. Member for Liverpool, Walton (Mr. Heffer) shares my concern. Unemployment in the building industry is twice what it was. Over 10 per cent. of the people in the industry are unemployed due to the Government's policy. Even at this late hour, the Government should do something about it.
I spent 40 years in the building industry. I have spent 10 years as a Member of the House. I had five years in government and five years in opposition. For two years I was Parliamentary Private Secretary at the Ministry of Public Building and Works. During that time I saw the industry through somebody else's eyes. I spent half my time explaining the Minister to the industry and the other half explaining the industry to the Minister. I would not attempt to explain the present Minister to the industry.
What is clear from my 40 years' experience of the building industry is that it is the worst possible industry to be a regulator, yet it is the simplest and easiest industry for any Government Department to make a regulator. The tap can be turned off, but the pipe takes a long time to empty and a long time to fill. That is the problem. That the Government wanted to penalise the building industry is illustrated by their refusal to exclude it from selective employment tax. What possible excuse can there be for making slum clearance suffer as a result of the payment of selective employment tax which local authorities and county councils must pay off over

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60 years while the income from it is squandered by that mob on the benches opposite? It is just bad finance. What possible excuse is there for adding at least £125 to the cost of a house for which a young married couple have saved up and for which they have probably put off their marriage—although they do not do much of that these days?
The figure of £125 in respect of selective employment tax being added to the cost of a house is bandied about. But that is the cost of the tax to the builder. It does not include the cost to industries which supply the builder. It does not include the ls. 9d. extra tax element on the price of petrol. How many people realise that the weight of material which has to be carted for building a house is about six tons? When the extra cost of petrol and taxation for lorries and the import duty on material such as copper, lead and timber which we cannot produce in this country is taken into account, about £250 is added to to the cost of a house. To that sum can be added the interest charges over the period, giving a total of an extra £500 in the cost of a house for a young married couple due to deliberate taxation by the Government. [Interruption.]
I will give way to any hon. Member who cares to rise. When S.E.T. was introduced I asked why I must pay the tax when I build a house to replace property destroyed in slum clearance but do not have to pay if I build myself a yacht. Would any hon. Gentleman tell me whether that is Socialist policy? Perhaps the hon. Member for Bassetlaw (Mr. Ashton) may know more about this.
Mr. Joseph Ashton: Some of us are trying to get into the debate to make a bigger contribution than merely on the question of S.E.T. In goading hon. Members to intervene the hon. Gentleman is merely prolonging the discussion. We would like to speak on building in general.
Mr. Costain: I can well understand why hon. Members opposite will not rise to make my point, though they interrupt to try to stop me making it. I am too old a hog for that.
If the Government genuinely feel a need to increase housing and to keep the architects' teams together, if they feel that the building industry must be kept together
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in such a form that it can help exports, they can make a real contribution with a stroke of the pen before the debate is over. I am sure that the Minister is saving up to the end an announcement that he has persuaded the Chancellor to abolish selective employment tax. If he has not, any words from the Government are but "phoney".
5.31 p.m.
Mr. Eric S. Heffer: In debates like today's I always find rather difficult to follow some hon. Members opposite, because their sudden championship of the building workers and operatives I find a little nauseating. I have worked for 32 years in the industry, unlike the hon. Member for Folkestone and Hythe (Mr. Costain), who has been an employer in it. I have never yet met an employer in the industry who has rushed forward to give my people better conditions and terms of employment without our having had to fight and work for them.
The truth is that the building industry has always been in an utterly chaotic condition. Unfortunately, it is still in a chaotic condition. When we talk about the building industry, we are talking about a number of very big employers, a mass of middle-range employers and a further mass of small employers, some having only a ladder and a barrow but calling themselves builders. This chaotic situation has existed for far too long. We must get this into perspective when we talk about the condition and position of the industry. It is no more in a crisis now in that sense than it ever was, though it is in a crisis in another sense which I shall explain in a few moments.
There is far too much even today of the old concept of the ragged-trousered philanthropists. I am sure that the hon. Member for Folkestone and Hythe will know what I mean even if no one else does, because he has been one of the employers that has undoubtedly had some sympathy with the employees——
Mr. Oscar Murton Mr. Oscar Murton (Poole) rose——
Mr. Heffer: I want to make it clear now that I shall not give way at all. Giving way wastes time. Other hon. Members wish to speak, and if everyone makes a fairly short contribution without giving way more people will be able to take part in the debate. I hope that the

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hon. Gentleman will get his opportunity to speak.
I want to get down to what I think is the real situation. We have about 115,000 wholly unemployed building operatives.
Mr. Wallace Lawler: The figure is 120,000.
Mr. Heffer: It may well have gone up. The last figure I had was 115,000 wholly unemployed. Including the temporarily stopped, the figure is higher.
Mr. Murton: Twenty per cent.
Mr. Heffer: That is right. I am not defending the figure of unemployment. I have attacked it consistenly in the House, though perhaps hon. Gentlemen opposite have not been here to hear me do so. I have opposed the unemployment in the building and other industries from the first day I entered the House. I make no apologies for this, because to me unemployment is a crime and always has been. It is a crime under a Conservative Government, Labour Government or any other Government. It is wrong that any of our people should be unemployed now, particularly the skilled workers who are not being used and should be used to build the houses, hospitals, schools, roads and so on that we require.
Hon. Members must not be too enthusiastic about the question of unemployment. In 1959 I wrote a pamphlet for the Liverpool Trades Council and Labour Party on the problem of unemployment in the Liverpool area. Under a Conservative Government then the number of unemployed building operatives in the development area was about 4,500. Unfortunately, today it is around 5,500, but in 1959 there was no S.E.T. and not all the terrible burdens that are now apparently on the industry, and which I think should not be on it.
But I want us to get the matter into perspective. Unemployment in the building industry is not a new phenomenon. It has always been the barometer of the country's economic condition. I know from practical experience that when the country has been booming and the economy has been doing well, I and my fellow building operatives were work-
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ing. When there was a down-turn, when there was a recession in the economy as a whole, some of us have been unemployed, walking the streets looking for employment. That has always been the position.
It is not quite true to say that there is an upturn in our economy. Certainly the balance of payments is right, but that does not mean that we have a totally healthy economy, and we cannot have one whilst we have 125,000 building operatives out of work.
I should like to draw the attention of the House to a statement made by my General Secretary, Mr. George Smith, in an address to the executive committee at the beginning of the year and contained in January's edition of the Woodworkers and Painters Journal. He says:
"We will continue to press upon the Government that, though this Society has been in the forefront in admitting the need for an increased supply of skilled labour, and in productivity bargaining, it cannot continue to cooperate in either of those fields if the sole result is to lead to the unemployment of its members. However, we are confident that with the high level of needs which currently exists for new houses, schools, hospitals and other buildings, the demand for which can be expanded by suitable Government decisions, there can be more than adequate work available for a fast developing industry"
Of course this is the position. My hon. Friend the Parliamentary Secretary made a very important point when he said that the building and construction industry can respond quickly to an upturn in the economy. In a way, we are arguing with hon. Gentlemen on the Government Front Bench today who are our friends, and who understand the position as well as we understand it. Why did my right hon. Friend himself go to the Treasury to argue about the position? We really ought to have the Treasury represented in the debate. [HON. MEMBERS: "Hear, hear"] We really ought to be saying to theChancellor—[HON. MEMBERS: "Hear, hear"]—that it is a question of action being taken by the Treasury in order that there shall be an upturn in the economy to get building operatives back. That should be the position, and my hon. Friend knows this very well indeed.
Let me make just two further points. I would have liked to have spoken at greater length, but I want everybody who wants to get into the debate to have

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a chance to speak, including the hon. Member for Poole (Mr. Murton), and so I shall be brief.
All is not the fault of this Government. Let us look at the housing question for a few moments. Local authorities built up very strong direct works deparment which were building houses consistently, Manchester was a very good example if this; Liverpool also had a good works department; and other local authorities also. [Interruption.] Of course, direct works departments can be as inefficient as private enterprise—just as inefficient, or just as efficient, with the right management; more efficient with the right management.
I am not suggesting that all direct works departments were wholly efficient or that all private enterprise was totally inefficient. Liverpool had a good works department which I, as chairman of that department, helped to build up. Those workers, or many of them, have been dispersed; those departments have been broken down because of doctrinaire attitudes on the part of local Conservative councils, and good building operatives have been thrown out of work quite deliberately. Subcontractors have been brought in, and in many cases are doing far inferior work. Even in my own area only last week, when I was going around, I found paint peeling off the doors—paint only just painted on corporation property by private enterprise sub-contractors.
We could go on for ever discussing this sort of situation, but it brings me to my final point. What we need in the building industry, as in the docks industry, is an end of casualisation. It is about time that building workers knew that once they have begun work in the industry they will have employment consistently and that it will not be constantly interrupted by unemployment. Building workers, most of them, do not get redundancy payments, because they are very fortunate if they work for any firm long enough to qualify for redundancy payments. Wage-related unemployment benefits in the main are not enjoyed by building operatives even now, and that, of course, makes the matter worse. Those 125,000 workers are not getting precisely the same sort of unemployment benefits which other workers get, or would be getting. So what we need today is,
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firstly, a scheme of decasualisation in the industry. Also we need a public building corporation which can compete with the larger firms and contractors, and ultimately, I hope, take on Government work throughout the country. This, of course, is a long-term measure.
What immediately needs to be done—and I have said it so often in the House that I am getting a little tired of saying it, but I hope that, on this occasion, prior to the Budget, it will not fall on deaf ears—is to ease and ease quickly the credit squeeze, particularly for builders of housing. I hope, too, that there will be an end of S.E.T. in the building industry. It is not a service industry. It never has been a service industry and never can be, in that sense. I also hope that we shall maximise pressure on the local authorities who are reluctant to go ahead with the housing programme.
If these three things are done as immediate aids we can get, if not all of our people back to work, some of our people back to work. In the long term we need a radical reconstruction of the building industry; we need to have a public building corporation; we need to have decent conditions and employment on the basis of one agreement for the industry. That means the bringing in of a Bill to end labour-only in the industry at the earliest possible moment. If we do these things I am confident that this industry will have a great future.
5.47 p.m.
Mr. Wallace Lawler: Figures and statistics, and we have had plenty of them in the debate to date, can be very interesting, and they can be put rhetorically about certain aspects of construction, and can be compelling, but I am much more concerned about, and want to direct what I have to say to, the general concern of people, the ratepayers, who have to pay the very high costs of constructing public buildings today, and of the factory chiefs who are delaying the building of factories because of high costs. I want to look at the grim situation which certainly prevails.
The Parliamentary Secretary spoke about the importance of having a highly skilled and compact building force. This seems to me to be illogical, if I may say so with respect, because when we have

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unemployment at a figure ascending 120,000 in the building and construction industries alone it is obvious that we are losing, as the builders will tell us, skilled labour and compact labour, and some is lost for ever. It is perfectly obvious, and the hon. Member for Liverpool, Walton (Mr. Helfer) made the point, in a way, when he spoke about the uncertainty in the industry, and the fact that employees are sometimes employed in branches of the industry for only a very short rime. Some people with very high skills decide, because of that uncertainty, to leave the industry altogether. Will the Parliamentary Secretary re-examine this, and consider whether it is logical in view of the position which has been allowed to prevail?
It is poor comfort for the Parliamentary Secretary to talk, as he did, about the prospect of still more offices, shops and garages. This is a daunting prospect for the Midlands where, a few years ago, we had to halt the situation which had given us a surplus of offices, which still exists, and a surplus of shops, as some shopkeeper with highly rated and high cost shops know only too well.
Mr. Loughlin: I do not want the hon. Gentleman to misconstrue my remarks but, short of controlling the whole of the activity in this sector, it would be difficult to stop it. What I said—as he will see if he reads HANSARD in the morning—was that we had not given a very high order of priority to these projects.
Mr. Lawler: I accept what the Parliamentary Secretary says, that not a very high priority has been given, and I want that position to continue. I shall read HANSARD, and I shall read that he suggested that the not quite so high priority will begin to lift in favour of more offices and shops.
Mr. Loughlin: I said nothing of the sort.
Mr. Lawler: There is a way to control this which has been employed in the Midlands, and in the local authority with which I have some association. Reference has been made to bricks and also to British Standard Time. It is not without interest to note the recent edict from one leading brickyard that transport drivers need not apply until after 10 a.m. because
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of the detrimental effect of British Standard Time. I wonder how many wasted hours and how much wasted labour have to be paid for during the hours before 10 a.m., when fleets of vehicles and operators are without alternative forms of employment.
The more one looks at the current situation, the grimmer it becomes. Reference has been made to the ever-soaring price of land and to the long delay between the opening of negotiations for the purchase of land, whether for housing or for other forms of construction, and the receipt of planning permission, during which period the cost of the land rises still higher. I have often found that, having acquired the money and the land, one is confronted with this long road of unfortunate factors which is responsible for the highest ever price of construction.
Before a trowel is lifted and before a brick is laid it costs £6 per week per employee—expenditure which is 100 per cent. non-productive. That is worth reiteration—£6 per week per employee before construction starts. One has to take into account not just the all-time record cost of insurance and selective employment tax, but also the cost of holidays with pay. When these factors are added together and then subdivided, the figure is in excess of £6 per week per employee. Thus, in one stroke, if we take the average of one man per house per year, about £300 is added to the cost of the average house.
I agree with the hon. Member who said that £125 per house, on average, has been added by the iniquitous selective employment tax. To this must be added the taxation on all the ancillary services which are absolutely essential to any builder. People engaged in the construction industry have now to face a new bogy, the additional cost with which they will be faced when the Transport Act comes into operation towards the middle of this year. This will mean another huge uplift on all building prices which cannot be evaded. Just what it will mean to local authority planning, to plans for private construction and to the already overburdened cost of housing is anybody's guess, but no one will deny that this is a grim situation which will get grimmer and which is worthy of anything but laughter.
Mr. Tony Gardner: I take the hon. Gentleman's point, but if he is talking about transport costs in the building industry, will he calculate the cost per journey mile of a three-ton lorry and say by how much it will be increased by increases in taxation?
Mr. Lawler: I would rather calculate the cost of a transport vehicle to any section of the building construction industry for one week. This is what builders and those operating transport fleets have to face. I would assess it at 12½ per cent., and this is in an industry which has already had nine increases during the last 15 months. That is a direct answer to the question by the hon. Gentleman, and I thank him for raising a point of such importance and value.
Where does this lead? What is the net effect on the construction industry? In housing, as home owners know to their cost, as do those people who would like to be home owners but are denied the opportunity because they cannot find sufficient money, it means higher and higher prices, higher and higher mortgage repayments and higher and higher rents for municipal tenants. It also means that there is an ever-increasing number of people who are deprived of the opportunity of home ownership.
How much effect does this have on the slowing-up of factory building? I have carried out a small survey in the Midlands, and I find that factory owners and private firms who, a year or so ago, had planned to proceed with the much needed building of new factories have been forced to defer their plans in the face of the ever-rising costs. The situation cannot be expected to improve until there is some abatement in interest rates.
The Government have been accused, sometimes unjustly, in recent weeks on many matters, but I find it difficult to believe that even this Government will allow the present situation in the construction industry to continue without their taking some very effective action. The selective employment tax is indefensible as it applies to the building industry, and I join with the hon. Member for Walton and others in hoping that the Government will bring the tax speedily to an end and that the absent Chancellor of the Exchequer will take effective steps to improve the situation.
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One gathers that there is to be a reexamination of the option mortgage scheme. One item that needs to be looked at, in view of the lamentable failure of the scheme, is the fact that people are refusing to take part in the scheme because they have no option to contract out if their financial or professional situation improves. It is not enough to have a pious hope that the scheme will succeed in moving people towards home ownership.
In addition to the overdue removal of S.E.T., other measures are necessary. To assist the building trade there is a very great need for an easing of the present curb on bank loans. There is also a strong case for the Government to take action to cut the red tape which surrounds local authority planning departments and which so often leads to delay in construction.
There is a case for examining the effects of British Standard Time on the building industry, which has always taken a pride in being an early-morning industry. When I was a boy I was often told by builders that they got on best with their job between the hours of 8 and 11 in the morning. Today it is not so easy to get on with the job that early, especially when materials are not available and cannot be collected because the transport system does not work very efficiently between 8 and 10 in the morning. Could not concessions be granted to builders who employ their own transport fleet, as well as to transport firms working exclusively for the construction industry? Such concessions, particularly in views of the new expenses envisaged by the forthcoming Finance Bill, would be of great assistance to the construction industry.
I hope that a new look can be taken at the possibility of constructing a new and cheaper type of house, but a house embodying all the standards which are so important. I envisage something on the lines of the terraced house which tens of thousands of people ask to be built, providing all the necessary amenities up to a standard that it is so important to ensure. I am assured by leading members of the building industry that such houses could be produced at a lower price than the average home today.
6.5 p.m.
Mr. Joseph Ashton: My hon. Friend the Member for Liverpool, Walton(Mr. Heffer) said that the building industry was governed by the barometer of the Treasury. All we have heard from the Opposition benches this afternoon is that the Treasury should alter the barometer so that the industry can once again revert to its inefficient procedures of the '50s and '60s.
We are dealing with an industry which, when compared with other industries, is one of the most inefficient. There has been a 20 per cent. increase in the number of houses built in the last five years compared with the five-year period 1960–65; there have been 60 per cent. more schools, 50 per cent. more hospitals, and many miles of motorway constructed. The Opposition are not satisfied because we are not getting back to the conditions of the early '60s when we were expending manpower to build petrol stations, bingo halls, large offices in the centre of London—which are still standing empty at the bottom end of Tottenham Court Road—and because, they say, we are not taking the brakes off industry.
There was a situation when people changed houses every two years, not because they needed another house, but simply to keep pace with the tremendous increase in the price of houses at that time. Since 1938–39 the price of houses has gone up 10 or 12 times. A house built in 1939 at a cost of£300 or£400 would today cost well over£4,000. But the wages paid in the building industry now, compared with those paid before the war, have gone up by only six or seven times.
The difficulty arises because the building industry has never had to sell its product. It has relied on traditional methods since the turn of the century. It takes just as long to build a semidetached now as it did 50 or 60 years ago. It is an industry in which some 90 per cent. of contractors have never heard of critical path planning, but try to organise the building of houses through a system of sub-contracts, as one can see on any building site, where half those present seem to be waiting for some other sub-contractor to do his piece of work before anybody else can get on with his work.
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Before I came to this House, I was chairman of the public works department of Sheffield, which employed 2,000 building trade workers, with£4 million a year turnover. It was one of the best public enterprises that exist in the country. It was a department whose direct labour system was examined by Aims of Industry. That organisation came along to see us and we allowed it to examine our books for a week. But Aims of Industry went away in silence, since it could find nothing to criticise. It was a public works department which made millions of£s profit for the Sheffield housing department, which competed on competitive tenders, and, incidentally, paid S.E.T., which it was compelled to pay since it was thought that otherwise it would be put at an unfair advantage.
The figure of S.E.T. in relation to building costs has been put at 3½ per cent. But it is nowhere near the burden of purchase tax borne by other industries. The hon. Member for Birmingham, Ladywood (Mr. Lawler) must know that in Birmingham any increase is production of motor cars will bring an additional burden in the purchase tax charges. But once the building industry is asked to pay a similar tax, even though it is much less, one hears perpetual cries of "poverty", and the plea that it just cannot be done, it cannot be absorbed and is ruining the industry.
We must face the situation of an industry whose costs have risen very highly when other industries have kept their prices down. Let us remember the price of television, cars, and so on, some 10 years ago. There has been a 20 per cent. increase in such commodities, including washing machines and household goods, in that period of 10 years, but over that time the price of houses has doubled. There has been no attempt at all to absorb cost increases. They have merely been passed on to the consumer. It is no wonder that when the Chancellor observes that sort of industry he insists that it must bear its burden of tax or S.E.T.
We have heard much today about who built most houses when and where, but the Opposition have not said from where the initial impetus comes for building houses. They know that the function of a Government in regard to housing is one

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of coaxing and bribing. The Government can offer a bribe of 4 per cent. interest rates, as we do. We can coax local authorities to build more, as we are trying to do. But, if a local authority says "We are not going to build", as local authorities in Manchester, Liverpool and London say, there is little we can do to make them build more. The hon. Member for Worcester (Mr. Peter Walker) has said that Labour local authorities build less than Tory local authorities, but in 99 cases out of 100 Labour local authorities are in mining areas where there has been a decline of population and Coal Board houses are standing empty.
I have listened for well over three hours to the debate and I hope that the hon. Member for Crosby (Mr. Graham Page), who is to wind up for the Opposition, will answer some of these points. I have listened attentively, and I want to find out three or four things. One is: if the Tories were elected at the next General Election, what would be their housing target? How many thousands of houses do they propose they will build if they get back into office? They keep deadly quiet about that. How many schools are they proposing to build? Do they propose that the present rate shall continue? What about interest rates? Do they say that interest rates for local authorities will be altered or, as has leaked out from time to time, that housing subsidies will be abolished? [An HON. MEMBER: "Ask the Prime Minister."] I cannot ask the Prime Minister what happened at Selsdon Park, for he was not there. We have waited to hear from the Selsdon Park conference how many houses the Tories would build if they were returned to office, but the silence has been deafening!
The hon. Member for Folkestone and Hythe (Mr. Costain) complained bitterly about S.E.T. I should expect him to take some drastic action if—God forbid—a Conservative Government were to be elected and they introduced value-added tax. Their proposals for a value-added tax of 10 per cent. or 11 per cent., if it did not excuse the building industry, would place a burden on it very much greater than that of selective employment tax which it is paying now. It is not good enough to criticise; a responsible Opposition would put forward plans
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showing what they would do if they had the chance. In the present set-up with nothing but the carping criticism that we have had from the Opposition this afternoon, they will never have that chance.
6.13 p.m.
Mr. James Allason: I am sorry that the hon. Member for Bishop Auckland (Mr. Boyden) is not now in his place. He made the sort of speech which brings politics into disrepute, and now he has hopped out. Obviously he does not want to hear the reply by my hon. Friend the Member for Crosby (Mr. Graham Page) from the Opposition Front Bench.
The hon. Member challenged my hon. Friend the Member for Londonderry (Mr. Chichester-Clark), who compared the figures for 1960 with those for 1964. He said that my hon. Friend's figures were dishonest, and then proceeded to deal with figures for 1961, 1962 and 1963. He did not mention the figures for 1960 and 1964. That was thoroughly dishonest, because there was a very considerable increase indeed in those years. The figures for the construction industry in 1960 were£1,600 million and in 1964£2,400 million, an increase of 50 per cent.
Mr. Bence: There was a General Election that year.
Mr. Allason: My hon. Friend dealt with that matter, but the hon. Member for Dunbartonshire, East (Mr. Bence) was not here to listen to him. The hon. Member for Bishop Auckland spoke only of the years 1961, 1962 and 1963. The figures having gone up by 1961, in 1962 there was a plateau before the increase which came in 1964. To deny the figures for 1960 and 1964 and accuse my hon. Friend of dishonesty brings politics into disrepute. All hon. Members will remember the dramatic moment on 20th July, 1966, when the Prime Minister coined the phrase "redeployment of industry" as an excuse for unemployment. After his statement he was asked where these people were to be redeployed—into what industries. One of the industries he mentioned was the construction industry. This is yet another of the Prime Minister's pledges which he has failed to honour. The Minister is entitled to go to the Prime Minister and remind him of that

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statement and say that something must be done to improve employment in this industry.
The Parliamentary Secretary told us that the whole position was being exaggerated. He accused my hon. Friend of using exaggerated language. But my hon. Friend was using the language of the industry, which is by no means exaggerated. The industry, architects and those in the brick industry, are all extremely worried about the situation. Small builders are extremely worried. I am intervening in this debate to express the concern of small builders in my constituency. They are desperately worried about the future. What will be done if we price small builders out of the industry and make it impossible for them to live? We shall not be able then to go to the very big builders and ask them to do small repairs, for they are much too busy doing other jobs. We shall find that we are unable to get necessary repairs done because of the lack of small builders remaining in the industry.
The Minister should make a far greater effort to get employment back into the industry and put it on its feet. When the hon. Member for Liverpool, Walton (Mr. Heffer) was speaking about shortage of employment in his area I recalled that the Government are spending an enormous amount of money in trying to provide new jobs, some of them in Liverpool. I have heard the figure of£100,000 per job quoted for the Liverpool area.
Mr. W. Howie: The hon. Member has spoken of the enormous sums of money the Government are spending to ensure employment in the vicinity of the constituency of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). Does the hon. Member suggest that we should spend less, or does he think that things are all right as they are now?
Mr. Allason: I wish the hon. Member for Luton (Mr. Howie) had been present for the whole debate. If the Government can afford to spend£100,000 per job they could get 20 or 30 jobs for the same amount of money were they to get the construction industry moving again. My argument is that the money is being wastefully spent. What is needed in the
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construction industry is priority loans for buildings. I have asked the Minister and the Treasury for this, and the answer has been that the construction industry is at the bottom of the queue. That is a similar argument to the argument about the cost of providing new jobs. The construction industry is clearly at the bottom of the queue. This is the fault of the Minister. The Minister's job is to try to get the construction industry moving again, and I ask him to do it.
6.20 p.m.
Mr. Graham Page: I should like to make the conventional declaration of interest in the subject matter of the debate. I am a director of a building society, of a development company and of a civil engineering company.
An article in the Sunday Times yesterday started with the sentence:
"The post-war building boom is over. Britain's building industry appears to be approaching a slump and large-scale unemployment in its skilled trades."
That was not an exaggeration. The speech of my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) was not an exaggeration. The debate has shown that there is truth in the grim situation in which the building and construction industry finds itself and truth in the rather frightening forecasts which we have before us of the future of what the Parliamentary Secretary, quite rightly, called our biggest single industry.
The hon. Member for Liverpool, Walton (Mr. Heffer) said that the building industry has always been in a chaotic condition. The hon. Member for Basset-law (Mr. Ashton) spoke on much the same lines. But, even if that were true, it is no excuse for the Government to add disaster to chaos.
The writing on the wall for this industry is in the drop in new work done by the industry during 1969 compared with the rise in the volume of new work over the previous ten years, 1959 to 1968. In the first part of those ten years, under a Conservative Government, the volume of work rose twice as fast as in the latter part, under the Labour Government. But, even under the slower rate of increase, it that had continued, the industry could have expected to be doing about£170 million more work in 1969 than in 1968. I will try not to use too many figures, but I wanted to make a point of that one.

