Sitting of 18 November 1970

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  GATESHEAD CORPORATION BILL [Lords]
  Bill read the Third time and passed, with Amendments.
  GLASGOW CORPORATION (WORKS ETC.) ORDER CONFIRMATION BILL
  Bill read the Third time and passed.
  ABERDEEN CORPORATION ORDER CONFIRMATION BILL
    STIRLING COUNTY COUNCIL ORDER CONFIRMATION BILL
    Considered; to be read the Third time tomorrow.

  DUNDEE CORPORATION ORDER CONFIRMATION BILL
  Mr. Secretary Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Dundee Corporation.
  To be considered upon Tuesday next and to be printed. [Bill 34.]

ORAL ANSWERS TO QUESTIONS
  AVIATION SUPPLY

    BAC3-11 and European Airbus
    1 and 2. Mr. Martenasked the Minister of Aviation Supply (1) if he will make a statement on the BAC3-11 proposals;
    (2) if he will make a statement on the European Airbus.
    Mr. Wilkinsonasked the Minister of Aviation Supply when he will announce a decision on the development of the BAC3-11 and of the Rolls Royce RB211/61 engine to power it; and if he will make a statement.
    Mr. Croninasked the Minister of Aviation Supply if he will make a statement on the policy of Her Majesty's Government with regard to an airbus for Europe.
    Mr. Barnettasked the Minister of Aviation Supply what discussions he has had about Government grants towards the production of the BAC3-11 and European Airbus; if he will publish the relevant figures; and if he will make a statement.
    Sir G. Nabarroasked the Minister of Aviation Supply whether he will make a further statement on the BAC3-11.
    Sir A. Meyerasked the Minister of Aviation Supply what proposals he has received from European Governments regarding British participation in the European Airbus project; and whether he will make a statement.
    Mr. Sheldonasked the Minister of Aviation Supply if he will make a statement on the European airbus.
    Mr. Onslowasked the Minister of Aviation Supply if he will now make a further statement on the BAC3-11 project.
    Mr. Carter-Jonesasked the Minister of Aviation Supply what discussions have taken place with British industry regarding the BAC3-11 and European

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    Air Bus proposals; and if he will make a statement.
    Mr. Rankinasked the Minister of Aviation Supply (1) if he will make a further statement on the future of the BAC3-11.
    (2) what decision he has now reached on the European airbus.
    Mr. Whiteheadasked the Minister of Aviation Supply if he will make a statement on his policy towards the European Airbus project; and to what extent this will involve Rolls-Royce Limited.
    Mr. Walter Johnsonasked the Minister of Aviation Supply if he will make a statement on the future of the BAC3-11 and on the effect he estimates it will have on the financial position of Rolls-Royce.
    Mr. Edelmanasked the Minister of Aviation Supply what decision he has taken in connection with the Rolls-Royce proposal to develop an engine for the BAC3-11.
    The Minister of Aviation Supply (Mr. Frederick Corfield): As I told the House on 9th November in reply to a Question from the hon. Member for Glasgow, Govan (Mr. Rankin), the Government are studying both the BAC3-11 and the A300B.
    The invitation from the French, German and Dutch Governments to participate in the A300B project was received less than four weeks ago and it has been necessary to clarify some important aspects of their proposals. This is being done urgently—there have been two Ministerial meetings and further talks between officials of the four Governments will take place later this week—but I should prefer not to promise a firm date for the Government's decision on either project. I am very conscious of the length of time that BAC has had to wait.
    Our decision will, of course, embrace the request from Rolls-Royce for launching aid for the RB211–61 engine which could power either aircraft. As I told the House last Wednesday, this is a separate matter from the decision to contribute additional launching aid to complete the RB211–22.—[Vol. 806, c. 35 and 398–407.]
    Mr. Marten: First, does the Minister realise that the whole House would, I am sure, like him to go for the British aircraft? Can he say whether the proposition that there might be American engines in this British airframe is being considered? Secondly, can he confirm that the French have put in another proposal subsequent to that which he mentioned from the Europeans? May we be assured that he will not use the European Airbus as a lever to crawl into the Common Market?
    Mr. Corfield: First, proposals to the effect mentioned by my hon. Friend have been put forward by the Company and they are being urgently examined. Secondly, I am sure that none of my right hon. Friends has any intention of crawling into the Common Market, and this will not be used as a lever to that effect.
    Mr. Wilkinson: Is my right hon. Friend aware that more worthy projects in the aerospace industry have been killed since the war by indecision than by almost any other reason and that the BAC3-11 would produce a £720 million profit to the balance of payments between 1975 and 1983? Is he further aware that in the last 20 years £1,025,000 on average in Government aid per annum to B.A.C. has produced a profit to the balance of payments of £40 million annually on civil aircraft?
    Mr. Corfield: I have used most of those arguments myself on one occasion or another, but I do not entirely agree with the profit figures which my hon. Friend mentions.
    Mr. Cronin: Will the Minister beat in mind that the BAC3-11 is already about a year behind the A300B and that therefore a decision is urgent? Will he undertake to make sure that a decision is made on commercial grounds and is not influenced by political considerations?
    Mr. Corfield: As I indicated in my Answer, I appreciate that B.A.C. has had to wait a long time and I appreciate the need for urgency. Nevertheless, these proposals were such that it would not have been right to ignore them.
    Sir G. Nabarro: Will my right hon. Friend bear in mind that a principal potential customer for the BAC3-11, namely, British European Airways, has

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    already voiced its views through its Chairman, Sir Anthony Milward, who has strongly urged the Government to buy British, which is obviously the opinion of most informed people in this matter? Secondly, will he ensure that this magnificent aircraft is not cast away as the TSR2 was before it?
    Mr. Corfield: I do not think that there is any comparison between this aircraft, which has not reached the stage of cutting metal, and the TSR2. I do not think that any of us could fail to be aware of the stridently expressed views of the Chairman of B.E.A.
    Sir A. Meyer: Will my right hon. Friend take account of the fact that the British Aircraft Corporation is not coterminous with the British aircraft industry and that a private firm, Hawker Siddeley, has invested very large sums of its own money in the European project? Will he also say what is the difference between an all-British aircraft with an American engine and, as I understand it, a Yugoslav undercarriage and a Roumanian tailplane, and a European aircraft with British wings?
    Mr. Corfield: I assure my hon. Friend that all those matters have been, and are being, taken into consideration.
    Mr. Sheldon: Will the right hon. Gentleman ensure that before making any decision to go ahead with the airbus project, attention will be paid to the need for complete control over these multinational projects—the kind of control which has been lacking in the past but which is quite essential if a project is ever to be a success?
    Mr. Corfield: I very much appreciate those sentiments, but I am sure that the hon. Member will realise that while complete control is something at which successive Governments have been aiming, it is not all that easy to work out a system which is foolproof. Progress is, however, being made and I believe that the Panavia set-up for the M.R.C.A. is a considerable advance on previous organisations.
    Mr. Onslow: Would my right hon. Friend agree that the whole cost of the BAC3-11 project so far has been borne by B.A.C. and that it has been, and still is, considerable? Will he remind the
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    House how many jobs are in prospect it the BAC3-11 goes ahead?
    Mr. Corfield: I cannot give the exact number. There are a very large number of claims that very large numbers of jobs will eventuate from a go-ahead for the 3–11. We have, however, to bear in mind that Hawker Siddeley has financed its contribution from its resources.
    Mr. Carter-Jones: Will the Minister accept that many right hon. and hon. Members, on both sides, are anxious about this matter? Is he aware that both sides have been subjected to a tremendous amount of propaganda? To allow simple souls like myself to make an assessment, will the right hon. Gentleman undertake at least to try to produce a neutral report from which we can make an assessment?
    Mr. Corfield: That, of course, is my endeavour in producing a report to my colleagues, but I assure the hon. Member that as the Member for Filton, I, too, am well aware of the pressures.
    Mr. Rankin: In coming to a decision, will the Minister bear in mind that the return on investment, the aid that would be given to our balance of payments and the industrial return would be far greater from the British project than from the airbus?
    Mr. Corfield: All those factors are, of course, relevant.
    Mr. Walter Johnson: Is not my right hon. Friend aware that this indecision is worrying and unsettling to the people who work in the industry? In my constituency in Derby, there are reports daily of wholesale redundancies at Rolls-Royce. When will the Government make up their mind on this important issue?
    Mr. Corfield: I fully appreciate those anxieties, but it is essential, in the interests of the country, that we look carefully at the proposals which have been made to us rather than make a precipitate decision.
    Mr. Edelman: What would be the effect on the balance of payments if the B.A.C. were to buy the General Electric CF6—50 instead of the Rolls-Royce engine?
    Mr. Corfield: It depends a good deal on the aeroplane into which one puts the engine. If it were to go into the BAC3-11, the effect on the balance of payments would be in no way unfavourable. If it were to be bought in the Lockheed 1011, again the effect would not be unfavourable, but it would not be as favourable. If it were to be used in the A300B, there would be some gain to our balance of payments, but this would be the third choice from that standpoint.
    Mr. Barnett: Will the Minister at least assure the House that he will present to us the figures on which he will base his decision, so that the House can decide whether that decision is the right one?
    Mr. Corfield: If I were to do that, I should be abrogating the function of government, which is to make these decisions. When the decision is made, however, I promise the House that I will be as informative as I possibly can within the overall necessity of considering the public interest.
    Sir R. Thompson: In considering the pros and cons of this decision, will my right hon. Friend bear in mind the immense value of the sub-contracted work that would flow to British industry from a decision in favour of the B.A.C.? Will he bear this particularly in mind, reflecting that at least two of these firms are in my constituency?
    Mr. Corfield: I will certainly bear that in mind, including the latter part of my hon. Friend's comment.
    Mr. William Rodgers: In view of the Minister's rather sharp remark about the views of Sir Anthony Milward, may we take it that B.E.A. will be free to choose the aircraft that it prefers if the 3–11 does not go ahead? Secondly, even if the Minister is not prepared, as I think he should be, to place the full facts before the House before making the decision, may we have a White Paper afterwards in which the matter is fully explained and all the details are given?
    Mr. Corfield: I certainly was not intending to be sharp to Sir Anthony Milward, for whom I have a great regard. He has, however, made his views abund-
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    antly clear and one can hardly fail to be aware of them. As to the decision, the hon. Member will, I am sure, appreciate that it must be a Government decision. I undertake, as I have said, to be as informative as possible within the confines of what the national interest demands.
    Mr. Maxwell-Hyslop: Among the welter of conflicting advice, will my right hon. Friend bear in mind that, historically, an aeroplane the performance of which is optimised to suit the B.E.A. requirement does not meet a world requirement of sufficient size to sell enough aircraft to break even? Historically, this is an accurate statement.
    Mr. Corfield: I accept that, but I do not think that it is strictly relevant to the project.
    Mr. Jay: Will the Minister note that some of us who have had responsibility for civil aviation believe that there is a most powerful case for the 3–11 on both technical and commercial grounds which has been further strengthened by the export success of the BAC1-11 during the last three years?
    Mr. Corfield: I am well aware of both the opinions that the right hon. Gentleman expresses and the facts relating thereto.
    Mr. Adley: Would not my right hon. Friend agree that the commercial success of either the 3–11 or the airbus depends in large degree upon the extent to which either aircraft can be sold to North American civil airlines? Would he not agree that B.A.C.'s sales record is outstanding in this direction, as it has sold more than seven times more aircraft in North America than any other European aircraft manufacturer since the war?
    Mr. Corfield: Yes. Again, that is a factor that will be considered.

    Concorde
    Mr. Croninasked the Minister of Aviation Supply if he will make a statement on the progress and future prospects of the Concorde airliner.
    Mr. Barnettasked the Minister of Aviation Supply if he will give the current estimate of research and development

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    costs of Concorde; and if he will make a statement.
    Sir G. Nabarroasked the Minister of Aviation Supply whether he will make a statement on Concorde.
    Mr. Sheldonasked the Minister of Aviation Supply if he will make a further statement on the Concorde project.
    Mr. Corfield: The two Concorde prototypes have now completed 310 hours of flight testing and both have flown at Concorde's cruising speed of Mach 2. I am sure that the House will wish to join me in congratulating all concerned on reaching this important milestone in the programme. As regards development costs, I have nothing to add to my statement on 28th October.—[Vol. 805, c. 193–6.]
    Mr. Cronin: When will the Minister be in a position to make a statement on the prospects of commercial success of the Concorde? Will he give the House a firm assurance that if there are indications that the Concorde will be a commercial success, the project will not be cut in the search for economies?
    Mr. Corfield: In reply to the first part of his question, I can only refer the hon. Member to what I have already said, namely, that I expect that the greater part of the tests will be completed by the middle of next month. I shall then have talks with my French opposite number, but I do not expect that the evaluation of the tests can be completed to the extent that is necessary to expect firm orders to eventuate until about March.
    Mr. Barnett: Will the Minister confirm that all past estimates have been fantastically unreliable? Can he assure the House in any way that the present figures are not likely to reach, say, at least £1,000 million? If he cannot assure us of that, can he, in the circumstances, at least tell the House that it will not be a commercial proposition in any way? If so, why is he going ahead with the project.
    Mr. Corfield: I think the hon. Gentleman has put forward a number of hypotheses on which I would not be prepared to give even a hypothetical answer.
    Sir G. Nabarro: While dissociating myself entirely from the last question—that this aircraft is unlikely to be a commercial proposition in the future—may I ask whether my right hon. Friend would not give some satisfaction to the House, and a crumb of comfort to me in all the questions that I have asked him, as to the maximum financial commitment over and above the £800 million already committed by the taxpayers of this country to this aircraft?
    Mr. Corfield: The estimate I have already given is the best estimate that can at present be given as to the cost of completing this aircraft. [Interruption.] An hon. Gentleman opposite says that it is not a very good estimate, but about 40 per cent. of the increased cost is due to increases in the cost of the raw materials for which his right hon. Friends had more responsibility than anybody else. That is a fact. I should be delighted to give my hon. Friend crumbs of comfort, but I am sure that he will appreciate that it is quite impossible for me to put my hand on my heart and give a guarantee on anything.
    Mr. Sheldon: Since there is no likelihood of this being a commercial success and it obviously is a commercial loss of a very high order indeed—[Interruption.]—that has been stated by the Minister himself—can the right hon. Gentleman say how much of the £825 million is likely to be recouped, how much is likely to be lost, and when he will draw this billion pound folly to an end?
    Mr. Corfield: As I think my predecessor, the right hon. Member for Bristol, South-East (Mr. Benn) said many months ago, it is quite clear that this stage would be the worst possible stage at which to think of cancelling this project. [An HON. MEMBER: "A referendum?"] I have no doubt that if the right hon. Gentleman had a referendum in his constituency the answer would be overwhelmingly in favour of the project.
    Mr. Nicholas Edwards: Would my right hon. Friend say whether the estimates are based on the assumption of supersonic flights over land being banned and make an early statement on that aspect?
    Mr. Corfield: The answer to the first part of my hon. Friend's question is, Yes; as to the second part, this is the

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    responsibility of my right hon. Friend the Secretary of State for Trade and Industry.
    Mr. Benn: May I ask the right hon. Gentleman how long the current arrangements with the French on forward expenditure last? That is to say, when is he expecting that, after evaluation of the tests and orders have come in, he will be in a position to decide whether a full production programme may go ahead and by what date?
    Mr. Corfield: I expect that it will be some time towards the end of March, but it may be necessary to take a limited decision in the middle of next month in regard to a certain amount of the early parts of the production programme which the right hon. Gentleman himself originally authorised.
    Mr. Adleyasked the Minister of Aviation Supply what representations he has received from the Anti-Concorde Society about damage attributable to supersonic testing of aircraft; and what reply he has sent.
    Mr. Corfield: I have in my present capacity received no such representations, although, of course, I am very well aware of the views of those supporting the Anti-Concorde Project.
    Mr. Adley: Will my right hon. Friend take note of the very great damage to the morale of those, in his constituency, mine and others, who work in the aircraft industry and who are not helped at all by the frequent pronouncements of this politically motivated organisation? Is he aware that if a pro-Concorde society were formed it would have a very different and larger membership?
    Mr. Corfield: While I accept the latter part of my hon Friend's remarks, I am bound to say that when I read the voluminous reports from this society when I was in Opposition I came to the conclusion that these were people who were best at spoiling their own case.
    Mr. Bob Brownasked the Minister of Aviation Supply if, in view of the further escalation of costs, he will now withdraw from the Concorde programme.
    Mr. Corfield: No, Sir.
    Mr. Brown: While I appreciate that the Minister would want to get the best out of the trial flights, may I ask him whether he would assure the House that once he gets evaluation from the trial flights he will consider suspending the programme? Does he, with hand on heart, believe that the nation can afford the luxury of Concorde at the expense of welfare milk, school milk, and increased prescription charges for the registered disabled?
    Mr. Corfield: I stress to the hon. Gentleman that the crux is the commercial factor rather than only the technical, because all the signs are that the technical tests will be successful, and it is then that we shall be able to judge the number of orders and, therefore, the aircraft's commercial viability.
    Mr. Robert Cooke: Does my right hon. Friend agree that the commercial success of Concorde to a large degree depends on confidence in the project, and that questions such as that just asked by the hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) do nothing but harm at this stage?
    Mr. William Rodgers: Would the right hon. Gentleman not agree that the commercial success will be measured in terms of planes sold, and can he, therefore, say what the anticipated price of Concorde will be and what proportion of that price will be attributable to development costs?
    Mr. Corfield: That is one of the factors which I am proposing to discuss next month with M. Mondon.
    Mr. Bob Brownasked the Minister of Aviation Supply what are his plans for recouping the expenditure incurred by the United Kingdom in the Concorde project.
    Mr. Corfield: We aim to recover a part of the development costs through a levy on sales.
    Mr. Brown: Is the Minister, then, conceding that it just is not possible ever to recoup the huge capital outlay by the taxpayers of this country on this wasteful project?
    Mr. Corfield: Yes, I think that that has been the bipartisan approach for many months.
    Mr. Marten: Is that true if one takes the stretched Concorde into account and if sales of them go very well—if there is no American supersonic aircraft?
    Mr. Corfield: I think that this is moving into the realms of hypothesis on which it would not be wise to base a commercial or financial decision. On present expectations it is wise to recognise that we shall not recoup a large part of the development costs.

    Multi-rôle Combat Aircraft
    Mr. Wallasked the Minister of Aviation Supply if he will make a further statement on the future of the multi-rôle combat aircraft project.
    Mr. Corfield: As my hon. Friend the Minister of State for Defence stated in reply to a Question on 28th October, the first major development phase is now proceeding on a tripartite basis.—[Vol. 805, c. 140–1.]
    Mr. Wall: Is it not a fact that the range of the MRCA is considerably less than that of the TSR2, and, now that British forces are to remain east of Suez, that there is considerable anxiety whether this aircraft will have the range to be of effective use in oceanic areas of the world?
    Mr. Corfield: It is, of course, true that the range is less than that of TSR2, but it is designed for a different rôle, and I do not think it follows that, because there is to be a limited presence east of Suez, that makes this aircraft an undesirable one with which to proceed.
    Mr. Warrenasked the Minister of Aviation Supply how aircraft equipment will be selected for the multi-rôle combat aircraft.
    Mr. Corfield: Aircraft equipment for the MRCA will be selected by agreement between governmental representatives and the aircraft prime contractor, Panavia, after a process of competitive tendering has taken place.
    Mr. Warren: Will my right hon. Friend bear in mind that the terms of the programme permit American equipment companies to bid into the programme on equal terms with British companies, whereas British companies have no such privilege in the United States? I hope that under
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    this programme he will see his way to negotiating an offset agreement with the United States.
    Mr. Corfield: If a significant part of either the equipment or the avionics should go to a United States contractor, I will closely bear in mind my hon. Friend's suggestion.

    Strike-Trainer Aircraft
    Mr. Michael McNair-Wilsonasked the Minister of Aviation Supply whether he will make a statement about the proposed new strike-trainer aircraft for the Royal Air Force.
    Mr. Corfield: At my Department's request the British Aircraft Corporation and Hawker Siddeley Aviation have submitted proposals for meeting this requirement. Information is also being obtained on the Alpha Jet which is being developed jointly in France and the Federal Republic of Germany.
    Mr. McNair-Wilson: Can my right hon. Friend give an assurance that he has no intention of seeing this country join the Europeans in the Alpha Jet project? It is about time that we had an aircraft which has British design leadership in it and, therefore, a British submission should be accepted.
    Mr. Corfield: I am very hopeful that one or other of the British aircraft companies' proposals—and both companies are putting them forward—will be in every respect acceptable, but it would be wrong not to look at any proposition in regard to the Alpha Jet at the same time.
    Mr. Onslow: Would my right hon. Friend bear in mind that there is very clear evidence that the capacity of design and management of this project on the part of the Europeans, particularly the French and Germans, is already grossly overstretched?
    Mr. Corfield: I think there may be something in what my hon. Friend says, but one must bear in mind that this is relatively a simple aircraft.

    Beagle Aircraft Company
    Mr. Onslowasked the Minister of Aviation Supply if he will make a statement on progress with the liquidation of the Beagle Aircraft Company.
    Mr. Corfield: The liquidation is progessing satisfactorily. A considerable part of the company's assets has been sold and a majority of creditor's claims have been settled. The Rearsby factory has been closed down and the Liquidator is currently negotiating the disposal of the remaining assets at Shoreham.
    Mr. Onslow: Can my right hon. Friend tell the House how much public money has been lost, and can he specifically say what is to become of the Royal Swedish Airforce Bulldog order?
    Mr. Corfield: I am not in a position to answer the first part of my hon. Friend's question as yet, because this will depend on the price at which the remaining assets are sold. As to the Swedish order for Bulldogs and for product support of other Beagle aircraft, I am glad to say that it has been possible to dispose of these liabilities to Scottish Aviation, and I hope that this support ensures that we shall very much reduce possible claims for breach of contract which otherwise might have had to be levied against the company.

    Royal Aircraft Establishment
    Mr. Warrenasked the Minister of Aviation Supply if he will make a statement about the future of the Royal Aircraft Establishment.
    Mr. Corfield: On 20th October the Royal Aircraft Establishment, Farnborough, and its outstations became part of the Ministry of Aviation Supply. My hon. Friend will be aware that the future of the whole range of responsibilities of my Ministry is at present under review. I refer my hon. Friend to paragraph 27 of Cmnd. 4506 on the Reorganisation of Central Government.
    Mr. Warren: I welcome the statement by my right hon. Friend, and I hope that the current Royal Aircraft Establishment research programme will be scrutinised to see whether it contains any work which should be transferred to industry as the user.
    Mr. Corfield: This question and other questions are subject to review almost continuously, but I am sure my hon. Friend will appreciate that I have not had a great deal of time to go into that matter in detail.
    Mr. Benn: Will the right hon. Gentleman tell the House whether, when the review of the work of his Department is completed, it is contemplated that Farnborough, which has a high proportion of civil work, might be transferred to the Ministry of Defence, which would be most undesirable?
    Mr. Corfield: This is one of the principal problems that will be the subject of review. It would be quite wrong of me to try to prejudge the result.

    Space Vehicles and Shuttles
    Mr. Wilkinsonasked the Minister of Aviation Supply what Government funding has been provided for design studies into lifting bodies and re-usable space vehicles and shuttles in the past six years.
    Mr. Corfield: About £200,000.
    Mr. Wilkinson: Is my right hon. Friend aware that the advanced project team of B.A.C. Warton patented its MUSTARD project as far back as 1964, and now that American Rockwell is entering into collaboration with B.A.C. on such projects, a valuable lead and the great potential for the 1980s and beyond could be lost?
    Mr. Corfield: I am not sure whether that has any direct connection with the Question asked by my hon. Friend. I am aware of the fact, and further contracts are being negotiated both with B.A.C. and Hawker-Siddeley in relation to the £200,000 we have contributed to the European space effort.

    Rolls-Royce Limited
    Mr. Edelmanasked the Minister of Aviation Supply what advice his Department has given to Messrs. Rolls-Royce Limited in connection with its technical and financial management.
    Mr. Corfield: My Department has kept in continuous close touch with the company and has endorsed its proposals to strengthen its technical and financial management.
    Mr. Edelman: Will the right hon. Gentleman say at what time he first became aware of the form of the financial and technical difficulties from which Rolls-Royce was suffering? Were they all concerned with the development of the

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    RB211, or were they also concerned with overloading the company with projects which it was incapable of supporting?
    Mr. Corfield: As far as I recollect, the first time I became aware of this was on 20th August, but the previous Administration had warning lights about a year ago, as a result of which the then Minister of Technology asked the I.R.C. to intervene. As the hon. Gentleman knows, we are commissioning a firm of accountants to give accounting advice. The troubles are almost exclusively tied to the development of the RB211–22. That is all I can say at the moment, but I will keep the House informed.
    Mr. Nott: Would it not be normal to ask accountants to investigate a company before money is invested in it rather than after, and what, precisely, will Cooper Bros. be doing?
    Mr. Corfield: As a counsel of perfection, I would entirely accept my hon. Friend's advice, but at this stage of the development of the engine the contractual situation is such that time did not allow for that exercise. The accountants are to give us a final—we hope—check on the figures, which have varied from time to time and have given us cause to believe that an outside check would be valuable.

  LOCAL GOVERNMENT AND DEVELOPMENT

    Pavements
    Mr. Greville Jannerasked the Secretary of State for the Environment whether he will seek powers to give directions to local highway authorities concerning the repair and upkeep of pavements; and if he will exercise such powers.
    The Minister for Local Government and Development (Mr. Graham Page): No, Sir. Highway authorities already have a statutory duty to maintain pavements.
    Mr. Janner: Is the hon. Gentleman aware of the considerable number of accidents suffered by pedestrians, particularly by elderly people, which are caused by defective pavements? Will he take steps to encourage or enable local
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    authorities to devote more resources to the repair of pavements?
    Mr. Page: As the hon. Gentleman probably knows, the Highways (Miscellaneous Provisions) Act, 1961, put the ordinary road user in a better position in relation to accidents on the pavements. We have recently received the Marshall Report on the maintenance of highways, and this contains valuable recommendations to highway authorities on the maintenance of footpaths and roads. We are studying the report to see how it can be implemented.
    Mr. Allason: Has my hon. Friend noted a judgment which was given last week and which seemed to imply that it was satisfactory for pavements to be inspected once every three months? Will my hon. Friend say what is the position when it is reported to a local authority that a pavement is in a dangerous condition?
    Mr. Page: I think that my hon. Friend is simplifying the decision in that case, but I do not wish to act as a court of appeal.

    Parliamentary Commissioner for Local Government
    Mr. Freesonasked the Secretary of State for the Environment whether he will introduce legislation for the appointment of a Parliamentary Commissioner or Ombudsman for local government.
    The Secretary of State for the Environment (Mr. Peter Walker): I am considering this, in consultation with the local authority associations.
    Mr. Freeson: Will the right hon. Gentleman give an undertaking to the House that he will pursue the policy, which was advocated in the last Government's White Paper on Local Government Reorganisation, of establishing a local government Ombudsman? There are many people in need of such a service. When can we expect a White Paper announcing the Government's intentions on the future of local government?
    Mr. Walker: The latter half of the supplementary question is an entirely different question. This is a matter with which we are progressing as speedily as possible. I cannot give a definite date at the moment. In reply to the first part of the supplementary question, I am

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    sure that the hon. Gentleman, with his experience as Minister, will agree that before coming to final conclusions on what should be done in this sphere, there should be proper consultation with local authorities.
    Mr. Deedes: Will my right hon. Friend say what representations he has received from the Parliamentary Commissioner on this point?
    Mr. Walker: As far as I know, none, Sir.
    Mr. Wellbeloved: Will the right hon. Gentleman in his consultations with local authorities take into account that they have a lot to hide? Is he aware that more than two-thirds of my daily mail is taken up with complaints against the London Borough of Bexley, which I partially represent? He should not be misled by the local authorities.
    Mr. Walker: I am certain that the previous Government in setting up a proper redress against grievances would consult the local authorities concerned, and I am doing that.
    Sir R. Thompson: Will my right hon. Friend accept that hon. Members on both sides of the House are perfectly capable of fighting their constituents' battles for them, whether or not with local authorities? Will he firmly resist any suggestion for setting up more bureaucracy to come between a Member and his constituents?

  HOUSING AND CONSTRUCTION

    Fair Rents
    Mr. Allasonasked the Secretary of State for the Environment what action he is taking to extend the fair rent system.
    Mr. Peter Walker: As I announced on 3rd November, I propose that the fair rent principle should be extended to council dwellings and that controlled tenancies in the private sector should more rapidly be brought into the fair rent system. My right hon. Friend, the Minister for Housing and Construction, will shortly embark on consultations with the local authority associations on the details of these broad proposals.
    Mr. Allason: Has my right hon. Friend any intention of extending the fair rent
    1224
    principle to furnished dwellings? Will he particularly take into account the desirability of transferring the duties of furnished rent tribunals to the fair rent system?
    Mr. Walker: As my hon. Friend will be aware, the Francis Committee is reporting on the problem of furnished dwellings, either at the end of the year or early in the coming year. I wish to review the position of furnished dwellings after I have seen that report.
    Mr. Blenkinsop: Is the right hon. Gentleman proposing to extend the rent differential to all local authority houses irrespective of low income areas and everything else, in which case the administration may be very heavy? What about the liberty of local authorities to make their own decisions?
    Mr. Walker: I believe that the position whereby local authorities have the liberty to keep on providing houses for those in need without many of the financial limitations that affect those local authorities at the moment will be a very important freedom.
    Mr. Marsh: Is the right hon. Gentleman aware that the content of the Question asked by his hon. Friend the Member for Hemel Hempstead (Mr. Allason) is directly in line with Labour Party policy? We hope that he will pursue it. Does not the right hon. Gentleman think it strange that he should be moving before he has the report of the Francis Committee, and will he tell us the time scale involved?
    Mr. Walker: The only announcement I have made so far is about unfurnished accommodation. I have made no announcement on furnished accommodation because we are awaiting the Francis Committee's report.
    Mr. Frank Allaun: Is it not a fact that the Government will take all dwellings out of rent control, even houses without inside water, a bath and a lavatory? Is not it monstrous that hundreds of thousands of tenants in slums will be decontrolled in this way?
    Mr. Walker: As a result of fixing a fair rent for properties without proper amenities and in bad condition, the rents could be lower than controlled rents.

    General Improvement Areas
    Mr. Freesonasked the Secretary of State for the Environment how many of the general improvement areas declared by local authorities under the Housing Act, 1969 were originally intended for slum clearance and redevelopment.
    The Under-Secretary of State for the Environment (Mr. Paul Channon): Local authorities are not obliged to give this information but from the reports available I have no reason to think there are many such cases.
    Mr. Freeson: Will the Minister take it from me that during the visits I have made round the country I have seen many authorities with serious housing and slum problems who are doing precisely this? Will he be a little less complacent about it and stop local authorities from switching from slum clearance to improvements and abusing the Act?
    Mr. Channon: If the hon. Gentleman thinks that we are being complacent, why on earth, when he was in office, did he frame the present Act in this way?

    House Building (Local Authorities)
    Mr. Blenkinsopasked the Secretary of State for the Environment what action he proposes to take to increase the building of houses to rent by local authorities in development areas.
    Mr. Channon: The reform of housing finance which my right hon. Friend announced on 3rd November will mean that local authorities with serious housing problems in development areas as elsewhere, will be better placed to solve them.
    Mr. Blenkinsop: Is the hon. Gentleman not aware that great doubt still exists, particularly in development areas, about this possibility? Is it his intention to increase the amount of local authority building for tenants, because a very large number of people cannot afford to buy houses?
    Mr. Channon: What my right hon. Friend said in his statement was that local authorities with the worst housing problems would receive the most help.
    Mr. Crosland: Will the hon. Gentleman tell the House when we shall have a statement filling out some of the details of the very vague statement made on 3rd November? Secondly, since there is grievous disquiet in the development areas about many aspects of government policy, when will his right hon. Friend, who has regional responsibilities, among others, make a statement on the Government's regional policy?
    Mr. Channon: In regard to the second part of the question, I will ask my right hon. Friend to get in touch with the right hon. Gentleman. As regards the first part of the question, my right hon. Friend is about to engage in negotiations with local authorities. When they are complete, further statements will be made.
    Mr. Blenkinsop: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment as soon as possible.

    New Towns
    Mr. Tebbitasked the Secretary of State for the Environment whether, in view of his decision to encourage the sale of existing houses in new towns, he will now take steps to ensure that in future more land in new towns will be allocated for private building of houses for sale than for corporation building of houses for rent.
    Mr. Peter Walker: The proportion of land to be used for these two purposes is bound to depend on complex local circumstances. I shall however be encouraging development corporations to make enough land available to allow private house building to take an increasing share.
    Mr. Tebbit: Am I safe in assuming that my right hon. Friend is aware that if we are to reach the 50–50 ratio which is the absolute minimum acceptable to most of us on this side of the House, in new towns particularly, he will have to divert very large areas of land to have houses built on them directly for sale instead of going through the back door of renting them to tenants first and then selling them?
    Mr. Walker: I think that the 50–50 ratio was agreed by both sides of the

    1227
    House. Certainly, I agree that much progress must be made to reach that figure.

  PARLIAMENTARY QUESTIONS
  Mr. Liptonasked the Lord President of the Council if he will move to amend the Standing Orders to provide that Questions to Ministers shall not be tabled more than two weeks before such Questions are due to be answered.
  The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): I would refer the hon. Member to my reply to him on this matter on 28th October.
  Only two hon. Members have so far approached me, but I will continue to keep these matters under review.—[Vol. 805, c. 215–6.]
  Mr. Lipton: Will the right hon. Gentleman bear in mind that no hon. Members have approached him to maintain the present system, so the score is two to nil? Three weeks being a long time in politics, will the Lord President of the Council take note that, as a result of the present arrangements, the Order Paper is cluttered up with a load of silly old rubbish which prevents topical Questions from being asked at the appropriate time?
  Mr. Whitelaw: It would not be right for me to follow the hon. Gentleman into any comments, critical or otherwise, on the Questions which are put down on the Order Paper. There are problems concerned with the Question roster as it is today, in particular in connection with the introduction of a large new Department. I am prepared to consider the whole problem. I think it right to keep the present Question roster and the present arrangements until Christmas, but I am willing to consider changes thereafter, if that be the general wish of the House. It is a matter for the House.
  Mr. Turton: As the right hon. Gentleman has on previous occasions said that he was anxious to hear the presentations of hon. Members, will he arrange a short debate on the Report of the Select Committee on Procedure on this subject before the Christmas Recess?
  Mr. Whitelaw: I will certainly consider what my right hon. Friend says, but I cannot give him a firm guarantee on that. If I cannot find time for such a debate, I shall be happy to hear all representations and try to assess the mood of the House—which can frequently be done without a debate.
  Mr. Barnett: Will the right hon. Gentleman have a word with the Prime Minister, who is seriously abusing Question Time by regularly evading Answers to Questions? If we do not get Answers between 3.15 p.m. and 3.30 p.m. on Tuesdays and Thursdays, we might as well dispense with the whole paraphernalia.
  Mr. Whitelaw: I can very well understand why right hon. and hon. Gentlemen opposite might like to dispense with the whole procedure—they have recently been so badly worsened in it.
  Mr. Boyd-Carpenterasked the Lord President of the Council whether he is aware that during the period from the resumption of sittings in October to 12th November it was possible for Ministers to answer orally only 452 of the 1,120 Questions put down for Oral Answer during that period; and whether, in the light of this, he will give further consideration to the recommendation of the Select Committee on Procedure in the last Session that the time allotted for oral Questions be extended to one hour.
  Mr. Whitelaw: I recognise that the figures quoted by the right hon. Gentleman present the House with a problem. Of course, I will consider further the recommendations of the Select Committee on Procedure.
  Mr. Boyd-Carpenter: I thank my right hon. Friend for what I construe to be a sympathetic reply. Would he agree that the figures suggest that the situation is now similar to that which caused the Select Committee on Procedure in the last Parliament to recommend that the addition of perhaps five or six minutes to Question Time would greatly increase the effectiveness of this House?
  Mr. Whitelaw: As I said in answer to earlier questions, I am certainly prepared to consider carefully all the representations made to me on this point. I

  1229
  believe that the changes such as my right hon. Friend proposes are a matter for the House as a whole, and I would be prepared to regard them in that sense.

  MEMBERS OF PARLIAMENT (RESEARCH ASSISTANCE)
  Mr. Blakerasked the Lord President of the Council if, in order to enable Members to have more time to serve on Committees and attend debates in the Chamber, he will make arrangements to provide Members who wish it with individual research assistance.
  Mr. Whitelaw: I have noted my hon. Friend's proposal, but I think the first priority must be staffing assistance for the proposed new Select Committee structure.
  Mr. Blaker: Is my right hon. Friend aware that a great deal of time is spent by hon. Members in doing simple research tasks which could be done for them, and that although the Library does its best, it cannot provide the continuity or the understanding of an individual Member's outlook that is desirable?
  Mr. Whitelaw: I note what my hon. Friend says. I have always thought the Library research service was, within the limits set, extremely good. I feel that we ought first to assess the needs of Select Committees before we go further in this matter.
  Mr. Marsh: Is the right hon. Gentleman aware that the facilities provided by the Library, admirable though they be, are inadequate to enable the Legislature to probe the Executive properly, and that no Parliament has an Executive more in need of probing than this one?
  Mr. Whitelaw: That would not accord with my own view having for some six years in Opposition sat opposite the right hon. Gentleman, before he was removed from office, and others of his hon. and right hon. Friends. However that may be, I still want to hear the views of the Chairman of the new Select Committee, when it is set up, to consider first its requirements. I am sure that that is the right priority and the best way to deal with the matter.

  EUROPEAN ECONOMIC COMMUNITY
  Mr. Arthur Lewisasked the Lord President of the Council whether in view of the fact that neither this House nor the general public have had an opportunity of giving judgment on whether or not Great Britain should apply for admission or negotiate terms and conditions for entry into the European Economic Community, he will arrange for a House of Commons debate on this subject.
  Mr. Whitelaw: These matters are, of course, kept under constant review, and I would make any announcement that was to be made in the course of a future Business Statement.
  Mr. Lewis: I thank the Minister for that uncustomarily evasive reply. Is he against the present procedure whereby all the political leaders are doing their utmost to prevent both the general public and this House from having an opportunity to discuss even the matter of whether negotiations should proceed? As we have not had a debate on this subject, and even now cannot be promised one, will he look at this matter with a view to our having a debate, if possible before Christmas?
  Mr. Whitelaw: It is not for me to follow the hon. Gentleman in his various policy views. So far as a debate is concerned, I am always prepared to consider that. I prefer to answer such questions as these following the Business Statement rather than in Questions put to me on these occasions, since that is the proper place for me to answer them.

  MEMBERS OF PARLIAMENT (SALARIES)
  Mr. Arthur Lewisasked the Lord President of the Council whether, in view of the increases approved for civil servants, chairmen and members of the nationalised boards, judges, local government officers and public employees since 1964 and the arrangements made for continuing increases, he will give the reason why he will not move to increase the salaries of Members of the House of Commons.
  Mr. Whitelaw: I do not believe that it would be right to increase the salaries

  1231
  of Members of the House of Commons in present circumstances.
  Mr. Lewis: This may or may not be right, but could the right hon. Gentleman explain why everybody in the country, including civil servants, have had consistent and regular increases since 1964 and that the latter are due to get further increases in January totalling some 43 per cent.? If it is fair for them, why is it not fair for Members of Parliament?
  Mr. Whitelaw: The hon. Gentleman said at the beginning of his supplementary question that my answer "may or may not be right". I believe that it is right.
  Mr. Lane: Although I support my right hon. Friend's attitude to salaries at the present time, I wonder whether he could confirm that throughout this Parliament he will do his best to keep up the momentum of improvement in our general facilities?
  Mr. Whitelaw: There were improvements in facilities produced by the previous Government under the right hon. Member for Workington (Mr. Peart). I have made one improvement in regard to Members' car mileage allowances, and I believe that that was right.
  Mr. Pearl: I thank the right hon. Gentleman for what he said about improvement in facilities. Is he aware that, although we should seek to improve facilities, we should not dodge the issue of proper and adequate remuneration for Members? I believe that some sort of machinery should exist to look into these matters. We had the Lawrence Report some years ago which, in the end, produced an increase. In view of what the Services Committee has done, and remembering that it is an all-party matter, I believe that it can be said that there is general agreement on all sides that something should be done at some time.
  Mr. Whitelaw: I would not dissent from the right hon. Gentleman's view that something should be done at some time. At the present time I will stick to my original Answer.
  Sir R. Thompson: Since hon. Members are about the only people in the country who, at the drop of a hat, can increase their salaries if they so wish,
  1232
  should we not be exceedingly reluctant to do so?
  Mr. Whitelaw: In present circumstances I am bound to agree with my hon. Friend.
  Mr. Heffer: Does the right hon. Gentleman not accept that there are many Members who are not millionaires, who are not company directors, and who do not receive any retaining fees from anybody outside this House? Is it not clear that, firstly, whether or not we increase salaries at this particular time, something must be done to give Members further assistance in regard to secretarial help so that such people may be paid a proper and decent wage and be given proper conditions in which to work, and, secondly, that there should be assistance to Members, particularly provincial Members, so that they can lodge in decent conditions when they have to come to this House?
  Mr. Whitelaw: I am certainly prepared to accept the facts which the hon. Gentleman produced at the beginning of his question. I note his other points, and I am certainly prepared to consider them, but I cannot at this time go further than my original Answer.
  Mr. Marten: In view of what my right hon. Friend said, could he nevertheless take a sympathetic look at the situation of widows of Members of Parliament?
  Mr. Whitelaw: Yes, I am perfectly prepared to look at all these matters, and, indeed, at pensions as well. There are many matters involved, and I should not like anybody in the House to think that in my replies, restrictive as they have been, I do not appreciate many of the problems raised by this Question. I do appreciate them. In present circumstances I must say that I will consider them all, but at this time I must stick to my original Answer.
  Mr. William Hamilton: If the right hon. Gentleman is not prepared to accede to the request in the Question, will he not consider the desirability of producing a public register of Members' outside financial interests so that the public may know which Members have to live on their salary full-time and which do not?
  Mr. Whitelaw: That raises quite other questions from that which I originally answered.
  Mr. Bob Brown: Is the Leader of the House aware of any other group of employees in this country who have not had a salary increase in six years? If so, will he list them in the OFFICIAL REPORT?
  Mr. Whitelaw: I personally would not like this House to become engaged in a form of pressure over its own remuneration. I recognise many of the problems involved and have said so. Equally, I feel it right in the present national circumstances to stick to my original Answer, and I do stick to it.
  Mr. Tugendhat: In view of the tone of the questions on this subject, would my right hon. Friend agree that it would be desirable for Members' salaries to be linked to a grade in the Civil Service, so that increases would be automatic and we should not need to have this sort of discussion?
  Mr. Whitelaw: These are all matters which can properly be considered.
  Mr. Sheldon: Is the right hon. Gentleman aware that when the Lawrence Committee met it was not under the impression that price rises would continue in all countries as well as in ours? This being so, and since inflation is a natural phenomenon with which we have to come to terms, surely what we now need is another committee impartially to examine this matter and to operate a wage-price link such as applies in other Parliaments?
  Mr. Whitelaw: I note what the hon. Gentleman says.

  HOUSE OF COMMONS (TRANSLATION OF DOCUMENTS)
  Mr. Englishasked the Lord President of the Council whether he is satisfied with the facilities available to Members for obtaining translations of documents; and whether he will make a statement.
  Mr. Whitelaw: There are no specialist staff of the House engaged on translation, and I am not satisfied that the expense involved would be justified by the amount of work which would be demanded.
  Mr. English: Is the right hon. Gentleman aware that the Foreign Office does not translate European Economic Community documents, other than the regulations, in their Gazette? Is he further aware that a document as important as
  1234
  the Werner Report has not been translated either by the E.E.C. or by the Foreign Office? Would he kindly explain why my first Question on the subject was transferred to the Foreign Office, which does not itself do the job?
  Mr. Whitelaw: I understand that the Library is able to obtain from Government Departments translations for Members. If I am wrong I shall be pleased to look into the point, but that is what I am informed. It is the reason that the Question was transferred.

  TRANSPORT INDUSTRIES

    Lorries (Heavy Loads)
    Mr. Wallasked the Secretary of State for the Environment if he will consider new regulations for the stowage of heavy loads in lorries.
    The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): My right hon. Friend is very concerned about the safety of the loads on lorries and is considering what further guidance might be given on this subject.
    Mr. Wall: I welcome the Minister's reply, but would he not agree that the present regulations are very imprecise, particularly in regard to open lorries, and that some loads are so stowed that they are a danger to the driver and to other road users?
    Mr. Griffiths: My hon. Friend would know that Regulation 76 of the Motor Vehicle (Construction and Use) Regulations requires the packing, distribution and adjustment of load to be such that no danger is caused, and also requires that the load must be secured so that no danger is likely to be caused through its falling off. I recognise the need for further precision and my right hon. Friend is right now looking into this matter.
    Mr. Lipton: Is the hon. Gentleman aware that at present the Minister for Transport Industries is considering an increase in the permitted load on lorries? How does that square with what he just said?
    Mr. Griffiths: The hon. Gentleman will realise that increase in load is one thing and increase in an unsafe load is another. I assure him that my right hon. Friend will in no sense consider increases in unsafe loads.

ORDERS OF THE DAY

  FAMILY INCOME SUPPLEMENTS BILL
  Considered in Committee [Progress 17th November].
  [Sir ROBERT GRANT-FERRIS in the Chair]
  The Chairman: Before I call Amendment No. 65, may I say that I think it would be for the convenience of hon. Members if we took Amendment No. 18 and Government Amendment No. 66 together.

  FAMILY INCOME SUPPLEMENTS BILL
    Clause 2

      PRESCRIBED AMOUNT
      3.31 p.m.
      The Under-Secretary, of State for Health and Social Security (Mr. Paul Dean): I beg to move Amendment No. 65, in page 1, line 26, leave out from 'substitute' to end of subsection and insert:
      'higher amounts for those for the time being specified in this section'.
      The Amendment will ensure that the prescribed amount levels cannot be reduced. It meets a point made by the Opposition, who have tabled an Amendment which is technically imperfect. This meets precisely the same point, and I am very glad that we start the afternoon by accepting in effect a valuable suggestion put forward by the Opposition. There was never any intention by the Government that the prescribed levels should be reduced. The Amendment achieves what both the Opposition and the Government wish to achieve.
      Mr. Brian O'Malley: We are grateful to the hon. Gentleman for moving the Amendment, which meets a point we raised, and we are very pleased to accept it. We hope that the hon. Gentleman will note that there are a number of good and rather bigger suggestions later. We are sure that he will accept them in the same spirit.
      Amendment agreed to.
      Question proposed, That the Clause, as amended, stand part of the Bill.
      Mr. Dick Taverne: I should like to turn to the question of rents,
      1236
      which we discussed last night, when the Under-Secretary of State gave a rather brief reply to the short debate on that issue. We understand why his reply was brief. It was because of the lateness of the hour, when everyone wanted to make progress.
      As I understand the hon. Gentleman's reply, he gave two main answers to the points put to him. First, he said that if we wrote into the Bill a provision that account should be taken of the rents payable on the lines suggested in our Amendment the scheme would be delayed, and everyone would like to see the scheme, such as it is, come into operation as soon as possible. Second, he said that the matter was in any event covered by the proposals of the Secretary of State for the Environment on the standard rent allowance.
      If it were true that this provision cannot be inserted now because it would delay the scheme, then we should have to accept that. But could not the hon. Gentleman undertake to put it in as soon as possible? Could not he or his right hon. Friend move on Report an Amendment enabling the standard rent to be considered as soon as the administrative problems have been solved?
      There is no doubt that his right hon. Friend the Secretary of State for Social Services must recognise the importance of this element. He said on 10th November:
      "I must confirm that there are large numbers of working households which are very hard pressed although their incomes are often substantially above the supplementary benefit level."
      We might add that that applies not only to those above but also to those below that level. The hon. Gentleman went on:
      "There is one principal reason for this. It is that many of the poorest pay large rents."
      In the course of his speech the right hon. Gentleman changed the proportion of families below the supplementary benefit levels that were to be helped. Just before this passage he had said:
      "We shall help over half the households below the poverty line as defined by the supplementary benefit level."
      But after the passage which I have just read, in which he referred to the depressing effect of high rents on family income, he said:
      "The people who pay large rents are not helped by the Bill, and that is why the

      1237
      Measure brings help to only between one-half and one-third of working households below the supplementary benefit level."—[OFFICIAL REPORT, 10th November, 1970; Vol. 806, c. 226–7.]
      We have been told by my hon. Friend the Member for Brentford and Chiswick (Mr. Barnes) of the kind of families that are affected. They are particularly the large families, of whom there are many amongst the lower-paid. They are the families with the greatest difficulties in the first place in finding council house accommodation. Often this is because of the severe competition for council houses with the large number of bedrooms that such families require. So they pay high private rents instead. They include many families where the wage-earner is a casual labourer, and the nature of his work means that they move from the area of one housing authority to another. In those cases there is a desperate search for the kind of accommodation that the family must have. They often end up paying rents which are high by any standards but which are aggravated still more by the fact that they need larger accommodation.
      The solution of including rent should commend itself to the Government, because it deals to some extent with the central problem they are seeking to meet. They are trying to deal with the difference between a family in work and a family out of work. There are cases where a family in work may be worse off but the breadwinner still goes to work out of a sense of self-respect. However, that is not likely to happen if the gap is too big, and it is likely to be too large precisely for the large families with many children—that was the reason for the other Amendments proposed by my hon. Friend the Member for Hitchin (Mrs. Shirley Williams)—and where the Supplementary Benefits Commission helps with the rent if the wage-earners are out of work but where no help is given when they are in work. The logic of the philosophy behind the Bill requires it to help in precisely such cases.
      The other answer given by the Government was that we should wait for the proposals for a standard rent allowance. Some of my hon. Friends have already pointed out the long time gap which will occur. It may be that there will be some delay before the rent can be taken into
      1238
      consideration for the purpose of F.I.S. I believe that that would be a delay of perhaps a few months. But if families have to wait for the standard rent allowance to come into operation they will have to wait 18 months to two years, and perhaps three years.
      We do not know how much help the standard rent allowance will give in these very needy cases. We shall have a wider spread of assistance, but at the same time we shall have a big saving on present projections. We have no guarantees, as we have no figures, that the allowance will deal with the high rent problems for the large families. If the scheme which is eventually put into practice by the Secretary of State for the Environment is adequate to meet the high rent problem, nothing will have been lost by putting it in the Bill, because this matter will have been catered for anyway. The provisions may be otiose, but they will do no harm. If the scheme is not sufficiently generous to help with the high rent problem of large families, safeguards should be provided in the Bill.
      The third point made by my hon. Friend the Member for Brentford and Chiswick was that the scheme does not apply to furnished accommodation. There will be many cases where low earners paying high rents will have to find furnished lodgings because nothing else is available.
      For these three reasons—the time gap, the doubt about how far the scheme will cover it, and the gap in the provisions about furnished accommodation—I do not see that the Government can rely on the proposals of the Secretary of State for the Environment meeting this severe problem which was recognised by the right hon. Gentleman himself.
      I come back to the point made by my hon. Friend the Member for Hitchin about the test of the good faith of the Government. They have never answered the point that they promised £30 million of aid and are providing only £7 million. All the arguments about how much FAM would provide are irrelevant to the issue: are they going to help to a large extent or to a small extent—to the extent that they promised? If the Government wrote an Amendment into the Bill on Report that rent would be taken

      1239
      into account as soon as it was practicable to do so—as soon as the administrative problems were solved—they would be rather less far away from the promise that they gave than at this moment.
      Mr. Dean: The hon. and learned Member for Lincoln (Mr. Taverne) has raised a question which was discussed on Second Reading; namely, rent levels and the reason that rent is not included. I cannot add much to what I told the Committee yesterday. We fully accept, and have never disguised from the Committee, that, in taking the average rent level, those on low rents will be helped thereby, whereas those on high rents will not get the full advantage. The reason that we have taken this average figure of £2 10s. is to get the scheme off the ground as speedily as we can—the Committee has been urging us on this matter—and to keep it as simple as possible.
      It was clear from the hon. and learned Gentleman's speech that to try to do in the Bill what he suggests would take us into the realm of rent policy and help with rents. This is not a matter with which we can effectively and adequately deal in a Bill of this nature. It is, after all, essentially a Bill to supplement the income of families in full-time work which are below the supplementary benefit levels. It is essentially a family income supplement. Rents are certainly an important part in the budget of any family, but equally they involve rent policy as a whole, which is a substantial matter and cannot be suitably dealt with in a Bill of this character. It is primarily for that reason that we feel that to do as the hon. and learned Gentleman proposes is not really acceptable.
      I turn now to one or two particular points raised by the hon. and learned Gentleman. Concerning the timing, we intend to introduce the family income supplement as early as possible. It is our intention that it should be introduced in August next year. There is no doubt that, to introduce the inevitable complications involved in assessing rents and introducing a rent element over and above the average figure which we have taken, would enormously complicate the scheme, the claims, and the assessments which would have to be carried out. There is
      1240
      little doubt, therefore, that it would be impossible to keep to the date to which I am sure the Committee would wish us to keep, namely, August, 1971. We would then be pushing back the whole scheme. We would be pushing further into the future the help which we all want to give to the families who will benefit. My right hon. Friend's scheme will go a long way to deal with this problem, and he is pressing ahead with it as fast as possible. It is hoped that the scheme will reach fruition in 1972.
      Regarding the time factor, bearing in mind that were we to accept the hon. and learned Gentleman's proposals the date of the Bill would be pushed back, there is probably little in it in practice. That is an important point.
      The hon. and learned Gentleman said that certain figures have been quoted, which apparently were contradictory, about the number of families below supplementary benefit level which would be helped by the Bill taking into account the level of rents. The correct figure is over one-half.
      3.45 p.m.
      The hon. and learned Gentleman said that this was a test of good faith on the part of the Government. The test of good faith is the action which the Government intend to take. The test of good faith on family poverty is the Bill. The test of good faith on rents and on rent allowances is the announcement made by my right hon. Friend the Secretary of State for the Environment which will introduce the new rent allowance, and, above all, will bring help for the first time to families in poverty which are in private accommodation. These are two effective examples of good faith on the part of the Government.
      Finally, the hon. and learned Gentleman mentioned the figure of £30 million which has been dragged up before. I suppose that I must repeat, yet again, that the figure in fact, as far as the net help to poor families is concerned, would be £6 million, whereas—
      Mr. Taverne rose
      Mr. Dean: Perhaps I may finish my sentence—whereas the Bill is offering help of £7 million. Therefore, it cannot

      1241
      be said that the previous statement would bring more effective help.
      Mr. Taverne: The hon. Gentleman is not meeting my point that the £30 million is a promise which could still be met. If the hon. Gentleman had accepted our Amendment, he would be much nearer the figure of £30 million.
      Mr. Dean: I am saying that the £30 million, which we hear from the Opposition, is totally unrealistic. They have picked out one bit of the arithmetic without completing the full picture. The full picture would be £6 million, whereas the Bill is proposing a higher figure. Therefore, it is more than carrying out the pledge and the figure which was given earlier.
      In view of what I have said, particularly on the rent allowance point, I hope that the Committee will feel that it is best to proceed with the Clause as it stands, combined with the provision for rent allowance which will shortly be introduced and which is another step in dealing with family poverty for those families which are being helped by the Bill.
      Mr. Kevin McNamara: I listened with interest to what was said by the Under-Secretary. He did not answer any of the points which I made yesterday, but I will leave that aspect because we shall have an opportunity to return to it on Report.
      I am concerned about the hon. Gentleman's complacent attitude to rents. He did not pay attention to the real problem of some of the families which will be receiving F.I.S. The hon. Gentleman also placed a great deal of faith on the Parliamentary programme, by assuming that the proposals for rent allowance announced by the Secretary of State for the Environment will come into operation.
      I mention this because I do not think that the Minister should close his mind to the problem. Even if one accepts the bulk of his argument, there is one area in which help could be given, and that is in the provision made for two families who are in receipt of F.I.S. For the purpose of the Bill they constitute one household, and for the purpose of rent they occupy one premise, a council house or a council flat.
      1242
      In working out rebate schemes most local authorities, working on the basis of their own arrangements, or on the recommendations of the Department, take into consideration the total income coming into the house. They consider not only the income of the wage earner, but the money received by the wife and children and any people who are classed as lodgers.
      It is not impossible to envisage a situation in which there are two households in receipt of F.I.S. One family has to pay the main burden of the rent. By virtue of the scales laid down for rent rebate, by virtue of having £30 within the household, it has to pay a hefty rent even though, in terms of the other family it could be very much worse off perhaps even if they have it.
      We have an interval of nearly a year before the scheme is implemented. It should not be impossible for the Minister, through his right hon. Friend the Secretary of State for the Environment, to issue a circular drawing the attention of local authorities to the situation in which some of the tenants are in households with two families receiving FI.S., and that some provision should be made for them on the general means test basis. That should be done if one accepts the Minister's argument, which of course I do not. I think that we should be able to make this disregard in the Bill. But, even if the Minister is not prepared to do that, he could take a simple administrative step which could alleviate a great deal of the difficulty that will arise.
      Mr. Taverne: The Minister's reply was totally unsatisfactory. The Clause as it stands, after the rejection of our Amendments and after the Minister's refusal to consider my suggestion, provides no solution to the gap between those in work and those out of work, particularly the large families.
      The hon. Gentleman's argument about pushing back the date of implementation of the whole scheme totally fails to answer my suggestion that this provision should be incorporated in the Bill to take effect when the administrative problems have been solved. What it comes to is that the Government are determined to stick to the figure of £7 million. They have made that plain by their answer on this Clause. This has been a test

      1243
      of good faith, and they have failed it. We therefore intend to vote against the Clause.
      Question put:—
      The Committee divided: Ayes 169, Noes 154.

      Division No. 25.]

      AYES

      [3.54 p.m.

      Adley, Robert

      Hannam, John (Exeter)

      Nott, John

      Allason, James (Hemel Hempstead)

      Harrison, Col. Sir Harwood (Eye)

      Onslow, Cranley

      Atkins, Humphrey

      Haselhurst, Alan

      Oppenheim, Mrs. Sally

      Awdry, Daniel

      Hastings, Stephen

      Orr, Capt. L. P. S.

      Baker, W. H. K. (Banff)

      Havers, Michael

      Owen, Idris (Stockport, N.)

      Batsford, Brian

      Hawkins, Paul

      Page, Graham (Crosby)

      Bennett, Dr. Reginald (Gosport)

      Hayhoe, Barney

      Pike, Miss Mervyn

      Benyon, W.

      Hicks, Robert

      Powell, Rt. Hn. J. Enoch

      Biffen, John

      Hill, James (Southampton, Test)

      Prior, Rt. Hn. J. M. L.

      Biggs-Davison, John

      Holland, Philip

      Pym, Rt. Hn. Francis

      Boardman, Tom (Leicester, S. W.)

      Holt, Miss Mary

      Raison, Timothy

      Boyd-Carpenter, Rt. Hn. John

      Hornby, Richard

      Ramsden, Rt. Hn. James

      Braine, Bernard

      Howell, David (Guildford)

      Redmond, Robert

      Brewis, John

      Howell, Ralph (Norfolk, North)

      Reed, Laurance (Bolton, E.)

      Bruce-Gardyne, J.

      Hutchison, Michael Clark

      Renton, Rt. Hn. Sir David

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

      Iremonger, T. L.

      Ridsdale, Julian

      Bullus, Sir Eric

      James, David

      Roberts, Michael (Cardiff, N.)

      Campbell, Rt. Hn. G. (Moray & Nairn)

      Jenkin, Patrick (Woodford)

      Rossi, Hugh (Hornsey)

      Carlisle, Mark

      Jennings, J. C. (Burton)

      Rost, Peter

      Channon, Paul

      Jopling, Michael

      Russell, Sir Ronald

      Chichester-Clark, R.

      Kellett, Mrs. Elaine

      Scott, Nicholas

      Churchill, W. S.

      Kerby, Capt. Henry

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

      Clark, William (Surrey, East)

      King, Tom (Bridgwater)

      Shelton, William (Clapham)

      Clarke, Kenneth (Rushcliffe)

      Kinsey, J. R.

      Sinclair, Sir George

      Cockeram, Eric

      Knight, Mrs. Jill

      Speed, Keith

      Cooke, Robert

      Knox, David

      Spence, John

      Cordle, John

      Lambton, Antony

      Sproat, Iain

      Cormack, Patrick

      Lane, David

      Stewart-Smith, D. G. (Belper)

      Costain, A. P.

      Langford-Holt, Sir John

      Stodart, Anthony (Edinburgh, W.)

      Crouch, David

      Le Marchant, Spencer

      Stoddart-Scott, Col. Sir M.

      Dalkeith, Earl of

      Lewis, Kenneth (Rutland)

      Stokes, John

      d'Avigdor-Goldsmid, Sir Henry

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

      Stuttaford, Dr. Tom

      d'Avigdor-Goldsmid, Maj.-Gen. Jack

      Loveridge, John

      Sutcliffe, John

      Dean, Paul

      MacArthur, Ian

      Tapsell, Peter

      Dixon, Piers

      McCrindle, R. A.

      Taylor, Robert (Croydon, N. W.)

      Edwards, Nicholas (Pembroke)

      McLaren, Martin

      Tebbit, Norman

      Elliot, Capt. Walter (Carshalton)

      McMaster, Stanley

      Thompson, Sir Richard (Croydon, S.)

      Eyre, Reginald

      Macmillan, Maurice (Farnham)

      Tilney, John

      Fell, Anthony

      McNair-Wilson, Michael

      Tugendhat, Christopher

      Finsberg, Geoffrey (Hampstead)

      Madel, David

      Turton, Rt. Hn. R. H.

      Fisher, Nigel (Surbiton)

      Marten, Neil

      Waddington, David

      Fookes, Miss Janet

      Mawby, Ray

      Walder, David (Clitheroe)

      Fowler, Norman

      Maxwell-Hyslop, R. J.

      Warren, Kenneth

      Fox, Marcus

      Meyer, Sir Anthony

      Weatherill, Bernard

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

      Mills, Peter (Torrington)

      White, Roger (Gravesend)

      Galbraith, Hn. T. G.

      Mills, Stratton (Belfast, N.)

      White law, Rt. Hn. William

      Gilmour, Sir John (Fife, E.)

      Moate, Roger

      Wilkinson, John

      Glyn, Dr. Alan

      Molyneaux, James

      Wolrige-Gordon, Patrick

      Goodhew, Victor

      Monks, Mrs. Connie

      Wood, Rt. Hn. Richard

      Gorst, John

      Monro, Hector

      Woodhouse, Hn. Christopher

      Cower, Raymond

      Montgomery, Fergus

      Worsley, Marcus

      Grant, Anthony (Harrow, C.)

      More, Jasper

      Wylie, Rt. Hn. N. R.

      Gray, Hamish

      Morgan-Giles, Rear-Adm.

      Younger, Hon. George

      Griffiths, Eldon (Bury St. Edmunds)

      Morrison, Charles (Devizes)

      Gummer, Selwyn

      Mudd, David

      TELLERS FOR THE AYES:

      Gurden, Harold

      Neave, Airey

      Mr Walter Clegg and

      Hall, John (Wycombe)

      Nicholls, Sir Harmar

      Mr. Tim Fortescue.

      Hall-Davis, A. G. F.

      Normanton, Tom

      NOES

      Abse, Leo

      Blenkinsop, Arthur

      Crawshaw, Richard

      Albu, Austen

      Boardman, H. (Leigh)

      Cronin, John

      Allaun, Frank (Salford, E.)

      Booth, Albert

      Cunningham, C. (Islington, S. W.)

      Archer, Peter (Rowley Regis)

      Bradley, Tom

      Cunningham, Dr. J. A. (Whitehaven)

      Armstrong, Ernest

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

      Davies, S. O. (Merthyr Tydvil)

      Ashton, Joe

      Buchan, Norman

      Deakins, Eric

      Atkinson, Norman

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

      de Freitas, Rt. Hn. Sir Geoffrey

      Barnes, Michael

      Carter, Ray (Birmingh'm, Northfield)

      Dell, Rt. Hn. Edmund

      Barnett, Joel

      Carter-Jones, Lewis (Eccles)

      Dempsey, James

      Beaney, Alan

      Castle, Rt. Hn. Barbara

      Devlin, Miss Bernadette

      Bennett, James (Glasgow, Bridgeton)

      Cocks, Michael (Bristol, S.)

      Doig, Peter

      Bidwell, Sydney

      Cohen, Stanley

      Douglas, Dick (Stirlingshire, E.)

      Bishop, E. S.

      Cox, Thomas (Wandsworth, Central)

      Duffy, A. E. P.

      Edwards, William (Merioneth)

      Lamond, James

      Reed, D. (Sedgefield)

      English, Michael

      Lawson, George

      Roberts, Albert (Normanton)

      Faulds, Andrew

      Leadbitter, Ted

      Robertson, John (Paisley)

      Fisher, Mrs. Doris (B'ham, Ladywood)

      Leonard, Dick

      Roderick, Caerlyn E. (Br'c'n & R'dnor)

      Fletcher, Ted (Darlington)

      Lever, Rt. Hn. Harold

      Roper, John

      Foot, Michael

      Lewis, Arthur (W. Ham, N.)

      Rose, Paul B.

      Ford, Ben

      Lipton, Marcus

      Ross, Rt. Hn. William (Kilmarnock)

      Forrester, John

      Lomas, Kenneth

      Sheldon, Robert (Ashton-under-Lyne)

      Freeson, Reginald

      Lyon, Alexander W. (York)

      Silkin, Rt. Hn. John (Deptford)

      Galpern, Sir Myer

      McBride, Neil

      Sillars, James

      Garrett, W. E.

      McCann, John

      Skinner, Dennis

      Ginsburg, David

      McCartney, Hugh

      Small, William

      Grant, George (Morpeth)

      McElhone, Frank

      Smith, John (Lanarkshire, North)

      Grant, John D. (Islington, E.)

      Mackenzie, Gregor

      Spearing, Nigel

      Griffiths, Eddie (Brightside)

      Mackintosh, John P.

      Spriggs, Leslie

      Hamilton, James (Bothwell)

      McMillan, Tom (Glasgow, C.)

      Stallard, A. W.

      Hamilton, William (Fife, W.)

      McNamara, J. Kevin

      Stewart, Donald (Western Isles)

      Hamling, William

      MacPherson, Malcolm

      Stoddart, David (Swindon)

      Harman, William (G'gow, Maryhill)

      Marks, Kenneth

      Summerskill, Hn. Dr. Shirley

      Hardy, Peter

      Mason, Rt. Hn. Roy

      Taverne, Dick

      Harper, Joseph

      Meacher, Michael

      Thomson, Rt. Hn. G. (Dundee, E.)

      Harrison, Walter (Wakefield)

      Mellish, Rt. Hn. Robert

      Thorpe, Rt. Hn. Jeremy

      Heffer, Eric S.

      Milne, Edward (Blyth)

      Tomney, Frank

      Horam, John

      Morris, Alfred (Wythenshawe)

      Tuck, Raphael

      Houghton, Rt. Hn. Douglas

      Moyle, Roland

      Urwin, T. W.

      Howell, Denis (Small Heath)

      Murray, Ronald King

      Wainwright, Edwin

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      O'Malley, Brian

      Walden, Brian (B'm'ham, All Saints)

      Hughes, Dr. Mark (Durham)

      Oram, Bert

      Walter, Harold (Doncaster)

      Hughes, Robert (Aberdeen, North)

      Orbach, Maurice

      Wallace, George

      Hughes, Roy (Newport)

      Orme, Stanley

      Wellbeloved, James

      Janner, Greville

      Oswald, Thomas

      White, James (Glasgow, Pollok)

      Jenkins, Rt. Hn, Roy (Stechford)

      Pardoe, John

      Whitehead, Phillip

      Williams, Mrs. Shirley (Hitchin)

      John, Brynmor

      Peart, Rt. Hn. Fred

      Wilson, Alexander (Hamilton)

      Johnson, Walter (Derby, South)

      Pendry, Tom

      Wilson, William (Coventry, S.)

      Jones, Barry (Flint, East)

      Pentland, Norman

      Woof, Robert

      Jones, Dan (Burnley)

      Perry, Ernest G.

      Kaufman, Gerald

      Prentice, Rt. Hn. Reg.

      TELLERS FOR THE NOES:

      Kelley, Richard

      Probert, Arthur

      Mr. Alan Fitch and

      Kerr, Russell

      Rankin, John

      Mr. J. D. Concannon.

      Lambie, David

      Clause 2, as amended, ordered to stand part of the Bill.

    Clause 3

      AMOUNT OF FAMILY INCOME SUPPLEMENT
      The Chairman: Before I call the hon. Member for Rowley Regis and Tipton (Mr. Archer) to move the next Amendment, I would remind the Committee that we shall be discussing with it Amendments Nos. 21, in page 2, line 4, leave out:
      'but shall not in any case exceed £3',
      and No. 22, in line 4, at end insert:
      'or such higher sum as in the circumstances of the case may be approved by the Supplementary Benefits Commission'
      Mr. Peter Archer: I beg to move Amendment No. 20, in page 2, line 2, leave out 'one half 'and insert 'two thirds'.
      As I understand it, all the Amendments in this group raise essentially the same issue. It is a question where the balance should be drawn between two converse dangers. If the sum paid to the recipient
      1246
      is too high he has no incentive to work harder, no incentive to get a better job and no incentive to press for a fairer wage; if the sum paid to him is too low, those who are intended to benefit continue to exist below the subsistence level.
      My mind is not made up beyond the possibility of reconsideration as to the correct proportion or the correct formula. I am hoping that this discussion will help to clarify my mind. But I hope that the Minister will not be too disappointed if we do not exactly exude sympathy from these benches, because his dilemma is of his own making. If a Government choose to tackle the problem in this way instead of in the way in which we understood was the original election promise they build into the whole framework of the Bill a dilemma precisely like this.
      Leaving aside the objections, one would have thought that the natural formula would be to say that incomes would be made up to what in the Bill is called the prescribed amount and what many of my constituents would think of as the breadline. The arguments against it may be stated in two ways. The first is the way

      1247
      adopted by the hon. Member for Kensington, South (Sir B. Rhys Williams) who, for unavoidable reasons, is not present today. The way in which he put it was that this was a poverty surtax. He said that if a loss of 8s. 6d. in the pound on an average or higher income is a disincentive to earning more, at the lower end a subsidy of 10s. in the pound on money that is not earned must, ipso facto, be a greater disincentive.
      I appreciate that the hon. Member for Kensington, South, whose compassion is not in dispute, was using this as an argument against this method of tackling the problem, but there is a danger that it could be real ammunition in the armoury of the uncompassionate. It could emerge as a repetition of the old argument that the rich will not work unless we make them richer and the poor will not work unless we make them poorer. I should be more impressed by that way of stating the argument if we had more information about the effects of disincentives. There is a complete dearth of research in this matter, and one contribution which the hon. Member's Department might make to this question would be to initiate some research into the effect of the alleged incentives and disincentives on how hard people work.
      I know many people who do not like paying income tax, and I do not argue vigorously with them about it. I do not know many people—if I can think of one—who actually work less hard because of the tax they pay; indeed, I could point to some who work harder because they want to make up for what they consider to be the difference between what they earn and what is left to them. In my submission there is little evidence of a disincentive effect of this kind. I do not believe that many people in the lower income brackets enjoy working for a lower wage simply in order that that wage shall be made up.
      A more impressive way of stating the objection is that wages are likely to become more depressed if public funds are used to shoulder a burden that should properly fall on the employer. I find that argument more worrying. Public funds are a sanctified commodity when it is suggested that they should be used to benefit the public generally, or a specific section of the public in the lower
      1248
      income brackets. Public funds cease to be sanctioned only when they are being used as a substitute for a burden that should fall on industrial management.
      That is the real objection that is summed up in the Speenhamland argument. I was startled to discover that I was probably one of the earliest to give this argument the label "Speenhamland". I discovered with a shock that I had mentioned it in the House on 24th May, 1966. If anybody wants to initiate research, he will find what I said at column 393 in HANSARD. Basically this is a way of restating a substantially wider argument—whether it is justifiable deliberately to depress conditions to create a public outcry for something better.
      My hon. Friend the Member for Brentford and Chiswick (Mr. Barnes) said yesterday that in his view the Bill was not in the long-term interests of the poor. I agree, but I cannot find it in my heart to say that we should oppose the Bill in the absence—from our point of view—of anything better. We are condemned, in the interests of those whom the Bill seeks to benefit, at least to try to improve it as best we can. We must start with the Bill that we have.
      I cannot bring myself to advocate that one generation of individuals should be deliberately condemned to suffer in order that future generations may benefit. It is too easy to say that that would be a price worth paying when we in this House do not have to pay it. If working conditions and wages for the future are to be improved the responsibility lies upon all of us, and it would be too easy, and grossly unfair, to push it off on to the shoulders of those who have burdens enough already.
      If those two arguments are not held to have sufficient weight we are left with what appears to be an unanswerable argument for giving higher benefits to people who are obviously in need of relief. If the arguments are not held to be overwhelming—and at the moment I should require convincing about that—in my submission we should bring these families, if not into affluence, at least closer to the subsistence level.
      Mr. John Boyd-Carpenter: I will not, if he will permit me, follow the hon. Member for Rowley Regis and Tipton (Mr. Peter

      1249
      Archer) into the intriguing arguments about the disincentive effects of high taxation. If I did, I should take up a good deal of the time of the Committee. I want to address myself solely to the point raised in Amendment No. 21—the £3 limit. My hon. Friend the Under-Secretary will, I am sure, recall that on Second Reading I raised this matter and asked him certain questions about it. In particular, I then put the point, which still seems to me to be material, that the overall limit of £3 runs counter to what I understand to be the general principle of the Bill.
      That principle appears to be that one takes the prescribed amounts, varying, very properly, with the size of the family, and then makes up half the difference between the family income and the prescribed amount. That is a comprehensible formula. I know that the hon. Member for Rowley Regis and Tipton, in respect of his own Amendment, thought that half was the wrong proportion, but it is at least a rational and understandable principle.
      But when one superimposes on that principle an arbitrary limit of a particular figure—and not a very high figure—of £3, one seems both to cast some doubts on the main principle of the Bill and, I believe—I shall be interested to hear what my hon. Friend says, of course—to inflict a considerable measure of particular hardship on certain categories.
      I would imagine—here again, I am willing to hear what my hon. Friend has to say—that the £3 limit would bite hardest in the case of the larger families, because the prescribed amount rises by £2 per child, so that the likelihood of a gap of one-half the difference between the prescribed amount and the family income obviously becomes greater as one moves into the larger families. But these are precisely the families where the greatest hardship is likely to be found.
      On Second Reading I asked my hon. Friend what it would cost to abolish the £3 limit and simply apply the formula of the Bill without the limit. I do not complain of the fact that when winding up, because he had to encounter certain difficulties, he was not able to answer that question. In the more peaceful atmosphere of this afternoon, I hope that he may be able to make up for that omission.
      1250
      The Committee would accept, I think, that no one who has served at the Treasury is likely to advocate any proposal, however sound, without knowing the cost; so I should like to know the cost. I venture, with some caution, to suggest that it might not be very large, but I am more than likely to be wrong, and I would like to have the figure. I gather that steps are now being taken to obtain it.
      This is what is important, a departure from the principle of the Bill. My hon. Friend, with his habitual courtesy, referred to this matter in the winding-up speech, although, while his courtesy was up to his habitual standard, his lucidity was somewhat below it. I sympathise with him. The Committee may remember that he was subjected, in terms of decibels at any rate, to a formidable onslaught from the front bench below the Gangway opposite, and even an experienced Parliamentarian like my hon. Friend possibly finds these things disconcerting.
      4.15 p.m.
      This is what my hon. Friend said:
      "I turn now to the questions put to me by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), especially that concerning the £3 maximum proposed. The main reason is the incentive that it provides."
      I do not follow that. I suppose that the point on incentive is the difference between the family income of earnings supplemented by F.I.S. compared with the family income on supplementary benefit. But, of course, family income if one is on supplementary benefit rises with the number of one's children because of the allowance per child. Therefore, I do not follow why this limitation has such importance from the point of view of incentive, at any rate from that angle.
      My hon. Friend went on:
      "Equally, we are anxious to make the full-time work test as simple as possible and to treat one-parent families as generously as we can."
      With all respect, interposing this arbitrary limit does not make the test simpler. Marginally, I suppose it makes it more complicated, because there is one more process which has to be completed—does half the difference between family income and prescribed amount come to more than £3?

      1251
      So I do not see my hon. Friend's argument about simplicity and treating one-parent families as generously as we can. If the one-parent family is, as is sometimes the case, the large family, this treats it less generously than if the limitation were not there.
      My hon. Friend went on:
      "Equally, it is necessary to have some maximum, otherwise anyone who can show that he or she is working full time will be able to claim."—[OFFICIAL REPORT, 10th November, 1970; Vol. 806, c. 334.]
      With respect, I do not follow that. As I understand the Bill, no one will be able to claim unless his family income is less, and less by at least 10s., than the prescribed standard. So here again, although all the ideas that my hon. Friend put forward—incentive, simplicity, need to exclude everyone in full-time work from claiming—are admirable ideas, I am unable to follow from that how those ideas are helped and supported by this limitation.
      The limit seems to me to bite most hard on the larger family. That is precisely the type of family which would have gained most had my right hon. Friend decided to proceed on the basis of using the family allowance instrument: the bigger the family, obviously the larger the family allowance.
      My right hon. Friend gave what he regarded as good reasons—whether one accepts them or not, they are, as one would expect from him, logical and arguable reasons—why on this occasion he would not proceed by way of family allowances. But I should have thought that that decision to some extent imposed on him a duty to ensure that those who would stand to gain most from use of the family allowance instrument should not be unduly handicapped or kept back by the limitation on the use of this instrument.
      Therefore, I must say to my hon. Friend—I shall be very happy to listen to his argument—that at the moment I am very unhappy about the £3 limit. He talked about this being a test of good faith, and I agree with him. But surely one should not therefore impose, without better reasons than we have so far heard, a limitation which diminishes the good which this measure will undoubtedly do
      1252
      in the case of some of the hardest hit families.
      Mr. John Pardoe: I want to direct my attention primarily also to Amendment No. 21, in my name and the names of the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) and her hon. Friends. The fact that my name was top of the list really means that I put mine in first and they put theirs in after, and that great minds thought alike. It is one of the advantages of being an outsider in this House that I do not have the weight of numbers to carry and I do not have to get agreement to any Amendment I put down—except, of course, the agreement of the Government, which I covet on this occasion.
      My Amendment deals with the £3 limit. As everyone has calculated, this will clearly affect the larger family, because, after all, taking the family with one child, the prescribed amount is £15. It is difficult to imagine the situation in which the difference, when halved, could result in a figure of more than £3 and in which case they would lose by it. One doubles the £3 to get the £6, and then one has to subtract that from the prescribed amount to find the point at which the family's income would actually lose money as a result of the £3 limit. For a family with one child, the prescribed amount is £15. If one takes £6 off that, one gets down to £9, and that is the point at which they would then lose something by the £3 limit. But there can be very few families with one child whose resources are as low as that—thank goodness.
      Going up the scale a little to a family with two children, the prescribed amount is £15 plus £2, a total of £17. The resources would have to be £11 before they would lose out as a result of the £3 limit. I think my calculations are right. The Parliamentary Secretary will amend them if they are wrong. I got a little muddled as to which side of the resources one adds family allowance, but no doubt he will sort out the mathematics. For the family with six children, by my calculations we have a figure of £15 plus five times £2, making a total of £25. Then the resources would have to be £25 less £6. It is easy to imagine a family with six children having total resources of £19 or less. If its resources

      1253
      were less than £19, it would lose out by the £3 limit. This is what the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) meant when he said that it is the larger family who will lose.
      What about, say, the family of six children with resources of £16? They are below the prescribed amount by £9. Applying the figure of 50 per cent., they ought to get £4 10s. In fact, they will only get £3. This seems an injustice.
      I agree with the right hon. Gentleman, that having read through the points that the Minister made in his reply to the Second Reading debate, I cannot say that he is on very strong ground, unless he was to argue that it was a question of cost, and I cannot think that the cost would be sufficient to make it very strong ground. But if the Government were of a particularly cheeseparing mind, as no doubt they are, then I imagine they want to stick to the £8 million. It may cost a few hundred thousands or even a million pounds to accept the Amendment.
      The Minister said that the main reason for the limit was the incentive reason. I do not accept that argument. I do not want to go into details on the question of financial incentives. It is an open debate, which runs the way one's political prejudices run. Nobody can prove the argument, but it will be canvassed every time we debate taxation or social security. We may wish to have some incentive for people who are, say, out of work—which does not include these people—so that we can overcome the problem of political unacceptability by the public.
      Some people, by no means Fascist in their inclinations, are worried when they see people out of work getting more, or nearly as much, as they who are working. This is a big problem in all social security benefits. It does not apply to this. But if a family with six children were getting a supplement of £5 or £6 a week, and therefore a substantial income compared with other people in the road, and the other people knew and were in a better-paid job but getting in total a lower income political unacceptability would follow. This is probably the reason for the relationship between the supplement and supplementary benefit. There are other ways to overcome the resulting tensions and problems, however. The
      1254
      argument about financial incentive or disincentive has not been sufficiently settled to be used as an argument for keeping the £3 limit.
      Oother reasons could be adduced for the £3 limit. The Under-Secretary has not adduced them yet, though he may do so. It may be part of the Government's new population policy. I am probably in a minority of one but I believe that the time is coming when we must seriously discuss population policy. One cannot stress too often that there is absolutely no connection between the level of financial incentive for having children and the actual number of children in a family. If there were, middle-class parents ought to be breeding ad lib, because their tax incentive for having more children is astronomically greater than the family allowance, supplementary benefit, or any of the other benefits, particularly this.
      I do not see why the Government are so intent on applying the limit. It would be a guide to their sense of good faith if they were to accept the Amendment. In view of the powerful arguments from his right hon. Friend, I hope that the Under-Secretary will accept the Amendment.
      Mr. Timothy Raison: I dare to cross swords with my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). It is a daring thing to do on an issue concerned with social security. I shall not go too far in committing myself to saying that he is wrong. I shall at least put to the Under-Secretary a question which I suspect is at the heart of this problem of the £3 maximum limit.
      It is possible that by the time people have received family incomes supplement, when they have large families—it was large families my right hon. Friend was particularly concerned about—and by the time they have also received certain rebates or benefits, whatever one likes to call them, which would not be available to people with larger incomes, such as free school meals, free prescriptions, free dental treatment, spectacles, and so on, one is getting close to the situation where some on ostensibly a rather low income are having a higher net income than people on about £24 per week.

      1255
      If the accumulation of these benefits is such that somebody with £14 a week income is as well off as somebody with £24 a week—assuming that he has a large family, for it would not apply otherwise—that is essentially a nonsensical situation which cannot be defended. It is right therefore to have this £3 maximum.
      I do not want to deal with disregards now, but I have observed a reply to a Question in which the Secretary of State said that for the moment he would disregard disregards.
      Mr. Tavern: Why does the hon. Member think that extending the limit beyond £3 will make any difference? Within the £3 range, there are now people who will lose not only 10s. of F.I.S. for every pound they earn, but other benefits clustered round it. The total effect of the scheme will be thoroughly disincentive as it stands.
      Mr. Raison: Am I right in assuming that when my right hon. Friend said that he would disregard disregards for the time being, that did not apply to the sort of things I have mentioned, for instance, rebates on spectacle charges, dental charges and so on, which are of a slightly different category from things like family allowances and other more direct cash benefits? I do not see that the hon. and learned Gentleman's argument destroys the essential of mine. It seems to me that the limit is necessary to prevent the spread of what may already be a problem and that without the limit we shall get into a slightly ridiculous situation.
      4.30 p.m.
      Mr. O'Malley: I rise to speak on this group of Amendments with optimism in my heart. An Amendment on behalf of the Official Opposition has been supported by the hon. Member for Cornwall, North (Mr. Pardoe) from the Liberal benches, and we have had the formidable support of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). But it is not only for those reasons that I am optimistic. I thought that the Under-Secretary was somewhat sensitive in a previous debate when discussing the sum of £30 million. In parentheses, perhaps I should say, with great friendship, that one cannot be that sensitive if one is
      1256
      a Member of the Conservative Government.
      However, it is not what the Under-Secretary says, but what the Prime Minister says, and it is the Prime Minister of whom we must take account for these purposes. The Prime Minister wrote to Mr. Frank Field of the Child Poverty Action Group on 1st June, 1970:
      "As Mr. Macleod said on 15th April, an increase of 10s. in family allowances would cost £30 milion a year using the claw-back procedure."
      In a letter to the Prime Minister dated 2nd November, Mr. Field pointed out:
      "You will remember that in this year's budget debate lain Macleod stated that as the Government had £220 million to return to the taxpayer, about £30 million ought to have gone to low income families in the form of increased family allowances."
      As we are now discussing a matter seriously and not trying to make party points, I think that we may take it that the Government, anxious as they are to deal with family poverty, would willingly go beyond the total of £8·6 million envisaged by the Bill; so we have some room for manoeuvre and if we can improve the Bill, financial cost will not disbar Amendments.
      Mrs. Jill Knight: Would the hon. Gentleman accept that this is an argument as to how best to help, as to whether F.I.S. helps best, or family allowances help best? It is an argument as to which way is more effective.
      Mr. O'Malley: I would not accept that. I find it hard to conceive of a situation, and I suppose that the public would also find it hard, where to be given £30 million is not somewhat better than to be given £8·6 million. What I am saying is that if we are to distribute money as a result of the family income supplement principle, if we can distribute rather more money, there will be rather more money going to help the family poverty with which we are concerned.
      I should like to consider some of the undesirable results which come from having a cut-off at £3. I can understand the reason for a provision limiting the payment to half the difference between income and prescribed means. I recognise the disincentive argument, although it is fair to say that my hon. Friend the Member for Hitchin (Mrs. Shirley

      1257
      Williams) and I dealt with this point on Second Reading. Is it possible to make a case, although I should like to say to my hon. Friend the Member for Rowley Regis and Tipton (Mr. Peter Archer) that it is largely an unproven case, more an assessment based on no solid research, for believing that there would be a disincentive effect if the figure of one half were replaced by the whole amount.
      However, as the right hon. Member for Kingston-upon-Thames pointed out, that does not apply to the £3 cut-off. I say that advisedly, in spite of what the hon. Member for Aylesbury (Mr. Raison) said. As the right hon. Gentleman said, the £3 cut-off runs counter to the general principles of the Bill and it has some undesirable side effects.
      Let us take the example of a man with about national average earnings—using the out-of-date figures which we are employing in these debates—and with six children. Family poverty is clearly concentrated largely among the large families and it is worse among these families. A man with £12 a week and six children will be entitled to £4 18s. family allowances. The prescribed sum as laid down under the formula of Clause 2 is £25 and half of the difference is £4 1s. But instead of getting £4 ls., he will have the cut-off at £3. The net result will be that his net wage plus the family allowances plus FIS will be £18 18s. 4d., while the supplementary benefit would be £23 10s.
      I do not want now to repeat the arguments that the Bill is creating a new poverty line below the supplementary benefit level but, with all the inadequacies of the Bill, when we are discussing it in detail in Committee, we should do everything we can to bring such a man's income as near as possible to the supplementary benefit level. If anyone starts to argue the necessity of the wage stop, the simple answer is that such a man is not unemployed, is not not working. Therefore, one should not use in this instance any of the theoretical arguments which have been used in favour of the wage stop principle.
      If there is this difficulty for the man at £12 a week with six children, the argument is even stronger for the low paid widow. Let us take the example of a widow with two children and earning £9
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      a week, and there are plenty of such examples. She would have 18s. family allowance. Under the 50 per cent. formula of Clause 3(1), she would be entitled to £3 11s., but, as a result of the cut-off, she will lose 11s. I take it further and consider the position of the widow with six children who ought to be getting £5 11 s. but who would be losing £2 11s. under the cut-off formula.
      As the right hon. Gentleman said, the cut-off bites, and bites hard, on the large family with low earnings.
      A further criticism of the cut-off principle is that the same help is given in similar circumstances to people with very real differences in size of family. For example, it gives the same help to a widow—the point applies also to couples at the bottom of the scale, but I think that the majority in this connection would be widows—with a weekly wage of £9 and one child as to a widow with the same earnings but six children. Again, anyone with a weekly income of £11 would receive the same whether there were three or six children in the family, or at £12 a week whether there were four or six children in the family.
      Since we are not this afternoon working strictly within the bounds of the £8·6 million, I must ask the Under-Secretary of State to consider this question most carefully. We on this side, as he knows, do not like the whole principle on which the Bill is based, but we genuinely wish nevertheless to try to improve it. We regard Amendment No. 21 as of value in that direction. It would give further alleviation to the problem of family poverty and it would remove some of the crudities introduced into the Bill by the £3 cut-off.
      Mr. Albert Booth: I shall discuss Amendment No. 22, Sir Robert, and I trust that you will in due course afford me an opportunity formally to propose it.
      The Chairman: Perhaps I should make clear to the hon. Gentleman now that I do not propose to call that Amendment for a Division.
      Mr. Booth: Very well, Sir Robert; I understand.
      There has been some difficulty apparent in our debate on these three Amendments because of the changing wages situation.

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      When the Clause was drafted, no doubt, reference was made to the then existing wage rates and the incomes of lower-paid workers.
      In an effort to meet that point and argue the case for better provision for people hit by the £3 limit, I have done some research on recent increases in wage rates of lower-paid workers. The increase of 25s. a week which was paid in the bacon-curing industry from 1st July this year raised the rate for grade 1 male workers to £14 18s. 4d. and for grade 3 workers to £13 15s. a week. The increase of 3 per cent. in railway shop-men's pay on 3rd August this year increased the weekly wage of a category 1 railway shopman to £15 4s. in areas outside Greater London. The increase of £1 a week for men in the wire and wire rope industries paid from 7th September this year increased the rate for winders to £12 1s. 2d. a week.
      In considering the validity of these Amendments in the light of the latest wage movements, we must have figures of that sort in mind. One could take area rates also to bear the point out. For example, male jute workers in Dundee, who have a wage rate of their own following an increase in their general minimum time rates of 31s. a week in September, now have a weekly rate of £12 15s.
      Families with earnings at that sort of level are the people who should benefit from the Bill if the aims claimed for it by the Government are achieved, yet people on those rates are the ones most severely hit by the £3 limit cutting off the amount of family income supplement which would otherwise be paid to them.
      I take, for example, men on £13 a week, almost the same as the £12 15s. for the Dundee jute workers. If any of them have five children, they will have family allowances totalling £3 18s., making their wage plus family allowances £16 18s. Their prescribed amount under Clause 2 would be £23. The difference between their wage plus family allowances and the prescribed amount is £6 2s., and the £3 limit would apply, giving them £3 family income supplement, with £3 18s. family allowances and £13 weekly wage, totalling £19 18s.
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      4.45 p.m.
      Let us suppose that a similar family next door has had the misfortune of having the principal wage earner out of work for some time, or even for a relatively short time, and their income is made up by supplementary benefit. That family will have an income of £21 a week, taking £3 rent and other allowances into account. Thus, in these cases, where there is undoubtedly poverty, the person who is working full time in industry has a total family income considerably smaller than that of someone on supplementary benefit.
      I hope that the Committee will not think that I have been carefully selective in my choice of rates. One can find similar circumstances in other areas and sections of industry. For instance, there has recently been an increase in the flax-hemp preparing, spinning and weaving industry which has brought male tenters of 21 years and over up to £13 15s. 3d. a week. A pay increase to male workers in the paper box making industry from 9th September this year gave rates of between £14 16s. and £13 a week to men over 21, according to the categories of work which they do. In Bury the district rate for workers employed in the manufacture of cloth for mechanical purposes was increased in August to £13 8s. 4d. for male workers and £9 2s. for female workers. There are whole areas in this country where wage levels are primarily determined by low wage industries and in which many people with large families will be severely affected by the limitation on benefits.
      Even within London, where there is a great demand for labour there are wage rates still applying at levels which, if earned by the father of a large family, would bring the £3 limitation into effect. The London Transport Executive—to its shame—on 3rd August brought the weekly payment to track cleaners to £15 3s. I say "to its shame" because the rate should have been raised further. How anyone with five children can live in London on £15 3s. a week I do not know.
      I have already shown that the effect of the Bill as drafted is to put a family with five children on £13 a week wage in a considerably worse position than a similar family who rely on supplementary benefit. But even in the £15 range, there

      1261
      is still a limitation, even without the £3 applying, which makes a man in work worse off than another on supplementary benefit. A man on £15 a week with five children would have £3 18s. family allowances, making a combined family income of £18 18s. Under Clause 2, the prescribed amount for the family is £23, so the difference between wage plus family allowances and the prescribed amount is £4 2s. He would be entitled to £2 1s. family income supplement, giving him the sum of £20 19s., which is still below the supplementary benefit level. Although the £15 a week man receives less than the man on supplementary benefit, he does not receive a total amount as far below the supplementary level as the £13 man. Surely it is obvious that the £13 man, with five children, is more likely to be in desperate need of help. Therefore, this part of the Bill will work against the very purpose which the Government claim it is designed for, namely, to be selective in directing aid to where it is most severely needed. By any objective examination of current wage rates, there is a built-in contradiction in the Bill.
      Therefore, the Committee must consider disincentive effects of a different kind to those considered up to now, namely, the disincentive to a man who, through no fault of his own, has been in receipt of supplementary benefit for a considerable time and is offered a job at a low wage. He cannot, as a responsible family man, take that job if it offers considerably less than he could get from supplementary benefit.
      I have the greatest sympathy with any person who is put in that position, and I should be very loath to advise him that he should take a cut in income and go to work for low wages. I think that any hon. Member would be loath to give such advice. Faced with such a query from a constituent, and realising that what he needed was more income, one would be tempted to say to him, "Get one morning's work a week at £2 which will increase your income but will not cut down your supplementary benefit allowance." For a Bill to place hon. Members in such a position that they will seriously have to consider giving advice of that sort is very serious, and the Government should at least think again before we pass the Clause.
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      There is obviously a case for revising the Bill in respect of payments to families affected by the £3 family income supplement limit. Whatever objections I have to the Bill as a whole. I appeal to the Government to consider this part of it in particular because even by their own criteria it fails to meet its aim. There is neither natural justice nor logic in using public funds in a way which disadvantages the poorest workers while claiming to meet their special needs.
      Mr. Hugh D. Brown: The Committee has enjoyed listening to the sort of constructive speech which we expect to hear from my hon. Friend the Member for Barrow-in-Furness (Mr. Booth). Supported, oddly enough, by the right hon. Member for Kingston - upon - Thames (Mr. Boyd-Carpenter), my hon. Friend has flattered the Government. The argument revolves around the weakness of the £3 cut-off. We have not had any information from the Government on this matter, and so I had better not jump to conclusions, but I agree with the right hon. Member for Kingston-upon-Thames that the question of cut-off is the crucial weakness in the Bill.
      It is generally accepted that the average amount of supplement likely to be paid is £1 per family. It is true that the limitation placed on people with larger families will be quite significant. It is impossible for us properly to consider the Clause and the Amendments without knowing a bit more about the resources which must be taken into account. This means thinking in terms of what will be counted as income and about whether provision will be made for disregards. Otherwise, the discussion must be confined to the very narrow point raised by the right hon. Member for Kingston-upon-Thames. I hope that we shall have some more information on this subject before we come to a conclusion on the Amendments.
      Why should family allowance be included as part of income? No doubt there is a simple explanation, but it has escaped me. What resources will he taken into account? Clause 4(2)(c) refers to
      "any income not consisting of money."
      What does that mean? I do not suppose that people in the jute, weaving, flax or

      1263
      bacon curing industries to whom my hon. Friend the Member for Barrow-in-Furness referred have any "perks". The agricultural labourer receives a wage of only £15. Will any of his "perks" be taken into account?
      When dealing with national superannuation Measures, we have had long and weary discussions about what should be included as income for superannuation purposes. Will the arguments used then be used to exclude people on the ground that "perks" are part of income, although not wages in the direct sense?
      I hope that we shall have a fairly wide-ranging debate on a matter about which we require much more information. I should like to know what thinking, if any, has been done about it and the reasons behind some of the provisions in Clauses 1 and 2 which cause us concern.
      [Mr. E. L. MALLALIEU in the Chair]
      Mr. Dean: We have had a very interesting debate on this important question of the prescribed limits and about whether there should be a cut-off point. All hon. Members who have spoken have admitted that very little is known about the possible effects of incentives, which are clearly relevant to the Amendments. The hon. Member for Rowley Regis and Tipton (Mr. Peter Archer), in his usual very fair way, admitted that his mind was open about the incentive or disincentive effect of what he was proposing, and he said that he would listen to the debate. The hon. Member for Cornwall, North (Mr. Pardoe) also mentioned that very little is known about the way in which his proposal would operate in practice with regard to the motivation for people who are, or might be, in full-time work. My hon. Friend the Member for Aylesbury (Mr. Raison) made the same sort of point, in this case in favour of a £3 limit.
      5.0 p.m.
      I freely admit that very little is known. What we know is that the families whom we are dealing with in the Bill are in full-time work. In spite of the fact that their earnings from full-time work are below the supplementary benefit level, they are in full-time work. In other words, they have a high motivation. It might well
      1264
      be said that were they to calculate, as we can calculate, the incentive or disincentive effect, they would not be in full-time work. It may well be, therefore, that there is a motivation operating here about which at present we know very little. One of the by-products of the scheme is that we hope to learn a great deal more about it than we know at present. The Government and I share the lack of knowledge which has been expressed in the debate. It suggests however, that, at least to begin with, we should proceed with caution.
      The effect of Amendment No. 20, moved by the hon. Member for Rowley Regis and Tipton, would be to alter the taper from one-half to two-thirds. The immediate difficulty which might arise is that in so far as there is at present a taper of 50 per cent.—and, therefore, one could say that there is that amount of disincentive—the effect of the Amendment would be to increase it from 50 per cent. to 66⅔ per cent. On the point made by the hon. Member himself about disincentives, that may well be an argument against proceding that far, at least until we learn more from experience about the way in which the scheme is likely to work. That is one of the big problems of both the hon. Member's Amendment and also of Amendment No. 21 in the name of the hon. Member for Cornwall, North.
      I hope, therefore, that the hon. Member will feel that it is better to keep the question under review, as my right hon. Friend has said that we firmly intend to do, to accept what, we admit, is something of a compromise figure—namely, 50 per cent.—to start with that and see how it works in practice; and if, in practice, we find that there are the hardship effects which have been mentioned in the debate and the disincentive effects—which may operate, but we do not know whether they will—are not operating, the figure can be altered in regulations under the Bill.
      I turn to Amendment No. 21 concerning the removal of the maximum limit. The hon. Member for Cornwall, North made the point, and it was made also by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), that one of the effects of having a limit is that it bears most hardly upon large families. I accept that this may be the effect. On the other hand,

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      however, that does not follow, because the figure which matters most is the actual earnings of the family concerned. This is much more important in this connection than the number of children.
      To give an example concerning the six-child family, the make-up level would be £25 of which family allowances would be £4 18s. and other income at most £20 2s. The shortfall to produce the maximum £3 family income supplement is £6. Thus the only families with six children who would benefit from a higher maximum would be those whose gross earnings were under £14 2s. I admit that the hon. Member for Rotherham (Mr. O'Malley) cited a family with under £14 2s.. I freely admit that families of that kind—they are not many in number, but I agree that they exist—would benefit from a higher maximum than is proposed in the Bill.
      The other point that I should like to make is the reason why the limit has been specified. The main reason for it is that we feel it necessary to have a limit, otherwise there is a danger of abuse. I do not put it higher than that. My right hon. Friend the Member for Kingston-upon-Thames mentioned my somewhat telescoped argument on Second Reading and I apologise to him for not being able to answer all his points on that occasion. He will, I think, realise that time was short and some of my time on that occasion was taken up.
      Mr. O'Malley: The hon. Gentleman says that there is a danger of abuse. Can he explain one thing about which I am not clear? What danger of abuse is there in not having a £3 limit which would not exist with a £3 limit for the income that a person gets under £3? I do not see that any new factor arises.
      Mr. Dean: I am developing the point. I was suggesting that there is a danger of abuse if there is no limit. I do not put it higher than that. One of the things that could happen, for example, is collusion between a man and his employer. There could also be possible difficulties with some kinds of self-employment. It is largely to guard against this and the additional checking and controls which would be required that we felt it prudent to have a limit in the scheme. It may well be that as we gain experience in practice of the working of
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      the scheme, either the limit can be raised or it may not be required.
      I assure the Committee, however, and particularly my right hon. Friend the Member for Kingston-upon-Thames, who mentioned the point, that it is not for reasons of cost that the limit is included. The figures on which we are working are very limited and they are not entirely up to date. It is, therefore, virtually impossible to give a meaningful calculation about the cost that would be involved, but that is not the factor which is uppermost in our minds on this point.
      Mr. McNamara: The hon. Gentleman has made the point that the reason is not cost but the dangers of collusion. If the object of the Bill is to help families in real poverty—and we give the Government all the benefit of the doubt that that is their aim—surely the Government should give them the money, not have a limit and, when it is found that there is collusion with an employer and people are abusing the system, then jump in. This could have been done easily under regulations. The hon. Gentleman surely does not think that he has given a sufficient reason for the limit.
      Mr. Dean: I do not want to put too much weight on this particular argument, but we do feel about all the proposals in this Bill and regulations under it that, if we are to maintain simplicity of approach in getting this scheme off the ground as soon as we possibly can, then there are some restrictions of this kind which will be desirable in the interests of avoiding abuse. The last position we want to get into—and this really answers the hon. Gentleman's point—is the position where abuse creeps into the scheme, where the practice of it comes under criticism, and where we have to tighten up the regulations. That is the last thing we want. We much prefer to get the scheme off the ground as quickly as we can, and to err, if necessary, on the side of caution, to begin with, and then increase the limits, and not to have regulations which are not actually required.
      That, therefore, is the main reason. The Committee may say that we are erring a little on the side of caution here, but I think it is desirable, in the circumstances, to do so, but I want to emphasise to the Committee that a comparatively

      1267
      small number of people would in fact benefit from the removal of the limit. It would be a comparatively small number of people. For example, very few two-parent families will be affected by the limit. For example, it would be altogether exceptional for a man genuinely in full-time work to have gross earnings of less than £9 a week which is a limit which affects the one-child family, and, of course, fatherless families have an alternative, the supplementary benefit. So I hope that the Committee will feel in these circumstances that it is wise, at any rate for the moment, to have this limit, always bearing in mind that there is power by regulations to alter it, to change it, in the light of experience.
      Now let me turn to the other point which was made by my right hon. Friend the Member for Kingston-upon-Thames and that concerned the larger families. I think I have already explained, through the figures I have given, that what really matters here is not so much the number of children but the income coming into the household. That is the figure which really affects the position, and it is only in the case of a family whose earnings are under £14 2s. that the maximum figure we are proposing would in fact operate.
      Turning now to the point made by the hon. Member for Barrow-in-Furness (Mr. Booth) and repeated in a slightly different form by the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown), who mentioned the difficulties of income disregards, perhaps he feels and the Committee feels that it would be more convenient if we discussed the question of disregards in a later debate when the whole of this question would come up.
      Mr. Boyd-Carpenter: Hear, hear.
      Mr. Dean: With the actual definition of earnings and the examples which the hon. Gentleman gave, we are in some difficulty, in that the statistics on which we rely are not as full and complete as is desirable. There are whole areas here about which very little is known, much less than we would hope. This, again, is one of the advantages of this scheme, that it will bring us into direct touch with those low-earning families, and we shall learn as a result a great deal more
      1268
      not only of their needs here but also of their needs in other fields.
      Mr. Booth: Precisely on this point I extracted all the figures from publications of the Ministry of Employment whose new review gave wages changes right up to September. Therefore, the figures I gave were available to the Government.
      Mr. Dean: Yes. The point I am going to make, though, is that many of the instances which the hon. Gentleman was giving were in terms of wage rates rather than actual earnings and family expenditure figures. I think that he would accept that what matters here is actual earnings and also the family expenditure figures, and it is in that regard, as I said, that we have not anything like as complete information as we would desire.
      5.15 p.m.
      I hope that the Committee will feel, having had a fairly long debate on these two interesting Amendments, that the Government's mind is certainly not closed. There have been some very valuable if rather tentative contributions made from both sides of the Committee. We intend to watch these figures extremely carefully, to learn by the light of experience and also the light of the interesting contributions which have been made in the debate.
      Mr. Hugh D. Brown: Would the hon. Gentleman add just one comment to what he has said? He has clarified the point made by my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) about wage rates. How does he propose to put before the House information which he gets? There is no mention here of an annual report. How shall we get this information on earnings or where cases of low earnings exist?
      Mr. Dean: My right hon. Friend gave an undertaking earlier—I think it was in the Second Reading debate—that he is extremely anxious that the House and the country should have, and that it is his intention that they should have as much information about the working of the scheme, and the take up, and the number of people who are involved, and the type of people who are involved, as we can possibly get.
      Mr. Boyd-Carpenter: No one on either side of the Committee would complain of the tone of my hon. Friend's reply, but

      1269
      I hope he will not mind my saying that the argument which he adduced about £3 limit, which has been the central issue of the debate, was a new one. It is not one of the three given to the House on Second Reading, nor even the lifeline cast to him, very chivalrously, by my hon. Friend the Member for Aylesbury (Mr. Raison), but a new one, and I think the Committee wants to weigh it.
      My hon. Friend said this is necessary to prevent abuse. I think he will accept that that is the substance of what he said. I am not sure that that is an argument of self-evident truth. I suppose there is force in the suggestion that as the amount involved increases so the temptation, to a limited number of people, to abuse the scheme increases. I suppose there is a sort of scale at which people choose to do wrong—the larger the amount of the reward for wrongdoing may be. This may have force.
      The Secretary of State for Social Services (Sir Keith Joseph): I would remind my right hon. Friend that it was the right hon. Gentleman my predecessor, in his speech on Second Reading, who said honesty was a question of the amount of the temptation.
      Mr. Boyd-Carpenter: I am very sorry that my right hon. Friend adopts the moral standards of that right hon. Gentleman.
      Sir K. Joseph: I only quoted them.
      Mr. Boyd-Carpenter: If there is anything which would alarm me about this Bill it is my right hon. Friend's present intervention!
      However, it obviously has force, although I am not sure how much weight it really has. We are dealing with people at the bottom of the poverty scale. I wonder how one can calculate and say that people will not indulge in wrong practices if £2 19s. is involved but will fall into temptation when the £3 limit is passed. It really does seem a very arbitrary rule.
      I can understand that my right hon. Friend does not want this scheme abused, and it is a scheme which, obviously, Members on both sides of the Committee interested in social security and with administrative experience will agree
      1270
      is one which could be abused. At any rate this is a new argument.
      To turn to what my hon. Friend the Member for Aylesbury said. I think, with respect, that this is a better case than his, because his argument was that the various items in kind when added to the payments under the Bill could rise to the sort of level at which people could be expected to get very good earnings figures. If that is true where the half difference between the supplement and family income is more than £3, it is equally going to be true when it is less. That, I do not think, justifies the £3 limit.
      My hon. Friend the Under-Secretary adopted a conciliatory attitude on this. He said it was an experiment. He drew my attention to this—I would be grateful if he would confirm it, if only by a nod of the head—that the £3 limit could be taken out altogether by regulations made under subsection (4) of the Clause. Is that right? If my hon. Friend could so indicate when he has had a chance to look at the Bill it might help us.
      Mr. Dean: It could both be increased and taken out altogether.
      Mr. Boyd-Carpenter: There are some who believe that this may cause hardship, but none of us would wish to lay down the law about that against the experience of the right hon. Gentleman's Department. Can we make sure that the House of Commons is informed about how this works, so that not only the attention of my right hon. Friend but that of the House of Commons can be focused on this.
      Will my right hon. Friend, in such form as is convenient to him, either by way of Written Answer or by laying a Paper, after the scheme has been operating for six months or a year, inform the House of Commons of the number of cases in which the £3 limit has operated to prevent the payment which would otherwise have been made, and the amounts involved. If this is a precautionary limit which will not affect many people, it will not be much of a burden. If it is a burden because there are so many cases, the matter becomes infinitely more serious. If my hon. Friend will say to the Committee that his right hon. Friend will give this information,

      1271
      many of us will be greatly helped, and will know, if our fears turn out to be justified, we shall be able to press my right hon. Friend for remedial action and the exercise of his powers under subsection (4).
      Mr. Pardoe: The reasons which we have heard for the £3 limit are in no way convincing. The Under-Secretary said that a family with six children would have to have an income of £14 2s. for the £3 to apply, and he seemed to imply that there were so few of these families that they were not worth bothering about. Admittedly, to take the combination of six children and £14 2s. may be stretching the point, but throughout the country there is a large number of families earning less than £14 2s. I will simply direct him to "Incomes Data Panorama, July 1967 to June 1970", from which he will see that there are many people whose rates of pay are below this level. If he goes a little further west than his own constituency—where the prosperity of Portishead may be having its effect—into South-West Devon and Cornwall, he will find a large number of people with incomes below this level.
      Mr. Dean: I think perhaps the hon. Gentleman has misunderstood me. The example and the figures I quoted were for a low earning family with six children. It is the combination of the two, low earnings and a large family.
      Mr. Pardoe: Yes, but it just does not happen that low earning income groups have small families. If the man were economic in every sense of the word that would happen, but unfortunately it often goes the other way.
      If the limit affects so few people, why not discard it? These people, few though they may be, are worth arguing for this afternoon. I understand, Mr. Mallalieu, that you will allow us to vote separately on Amendment 21. These people are not only worth arguing for but are worth voting for, and I hope a large number of hon. Members will support me.
      Mr. Dean: I will deal quickly with one or two specific questions which my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) asked me. I will first slightly correct a point which I made in an intervention to him. I said that the £3 limit could
      1272
      be removed altogether. In fact, it can be raised right through the roof, and that amounts to much the same thing. It cannot be removed altogether, but it can be raised to a limit which would, in effect, erase it altogether.
      My right hon. Friend asked whether it would be possible to provide information generally on the working of the scheme and in particular about the number of people on whom the £3 limit would bite. The answer is "Yes". My right hon. Friend is anxious to provide this information and, indeed, as much information as possible. It will probably take longer than six months before we have meaningful information, but it is the intention to provide such information.
      Mr. O'Malley: I feel sorry for the Under-Secretary. He has been driven into strange arguments in his attempt to defend the Bill. He said that little is known about what constitutes incentives and disincentives. I thought that this was one of the main planks of Tory taxation policy. I can imagine one of my hon. Friends on the back benches putting down a Question to the Prime Minister asking whether or not the speech of the Under-Secretary of State for Health and Social Security in Committee on 18th November represents Government policy.
      Secondly, the Under-Secretary said that there was a danger of abuse. When I asked him how the danger of abuse was magnified by the removal of the £3 limit he gave me a non-answer. Thirdly, he suggested that it was simpler to leave it as it is. In fact, it is not it is more complicated. Fourthly, he admitted that the people who would benefit would be those earning under £14 2s. a week. Taking that in conjunction with his reply to his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) that the provision can be changed by regulations, I should have thought that the equitable thing to do would be to accept the Amendment rather than to argue against it as he did.
      I think the hon. Gentleman will not deny that the real reason for his rejection of the Amendment has virtually nothing to do with the arguments he has adduced. His Department has been given its strict instructions by the Treasury not to go beyond the £8·6 million

      1273
      limit. Since the hon. Gentleman will not accept the Amendment, we intend to press it to a Division.
      Mr. Peter Archer: Striving as I still am to suggest improvements to a bad Bill, I invite the Under-Secretary to think about what he has just said in relation to regulations under Clause 3(4). If the only way in which he can later deal with the situation imposed by the limitation is by increasing the amount to an absurd figure such as £1 million, would not it be better for him to avoid getting himself into that difficulty?
      This has been an enlightening debate. I said at the beginning that I approached the principal matter with an open mind and that I did not seek to be dogmatic. I am now much more dogmatic, and my mind is virtually closed. It may be that my assessment of incentives represents
      nothing more than prejudice, but I have heard nothing to displace it. However, I appreciate that there are considerations relating to cut-off which do not necessarily apply to the proportion. If a test of the feeling of the Committee is to be taken, it had better be on the question of the cut-off rather than the proportion.
      Accordingly, I ask leave of the Committee to withdraw Amendment No. 20.
      Amendment, by leave, withdrawn.
      Mr. Pardoe: I beg to move Amendment No. 21, in page 2, line 4, leave out 'but shall not in any case exceed £3'.
      Question put, That the Amendment be made:—
      The Committee divided: Ayes 166, Noes 201.

      Division No. 26.]

      AYES

      [5.30 p.m.

      Abse, Leo

      Foot, Michael

      McCartney, Hugh

      Albu, Austen

      Ford, Ben

      McElhone, Frank

      Allaun, Frank (Salford, E.)

      Forrester, John

      Mackenzie, Gregor

      Archer, Peter (Rowley Regis)

      Freeson, Reginald

      Mackie, John

      Armstrong, Ernest

      Garrett, W. E.

      Mackintosh, John P.

      Ashton, Joe

      Ginsburg, David

      McMillan, Tom (Glasgow, C.)

      Atkinson, Norman

      Gourlay, Harry

      McNamara, J. Kevin

      Bagier, Gordon A. T.

      Grant, George (Morpeth)

      MacPherson, Malcolm

      Barnes, Michael

      Grant, John D. (Islington, E.)

      Marks, Kenneth

      Bannett, Joel

      Griffiths, Eddie (Brightside)

      Mason, Rt. Hn. Roy

      Beaney, Alan

      Griffiths, Will (Exchange)

      Meacher, Michael

      Bennett, James (Glasgow, Bridgeton)

      Hamilton, James (Bothwell)

      Mellish, Rt. Hn. Robert

      Bidwell, Sydney

      Hamilton William (Fife, W.)

      Milne, Edward (Blyth)

      Bishop, E. S.

      Hamling, William

      Morris, Alfred (Wythenshawe)

      Blenkinsop, Arthur

      Hannan, William (G'gow Maryhill)

      Murray, Ronald King

      Boardman, H. (Leigh)

      Hardy, Peter

      O'Malley, Brian

      Booth, Albert

      Harrison, Walter (Wakefield)

      Oram, Bert

      Bradley, Tom

      Healey, Rt. Hn. Denis

      Orbach, Maurice

      Broughton, Sir Alfred

      Heffer Eric s.

      Orme, Stanley

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

      Horam, John

      Oswald, Thomas

      Buchan, Norman

      Houghton, Rt. Hn. Douglas

      Pardoe, John

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

      Howell, Denis (Small Heath)

      Peart, Rt. Hn. Fred

      Carter-Jones, Lewis (Eccles)

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Pentland, Norman

      Castle, Rt. Hn. Barbara

      Hughes, Dr. Mark (Durham)

      Perry, Ernest G.

      Clark, David (Colne Valley)

      Hughes, Robert (Aberdeen, North)

      Prentice, Rt. Hn. Reg.

      Cocks, Michael (Bristol, S.)

      Hughes, Roy (Newport)

      Prescott, John

      Cohen, Stanley

      Jenkins, Hugh (Putney)

      Probert, Arthur

      Concannon, J. D.

      Jenkins, Rt. Hn. Roy (Stechford)

      Rankin, John

      Conlan, Bernard

      John, Brynmor

      Reed, D. (Sedgefield)

      Cox, Thomas (Wandsworth, Central)

      Johnson, Walter (Derby, South)

      Rhodes, Geoffrey

      Crawshaw, Richard

      Johnston, Russell (Inverness)

      Roberts, Albert (Normanton)

      Cunningham, G. (Islington, S. W.)

      Jones, Dan (Burnley)

      Robertson, John (Paisley)

      Cunningham, Dr. J. A. (Whitehaven)

      Jones, Barry (Flint, East)

      Roderick, Caerwyn E. (Br'c'n & R'dnor)

      Davies, S. O. (Merthyr Tydvil)

      Kaufman, Gerald

      Roper, John

      Davis, Clinton (Hackney, C.)

      Kelley, Richard

      Rose, Paul B.

      Deakins, Eric

      Kerr, Russell

      Ross, Rt. Hn. William (Kilmarnock)

      de Freitas, Rt. Hn. Sir Geoffrey

      Lambie, David

      Shore, Rt. Hn. Peter (Stepney)

      Delargy, H. J.

      Lamond, James

      Silkin, Rt. Hn. John (Deptford)

      Dell, Rt. Hn. Edmund

      Latham, Arthur

      Sillars, James

      Dempsey, James

      Lawson, George

      Skinner, Dennis

      Doig, Peter

      Leadbitter, Ted

      Small, William

      Douglas, Dick (Stirlingshire, E.)

      Leonard, Dick

      Smith, John (Lanarkshire, North)

      Duffy, A. E. P.

      Lestor, Miss Joan

      Spearing, Nigel

      Dunnett, Jack

      Lever, Rt. Hn. Harold

      Spriggs, Leslie

      Edwards, William (Merioneth)

      Lewis, Arthur (W. Ham, N.)

      Stallard, A. W.

      English, Michael

      Lipton, Marcus

      Stewart, Donald (Western Isles)

      Faulds, Andrew

      Lomas, Kenneth

      Stoddart, David (Swindon)

      Fisher, Mrs. Doris (B'ham, Ladywood)

      Lyon, Alexander W. (York)

      Summerskill, Hn. Dr. Shirley

      Fitch, Alan (Wigan)

      McBride, Neil

      Tavern, Dick

      Fletcher, Ted (Darlington)

      McCann, John

      Thomson, Rt. Hn. G. (Dundee, E.)

      Thorpe, Rt. Hn. Jeremy

      Walker, Harold (Doncaster)

      Wilson, William (Coventry, S.)

      Tomney, Frank

      Wallace, George

      Woof, Robert

      Torney, Tom

      Wellbeloved, James

      Tuck, Raphael

      White, James (Glasgow, Pollok)

      TELLERS FOR THE AYES:

      Urwin, T. W.

      Whitehead, Phillip

      Mr. Joseph Harper and

      Wainwright, Edwin

      Williams, Mrs. Shirley (Hitchin)

      Mr. John Golding.

      Walden, Brian (B'm'ham, All Saints)

      Wilson, Alexander (Hamilton)

      NOES

      Adley, Robert

      Gurden, Harold

      Morrison, Charles (Devizes)

      Allason, James (Hemel Hempstead)

      Hall, John (Wycombe)

      Mudd, David

      Astor, John

      Hall-Davis, A. G. F.

      Nicholls, Sir Harmer

      Atkins, Humphrey

      Hannam, John (Exeter)

      Noble, Rt. Hn. Michael

      Awdry, Daniel

      Harrison, Col. Sir Harwood (Eye)

      Normanton, Tom

      Baker, W. H. K. (Banff)

      Haselhurst Alan

      Onslow, Cranley

      Batsford, Brian

      Hastings, Stephen

      Oppenheim, Mrs. Sally

      Bennett, Dr. Reginald (Gosport)

      Havers, Michael

      Orr, Capt. L. P. S.

      Benyon, W.

      Hawkins, Paul

      Owen, Idris (Stockport, N.)

      Biffen, John

      Hayhoe, Barney

      Page, Graham (Crosby)

      Biggs-Davison, John

      Hicks, Robert

      Percival, Ian

      Boardman, Tom (Leicester, S. W.)

      Hill, James (Southampton, Test)

      Pike, Miss Mervyn

      Boscawen, R. T.

      Holland, Philip

      Powell, Rt. Hn. J. Enoch

      Boyd-Carpenter, Rt. Hn. John

      Holt, Miss Mary

      Prior, Rt. Hn. J. M. L.

      Braine, Bernard

      Hordern, Peter

      Pym, Rt. Hn. Francis

      Brewis, John

      Hornby, Richard

      Raison, Timothy

      Brown, Sir Edward (Bath)

      Hornsby-Smith. Rt. Hn. Dame Patricia

      Ramsden, Rt. Hn. James

      Bruce-Gardyne, J.

      Howell, David (Guildford)

      Redmond, Robert

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

      Howell, Ralph (Norfolk, North)

      Reed, Laurance (Bolton, E.)

      Bullus, Sir Eric

      Hutchison, Michael Clark

      Renton, Rt. Hn. Sir David

      Burden, F. A.

      Iremonger, T. L.

      Ridley, Hn. Nicholas

      Campbell, Rt. Hn. G. (Moray & Nairn)

      James, David

      Ridsdale, Julian

      Carlisle, Mark

      Jenkin, Patrick (Woodford)

      Roberts, Michael (Cardiff, N.)

      Channon, Paul

      Jennings, J. C. (Burton)

      Rossi, Hugh (Hornsey)

      Chichester-Clark, R.

      Jessel, Toby

      Rost, Peter

      Churchill, W. S.

      Jopling, Michael

      Russell, Sir Ronald

      Clark, William (Surrey, East)

      Joseph, Rt. Hn. Sir Keith

      Scott, Nicholas

      Clarke, Kenneth (Rushcliffe)

      Kaberry, Sir Donald

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

      Cockeram, Eric

      Kellett, Mrs. Elaine

      Shelton, William (Clapham)

      Cooke, Robert

      Kerby, Capt. Henry

      Sinclair, Sir George

      Coombs, Derek

      Kershaw, Anthony

      Soref, Harold

      Cooper, A. E.

      Kilfedder, James

      Spence, John

      Cordle, John

      King, Tom (Bridgwater)

      Sproat, Iain

      Cormack, Patrick

      Kinsey, J. R.

      Stanbrook, Ivor

      Costain, A. P.

      Knight, Mrs. Jill

      Stewart-Smith, D. G. (Belper)

      Critchley, Julian

      Knox, David

      Stodart, Anthony (Edinburgh, W.)

      Crouch, David

      Lambton, Antony

      Stoddart-Scott, Col. Sir M.

      Dalkeith, Earl of

      Lane, David

      Stokes, John

      d'Avigdor-Goldsmid, Sir Henry

      Langford-Holt, Sir John

      Stuttaford, Dr. Tom

      d'Avigdor-Goldsmid, Maj-Gen. Jack

      Legge-Bourke, Sir Harry

      Sutcliffe, John

      Dean, Paul

      Le Marchant, Spencer

      Tapsell, Peter

      Dixon, Piers

      Lewis, Kenneth (Rutland)

      Taylor, Sir Charles (Eastbourne)

      Edwards, Nicholas (Pembroke)

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

      Taylor, Frank (Moss Side)

      Elliot, Capt. Walter (Carshalton)

      Loveridge, John

      Taylor, Robert (Croydon, N. W.)

      Eyre, Reginald

      McAdden, Sir Stephen

      Tebbit, Norman

      Farr, John

      MacArthur, Ian

      Thompson, Sir Richard (Croydon, S.)

      Fell, Anthony

      McCrindle, R. A.

      Tilney, John

      Fenner, Mrs. Peggy

      McLaren, Martin

      Tugendhat, Christopher

      Fidler, Michael

      Maclean, Sir Fitzroy

      Turton, Rt. Hn. R. H.

      Finsberg, Geoffrey (Hampstead)

      McMaster, Stanley

      Waddington, David

      Fisher, Nigel (Surbiton)

      Macmillan, Maurice (Farnham)

      Walder, David (Clitheroe)

      Fookes, Miss Janet

      McNair-Wilson, Michael

      Ward, Dame Irene

      Fortescue, Tim

      Madel, David

      Warren, Kenneth

      Fowler, Norman

      Marten, Neil

      Weatherill, Bernard

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

      Mawby, Ray

      White, Roger (Gravesend)

      Fry, Peter

      Maxwell-Hyslop, R. J.

      Whitelaw, Rt. Hn. William

      Galbraith, Hn. T. G.

      Meyer, Sir Anthony

      Wilkinson, John

      Gardner, Edward

      Mills, Peter (Torrington)

      Wolrige-Gordon, Patrick

      Gibson-Watt, David

      Mills, Stratton (Belfast, N.)

      Wood, Rt. Hn. Richard

      Gilmour, Sir John (Fife, E.)

      Mitchell, David (Basingstoke)

      Woodhouse, Hn. Christopher

      Glyn, Dr. Alan

      Moate, Roger

      Woodnutt, Mark

      Goodhew, Victor

      Molyneaux, James

      Worsley, Marcus

      Gorst, John

      Money, Ernie

      Wylie, Rt. Hn. N. R.

      Gower, Raymond

      Monks, Mrs. Connie

      Younger, Hn. George

      Grant, Anthony (Harrow, C.)

      Monro, Hector

      Gray, Hamish

      Montgomery, Fergus

      TELLERS FOR THE NOES:

      Green, Alan

      More, Jasper

      Mr. Walker Clegg and

      Griffiths, Eldon (Bury St. Edmunds)

      Morgan-Giles, Rear-Adm.

      Mr. Keith Speed.

      Gummer, Selwyn

      Amendment No. 66 made: In line 9, leave out from 'vary' to end of subsection and insert:
      1276
      'the proportion and increase the amounts for the time being specified in this section'.—[Mr. Dean.]
      Mr. Michael Meacher: I beg to move Amendment No. 70, in page 2, line 10, at end to add:
      (5) Where the weekly rate falls to be reduced on a subsequent claim as a result of an increase in the family's resources, the reduction shall not be such that, taken together with the effect of that increase on the amount of any other benefits, rebates or exemptions, it reduces the value of the increase by more than 0–75 in every £1.
      I am grateful that on reconsideration this Amendment has been called since it raises the whole question of the overall impact of the total accumulation of disincentives, and I believe that the Amendment is of the greatest importance for the operation of the Bill. I therefore hope the Government will regard this matter sympathetically.
      It augurs wells for the Amendment that the Under-Secretary, in summing up the previous group of Amendments, rejected one Amendment on the ground that it would involve a marginal tax levy of 66⅔ per cent., which he regarded as too high. The aim of this Amendment is to prohibit a marginal tax levy in excess of the 75 per cent. I therefore assume that the Government, if they wish to be consistent, will agree to my Amendment.
      Let me illustrate the significance of the Amendment by drawing attention to the effect of the interaction between family income supplement and one single other means-tested benefit, namely rate rebate. For any size of family with two parents, the income limit for a rate rebate is 15s. per week below the F.I.S. prescribed amount, and for a one-parent family is as much as £3 below. If the prescribed amounts are raised before the F.I.S. scheme comes into operation in 1971, as the Secretary of State has hinted, the gap will grow even wider. This means that families just above the income limit for a full rate rebate will both have their rate rebate reduced by 5s. for every extra £1 of income above the limit, and lose 10s. of F.I.S. for each additional pound in the same income range. Thus, in terms of benefit forgone, these two means tests alone will represent a tax rate of 15s. in the pound for a large number of families.
      5.45 p.m.
      This is serious enough, but it is infinitely worse if we include, as we must, the whole plethora of other national and
      1278
      local means-tested benefits. Admittedly, most of the other national means tests, such as those for school meals and exemptions from Health Service charges, are pitched at a slightly more generous level and involve somewhat higher cutoff points. But there will often be local means-tested benefits which will be reduced or cut off at the same level of income as rate rebates. I am thinking of rent rebate, school uniform grants and educational maintenance allowances. In such cases the combined marginal tax rate will be very much in excess of 75 per cent.
      In addition, each extra £1 of income will be subject to a further proportional levy because of national insurance contribution. Even beyond this, there will be cases where income tax will be payable by claimants of F.I.S. A family whose income is above the prescribed amount in the first six months of the tax year and then falls below it will still qualify for F.I.S. but at the same time will be liable to tax at the standard rate on each additional £1 of income.
      To make this situation clearer, let me illustrate the cumulative effect of these contingencies in a single typical case. Let us take the case of a married man with three children who by dint of harder work, more overtime, or more generous piece-work earnings improves his pay from £15 to £18 a week. At this new level—and I admit that the exact position depends on the locality—he stands to lose about 15s. in school meals, 13s. 4d. in rent rebates, 15s. in rate rebates, and at the same time he will have to pay an extra 2s. 10d. in graduated national insurance contributions, representing a combined levy of 46s. 2d. out of £3, which means a marginal tax levy of 15s. 4d. in the pound.
      If F.I.S. is added to this, the total levy rises to 68s. 2d. out of £3, or 22s. 9d. in the pound. If one of the children is aged between 15 and 18 and if that child is still in full-time education and the family is claiming educational maintenance allowance, the total levy actually rises to around 80s. out of £3, or 27s. in the pound. This is a preposterous situation. But it may be argued that a small proportion of families eligible for educational maintenance allowance actually claim it. It may also be said that the man in my example lives in one of the many

      1279
      areas of the country where a rent rebate of any generous nature is not available, although the scheme recently propounded by the Secretary of State for the Environment will soon alter this situation. But, for the purposes of debate, I accent these limitations on my argument, although I would insist that it is the framework of benefits that are open to the public to claim, rather than what is actually claimed, to which we should address our minds. Even accepting these restrictions, the levy in my example, excluding rent rebate and educational maintenance allowance, will still be 54s. 10d. out of £3, or 18s. 3d. in the pound. To this sum F.I.S. has contributed 7s. 4d. in the pound.
      It will be clearly seen from this example that the poor are far worse off than the rich in the matter of incentives and that, in spite of the considerable emotional heat that has been generated on the other side of the House, about incentives, far more attention has been given to incentives to highly-paid executives rather than to what under these proposals will be a disincentive to a far greater number of low-paid workers on the shop floor. Even at the highest point of the income tax scale, the new marginal rate on earned income, bearing in mind the two-ninths earned income tax relief, never exceeds 17s. 9d. in the pound, while a maximum marginal levy of 15s. in the pound, which is the object of this Amendment, is not reached on the earned income tax scale until the very high salary level of around £11,000 a year. It is too much to say that there should be a direct comparison between high marginal rates for both rich and poor because the rich also get considerable fruits of a large gross income in terms of extensive accrued pension entitlements, lucrative widows' entitlements and also high status. None of these offsets is available to the poor and, therefore, the effects upon them of an extremely high marginal levy are all the worse.
      There is an inescapable argument for a marked reduction in what constitutes an utterly inadmissible burden of disincentives at the bottom of the income scale, such as we are considering under the Bill. The Government may argue that this position may arise only if a series of means-tested benefits are claimed and that this is unlikely. If means-tested bene-
      1280
      fits were considered to be an unsatisfactory method of delivering services to poor families, I am glad that the Government are blocking up this escape route in two ways. The first is by the admirable intention on the part of the Secretary of State to make eligibility for F.I.S. an automatic passport for eligibility to exemption from the other increased charges, such as higher prescription charges and ophthalmic and dental charges.
      Sir K. Joseph: From the charges themselves, if we can—not just the higher element in them.
      Mr. Meacher: I entirely accept that. The other way is by an increased advertising budget, designed to increase the take-up of at least the rate rebates, and I think the same for F.I.S. as well, although I am not clear about that—
      Sir K. Joseph indicated assent.
      Mr. Meacher: I am glad that the Secretary of State is nodding. While commending the purpose of both these Measures, I am sure that the Government must also agree that they will grossly aggravate the whole problem of disincentives discussed under the Amendment, because the higher the uptake, the more people who will have more to lose.
      For all these reasons, I trust that the case for easing the disincentives for the low-paid workers will be seen to be both plausible and convincing. What the Amendment seeks is far from an ideal settlement, but at least it would prevent an intolerable situation getting completely out of hand. In this vein, I hope that the Government will give it the sympathetic consideration that I believe it deserves.
      Mr. John Roper: I should like briefly to support the Amendment. One of the many disadvantages of the Bill, which the Amendment seeks to remove, is the addition to the disincentives that it imposes on the low paid. Earlier today, the Under-Secretary admitted the ignorance of his Department about the disincentive effects of different parts of this Measure on the low paid. He referred to it as an experiment to discover the strength of motivation of people in full-time work with low incomes.
      Mr. Dean: This is true of everyone—not just the Department.
      Mr. Roper: But it is odd that there is so much certainty about incentive or disincentive effects at high levels of income, but so much ignorance about the incentive or disincentive effect of these low incomes.
      There has been a certain amount of work on this already. My hon. and learned Friend the Member for Lincoln (Mr. Taverne) referred in an earlier debate to the paper by Professor Prest, the Hobart Paper published by the Institute of Economic Affairs, which analysed the effect of this multiplicity of means tests, which will be added to by the family income supplement. Similarly, Professor Kaim-Caudle has done a certain amount of work on this subject.
      My hon. Friend the Member for Oldham, West (Mr. Meacher) referred to the marginal tax levy, and I think that he was referring to the high marginal loss of social benefits for people in this situation as a result of the multiplicity of means tests. I hope that the Government will consider the Amendment seriously and will not think it necessary to carry their scientific research into the motivation of those on low incomes to a greater extent than a marginal loss of social benefits of 15s. in the £. Therefore, I hope that they will accept the Amendment.
      Mr. Dean: The hon. Member for Oldham, West (Mr. Meacher) admitted that the solution which he suggested was not ideal, and I entirely agree with that. In fact, it was very much an underestimate. What he was doing in drawing attention to a problem which certainly exists, as is clear from our earlier debates, is to take a very extreme case. There would be very few cases in which all these tests would operate together and have the sort of impact which he suggested on any particular family.
      In particular, most of the tests would operate at higher income levels than the family income supplement level. In typical cases, a family entitled to F.I.S. whose income is increased by £3 a week would still be eligible for full remissions in respect of school meals, prescription charges, welfare foods and optical and dental charges. So there would be very few cases in which the full impact of the cost that the hon. Gentleman mentioned would operate.
      Mr. Meacher: Would the hon. Gentleman not accept that it is precisely the
      1282
      fact that F.I.S. will act as a passport for remission of other charges which will itself increase the disincentive to move above the F.I.S. level in order to rely on ordinary earnings?
      Mr. Dean: There is a disincentive operating here—and this is admitted—but we do not know to what extent. This is an area where little is known about incentives and disincentives. But my point is that the sort of example which the hon. Member has quoted amounts to an overstating of his case. It is so extreme that he spoils what starts off as a reasonable argument on a problem which we admit exists.
      But there are also practical difficulties in the hon. Gentleman's proposal. It would mean that on all claims but the first, we would have to ask for full details of the various benefits and rebates a family has to be able to make a complete calculation, comparing the position at the time of the earlier claim with that at the time of the later claim. This would add greatly not only to the administrative burdens involved but also to those of the families concerned.
      So it is both for the first reason I gave and also for the practical reason that this Amendment is not acceptable. Where one has many forms of help, this type of problem is likely to arise. But this wide question which the hon. Member has raised is one of which the Government are very conscious, and which we are considering, of course, in the measures that we are taking to deal with this problem and the problem of family poverty as a whole.
      Mr. O'Malley: The Under-Secretary says that the Amendment is not acceptable. I would advise my hon. Friends that I do not find his arguments acceptable or convincing. Therefore, if my hon. Friend the Member for Oldham, West (Mr. Meacher) wishes to press the Amendment to a Division, I would advise my hon. Friends to support him in the Lobby.
      Mr. Meacher: I should like to reply to the points made, if they were really intended as substantial objections to the Amendment. It is suggested that it is very unlikely that several of these means tests would be taken together. I have already said that for most local and national means tests it remains the case

      1283
      that the cut-off point is at about the same level as for F.I.S.; so persons on F.I.S. will have an added disincentive to move their earnings to a higher level, not only because they will lose F.I.S., which is a substantial disincentive by itself, but because of the accumulation of all these other benefits.
      It is untrue to say that they will not occur at the same level. I should like to hear the Under-Secretary's view on the impact of the expensive advertising campaign which the Secretary of State for the Environment proposes to launch—£600,000 to be spent to improve the take-up on rate rebates. I would estimate that we might have an advertising budget for F.I.S. of around £250,000 or some similar figure. Perhaps it is lower than that. If we take the advertising budget of the two together, it will not be far short of £1 million.
      It is bound to improve the take-up and it will aggravate the whole problem of disincentives. In trying to do the right thing in increasing the take-up, the Government are getting themselves into increasing logical toils. I suggest that the Under-Secretary either does not see the problem or is making no attempt to find a proper way out of it.
      Second, the hon. Gentleman says that there is uncertainty, that we do not know enough about what constitutes a disincentive.
      Sir K. Joseph: At this level of income.
      Mr. Meacher: Can the right hon. Gentleman suggest, even at this level of income, that a 75 per cent. loss of earnings is not a very potent disincentive? Is there any level, however low, where that is not the case? Does the hon. Gentleman seriously suggest that we must have a controlled piece of research? It is often said of sociology that the aim is to prove the obvious. Must we have a piece of sociological research to indicate that a 75 per cent. loss of earning is not a massive disincentive?
      6.0 p.m.
      Mr. S. C. Silkin: Would my hon. Friend agree with what seems, to me at any rate, to be common sense: that the lower the income level the greater the disincentive of a very small sum?
      Mr. Meacher: I am grateful to my hon. and learned Friend for that point. I entirely accept it.
      For both these reasons, and in the absence of any substantial arguments against the Amendment, I should indeed like to press the matter to a Division.
      Question put, That the Amendment be made:—
      The Committee divided: Ayes 152, Noes 191.