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Instead of the work increasing by£170 million worth in 1969, it dropped, so far as I can tell from the figures before us, although I admit that we have not got the official figures, by about£60 million compared with 1968.
The Parliamentary Secretary said that this is all due to housing, that in other sectors output has increased, and that we can be optimistic about is increasing in future. The hon. Gentleman pointed to roads, to schools, to industrial buildings, and even to overseas work. I do not think that we can tell the small building contractors or the unemployed skilled building workers to go to Europe or Australia to do their building.
Taking those other sectors—roads, schools and industrial buildings—there has indeed been a switch, as I interpret the figures, of about£45 million worth of work into that type of work during 1969 to cope with the drop in housing. But neither building operatives nor building firms are interchangeable between roads and house building or between civil engineering and shops or offices or industrial buildings. This is the difficulty facing the industry. We must look at the complete programme of new work; it has stopped increasing and has started decreasing significantly—very significantly compared with the promises that we used to see in the National Plan upon which the Labour Party sought to catch the votes in the 1966 General Election. If we had believed the National Plan we ought to have been having about£1,000 million more new work in 1969 than was in fact on the hooks of the building and constructiton industry for that year. After all, it is a comparatively short time since the National Plan was abandoned.
The Parliamentary Secretary now asks us to look at, and be optimistic about the plans in the new White Paper on Public Expenditure. To start with, the White Paper is on public expenditure only. It is trying to tell the industry what may happen in the public sector. But can the industry and the country as a whole put any greater reliance on this recent White Paper on Public Expenditure than on the ill-famed National Plan?
I am not so sure of the truth of what the Parliamentary Secretary said—indeed, it was endorsed by the hon. Member for Liverpool, Walton—about this being an
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industry which can respond quickly to an upward trend in demand. The building and construction industry has to plan ahead for two or even three years to be successful in its work. The tempestuous changes and reversals of Government policy have sent the structure of the industry's planning crashing to the ground in the last year. Ministerial statements, only a few months ago, indicated that we would have a 4 per cent. increase in 1969. It has turned out to be a 2 per cent. decrease—6 per cent. wrong. It sounds a small figure, 6 per cent. wrong, but looking at the turnover it means£180 million worth of work. So the Minister's predecessor was wrong to the extent of about£180 million—good compared with the National Plan, which was wrong by about£1,000 million.
The hon. Member for Bishop Auckland (Mr. Boyden) asked for further plans from the Government. But would a further plan be any good to the industry after what has happened?
Mr. Boyden: The Phelps Brown Committee had access to all the information.
Mr. Page: I support what the hon. Gentleman said about carrying out the recommendations of the Phelps Brown Committee. It referred to regional planning and division of the programme into regions. It might be useful to have that. But, looking at the past record, I do not know that we can rely on it from this Government.
I advise the Minister never to enter for that competition on Sunday afternoons on the televison, "The Golden Shot". If his predecessor and the Government were so far off target, I do not think he will ever hit the target of the golden shot.
To express the crisis in millions of pounds is impersonal and fails to describe the real human factor. Out of every 100 people employed in this country six are building workers. Out of every 100 people unemployed at present 20 are building workers. This really is a serious situation. Whether it is 115,000 or 125,000 it is that number of men out of work.
My hon. Friend the Member for Folkestone and Hythe (Mr. Costain) expressed this clearly in his speech. I think that the whole House was sympathetic to the impressive manner in which the hon.

91
Member for Liverpool, Walton put the case for the unemployed. He and I share the same concern over the high figures of unemployed in this industry in the North West.
Employers are suffering as much as employees. The Minister will remember that the President of the N.F.B.T.E., in proposing his toast at the annual dinner early this month, said:
"Many building firms (including some efficient and respected members of our Federation) have passed the point of no return this time. Some have been forced to close down; others—frustrated and disillusioned—have done so voluntarily."
We are told that of the small building firms 810 closed down during last year. Bankruptcies have been at a very high rate in the building trade over the past year My hon. Friend the Member for Meriden (Mr. Speed) drew attention to the difficulties faced by the brickworks. Again to give figures, I understand that 13 brickworks closed down in a matter of 13 weeks, and many others have gone on short time.
The building material producers are working at about half capacity, and so are some of the industrialised building factories—those which have not already closed down. The fact is that thousands of firms in the building and civil engineering industry, and the firms which produce the materials for them, are struggling to keep their heads above water. The Government throw them no lifeline. Instead, they hang more and more millstones round their necks. There is the£155 million levy which is called S.E.T. I call it a levy. It is not what we understand to be a tax out of profits or income. That is one of the millstones.
The Minister said the other day that it added only a little less than 4 per cent. to construction costs. My arithmetic makes it more than 5 per cent. of the turnover of the industry, and that is quite a substantial slice of the takings when one remembers that corporation tax, the industrial training board levy, import deposits, and betterment levy have been taken out of those takings.
Builders are being strangled by these levies and deposits which have nothing whatever to do with the profits they are making. They do not even have anything to do with the receipt of the money from their work. They are capital levies. The
92
cost of S.E.T. is£125 for every building craftsman plus£25 which has to be paid for the I.T.B. levy. That is about£3 a week. I do not use the£6 a week figure because that includes normal taxation. Abnormal taxation accounts for about 50 per cent. of that figure of£6.
Mr. Heffer: I follow the hon. Gentleman in what he is saying about S.E.T. Is he saying that his party is opposed to the levy for industrial training? Surely this is one of the most important things which have been introduced to make sure that there is a fair distribution of apprenticeship training throughout the industry?
Mr. Page: If the hon. Gentleman had waited a moment I should have made that comment. I was complaining about that levy because the industry is being asked to pay for the overdraft accumulated by the board by a bit of mismanagement, and I do not think that that deficit should be collected from the industry in one year. It is a substantial and irritating amount for the builders to have to pay.
On top of that the industry, quite rightly, has to meet the agreed increase in wages, which will result in about a 26 per cent. increase in the cost of labour on the job, an incerase of about 12 per cent. in steel prices, and an increase of about 13s. 6d. a ton in the cost of cement. The cost of petrol was mentioned by my hon. Friend the Member for Folkestone and Hythe. It also has to meet the cost of lower efficiency due to British Standard Time. These are all difficulties which the industry is facing without the Government's interference by the collection of these levies.
With all those increased costs and harsh levies falling on the industry, the builder is still subject to the credit squeeze, and he cannot claim any priority for his bank finance to carry him through this desperate period. His only source for credit is the builders' merchant, and builders' merchants cannot go on for ever being merchant bankers. Already they are carrying about£90 million of credit for the builders. Like the architects, who are hit by the worst depression in work for many years, the builders' merchants are an early warning system to this industry. Who can blame them if they refuse to take on any further the job which the Government have refused to allow the banks to take on?

93
What, then, should be done? My hon. Friend the Member for Londonderry gave a formidable list of items which would be undertaken as a matter of Conservative policy. I want to group the actions which I believe can be taken by the Government without any further delay. This, after all, is what the debate is about. It is about what we believe the Government have done to damage the industry, and, if the debate is to be of any use, it should put before the Government the sort of steps which they can take now to correct the disaster facing the industry.
First, as many hon. Members have said, the construction industry should be put into the priority class for bank loans. Why should it be so favoured? I think that the hon. Member for Bishop Auckland made the case on this. He said that builders are bankers to the extent of£500 million a year. Indeed, one-fifth of the industry's annual turnover is normally outstanding in the form of unpaid accounts. The Government are one of the worst payers—not necessarily the right hon. Gentleman's Department, but other Departments of the Government. This should be studied very closely.
Mr. Loughlin: Has the hon. Gentleman any evidence of that?
Mr. Page: I shall give the hon. Gentleman evidence of it but not across the Table because the Ministers of other Departments are not here to answer for themselves. I can support it with facts and figures on Ministry of Health contracts, and I know of others. Apart from the complaint about the Government being bad payers, I am sure the Minister will agree that the industry carries a heavy burden in the form of outstanding accounts.
Second, the industry should not have to pay the S.E.T., import duties, and betterment levy. Those are impositions which are levied whether the builder has received payment for his work or not, and whether he has made any profit out of it or not. That is why they bear so hardly on the industry.
Third, compulsory non-productive time should he cut drastically. I know that every business has to collect taxes for the Government. Every business has to give information to the Government by filling in forms. Every business has to learn all the new laws which we pass
94
through this place controlling their trade and business. I am complaining not so much about that but that the building and construction industry is a particular victim of the need to supply information, statistics on trade, factory regulations, redundancy payments, and so on. The builder has to be his own form-filling lawyer. That is not a very productive effort.
But even more important—and these are two specific points that I want to make—there is the fustratingly unproductive waiting period, first, for the private enterprise builder in planning procedures and, second, for the local authority in the cost yardstick procedures. It is essential, on the planning procedures, that there should be a quicker release by local planning authorities of land for building. Not every builder has a job to be getting on with while he is waiting for planning permission on the next one. In so many cases he is delayed for three to six months in getting on with the job. Surely we can devise better planning procedures than that.
The local authority cost yardstick procedure, which was introduced by this Government in 1967, is having the result of delaying a local authority by as much as three months in its preparations to start building. I beg the Minister to look at this procedure again. I do not think that it is necessary for the papers to lie on a desk in the Ministry for all that time to enable the Ministry to decide what shall be the cost yardstick, or what shall be the right figure at which to go ahead and put the job out to tender. This is what happens before the local authority is entitled to go out to tender, and it is a waste of three months' time.
The output of the building and construction industry could be increased by as much as one-fifth in every year by cutting out that compulsory desk dawdlling in both central and local government.
Those are the three constructive steps to be taken—priority for loans, relief from impositions, and cuts in unproductive time. There are other things which we on this side have put forward from time to time to help the customer to buy, and thus provide the market for the industry. I have tried to restrict my proposals today to the direct action by the Government on the industry.

95
I want to conclude with the words of the President of the National Federation of Building Trades Employers, again when proposing the toast to the Minister. He said:
"It is my duty, Minister, to warn Her Majesty's Government that it bears a serious responsibility to establish quickly a much more encouraging future for the building industry. The Government will have to remember here that its decisions on building greatly affect the lives of millions of people in this country—not only those in the industry itself. I look to you, Sir, for your unqualified support. I hope that I shall not look in vain."
I hope that this House will not look in vain today.
6.40 p.m.
The Minister of Public Building and Works (Mr. John Silkin): This has been a wide-ranging and interesting debate. Some long-term solutions have been suggested which are well worthy of study. Short-term points have been made, some polemically. I thought that the hon. Member for Londonderry (Mr. ChichesterClark) was in a particularly Don Quixote mood. He charged every windmill in sight, and a number that were out of sight. There were moments when I could not help feeling that anybody who did not know him might have thought that he was electioneering. Perish the thought!
Broadly speaking, the major points that have been made during the debate fell under one or two headings. The first was the effect upon the industry of the Government's economic and fiscal measures. To say that the economic and fiscal measures of Her Majesty's Government have had an effect upon the industry is to state the obvious. The problem has been related not only to the industry but to the whole country—the problem of converting a deficit of£800 million—[Interruption.] Oh, yes! And I shall go on saying it, because it is right. A deficit of£800 million has been converted into a surplus running at the rate of£500 million—and, incidentally, I hope that hon. Members opposite were as cheered as my hon. Friends and I were to hear the latest trade figures.
Sir Arthur Vere Harvey: Whenever the Government are in a jam they fall back on something that happened six years ago which, in fact, did not happen. My right hon. Friend the
96
Member for Barnet (Mr. Maudling) made it clear where the trouble really is.
Mr. Silkin: The right hon. Member for Barnet (Mr. Maudling) took six years to think up an excuse. That is an excessively long time, even for hon. Members opposite.
I was trying to explain what the situation was. Apparently hon. Members are unaware that there was an economic crisis. I can assure them that there was. That crisis started with a deficit that we have succeeded in changing to a surplus of£500 million. If we consider that building and construction industries in that context the matter becomes rather more clear. Just as every industry except those immediately concerned with exports was to some extent hit by the economic measures that we introduced, so, inevitably, was the building industry. It is part of the whole community.
Builders are no less patriotic than other members of the community. All of them have always understood it. Of course, the builders would like priority bank-lending. Who would not? But they also understood that it was necessary, in the interests of the community and the economy as a whole, that credit should be restricted. To say—as one hon. Member opposite did—that they are at the bottom of the queue is to be somewhat extravagant. They are in the neutral zone. Bank advances to builders in 1969 were approximately the same—in fact I think they were a little up—on the year previously. The variation was very small. I was pointing out that they were not at the bottom of the queue.
Those hon. Members who have said that high interest rates played their part in the difficulties experienced in the building industry were correct. Of course they did; there was no question about that. But I have to think in terms of a wider situation. The right hon. and learned Member for Hexham (Mr. Rippon) put the situation firmly into proportion in 1962, when he was Parliamentary Secretary to the Ministry of Housing. He said:
"It is…a fallacy to believe that low interest rates quite unrelated to the economic situation of the country would mean lower prices.—[OFFICIAL REPORT, 2nd May, 1962; Vol. 658, c. 1041.]

97
The principle is correct. We must relate it to the economic situation of the country. It is no part of this Government's intention to keep our rates high for any longer than is necessary to protect the reserves and maintain the right monetary conditions.
Many hon. Members opposite, including the hon. Member for Crosby (Mr. Graham Page), have mentioned the import deposit scheme. I have been informed that its effect is marginal. The industry is continually increasing its use of home-produced materials. From time to time it is suggested to me—and I totally agree—that we should increase the amount of home-produced materials and cut down our imports. That has been a large part of the whole consideration.
Many hon. Members also referred to the question of increasing costs. During the years comparisons have been made between the period when the Conservatives were in office, when it is said that costs were arising at about 3 per cent., and the period of the Labour Government, when costs are said to have risen by 4 per cent. I accept those figures. There is a difference of 1 per cent. in the increase in costs. Various reasons have been put forward for that. One is the effect of the selective employment tax. That allegation has been made very frequently by hon. Members opposite, and it was made finally and very forcefully by the hon. Member for Crosby and by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer).
It has been pointed out that S.E.T. adds nearly 4 per cent. to construction costs. Here again, we have to ask what are the alternatives. [An HON. MEMBER: "Take it away!"] That is a possible alternative. But in its place we have to put something else.
On 29th January the hon. Member for Worcester (Mr. Peter Walker) said that if the Conservatives brought in a value-added tax it would not discriminate against house-building. I am delighted to hear it. The hon. Member did not say that house-building would be exempted from the tax. That fact was forcefully made by my hon. Friend the Member for Bassetlaw (Mr. Ashton). It is true that if a value-added tax ran at the same rate as it appears to be running in other countries where it is imposed,
98
so far from builders being better off with that tax instead of S.E.T. they might find themselves worse off. In any case, the tax applies to only one section of the industry; another section—that which is concerned with manufacturing materials—is exempt from S.E.T. at the moment but would pay under a value-added tax—[Interruption.] It is an idea being floated among the hon. Members' Friends. That section would then be forced to pay it, and we would have an idea of what the effect must be on the cost of building.
Basically, all hon. Gentlemen were saying that, apart from house-building, the industry was doing reasonably well, and I believe that it is. [HoN. MEMBERS: "Oh."] Yes, it is. It is only in house-building that the output has fallen recently. If S.E.T. were to go and a value-added tax were to come in, another factor would enter the equation—that is, that the prospective house purchaser would have to pay more for other goods. There would be a loss in demand which would affect him and his ability to pay.
Mr. Allason: Is the Minister aware that the intention is that there would be no value-added tax on house-building and house purchase?
Mr. Silkin: The hon. Member should listen. The intention expressed by his hon. Friend the Member for Worcester was that there would be no discrimination—everybody would be discriminated against, in other words. He did not say that this industry would be exempt.
I have said before, on the important question of costs, that if one takes 1963 figures as 100 and deals in constant prices one finds that United Kingdom costs today are 118 and those of West Germany are 115, so it is doing three points better than we are. But there is a very different picture in other countries. The figure for France is 118, for the U.S.A. 118, for Belgium 127 and for the Netherlands 128.
I would maintain that the costs of construction in this country compare very favourably with those of most other industrial nations. [An HON. MEMBER: "What about the Common Market?"] That matter lies outside the scope of this debate. I was trying to provide ammunition for my hon. Friends and not for hon. Gentlemen opposite.

99
The other part of the debate concerned house-building. My hon. Friend the Member for Walton, a building worker throughout his career, spoke very movingly about unemployment, which naturally concerns him. I share his concern, and my colleagues and I will watch this with great vigilance. It is a difficult situation, but I will try to explain how we hope to deal with the problem in the near future.
I have dealt with the effect of the economy on the whole building industry. As for house-building, the measures which will be most effective in the near future and will have some bearing on the problem of unemployment are, first, that from the end of next month to the end of March, 1971, there will be an additional£45 million of local authority mortgages made available. This will obviously increase the demand for new homes and stimulate house-building. It is a practical method of seeing that where there is a deficit on our own high performance, that deficit shall be assisted.
The second method of assisting new homes is the ability of building societies to use S.A.Y.E. I hope that, as the months go by, this will add considerably to their funds. The next important piece of assistance is the Housing Act, 1969. This provides new grants for the improvement of old homes and loans towards the balance. As my hon. Friend explained, the Minister of Housing will be giving greater publicity to this scheme. Certainly it will have its effect on employment in the months and years ahead.
One thing which slightly surprised me was the hon. Member for Londonderry relating interest rates to housing. It made me wonder whether he was aware of the Housing Subsidies Act of 1967. which effectually reduces the rate of borrowing for local authorities on completed new houses to 4 per cent. or so.
So much for the question of housing. It is part of the general picture of building and construction. Right hon. and hon. Members opposite deplore the policies of
the Government in this respect, but they talk about the rate of house building as though there had been a tremendous decline. The noble Lord, Lord Brooke, when Minister of Housing, said on 20th March, 1961—[Interruption.] What he was saying was meant to be true for all time. He said:
"at the present rate of building of 300,000 houses a year in Great Britain, the building industry is already fully strained."
He made the point that a substantial increase in house building would inevitably lead to cuts in other building work, particularly, he said, hospitals, schools and roads.
What has actually happened is that for every£100 in constant figures which hon. Members opposite were spending on hospitals, schools and roads, this Government are spending£140. In the comparable periods right hon. and hon. Members opposite built 1,743,691 houses, and we have built 2,026,299, an increase of 282,608 over the figure in their period, at a time when we were spending£40 more for every£100 which they had spent on these very projects which the then Minister said we could not do.
There is one other significant contribution to that debate on 20th March, 1961—from the hon. Member for Crosby. He said:
"When one looks at the figures over the past 10 years, and certainly over the past eight years, one finds that on the average they have been very good. I want to see them better."—[OFFICIAL REPORT, 20th March, 1961; Vol. 637, c. 75, 151.]
Average completions during the eight years, which the hon. Gentleman quoted, came to 297,000. Average completions in the last five years of Labour Government came to 390,000. We are all very glad that the hon. Member's wishes should have been granted, but it took a Labour Government to grant them. I ask the House to reject this Motion.
Question put:—
That this House deplores the effect of Her Majesty's Government's policies on the building and construction industries.
The House divided: Ayes 240, Noes 303.

Division No. 64.]

AYES

[7.0 p.m.

Alison, Michael (Barkston Ash)

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

Barber, Rt. Hn. Anthony

Allason, James (Hemel Hempstead)

Awdry, Daniel

Bennett, Sir Frederic (Torquay)

Amery, Rt. Hn. Julian

Baker, Kenneth (Acton)

Bennett, Dr. Reginald (Gos. & Fhm)

Archer, Jeffrey (Louth)

Baker, W. H. K. (Banff)

Berry, Hn. Anthony

Astor John

Balniel, Lord

Biffen, John

Biggs-Davison, John

Harrison, Col. Sir Harwood (Eye)

Osborn, John (Hallam)

Birch, Rt. Hn. Nigel

Harvey, Sir Arthur Vere

Page, Graham (Crosby)

Black, Sir Cyril

Hastings, Stephen

Page, John (Harrow, W.)

Blaker, Peter

Hawkins, Paul

Pearson, Sir Frank (Clitheroe)

Boardman, Tom (Leicester, S.W.)

Hay, John

Peel, John

Body, Richard

Heald, Rt. Hon. Sir Lionel

Percival, Ian

Bossom, Sir Clive

Heath, Rt. Hn. Edward

Peyton, John

Boyd-Carpenter, Rt. Hn. John

Heseltine, Michael

Pike, Miss Mervyn

Boyle, Rt. Hn. Sir Edward

Higgins, Terence L.

Pink, R. Bonner

Braine, Bernard

Hiley, Joseph

Pounder, Rafton

Brewis, John

Hill, J. E. B.

Powell, Rt. Hn. J. Enoch

Brinton, Sir Tatton

Hogg, Rt. Hn. Quintin

Price, David (Eastleigh)

Bromley-Davenport, Lt. -Col. Sir Walter

Holland, Philip

Prior, J. M. L.

Brown, Sir Edward (Bath)

Hooson, Emlyn

Pym, Francis

Bruce-Gardyne, J.

Hordern, Peter

Quennell, Miss J. M.

Bryan, Paul

Hornby, Richard

Ramsden, Rt. Hn. James

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

Hunt, John

Rawlinson, Rt. Hn. Sir Peter

Buck, Antony (Colchester)

Hutchison, Michael Clark

Rees-Davies, W. R.

Bullus, Sir Eric

Iremonger, T. L.

Renton, Rt. Hn. Sir David

Burden, F. A.

Irvine, Bryant Godman (Rye)

Rhys Williams, Sir Brandon

Campbell, B. (Oldham, W.)

Jennings, J. C. (Burton)

Ridley, Hn. Nicholas

Campbell, Cordon (Moray & Nairn)

Johnson Smith, G. (E. Grinstead)

Ridsdale, Julian

Carlisle, Mark

Jones, Arthur (Northants, S.)

Robson Brown, Sir William

Carr, Rt. Hn. Robert

Jopling, Michael

Rodgers, Sir John (Sevenoaks)

Cary, Sir Robert

Joseph, Rt. Hn. Sir Keith

Rossi, Hugh (Hornsey)

Chataway, Christopher

Kaberry, Sir Donald

Royle, Anthony

Chichester-Clark, R.

Kerby, Capt. Henry

Russell, Sir Ronald

Clark, Henry

Kershaw, Anthony

St. John-Stevas, Norman

Clegg, Walter

Kirk, Peter

Sandys, Rt. Hn. D.

Cooke, Robert

Kitson, Timothy

Scott, Nicholas

Cooper-Key, Sir Neill

Knight, Mrs. Jill

Scott-Hopkins, James

Corfield, F. V.

Lancaster, Col. C. G.

Sharples, Richard

Costain, A. P.

Lane, David

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

Craddock, Sir Beresford (Spelthorne)

Langford-Holt, Sir John

Silvester, Frederick

Crouch, David

Lawler, Wallace

Sinclair, Sir George

Crowder, F. P.

Legge-Bourke, Sir Harry

Smith, Dudley (W'wick & L'mingtor

Cunningham, Sir Knox

Lewis, Kenneth (Rutland)

Smith, John (London & W'minster)

Currie, G. B. H.

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

Speed, Keith

Dalkeith, Earl of

Lloyd, Ian (P'tsm'th, Langstone)

Steel, David (Roxburgh)

Dance, James

Lloyd, Rt. Hn. Selwyn (Wirral)

Stodart, Anthony

Dean, Paul

Longden, Gilbert

Stoddart-Scott, Col. Sir M.

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

Lubbock, Eric

Summers, Sir Spencer

Digby, Simon Wingfield

McAdden, Sir Stephen

Tapsell, Peter

Dodds-Parker, Douglas

Mac Arthur, Ian

Taylor, Sir Charles (Eastbourne)

Doughty, Charles

Maclean, Sir Fitzroy

Taylor, Frank (Moss Side)

Drayson, G. B.

Macleod, Rt. Hn. Iain

Temple, John M.

du Cann, Rt. Hn. Edward

McMaster, Stanley

Thorpe, Rt. Hn. Jeremy

Eden, Sir John

Macmillan, Maurice (Farnham)

Tilney, John

Elliot, Capt. Walter (Carthalton)

McNair-Wilson, Michael

Turton, Rt. Hn. R. H.

Emery, Peter

McNair-Wilson, Patrick (New Forest)

van Straubenzee, W. R.

Errington, Sir Eric

Maddan, Martin

Vaughan-Morgan, Rt. Hn. Sir John

Farr, John

Maginnis, John E.

Vickers, Dame Joan

Fisher, Nigel

Marples, Rt. Hn. Ernest

Waddington, David

Fletcher-Cooke, Charles

Marten, Nei.

Wainwright, Richard (Colne Valley)

Fortescue, Tim

Maude, Angus

Walker-Smith, Rt. Hn. Sir Derek

Foster, Sir John

Maudling, Rt. Hn. Reginald

Wall, Patrick

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

Mawby, Ray

Walters, Dennis

Fry, Peter

Ward, Christopher (Swindon)

Galbraith, Hn. T. G.

Maxwell-Hyslon, R. J.

Ward, Dame Irene

Gibson-Watt, David

Mills, Peter (Torrington)

Weatherill, Bernard

Gilmour, Sir John (Fife, E.)

Mills, Stratton (Belfast, N.)

Wells, John (Maidstone)

Glover, Sir Douglas

Miscampbell, Norman

Whitelaw, Rt. Hn. William

Goodhart, Philip

Mitchell, David (Basingstoke)

Wiggin, A. W.

Goodhew, Victor

Monro, Hector

Williams, Donald (Dudley)

Gower, Raymond

Montgomery, Fergus

Wilson, Geoffrey (Truro)

Grant, Anthony

More, Jasper

Winstanley, Dr. M. P.

Grant-Ferris, Sir Robert

Morgan, Geraint (Denbigh)

Wolrige-Gordon, Patrick

Grieve, Percy

Morgan-Giles, Rear-Adm.

Wood, Rt. Hn. Richard

Griffiths, Eldon (Bury St. Edmunds)

Morrison, Charles (Devizes)

Woodnutt, Mark

Gurden, Harold

Mott-Radclyffe, Sir Charles

Worsley, Marcus

Hall, John (Wycombe)

Munro-Lucas-Tooth, Sir Hugh

Wright, Esmond

Hall-Davis, A. G. F.

Mutton, Oscar

Wylie, N. R.

Hamilton, Lord (Fermanagh)

Nabarro, Sir Gerald

Hamilton, Michael (Salisbury)

Nicholls, Sir Harmar

TELLERS FOR THE AYES:

Harris, Frederic (Croydon, N.W.)

Noble, Rt. Hn. Michael

Mr. R. W. Elliott and

Harris, Reader (Heston)

Onslow, Cranley

Mr. Reginald Eyre.

Harrison, Brian (Maldon)

Orr, Capt. L. P. S.

NOES

Abse, Leo

Anderson, Donald

Ashton, Joe (Bassetlaw)

Albu, Austen

Archer, Peter (R'wley Regis & Tipt'n)

Atkins, Ronald (Preston, N.)

Alldritt, Walter

Armstrong, Ernest

Atkinson, Norman (Tottenham)

Allen, Scholefield

Ashley, Jack

Bacon, Rt. Hn. Alice

102

103

Bagier, Gordon A. T.

Freeson, Reginald

MacMillan, Malcolm (Western Isles)

Barnes, Michael

Galpern, Sir Myer

McMillan, Tom (Glasgow, C.)

Barnett, Joel

Gardner, Tony

McNamara, J. Kevin

Beaney, Alan

Garrett, W. E.

MacPherson, Malcolm

Bence, Cyril

Ginsburg, David

Mahon, Peter (Preston, S.)

Benn, Rt. Hn. Anthony Wedgwood

Golding, John

Mahon, Simon (Bootle)

Bennett, James (G'gow, Bridgeton)

Cordon Walker, Rt. Hn. P. C.

Mallalieu, E. L. (Brigg)

Bidwell, Sydney

Gray, Dr. Hugh (Yarmouth)

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

Binns, John

Greenwood, Rt. Hn. Anthony

Manuel, Archie

Bishop, E. S.

Gregory, Arnold

Mapp, Charles

Blackburn, F.

Grey, Charles (Durham)

Marks, Kenneth

Blenkinsop, Arthur

Griffiths, Eddie (Brightside)

Marquand, David

Boardman, H. (Leigh)

Griffiths, Will (Exchange)

Marsh, Rt. Hn. Richard

Booth, Albert

Gunter, Rt. Hn. R. J.

Mason, Rt. Hn. Roy

Boston, Terence

Hamilton, William (Fife, W.)

Maxwell, Robert

Boyden, James

Hamling, William

Mayhew, Christopher

Bradley, Tom

Hannan, William

Mellish, Rt. Hn. Robert

Bray, Dr. Jeremy

Harper, Joseph

Mendelson, John

Brooks, Edwin

Harrison, Walter (Wakefield)

Mikardo, Ian

Broughton, Sir Alfred

Hart, Rt. Hn. Judith

Millan, Bruce

Brown, Rt. Hn. George (Belper)

Haseldine, Norman

Miller, Dr. M. S.

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

Hattersley, Roy

Milne, Edward (Blyth)

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

Hazell, Bert

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

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

Healey, Rt. Hn. Denis

Morgan, Elystan (Cardiganshire)

Buchan, Norman

Heffer, Eric S.

Morris, Alfred (Wythenshawe)

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

Henig, Stanley

Morris, Charles R. (Openshaw)

Butler, Herbert (Hackney, C.)

Herbison, Rt. Hn. Margaret

Morris, John (Aberavon)

Butler, Mrs. Joyce (Wood Green)

Hilton, W. S.

Movie, Roland

Callaghan, Rt. Hn. James

Hooley, Frank

Mulley, Rt. Hn. Frederick

Cant, R. B.

Horner, John

Murray, Albert

Carmichael, Neil

Houghton, Rt. Hn. Douglas

Neal, Harold

Carter-Jones, Lewis

Howell, Denis (Small Heath)

Newens, Stan

Castle, Rt. Hn. Barbara

Howie, W.

Norwood, Christopher

Chapman, Donald

Hoy, Rt. Hn. James

Oakes, Gordon

Coe, Denis

Huckfield, Leslie

Ogden, Eric

Coleman, Donald

Hughes, Roy (Newport)

O'Halloran, Michael

Concannon, J. D.

Hunter, Adam

O'Malley, Brian

Conlan, Bernard

Hynd, John

Oram, Bert

Corbet, Mrs. Freda

Irvine, Rt. Hn. Sir Arthur

Orbach, Maurice

Crawshaw, Richard

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

Oswald, Thomas

Cronin, John

Jackson, Peter M. (High Peak)

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

Crosland, Rt. Hn. Anthony

Janner, Sir Barnett

Padley, Walter

Crossman, Rt. Hn. Richard

Jay, Rt. Hn. Douglas

Paget, R. T.

Darling, Rt. Hn. George

Jeger, George (Goole)

Pannell, Rt. Hn. Charles

Davidson, Arthur (Accrington)

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

Park, Trevor

Davies, E. Hudson (Conway)

Jenkins, Hugh (Putney)

Parker, John (Dagenham)

Davies, C. Elfed (Rhondda, E.)

Jenkins, Rt. Hn. Roy (Stechford)

Parkyn, Brian (Bedford)

Davies, Dr. Ernest (Stretford)

Johnson, Carol (Lewisham, S.)

Pearson, Arthur (Pontypridd)

Davies, Rt. Hn. Harold (Leek)

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

Peart, Rt. Hn. Fred

Davies, Ifor (Gower)

Jones, Dan (Burnley)

Pentland, Norman

Davies, S. O. (Merthyr)

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

Perry, Ernest G. (Battersea, S.)

de Freitas, Rt. Hn. Sir Geoffrey

Jones, J. Idwal (Wrexham)

Perry, George H. (Nottingham, S.)

Delargy, Hugh

Jones, T. Alec (Rhondda, West)

Prentice, Rt. Hn. Reg

Dell, Rt. Hn. Edmund

Kelley, Richard

Price, Christopher (Perry Barr)

Dempsey, James

Kenyon, Clifford

Price, Thomas (Westhoughton)

Dewar, Donald

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

Price, William (Rugby)

Diamond, Rt. Hn. John

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

Probert, Arthur

Dickens, James

Kerr, Russell (Feltham)

Rankin, John

Doig, Peter

Latham, Arthur

Rees, Merlyn

Driberg, Tom

Lawson, George

Rhodes, Geoffrey

Dunn, James A.

Leadbitter, Ted

Richard, Ivor

Dunnett, Jack

Lee, Rt. Hn. Frederick (Newton)

Roberts, Albert (Normanton)

Dunwoody, Mrs. Gwyneth (Exeter)

Lee, Rt. Hn. Jennie (Cannock)

Roberts, Rt. Hn. Goronwy

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

Lee, John (Reading)

Roberts, Gwilym (Bedfordshire, S.)

Edwards, Robert (Bilston)

Lestor, Miss Joan

Robertson, John (Paisley)

Edwards, William (Merioneth)

Lever, Rt. Hn. Harold (Cheetham)

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

Ellis, John

Lewis, Arthur (W. Ham, N.)

Rodgers, William (Stockton)

English, Michael

Lewis, Ron (Carlisle)

Roebuck, Roy

Ennals, David

Lipton, Marcus

Rogers, George (Kensington, N.)

Evans, Albert (Islington, S.W.)

Lomas, Kenneth

Ross, Rt. Hn. William

Evans, Fred (Caerphilly)

Loughlin, Charles

Rowlands, E.

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

Luard, Evan

Faulds, Andrew

Ryan, John

Fernyhough, E.

Lyon, Alexander W. (York)

Shaw, Arnold (Ilford, S.)

Finch, Harold

Mabon, Dr. J. Dickson

Sheldon, Robert

Fitch, Alan (Wigan)

McBride, Neil

Shinwell, Rt. Hn. E.

Fletcher,Rt.Hn.SirEric(Islington,E.)

McCann, John

Shore, Rt. Hn. Peter (Stepney)

Fletcher, Raymond (Ilkeston)

MacColl, James

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

Fletcher, Ted (Darlington)

MacDermot, Niall

Short, Mrs. Renée(W'hampton,N.E.)

Foley, Maurice

Macdonald, A. H.

Silkin, Rt. Hn. John (Deptford)

Foot, Rt. Hn. Sir Dingle (Ipswich)

McElhone, Frank

Silkin, Hn. S. C. (Dulwich)

Foot, Michael (Ebbw Vale)

McGuire, Michael

Silverman, Julius

Ford, Ben

McKay, Mrs. Margaret

Skeffington, Arthur

Forrester, John

Mackie, John

Slater, Joseph

Fraser, John (Norwood)

Mackintosh, John P.

Small, William

104

105

Spriggs, Leslie

Walker, Harold (Doncaster)

Williams, Mrs. Shirley (Hitchin)

Steele, Thomas (Dunbartonshire,W.)

Wallace, George

Williams, W. T. (Warrington)

Stewart, Rt. Hn. Michael

Watkins, David (Consett)

Willis, Rt. Hn. George

Stonehouse, Rt. Hn. John

Weitzman, David

Wilson, Rt. Hn. Harold (Huyton)

Strauss, Rt. Hn. G. R.

Wellbeloved, James

Wilson, William (Coventry, S.)

Summerskill, Hn. Dr. Shirley

Wells, William (Walsall, N.)

Winnick, David

Taverne, Dick

Whitaker, Ben

Woodburn, Rt. Hn. A.

Thomas, Rt. Hn. George

White, Mrs. Eirene

Woof, Robert

Thomson, Rt. Hn. George

Whitlock, William

Wyatt, Woodrow

Thornton, Ernest

Wilkins, W. A.

Tomney, Frank

Willey, Rt. Hn. Frederick

TELLERS FOR THE NOES:

Tuck, Raphael

Williams, Alan (Swansea, W.)

Mr. James Hamilton and

Urwin, T. W.

Williams, Alan Lee (Hornchurch)

Mr. R. F. H. Dobson.

Wainwright, Edwin (Dearne Valley)

Williams. Clifford (Abertillery)

STEEL INDUSTRY
7.12 p.m.
Sir Keith Joseph: I beg to move,
That this House deplores the consequences of the nationalisation of steel by Her Majesty's Government, which has retarded the progress of the industry and reduced the service to the public.
Although we shall have a number of critical things to say, our criticism is directed primarily at the Government, and not at the management of the Corporation, or in the regions. It has been two years or more since vesting day, and it is time to review the progress of the industry in the light of the claims made for nationalisation. The fact is that in a time of immense change and opportunity, the industry's structure has been ossified by the act of nationalisation itself.
In 1964, the Restrictive Practices Court outlawed the price agreements between the steel companies and thus, for the first time since the war, exposed the private steel companies to the necessity to compete one with another. Had nationalisation not occurred, all sorts of changes, under pressure of market forces, which is the same pressure as affects all other companies in the private sector, would have changed the structure of the steel industry.
Some firms would have grown, some would have merged at home and overseas, and some would have declined, because there is built into the private enterprise system a pressure for resources to move where they are best used. It is this inbuilt pressure which nationalisation has not allowed to occur. It has stifled the forces of competition which were just about to be imposed on the industry by the 1964 decision of the Restrictive Practices Court.
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So what I shall do this evening is to consider the objectives of nationalisation and what has happened since vesting day. The first and main reason for nationalisation put by the right hon. Gentleman the then Minister was that it would rationalise the industry, would enable it to be restructured into the units and sizes necessary to face international competition. It was common ground to the Government, to the industry and to the Opposition that the steel industry had been for some time over-manned and, in the words of the then Minister, the gap in productivity per man year which was heavily in the favour of the Americans, the Japanese and some of our European competitors was opening further against us. In May, 1968, a year after vesting day the Corporation pledged itself to a target of reducing the manpower employed in the industry by 50,000 men by 1975. It was common ground that much of any reduction in manpower would be carried out by wastage and by redeployment of men from one firm to another.
The fact is that the Government have held back the Corporation from any start upon rationalisation. Before nationalisation, industrial relations between men and management in the steel industry were a model, they were excellent; but I have to confess that harmony was perhaps bought at some cost by ignoring the overmanning that went on. The fact that, since nationalisation, industrial relations have deteriorated sharply is not the result of any attempt to deal with overmanning. It is not that the Government or the Corporation have set their hands to cutting the over-manning, which was one of the first objectives of nationalisation, and have thus fallen out with the unions. That is not why they have fallen out with the unions. So ill will has come into the industry without any benefit to the country at all. No start

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has been made on tackling overmanning, but industrial relations have become, and have remained, turbulent since nationalisation.
Mr. Donald Anderson: Is the right hon. Gentleman seriously suggesting that there was no link between the blast furnacemen's dispute at Port Talbot and the rationalisation process under way there?
Sir K. Joseph: The new blast furnace was started before nationalisation. There has been no new initiative by the Corporation since nationalisation to justify the main claim for nationalisation, which was that it would enable rationalisation and reduction in over-manning to occur.
The second claim behind nationalisation was that only by taking the industry into public ownership would enough capital be supplied and would prices be kept down. Of course, the two are closely connected. Unless the industry services its capital and makes itself a profit it will not have enough funds for investment. The public have faced a considerable write down of the capital employed in the industry. A large chunk of the capital has been relabelled "public dividend capital". In fact, the industry is still not making a profit or making any decent return on the capital employed. It has not even been given a target rate to earn on capital employed, and we hope that this evening the right hon. Gentleman the Paymaster-General will tell us what the Government have decided that target rate should be.
Upon this industry, which was intended by nationalisation to have enough capital and profit to carry out the ambitious investment programme envisaged, has fallen the whole paraphernalia of Government price control, and this paraphernalia has been absolutely self-defeating. The Government have denied the Corporation the ordinary commercial freedom to cope with prices. They have delayed and distorted the price movements. As a result, there have been no fewer than three price increases in a very short period of time, and the total of those three price increases has been larger than it would have been if the Corporation had been free to raise its prices when it wanted to. The extra delay in allowing prices to rise and the
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Government's political juggling with prices and delays in dealing with them have led to even higher increases than would have been necessary.
Moreover, Government price control has intensified the demand for British steel by making it artificially cheap. It is no good, in our view, the Government instructing the Corporation to sit on prices—which only results in a weaker cash flow, less service of capital and less investment funds—when the real job of the Corporation is to sit on costs.
This is the operation which the Corporation has failed to do. The report of the Prices and Incomes Board on the claim for increased steel prices was full of complaints against the failure of the Corporation to have a proper cost reduction programme. It was because it was making no start on cost reduction that the Prices and Incomes Board recommended that the full increase claimed by the Corporation should not be allowed. Here we are back again at the failure of the Corporation to embark upon rationalisation. It has failed to set its hands to cost reduction and it has failed to set its hand to rationalisation.
Mr. Eddie Griffiths: Is the right hon. Gentleman not aware—and he is not far removed from the Sheffield and Rotherham area—that there has been a fantastic amount of rationalisation going on there, with job losses occurring quite regularly over the last two, three or four years? Is the right hon. Gentleman not also aware—as my hon. Friend said—that there are 5,000 jobs to be lost or already lost in Port Talbot?
Sir K. Joseph: The hon. Gentleman is aware that output per man year in the industry has not risen even so much as the national industrial average which is the criterion of rationalisation. The British steel industry still limps, after 2½ years, far behind its international competitors, although it was claimed as one of the reasons for nationalisation that it would set rationalisation in hand. All that has been phased out since nationalisation are a number of relatively minor facilities which had reached the end of their commercial life before vesting date. The Corporation has made virtually no change and as a result of Government price control and of bad industrial relations in the

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industry the public has suffered a loss in steel in 1968 and again in 1969 despite a record world boom in steel. The actual investment programme has fallen below what it was in the last years of private enterprise. [HON. MEMBERS: "Wrong"] The figures are definitely in favour of what I am saying. Even after deducting from private enterprise investment the full amount of the loan from the Conservative Government for R.T.B. and Colvilles, the average annual investment by private enterprise in the four years before nationalisation, when the clouds of uncertainty due to possible Labour victory and nationalisation were hanging over the market, was substantially larger than it has been in the four years after the Labour Government came into office. Indeed "Finance for Steel" predicted in May, 1969, an annual investment in the steel industry for five years of £175 million a year. What has happened? In 1968–69 there was not £175 million invested but £69 million invested. In 1969–70 there was not£175 million invested—there was£105 million invested. There is no evidence, therefore, that nationalisation has either increased the pace of rationalisation and productivity or that it has found extra investment money.
The Corporation production programme for 1975 of 35 million tons is much the same as that which private enterprise had in mind for that very year, and for which it was investing with its own private funds. The actual investments in Anchor and Margam are much the same as those already set in hand and designed under private enterprise. All that has happened is that private enterprise plans have been labelled public and given public relations treatment.
There is no new investment yet emerging which is due entirely to the British Steel Corporation. This is at a time when all our rivals are benefiting, as we are not, from the world steel boom and are salting away large profits made in that boom to help them continue their investment during the world steel downturn which under the normal cycle is almost bound to come sooner or later.
The third target of nationalisation was to improve exports without, I presume, affecting home trade in steel, but both have suffered. Due on the one hand to the Government's price control and on the other hand to turbulent labour rela-
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tions, the home market has suffered from lack of production, from delayed deliveries, from rationing of many steel varieties, while we have failed to have the surplus to serve our markets in the world steel trade boom.
The shortage of important structural materials such as reinforcing bars and a whole range of other semi-finished products has left the British manufacturing trade short of steel just at a time when the world market for their products is booming. It is a sad commentary on nationalisation, on Government interference with prices and on labour relations in the steel industry that at this stage the British industry and our overseas markets are suffering actual rationing and long delivery delays in steel products. Building contracts are being held up all over the country. Shifts worked in different parts of the country are being cut through lack of steel deliveries. Buyers are having to import at high prices when they can, and direct steel exports are suffering sharply. As a result of all this, the United Kingdom is being denied any balance of payments advantage from the world steel boom, and all this is two and a half years after nationalisation, one of the purposes of which was meant to increase exports while serving the home market.
One of the saddest sights in the last few months has been to see the Corporation shopping around the world with tears in its eyes and blank cheque books in hand buying steel wherever it could at high prices and having to sell it at a loss in the home market because of the Government's control of prices in this country.
But the British Steel corporation is in no danger of bankruptcy, because public enterprise is immune from this sort of fear. It is a somewhat disagreeable sight to contemplate a vast immune British Steel Corporation squeezing private traders who are not immune from bankruptcy in order to get payment at a time of the fiercest credit squeeze in British history.
Meanwhile, the steel corporation's main preoccupation seems to be with administrative arrangements. It seems that consumers are soon to be faced with allocation of orders to particular works, giving them no choice as to where they