      Division No. 27.]

      AYES

      [6.1 p.m.

      Albu, Austen

      Cunningham, G. (Islington, S. W.)

      Hamilton, William (Fife, W.)

      Allaun, Frank (Salford, E.)

      Cunningham, Dr. J. A. (Whitehaven)

      Hamling, William

      Archer, Peter (Rowley Regis)

      Davies, S. O. (Merthyr Tydvil)

      Hannan, William (G'gow, Maryhill)

      Armstrong, Ernest

      Davis, Clinton (Hackney, Central)

      Hardy, Peter

      Ashton, Joe

      Deakins, Eric

      Harper, Joseph

      Atkinson, Norman

      Dell, Rt. Hn. Edmund

      Harrison, Walter (Wakefield)

      Bagier, Gordon A. T.

      Dempsey, James

      Healey, Rt. Hn. Denis

      Barnett, Joel

      Doig, Peter

      Heffer, Eric S.

      Beaney, Alan

      Douglas, Dick (Stirlingshire, E.)

      Horam, John

      Bennett, James (Glasgow, Bridgeton)

      Duffy, A. E. P.

      Houghton, Rt. Hn. Douglas

      Bidwell, Sydney

      Dinnett, Jack

      Howell, Denis (Small Heath)

      Bishop, E. S.

      Eadie, Alex

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Boardman, H. (Leigh)

      Edwards, William (Merioneth)

      Hughes, Dr. Mark (Durham)

      Booth, Albert

      English, Michael

      Hughes, Roy (Newport)

      Bradley, Tom

      Faulds, Andrew

      Jenkins, Hugh (Putney)

      Broughton, Sir Alfred

      Fisher, Mrs. Doris (B'ham, Ladywood)

      Jenkins, Rt. Hn. Roy (Stechford)

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

      Fletcher, Ted (Darlington)

      Jones, Dan (Burnley)

      Buchan, Norman

      Foley, Maurice

      Jones, Barry (Flint, East)

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

      Foot, Michael

      Kaufman, Gerald

      Carmichael, Neil

      Forrester, John

      Kerr, Russell

      Carter-Jones, Lewis (Eccles)

      Freeson, Reginald

      Lambie, David

      Castle, Rt. Hn. Barbara

      Galpern, Sir Myer

      Lamond, James

      Clark, David (Colne Valley)

      Garrett, W. E.

      Latham, Arthur

      Cocks, Michael (Bristol, S.)

      Ginsburg, David

      Lawson, George

      Cohen, Stanley

      Gourlay, Harry

      Leadbitter, Ted

      Concannon, J. D.

      Grant, George (Morpeth)

      Leonard, Dick

      Conlan, Bernard

      Griffiths, Eddie (Brightside)

      Lestor, Miss Joan

      Cox, Thomas (Wandsworth, C.)

      Griffiths, Will (Exchange)

      Lever, Rt. Hn. Harold

      Crawshaw, Richard

      Hamilton, James (Bothwell)

      Lewis, Arthur (W. Ham, N.)

      Lipton, Marcus

      Peart, Rt. Hn. Fred

      Spriggs, Leslie

      Lomas, Kenneth

      Pentland, Norman

      Stoddart, David (Swindon)

      McBride, Neil

      Perry, Ernest G.

      Summerskill, Hn. Dr. Shirley

      McCann, John

      Prentice, Rt. Hn. Reg.

      Taverne, Dick

      McCartney, Hugh

      Prescott, John

      Thomson, Rt. Hn. G. (Dundee, E.)

      McElhone, Frank

      Probert, Arthur

      Tomney, Frank

      Mackenzie, Gregor

      Rankin, John

      Torney, Tom

      Mackie, John

      Reed, D. (Sedgefield)

      Tuck, Raphael

      Mackintosh, John P.

      Rhodes, Geoffrey

      Wainwright, Edwin

      McMillan, Tom (Glasgow, C.)

      Roberts, Albert (Normanton)

      Walden, Brian (B'm'ham, All Saints]

      McNamara, J. Kevin

      Robertson, John (Paisley)

      Walker, Harold (Doncaster)

      MacPherson, Malcolm

      Roderick, Caerwyn E. (Br'c'n & R'nor)

      Wallace, George

      Marks, Kenneth

      Roper, John

      Wellbeloved, James

      Mason, Rt. Hn. Roy

      Rose, Paul B.

      White, James (Glasgow, Pollok)

      Meacher, Michael

      Ross, Rt. Hn. William (Kilmarnock)

      Whitehead, Philip

      Mellish, Rt. Hn. Robert

      Shore, Rt. Hn. Peter (Stepney)

      Williams, Mrs. Shirley (Hitchin)

      Morris, Alfred (Wythenshawe)

      Silkin, Rt. Hn. John (Deptford)

      Wilson, Alexander (Hamilton)

      Murray, Ronald King

      Silkin, Hn. S. C. (Dulwich)

      Wilson, William (Coventry, S.)

      O'Malley, Brian

      Sillars, James

      Woof, Robert

      Oram, Bert

      Skinner, Dennis

      Orbach, Maurice

      Small, William

      TELLERS FOR THE AYES:

      Orme, Stanley

      Smith, John (Lanarkshire, N.)

      Mr. Alan Fitch and Mr. John Golding.

      Oswald, Thomas

      Spearing, Nigel

      NOES

      Adley, Robert

      Gibson-Watt, David

      Macmillan, Maurice (Farnham)

      Allason, James (Hemel Hempstead)

      Gilmour, Sir John (Fife, E.)

      McNair-Wilson, Michael

      Astor, John

      Glyn, Dr. Alan

      Madel, David

      Atkins, Humphrey

      Goodhew, Victor

      Marten, Neil

      Awdry, Daniel

      Gorst, John

      Mawby, Ray

      Baker, W. H. K. (Banff)

      Cower, Raymond

      Maxwell-Hyslop, R. J.

      Batsford, Brian

      Grant, Anthony (Harrow, C.)

      Meyer, Sir Anthony

      Bennett, Dr. Reginald (Gosport)

      Gray, Hamish

      Mills, Peter (Torrington)

      Benyon, W.

      Green, Alan

      Mills, Stratton (Belfast, N.)

      Biffen, John

      Griffiths, Eldon (Bury St. Edmunds)

      Mitchell, David (Basingstoke)

      Biggs-Davison, John

      Gummer, Selwyn

      Moate, Roger

      Boardman, Tom (Leicester, S. W.)

      Gurden, Harold

      Molyneaux, James

      Boscawen, R. T.

      Hall, John (Wycombe)

      Money, Ernie

      Boyd-Carpenter, Rt. Hn. John

      Hall-Davis, A. G. F.

      Monks, Mrs. Connie

      Braine, Bernard

      Hannam, John (Exeter)

      Monro, Hector

      Brewis, John

      Haselhurst, Alan

      Montgomery, Fergus

      Brown, Sir Edward (Bath)

      Hastings, Stephen

      More, Jasper

      Bruce-Gardyne, J.

      Havers, Michael

      Morgan-Giles, Rear-Adm.

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

      Hawkins, Paul

      Morrison, Charles (Devizes)

      Bullus, Sir Eric

      Hayhoe, Barney

      Mudd, David

      Burden, F. A.

      Hicks, Robert

      Neave, Airey

      Campbell, Rt. Hn. G. (Moray & Nairn)

      Hill, James (Southampton, Test)

      Nicholls, Sir Harmar

      Channon, Paul

      Holland, Philip

      Noble, Rt. Hn. Michael

      Chichester-Clark, R.

      Holt, Miss Mary

      Normanton, Tom

      Churchill, W. S.

      Hordern, Peter

      Onslow, Cranley

      Clarke, Kenneth (Rushcliffe)

      Hornby, Richard

      Oppenheim, Mrs. Sally

      Clegg, Walter

      Hornsby-Smith. Rt. Hn. Dame Patricia

      Orr, Capt. L. P. S.

      Cockeram, Eric

      Howell, Ralph (Norfolk, North)

      Owen, Idris (Stockport, N.)

      Cooke, Robert

      Hutchison, Michael Clark

      Page, Graham (Crosby)

      Coombs, Derek

      Iremonger, T. L.

      Percival, Ian

      Cooper, A. E.

      Jenkin, Patrick (Woodford)

      Pike, Miss Mervyn

      Cordle, John

      Jennings, J. C. (Burton)

      Powell, Rt. Hn. J. Enoch

      Cormack, Patrick

      Jessel, Toby

      Pym, Rt. Hn. Francis

      Costain, A. P.

      Jopling, Michael

      Raison, Timothy

      Critchley, Julian

      Joseph, Rt. Hn. Sir Keith

      Ramsden, Rt. Hn. James

      Crouch, David

      Kaberry, Sir Donald

      Redmond, Robert

      Crowder, F. P.

      Kerby, Capt. Henry

      Reed, Laurance (Bolton, E.)

      Dalkeith, Earl of

      Kershaw, Anthony

      Renton, Rt. Hn. Sir David

      d'Avigdor-Goldsmid, Sir Henry

      Kllfedder, James

      Ridsdale, Julian

      d'Avigdor-Goldsmid, Maj-Gen. Jack

      King, Evelyn (Dorset, South)

      Roberts, Michael (Cardiff, N.)

      Dean, Paul

      King, Tom (Bridgwater)

      Rossi, Hugh (Hornsey)

      Deedes, Rt. Hn. W. F.

      Kinsey, J. R.

      Rost, Peter

      Dixon, Piers

      Knight, Mrs. Jill

      Russell, Sir Ronald

      Edwards, Nicholas (Pembroke)

      Knox, David

      Scott, Nicholas

      Elliot, Capt. Walter (Carshalton)

      Lambton, Antony

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

      Fair, John

      Lane, David

      Shelton, William (Clapham)

      Fell, Anthony

      Langford-Holt, Sir John

      Sinclair, Sir George

      Fenner, Mrs. Peggy

      Legge-Bourke, Sir Harry

      Soref, Harold

      Fidler, Michael

      Le Marchant, Spencer

      Spence, John

      Finsberg, Geoffrey (Hampstead)

      Lewis, Kenneth (Rutland)

      Sproat, Iain

      Fisher, Nigel (Surbiton)

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

      Sranbrook, Ivor

      Fookes, Miss Janet

      Loveridge, John

      Stodart, Anthony (Edinburgh, W.)

      Fortescue, Tim

      MacArthur, Ian

      Stoddart-Scott, Col. Sir M.

      Fowler, Norman

      McCrindle, R. A.

      Stuttaford, Dr. Tom

      Fry, Peter

      McLaren, Martin

      Sutcliffe, John

      Galbraith, Hn. T. G.

      Maclean, Sir Fitzroy

      Tapsell, Peter

      Gardner, Edward

      McMaster, Stanley

      Taylor, Sir Charles (Eastbourne)

      1286

      1287

      Taylor, Frank (Moss Side)

      Ward, Dame Irene

      Woodhouse, Hn. Christopher

      Taylor, Robert (Croydon, N. W.)

      Warren, Kenneth

      Woodnutt, Mark

      Tebbit, Norman

      Weatherill, Bernard

      Wylie, Rt. Hn. N. R.

      Thompson, Sir Richard (Croydon, S.)

      White, Roger (Gravesend)

      Younger, Hn. George

      Tugendhat, Christopher

      Whitelaw, Rt. Hn. William

      Turton, Rt. Hn. R. H.

      Wilkinson, John

      TELLERS FOR THE NOES:

      Waddington, David

      Wolrige-Gordon, Patrick

      Mr. Reginald Eyre and

      Walder, David (Clitheroe)

      Wood, Rt. Hn. Richard

      Mr. Keith Speed.

      Clause 3, as amended, ordered to stand part of the Bill.

    Clause 4

      RESOURCES TAKEN INTO ACCOUNT
      Mr. Joel Barnett: I beg to move Amendment No. 24, in page 2, line 13, leave out 'except where regulations otherwise provide'.
      The right hon. Gentleman was kind enough to accept my first Amendment yesterday and I feel sure, knowing that this is an equally reasonable Amendment, that he will accept this one, too.
      The Clause is a vital one, dealing, as it does, with disregards, and the Amendment relates to whether the Minister should have power to include, by regulations, the income of a child. One appreciates that, generally, a Minister needs powers to do things by regulation, but this is rather different because if the Bill is left as it is the Minister will be able to alter the provisions of the Bill and include the income of a child, either in whole or in part.
      On what grounds, and in what circumstances, would the Minister wish, by regulation, to include a child's income? If there are only very few instances in which a child's income should be aggregated for this purpose, the right hon. Gentleman does not need the power given to him by the regulations. If this power is to be used only occasionally, there is all the more reason why the right hon. Gentleman should come back to the House to seek the powers that he would need to include a particular type of child's income. The right hon. Gentleman owes it to the House to explain in some detail why he would need to aggregate a child's income in those circumstances.
      Everyone must be aware of the great difficulties that could arise if a child's income were aggregated for F.I.S. purposes. A child could be earning a small sum, but that amount could nevertheless, be sufficient to exclude that family from
      1288
      F.I.S. and that could have the effect of driving that youngster out of the house. Surely that is not what the Minister and the Committee have in mind. Surely the Minister would not want to include a child's investment income, or income resulting from compensation for injuries, or income from a small amount of savings, or money received from a grandparent? I am sure that neither the Minister nor the Committee would want to aggregate the income of a child under those circumstances.
      It is interesting to note the approach of right hon. and hon. Gentlemen opposite, now that they are the Government, to the poorer sections of the community, compared with their attitude when they were the Opposition and expressed their opinion about the aggregation of a child's income for income tax purposes. There were some interesting debates in the Committee on the Finance Bill in 1968 when we discussed the question of aggregating a child's income with that of a family paying surtax.
      I shall not bore the House with quotations at length, but it is interesting to recall some of the remarks made at that time, because they are particularly relevant to this whole question of the aggregation of a child's income. It is interesting to compare the attitude of right hon. and hon. Gentlemen opposite today with their attitude in 1968. On 15th May, 1968 the late Iain Macleod said:
      "It is not only full of anomalies, but it is an attack upon savings, an attack, perhaps in particular, upon those in the middle income groups, and some of its consequences will be disastrous and tragic.…"—[OFFICIAL REPORT, Standing Committee A, 15th May, 1968: c. 849.]
      I did not believe that the right hon. Gentleman was right.
      Many families to whom the Bill is intended to apply will suffer considerably if it contains a provision that some types of children's income can be aggregated. Many more tragic circumstances were brought to our notice during those debates in 1968. We were told about

      1289
      thalidomide children who had some income which could be aggregated for surtax purposes. Could that income be aggregated by the Minister under the proposed regulations? I suppose it could. I am not suggesting that the right hon. Gentleman would do that, but it could be done under the regulations.
      6.15 p.m.
      Some strong words were used in 1968 by some right hon. and hon. Gentlemen who are now Members of the Government. The right hon. Gentleman who is now the Minister for Transport Industries used words which we expected from him. He told us how cruel it was to deal in that way with the children of families in this category, and let us bear in mind that we were talking about families who were trying, under the law as it stood, to avoid particular levels of surtax. That is not quite the same as the kind of family that we are dealing with here. If right hon. Gentlemen felt so strongly about aggregation in those circumstances, I should have thought that it was incumbent upon them now that they are the Government, to accept the Amendment and show that they feel at least as strongly about families and children at the lower end of the scale.
      If, as we have been told repeatedly, the idea is to make this provision as simple as possible so that not only we in the House understand it, but that it is understood by those who will be involved in making claims, the Minister should accept the Amendment. After all, the Government will spend tens of thousands of pounds on trying to make this provision clear to ordinary people.
      Sir K. Joseph indicated dissent.
      Mr. Barnett: Is the right hon. Gentleman suggesting that the Government are not going to spend tens of thousands of pounds on making the position clear?
      Sir K. Joseph: A lot of money, but certainly not tens of thousands of pounds.
      Mr. Barnett: The right hon. Gentleman may need to spend that much money to make the meaning of the Bill clear to the people who will be eligible to claim under it. The Preamble to the Bill tells us that the entitlement will be based on a simple test. If that is so, and if the Minister wants to make provision easily understood he should accept the
      1290
      Amendment and make it clear that no income of a child will be included for the purposes of aggregation. If, at some future date, the right hon. Gentleman wants to bring in a particular type of child's income because there is some kind of evasion, it will be possible for him to do that. To leave in this provision with the possibility of amendment by regulation runs directly counter to the right hon. Gentleman's whole idea of making the whole thing simple for the people involved to understand.
      The impression that one gets from subsection (1) is that those who are to claim can generally disregard a child's income. If the regulations are intended to alter that, the least the Minister should do is to tell us in what circumstances he will make a change in this provision. If this is not a deliberate attempt to hide behind the Regulations, the Committee ought to be told. If we do not get a proper answer from the right hon. Gentleman, I feel that we should press the matter to a Division.
      [Mr. BRYANT GODMAN IRVINE in the Chair]
      Mr. James Dempsey: I want the Minister to address himself to certain anomalies that seem likely to arise if he is bent on this course. To aggregate certain incomes would be rather mean on the part of the right hon. Gentleman's Department. We are talking here about young people. Has the right hon. Gentleman considered the case of young persons who reach the acceptable age and are responsible for the delivery of milk before going to school in the mornings? I should like to know whether their incomes will be aggregated for this purpose or whether the Minister can say that income of that nature will be disregarded. That question ought to be cleared up before we dispose of the Amendment.
      Further, there are young persons who serve the community in other ways during the permitted hours. In my part of the world, at least, these young persons deliver morning rolls. Their work is part-time, but they receive weekly earnings. Is it the intention to aggregate that form of earnings in applying the scale? The right hon. Gentleman must give thought to that question.

      1291
      There is the whole question of seasonal employment. I do not know what happens in the south, but in the north we make a special appeal, through the schools, for young people of the approved age to assist in potato harvesting. Without their assistance it would be extraordinarily difficult to bring in the potato harvest. For their work these young people receive a certain amount of money, and I should like to know whether that element would be aggregated. If so, in many cases—especially in the case of those eligible for F.I.S.—it would be a decided disincentive for these young people to give such a service. It is not easy work; in fact, it is a back-breaking job. If the Bill is to operate properly the Minister must come clean and tell us whether such earnings will be aggregated.
      Other activities that I want to mention include berry picking. That is a seasonal operation which attracts young people, including those of the permitted school age. In that case, too, young people are unlikely to take part in such activities if the result is a reduction of their entitlement to F.I.S.
      I am sure that the right hon. Gentleman and his Department must have given some thought to these matters. I should like an explanation from the right hon. Gentleman so that we know where he stands on them. It would appear obvious to all that to take account of this type of income and not to disregard it would be not only mean but miserable. I hope that when the right hon. Gentleman explains the real intention of this part of the Bill he will answer the questions that I have raised. It is extremely difficult to interpret some aspects of the Bill, and the one with which I am now dealing is one with which I have found myself at cross purposes. I am completely unclear about the intention of these provisions.
      If income of this nature is not to be disregarded I do not see how anybody can support this legislation. I hope that the right hon. Gentleman will therefore have regard to my arguments and will study closely the implications of what I have said. I hope that when he replies he will be able to tell the Committee whether my fears are well-grounded.
      Mr. Hugh D. Brown: I do not want to detain the right hon. Gentleman from making what will obviously be a very sympathetic reply. He has not had much opportunity to do so until now. I want to add briefly to the categories of case that my hon. Friend has outlined—the case of young people who may still be at school, receiving full-time education, but who work on Saturdays. Sometimes the contribution made by such young people is not significant in terms of the total income of the family; the work is done to enable the young persons to participate in extra-school activity, or to have a holiday, or to do something that is extremely desirable. Taking up part-time work is the only way in which such young people, if they are members of a low-wage-earning family, can benefit in this way.
      I am sure that the Minister is bursting to reassure the Committee on the matter. I hope that at the same time he will be able to give us some idea whether he will exclude income of the kind to which I am referring, and, if so, what income he will include.
      Sir K. Joseph: I am grateful to hon. Members opposite for sympathising with my desire to call off the bombardment, if I can. The Government have no intention whatsoever of using regulations to bring into account any of the sorts of income or earnings of children, to which hon. Members have referred. The only reason for keeping the power to make regulations is to cover the situation if we find that there is abuse. A situation might arise in which parents deliberately arranged that some of the income due to them was put into the name of one of their children. If that happened we should have to take it seriously, because it would be inequitable as between one household that did not do it and another that did.
      It is simply in order to protect the public purse against abuse of that or a similar sort that I wish to keep this regulating power in the Bill. I hope that that will give some satisfaction to hon. Members.
      Mr. McNamara: I appreciate the sympathy with which the right hon. Gentleman has met us on this point. Nevertheless, there are two points which

      1293
      do not arise under the category of case that has been mentioned. The first concerns boarding-out allowances for foster children. In certain cases the allowance that comes in in respect of foster children could take the family income beyond the level of F.I.S. As that money is paid for the upkeep of a child, would it be regarded as income for the child or income for the foster parents, which might therefore take them out of F.I.S.?
      My other point concerns money paid into a household by way of maintenance allowance to children whose parents have been divorced or have separated and are living in different households. The money is paid for the maintenance of the children, but there may be other children in the household and the money coming in may take the family beyond the limit. I agree that it can be argued that in these cases the money is paid to the parent, but it is paid specifically for the maintenance of children. Therefore, it takes them out of the F.I.S. limit. With regard to the limitation that we have already laid down for six children, these could be important points.
      6.30 p.m.
      Mr. Meacher: May I revert to the last remark of the Secretary of State, when he mentioned possible abuse? It is significant that he used the word "abuse" to describe a situation in which income coming to the parent was deliberately put into the account of the child.
      Sir K. Joseph: No, where money earned by the parent was treated as earned by the child. We are not talking of a donation, if that is the right word, from a parent to a child. It is where a stream of income earned by the parent is put into the child's name, purely because the child's income is disregarded.
      Mr. Meacher: Is that entirely compatible with the intention as revealed in an answer I had yesterday, to do away with the parent-child aggregation whereby money is quite deliberately fed to the child in order to escape a much higher rate of income tax, either for the grandparent or the parent, which is used particularly by rich parents to secure a taxpayer-granted education for their child at a public school?
      Mr. Barnett: I found the right hon. Gentleman's reply far from satisfactory.
      1294
      He did not reply at all to the points of my hon. Friends. He just said that he accepted all they said but would not intend to use the regulations to do what they had in mind. Then, with the whole paraphernalia of the Government at his disposal, the only example of abuse that he could give as his reason for refusing the Amendment was one whereby parents would allow some of their income to be treated as the income of their child.
      This tells us a great deal about the right hon. Gentleman's thinking. If he imagines that this type of person has the sort of income which he can somehow or other divert and call his child's, I am afraid that he is still thinking of the surtax payer to whom my hon. Friend referred. It is surprising that the only abuse that he could unearth was this one. If he has more, I should be pleased to hear them. But if this is the only example, if he accepted the Amendment and there were then many cases in which this abuse applied, it would be simple for him to come to the House and ask for regulations. Without that sort of evidence, he has not satisfield the Committee, and I would certainly press my hon. and right hon. Friends to vote for the Amendment.
      Sir K. Joseph: The hon. Member is determined to have a battle here, but it was he, the hon. Member for Heywood and Royton (Mr. Barnett), who instanced a situation in which the child might have some investment income. I never conceived of such a possibility for an F.I.S. family. I am postulating a situation in which a parent does an item of work and says, "Make the pay ment to my child for the work." That could conceivably happen. If it happened systematically, we should have to take it into account. That is the sort of possibility that I have in mind in retaining the regulating power.
      Mr. J. R. Kinsey: What would be the position in the case which frequently happens—that of a child star or model paying his mother as a secretary?
      Sir K. Joseph: Then we should be outside the FIS galaxy; that is all I can say.
      If the hon. Member for Heywood and Royton and his hon. Friends wish to have a battle—fine, but not because we on this side believe that F.I.S. families

      1295
      will have large dividend income to divert to any member of the family they wish.
      Mr. Barnett: I was only saying that we will bear the right hon. Gentleman's argument in mind when we come to consider aggregation for surtax purposes which the Chancellor suggests he will abolish.
      Meanwhile, I will certainly ask my right hon. and hon. Friends to press this to a Division.
      Question put, That the Amendment be made:—
      The Committee divided: Ayes 139. Noes 183.

      Division No. 28.

      AYES

      [6.35 p.m.

      Albu, Austen

      Griffiths, Will (Exchange)

      O'Malley, Brian

      Allaun, Frank (Salford, E.)

      Hamilton, James (Bothwell)

      Oram, Bert

      Archer, Peter (Rowley Regis)

      Hamilton, William (Fife, W.)

      Orbach, Maurice

      Armstrong, Ernest

      Hamling, William

      Oswald, Thomas

      Ashton, Joe

      Hannan, William (G'gow, Maryhill)

      Peart, Rt. Hn. Fred

      Atkinson, Norman

      Hardy, Peter

      Pentland, Norman

      Bagier, Gordon A. T.

      Harper, Joseph

      Perry, Ernest G.

      Barnett, Joel

      Harrison, Walter (Wakefleld)

      Prentice, Rt. Hn. Reg.

      Beaney, Alan

      Healey, Rt. Hn. Denis

      Prescott, John

      Bennett, James (Glasgow, Bridgeton)

      Heffer, Eric S.

      Probert, Arthur

      Bidwell, Sydney

      Horam, John

      Rankin, John

      Boardman, H. (Leigh)

      Houghton, Rt. Hn. Douglas

      Reed, D. (Sedgefield)

      Booth, Albert

      Howell, Denis (Small Heath)

      Rhodes, Geoffrey

      Bradley, Tom

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Roberts, Albert (Normanton)

      Broughton, Sir Alfred

      Hughes, Dr. Mark (Durham)

      Robertson, John (Paisley)

      Buchan, Norman

      Hughes, Roy (Newport)

      Roderick, Caerwyn E. (Br'c'n & R'dnor)

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

      Jenkins, Hugh (Putney)

      Roper, John

      Carmichael, Neil

      Jenkins, Rt. Hn. Roy (Stechford)

      Rose, Paul

      Carter-Jones, Lewis (Eccles)

      Jones, Dan (Burnley)

      Ross, Rt. Hn. William (Kilmarnock)

      Clark, David (Colne Valley)

      Jones, Barry (Flint, East)

      Shore, Rt. Hn. Peter (Stepney)

      Cocks, Michael (Bristol, S.)

      Kaufman, Gerald

      Silkin, Rt. Hn. John (Deptford)

      Cohen, Stanley

      Kerr, Russell

      Silkin, Hn. S. C. (Dulwich)

      Concannon, J. D.

      Lambie, David

      Sillars, James

      Conlan, Bernard

      Lamond, James

      Skinner Dennis

      Cox, Thomas (Wandsworth, Central)

      Lawson, George

      Small, William

      Crawshaw, Richard

      Leadbitter, Ted

      Smith, John (Lanarkshire, North)

      Cunningham, G. (Islington, S. W.)

      Lestor, Miss Joan

      Spearing, Nigel

      Cunningham, Dr. J. A. (Whitehaven)

      Lever, Rt. Hn. Harold

      Spriggs, Leslie

      Davies, S. O. (Merthyr Tydvil)

      Lewis, Arthur (W. Ham N.)

      Stoddart, David (Swindon)

      Dell, Rt. Hn. Edmund

      Lomas, Kenneth

      Summerskill, Hn. Dr. Shirley

      Dempsey, James

      Lyon, Alexander W. (York)

      Taverne, Dick

      Doig, Peter

      McBride, Neil

      Tomney, Frank

      Douglas, Dick (Stirlingshire, E.)

      McCann, John

      Tuck, Raphael

      Duffy, A. E. P.

      McCartney, Hugh

      Wainwright, Edwin

      Dunnett, Jack

      McElhone, Frank

      Wallace, George

      Eadie, Alex

      Mackenzie, Gregor

      Wellbeloved, James

      Edwards, William (Merioneth)

      Mackie, John

      Wells, William (Walsall, N.)

      English, Michael

      Mackintosh, John P.

      White, James (Glasgow, Pollok)

      Faulds, Andrew

      McManus, Frank

      Whitehead, Philip

      Fisher, Mrs. Doris (B'ham, Ladywood)

      McMillan, Tom (Glasgow, C.)

      Williams, Mrs. Shirley (Hitchin)

      Fletcher, Ted (Darlington)

      McNamara, J. Kevin

      Wilson, Alexander (Hamilton)

      Foley, Maurice

      MacPherson, Malcolm

      Wilson, William (Coventry)

      Foot, Michael

      Marks, Kenneth

      Woof, Robert

      Freeson, Reginald

      Mason, Rt. Hn. Roy

      Galpern, Sir Myer

      Meacher, Michael

      TELLERS FOR THE AYES:

      Gourlay, Harry

      Mellish, Rt. Hn. Robert

      Mr. Alan Fitch and

      Grant, George (Morpeth)

      Morris, Alfred (Wythtnshawe)

      Mr. John Golding.

      Griffiths, Eddie (Brightside)

      Murray, Ronald King

      NOES

      Adley, Robert

      Bullus, Sir Eric

      Crowder, F. P.

      Astor, John

      Burden, F. A.

      Dalkeith, Earl of

      Atkins, Humphrey

      Campbell, Rt. Hn. G. (Moray & Nairn)

      d'Avigdor-Goldsmid, Sir Henry

      Awdry, Daniel

      Chichester-Clark, R.

      d'Avigdor-Goldsmid, Maj.-Gen. Jack

      Baker, W. H. K. (Banff)

      Churchill, W. S.

      Dean, Paul

      Batsford, Brian

      Clarke, Kenneth (Rushcliffe)

      Deedes, Rt. Hn. W. F.

      Benyon, W.

      Clegg, Walter

      Dixon, Piers

      Biffen, John

      Cockeram, Eric

      Edwards, Nicholas (Pembroke)

      Biggs-Davison, John

      Cooke, Robert

      Elliot, Capt. Walter (Carshalton)

      Boardman, Tom (Leicester, S. W.)

      Coombs, Derek

      Eyre, Reginald

      Boscawen, R. T.

      Cooper, A. E.

      Farr, John

      Boyd-Carpenter, Rt. Hn. John

      Cordle, John

      Fell, Anthony

      Braine, Bernard

      Cormack, Patrick

      Fenner, Mrs. Peggy

      Brewis, John

      Costain, A. P.

      Fidler, Michael

      Brown, Sir Edward (Bath)

      Critchley, Julian

      Finsberg, Geoffrey (Hampstead)

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

      Crouch, David

      Fisher, Nigel (Surbiton)

      Fookes, Miss Janet

      Kinsey, J. R.

      Redmond, Robert

      Fortescue, Tim

      Knight, Mrs. Jill

      Reed, Laurence (Bolton, East)

      Foster, Sir John

      Knox, David

      Renton, Rt. Hn. Sir David

      Fowler, Norman

      Lam, David

      Ridley, Hn. Nicholas

      Fry, Peter

      Langford-Holt, Sir John

      Ridsdale, Julian

      Galbraith, Hn. T. G.

      Legge-Bourke, Sir Harry

      Roberts, Michael (Cardiff, North)

      Gardner, Edward

      Le Marchant, Spencer

      Rost, Peter

      Gibson-Watt, David

      Lewis, Kenneth (Rutland)

      Russell, Sir Ronald

      Gilmour, Sir John (Fife, E.)

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

      Scott, Nicholas

      Glyn, Dr. Alan

      Loveridge, John

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

      Gorst, John

      MacArthur, Ian

      Shetton, William (Clapham)

      Gower, Raymond

      McCrindle, R. A.

      Sinclair, Sir George

      Gray, Hamish

      Maclean, Sir Fitzroy

      Soref, Harold

      Green, Alan

      McMaster, Stanley

      Speed, Keith

      Griffiths, Eldon (Bury St. Edmunds)

      Macmillan, Maurice (Farnham)

      Spence, John

      Gummer, Selwyn

      McNair-Wilson, Michael

      Sproat, Iain

      Gurden, Harold

      Madel, David

      Stainton, Keith

      Hall, John (Wycombe)

      Marten, Neil

      Stanbrook, Ivor

      Hall-Davis, A. G. F.

      Mawby, Ray

      Stodart, Anhony (Edinburgh, W.)

      Hannam, John (Exeter)

      Maxwell-Hyslop, R. J.

      Stoddart-Scott, Col. Sir M.

      Haselhurst, Alan

      Meyer, Sir Anthony

      Stuttaford, Dr. Tom

      Hastings, Stephen

      Mills, Peter (Torrington)

      Sutcliffe, John

      Havers, Michael

      Mills, Stratton (Belfast, N.)

      Tapsell, Peter

      Hawkins, Paul

      Mitchell, David (Basingstoke)

      Taylor, Sir Charles (Eastbourne)

      Hayhoe, Barney

      Moate, Roger

      Taylor, Frank (Moss Side)

      Hicks, Robert

      Molyneaux, James

      Taylor, Robert (Croydon, N. W.)

      Hill, James (Southampton, Test)

      Money, Ernie

      Tebbit, Norman

      Holland, Philip

      Monks, Mrs. Connie

      Thompson, Sir Richard (Croydon, S.)

      Holt, Miss Mary

      Mornro, Hector

      Tugendhat, Christopher

      Hordern, Peter

      Montgomery, Fergus

      Turton, Rt Hn. R. H.

      Hornby, Richard

      More, Jasper

      Waddington, David

      Morgan-Giles, Rear-Adm.

      Walder, David (Clitheroe)

      Hornsby-Smith, Rt. Hn. Dame Patricia

      Morrison, Charles (Devizes)

      Ward, Dame Irene

      Howell, Ralph (Norfolk, North)

      Mudd, David

      Warren, Kenneth

      Hutchison, Michael Clark

      Neave, Airey

      Weatherill, Bernard

      Iremonger, T. L.

      Nicholls, Sir Harmar

      White, Roger (Gravesend)

      Jenkin, Patrick (Woodford)

      Noble, Rt. Hn. Michael

      Whitelaw, Rt. Hn. William

      Jennings, J. C. (Burton)

      Normanton, Tom

      Wilkinson, John

      Jessel, Toby

      Onslow, Cranley

      Wolrige-Gordon, Patrick

      Jopling, Michael

      Oppenheim, Mrs. Sally

      Woodnutt, Mark

      Joseph, Rt. Hn. Sir Keith

      Owen, Idris (Stockport, North)

      Wylie, Rt. Hn. N. R.

      Kaberry, Sir Donald

      Page, Graham (Crosby)

      Younger, Hn. George

      Kerby, Capt. Henry

      Percival, Ian

      Kershaw, Anthony

      Pike, Miss Mervyn

      TELLERS FOR THE NOES:

      Kilfedder, James

      Powell, Rt. Hn. J. Enoch

      Mr. Victor Goodhew and

      King, Evelyn (Dorset, South)

      Pym, Rt. Hn. Francis

      Mr. Hugh Rossi.

      King, Tom (Bridgwater)

      Ramsden, Rt. Hn. James

      Mr. Taverne: I beg to move Amendment No. 25, in page 2, line 14, at end insert:
      'or other member of the said family under the age of eighteen'.
      Before we come to the batch of big Amendments, as it were, this is one on which I intend to speak briefly. It is of a somewhat exploratory nature. The purpose of the Amendment in the first place was to cover the position of those in full-time education. From the answer which the right hon. Gentleman gave to a question from his hon. Friend the Member for Rochester and Chatham (Mrs. Fenner) on Friday, I gather that this will be covered. I should like reassurance on that.
      The other problem with which the Amendment is concerned is one which the Supplementary Benefits Commission has already come across. It is the problem that by taking into account the earnings of boys and girls who have just left school
      1298
      there are cases in which the effect of it is to drive the boys and girls in question away from home. They go and live with their grandmother, or somewhere else. To drive a family apart at a time when the children still need the care of the parents is not the result which we wish to achieve.
      I realise that if there is a total disregard of earnings, however high, this might raise difficulties within the scheme as a whole. Therefore, this Amendment should be read together with Amendment No. 30, which mentions a figure of £2. This is a serious problem. The F.I.S. scheme will make it worse. I should appreciate the right hon. Gentleman's comments on the particular problem with which the Amendment is concerned and also reassurance on the first point.
      Sir K. Joseph: On the first point, I can give the Committee the assurance required that full-time education up to the ending of the secondary school leaving age will be covered. That is to say, the

      1299
      adolescent remains a child for the purposes of F.I.S.
      I am not quite sure that I have fully grasped the implications of the second point put. I shall have to study it and give an answer to a written Question, if I may, because I cannot give a categorical assurance from the Box now.
      Mr. Taverne: I am not sure that a Written Answer is a suitable way in which to give an answer. I wonder if, in some way, the right hon. Gentleman could give some sort of answer at Report.
      Sir K. Joseph: Certainly.
      Amendment negatived.
      Mr. O'Malley: I beg to move Amendment No. 26, in page 2, line 16, after 'shall', insert:
      'subject to the following provisions of this section'.
      The Temporary Chairman: With this we are to take the following Amendments: Amendment No. 27, in page 2, line 17, leave out from 'manner' to end of line 26 and add:
      'as is now used by the Inland Revenue'.
      Amendment No. 28, in line 23, leave out paragraph (c).
      Amendment No. 29, in line 26, at end add:
      (3) For the purposes of this Act money paid by a widower to a person for caring for his children shall be disregarded in calculating his gross income.
      Amendment No. 30, in line 26, at end add:
      (3) In the calculation of gross income there shall be disregarded to the extent of the first £2 thereof any earnings (other than such as are excluded by virtue of sub-section 1 of this section) of any member of the said family who is not engaged in full-time remunerative work.
      Amendment No. 31, in line 26, at end add:
      (3) In the calculation of gross income there shall be disregarded any sum paid or payable to any member of the said family by way of attendance allowance under section 4 of the National Insurance (Old Persons' and Widows' Pensions and Attendance Allowance) Act 1970.
      Amendment No. 32, in line 26, at end add:
      (3) In the calculation of gross income there shall be disregarded a sum equivalent to
      1300
      such sum (not exceeding £5 per week or such higher sum as may from time to time be provided by Regulations) as is being paid out of the said gross income to any person not being a member of the said family for services which relate to the care of the said household or of any member of the said family requiring such care.
      Amendment No. 33, in line 26, at end add:
      ( ) In the calculation of gross income there shall be disregarded any sum paid or payable to any member of such family by way of pension in respect of war service.
      Amendment No. 34, in line 26, at end add:
      ( ) In the calculation of gross income there shall be disregarded any sum paid or payable to any member of the said family by way of family allowance in respect of any child or children who is a member of the said family.
      Amendment No. 35, in line 26, at end add:
      ( ) In the calculation of gross income there shall be disregarded any sum paid or payable to any member of the said family by way of National Insurance benefits in respect of sickness or disability or industrial injury.
      And Amendment No. 36, in line 26, at end add:
      ( ) In the calculation of gross income there shall be disregarded any sum paid or payable to any member of the said family by virtue of section 1 of the National Insurance (Old Persons' and Widows' Pensions and Attendance Allowance) Act 1970.
      6.45 p.m.
      Mr. O'Malley: For the convenience of the Committee, we shall make speedier progress if I make some general remarks on the subject of disregards, which are the subject of virtually every Amendment we are discussing. Perhaps later in the debate some of my hon. Friends, both from the Front Benches and the back benches, will seek to catch your eye, Mr. Godman Irvine, to deal with particular Amendments in this group.
      First, the Bill provides for some disregards. In Clause 4(2)(b), there is provision as follows:
      "for disregarding the whole or part of the income from any source specified in the regulations."
      Since that time, however, we have had further guidance on the subject. On Second Reading, the Under-Secretary was speaking about war pensions and war pension disregards, but he ranged wider than that when he said in reply to a query from the right hon. Member for

      1301
      Kingston-upon-Thames (Mr. Boyd-Carpenter):
      "As the responsible Minister, I am sorry to tell my right hon. Friend, but I hope that he will appreciate, that if we are to keep the scheme simple, as we must, it is very difficult to introduce any form of disregard."—[OFFICIAL REPORT, 10th November, 1970; Vol. 806, c. 334.]
      we were given further advice in reply to a Written Question on 13th November when the Secretary of State said:
      "Initially it is not proposed to exercise the powers conferred under Clause 4(2)(b) (disregarding the whole or part of the income from any source specified in the regulations) or (c) (treating capital resources and any income not consisting of money as equivalent to gross income of a specified amount)."—[OFFICIAL REPORT, 13th November, 1970; Vol. 806, c. 285.]
      On the one hand the Under-Secretary saw no possibility of the introduction of disregards, because he wanted the scheme to be kept simple, and, on the other, we are told that it is not proposed initially to exercise the powers under paragraph (b). Apparently we are now in the situation in which there are to be no disregards whatever in the administration of the scheme.
      The purpose of Amendment No. 28 is to leave out the paragraph which deals with capital resources. It was intended as a probing Amendment because we wished to inquire how capital was to be treated. We now understand that capital will not be treated at all. I appreciate that the vast majority, and perhaps all, of those concerned will not have capital resources, but legislation must take account of every conceivable kind of situation and I suppose that for that reason capital was included in the draft of Clause 4. Nevertheless, we should be glad if the right hon. Gentleman would give us some information, both about the short-term treatment of capital that is, before paragraph (c) is brought into operation, and the longer-term treatment of capital once it is brought into operation.
      I wish now to turn to the broad subject of disregards. The lowest paid, those who will receive the family income supplement, will sometimes receive an income below, even substantially below, the income which they would receive at supplementary benefit level. This has already been demonstrated. We are now to have a situation in which, because the recipient of supplementary benefit may have a dis-
      1302
      regarded income, the lowest paid in work will be treated more harshly under one State social security scheme than another individual is treated under another State social security scheme.
      Nor is it only the lowest paid who are affected. Even those with incomes somewhat above the lowest paid, but affected by the scheme, will be treated more harshly than, for example, unemployed people on supplementary benefit. I said last night that it is no answer to say that we must keep the scheme simple. It does not seem sensible to say that we know that it is unfair and unjust between one section and another and completely inequitable, but that we have the defence that we want to keep it simple. That is where the Government are falling down. The scheme is not simple, and it would be a much better scheme if the admittedly increased complexity of the assessment of disregards were added.
      Anyone who has heard the debates of today and yesterday would find it difficult to say that the scheme was simple. We all admire the capacity of the Secretary of State and it may be a test of the simplicity of the scheme to invite him to say in not more than 50 words how he will put the proposition arising out of Clauses 1, 2 and 3 to the general public. That would be an interesting demonstration of the simplicity of the scheme.
      Amendment No. 29 deals with the widower with a number of children who has to pay someone to look after the children while he goes out to work. The Committee will agree that it is better that a man in this kind of situation, without the help which some get from grandmothers and other relatives, should be able to follow his employment and earn his livelihood rather than stay at home himself to look after his children, as sometimes, if rarely, occurs under the supplementary benefit scheme.
      Amendment No. 30 is intended to provide the same conditions for the wife of a lowly paid man receiving F.I.S. as are permitted to the wife of a recipient of supplementary benefit. Under the supplementary benefit regulations, a wife may work part time and the first £2 of income are disregarded. Without such a disregard, there would be a strong disincentive against the wife going to work to improve the conditions of the family,

      1303
      albeit marginally. The woman who wants to buy some Christmas presents for the kids is in precisely the kind of situation we have in mind. The supplementary benefits scheme recognises the need for mitigation by its disregards and there seems to be a substantial case for a similar disregard for the working "mum" in these circumstances.
      It is not only the working mother who is affected. What about the young people living in the house and just over 16, the girl who is an apprentice hairdresser, for instance? I have always thought that the wages paid to some of these young girls as apprentice hairdressers were nothing short of scandalous. The supplementary benefit scheme disregards 20s. of this income. We do not want these young people to be in penury and they ought to be allowed at least a limited amount of the enjoyment and entertainment that young people of that age ought to have in the 1970s.
      We are on strong ground with Amendment No. 31 which deals with attendance allowances. The Under-Secretary and I took part in long debates about attendance allowances. We were all at one about how desirable it was that they should be completely disregarded in calculating supplementary benefit. We were pleased to have broken new ground and there was no one who took a contrary view. We should feel justified in an angry approach if the Government decided not to do something about this group of people.
      7.0 p.m.
      Amendment No. 34 deals with the family allowance. In this connection, will the right hon. Gentleman answer one question? If family allowances are increased, and the terms of the Bill are not changed at the same time, it could happen that a family would receive increased family allowances at some stage in the future but they would not gain from the increase because their family income supplement would be reduced. What has he in mind there?
      Amendment No. 35 deals with national insurance benefits in respect of sickness, disability or industrial injury. Again, disability pensions are disregarded for supplementary benefit purposes to the extent of £2. As regards sickness benefits,
      1304
      will the right hon. Gentleman explain how the system will work? For example, if someone at work is assessed as entitled to family income supplement for a period of 26 weeks, and during that period he falls sick and starts receiving sickness benefit, how will the two knit together, and how will the scheme be administered?
      Amendment No. 36 deals with old people in households, with particular reference to those who benefited under the National Insurance (Old Persons' and Widows' Pensions and Attendance Allowance) Act, 1970.
      Finally—I deliberately leave it to the last—the question of war pensions. It has always been accepted in this country, and I hope that it will continue to be, that those who receive pensions in respect of injuries, wounds or disabilities sustained in time of war are in a special position. I am sure that this is accepted across the Floor and throughout the country. As recently as 23rd July this year, the noble Lord, Lord Aberdare, said in the other place:
      "Her Majesty's Government acknowledge the unique nature of the war pensions and allowances provided for those whose disablement or widowhood results from service in the Armed Forces, reaffirm their intention to preserve the tradition of giving special treatment to war pensioners and their widows, and undertake to review war pensions and allowances at two-yearly intervals …".—[OFFICIAL REPORT, House of Lords, 23rd July, 1970; Vol. 311, c. 1105–6.]
      The important part of that passage is the reaffirmation that we give war pensioners a very special position. For example, the first £2 of such pensions is disregarded for supplementary benefit purposes, whereas—a recent example about which controversy flared was the miner's pension—only 20s. of other pension or superannuation is disregarded.
      The sort of payment one has in mind included within the 539,000 pensions in payment at the end of 1969 is the constant attendance allowance. Up to £3 6s. for other ranks may be in payment even if the individual concerned has some employment. There are those who receive some kind of income because of the lowered standard of their occupation on account of a disability arising from war injuries. There are the war widows and children orphaned as a result of one or both parents being killed during war.
      I cannot believe that the Government will complete the Committee stage of the Bill without providing for at least some disregard—we urge total disregard—for these people.
      It is worth considering the sort of disregards which are allowed not just for supplementary benefit purposes but for other means-tested benefits. Means-tested benefits generally have disregards of one kind or another. In the assessment of whether a person is entitled to remission of prescription charges, the first £2 of a disability pension is, I understand, disregarded. In the assessment of school maintenance grant, there are allowances for dependent relatives, a housekeeper or help when, for example, the mother is incapacitated. When a person is applying for free school dinners, there are disregards in respect of disability pensions, the first £1 of national insurance industrial injury benefit, and family allowances. There are allowances made in the calculation of rent rebates, too.
      It seems to us extraordinary that the Government should introduce a new scheme in an attempt to ameliorate family poverty yet not provide for these people who are at work at least similar advantages to those given to people not at work. Their scheme will stand on its own as virtually the only means-tested scheme in the country designed to ameliorate poverty which allows for no disregards whatever.
      A case can be made for all the Amendments, and I am sure that hon. Members on both sides will wish to make a case for one or other of them. However, after seeing the performance in Committee over the past two days, when reasonable Amendments modest in their financial implications have been rejected, we now envisage—I should not have done so two days ago—that the Government may reject these Amendments. Nevertheless, I cannot believe that even a Conservative Government could resist us on the Amendment dealing with war pensions.
      Mr. Boyd-Carpenter: I hope that my right hon. Friend will take the opportunity given by this group of Amendments to tell the Committee about his attitude to the general question of disregards. At present, the position is far from clear. There is a passage in the speech of my hon. Friend the Under-Secretary of State at the end of the
      1306
      Second Reading debate—it has already been quoted by the hon. Member for Rotherham (Mr. O'Malley)—which appears to suggest that it is at least highly improbable that any disregard will be allowed:
      "… if we are to keep the scheme simple, as we must, it is very difficult to introduce any form of disregard."—[OFFICIAL REPORT, 10th November, 1970; Vol. 806, c. 334.]
      On the other hand, the second half of Clause 4 confers on the Government wide powers by regulation in the matter of disregards. I am certain that so consistent a Parliamentarian as my right hon. Friend would not be seeking powers for something which he had not the faintest intention to do. If he asks for these powers, he must have in mind at least the possibility that in certain respects a disregard will be allowed.
      I have great sympathy with the point which my hon. Friend put in winding up on Second Reading about the administrative problems once one launches oneself into the disregards. There are real problems there, and I can well understand his desire to keep the scheme simple. But it is not intended to bring the scheme into operation till next August. The resources and high administrative capacity within the Department could, I am certain, if my right hon. Friend wanted it, handle the administrative problems of some disregards in the fairly long period between tonight and August next year. Therefore, I hope that my right hon. Friend will make it clear that in taking power to introduce disregards he has it in mind to use them, at any rate in certain cases.
      I come to a point which I raised on Second Reading, to which the hon. Member for Rotherham has just referred, and which produced the answer of my right hon. Friend which has been quoted. I refer to the question of war pensions. The hon. Member for Rotherham is quite right. Under Governments of all parties war pensions have been treated as a distinct and different provision from anything else in our social security system. This derives to some extent from the fact that all Governments have committed themselves to the general proposition of priority for war pensioners, and this priority has been illustrated in many ways—the slightly higher rates of benefit compared with industrial injuries benefit, the priority provision of transport, and so on.

      1307
      There is one supporting factor which the hon. Gentleman did not mention but which I think is very significant. A war pension, compensation for disability, is completely disregarded for income tax purposes. That is not the case with the war widow. But it has always been the fact—and I believe that it goes back to the instruments after the First World War—that a war pension, together with the allowances going to the pensioner, which are sometimes of considerable value, is completely disregarded for Inland Revenue purposes and is not treated as income.
      That indicates that such payments are in a very special category. I hope that my right hon. Friend appreciates the reason for it. The concept is that in giving priority to people injured in the service of their country the compensation which they receive for their injuries should be treated as simply putting them back, as far as is possible—and, of course, it is not completely possible—in the position of an uninjured person. This is not income; it is simply to offset the handicap of the disability. What they earn above that should be subjected to tax, but they should be regarded as starting the race rather further back, and this is required to cancel out the handicap. That is the reasoning which has lain behind what is, from the Inland Revenue point of view, a rare exception.
      It is unhappily the fact that, although some of us urged it very strongly on the late Government and were turned down, war pensions are not disregarded for the purposes of rate rebates under the relevant legislation. But it is my clear recollection that the party to which my right hon. Friend and I belong is pledged to put that right, and I very much hope that the Government will do so before long. A very clear commitment was made. That is indicative of the special position of war pensioners. There is also the very good point of the hon. Member for Rotherham that, from the point of view of supplementary benefit, war pensions are treated differently and given a higher disregard than other forms of income.
      I hope that, when my right hon. Friend tells us how he proposes to exercise the powers, war pensions will be very much
      1308
      in his mind and perhaps will be the first of the benefits which he should consider.
      Mr. O'Malley: I agree with the right hon. Gentleman about the importance of war pensioners. A second vital category is made up of people who will be receiving the attendance allowance.
      7.15 p.m.
      Mr. Boyd-Carpenter: My right hon. Friend will recollect that there is one connection between the attendance allowance provision and the provision made for war pensions. When my right hon. Friend announced the very welcome attendance allowance in his admirable piece of legislation last summer, there was some doubt about whether it would be subjected to tax. On reflection, the Government decided that it should be exempted from tax. I think that it was the Under-Secretary of State who made that very welcome announcement. But on parity of reasoning, the considerations which led him, on reflection, to provide that the constant attendance allowance should not be taxable lead irresistibly to the conclusion that there should be a disregard for the purpose of family income supplement.
      I wish to raise only one other point. It was put to me by one of the outside organisations which concern themselves with this matter. It is slightly complicated, for which I apologise. What will be the position if in a family in respect of which application is made for family income supplement there is a foster child with a payment made for the foster child in excess of £2 a week? This is a situation which arises in fact; it is not an academic point.
      As I understand the Bill—and I hope that this will be confirmed—the foster child is brought into the calculations, being a child within the definition of Clause 1(1)(c). But suppose that the allowance made to the family for the foster child is, as it may well be and very often is, about £3 or £4. Will the receipt of any excess of £2 operate to diminish the amount of family income supplement or deprive the family of it? If that were so, it would be wrong. When an allowance is made for a foster child, it is made on a sober calculation of what it will cost properly to look after the child. It would be wrong if part of the money

      1309
      coming from public sources for that purpose were to operate to diminish below what it would otherwise be the total income of the family.
      I do not know whether my right hon. Friend has considered that point. It was not a point which occurred to me. It was put to me by an authoritative outside commentator. I undertook to put it to my right hon. Friend, and I seize this opportunity of doing so.
      Mr. McNamara: I should like to follow up the point made by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I tried to put it, although not as ably and eloquently as the right hon. Gentleman, when we were discussing the last Amendment. I support all that the right hon. Gentleman said, and, therefore, I do not wish to pursue the point unduly, but it is of considerable seriousness and could detrimentally affect a lot of children and families and could, to a limited extent, place inhibitions on people who otherwise might be more than willing to take children into their care and give them a normal family life if they felt that their own children would dramatically suffer financially rather than enrich the life of the foster child. I am not suggesting that people do this for profit; I do not think that people go in for the job of foster parents for profit. But their income and their children could be detrimentally affected if the point of the right hon. Member for Kingston-upon-Thames is not borne in mind by the Secretary of State as a disregard.
      I should like to draw the Secretary of State's attention to the question of maintenance allowances for children in a family. It depends whether we look upon them as money paid as income for the children or as money going to the parents. If they are regarded as money going to the parents, will they be counted as part of the income going into the household as a whole?
      Sir K. Joseph: I hope to have an opportunity to comment on the powerful point made by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), but the Committee should know that, as at present advised, both streams of income—the money received as foster parents and the main-
      1310
      tenance payment—are family income for the purposes of the Bill.
      Mr. McNamara: I am obliged to the right hon. Gentleman. That seems to me to be most regrettable. It means that where a family, perhaps a one-parent family, would otherwise benefit by the scheme, it would not do so if maintenance were coming in for, possibly, a later union or when people were living together and bringing two families together. That is simply one aspect of the maintenance matter.
      I want to look at another aspect which could, perhaps, be more important. I have talked about maintenance coming in, but what about maintenance going out? I have in mind a situation in which a person is separated from his wife and child and moves into another household, creating, for the purpose of the Bill, a fresh household. Under the terms of the separation, the magistrates may have laid upon that person powerful commitments to his former union and children. He attempts to meet those commitments and a great deal of money goes out from his income.
      I am quoting an actual case and I therefore know the situation. That man may go into another household in which there is a woman and a number of children, who would benefit by way of family income supplement, but as he is living with her, they would not benefit by way of the family income supplement if his income, inclusive of the maintenance which he pays out to his former wife or cohabitee, is taken into account.
      On the other hand, the money which the woman from whom he is separated and her children are getting for maintenance has already been disregarded for her application for social security benefits. As the right hon. Member for Kingston-upon-Thames has just said, that sum of money would, at present, be included as income for the household.
      In that complicated and difficult situation which those people have got themselves into—unfortunately, lots of people get themselves into difficult and complicated situations, as we all know from our weekly "surgeries"—family income supplement could be of considerable value. Otherwise, a situation might arise in which subterfuges are adopted The man might be only a lodger. He might simply pay the woman a certain

      1311
      amount of money and they do not live together; they are not a household. This might give rise to all sorts of dishonesty, which is bad for the State, bad for the situation generally and bad for the children in that kind of atmosphere. I suggest that maintenance which goes to another family unit should be disregarded.
      It could be argued that people should not get themselves into that tangle and mess; but they do. Unless we try to cater for the situation, children so placed will suffer for the sins, the peccadilloes or the misfortunes of their parents. We want to avoid that kind of situation.
      I am sorry to have taken so much time in putting the point. It is complicated, as the Secretary of State will admit. This is, however, a point of substance. The money paid out has once been disregarded for the person who is separated. Why cannot it be disregarded for the purposes of the Bill?
      I should like to underline a point made by my hon. Friend the Member for Rotherham (Mr. O'Malley) in moving his Amendment—that is, the position of the widower who pays money either for people to look after his children in the home or for his children to go to a day nursery or to one of the many institutions which have grown up to help people in this situation to keep a family unit going when there is no mother or woman present in the house. If, under the scheme, we create a situation in which we help the fatherless family, on the other side of the coin we should also have a disregard to help the motherless family. This is important.
      Dame Irene Ward: The various points which have been brought forward, particularly on the present series of Amendments, confirm how wise it is of my right hon. Friend to introduce in the first case a simple scheme and to leave all the complicated issues, which are obvious from the speeches which have been made from both sides, until the regulations are laid. I for one want to study in depth all the various angles which have been put forward this afternoon by so many hon. Members.
      In a scheme of this kind, which touches so many aspects of social life, it is very wise to allow a period in which all of us who have a deep interest in these
      1312
      matters can collect our evidence and look at the cases which are brought forward, because quite a number of considerations have been mentioned in this debate. We all need time, not only to look at the points which have been put forward, but, jumping from those points, there are many other circumstances which may crop up and other disregards which ought to have been put in the Bill but which might be left out, because this is a very complicated issue throughout the country. Therefore, my right hon. Friend is very wise to say that the introduction of the scheme will be simple and we shall then have an opportunity on the regulations to deal with all the important points which have been brought forward.
      I support the point made by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) about the foster child. Although there are a lot of things that I expect to see in the regulations, I give my right hon. Friend the Secretary of State full warning that, although I support him tonight, I shall expect him to consider in depth all the points of view which are put forward. Even now, there are some of his observations with which I do not agree. I am simply letting him know here and now, because I believe in going into battle as early as possible.
      I have known for many years that my right hon. Friend has a very deep interest in all these matters. It is up to those of us in the House of Commons, on both sides, who have knowledge of the detail about how all these matters are dealt with to give him the facts. He certainly is a man who will alter his mind when he thinks it right to do so, and it is up to us to make him alter his mind. That is as I see it.
      I am interested in the variety of problems such as were related by the hon. Member for Kingston upon Hull, North (Mr. McNamara) concerning people who get themselves into muddles. I wish to quote a case which, I know, will be covered by the Bill but about which I felt unhappy at the time.
      I remember a young apprentice on the Tyne whose girl friend was having a baby. The apprentice married her, which we would all think was quite the right line to take. Then, however, because he was earning an apprentice's wage, he could not get any consideration for the

      1313
      baby. Those who were concerned in social work on Tyneside pointed out to me in strong terms that the baby was almost at starvation point. All that was done for the child had to be done—and was done gladly—by the voluntary organisations. It was a really perfectly frightful situation to have arisen in our civilised society, that a young apprentice having very rightly married his girl friend should have been deprived, because he was earning, of provision under supplementary benefit for the baby.
      7.30 p.m.
      From what I have learned in my "surgery" I can appreciate the very serious and widespread problems which arise, many of which have not been mentioned in the Committee, and I want to emphasise what my right hon. Friend the Member for Kingston-upon-Thames said about disregard of disability pensions and so on. Of course, everybody in the Committee ought to know that a tradition which has been accepted by all parties here over the years is never broken by the Government—certainly not by the Government of my party; nor, indeed, would it be broken by the Opposition. So I say to myself that if the disregards are not included in the Bill we are going to see them in the regulations. I certainly would not support the Bill if I thought we were not going to get the disregards in the regulations when they come. The fact that they are not provided in the Bill itself is an indication that we are going to be able to get all sorts of things included in the regulations which will make the Bill more human, more in line with what we want for people who have been living below the poverty line. I am quite certain this is in the mind of my right hon. Friend. So I hope that between now and the introduction of the regulations all of us who take such a deep interest in these matters will find many problems for my right hon. Friend to solve.
      I do not mind in the least pouring problems on to the head of my right hon. Friend. The more I pour problems on to his head the better am I pleased, because I expect that he will solve them in the way the Commitee and I would like. Even though he may not be surprised at my saying so, he will have this opportunity. Knowing his character, and the work which he has done over many
      1314
      years, and the interest which he has shown in these matters, I am jolly certain that he will be very human and very humane—and the same applies to my hon. Friend the Under-Secretary who has been a tower of strength. All I am saying is that I approve the way my right hon. Friend is handling the matter, but that I do, as I said, give him a warning that I have a lot of things which I want to see done; and also, that I can see some wonderful ways of dealing with the Treasury when the Finance Bill comes along. I think my right hon. Friend is absolutely right, and I say to him, do not get too busy saying—as he has when he has jumped up once or twice—things I do not approve of, because the time will come when we shall expect to have notice taken of what back benchers on both sides of the Committee have said, and on this issue they have very wide knowledge. So my right hon. Friend ought to bear in mind all the points which have been put by hon. Members, and he ought also to bear in mind that those cases vary from one part of the country to another. So I say to him, let him proceed as he wants to, but bear these things in mind.
      I do not object to the Opposition making all the points which they have made, because they must be very sorry that they did not introduce this Bill. I am not sorry for them. I think we have been doing a very good job in bringing out this whole matter of family poverty, and I am sure that our measures will be a great success in helping them who require our help. So I shall support my right hon. Friend, but I shall do so hoping that when the regulations come they will deal with many of those defects which constitute injustices to people; because I do not think the House of Commons has removed nearly enough injustices in the 34 years I have been a Member of it. Here is a new opportunity. So good luck to my right hon. Friend. I am sure he is doing the right thing, but he should remember that many of us have a lot of things we want him to deal with by including them in the regulations.
      Mr. Alfred Morris: I am most happy that my first brief speech from this Box should be on a matter of concern to the long-term sick and disabled and more

      1315
      especially to the families of the disabled.
      As my hon. Friend the Member for Rotherham (Mr. O'Malley) has emphasised, this is a very important group of Amendments. They deal with some of the most sensitive problems raised by the provisions of this Bill. I hope very much that the right hon. Gentleman will have taken very seriously the arguments which have been deployed from this side of the Committee and that he wil have received those arguments sympathetically.
      I have a very personal interest in saving constant attendance allowance from the erosive effects of this Clause as it now stands. It may be recalled that as it was originally drafted my Private Member's Bill, now the Chronically Sick and Disabled Persons Act 1970, helped to inform the arrangements for constant attendance allowance as provided in the Superannuation Bill promoted by my right hon. Friend the Member for Coventry, East (Mr. Crossman) in the late Parliament. It was emphasised in our debates on what is now the National Insurance (Old Persons' and Widows' Pensions and Constant Attendance Allowance) Act 1970, that constant attendance allowance is woefully inadequate. By definition of the term "constant attendance" an allowance of £4 must be considered as totally inadequate to meet the costs of those who care constantly for the very severely disabled. My right hon. Friend the Member for Coventry, East proposed an invalidity pension which, with the constant attendance allowance, would have made the financial standing of disabled people and their relatives far stronger than it is today. Surely the right hon. Gentleman will agree that we ought not to be reducing the constant attendance allowance in consequence of any provision in this Bill?
      Disablement is often another word for poverty. We sometimes forget that most people who are severely disabled are also extremely poor people. I would emphasise that if you want to make certain of a deprived childhood, find a disabled father. I know that the Child Poverty Action Group will agree with me that a great deal of the deep-seated poverty soiling the lives of many children
      1316
      in this country at the moment is caused by the very low living standards of most disabled people. Even if a disabled person is fortunate enough to be in employment, in most cases he is likely to be in menial and low-paid employment. There are many disabled people who can be very much affected by the provisions of this Bill.
      I was refreshed by the speech of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). He always speaks with great candour, force and experience on these questions. The argument which he has put today is unquestionably the correct course for his right hon. Friend to follow. In his speech on the National Insurance (Old Persons' and Widows' Pensions and Attendance Allowance) Act, 1970, the right hon. Gentleman argued powerfully and with great sincerity that we should save the constant attendance allowance from the erosive effect of taxation. He was so persuasive that he carried the point. I hope that what he has said today and what has been said on this side of the House will convince the Secretary of State that the constant attendance allowance should be affected by F.I.S. nor F.I.S. by the constant attendance allowance.
      I am extremely concerned to support the points that have been made on behalf of the war disabled. The right hon. Member for Kingston-upon-Thames put forward an incontrovertible case, and I hope that the interests of the war disabled will be fully respected by the Secretary of State.
      The propositions made by my hon. Friends will cost more money but, as my hon. and learned Friend the Member for Lincoln (Mr. Taverne) said, we had the impression that the Government were prepared to spend up to £30 million for the relief of poverty and, more especially, of child poverty. The Child Poverty Action Group certainly expected that amount of money to be available. My hon. and learned Friend the Member for Lincoln was the Financial Secretary to the Treasury at an important stage in the passing of the recent legislation for the long-term sick and disabled and the Money Resolution for that Act of Parliament owes a great deal to his constancy and the sincerity of his efforts.