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get their product despite years of contacts and the prime importance of quality and finish. The industry and its consumers are to be faced soon with a movement to product groups, and I hope that the Minister will reassure us about the conditions that consumers are likely to find when product groups come into operation. Those of us who have studied the organisation chart, which has been published, have been puzzled to see that there are managing directors of product groups on the one hand—and that makes sense—and also managing directors of the staff functions at Corporation headquarters as well. There is, for example, a managing director (commercial) for marketing, Lord Layton, with a large central headquarters staff. Where is the power of decision to lie? Is it to lie with the managing director of the product groups or is there some confusion about where commercial decisions will be made? We understand very well that in a holding company operation there are managers or even directors of staff functions at headquarters, but normally there is only one managing director responsible to a group managing director, or one set of managing directors out in the regions or in companies responsible to a group managing director. Where is the balance of power to be between the Corporation staff managing directors and the product group managing directors?
We look forward to a reply from the Paymaster-General, but we have become used to the bland way in which he rides over all the questions he is asked. The right hon. Gentleman sees no evil, he speaks no evil—except of Her Majesty's Opposition—and he hears no evil. We ask him now not to be so blind or so bland. There are some real problems here to be faced. When will the Corporation embark upon rationalisation? When will it try to bring productivity per man-year up to that of our rivals? What is to be the effect of the movement to product groups, and what is to be the return which they are to earn on their capital?
For our part, we shall not go back to the old companies. [HoN. MEMBERS: "Oh"] We want a flexible, responsive, enterprising steel industry, and that is why we shall make any changes necessary
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and practicable to provide the discipline of competition for steel.
The story which we are discussing tonight is one of shirk and shackle. The Government have shirked the rationalisation which they gave as their main reason for nationalisation. The Government have shackled the British Steel Corporation so that it has not been able to operate properly. To sum up, we have had, virtually, more paper and more plans than profits. We have had three reports on operations. We have public dividend capital, but no dividend, no profit, and no rate of return. We are shortly to have the new product groups, with the elimination of world-famous company names and the goodwill going
with them. But, after 2½ we have not got enough steel to meet the demands of British industry or of our overseas customers.
Mr. Richard Marsh: The right hon. Gentleman seems to be reaching his peroration. One or two of us were not entirely clear what he was proposing to do with the Steel Corporation. Could he enlarge on that a little?
Sir K. Joseph: The right hon. Gentleman would think us very unwise to commit ourselves to the exact method and degree to which we shall reintroduce competition when we win the election. He would be amazed if we were to commit ourselves without knowing the state of the books.
I say again that, after over 2½ years, we have not enough steel to meet the demands of British industry or of our overseas customers. The developments which we see emerging are almost identical with the ones on which the independent companies were working before nationalisation. At least part of these developments would have been in operation if the last years had not been consumed in administrative uncertainty and upheaval due to the ideological follies of this Government, and that is why we shall vote against them tonight.
7.32 p.m.
The Paymaster-General (Mr. Harold Lever): This is one of a series of debates, intended, at least, by the Opposition, to be conducted on an adult level. What has to be done is to search for some possible grievance which can be exploited,

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then exploited in the hope that those who know little about the subject matter or who are not prepared to examine it in depth will feel that their grievance is being espoused by the Opposition, and it is hoped that some electoral support may follow therefrom.
There is complaint about the power industry. If power is short today, this must be so because of the failure on our part to put up new power stations in the last four or five years, although, as everyone knows, one has to plan them and build them many years before. If smokeless fuel is in short supply, this is so because we did not yesterday put up the necessary plants to produce smokeless solid fuel. If the balance of payments does not show a miraculous improvement in the months after we came into office, everyone can ignore the long years of gestation of this problem under the Tory Party, and one is to assume that it is all the Labour Government's fault.
The right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) kept on about "2½ years "and" after 2½ years", as though this were an astounding period of time in the provision of steel works, as though the country should by now be littered with steel works which the pressure of competition had failed to bring into being in half a century or so beforehand. He kept repeating "after 2½ years". I shall have to take him aside and tell him how long it takes to plan a steel works. I give him this assurance, at least: under private enterprise or public enterprise, one cannot bring into being and into production any steel works of modern size in less than three years, and in most cases the period required is five or seven years.
I do not know why the right hon. Gentleman seems to think that it is not the industry but the Government who are to blame. He is right in not blaming the industry, at least the nationalised industry. I suppose that if the Government were to nationalise the egg industry and the right hon. Gentleman found a shortage on his breakfast table the next day, he would be here at the House with a Motion of censure implying that we had not brought into being overnight a sufficient supply of chickens to lay for the right hon. Gentleman's convenience.
At the end of it all, having blamed the inadequacies of supply—with which I
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shall deal—and the lack of production of steel on the Government and their policy of nationalisation, what does the right hon. Gentleman do? He finds the lady in distress, the lady who, under the forces of competition, would have been showing every evidence of health and success; but, having found that maiden in extreme distress, what does the gallant knight do but denounce the sinner, the Government, and then propose to gallop away and do nothing at all about it. Having declared himself against sin, the right hon. Gentleman is plainly unlikely to be energetic in the cause of virtue.
Sir Harmar Nicholls: Somebody ought to take the right hon. Gentleman the Paymaster-General on one side and explain to him that, although it is true that it may take three to five years to start a steel plant, it takes only about three minutes of badly used time for the Government to stop it. We blame the Government for having, by their interference and by their squeezes, stopped the developments which would have taken place.
Mr. Lever: That is what the hon. Gentleman says, but his right hon. Friend's figures do not bear him out. The rate of investment after nationalisation continued upwards and is going up to a record level of£900 million in the coming years. We are to see£150 million to£200 million brought into being to restructure the steel industry. I do not want to weary the House with a list of the works, for my hon. Friend who is to wind up will be able to give the details. It is£900 million in the next five years. The industry's investments will be at a record rate.
I do not wish to denigrate the predecessors of the nationalised industry, but, as the right hon. Gentleman knows, the British steel industry has had a rather stagnant record of production increases and productivity. For instance, in the five years ending 1969, the United Kingdom achieved an increase in productivity of 12 per cent. In the same period France achieved an increase of 27 per cent., and West Germany a similar increase of 27 per cent. In the same period, Italy achieved a 40 per cent. increase in productivity and Japan 77 per cent.
This is an industry in which, alas, much to our disadvantage over ten years

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or more the rate of increase in productivity in our country has been running at something under 3 per cent. compared with something over 7 per cent. in most of our competitor countries. I am speaking now not of the spectacular increases seen at particular times in Japan or in Italy. The reason for that—I am not blaming the steel masters and the fragmentation of their industry—is that the industry, like many of our great industries, has been the victim of the stop-go policies which have bedevilled all attempts to expand production and productivity in a sustained and continuous way.
I do not believe that we shall ever match the productivity increases which we have seen in other countries until we match the production increases in a continuous and sustained way, as they have done, because it is only a sustained profitable increase in production uninterrupted by artificial stop-goes which permits the kind of massive productivity increase which we have seen in other countries.
Sir K. Joseph: The right hon. Gentleman is putting forward a very plausible argument. In fact, the stop-go in Japan has been much more violent, even than here and in several European countries.
Mr. Lever: It is not true that the stop-go in European countries has been in any way comparable with what has occurred in Britain, otherwise there would not have been in France in the five years up to 1969 a 27 per cent. increase, nor as in Japan a 77 per cent. increase. I do not know where the right hon. Gentleman gets his figures or his beliefs from if he believes that Japan, for example, has suffered anything like the deliberate frustration of production which has so often marked and marred the British industrial and economic scene in the post-war years.
Of course the Japanese have had relatively brief setbacks, but nothing compared with the repeated setbacks which have followed every major exchange crisis which has hit Britain since the war. There have been about eight major exchange crises in Britain since the war. For every one the British industrialist has had to pay in terms of his expansion plans and British workers have had
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to pay in terms of advancved standards of life and the advanced productivity which would have supported those advanced standards.
It is idle to come here two and a half years after nationalisation and attribute either the level of production or the development of steel works to the nationalisation position. In fact there are under way projects far greater, far more imaginative, than anything that has ever been seen in a comparable period under private enterprise. When the Bill was going through the House there was one steel works in Britain with an annual capacity of more than 3 million tons. There were 14 in the United States, and five in Japan, with four more in prospect, most of which have already arrived.
I will not retail the figures and the plans that have been made and which will be followed up with vast investment carefully planned on behalf of the steel industry to put us on to something like competitive equality with the industries in other countries that I have quoted. As a result of these plans, we not merely project the increase in overall production to which the right hon. Gentleman has referred but are confident that we shall double the rate of productivity, given this rate of capital investment and the sustained expansion of the steel industry that we envisage.
Sir Spencer Summers: By when?
Mr. Lever: Within the next five years. By 1975 we expect, on the basis of the capital investment and productivity plans that are now being developed rapidly, to double, from just under 3 per cent. to nearly 6 per cent., the annual rate of productivity in the steel industry. Those are the plans at present. When we do so, we can hope then to equal France and Germany, and we shall be running more or less at the productivity levels of the Community.
Sir S. Summers: So that I may clearly understand the figures, will the Paymaster-General say whether the magic figures of 3 per cent. and 6 per cent. have any relationship to the output per man in the process?
Mr. Lever: Certainly; it has a direct relationship to the output per man. We hope to see the overall output per man

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rise. It is a very complicated technicality, but only at the margin—the output per man will double, as will the productivity rate.
Sir S. Summers: It is the rate of growth.
Mr. Lever: The rate of growth in productivity, not the output per man. I meant the rate of growth in productivity, which has been running for nearly 20 years at under 3 per cent. in Britain, compared with about 20 per cent. in our European competitors, to say nothing of the remarkable figures for Japan and Italy. The rate of productivity growth per man is intended to increase to approximately 6 per cent. per annum by 1975, as a result partly of the massive capital investment, details of which have been given and specified—I do not want to spend my speech in reciting them—and the immense plans for productivity arising therefrom which are in train. That is our confident prediction. That is what we seek to achieve. We cannot achieve it in two and a half years. That does not make any kind of industrial or economic sense.
As to labour relations, we are asked to believe, with a classic post hoc propter hoc argument, that, as there has been some labour trouble after the industry was nationalised, and even more labour trouble than in the years immediately preceding it, this is due to nationalisation. Not one single word of evidence or argument was addressed to the House to suggest that this is so. All that the right hon. Gentleman can hope is that ignorant people outside who have not followed this problem and not reflected upon it will take this to be a supportable indictment of the industry.
In fact, this industry since it has been nationalised has made greater efforts to improve and organise its labour relations than was ever the case in the years before nationalisation. Apart from the simple argument that there have been the strikes after nationalisation and that these are therefore due to nationalisation, we have not heard a single word to link the two.
Sir K. Joseph: Nor did I say a word. I said that the inept handling of labour relations by the Corporation had caused the turbulence, not nationalisation.
Mr. Lever: As the right hon. Gentleman was at pains to exonerate the Cor-
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poration when he commenced his speech, it is rather sad that the logic of his own argument compels him to pin the blame upon it. I hope he is more forthcoming should he be so fortunate as to be selected to replace me; for that is the only remedy that he can suggest. He has not told us in any detail what remedy he has in mind apart from that. His real remedy is that he should replace me as the Minister in charge of the industry.
I do not undervalue the right hon. Gentleman, and I certainly do not overvalue myself. However, the agreeable change—at least agreeable to him— would be exalted if it were described as an industrial policy. The right hon. Gentleman has to condescend to rather greater particulars if he is to convince even my most confirmed critics. He knows very well that I have been there for months. It is a wonder that he did not roll those months round his tongue as he rolled the two and a half years that the industry has been nationalised. At all events, he must come up with something better. On labour relations I am rather disappointed with him. I hope that hon. Members on both sides will contribute their views on this question.
In modern times, these vast industries, whether they are in private hands or in public hands, pose tremendous human problems. I will not expatiate on those tonight. Obviously this is one of the central group of problems which we must all face and which affect the standard of life and prospects for our country, not only in the steel industry, but in all industries.
I am satisfied that the Corporation has made immense efforts to improve labour management relations. It has tried worker directors regionally. It has had a worker director on the central board. It has gone to immense trouble over a wide area to seek to improve relations. This will continue.
It has just appointed my right hon. Friend the former Minister of Health to take on a special role on the Corporation. I welcome this, because I think that people on either side of the House who know my right hon. Friend will know that he has a unique contribution to make in the sphere of the social purposes and the industrial relations of this great industry.

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I have nothing to apologise for in the rôle of the corporation in its management/industrial relations. I wish that hon. Members on both sides would turn their minds to saying something constructive instead of merely idle comment on so-called ineptitude in the handling of labour relations and the consequences in terms of strikes. We all know that the last two years have been a period of especial tension and difficulty in labour relations, for a number of reasons and not only in Britain. I would very much welcome it if we heard something constructive on either side of the House about how we might help in improving them in this great industry.
The right hon. Gentleman wants to have it both ways on the question of prices in the industry. He complains, on the one hand, that we denied the industry the increases in prices that it should have had earlier. He then says, on the other hand, again without a scrap of evidence, that the price increases as a result are greater.
Why does the right hon. Gentleman say that? I ask him to give a scrap of evidence, or argument even, to show that prices will now be higher because we held back the price increase until we had a proper opportunity to scrutinise it in relation to the industry's general plans and price strategy. When the price increase occurred, most of the right hon. Gentleman's hon. Friends, and many of his industrialist supporters outside, merely complained that the increase had taken place at all. The right hon. Gentleman should tell his industrial supporters and others outside what he is complaining about. Is he complaining that we are increasing prices now, or is he complaining that we ought to have increased them a long time ago? [Interruption.] The right hon. Gentleman pretends to try to have it both ways. He had a predecessor of his name who had a coat of many colours, which excited a great deal of discontent among his brethren. He must try to parade, in this House at any rate, in a coat with a single colour and a coherent theme.
At the moment, I do not know whether to defend the Corporation for charging too much or for charging too little or for increasing too soon or for increasing too late. I can only say that it has been of
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immense advantage to British industry that, until now, our prices have been significantly below world and European prices. It has been a great help to our exporters and to our engineering and motor industries. The right hon. Gentleman may regret it: they do not. They only regret that prices inevitably have to move up now towards the level of European prices. They will still remain below European prices. That is why the industry has not had the spanking profit which it might have had in the steel boom.
The right hon. Gentleman complains that there is a shortage of steel reinforcing bars. Is that the fault of the corporation, does he say, or the Government? In fact, it is the fault of neither. These steel reinforced bars are cheaper in this country, even after the price increase, by an immense margin, than any such bars available on the world or the European market. That is why, of course, every British consumer is trying to get his supplies here in Britain. Not that I blame them—we are living in a free trading world.
Many of them used to get them abroad, but in the world steel boom there is a shortage of these bars and immensely higher prices are being asked in the world market than the British Steel Corporation charges. Not unnaturally, those who have hitherto gone abroad for supplies are queuing to get them from the Corporation. Although the Corporation has increased production of these bars 50 per cent. in 12 months, we still cannot meet the eager demand by those who cannot get the supply for a reasonable price from the Continental and world suppliers, whom the right hon. Gentleman compares favourably with the British Steel Corporation.
There is really not much to answer. This is a very depressing debate. I do not think that the right hon. Gentleman can be too much blamed. There was a certain lack of conviction in his complaints which redeemed his speech and permits me to say that he reduced it to the level of relatively harmless electioneering. I cannot complain of the relatively moderate way in which he presented it. He tried to whip up some enthusiasm, and we felt that he was banging violently on the door, but it then became clear that he had not the least intention of

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going through it, and that the industry will go on as a nationalised industry even if the electorate makes a decision which none of us on this side would welcome.
The Tories, we can now see, are becoming the party of organised nostalgia. They do not tell the electorate the things which they are going to do; they are telling the electorate the things which they would like to do but cannot or will not do. This will take the place of a serious programme for the steel industry. I hope that as the debate proceeds we shall hear a little more detailed criticism, because I am sure that there are useful things to be heard about labour relationships and hopeful things to be heard about productivity and world prospects and the like, and many experienced hon. Members on both sides should make a contribution.
Of course, they will not bear any relationship to the ludicrous terms of the Motion of censure, but at least they will be none the worse for that. I hope that my hon. Friends will join in the debate in the same helpful and constructive spirit. in the knowledge that, at due time, 10 of the clock, we shall all register our extreme disagreement with a Motion of censure undocumented by serious argument or by appropriate fact and brought purely to seek a little electioneering vainglory in the darker and more distant strongholds of Tory opinion.
The final word which I have to say in confirmation that this is so is that, to the knowledge of the right hon. Gentleman and his hon. Friends, the annual report of the steel industry is about to come out. It has been announced that it is to come out in mid-February. The right hon. Gentleman does not wait for the facts: he would much rather argue on the myths. He has had his argument and he has presented it in an attractive and moderate way, but I am afraid that he cannot have convinced anyone, not even, I suspect, his own supporters.
7.55 p.m.
Mr. John Peyton: The kindest thing that can be said about the speech of the Paymaster-General is that it constituted an excellent rehearsal for the days, which we hope will shortly come, when he speaks from the Opposition Benches. He always sparkles a little more freely when he does not have any responsibility. No one can accuse him of being
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weighed down with responsibility tonight in the very flippant answer which he has given to a very eloquent, although restrained, speech by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph).
It has long been my opinion that if anyone who had spent his life in the steel industry without being contaminated by politics were to have a right to speak in a debate on the industry in this House, I am certain that he would prescribe for all politicians a substantial suit of sackcloth. The right hon. Gentleman may attribute this to bias on my part, but I believe that such a person would say that the party opposite was much more to blame than the one of which I am a member. He would attribute both to the fact of nationalisation and to its threat many of the ills which have struck the industry since the war.
Looking back, as a Conservative and as one who was a junior member of a Government and with some responsibility for the industry, I take no comfort from reflecting upon the futility of the Iron and Steel Board and that policy of restraining artificially the industry's earnings, which prohibited and prevented it from obtaining, either from within itself or from outside, the resources which it needed to develop. For that, there is great blame.
But the excuse legitimately put forward on behalf of the Conservative Party is that it did this so as to appease the wrath of the party opposite, and to curb the predatory instincts of Socialism. We should have known, of course, that such a flabby compromise as was represented by the Iron and Steel Board would do nothing to satiate the doctrinal lusts of the Socialist Party. At the end of the day they insisted that they should have their way and take over the industry once more.
What has happened since then? We have had a major capital reconstruction, and £700 million out of a debt of £850 million or so overnight ceased to be loan capital and became public dividend capital. My right hon. Friend was surely right to call attention to the fact that, so far, this capital shows little prospect of attracting any dividend at all. The right hon. Gentleman knows that perfectly well. In dealing with this matter and answering my right hon. Friend, he never referred to this point at all.

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Nevertheless, one must accept that this sort of privilege is not lightly dished out to private enterprise. The right hon. Member for Greenwich (Mr. Marsh), who was Minister of Power at the time, could hardly have anticipated, when speaking in Committee on the Bill, that this was in the Government's mind.
Mr. Harold Lever: I am sorry that I did not answer the right hon. Gentleman's point. It was precisely because this structure of having dividend capital and loan stock is very normal for private enterprise. In fact, what is abnormal was the original structure in which the entire capital was in the form of loan stock without any dividend capital. This is exactly like private enterprise.
Mr. Peyton: If I may engage in a little private understanding with the right hon. Gentleman, if he will stand me a drink every time the dividend is passed, I will willingly stand him two whenever it is paid.
Mr. Lever Mr. Lever indicated assent.
Hon. Members: I will take that.
Mr. Peyton: Regard for my health and a respect for abstinence prevent my accepting all challenges on this point.
The industry, prevented from enjoying economic prices before, has been granted substantial price increases now. It would be a mistake and unfair to say that they should not have taken place. But I am human, and so yield to temptation every now and again, and must therefore read to the House one quotation from something said by the National Board for Prices and Incomes. I have never before quoted the board with approval, but I suppose that there must be a first time for everything.
On the first page of the Report on Steel Prices we read in paragraph 4:
"The difficulties of the investigation have been increased by the fact that the Corporation's proposals, covering some 50 different product groups, have been undergoing constant change while the reference has been with us, largely as a result of complaints from, and discussions by the Corporation with, customers. The volume of complaints has been large, far exceeding those received in response to any other price increase referred to us."
I have one further short quotation, from page 28 of the same document:
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"The proposed prices have been determined without a prior firm programme of cost reduction, and we recommend that such a programme should be required by the Ministry of Power."
It is only fair to add that I know that the Corporation was offended and replied rather sharply to those two charges. But it is at least worthy of note that the Prices and Incomes Board should have seen fit to make such sharp remarks on the subject of those price increases.
Before I leave the subject of the price increases I should just mention, if only to say "Goodbye", the Iron and Steel Consumers Council, which seems to me a singularly toothless body. I believe that the British Steel Corporation has quite sufficient means to look after itself without being protected by such a body, and for the council to say that it is concerned with the health and strength of the British steel industry seems to me to indicate that it may have got its role slightly upside down.
Hon. Members: Why?
Mr. Peyton: I move now briefly to production——
Mr. Marsh: Before the hon. Gentleman does so, will he say why he thinks it surprising that steel users should be concerned with the health of the steel industry?
Mr. Peyton: I do not believe that it is surprising that they should be concerned. I think that it is surprising that the Council should regard it as one of its main purposes. The Corporation is a very powerful monopoly. The British steel user is rather bereft of protection, and I do not believe that the Iron and Steel Consumers Council need concern itself overmuch with the strength of the industry. It should leave that to others and look after the perfectly legitimate interests of customers. I am, naturally, grateful for the right hon. Gentleman's intervention, but I want to turn to the question of production.
In 1965, 27 million tons of steel were produced in this country. In 1969, another boom year, the total was 26·4 million. I take it from the Minister that it is quite unreasonable to expect dramatic increases in a couple of years. But we do not expect reverses, and the right hon. Gentleman would have been a little more straight with the House if he had

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admitted that this was something of a disappointment.
I did not hear my right hon. Friend say anything about the forecast by the chairman of a profit of £30 million for this year, nor did I hear the right hon. Gentleman anticipate what we are shortly to hear, the out-turn for the last financial year. But am I right in thinking that we face a loss of £30 million or £40 million as opposed to an indicated profit of £30 million? We are entitled to ask this. I am very grateful to the right hon. Gentleman for suggesting that we might have waited until after the report had been published. Of course, when it has been published we may well want to return to the subject.
The Corporation has had some powerful advantages. It has had increases in prices, the loan part of its capital debt virtually wiped out and a major boom in steel demand. Against that background, it has made a substantial loss.
The right hon. Gentleman said a good deal about industrial relations, on which he felt we were on somewhat weak ground. I believe that it is fair to say, as my right hon. Friend did, that the industry had first-class industrial relations until nationalisation, but that this year they have not been very good. There was a recent article in The Times Business News headed
"Troubled Times for Mr. Smith".
It referred to the dismal record of labour relations this year and mentioned the £750,000 loss due to industrial disputes, £450,000 of which was lost in the Port Talbot dispute. It is not unfair to ask whether the right hon. Gentleman considers that that dispute was particularly well handled.
We welcome the recent announcement that the right hon. Member for St. Pancras, North (Mr. K. Robinson) is now to go to the steel industry. We all have the greatest possible respect for him, and many of us on this side of the House regard him as having been a first-class Minister of Health. I say that without any reservation. I am sure that he will forgive me if I allow myself the slight joke of saying that an ex-Minister of Health is probably the best choice the industry could make today.
I am very concerned to ask the Minister winding up what he thinks will be the
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effect of the reorganisation on industrial relations. How does he think senior management, many of whom have left the industry, will feel? How will others face the destruction of companies that have meant a good deal to them during the whole of their working lives? One wonders which of the men who have spent their lives in the industry have given themselves to the policy.
I am more than anxious to know what will be the effect on works managers or directors, who will now have to work under increasing centralisation and in a new world of product groups rather than regional arrangements.
Mr. Eddie Griffiths: Would the hon. Gentleman take my word if I referred, not by name, to a person who came into the accounts department of a steel plant two years ago as an unknown and has recently been appointed the financial director in the new Special Groups Division in Sheffield?
Mr. Peyton: I am very grateful to the hon. Gentleman for that bit of news. What I am expected to learn from it, I am a little less than clear. The point I am making is, what is to be the effect upon those in the industry of reorganisation which is due to take effect at the end of March, the Minister having given his consent?—really mistakenly, in my opinion.
I am also curious to know where the trade unions stand. I am sure that the right hon. Gentleman's conversation is much more interesting than my speech, but I am hoping his colleague, the Joint Parliamentary Secretary, will reply to me. I am really concerned indeed to know what part the unions have played in the discussions about the new reorganisation. And also to what extent, right at the end of the queue, even the poor public have been considered.
How many people are clear that the bulk of the Scottish steel industry will be run from Cardiff, Bedford, Corby or Sheffield, that only the general steels division will have its headquarters in Glasgow? What happens when there is a dispute at Ravenscraig? Has every decision got to be referred to higher authority at Cardiff to get a ruling? It seems to me to be a system of bedlam.
Now, we have had altogether three plans. The first one was, if I may

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respectfully say so, not too bad. It showed on page 22, paragraph 56(c), from which I would quote one sentence:
"A grouping on product lines would make it easier to concentrate management expertise and sales and research effort. It could facilitate the rationalisation of production and the achievement of the optimum balance of production as between works making the same product. On the other hand, the customer's freedom of choice would be limited, the scope for competition between Groups reduced, and the Groups made more dependent on a single style of product."
This was recommended a few pages later, in page 25, paragraph 64:
"The spur of competition, other than in price, between the Groups and between the units below them is in our view highly desirable."
Those were the British Steel Corporation's views in 1967 when it published the first organisation plan.
The second plan succeeded in eradicating the merits of the first one. In paragraph 52 it had this rather nasty sentence:
"As a result of its experience in operating the present system of multi-product Groups it has become clear to the Corporation that this system by its nature impedes rationalisation and the optimum utilisation of the Corporation's assets."
A nasty sentence, with a nastier meaning, and I myself feel that the Corporation has taken a very substantial step down the hill which leads to a most uncertain and possibly very unwelcome destination both for the industry and for the nation.
The third Report—productivity in terms of reports has been fairly substantial—was, in my view, the worst of all. It spelt out the death knell of the companies which had contributed enormously to the industry in the past, in my view, without any compensating gain whatsoever. It had one or two rather ominous sentences. The phrase "rationalising of sales" seems to me to come very high on the list of priorities and to be repeated more than its fair share of times. One wonders whether, perhaps, the sales department is not beginning to run this great industry far more than is proper or desirable.
There was a reference on page 17 of this third plan to distribution of orders among its works. This is not necessarily what the customer will want, and even the Corporation seems to be aware of
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this, because on the same page, paragraph 45, we have these words:
"The Corporation nevertheless understands the apprehension felt by some customers that more rationalisation might mean less responsiveness to individual customers' requirements."
This is exactly what the vast majority of the customers are beginning to fear. They do not need to look for evidence, but if they do, then, in my view, there are the onerous conditions of sale which have received quite inadequate public attention and could be the cause of apprehensiveness and the justification of apprehension. I myself took the matter up with the board and Dr. Finniston, very courteously, replied to the effect that these conditions of sale are almost entirely a restatement of conditions operated by the individual companies before nationalisation.
May be, but I regard this assemblage as an arrogant amalgam in most improper circumstances, paying no attention to the fact that, whereas there was competition before—at least there was a choice of the suppliers—here we have none, and these terms, in my view—and I invite the right hon. Gentleman to inspect them most carefully, and I hope he will do this—are most onerous and unfair. If he says the industry has not had any complaints, I hope he will bear in mind that at least in times of boom customers of the British Steel Corporation will be reluctant to make complaints about a monopoly supplier upon whom they depend.
Mr. George Lawson: Will the hon. Gentleman take it from me that I can produce evidence from firms that were afraid to complain about steel supplies when the industry was in private ownership because they thought they might be blacklisted?
Mr. Peyton: How very shocking that a private enterprise firm should so conduct itself, but how much more shocking that a State monopoly should do so. I will not challenge the hon. Gentleman to produce evidence. I have no doubt he has got it, from what he has said, but what I do say is that because something wrong happened under the private enterprise system is not justification for continuing it—and this was the whole justification in the minds of hon. Members opposite for nationalising the industry, yet here they are justifying perpetuation

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of sin by reference to a past which they regarded as rather sordid.
Mr. Harold Lever: I hope the hon. Gentleman is not saying that the Steel Corporation has threatened in any way to blacklist customers who complain. I am sure he would not want to say that unless he had some evidence that it was so.
Mr. Peyton: I am not suggesting a blacklisting of customers. It was the hon. Member for Motherwell (Mr. Lawson) who introduced the blacklisting subject. I was inviting the right hon. Gentleman's attention to the terms and conditions of sale which are imposed upon all customers in the United Kingdom by a monopoly, and I am asking him to let me know whether or not he thinks these are unduly onerous and should be reviewed. If I have his undertaking on that I am most grateful, and glad that I raised it.
Mr. Peter Emery: Does my hon. Friend realise that the Consumers Council, of which he complained, did not deal with any of the objections, many of which were voiced about these conditions, until about nine months after it had them?
Mr. Peyton: I am grateful to my hon. Friend for making the point. I can only go back to what I said before, that I do regard that as a rather toothless body.
I do not need to tell the right hon. Gentleman, I hope, that there are very widespread complaints from customers about the unreliability of supplies, and they feel very strongly indeed about it. I ask the right hon. Gentleman to accept that various of them who have spoken to me about it are, for reasons I referred to just now, reluctant to have their names used publicly, but I am perfectly prepared to give the evidence to the right hon. Gentleman privately, if I can get permission. But the fact is that the customers are increasingly reluctant to attack the Corporation in public.
Mr. Harold Lever: I was not shaking my head to indicate that I disbelieved the hon. Gentleman—the day has not arrived when I have to do that. I was shaking my head at the lamentable attitude of stupid people who feel that there is the smallest danger of retaliation by the British Steel
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Corporation to anybody who complained about anything.
Mr. Peyton: I think that reflects a lack of practical experience of current affairs on the part of the right hon. Gentleman. There are a great many customers who think themselves to be men possessed of ordinary courage and resolution who are very reluctant to complain. It is difficult to persuade the right hon. Gentleman that anybody except himself is gifted with even a glimpse of truth from time to time, but I hope he will accept from me that some very successful substantial customers of the industry feel convinced that it is not in their best interests to complain, and certainly not to complain publicly.
My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) made reference, very properly, to the fact that the British Steel Corporation, whose relations with its customers are going, in my view, from bad to worse, is also being the reinforcing agent of the stiffest squeeze ever to hit British industry. This will vitiate relations between the industry and its customers for many years.
There is always a danger with a monopoly that all those who are most informed about its affairs for some reason or another get an interest in keeping quiet. Whether or not they are cowardly is neither here nor there, but they tend to keep quiet, and the result is a lack of well-informed criticism.
May I go on from that point to the relations between the corporation and Members of Parliament? It has been my experience, and certainly my understanding, that senior people in the Corporation have been seriously discouraged from having anything at all to do with Members of Parliament. I have a certain amount of support for this allegation. I know one or two people who have been very reluctant to meet or to talk to Members of Parliament, and when I put this point to Lord Melchett I did not get a categorical denial.
May I sum up what I have been trying to say in this way? It seems to me that the interests of all of us, the interests of this country, taxpayer, consumer, management and worker appear to have been ill-served by nationalisation, and that they are now further threatened by a measure of centralisation which was

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at one time judged wrong by the British Steel Corporation itself and which is the last thing now required to tone up a massive and variegated industry to face the realities not of political theories but of a real and somewhat perilous world.
Sir Geoffrey de Freitas: On a point of order. I wonder, Mr. Deputy Speaker, whether you favour short speeches. It looks as though hon. Members representing steel constituencies will have no chance of speaking.
Mr. Deputy Speaker (Mr. Sydney Irving): I hope all hon. Members will remember this.
Mr Lawson: On a point of order. In view of the importance of this subject, Mr. Deputy Speaker, was there no objection that we should be devoting only three hours to it? Is not this an example of a propaganda debate rather than an attempt to help the industry?
Mr. Deputy Speaker: The timetable is not a matter for the Chair.
8.24 p.m.
Mr. Richard Marsh: I shall be very brief because in a three-hour debate, in all fairness, one hon. Member speaking for half an hour is enough.
The hon. Member for Yeovil (Mr. Peyton) said something which I thought was very significant. When he spoke of the industry's decision to organise itself in product groupings he said, with that phoney emotion which is sometimes summoned when people are talking about nationalised industries: what possibly can the managers in the industry be thinking of the future? But what possibly can the managers in the industry be thinking of the future in the light of the Opposition's disgraceful irresponsibility in throwing in question the entire future of the steel industry and flatly refusing to give any indication of what they have in mind?
It is perfectly right and proper that there should be arguments between the two sides, although I personally think it is a pity that this industry has become a political football, but for an Opposition to call a debate and say:
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"That this House deplores the consequences of nationalisation of steel by Her Majesty's Government"
and then flatly refuse to give any indication of what they intend to do is to cast that industry deliberately, not by accident, into total lack of security in the future.
Why do they do it? They do it because they nurse this troglodytical, doctrinaire opposition to anything which is publicly owned. The argument is that the industry in two and a half years has not solved the problems of the previous 50 years. The right hon. Gentleman said:
"Had nationalisation not occurred market forces would have changed the structure of the industry."
How much longer did the market forces need? For years and years everybody was highly critical of the British steel industry, including many people within it. Then the present Government came into office in 1964, and their policy was to take into public ownership the steel industry. We all remember that debate in the 1964 Parliament when suddenly the industry was reprieved by a discussion between my right hon. Friend the Member for Belper (Mr. George Brown) and an hon. Member who was then on this side of the House but who is now on the other side of the House, and will in due course no doubt finish up somewhere over the top of the Speaker's Chair. After that discussion the White Paper was withdrawn or suspended.
After some months I went into the Ministry of Power, and I thought that the threat of nationalisation would have spurred the industry into doing something, because market forces had not, but it was just falling further and further behind. My first question to the Department was: what changes were taking place in the industry in the light of its reprieve from nationalisation? There was an economic crisis at that time, and many people were worried about the possible effect upon foreign confidence and sterling of going ahead with nationalisation at that time, and the industry knew this. The industry could have done something about it. Had the industry itself made major changes, I am not totally sure that it would have been nationalised at that time—if the industry had shown willing. But, although faced with the threat of nationalisation,

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not one single thing had the industry done.
What has happened since? As my right hon. Friend says, the British Steel Corporation has been in existence for 2½ years and it has problems. That is not surprising. This is the biggest merger of competing manufacturing companies the world has ever seen—13 firms, 100 works throughout the country, 250,000 men, a major restructuring of prices, a major restructuring of unions. The Corporation deserves congratulations for the way in which it has brought the unions together in a difficult situation. On the argument about recognition, I do not think that the fault lies with the British Steel Corporation. I will not go into detail into whose fault it is, but I do not think the Corporation can be blamed for that.
The Corporation has gone through all these difficulties. It is now the seventh largest company in the world outside the United States of America. No hon. or right hon. Gentleman opposite believes that at the end of 2½ years in those circumstances it is even sensible to get up and say, "But there are criticisms we can make of the British Steel Corporation". In 2½ years it has done a superb job. Look at some of the things it has done.
Sir K. Joseph: Both the right hon. Member for Greenwich (Mr. Marsh) and the Paymaster-General are replying as if the Opposition were criticising the Government for not having built new steel works. That is not the point. The criticism has been that nationalisation was introduced in order to increase productivity per man and to rationalise. But one sees from the report of the N.B.P.I. that reduction of manpower, through wastage and other humane means, has not been begun.
Mr. Marsh: If the right hon. Gentleman believes that it has not begun, then it makes me even more worried about the possibility of his taking an interest in this industry.
Mr. Donald Coleman: If I may interrupt my right hon. Friend, does not the right hon. Member for Leeds, North-East (Sir K. Joseph) not know of the exercise which has been taking place in the Steel Company of Wales Works
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at Port Talbot, about which his hon. Friend the Member for Bournemouth, West (Sir J. Eden) knows since he recently has visited the place?
Mr. Marsh: The fact that the hon. Gentleman recently visited the place is no evidence that he knows what it is all about. The right hon. Gentleman knows that a great deal has been done in difficult circumstances. One has only to look at the situation in 1968–69 with £230 million new capital projects approved. Now that they have been approved they will begin to pay off. There will be capacity in Scunthorpe alone of £130 million. These are vast investments which take time even to build, quite apart from their paying off.
I want to be brief, and I will conclude by making a point on prices. The hon. Member for Yeovil seemed surprised that the Iron and Steel Users Consumers Council should have adopted a view which agreed with the Steel Corporation. It is not the rôle of a responsible body to turn itself into a sort of gripe factory. This is an organisation which represents every major section of steel users. It is a body of very high calibre and a body with which I had the honour to be involved. It takes a responsible view. It comprises the steel users. If it approves price rises, we should ask ourselves to think carefully about the prices charged for steel.
I agree with the right hon. Gentleman on one thing, and that is that it is no credit to us that our prices are the lowest in Europe. I believe that the price of steel in this country is too low, has been too low and that the increases have been delayed too long. I do not see the purpose of a nationalised industry as a sort of hidden subsidy to the private sector. If it is desired by the Government to subsidise industry, which is perfectly legitimate in times of difficulty, then one does not distort the price pattern of a nationalised industry to do so.
I apologise for putting in a somewhat jarring note on this side of the House, but I believe that these increases should have been granted, and I hope that the industry will be allowed to get to a sensible price structure.
Hon. Gentlemen opposite have spoken about a monopoly. They are not facing a monopoly, but they are facing intense

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competition. The fact that the industry is not facing so much competition in this country does not detract from the fact that it faces real competition elsewhere.
I do not believe that one can run this industry other than as a commercial operation. If it is to be run as a commercial operation, its prices should reflect the real position. I shall be interested to know whether there is any calculation as to what the financial position of the industry would have been if the prices charged by the B.S.C. had equalled those being charged in the European Coal and Steel Community.
Mr. Harold Lever: There would have been £100 million profit.
Mr. Marsh: My right hon. Friend says that there would have been £100 million a year profit. That is one of the arguments against restrictions on price increases and the prices and incomes policy as applied to this particular commodity.
I end as I began, because I said that I did not wish to speak for too long. Hon. Members opposite after the next General Election, if they win it, will not denationalise the British steel industry. I know it and they know it. There are two reasons why they will not do so. One is that some of us have given a great deal of thought and effort to ensuring that they cannot. Secondly, they would not be foolish enough to take this massive industry and shake it apart again. Since this is the case, there is no sense in this sort of electioneering debate which damages a major industry, has its effects on the economy of Britain and cannot be justified on the ground of the arguments put forward by the party opposite.
8.37 p.m.
Sir Spencer Summers: I do not propose to detain the House for very long. I begin by agreeing wholeheartedly with what the right hon. Member for Greenwich (Mr. Marsh) had to say on the subject of prices. It is interesting that we have heard from the Paymaster-General a defence of the delay by the Government in raising prices. Perhaps the two right hon. Gentlemen will decide which of them is right.
I thought the Paymaster-General's treatment of the speech of my right hon.
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Friend the Member for Leeds, North-East (Sir K. Joseph) little short of disgraceful. It was flippant, it was designed to entertain, and to some extent did. But it paid no serious attention to the charges made. The right hon. Gentleman was at pains on the subject of labour relations to say that no evidence was produced that an increase in strikes following nationalisation had any relationship to each other. Does he really think that if, since nationalisation, the number of strikes had fallen, he would not have taken credit for the improved situation in labour relations'? Of course he would.
Mr. Harold Lever: The hon. Member would have told me that I was talking rubbish if I had brought no argument in support of that assertion.
Sir S. Summers: The Paymaster-General is entitled to his views, but if he thinks that because a proposition is simple it is not worth listening to, he is much mistaken. The public is interested in results. What happens after an event, unless there is proof to the contrary, is likely to have been influenced very strongly by the change in attitude throughout this industry.
The right hon. Gentleman had a lot of lighthearted things to say about our having to make up our minds on the subject of prices. He was at pains to say how helpful the industry had been in keeping down prices and in making those who used steel competitive in the world. He paid no attention to the lack of profits, profits that were shown to be lacking. It is the Paymaster-General who wants it both ways, not the Opposition, in that particular context.
I should like to make clear how unwise I believe it to be to eliminate the goodwill associated with individual companies. In saying that, I have done my best to dissociate my mind from old loyalties in that respect, but I am quite convinced that it is in the interests of the British steel industry to preserve the goodwill of those companies, their names, habits and attitudes in the commercial markets of the world. It is a thousand pities that they are being done away with.
I will not go over ground that has already been traversed about nationalisation being a monopoly and all the rest of it. But I am quite certain that the

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existence of that monopoly, the absence of competition and the creation of product groups is doing a great deal to undermine morale in the industry. Nor do I believe that it is anything like as easy, if at all possible, to have loyalty to a group in the same way as in former days it was possible to have loyalty to a company.
My right hon. Friend alluded to the new set-up. I have before me a description of the new set-up illustrated in the December issue of Steel News. It is as well that we should look at the duplication and split loyalty which is almost bound to occur by the way in which this industry is to be organised. There are to be six product groups and six administrative functional responsibilities for individuals also responsible to the Chairman of the Corporation. We are told that the managing director at the centre, not the managing director of the product group—that is the managing director of a series of factories—will be responsible for financial assessment of expenditure proposals. Surely if anyone is to take responsibility for assessing expenditure proposals—which I take to be capital expenditure—it is people on the spot at the site where the money is to be spent and where the management will operate the new expenditure.
If responsibility is to be placed at the centre there is bound to be confusion and division. The same goes for development planning and the Corporation's marketing policy, and determination of marketing and sales policy. Who is the individual down the line to believe that he is ultimately responsible to, the managing director in charge of his product group or one of the half-dozen so-called managing directors at the centre? I had some experience of this kind of situation of divided loyalties during the war when I had the exalted title of Director-General of Regional Organisation. The individuals in the several regions were responsible to the Department in the Ministry of Supply who made, perhaps ammunition, perhaps weapons, perhaps some other feature of the war effort. There was a division of responsibility between the individuals in a regional office to his product group and to the regional office and the head of it in London.
Constantly much of my time was taken up trying to resolve these confusions and
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difficulties of persons with a dual loyalty. I take it to my credit that almost invariably I said that the "product group carried the more important loyalty—the man who is responsible for what you, the individual, is concerned with making".
That seemed to be the only possible solution. Here the only possible solution is for the product group managing director to be responsible for everything in his factory. If he looks for advice only and co-ordination from the functional managing directors, well and good. I hope that the Minister and all those concerned will see that inevitable confusion can arise unless steps are taken more precisely to define the responsibilities and deal with them in advance.
Nationalisation was bad enough, but if the mistaken application of it is to be anything like what we are now told is to happen in March it will be a disaster for the industry.
8.43 p.m.
Sir Geoffrey de Freitas: I agree with the hon. Member for Aylesbury (Sir S. Summers) that the public is interested in results. The results of nationalisation in Corby, in my constituency, are something in which the public are particularly interested. Incidentally, the firm is called Stewart & Lloyds, and I hope that it will continue to be called Stewart & Lloyds. I do not know of any reason why it should not so continue.
At the General Election I argued on the platform, on the radio and television and put the case for what we would do. I said that we were in favour of nationalisation. One of the arguments I used was that a properly organised industry would make full use of the Northants iron ore, which not only grows beautiful roses but is the basic raw material used by Stewart & Lloyds. I argued that with the small privately-owned units in the steel industry the steel workers in Corby, and Corby itself, would be abandoned. I argued that nationalisation would achieve that reorganisation which was essential in the national interest and would also bring about full use of Corby, the skill of the workers and the iron ore which is there. My opponents disagreed.
Two weeks ago Sir Henry Benson came to my constituency. Hon. Members interested in the steel industry will remember the Benson Report of 1966.