      1317
      I therefore press strongly Amendment 31 and the Amendments which seek to help the war disabled. I do so because otherwise disabled people will think that "F.I.S." is nothing more than a "Swizz".
      Mr. Kenneth Clark: I will briefly address the Committee on Amendment 31. I hope that my right hon. Friend will take the opportunity either by accepting the Amendment or, more probably, by telling us what will run through his mind when he is drawing up the regulations, to assure the Committee that receipt of a constant attendance allowance will not affect entitlement to F.I.S. As the Committee has already been addressed twice on this subject, I do not need to reiterate what has been said about the belief on both sides of the Committee that entitlement to a constant attendance allowance should in no way affect entitlement to any other benefit. F.I.S. clearly falls into that category in view of the special arrangements that have been made for the constant attendance allowance.
      I hope to persuade my right hon. Friend that the administrative difficulties which face the other claims for disregards do not apply in the case of constant attendance allowance.
      I hope that my right hon. Friend will be able to say that the constant attendance allowance can be disregarded, as this benefit is not yet being paid. His Department is having to contend with the first administrative steps towards making the allowance payable and I understand that it will not become payable until April, 1972, whereas F.I.S. is expected to become payable in August of next year.
      I am sure my right hon. Friend will be able to inform the Committee that it is not the intention that people who are expecting to receive a constant attendance allowance of £4 a week in April 1972 and who will also qualify for F.I.S. in August next year will find in April 1972 that the £4 a week Allowance will disentitle them to F.I.S. which they will by then have been receiving for about seven months.
      I hope that the Secretary of State will give an assurance of this. This is the second of two important pieces of legislation which the Government have brought forward in this field. The families who will be benefited by both pieces
      1318
      of legislation will be those with a severely disabled member entitled to an attendance allowance and also having a low wage earner eligible for this benefit and they must be in a very small exceptionally needy category in our society. I hope that he will be able to assure the Committee that these two major steps will be complementary and that the first piece of legislation will in no way exclude entitlement to benefit under this Bill.
      [Miss HARVIE ANDERSON in the Chair]
      7.45 p.m.
      Mr. John Golding: I was pleased to hear the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) appeal for disregards on the ground of logic and consistency. The hon. Member for Tynemouth (Dame Irene Ward) appealed for humane treatment for the disabled and the poor sectors of our community. We were particularly pleased to see the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) take his rightful place at the Box to speak for the disabled. No man before reaching the Dispatch Box could have done as much for them as he did.
      Logic, consistency, humanity and a passionate appeal are the arguments that have been used in support of this group of Amendments. I do not have the feeling that the Amendments will be taken into account when the regulations are introduced. I am more pessimistic. I want to argue for the Amendments in terms of public expenditure. It is utterly unreasonable not to accept the Amendments dealing with the constant attendance allowance and the allowance for a widower with children. An important argument in favour of the constant attendance allowance was that the demand on the State Health Service was less when families looked after a member who was chronically sick or disabled. It is better for the patient and also for the family, although in many cases it is more inconvenient for the family. The saving to the State is far in excess of the small constant attendance allowance.
      If the Amendments are not accepted a bizarre situation will arise. Families will have a financial incentive to exclude the chronically sick or disabled person from their family and put that person

      1319
      into an institution. The Minister looks aghast; but people on this level of poverty must take into account every penny, and where there are differences between a man and wife as to whether an old person should be cared for at home this can certainly come into consideration. There should be no financial penalty on the family for caring for a chronically sick or disabled person at home. The Health Service cannot adequately provide for the geriatric patient or the young chronic sick. This argument applies equally to the widower who decides to keep his young family together. It is utterly absurd to provide in the Bill a financial disincentive to a person who wants to keep his family together.
      If the pension of a war pensioner is not disregarded a great feeling of injustice will be created. We all know that rent rebates because they have disregarded the war pension have caused a feeling of injustice. The man who was injured in the war will be no better off after the means test is applied than the man who has not been injured in the war. Most people feel that the men who have been injured should be better off and that there should be an element of compensation. For these reasons I ask the Government to accept the Amendments.
      Mr. Lewis Carter-Jones: When I hear the hon. Member for Tynemouth (Dame Irene Ward) speak, I sometimes think that I should address her as "my hon. Friend". With some of her ideas she should be on this side of the House.
      I think the right hon. Gentleman will be almost bound to accept Amendment No. 29 because it goes to the heart of the matter in terms of applying value analysis. If a widower can be encouraged to look after his children and not put them in a home, this will in the long run save money. It is morally right and would have the virtue of being economically sound.
      Amendment No. 30 mentions the figure of £2. That magical figure is always cropping up in my constituency mail and in my work with disabled people. It is a measure of the despair and difficulty in which these people find themselves. They are frequently exploited. It is known that they have a maximum earnings ceiling and frequently they have to
      1320
      work very hard as out-workers—and this applies both to the disabled and to women working in their own homes. Therefore, this magical figure imposes a hardship and if the £2 is taken into account this hardship will be increased. Perhaps at some stage the right hon. Gentleman will consider raising the minimum earnings rule and will accept the terms of the Amendment.
      I speak with some feeling on Amendment No. 31. My hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) and I were grateful for the support of the right hon. Gentleman in the legislation mentioned in the Amendment, but its application from April, 1972, has caused anxiety. One of my constituents, a lady, has been affected by this matter, and the way things are going she will not have the benefit of the £4 constant attendance allowance if we have to wait another 18 months or so for implementation.
      On the other hand, I congratulate the right hon. Gentleman because, although he has not conceded our point that there should be disabled members of the board, he has taken our advice and appointed Miss Mary Grieves to the board. Perhaps I am straying from the terms of the Amendment and I conclude by saying that I hope the Government will accept Amendment No. 31.
      I also wish to commend Amendment No. 33 to the Committee. People drawing pensions as a result of war injuries or disability are often the sort of people who try to do work. I have had correspondence with the right hon. Gentleman's Department about one particular case. I feel that the general practice of disregarding pension in respect of war service will be another way of showing compassion. Therefore, I hope that the right hon. Gentleman will be able to accept all these Amendments, but particularly Nos. 29, 30, 31 and 33.
      8.0 p.m.
      Sir K. Joseph: This has been a valuable debate. I should like to distribute prizes, as the Committee will remember Alice did after the tortoise race, to all the runners because so many participants in the discussion have put a powerful case. But I must put the situation to the Committee that the aim of the Bill is to help the poorest of the poor and to help them as quickly as we can, and we are up against some time problems.

      1321
      I ask the Committee to accept that at the first stage we shall not be able to deal with the exceptional cases which hon. Members have legitimately raised and also to keep to the date of 1st August for putting the supplement into payment. I shall not therefore be able to encourage hon. Members to think that the first batch of regulations will make the range of disregards that hon. Members feel will be justified. That is not to say that once we have the scheme in operation we shall not be able to introduce the more complex administrative arrangements involved in disregards.
      I will not take the general philosophical point that disregards have no logical place in means-tested schemes because we all know that we do not strain logic to that extent. We are all aware that the supplementary benefits system embodies a number of disregards. It may be that at a later stage after this scheme is in operation the family incomes supplement scheme will have to have some disregards.
      I say to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) that there is no disregard the Government would wish to introduce in preference to or before a disregard for the war pensioner. But I ask the Committee to be sympathetic in the administrative problem that faces the Government. The Bill has to go through several more stages both here and in another place and once, as I hope will happen, it receives the Royal Assent there must then be a mass of preparatory work to get the benefit tout simple into payment.
      I was challenged to devise a simple presentation of the theme of this Bill, and I designed a 38-word description which I will not quote to the Committee. But I can assure the Committee that the moment disregards are introduced there must be qualifying clauses in the description of the supplement in the manual of instructions, and then there will be a large administrative task in sorting out those who are not entitled.
      I say to my hon. Friend the Member for Tynemouth (Dame Irene Ward), who told me that she had to leave these discussions and who offered me a sort of armed warning with guns loaded but not actually fired, that disregards as justified will be considered for the second stage
      1322
      if we feel that arguments by hon. Members are right.
      I hope that the Committee will sympathise with my right hon. Friend the Member for Kingston-upon-Thames and other hon. Members who supported him in saying that the war pensioner has a unique position. Both parties have honoured that position in every single benefit except, as was pointed out, by the recent Government in its rate rebate scheme. I hope that at a later stage we shall be able to carry forward that treatment, though I cannot at this stage give an absolute commitment.
      Mr. McNamara: The right hon. Gentleman spoke in terms of stage 1 and stage 2. Could he give some idea of the time scale when we might have, for example, a second batch of regulations dealing with disregards?
      Sir K. Joseph: I would have thought not before a year after the supplement comes into operation. I do not want to give an exaggerated impression to the Committee, but I hope that it will be about then. We would then have enough experience and the machine would be operating smoothly enough to enable us to prepare to introduce the second stage.
      Mr. Boyd-Carpenter: Perhaps my right hon. Friend will be able to help some of us who will have to come to a decision shortly. Will he say whether the fact that he has put a disregard provision in the Bill indicates that it is his present intention to have at some stage a system of disregards; and in the light of what he said about war pensions that they would be the first in that batch?
      Sir K. Joseph: I know that my right hon. Friend is trying to help me as well as the Committee, but I am in this difficulty. I am being asked to look ahead to a time not too far away when earnings, prices, taxes and, therefore, the numbers involved in the poorest of the poor may have changed. I do not know whether the number will increase or reduce, but I have to consider the equity of the matter in distinguishing between a family whose income is above the prescribed amount because of an ingredient which is disregarded and is still helped by the supplement, and another family whose income solely from earnings is the same but which will not get a supplement. I ask my right hon. Friend to

      1323
      give the Government liberty to make an assessment about that matter in the light of the then volume of poverty without asking me to give a final commitment. If the number remains something like it is now, I would have thought that it made good sense to introduce a moderate range of disregards, but I would not like to be absolutely committed to that proposition since so many factors may alter in the meantime.
      Mr. Boyd-Carpenter: My right hon. Friend posed the problem of the poorest of the poor and of disregarding one source of income for one family rather than for another. When making his final decision, will he reflect that in dealing with the very poorest of the poor, those on supplementary benefit, it has been accepted policy for many years to give a substantial extended disregard to the war pensioner?
      Mr. Barnett: Before the right hon. Gentleman answers his right hon. Friend, could he confirm that he is not prepared to give a firm commitment to have a disregard for war pensioners?
      Sir K. Joseph: To answer both points, I accept that the supplementary benefits scheme does not help the poorest of the poor in the section we are now discussing, because the people we are now discussing are poorer than those on supplementary benefit.
      Mr. Boyd-Carpenter: Some of them.
      Sir K. Joseph: I mean in terms of gross income. I would love to be able to tell the Committee that there will be disregards for the war pensioner. I want to reserve a small liberty of manoeuvre by saying that there may be changes. It must be remembered that with this Bill we are sailing into unknown territory. We are trying to bring a new form of help to a group of people whom we all hope will before long be eliminated by the movement of earnings as against the movement of prices. We hope that the people concerned will be enabled to improve their standards of living in real terms sufficiently to escape from the FIS bracket.
      Mr. Meacher: Does the right hon. Gentleman's last statement imply that
      1324
      the Government, even at this stage, do not intend to raise FIS at all in line with average earnings and to increase it at very much less than the rate of increase in the average earnings? That would seem to be the import of his statement.
      Sir K. Joseph: No. I have already told the Committee at an earlier stage of the Bill that the Government will look again at the latest level of earnings known to us at the last possible date in making regulations to affect the prescribed amount before the Bill comes into force. There was no such implication or inference to be drawn by the hon. Gentleman from what I said.
      I want to help the Committee. I cannot envisage circumstances at the moment in which it would not be right for the Government at one stage after the supplement has been in payment for something of the order of a year to introduce a disregard for war pensioners. It is because no Government can yet envisage all the relevant circumstances, that I wish to avoid making an absolute commitment on this matter.
      I now move on to the other elements in the questions that were asked.
      Mr. Alfred Morris: On the matter of disregards, would it be possible for the right hon. Gentleman to make a more considered statement at a later stage in the Bill?
      Sir K. Joseph: Yes. The hon. Gentleman is being very helpful. I may be able after reflection on various considerations to go further on Report. I undertake to make a statement. I cannot undertake that that will be a guaranteed, copper-bottomed reassurance, but I shall reconsider the arguments and make a statement on Report. I am grateful to the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris).
      This has been a valuable debate, and I have a number of other questions to deal with. First, there is an Amendment to disregard family allowances. That Amendment is misconceived, because the prescribed amount already takes family allowances into account, so that the ceiling for supplement already builds in the family allowance.
      Mrs. Shirley Williams: Does the right hon. Gentleman recall an earlier Amendment moved from this side of the Committee suggesting that there should be a reduction in the allowance for children in order to allow family allowances to be paid, having been disregarded? This Amendment complements that earlier Amendment, its object being that any future increase in family allowances shall go to families across the board, including those which benefit from F.I.S.
      Sir K. Joseph: I can reassure the hon. Lady that any future increase in family allowances would need to be reflected in the prescribed amount under the Bill.
      The hon. Member for Kingston upon Hull, North (Mr. McNamara) made a valuable point when he raised the question of a payment for a foster child in excess of the normal amount. I need to look again at the whole position of the foster child in the light of what the hon. Gentleman said. He posed a situation for which I do not have an immediate answer. I undertake to look at the implications of the Bill for fostering. The last thing we want to do is to inhibit a local authority from fostering a child with one of these families if it is otherwise suitable. I shall give the House a considered view on Report.
      But I ask the Committee to realise that up to the prescribed amount all the streams of income that have been discussed by hon. Members are already disregarded up to 50 per cent., up to the prescribed amount. [Interruption.] The hon. Member for Hitchin (Mrs. Shirley Williams) takes the point. It is a general acceptance of disregards for all streams of income within the Bill up to the prescribed amount.
      I was asked about Amendment No. 28, about what we intended to do by way of disregards for capital. At present we have no intention of making regulations about capital, largely because we do not expect that many of these families will pose a capital problem. But as we are moving into an unknown field, we thought it right to take power in the Bill to make regulations about how capital should be treated if a number of families prove to have capital assets.
      Mr. O'Malley: I trust that when the inquiries are made on which the assessment will be based, there will be no
      1326
      inquiries as to any capital such families have.
      Sir K. Joseph: That is correct. The only relevance of capital about which any inquiry as such will be made will be if it is producing a stream of income, if dividends or Post Office interest are coming into the family income.
      Mr. O'Malley: What I fear is the situation where a family might have very limited money, for example, in a Post Office. We should want an assurance that no officer of the Department would say, "You have a few hundred pounds there. While you have that, you are not entitled to family income supplement." In the absence of regulations defining the situation, could not that kind of thing happen?
      Sir K. Joseph: No. I do not think that there would be any entitlement for an officer to do that in the absence of regulations, because he will be concerned with the income coming into the household. But if we find that enough of such families have significant amounts of capital we shall have to bring regulations before the House.
      I come now to the attendance allowance, which comes into payment, I hope, in April 1972. There is a strong feeling in the Committee that it should be disregarded. But I must point out to hon. Members, including my hon. Friend the Member for Rushcliffe (Mr. Kenneth Clarke) and the hon. Member for Manchester, Wythenshawe, that if the man in the F.I.S. household is in receipt of constant attendance allowance it cannot really be a F.I.S. household, because he will be on supplementary benefit.
      Mrs. Shirley Williams: The woman?
      8.15 p.m.
      Sir K. Joseph: If the wife is in receipt of the constant attendance allowance for the very severely disabled it will be a very exceptional case. I am perfectly prepared to take it into account at stage 2 and consider whether there is a case for disregards, but I do not want to complicate the instructions to the officers concerned by writing in a disregard for that very limited case in the first stage. I undertake that we shall watch out, particularly during the first months when the supplement is in payment, to see whether any of these cases are involved, and if

      1327
      they are—or even if they are not, but there is evidence that they might be—we shall introduce regulations to disregard them.
      But the allowance is not payable until April, 1972, and we have time in the intervening months to introduce regulations to cause it to be disregarded if that seems necessary.
      Mr. Golding: Will the right hon. Gentleman inquire of the families whether there are members of them who are disabled? Very often it is not the father that is disabled. It may be the mother or very often the father or mother of one of the parents, or a child.
      Sir K. Joseph: I shall not quarrel with the hon. Gentleman about the technicalities of his point. Certainly we shall know if one of the parents or the substitute parent is in receipt of attendance allowance, because requiring both to make the claim jointly will ensure that the officers know the income that either and both receive.
      I come to the whole range of Amendments dealing not so much with disregards as with deductions. Several hon. Members have made the point that single women, widowers and motherless households are often involved in costs in arranging care for the child or children. The hon. Member for Kingston upon Hull, North, who specialises in difficult cases—very helpfully, made the point about maintenance going out of one household and into another FIS household. Here again I must ask the Committee to be understanding. To allow deductions for costs would involve a great increase in checking. We could not always rely on an individual saying, "I must pay out £4 a week" for this or that arrangement. It could be collusive in many cases. There would need to be checking, and once we introduce checking our chance of having a 1st August, 1971, start to payment will be in danger.
      Anyway, I am not sure that we can begin to take account of deductions. Our object is to raise the income of the poorest of the poor wage-earning households. We are not trying to erect a parallel supplementary benefit scheme for those in work. Our object is to get their earnings up, by increased productivity,
      1328
      and until they are up to help them in this way.
      I can give the Committee a categorical reassurance about the interaction of sickness benefit and F.I.S. If a F.I.S. payment is arranged for 26 weeks, or any shorter period, and during the period covered by the F.I.S. commitment the parent falls sick, the F.I.S. continues for that period. There is no attempt to reclaim it in the weeks after sickness began, and the sickness benefit, which is a contributory benefit, comes into payment as if F.I.S. were not in payment—that is, irrespective of F.I.S. I hope that that at least is one solid reassurance.
      I am sorry that I have had to give less than a total reassurance to right hon. and hon. Members who feel strongly about these various Amendments, but I assure them that at stage two we shall seriously take into account all their arguments, and I will make a further statement on Report on the war pensions disregard point and on the foster-child household point.
      Mrs. Shirley Williams: I have no doubt that the right hon. Gentleman has attempted to be helpful and has recognised that this is a debate about which many right hon. and hon. Members on both sides feel deeply. I am sorry, therefore, to press him further, but press him I must. Occasionally it is the job of Parliament to make the life of the Executive more difficult or to make the life of the Civil Service more inconvenient, because Parliament, in its wisdom, believes that justice must be done.
      There are about six or seven right hon. and hon. Members present who have been Ministers, all of whom know better than I that frequently a Minister is advised that if he accepts a particular Amendment it will complicate his life and that of his Department, and it is only when the Minister decides that the feeling in Parliament is so strong that he must give way that he in fact does. I suspect that this is such a situation: that the right hon. Gentleman is not without sympathy for the points which have been argued by his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and others, but that he feels that the Amendment would complicate the Bill. We are not persuaded that the Amendment would complicate the

      1329
      Bill past the possibility of bringing it in at the date which the right hon. Gentleman has in mind. If there is a will, we suspect that a way will be found.
      On the basis of that broad presentation which I put to the right hon. Gentleman, I wish to raise several crucial points. At the beginning of his speech, the right hon. Gentleman said that there might be a stage two and that, when his scheme became more sophisticated, it might then be possible to include certain disregards. The right hon. Gentleman will appreciate that by the end of his speech the stage two which seemed potential at the beginning had got rather close to actuality. We must press him to make sure that it is actual and to attach a date to it. But, more than that, we must press the right hon. Gentleman to look again at whether stages one and two cannot coincide.
      The right hon. Gentleman pointed out that the constant attendance allowance will come into operation in 1972 or, more precisely, his hon. Friend the Member for Rushcliffe (Mr. Kenneth Clarke) pointed that out. That means that it would be possible to operate that disregard in the Bill, because administratively it could be coped with by 1972. It would be an earnest of his good intentions to amend the Bill in that way.
      It would not be all that difficult to do the same for war pensions. I will explain why in a moment. Nor would it be all that difficult for the right hon. Gentleman to do it in another case which would completely meet his worry about foster parents. I refer to the point about the £2 disregard for the earnings or income—I accept that the drafting would have been better as "income"—of other members of the family.
      In this situation the right hon. Gentleman must look again at the crucial question of disincentives. In many instances a wife, or other member of the family, who is going out to work parttime—in most cases it would be a wife—will have to stop work if there is no disregard should her husband's income increase by a pound or two unless the entire family is to lose as a result. The right hon. Gentleman must look into this matter because it is realistic that this will happen. We ask the right hon. Gentleman, therefore, not to produce a disincentive which is severe in some
      1330
      spheres with which he is concerned. Women who take lowly paid jobs often work, for example, as school dinner helpers, as assistants in wards for the mentally handicapped, and as nursing assistants. Their work is often important to these services. The right hon. Gentleman will not assist that work to continue by refusing a disregard for a wife's income.
      I should like now to go back to the points about war pensions, the disregard for wives, and the constant attendance allowance. The right hon. Gentleman in his statement on Second Reading—in many ways it was an encouraging statement—said that he would wish to seek to find a single passport—by which he meant a single means test—for a whole range of means tested benefits. Part of the logic of the right hon. Gentleman's position, though not that of the Opposition, is that he should seek to do this. If the right hon. Gentleman's philosophy is to stand, he must have the simplest possible means testing arrangements over the whole range of means tests.
      I have about 25 copies of means tests. Nine or 10 are national ones; the other 10 or 11 are local authority ones. Those schemes are complex, but almost every one includes certain disregards. Above all, they include—not in every case, but in most cases—specific disregards for war pensions and for the income of a working wife. Therefore, the right hon. Gentleman is taking a step not towards simplicity, but, in the end, towards complexity by accepting a scheme without disregards and trying to relate it to a set of means tests with disregards. This is a serious and real point which the right hon. Gentleman must consider.
      The right hon. Gentleman in his speech—I hope that he will forgive me saying this, but I must—presented a rather disingenuous argument when he said that all kinds of income were taken into account so that it could be called a kind of general disregard. But that is not what we are trying to do. What we, the right hon. Member for Kingston-upon-Thames, and the hon. Member for Rushcliffe, are trying to indicate is that certain categories of people deserve a little better of the community, because, like the disabled, the expenses that they cannot avoid are particularly high. This is the reason for the constant attendance

      1331
      allowance. For example, a family with a disabled mother meets expenses which the rest of us do not begin to understand or even contemplate.
      The same is true in a different way of war pensioners. It has always been accepted in the House that the war pensioner deserves not the same treatment as everbody else, but something a little better. We are not just talking about the average war pensioners; we are talking about war pensioners who, by definition, are on very low incomes and who, in a sense, the community have let down. So in this case, of all cases, it is essential that this additional privilege should be allowed. I therefore ask the right hon. Gentleman to look at this point again.
      I cannot accept the right hon. Gentleman's assurance, which was rather lightly given, that he would at least come forward with a statement on Report but could not commit himself to what that statement might contain. It is far too vague an assurance for us to accept. Therefore, we must press for Divisions on certain of these Amendments.
      8.30 p.m.
      Mr. Boyd-Carpenter: I am sorry that the hon. Lady took the line that she did in her concluding sentences. The Committee will agree that we have had a very good debate, and it seemed to me to culminate in my right hon. Friend's assurance that on Report he would make a further statement with particular reference to the matters about which the whole Committee is concerned, those of war pensions and constant attendance allowance.
      It is my view that my right hon. Friend should be given that opportunity. The hon. Lady has been in Government. She knows that when a Minister encounters, as my right hon. Friend has, considerable resistance on one point in Committee, if he is a responsible Minister he will want to go back and have an opportunity to discuss in his Department what it may be possible to do to meet the wishes of the Committee.
      I have complete personal confidence in my right hon. Friend that he did not make that statement without at least contemplating the possibility that he may be able to go a little further on Report. I am
      1332
      satisfied with that assurance, and I am glad that he has given it. I think that the hon. Lady would strengthen the general all-party demand on my right hon. Friend that he should do that if she would reserve her judgment until that occasion. It would be perfectly easy to table an appropriate Amendment—indeed, it would be sensible to do so—to give my right hon. Friend an opportunity to make his statement on Report.
      The hon. Lady might get far more support if my right hon. Friend's statement were then unsatisfactory than she is likely to get tonight. I think, too, that she will give my right hon. Friend a greater encouragement to go a little further to meet us if she does not press the matter to a Division tonight. For my part, I am satisfied, for the time being, with my right hon. Friend's assurance.
      Mrs. Shirley Williams: The right hon. Gentleman is extremely persuasive, but I must put a direct question to his right hon. Friend the Secretary of State. If the answer is satisfactory, we shall not press the matter to a Division.
      Will the right hon. Gentleman consider making a statement on Report, first, about whether war pensions and constant attendance allowance can be exempted, and exempted at an earlier stage than some hypothetical Stage 2? We want a specific statement that these will be exempted at the earliest possible date that he can conceivably administratively achieve.
      Second, will the right hon. Gentleman assure us that he will give serious consideration to, and make a statement about the disregard of £2 for a wife and other people's earnings? I put that less powerfully because the right hon. Gentleman has not made that a specific part of his plea.
      Sir K. Joseph: I thank my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) for putting my position perfectly. I have undertaken to make a statement on Report, and I have considered the possibility that I may be able to move further than I have felt free to move today. That is with particular reference to war pensions and constant attendance allowance. I should not like to be quite as strong about the £2 earning disregard.
      Amendment negatived.
      Mrs. Shirley Williams: On a point of order. Was that Amendment No. 26?
      The Deputy Chairman: Yes. When I put the Question there was no response from the Opposition.
      Mrs. Williams: There was.
      The Deputy Chairman: With respect, there was not. If I may continue, perhaps I can clarify the position. If I understand it correctly, the position is that, on the following Amendments which have been discussed, the Committee wishes to divide on Amendments Nos. 30, 31 and 33, and if it is for the convenience of the Committee I shall proceed to put Amendment No. 30 separately.
      Mrs. Williams: On a point of order, Miss Harvie Anderson. In view of the statement that the right hon. Gentleman has just made, we would wish to divide the Committee on Amendment No. 30. I apologise if I was deep in thought trying to work out the Amendments on which we were to divide. As I understand it, Amendment No. 30 would not make a great deal of sense unless the Committee was permitted to divide on Amendment No. 26. That is why I am afraid we rather belatedly shouted "Aye".
      The Deputy Chairman: I think that there has been a slight misunderstanding. I clearly put the Question on Amendment No. 26. I collected the voices and there was no response from the Opposition. The Clerk at my side and I were
      taking particular care to listen to the response because I had anticipated that as the hon. Lady had not withdrawn her Amendment she would wish me to put the matter to a Division. It was in the absence of a response that I moved as I did.
      I do not want to embarrass the Committee in any way, but I assure the hon. Lady that it was in my mind that she would wish to divide the Committee on Amendments Nos. 30, 31 and 33 and that this would be appropriate, and I shall do that if that would be for the convenience of the Committee.
      Sir K. Joseph: May I see whether I can help the hon. Lady, because I agree that although the Opposition intended to divide they did not make a noise about it. If the Opposition succeed in winning a Division on Amendment No. 30 we shall help by introducing a technical Amendment at a later stage in order that Amendment No. 30 shall make sense.
      The Deputy Chairman: That is what I expected would be the position.
      Amendment proposed: No. 30, in page 2, line 26, at end add:
      (3) In the calculation of gross income there shall be disregarded to the extent of the first £2 thereof any earnings (other than such as are excluded by virtue of sub-section 1 of this section) of any member of the said family who is not engaged in full-time remunerative work.—[Mrs. Shirley Williams.]
      Question put, That the Amendment be made:—
      The Committee divided: Ayes 137, Noes 177.

      Division No. 29.

      AYES

      [8.35 p.m.

      Albu, Austen

      Cronin, John

      Garrett, W. E.

      Allaun, Frank (Salford, E.)

      Cunningham, C. (Islington, S. W.)

      Gourlay, Harry

      Archer, Peter (Rowley Regis)

      Cunningham, Dr. J. A. (Whitehaven)

      Grant, George (Morpeth)

      Armstrong, Ernest

      Davidson, Arthur

      Griffiths, Eddie (Brightside)

      Ashton, Joe

      Davies, S. O. (Merthyr Tydvil)

      Griffiths, Will (Exchange)

      Atkinson, Norman

      Dell, Rt. Hn. Edmund

      Hamilton, William (Fife, W.)

      Bagier, Cordon A. T.

      Dempsey, James

      Hamling, William

      Bennett, James (Glasgow, Bridgeton)

      Doig, Peter

      Hannan, William (G'gow, Maryhill)

      Bidwell, Sydney

      Douglas, Dick (Stirlingshire, E.)

      Hardy, Peter

      Boardman, H. (Leigh)

      Duffy, A. E. P.

      Harper, Joseph

      Broughton, Sir Alfred

      Dunnett, Jack

      Heffer, Eric S.

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

      Eadie, Alex

      Horam, John

      Buchan, Norman

      Edelman, Maurice

      Houghton, Rt. Hn. Douglas

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

      Edwards, William (Merioneth)

      Huckfield, Leslie

      Carmichael, Neil

      English, Michael

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Carter-Jones, Lewis (Eccles)

      Faulds, Andrew

      Hughes, Dr. Mark (Durham)

      Clark, David (Colne Valley)

      Fisher, Mrs. Doris (B'ham, Ladywood)

      Hughes, Roy (Newport)

      Cocks, Michael (Bristol, S.)

      Fitch, Alan (Wigan)

      Jenkins, Hugh (Putney)

      Cohen, Stanley

      Fletcher, Ted (Darlington)

      Jenkins, Rt. Hn. Roy (Stechford)

      Concannon, J. D.

      Foley, Maurice

      Jones, Dan (Burnley)

      Conlan, Bernard

      Foot, Michael

      Jones, Barry (Flint, E.)

      Cox, Thomas (Wandsworth, Central)

      Freeson, Reginald

      Kaufman, Gerald

      Crawshaw, Richard

      Galpern, Sir Myer

      Kerr, Russell

      Lambie, David

      Morris, Alfred (Wythenshawe)

      Smith, John (Lanarkshire, North)

      Lamond, James

      Murray, Ronald King

      Spearing, Nigel

      Latham, Arthur

      O'Malley, Brian

      Spriggs, Leslie

      Lawson, George

      Orbach, Maurice

      Stoddart, David (Swindon)

      Leadbitter, Ted

      Pardoe, John

      Strang, Gavin

      Lestor, Miss Joan

      Pendry, Tom

      Summerskill, Hn. Dr. Shirley

      Lewis, Arthur (W. Ham N.)

      Pentland, Norman

      Taverne, Dick

      Lomas, Kenneth

      Perry, Ernest G.

      Thomas, Jeffrey (Abertillery)

      Lyon, Alexander W. (York)

      Prentice, Rt. Hn. Reg.

      Tomney, Frank

      McBride, Neil

      Prescott, John

      Urwin, T. W.

      McCann, John

      Probert, Arthur

      Wainwright, Edwin

      McCartney, Hugh

      Rankin, John

      Wallace, George

      McElhone, Frank

      Reed, D. (Sedgefield)

      Wellbeloved, James

      Mackenzie, Gregor

      Rhodes, Geoffrey

      Wells, William (Walsall, N.)

      Mackie, John

      Robertson, John (Paisley)

      White, James (Glasgow, Pollok)

      Mackintosh, John P.

      Roderick, Caerwyn E. (Br'c'n & R'dnor)

      Whitehead, Philip

      McManus, Frank

      Roper, John

      Williams, Mrs. Shirley (Hitchin)

      McMillan, Tom (Glasgow, C.)

      Rose, Paul B.

      Wilson, Alexander (Hamilton)

      McNamara, J. Kevin

      Ross, Rt. Hn. William (Kilmarnock)

      Wilson, William (Coventry, S.)

      MacPherson, Malcolm

      Shore, Rt. Hn. Peter (Stepney)

      Woof, Robert

      Marks, Kenneth

      Silkin, Rt. Hn. John (Deptord)

      Mason, Rt. Hn. Roy

      Silkin, Hn. S. C. (Dulwich)

      TELLERS FOR THE AYES:

      Meacher, Michael

      Sillars, James

      Mr. John Golding and

      Mellish, Rt. Hn. Robert

      Skinner, Dennis

      Mr. James Hamilton.

      NOES

      Adley, Robert

      Gorst, John

      Mills, Stratton (Belfast, N.)

      Allason, James (Hemel Hempstead)

      Gower, Raymond

      Mitchell, David (Basingstoke)

      Astor, John

      Grant, Anthony (Harrow, C.)

      Moate, Roger

      Atkins, Humphrey

      Gray, Hamish

      Molyneaux, James

      Awdry, Daniel

      Green, Alan

      Money, Ernle

      Baker, W. H. K. (Banff)

      Griffiths, Eldon (Bury St. Edmunds)

      Monks, Mrs. Connie

      Benyon, W.

      Gummer, Selwyn

      Monro, Hector

      Biffen, John

      Gurden, Harold

      Montgomery, Fergus

      Biggs-Davison, John

      Hall, John (Wycombe)

      More, Jasper

      Boardman, Tom (Leicester, S. W.)

      Hall-Davis, A. G. F.

      Morgan-Giles, Rear-Adm.

      Boscawen, R. T.

      Hannam, John (Exeter)

      Morrison, Charles (Devizes)

      Boyd-Carpenter, Rt. Hn. John

      Haselhurst, Alan

      Mudd, David

      Braine, Bernard

      Hastings, Stephen

      Neave, Airey

      Bray, Ronald

      Havers, Michael

      Nicholls, Sir Harmar

      Brewis, John

      Hawkins, Paul

      Noble, Rt. Hn. Michael

      Brown, Sir Edward (Bath)

      Hayhoe, Barney

      Normanton, Tom

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

      Hicks, Robert

      Nott, John

      Bullus, Sir Eric

      Hill, James (Southampton, Test)

      Onslow, Cranley

      Oppenheim, Mrs. Sally

      Burden, F. A.

      Holland, Philip

      Owen, Idris (Stockport, Norh)

      Campbell, Rt. Hn. G. (Moray & Nairn)

      Holt, Miss Mary

      Page, Graham (Crosby)

      Chichester-Clark, R.

      Hordern, Peter

      Percival, Ian

      Churchill, W. S.

      Hornby, Richard

      Pike, Miss Mervyn

      Clarke, Kenneth (Rushcliffe)

      Hornsby-Smith, Rt. Hn. Dame Patricia

      Powell, Rt. Hn. J. Enoch

      Cockeram, Eric

      Howell, Ralph (Norfolk, N.)

      Pym, Rt. Hn. Francis

      Cooke, Robert

      Hutchison, Michael Clark

      Ramsden, Rt. Hn. James

      Coombs, Derek

      Iremonger, T. L.

      Redmond, Robert

      Cooper, A. E.

      Jenkin, Patrick (Woodford)

      Reed, Laurance (Bolton, East)

      Cormack, Patrick

      Jennings, J. C. (Burton)

      Renton, Rt. Hn. Sir David

      Costain, A. P.

      Jessel, Toby

      Ridley, Hn. Nicholas

      Critchley, Julian

      Joseph, Rt. Hn. Sir Keith

      Roberts, Michael (Cardiff, North)

      Crouch, David

      Kaberry, Sir Donald

      Rossi, Hugh (Hornsey)

      Crowder, F. P.

      Kerby, Capt. Henry

      Rost, Peter

      Dalkeith, Earl of

      Kershaw, Anthony

      Russell, Sir Ronald

      d'Avigdor-Goldsmid, Sir Henry

      Kilfedder, James

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

      d'Avigdor-Goldsmid, Maj.-Gen. Jack

      King, Evelyn (Dorset, S.)

      Shelton, William (Clapham)

      Dean, Paul

      King, Tom (Bridgwater)

      Sinclair, Sir George

      Deedes, Rt. Hn. W. F.

      Kinsey, J. R.

      Soref, Harold

      Dixon, Piers

      Knight, Mrs. Jill

      Spence, John

      Edwards, Nicholas (Pembroke)

      Knox, David

      Sproat, Iain

      Elliot, Capt. Walter (Carshalton)

      Lambton, Antony

      Stainton, Keith

      Eyre, Reginald

      Lane, David

      Stanbrook, Ivor

      Fell, Anthony

      Langford-Holt, Sir John

      Stewart-Smith, D. G. (Belper)

      Fenner, Mrs. Peggy

      Legge-Bourke, Sir Harry

      Stodart, Anthony (Edinburgh, W.)

      Fidler, Michael

      Le Marchant, Spencer

      Stoddart-Scott, Col. Sir M.

      Finsberg, Geoffrey (Hampstead)

      Loveridge, John

      Stuttaford, Dr. Tom

      Fisher, Nigel (Surbiton)

      MacArthur, Ian

      Sutcliffe, John

      Fookes, Miss Janet

      McCrindle, R. A.

      Taylor, Sir Charles (Eastbourne)

      Fortescue, Tim

      Maclean, Sir Fitzroy

      Taylor, Frank (Moss Side)

      Fowler, Norman

      McMaster, Stanley

      Taylor, Robert (Croydon, N. W.)

      Fox, Marcus

      Macmillan, Maurice (Farnham)

      Tebbit, Norman

      Fry, Peter

      Madel, David

      Thompson, Sir Richard (Croydon, S.)

      Gardner, Edward

      Mawby, Ray

      Trew, Peter

      Gibson-Watt, David

      Maxwell-Hyslop, R. J.

      Tugendhat, Christopher

      Gilmour, Sir John (Fife, E.)

      Meyer, Sir Anthony

      Turton, Rt. Hn. R. H.

      Goodhew, Victor

      Mills, Peter (Torrington)

      Waddington, David

      1336

      1337

      Walder, David (Clitheroe)

      Wilkinson, John

      Younger, Hn. George

      Ward, Dame Irene

      Wolrige-Gordon, Patrick

      Warren, Kenneth

      Woodhouse, Hn. Christopher

      TELLERS FOR THE NOES:

      Weatherill, Bernard

      Woodnutt, Mark

      Mr. Walter Clegg and

      White, Roger (Gravesend)

      Wylie, Rt. Hn. N. R.

      Mr. Keith Speed.

      The Deputy Chairman: As I understand the Committee is satisfied that it is not necessary to divide on Amendments Nos. 31 and 33, I think it would be the wish of the Committee to move on to the Question, That the Clause stand part of the Bill.
      Question, That the Clause stand part of the Bill, put and agreed to.
      Clause 4 ordered to stand part of the Bill.
      [Sir ROBERT GRANT-FERRIS in the Chair]

    Clause 5

      CLAIM TO AND PAYMENT OF FAMILY INCOME SUPPLEMENT
      Mr. McNamara: I beg to move Amendment No. 40, in page 2, line 31, leave out from 'shall' to 'and' in line 32 and insert:
      'be made in such manner as regulations may provide'.
      The Deputy Chairman (Miss Harvie Anderson): With this Amendment we can also take Amendment No. 41, in page 2, line 33, leave out 'be receivable by either of them' and insert:
      'except in such cases as may otherwise be provided by regulations be receivable by the woman'.
      8.45 p.m.
      Mr. McNamara: This is a brief probing Amendment. The nearest comparison that we have to the type of assistance to be given by the Bill is family allowance. Family allowances are made to the mother. The mother may assign another person to pick them up. I can scarcely ever recall my wife collecting them; she usually leaves that to me.
      The Secretary of State suggests that the application should be made by both parties jointly and that the payment should be made to either. To a certain extent, I appreciate some of the reasons for that. Obviously there may be circumstances where a husband is keeping his wife on short commons when she does not know what his true income is. There might be an occasion when both are
      1338
      working and they do not know what each other's income is.
      There may well be an important case which I should like the Under-Secretary to consider, when the pride of the man might be such that he feels that because he is in full-time occupation, his wage should be sufficient to keep his wife and children. In such circumstance, in what otherwise is a normal, happy family with a contented domestic background, he might put tremendous difficulties upon his wife because he is not prepared to go through a means test. But she, being a woman, and perhaps more realistic, finding it very difficult to make ends meet, would be prepared to do so.
      These Amendments are to meet that type of situation. If the husband and wife are living jointly and one refuses to make the application, the wife should be able to do so.
      In certain circumstances, it could create some domestic disharmony if a husband were not paying what he could well afford for the support of his wife and children. It might bring him up to recognise properly what his responsibilities were. But if he were too proud, it should at least be at the discretion of the wife to make application.
      The second point is concerned with to whom the payment shall be made. Under the Bill the moneys will be receivable by either. For some of the reasons I indicated earlier, I should prefer the money to be paid to the wife at the first instance, with the wife able, as she is with the family allowance, to name an assignee to pick up the money for her. There are situations where that might be in the interests of the children and of the family living in poverty. This is the sort of situation with which we are concerned where it would be better for the wife to have the money first.
      Briefly, the object of these two Amendments is simple. Could we not make the set-up more or less parallel with the family allowance arrangement?
      Mr. Dean: I am grateful to the hon. Member for Kingston upon Hull, North (Mr. McNamara) for drawing attention to

      1339
      another valuable consideration. He said that the Amendment was a probing Amendment to discover the Government's intentions about joint applications. The Bill says that there should be joint application except when the regulations provide otherwise.
      We envisage that joint application would not be appropriate in, for example, one-parent families. There would be some difficulty in his proposal about two-parent families if a husband were not prepared to disclose his earnings—the earnings on which the basis of the supplement is calculated. I am a little doubtful about whether his suggestion would be practicable when two parents were involved.
      Mr. McNamara: In order to save time, I did not elaborate the argument, but there may be families when two people are living together and are not husband and wife, when that particular legal bond does not exist. The man might be acting quite irresponsibly towards the household, but if he is brought up to see the problems, may act properly. I want the Government to keep that situation in mind.
      Mr. Dean: Certainly. The hon. Gentleman is envisaging circumstances in which there may well be two FIS allowances due in a household, in which case one would need to know the income of each of the two people. We have the power to deal with that in the regulations. I undertake to look carefully at the point he has made to see whether it is necessary to cover it, or to see whether it is practicable to cover it, in which case it will be covered in the regulations.
      Secondly, he discussed to whom the payments should be made. I understood what he had to say about family allowances normally being paid to the mother, and one assumes that in a normal two-parent household, this scheme would have that sort of arrangement. However, there may be instances where a practical objection would arise in that the family income supplement, unlike family allowances, might be paid to couples who were not married and when the woman was not the mother of the children. To do as the hon. Member suggests in all cases would therefore create difficulties.
      1340
      However, we have very much in mind the general spirit of what the hon. Member wishes to achieve. It may not be possible to meet every case because of the practical difficulties which I have mentioned. However, I hope that the hon. Gentleman will feel that this short debate has been useful.
      Mr. McNamara: I am grateful to the Under-Secretary for what he has said and, in the circumstances, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 5 ordered to stand part of the Bill.

    Clause 6

      DETERMINATION OF RIGHT TO, AND AMOUNT OF, FAMILY INCOME SUPPLEMENT.
      Mrs. Shirley Williams: I beg to move Amendment No. 42, in page 2, line 38, leave out 'Supplementary Benefits Commission' and insert 'Secretary of State'.
      I understand that we are to discuss at the same time Amendment No. 44, in page 3, line 2, leave out 'Commission' and insert 'Secretary of State'.
      These two Amendments are designed to deal with the division of responsibility as the matter stands at present. In our view, the Secretary of State should be wholly responsible for the administration of the family income supplement scheme. Earlier in the debate, my hon. Friend the Member for Rowley Regis and Tipton (Mr. Peter Archer) sought to discuss the possibility of the entire scheme being the responsibility of the Supplementary Benefits Commission, but in our Amendments now we suggest that the responsibility should be accepted where it belongs, that is, by the Secretary of State.
      As the Bill is drafted, there is a most unsatisfactory sharp division of responsibility, with responsibility for paying the family income supplement and for receiving claims resting with the Secretary of State, under Clause 5, while a whole range of determinations and decisions which will to a great extent, in effect, decide the scope and practical consequences of the Bill are left to the Supplementary Benefits Commission, under Clause 6.

      1341
      If the Supplementary Benefits Commission was to be left with the responsibility of deciding a whole range of crucial questions very much affecting the families involved, why did the Secretary of State not pursue the logic of that argument and ask the Commission to undertake the whole responsibility? We conclude that there are reasons why the right hon. Gentleman did not take that course, and we wonder whether they have anything to do with the fact that virtually no independent body concerned with poverty has given the Bill any kind of welcome at all.
      If that is the situation, and if, in consequence, the Secretary of State and his Department must take responsibility for the Bill, we argue that the responsibility should go rather further than it does under Clauses 5 and 6. As the Bill stands, the Supplementary Benefits Commission will have to decide a range of questions which are normally thought to be policy matters. For instance, it will be asked to decide such questions as what constitutes a family, a question which has been to some extent widened now because the right hon. Gentleman has agreed to give serious consideration to the position of grandparents, whether as part of a household with children or whether themselves responsible for their grandchildren. My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) has raised the question of foster-children. There is also the question of children in care and whether they constitute children for the purposes of the Bill. Again, as things stand, this will be a matter to be decided by the Supplementary Benefits Commission.
      Let us suppose that a man spends part of the period of five weeks or slightly longer—the qualifying period for a family income supplement—in prison or other form of detention. It would be the Commission which will have to decide what his income ought rightly to be considered to be. Again, I understand that the period which will be taken as the proper period on which one can justify having a family income supplement will be a matter left to the Commission to decide. It will have to decide whether an occupation is such that a period of only two months is adequate for the basis of an application or whether the five weeks rule will suffice. Clearly, if families have
      1342
      casual or seasonal earnings, or if the earner is in and out of work, all these questions will be of crucial importance.
      Such questions must be resolved because, if they are not, Ministers will find that there are vast anomalies in relation to the 26-week period of FIS based upon what has happened in the five weeks or slightly more on which the income supplement is based. For example, if the husband is away and out of the house for the period of five weeks, possibly on a seasonal job, will he be considered a member of the family for the purpose of family income supplement?
      Who decides where responsibility for children lies? Who decides whether a child is part of the family? I am referring here not to a foster-child or to a child in care but to a child who is not a blood relation but who has normally lived with the family in the past.
      In short, what we see in the Bill—we have raised this matter time and again—is a disturbingly wide range of discretion. Some part of the discretion is left to regulations, and this is why we have as an Opposition probed and pushed so hard for the terms of the regulations to be defined in advance, so far as they can be.
      9.0 p.m.
      I turn to the other part of that range of discretion which will never be discussed by the House of Commons and which will not even be subject to the negative resolution procedure, under which most regulations fall, namely, that part which rests with the Supplementary Benefits Commission. I ask the Under-Secretary of State to tell us why this range of discretion has passed, not just from the hands of the Secretary of State, but, from our point of view more seriously, from the position in which Parliament can question and can be the ultimately responsible body and is passed to the Commission.
      It is not that we on this side of the Committee distrust the Supplementary Benefits Commission. We recognise that it is a body which almost invariably—though not invariably—tries to come down on the side of the applicant. But we are disturbed that the Commission is now being asked to undertake what one can only describe as a minimal policy rôle. We do not believe that this is

      1343
      the job which the Commission was set up to do, and we do not think it fair of the Secretary of State to ask it to do this job.
      We are dealing with a whole new range of benefits for families in work. Consequently, this range of discretion will have behind it no case law, no precedents—nothing of that kind—on which a body like the Supplementary Benefits Commission can depend. The decisions will be made afresh. They will be made against a background of no history at all. It is, therefore, even more disturbing that the Secretary of State and his colleagues should permit this power to pass to a body which is not directly answerable to Parliament.
      The Supplementary Benefits Commission is desperately overworked, as all of us who are in the last interested in pensions and social security affairs know. The Under-Secretary of State will know, as I do, that the people who work for the Commission are working very long hours of compulsory overtime and, consequently, there are grave difficulties about recruiting to this no longer particularly attractive, though very dedicated, type of service. By putting so many more responsibilities on this body, we suspect that the Secretary of State and his colleagues may take it to breaking point. The Bill suggests that an additional 200 civil servants will be required. It would be helpful if the Under-Secretary of State would make clear how they will be divided between the Ministry and the Commission so that we can know whether the Commission will be expected to take on this load in addition to the very heavy load which it carries now.
      I wish to put to the Under-Secretary of State a question which will become all the more important if his reply is that he cannot accept the Amendments and we continue with this highly unsatisfactory position of divided responsibility. If that is his answer, I must ask him to give, if not the Committee, then the applicant the benefit of the doubt at every stage. This means that the House of Commons must ask to see the form upon which the application is made and, not the regulations laid before the House, but the codes of conduct which will be used in reaching decisions in the way in which codes of conduct are used in respect of supplementary benefit. Will the Under-Secre-
      1344
      tary of State tell us whether any applicant whose case is to be decided, not at the appeal tribunal, but before the Supplementary Benefits Commission, will be permitted to be represented by a relation, trade union or an organisation such as the Child Poverty Action Group?
      I hope that the Under-Secretary of State will not under-estimate the seriousness of this very unsatisfactory administrative situation, will say why the Supplementary Benefits Commission has not been given the whole responsibility, which we believe would be logical, and will reply to the questions about representation of the client and the means test form and will say whether Parliament will be able to survey and watch matters to try to make good what we believe to be a very serious lacuna in the Bill.
      Mr. Hugh D. Brown: Hon. Members opposite cannot have it both ways. If they argue, on the one hand, as they have just argued concerning disregards, that simplicity must be of the essence, they are caught with their own arguments concerning disqualifications. The lack of detail that we have had is frightening.
      I hope that I will not be misunderstood when I say that if we as a Government had attempted to bring in a scheme like this, every hon. Member opposite would have accused us of creating a scrounger's paradise. I like to feel that it is a test of our genuine concern for unfortunate people that none of us has used that argument during the debate. Perhaps my right hon. Friend the Member for Coventry, East (Mr. Crossman) hinted at it on Second Reading. We are entitled to more information.
      In a Written Answer on 13th November dealing with Clause 6 and, to some extent, Clause 5, the impression was given that there would be 80 assessment offices. Does that mean that it will be only at those offices that inquiries can be made? It is no use the Minister saying that every assistance will be given at each local office throughout the country when he does not have, or does not seem to have, the support or the willingness to operate the scheme from the Supplementary Benefits Commission. I do not think that the Minister has had proper regard for the staff who will be required.
      Here, therefore, we get into a kind of hybrid situation. My hon. Friends argue that it should be a matter for the

      1345
      Department of Social Security. I think that it should be a matter for the Supplementary Benefits Commission. Nevertheless, I want assurance that proper regard has been given to the acute staffing position in the local offices. Relationships with the public are difficult enough in dealing with the whole variety of people with serious social problems, but when we are dealing for the first time with wage earners, we obviously want to be assured that properly trained staff and adequate accommodation will be available.
      What about disqualification? My hon. Friend the Member for Hitchin (Mrs. Shirley Williams) has mentioned prison. What about strikers? We hear a lot of hon. Members opposite thundering away about the gross abuse of public funds in helping the dependants of strikers. Will strike action be a disqualification, or is the Minister giving a categorical assurance that there will be practically no disqualification once an award has been made for 26 weeks? He cannot have it both ways. Is there to be simplicity on this side also?
      Prison is another example which has been mentioned. I see nothing in the Bill which leads me to believe that there should be an exclusion, unless it is because a person is not in full-time employment when he is in prison. He may be deemed to be in full-time employment, but prison is not full-time employment under the definition.
      The lack of information and the lack of detailed thought which has gone into these matters is appalling. I hope that we shall get more information when the Minister replies.
      Mr. Dean: This has been an interesting debate. I hope that I shall be able to reassure the Committee, because I think that the hon. Lady the Member for Hitchin (Mrs. Shirley Williams), in moving the Amendment, has somewhat misunderstood the position and how the scheme will work. What the hon. Lady has not, perhaps, fully appreciated is the clear distinction which will be drawn, as with all our social security arrangements, between the laying down of the structure of the scheme and the determination within that structure of the benefits to be made available to the people concerned.
      1346
      The Bill and the regulations will lay down the structure of the scheme. The sort of things that we have been discussing on the Bill—the definition of earnings over the five-week period and the definition of a family, for example—are factors which are not specifically in the Bill but which will be laid down in regulations. In that sense, therefore, the Secretary of State is responsible and will be responsible to Parliament for the actual structure and definitions within the scheme.
      I do not think the hon. Lady would want the Secretary of State to decide also to determine within the structure which he has laid down, which Parliament has agreed, exactly the entitlement of the individuals concerned; because, surely, we would then be in a position in which the Secretary of State, a Minister, would be judge and jury; we would be departing from the traditional structure which we have of independent statutory authorities who make decisions on these matters rather than a Minister himself. This, I think that the hon. and learned Gentleman, the Member for Dulwich (Mr. S. C. Silkin), would agree, is a fundamental principle. He knows much more about the law than I do, but certainly in our National Insurance arrangements the determination of questions is made by statutory authorities who are independent of the Minister.
      Mr. S. C. Silkin: I hope that the hon. Gentleman will explain a little more clearly what he means when he says that questions as to policy will be a matter for the Secretary of State through regulations. In subsection (1) we have a very clear statement:
      "Any question as to the right to or the amount of a family income supplement shall be referred to and determined by the Supplementary Benefits Commission"
      was a right of appeal. Are we to take it that what that really means is that this will be a purely mechanical procedure and that all the policy decisions will have been taken first by means of regulations? If that is so, then would the Under-Secretary of State say why he feels that, so far as this Clause is concerned, the negative resolution procedure is adopted, when, clearly, very important matters are going to be decided under it?
      Mr. Dean: There is nothing unusual in the procedure being proposed here. The

      1347
      intention of the structure of the scheme, with the definitions which are envisaged in the regulations, will be laid down by statute—in the Bill and in the regulations which will follow the Bill—with the due approval of Parliament, but the actual determination of entitlement, for example, is a function which the Commission will fulfil, in exactly the same way as the Commission fulfils very similar functions in regard to supplementary benefits at the present time. For example, various questions which have been discussed during these debates are very similar in type to the questions which the Commission determines now for supplementary benefit purposes. So there is clearly an exact parallel here between the legal framework, in the Bill and in the regulations, and the determination of entitlement within that framework, and the latter will be the task of the Commission, in much the same way as it is the task of the Commission to determine, within the framework laid down by Parliament, entitlement to supplementary benefit. The parallel is really very similar.
      Mr. S. C. Silkin: I am sorry to press the hon. Gentleman, but is that really so? Surely, the position of the Supplementary Benefits Commission at the moment is that it is dealing with matters which are discretionary; it exercises its discretion. What I understand to be the purpose of this legislation is to give people a legal right to claim, where the combined effect of the Bill and the regulations provides for that situation. There is all the difference in the world between a body which is exercising and is used to exercising a discretion and a situation in which there is a legal right.
      9.15 p.m.
      Mr. Dean: It is true that the commission has a discretion, and therefore it has more manoeuvring room than there is here but even there the commission's discretion is exercised within a framework which is laid down by Parliament and altered from time to time. The commission works from the basic scale rates and it has discretion over and above that so there is a fairly exact parallel here. The legal aid scheme, with which I have no doubt the hon. and learned Gentleman is more familiar than I, is perhaps a more
      1348
      exact parallel. The commission administers the legal aid scheme, and the procedure here will be similar to the function that it will have with regard to the legal aid scheme.
      The effect of what the hon. Lady is proposing—and I am sure this is not what she intends—is that the Minister would be judge and jury. He would not only be laying down, with the approval of Parliament, what is in the Statute and in the regulations following from it, but he would also be determining the entitlement. That would be a substantial departure from the concept of independent statutory authorities determining these matters, which I feel sure both sides of the Committee agree is a valuable safeguard to individuals who think they are entitled to benefit, and also to Ministers who occasionally wish to appeal to the statutory authorities.
      With that explanation, I hope that the hon. Lady will be assured that we are following past precedent and practice, and that to adopt her suggestion would not be in the interests of the independent administration of this scheme or in the interest of ensuring that justice is done and seen to be done to the individuals concerned.
      Mr. Peter Archer: I follow what the hon. Gentleman says about the determination of claims, although I would not wish to express myself as being in agreement. Will he now address himself to the other question which was asked? Why, in that case, is it suggested that the Secretary of State should receive claims and make payments? What is the distinction between the making of payments under this scheme and under the supplementary benefits scheme? Is it intended that the two should be duplicated?
      Mr. Dean: I was coming on to that point, which was raised by the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown). The administrative arrangements we envisage are that payments will be made from a central office rather than from offices dispersed throughout the country. This will produce administrative savings. The actual claims can and will be made through the local offices, but we envisage central payments, and the more we can achieve this as we get the scheme running the more administrative savings we shall get.

      1349
      I was asked whether people who for a 26-week period are getting FIS payments will continue to receive payments regardless of the circumstances. Broadly speaking, the answer is "Yes". We intend to simplify the scheme as far as possible, and that is why we laid down a comparatively long period. A great many people will benefit from this. We were asked what would be the effect on sickness benefit. My right hon. Friend stated that the FIS payment will continue, and that is the answer to this question. I am not certain, off the cuff, what happens about someone who is in prison, but I suspect that in practice the wife and children will almost certainly be eligible for supplementary benefit, which in many cases will be at a higher rate than the FIS payment.
      I hope with that explanation the hon. Lady and the Committee will feel reassured.
      Mrs. Shirley Williams: Before the hon. Gentleman comes to the end of his speech, may I ask whether he has said all he intends to say about the reasons for having this divided system? With respect, in the light of all he said before in explaining why the S.B.C. was giving the final decision in some cases, I thought his explanation about why it had not been chosen was a very lame one. It seemed to boil down to the S.B.C. not having a central office, but the hon. Gentleman will know as well as I do that the S.B.C. could be asked to allocate one office for the purpose and could therefore administer the scheme.
      If the hon. Gentleman takes the view which is put forward in the Amendments that because, in the words of his right hon. Friend, the Government are not setting up a parallel supplementary benefit scheme for those in work, the S.B.C. would not be the appropriate body, he has not satisfied us why quite considerable decisions will be made by the S.B.C. just the same.
      If the hon. Gentleman is ending his speech, I press on him the last two questions to which he did not reply. They are quite crucial to asking Parliament to accept this scheme. We ask that the procedures, the rules of working and the application form shall all be put before Parliament so that we can at least exercise surveillance over this divided responsibility.
      Mr. Dean: Yes, I readily reassure the hon. Lady on both those points. We intend to make the maximum information available to those who are likely to benefit. The whole intention of the take-up campaign is to do just this. The information will be made available to Parliament and to others who are interested.
      I also give the hon. Lady the assurance for which she asked with regard to representation. People who wish to have help from relatives or friends will be able to have that help in making a claim in exactly the same way as when they are making a claim for supplementary benefit or any other allowance under our social service arrangements.
      Amendment negatived.
      Mr. S. C. Silkin: I beg to move Amendment No. 45, in page 3, line 4, leave out 'affected by' and insert 'reduced by reason of'.
      I am emboldened to hope that this Amendment will be accepted. The reason for this optimism is that in relation to Clauses 2 and 3 when we tabled Amendments suggesting that the figures in the Bill should be in an upward direction rather than either upward or downward as circumstances change and no doubt inflation gathers, the right hon. Gentleman in each case put down his own Amendments, Nos. 65 and 66, to accomplish the same purpose.
      The Amendment I am now proposing is intended to have the same effect on the situation in Clause 6, under which it is now proposed that family income supplement as determined by the Commission shall be payable for a period of 26 weeks and that the rate at which it is payable shall not be as it reads at the moment:
      "affected by any change of circumstances during that period".
      This seems to us to be a precise parallel to the circumstances of the earlier Clauses.
      Although we would not wish to see the rate reduced during the course of this long period of 26 weeks, we see no reason why it should not be increased if circumstances arise which make it a hardship upon those concerned that it should continue at the same rate for what is after all a substantial period of half a year. Would the right hon. Gentleman suppose a situation involving a

      1351
      person who has applied for F.I.S. and who, owing to his circumstances, has not been able to get it and perhaps a week or two later finds his circumstances change for the worse and is then able to reapply and would get it? As the Bill stands at the moment, a person who gets family income supplement and whose circumstances change for the worse during the period of 26 weeks, unless the regulations otherwise provide, will not be able to get any improvement in his family income supplement as a result of those changes of circumstances. This appears to be very odd and, indeed, to produce a situation of hardship.
      My hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) asked how the regulations would work, and this is crucial to the point I am putting forward in this Amendment. If we were assured that the regulations would provide for the possibility of an increase during the 26-week period so much the better, but we want to know what is intended. Indeed, we want to know a great deal about these regulations. What, for example, will be the position of people who are on strike? What will be the situation of a woman who is in receipt of family income supplement but who ceases to cohabit? Is she by virtue of regulations to have the supplement immediately cut off? There are all kinds of situations of that kind which might arise and I hope that we shall be given answers on them. The main point of the Amendment is that we feel it to be logical and right that any change should be in an upward direction, and not as the Bill stands at the moment.
      Mr. Dean: The hon. and learned Gentleman is tempting providence a little in moving the Amendment, although I accept that it is probably largely probing in nature to seek information about the Government's intentions. The Clause clearly lays down that the rate payable shall not be affected by change of circumstances during the period; that is, during the 26 weeks. In other words, the intention is neither to reduce it nor to increase it. Therefore, the optimistic parallel the hon. and learned Gentleman drew with earlier Amendments which we were able to accept in slightly changed form does not apply here.
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      9.30 p.m.
      If the hon. and learned Gentleman were to press us to say that in no circumstances would regulations be introduced to reduce the amount during the 26-week period, I think that he would agree that we should probably also have to ask to take power to ensure that they were not increased either. Would not it be very much better in the circumstances for us to leave the situation as it is, with the assurance I have given that the whole essence of the arrangement, as we see it, is that the 26-week award system should stand, because of its simplicity and the other advantages which we discussed under earlier Amendments? It is a for-better, for-worse arrangement; it is a simpler arrangement. It is not the intention that there should be either an increase or a reduction during that period. I hope that in view of that explanation the hon. and learned Gentleman will not wish to press his Amendment.
      Mr. S. C. Silkin: I am by no means satisfied with the hon. Gentleman's answer. In particular, he does not seem to me to have dealt at all with the point of the parallel between the person who gets nothing and then can apply a short time afterwards and the person who happens to have been successful in his application and may suffer a drastic change of circumstances for the worse during the period of 26 weeks.
      I should have been much happier if the hon. Gentleman had felt able at least to say that he would look into that point and, although I would not ask him to give any undertaking to make a change on Report, at any rate consider the kind of situations which have been shown as being likely to arise and see whether there is any possibility of dealing with them. If the hon. Gentleman wished to interrupt me and give such an undertaking now, that would make me much happier.
      Mr. Dean: I think I can help the hon. Gentleman. What I can tell him is that if a person would be in a more favourable position, if he would get a larger F.I.S. by claiming rather later, then that is a valid point, and I can give him the assurance that it is the sort of point we will examine to ensure that it is met effectively through regulations.
      Mr. Siikin: I am very much obliged to the hon. Gentleman. In view of that

      1353
      undertaking, so far as it goes, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 6 ordered to stand part of the Bill.

    Clause 7

      APPEALS
      Question proposed, That the Clause stand part of the Bill.
      Mr. Peter Archer: I do not wish to delay the Committee unduly at this late hour, but there is one matter to which I invite the sympathetic attention of the Secretary of State. It is a problem which is admittedly not of his making, but he has the power to mitigate some of the hardships which might arise. It arises on some of the appeals which will no doubt lie under the Clause.
      An appeals procedure is pointless if it is incomprehensible to those who are pursuing the appeals. The difficulties arose in the first instance, I think, because we insisted on having our social welfare provisions within the framework of the ultra vires doctrine. It all began with the desire to ensure that we limited the power of officials to interfere in the lives of individuals. Although that is understandable, it also ensured that it limited their power to help individuals.
      We cannot have it both ways. If we insist that officials remain within the rules, we cannot complain when they do. If then there are objections about red tape, these all flow from this decision. But there it is. We have taken the decision now and the framework of our welfare legislation and regulations lies within it. But the effect is that they are drafted as legal terminology. The whole method is a legal method, and we have created a sphere of law where those unfortunate enough to be involved require the maximum guidance.
      Judging from previous experience, the claimant who makes use of the machinery of appeals will hear mysterious references to Section 1(1)(b) and to Regulation 47. He will no doubt wonder what it all has to do with paying his grocer's bill. He may receive a sympathetic hearing, but I would be surprised if it is comprehensible to him. If his claim is disallowed, he may
      1354
      be left feeling that it has been disallowed for reasons which he did not understand. The connection between what the appeal tribunal was talking about and what matters to him will, at the lowest, not be obvious.
      The ideal solution would be to make legal aid and advice available in these tribunals. I appreciate that that does not lie within the right hon. Gentleman's province, and, clearly, I shall be out of order in pursuing that point. But there is a way whereby the right hon. Gentleman might mitigate some of the difficulties which arise.
      At the moment, even for social workers, trade union officials, and lawyers to intervene in this sphere is rather like navigating a completely unfamiliar water without a chart and without instruments. So far as I am aware, there is virtually no practitioners' textbook on the subject. There are some relatively good indices, but few libraries have them—even legal libraries. There are volumes of regulations and previous decisions, but they are hoarded like gold by the authorities, and it is difficult even for counsel appearing at the tribunals to find them. If there are these difficulties for trade unionists, social workers and lawyers, we can only guess how it must appear for the individual claimant, unassisted, who is trying to find his way through this maze of legislation, regulations and decisions.
      I wonder whether the right hon. Gentleman could assist by making available the Act, the regulations and the volumes of decisions to all who want to use and are capable of using them. I am not suggesting that the right hon. Gentleman should make a free presentation copy to everybody concerned, but if he places them where they are easily available—in the offices of whoever administer these matters—it would be a real contribution. I am not asking for a firm commitment this evening. I ask the right hon. Gentleman only to undertake to give it his serious consideration.
      Mr. Meacher: I am grateful for the opportunity of taking a little further the argument about appeals, so ably introduced by my hon. Friend the Member for Rowley Regis and Tipton (Mr. Peter Archer), by raising in particular the legal

      1355
      framework or otherwise in which the Bill will be couched.
      I understand that my Amendments were not called because their being germane to the whole purpose of the Clause, it was felt that they could be discussed as easily on the Question, "That the Clause stand part of the Bill". Therefore, I am glad to look at the question of appeals with a special eye to the alternative structure for appeals envisaged in the Amendments.
      Clause 7(3) lays down:
      "The Appeal Tribunal … shall be … constituted in accordance with the provisions of Schedule 3 to the Ministry of Social Security Act, 1966".
      That Schedule governs appeals concerning entitlement to supplementary allowances and pensions.
      For several reasons I believe that it would be entirely inappropriate to transpose the appeals procedure governing supplementary benefits to the question of entitlement under the Bill. The central reason is that the supplementary benefits appeal tribunals are largely concerned with the exercise of discretion. By contrast, F.I.S. is clearly a matter of legal entitlement and the only Question that will arise are matters of fact and of law. For this reason, this F.I.S. scheme gives no discretionary powers to the commission or to the appeal tribunals, and therefore it is unsuitable that appeals under this scheme should go before these tribunals.
      F.I.S. has far more in common with national insurance than with supplementary benefits. I might add, in case this is alleged against the statement that I am making, that the fact that F.I.S. is not an insurance benefit is not relevant, since family allowances, which are equally not insurance benefits, are also dealt with under national insurance tribunals. In this respect one might do well to look at F.I.S. as a kind of supplementary family allowance.
      More positively, there are several definite advantages to be derived from putting questions relating to F.I.S. before the National Insurance tribunal. One is that the chairman is more likely than in the case of a supplementary benefits tribunal to be legally qualified, which seems to be more suitable for dealing with explicitly legal matters.
      1356
      Another advantage is that the insurance tribunals are already exercised in the knotty problems of the definition of what exactly constitutes a family, or household or cohabitation, or indeed wiht such intricacies as exactly what is a "part child". Clause 1(1,c) refers to:
      "the child or children whose requirements have to be provided for, in whole or in part …".
      I wonder what a supplementary benefits appeals tribunal is likely to make out of that. How does that relate to a child in local authority care? It is precisely these esoteric matters that insurance tribunals dealing with family allowances are already well versed in.
      Third, why duplicate the existing appeals machinery? There has been such a burgeoning of tribunals that what is needed is rationalisation rather than any unnecessary proliferation.
      My second main reason for disagreeing with the Clause is that the decision of supplementary benefits tribunals is final. This has certain crucial implications. First, there is no system of precedents, and every case is dealt with on its merits. The inevitable result of this will be to encourage the multiplication of appeals, and surely that is not what the Government really intend.
      Second, under the Clause numerous points of law which are bound to arise in the early days of the scheme will have to be taken to the Divisional Court, and there will have to be the lengthy and costly procedure of applying for one of the prerogative orders, whether an order of mandamus or certiorari. The Secretary of State may be disinclined to believe that that will happen. If so, I assure him that with the increasing number of lawyers who are concerned with the whole aspect of welfare rights, with the undercurrents flowing very strongly at the moment towards the formation of a welfare rights movement, a citizens' rights office, call it what one will, all the signs point in the direction that that is precisely what will happen.
      Third, and this is very important, if appeals are dealt with by the national appeals tribunals there will be a further right of appeal to the National Insurance Commissioner who, by Statute, must be an advocate or barrister of at least 10 years' standing, and in effect could be

      1357
      said to have the standing of a High Court judge.
      That, I submit, has several important advantages. Most obviously, from what I have already said, it will relieve the Divisional Court from the burden of processing endless appeals. More particularly, it will establish a firm system of precedents, and it will enable precise and definite judgements to be formed about such surprisingly nebulous concepts as what exactly is "family" or "cohabitation", based on past judgments clearly revealed in the volumes of the Commissioner's decisions.
      I therefore ask the Secretary of State, both because of the clear and important advantages to be derived from setting F.I.S. within the appeals system of the National Insurance tribunals, and also because of the equally clear dysfunction of leaving F.I.S. with regard to appeals where it stands under the Clause, to give the proposed change the very closest scrutiny and, I hope, his sympathy.
      9.45 p.m.
      Mr. Dean: The two hon. Members who have spoken have to some extent been talking at cross purposes. The hon. Member for Rowley Regis and Tipton (Mr. Archer) made the valid point that we want the simplest procedure, because we want the people to understand what this is about. The hon. Member for Oldham, West (Mr. Meacher), on the other hand, put forward powerful arguments—his arguments are always powerful—suggesting an appeals procedure that would tend to legalise and make more difficult, remote and forbidding to the individual the procedure that we are proposing.
      The hon. Member for Rowley Regis and Tipton asked what steps we proposed to take to try to make the understanding of the scheme as simple as possible to those who were likely to benefit. We intend to have a take-up campaign which will be extremely carefully planned, with the intention of getting the maximum possible uptake of this benefit. We attach the greatest importance to that, and we shall be using the various media of communications and the various methods available to us, including our local offices and, we hope, the good offices of local authorities, voluntary bodies, and so on.
      1358
      But we are prepared to go one step further than the hon. Member asked; we are prepared to consider publishing something on lines similar to the supplementary benefits handbook. Hon. Members on both sides of the Committee will agree that that handbook has been immensely useful not only to them, in their constituency work, but to many outside people who are concerned in the running of our welfare services. I hope that the hon. Member will appreciate that we are seriously considering the possibility of doing something on those lines.
      I now come to the points made by the hon. Member for Oldham, West. He suggested that the more satisfactory appeal machinery would be the National Insurance machinery rather than the Supplementary Benefits Commission machinery. I want to explain why we feel that the latter machinery would be better—and some of the arguments put forward by the hon. Member for Rowley Regis and Tipton were valid in this connection. Under the National Insurance Act a large part of the adjudication consists of interpreting in precise, legal terms, and with due regard to commissioners' case law, the substantial and complex body of Acts and regulations that make up the National Insurance system.
      The National Insurance appeal procedure also deals with appeals concerning family allowances. The local proceedings are always presided over by legally-qualified chairmen, and inevitably their procedures are somewhat more formal than those of the supplementary benefits appeal tribunal. I should have thought that the more formal procedure that is necessary for the National Insurance scheme is not desirable for a scheme of this kind; that the less formal and more friendly—in the best sense of that term—procedure that can be adopted under the supplementary benefits system is more suitable for a scheme of this kind.
      There is also the point that this scheme—as the supplementary benefits scheme—will be concerned primarily with questions of fact, such as a claimant's normal gross income, and very much more the sort of question that is now determined under the supplementary benefits appeal procedure rather than the national insurance procedure. It is largely for

      1359
      those reasons that we feel that the objectives so effectively outlined by the hon. Member for Rowley Regis and Tipton are more likely to be achieved through the procedure laid down in this Clause than under the procedure suggested by the hon. Member for Oldham, West.
      Question put and agreed to.
      Clause 7 ordered to stand part of the Bill.