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One matter that the Report emphasised was that the future development of the industry should be in the deep water coastal ports using high grade ores. That report cast a great deal of gloom over Corby when it was published, because Corby's inland iron and steel industry is based on lower-grade ores, and such a move would have made Corby obsolete.
There was despondency in Corby when that report came out, but Sir Henry Benson, on 30th January, said:
"The Benson Report was produced before nationalisation. We were working on groupings of private companies on geographical principles. Once the British Steel Corporation came into being the whole grouping was changed and the emphasis put on the product. I am sure that what is happening now is right."
It so happens that, arguing by results, nationalisation has directly saved Corby.
Besides production, there is the question of administration. I have frequently argued that Corby was well suited to be an administrative centre because of geography, available housing and good amenities. I was delighted a few months ago when, in answer to a Question, I was told that the administrative headquarters of the Tubes Division would be there. I hope that more administration will be transferred to Corby. If so, the British Steel Corporation will have to act quickly. Other organisations are moving in. The Home Office is moving a department there in the next few months, so it is important that the Steel Corporation should move quickly.
The urban district council and the New Town Development Corporation are efficient. They welcome new industry. A few months ago I opened a new factory which will employ up to 700 people.
Diversification is continuing, but Corby remains essentially a steel town proud of its steel works. We have every right to be proud of the people who manage it and work in it. They come chiefly from the Midlands, Scotland and Ireland. The Registrar-General's Report shows that there are more people from Northern Ireland in my constituency than in any other constituency in England. The hon. Member for Belfast, South (Mr. Pounder) will be glad to know that we have not got any Protestant or Roman Catholic streets. We have Corby streets. We have peace. I say, thanks to nationalisation, we also have prosperity.
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Steel works are fine to look at, but they pollute the air. Anyone interested in nature conservation over the years knows this. I have been concerned about it since I was on the Nature Conservancy. The problem has become greater, but so has public concern. Here I will ask something of the British Steel Corporation.
A week ago today I was in Strasbourg attending the Council of Europe where the European Conservation Year was launched with speeches by well known people, including the Duke of Edinburgh. There is no doubt that in the coming years there will be increased public pressure and bodies like the B.S.C. will be very much criticised. I wonder whether it is taking pollution seriously enough. It is expensive to stop. I will refer to a figure in a moment. My experience of the B.S.C. in this respect is not too encouraging
In August, 1968, there was a tremendous outcry about pollution in Corby. There were public meetings, I heard evidence and I accepted a petition signed by over 1,000. I took this up with the B.S.C.
Eventually, in July, 1969, Lord Melchett wrote to me saying that the Corporation had approved expenditure of about £700,000 for the installation of additional equipment, work was to begin in the autumn of 1969, the installation would be completed by August this year, and the new equipment—this is an important point—would enable the plant to conform to the statutory requirements for clean air. By August it will be two years since councillors, public opinion and the Member for Parliament started agitation.
We are glad that there will be this improvement, but has it not taken rather a long time? I am not blaming the local management. A lot of money was involved. I want to be assured that in other parts of the country the B.S.C. will do more to meet the statutory requirements. I am not asking more than that at this moment. In this, Conservation year, it is the least the Corporation should do. It has a wonderful opportunity of showing itself as an enlightened public enterprise.
8.50 p.m.
Mr. Patrick McNair-Wilson: I was disappointed with the Paymaster-General's speech, because he

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showed that indifference and lack of concern which he showed when speaking in the debate on smokeless fuels only the other day.
I think we must realise that in this House we are husbanding the public's money, and that therefore anodyne barely passable after-dinner type speeches which may keep one's supporters in fits of laughter are hardly a way to look at what I regard as a serious subject; namely, the plight of the British steel industry. I do not believe that the picture is anything like as rosy at it was painted by the Paymaster-General. When I listened to his right hon. Friend the Member for Greenwich (Mr. Marsh), I rather wished that he had been handling the job for the Government, because he did at least seem to have some knowledge of the problems in this industry.
This is a very sensitive subject in this House. It is particularly sensitive on the Government benches, because it can really be described as one of the great sacred cows of Socialism. It is a subject which has been in the political arena since the 'thirties, and the Prime Minister, in his recent speech, tried to take us back into the 'thirties with his talk of 15-bob a week housemaids. We have moved away from those days, but as soon as steel is debated in the House of Commons we get a very touchy audience on the other side of the House, because this is one of the untouchables in Socialist dogma.
I know, and the right hon. Gentleman knows perfectly well, that the reasons for taking this industry into public ownership had nothing to do with the commercial good sense of this matter. It was a purely political decision, perhaps originated by Lord Dalton, as he made it clear in his book "High Tide and After". It was not about how much open-hearth capacity we had. It was not whether or not the industry had monopolistic tendencies. It was not because the industry was failing the nation. It was simply because Socialism wanted the industry taken into its maw —and we are suffering from this today. This is beyond the dispute.
The Government might remember that nationalisation is mostly a form of management. It is no panacea. It is no answer to the problems which they always used to say existed in the industry.
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It is a form of management, and I suggest that it is a form of management lacking the essential commercial disciplines which make enterprises efficient.
I remember last year being on the Committee which considered the borrowing powers Bill for the steel industry. I remember going over all this ground, and today we do see not a happy, successful, industry, so much better, as we were promised, than its predecessor, but an industry which has serious problems to face, and these cannot be laughed off merely by saying that my right hon. Friend and his hon. Friends are making electioneering speeches.
These are serious matters which should be looked at by the Paymaster-General. [Interruption.] I know that hon. Gentlement opposite will provoke me into making a long speech. I do not want to deprive particularly the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) of giving his views in a moment.
Mr. Eddie Griffiths: The hon. Gentleman referred to the Standing Committee which considered the steel Bill. If I recall the hon. Gentleman's words about efficiency, and if he had his way, half the steel plants in this country would now be on the scrap heap because they were losing money. Would the hon. Gentleman like to consider that?
Mr. McNair-Wilson: I do not want to be drawn too far. The commercial test must be success or failure. I shall press on.
I want to examine the deficiencies of the British Steel Corporation, and look at the production figures, to which reference was made earlier. We are now considering an annual production figure of a little over 26 million tons a year, which compares not very favourably with the figure for 1964. Here we are, five years later, after more than two years of nationalisation, still unable to meet the orders which the industry would be able to fulfil if it were working more efficiently. I do not regard the figure of 26·42 million tons as a very good one for the industry. We are importing 400,000 tons more this year than we were in 1947.
The import bill, which I would have thought hon. and right hon. Gentlemen opposite were anxious to see reduced, is being increased by the failure of the

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industry to satisfy its customers. Only today I was talking to a friend of mine in a large international construction company which was trying to buy 5,000 tons of constructional steel but could get only 1,000 tons.
Mr. Harold Lever: It cannot get any abroad.
Mr. McNair-Wilson: There is a £18 premium, and nobody can hope to get steel in the construction business now.
Then we have the problem of delay, which is substantial. The friend to whom I have referred mentioned a delay of over three months in the case of his steel. I wonder why the shortage should exist. We are told that it is because steel is being exported. When the civil engineering industry shows signs of picking up, our steel industry cannot supply it. This is a disastrous indictment against the Steel Corporation.
We have the problem of the pipe mill at Greatham, which was built in a hurry but failed to produce pipes that could be used. That point needs to be answered by the right hon. Gentleman. The stockholders were told that the shortage was such that if the firm expected more a certain amount of its allocation would be cut. These are serious effects, and should be treated seriously.
This very day we read in the newspapers that the Rootes motor company would not be launching its new model, the Avenger, because the price of the car would rise by £25 per unit owing to increased steel costs.
Mr. Harold Lever: Did not the hon. Gentleman hear his hon. Friend and his right hon. Friend complain that we had not put the price up earlier?
Mr. McNair-Wilson: I am well aware what the price should be—as is the Corporation. I suggest that the Corporation's costs should have been reduced to make sure that this price increase was not necessary, but the necessary steps were not taken. So far, instead of reducing costs, nationalised industry always takes more money out of the taxpayer's pocket.
Reference has been made to the present level of investment in the industry. It has been suggested that in the bad old days before nationalisation invest-
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ment was low. It was low in the years immediately preceding nationalisation, but it might surprise hon. Members opposite to know that between the years 1958 and 1963 it was running at about £175 million a year. In 1952 it was running at the rate of £230 million a year, and the figure was £193 million for the following year.
Mr. Eddie Griffiths: Referring to two of the plants to which the hon. Gentleman has referred—Ravenscraig and Llanwern—is he aware that the B.S.C. proposes to spend £76 million to make what his Government put down as an unbalanced, so-called integrated works into a properly balanced and integrated works, with smelting capacity and finishing and matching up?
Mr. McNair-Wilson: I am aware of the problems of those two plants, which we have debated in Committee. I am only saying the level of investment now suggested, of £900 million over five years which was announced for the near future, is nothing very outstanding and we have a long backlog to catch up on for those years when investment was low.
I now want to turn to the organisation of the industry. I am sorry to say that my friends in the industry tell me that morale is very low. I used to be in the industry and I know that, as a result of the switching and changing and the muddle and confusion, morale of junior and middle management is very low.
There are some very good reasons for this. Some very large organisations are being set up in the centre of the Corporation and layer upon layer of management is being imposed in the plants, so that communications within the industry are very poor. Although a plethora of newspapers and newsletters has been produced by the Corporation which are supposed to keep the employees in the plants informed, these communications are now very bad. Whereas they used to be quite short, the lines of communication are now greatly extended, and this is having a serious effect on morale.
Another thing which has upset morale is the level of appointment to senior management from outside. I am not here making any criticism of the right hon. Member for St. Pancras, North (Mr. K. Robinson) but the fact that a number of people are being introduced on to the

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Board and into various levels of the Corporation from outside is now beginning to unsettle the management structure and people are beginning to feel that the management ladder is becoming more and more difficult to climb. As for the number of large central departments set up by the Corporation, its administrative costs and administrative bureaucracy have got much too big. I do not criticise individuals, but the Corporation itself is becoming a bureaucratic giant.
The new product groups may be successful in the long term. They have had the problems of switching from the original structure to the new one on which everyone pins so much faith. But the grouping may have become slightly out of balance. The general steels group is far too large, having over 45 per cent. of the productive capacity of the industry and about 36 per cent. of the total employed. This is a giant group to have in a four-group system. For really efficient working I would have thought that it would prove too large. In this new grouping system, there is the problem of breaking up what were cohesive units before scattering the headquarters and making people responsible to new and different areas. This is not likely to lead to a more efficient system.
This can be seen in the fact that of the six groups—that is to say, the four steels groups and the two of construction and chemicals—there will be the unusual situation of each having some plant or being responsible to different places. That is likely to lead to a very confused situation.
I am far from sanguine about the Steel Corporation and the industry at this time. There are problems. The production figures are disturbing, and although the right hon. Gentleman tells us of all these wonderful plans that will come into being —he talks in terms of five years from now and what the output per man figure is likely to be—I believe that we may have left it too late.
We have enjoyed, and are enjoying, a great steel boom, but there are many other materials which can be used for fabricating in various forms. I am afraid that we will find that we are investing our £900 million in new plant and equipment which when it comes into production, may find itself operating at a time when it is not required.
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There was one real fallacy in the concept of steel as a commanding height. It is not a commanding height. It is the first of the industries to feel the pinch when anything goes wrong in the economy. The steel industry is always tremendously vulnerable in this situation. Anybody who knows the industry—and I had the honour of working in it at one time—recognises how vulnerable it is.
I am led to believe that the nationalisation of steel has achieved nothing. The frog was too big for the snake to swallow. It is too big an industry to be taken in in one bite. It did not grow out of the commercial desire of companies to come together. The right hon. Gentleman said that they did not want to come together; but that is not entirely true. For example, we have the case of South Durham and Dorman Long. We have other evidence to show that this type of development would have occurred.
To take the example of Japan and Europe and say that because they have very large units we must have a big unit, too, is not necessarily the right concept. We should have allowed the industry to develop in its own way into sensible and viable units. I am, therefore, far from happy about the future of this organisation and of the industry. I only hope that the Parliamentary Secretary will deal with some of the points that I have raised and particularly my questions relating to the new organisation and the fact that steel still has some major problems to face.
Mr. Harold Lever: In the temporary absence of my hon. Friend the Parliamentary Secretary, and so that he will know the questions to answer, may I ask the hon. Gentleman if he is complaining that too much is now being invested in the steel industry, or too little? I was not quite sure from his remarks.
Mr. McNair-Wilson: I said that it may be too much too late.
9.8 p.m.
Mr. Donald Coleman: I wish at the outset to declare my interest in the steel industry. The hon. Member for New Forest (Mr. Patrick McNair-Wilson) said that he had at one time been employed in the industry. I, too, have been employed in it. Indeed, I am still a member of the British Iron, Steel and

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Kindred Trades Association, the trade union to which the overwhelming majority of people engaged in this great industry, in both the public and private sectors, belong.
I, too, had the privilege of serving on the Standing Committee which brought the major part of the British steel industry into public ownership. It is because of the qualifications that I have that I am jealous of the interests of this great industry. It is because of this jealousy that I venture into this debate.
Those engaged in the steel industry do not believe, nor do I believe, that it serves the interests of the industry to make it the object of the obvious propaganda that we have had from hon. Gentlemen opposite tonight. No one complains of a debate on the British steel industry but surely one can complain when the Opposition are so little concerned about the industry that they have failed to provide a whole Supply day. If they were really concerned, that is what they would have done. It will not go unnoticed outside by those who really have the interests of the industry at heart that, once again, we have had hon. Members opposite playing politics round the head of the most important British industry.
When we supported the Government's intention to bring a major portion of our steel industry into public ownership, hon. Member's opposite attacked us by saying, and they say it now, that we would ruin the industry by such a monstrous Measure. They said that production would fall and that, as a result, our steel industry would decline. It is interesting to note that in 1969 steel output was up by 2·2 per cent.; and that figures recently issued jointly by the British Steel Corporation and the British Independent Steel Producers Association show that United Kingdom crude steel production totalled 26,422,500 tons in 1969, an increase of 2 per cent., or about 560,000 tons, on 1968.
I turn to the output side, because it must be stated that these figures are about 1 million tons short of the level forecast about a year ago. It is claimed that the shortfall results from production losses during the year. This can only refer to loss of production through dis-
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putes in the industry, but comment from this side is necessary if we are to have a balanced consideration.
I point out in particular to those who have responsibility within the Corporation for labour relations that over many years the system of regulating those relations has been built up and worked with a degree of smoothness that would have benefited many other industries. We may not have always agreed with one another, but we always respected one another. I urge those now responsible to realise that steel industrial relations have been conducted at a fairly sophisticated level for a very long time, and have never been based on the law of the jungle.
Steel output in December averaged 520,300 tons a week on a seasonally adjusted basis. This was the highest output for six months, and showed an increase of 12,900 tons a week on the November figure. I refer especially to the fact that production in the South Wales steel plants showed a good recovery in December, because it is a real illustration of the contribution of the people of Wales to the wellbeing of the United Kingdom and in sharp contrast to the lunatic behaviour of a tiny minority of Welsh people who are bent on the destruction of the livelihood of the people of Wales and of the United Kingdom.
I turn to the question of the increases in steel prices. The Government's agreement to an average increase of 10 per cent. in steel prices from 28th January will mean that an extra £100 million in revenue will be available to the British Steel Corporation. That will enable the Corporation to meet the extra cost it has incurred over the past months, to pay off part of the deficit and show some return on the £700 million worth of public dividend capital with which the State financed the Corporation. It will also mean that the Corporation can get ahead with its modernisation programme which involves replacing uneconomic plant with new plant based upon the lastest manufacturing technology. This in turn will mean that redundancies can be kept to a minimum and that the future price of British steel is competitive in world markets because it is made in plants using modern techniques of production.
It is not only in Britain that there has been a demand for increased prices.

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Foreign steel makers have increased their revenues by increasing prices while British steel prices have been kept artificially low. Much of the increased revenue to foreign sources has been reinvested in order to increase production which, in turn, will lower prices in world markets. We must not prevent the British steel industry in these circumstances from increasing its own revenue which will enable it to match the investment of overseas steel manufacturers; otherwise, what will happen in time is that British steel will not be competitive with foreign steel.
Such a situation cannot and will not be in the interests of British steel workers and cannot be tolerated by them. We have seen the difficulties put on others of our basic industries through lower prices forced upon them as a means of subsidising other industries, which has meant that they have been unable to raise the necessary revenue to finance developments which ought to have been made, and I am thinking here particularly of the coal mining industry. There are people who have attacked the decision to increase prices on the ground that it will lose for us competitive gain for this country as a result of devaluation.
Even with a 10 per cent. increase in prices British steel prices are still 5 per cent. lower than those of our foreign competitors and therefore if it is held that this cost advantage to our industries will mean that they are not competitive then we should take a very close look at others of our manufacturing industries because there is surely something wrong with the efficiency of those industries if they cannot work on the basis of steel prices at this level.
Steel workers have long recognised that their interests are inseparable from the fortunes of their industry, and they will hold members of the Corporation entirely responsible if they fail to take advantage of the more favourable conditions under which they now operate—and so, too, will members of the party on this side of the House. But I feel that with an industry in public ownership there is much more likelihood of this industry being sensitive to the need to take the opportunities which are now becoming available to it as a result of increasing investment and better world conditions.
9.20 p.m.
Mr. Rafton Pounder: Most hon. Members who have taken part in the debate come from areas in which there is an important steel manufacturing unit. I come from an area which has no steel production whatever, a matter of constant regret to us, but we in Northern Ireland are substantial users of steel, and my interest in the industry stems more, perhaps, from the consumer's standpoint.
Time is too short to rehash or comment upon many of the political arguments which, inevitably, are advanced in a steel debate. Suffice it to say that I deplore the way in which, over the last 20 years or so, this vital industry has been regarded by right hon. and hon. Members opposite as a sort of political football. But let us accept, at least—I think that this will be one point on which there can be unanimity in the House—that the position of the steel industry in the British economy is one of dominance. It is vital that the industry should be both efficient and competitive, but there is grave doubt that it is either.
No one will claim that, in the pre-nationalisation days of the mid-1960s, the steel industry was the acme of efficiency, but what can be fairly claimed is that the great forecasts made of what would happen when the British Steel Corporation got into its stride have thus far not been supported.
As recently as last Saturday night, I had occasion to talk to one of our main building contractors in Belfast who was expressing anxiety to me about the supply of reinforcing bars which are used a great deal in building construction. The point he made—I find it alarming—is tint until recently it was possible to place one's orders for steel on a month-tomonth basis, but now, apparently, ordering is required on a quarterly basis. For someone who may not be in a very large way of business, having to anticipate one's needs a quarter in advance will make life much more difficult, and this difficulty will be felt by many users of steel apart from the giants. Moreover, in the construction industry one does not often have all that much notice of an order which has to be completed in, perhaps, a fairly short time. Therefore, apart from the fact that costs seem to be going up alarmingly, the new ordering requirement calling for anticipation of

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needs much further ahead on a quarterly procedure rather than monthly will make the running of business that much more difficult.
It is distressing that, although one acknowledges that the cost of steel in this country is a great deal lower than that of our competitors overseas, one tends to hear more about the putting up of the price of steel than of making savings in costs. In its report in the middle of last year, the National Board for Prices and Incomes said that it expected cost savings from the British Steel Corporation. It is, perhaps, a little too early yet to condemn the Corporation on this point; we will be able to tell whether it has made any cost reductions when we see the state of its accounts which are to be published within the next few days.
There has been comment more than once in the debate on the Corporation's production plans over the next five years. My understanding from the Paymaster-General was that it plans to increase production by 6 per cent. annually over each of the next five years. I grant that at present the increase in production is about 2 per cent. to 3 per cent. Even leaving out of account the Japanese, whose progress in the manufacture of steel has been fantastic, our E.E.C. competitors are and have been averaging an increase in production of about 8 per cent. So, even if we achieve 6 per cent. over each of the next five years, presumably we will still be substantially behind our continental competitors.
When steel is being discussed the mind of any Belfast Member inevitably turns to shipbuilding. The way in which shipyards are having to tender cut-throat prices for such work as may be available is atrocious. In a period as short as seven months there have been as many as three increases in the price of steel. Although I acknowledge that steel does not represent the bulk of the cost of ship, already it costs the British shipbuilder of an ordinary medium-sized bulk tanker £20,000 more for his steel than his Japanese rival. In these days of intensive competition, £20,000 could be sufficient to win an order away from a British shipyard. The shipbuilding industry is at the mercy of the British Steel Corporation and its fixing of prices.
152
Harland and Wolff has taken orders for delivery in 1971 and 1972, and already there have been three increases in the last seven months in the price of the steel which will be used to fulfil the orders. Who knows how many more increases there will be in the intervening period before completion of these orders?
One particularly distressing facet is the fact that brand names or trade names will disappear. I do not know what the position is for the industry as a whole. I can speak only of the shipyard in Belfast, of which I have some knowledge and which for many years has had a special link with Colvilles. It means something to an organisation to have a link with an organisation in a trade which is vital to it. Now the separate names and entities will disappear and, with them, the goodwill that has been built up over many years.
This is a matter of the profoundest regret. It is impersonal to deal with a vast entity like the Corporation when for years there has been a homely and mutually satisfactory relationship with a specific member of the steel industry.
The pattern is that customers face spiralling increases in prices, delivery dates are lengthening, and we now have the absurd situation of rationing of certain vital types of steel.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: Order. I remind the House that the Front Bench is intervening at half-past nine.
9.28 p.m.
Mr. Eddie Griffiths: From listening to the right hon. Member for Leeds, North-East (Sir K. Joseph) one could get the impression that it is new for there to be a sellers' market with customers having to wait for steel. Before the steel nationalisation Bill was passed, I spent fifteen years in a steel plant. From my experience there I could give the right hon. Gentleman chapter and verse of how people used to order 500 tons of steel and how they were told, regretfully, that they might be offered 100 tons of it six months hence. The right hon. Gentleman grossly misleads the House by saying that it is only now that there are these waiting lists, because there is a terrible shortage of good quality steel throughout the world.

153
In the very short time available to me I do not want to harp back on the difficulties of the past twelve months. I do not condone any one of the strikes which have hampered the industry and resulted in the loss of production of 750,000 tons of ingot steel.
The obverse side of the coin is that many steel plants struck an all time record in 1969. Ebbw Vale, about whose future there has always been a cloud, broke no fewer than 13 records in 1969. Records were broken in the Midland group at Scunthorpe and at Steel, Peech and Tozer. Do the Government and the Corporation have a policy on scrap for the 1970s? As we push up production, there is no point in importing it. We have had difficulties, especially in the special steels division. Would the Minister address his mind to a nickel policy for the industry?
9.30 p.m.
Sir John Eden: I am sure that every hon. Member agrees that the steel industry occupies a position of immense importance to our economy, that we are all dependent on it and, therefore, to an even greater extent, on its success. I begin, although it is unnecessary for me to do so, by underlining what my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, that it is our hope and our earnest desire that, whatever may come the industry's way in future, it will earn ever greater profits and be even more successful at meeting the customer's needs.
It was unfortunate that the Paymaster-General treated the debate so flippantly. He did not seem to recognise just how serious is the position which confronts not only the industry but all of us as taxpayers. My hon. Friend the Member for New Forest (Mr. Patrick McNair-Wilson) was quite right to remind the House that we are husbanding public money here. That is the aspect which has caused us great concern.
One of the ways in which the Steel Corporation will be able to show a better return on the capital invested in it is by more realistic pricing policies. I agree with the right hon. Member for Greenwich (Mr. Marsh), but there seems to be a divergence between his views and
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those of the Paymaster-General—[Interruption.] Yes, the right hon. Gentleman has now raised the prices twice, but what he claimed credit for earlier was that, under some self-denying ordinance apparently, the Corporation had kept its prices artificially low. But, as he knows, steel prices have been too low for too long, which is one reason why the Corporation has been in difficulties.
I hope that the Minister will make some reference to the out-turn for the year ending September, 1969. We have had little information about this, but it is common knowledge that the Corporation, which had expected a profit of about £20 million to £30 million in 1969, has now had to return a loss of about £22 million. One does not know the exact figure, but I understand the Annual Report and Accounts are to be published shortly. No doubt we shall then be able to discuss them in greater detail.
But the fact remains that, in the short time it has been publicly owned, a number of forecasts have been made by the industry, and claims have been made for it by Ministers, which have not been achieved in practice. Perhaps this is partly due to the uncertainty which the board faced after the original White Paper on Steel Nationalisation. This was produced in April, 1965, and it had this to say about the Corporation's pricing policies in paragraph 12:
"In the Government's view, these monopoly characteristics "—
a reference to what went on in the then private sector—
"in this basic industry point to the need for public ownership under which price policy would be determined and prices fixed with regard only to the public interest."
That is an extraordinary statement. Right hon. and hon. Gentlemen opposite had better try to get the matter clear, and decide once and for all what is to be the Corporation's pricing policy.
The Corporation, like every other sector of British industry, has had to endure considerably increased costs in many areas including increased wages and substantial increases in its fuel costs. Fuel accounts for 22 per cent. of its overall costs. Prices of coking coal, which accounts for two-thirds of steel's total fuel intake, have risen.
What we complain about is the delay which there has been in adjusting prices,

155
and the uncertainty which seems to have surrounded it. First, the Corporation submitted a comparatively small price increase—5·6 per cent.—to yield £40 million in a full year. This was granted early in 1969. The original claim had been subject to an abatement by direct Government policy of 1¾ per cent.; it was Government policy which held that back. The Government then demanded, in conjunction with the Prices and Incomes Board, that there should be some attempt to get greater savings from improved efficiency, and I understand that this has been done. Curiously enough, the figure is exactly comparable to that which was advocated by the Prices and Incomes Board. I cannot help feeling a bit suspicious about the coincidence of those two figures. If, as a result of the recommendations of the P.I.B. on the original price increase claim, the Corporation has been able to find those savings through greater efficiency, I wonder what would have happened had the latest increases been referred to the board, though I am glad that it was not.
This spells a complete change of Government policy, which has not gone unnoticed. It has not gone unnoticed in the rest of industry. Many sectors of industry would dearly like to be able to put up their prices to counter the increased costs they have suffered as a result of Government policy, but it is apparently Government policy to try to prevent their doing so. Here is one law for the public sector and another for private enterprise. If the Government are in favour of industries trading at a profit and covering costs which Government policies have imposed on them, let them say so. Let them spell this out clearly and ensure that it covers the whole range of British industry, and not just the privileged public sector.
My hon. Friends raised a number of important points, particularly in a characteristically moderate speech by my hon. Friend the Member for Yeovil (Mr. Peyton), who referred to the conditions of sale. I hope that after the debate the right hon. Gentleman will go over the ground we have covered and have a close look at the conditions of sale and the policy—no so much the policy as the attitude of mind—which caused the Corporation to try to impose them. There
156
is much here which is cause for concern to all of us who believe it right that even those in the public sector must be extremely sensitive in their handling of their customers and have regard to those dependent on them, particularly when they are a monopoly.
The right hon. Gentleman thought to taunt us because we said that we expected better results after 2½ years of nationalisation. He made great play with this in a very entertaining and flippant speech. I agree that 2½ years is not a long time.
It was not we who were expecting a great deal as a result of nationalisation. It was hon. Members opposite; it was Labour Ministers; it was the right hon. Gentleman himself; and it was the British Steel Corporation. All of them, in speech after speech and in publication after publication, made great claims for nationalisation, as though the mere act of nationalisation would transform the situation overnight and bring about many of the conditions which all of us would regard as wholly desirable.
Mr. Lawson: Rubbish.
Sir J. Eden: It is not rubbish. This was the reason for nationalisation and it is contained in the White Paper which I have here. These were the great claims made in the Second Reading debate and these were the claims made in publication after publication by the British Steel Corporation itself. It was claimed that as a result of nationalisation there would be enough capital to meet the needs of the industry, that prices would be kept down, that the export position would be improved, that labour relations would be enhanced. All these and other claims were made by the Government in order to excuse the folly of the act of nationalisation.
What, in fact, has happened?
Mr. Marsh Mr. Marsh rose——
Sir J. Eden: No. I cannot give way.
Hon. Members: Give way.
Sir J. Eden: The most remarkable series of claims made on behalf of the industry——
Hon. Members: Give way.
Mr. Speaker: Order.
Sir J. Eden: I apologise for not giving way, but I have an extremely short time to cover the ground. Of course, if the right hon. Gentleman promises to be quick I will give way.
Mr. Marsh: Would the hon. Gentleman answer the question I asked his right hon. Friend? Does his party intend to denationalise the steel industry?
Sir J. Eden: The right hon. Gentleman has already had a very satisfactory answer from my right hon. Friend, so I need not waste further time on that.
As I was saying, a great number of claims were made on behalf of the industry and about what would be the effects of nationalisation. What in fact has happened? Let us just recapitulate what has taken place. We have had three reports on organisation. We have had three price increases. We have had a whole series of most unfortunate and costly industrial disputes. We have had a reduction in exports. We have had an increase in imports. We have not had the capital expenditure which the needs of the industry warranted, and we have had £700 million worth of commencing capital debt converted into public dividend capital and, as my right hon. Friend said, no dividend.
In addition to that we have had adverse effects on morale, particularly at middle management level. In this connection I hope that the hon. Gentleman the Joint Parliamentary Secretary will answer the points raised by my hon. Friend the Member for Aylesbury (Sir S. Summers) and others about the dual loyalty which is to be required of individuals throughout the industry. We have not had the progress with rationalisation that we were led to believe would be forthcoming. After all this great and costly effort we are still only at the beginning of the process of rationalisation.
In fact, we have made very little or no more progress than that which was announced in the series of plans brought forward in the Benson Report to which the right hon. Member for Kettering (Sir G. de Freitas) referred. The Benson Report advocated the rationalisation of plant at three or four major integrated works, and although there are slight differences, which I accept, between the exact locations, broadly speaking this is exactly the
158
same as now advocated by the British Steel Corporation. Benson stressed the need for a reduction of manpower of 100,000 by 1975, broadly in line with what is now proposed. Benson envisaged the need to expend some £170 million a year on investment—the amount actually forecast by the chairmen of the companies concerned. This compares with the figure of £180 million forecast by the right hon. Gentleman and the Corporation. No difference. All this time, after two and a half years of costly expenditure and wasteful expenditure we have got no further.
Mr. Lawson Mr. Lawson rose——
Mr. Speaker: Order.
Sir J. Eden: We are absolutely no further than had been proposed before nationalization——
Mr. Lawson: On a point of order. Everyone agrees that this is a very serious subject, but may I ask you, Mr. Speaker, how it is that we are allowed only three hours to discuss the subject?
Mr. Speaker: That is not a point of order for Mr. Speaker.
Sir J. Eden: In the circumstances as I have described them, it was less than generous of Dr. Finniston, when he was asked if he did not agree that his thinking was somewhat similar to that outlined in the Benson Report, to describe that document as "superficially correct". It was spot on. The tragedy is that the responsibility for making this industry a political football is on the Government.
The right hon. Member for Greenwich boasted that this was the biggest merger of all time. He will know that any merger generates enormous problems. This one is certainly not without them, because of its size and complexity, and the Government have imposed an almost impossible task on the people they have put in to run the industry. Added to this are the additional problems of nationalisation, the result of which has been to bring the Minister and his Department into checking and double-checking virtually everything brought forward by those in whom they have put their confidence and trust to run the industry. This imposes delays and leads to frustration and the sapping of the enterprise of men and management.

159
This act of renationalisation has retarded the progress of the industry and reduced the service to the public, and it is for that that we censure the Government tonight.
9.46 p.m.
The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams): I have been left with rather little time to wind up the debate. The hon. Member for Bournemouth, West (Sir J. Eden) and I agreed that we would limit our time so as to enable as many back benchers with constituency interests as possible to take part. In view of the shortage of time, I hope hon. Gentlemen will excuse me if I do not cover every single point raised. I will do the best I can in the time to cover the main points.
It is not enough for the Opposition to show that problems exist. Of course problems exist. What industry in this country or abroad, be it private or publicly owned, does not have problems of some sort? What the Opposition must show in relation to the Motion is that the problems would not have existed if the industry had remained in private hands, or that they have been worsened by nationalisation, not just by an unforeseen change in world circumstances but by the act of nationalisation. So far, no one has attempted to address himself to the Motion. There have been many criticisms on the production and supply front, yet no one had denied that, when the British Steel Corporation took over, the industry had inherited inadequate previous investment. It took over in the trough of a cycle. No one has attempted to deny that in the time available the industry could not have hoped to remedy the inadequacies of investment for all the previous years.
Yet, again this background, having taken over in a loss environment, having taken over with inadequate investment, the Corporation found itself faced with an unforeseen and, as I think most people would agree, an unpredictable upsurge in the world demand for steel. This was unforeseen by the previous owners, and unforeseen, I will accept, by the nationalised industry. [Interruption.] The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is showing the same capacity for irrelevancy as most
160
of his colleagues who have spoken this evening. As world prices rose, previous importers switched to domestic supplies. Not just Britain but many other countries have been faced with tight supply conditions.
We recognise that there has been an unfortunate labour record this year [HON. MEMBERS: "Oh."] It is a record none of us likes. The hon. Member for Yeovil (Mr. Peyton) and others referred to the unfortunate events at Port Talbot and described it as an indictment of nationalisation that we should have lost so much time and output there. They both forget the fact that although during the summer at that particular works there was an unfortunate loss of 220,000 working days, in 1963 when the works were in private hands the loss was not 220,000, but 310,000 working days. Indeed, only the abnormalities of the labour situation, plus the unfortunate minor technical difficulties, have frustrated the highest output ever. We shall still come very near to the highest output ever during this year.
Despite this fact, the Steel Corporation and indeed the private sector showed their concern for the domestic consumer. While crude steel output rose by only half a million tons during this year, home delivery rose by 750,000 tons and the B.S.C. increased its home deliveries by over 2 million tons during this year as compared with the previous year. It did so by itself assuming a considerable sense of priority in the national advantage. Faced by potential domestic shortages, the Steel Corporation diverted its own potential exports from the premium high-earning market to the higher-valued manufacturing exporters of this country. It diverted them to those areas which were in the short-term yield of higher return to the economy through exports.
It went further, and this again is a remarkable demonstration of concern for the national interest. Where there were inadequate semi-finished products it finished them itself and so reduced the gross value of imports which otherwise would have been brought into the country. In both these ways, despite the fact that it was injurious to its own financial position, it showed great regard for the national interest and the national import/export position. This year the net balance of trade surplus on steel was £125 million.

161
Some hon. Gentlemen opposite including the hon. Member for New Forest (Mr. Patrick McNair-Wilson) and the hon. Member for Belfast, South (Mr. Pounder) referred to reinforcing steel. This is an area in which the political prejudice of hon. Gentlemen opposite is shown at its clearest. In fact, although British demand for reinforcing steel has hardly increased over the last three years, there has not been much of a fall. Imports this year fell by 32 per cent. This meant that the people who previously had been buying that steel abroad switched to the domestic suppliers.
Faced with this situation, the B.S.C. increased its production during the year by between 45 and 50 per cent. That was a remarkable increase. Hon. Gentlemen opposite do not want to give credit for it. But the Cement and Concrete Association, which is directly interested, gave credit for it. A report prepared for the association by Economic Consultants Limited looked at the problem of supplies of reinforcing steels and in paragraph 44 said that the B.S.C. had increased its production of steel for reinforcement by 45 per cent. in the past year, which was a considerable achievement. But the B.S.C. gets no credit from the party opposite.
I am at a loss to understand how the consumers can criticise the actions of the Steel Corporation in this respect if they wish, as apparently they do, to remain contractually fancy-free. If they wish to show a preference for the foreign product, then they cannot complain if, when they unpredictably undertake financial flirtations with the British steel industry, their hoped-for favours are not reciprocated. The main responsibility of the industry must be to its long-term customers.
There has been criticism by the right hon. Member for Leeds, North-East that deliveries have lengthened. Of course they have. In a situation of world shortage we would not have expected anything else. They have not lengthened just in this country, but also abroad. In December in the export market there was normally on reinforcement steel a delivery date of two, and more generally three, months and that at a price of 50 per cent. above the United Kingdom price levels. So far, despite the shortages of which hon.
162
Members opposite have spoken, we have found no evidence of delays on major construction work.
The right hon. Gentleman asked specifically about rationalisation measures which have been introduced since the Corporation took over. He implied that there has been no progress in this sphere of labour productivity. In fact in the year 1968–69 the B.S.C. gave notices of closure or rationalisation to 30 different works affecting about 12,000 jobs. By 1975 the Corporation expects to reduce manpower by a net 28,000 jobs. In addition, productivity deals should save another 20,000, which would give a total of 50,000 jobs saved.
Some of my hon. Friends may say, is this contraction in manpower desirable? If the industry is to be competitive and to match the overseas competition which it meets in times of world surplus capacity, which is what the industry normally faces, it has to put itself on a viable basis. The Corporation is also stepping up its positive rôle of new investment. The right hon. Gentleman criticised the level of investment since the Corporation took over. I shall give a few examples of its record. This current year the Corporation's investment programme is for £105 million. For the five-year programme 1969–74, it will be up to £900 million. This annual rate of well over £150 million compares with £94 million a year in the five years preceding nationalisation.
Sir K. Joseph: It was double that in the five last Tory years.
Mr. Williams: The right hon. Gentleman should look at the record. This is an unprecedented level of investment. This Motion could have been tabled only by hon. Members with no understanding of the national or international problems of the industry. It could have been tabled only by a party which at Selsdon Park chose to fight the General Election on increasing food prices and increasing house rents, a party which does not understand the industry. The Motion deserves to be heavily defeated.
Question put,
That this House deplores the consequences of the nationalisation of steel by Her Majesty's Government, which has retarded the progress

163
of the industry and reduced the service to the public.
The House divided: Ayes 238, Noes 301.

Division No. 65.]

AYES

[10.0 p.m.

Alison, Michael (Barkston Ash)

Glover, Sir Douglas

Montgomery, Fergus

Allason, James (Hemel Hempstead)

Goodhart, Philip

Morgan, Geraint (Denbigh)

Amery, Rt. Hn. Julian

Goodhew, Victor

Morgan-Giles, Rear-Adm.

Archer, Jeffrey (Louth)

Gower, Raymond

Morrison, Charles (Devizes)

Astor, John

Grant, Anthony

Mott-Radclyffe, Sir Charles

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

Grant-Ferris, Sir Robert

Munro-Lucas-Tooth, Sir Hugh

Awdry, Daniel

Grieve, Percy

Murton, Oscar

Baker, Kenneth (Acton)

Griffiths, Eldon (Bury St. Edmunds)

Nabarro, Sir Gerald

Baker, W. H. K. (Banff)

Gurden, Harold

Nicholls, Sir Harmar

Balniel, Lord

Hall, John (Wycombe)

Noble, Rt. Hn. Michael

Barber, Rt. Hn. Anthony

Hall-Davis, A. G. F.

Onslow, Cranley

Bennett, Sir Frederic (Torquay)

Hamilton, Lord (Fermanagh)

Orr, Capt. L. P. S.

Bennett, Dr. Reginald (Gos. & Fhm)

Hamilton, Michael (Salisbury)

Osborn, John (Hallam)

Berry, Hn. Anthony

Harris, Frederic (Croydon, N.W.)

Page, Graham (Crosby)

Biffen, John

Harris, Reader (Heston)

Page, John (Harrow, W.)

Biggs-Davison, John

Harrison, Brian (Maldon)

Pearson, Sir Frank (Clitheroe)

Birch, Rt. Hn. Nigel

Harrison, Col. Sir Harwood (Eye)

Peel, John

Black, Sir Cyril

Harvey, Sir Arthur Vere

Percival, Ian

Blaker, Peter

Hastings, Stephen

Peyton, John

Boardman, Tom (Leicester, S.W.)

Hawkins, Paul

Pike, Miss Mervyn

Body, Richard

Hay, John

Pink, R. Bonner

Bossom, Sir Clive

Heald, Rt. Hon. Sir Lionel

Pounder, Rafton

Boyd-Carpenter, Rt. Hn. John

Heath, Rt. Hn. Edward

Powell, Rt. Hn. J. Enoch

Boyle, Rt. Hn. Sir Edward

Heseltine, Michael

Price, David (Eastleigh)

Braine, Bernard

Higgins, Terence L.

Prior, J. M. L.

Brewis, John

Hiley, Joseph

Pym, Francis

Brinton, Sir Tatton

Hill, J. E. B.

Ouennell, Miss J. M.

Bromley-Davenport,Lt.-Col.Sir Walter

Hogg, Rt. Hn. Quintin

Ramsden, Rt. Hn. James

Brown, Sir Edward (Bath)

Holland, Philip

Rawlinson, Rt. Hn, Sir Peter

Bruce-Gardyne, J.

Hooson, Emlyn

Rees-Davies, W. R.

Bryan, Paul

Hordern, Peter

Renton, Rt. Hn. Sir David

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

Hornby, Richard

Rhys Williams, Sir Brandon

Buck, Antony (Colchester)

Hunt, John

Ridley, Hn. Nicholas

Bullus, Sir Eric

Hutchison, Michael Clark

Ridsdale, Julian

Burden, F. A.

Iremonger, T. L.

Robson Brown, Sir William

Campbell, B. (Oldham, W.)

Irvine, Bryant Godman (Rye)

Rodgers, Sir John (Sevenoaks)

Campbell, Gordon (Moray & Nairn)

Jennings, J. C. (Burton)

Rossi, Hugh (Hornsey)

Carlisle, Mark

Jones, Arthur (Northants, S.)

Royle, Anthony

Carr, Rt. Hn. Robert

Jopling, Michael

Russell, Sir Ronald

St. John-Stevas, Norman

Cary, Sir Robert

Joseph, Rt. Hn. Sir Keith

Sandys, Rt. Hn. D.

Chataway, Christopher

Kaberry, Sir Donald

Scott, Nicholas

Chichester-Clark, R.

Kerby, Capt. Henry

Scott-Hopkins, James

Clark, Henry

Kershaw, Anthony

Sharples, Richard

Clegg, Walter

Kirk, Peter

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

Cooke, Robert

Kitson, Timothy

Silvester, Frederick

Cooper-Key, Sir Neill

Knight, Mrs. Jill

Sinclair, Sir George

Corfield, F. V.

Lancaster, Col. C. G.

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

Costain, A. p.

Lane, David

Smith, John (London & W'minster)

Craddock, Sir Beresford (Spelthorne)

Langford-Holt, Sir John

Speed, Keith

Crouch, David

Lawler, Wallace

Steel, David (Roxburgh)

Crowder, F. P.

Legge-Bourke, Sir Harry

Stodart, Anthony

Cunningham, Sir Knox

Lewis, Kenneth (Rutland)

Stoddart-Scott, Col. Sir M.

Currie, G. B. H.

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

Summers, Sir Spencer

Dalkeith, Earl of

Lloyd, Ian (P'tsm'th, Langstone)

Tapsell, Peter

Dance, James

Lloyd, Rt. Hn. Selwyn (Wirral)

Taylor, Sir Charles (Eastbourne)

Dean, Paul

Longden, Gilbert

Taylor, Frank (Moss Side)

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

Lubbock, Eric

Temple, John M.

Digby, Simon Wingfield

McAdden, Sir Stephen

Thorpe, Rt. Hn. Jeremy

Dodds-Parker, Douglas

MacArthur, Ian

Tilney, John

Doughty, Charles

Maclean, Sir Fitzroy

Turton, Rt. Hn. R. H.

Drayson, G. B.

McMaster, Stanley

van Straubenzee, W. R.

du Cann, Rt. Hn. Edward

Macmillan, Maurice (Farnham)

Vaughan-Morgan, Rt. Hn. Sir John

Eden, Sir John

McNair-Wilson, Michael

Vickers, Dame Joan

Elliot, Capt. Walter (Carshalton)

McNair-Wilson, Patrick (New Forest)

Waddington, David

Emery, Peter

Maddan, Martin

Wainwright, Edwin (Dearne Valley)

Errington, Sir Eric

Maginnis, John E.

Walker-Smith, Rt. Hn. Sir Derek

Eyre, Reginald

Marples, Rt. Hn. Ernest

Wall, Patrick

Farr, John

Marten, Neil

Walters, Dennis

Fisher, Nigel

Maude, Angus

Ward, Christopher (Swindon)

Fletcher-Cooke, Charles

Maudling, Rt. Hn. Reginald

Ward, Dame Irene

Forteseue, Tim

Mawby, Ray

Weatherill, Bernard

Foster, Sir John

Maxwell Hyslop, R. J.

Wells, John (Maidstone)

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

Mills, Peter (Torrington)

Whitelaw, Rt. Hn. William

Fry, Peter

Mills, Stratton (Belfast, N.)

Wiggin, A. w.

Galbraith, Hn. T. G.

Miscampbell, Norman

Williams, Donald (Dudley)

Gibson-Watt, David

Mitchell, David (Basingstoke)

Wilson, Ceoffrey (Truro)

Gilmour, Sir John (Fife, E.)

Monro, Hector

Winstanley, Dr. M. P.

Wolrige-Gordon, Patrick

Worsley, Marcus

TELLERS FOR THE AYES:

Wood, Rt. Hn. Richard

Wright, Esmond

Mr. R. W. Elliott and

Woodnutt, Mark

Wylie, N. R.

Mr. Jasper More.

NOES

Abse, Leo

Edwards, Robert (Bilston)

Latham, Arthur

Albu, Austen

Edwards, William (Merioneth)

Lawson, George

Alldritt, Walter

Ellis, John

Leadbitter, Ted

Allen, Scholefield

English, Michael

Lee, Rt. Hn. Frederick (Newton)

Archer, Peter (R'wley Regis & Tipt'n)

Ennals, David

Lee, Rt. Hn. Jennie (Cannock)

Armstrong, Ernest

Evans, Fred (Caerphilly)

Lee, John (Reading)

Ashley, Jack

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

Lestor, Miss Joan

Ashton, Joe (Bassetlaw)

Faulds, Andrew

Lever, Rt. Hn. Harold (Cheetham)

Atkins, Ronald (Preston, N.)

Fernyhough, E.

Lewis, Arthur (W. Ham, N.)

Atkinson, Norman (Tottenham)

Finch, Harold

Lewis, Ron (Carlisle)

Bacon, Rt. Hn. Alice

Fitch, Alan (Wigan)

Lipton, Marcus

Bagier, Gordon A. T.

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

Lomas, Kenneth

Barnes, Michael

Fletcher, Raymond (Ilkeston)

Loughlin, Charles

Barnett, Joel

Fletcher, Ted (Darlington)

Luard, Evan

Baxter, William

Foley, Maurice

Lyon, Alexander W. (York)

Beaney, Alan

Foot, Rt. Hn. Sir Dingle (Ipswich)

Mabon, Dr. J. Dickson

Bence, Cyril

Foot, Michael (Ebbw Vale)

McBride, Neil

Benn, Rt. Hn. Anthony Wedgwood

Ford, Ben

McCann, John

Bennett, James (G'gow, Bridgeton)

Forrester, John

MacColl, James

Bidwell, Sydney

Fraser, John (Norwood)

MacDermot, Niall

Binns, John

Freeson, Reginald

Macdonald, A. H.

Bishop, E. S.

Galpern, Sir Myer

McElhone, Frank

Blackburn, F.

Gardner, Tony

McGuire, Michael

Blenkinsop, Arthur

Garrett, W. E.

McKay, Mrs. Margaret

Boardman, H. (Leigh)

Ginsburg, David

Mackie, John

Booth, Albert

Golding, John

Mackintosh, John P.

Boston, Terence

Cordon Walker, Rt. Hn. P. C.

MacMilian, Malcolm (Western Isles)

Bottomley, Rt. Hn. Arthur

Gray, Dr. Hugh (Yarmouth)

McMillan, Tom (Glasgow, C.)

Boyden, James

Greenwood, Rt. Hn. Anthony

McNamara, J. Kevin

Bradley, Tom

Gregory, Arnold

MacPherson, Malcolm

Bray, Dr. Jeremy

Grey, Charles (Durham)

Mahon, Peter (Preston, S.)

Brooks, Edwin

Griffiths, Eddie (Brightside)

Mahon, Simon (Bootle)

Broughton, Sir Alfred

Griffiths, Will (Exchange)

Mallalieu, E. L. (Brigg)

Brown, Rt. Hn. George (Belper)

Gunter, Rt. Hn. R. J.

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

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

Hamilton, James (Bothwell)

Manuel, Archie

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

Hamilton, William (Fife, W.)

Mapp, Charles

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

Hamling, William

Mark, Kenneth

Buchan, Norman

Hannan, William

Marquand, David

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

Harper, Joseph

Marsh, Rt. Hn Richard

Butler, Herbert (Hackney, C.)

Harrison, Walter (Wakefield)

Mason, Rt. Hn. Roy

Butler, Mrs. Joyce (Wood Green)

Hart, Rt. Hn. Judith

Maxwell, Robert

Callaghan, Rt. Hn. James

Haseldine, Norman

Mayhew, Christopher

Cant, R. B.

Hattersley, Roy

Mellish, Rt. Hn. Robert

Carmichael, Neil

Hazell, Bert

Mendelson, John

Carter-Jones, Lewis

Healey, Rt. Hn, Denis

Mikardo, Ian

Castle, Rt. Hn. Barbara

Heffer, Eric S.

Millan, Bruce

Chapman, Donald

Henig, Stanley

Miller, Dr. M. S.

Coe, Denis

Herbison, Rt. Hn. Margaret

Milne, Edward (Blyth)

Coleman, Donald

Hilton, W. S.

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

Concannon, J. D.

Hooley, Frank

Morgan, Elystan (Cardiganshire)

Conlan, Bernard

Horner, John

Morris, Alfred (Wythenshawe)

Corbet, Mrs. Freda

Houghton, Rt. Hn. Douglas

Morris, Charles R. (Openshaw)

Crawshaw, Richard

Howell, Denis (Small Heath)

Morris, John (Aberavon)

Cronin, John

Howie, W.

Moyle, Roland

Crosland, Rt. Hn. Anthony

Hoy, Rt. Hn. James

Mulley, Rt. Hn. Frederick

Crossman, Rt. Hn. Richard

Huckfield, Leslie

Murray, Albert

Darling, Rt. Hn. George

Hughes, Roy (Newport)

Neal, Harold

Davidson, Arthur (Accrington)

Hunter, Adam

Newens, Stan

Davies, E. Hudson (Conway)

Hynd, John

Norwood, Christopher

Davies, G. Elfed (Rhondda, E.)