    Clause 8

      PREVENTION OF DOUBLE PAYMENTS AND RECOVERY OF OVERPAYMENTS
      Mr. S. C. Silkin: I beg to move Amendment No. 48, in page 3, line 34, leave out from 'is' to end of line 38 and insert:
      'proved to the satisfaction of a court of summary jurisdiction that any such sum would not have been paid if any person making a claim therefor had not knowingly failed to disclose material facts'.
      This is a probing Amendment, but in the sense that the existing provisions might attract a good deal of criticism. They say:
      "Regulations may provide for the recovery of sums paid by way of family income supplement where it is found that the sums were not due and the persons by whom the sums were receivable cannot satisfy the Supplementary Benefits Commission or the Appeal Tribunal that they had disclosed all material facts."
      In other words, the burden is placed upon the person who has received a supplement. If he cannot prove that he has disclosed all material facts, even if his failure is not fraud but accidental and inadvertent failure, the sums can be recovered from him. That seems harsh.
      The Amendment puts the matter the other way around and would provide that it would be for the Secretary of State to satisfy the court, where the person concerned might have legal aid, that the sum in question would not have been paid if the claimant had not only failed to disclose the material facts but had done so knowingly. There must be an element of fraud before the sum can be recovered.
      The Secretary of State knows, because he has said this again and again, that the people we are talking about will not
      1360
      be well versed in the law or expert in completing documents. It is a real hardship if all the burden of establishing that they have made no mistake is placed on them. The means of these people are inevitably low: they would not come under the Bill otherwise.
      Would the right hon. Gentleman reconsider this? I do not suggest that our wording is best, but we should like some reassurance.
      Sir K. Joseph: I sympathise with the object of the hon. and learned Gentleman. I am impressed by the homework done by hon. Members opposite. What I am about to say is not a judgment on that homework, but the hon. and learned Gentleman is introducing the Amendment under a misapprehension. I can give him the reassurance he seeks.
      The problem is not one of deciding whether the claimant has committed a crime of any sort. There is no question of an offence under this Clause. We come to questions of offence later, under Clause 12. We are considering whether a repayment is necessary or justified. The procedure we propose is precendented in all the main social security legislation—National Insurance and family allowance—and was included in the National Superannuation and Social Insurance Bill which was introduced by the last Government but did not become law because of the election. The same procedure for recovering repayments at the discretion of the Supplementary Benefits Commission or, on appeal, the appeals tribunal, was included. There is, therefore, no departure from precedent.
      Courts are not involved, as no offence is involved. Courts are not equipped to decide whether a payment was made to a claimant on a statement that turned out to be false. There is no question of judging the claim to have been fraudulent.
      With that reassurance, I hope that the hon. and learned Gentleman will feel reassured and able not to press the Amendment.
      Mr. S. C. Silkin: First, may I give my reassurance to the right hon. Gentleman that the Amendment was not put down under any misapprehension? We were well aware that there were other provisions in the Bill dealing with criminal offences. What we were concerned about,

      1361
      however, was the manner in which recovery of over-payments could be made. When I said that we were not wedded to the precise way of accomplishing what we have in mind as expressed in the Amendment, I meant that we were not wedded to the court of summary jurisdiction procedure. The right hon. Gentleman will know that that is by no means confined to criminal matters. It deals with many others.
      I hope that the right hon. Gentleman will look again at the main points and that he will not take it that provisions which have been followed in the past must never be looked at again.
      The main point here is putting the burden upon the person who appears to the Commission to have been overpaid to satisfy the Commission that he has disclosed all material facts. That seems a harsh provision. If between now and Report the right hon. Gentleman can look at it again—never mind the manner in which it may be altered—the Opposition will be grateful.
      I recognise that our proposal may not be a satisfactory way of accomplishing what we have in mind. I therefore beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
      Committee report Progress.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings on the Family Income Supplements Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Fortescue

  FAMILY INCOME SUPPLEMENTS BILL
  Again considered in Committee.
  Mr. O'Malley: I beg to move Amendment No. 49, in page 3, line 42, leave out from 'supplement' to end of line 45.
  After that agreeable respite in our deliberations, if that is a way in which it
  1362
  may be regarded, I come to what is more than a probing Amendment.
  The words which we propose to leave out are unprecedented in the law of National Insurance, pensions and other State payments. If anyone has been overpaid supplementary benefit, he may be required to repay either in a lump sum, or in weekly instalments, and, as a constituency Member, one comes across these cases from to time. However, as the law stands, no other kind of State benefit has a provision for money to be recovered in this manner.
  Section 26(2,c) of the Administration of Justice Act 1970 specifically excludes from treatment as earnings:
  "pensions, allowances or benefit payable under any of the enactments specified in Schedule 6 to this Act (being enactments relating to social security)."
  That Schedule 6 provides that enactments providing benefits which are not to be treated as debtor's earnings are the National Insurance Act, 1965, the National Insurance (Industrial Injuries) Act, 1965, the Family Allowances Act, 1965, the Ministry of Social Security Act, 1966, and the Industrial Injuries and Diseases (Old Cases) Act, 1967.
  It appears that the Secretary of State is taking unprecedented powers badly balanced in favour of the Executive rather than the individual claimant. Under this subsection, and perhaps under the Clause as a whole, there seems to be a complete absence of a procedure for payment if the individual recipient finds that he has been under paid. I thought hard to find reasons why the Government should have introduced these words. We can only assume that the Government have decided that, at least initially, there will be a substantial number of miscalculations by individual officers in the operation of the scheme, and they have felt justified in taking these extraordinary and unprecedented powers to obtain recovery of overpayments from benefits which, under the general law, are inalienable. We are most concerned, and we await the right hon. Gentleman's explanation.
  [Miss HARVIE ANDERSON in the Chair]
  Sir K. Joseph: Again, the bulk of the powers here are perfectly normal within the social security mechanism. There

  1363
  are provisions for recovery of excess payments of National Insurance benefit or of family allowance from national insurance benefits. There is a danger in the payment of this supplement of an over-payment due to an understatement of income being corrected by the cutting off of further family income supplement, with, therefore, no source of repayment to the taxpayer of money overpaid.
  I am, therefore, on solid ground, and I assure the Committee that the hon. Gentleman the Member for Rotherham (Mr. O'Malley) who does his homework thoroughly, is for once wrong in his assertion that the powers are unprecedented.
  There was, however, one point raised by the hon. Gentleman on which I am not quite so sure of my ground. The Bill as drafted gives power to recover an overpayment of family income supplement from future family allowances, and it was the Government's intention that that power would never be used if the family was in need of the money. We are dealing here with families who are bound to be poor, if not very poor, and, although there may have been overpayments of family income supplement it is highly unlikely that the family will be other than pretty poor. On reflection, therefore, after listening to the hon. Gentleman, I think that I ought to reconsider the new power which is covered by the Amendment, namely, the power to recover an overpayment from future family allowances.
  I give the assurance that I shall look again at that element in the Clause. It would not be met by passing the Amendment. I assure the Committee that the hon. Member for Rotherham is technically wrong and that all the other powers of repayment from other national insurance benefits are perfectly precedented and not at all unusual in this case. I hope that the Committee on that assurance, which I shall honour on Report, will encourage the hon. Gentleman not to press the Amendment.
  Mr. O'Malley: I am grateful to the Secretary of State for the undertaking which he has given as regards family allowances, which deals with part of the problem which concerns us.
  The right hon. Gentleman has said that I am wrong, but I understand the
  1364
  position to be this. If someone has been overpaid in a particular kind of benefit paid under national insurance, the matter can be put right by deductions from similar kinds of National Insurance benefit, but not from different kinds. I believe that the right hon. Gentleman will confirm that, for example, one cannot claim overpayments of supplementary benefit from National Insurance payments. Is that not so?
  Take the case of a pensioner who is getting a National Insurance retirement pension. She makes a claim and receives a weekly supplementary pension from the Supplementary Benefits Commission. It is discovered at a later date that there has been overpayment. There is a request from the Commission that there should be a repayment. Surely I am right in saying that the Commission has no power to require the repayment from the woman's National Insurance benefit. Therefore, to that extent, the Secretary of State will concede that a new principle is being invoked.
  Perhaps the Secretary of State would, without commitment, consider the other matters which I raised. He says that I am wrong, but I am wrong in a very limited way. In the broader sense, I think that I am right. If the right hon. Gentleman will consider all the points that I have raised I shall be pleased to withdraw the Amendment.
  Mr. Hugh D. Brown: I am sure that the Secretary of State is wrong because he is confusing a non-contributory benefit with a contributory benefit. Is he suggesting that an overpayment of family income supplement can be recovered from a widow? That is what he appears to be arguing.
  Sir K. Joseph: I think that it would be prudent of me if I were to say that I shall look at the point again. I am advised that under Section 26(4) of the Ministry of Social Security Act, 1966, the propositions which I have indicated are correct. It would be most imprudent of me to give too many assurances without looking again at what the hon. Member for Rotherham (Mr. O'Malley) said. I am impressed by his self-confident mastery of the intricacies of the social security mechanism. I will report again to hon. Members at the next stage of the Bill.

  1365
  I am not happy about the implications of recovery of family allowances. That is on the substance. On the presentation point, I will tell the House either that I am right or that the hon. Gentleman is right. If the hon. Gentleman is right, I will see whether any Amendments need to be made.
  Mr. O'Malley: In view of the Secretary of State's undertakings, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause 8 ordered to stand part of the Bill.

  FAMILY INCOME SUPPLEMENTS BILL
    Clause 9

      RECOVERY OF COST IN CERTAIN CASES
      Question proposed, That the Clause stand part of the Bill.
      Miss Mervyn Pike: I wish to oppose the Clause and to try to persuade the Secretary of State to withdraw it from the Bill.
      Mrs. Knight: Hear, hear.
      Miss Pike: Like many hon. Members on both sides of the Committee, I have not sought to delay the proceedings this evening by repeating arguments which have already been ably put. I want to be as brief and clear as possible in persuading the Minister to withdraw the Clause.
      The Clause applies to the Bill the provisions of Sections 23 and 24 of the Ministry of Social Security Act, 1966, which enable the Supplementary Benefits Commission to recover from a husband or father the cost of any supplementary benefit paid to a family and in respect of illegitimate children to obtain affiliation orders or apply for payment under existing orders to be made to the Department. As the Clause stands, any unsupported mother who claims family income supplement will be expected to supply information about her husband or the putative father of her children from whom, as under the supplementary benefit provisions, repayment can be claimed and the man followed up.
      While these provisions are appropriate in the case of supplementary benefit, I am sure that hon. Members will agree that they are not appropriate to a scheme
      1366
      such as this. Family income supplement can be claimed only by a woman who has made the choice to go into full time work to support herself and her family instead of relying upon supplementary benefit. It is only a relatively small supplement to her income and, most important, only 50 per cent. makes good any shortfall in the woman's income. It is unlikely, therefore, that there would be any temptation to collusion between man and wife, as there is sometimes in the case of supplementary benefit.
      10.15 p.m.
      We have agreed with my right hon. Friend the Minister in all his pleas that the Bill should be as simple as possible and, equally, that it should provide as little deterrent as possible against people claiming benefit. I believe that the provisions of the Clause, which I do not believe that the Minister would intend to use except in exceptional circumstances, would nevertheless prove a deterrent to many women in applying for benefit. In these circumstances, I ask the Minister to remove the Clause from the Bill.
      Mrs. Knight: I support my hon. Friend the Member for Melton (Miss Pike) in her plea. The House of Commons should do everything possible to help and support women who are making an effort in a very difficult situation to support their child who has no father. Because I feel strongly that the Clause would be a positive disincentive to a woman to stand on her own feet—indeed, it would almost force her to apply for supplementary benefit full-time—I emphasise my support for my hon. Friend.
      Mr. S. C. Silkin: Time is getting on and the matter has been ventilated so eloquently by both hon. Ladies who have spoken from the Government benches that it is quite sufficient for me to do no more than say that we on this side have a great deal of sympathy for the point of view which they have expressed. We would certainly like to hear from the Secretary of State why that point of view should be wrong.
      Sir K. Joseph: I assure the Committee that the Clause was put in perfectly innocently, but it has been misunderstood and a number of organisations have

      1367
      drawn the conclusion that we intend to harry any unsupported mother, before helping her with the supplement, to secure the name of the putative father of the child in order to extract payment from him. It was not our intention in any way to harry the women whom we seek to help.
      The points made by my hon. Friends the Members for Melton (Miss Pike) and Birmingham, Edgbaston (Mrs. Knight) are valid, and there is only the slightest possible risk of collusion or abuse if we remove the Clause. I therefore think that their arguments are such that the Committee would be wise to accept them and to delete the Clause from the Bill.
      Question put and negatived.

    Clause 10 ordered to stand part of the Bill.
    Clause 11

      REGULATIONS
      Sir K. Joseph: I beg to move Amendment No. 67, in page 4, line 22, leave out 'having, or as not having, to provide' and insert:
      'providing or as not providing'.
      This Amendment is consequential on an Opposition Amendment which the Committee, on the Government's advice, accepted.
      Amendment agreed to.
      Sir K. Joseph: I beg to move Amendment No. 68, in page 5, line 8, at end insert:
      (2A) Regulations may make different provision for different classes of case and otherwise for different circumstances.
      This is a point which is to be inserted in the Bill by both Government and Opposition perception, that we might need powers to provide in the regulations different treatment for different classes of claimant. I do not think that, after all this probing of the variety of circumstances in which claimants might find themselves, the Committee will need me now to argue the need for the powers involved.
      Amendment agreed to.
      Mr. S. C. Silkin: I beg to move, Amendment No. 56, in page 5, line 11, leave out 'section 2 or section 3'and insert 'sections 2, 3, 4 and 5'.
      The Deputy Chairman (Miss Harvie Anderson): With this Amendment, if it is convenient to the Committee, we can take also Amendment No. 57, in page 5, line 14, leave out 'section 2 or section 3' and insert 'sections 2, 3, 4 or 5'.
      Mr. Silkin: During the discussions on various Clauses it has become quite apparent that matters of very great substance are going to be dealt with by regulations. When one compares this Bill with the Ministry of Social Security Act, to which reference is made in one or two places in this Bill, and with which comparisons have been made, one finds that here there is far less definition of what is proposed in this Bill than there was definition in that Act. That Act is far more specific about the various questions it is to cover than anything we find in the Bill, as it stands, is specific of what this Bill is to do, and a tremendous amount is left to be dealt with by regulations.
      We understand that this Bill may have been produced in some haste, and that that may be the reason why the regulations are to deal with so much. We understand what the right hon. Gentleman and the Under-Secretary of State have said, that on many question relating to this area of poverty they feel that their information at the moment is not sufficient for them to put forward positive proposals. I think that we on this side of the Committee are probably better informed.
      What concerns us is that the procedure which enables Parliament to debate a regulation before it is made is confined at the moment to those regulations made under Clauses 2 and 3. When I heard the Secretary of State reply to the criticisms which were made about Clause 4, for example, when he said that regulations to be made would be such as to prevent abuses, that fortified me in the view which we have on this side of the Committee that a good deal more should be subject to the affirmative procedure than is at present proposed in the Bill. The right hon. Gentleman will remember that he said, for example, that the sort of situation which was envisaged was that where, somehow or another, earned income of a

      1369
      parent would be diverted to the child. We should want to know what sort of cases he has in mind and to study them carefully before we approved that kind of regulation.
      This is a matter that could be developed at some length. The more that we on this side of the House have heard of the intentions of the Government with regard to regulations, particularly their intentions about laying down the policy and leaving the Supplementary Benefits Commission simply to act as a mechanical body for putting the policy into effect, the more we feel that we have been unduly moderate in suggesting that only regulations under Clauses 4 and 5 should be subject to the affirmative procedure as well as those under Clauses 2 and 3. It may be that we shall want to return to this matter at a later stage, but for the moment we are content to ask the Committee that those two Clauses should be added.
      Sir K. Joseph: I confess straight away that there are a lot of regulation powers in the Bill, and we shall be laying regulations. The main reason is the need for speed in getting the supplement into payment. I do not blame the Opposition for at least probing the possibility of making more of the regulations subject to the affirmative procedure. The difficulty is that, if we are to get the supplement into payment at the beginning of August, we shall have to move very fast after the Royal Assent. We shall want to lay regulations covering Clauses 4 and 5 as soon as possible after the Royal Assent. If we switch from negative to affirmative procedure we shall not be able to lay those regulations probably until the end of January. Not until we have laid the regulations can we get on with the printing of the forms and the distribution of the detailed manual of instruction which will have to be studied by the staff we shall be recruiting for the payment of the supplement.
      The Committee will be aware that the substance of Clause 4, namely, the resources to be taken into account, has been fairly fully debated today, and that I have made undertakings to come back on Report on a number of points where there was doubt. As for Clause 5, I do not think there has been any criticism about the method of making the claim, although I have been out of the Chamber for about an hour and I am not myself dealing with that Clause. Both these subjects have been discussed to the extent that the Committee wished. I ask the hon. and learned Gentleman to take into account our need to lay these regulations as soon as possible after Royal Assent and not to press the Amendment.
      Mr. Booth: I do not think that the Secretary of State's explanation is good enough. He should at least explain to the Committee why it takes longer to deal with regulations made under the affirmative procedure than it does under the negative procedure. In both cases the regulations have to lie before Parliament for a certain number of days. If the regulations are laid under the negative procedure and there is a debate after that number of days it makes no difference to the Instrument and the debate becomes a hypothetical exercise.
      Mr. S. C. Silkin: We have listened to what the right hon. Gentleman has said, but we are not satisfied. He has had the whole of the long hot summer in which to make preparation. We feel that this is a matter of important principle and that the House of Commons should have the opportunity of considering the regulations before they come into effect. In those circumstances, we have no option but to ask the Committee to divide.
      Question put, That the Amendment be made:—
      The Committee divided: Ayes 124, Noes 168.

      Division No. 30.]

      AYES

      [10.30 p.m.

      Albu, Austen

      Booth, Albert

      Conlan, Bernard

      Allaun, Frank (Salford, E.)

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

      Cox, Thomas (Wandsworth, Central)

      Archer, Peter (Rowley Regis)

      Buchan, Norman

      Crawshaw, Richard

      Armstrong, Ernest

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

      Cunningham, Dr. J. A. (Whitehaven)

      Ashton, Joe

      Carmichael, Neil

      Davidson, Arthur

      Atkinson, Norman

      Carter-Jones, Lewis (Eccles)

      Davis, Clinton (Hackney, Central)

      Bagier, Gordon A. T.

      Clark, David (Colne Valley)

      Deakins, Eric

      Bennett, James (Glasgow, Bridgeton)

      Cocks, Michael (Bristol, S.)

      Dempsey, James

      Bidwell, Sydney

      Cohen, Stanley

      Doig, Peter

      Blenkinsop, Arthur

      Concannon, J. D.

      Douglas, Dick (Stirlingshire, E.)

      Duffy, A. E. P.

      Lambie, David

      Reed, D. (Sedgefield)

      Dunnett, Jack

      Lamond, James

      Rhodes, Geoffrey

      Eadie, Alex

      Latham, Arthur

      Roderick, Caerwyn E.(Br'c'n & R'dnor)

      Edelman, Maurice

      Lawson, George

      Roper, John

      Edwards, William (Merioneth)

      Leadbitter, Ted

      Rose, Paul B.

      English, Michael

      Lestor, Miss Joan

      Ross, Rt. Hn. William (Kilmarnock)

      Fisher, Mrs. Doris (B'ham, Ladywood)

      Lewis, Arthur (W. Ham, N.)

      Shore, Rt. Hn. Peter (Stepney)

      Fitch, Alan (Wigan)

      Lomas, Kenneth

      Silkin, Rt. Hn. John (Deptford)

      Fletcher, Ted (Darlington)

      McBride, Neil

      Silkin, Hn. S. C. (Dulwich)

      Foley, Maurice

      McCann, John

      Sillars, James

      Foot, Michael

      McCartney, Hugh

      Skinner, Dennis

      Galpern, Sir Myer

      McElhone, Frank

      Smith, John (Lanarkshire, North)

      Golding, John

      Mackenzie, Gregor

      Spriggs, Leslie

      Gourlay, Harry

      Mackie, John

      Stallard, A. W.

      Grant, George (Morpeth)

      Mackintosh, John P.

      Stewart, Donald (Western Isles)

      Grant, John D. (Islington, East)

      McManus, Frank

      Stoddart, David (Swindon)

      Griffiths, Eddie (Brightside)

      McMillan, Tom (Glasgow, C.)

      Strang, Gavin

      Hamilton, James (Bothwell)

      McNamara, J. Kevin

      Taverne, Dick

      Hamilton, William (Fife, W.)

      Marks, Kenneth

      Urwin, T. W.

      Hardy, Peter

      Mason, Rt. Hn. Roy

      Wainwright, Edwin

      Horam, John

      Meacher, Michael

      Walker, Harold (Doncaster)

      Houghton, Rt. Hn. Douglas

      Mellish, Rt. Hn. Robert

      Wells, William (Walsall, N.)

      Huckfield, Leslie

      Morris, Alfred (Wythenshawe)

      White, James (Glasgow, Pollok)

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Murray, Ronald King

      Whitehead, Phillip

      Hughes, Dr. Mark (Durham)

      O'Malley, Brian

      Williams, Mrs. Shirley (Hitchin)

      Hughes, Roy (Newport)

      Orbach, Maurice

      Wilson, Alexander (Hamilton)

      Janner, Greville

      Oswald, Thomas

      Wilson, William (Coventry, S.)

      Jenkins, Rt. Hn. Roy (Stechford)

      Pendry, Tom

      Woof, Robert

      Jones, Dan (Burnley)

      Pentland, Norman

      Jones, Barry (Flint, East)

      Perry, Ernest G.

      TELLERS FOR THE AYES:

      Kaufman, Gerald

      Prentice, Rt. Hn. Reg.

      Mr. Joseph Harper and

      Kerr, Russell

      Prescott, John

      Ml. William Hamling.

      Kinnock, Neil

      Probert, Arthur

      NOES

      Adley, Robert

      Gibson-Watt, David

      McCrindle, R. A.

      Allason, James (Hemel Hempstead)

      Gilmour, Sir John (Fife, E.)

      McLaren, Martin

      Astor, John

      Goodhew, Victor

      Maclean, Sir Fitzroy

      Atkins, Humphrey

      Gorst, John

      McMaster, Stanley

      Awdrey, Daniel

      Gower, Raymond

      Macmillan, Maurice (Farnham)

      Baker, W. H. K. (Banff)

      Grant, Anthony (Harrow, C.)

      Madel, David

      Benyon, W.

      Gray, Hamish

      Mawby, Ray

      Biffen, John

      Green, Alan

      Maxwell-Hyslop, R. J.

      Biggs-Davison, John

      Gummer, Selwyn

      Meyer, Sir Anthony

      Boardman, Tom (Leicester, S. W.)

      Hall-Davis, A. G. F.

      Mills, Peter (Torrington)

      Boscawen, R. T.

      Hannam, John (Exeter)

      Mills, Stratton (Belfast, N.)

      Boyd-Carpenter, Rt. Hn. John

      Haselhurst, Alan

      Mitchell, David (Basingstoke)

      Bray, Ronald

      Hastings, Stephen

      Moate, Roger

      Brown, Sir Edward (Bath)

      Havers, Michael

      Molyneaux, James

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

      Hawkins, Paul

      Money, Ernie

      Bullus, Sir Eric

      Hayhoe, Barney

      Monks, Mrs. Connie

      Burden, F. A.

      Hicks, Robert

      Monro, Hector

      Carlisle, Mark

      Hill, James (Southampton, Test)

      Montgomery, Fergus

      Chichester-Clark, R.

      Holland, Philip

      More, Jasper

      Churchill, W. S.

      Holt, Miss Mary

      Morgan-Giles, Rear-Adm.

      Clarke, Kenneth (Rushcliffe)

      Hordern, Peter

      Morrison, Charles (Devizes)

      Cockeram, Eric

      Hornby, Richard

      Mudd, David

      Cooke, Robert

      Hornsby-Smith. Rt. Hn. Dame Patricia

      Neave, Airey

      Cooper, A. E.

      Howell, Ralph (Norfolk, North)

      Nicholls. Sir Harmar

      Cormack, Patrick

      Hutchison, Michael Clark

      Normanton, Tom

      Costain, A. P.

      Iremonger, T. L.

      Nott, John

      Critchley, Julian

      James, David

      Oppenheim, Mrs. Sally

      Crouch, David

      Jenkin, Patrick (Woodford)

      Owen, Idris (Stockport, North)

      Crowder, F. P.

      Jennings, J. C. (Burton)

      Page, Graham (Crosby)

      Curran, Charles

      Jessel, Toby

      Percival, Ian

      Dalkeith, Earl of

      Joseph, Rt. Hon. Sir Keith

      Pike, Miss Mervyn

      d'Avigdor-Goldsmid, Sir Henry

      Kaberry, Sir Donald

      Powell, Rt. Hn. J. Enoch

      d'Avigdor-Goldsmid, Maj.-Gen. Jack

      Kellett, Mrs. Elaine

      Pym, Rt. Hn. Francis

      Dean Paul

      Kerby, Capt. Henry

      Ramsden, Rt. Hn. James

      Deedes, Rt. Hn. W. F.

      Kilfedder, James

      Redmond, Robert

      Dixon, Piers

      Reed, Laurance (Bolton, E.)

      Edwards, Nicholas (Pembroke)

      King, Evelyn (Dorset, South)

      Renton, Rt. Hn. Sir David

      Elliot, Capt. Walter (Carshalton)

      King, Tom (Bridgwater)

      Roberts, Michael (Cardiff, North)

      Eyre, Reginald

      Kinsey, J. R.

      Rossi, Hugh (Hornsey)

      Fell, Anthony

      Knight, Mrs. Jill

      Rost, Peter

      Fenner, Mrs. Peggy

      Knox, David

      Scott, Nicholas

      Fidler, Michael

      Lambton, Antony

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

      Lane, David

      Shelton, William (Clapham)

      Finsberg, Geoffrey (Hampstead)

      Langford-Holt, Sir John

      Sinclair, Sir George

      Fletcher-Cooke, Charles

      Legge-Bourke, Sir Harry

      Soref, Harold

      Fookes, Miss Janet

      Le Marchant, Spencer

      Speed, Keith

      Fowler, Norman

      Loveridge, John

      Spence, John

      Fox, Marcus

      MacArthur, Ian

      Sproat, Iain

      1372

      1373

      Stainton, Keith

      Trafford, Dr. Anthony

      Wilkinson, John

      Stanbrook, Ivor

      Trew, Peter

      Wolrige-Gordon, Patrick

      Stewart-Smith D. C. (Belper)

      Tugendhat, Christopher

      Woodhouse, Hn, Christopher

      Stodart, Anthony (Edinburgh, W.)

      Turton, Rt. Hn. R. H.

      Woodnutt, Mark

      Stoddart-Scott, Col. Sir M.

      Waddington, David

      Wylie, Rt. Hn. N. R.

      Stuttaford, Dr. Tom

      Walder, David (Clitheroe)

      Younger, Hon. George

      Sutcliffe, John

      Ward, Dame Irene

      Taylor, Frank (Moss Side)

      Warren, Kenneth

      THE TELLERS FOR NOES:

      Taylor, Robert (Croydon, N. W.)

      Weatherill, Bernard

      Mr. Walter Clegg and

      Thompson, Sir Richard (Croydon, S.)

      White, Roger (Gravesend)

      Mr. Tim Fortescue.

      Question proposed, That Clause 11, as amended, stand part of the Bill.
      Mr. Booth: I hesitate to delay the Committee at this hour, but the Clause should not pass without the Secretary of State indicating whether he considers that it will be necessary for him to make a regulation under it to deal with the position of the seasonal worker, or one who is deemed to be a seasonal worker under our National Insurance rules for the purposes of unemployment benefit.
      I understand that if a person establishes a pattern of work over a period of three years during which he is in and out of work for the same months in each of the three years, he is deemed for National Insurance purposes to be a seasonal worker and therefore does not have an unemployment benefit entitlement.
      It seems to follow that if a person has passed into work from a period when he has been out of work which was considered to be seasonal, he would not be able to claim family income supplement on the basis of his earnings for the preceding five weeks, because he would not have been earning or getting unemployment benefit in the preceding five weeks. Therefore, as I read the Bill, there is no provision enabling the seasonal worker to claim family income supplement when he is in work. I should be grateful, therefore, if the right hon. Gentleman would answer this question.
      Sir K. Joseph: I think that I can reassure the hon. Gentleman. The five-weeks rule for evidence of earnings is only a guideline. In such a situation the man would go along with, or would send, evidence of his first week's earnings. If those earnings justified family income supplement, it would be paid to him for a limited period of, say, six weeks. At the end of five weeks he would be able to show five weeks' evidence of earnings, which would then give him an entitlement to renewal for 26 weeks.
      Question put and agreed to.
      Clause 11, as amended, ordered to stand part of the Bill.
      Clause 12 ordered to stand part of the Bill.

    Clause 13

      LEGAL PROCEEDINGS
      Mr. S. C. Silkin: I beg to move Amendment No. 58, in page 5, line 37, leave out 'last' and insert 'first'.
      The Deputy Chairman: I think that it would be for the convenience of the Committee if with this Amendment we were to take Amendment No, 59, in page 5, line 38, leave out subsection (3).
      Amendment No. 60, in page 6, line 8, leave out 'last' and insert 'first'.
      And Amendment No. 61, in page 6, line 14, leave out paragraph (b).
      Mr. Silkin: I know that we have some even more important matters to deal with than these Amendments. Therefore, I shall be extremely brief.
      Subsection (2) provides that proceedings may be brought against anybody
      "… at any time within the period of three months from the date on which evidence, sufficient in the opinion of the Secretary of State to justify a prosecution for the offence, comes to his knowledge, or within the period of twelve months from the commission of the offence, whichever period last expires."
      We cannot understand why three months from the date when the Secretary of State has sufficient evidence should not be sufficient. Therefore, the purpose of the Amendment is to substitute "first expires" for "last expires".
      The other Amendments are concerned with subsection (3), which provides that, for the purpose of proving when the Secretary of State acquired his knowledge,
      "… a certificate purporting to be signed by or on behalf of the Secretary of State … shall be conclusive evidence thereof."
      We feel that in criminal proceedings a matter of this kind should be properly proved; it should not be sufficient that a document signed by a civil servant should be accepted as "conclusive evidence thereof". We, therefore, move to leave out that subsection.
      Mr. Dean: I can deal equally briefly with the point raised by the hon. and learned Gentleman.
      The Clause follows what can now be called the time-hallowed practice in social security matters. It is modelled

      1377
      exactly on the arrangements for timing and so on which have existed in the sphere of National Insurance for a long time. I hope that the hon. and learned Gentleman will agree that unless there are substantial arguments for departing from the normal practice in these matters it would be better to follow the precedents which have already been set. This the Clause does.
      Mr. Silkin: Even on this side of the Committee we have felt that sometimes the Government might be able to improve what has been done in the past. Apparently that is not so. In those circumstances, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 13 ordered to stand part of the Bill.
      Clauses 14 and 15 ordered to stand part of the Bill.

    Clause 16

      COMMENCEMENT OF FAMILY INCOME SUPPLEMENT
      10.45 p.m.
      Mr. Taverne: I beg to move Amendment No. 62, in page 7, line 11, at end insert:
      'Not being later than the fifth day of April 1971'.
      The previous Amendment might have been phrased that the last shall be first and the first shall be last, but I come now to the question of the commencement date, and I must press the right hon. Gentleman about this.
      The right hon. Gentleman will have to admit that there is a most unfortunate contrast between the urgency of the tax cut of about £300 million which goes mainly to the better off, and takes effect in early April, and the £7 million for the poorest, who must wait until August. In one case there is special provision which anticipates the Budget, and to some extent ties the Chancellor's hands. In the other case they must wait for the extra expense that will be incurred in the meantime. They will have to pay higher fares as a result of the withdrawal of grants. They will have to pay higher prices as prices rise. They will probably be faced with the introduction and extension of fair rent provisions to council
      1378
      housing as well. It is intolerable that the worst off should be the ones who have to wait the longest. What is more, if the alternative methods which have been suggested from this side of the House had been accepted, such as, for example, the suggestion of Professor Abel-Smith, not only could a larger sum have been allotted but it could have taken effect from 1st April.
      The right hon. Gentleman has pleaded administrative impossibility. When he was in Opposition he was impatient of administrative impossibility. I could, but I shall not, cite what the right hon. Gentleman said in 1964 about supplementary benefits. When the right hon. Gentleman was Minister for Housing and Local Government he speeded up certain procedures. I think that he should show the sense of urgency that he showed in Opposition, and to some extent in office, and move the date forward, and not allow this intolerable position to arise.
      Mr. Dean: The hon. and learned Gentleman has sought to persuade my right hon. Friend that the date should be brought forward. My right hon. Friend said on Second Reading that he regretted as much as anyone else in the House that it was not possible to introduce this scheme until next August. One reason why this is so is that no plans were being prepared to deal with family poverty when we took office. That is one reason why it was necessary to start from scratch.
      Mr. O'Malley rose—
      Mr. Dean: In a moment. It was necessary to start from scratch to produce this scheme, and that is one reason why we are not able to introduce it before next August.
      Mr. O'Malley: The hon. Gentleman should not distort the facts. The truth is that any Government coming into office after the July Election could have brought in increased family allowances next April instead of waiting until August.
      Mr. Dean: What I am saying is that we have produced this scheme in a very short time, and that we are introducing it as early as we possibly can. My right hon. Friend would have preferred to introduce it earlier, but a whole series of preparations has to take place, material has to be prepared, the staff has to be

      1379
      recruited, the take-up campaign has to be carried out, and eventually the claims have to be assessed. All this inevitably takes time.
      My right hon. Friend and I have gone extremely carefully into the point of the date of introduction. If we compare this with the family allowances scheme, introduced many years ago, we find that there is a distinct contrast in the matter of timing. In that period it took about 18 months from the time when the Bill was introduced into Parliament to the time when the scheme was put into operation; on this occasion the scheme is being introduced in about eight months, so the Committee can see the contrast, and the way in which it has been possible to speed up the procedures.
      It is not through want of good will. The work being done on this is being done at the greatest possible speed and with the greatest possible urgency. The good will is there. It is just not physically possible to introduce a scheme at the date suggested in the Amendment. My right hon. Friend has said that it is his firm intention that if it is possible to do the necessary preparatory work before the target date of 1st August that will be done.
      Mr. Taverne: In view of the time, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Clause 16 ordered to stand part of the Bill.
      Clause 17 ordered to stand part of the Bill.

    New Clause 1

      FAMILY INCOME SUPPLEMENTARY ADVISORY COMMITTEE
      (1) Within a period of one month from the passing of this Act the Secretary of State shall appoint a Family Income Supplements Advisory Committee consisting of a Chairman and not less than ten other members.

      (2) Before any regulations are made by virtue of any of the provisions of this Act the Secretary of State shall consult the Family Income Supplements Advisory Committee thereon.

      (3) The Family Income Supplements Advisory Committee shall at intervals not less frequent that once yearly report to Parliament upon the operation of this Act and for the said purpose the Secretary of State shall supply
      1380
      to the said Committee such information as it may require of him.

      (4) Each such report as is in the preceding sub-section referred to shall in particular estimate the proportion of families entitled to benefit under the provisions of this Act which has in fact received such benefit.—[Mrs. Shirley Williams.]

      Brought up, and read the First time.
      Mrs. Shirley Williams: I beg to move, That the Clause be read a Second time.
      In view of the lateness of the hour I shall move the new Clause extremely briefly. There are two main points to make. The purpose is, first, to set up an advisory committee to which the Secretary of State can turn in the administration of the Bill. We have had long debates about the Bill, in the course of which it has emerged that many things are not known. In the Second Reading debate the Secretary of State himself said that the Bill would give him contact with the poorest working households, and he went on to say that far too little is known about them.
      We very strongly urge the Minister to set up an advisory committee, thus bringing the Bill into line with the position under the National Insurance Acts—there is a National Insurance Advisory Committee—and the Industrial Injuries Act—there is an Industrial Injuries Advisory Committee. The Supplementary Benefits Commission acts as an advisory committee, too. There is also the War Pensions Central Advisory Committee. In the case of all these bodies, which closely parallel the attempt being made in this scheme, there are discussions with interested bodies—employers' organisations and trade unions—and an opportunity for them to consider matters arising under those Acts. Yet all those Acts are clearer and involve less dependence on regulations, and less dependence on a divided system of responsibility, than the present scheme. If ever a Bill cried out for an advisory committee this Bill does. We hope that the Secretary of State will see that there are powerful arguments for an advisory committee in a field about which too little is known.
      The second point—to which I believe the Government are to some extent morally bound—is dealt with by subsections (3) and (4), which together require that there should be an annual report

      1381
      which should indicate the uptake of the scheme. In the Second Reading debate the right hon. Gentleman said:
      "We will do our very best, by the most elaborate take-up campaign … to reach all the households we possibly can … The finances presume that we shall have an 85 per cent. take up. I will do my best to do that, and better."—[OFFICIAL REPORT, 10th November, 1970; Vol. 806, c. 227–8.]
      We are sure he will, but we want to know whether or not he has succeeded. Therefore, the argument for having an annual report indicating the extent of his success is in our eyes crucial to the right hon. Gentleman's good faith and to the effort that he is attempting to make in the Bill to reach those poor families. I therefore press this new Clause upon the right hon. Gentleman, and very much hope that he will accept it. It is seen by us as being crucial to the improvement of the Bill.
      Sir K. Joseph: I well understand the case of the hon. Lady the Member for Hitchin (Mr. Shirley Williams). It makes good sense, if this supplement is to be a permanent feature of our social security arrangements, to have some system of surveillance. But we do not yet know how permanent this supplement will need to be. Some, I believe all, of us hope that the economy itself will eliminate the need of the poorest of the poor, because they will cease to be in such poverty.
      It would not be wise of the Committee to saddle the country with another advisory committee at this first stage. There is also a time problem. I have explained, and the Committee, I think, grudgingly accepts, that we will have to hasten extremely with the regulations. We would not have time to put them to a new advisory committee.
      But I can assure the hon. Lady and the whole Committee that the Government will be anxious to lay before the House and the country all the relevant information that we get from the operation of this Bill when it becomes an Act. We shall not be coy about the information. By Parliamentary Question, by statement, by any other mechanism which seems appropriate, we shall lay before the country the information—and it may be very valuable information—about people for whose standard of living we are all very much concerned.
      In the light of that assurance, I hope that the hon. Lady will not press the new Clause. But I know that the Opposition take it very seriously, and if it is pressed, I must, in the light of the considerations that I have mentioned, ask my right hon. and hon. Friends to resist it.
      Question put, That the Clause be read a Second time:—
      The Committee divided: Ayes 118, Noes 168.

      Division No. 31.]

      AYES

      [10.57 p.m.

      Allaun, Frank (Salford, E.)

      Eadie, Alex

      Lamond, James

      Archer, Peter (Rowley Regis)

      Edelman, Maurice

      Latham, Arthur

      Armstrong, Ernest

      Edwards, William (Merioneth)

      Lawson, George

      Ashton, Joe

      English, Michael

      Leadbitter, Ted

      Atkinson, Norman

      Fisher, Mrs. Doris (B'ham, Ladywood)

      Lestor, Miss Joan

      Bagier, Gordon A. T.

      Fletcher, Ted (Darlington)

      Lomas, Kenneth

      Bennett, James (Glasgow, Bridgeton)

      Foley, Maurice

      McBride, Neil

      Bidwell, Sydney

      Foot, Michael

      McCann, John

      Blenkinsop, Arthur

      Galpern, Sir Myer

      McCartney, Hugh

      Booth, Albert

      Golding, John

      McElhone, Frank

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

      Gourlay, Harry

      Mackenzie, Gregor

      Buchan, Norman

      Grant, George (Morpeth)

      Mackie, John

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

      Grant, John D. (Islington, E.)

      Mackintosh, John P.

      Carmichael, Neil

      Griffiths, Eddie (Brightside)

      McManus, Frank

      Clark, David (Colno Valley)

      Hamilton, James (Bothwell)

      McMillan, Tom (Glasgow, C.)

      Cocks, Michael (Bristol, S.)

      Hardy, Peter

      McNamara, J. Kevin

      Cohen, Stanley

      Harper, Joseph

      Marks, Kenneth

      Concannon, J. D.

      Horam, John

      Mason, Rt. Hn. Roy

      Conlan, Bernard

      Houghton, Rt. Hn. Douglas

      Meacher, Michael

      Cox, Thomas (Wandsworth, Central)

      Huckfield, Leslie

      Mellish, Rt. Hn. Robert

      Crawshaw, Richard

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Morris, Alfred (Wythenshawe)

      Cunningham, Dr. J. A. (Whitehaven)

      Hughes, Dr. Mark (Durham)

      Murray, Ronald King

      Davidson, Arthur

      Hughes, Roy (Newport)

      O'Malley, Brian

      Davis, Clinton (Hackney, Central)

      Janner, Greville

      Orbach, Maurice

      Deakins, Eric

      Jones, Dan (Burnley)

      Oswald, Thomas

      Dempsey, James

      Jones, Barry (Flint, East)

      Pendry, Tom

      Doig, Peter

      Kaufman, Gerald

      Pentland, Norman

      Douglas, Dick (Stirlingshire, E.)

      Kerr, Russell

      Perry, Ernest G.

      Duffy, A. E. P.

      Kinnock, Neil

      Prentice, Rt. Hn. Reg

      Dunnett, Jack

      Lambie, David

      Prescott, John

      Probert, Arthur

      Smith, John (Lanarkshire, North)

      White, James (Glasgow, Pollok)

      Reed, D. (Sedgefield)

      Spriggs, Leslie

      Whitehead, Phillip

      Rhodes, Geoffrey

      Stallard, A. W.

      Williams, Mrs. Shirley (Hitchin)

      Roderick, Caerwyn E. (Br'c'n & R'dnor)

      Stewart, Donald (Western Isles)

      Wilson, Alexander (Hamilton)

      Roper, John

      Stoddart, David (Swindon)

      Wilson, William (Coventry, S.)

      Rose, Paul B.

      Strang, Gavin

      Woof, Robert

      Ross, Rt. Hn. William (Kilmarnock)

      Taverne, Dick

      Shore, Rt. Hn. Peter (Stepney)

      Urwin, T. W.

      TELLERS FOR THE AYES:

      Silkin, Rt. Hn. John (Deptford)

      Wainwright, Edwin

      Mr. William Hamling and

      Silkin, Hn. S. C. (Dulwich)

      Walker, Harold (Doncaster)

      Mr. Alan Fitch.

      Sillars, James

      Wells, William (Walsall, N.)

      NOES

      Adley, Robert

      Gummer, Selwyn

      Morgan-Giles, Rear-Adm.

      Allason, James (Hemel Hempstead)

      Hall-Davis, A. G. F.

      Morrison, Charles (Devizes)

      Atkins, Humphrey

      Hannam, John (Exeter)

      Mudd, David

      Awdry, Daniel

      Haselhurst, Alan

      Neave, Airey

      Baker, w. H. K. (Banff)

      Hastings, Stephen

      Nicholls, Sir Harmar

      Benyon, W.

      Havers, Michael

      Normanton, Tom

      Biffen, John

      Hawkins, Paul

      Nott, John

      Biggs-Davison, John

      Hayhoe, Barney

      Oppenheim, Mrs. Sally

      Boardman, Tom (Leicester, S. W.)

      Hicks, Robert

      Owen, Idris (Stockport, North)

      Boscawen, R. T.

      Hill, James (Southampton, Test)

      Page, Graham (Crosby)

      Boyd-Carpenter, Rt. Hn. John

      Holland, Philip

      Percival, Ian

      Braine, Bernard

      Holt, Miss Mary

      Pike, Miss Mervyn

      Bray, Ronald

      Hordern, Peter

      Powell, Rt. Hn. J. Enoch

      Brown, Sir Edward (Bath)

      Hornby, Richard

      Pym, Rt. Hon. Francis

      Brown, Ronald (Shoreditch & F'bury)

      Hornsby-Smith. Rt. Hn. Dame Patricia

      Ramsden, Rt. Hn. James

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

      Howell, Ralph (Norfok, North)

      Redmond, Robert

      Burden, F. A.

      Hutchison, Michael Clark

      Reed, Laurance (Bolton, East)

      Carlisle, Mark

      Iremonger, T. L.

      Renton, Rt. Hn. Sir David

      Chichester-Clark, R.

      James, David

      Roberts, Michael (Cardiff, North)

      Churchill, W. S.

      Jenkin, Patrick (Woodford)

      Rost, Peter

      Clarke, Kenneth (Rushcliffe)

      Jennings, J. C. (Burton)

      Scott, Nicholas

      Clegg, Walter

      Jessel, Toby

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

      Cockeram, Eric

      Joseph, Rt. Hn. Sir Keith

      Shelton, William (Clapham)

      Cooke, Robert

      Kaberry, Sir Donald

      Sinclair, Sir George

      Coombs, Derek

      Kellett, Mrs. Elaine

      Soref, Harold

      Cooper, A. E.

      Kerby, Capt. Henry

      Spence, John

      Cormack, Patrick

      Kilfedder, James

      Sproat, Iain

      Critchley, Julian

      King, Evelyn (Dorset, South)

      Stainton, Keith

      Crouch, David

      King, Tom (Bridgwater)

      Stanbrook, Ivor

      Crowder, F. P.

      Kinsey, J. R.

      Stewart-Smith, D. G. (Belper)

      Curran, Charles

      Knight, Mrs. Jill

      Stodart, Anthony (Edinburgh, W.)

      Dalkeith, Earl of

      Knox, David

      Stoddart-Scott, Col. Sir M.

      d'Avigdor-Goldsmid, Sir Henry

      Lambton, Antony

      Stuttaford, Dr. Tom

      d'Avigdor-Goldsmid, Maj.-Gen. Jack

      Lane, David

      Sutcliffe, John

      Dean, Paul

      Langford-Holt, Sir John

      Taylor, Frank (Moss Side)

      Deedes, Rt. Hn. W. F.

      Legge-Bourke, Sir Harry

      Taylor, Robert (Croydon, N. W.)

      Edwards, Nicholas (Pembroke)

      Le Merchant, Spencer

      Tebbit, Norman

      Elliot, Capt. Walter (Carshalton)

      Loveridge, John

      Thompson, Sir Richard (Croydon, S.)

      Eyre, Reginald

      MacArthur, Ian

      Trafford, Dr. Anthony

      Fell, Anthony

      McCrindle, R. A.

      Trew, Peter

      Fenner, Mrs. Peggy

      McLaren, Martin

      Tugendhat, Christopher

      Fidler, Michael

      Maclean, Sir Fitzroy

      Turton, Rt. Hn. R. H.

      Finsberg, Geoffrey (Hampstead)

      McMaster, Stanley

      Waddington, David

      Macmillan, Maurice (Farnham)

      Walder, David (Clitheroc)

      Fletcher-Cooke, Charles

      Madel, David

      Ward, Dame Irene

      Fookes, Miss Janet

      Mawby, Ray

      Warren, Kenneth

      Fortescue, Tim

      Maxwell-Hyslop, R. J.

      Weatherill, Bernard

      Fowler, Norman

      Meyer, Sir Anthony

      White, Roger (Gravesend)

      Fox, Marcus

      Mills, Peter (Torrington)

      Wilkinson, John

      Gibson-Watt, David

      Mills, Stratton (Belfast, N.)

      Wolrige-Gordon, Patrick

      Gilmour, Sir John (Fife, E.)

      Mitchell, David (Basingstoke)

      Woodhouse, Hn. Christopher

      Goodhew, Victor

      Moate, Roger

      Woodnutt, Mark

      Gorst, John

      Molyneaux, James

      Wylie, Rt. Hn. N. R.

      Gower, Raymond

      Money, Ernie

      Younger, Hn. George

      Grant, Anthony (Harrow, C.)

      Monks, Mrs. Connie

      Gray, Hamish

      Monro, Hector

      TELLERS FOR THE NOES:

      Green, Alan

      Montgomery, Fergus

      Mr. Keith Speed and

      Griffiths, Eldon (Bury St. Edmunds)

      More, Jasper

      Mr. Hugh Rossi.

    New Clause 3

      AMENDMENT OF ADMINISTRATION OF JUSTICE ACT, 1970.
      In Schedule 6 of the Administration of Justice Act 1970 the following shall be added at the end of the Schedule:—
      'The Family Incomes Supplements Act 1970'.—[Mr. Meacher.]
      Brought up, and read the First time.
      Mr. Meacher: I beg to move, That the Clause be read a Second time.
      The effect of the Clause is that by virtue of Section 26 of the Administration of Justice Act, 1970, any benefits payable under the Bill would not be counted as earnings of a debtor to form the basis for a calculation of the sum to be deducted by his employer in respect of an attachment of earnings order for the purposes of a judgment debt or maintenance order. In this respect the Bill would be on a par with various other social service and National Insurance benefits, such as the National Insurance Act, 1965, the National Insurance (Industrial Injuries Act), 1965, the Family Allowances Act, 1965, the Ministry of Social Security Act, 1966, and the Industrial Injuries and Diseases (Old Cases) Act, 1967. Adding the Bill to the list would be a logical addition, and I trust that the Government will agree to the Clause.
      Mr. Dean: The eagle eye of the hon. Member has been used to good effect and I recommend the Committee to accept the new Clause.
      Question put and agreed to.
      Clause read a Second time and added to the Bill.
      Bill reported, with Amendments; as amended, to be considered Tomorow, and to be printed. [Bill 35.]

  NORTHERN IRELAND
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Humphrey Atkins.]
  11.8 p.m.
  Mr. R. Chichester-Clark: I suppose that every economic study of Northern Ireland since the war has recognised that the Ulster Government has a mammoth task to undertake due to its high unemployment, often over 10 per cent. overall and 20 per cent. in places like Londonderry, with fewer jobs in declining industries like the linen industry, agriculture and shipbuilding, and the rapidly rising number of insured employees. The achievements of the often maligned Northern Ireland Government in this field will earn a most honourable place in history. More than 80,000 new jobs have been negotiated. A new industrial complex in man-made fibres has been created, wide diversification has been achieved in engineering and electronics, and new sectors in manufacturing industry, such as rubber and paper, have been opened up.
  All this has been achieved by the optimism and energy of the Northern Ireland Government coupled with the right inducements, and, as I readily accept, varying degrees of help from London. It was established as long ago as 1932 that Northern Ireland needed special help to create employment because of its economic disadvantages. It was in 1954 under a Conservative Administration in this country, 12 years before investment grants were introduced by the Labour Government in Great Britain, that a Capital Grants Act in Ulster established the regular use of investment grants as a means of attracting new employment to Ulster. Subsequently, a wide range of flexible inducements has been developed, and those required for the next five-year period were accepted by the new Government in this country in June, 1970. They included investment grants for new projects ranging from 45 per cent. to 60 per cent., though I should add the caveat that the White Paper said at the time that these were
  "subject to any adjustment which might from time to time be required in connection with the task of managing the economy as a whole".

  1387
  However, while the energy of the Northern Ireland Government is, I believe, undiminished, for the first time since the war there are signs that their optimism is faltering somewhat. The Minister of Development in Northern Ireland said last week that the outlook for jobs and for industrial investment in the Province was at an all-time low, and he went on to describe the situation as "almost grim". I fear that he is a realist. It is true that no major industry has indicated an intention to settle for 18 months. Jobs in new projects so far this year total 1,192, compared with 3,245 in 1968 and 2,491 in 1969.
  It is significant that 70 per cent. of all new jobs negotiated this year are in expansions of existing industry. It is interesting to note that those industries already on the spot which know and, at least to some extent, understand the situation have not been deterred by certain events from expansion.
  Unemployment is still at the unacceptably high level of 6·8 per cent. overall, and 8·8 per cent. for males. It is higher than a year ago particularly in manufacturing industry. The unemployment rate, sad to say, among men in Londonderry—though it covers a wider area than the name might suggest—is 16 per cent., and in Strabane in the constituency of Mid-Ulster it is 17·3 per cent.
  That is bad enough, but there is now an added uncertainty about the level of inducements available both to existing industry and to new projects. It is about them that we must think. I imagine that almost at this moment talks are taking place between the two Governments. I cannot tonight emphasise too strongly how urgent it is that action should follow those talks, and quickly. Otherwise, there will be no movement for an appreciable time on the industrial front, and opportunities may well be lost. We cannot afford to lose a single opportunity at this time.
  As I have said, the Minister of Development described the situation as grim, or, to be fair "almost grim". Why is it almost grim? There are two main reasons, one being that the Northern Ireland economy reflects the economy of the United Kingdom as a
  1388
  whole. When there is a buoyant economy here, the economy of Northern Ireland is buoyant, or relatively so. Unhappily, the converse is true: when things are going badly in the United Kingdom, they go disastrously in Northern Ireland. This is particularly true in the matter of investment, which, as we all know only too well, has been stagnant in the United Kingdom for some time. Undoubtedly, that is an important factor in the difficulties which Northern Ireland faces today.
  Mr. Elystan Morgan: I understand that the general purposes committee of the Northern Ireland Economic Council has urged the Stormont Government to maintain a policy of investment grants despite the decision taken by the United Kingdom Government. Would the hon. Gentleman give an undertaking that he will exhort his brethren in the Conservative and Unionist Party to change their policy with regard to development areas in Britain?
  Mr. Chichester-Clark: The hon. Gentleman had better contain his soul in patience. If he had waited to hear what I have to say, he would probably not have bothered to make that intervention. He sometimes makes valuable observations, but that was not one of his better efforts.
  I was dealing with the reasons why I regarded the situation as almost grim, and I had mentioned the way that one economy affects the other.
  The second and, in my view, principal reason must be the recent civil unrest in Northern Ireland, which has without question discouraged those who might have brought new projects and new employment to Ulster. We have to face that. It is vital—and I hope that my hon. Friend the Minister will say this tonight—to say, and say loudly, that only a very small proportion of the working force of the Province has been affected in any way by the disturbances, even when they were at their worst. It is also important to say that the incidents have been almost entirely confined to a few square miles.
  From some of the things that have been said and written in this country, one might be led to believe that Ulster

  1389
  was engulfed in a mini-religious war affecting the whole Province. This is far from the facts. In the interests of the unemployed, it is an impression which should be dispelled at once.
  Long before the disturbances of 1968, I remember saying in this House that the shortage of employment in Northern Ireland was the tinder out of which community tension could be fanned into flame all too easily. That was long before 1968. That was not then, and is not now, to suggest that full employment had ever been the whole answer to the problems which faced Ulster—it is no use pretending that it is—but a reduction in the level of unemployment at this time would certainly go a long way to help.
  Consultants who drew up the development programme for 1970–75 indicated that Ulster needed 8,000 jobs a year for the next five years if any inroads were to be made on the underlying level of unemployment. The sad fact is that now, in 1970, it looks as though we may barely reach 6,000. No wonder the situation is regarded by responsible figures in Northern Ireland as "almost grim".
  What we really need—what we have always needed but what we need a little bit more now—is a range of inducements for new projects at least as attractive in cash terms as the present arrangement. In calculating what the inducements should be, I trust that the Treasury in this country will bear in mind that it is as important to take into account the differential with the development areas as it is to measure the differential with the incentives offered by the Republic of Ireland.
  This is a very important, and increasingly important, matter—heaven knows, we hear enough about it sometimes in this House, and Stormont hears more about it—having regard to the particular difficulty in obtaining employment for the western counties of Ulster, about which I happen to know a good deal and where we realise that the problem is of exceptional severity. The western counties are very close to the Republic.
  The new policies that were outlined for development areas by one of my right hon. Friends the other day indicated that greater use was likely to be made of
  1390
  operational grants linked to employment and infrastructure grants. These operational grants are already used in Northern Ireland by the Ministry of Commerce. The Government here must, therefore, be asked—and I ask them tonight—to consider to what extent these new policies go at least some way, if not all the way, to closing the gap between Ulster and the development areas. It would be unfortunate if it were so.
  I must speak rather more warmly of certain measures which, in my own way, in a letter to my right hon. Friend the Chancellor of the Exchequer, I have welcomed as being beneficial, I hope, in the long run to the United Kingdom as a whole. Among those recent measures which will be most welcome is the extension of investment allowances to the services sector in Northern Ireland, which has suffered so badly from selective employment tax.
  I assure the hon. Member for Cardigan (Mr. Elystan Morgan) that I have not become any sort of crypto-Socialist and I am not by inclination a devotee of investment grants. Neither am I a believer in featherbedding dying ducks, or any other mixed metaphor of that kind. It must, however, be recognised that investment grants or an alternative to them are absolutely vital at this time to attract new industries to Northern Ireland. They have been in active use there for sixteen years, and to abandon them at this moment without an equivalent attraction would be to court disaster.
  I think also that greater consideration has to be given to the assistance available to existing industry wishing to reequip and modernise. There are in Ulster a great many firms which need the help of investment grants if they are to remain in business, and as things stand in Ulster we simply cannot afford to lose a single job there. If it gives the hon. Member for Cardigan any pleasure I will quote what the general purposes committee of the Northern Ireland Economic Council, as he has referred to it, said last week:
  "There are many employers for whom the loss of investment grants alone could create a serious cash problem even with free depreciation for firms earning profits."
  I must say one word about hotels—the tourist industry in general, but hotels especially—because here in particular

  1391
  there is considerable nervousness being felt about the application of the United Kingdom Government's new policies for the tourist industry. This industry has suffered pretty grievously from the unrest of the past two years. It is capable of very great expansion, perhaps more than any other industry in Northern Ireland. At present the standard of accommodation provided in holiday areas in my constituency could be improved. I hope that is a tactful way of putting it. I am not saying that some of it is not very good, but it could be improved, just as that in Donegal across the Border could be improved, and I know that many of my constituents are looking forward anxiously to seeing that grants to hotels are continued in some form.
  I must say a word in regard to military bases, because, as my hon. Friend knows, the closing of the Ballykelly R.A.F. station in 1971 and, most recently, H.M.S. "Sea Eagle" strike severe blows at Northern Ireland. There is the commitment of the British Army in Northern Ireland at present, but it could have an enormous economic and psychological effect if there were some defence establishment which could be sent over to Ulster. I would not make that suggestion if I did not think it possible from the defence point of view that that might well be feasible, and if it is feasible, and feasible for Ballykelly, then I hope that an imaginative plan put forward by a certain county council is kept in mind by the Government, and I hope that they will look at it with sympathy, because the Ministry of Defence, as it was under the last Government, does owe some retribution for what it did about the closing of Ballykelly. The people in that area were led to believe that the base was to remain open, and a lot of money was spent locally in that belief, and the people were led to that belief by the Ministry of Defence.
  Of course, the locating of a major Government Department or enterprise in Ulster would be a considerable step forward.
  I do not know whether consideration has been given lately to a car assembly plant. That might be the debut of the steel industry in Northern Ireland, but we shall hear what the Minister has to say, if anything, about that.
  1392
  In agriculture, the new measures pose a certain threat to the industry in Northern Ireland which still employs 10 per cent. or slightly more of the Province's labour force. The Milk Marketing Board in Northern Ireland estimates that the ending of the cheap welfare milk and free school milk for those aged over 7 will mean a loss of 4 million gallons a year in milk supplies, and that is bound to depress the overall return for milk, which is already 6d. a gallon lower there than in the rest of the United Kingdom. This is a situation in which the Ulster dairy farmer has to fight against the higher cost of feedingstuffs and the prospect of a lower return on milk. I ask the Minister to bear in mind that 10,000 tons of milk products were imported into Northern Ireland from the Republic in 1969, representing £2·8 million in value. The largest item was butter, which for various reasons, is being sold cheaper on the Northern Ireland market, making it uneconomical for the Ulster farmer to produce. Certainly, an immediate levy on milk products would greatly alleviate what is a very unsatisfactory situation. It would help to make the Northern Ireland farmers a good deal happier about the whole concept of the support system if they knew that levies on milk products were to be introduced.
  Most of the problems about which I have been speaking are in some way the legacies of actions of United Kingdom Governments long ago, and the measures which are needed now are proportionately no greater than those required by some other areas. I know that I am asking for much, and I know it will be said that I am asking at the wrong time. It is always the wrong time, but for Northern Ireland in a sphere wider than that of the economy it may be that it is a "make or break" time. Community peace in the future certainly does not depend wholly upon great economic prosperity—not while we have the presence of those determined to disrupt it for their own ends—but a higher employment level would certainly help towards greater harmony.
  Miss Bernadette Devlin rose—
  Mr. Chichester-Clark: I cannot give way. I have not the time.

  1393
  There has been much talk in another context of direct rule. I am not tonight advocating that, but I sometimes speculate whether, had that form of government existed, involving direct responsibility over the years, any Government of any complexion in this country could have allowed to continue in any part of this kingdom an unemployment rate of between 6 and 8 per cent.
  I ask my hon. Friend tonight whether he can give us some form of reassurance.
  Miss Devlin rose—
  Mr. Chichester-Clark: I hope my hon. Friend will answer the points I have raised and say something which will alleviate the anxiety which is deeply felt in many parts of Northern Ireland.
  Miss Devlin rose—
  11.27 p.m.
  The Minister of State, Home Office (Mr. Richard Sharples): I am grateful to my hon. Friend for bringing this important issue before the House at this time. He said that he thought it might be the wrong time to do it, but I would not say so at all, and I congratulate him upon his timing.
  The Government have already announced their new policies for public spending and investment incentives for Great Britain in two White Papers. Discussions are now taking place with the Northern Ireland Government about the matters for which they are responsible. We here at Westminster are in no doubt as to the particular economic problems which face Northern Ireland.
  A great deal is said about Northern Ireland, and no small part of it is nonsense. It is not easy for those living outside to get a balanced picture of what is happening. Many people this year have thought of the whole population as having to survive riots, searches, the discharge of smoke, and so on. The truth is that the great majority, even of those living in Northern Ireland, would be unaware of most of the incidents were it not for the Press and the television.
  I am sure that the House will wish to pay tribute to the considerable efforts of the Northern Ireland Government to promote new industry in the Province. This, one must admit, is against a background of certain industries in decline, a constant
  1394
  drift of labour from the land, and a general and often mistaken belief that Northern Ireland's geographical disadvantages, such as distance from the market, cannot be offset by its undoubted advantages. The Northern Ireland Government's efforts have had a good measure of success in the past, attracting many firms from overseas. It is the aim of the United Kingdom Government to enable the Northern Ireland Government to continue this work.
  Miss Devlin rose—
  Mr. Sharples: There is not time. I am sorry; I cannot give way.
  We have already shown this by our agreement in June of this year, immediately upon taking office, to the addition of £75 million to anticipated expenditure in Northern Ireland on development during the next five years.
  Partly as a result of the measures contained in the new development plan, partly as a result of those which the previous Government agreed to last October and partly as a result of earlier measures, the Northern Ireland Government have been able to offer to new and expanding industry greater inducements than anywhere else in the United Kingdom. Without these differential advantages Northern Ireland's economic position would be much worse than it is today. Discussions are now in progress between the United Kingdom Government and the Northern Ireland Government about the most suitable financial inducements for Northern Ireland to offer in the light of the recent Government proposals to rely on investment allowances rather than investment grants. The House will not expect me to anticipate the outcome of these discussions, but it may be helpful if I indicate some of the guidelines we are following.
  First, we recognise that there is a need for Northern Ireland to retain a lead in the level of investment incentives. Secondly, it would not be right for Northern Ireland to enjoy the benefit of the Chancellor of the Exchequer's proposals about investment allowances without at the same time making changes in its other industrial incentives. Thirdly, we must take into account the concept of parity which has grown up in dealings between the two Governments. As the House will know, this requires that the citizens of

  1395
  Northern Ireland should enjoy the same standard of services as the citizens of Great Britain so long as the rates of taxation, both transferred and reserved, are the same in both places. Fourthly, at a time when public expenditure in Great Britain is being carefully pruned, we think it right to ask the Northern Ireland Government to have a further look at their own programmes.
  These are the principles which are guiding our approach to the discussions.
  Mr. Elystan Morgan: Even accepting the superficial validity of the Minister's arguments, is it not a fact that very many firms which went to Northern Ireland did not make a profit for the first few years and, therefore, do not gain a penny's benefit from the investment allowances?
  Mr. Sharples: I must stick to what I have been saying. Discussions are going on between the Westminster Government and the Northern Ireland Government, and it would be improper, while those discussions are taking place, for me to go further than I have gone in outlining the broad principles which guide our thinking.
  I want to say a few words about today's situation. It is fair to say that there are very encouraging factors about the economy of Northern Ireland. The gross domestic product increased by over 45 per cent. between 1963 and 1968 while that for the United Kingdom as a whole increased by 35 per cent. Between 1960 and 1968 the index of manufacturing production rose by 46 per cent. in Northern Ireland compared with 24 per cent. in the United Kingdom.
  Miss Devlin rose—
  Mr. Jones Kilfedder rose—
  Mr. Sharples: I am sorry; I cannot give way.
  Investment by manufacturing industry is increasing rapidly at a time when relatively little increase has occurred on this side of the Irish Sea. Northern Ireland is a go-ahead place, and I can understand why. The Northern Ireland authorities go to great pains to attract and encourage industry to settle and expand there. The amenities offered by the beautiful unspoiled countryside are ex-
  1396
  cellent. The reserves of good labour are one of Northern Ireland's greatest assets.
  But there is another side to the picture. Total unemployment stands at 6·8 per cent.—nearly three times the Great Britain average. There are specific concentrations of unemployment, too—Belfast, where there are 11,000 people out of work, Londonderry and Newry, where the male rate of unemployment is about 16 and 18 per cent. and the number of unoccupied males alone is more than 2,700 and 2,000 respectively. These are facts which we must recognise. It would be foolish to pretend that there are any easy solutions.
  My hon. Friend has raised a number of points and I only wish I had time to reply to them. He raised particularly the situation of the tourist industry, including the hotel position, the situation of agriculture and the situation relating to the Ballykelly airport. With regard to Ballykelly I can say that the Ministry of Defence is at present sympathetic to the civil use of the airport, and its future is being considered by the Northern Ireland Government with the local authorities concerned. I cannot go further than that at the moment.
  My hon. Friend has also raised certain points in a letter to my right hon. Friend the Chancellor of the Exchequer. I understand a reply is on its way to him, if he has not already received it. He also referred to the resolution made last week by the general purposes committee of the Northern Ireland Economic Council. I assure him that it is receiving careful consideration.
  In the two or three minutes that remain to me, I want to say something about one matter that was touched upon by my hon. Friend, and that is the effect of disorders on the economy of Northern Ireland. I have mentioned the distorted impression held by many people outside Northern Ireland. I do not want to be over-optimistic and it would be a mistake to be so, but I am sure the House will welcome the real improvement which I think it is fair to say has taken place in recent months. We must, none the less, recognise that there are those criminal elements who appear to have a vested interest in creating trouble. They are the real enemies of full employment in

  1397
  Northern Ireland. They are the main deterrent to investment, without which—
  Miss Devlin: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister in this House to make a statement which is in contradiction to the actual facts of trade and exports in Northern Ireland?
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): No point of order whatever arises on that.
  Mr. Sharples: I believe the vast majority of people in Northern Ire-land—
  Miss Devlin: Will the Minister give way?
  Mr. Sharples: —want no part of these troubles. The time has now come for all those who believe in the future of Northern Ireland to help the police in putting these criminals behind bars, where they belong. At the same time, I ask industrialists who are thinking of placing orders or setting up firms in Northern
  1398
  Ireland to look at the picture for themselves. They will not in any way be disappointed by what Northern Ireland has to offer.
  This has been a useful debate. I am only sorry that it has been so short. It is difficult in a short debate of this kind to reply to a very great number of detailed points which have been raised by my hon. Friends, points to which I certainly would have wished to reply had I been able to do so. I should like to have been able to reply to his points about agriculture, and to his important points about the tourist industry. I appreciate very much the importance of the growing tourist industry to Northern Ireland—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-two minutes to Twelve o'clock.

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  Rolls-Royce (Lockheed Tristar)
  Beagle Aircraft Company
  Beagle Aircraft Company
  Supersonic Aircraft (Upper Atmosphere Pollution)
  Supersonic Aircraft (Upper Atmosphere Pollution)
  Concorde
  Concorde
HOUSE OF COMMONS
  Questions to Ministers
  Questions to Ministers
  Strangers' Gallery (Admission Charge)
  Strangers' Gallery (Admission Charge)
  Staff Pay
  Staff Pay
HOUSING AND CONSTRUCTION
  New Towns
  New Towns
  Council Houses
  Council Houses
  Housing Subsidies
  Housing Subsidies
  St. Catherine's Chapel, Abbotsbury
  St. Catherine's Chapel, Abbotsbury
  Rent Act, 1968 (Rateable Values)
  Rent Act, 1968 (Rateable Values)
  Council Houses (Sale)
  Council Houses (Sale)
  Housing Construction
  Housing Construction
  Housing Demolition
  Housing Demolition
  Multi-accommodated Properties (Fire Precautions)
  Multi-accommodated Properties (Fire Precautions)
LOCAL GOVERNMENT AND DEVELOPMENT
  Intensive Animal Husbandry (Premises)
  Intensive Animal Husbandry (Premises)
  Houses (Rateable Value)
  Houses (Rateable Value)
  Rate Subsidies
  Rate Subsidies
  Disabled Persons (Parking Facilities)
  Disabled Persons (Parking Facilities)
  Local Authority Operations (Savings)
  Local Authority Operations (Savings)
  Trunk Roads
  Trunk Roads
  Sports Centre, Worksop
  Sports Centre, Worksop
  Rate Rebates
  Rate Rebates
  Refuse Collection (Bags)
  Refuse Collection (Bags)
  Greater London Council
  Greater London Council
ENVIRONMENT
  Derelict Land
  Derelict Land
  Compensation
  Compensation
  Smoke Control Orders
  Smoke Control Orders
  Thames Barrier
  Thames Barrier
  Military Establishments
  Military Establishments
TRANSPORT INDUSTRIES
  Lorries and Trailers
  Lorries and Trailers
  Liverpool (Minister's Visit)
  Liverpool (Minister's Visit)
  Scotland-Northern Ireland (Tunnel)
  Scotland-Northern Ireland (Tunnel)
  Edenthorpe (Pelican Crossing)
  Edenthorpe (Pelican Crossing)
  Concessionary Bus Fares (Fife)
  Concessionary Bus Fares (Fife)
  Vehicle Design and Manufacture
  Vehicle Design and Manufacture
  Motor Vehicles (Colour)
  Motor Vehicles (Colour)
  Motorways (Accidents)
  Motorways (Accidents)
  Automatic Traffic Controls
  Automatic Traffic Controls
  Oil Delivery Lorries
  Oil Delivery Lorries
SCOTLAND
  Autistic Children
  Autistic Children
  Chronically Sick and Disabled Persons Act, 1970
  Chronically Sick and Disabled Persons Act, 1970
  Primary School Building
  Primary School Building
  Prescriptions
  Prescriptions
  Welfare Milk
  Welfare Milk
  Overspill Housing
  Overspill Housing
  Rents
  Rents
  Old Property, Lanarkshire (Demolition)
  Old Property, Lanarkshire (Demolition)
  Crofters (Housing Grant)
  Crofters (Housing Grant)
  Western Isles
  Western Isles
  Concessionary Fares
  Concessionary Fares
  Housing Subsidies
  Housing Subsidies
  Hospital-supplied Appliances (Charges)
  Hospital-supplied Appliances (Charges)
  Private Tenants, Edinburgh (Rebates)
  Private Tenants, Edinburgh (Rebates)
  Legal Aid
  Legal Aid
  Land Use Study
  Land Use Study
  Sheriff Principal (Lanarkshire)
  Sheriff Principal (Lanarkshire)
  Non-vocational Courses (Retirement Pensioners)
  Non-vocational Courses (Retirement Pensioners)
  Public Building Contracts (Tendering)
  Public Building Contracts (Tendering)
TRADE AND INDUSTRY
  Industrial Development Certificates
  Industrial Development Certificates
  Redundant Miners
  Redundant Miners
  Industrial Training (North-East)
  Industrial Training (North-East)
DEFENCE
  Beira Patrol
  Beira Patrol
  Royal Navy (Discharge Document)
  Royal Navy (Discharge Document)
  Gordon Baracks, Gillingham (Fire)
  Gordon Baracks, Gillingham (Fire)
  Government House, Northern Ireland (Flags)
  Government House, Northern Ireland (Flags)
CIVIL SERVICE
  Public Service Pensions
  Public Service Pensions
  State Employees (Salaries)
  State Employees (Salaries)
  Ministerial Salaries, Expenses and Services (Taxation)
  Ministerial Salaries, Expenses and Services (Taxation)
  Spencer Abbott & Co. Ltd., Birmingham (Industrial Dispute)
  Spencer Abbott & Co. Ltd., Birmingham (Industrial Dispute)
EMPLOYMENT
  Scotland (Unemployed Persons)
  Scotland (Unemployed Persons)
  Construction Industry Training Board
  Construction Industry Training Board
  Strikes
  Strikes
  Redundancy
  Redundancy
  Remploy
  Remploy
  Conciliation Service
  Conciliation Service
  Dustmen
  Dustmen
FOREIGN AND COMMONWEALTH AFFAIRS
  European Economic Community
  European Economic Community
  Czechoslovak Refugees
  Czechoslovak Refugees
  European Cultural Property
  European Cultural Property
NATIONAL FINANCE
  Building Societies (Lending Limit)
  Building Societies (Lending Limit)
  House of Lords (Attendance Allowance)
  House of Lords (Attendance Allowance)
  Income Tax
  Income Tax
  Public Expenditure
  Public Expenditure
  International Monetary Fund
  International Monetary Fund
  Exchequer Revenue
  Exchequer Revenue
AGRICULTURE, FISHERIES AND FOOD
  Hill Subsidy Scheme (Fermanagh and South Tyrone)
  Hill Subsidy Scheme (Fermanagh and South Tyrone)
  Food Prices
  Food Prices
HOME DEPARTMENT
  Light Vans (Speed Prosecutions)
  Light Vans (Speed Prosecutions)
  Bus Employees (Assaults)
  Bus Employees (Assaults)
  Fireworks Accidents
  Fireworks Accidents
  Constitutional Development (Wales)
  Constitutional Development (Wales)
  Probation Service
  Probation Service
  British Standard Time
  British Standard Time
  Police, Nottinghamshire
  Police, Nottinghamshire
  Immigrant Children
  Immigrant Children
  Northern Region (Urban Aid Programme)
  Northern Region (Urban Aid Programme)
  Illegal Immigrants
  Illegal Immigrants
  House of Lords (Modernisation)
  House of Lords (Modernisation)
  Animals (Research)
  Animals (Research)
EDUCATION AND SCIENCE
  Northern Region (Secondary School Building)
  Northern Region (Secondary School Building)
  Medical School, Leicester
  Medical School, Leicester
SOCIAL SERVICES
  Welfare Milk
  Welfare Milk
  Leicester Royal Infirmary
  Leicester Royal Infirmary
  Local Authorities Social Service Act
  Local Authorities Social Service Act
  Prescription Charge Pre-payment Certificates
  Prescription Charge Pre-payment Certificates

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bath and Wells.
Several Lords—Took the Oath.

MESSAGES FROM THE QUEEN
2.38 p.m.
LORD COBBOLD: My Lords, I have the honour to present to your Lordships two Messages from Her Majesty The Queen, signed by her own hand. The first Message reads as follows:
"I have received your request praying that the Secretary of State for the Environment Order 1970 be made in the form of the draft laid before your House.
"I will comply with your request."
The second Message reads as follows:
"I have received your request praying that the Transfer of Functions (Overseas Aid) Order 1970 be made in the form of the draft laid before your House.
"I will comply with your request."

LAND RETENTION BY ARMY
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will set up a commission of inquiry into the use of land by the Army, with particular reference to Tyneham because of its natural beauty.]
THE SECRETARY OF STATE FOR DEFENCE (LORD CARRINGTON): My Lords, I am initiating a review of Defence land holdings on coastal and country sites. I am consulting with my colleagues and an announcement will be made as soon as possible.
LORD BROCKWAY: My Lords, while sincerely welcoming that reply and what the Prime Minister has said on this mat-
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ter, may I ask the noble Lord two questions, one in general and one relating to Tyneham? In general may I ask the noble Lord whether he can confirm that of the 618,000 acres held by the Ministry of Defence half are in National Parks and 134 miles are on the coast? Also, when he is taking part in this review will he consider the recommendation of the Countryside Commission, that there should be a court of inquiry to which evidence can be given in order to assist?
LORD CARRINGTON: My Lords, I cannot confirm the noble Lord's figures, but I have an idea that, since he has asked me that question, he probably knows they are right—and for all I know they are. I most certainly will bear in mind the suggestion he has made.
LORD BROCKWAY: My Lords, in relation to Tyneham, in particular, may I ask the noble Lord whether it has not been designated by the Countryside Commission a heritage coast because of its great natural beauty? May I also ask whether, when it was taken over in 1943, a promise was given that it would be returned after the emergency of the war?
LORD CARRINGTON: Yes, my Lords, I think that that is perfectly right. I believe that this was considered in 1948 at a public inquiry in the time of the first Labour Government, and the Government of the day decided that Tyneham should be retained. But I think that all of this must be looked at again in the light of this review.
THE MARQUESS OF SALISBURY: My Lords, may I ask the Government especially to consider the position of Tyneham? For, as the noble Lord, Lord Brockway, has said, the people were definitely promised when they left their homes during the war that they would be restored to their homes as soon as the war was over, and that promise was not honoured by the Government of the day. Though anyone must realise that you cannot put the clock back to that extent, I hope that in any commission of inquiry which is set up the special position of Tyneham will be considered and that as much as possible will be done to undo the wrong which has been done to these people.
LORD CARRINGTON: My Lords, I will most certainly give an undertaking to

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my noble friend that Tyneham, in company with all the others, will be looked at most carefully. But I would say this, not in relation to Tyneham but in relation to land held by the Defence Department generally: that I hope your Lordships will realise that if we are to have Defence forces there must be training areas, and it is quite out of the question that I should give up everything to the Secretary of State for the Environment.
LORD BROCKWAY: My Lords, will my noble friends take note of the unusual coalition on this matter?
LORD CARRINGTON: It is all the more powerful, my Lords.
LORD LEATHERLAND: My Lords, while we are talking about natural beauty, will the noble Lord also note that Her Majesty's troops of all ranks are usually very highly appreciative of natural beauty in all its manifestations?
LORD SLATER: My Lords, may I ask whether it is true that once it is decided to give up land which is now occupied by the Defence Department, the previous owners will have a right to an option on that land?
LORD CARRINGTON: Yes, my Lords; that is right.
LORD FOOT: My Lords, in order to fortify the coalition, may I say a special word—
SEVERAL NOBLE LORDS: No!
LORD FOOT: My Lords, may I ask the noble Lord whether he will pay particular attention to the claims of Dartmoor?

SEWERAGE SCHEMES IN RURAL AREAS
2.44 p.m.
LORD GARNSWORTHY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they intend to spend the extra £17 million on providing sewers: in rural areas which the last Government announced in May, 1970, that they would spend.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, no doubt the noble Lord refers to the decision, announced in the White Paper on The Protection of the Environment, to permit local authorities to carry out schemes which the last Government had deferred. The authorities concerned were, I understand, informed individually that they might proceed with particular deferred schemes. The spending of the money now depends upon the decisions of the local authorities themselves.
LORD GARNSWORTHY: My Lords, while thanking the noble Lord for that reply, may I ask him whether the Government will actively give encouragement to all the local authorities involved at least to begin in the years 1970 to 1972 the schemes covered by paragraph 2 of Command Paper 4373? Can the noble Lord give an assurance that, so far as Her Majesty's Government are concerned, there will be no curtailment of the programme, particularly having regard to his remark that there have already been deferments?
LORD SANDFORD: My Lords, as to the last part of the noble Lord's supplementary question, I can assure him that the cuts in public expenditure which have been announced do not affect these particular schemes. There is no indication at the moment that the local authorities need any particular encouragement from Central Government, and unless and until that situation arises we are disposed not to interfere with their own local decisions.
LORD GARNSWORTHY: My Lords, may I thank the noble Lord for indicating that the recently announced cuts do not affect the programme?

ACCIDENTAL POLLUTION
LORD GARNSWORTHY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they intend, as the last Government did, to strengthen the law on accidental pollution.]
LORD SANDFORD: My Lords, study and consultation in this matter are proceeding on three or four separate fronts.
LORD GARNSWORTHY: My Lords, while appreciating what that reply does not tell us, may I ask the noble Lord whether we may anticipate legislation, particularly having regard to the Report of the Working Party on Sewage Disposal, issued under the heading of Taken for Granted, where again and again they indicate the need for legislation?
LORD SANDFORD: Yes, my Lords. I shall be answering a Question tomorrow dealing with one earnest of our intention to proceed and to introduce legislation over this broad field, but at the moment I am not in a position to give any firm indication as to when particular pieces of legislation will come forward as a result of the three or four other separate approaches which are being made.
LORD GARNSWORTHY: My Lords, would the noble Lord not agree that there is a degree of urgency about this matter, as was made clear in the Report to which I have already referred? It was stated in paragraph 154 that
"accidental escape of cyanide from industrial premises which drained through a local authority treatment works discharging to a river used for drinking water killed some 35,000 fish"?
LORD SANDFORD: Yes, my Lords. This is one of the three or four different spheres in which work is proceeding, but we are not yet ready with legislation.
LORD HAWKE: My Lords, how does one legislate against accidental pollution? One can legislate against intentional pollution, but how do we do it against accidental pollution?
LORD SANDFORD: My Lords, for example, another of the fields which we are studying at the moment is whether it is possible to tighten up the building regulations so as to reduce the danger of accidental pollution; and another is whether some further aspect can be introduced into the handling of planning applications.

CIVIL AVIATION POLICY
2.48 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can now make a statement on civil aviation policy covering the future of B.O.A.C. and B.E.A. arid their Boards, and how far negotiations have gone in respect of the proposed transfer of scheduled routes valued at £6 million to this proposed Second Force.]
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, the Government hope to make a Statement shortly on civil aviation policy, including the future of B.O.A.C. and B.E.A. and their Boards. Meanwhile, discussions about the transfer of routes are proceeding, and a Statement will be made when it has been decided which routes are to be transferred.
LORD BALFOUR OF INCHRYE: My Lords, arising out of that reply, may I ask the noble Lord this question? How can the Government justify the present position, when in five or six weeks' time there will be no chairmen of Boards, there will be no Board members, there will be no instructions for the implementation of policy and, so far as B.E.A. is concerned, there will be no new aircraft? Really, you cannot run a business—
SEVERAL NOBLE LORDS: Order, order!
LORD BALFOUR OF INCHRYE: My Lords, is the Minister aware that it is impossible to run a business which earns £320 million a year, as the two Corporations do, if for five to six weeks they do not know where they stand?
LORD DRUMALBYN: My Lords, may I say two things to my noble friend? First, I have already said that a Statement will be made shortly—and I mean shortly. Secondly, when you are working to a fixed time and there has been an Election earlier in the year, some time must be allowed to the Government to decide their policy.
LORD BESWICK: My Lords, the noble Lord says "shortly". Would he tell the House what he means by "shortly"? Then, with regard to routes, is the noble Lord aware that all those interested in aviation, of all Parties and of no Party, had hoped that by now any decision about routes would be taken on a non-Party basis; that it had been hoped that with the introduction of the promised new aviation authority this would be the pattern of the future? Can he give an assurance that no transfer of routes will take place until the new licensing authority is established?
LORD DRUMALBYN: My Lords, with regard to the first point, I think that I can only say that "shortly" means "very soon". In regard to the second point, the answer is that I cannot give such an assurance.
LORD BLYTON: My Lords, does not the Minister think it disgraceful that there should be contemplated the having-off of £6 million worth of business from the nationalised industries to private enterprise, to give profits to the Government's Tory friends?
LORD DRUMALBYN: My Lords, this really is a question for debate, and the opportunity to debate a matter of this sort will arise when the civil aviation declaratory provisions come before the House.
LORD BALFOUR OF INCHRYE: My Lords, is the Minister aware that "shortly", as he says, is too late and that the Boards of the Corporations do not know where they are and the personnel of the Corporations do not know where they are? And to say that a General Election took place and we had our own policy set out in our Election Manifesto, is no excuse for the lateness of Her Majesty's Government on this subject.
LORD DRUMALBYN: My Lords, I feel every sympathy with the noble Lord in this matter, but the Government have made all due expedition in reaching their decision and, as I say, he will not have to wait very much longer.
LORD BESWICK: My Lords, although the noble Lord, Lord Drumalbyn, says that he has every sympathy, will he take this a little further? I beg of him to
1122
prevail on his right honourable friend to believe that it would be in the interests of everyone, including Caledonian Airways, that this transfer of routes takes place, if at all, on the authority of the new licensing body, and not on a political decision.
LORD DRUMALBYN: My Lords, I also hope that the transfer of routes will take place on the authority of the Air Transport Licensing Board. But this, as the noble Lord will be aware, does not lie entirely in the hands of the Government at the present time.
EARL AMHERST: My Lords, despite the fact that a Statement is shortly to be made, can the noble Lord now tell us just what the new Board can do which the two Boards of the Corporations have not done in the past, bearing in mind that the co-operation between B.E.A. and B.O.A.C. is greater now than it has ever been and has culminated in a worldwide joint computerised sales service? Is this not really the first step towards amalgamation?
LORD DRUMALBYN: My Lords, the noble Earl's question indicates once again how difficult it is to get all-Party agreement on a matter of this kind. I thought that there was agreement between the Parties on the amalgamation of the two Boards.
LORD BESWICK: My Lords, may I ask the noble Lord in what way this decision will be made? Will it be made by way of a simple Statement, or will there be some sort of Order before the House? Will the agreement of the two Houses be asked before any decision is taken?
LORD DRUMALBYN: My Lords, the Government are going to state their policy in this matter, and I think that when that statement is made the noble Lord will have his answer.
EARL AMHERST: My Lords, if it is true that the transfer of routes is the only way to make a Second Force viable, does it not indicate that there is not enough surplus British business going to warrant the formation of a Second Force at all?
LORD DRUMALBYN: No. my Lords; I would not accept that. In order that the noble Earl may know exactly what the Government are proposing, may I say that the statement that was made on the

1123
Government's policy was the subject of a Press release on August 3 last, and I have put copies of that statement in the Library.
EARL AMHERST: My Lords, would not the noble Lord agree that the transfer of some £6 million worth of routes to this new Corporation as a free gift, having regard to the fact that these routes were built up by public money, is really robbing Peter to pay Paul? And bearing in mind that Peter is owned by all of us, the taxpayers, would not the noble Lord agree that it might be wise to consider whether the taxpayers should be reimbursed for this, possibly in the shape of a loan?
LORD DRUMALBYN: My Lords, surely we cannot make this the subject of a debate at the moment. May I simply reply to the noble Earl that it was a matter of agreement between the Parties, I think, and on all sides, that there should be a second air line in accordance with the Edwards Committee recommendations. If you are going to have such a second airline, or Third Force or whatever you like to call it, surely it should be a viable one, and one that can hold its own in the world.
EARL AMHERST: My Lords, does the noble Lord really mean that to make it viable it is necessary to hive-off routes from the Corporations?
LORD DRUMALBYN: My Lords, surely this is really a matter to be debated. It is not a matter to which it is easy to give definite answers in a question and answer procedure.
LORD BESWICK: My Lords, can the noble Lord explain what he means by saying that this is a matter to be debated? Do I gather now that the two Houses of Parliament will be given a proposal which they can debate before a final decision is made, or are they to be presented with a fait accompli?
LORD DRUMALBYN: My Lords, it is up to the House itself—it is a matter for my noble friend—to decide what it will debate. All the Government can do is to state their policy. It is then a matter for the House to decide whether it will debate it.
LORD WYNNE-JONES: My Lords, can the noble Lord tell us whether the
1124
short period to which he refers is a small fraction of the five weeks remaining? We understand that the word "instant" is not liked by the present Government, but one would hope that "soon" might be a very small fraction of five weeks.
LORD DRUMALBYN: My Lords, I hope so, too.

MEMORIAL SERVICE TO THE LATE GENERAL DE GAULLE
EARL ST. ALDWYN: My Lords, your Lordships will be aware from the notice which the Clerk of the Parliaments circulated on Monday that there is a Memorial Service for General de Gaulle tomorrow, Thursday, at 12 noon at St. Paul's Cathedral.
The time limit for applications for tickets for the accommodation which has been reserved in the Cathedral for Members of your Lordships' House expired this morning. But your Lordships may like to know that there are still some tickets available in the Office of the Clerk of the Parliaments. These will be issued to Peers, who apply in person, on a "First come first served" basis. Secondly, whereas in the first instance it was decided that not more than one ticket could be issued to each Member of your Lordships' House, this limitation is now removed and two tickets will be issued to any Peer who would like a second ticket, for so long as the supply of tickets lasts.

TRENT AND LINCOLNSHIRE WATER BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
IPSWICH DOCK BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

PUBLIC SPENDING AND ECONOMIC POLICY
3.0 p.m.
Debate resumed on the Motion moved yesterday by Lord Beswick, on behalf of Lord Shackleton—namely, to resolve, That this House regrets that the measures

1125
outlined by the Chancellor of the Exchequer on October 27 run counter to the Government's declared intention to reduce prices; will widen the gap between rich and poor in our nation; will make more difficult the achievement of an acceptable prices and incomes policy; will tend to aggravate the problem of regional development, and generally will impede Britain's progress towards an economically sound and socially just society.
LORD SHEPHERD: My Lords, we had a long debate yesterday and those who remained to a late hour will I think agree that a high standard was maintained throughout. The tone of the debate was in the traditional key of your Lordships' House and, unlike critical Motions in another place, we debate our affairs with calm and moderation and without the turmoil and sometimes bitterness that one sees at the other end of this building. But as the noble Lord, Lord Thorneycroft, said, this calm and moderation should not disguise the deep divisions that now exist, not between the two Front Benches but certainly between my Party and the Party opposite.
At the end of the debate the noble Lord, Lord Drumalbyn, replied with his customary care. He gave us a great many facts and figures, but because of the lateness of the hour clearly there was no opportunity to intervene and probe further. We shall certainly have to look at what the noble Lord said. For example, he dealt with the problem of the regions; and as I am sure the noble Lord himself is aware, there is very deep concern to-day as to how the new policies will affect the regions.
The debate was graced—I think that is the only word to describe it—by the speech of my noble friend Lady Lee of Asheridge. It was an uncontroversial speech, at least in presentation, and I suspect that it had the sympathy and support of all noble Lords who heard it. In many respects the plea she made for the galleries and museums expressed, perhaps more clearly than any speech on this side of the House, the conflict between the new abrasive society of the Conservative Government and Party and our concept on this side of human and national life. There were two other notable maiden speeches, those of the noble Lords, Lord Hamnett and Lord
1126
Avebury. This afternoon we look forward to the maiden speeches of the noble Lord, Lord George-Brown, and the noble Lord, Lord Rhyl.
Arising from our critical Motion there are three distinct issues. The first concerns the long-term aims of the Government, the sort of society that will arise as a result of the pursuance of their present policies; the second concerns the effects of those proposals on certain sections of our community; and the third, whether there is an economic crisis and, if so, the Government's policies to combat it. The noble Earl, Lord Jellicoe, suggested that we should not have been surprised that new policies were to be adopted by a new Government. We expected new policies but I am bound to say that we did not expect such a major and drastic departure from the Conservatism that we have grown to understand, the Conservatism since 1945.
It seems to me that the whole principle behind the philosophy of the Government goes back to the pre-war days. It seems to esteem personal gain and private advantage as virtues. I believe that noble Lords opposite who spoke in support of the Government supported their broad long-term aims; but I think it is true to say that in varying degrees they all expressed concern at the inflationary trends and the steps open to the Government to deal with the situation.
My Lords, I should like to pose this question: Is there to-day an economic crisis? Let us take the balance of payments. To-day it is in surplus, I suppose to the extent of about £500 million in the year. This is a very satisfactory surplus and it is broadly in line with the forecast of Mr. Roy Jenkins, the Chancellor in the previous Administration. I think, too, that there is some slack in the economy. The noble Earl, Lord Jellicoe, in applauding the surplus yesterday had, of course, to criticise the price that the Labour Government and the nation had to pay, particularly in regard to increased taxation and curbs on the growth of the economy, in order to achieve that surplus. But the surplus is there; there is room to manoeuvre. I say to noble Lords opposite that the present Government are perhaps the first for very many years to have been returned to power able to consider seriously whether the economy could be reflated. At least they have room to manoeuvre.

1127
I am not to-day concerned with the Election battles: they have come and gone. I am more concerned with the present situation. We hear talk of roaring inflation, we see reports of the very deep concern expressed by O.E.C.D. and the International Monetary Fund, and certainly there is hardly a responsible newspaper in the land which does not express serious concern about the inflationary trends and what their effects may be upon the balance of payments. The noble Earl, Lord Jellicoe, when he spoke yesterday, made it clear that in his view there should be no panic measures; that the Government are not going to undertake panic measures. He then went on to say:
"The sort of talk and speculation which I have seen a good deal of in the Press recently, that we are on the brink of some Weimar precipice, is neurotic, unhealthy and nonsensical."—[OFFICIAL REPORT, 17/11/70, col. 956.]
That is the real issue; but the real issue only so far as it goes. I am bound to ask the noble Lord, Lord Aberdare (I do not know whether he can reply; but perhaps the noble and learned Lord who sits on the Woolsack may do so), what is the significant change that has occurred in the inflationary spiral since January of this year, that is to say, during the last five months? If we could know this, it might help us to understand how serious or otherwise is the situation.
The Conservatives, poised to take office—of course, they did not know it—on June 16, made a very considerable and powerful case on inflation and prices. Crisis was mentioned; even devalution. And so I should like to know, and I am certain that the country itself would like to know, what improvements there have been. But we should also like to know of the measures that the Conservatives propose to deal with the prices and wages spiral. These measures are referred to in a document issued by the Conservative Central Office in the name of Mr. Heath. In it he talked about inflation. I will read a little from it:
"There is a very real alternative which ought to be pursued immediately"—
I stress the word "immediately".
"That alternative is to break into the price/ wage spiral by acting directly to reduce prices. This can be done by reducing taxes which bear directly on prices and costs such as the
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selective employment tax and by taking a firm grip on the public sector prices and on charges such as coal, steel, gas, electricty, transport charges and postal charges."
My understanding is that the Government took action to curb some of the increases in the fields of coal and postal charges, but they were willing to see other price increases proceed.
I think that the House would like to know, and particularly the noble Lord, Lord Moyne, who spoke on this subject last night, why the Government have decided at this juncture not to remove the selective employment tax as they promised in their Manifesto. The noble Lord believes, as did his colleagues in the Election, that the removal of S.E.T. would have a major impact on the reduction of prices. But there has been no removal of S.E.T. or any specific action in the proposals for changes to deal with the price spiral about which we have heard so much. I agree with the noble Viscount, Lord Massereene and Ferrard, that we do not expect the Government to fulfil their Election promises in five months, but we are entitled to question how it is that within three months the Government decide upon a completely new change in the policy which was a main plank in their Election programme.
There has been no control of increases in the private sector. Prices have moved up very considerably. Petrol, bread and most of the commodities in which the big combines are involved have moved up pretty well unanimously. Last night my noble friend Lord Raglan indicated that there had been some 3,000 increases since June. I hope my noble friend did not do what I believe the Central Office of the Conservative Party did during our period of office—when three qualities of soap or three different sizes of cartons went up in price, this was regarded as three changes.
I do not know what the Government are trying to do in the field of price stability. They have abolished the Prices and Incomes Board. The Board had been open to attack. There were some who were disappointed with the results. But looking at the careful and penetrating reports produced by the Board, I do not think there is any doubt that they must have had an effect on many firms and large groups of companies in making

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them realise that in raising their prices they were liable to scrutiny. It seems to me now, reading the newspapers, that the Government have even hinted to companies that they should increase prices to improve the cash flow, profits and investment. Some of these reports seem to give an indication that they have been leaked by the Treasury. I do not know whether the noble Lord, Lord Aberdare, can confirm or deny whether this is the view of the Government.
I should now like to turn to the Chancellor of the Exchequer's proposals. We maintain that they run directly counter to the Election undertakings. They certainly fail to deal with the existing inflation. In my view, they add to it, because in the long run they must have an inflationary effect. If we take the package as a whole, we are not confronted, as the noble Earl, Lord Jellicoe, said, with a tax reduction. In our view, we are confronted with a redistribution of the burdens. We regard this as unfair, and in our opinion it will add to the pressure for wage claims and still higher prices. Consider the fact that single people benefit more than married men with families, both in tax reductions and by the fact that they do not meet the same charges. If we take a married man with a salary of £2,000 a year, we find that he gets a tax reduction of £22 11s. 3d., but a single man gets a tax reduction of £30 15s. 4d. I suggest that that weighting is wrongly slanted. Is it really right, too, that those who have other incomes should enjoy greater relief than those who depend on earned income? I cannot believe that to be right.
We on this side of the House accept that the Government have made some provision for those who earn wages of £1,000 a year or less. They may be covered by the changes in these proposals, provided only that all the assistance that is available to them is taken up. But the full shock—and it is a very heavy one—is going to be borne by those in the £1,000 to £2,000 a year group. A married man with £1,500 a year—and this is not a very high standard—will have a tax reduction of £12 16s. 10d. This person will have no cushion whatsoever from the effects of the new charges and all the new items that are going to be placed
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upon him by adjustments in the rating review and increases in rent.
We shall listen this afternoon to the noble Lord, Lord Aberdare, with great keenness. I hope that he will reply to the noble Lord, Lord Boothby, on the effect which charges for children's milk will have on the dairy industry. I understand it will be quite severe. I hope that he will also reply to my noble friend Lady Summerskill on the effects of this charge on the nutrition of children. I also hope he will reply to the noble Lord, Lord Platt, upon the effects on the Medical Research Council of the ending of grants. The noble Lord spoke passionately about the effect of the proposals on the middle class and on the skilled and some semiskilled workers.
I come back to the man with two children earning £1,500 a year. If he is in a council house, is he likely, as a consequence of the reduction in housing subsidy, to receive a rebate on any increase in rent? My understanding is that he will not. And let us be under no illusion; there are going to be heavy increases in rents, both in local authority housing and in the private sector. We do not know yet what the full effect will be on food prices, but I think that it will be severe. For those who live in London, the first result of the cuts is that there is going to be a 15 per cent. increase in fares, bringing increased difficulties to the transport authorities and increased congestion on the roads. I would ask the noble Lord, Lord Aberdare;, whether there is any truth in the rumour that appeared in last night's papers, and again this morning, about a cut in the rate subsidy—and a figure of £12 million has been given. If this is true, here is yet another burden to be faced through increased rates. It seems to us on this side of the House that the freedom of which noble Lords opposite speak—the freedom to be able to spend money as one wishes—clearly is not going to apply to this large section of our community who earn between £1,000 and £2,000 a year.
We have been told that these are the first of new measures, and that there is going to be further redistribution of the burden. I do not know whether in the spring we shall hear of a value added tax to match the reduction in income tax or, perhaps, surtax. I do not know whether (he noble Lord, Lord Aberdare,

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can tell us something about the reasons why the Government abolished the Consumer Council. Why have they decided to destroy it? Did it fail, or was it too powerful? Have the Government really considered these changes and how they will affect wage claims, not only as to their size but, perhaps more seriously, as to their frequency?
How is the worker going to view this new abrasive society? The noble Earl, Lord Jellicoe, spoke in a very urbane way, to which we are all accustomed, but I wonder whether the picture that he gave us was in fact the true picture. I think it needs to be compared with the picture of our society that was given by Mr. Davies, the Secretary of State for Trade and Industry, in another place on November 4. There is a considerable contrast in their views. Mr. Davies, speaking on these measures, said this:
"They constitute a first step towards a new condition in the development of this country's life, and one in which this Party believes profoundly. We believe that the essential need of the country is to gear its policies to the great majority of people, who are not lame ducks, who do not need a hand, who are quite capable of looking after their own interests and only demand to be allowed to do so."—[OFFICIAL REPORT, Commons, 4/11/70; col. 1211.]
"Lame ducks!" He continued (col. 1212):
"National decadence is the consequence of treating us all, the whole country, as though we were lame ducks."
Later on he said:
"The vast majority lives and thrives in a bracing climate and not in a soft, sodden morass of subsidised incompetence."
Who are the "lame ducks"? Clearly, the Secretary of State had in mind those who need State assistance. Is this a reference to the old age pensioner, to the handicapped and to those injured in war? All these receive subsidy from the State. Are they to be branded as "lame ducks"?
Sir Keith Joseph has undertaken—and no doubt the noble Lord, Lord Aberdare, will confirm this—to ensure that all those who are entitled to assistance will be made aware of their rights of entitlement and encouraged to make use of these rights. But what sort of encouragement is there, knowing that if you apply you are going to be branded as a "lame duck"? I presume that the term "lame duck" also refers to those who are en-
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titled to receive family income supplements, since they are lowly paid. If this is the brand to be placed upon them, then clearly they are going to become militant, seeking ways and means out of that position. We should remember that 10 per cent. of the whole of our working force falls below the £18 a week level. I must say that the attitude of Mr. Davies, which has never been repudiated by any member of the Government, only adds support to our belief that the policies the Government have in mind do not match up to our idea of a just social society. We are reinforced in our view that these measures are unfair and derisory.
The noble Lord, Lord Balfour of Inchrye, posed one of those difficult questions earlier to his colleague on the Bench opposite in regard to our attitude on prices and incomes. I want to say a few words about this. I accept the views of the noble Viscount, Lord Watkinson, that the apparent price is being paid by industry generally since we were unable in the last Administration to pursue an agreed policy on prices and incomes. I will not go over the ground of why the policy could not be pursued, except to say that perhaps my noble friend Lord Shinwell was right when he said that the penal clauses just could not be stomached by the unions, and that rising prices, as a consequence of devaluation, also played some part.
My Lords, what are the alternatives? The noble Viscount, Lord Amory, set out three of them, and I will add one or two. The first is a prices and wage freeze. I think this has to be ruled out. It can only be short term, and at the end we should be back to square one. Then there is deflation. It is hard to estimate the number of unemployed needed for such a policy, but I would guess that it is at least one million. Surely this is an intolerable price to pay, with all its degrading hardship. There will have to be drastic cuts in consumer spending, credit and investment, and in the end I doubt whether it would solve the basic problem. Thirdly, there is the exciting dash for expansion at any cost. Attractive though this may be, I have no doubt that in the end it would lead right back to the balance-of-payments difficulties we were experiencing in 1964.
I will be frank, my Lords, and say that I know of no other course open to

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us if we reject these three possibilities except some form of prices and incomes policy. Last night the noble Lord, Lord Drumalbyn, said that the Government had an incomes policy. He specified, first, the monetary control; secondly, a rigid attention in the public sector; and thirdly, a trust in the responsibility of the employers' and unions' negotiators. As in the case of the local public servants' dispute, according to the noble Lord, the Government will not permit the conciliation machinery to be used if the unions are seeking an advance beyond which the employers are not prepared to go. In other words, the employers and union leaders are in the ring alone, without any form of guidelines as to what is a fair settlement. I suspect that in such a confrontation there will be a bloody nose, but it will not be only the unions or the employers who will suffer. I believe that in the end, in the main it will be the consumer. There is no doubt at all that it is the consumer who eventually pays the cost of a strike, irrespective of its length or success.
My Lords, surely it is right that the consumer should have some form of representation when a major award is likely to be made. Clearly, it is only the Government, or some form of agency of the Government, that can watch over the interests of the consumer. In the private sector the directors—the employers—have mainly the interests of the shareholders in mind. The union leaders are mainly concerned with the interests of members of their particular union. There seems to be no one, therefore, to speak for the consumer. The Prices and Incomes Board has gone, the I.R.C.—to which we on this side of the House, and the noble Lord, Lord Aldington, who I regret is not speaking this afternoon, attached so much importance—is shortly to disappear. Clearly the I.R.C. has played a very prominent role in productivity.
I do not believe that the policy that the Government have in mind, one of basic confrontation, will succeed. I believe that it will fail, with increased bitterness on all sides. I do not know whether the House is aware of the speech that was made the other day by Mr. Victor Feather of the Trades Union Congress. I should like to read it. In the latter part of his speech he said:
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"The future of this country depends on voluntary co-operation, not compulsion. It depends on the successful pursuit of prosperity by all branches of industry, trade, and commerce. And trade unions are involved in them all.
"This country must have economic growth, sustained and sustainable growth. And we can only achieve that by all the parties concerned, managements, unions and Government getting together and working out a common strategy."
Is it not possible, before the hour is too late, for the T.U.C. and the C.B.I. to get together to see whether there is a chance of a real voluntary co-operation? Could not some start be made in getting those talks going? It might be necessary to go back to the Declaration of Intent, but whether that is so or not is immaterial—a start needs to be made. I know that a satisfactory solution will not be easy to achieve, but when you view the alternatives and the possibility of rigid confrontation stretching over months ahead, should we not seek to encourage the two sides to talk? The issue for the Government is this: if there are to be serious talks, either between the unions and the C.B.I., or the unions and the Government, and there is to be any chance of success for the Government, a major decision has to be taken as to what will be their role in prices. We on this side of the House believe firmly that you cannot have an incomes policy unless you have a prices policy side by side with it. As we say in our Motion, we fear that the present policies adopted by the Government are more of a hindrance than a help. Despite that, I believe that the Government should seek ways and means of bringing the T.U.C. and the C.B.I. together to see whether a voluntary prices and incomes policy could be created by themselves, with the Government participating as a partner.
We have moved this Motion this afternoon, my Lords, not in any sense as a ritual dance through the Division Lobbies but because we sincerely believe that the policies and aims of the Government will lead to disaster. They will permanently divide this nation and throw a social stigma on those who require State assistance or community help as against those who do not. Some will get assistance, while others, only marginally better off, fail to get it and therefore meet the full impact of the redistribution. We believe that this is unfair and that it will lead to increased industrial unrest—something which this nation can ill-afford.
3.36 p.m.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, I agree wholeheartedly with the noble Lord, Lord Shepherd, in the first sentence that he uttered, that we had a long and most interesting debate yesterday. But I cannot agree with everything he said thereafter, and I do not think he would expect me to. I do not intend to follow him in his very wide ranging speech (if he will forgive me), but I have no doubt that my noble and learned friend on the Woolsack will take up some of his points.
My noble friend Lord Drumalbyn, in winding up last night, said that I would try to deal with some of the points that arose concerning the social services. It would, I am afraid, be an impossible task—
LORD SHACKLETON: My Lords, I am sorry to interrupt the noble Lord, but it appears that the noble and learned Lord who is sitting on the Woolsack is in some way taking part in this debate, although we cannot quite hear what he is saying. He is not, of course, inside the House at the moment, and there is a Standing Order about the Lord Chancellor having one power which forbids people to speak behind the Woolsack. But he is sitting on it and seems to talk continuously.
LORD ABERDARE: My Lords, I am sure that my noble and learned friend is perfectly able to look after himself. I should like to refer to some of the main themes that were mentioned yesterday in the field of social services. It would be impossible, without speaking at inordinate length, to deal with all the questions that arose, and perhaps I will be forgiven if I answer some of the specific questions in writing.
The first and most important point I should like to make on the social services provisions—and I should be very well satisfied if on this point alone I could convince your Lordships—is that the whole package of measures must be considered together and not in isolation. To take individual items, such as specific increases in National Health Service charges, without considering the corresponding benefits over the whole field, is to misconceive the whole object of our
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policies. It is all too easy to fail to see the wood for the trees, especially when the trees are, for some, a sacred grove. I thought it unfortunate that many of your Lordships who spoke yesterday on the social services matters spoke about reductions in public expenditure without any reference to the corresponding increases. It is impossible to make a fair judgment without considering the proposals as a whole.
During the years that we were in Opposition, many of us were concerned with seeking out new policies for the social services. The one fact that struck us was that in every case there was an urgent need for more money. Health, welfare, housing, education—everywhere there were opportunities for improvement if only the money were available. This was not only obvious to us; it was equally obvious to the previous Government. Only last June Mr. Crossman, then Secretary of State for Social Services, said that the Health Service required a further £350 million over five or six years to enable it to keep its head above water, let alone make any of the necessary improvements. Where was this additional money to be found? It can, of course, come from an increase in taxation; but already since we were last in office taxation has been increased by an additional £3,000 million and was taking some 50 per cent. of our national output. The previous Chancellor of the Exchequer recognised the facts when he said at the Labour Party Conference in 1968:
"Since we came to power public expenditure has risen nearly four times as fast as the national income, but it is not a process which can go on without limit; at least it cannot go on without limit unless we seriously believe that people, ordinary people, our people, our supporters, are indifferent to how much tax they pay, and I do not believe that that is the fact."
Certainly on this side of the House we see a need for a reduction in taxation in order to stimulate the economy—for this is the second way in which increased money can be found for the social services, by greater growth in the national product. From 1965 to 1969 national output per head grew by only 1½ per cent. per annum, but by restoring incentives, reducing taxation and encouraging enterprise we seek to increase output and in the long run to make provision for the increasing demands of the social services.

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A third way of providing more money is by critical examination of the way in which the taxpayers' money is spent at present in order to decide on correct priorities. This is what we have done, and it is on this choice of priorities that our measures must be judged. Of course, we are deeply concerned with the existence of poverty in this relatively prosperous land, but ultimately the answer must lie in increased prosperity for all in an expanding economy. In the meantime, we have taken steps to help those most in need and to prevent any increase in charges from falling upon those unable to afford them. Actual figures will vary according to circumstances, but I can assure your Lordships that, broadly speaking, a family with two children or more will not be affected by the increased charges unless their income is more than £1,000 a year. But there are surely many others who can afford to make some additional contribution to their own health and welfare. Even in Sweden, so often held up to us as a Socialist Mecca, patients pay 20 per cent. of the public cost of medical care, compared to our present figure of 10 per cent. And our proposals stem from the conviction that, within the total of £28,500 million of consumer expenditure, more could and should be devoted to personal provision for health, housing and welfare, and that State assistance at taxpayers' expense is better directed at those who are least able to help themselves.
The noble Baroness, Lady Birk, whose work as Chairman of the Health Education Council is extremely valuable, touched on the nub of the point when she said yesterday that beer, bingo, betting and a better TV set all come well above dental treatment. That may be so, but is, it really right that the taxpayer should be expected to subsidise dental treatment in order that a man who could well afford to pay something towards it should be free to spend his money on beer, bingo, betting and a better television set?
Of course, noble Lords opposite may criticise details of the package and the balance between charges and benefits; but as their crocodile tears come rolling down their cheeks let me remind them that they have done it all before. They introduced prescription charges in January, 1968, and Mr. Wilson said:
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"What we decided—and this is our choice of priorities—was that it was still more important to maintain the fabric of the National Health Service and particularly the hospital building programme."
They twice increased charges for school meals, and they stopped the supply of school milk in secondary schools. They increased charges for spectacles and dentures in August, 1969, and Mr. Crossman then said:
"This method of saving £3½ million is far less damaging than would be cutting back one of the increases in the Health Service to which we are committed. I have no doubt that this was a lesser evil."
But let us also remember that at the same time as they increased these charges they also increased taxation; they cut back on the school building programme, and they reduced local health and welfare programmes by an average of £5 million a year for three years.
I turn now to some of the individual proposals. First, the increase in National Health Service charges. The introduction or increase of prescription charges has always aroused considerable feeling. In fact, I do not believe that our proposal to raise the charge to 4s., which must be set against the average cost to the National Health Service of some 14s., will cause hardship. Children, old people, war pensioners, expectant and nursing mothers, people suffering from certain chronic illnesses and those who would suffer hardship if they had to pay, are all exempt. Some 40 per cent. of the population, and rather over 50 per cent. of all prescriptions, will not be subject to the charge. For those who are not exempt but need fairly numerous prescriptions there are available pre-payment certificates which provide an excellent hedge against charges and enable anyone to place a fixed limit to his liability, whatever the number of prescriptions he requires. I am glad to be able to announce to-day that from April 1 next this prepayment certificate will be an even better bargain than it is at the moment. The charge for a six-months certificate will then be 40s., and for a 12-months certificate 70s. In other words, on an annual basis everyone can limit the cost of his prescriptions to under 1s. 6d. a week—and surely, my Lords, that is not excessive.
So far as dental charges are concerned, it does not seem to be fully realised that

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there will be a considerable number of people who will pay less under the new arrangements than they do at present. In fact, all those whose treatment costs up to £3 at present will pay less; and I may remind your Lordships that in 1968 50 per cent. of all treatments cost less than £2. The effect will be a genuine incentive to regular attendance in order to maintain a good standard of dental health. I think the dental profession will find that they have here a very good argument for educating their patients to come and consult them regularly, rather than waiting until something serious has gone wrong. I was pleased to see that at a recent meeting of the Council of the General Dental Practitioners' Association it was agreed that many patients may pay less than at present for dental care, particularly those who look after their teeth, and that the new pattern of the National Health Service dental health was a challenge which the profession must accept.
Next, my Lords, I come to milk. This is a subject which I recognise is full of deep emotional undertones, but I suggest that we should remember, as the noble Lord, Lord Boothby, reminded us yesterday in a forceful speech, that the welfare milk scheme dates back to the days of rationing during the war. It has remained substantially unchanged ever since. When food was limited and the supply of milk was small, it was obviously right that it should be distributed to those most in need—children and expectant and nursing mothers, and the noble Lord, Lord Boothby, and the late Lord Woolton, who was the Minister at the time, are entitled to full credit for what they did then. But to-day, general nutritional standards are high and milk is plentiful: Is it really necessary to spend £35 million a year of the taxpayers' money in providing cheap milk for the whole pre-school population, and for all expectant and nursing mothers regardless of their ability to pay for it? We believe that the great majority of parents can look after their children's feeding properly, regardless of this sort of State assistance; but at the same time we shall continue to provide free milk for large families and for those in need. In fact by redefining the standards of need we shall extend entitlement to free milk to some 150,000 more mothers and children.
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So far as school milk is concerned, this will no longer be provided free, for exactly the same reasons, for children between the ages of 7 and 12 unless—and this is a most important proviso—it is recommended on health grounds by the school medical officer. Moreover, to make as sure as possible that no nutritional ill-effects result, the Committee on Medical Aspects of Food Policy has agreed to take urgent steps to monitor the effect of these new decisions.
The noble Lord, Lord Hamnett, in an excellent maiden speech yesterday, and the noble Baroness, Lady Summerskill, both mentioned a survey carried out recently by Dr. Lynch of the Social Nutritional Research Unit at Queen Elizabeth College, London. It is difficult to accept Dr. Lynch's findings at their face value without full details of the method of collecting the information. I am sorry that he has not yet been able to publish the full report. When it is available it will, of course, be carefully studied and will, I hope, be considered by the Committee on the Medical Aspects of Food Policy. But I would remind your Lordships that there are other surveys which have pointed to different conclusions, and I would instance the work of Professor Holland of St. Thomas's Hospital, and a recent Medical Research Council report of a survey on this subject in Jamaica.
Some of your Lordships mentioned school meals. It is true that experience in the past has been that when the charge for meals is raised there is a temporary fall-off in demand, which recovers after a short time. It is perhaps relevant to point out that on other occasions when the charge has been raised only marginal improvements have been made in the arrangements for remitting the charge. The increases proposed by the Government will be accompanied by a substantially more generous scale of remission, and this should help those with modest resources who might otherwise find the initial cost beyond their means. I think most parents are shrewd enough to appreciate that even at 2s. 10d. a school meal represents a very good bargain and surpasses, both in quality and quantity, any meal of a comparable standard available outside.
Finally, my Lords—because I do not want to keep your Lordships for too long

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—may I list the corresponding advantages which have accrued to the Government as a result of re-assessing the priorities. In the first place, there is the Family Income Supplements Scheme, directed at those most in need, where the breadwinner is at work and therefore not eligible for supplementary benefit although his earnings are below the level of supplementary benefit. We shall have an opportunity to debate the Bill in greater detail when it comes to this House; but it is an important part of the package.
I was glad that the noble Lord, Lord Donaldson of Kingsbridge, yesterday, though somewhat lukewarm, acknowledged that it would help and expressed his pleasure at its introduction. I regret that the noble Lord, Lord Wells-Pestell, was less generous and I deplore—as did my noble friend Lord Lauderdale—his frequent use of the adjective "dishonest" in his speech.
SEVERAL NOBLE LORDS: Hear, hear!
LORD ABERDARE: My Lords, when I asked him what his Government did for the poor families he told me to look it up. Well, I have, and I have found nothing. Even the noble Lord, Lord Beswick, was honest enough to say that he was disappointed that the Labour Government were unable to do more for the low-paid worker.
LORD BESWICK: My Lords, since the noble Lord has mentioned my name, will be also remember that I asked a question that has never been answered? Why is it considered inflationary for a man to get 50s. a week extra as of right in respect of pay for a job that he is doing, but not inflationary and virtuous if it is given as charity under this new Bill?
LORD ABERDARE: My Lords, the final settlement was thought to be inflationary, but the original offer was thought to be fair in the case of the council workers. I think the two things are totally different.
LORD WELLS-PESTELL: My Lords, I apologise for interrupting the noble Lord, because it must be very unsettling for him. I thought the noble Lord would have known that between 1964 and this year the Labour Government
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increased family allowances no fewer than three times. In 1964 it was 8s. 0d. for the first child and 10s. 0d. for the second, and gradual increases meant that just before the Election the second child was getting 18s. 0d. and the third child 20s. 0d. Furthermore—
SEVERAL NOBLE LORDS: Order!
LORD ABERDARE: My Lords, the noble Lord did speak yesterday, and I suggest that I might be able to carry on with my speech now. The point about the Family Income Supplements Scheme, of course, is that it benefits the first child while family allowances do not. The reason why we chose family income supplements rather than increasing family allowances was purely because it brings help more quickly to those most in need. It is as simple as that. The operation of the tax system is such that an increase in family allowances would not have helped as much or as quickly and, as I have said, a family income supplement has the great advantage of helping the first child in the family. Every penny that is spent on it—and the figure is some £8 million—will go to families with low incomes. It will also help all those who had their wages stopped for purposes of supplementary benefit, and it will help the one parent families.
The noble Lord, Lord Shepherd, asked me about the implementation—making sure that everybody took advantage of the exemptions to which they are entitled. I can only repeat what my right honourable friend said: that we intend to take vigorous steps to make sure that as many as possible of those entitled to this scheme benefit from it. Not only shall we launch an extensive advertising campaign, but we also intend to make full use of the information already at our disposal, as well as that available to local authorities and voluntary organisations.
A further benefit of this re-arrangement is that we can provide, as I announced in this House last week, a further £110 million for the National Health Service over the next four years. This, I can assure your Lordships, is a real tonic to those who could not see where the next penny was coming from, and who now have a chance to make much better provision in those areas of particular need, especially the mentally handicapped, the aged and the mentally ill.

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In school building, the first programme that we can decisively influence is that for buildings started in 1972/3, and the figure for that year will be £38½ million—more than three times as much as the figure for improvements and replacements which we found in the programme at the beginning of this Parliament.
BARONESS BACON: My Lords, can the noble Lord say whether or not this amount which it has been said will be an increase in school building is in fact an increase on the total already announced by the Labour Government, or whether it is a transfer within that total?
LORD ABERDARE: My Lords, the noble Baroness is very well informed on this matter and she will know that there is an increase over the four years. The figures are complicated but there is an overall increase of, I think, £38 million over four years, and virtually the whole of this money will be devoted to the improvement and replacement of old primary schools. We expect to be able to finance nearly 500 projects for the improvement and replacement of old primary schools, and our hope is that over a period of five years we shall be in sight of the elimination of primary schools built in the 19th century.
I should like to end as I began. These measures must be viewed as a whole. I suggest that they constitute a realistic reappraisal of Government priorities for the social services in the 'seventies. Taxpayers' money will no longer be spent where it is not required. People will be encouraged to make some small provision for their own health and welfare except where they cannot afford to do so. Help will be directed to those most in need, and the resulting reductions in public expenditure and in taxation will encourage the initiative and enterprise needed to stimulate the economy on which the standard of life of every one of us depends.
4.0 p.m.
LORD GEORGE-BROWN: My Lords, this is quite a moment for me, and judging by the response I got from the Opposition Chief Whip last night when I indicated that I thought I might like to address your Lordships, it is quite a moment for him, too. But I am encouraged by being flanked, as I am,
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by two, if I may say so, very senior, much respected, colleagues. On my right, is the noble Lord, Lord Henderson, the son of the man who, in my view, saved the Labour Party when it went wrong on the very issues we are discussing in this Motion. When a Prime Minister and a few colleagues were misled by the Treasury and the City into wrong policies, Arthur Henderson pulled the Party round and held it together. And on my left is the noble Lord, Lord Soskice—
SEVERAL NOBLE LORDS: Stow Hill!
LORD GEORGE-BROWN: Well, of course, only some of us win our battle with Garter: Lord Stow Hill-nevertheless one of my greatest and closest friends, who has seen me through very many moments when I have done things he would rather I had not done, or at least not quite to that extent.
My Lords, I wish to address myself to the Motion and have some things I feel I want to say, mostly out of a sense of, if you will forgive me, personal and slightly historical nostalgia. In doing so, I ought to start, I think, with two apologies: one for missing so much of yesterday's debate, when I was in the North, trying to help industrially to restore the situation from the rather difficult position into which the measures of the present Government have put it. I hope that I have made up for that absence by having read most conscientiously every word uttered by those who spoke before I came. And to prove it, may I say to the noble Lord, Lord Boothby, that I agreed with every single word he said? It desperately badly needed saying, and only he could say it in the mood and with the panache with which he said it. And to my noble friend Lord Shinwell, with whom I have not always seen eye to eye— or maybe, put better, he has not always, alas! seen eye to eye with me and wisdom—I would say that I agreed largely with much of what he said. And to the noble Lord, Lord Roberthall, who made me feel very angry with Garter (because the noble Lord did not even have to invent a hyphen; he got it just like that), I would say that in his case also I agreed largely with what he said, after the first two or three minutes.
I also apologise for inflicting myself so soon after coming into your Lordships' House at this stage in the debate, and will

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try to make up for that by being reasonably brief. My main reason for intervening is that so many speeches yesterday seemed, if your Lordships will forgive my saying so, to get the issues out of perspective. Of course, there were noble Lords and Ladies who concentrated on their personal interests, the subjects that fascinate them most. I got used to that in the other place, and it is a proper thing to do. But many of the speeches yesterday seemed to me to concentrate on the issue of what they called an incomes policy. Indeed, there were noble Lords who asked us, "What incomes policy? How will you get it? What will you do?" I thought I would like to say, with your Lordships' permission, or at any rate your indulgence—and incidentally, may I say that, unlike those who have made maiden speeches before me, your indulgence I do not ask for; but your sympathetic understanding would be of some assistance—an incomes policy is not and can never be an issue on its own. We shall always have an incomes policy. I used to try to say this to my trade union colleagues—who can always hear but sometimes pretend not to understand—in 1964. An incomes policy we shall always have. The issue is whether we have a rational one or an irrational one; whether we have a relevant one or an irrelevant one; whether we have the law of the jungle or the law of civilised man. It is not an issue on its own; it flows from other things, from other decisions.
The first thing we have to do—and I am not going to make a Party speech: mark you! everybody else says that; but I am actually going to do it—
A NOBLE LORD: Not to do it.
LORD GEORGE-BROWN: I do not like double negatives. What I meant was that I am going to do what I said I was doing to do, which is the positive way of putting it; but of course one understands that the Government normally deal in double negatives because they hope that way they will get you the better confused. I used to say to my trade union colleagues: let us get the direction, the economic climate, the level of industrial activity we want. Let us establish that, then we can see what level of productivity, as distinct from production, we can aim for. Then we can see what it is
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we have to distribute: some must go (I am delighted to see my noble friend Lord Citrine behind me). Then we can see how much must go for re-investment, for replacing the machinery. Much must go for rewarding capital. Then we can see what we have to reward the workpeople. Then we can see what we have to put into social services.
I was fascinated in listening to the noble Lord, Lord Aberdare, discussing what goes for school meals, what goes for this and what goes for that, as though it were a decision made in the abstract. It is not. It is part of a whole complex of decisions which you cannot make until you have made up your mind how you arrive at the total dividend. Then you can start discussing how to divide the dividend, and for what purposes and in what words.
It seems to me that the major areas for policy decision for this Government are the same as they were for mine. I will come back in a moment to whether we got them right, but they are the same areas of decision. They are, I repeat, the economic approach we are making and the economic climate we want to achieve. I myself have no doubt at all that there has to be an approach and a climate of expansion. With respect, you cannot deflate yourselves out of a problem; you can only deflate yourselves deeper into the pit. You must expand your way out of it. This horrible word "growth" (I do not know a better one) must be the touchstone of the economic decision. We are going down. We are declining. I do not lay this at the door of this Government. I repeat, I am not making a Party speech—at least not seeking to. We are declining. I confess an interest. I spend a large part of my time nowadays with one of the greatest and, as I believe, one of the best industrial complexes in this country. I was in the North yesterday. It is very difficult to keep up an atmosphere of expansion, of development, an attitude to growth, under the policies that are currently and have for some time been pursued.
The level of industrial activity is therefore the next area we need to settle. Do we want our industrial enterprises to be operating at the maximum, seeking a new maximum next year, buying new machines, pushing their people to work and working the machines 168 hours a week?