Irvine, Rt. Hn. Sir Arthur

Oakes, Gordon

Davies, Dr. Ernest (Stretford)

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

Ogden, Eric

Davies, Rt. Hn. Harold (Leek)

Jackson, Peter M. (High Peak)

O'Halloran, Michael

Davies, Ifor (Cower)

Janner, Sir Barnett

C'Malley, Brian

Davies, S. O. (Merthyr)

Jay, Rt. Hn. Douglas

Oram, Bert

He Freitas, Rt. Hn. Sir Geoffrey

Jeger, George (Goole)

Orbach, Maurice

Delargy, Hugh

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

Oswald, Thomas

Dell, Rt. Hn. Edmund

Jenkins, Hugh (Putney)

Padley, Walter

Dempsey, James

Johnson, Carol (Lewisham, S.)

Page, Derek (King's Lynn)

Dewar, Donald

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

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

Diamond, Rt. Hn. John

Jones, Dan (Burnley)

Paget, R. T.

Dickens, James

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

Panned, Rt. Hn. Charles

Doig, Peter

Jones, J. Idwal (Wrexham)

Park, Trevor

Driberg, Tom

Jones, T. Alec (Rhondda, West)

Parker, John (Dagenham)

Dunn, James A.

Kelley, Richard

Parkyn, Brian (Bedford)

Dunnett, Jack

Kenyon, Clifford

Pearson, Arthur (Pontypridd)

Dunwoody, Mrs. Gwyneth (Exeter)

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

Peart, Rt. Hn. Fred

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

Kerr, Russell (Feltham)

Pentland, Norman

166

167

Perry, George H. (Nottingham, S.)

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

Watkins, David (Consett)

Prentice, Rt. Hn. Reg

Short, Mrs. Renée(W'hampton,N.E.)

Weitzman, David

Price, Christopher (Perry Barr)

Silkin, Rt. Hn. John (Deptford)

Wellbeloved, James

Price, Thomas (Westhoughton)

Silkin, Hn. S. C. (Dulwich)

Wells, William (Walsall, N.)

Price, William (Rugby)

Silverman, Julius

Whitaker, Ben

Probert, Arthur

Skeffington, Arthur

White, Mrs. Eirene

Rankin, John

Slater, Joseph

Whitlock, William

Rees, Merlyn

Small, William

Wilkins, W. A.

Rhodes, Geoffrey

Snow, Julian

Willey, Rt. Hn. Frederick

Richard, Ivor

Spriggs Leslie

Williams, Alan (Swansea, W.)

Roberts, Albert (Normanton)

Steele, Thomas (Dunbartonshire,W.)

Williams, Alan Lee (Hornchurch)

Roberts, Rt. Hn. Goronwy

Stewart, Rt. Hn. Michael

Williams, Clifford (Abertillery)

Roberts, Gwilym (Bedfordshire, S.)

Stonehouse, Rt. Hn. John

Williams, W. T. (Warrington)

Robertson, John (Paisley)

Strauss, Rt. Hn. G. R.

Willis, Rt. Hn. George

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

Summerskill, Hn. Dr. Shirley

Wilson, Rt. Hn. Harold (Huyton)

Rodgers, William (Stockton)

Taverne, Dick

Wilson, William (Coventry, S.)

Roebuck, Roy

Thomas, Rt. Hn. George

Winnick, David

Rogers, George (Kensington, N.)

Thomson, Rt. Hn. George

Woodburn, Rt. Hn. A.

Ross, Rt. Hn, William

Thornton, Ernest

Woof, Robert

Rowlands, E.

Tomney, Frank

Wyatt, Woodrow

Ryan, John

Tuck, Raphael

Shaw, Arnold (Ilford, S.)

Urwin, T. W.

TELLERS FOR THE NOES:

Sheldon, Robert

Wainwright, Edwin (Dearne Valley)

Mr. Ernest G. Perry and

Shinwell, Rt. Hn. E.

Walker, Harold (Doncaster)

Mr. R. F. H. Dobson.

Shore, Rt. Hn. Peter (Stepney)

Wallace, George

BEAUCETTE QUARRY, GUERNSEY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boston.]
10.11 p.m.
Mr. Roy Roebuck: I welcome the opportunity to raise on the Motion for the Adjournment tonight the subject of the blasting of Beaucette Quarry by the Army. I am glad to see that my hon. Friend the Under-Secretary of State for Defence for the Army is here to assist the House in this matter.
Beaucette Quarry is in Guernsey. Men of the Royal Engineers blasted rocks there to facilitate the construction of a yachting marina for a private enterprise company, Vale Investments Ltd. Work costing at least £32,910 has been done for the company, of which the taxpayers have recovered only £3,300. There is a strong presumption, which I hope my hon. Friend will be able to rebut, that the Army has been used as cheap—indeed, free—labour by a private enterprise company to construct a haven for rich men's yachts.
Mr. Robert Cooke Mr. Robert Cooke (Bristol, West) rose——
Mr. Roebuck: I cannot give way.
Mr. Cooke Mr. Cooke rose——
Mr. Speaker: Order. If the hon. Member does not give way, he does not give way.
Mr. Roebuck: Two principal——
Mr. Cooke Mr. Cooke rose——
Mr. Speaker: Order. The hon. Member for Bristol, West (Mr. Robert Cooke) must contain himself.
Mr. Roebuck: Two principal matters arise out of this operation on which I seek further assurance. First, was this appropriate work for the Army? Secondly, was it carried out efficiently.
Was this appropriate work for the Army? The House will recall that in 1968 the Ministry of Defence published a pamphlet for the guidance of civil authorities and organisations called "Military Aid to the Civil Community." This drew attention to the large number of ways in which the Services could help
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the civil community other than those given in the case of emergencies such as floods, the sinking of the "Torrey Canyon ", when oil threatened to spoil the coast, and the high winds that destroyed homes in Glasgow.
In the foreword to that pamphlet, my right hon. Friend the Secretary of State for Defence said:
"…there are many areas where the training requirements and skills of a military unit can be harnessed to do a particular task which the community as a whole would like undertaken. I am sure that there will be many such instances where the Services, by co-operation with civil organisations, will be able to help not only the local community, but also the country as a whole."
That foreword is dated December, 1968. It is true that the arrangements for the blasting of Beaucette Quarry were made before it was written, but this need not affect our consideration of the matter, because on page 1 the pamphlet says:
"The aim of this publication is not to change the administrative arrangements which have worked very well in the past, but to draw together in one pamphlet all the various aspects of service assistance to the community to show what the Services may be able to do, and to indicate how aid can be sought."
It is clear, therefore that the principles laid down in the pamphlet are of long standing and must have been applicable when the Ministry of Defence agreed to undertake this task. The pamphlet refers to the help the services are qualified to give to the civil authorities, the point undoubtedly being that as the civil community maintains the Services by taxation it is entitled to receive every possible return in addition to the paramount one of protection from enemies of the realm.
A significant point here is that the people of Guernsey do not contribute a brass farthing to the upkeep of the Services, although many of them are very rich. Indeed, Guernsey is not part of the United Kingdom; it is a Crown dependency which has a special relationship with the United Kingdom because of its proximity and the antiquity of its connection with the Crown. Many of its people are extremely rich, and it is my contention that any work there by agencies sustained by the United Kingdom taxpayer—save possibly acts of mercy carried out at times of emergency —should be paid for in full.
The people of Guernsey are taxed at only 4s. in the £, cigarettes cost 2s. 2d. for 20, whisky is 32s. 6d. a bottle and

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premium petrol 3s. 4d. a gallon. I can see no reason why my constituents are required to dip into their pockets to assist the civil population of Guernsey.
Mr. Marcus Lipton: Mine, too.
Mr. Roebuck: I am obliged to my hon. Friend.
If that point is acceptable to the House as being a fair one, then my next is overwhelming, because the work under discussion was not even done for a civil authority, but for a private enterprise company. This work, even if it had been undertaken in the United Kingdom, would appear to conflict with paragraph 6c of the pamphlet, which says, in part:
"Work will, save in exceptional circumstances, be undertaken only for public authorities or for organisations which are non-profit-making.…"
I invite my hon. Friend the Under-Secretary to dilate upon what the Ministry conceives to be exceptional circumstances in this case. It has been maintained in correspondence that the sort of training that resulted from the blasting of this quarry could not be obtained elsewhere. Why not? Is it my hon. Friend's contention that there is nowhere in the United Kingdom, or the Commonwealth, or the under-developed world, where training of equal value could not be obtained which would have produced greater social value than the blasting of these rocks to provide a playground for rich men? I also invite my hon. Friend to tell the House how this project came to be put to the Ministry of Defence. Who came to the Department with the proposal? Who encouraged it within the Department?
I now turn to the question whether the work was carried out efficiently. There can be little doubt that it was not. The Ministry of Defence's estimate for the work, excluding pay and allowances, was £2,300, but the actual cost, excluding pay and allowances, was £5,910—an astonishingly high under-estimate.
How did this come about? I sought an answer from my hon. Friend the Minister of Defence for Administration, and he told me in a letter dated 10th November last:
"The miscalculation arose from a number of factors. Rock drilling posed larger prob-
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lems than had been foreseen. Tidal interference with the work was greater than expected, and the weather played an unwelcome part when a gale swept some 600 tons of excavated rock back into the workings in August 1968. All of these factors led to delay which, in turn, proved costly.
Although projects such as this one are difficult to assess beforehand there is no doubt that the original estimate should have been much nearer the mark.
Instructions in these matters have, therefore, been tightened to guard against a recurrence."
Perhaps this is a case of the military maxim
"Time spent on reconnaissance is seldom wasted "
having been overlooked in the Department. Can my hon. Friend give a more detailed explanation of the colossal underestimate? Can he also say in what way the instructions have been tightened?
I now turn to the question of the financial arrangements. The Department has maintained that this private enterprise company was not asked to pay the £27,000 in pay and allowances of the officers and men employed on this task of making Beaucette Quarry a haven for rich men's yachts because it was worthwhile training. I have already asked my hon. Friend to show why such training could not be obtained elsewhere. Even if he can, is that any reason for these rich yachtsmen to have free the services of highly-trained Royal Engineers? I think not.
The Ministry pamplet to which I referred is specific on this point. It says, in paragraph 6c, on page 4:
"Servicemen must not be used as a form of cheap labour…"
Can there be any doubt that, so far as Vale Investments Limited is concerned, the company received, at no cost at all, the services of craftsmen who would be very expensive indeed on the open market?
As I say, the pay and allowances of the officers and men was £27,000. But is this the full total of the expenses involved? What about their accommodation, transportation and use of equipment? Can my hon. Friend put a figure on those items? Can he also say how many officers and men were employed on the project, and for what period?
I turn back to the under-estimate of cost, other than pay and allowances accommodation and transport, and the

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use of equipment. The estimate was for £2,300 and the final cost was £5,910. The House will recall that on 28th November last I asked my hon. Friend the Minister of Defence for Administration on what date he began discussions with the company about a settlement. He replied:
"The discussions began on 31st January, 1969. We expect them to conclude within the next few weeks".—[OFFICIAL REPORT, 28th November, 1969; Vol. 792, c. 159.]
I pressed the matter in a further Question on 19th December last, when my hon. Friend the Minister of Defence for Administration said, in part:
"I will write to the hon. Member when the matter has been settled".—[OFFICIAL REPORT, 19th December, 1969; Vol. 793, c. 431.]
Then there was silence, until notice of this Adjournment debate appeared on the Order Paper.
My hon. Friend the Minister then wrote to me, on 12th February, saying:
"As you know, the final costs were assessed at £5.910. The company's contractual obligation has been accepted at about £2,300. In subsequent discussions we have been offered an additional £1,000. We have decided to accept this offer and settle for payment of £3,300.
The letter continued:
"In one sense we shall be £2,610 out of pocket on this project and, as I indicated in my letter to you of 10th November, 1969, we have learnt a lesson in this respect. In another sense, the Royal Engineers have gained valuable experience and the community at large has benefited."
There are some points in that letter which require clarification. The first is why did it take a year to reach a settlement? This seems a very long time. Secondly, my hon. Friend the Minister speaks of a "contractual obligation". Was there, in fact, a contract as distinct from an agreement? If so, who was the offeror and who the offeree? How has it been found possible to modify the terms of the contract?
Thirdly, how has the "community at large" benefited? For example, have the taxpayers of my constituency of Harrow, East benefited? It would appear to me, subject to what my hon. Friend says in reply, that the only people who really benefited are those persons associated with Vale Investments Limited. They have benefited to the tune of at least £30,000 at the expense of the taxpayers of the United Kingdom. I ask my hon.
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Friend to tell the House what the taxpayers have got out of this operation.
Several Hon. Members Several Hon. Members rose——
10.23 p.m.
The Under-Secretary of State for Defence for the Army (Mr. Ivor Richard): I regret having to interrupt at this stage, because I know that some other hon. Members would like to speak in this short debate. However, my hon. Friend the Member for Harrow, East (Mr. Roebuck) has made a number of strong points and since I have only about 15 minutes in which to reply I trust that hon. Members will forgive me if I rise immediately to answer the debate.
I suggest that my hon. Friend the Member for Harrow, East posed two questions in relation to this whole work. The first, a proper one for the House to consider, is whether it was appropriate work for the Army to carry out; and there are a number of subsidiary questions arising from that. The second is whether or not it was carried out efficiently, and it might assist the House if I sketched in some of the background to this project.
The first point I wish to impress on my hon. Friend is that the work that was undertaken at Beaucette Quarry stemmed from the arrangement, to which my hon. Friend referred briefly, whereby units of the Royal Engineers may do work for the civil community, provided—and I stress the word "provided"—that it offers sufficiently valuable training and provided, also, that it does not offend trade unions or employers associations by appearing to displace civil firms. Costs must be recovered, but they may be related, as they almost invariably are, to the training value of the work.
Early in 1968 plans were laid for Royal Engineers from the Third Division to carry out a period of training in Jersey and Guernsey working on a variety of tasks to benefit the local community. It is important for the hon. Gentleman to notice, when casting some of the strictures he did cast, that the tasks that were carried out by the Royal Engineers in the Channel Islands in 1968 were not confined to this particular task at Beaucette Quarry, although it is true to say that all but one of them were sponsored by local authorities and that the only one not so sponsored was that at Beaucette Quarry,

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which was sponsored by a commercial firm, Vale Investments Limited.
It is, perhaps, important, too, that we should have some idea of what the work entailed. This firm offered the Royal Engineers the task of blasting a channel to connect the disused quarry to the sea. Subsequently, after the connection had been made, the rock had been blasted and the channel thereby created, it is perfectly true that Vale Investments Limited converted what used to be a quarry into a yacht marina, and that this was supposed to happen towards the end of 1968.
What my hon. Friend did not pay sufficient regard to is the fact that the project which was offered to the Royal Engineers in this work at Beaucette Quarry offered first-class training in quarry and rock blasting. In addition, I am told that the rock to be blasted was hard granite and that, therefore, the work itself was considered to be unique. I use the word "unique" quite deliberately. When the offer was made, it was considered to present a unique opportunity for engineers to engage in this form of task.
The offer in this instance followed the normal form in this type of project; namely, the Royal Engineers and the Army do not go round looking for work to do on behalf of the civil community. A project may or may not be put up by a local authority or, as in this case, by a private company or a private individual. It is then for the Army to consider whether that work falls within the normal rules which are applied when considering aid to the civil community.
In this case, because of the nature of the work that was proposed and of the unique quality of the training it appeared to offer, it was an opportunity which, I say quite frankly, the Royal Engineers were anxious to have. It was a project which we regarded—and, I think, rightly —as one which was highly desirable from the point of view of training.
The next stage was that a reconnaissance was carried out. It is true, as my hon. Friend says, that the initial estimate of the cost of these works was for a sum of £725 plus the cost of explosives. That estimate was for the employment of one officer and nine men to work for three weeks. Ministry of Defence
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approval for the work was given on 18th June, 1968. Vale Investments Limited accepted the Ministry's estimate, which was £725 plus the cost of explosives provided that the necessary certificates from local trade unions and employers were forthcoming, and also provided that Vale Investments took out an insurance policy to support the required indemnity. This the firm did, the certificates were forthcoming from the trade unions and the employers, and work started at the beginning of July.
Once the work had started, it soon became apparent that the original estimate was extremely optimistic, and that the work would take far longer than had been allowed for. The reasons are, to say the least of it, varied, and because of their technical nature perhaps I can summarise them by saying that the nature of the work which had to be undertaken —namely, the blasting of a channel to connect the quarry with the open sea—could be done, it was originally thought, in a comparatively cheap and easy manner by boring holes through the rock from the top. It was thought that this would loosen the rock, and that the weight of water on both sides, plus the tides, would be sufficient to open the channel. In fact, this did not happen. The work took a great deal longer and was more expensive than had been expected.
Sir Harmar Nicholls: So the Royal Engineers learned something.
Mr. Richard: We learned a great deal not only about carrying out this type of work, but about the procedure under which the work should perhaps be undertaken and the contractual arrangements which should be entered into.
By the beginning of October, 1968, it was obvious that the state of the tides would hinder the progress of the work during the winter, and the decision to withdraw the unit was taken on 8th October, when the work had not been completed. When the unit withdrew, no firm undertaking was given that it would return, but Vale Investments was advised that it was its intention to accept the task if possible. A full reconnaissance was carried out in November, 1968, to assess the situation and plan for completion of the task.

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About 80 per cent, of the rock was removed in Phase I, and the Royal Engineers advised that the rest could be cleared by a team of two officers and 60 other ranks working from 17th February to 6th June. This estimate allowed for the fact that work on most of the task would be possible for only short periods each tide. Costing on an extra cost basis the whole of the work, the total was £5,910, which was £3,610 more than the sum originally envisaged.
That is the background to the affair, and perhaps I could now deal with the specific points raised. First, should the work have been carried out by the Ministry of Defence for a private contractor? I have in front of me the Defence Council instructions governing the rules under which military aid to the civil community in the United Kingdom should be undertaken. That aid may be briefly divided into three categories. Category A is assistance in emergencies. My hon. Friend quoted the "Torrey Canyon" disaster as an example. Aberfan and the South-East floods are other examples. It would cover assistance during any other major emergency in which such assistance became necessary.
Category B, in which this work falls, covers assistance of a routine, non-emergency nature. I suppose that an example that the House might have in mind is the bridge built in Caernarvon for the Investiture of the Prince of Wales, and there is also the more recent one, the construction of a bridge at King's Lynn, where some road works were being carried out. What the rules say——
Sir Harmar Nicholls: Was the explanation why this work was taken on given to the hon. Gentleman's hon. Friend by letter before this debate?
Mr. Richard: Some of it was, but I do not think all of it was. In any event, I do not think it is any bad thing that the matter should be aired, for this is the right forum for it. Indeed, I am not ungrateful to my hon. Friend for raising the matter.
Rule 21 says:
"Civilian requests for Category B assistance must meet the following general conditions: (a) The task must be of social value to the community and, normally, be undertaken for a public authority".
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I stress "must be of social value to the community". In this case the Government thought it was of great social value to Guernsey although it was being carried out for a private company. I also stress "normally"—not exclusively—"be undertaken for a public authority".
The rule goes on somewhat delicately to say:
"It must not lead to any undesirable publicity, dispute, or criticism."
I am not sure that we have complied with that part of the rule.
The second half of the rule says:
"The task must constitute good military training, the equivalent of which is not readily available within the same cost from Service resources."
The third part of the rule says:
"(c) The task must not conflict with nor limit in any way the commanding officer's first duty of keeping his unit in a state of readiness for war …"
"(d) Before the task is accepted, the civilian authority must certify in writing that it has obtained the agreement of trade unions, employer's associations and other organisations affected."
In this case, it was felt that the nature of the work which was to be undertaken provided such valuable training that it was justifiable to undertake it, perhaps outside the normal rules as to undertaking it only for public authorities, and to do it for a private company. I would not say that this was normal, but it is at least acceptable in situations where the training value of the work to be undertaken is exceptionally high. In this case it was.
Secondly, my hon. Friend asked how it came about that the estimate was £725. It must be accepted that that was an under-estimate. I have already said so. It was an under-estimate based, perhaps, on undue optimism on the part of the officer who did the reconnaissance, and—I say this frankly; although this is reprehensible, it is not, perhaps, as culpable as other matters that are aired in the House—I suppose that some explanation of the way in which the estimate came to be put forward by the Ministry of Defence was that the officer concerned who saw the work and carried out the reconnaissance regarded this opportunity to do the work as of such good value for the Royal Engineers that he wanted the work for his unit: he thought it worth doing and he thought its training value

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rendered it worth while. In fact, the work took much longer than was expected.
My hon. Friend asks what has happened as a result of this case. I can reassure him on a few major points about the procedure. The first is that responsibility for contractual arrangements in matters of this sort no longer rests with the unit. It rests with the command headquarters. This is a far greater check than existed hitherto. Secondly, instructions have been issued that the assessment of costs must be made with the greatest possible accuracy in future. Thirdly, further tightening up measures are in hand. They are designed, for example, to ensure that appropriate technical reconnaissances are carried out by properly qualified officers and that confirmation is received that the necessary equipment is available before any contract is signed in future.
Finally, my hon. Friend asked whether there was a contract. There was, in the opinion of those advising the Ministry, a contract contained in two letters passing between the Army and the firm—one in which the Army said that on the basis of its preliminary reconnaissance it was prepared to carry out the work for £725 plus the cost of the explosives, and, secondly, one in answer to that from the firm accepting it.
My hon. Friend then asked why it has taken so long to get payment. Negotiations for payment started in February, 1969. At that time the work was in abeyance. As my hon. Friend will realise, we withdrew in October, 1968, and came back in again in the spring of 1969 to complete the work. Negotiations took place between the firm and the Ministry. The firm advanced the view in correspondence—it is not for me to say whether morally it should have taken this view—that what it had got was a valid, binding contract between itself and the Ministry; in those circumstances it said that its maximum liability was £2,300. We recovered from the firm £3,300. The reason we did that was that one of the firm's directors paid £1,000 to the Ministry by way of an ex gratia payment out of his own pocket.
My hon. Friend concluded by asking how the community has benefited. How have the taxpayers of Harrow, East, of Brixton or, for that matter, of Barons
180
Court, benefited as a result of this incident? I think that they benefited in three ways. First, I think that as a result the Royal Engineers are rather better at blasting than they were before. My hon. Friend should not underestimate the strength of that argument. It is a difficult technical field in which the work was carried out, and to be offered this type of training in this way in this part of the United Kingdom is desirable. Secondly, I think that we have benefited because this whole incident showed up gaps in the procedural and contractual arrangements under which aid to the civil community projects were undertaken. Thirdly, I think that we may perhaps be said to have benefited because of my hon. Friend's raising of the matter in the House this evening. I hope, by the answer I have given him, that we may perhaps be said to have laid one ghost which I know my hon. Friend has been pursuing for some time.
10.40 p.m.
Mr. Robert Cooke: The Channel Islanders, who are not represented in this House, have been completely vindicated by what the Minister has said. Obviously the hon. Member for Harrow, East (Mr. Roebuck) was right to raise the matter. I am very glad —and I am sure that I speak for the vast proportion of hon. Members—that the Minister has been able in this short debate to prove that what took place was a valuable piece of training, and that there is nothing wrong in private enterprise sometimes being involved in something to the community's good. I am grateful to the Minister for what he said.
I am sure that the motives of the hon. Member for Harrow, East in raising the matter in the House were nothing but good. If there was any confusion, I am sure that it is now all settled. As for the rich man's playground, I gather that this is sometimes enjoyed by the most humble people, who like to get out of the United Kingdom and away from some of the rigours——
The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at nineteen minutes to Eleven o'clock.

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