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I see the noble Lord, Lord Wright of Ashton under Lyne, in his place. He knows what I mean. One can make it easier for the people. On can give them better terms and better conditions. But keep the machines going through the week. How else can we meet the competition from the Germans and from our other competitors? That is the second area for decision. Make these decisions, and then so much else, I think, becomes easier of solution.
The third area which I say, with respect and humility, seemed to me to be left out yesterday is the importance we attach to what I call the regional spread of activity: the so-called "golden triangle", from, it may be, a little above Birmingham down to the South-East. Nobody is going to stop that one. But what are we to do about the North-East, the Northwest, Scotland and Wales, and Northern Ireland, which is a province of the United Kingdom?—if I had my way it would not be; but that is another matter. Is is. What are we to do about these? How much do we care about the regional spread? It costs us enormous sums of money to keep the industrial effort going in the "golden triangle". Just drive around it and look at the congestion on the roads. Just see what we have to put into the environmental aids so that people can live in those numbers there. Resources and people can be wasted in the other regions of the country, but it costs effort and money to develop those regions, and at the end of the road is a wonderful reward. I think we have to decide how much we devote to this effort.
I like to think that the regional policy which was developed when I was at the Department of Economic Affairs was different from the one pursued by the Government that preceded ours. The noble and learned Lord the Lord Chancellor on the Woolsack, wearing a different kind of headgear, went to the North-East, it is true, in the time of the Government that preceded ours, and began a job totally ignored up till then. But I hope he will not only forgive me for saying, but will agree with me later in saying, that he was doing, in a characteristic way, something that nobody in his Government was doing as a planned operation for the regions as a whole. We did do it, and anybody going round the
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North-East and the North-West, Scotland or Wales, can see it now. How much importance do this Government attach to that, if we are to be competitive, and, more importantly, if we are to be an effective member of the Common Market when we join it?
The next area for decision which I feel Her Majesty's present advisers are not approaching—indeed, are doing the opposite of approaching—is how to ensure the cash flow. Industries that are persuaded, as the one which I know best is persuaded, to go into these areas to develop, to go for expansion and to spread it through the regions, have to find the cash. Even great businesses (we all saw the I.C.I. speculation yesterday) have to find not just the promises of borrowed money but cash with which to finance their expansion, and the arguments when money costs 10½ per cent. are different from those when it cost 6½ per cent. or 7 per cent., not to talk about 3½ and 4 per cent. But the arguments are different again when you are not just talking about 10½ per cent., if you can get it, but talking about 10½ per cent. when you cannot even find it at that price.
I am a mixed economy man. I think there is a great case for public enterprise, and you must make the case on merit; I also think there is a great case for private enterprise, and you must make the case on merit. And there is a case, as I tried to prove in the instance of the Fairfields Shipyard, for a mixture of both, if you make it on merit. I am not doctrinaire here. In this situation, private enterprise must be able to finance what it is doing.
My Lords, Her Majesty's present advisers are making it, if your Lordships prefer the word, even more difficult than it ever became in our time. The withdrawal of investment grants in favour of tax allowances is one of the most crassly stupid things anybody could have dreamt up, because you are taking away, at the very moment when the cash flow and liquidity is most difficult, a source of actual finance, of actual cash. It is all right when you make profits; you get it back. I cannot believe that the Secretary of State for Industry, Technology, President of the Board of Trade, and heaven knows what else, except the environment, does not understand this. I cannot believe

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that he made the decision. Keeping election promises is good—not every Government has always done it—but not keeping them when they are stupid is even better. This was silly; it is silly.
The other day I was at Spennymoor. Some of your Lordships will know about Durham, and the problems the Durham coalfield has had to face. I learned about them to my electoral cost, as well as my personal sadness, in the Belper Division. Pits get shut. The most difficult people of all to look after when that happens are colliers of 50 and thereabouts. They cannot travel. Most of them are injured, either slightly or badly. They have become so used to working underground anyway that they do not adapt very easily even to the nicest conditions above ground. When I was in Spennymoor I saw a new textile factory opened, and almost wholly staffed, with ex-colliers in that sort of age range. That factory would not have gone to Spennymoor but for the regional policy and the investment grants, I venture to guess. I have not asked the chairman or the board, but I venture to guess that is how it got there. Withdraw the investment grants, and factories like that will not go there. You will make profits quicker in the golden triangle; and if you have to make profits quickly in order to get your tax allowance, you go where you make the profits more quickly, and not where it takes longer.
The development in Northern Ireland has gone on because enterprises from this country have been encouraged to go there, partly as a regional policy, and partly because they received development investment grants for going there. Withdraw that, and who is going to go to Northern Ireland, with all the internal risks, and the sea passage, if the firms are told they will not get a penny back until they have started making profits? It is self-defeating. This is an area in which Her Majesty's advisers ought to think again very quickly. I repeat: it is all part of the problem which leads up to the issue that so many people want to discuss, which is prices and incomes. It is when you have answered these questions; and, as the noble Viscount, Lord Montgomery of Alamein, would say, "When you have the strategy right in your mind, and you know whether you are going to Berlin or Vienna", that you
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can start discussing the tactics of how you go.
I see now, and always saw, prices and incomes as part of the tactical way you went, not the strategic way. I say this especially to Her Majesty's Government, but also, if I may, to my own people, because I do not think any of us come wholly clean on this. I think it was the noble Lord, Lord Shinwell, who said yesterday, "Knocking the Government down is as easy as falling off a log". I did not quite like the simile, but it is pretty simple, and there is no great problem: they are not giants over this. We ourselves have to face the very same issue, because if we get them out—or, more likely, they get themselves out; and they are making a fairly good job of that at the moment—we want people to come back to us.
In the early hours of this morning, I was thinking that Sir Oswald Mosley fell out with Jimmy Thomas and George Lansbury over a very similar issue. Sir Oswald Mosley made a fair pass—happily he did not succeed—at becoming a third force. There is a gentleman in the Midlands who has a seat in the other House and who is trying the same objective now, and I do not want to have the people who deserted us, who now realise they have been taken in by them, then to turn somewhere else. Therefore we have to get our lines clear about this and even be tough with our own paymasters—and I speak as a life-long trade unionist. At this point, prices policy and incomes policy fit in, and one can run, as I tried to do, a policy which will relate prices and incomes—and in incomes we include profits—to the productivity which we are achieving. I think the plan of 1964, which was much derided and possibly mistakenly done, was the right approach. There may be a better one and it may be better done, but we need to plan our economic policy and allocate our resources.
As regards the instruments—good gracious, my Lords, fancy getting rid of the I.R.C. which helped to restructure British industry! Coming as I did from Derbyshire only very recently, somewhat ignominiously kicked out, I still feel deeply about Rolls Royce and about their efforts. Of course they should be sustained; but not as a charitable effort. They should be sustained as part of a

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constructive approach to restructuring industry. The I.R.C. played a part in producing the report which led to this decision, and fancy throwing it away! Her Majesty's advisers will offer a lifeline to Mersey Docks. They will save anybody whom they cannot let go away. Of course they will. Every now and again there will be another Jarrow shipyard. But the Government's way is not the way to do it. The I.R.C. was an instrument which could do the job properly, and it was not politically motivated or controlled. Regional policy and all the rest must come back. Somebody will fetch them back. The Prices and Incomes Board, again, is much derided, but somebody other than Ministers—and I speak feelingly, knowing the political pressures on Ministers—must look at all these problems.
Finally—having spoken much longer than I promised myself I would, but your Lordships looked so enchanted that I did not think I could deny you the pleasure of the rest of my speech—some Government will have to deal with the dominance of the Treasury. I see the noble Lord, Lord Diamond, sitting there and I hope he will allow me to say that, no matter how good Treasury Ministers are, they cannot control the Treasury "knights". The economic departments, the production departments, the spending departments, become wholly subservient to the Treasury with its totally out-of-date approach to monetary policy. My noble friend Lord Boothby has his place as a servant. I read with much happiness what he said yesterday. Economic policy must determine our way ahead. The Treasury must then become the instrument by which we get money to work for us—to use what I think was a Keynesian phrase, though I am not quite sure—instead of being the master of the rest of us. I doubt whether there is any chance that this Government will tackle that. Mind you, my Lords, they should. In all my knowledge of politics there has never been such a lightweight at the Treasury as there now is. It is a wonderful opportunity to do what is wanted. But I do not see any other heavyweight around and the opportunity will be missed.
I think that the Resolution is on the right lines, and I mean by that that I
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think it puts the priorities right. I shall vote for it very happily, in the hope and belief that my Party, too, will realise that this means new thinking for us, as well as denigration of the Government.
4.36 p.m.
LORD ROBBINS: My Lords, it is a pleasure and an honour to be chosen to succeed the maiden speech of the noble Lord, Lord George-Brown, who has just resumed his seat. He has adorned our public life in another place for many years with courage, integrity and liveliness, and this afternoon he has given us a very characteristic exposition of a point of view which I am sure all of us, wherever we sit, will agree must be taken seriously. He will forgive me, perhaps, if I say as an old civil servant that I slightly regret his reference to the Treasury "knights"—anonymous, dedicated men unable to defend themselves and most frequently misrepresented in public. But with all that, I congratulate the noble Lord on a notable maiden speech, and I am sure that I express the wishes of all your Lordships if I say that I hope we shall often hear from him again.
I seem to remember that in a recent debate a noble Lord—I think it was the noble Lord, Lord Balogh—referred to those of us who sit in this part of your Lordships' House as skulking on the Cross-Benches. If that be the appropriate appellation, I confess that I have never felt more of a skulker than I have done during this debate. There are elements in the Government's policy with which I profoundly agree, but there are also elements—or, at least, the appearance of elements—which fill me with some apprehension.
Let me begin with what I can agree with, although I have the fear that this will make noble Lords on the Opposition Benches less inclined to believe my credentials when I come to the disapprobatory grounds. I welcome in principle, if not always in detail, the introduction of greater selectivity in the administration of benefits. I have never been able to see why large numbers of people should receive benefits which they could perfectly afford for themselves. I agree, too, with the diminution of various subsidies to industry. There may be exceptions for Defence industries, depressed areas and the like, but as a first approximation I am sure it is a good principle

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that economic activities, State-owned or otherwise, should be made to stand on their own feet. I approve, too, of the general attitude of Ministers that the scope of government has become too large for efficiency and should be diminished where it is sensible and practical to do so—which does not mean, my Lords, that I think that the functions of Government are those of the night watchman. But having said that, I must also say that much of this, although commendable in itself, is almost totally irrelevant to the main problem of the moment—the problem of continuing inflation. The last position I should wish to occupy is that of panicmonger, but I am sincerely alarmed at the present situation, which in my judgment is certainly at once the most serious and the most intractable problem with which we have been confronted since the war.
I think experience shows that you can live with a rate of inflation of, perhaps, 2 per cent. or even 3 per cent., although cumulatively, in the absence of adjustments, this bears hardly on the more sober and prudent members of the community. But the rate at which we are inflating at the moment—a percentage rate of increase of wages of over 12 per cent. per annum and of growth of not much more than 2 per cent.—is different. Such an inflation undermines the whole basis of business calculation, of depreciation allowances; it involves the most blatant and cruel distributive injustice, even if there are biennial reviews of pensions and such like; and it eventually, as we know from history, creates an economic and a political atmosphere inimical to social peace, to mutual understanding and, eventually, to common honesty. I do not know any example in history in which an inflation of this order which has been allowed to go on for very long has been stopped, as eventually it must be, without severe dislocation and hardship one way or the other. It is possible that there may yet be time for us to escape from these consequences. I pray that it may be so, but the sands are running out.
My Lords, the taunts of the Opposition on this matter leave me cold—very cold. The late Government bequeathed to their successors a crisis which in my judgment is worse than the crisis which their predecessors bequeathed to them, and, as they have often emphasised, that was bad
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enough. It is quite true that, as a result of devaluation and a temporary exercise of prudence in fiscal and monetary policy, there has been an alleviation of our difficulties with the balance of payments. Let there be credit where credit is due. But the abandonment of any attempt to control the causes making for inflation has created a problem far worse than the balance-of-payments problem. That, after all, was soluble—an adjustment of the rate of the exchange and a firm control of the money supply. It was soluble without much hardship to anybody. But an internal inflation of the kind from which we are suffering now, if it goes on, will create hardship for most of us.
Let there be no mistake about what is happening and what has happened. We all know about the bargains in the labour market, and I do not want to discuss that further. But how few realise that, in the quarter before the Election, the money supply was increasing, not at the target rate set by the Chancellor, but at the rate of 16 per cent. per annum. Let me be clear, my Lords: I am accusing nobody. Mr. Jenkins is a very honourable man. I do not believe that he deliberately threw the reins on the horse's neck. The authorities of the Bank, with whom I have the greatest sympathy, are dedicated to the public interest. I have no doubt at all that what happened was the by-product not of intention but, as so many untoward events in this world are, of muddle and confusion of purpose. The fact is that under the last Government the funds were being created which will be sustaining the inflationary pressure for months to come.
If I am not impressed by the indignation of the Opposition at the situation which they have passed on, I am equally not impressed by the spirit in which, in public at least, the present Government are confronting the problems to which it gives rise. I have said already that I approve of the policy of less government in the sphere of industrial operations. But I do not approve of less government where the value of money is concerned. I know no responsible economist of any school of thought who believes that with a paper standard, the standard that we have at present and certainly will have in future, the Government have not the most momentous responsibilities of control. There can be no laissez-faire as regards

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aggregate demand. Yet it sometimes almost seems as if Ministers believe that there can be; that if they reform the law relating to trade unions, diminish the disincentives to initiative and reform an admittedly ridiculous tax system, they will have done all that it is reasonable to expect of them, that there will be a glorious increase of production and that inflation will die away, if not of its own accord because of a new spirit.
My Lords, this is a tragic delusion. Just as the Labour Government seemed to believe at first that the 1964 exchange crisis could be dealt with by mainly Socialist measures, so the Conservatives seem to think that the present crisis can be dealt with mainly by individualist measures. But in fact neither meet the problem. I can believe that if the disparity between the growth rate and the inflation rate was of the order of 2 per cent., then perhaps some abolition of the more obvious restrictions on enterprise and some greater order in industrial relations might perhaps bring about a rate of increase of production sufficient to bridge the gap. It was for that reason that yesterday I addressed a question on this matter to the noble Earl sitting on the Front Bench. I wondered how much he thought that production would increase as a result of the beneficial measures now being introduced. In my own judgment, my Lords, the gap is not of that order. In my judgment, we are living in a fool's paradise if we suppose that the measures of the mini-Budget and the proposed industrial relations legislation can stop the inflation. I say that it is an abdication of responsibility to stop there, and an abdication for which history will provide no excuse.
What then are we to do? I can well understand the reluctance of the Government to countenance the idea of a general freeze of prices and incomes; although if they go on without firmer policies they may well have to change their minds. I agree with what was said yesterday by the noble Lord, Lord Thorneycroft, that no policy should be ruled out a priori at this stage. But, quite apart from Election promises, which we all know can be broken at least as decently as rash promises to get married, a general freeze, if it goes on for very long, begins to
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make rogues of us all. Consider the situation. As a manufacturer I am forbidden, whatever is happening to my costs—and I am talking about a general freeze—to advance the price of commodity "A". What do I do? I lower its quality or I turn to the production of commodity "B", which is not yet on the market and which consequently does not come into the schedule. Or—to turn to labour relations—my best expert in a certain field comes to me and tells me that he has been offered £500 a year more by my chief industrial rival. "I'm sorry, old chap", I reply. "I must not give you a rise in your present position. But I have been thinking for some time that we need to fill a job with some different title. If you are willing to take that, then I think we could legitimately pay you £1,000 a year more than you are getting in your present one". My Lords, do you think that this is fanciful? I ask all of you who have knowledge of affairs if that is not a typical temptation under a wage and prices freeze which goes on for very long.
Well, then, what about an orderly incomes policy? I well understand the theory underlying this demand and I whole-heartedly respect the impulse towards it. If he were here I should like to say that, much as I have suffered from his tongue and his pen in the last 25 years, I greatly respect the courage with which the noble Lord, Lord Balogh, has often spoken (in defiance of the inclinations of many sitting on his own Benches) in favour of this policy. But it is one thing to demand such a policy; it is quite another thing to spell out the way in which to execute it. Suppose we tell the Coal Board that it will not be allowed to put up its prices or to borrow to finance an increased wage of so much per cent. Is that an acceptable incomes policy? Well, since the Government, willy nilly, are involved in the Coal Board, I should certainly find it part of an acceptable incomes policy.
But, my Lords, the logic of general regulation, the regulation of incomes throughout the whole system, carries you into very deep waters indeed. Even at the height of the war crisis, that great national leader, Ernie Bevin, refused to undertake the detailed regulation of wage bargains. I believe it would be an exaggeration to say that under the last Government, inspired by the best will in

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the world, the operations of the Prices and Incomes Board restrained the rise of incomes by more than a negligible percentage. I am bound to say, having searched long and far in this connection, that if there is a workable incomes policy it has not yet been made clear—at any rate, an incomes policy in this sense of detailed regulation all round.
So I am forced to the conclusion, unpalatable to some on the Cross-Benches, I fancy, that the main instruments of control must be overall rather than particular. I am not a bit doctrinaire about this; I am equally prepared in theory to operate both with fiscal and with monetary policy. The essential desideratum in a situation in which the growth of spending is so much outstripping the growth of production is that, somehow or other, the stream of expenditure (the "cash flow", if you like to expand Lord Thorneycroft's term) impinging on the stream of goods and services must not exceed the value of the latter at constant or, at worst, very slowly rising prices. If it is exceeding it, as it unquestionably is to-day, then the excess must cease.
Is this deflation? I can almost feel some noble Lords responding with this comment. Well, perhaps it is all a semantic question; but in my vocabulary, at least, "deflation" means a reduction of spending power below the point at which it will sustain constant prices and incomes rising with productivity. What I am asking for is not that. I am not saying that the volume of spending power should not increase. I am saying that it should not increase faster, or much faster, than productivity. A noble Lord reminded us yesterday of Humpty Dumpty's saying that you can use words to make them mean what you want. But I seriously suggest that it is not helpful to the understanding of what is really involved in this deeply serious situation in which we find ourselves if you call what is in fact a reduction of an excess rate of increase by the same term as you would apply to the creation of a positive deficiency.
The implication of this policy is simple enough, and I should have thought it to be—and I hope that I have said enough already to convince noble Lords that my sympathies are in some respects neither with the giants on one side or the pygmies on the other, to use one noble Lord's interesting terminology—eminently
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reasonable. Indeed, I would say that it is an incomes policy, but it is an incomes policy without the immense practical difficulties and political frictions inevitably associated with such a policy as usually propounded.
LORD BROWN: My Lords, may I interrupt to put just one question to the noble Lord? Is he implying that by the restriction of money supply you will stop the powerful unions from extracting large wage increases? That is the implication of what the noble Lord is saying.
LORD ROBBINS: My Lords, I am coming to that; I am not going to dodge the question. This is an incomes policy which, while containing aggregate demand within appropriate limits, leaves initiative as regards particular rates to the parties immediately concerned. On this view the Government should say to business and to the trade unions, "We do not in the least go back on the policy, supported by all Parties since the Coalition White Paper, of avoiding deflation, of endeavouring to secure, through fiscal and monetary policy, a volume of demand which, rising with production, will sustain adequate levels of employment. But beyond that we will not go, because to go beyond that involves debasing the standard; involves continued depreciation of money: and no group in the community, industrialists or workers, has the constitutional or moral right to demand that".
The Government should go on to say, "If any of you want that, it is your choice. You can have higher rates, but you must not expect the finance to be made available to provide a full use of labour and resources at that depreciating level of the value of money. We are not going to bail you out if you make bargains involving an excessive strain on the price level. Our policy is to maintain the purchasing power of money and a volume of demand which will provide high employment and incomes rising with productivity; just that". My Lords, is that unreasonable? I ask, is it really true that the great trade unions, the hitherto soberly led trade unions, which have meant so much to the social life of this country, wish to make demands on the products of industry under which full employment can be maintained only by continuing inflation? I refuse to believe it.

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That, my Lords, is a general statement. What should be done to translate it into practice? I am quite clear that we have to accept bygones as bygones. There can be no question of undoing the bargains that have been made in the last few months. Positive deflation, I say again, is no proper counter-measure to an inflation of the order of magnitude which has now occurred. The best we can hope for is to see that it does not go on; to contain what has happened; to prevent its continuing and to hope that, eventually, no further devaluation is implied. We cannot be certain of that. The rises of the last few months will take time—probably six months—to seep through; and although there is some inflation elsewhere, it is not nearly at the same rate in relation to productivity. The balance of payments, thank heaven! is favourable enough now, but it will not continue so for long if the inflation continues. Given this objective, let me make it perfectly clear that I have no doctrinaire objection to the use of the fiscal weapon.
Now, my Lords, I am going to say something that will shock my friends on the Government Benches very much: that I personally should have been much happier if the Government had not promised to give away their savings until the crisis had passed. I certainly should not object, even now, to laying additional increases of purchase tax—on luxuries, for instance—where that is practicable. But in the circumstances I am afraid that much reliance will have to be placed on monetary policy; and, having regard to the effect on interest rates and investments, perhaps more than otherwise might be wished.
I am equally clear that the present mild measures are not yet enough. I have great sympathy for the Bank, and its very distinguished Governor, in this situation. Public opinion, and often the Bank's political masters, expect it to provide at once support for the gilt-edged market and a limitation on the provision for aggregate expenditure. And, of course, my Lords, in present circumstances the two objectives are not necessarily compatible. Unless, therefore, we are extraordinarily lucky—and I hope that we shall be—we must expect liquidity to become tighter and interest rates to become higher
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if the depreciation of the pound is to be arrested. And if we are disposed to grumble at that—and here I would address a friendly word to the noble Lord, Lord George-Brown—do let us remember that, with the present rate of inflation, real rates of interest are not all that high. Suppose, my Lords, that prices are rising at the rate of 8 per cent. per annum. A man who lends money to the Government at that rate is in fact, poor fool! getting a zero return on his investment; and the Government, or the borrower, is getting off very lightly indeed.
My Lords, I have been too long. I return to my starting point. This, surely, is no time for recrimination on Party lines. Nobody with the record of the last Government is entitled to throw stones. But, equally, I would say in all earnestness that the failure, perhaps the inadvertent failure, of the present Government to make plain to the public the nature of the present peril, and to take steps sufficiently strongly to avert it, puts them in a very vulnerable position, vis-à-vis the general public. On one thing, at any rate, I hope, we shall all agree: that if inflation goes on at its present rate it will impair still further both our internal stability and our international standard. It is surely a time when all men of good will should talk things out, calmly and constructively, with a due sense of the momentous issues at stake.
5.8 p.m.
LORD RHYL: My Lords, I rise to address your Lordships' House for the first time and I ask for your indulgence. I do this with some anxiety. I have endeavoured to study the customs, Rules and Orders of this House, and I have come across that admirably phrased one against making sharp and taxing speeches. But, looking back over quite a long period of speaking in another place, I hardly ever remember making a speech that was not sharp and taxing; and learning graces and good manners in your Lordships' House may be rather difficult. However, I shall be consoled by what Disraeli said, when he entered this House, to a fellow Peer who asked him how he felt. He said, "I am dead, dead—but in the Elysian Fields." So if temptation comes my way I shall have to remember my condition and where I am.
My Lords, I want to make a speech on inflation and monetary policy which

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will to a large extent follow what the noble Lord, Lord Robbins, has said. But first I should like to make one or two points about the Treasury, as did the noble Lord, Lord George-Brown. It is perfectly true to say that no Department other than the Treasury ever gets so much criticism. What I am rather doubtful about is whether the criticism is really directed in the right direction.
Once again the noble Lord, Lord George-Brown, said that the Treasury was too restrictive, and that that was the reason why the Department of Economic Affairs was set up. I always thought that the setting up of that Department was (I must be careful) odd. After all, if you think the policy of a Department is wrong, the thing to do is to put somebody in to alter the policy. This is like saying, "The Foreign Office is too pro-European, so let us set up a rival Foreign Office which is anti-European". The people there would be no happier than they were in the Department of Economic Affairs. I believe that that blunder led to constant delays and confusion and added to the weight of debt we still have round our necks. I would only say to the noble Lord, who said that we cannot deflate ourselves out of a crisis, that we certainly can inflate ourselves into one.
I think that the reason why the Treasury irritates people is that it necessarily supervises all expenditure. It is the small matters that often irritate people, and the Treasury is far better, I believe, in small matters than in big ones. If you were to ask them to calculate the daily subsistance allowance in Bogota, they would produce a magnificent Paper. It would hardly be definitive because inflation there would have gone on and the report would have been all wrong before it was finished. But still, it would be a very fine piece of work. The trouble is, I think, that the Treasury is not so good in large matters. The old Gladstonian garrison of the Treasury surrendered unconditionally in the war and the fortifications were razed to the ground. Never since then has the Treasury had the will, or even the wish, to erect any defensible barriers. For example, so far as I know there has never been any Treasury doctrine upon what percentage of the national income can be taken in taxation without running the risk of serious inflation. Until very recently there was no doctrine whatever on
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money supply—on domestic credit expansion, as it is now called. It always seemed to me, when I was in the Treasury, that the general mood was: hope for the best, but fear the worst. It has always been sustained by a few rather vaguely Keynesian ideas.
In the watches of last night, the noble Lord, Lord Roberthall, for long Economic Adviser to the Treasury, made a distinguished speech. I do not think that many noble Lords had a chance of hearing it, but if they read it they will find exactly the sort of advice which was tendered by Economic Advisers to many Chancellors. I think it was a tragedy that Keynes died when he did. If he had lived he would have written a book about inflation instead of writing a book about deflation; and if he had written such a book every single noble Lord who has spoken would have quoted from it. I think that misinterpretation of Keynes has undoubtedly done a great deal of harm.
By far the greatest economic Minister since the war, I do not doubt, was Professor Erhardt, and he owed nothing to Keynes. I remember that when talking to him once I mentioned Keynes, and he said, rather vaguely, "Oh, he was one of the naughty ones, wasn't he?" But Erhardt was immensely successful. He put forward a policy of the purest classical economics. Everyone was delighted with his success—with the possible exception of the noble Lord, Lord Balogh, who no doubt would describe it, in his elegant phrase, as "globaloney".
Of course, the whole of monetary supply depends upon expenditure and fiscal policy as well. I entirely approve of what the Government have done. I only wish they had gone a good deal further. I find the criticisms of what the Government have done odd, to use that word again. What is this monetary policy—or lack of it—we have had? When my noble friend Lord Thorneycroft went to the Treasury, he noticed at once that there was no real policy or doctrine—at any rate, no firm one—about money supply, and for that reason he set up the Radcliffe Commission on Monetary Policy. Considering the immense intellectual eminence of the noble Lord who headed that Commission I thought that their Report was disappointing. I went so far as to say in another place that it

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darkened counsel. The reason, I think, was that the Commission tried to get agreement. We must all accept it as a fact of life that gang warfare between economists goes on all the time. Nothing excites them so much, nothing makes them sharpen their knives and brandish their bicycle chains more vigorously, than the words, "monetary policy". So they found in this document a sort of monster curate's egg, in which anyone could find something which he will pick up as a confirmation of his own views.
I do not want to discuss the Report, but two paragraphs are relevant. In the first, the Commission said how important it was that the Government should go on funding all the time—that is to say, selling Government stock outside the banking sector. They said this for two good reasons: first, the large sums of debt maturing every year; and secondly, the financing of the capital expenditure of nationalised industries. Among the arguments against nationalisation, for me one of the greatest is the immense difficulty of financing the capital expenditure. When the original nationalisation measures were put forward, this was never considered. It was simply assumed that the Government could sell any amount of Government securities they wanted. In fact they cannot do so. If you cannot do that you must raise taxation or raise the prices charged by nationalised industries, or pay for it by inflation. Normally it has been done by all three methods simultaneously. The classic example was when steel was re-nationalised. A sum of £650 million of Government stock was raised. The authorities did not dare issue a long-term stock, but offered a three years stock, practically the whole of which was put on the market and bought back by the authorities on the first day. In effect, the money to pay for this re-nationalisation of the steel industry might just as well have been printed in pound notes. This, of course, increased the money supply largely and increased the difficulties of the unfortunate Mr. Callaghan. The only thing to do about nationalisation is not to do it; to denationalise where you can and sell off any substantial bits that you can, and then, so far as the economy of the country goes, you are doing the Lord's work.
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The other paragraph in the Radcliffe Commission's Report to which I wish to draw attention was a sadly nostalgic one. It said that if prices go up by 2 per cent. each year then you want 5 per cent. on your money instead of 3 per cent.; if you lent £100 to the Government on a loan redeemable in 25 years' time then to get back the same purchasing power as you lent with a 2 per cent. rise every year in prices, it would have to be redeemed at 164 per cent. Of course, we are not in a 2 per cent. period: I suppose that we are now coming up to something like 11 per cent. now. So if you lent £100 to the Government for 25 years and there is an 11 per cent. inflation, in order to get back the original purchasing power at the end of 25 years you would need to have the loan redeemed at £1,358 10s. 0d. per cent. I very much agreed with the noble Lord, Lord Robbins, when he pointed out to the noble Lord, Lord George-Brown, that money is not, in fact, terribly dear. If you can borrow money for any length of time and this sort of thing goes on, you can pay it back in wastepaper. So much for that.
We have now had a monetary policy, and that came about through the Letter of Intent when we borrowed money from the International Monetary Fund after devaluation. I do not think the Treasury or the Chancellor of the Exchequer at the time could really take all the credit: "Non nobis domine"—" Not unto us, O Lord," but unto Pierre Paul Schweitzer be the praise. Still, a conception of controlling domestic credit expansion did come in, and it worked very well and had a good deal to do with the improvement in our balance of payments. But, as the noble Lord, Lord Robbins, said, for some reason it was suddenly let go three months before the Election, and we got this staggering 16 per cent. increase in the money supply.
LORD ROBBINS: Sixteen per cent. per annum?
LORD RHYL: Yes; 16 per cent. per annum. The last publication of the Bank of England did say, rather vaguely, that they thought things were getting a little better now. I jolly well hope they are! The control of money supply is of course helped by fiscal measures and so on, but it does involve selling stock in the market;

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and the noble Lord, Lord Robbins, rightly said that it may well involve a lowering of prices in the gilt-edged market. But given the destruction of the purchasing power, which is the alternative to this, it certainly seems to me to be a piece of affected whimsy to say that you are really protecting the gilt-edged market when you do not keep control of the money supply. But it is difficult, and will cause trouble.
The one thing that I hope we shall not do is to have Index Bonds; that is to say, bonds whose rate of interest is conditioned by prices. In the years between the end of the war and de Gaulle's coming to power as President there were eight French devaluations. During that period they issued a large number of different series of Index Bonds. As soon as de Gaulle came in, advised, I imagine, by Monsieur Ruess and Pierre Paul Schweitzer, they stopped these. The reason why they stopped them was that if you have an Index Bond you are admitting that you have stopped trying; you are admitting that you have accepted defeat. I do not think we should do that.
The last comment I have in this field is that I believe it would immensely help money control if the clearing banks were decartelised; that is to say, if they were free to bid up the deposits and to charge for advances as they want to.
My Lords, I imagine that it is now almost compulsory for a Member making his maiden speech in this House to quote Horace, and I will do so:
"Naturarn expelles furca tamen usque recurret."
If you substitute the price mechanism for Nature, you can translate it freely:
"You can try and get rid of the price mechanism, but it always beats you in the end."
Of course, that is what is happening here. All the quantitative restrictions on bank advances simply mean that the business passes outside the banking system. Many companies are lending money to other companies, and not going through the banks at all, simply because the rates do not express the true value of money. If you can borrow money from the bank, you can, in most cases, lend it to somebody else for much more. So a black market—or perhaps "black market" is not a nice expression: the French call it the marché parallel—has very naturally grown up. I believe that if you decar-
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telised the banks you would have far more control of the monetary system. It would be fairer, far more sensible and more efficient.
Well, my Lords, I have done. I entirely agree with the noble Lord, Lord Robbins, that the situation is very dangerous. I believe that inflation at this rate cannot be allowed to continue. I believe that one of the best methods of controlling it will be by a strict and stern monetary policy on the lines advocated by him. But it may not be easy. It is conceivable, I think, that the noble Lord, Lord Robbins, slightly understated the difficulties. But what is to be done? We cannot know that this will work. But the stakes are great, and rising every day, and in great affairs you must wager; it is not optional. So I say to the Government: "Use every method to control this inflation: use your monetary policy. But please do it with courage so that everybody knows you will carry it through: "L'audace! Toujours l'audace!".
5.25 p.m.
LORD SOPER: My Lords, it is my pleasant duty immediately to congratulate the last speaker and to say with what pleasure we have listened to his maiden speech, and with what pleasure we shall listen to forthcoming speeches which he will no doubt make to the House and in the process thus delight the House. It is no surprise to those of us who have known the last speaker in other places that he brings to your Lordships' House the quality of wit, a forking humour and an eloquence of speech which again put us in his debt to-day. I will not follow him either in his French references or the particular reference he made to the pitchfork. But in reference to his theological statements, I would probably agree with the second one—it is good Augustinianism—but I felt that when he, so to speak, regarded the Lord as being on the side of denationalisation he was going a little far, and from the "hot line" which I possess in this matter, and he does not, I assure him that he was wrong.
I notice that I am the only clerical speaker in this debate. That puts a responsibility on my shoulders, and also involves an insidious temptation which I hope to resist. I will not indulge in

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moral salvoes, even if I were able to discharge them; and I have no stomach for, and I am sure this House has no ear for, moral aspersions on the intentions of those who are carrying through, or intend to carry through, the particular measures which form the subject of this debate. What I prefer to do—and professionally it is with the last two words of the Motion that I am primarily concerned—is to try to examine in a very brief time three of the major concepts lying behind this package. I shall vote against the Government and for this Motion, because I believe that from the standpoint of human relations rather than economic arguments these precepts and concepts are faulty.
I begin with the reflection which the noble Lord, Lord Aberdare, invited us to sustain, that we are dealing with a package and not with a number of disparate individual projects and plans. This I firmly agree, and would therefore deprecate any idea that one can vitiate the whole programme by pointing out deficiencies in any one part of it. But I think the noble Lord, Lord Aberdare, if I may say so, is hoist on his own petard, because it is in the very nature of the overall intention of the Government that I find the most severe of the condemnations which I feel obliged to bring to them.
I should like to try for a moment to interpret what is the Government's plan. It is the increase of productivity; it is substantial growth rate produced by the release of the citizens of this country from inhibitions so that they will be free to make their own plans, and in fact will be so spurred to do. I would find this a satisfactory statement but for the fact that it involves the knowledge that these particular proposals as a package will be incentive. I find them disincentive. I cannot see that there is any incentive worth mentioning in the provision of supplementary benefits for the very poor. On the contrary, it is highly likely that, inasmuch as the Government have preferred supplementary benefits to what seemed to me to be its promises of family allowances, it will be putting into a more permanent form a particular category of the community which we obviously should like to see emerge from that category and mingle more freely and economically with
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the community as a whole. Is it not highly likely that those in receipt, or who will be in receipt, of supplementary benefits will continue to be in receipt of low wages, because it will be in the interests of their employers not to produce higher wages for them? Is that not disincentive? I believe it is. Furthermore, is it not disincentive that those who will be in receipt of this particular form of charity (for that is what it will appear to them to be) will be dissuaded from the kind of energy and enterprise which might easily be theirs if the family relationship were stressed, rather than the poverty of income they receive week by week?
If there is one supremely important element in this part of the argument, it lies in the fact that there is a large wedge in the community of people within the £1,000 to £3,000 per annum salary bracket who will be profoundly the worse off for the particular package deal with which they are confronted. This large section in the community will be above the level which would entitle them to supplementary benefits, but they will feel the full force of the indirect taxation and the increased prices and fares, and the provision that they will have to make for school meals, as well as for milk, if they so decide to provide it for their children. This is a very large section of the community, one upon which the welfare of the entire community largely depends. It is this section of the community which will remain poor, in which there will be no incentive but only a continuous sense of frustration.
There is another argument; that is, that if incentives are to be effective they must have two obvious characteristics: they must be clear and short term. A number of articles have been written—and no doubt your Lordships have read some of them—indicating how easy it is to disagree on who will benefit in which particular category, and what will be the sum total or the mean total of what these particular resolutions and plans will effectually mean in the family budget. It is possible to argue both ways, and I have read plenty of evidence which would take a great deal of computer wisdom to assess its relevance or truthfulness. What is the kind of incentive which is not clear and not proximate? I believe that that incentive does not exist, such is the condition of humanity at the present

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time. As I see it, the present incentives within the package deal for the large section of the community (leaving out the £10,000 a year and above bracket) are about as clear as a Scots mist and about as proximate as the Greek Kalends.
In the second place, this particular package deal envisages a unity in the community. I was impressed listening to the Prime Minister on the television the other night when he re-stressed the three words, "All of us"; that we were to regard ourselves as a community. This is exactly what I would desire; I find that this is a divisive package, which instead of cementing a community is rather like trying to plait a head of hair with pair of scissors. It is impossible under the present system of specialised and selective provision of public welfare to avoid that sense which I know as a social worker—and I have no doubt many of your Lordships know—divides the community into categories and destroys the entire sense that we are one body of people, and all of us are expected to make our contributions to the welfare of the society in which we live. All indirect taxation is fundamentally unfair, except in a Socialist community. The indirect taxation which, in various forms, will affect middle-class people, particularly under the impetus of inflation, is one which will divide the community irrevocably rather than uniting it; and this sense of bifurcation, this sense of discontinuity in the whole process of life within the community, is one which has been impressed upon me in the various contacts that I have had in the past three weeks with people up and down the country. That is not a large communication, and I make no special claim to have the ear of the community, but I am well aware of the length and depth of the comments in the Press which seem to me to substantiate the claim that, far from uniting the community, this particular package deal will tend further to divide it.
There is a further element and, I suppose, the most difficult of all in this package deal to put into precise language. If your Lordships will allow me to say so, it appears that there is a lack of elementary psychological insight on the part of many who imagine that if provisions are made for social welfare, those provisions will automatically or
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necessarily be taken up by those who are entitled to receive them. This is a fallacy, and it rests upon a truth which I have not seen very carefully noted, and I shall venture to put to you. It is the truth that one of the disabilities from which the poor suffer is an inbuilt fear of taking their own case, however logical and right it is, and pressing it to the limit. It is the fear that they will not be competent to do it; it is the frightening sense that forms and interrogations present to them, and the story of those who, entitled to welfare, have made no effort to collect that welfare is a very sorry one. In 1965, a particularly well-informed Commission on this matter came to the conclusion that about 27 per cent. of poor people entitled to welfare then did not proceed to the process of getting it. It is possible to say, "If they do not take the trouble, that is their look out". I do not believe that. I believe that we have to tend and recognise that in a community where some people are very poor, part of their poverty is poverty of outlook, poverty of conscience, poverty which, if you like, produces inferiority, poverty which needs to be cared for and cherished rather than to be regarded in terms of a computerised declaration of what their rights are, and how they can proceed to declare and establish them.
I suppose this is all the more evident in the contact with old people. I know that pride is one of the deadly sins, but I often think that pride among some pensioners is about their only last remaining virtue—or rather it is that which they would rather preserve even if they freeze in winter and have little food with which to comfort themselves. I make no sentimental claim on their part, but I am quite sure that there are innumerable pensioners, as well as other poor people, who, whatever the provisions of a complicated welfare system, will not be able to face the problems of declaring and ensuring their own rights, however clearly declared those rights may be, in formal fashion. That is why comprehension is a social virtue, where selectivity is a most dangerous virtue and, I think, aberration.
I agree that there will be some under the comprehensive system of welfare who will be scrimshankers, but I would rather see a few people in the community—and it will be a few—taking advantage of welfare, than a great many people in

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the community denying it, for reasons which do no credit in particular to their wisdom or even to their probity, but recognise the fact that they are human beings and part of their poverty is their inability to match themselves to the problems confronting as complicated a system as this system of welfare is. For these reasons, I do not find those who have embarked upon this particular set of programmes mean or vicious; I believe that they have it all round the wrong way, and they have it round the wrong way because they have probably listened too carefully to people like Mallarmé, who said, as probably some of you will know, that it is not the thing itself, it is the effect that matters, and do not paint the thing, paint the effect. In other words, do not worry too much about what the thing is that you are talking about, but get on with the way in which you may think it may work itself out.
What happened in Mallarmé's case is that the more he pursued this particular doctrine, the more incomprehensible his poetry became, until at last nobody could understand a word he was trying to say. That may seem an extreme case, but I think that the noble Lord, Lord George-Brown, was venturing in this same direction. It is the concept of the community as a whole that is lacking from this particular set of programmes; and precisely because there is a lack of community there is a disability that infects each of the three various propositions to which I have adverted.
If, for instance, there were a community in which the sense of the whole was sufficiently stimulated, then there would be an incentive which I suppose a great many people to-day regard as inferior to that of enlightened self-interest. I wonder. Whatever one may say about Cuba, or China, or Russia—and there are a great many things one would want to say against the régimes in those countries—they have demonstrated, surely, the power of community to overcome personal and private selfishness. It would seem to me in this regard that if the community were the first objective, the particular disabilities that now infect the disincentive programme of this package deal would be overcome.
Secondly, with regard to the division into various groups within the community,
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the class-conscious community, if the community itself were able to be established on the foundations of a sense of commonalty and of common responsibility, once again I believe there would be a response to the kind of programme which is now envisaged. Thirdly, without any attempt to deny that the Government have a genuine desire to help those who are impoverished, I would say that a great deal of the difference between a community and a number of atomistically defined and distinguishable individuals is that within a true community people have no pride that they must lose; they have a sense of right and obligation, and a sense of participation. It was Winston Churchill—was it not?—who said that the only place for recrimination is as a spur to action.
I want to declare my own conviction, which is that we have come to the end of the particular sort of work which perhaps could be run in past days by the various and differentiated programmes of capitalism or what-you-will. We have now come to a stage at which I myself am quite convinced that only some kind of Socialism will meet the increasingly complicated and difficult demands of the society in which we live. Therefore, even in what may seem an intrusion, with all the various programmes which have been adverted to and all the various methods that have been advanced by which we can meet this present emergency, I remain completely convinced that there is no alternative to the kind of programme which I had hoped the previous Government would be able to put into effect, and which when they come back to power I believe they will.
When Hitler started the war a Methodist local preacher in the North of England prayed as follows:
"Oh, Lord, convert Hitler; but if that seemeth too hard for Thee, take him home to Thyself."
I have no Party bias in saying that I venture to hope that the Government will be converted to a much more comprehensive sense of social welfare and may indeed change their mind. If they do not, then I hope, for their own sake and for the sake of the community, that they will give place to one which can. A community of that kind is no longer an ideal or a piece of airy nonsense. It to me, and to an increasing number of my ecclesiastical brethren, is the only alternative to

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a programme of inflation and more inflation, more and more bewilderment, and finally a collapse into the kind of trouble and the kind of issues which to-day we deplore as we see them elsewhere and which we earnestly desire will not happen here. My Lords, the answer to this debate, as I see it, is to say that we will not have this particular kind of package deal because we believe that a total refashioning of the community is required if we are to emerge from our present disorder.
5.44 p.m.
LORD DIAMOND: My Lords, I cannot say with what pleasure I follow the noble Lord, Lord Soper, not only because I thought he put such balance back into the debate and drew attention to the important human and community issues, but also because of what he said about the lack of incentive effect of the proposals which are now before us. I am very happy indeed to follow him because he dealt with the "incentive", or as he regarded it (and I agree with him) disincentive, effect of the package so far as the benefits and the social side are concerned. I want to deal with the alleged incentive effect of the tax reduction, because that has not so far been dealt with. It is of the essence of the case of the Government that anything they are doing is justified because of two reasons. The first is that the reduction in taxation will lead to an increased effort by the individual, being a great incentive to the individual, and the second is that, as a result of that process, there will be a more rapid growth of the wealth and income of our country. If your Lordships will bear with me, I want to direct your attention to those two propositions.
First, however, may I make one prefatory comment, in case your Lordships may have heard a reference to it during the course of this debate, to the Treasury. I do not recollect whence the comments came, but I think it is right to say that I have been privileged to be a Treasury Minister during the whole of the six years of Labour Government, and no Government, no Department and no Minister or group of Ministers could have been better served by individuals who devoted the whole of their thinking, the whole of their loyalty and the whole of their living hours to their Minister. I
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have seen two such individuals driven into hospital by overwork, and one killed by overwork—in the interests of the Department and of the Ministers they served. The pressures on the Ministers were endless and, as a result of our constitutional system, Ministers are required to be both departmental Ministers and Parliamentary Ministers, as well as constituency Members—ridiculously excessive tasks. They require their assistants of the top grade, of the medium grade and of lower grades to work similar hours under similar pressures. I know of no body of men of such excellence of mind and such devotion of spirit as we were fortunate enough to have throughout our six years of office—and I speak from first-hand knowledge.
The reason why I wanted to direct your Lordships' attention to the tax situation is that the Government are justifying what they are doing. I take a very practical view of politics and concern myself with the Motion before your Lordships' House and with the proposals of the Government. I am sure there will be other opportunities to discuss proposals which will be coming before us affecting industrial relations, inflation and a number of other issues. For the moment one has to concentrate on what the Government are doing and the reasons why they are doing it. The Government are proposing to reduce taxation because of the incentive effect of that reduction, and they recognise that room must be found for that reduction in terms of reduced public: expenditure so as to keep the pressure of demand stable—which I agree with. They recognise that they are making a number of reductions in public expenditure to enable the tax incentive to take place.
I want to examine all three propositions. First, that the tax incentive is a real incentive to the individual; second, that it is going to result in extra growth of the wealth of the community, and third, that the demand effect, as is essential under the Government's own proposals, will be kept constant by the piece of paper which has been put before us headed Savings in Public Expenditure.
First, may I say, very shortly, that I am sure it will be within your Lordships' recollection that the general structure of the tax is broadly this: that our direct taxes are highly progressive; that our indirect taxes are highly regressive; that

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the combination of the two in their impact on the average family is neutral, and that it is the social service benefits and subsidies that are progressive. Therefore if we could imagine a case under which we had a Government which wanted to put the clock back (difficult to imagine, but I am asking your Lordships to consider it purely as a conjecture, so as better to understand the situation I am going to put before you), and which said, "We have moved too far away from inequality towards equality; we want to put the clock back and move back towards inequality", what such a Government would do would be to reduce direct taxes, to increase indirect taxes, and to reduce the benefits and subsidies which arise from social services. That is what they would do.
Now I want to examine first the individual incentive argument that a reduction in taxation leads to harder work and greater effort. My Lords, as an ex-Treasury Minister I do not need to be satisfied that people prefer to have more money in their pockets rather than less money, and accordingly prefer to pay less taxes rather than more taxes. I need not waste your Lordships' time on that. What I am seeking to examine, if your Lordships will be patient with me, is the evidence in support of the proposition that the way to get people to work harder is to reduce their taxes. I am going to preface what I wish to say by my own experience. My own experience when I had considerable industrial responsibility was that when you wanted to get men to work overtime and asked for volunteers you always got those whose financial need was greatest. That is what made them work harder; and obviously it is the case that where a man has a given amount of financial commitment which he has to meet, where his taxes are increased and his net remuneration reduced, it follows that he must work the harder in order to achieve the amount of his commitment. So in that case an increase in tax would result in harder individual effort.
Your Lordships are not interested in my experience, but what you will be interested in is all the studies that have been made. If I may, I am going to refresh your Lordships' memories (because for aught I know it has been gone over many times before) on the various findings of
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the authorities and bodies that I have had drawn to my attention, in my previous capacity, in relation to this so-called "harder work" argument through reducing taxes. The first was the Royal Commission, the Radcliffe Commission; and what they said was:
"The present structure"—
that is to say, of income tax—
"and what people know about it do not have any significant effect on the productivity of industrial workers."
And, again, there is no significant association between informants' productivity effort as assessed by their working hours and the way they are affected by income tax. That is a finding with regard to industrial workers. Now may I draw your Lordships' attention to professional workers? In 1950, Professor Sanders, of Harvard University, carried out a survey of business executives and professional men. The great majority of those interviewed thought that effort was not being abated because of taxation. One small group thought that taxes drove executives to work harder, and another small group thought that the reaction was more often a relaxation of effort.
THE LORD CHANCELLOR (LORD HAILSHAM OF ST. MARYLEBONE): My Lords, I wonder if I may ask the noble Lord a question. Is not the logical conclusion of what he is now saying that you ought to put the direct taxes up to 19s. 11d. in the pound to make people work harder still?
LORD DIAMOND: My Lords, I am most grateful to the noble and learned Lord who sits on the Woolsack, that he gave me the privilege of listening carefully to what I was saying. It is quite clear that he is following the argument, and if I can have his attention while I pursue it I hope that in the end we may see him in the Division Lobby with us.
May I turn from the effective rate of tax to the marginal rate of tax?—because, of course, the argument is supposed to be that it is the marginal rate of tax which is the real deterrent. I would draw your Lordships' attention to the study of two economists of London University, Mr. Buck and Miss Shimmin, in 1969. They found that their data indicated little or no relationship between the marginal tax rate and the amount of overtime worked.

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They added that "overtime was worked in response to financial needs, irrespective of whether the rate of taxation was high or low."
Then there was a more general inquiry by Professor George Break, of the University of California, in 1956, and this is of interest to us because it deals with the question not of what people do about their taxes but of whether they complain about their taxes. He asked a sample of solicitors and accountants in the United Kingdom for their assessment of the effects of taxation, and checked their replies against action taken. The studies show—and I quote:
"That the showers of complaints, vehement and eloquent, against penal taxation echoed by the great majority of respondents interviewed for the present study, was infrequently transplanted into action."
And he concluded that "contrary to the frequently repeated injunction of so many financial commentators, solicitude for the state of work incentives does not, under current conditions, justify significant reductions in the role of progressive taxation."
There are three more quotations I could give, but I fear that I should weary your Lordships if I gave them. But, finally, may I draw your attention to the findings of the Jones Working Group into the "brain-drain", when it was alleged that so many qualified men were leaving this country because of the weight of taxation. The Working Group's finding was that "for qualified men the effect of taxation, if properly understood, is unlikely to sway a decision to emigrate." My Lords, I wish that I knew—and I am sure there is not a Treasury Minister, past or present, who does not wish he knew—for certain the motivation of every worker and what the effect of every tax provision would be. All I am saying is that the evidence makes it abundantly clear that one cannot say that if taxation is reduced it will produce harder effort. There is no evidence to support that at all. AH the evidence leads to one conclusion: that one cannot be positive about it. Therefore I am saying that the argument that the reduction of taxation is essential in order to produce greater incentive is not true.
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But even on the argument that it is a good incentive, I want to examine the kind of incentive that the Government are putting before us. As we all know, they are putting before us an incentive which favours the bachelor as against the married man—though why this sudden cult of the bachelor I know not: the married man without responsibilities against the married man with responsibilities and the non-producer against the producer. They favour the man with unearned income against the man with earned income. This is the Tory argument for what I think the noble Lord, Lord Watkinson, called the "pacemakers"—the leaders of industry, I think he called them. The incentive for them is that if they were to stop working and were to rely entirely on their unearned income, their benefit per pound of income would be the greater. It is absolute nonsense for the Government to come forward and say that their proposals, on their philosophy, the way they have put them to us, represent an incentive to the leaders of industry or to anybody else.
May I revert for one moment to a speech which interested me enormously yesterday, the one by my noble friend Lord Raglan. He pointed out that it is surely nonsense in the case of people at the higher levels of remuneration which accompany jobs of higher responsibility and greater interest to say that the tax effect on remuneration is the major element, the all-important element and the one, therefore, that is going to make the decision clear to the man whether he should accept greater responsibility or not. All the other elements, of job satisfaction, of engaging in something worth while, of accepting responsibility, of being a man—all these things must weigh much more with him than either a small increase in remuneration or the tax element within that remuneration. Therefore, I am saying that, so far as individual incentive is concerned, according to my philosophy there was no need for this reduction. According to current Tory philosophy, it is the wrong instrument they are using, because they are giving the greatest incentive to the non-producer, and so far as encouraging incentive or harder work is concerned, it is irrelevant.
But they go on to say that this will result in greater national economic growth. It is a statement made by the

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Chancellor of the Exchequer, and by the Prime Minister. I do not know what support there is for that statement. It does not tie up with any of the comparisons one can make. There is no correlation between levels of taxation and rate of growth. If you look at the O.E.C.D. tables, we all know that this country comes broadly in the middle of the tax tables and at the bottom of the growth tables. There is no correlation between tax reductions and increased growth. Nobody knows that better than Tory Chancellors. They frequently told us that in the thirteen years when they had the reins of government tax was reduced on four occasions and in terms of growth we moved from near (the bottom to the bottom of the league tables. So there is no evidence that it worked in their case.
And there is no correlation between the rate of public expenditure and growth of national income. I take one example, and there could be many more. France has a greater percentage of public expenditure than Germany and it has a higher growth rate than Germany. So I am saying that neither claim is established, neither by their philosophy nor by our philosophy. As my noble friend, Lord Soper, said, the social cuts will be a disincentive; and I am adding, the income tax cuts themselves will not be an incentive.
Before we leave this matter, I must turn for a moment, by virtue of some little experience I have had in these matters, to the so-called cuts in public expenditure. These cuts are of four categories, if your Lordships will be good enough to examine them. First of all, cuts in capital expenditure. There has been £30 million saved on the I.R.C. That, of course, is merely money that was loaned to the I.R.C. and would be returned; the I.R.C. has been making a profit, so the money is merely on revolving loan. There is £30 million on acquisition of ports, and this is merely transfer of assets; £20 million on land purchase, again transfer of assets; £42 million on the capital expenditure of the nationalised industries. That is one element. Another element is charges. There is some £97 million of additional charges for education and health. A third element is cuts in the public sector activities, such as very definite cuts in aid to
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industry and on roads. And the fourth element I can only describe as unreal, because it includes all those alterations to the figures which have no effect on demand at all; it includes very large figures for shortfall, for recalculation of the estimates, for unallocated items and for the contingency reserve. All these things have no effect at all on demand.
The Government's case is, and I accept it, that demand pressures must be kept constant, and that the cuts, therefore, must be provided in order to make room for the tax reductions. On paper these figures add up arithmetically—my word, they have scraped the barrel!—to a figure which is just comparable to the cut in income tax for the first year we are considering, 1971–72. But in terms of demand, I find it impossible to believe that the Government have achieved what they set out to do. The Chancellor of the Exchequer has said that these cuts provide a figure in demand equivalent to the income tax cut. He paid no attention to corporation tax, where there is a reduction of £60 million in the current year and £90 million in the year we are discussing, 1971–72; he paid no attention whatsoever to the reduction in betterment levy. I am saying to the Government, therefore—and I shall be pursuing them with Written Questions on this matter to get it thoroughly sorted out—that I find it impossible to believe that they have achieved the target they set themselves of finding room for these tax cuts.
Why do I draw your Lordships' attention to this subject at some length? Because it helps us to understand the motivation of the Government The Government action has clearly been, "We must provide the tax cuts. Therefore we must provide, or attempt to provide, or allege that we are providing, the room for them by way of cutting public expenditure". And I am saying that there was no economic need, and so are the Government. The Government are saying that you must keep demand stable as it is at the moment, and indeed for 1971–72. They are saying, "We accept the Budget judgment of the last Chancellor of the Exchequer, Roy Jenkins, and the demand is to be kept as it is". They are saying there was no need for it in those terms, but there was need in terms of incentive.
I am saying that that is not a reason; that is a rationalisation. I am saying

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that this is not an economic decision; it is a purely political decision to give assistance to the richer at the cost of the poorer—nothing more nor less than that. It is a plain political decision from which I want to dissociate myself and as many as think with me. Let me be absolutely clear: there must be any number of us on this side of the House who will benefit financially from the proposals put by the Government. We want none of it, and I appeal to all your Lordships, on the grounds of our common humanity, to have none of it to-night.
6.10 p.m.
LORD WADE: My Lords, I should like at the outset to congratulate the noble Lord, Lord George-Brown, on his maiden speech. The House will certainly be enlivened by his presence. I would also congratulate the noble Lord, Lord Rhyl. I am sure the House will benefit from his acute brain and the witty manner in which he expresses his penetrating thoughts.
I do not think that during this two-day debate any noble Lord has pointed out that ever since the General Election of 1955 Parliament has found itself, within a few months of the Election, faced with an economic crisis. Certainly that was so in 1955, in 1959, 1964 and 1970. The nature of the crisis has not always been the same. Sometimes it has been a serious adverse balance of payments, sometimes an increasing inflationary pressure. But the cause has been the same; namely, that the Government of the day have either encouraged a boom or allowed things to slide, having their eyes on the electors. I cannot expect the noble Lord, Lord Shackleton, or the noble and learned Lord the Lord Chancellor, to admit this in winding up, because it might be embarrasing for their respective Parties; but I think that in their heart of hearts they know that what I say is true.
However, the question this afternoon is not about the failure of past Governments, or to what extent the last Labour Government are to blame for this galloping inflation—although it is certainly a pertinent point in political debate. The question is whether the promises made by the Conservatives at the last Election
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are being kept; whether the expectations about the cost of living are being fulfilled, and, in particular, whether this House has complete confidence in what the Government are doing. My answer to that is: No, I have no such confidence. Yesterday the noble Lord, Lord Thorneycroft, speaking in support of the Government—at least, I think he was speaking in support of the Government—said. "I feel far from certain about the prospects of the present measures of the Government succeeding." I hope that is a fair analysis of what he said. Well, my Lords, I feel very far from certain. Before offering my main reasons for this view and summing up from the Liberal Benches I should like to take up two points, both of which I think are relevant to this debate.
Yesterday, my noble friend Lord Henley said that in criticising the Government we must not be unwilling to contemplate any change; that it would be a great mistake to get into the position of opposing any reform, say in the social services. I agree with him. But I am sure he will agree with me in saying that this does not mean that, with the rising standard of living which we all hope for, the overall cost of the social services will necessarily fall. It does not mean that as people can fend for themselves we can dispense, even in part, with our welfare society, It does not mean that there is any magic formula in the word "selectivity."
Of course it is right to help those in greatest need. But the welfare society—I say "welfare society", not "Welfare State"—is something more than just the creation of some kind of benevolent fund for the poor and needy. Of course we must be willing to accept change. But it must be remembered that there are, broadly, three stages in the development of most forms of social service. Welfare is at first provided by voluntary workers—the pioneers. Then it is taken over by the community and provided as a service for all. At a later stage, as the standard of living rises, many people can provide for some of their own needs. But as this process goes on, new services are developed by pioneers, services which can be adequately provided only by the community. Therefore the question is not whether there should be welfare service, but how much the community can at any one time afford to spend, and on what.

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It seems to me that the Government have missed a golden opportunity of presenting in a hopeful way the future prospects for the welfare society. They could have said: "The country is faced with this galloping inflation. It has a poor growth rate. This inhibits the improvement of our welfare services. Let us overcome these difficulties. When we do, there are almost unlimited prospects for improving and reforming the social services. That is what we wish to do. In that way we can create a more generous and more humane society." Notwithstanding what the noble Lord, Lord Aberdare, said this afternoon, rightly or wrongly the impression has been created that there are some members of this Government who regard the cutting down of parts of the welfare services as desirable, as an end in itself. Certainly I regret some of the cuts announced by the Chancellor. Unfortunately, this seems to fit in with a call for greater reliance on the motive of self-interest. If that is so, if that is to be the new climate, we must accept the consequences, for self-interest more than ever will affect the attitude of people to wages and salaries.
I come to my second point. On Monday there were a number of inspired statements in the Press about the Government's attitude to prices and incomes. Peter Jay, in The Times, wrote:
"The Government still reject an incomes policy."
I do not ask the Government to accept everything that is said in the Press. Obviously, no Government can stand entirely on one side. Every Government must have an incomes policy of a sort, even if it is the consequence of inaction or of several inconsistent actions. In the dark days of the 'twenties and 'thirties the Government had a policy on incomes which was a cutting-down incomes policy associated with mass unemployment. In recent months we have had a "Let things slide" incomes policy. The problem is, how much further is it going to slide. What is going to happen this winter?
I do not think we can wait several years for the position to improve. Our views may differ on the seriousness of the inflation and on the measures to deal with it, but it cannot be denied that infla-
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tion is greater to-day than it has been for many years, that the rate of economic growth is extremely disappointing, and that, although the balance of trade figures are better certainly than they were two years ago, there is truth in what The Times said yesterday, and repeated again to-day, that virtually all growth in export values reflects rising prices, while almost all the growth in imports represents rising volume. So the outlook is not too good.
The crucial question is, if inflation continues at the present rate during the coming months what are the Government going to do? Will the Government permit large-scale unemployment? If not, what? It is generally agreed that, owing to the inflationary climate in which we live, deflation, if it is to be effective at all, must be much harsher than it has ever been in the past—and heaven forbid that that policy should be adopted! Yet something drastic may have to be done. I believe that the only alternative is what Lord Henley yesterday called action on a broad front, a variety of measures, including some form of prices and incomes policy.
Yesterday, the noble Lord, Lord Balogh, criticised my noble friend Lord Henley for what he said about controlling wages and the unions, and he asked for my noble friend to be repudiated. I am sorry that the noble Lord, Lord Balogh, is not here to hear the answer to the attack which he made. If I may say so, I think he is more inclined to listen to his own speeches than to the speeches of others. Perhaps the fairest answer is found in a quotation from the Economist of June 6 of this year:
"Actually, the best suggestion on curbing wage inflation has come from the Liberals: that nationwide trade union bargains should have to be approved by the Restrictive Trade Practices Court, just as other much less dangerous restrictive practices are."
It need not necessarily be the Restrictive Trade Practices Court; some other body could perform that function, but it would, of course, have to observe certain guiding principles. This is one positive suggestion that I put forward. It is precise; it could be implemented, and it is not an attack on the trade unions. If representatives of employees and employers flouted the requirements of such a body, they

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would be in breach of the law. It is a radical suggestion, but I think it is sound in principle. After all, freedom has to function under an umbrella of the law. We have already accepted in principle that monopoly power must be controlled, and we acknowledge—I certainly acknowledge—that there must be some control if we are to enjoy full employment. In fact, some control is the price we have to pay for full employment. The question is, what restraint can we accept in order to achieve full employment? I do not believe that it will happen automatically as a result of exhortations or vague talk about a free society.
I come now to the question of voting. One of the merits of this House is that there is such great freedom that we are able to enjoy freedom of expression of different opinions. But, at the end of the day, there are only two Lobbies; there is no Lobby for those who say, "A plague on both your sides". As the issue is one of confidence, and we have not that confidence, my friends will go into the Lobby against the Government.
My Lords, may I be permitted this postscript? I am indeed worried about the lack of a sense of urgency, as I see it, in dealing with this serious problem of rising prices and continuing inflation. However, I must say that I am also disturbed at the number of political commentators who have stated in recent weeks that the remedies for dealing with inflation are available, but they are all so unpopular that they would be politically impossible. If that is really true, then it is not just the Government who are on trial, political democracy is on trial.
6.24 p.m.
LORD SHACKLETON: My Lords, I believe that this has been a very notable debate and that the standard has been universally high. In addition, we have had some particularly notable maiden speeches. There was a speech from my noble friend Lord George-Brown, who seems to have disappeared as quickly as he arrived. He apologised for being absent yesterday, so we must take it that that apology covers to-day as well. Certainly it was a notable speech. We also had a characteristically witty speech from the noble Lord, Lord Rhyl. It was characteristic except, as he pointed out, in one respect, in that it was neither
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sharp nor taxing. He is perfectly right. He was a very sharp and taxing speaker in another place. Most of the time he was also extremely funny and very much to the point, and there is no doubt that he will add to the humour of your Lordships' House. I suspect that we, on this side of the House, will not always enjoy some of the remarks which the noble Lord will make to us, but certainly he is an ornament to your Lordships' House.
We also had a number of notable speeches yesterday. There was the speech of the noble Lord, Lord Avebury, who plucked up courage after many years to tackle a maiden speech from that most difficult of all places, the Cross Benches. It is always only with luck that you get heard from there, and I congratulate him, and also my noble friend Lord Hamnett. In particular—and I think it will be no reflection on other maiden speakers when I say this—we were all deeply impressed by the speech of the noble Baroness, Lady Lee. She made a deeply moving speech. I always think we make a slight mistake (because nobody pays any attention to it) in expecting maiden speeches to be non-controversial. What is required—and this is consistent, at any rate, with your Lordships' approach—is to observe good manners; and my noble friend Lady Lee, and the other colleagues I mentioned on both sides of the House, have fulfilled that requirement.
Owing to the somewhat dynamic way in which the order of speakers has moved, I find myself, contrary to expectations, speaking before the noble and learned Lord who sits on the Woolsack. Although we have had the benefit of some running commentary from him during the day, it has not always been audible to us this far in the middle of the Chamber. I was going to say, and with some certainty, that we had" had a characteristic speech from him. I will say that we shall have a characteristic speech; but the only speech I have heard from him so far in this debate was when my noble friend Lady Birk was speaking about false teeth, and he advised the House that the only thing to do was, "To take one's snappers out". I do not know whether this has a deep significance from the standpoint of the Government's economic policy, but those of us who are required to do so will do so. I may say that the noble

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and learned Lord seems to have been in good form at the Mansion House the other night, if the Guardian newspaper is correct. He asked that dangerous question—I think it was the noble and learned Lord—"Do we look like dinosaurs?" He must speak for himself in this matter. I only hope that his speech to-day does not show that somewhat dinosaur-like quality, the sort of thundering, trampling approach which overwhelms a large quantity of undergrowth without always revealing the truth. I think it was in the mesozoic age that dinosaurs existed, and I hope that Conservative policy philosophy has not gone back so far as that.
Our debate has ranged very widely because noble Lords have come here sometimes from a great distance, and I should like to welcome those noble Lords, not only on that side of the House but a few on this side of the House, who have made the special effort. I suspect that there are a few more on that side, and I think that some of them—including those who held office in previous Governments—are somewhat surprised at the turn Conservative policy has taken. Without going so far as to echo all that the noble Lord, Lord Boothby, said about the virtues of Mr. Baldwin's policy, I must say that I see a departure, a distinct difference, from the policy pursued by previous Governments, whether it be the Government of Mr. Macmillan, the noble Earl, Lord Avon, or even perhaps Mr. Baldwin.
What we have to do this evening is to judge the measures that are before us and make a decision, and clearly there are important differences of Party attitude in this matter. It would be absurd for us to pretend that we are not sharply divided on this subject. That is no reason why, while philosophies clash, we should not look at the particular proposals on their merits. The Government's own objectives are to reduce the role of Government, to reduce direct taxation and to create more incentives in industry. There are a number of other objectives, and we have been told that these measures represent only the first step towards their achievement. I do not consider, and I believe that very few in your Lordships' House, including noble Lords on the other side, consider that the declared objective of a 6d. cut in the stan-
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dard rate of tax is going to be much in the way of an incentive; and my noble friend Lord Diamond has proved that quite conclusively. On the other hand, it is a redistributive measure associated with the other proposals which will hardly benefit the majority of Britain's wage earners. It is very difficult to see any less government resulting from it.
When we look at the proposals we are very surprised and depressed. Let us take one example which has been a matter of uniform criticism—the abolition of the Consumer Council. This seems to me an act of sheer cannibalism. The Government are eating their own child, and the special foster mother, the noble Baroness, Lady Elliot of Harwood, has already expressed her views in no uncertain terms on the Order Paper. No reason whatsoever has been given for this step, other than the general statement from the Government that there will be desirable things which we can do without. They are determined, they say, to pursue the essentials, but some of the desirable things we must dispose of. My noble friend Lord Donaldson of Kingsbridge, whose speech I have read, made a strong case against the Government on this point.
That is not the only example. Noble Lords have referred to the Industrial Reorganisation Corporation and the case has been very strongly put. I know of no industrialist—perhaps there are some on the other side: I am looking at the noble Lord, Lord Nelson, and others—who does other than regret the abolition of this body. One of the consequences of this action is that it has brought Government much more directly into industry than would have been the case if it had been preserved. They have had to work direct to Rolls Royce in a deliberate and direct action. It is worrying when one sees an institution of this value, which other countries are beginning to copy, removed without any examination other than within the Government.
When I heard of it, I began to wonder whether it was wise to talk about other bodies. I think my noble friend Lady Birk was rather rash to talk about her Health Education Council: the noble Lord, Lord Aberdare, will probably be abolishing that in a few days' time.
LORD ABERDARE: No.
LORD SHACKLETON: I am glad. We have the assurance that it will not be abolished. If I go through a list, can I get assurances from the Government? Will they preserve the Countryside Commission, the Arts Council and various other bodies? One wonders why they have picked on two particularly valuable institutions; namely, the I.R.C. and the Consumer Council.
Then we come to their policy in the regions, and their policy with regard to investment grants. The previous Government were well aware that we were spending a great deal of money in the regions, something around £300 million a year, and we recognised that there was probably scope for using that money more effectively, with more selectivity. So the previous Government set up a thorough study into the effectiveness of investment grants, but instead of waiting for the completion of that study this Government went ahead and abolished them. Again, this has been the subject of criticism, not only in the Labour Party but very widely throughout industry and among the public at large.
It is interesting, since the Government attach some importance to their investment allowances, to see that the Institute of Directors, who also carried out a careful study, hiring a well-known firm to do it, came to the conclusion that in taking their investment decisions directors paid very little attention to tax allowances. Here again I think the Government would have been well advised to wait for the study. They abolished regional employment premiums which, again, following the remarks of my noble friend Lord Diamond, are entirely negative from a demand management point of view. It is rather curious that, in a debate which is predominantly economic, we have heard very little from the Government about demand management.
As regards social policy, the noble Lord, Lord Platt, my noble friend Lady Summerskill, the noble Lords, Lord Boothby and Lord Soper, and many others, have pointed to the ill-effects of the policy which the Government are following. I shall not describe them again, beyond pointing out that there is real anxiety about the decisions that have been taken with regard to milk and meals. The noble Lord, Lord Aberdare, has not answered questions on these decisions, and the concern will continue. He
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said that the Government are going to make a special study to see whether there are any ill-effects. That rather suggests that perhaps the Government are a little less confident about the policy which they are following in this matter.
But the most worrying point in all their proposals is this. The noble Lord said that the family income supplements will really meet the needs of those who are below the official poverty line. The fact is—and the noble Lord, Lord Soper, made this point—that a recent survey showed that something like 50 per cent. of the people do not take up these benefits. It is no use noble Lords saying that they "jolly well ought to". These people have their pride, or perhaps they do not know how to go about obtaining benefits. And the Government will not solve this problem with the £8 million.
The hour is late and I shall not go further into the other arguments which have been advanced. But our major condemnation of the Government's package, and the other policies associated with it, is its irrelevance to our real problem. There is a logic, I admit, behind the Government's policy. They have diagnosed the ills of our country as being too much government, and they believe that 6d. off the income tax—the carrot—will compensate people for the stick contained in the extraordinary collection of measures. The Government have gone in for such old-fashioned remedies that I was surprised they had not brought out the leeches; but then I suddenly remembered that they were making extensive use of special bank deposits.
But what they are now going to carry through does not meet the subtle malaise that afflicts not only our own country, but many other advanced communities. Furthermore—and I put this very seriously to noble Lords in this House, particularly some of the younger noble Lords who are well aware of this—the Government ignore the fact that there is real social unrest, especially among the young who are interested in something more than the pursuit of selfish or economic ends. Noble Lords may say that the Chancellor cannot take this sort of factor into account when he is framing his economic policy, but I say that there are forces at work of a kind which show a sense of fairness and a sense of justice, and the feeling is that this package is

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basically unjust. There will be a feeling, too, in relation to industrial matters that a package of law is no answer to the underlying social uncertainties within the trade unions.
There is almost a sign that the Government are going back to 19th century economics, and once again the iron law of the 19th century economist will be shown to be the disaster that it has been hitherto. The Government have followed policies and have done particular acts which will now make it impossible for their main policies to succeed. They have lost the confidence of many people (because there is still a strong sense of fair play among the British people, and nobody can say that this package is fair), and they have lost also the confidence of many in industry, particularly in relation to the inconsistencies of their policies with regard to investment and the I.R.C.
My Lords, we shall soon see—and the noble Lord, Lord Balfour of Inchrye, revealed this at Question Time—a confrontation with the leaders of some of the nationalised industries, and the Government will not be forgiven if they damage some of these great national assets. I do not believe that any Government or any Prime Minister in the last 70 years has pursued such a deliberately doctrinaire policy. I say this not as a term of contempt: I say it because I believe that the present Prime Minister and the leaders of the Party opposite are deliberately following a policy based on a doctrine. But this will not meet present-day needs. One of the painful facts is that any Government coming into office will come in with ideas as to the long-term strategy that they should follow. We came into office with a long-term strategy, and it was at the cost of great unpopularity that we had to pursue other policies which were not part of our original pre-Election thinking. We had to seek, especially, a strong balance of payments situation, and many of our aims and, indeed (let me admit this), some of our policies were negatived; we were unable to fulfil them because of the overwhelming need to deal with the immediate situation, the temporary balance of payments situation—a problem which has bedevilled this country ever since the war.
My Lords, the Government justify their actions by saying that they are doing
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what they were elected for. That is a pretty dangerous argument, especially when you look at what was said on the subject of prices—and I will not embarrass noble Lords by reminding them of it again. The painful fact is that, however much the Government may dislike it, their choices of long-term strategy will always be bedevilled by the short-term needs of the situation. This has been the message which has been coming out from speaker after speaker—the weighty words of the noble Lord, Lord Robbins, the noble Viscount, Lord Amory, and others—and this is the painful lesson that the Government have to learn. We are all agreed, I think, that inflation is the present-day threat, as opposed to the balance of payments situation, which, as we know, is still very strong. The trend continued to be favourable, despite what Mr. Heath said at Election time, although perhaps that was not his fault because the figures we were all given were not right. But the balance of payments situation is strong, and there is time now for the Government to carry out certain essential deeds and policies. However, the pressing problem is the problem of inflation. What are the Government doing about it? We know that the cut in income tax has been received with hostility in some quarters and boredom in others. It achieves nothing towards dealing with the problem of inflation. As to demand management, the Chancellor said in relation to his package that it was neutral from a demand management point of view. Actually, it is not; and although I would support my noble friend in his praises of the Treasury I had hoped that the Treasury would in fact have corrected their views as to the demand effect of the package.
My Lords, the simple fact is that, within the economic situation—and this is what is making it so difficult for the Government to carry through their policies—whereas the very poor may get some protection and the majority of us in your Lordships' House will be better off, a very large number of people (indeed, the majority of them) earning between £1,000 and £3,000 a year, whether they be workers or management, will be worse off; and no one has disputed this. If I may put it another way, a Lord-in-Waiting—and let me again say how much we appreciate their hard work—benefits

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very little from the Government's measures, but senior Ministers benefit quite a lot. I hope that Lords-in-Waiting have some private means as well; otherwise, what the Government have done will be very discriminatory. But it is in this respect that the public as a whole are aware of what the Government are doing.
The Government have been justifying the measures they have put forward by saying that the previous Government's policy has failed and that they must try something new. This, of course, is one of the most dangerous arguments that one can use. I would be the first to admit—and we may as well agree on at least some of the facts—that the statutory incomes policy, to put it mildly, was not the success that we had hoped. It has certainly led to unfortunate repercussions, and I agree that the Government are having to face some of those repercussions. But it is another thing to say that the Government's monetary and fiscal policies, and their approach to the question of wage settlements, constitute, in the words of the noble Earl, Lord Jellicoe, "in the broadest sense a policy for England". As the noble Lord, Lord Drumalbyn, showed last night—and he did not seem quite as happy with his brief as I expected—the Government seem to have ignored the way wages have moved and how this whole inflationary and cost inflationary development has come about. My Lords, at some stage we have to achieve a total policy—and I agree with what my noble friend Lord George-Brown has said—in which, among other things, there is in fact an effective voluntary prices and incomes policy; and yet it is at this moment that the Government have chosen to pursue courses that will destroy the basis of voluntary co-operation by, in particular, their proposals for industrial relations.
One of the more startling things is the kind of figures the Government quote with regard to the number of days lost through strikes. They find what seems to be the most damaging comparison—a sort of guilt by association—and say that it is worse than at any time since the General Strike of 1926. But what they do not say is that the number of days per worker lost through strikes in this country is still only half what it is in the
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United States, whose unsatisfactory policies in the matter of labour relations they propose to emulate in their own industrial relations policy. My Lords, if the Government believe it is right—and it may well be that it is a policy that in time could work; I would say that it cannot—it does nothing to meet the needs of the present situation. The noble and learned Lord who sits on the Woolsack had quite a lot of fun in the debate on industrial relations the other night, the purpose of which, if I may say so, he misconceived. We did not approach that debate in any partisan spirit, and there was a lot of free discussion. He repeated then the Government's willingness to talk to the T.U.C. But the snag is that the Government will talk only on the basis that there is no discussion on, and there will be no variation from, the main principles of their package.
My Lords, that it not negotiation. I should like again to appeal to the Government, and I would ask the noble and learned Lord who sits on the Woolsack, even if he cannot say anything to-night, to take it very seriously indeed—and this is honestly meant as a serious suggestion. We are faced with a dangerous and difficult position. I agree that one can exaggerate it, but we know, as the noble Lord, Lord Robbins, made clear, that we have to try to meet the present-day problems. I would appeal to the Government: will they now, without any strings attached, sit down with the C.B.I. and the T.U.C. to try to hammer out a policy to deal with inflation? My noble friend Lord Beswick mentioned this and pressed it at the outset of the debate, and my noble friend Lord Shepherd has repeated it again. We have still had no reply.
Mr. Vic. Feather has given a great deal of constructive thought to this subject—and again there is no reply from the Government. It is quite astonishing. I suggest to the Government that they should postpone the introduction of the Industrial Relations Bill. I do not ask them to drop it entirely; I would ask them to postpone it. It is vital to get some sort of talk going, to arrive at some sort of consensus in order to achieve some kind of voluntary prices and incomes policy. Mr. Vic. Feather, the General Secretary of the T.U.C, to whom I spoke this morning, has again authorised me to

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repeat his undertaking to sit down with the C.B.I. and with the help of the Government to discuss the whole of the country's economic problems, the problem of the growth of investments, of employment and in particular of an incomes policy. The Government have little to lose by doing this; but we, as a country, have a great deal to lose unless they do it.
My Lords, we have been criticised. The noble Earl, Lord Jellicoe, asked what we should have done. That is a perfectly fair question. First, we should not have introduced this regressive and socially divisive package, but we should have persevered believing that the Government in this country depends on consensus. It is not enough for the Government to say that the electorate were behind them at the Election; for they will very soon find that the electorate is not behind them. There is no alternative other than to face and to talk about the problems within the country. The long-term strategy, whether it be right or wrong—and we think it wrong—fails entirely to deal with this most pressing problem. It is not just we on this side of the House who are saying this; many others, in particular our friends in Europe, are saying so. I should be the first to admit that there were many things in the previous Government which were not successful; but that Government would not have abdicated their responsibility in the way that I believe the present Government are doing. I beg noble Lords to face the particular issue. Either we continue on this present path and in the end be driven into deflation and mass unemployment, or we attempt to hammer out a policy which, even if it does not work totally, is at least acceptable, is regarded as socially more just and is one that will work on that pressing problem of inflation.
It is for the Government to take the lead—not to make speeches about "Use your Freedom Aright!" which helps no one. It sounds fine—although it did not get much enthusiasm at the Guildhall the other night. Nor does it help to make references of the kind that Mr. Davies (but perhaps I will pass from Mr. Davies; it is an embarrassing subject) made in the other place. I would urge your Lordships—for we cannot defeat the Government easily in this House and if we were lucky enough to do so we cannot bring
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the Government down—to show by your votes to-night that we want to urge the Government to try a different tack, to get the right sort of seaway, which I am sure the noble Earl, Lord Jellicoe, would like to have. At the present time they are running out of the ability to manæuvre and they will leave behind a country which is a good deal less happy, a good deal more worried and a great deal less socially just than it has been in the past.
6.54 p.m.
THE LORD CHANCELLOR: My Lords, the noble Lord, with his characteristic courtesy and urbanity, has just given the second instalment of what we were assured at the beginning of this Parliament would be the most formidable and determined Opposition that this House has ever seen. I suppose that I hold in my hand, or on the small trolley on which I am permitted to place my papers, about one and a half hours of constructive oratory which I might address to the long debate which we have been having. Happily I know the wishes of the House in this matter; and if your Lordships will promise not to accuse me of skimping my work or failing to answer each one of the forty speeches which have preceded mine, I will endeavour to compress into a relatively small compass what I have to say.
The noble Lord, Lord Balogh, in one of the more charitable of his recent utterances, delicately referred to me as "Pooh Bah". It is true that Pooh Bah held the Lord Chancellorship, among various other offices; but I confess that, having been cast by my Leader for a role on, I think, nine occasions during the current eleven days of Parliamentary Sittings, I feel much more like that broken-down old cab horse "Black Beauty", in Anna Sewell's famous novel; and I hope that your Lordships will forgive me if I put a few thoughts before you in a slightly ingenuous way.
But I must begin by thanking noble Lords on our side of the House and on the Cross-Benches, and indeed on the Opposition side, for taking part in this debate. We are not very good in this House at public relations, but if anyone were tempted to criticise the House of Lords as a place where people do not come, it would be, I think, useful for him to look at the state of the Chamber

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this evening. And if we may just for a moment compare ourselves with another place, to which I also hold an almost unqualified allegiance, I must point out that in two days we have staged a debate on one of the most controversial and difficult subjects to be handled in any Parliamentary Assembly. We have put on forty-one speeches, so far as I can count them; we have had among the speakers two ex-Chancellors of the Exchequer and a number of Privy Counsellors; there has hardly been a word in bad taste, and certainly a number of very notable speeches have been made. Therefore if anyone ventures to criticise this House I hope he will remember this debate and see how we have done things here—something which I think can give universal satisfaction to us all.
I must also congratulate five maiden speakers. The noble Lord, Lord George-Brown, I think, only comes into the category of demi-vierge, and of the remaining four, with great respect to the noble Baroness, Lady Lee of Asheridge, I would say that the only true Parliamentary virgin was the noble Lord, Lord Hamnett. With the others I have found myself debating for the greater part of my adult life. I hope, therefore, that they will forgive me if I treat their admirable remarks in the ordinary way in which such remarks would be treated in the course of a consecutive debate. Certainly the noble Lord, Lord Avebury, whom I have not had the advantage of hearing before in either place, was hardly a Parliamentary newcomer, since he succeeded to the title in 1929 and has remained a Member of this House since he was 21–36 years ago. I am delighted that he has found his way here at last, and I hope that we may have the opportunity of meeting him on a number of subsequent occasions.
My Lords, coming to the speech of the noble Lord, Lord Shackleton, I could not help thinking that I was justified the other day, since he has referred to the subject, in describing the extraordinary attitude of the Labour Party on the Motion on industrial relations, like its attitude on to-day's debate, as something almost schizophrenic. I think I know the reason. The reason is that all this talk about a jungle does not sound so nice in relation to strikes. This talk about a free-for-all, and about the Tory philosophy of greed,
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is not quite so convincing in the light of the galloping inflationary wage settlements of which the noble Lords on the Liberal Benches spoke. The result was that in the industrial relations debate noble Lords in the Labour Party contracted out; they withdrew their labour, as they were entitled to do, and as they will continue to be entitled to do, and left the noble Lords, Lord Brown and Delacourt-Smith, like two melancholy Casabiancas defending the burning deck from which all but they had fled.
LORD SHACKLETON: My Lords, I realise that the noble and learned Lord was very upset that there was no audience for his remarks on that occasion. But some of us have read them, and there is no need for him to repeat them again to-night.
THE LORD CHANCELLOR: My Lords, I was only saying how right I was—which always gives a Parliamentary orator some modest satisfaction. I would not have referred to the subject at all had not the noble Lord, Lord Shackleton, deliberately provoked me into doing so.
Now my Lords, if I may, I will deal with what seem to be the salient issues in this debate. I shall say very little about what is genuinely troubling a large number of noble Lords on both sides of the House—the immediate situation with regard to wage settlements. I can assure noble Lords that any reticence on my part in this respect is not due in the slightest degree to complacency: Her Majesty's Government view that situation as gravely as any noble Lord who is here.
But I would venture to point out to the Opposition Front Bench that their Motion does not relate to the immediate situation. That is the context in which this Motion is being debate, but the Motion relates to the measures of October 27, proposed by the Chancellor of the Exchequer; and, if I may point them out, for the most part, they do not take effect until April, and are not intended to do so. They are intended to deal with the middle-term situation. The immediate questions relating to the wage settlements must, I think, be viewed in a different debate; and I can only wish that the natural sense of occasion of noble Lords opposite had led them to withdraw the present Motion and to put down another

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Motion relating to it, if they had wanted a considered answer.
I must say two things to the House about remarks which have been made about that situation. The first was the astonishing interruption by the noble Lord, Lord Shepherd, of my noble friend Lord Thorneycroft during his speech. "What does an extra 1 per cent. matter?" was the burden of his criticism of my noble friend on the occasion of his interjection—little remembering that the noble Lord, Lord Beswick, as reported at col. 938 of the OFFICIAL REPORT for that day, had said, albeit in a different context—
LORD BESWICK: In a totally different context.
THE LORD CHANCELLOR: He had said:
"In such a case even 1 per cent. can have enormously cumulative effect."
Of course, what we have been facing in the recent situation (again I should not have mentioned this unless I had been provoked into doing so) is the after-effects of the Labour Government's policy in the run-up to the General Election. We were faced with a situation in which the Labour Government, through the mouth of Mrs. Barbara Castle, had said—she said it at the turn of the year—that increases above 3½ to 4½ per cent. were inflation. We had an offer by the employers of 14 per cent. We had an inquiry between that and the demand of the workers for 55s. (I forget what percentage that would be) which resulted in a settlement that was 1 per cent. above the 14 per cent.; and it is directly relevant to some of the most vital arguments which have been deployed in this debate.
It is vitally relevant to point out that that offer of 14 per cent. ensured (I think from the start, but certainly from the very early days when I first became aware of it) a built-in clause that the take-home pay would be nothing less than £16 10s.: not perhaps a high wage but, none the less, the propaganda was to bring out the purely imaginary—or at least irrelevant—figure for this purpose of the £11 10s. man. What we saw in that settlement; what we have seen in the future demands, is the £25-a-week man, and the £50-a-week man demanding much higher increases, and producing the
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largely irrelevant figure of the lower-paid man in order to excite public sympathy. That is something which cannot be allowed to pass without adverse criticism.
LORD BROWN: My Lords, may I interrupt the noble and learned Lord?
THE LORD CHANCELLOR: In a moment, my Lords. I think that is something which cannot be allowed to pass without public criticism, and it will have, if I am given the time to show it, a direct relationship to some of the most important arguments which have been deployed in this debate.
LORD BROWN: My Lords, the noble and learned Lord is now talking about differentials. He spent five minutes sneering at my speech on differentials on November 4. He sneered again to-night. Is he really going at last to take notice of the fact that differential wages are the problem of the economy to-day?
THE LORD CHANCELLOR: My Lords, I think the noble Lord and I had an exchange which apparently he remembers with some bitterness. But I should be disregarding the injunction of his noble Leader not to talk about the debate the other day—which is so painful to him—if I were to pursue that particular line of argument at the present time. I would only say this in addition about the present situation. The noble Lord, Lord Beswick, in opening the debate, and again the noble Lord, Lord Shackleton, in winding it up on behalf of the Opposition, showed that they wholly misunderstood the nature of what was meant by the disengagement of the Government. They would have clearly understood it better if they had listened more carefully to the speech which my noble friend Lord Thorneycroft delivered yesterday.
My Lords, where you have a reasonable offer—indeed, an offer which, by Mrs. Castle's standards, would have been grossly inflationary—for the Government to lend their own services to increase it in order to avoid industrial action would be the straight way to national bankruptcy; about which the Liberal Peers who have spoken in the debate were quite right to warn the House.
There is only one other thing that I should like to say directly to the noble Lord, Lord Beswick. It is all very well

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to talk about self-interest, greed, and selfishness as being erected into a social principle. But the only thing which he quoted against the Leader of the Conservative Party was his speech at the Guildhall, when he said that a sense of responsibility was the social principle in which the Conservative Party believed. And as I shall try to develop in due course, as the argument proceeds, in my judgment at least, and I think in the belief of the enormous majority of the Members of this House, a sense of responsibility is not only not the same thing as selfishness; it is also directly the opposite of selfishness.
LORD BESWICK: My Lords, the noble and learned Lord might as well get his facts right. I did not quote his friend the Prime Minister in anything that the Prime Minister said at the Guildhall Banquet in this connection. I was quoting what he said in the television interview, and I was quoting him in connection with his advice that each man should look after his own interest.
THE LORD CHANCELLOR: My Lords, what the noble Lord said, according to Hansard, was:
"But to-day the Government have elevated selfishness into a social principle."
Then, after a few words of comment, he said that Mr. Heath was reported as saying:
"What it means is that people must face up to their own responsibilities …"—[OFFICIAL REPORT, 17/11/70, col. 938.]
It is for the House to judge whether I have been fair or unfair to the noble Lord, but it seems to me that I have nothing to retract and nothing to modify. The fact is that responsibility is one thing and selfishness is another.
I now turn from the immediate situation and from the noble Lord, Lord Beswick, to what seems to me the underlying problems in this debate. At the risk of incurring the displeasure of my noble friend the Leader of the House, I must say that I see the underlying seriousness not as a matter of crisis—and I felt my noble friend was relating the position to this when he used words like "unhappy" and "neurotic"—but as a matter of chronic sickness. I do not think it is possible to overstate the seriousness of the situation which this country is facing.
The other day we paid tribute to General de Gaulle and I myself have
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been reading his own brilliant account of the part he played in what he described as the renewal of France. Every word about the Fourth Republic which he uttered could be uttered about Britain in the sixties. This is the disease from which the Weimar Republic died and gave place to Hitler. This is the disease from which the Third Republic died and gave place to Pétain, after a humiliating defeat. It is the disease from which the Fourth Republic died and gave place to de Gaulle. The disease is sometimes called inflation—and inflation is unpleasant in a stagnant economy. I hope that I am not guilty of any want of patriotism but I do not believe I am the only Member of this House who is filled with a deep sense of shame when I compare the progress of this country over the last 25 years since 1945 with that of our defeated enemies and our rescued allies. They had all the problems we had, and a great deal more—half the manhood of France transported into slave labour camps and foreign factories; Germany destroyed; the whole system of communications disrupted—graphically described in de Gaulle's Memoirs.
What do we find now? We are borrowing money from them. Our rate of growth is slower. Their rate of income per head is higher. Their development has been spectacular from lower levels. I really must ask members of the Labour Party whether they can altogether blame us if we ask ourselves: has there not been some common factor, not only in their Government, which showed it to a marked and exaggerated degree, but even in previous Governments of our own Party since 1945, which has led to this comparatively weak performance? I think that there has been such a common factor.
Although I have only a few minutes until the end of my speech, and I should have much liked to develop this at greater length, I feel under an obligation to say in a few words what I think the common factor has been. We have been trying to operate a fully employed society with the moral and social assumptions which we worked up in the 'thirties under a system of unemployment and under-employment. As the noble Lord, Lord Henley, who spoke first for the

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Liberal Party said, in relation to our social security, we have tried to run a system which was built on the 1909 model, improved in 1942 by Lord Beveridge and which avowedly contained the basic assumption that it was working on a basis of 10 per cent. unemployed.
I wish to develop this in relation to the issue of subsidy, because this goes to the root of the Government's proposals of October 27. We have been assuming that subsidy is something which can be used indiscriminately on every possible occasion. If we want a merger in the City, we subsidise it, to the tune of a revolving loan of £10 million. We want to subsidise the Arts, so we make the galleries free. We want to subsidise food in order to improve agricultural production, and do so at the cost of £300 million a year. When we are told by the noble Lords, Lord Beswick and Lord Shackleton, that the effect of the proposals of October 27 and their associated proposals is to put up the price of food, I must ask them what they mean. The price across the counter is 1 per cent. of the national income—that we know. But what is the true price of food?—the price across the counter or the price which the taxpayer has to pay in addition to the price across the counter? How long do we go on kidding ourselves that the true price of food is only the subsidised price and not what is actually paid? I will give way in due course to the noble Lord, if he will be patient. The truth is that it is part of our proposals to levy the price of articles and services at the point of consumption rather than by way of subsidy. That will not alter the true price of the article.
LORD GEORGE-BROWN: My Lords, I understand that the noble and learned Lord who sits on the Woolsack has got to the end of his peroration, at which point he is willing to give way. When talking about our defeated enemies and assisted allies, had he thought about the E.R.I. in Italy? They did it for themselves. Had he thought about the Marshall Aid they were given? Had he thought about the days when we—
SEVERAL NOBLE LORDS: Order, Order! Question!
LORD GEORGE-BROWN: My Lords, I could never be shouted down in another
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place, and I am not going to be shouted down here.
SEVERAL NOBLE LORDS: Order, Order!
LORD GEORGE-BROWN: Had he forgotten the days when we forwent wheat which we needed in order to help our allies and our defeated enemies to get on their feet again? Why does not the noble and learned Lord make clear the things we did in this country to put our defeated enemies and our allies on their feet again?
THE LORD CHANCELLOR: My Lords, the noble Lord has asked me a question and perhaps he will allow me to preface the answer with this humble remark. The reason why noble Lords are not shouted down in this House is precisely because we all respect the Rules of Order without any direction from the Chair. The answer to the noble Lord's question is this. Whatever may be the importance of those things in the early days of reconstruction of a disfigured and dismembered Europe, they can have remarkably little relevance to the discussion to-night, 25 years afterwards. One would have thought that, whatever credit one could take for the past, it did little credit to us that chronically over 25 years we have had this slow rate of growth. When I was interrupted—because I have not yet by any means reached the peroration—I was counting the effect of subsidy on the thinking of the public about matters of this kind.
I want at this stage of my argument, even though I am, I fear, taking a little longer, perhaps partly due to welcome interruption, to come straight to the argument on schools and food. The noble Lord, Lord Boothby, made a notable speech on this subject, but he did himself say that it was the same speech that he had been making for fifty years; and I can testify to the last 35 of them myself. But the effect of the subsidy upon our national life has been this—and let us face it. In the first place, the Welfare State is not, in my judgment, an issue. Other European countries—France, Germany, Scandinavia, the Netherlands—all have their Welfare States, all have benefits by and large as generous as, and some of them more generous than, our own. The difference is that because we based our finance on the Beveridge Plan, which assumed 10

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per cent. unemployment, in this Welfare State alone, so far as I know, the weight is borne by the taxpayer instead of by industry at the point at which it employs men and women.
Let me give an example. Take the commuters into London—a small example, but rather a good one. We are paying to get workers into London with one hand—we are paying because the railways make a loss and we pay the amount out of the taxpayer. We subsidise their rents if they stay in London. But all the time noble Lords are arguing that for the purposes of development policy it is necessary to pay other huge cash grants by way of development grants for people to stay away from London and to erect their factories elsewhere. Whom do they really think that these subsidies are benefiting? I can tell them what I think. In fully-employed London, in over-employed London, these subsidies are subsidies to wages. This is Speenhamland, and you are in fact doing the direct opposite of the regional development policy that we should all like to see, by subsidising the employer to bring his workers into London or to find them accommodation when they are there. Of course the tenant thinks that the subsidy for rent is helping him; but in the medium or the long term—and I hope that this is a view which noble Lords will take, whatever may be thought of it in another place—these subsidies operate as subsidies for the employer.
That brings me to the situation with regard to milk and school meals—and of the two perhaps school meals is the easiest example to take. No one would have thought, listening to the noble Baroness, Lady Summerskill, and I doubt whether anybody would have known listening to the noble Lord, Lord Platt, or the noble Lord, Lord Boothby, that this is what is at issue here. We are in fact proposing to give free school meals to 250,000 more children than those who got free school meals under the last Government. What we are not proposing to do is to subsidise parents to the extent that they pay, as I think they do now, 1s. 9d. In April they will pay 2s. 5d.; and it will be 2s. 10d. in April, 1973, when the exemption limit will be raised not only by the 30s. but by a further 10s. That is the issue which gave rise to all this symposium.
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But if we are really talking in terms of a just society or a sound economy (because, unlike the noble Lord, Lord Shackleton, I remember the words of the Motion) let us look at this set of social values that the noble Lord, Lord Platt, I or the noble Baroness have invited us to take. The noble Lord, Lord Platt, was perfectly explicit. He said: "The mother goes out to work to earn some more money". Well, good luck to her! We are not suggesting that she should not do so. Her child needs a dinner. Well, we think so, too. The child needs a dinner cooked at school. We think so, too. But what he is saying is that instead of the parents—who are so prosperous that they go above the exemption limit on the father's income already, and the mother goes out to earn still more money, for what the noble Lord quite candidly admitted was beer, bingo and, I think, tobacco—paying the cost of that meal, somebody else should pay the cost. And remember, that somebody else is net only the surtax payer, but is also the old age pensioner.
LORD BOOTHBY: My Lords, perhaps I might interrupt the noble and learned Lord to ask him this question. He can hardly deny that these proposals do in fact enormously reduce the supply of free or cheap meals to schoolchildren over the whole range, up to and during school age.
THE LORD CHANCELLOR: Not only does it not reduce the supply of free meals, but the new exemption limit will add 250,000 extra children to the entitlement.
LORD PLAIT: My Lords, I would—
THE LORD CHANCELLOR: I will give way when I have answered one question. I am not going to answer two questions at once; nobody can make me do that. So far as Lord Boothby's second question is concerned, of course it will reduce the number of subsidised meals. But I am asking the House to consider at what point of time it is either socially just or economically sound to ask other people to pay for your children's meals. Now I will give way to the noble Lord, Lord Platt.
LORD PLATT: I was only going to ask the noble and learned Lord if he would kindly read, when he has time, the

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end of my speech, as well as quoting a sentence from it.
THE LORD CHANCELLOR: I listened to every word of it, so far as I can remember, with great pleasure, but I did not agree with it; and I doubt whether I shall agree with it if I accept, as I certainly shall, the noble Lord's invitation to read it again.
That brings me to the noble Baroness, Lady Birk, who spoke about dental charges. This is not my subject, and it is hers. But she was so keen about dental charges that she reiterated the words of the noble Lord, Lord Platt, about the disastrous effect on the parents of beer, bingo and tobacco—
BARONESS BIRK: I did not mention tobacco.
THE LORD CHANCELLOR: I will settle for beer and bingo. Her argument was that the father is so keen on his beer and bingo that he will not send his child to the dentist. Well, he is not a very well-informed father, because, although he may have to pay the dental charges for himself, the children are exempt until the age of 21. The only change proposed by the Government in dental treatment is that the age of exemption should be reduced to 18, which is a necessary corollary of the improved age of majority.
But even if there were some truth in it, I ask the noble Baroness to consider whether her social priorities are right. Does she really think that she is going to improve the health of the children of this country—and do noble Lords who have spoken so eloquently really suggest that they are going to improve the health of the children of this country—by asking other people to pay, when the only reason the parent does not pay is that he puts beer and bingo in front of his children's welfare? Is that the kind of social justice to which the Motion refers? Is it going to lead to the economically sound society that the Motion requires? My Lords, I do not think so, and I think that this country has been kidding itself for 25 years on a false set of social values. They have been talking the language of the 'thirties and they are still talking that language in the 1970s. With great respect, I say it was not altogether without significance that the
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noble Baroness began her speech by saying what a good thing it is that this House contains a number of elderly persons. They are still thinking—
BARONESS SUMMERSKILL: My Lords, in view of the fact that the noble and learned Lord has referred to me, may I point out the complete fallacy in his argument that he is being so dogmatic about? He has not distinguished between the child who hitherto has received a free meal and the one whom he is now going to subject to a means test. That is the great difference.
THE LORD CHANCELLOR: My Lords, the noble Baroness is not quite as good at logic as she fancies herself, because if that argument proved anything it would be an argument against the present system of subsidy and charge and the present system of free meals. That was instituted by the Government which she supported for so long. While I am on the subject of the noble Baroness's logic I should like to say that her speech included a tremendously moving and obviously sincere passage about the unwillingness of people to take up their entitlement. That reflects a number of, as I thought, unworthy things about "charity" said by several noble Lords from the Party in Opposition.
If that is true, what kind of service does the noble Baroness think she is doing to the people who are entitled now? The only effect of the Government's policy is to add to them another 250,000 people. If that does not decrease their sense of isolation, if that does not improve their sense of pride (and I am now addressing the noble Lord, Lord Soper) I do not know what, in logic—even the "logic" of the noble Baroness—one can expect the effect to be. Because the truth is that not only are we increasing their number, and thereby decreasing their isolation, but part of the proposals which the noble Lord, Lord Soper, is proposing to vote against is to initiate a new propaganda campaign to make people realise that they are not receiving charity when they receive supplementary benefit. When they receive these various social services they are only getting their rights. Wet get small help from the noble Lord, Lord Soper, and from the noble Baroness and, I think, from the noble Lord who wound up

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for the Opposition, when they keep on using the word "charity" about gratuitous social services.
In conclusion, I only want to say this to your Lordships. The result of the subsidies over 25 years has been that in the higher income brackets we are, from the point of view of direct taxation, the highest taxed people in the world. I have some figures here which are 1967 figures because I am told that it is not possible to get a later set. The changes which have taken place do not alter the value of the comparisons. I take Lord Soper's reference to the income bracket, which I think was anything up to £3,000 a year—£60 a week. A man with two children, earning £2,500 a year in 1967, was paying 22·1 per cent. of his income in direct taxation. In France the figure was 5 per cent.; in the U.S.A. it was 8 per cent. and in West Germany it was 12 per cent. At £5,000 per annum the comparison is even stronger. Is that social justice? Is that a good, sound economy? We think it is not, and that is why we are proposing this measure. If the noble Lord, Lord Shackleton, or the noble Lord, Lord Diamond, think that it is only because of incentives that we are doing this, I say that that is not so; we are doing it because we think it is socially just and that after eleven years the income tax payer is entitled to a reduction on the standard rate.
The tragedy of it is that after 25 years of muddled thinking and subsidy we have
not abolished poverty, we have not abolished unemployment; there are still the vulnerable classes for whom it still can be said that all the evils of underemployment still exist; there are the chronic sick, the mentally and physically handicapped, the children whose need is uncovered by the Child Poverty Action Group. These are vulnerable classes, all of whom our Welfare State has done nothing adequate to help because what is spread universally is spread uncommonly thin. We are doing what we are doing because we want help to be spread thicker for them. That is why we increased the pensions for the over 80s and for the widows. That is why we put £110 million more into hospitals for the mentally sick and £28 million into the primary schools. That is why the Family Income Supplement will spend £8 million on trying to bring 500,000 children out of poverty. That is why we have increased the exemption limits for the children's meals and welfare milk. The fact is that noble Lords opposite are like the Bourbons; they forget nothing and, most unfortunately, they learn nothing. My Lords, I beg the House to vote against this silly Motion of Censure this evening.
7.35 p.m.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 98; Not-Contents, 235.

CONTENTS

Addison, V.

Davies of Leek, L.

Jacques, L.

Amherst, E.

Delacourt-Smith, L.

Janner, L.

Ardwick, L.

Diamond, L.

Kennet, L.

Arwyn, L.

Donaldson of Kingsbridge, L.

Kilbracken, L.

Bacon, Bs.

Douglass of Cleveland, L.

Leatherland, L.

Beaumont of Whitley, L.

Evans of Hungershall, L.

Lee of Asheridge, Bs.

Beswick, L. [Teller.]

Fiske, L.

Lindgren, L.

Birk, Bs.

Fletcher, L.

Llewelyn-Davies, L.

Blackett, L.

Foot, L.

Llewelyn-Davies of Hastoe, Bs.

Blyton, L.

Gaitskell, Bs.

Lloyd of Hampstead, L.

Boothby, L.

Gardiner, L.

Longford, E.

Bowden, L.

Garnsworthy, L.

McLeavy, L.

Bowles, L.

Geddes of Epsom, L.

Maelor, L.

Brockway, L.

George-Brown, L.

Mais, L.

Brown, L.

Gifford, L.

Milner of Leeds, L.

Burton of Coventry, Bs.

Granville of Eye, L.

Morris of Grasmere, L.

Byers, L.

Greenwood of Rossendale, L.

Moyle, L.

Campbell of Eskan, L.

Hamnett, L.

Nunburnholme, L.

Chalfont, L.

Henderson, L.

Phillips, Bs. [Teller.]

Champion, L.

Hsnley, L.

Platt, L.

Chorley, L.

Hilton of Upton, L.

Plummer, Bs.

Citrine, L.

Hirshfield, L.

Raglan, L.

Cooper of Stockton Heath, L.

Hoy, L.

Ritchic-Calder, L.

Crook, L.

Hughes, L.

Rushhholme, L.

Sainsbury, L.

Snow, L.

Taylor of Mansfield, L.

St. Davids, V

Soper, L.

Wade, L.

Segal, L.

Sorensen, L.

Wells-Pestell, L.

Serota, Bs.

Southwark, L. Bp.

White, Bs.

Shackleton, L.

Stocks, Bs.

Williamson, L.

Shepherd, L.

Stow Hill, L.

Wilson of Langside, L.

Shinwell, L.

Strabolgi, L.

Wright of Ashton under Lyne, L.

Silkin, L.

Summerskill, Bs.

Wynne-Jones, L.

Slater, L.

Taylor of Gryfe, L.

NOT-CONTENTS

Aberdare, L.

Cowley, E.

Ilford, L.

Aberdeen and Temair, M.

Craigavon, V.

Inchcape, E.

Abinger, L.

Craigmyle, L.

Inchyra, L.

Ailsa, M.

Cranbrook, E.

Inglewood, L.

Ailwyn, L.

Crawshaw, L.

Jellicoe, E. (L. Privy Seal.)

Airlie, E.

Cromartie, E.

Kemsley, V.

Albemarle, E.

Cross, V.

Killearn, L.

Aldenham, L.

Daventry, V.

Kilmarnock, L.

Aldington, L.

De Clifford, L.

Kindersley, L.

Alexander of Tunis, E.

De La Warr, E.

Lansdowne, M.

Allerton, L.

De L'Isle, V.

Lauderdale, E.

Alport, L.

Denham, L.

Lindsey and Abingdon, E.

Amherst of Hackney, L.

Derwent, L.

Liverpool, E.

Amory, V.

Devonshire, D.

Lloyd, L.

Ampthill, L.

Digby, L.

Loudoun, C.

Ashbourne, L.

Downe, V.

Lucan, E.

Auckland, L.

Drogheda, E.

Lucas of Chilworth, L.

Audley, Bs.

Drumalbyn, L.

Luke, L.

Avebury, L.

Dudley, E.

Lyell, L.

Balerno, L.

Dulverton, L.

Lyle of Westbourne, L.

Balfour, E.

Dundee, E.

MacAndrew, L.

Balfour of Inchrye, L.

Dundonald, E.

McCorquodale of Newton, L.

Barnby, L.

Ebbisham, L.

Macpherson of Drumochter, L.

Bearsted, V.

Eccles, V.

Margadale, L.

Beauchamp, E.

Effingham, E.

Massereene and Ferrard, V.

Beaumont, Bs.

Egremont, L.

Merrivale, L.

Belhaven and Stenton, L.

Elgin and Kincardine, E.

Mersey, V.

Belstead, L.

Ellenborough, L.

Milverton, L.

Berkeley, Bs.

Emmet of Amberley, Bs.

Molson, L.

Bessborough, E.

Essex, E.

Monk Bretton, L.

Bethell, L.

Exeter, M.

Monsell, V.

Birdwood, L.

Falkland, V.

Montgomery of Alamein, V.

Blackford, L.

Falmouth, V.

Mountevans, L.

Blakenham, V.

Ferrers, E.

Mowbray and Stourton, L.

Bledisloe, V.

Ferrier, L.

Nairne, Bs.

Boston, L.

Fortescue, E.

Napier and Ettrick, L.

Bourne, L.

Fraser of Lonsdale, L.

Nelson of Stafford, L.

Boyd of Merton, V.

Gage, V.

Netherthorpe, L.

Brabazon of Tara, L.

Glasgow, E.

Newton, L.

Bradford, E.

Glendevon, L.

Northchurch, Bs.

Brecon, L.

Glendyne, L.

Nugent of Guildford, L.

Brooke and Warwick, L.

Goschen, V. [Teller.]

Pender, L.

Brooke of Cumnor, L.

Gowrie, E.

Penrhyn, L.

Brooke of Ystradfellte, Bs.

Grantchester, L.

Perth, E.

Brougham and Vaux, L.

Gray, L.

Poole, L.

Broughshane, L.

Greenway, L.

Radnor, E.

Buccleuch and Queensberry, D.

Grenfell, L.

Ranfurly, E.

Buchan, E.

Grimston of Westbury, L.

Rankeilour, L.

Buckton, L.

Hacking, L.

Rathcavan, L.

Burton, L.

Hailes, L.

Ravensworth, L.

Caccia, L.

Hailsham of St. Marylebone, L. (L. Chancellor.)

Redesdale, L.

Caldecote, V.

Redmayne, L.

Carrington, L.

Hampden, V.

Reigate, L.

Cawley, L.

Harlech, L.

Rennell, L.

Chandos, V.

Hastings, L.

Rhyl, L.

Chelmer, T.

Hatherton, L.

Ridley, V.

Chesham, L.

Hawke, L.

Ritchie of Dundee, L.

Clinton, L.

Hayter, L.

Rochdale, V.

Clwyd, L.

Headfort, M.

Rockley, L.

Colgrain, L

Hindlip, L.

Rosslyn, E.

Conesford, L.

Hives, L.

Rothermere, V.

Cork and Orrery, E.

Hood, V.

Rotherwick, L.

Cornwallis, L.

Howard of Glossop, L.

Rothes, E.

Cottesloe, L.

Howe, E

Runciman of Doxford, V.

1212

1213

Ruthven of Freeland, Ly.

Somers, L.

Trefgarne, L.

St. Aldwyn, E. [Teller.]

Spencer, E.

Tweedsmuir, L.

St. Just, L.

Stamp, L.

Tweedsmuir of Belhelvie, Bs.

Salisbury, M.

Stradbroke, E.

Ullswater, V.

Salter, L.

Strange of Knokin, Bs.

Vestey, L.

Sandford, L.

Strathcylde, L.

Vivian, L.

Sandys, L.

Suffield, L.

Wakefield of Kendal, L.

Savile, L.

Swinton, E.

Ward of Witley, V.

Selkirk, E.

Tenby, V.

Watkinson, V.

Selsdon, L.

Terrington, L.

Wigram, L.

Sempill, Ly.

Teviot, L.

Windlesham, L.

Shannon, E.

Teynham, L.

Wolverton, L.

Shawcross, L.

Thorneycroft, L.

Wynford, L.

Skelmersdale, L.

Thurlow, L.

Yarborough, E.

Somerleyton, L.

Townshend, M.

Resolved in the negative, and Motion disagreed to accordingly.

INCOME AND CORPORATION TAXES BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read Ia, and to be printed.

WHITBREAD BREWERY AND PLANNING DECISION
7.57 p.m.
LORD MOLSON LORD MOLSON rose to ask Her Majesty's Government why the Minister of Housing and Local Government rejected the advice of his inspector and gave planning permission for the building of a brewery by Messrs. Whitbread in the rural area between Preston and Blackburn. The noble Lord said: My Lords, when Messrs. Whitbread wished to build a large new brewery in the village of Samlesbury, the noble Lord, Lord Greenwood of Rossendale, who was at that time Minister of Housing and Local Government, called in the planning application. He did so on the ground—and I quote his words—that
"The proposal involves a substantial departure from the development plan and objections have been raised locally."
The inspector held a local public inquiry which lasted for some six days. He recommended that permission be refused.
After setting out the facts as he saw them, at very considerable length he wrote as follows—and I do not quote his conclusions in full, but none of what I omit in any way invalidates or even modifies what I am quoting:
"Bearing in mind the above facts I am of the opinion that:
1214

i. the proposal would result in a gross intrusion of industrial development into a pleasant rural area forming a valuable break of open country separating Preston and Blackburn.

iii. The provision of kerbs to carriageways paved footpaths and street lights, bearing in mind night work, would urbanise the area.

v. Preston would form the likely place of habitation for employees and they would be likely to use Vicarage Lane.

vi. There would be pressure to have access to that road or cars would be left on the roadside verges.

vii. Future development within the site would create pressure to locate car parking for employees outside the brewery perimeter …

viii. These results, if they arise, would cause further detriment to the countryside and tend towards an undesirable coalescence of Preston with Blackburn.

ix. The whole project is out of balance with the projected New Town where housing and industry should go hand-in-hand."

My Lords, the Minister wrote a letter of decision, of which this is the decisive paragraph:
"On balance, therefore, the Minister has come to the conclusion that the Inspector has not given sufficient weight to the special site requirements of the brewery and the evidence of the site inspection. He has decided, contrary to the recommendation of his Inspector, that the brewery should be permitted to proceed."
I want to make plain at the outset that I, the Council for the Protection of Rural England, and the amenity interests for which I speak, and also Mr. Edward Gardner, the local Member of Parliament who raised this matter in another place, dissociate ourselves entirely from the improper suggestions that have been made in various quarters that the Minister was actuated by financial inducements and particularly by a gift made earlier by Whitbread's to the Conservative Party.

1215
I recognise that this was a difficult decision, but I hope to persuade your Lordships in what I am now going to say that on balance the Minister's decision was wrong.
Nor do I question the right and indeed the duty of any Minister to reject the advice of his inspector, for an inspector's report in this connection is only advice, and the Minister is discharging quasi-judicial functions where he must be influenced by his own independent judgment after reading the report. Indeed, the noble Lord, Lord Greenwood, had on a previous occasion, very properly, if I may say so, done exactly the same thing. If he had not in one important respect departed from his inspector's report, Samlesbury itself would have been incorporated in the central Lancashire New Town. I recognise with gratification and gratitude that in two recent cases Mr. Walker has disregarded, overruled, the advice of his inspectors in a way that is highly acceptable to the Council for the Preservation of Rural England. We are grateful to him and we congratulate him upon it. One was where he refused permission for drilling for oil in the North Yorkshire National Park, and the other was his refusal to allow dumping of urban rubbish in a Green Belt.
So I make no complaint that Mr. Walker made up his own mind. I merely advance reasons why I am convinced that he was wrong, and my arguments are these: (1) that this pleasant open country between two expanding industrial towns should have been preserved; (2) that it is unjust unexpectedly to depart from an established custom of refusing planning permission for industrial development and suddenly and unexpectedly to grant planning permission in one particular case; (3) that one of the neighbouring New Towns should have had the benefit of this industrial development; and (4) that the whole system of State encouragement to industry should be brought into harmony with planning policy and not be in conflict with it, as now it too often is. I will add no words of my own on the first point. I have quoted the opinion of the independent inspector who had visited the whole area and had heard evidence for nearly six days, whose opinion was in favour of preserving what he called this
1216
"pleasant rural area." His words are enough.
In the second place, I want to show that this is not technically Green Belt, and I regret that some of my friends should have mistakenly so described it. It is "white land". The planners have a jargon of their own, and the definition of "white land" is land of which the existing use is intended for the most part to remain undisturbed. It has been the practice of the planning authority over a considerable period of time to refuse permission for industrial development in this area. I do not say that there have been no exceptions, but that has been the accepted policy in conformity with the accepted development plan.
Land which it is intended to keep undeveloped is of three kinds, with varying degrees of sanctity. First, there is approved Green Belt; secondly, there is proposed Green Belt; and thirdly, there is white land, of which I have read the definition. When planners propose, with good intentions and for plausible reasons, to permit development in any of these areas, they almost always inflict an injustice on the local owners of land. If, while permission for development is normally being refused, Jones sells land to Smith, he can only sell it at the agricultural price. If, after Smith has bought the land, unexpectedly planning permission is given for industrial development, the value of that land suddenly increases in his hands. It is therefore, a great injustice as between the man who sold it and the man who bought it. That is one of the many reasons why it is usually wrong for the Minister or for any other planning authority to depart from what I may call the case law in these matters, which has been built up by past decisions and which are reported. This Samlesbury decision errs in this respect. It was a sudden departure from the practice of not giving planning consent to development in this area and it was a departure from the agreed development plan.
I come to the third point. Ministers often find themselves in an extremely difficult position when planning permission is sought in one of these areas and that is the only possible site. This arises, of course, particularly in the case of mineral development. The inspector, in one of his conclusions that I have not

1217
read out, indicates that there was a suitable alternative site. He wrote:
"If urgent attention be given to the sewerage of the New Town, and in particular the area suggested by the Preston Rural District Council for the brewery at Walton-le-Dale, this enterprise can no doubt be accommodated there to meet the requirements of the company and in conformity with sound planning principles."
So not only was it wrong to locate the brewery in a rural area; it should have been located on a neighbouring site, included within the designated area of the New Town of Walton-le-Dale.
It has always been an essential feature of New Towns that they should not be dormitories, but that they should have their own industries. It is the urgent and anxious hope of the manager of a New Town to attract some important and prosperous industrial concern into the New Town to assure employment for the people there and indeed to encourage people to move in. The central Lancashire New Town at Walton-le-Dale is close to Samlesbury and was the proper site for the brewery. The obstacle which was mentioned by the inspector, but which surely the Government could have overcome, was the need to speed the establishment of the administration of that New Town and the building of a 10 mile sewer to Freckleton, where there are already sewage works provided by the Preston County Borough.
So far I have been criticising the past. I have indicated reasons why I am convinced that the decision of the Minister was a wrong one. Some factors which led to this unfortunate decision call, I think, for an adjustment of the machinery of government. The factors to which I refer are these. Under the Local Employment Act 1970, Samlesbury was designated as an intermediate area by the Ministry of Employment; secondly, in accordance with that policy of the Ministry of Employment, the Board of Trade granted an industrial development certificate for the brewery to be built at Samlesbury. In this matter it is quite clear that the right hand of the Government does not know what the left hand is doing. Under the planning code, over which the Ministry of Housing and Local Government (now the Department of the Environment) presides, Samlesbury was a white area; yet, at the same time, these special inducements are provided by the Department of Employ-
1218
ment, supported by the Board of Trade, to encourage industrial concerns to go into an area of that kind.
I have been at pains to find out whether this anomaly will be ended by the new White Paper Investment Incentives. A letter I have had from the Treasury—and I am deeply grateful to the Chief Secretary to the Treasury for speeding up his answer to my question in time for this debate—plainly indicates that under present arrangements the anomaly will continue, and may indeed become greater.
By building at Samlesbury, under the last Government and its actions, Whit-bread's became entitled to two Government grants. One was a building grant which was, and is, payable only in the development areas and intermediate areas and requires the Government's prior approval. The present Government are increasing these building grants in development areas and continuing them! at the same level in intermediate areas. Investment grants paid to selected industries on plant and machinery have, in the past, been payable automatically any where in Great Britain. Under the new policy they have been discontinued; but I they have been replaced by tax allowances on industrial plant and machinery throughout the country, with higher rates specially for development and intermediate areas. Apparently, the present Government think that these tax concessions are going to be even more effective than the grants they have done away with for the purpose of encouraging industry to establish itself in these places.
The Prime Minister has set up two great Departments, that of the Environment and that of Trade and Industry, to secure co-ordination of the functions which were previously earned out by separate Ministries. I hope he will carry the principle of co-ordination one stage further and ensure co-ordination between these two new Departments. It is surely the height of absurdity that the Departments concerned with employment and industry should offer building grants and tax concesssions to industries if they can establish themselves in areas which the planning authorities, whether they be the local planning authorities or the Ministry of Housing and Local Government in its new guise, have zoned in the development plans as rural areas.
This is what happened in the case of Samlesbury. I greatly regret that decision. I believe it was a mistaken decision. But it would at any rate be some consolation if we can have an assurance from the Parliamentary Secretary when he replies, that under the new Government it is intended that the encouragement to employment given by the Ministry for Trade and Industry will be brought into harmony with the planning code of the country as a whole.
8.18 p.m.
LORD GREENWOOD OF ROSSENDALE: My Lords, the noble Lord, Lord Molson, has for a very long period rendered great service to the amenity movement, and to-night I think he has placed further in his debt all those of us who want to see a more civilised approach to the environmental problems that we have to solve. I am grateful to him for having brought to the attention of your Lordships' House a case which was described by Mr. Edward Gardner, Q.C., M.P., at the Conservative Party Conference as
"a monument to muddled planning."
I want to associate myself with what the noble Lord said about Mr. Peter Walker. I think that a Minister of Housing and Local Government is one of the loneliest men in a Government. I early reconciled myself to the fact that every time I made a friend I could count upon making two enemies at the same time. That worked out pretty accurately, because I am afraid that, unlike the Almighty, the public are
"swift to chide and slow to bless".
Before the Minister reaches a decision, and when he takes the decision, he has to behave with the same detachment and objectivity as one of Her Majesty's Judges. To suggest that Mr. Peter Walker did otherwise in this case is unfair to him and—this is no less important—I think it is derogatory to public life in general. The Samlesbury decision was, in my view (and I agree with the noble Lord), a deplorably bad decision on purely planning grounds. But it is quite wrong to argue—and I was glad that the noble Lord resisted the temptation—that a Minister should not overrule his inspector. It happens, I think I am right in saying, about 100 times every year. When I was a Minister I frequently, after the most careful consideration,
1220
rejected the advice that my inspector had given. I am certain that no Minister does so lightly, for inspectors like Mr. Harcourt, who conducted this Inquiry, are men of sound judgment and great experience.
But in a major case of this kind, I am certain that it is right that the Minister, with the aid of his officials, should be able to sit back, to take a less localised view than the inspector, and should be free to decide to overrule the inspector's recommendations. Indeed—and I was grateful to the noble Lord for mentioning this—if I had not rejected the advice of Sir Andrew Wheatley, whom I had appointed to conduct the inquiry into the area to be designated for the Central Lancashire New Town, Samlesbury would have been included in the New Town area. As it was, I accepted his advice on the Longridge Spur and rejected his advice on Samlesbury.
So my criticism of Mr. Walker's decision is not that it was improperly reached—I utterly reject that suggestion—or that he should have accepted his inspector's advice without question. My complaint is that the decision, on strictly planning grounds, was an utterly wrong decision. Because of the importance of this application, I decided to call it in for the Minister's decision. I know the site reasonably well—I visited it earlier this year—and I know very well the need to avoid further industrial sprawl in Lancashire, and to preserve for quiet enjoyment the areas which industry has left comparatively unimpaired.
The site which we are discussing tonight would not, of course, qualify as an Area of Outstanding Natural Beauty, in the technical sense of the word and using capitals at the beginning of each word, because that is a technical term which applies to the Norfolk Broads and applies to Dedham Vale, but does not apply to Samlesbury. Nevertheless, it is a pleasant and peaceful stretch of country, and it provides a great amenity for the people both of Blackburn and of Preston. That is why, in general, applications for development in the area have been refused.
I read with special interest paragraphs 69 and 70 of the inspector's report, and if your Lordships will bear with me I should like to read you most of what

1221
is said in those two paragraphs. This is based upon the views of the Preston Rural District Council, which was represented at the inquiry by the surveyor and also by the clerk, whom I had the privilege to know well when he was the Town Clerk of Rawtenstall in my old constituency of Rossendale. The Preston Rural District Council made various points. Paragraph 69:
"The Lancashire County Council as local planning authority have been consistent in refusing industrial, commercial and residential development in the surrounding rural area and in this they have had strong support from the Rural District Council. Those applications for residential development which have been granted permission represent either the conversion of existing buildings to residential use or applications supported by the Ministry of Agriculture, Fisheries and Food. The approved application for commercial development on the site of the disused Paper Mill at Samlesbury Bottoms is one where the building had existing use rights for general industry."
Then paragraph 70:
"The policy of resisting development in the area has had the support of the Minister as the following appeal decisions show:—
"1. In dismissing an Appeal against the refusal of permission for an Agricultural Joiner's Workshop one mile south of the inquiry site in October 1969, the Minister stated:—
It is to be expected that the use will grow and in these circumstances the use proposed is inappropriate and would constitute an unjustified intrusion into a predominantly rural area.
"2. In dismissing an appeal against the refusal of permission for a Motel Licensed Restaurant and Bar on the A.59 Trunk Road, less than a third of a mile north-west of the inquiry site in June 1966, the Minister stated:—
'The establishment of a Motel Public Restaurant and Bar, and associated car parking area on the appeal site, could hardly fail to detract from the pleasant rural character and appearance of the Ribble Valley where it formed a valuable open foreground at the approaches to Preston.' "
It was no doubt on account of considerations of that kind that the proposal to put a brewery there—a much more serious intrusion into the peaceful surroundings—was objected to by—and I quote now from paragraph 46 of the Inspector's Report:
"Preston County Borough Council, Preston Rural District Council, the Samlesbury and Cuerdale Parish Council, the Central Lancashire New Town Consultants, the Lancashire Branch of the National Farmers' Union, the Cumberland, Westmorland and Lancashire
1222
Branches of the Country Landowners' Association, and the local branch of the Council for the Protection of Rural England …".
There is the further and, I think, overwhelming reason why, in my view, the application should have been rejected. I cannot for the life of me understand why the Lancashire County Council did not ask for its rejection—indeed, as the Samlesbury Parish Council has commented, the County Council has made a complete volte face. The reason for rejection I have in mind is the importance of the Central Lancashire New Town as a growth point for the whole of Lancashire. I do not believe there is any validity whatsoever in the arguments advanced by the Minister and his colleagues against having the brewery in the New Town area, for example, in Walton-le-Dale, as the noble Lord, Lord Molson, has suggested. It would in fact have got the New Town off to an extremely good start, and there is no administrative reason that I know of why the development should not have been expedited in that area.
In fairness to the noble Lord, Lord Molson, I must confess that I am not wholly convinced by his arguments about the confusion which exists within the Government's machine, but I agree with him that it would be well worth while seeing whether any more efficient procedures can be devised. But we must remember that the criteria for designating an Intermediate Area and for granting a planning application are quite different. I, in all modesty, claim some credit for the scheduling of North-East Lancashire as an Intermediate Area, with all the benefits that that can bring. But the employment that is provided there must, in my submission, be provided in a way which does not destroy the environment which the workers are entitled to enjoy.
The strategy of the last Government for the North-West was three-fold: first, to provide additional employment in North-East Lancashire, and proposals for advance factories in Nelson, Altham and Rossendale were approved; secondly, to establish the Central Lancashire New Town as a growth centre for the whole counly; thirdly, to preserve and, where possible, to enhance the pleasant countryside between the towns. I believe that that strategy is right, and I deplore the abysmally bad decision which I believe the Minister has made.
8.30 p.m.
LORD CHORLEY: My Lords, I should like to thank the noble Lord, Lord Molson, for putting down this Question. It is obviously a very important matter, not only from the point of view of Central Lancashire but also from the point of view of the planning arrangements of the country as a whole. Also, there has been the great advantage of our receiving a speech from the former Minister, who won golden opinions for the way he dealt with matters of this kind and who has certainly treated us to an extraordinarily impartial and, indeed, sympathetic account of this case.
I was impressed—although not so impressed as I might have been, because I should have expected it of him—by hearing that he took the opportunity of visiting this area himself; and no doubt he knew it to some extent, because his constituency was not so very far away. As he has told us, he visited the area at the time when this matter was becoming important, and I should be grateful if the Minister who is replying to the Question would tell us whether the present Minister followed his example and inspected this site before coming to his decision, which—and I agree with what has been said so far—is a deplorable one. Of course the milk has been spilled here and it cannot be got back into the bottle. Some people may ask, "What is the good of bemoaning it after the event, when nothing can be done about it?" But I think it is very valuable indeed to spend some time looking at cases of this importance when they have gone wrong, particularly in the case of a new Minister who is the first Minister for the Environment.
I have been in this business of trying to protect rural England for a very long time. It is a heartbreaking job, and this is one of those cases which tend to break one's heart. My impression is that Ministers are much more likely to go wrong at the beginning of their régime than when they have really begun to understand the problems with which they have to deal. Therefore it will be valuable if the Minister will consider not only this debate here but what has been said about this subject in the Town and Country Planning Journal and, generally, in informed areas. It may well be that that will help him to get the sort of
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expertise which the noble Lord who has just resumed his seat undoubtedly acquired.
I remember that Mr. Richard Crossman went badly wrong in the Kent Green Belt. Perhaps I shall be called to order for describing it as a Green Belt, since, technically, it was not really a Green Belt although it was treated as one by most of the amenity societies and by the planners. He was criticised a good deal and I criticised him myself, although some of my friends on this side felt that I was not altogether right. But I never have any hesitation in dealing with these matters, since I do not think they are Party issues; they are issues in which the national interest has to come first. I am sure that Mr. Richard Crossman's later decisions were very much better.
Not very long after that he gave a very good decision in the Birmingham pseudo-Green Belt, and I have a feeling that what was said about his Kent decision influenced him to some extent. However, as the noble Lord, Lord Molson, pointed out, the present Minister has given at least two very satisfactory decisions, one of which I was particularly pleased about, because the dumping site which the noble Lord mentioned was situated within a quarter-of-a-mile of my own house. So I welcomed that decision with considerable enthusiasm.
The trouble is that at the beginning a Minister tends to judge these matters by the light of nature. Whitbread's, who have three biggish breweries situated in different parts of Lancashire, wanted to reorganise their business and establish one large brewery somewhere else. Whether that was a wise decision has not really been brought into this debate very much, but the result of that decision is that a very large area will be affected. There will be 55 acres for the brewery site, but when one considers the amount of additional country which is going to be taken up by building new houses for all the workers there, together with car parks—because many of the workers will have to travel long distances to get there—this decision is going to have the effect of murdering what has been described as a very pleasant rural piece of England. It will cease to be a very pleasant rural piece of country, and many farmers who have carried on their business, on which the

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country depends so much at the present time when we are continually in difficulties about the balance of payments and so on, are going to be most adversely affected by this decision.
It was particularly ironic to sit in the Guildhall recently at the splendid Conference on the Countryside in 1970, which was so wonderfully and inspiringly presided over by the Duke of Edinburgh, listening to the Prime Minister himself, who made a very inspiring speech, the burden of which was that in future environment was going to receive much more consideration than it had received in the past. When economic considerations clashed with environmental considerations—this was the burden of his speech, which was tremendously well received—only in cases where the national interest obviously required the economic considerations to be put first should environment be put at the bottom of the list.
That has not been the case, and if it could be we in the amenities movement would be very happy. We have always regarded it as our duty, in cases where it was clear that the national interest, in the shape of Defence or something of that kind, came first, to feel that our own enthusiasm for defending the countryside should take second place. But this decision takes a completely different line, because while I like my glass of beer and have no feeling at all against breweries, particularly Whitbread's who make a very good beer, nobody could say that that was an economic matter of such great national importance that everything environmental ought to be put on one side in order that this large tract of land might be made available in this part of Lancashire, which is still rural. In Liverpool and Blackburn there are other branches of this brewery, in an area which is already completely industrialised, and the argument would have been all in favour of confining this activity to that part of Lancashire.
This case has been analysed with great skill and great moderation by both of the previous speakers, and I do not want to go over all that ground again. I quite agree that the inspector's view of the matter is not to be regarded as final. It is interesting to note—and it appears perfectly clearly from what the inspector said, which was read out by the noble
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Lord, Lord Molson—that this was not one of those cases where the inspector had any doubts. Sometimes an inspector balances what he says and concludes, "On the whole, I come down on this side or that" This was a case where he had no doubt whatever, and that is one of the reasons why I am so interested to know whether the Minister himself saw this place before he came to his decision.
Then, of course, there is the effect on the proposed New Town, which is a very important matter in this part of Lancashire. Instead of getting off to a good start, it may well be that this decision will interfere with its progress so seriously that it will never really become a first-class New Town. That was a very obvious danger, and I find it extraordinarily difficult to understand how the Minister could have overlooked it.
As I have said, this decision alters the whole environment of a very important, remaining part. There is not much of this sort of country left in Lancashire. Unfortunately, while there is practically no country of outstanding natural beauty in Lancashire at all, there is a good deal of very pleasant rural country of this kind, and this is one of the areas which is particularly so. Not very far away we have Clitheroe, the Trough of Bowland and other country which is really of fairly high quality, all of which will look down upon this. It really is a very great pity that a decision of this kind, which has now got to be accepted, has been reached, because it will undoubtedly very seriously affect and damage the environment of this particularly pleasant part of the countryside.
8.41 p.m.
LORD O'HAGAN: My Lords, before the noble Lord replies, perhaps I may follow on from what the noble Lord, Lord Chorley, was saying, because I happened to be in Burnley just after this decision was announced. I thought I might "chip in", because the noble Lord mentioned the scarcity of decent countryside in Lancashire. Somebody in Burnley said to me, "This decision will destroy one of the only real bits of countryside"—in fact, I think be said "the only real bit of countryside"—"between Burnley and the sea"; and for people who happen to be lucky enough to live in the Southern part of England,

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even if it happens to be London, it is worth while bearing in mind the sort of implications that a decision of this sort can have on those people who have to live with the refuse of the Industrial Revolution.
There is one question that I should like to ask the Minister, and that is whether he can give us some indication of the amount of money available to Whitbreads in the way of grants in the case of the site that they have now been allowed, and whether he can compare that with what they would have got if they had gone to the New Town.
8.42 p.m.
LORD SANDFORD: My Lords, I think your Lordships would wish me, before I answer the Question of the noble Lord, Lord Molson, to express a welcome to the noble Lord, Lord Greenwood, on the occasion of his first speech from the Front Bench of the Opposition. I think, also, that your Lordships will be grateful to the noble Lord, Lord Molson, for having initiated this debate and provided us with a chance, not only to discuss this particular case but to consider some general points of importance which relate to planning, and to do so in the company of a number of noble Lords who have spoken and who have all made such great contributions in this field in their different ways at different times.
I thought it might be helpful if I began my remarks by giving your Lordships a few statistics which might help to put this case into perspective. I shall deal first of all with the figures to do with the scale of the whole planning exercise—and these are figures for England for the year 1969. In that year, in England, 7,000 planning applications a week were going to the local authorities, of which 160 a week were received in the Department, largely as a result of appeals but also as a result of the matter having been referred to the Department by the local planning authority, as was the case in this instance. There were 60 decisions a week taken by Ministers after inquiry—12 each working day—and of those 60 a week there were one or two occasions per week when the Minister disagreed with his inspector. I think that corroborates what the noble Lord, Lord Greenwood of Rossendale, was saying. So it is nothing out of the way, unusual or
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improper for a Minister to disagree with his inspector.
I come now to two other general points about planning and the relationship between planning and industrial considerations—the point that the noble Lord, Lord Molson, asked me to clarify if I could; and I am very glad to be able to do so. I think that this, too, bears out what the noble Lord, Lord Greenwood, was saying. All applications for planning permission for large industrial buildings have to be accompanied by an industrial development certificate. That is laid down in the Town and Country Planning Act 1962. But, my Lords, the consideration of the planning merits of the application is affected by the existence of that industrial development certificate only to the extent that it is not then open to anyone—the local planning authority or anyone else—to claim objections to that application on the ground that the proposed building is contrary to the national distribution of industry and employment. That being so, I do not really believe that there is the discord or the conflict between these two separate considerations which the noble Lord, Lord Molson, led us to suppose. It is, nevertheless, a matter which needs constant attention if there is not to be a case of the left hand not knowing what the right hand is doing. I will come back to the industrial certificate which was awarded by our predecessors in this particular case, but I hope that that deals with the general point.
The next general point on which I should like to spend a little time is to rehearse (and I am afraid this will be very familiar ground to a number of noble Lords) the different grades of countryside which are used within the planning world in order to ensure that the most precious parts of our countryside are given the greatest attention and the greatest care, and that places of lesser significance are given rather less, in order to keep the whole thing in balance.
First of all, we have the National Parks—and, of course, it is worth noting that close to this site, not far away, are the famous Yorkshire Dales. These are extensive tracts of country, mostly uplands, designated by the Countryside Commission, confirmed by the Minister, for the special purposes of preserving and enhancing the natural beauty of the areas

1229
concerned. Then, slightly less in the degree of sanctity accorded to them, we have the areas of outstanding natural beauty—and almost adjacent to this site we have the Forest of Bowland in this category. These are areas, outside the National Parks, also designated by the Countryside Commission as being of outstanding beauty, and again a designation confirmed by the Minister. In relation to both these categories special provisions are made in the National Parks and Access to the Countryside Act 1949, and although normal life continues within them there is naturally a presumption against development and a very special concentration of attention by all the planning authorities concerned.
We then come to the country parks. Provision is made in the Countryside Act 1968 for local authorities to provide these, and the idea is that these should be areas specifically intended for public enjoyment, and often developed for that purpose, unlike National Parks or areas of outstanding natural beauty. Still descending in the scale, we come to the green belts—and, of course, as every noble Lord has said, this was not a green belt. A green belt is an area of land, near to and sometimes surrounding a town, which is kept open by permanent and severe restrictions on building. The main purpose is to prevent the spread and the coalescence of towns, and the secondary purpose is to provide opportunities for recreation. Now we come to yet a further grade down the scale, which is still not Samlesbury: an area marked on a development plan for the quality of the landscape and carrying a restrictive implication for development. This is usually known as an area of great landscape value. The written statement attached to a development plan usually contains a policy statement of the degree of control to be exercised.
Lastly, my Lords, in the categories applicable to the countryside we come to white land—and this is the category in which Samlesbury lies. "White land", if I may remind your Lordships, concerns a whole variety of areas having in common only the presumption that the areas in general will remain undisturbed throughout the period of the plan to which they refer. This will cover some land on the edge of towns that is generally accepted as being right for develop
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ment in due time and also much wider areas of open country which are not of great landscape value. All I have to add to that to demonstrate the relevance in this particular case is that the development plan in question is dated 1960.
It is against that general background that I should like to say now a few words about the particular factors that bore expressly on this case and led my right honourable friend the Secretary of State to make the decision he did make. First, there was an industrial development certificate for this factory given by the previous Government relating not to Samlesbury or Blackburn or any particular place but to the whole of the North-East Lancashire intermediate area, which the noble Lord, Lord Greenwood, designated. Secondly, this application from Whitbreads, although objected to by all the people whom the noble Lord, Lord Greenwood, cited and catalogued, was in fact approved by the people who have the greatest standing in this matter; namely, the democratically-elected Lancashire County Council, and was strongly supported by the democratically-elected Council of Blackburn. Very full evidence was given in favour of this application by the Lancashire County Council planning officer who is of the greatest standing of anybody in this particular case. Thirdly, and this has been said many times already, this area is not green belt nor is it designated as an area of great landscape value, the two lowest categories that can be accorded to the countryside for its special protection. The site adjoins a sewage works; it is a few hundred yards from a large paper mill (and any noble Lord who has seen the site, as I have, will know this to be the case) with numerous lorries coming from the paper mill; it adjoins a dual carriageway; it is less than one mile from two enormous hangars which are used for industrial purposes and the main vista from the site is the two large chimneys of Courtauld's factory.
But in addition to all this, this particular site met the very stringent industrial requirements of land stability, water availability, transport and effluent disposal, better and sooner than any of the many other alternative sites which had been considered, many of which were rejected on landscape grounds. The village of Samlesbury, the area most affected

1231
by this, is on the other side of the dual carriageway from this development and, apart from the village hall which happens to be outside the village, you cannot see this site from anywhere in the village. It was for these reasons that my right honourable friend the Secretary of State made the decision that he did although it involved disagreeing with his inspector.
Now, my Lords, I should like to turn to some of the advantages that flow from this decision. First—and this was the reason why the industrial development certificate was granted—600 new jobs in an area designated as an intermediate area have been created, only four miles on a good road from the centre of Blackburn, thus helping significantly with the unemployment situation in the area.
LORD CHORLEY: My Lords, could the Minister tell us how many jobs will be lost in Liverpool, which is an even worse place for unemployment?
LORD SANDFORD: My Lords, I am coming on to the effects on Liverpool and elsewhere in a moment. It is the fact that of the new jobs on that site, the net, as distinct from the gross, gain will probably be in the region of 200. I readily admit that jobs have been lost elsewhere in other breweries owned by the same company.
The second advantage which flows from this decision is that the development of the brewery will result in the closing of two other breweries. There is a considerable pollution of the rivers Irwell and Mersey resulting from the activities of these old breweries, where effluent was not properly dealt with. On the new site no pollution whatever will take place due to the effluent being properly treated in the new sewage works adjoining it. The third advantage flowing from this decision is that by putting the brewery on this site where it is near the A.59 dual carriageway and one mile only from a motorway, the brewery will be able to deliver throughout Lancashire causing the minimum of congestion; whereas in the previously sited breweries in the middle of the towns of Salford, Liverpool and Blackburn large brewery lorries were going to and from the breweries, causing a considerable amount of congestion in the streets and damage to the environment.
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The fourth advantage is that all the parking of cars and lorries associated with those congested sites within the towns—contrary to what the noble Lord, Lord Chorley, feared—will be contained within this site. The conditions that have been put on the approval of this application include landscaping and the condition that all car parking should be provided within the site. The inspector who reported on this case was very properly concerned with the congestion that might be caused by cars parking on the adjacent roads and that point has been dealt with by that condition. The one final advantage that flows from this is that the vicarage, at no cost to the Ecclesiastical authorities, can be moved into the parish. It has existed so far on the border.
Before I come to the end of what I want to say, perhaps your Lordships will permit me a few reflections upon this case. My first reflection is on how easy it is for people to be led astray—in this case to the effect that this was in a Green Belt. These were the headlines immediately after this decision was issued by my right honourable friend the Secretary of State. In the Daily Telegraph on August 29: "Plan for Brewery in Green Belt Approved". There was no Green Belt at all. In the Guardian on the same day: "Brewery for Green Belt". Then a little later, under the influence of a number of bodies and people who might have known better, on September 13 in the Observer we get, "M.P.s Fight Green Belt Brewery Plan". Another letter in the Observer a week later was headed, "Green Belt Brewery". In the Guardian on September 21 as a headline over a letter which had no reference to the Green Belt in it, we get: "End of the Green Belt?". In another letter, again without any reference in it to the Green Belt, we have. "Brewery and the Green Belt". There were other letters under the same heading from a clergyman in Bayswater and from an architect in Manchester.
It is fair to say that, when issues like this are being discussed, this kind of misrepresentation really does not help. Of course, the noble Lord himself would never make mistakes of this kind nor, I hope, would members of the Council for the Protection of Rural England. But the damage has been done; and if, because of this misrepresentation, it is

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thought that this Government have any lack of care for the countryside, that is a view that I would emphatically rebut. However, inasmuch as this case has helped to focus and inform public concern for the preservation of the countryside there has been a gain. In that connection I should like to mention one among a number of conservation policies to which we, in the Department of the Environment, are currently giving particular attention.
The Secretary of State has recently made it very clear that the intention of the present Government is to bring forward decisions on outstanding Green Belt submissions as quickly as possible within the context of the regional policies which will provide a proper basis for decision on Green Belts. It may surprise many members of the public, but it will not surprise your Lordships, certainly not those who have spoken, to know that in fact there are only four major approved Green Bells; one for Greater London; one for Bristol and Bath; one for Sheffield and Leeds and one for North Tyne-side. There is a small approved Green Belt between Cheltenham and Gloucester. There are outstanding submissions, many of them long outstanding, for extensions to the London Green Belt and for Green Belts in South Hampshire, the West Midlands, the country round Liverpool and Manchester, and a number of others. To take one example, the proposed Green Belt for South Lancashire was submitted as long ago as 1960. No submission has been made for Central Lancashire, the area around Preston and Blackburn.
The Government regard all policies for the preservation of the countryside as of the greatest importance, and I should like to end my speech by quoting the Prime Minister on this theme. At the Countryside in 1970 Conference at the end of October, he said:
"The protection of our countryside, the avoidance of pollution and the striking of a right balance between the needs of conservation and development are now among the most important and difficult tasks of Government. … The protection of our countryside and the prevention of pollution are among the highest priorities of the 1970s and are essential for any decent sort of living."
It is in that spirit, my Lords, that the Government will tackle these problems.
LORD CHORLEY: My Lords, is the noble Lord able to answer the question I put, whether the Secretary of State has inspected this area?
LORD SANDFORD: My Lords, I cannot speak for the Secretary of State. The Minister for Local Government and Development, I know, has visited the site and I have visited the site myself.

CITY OF LONDON (VARIOUS POWERS) BILL
Reported, without amendment.
BARRY CORPORATION BILL
Returned from the Commons, with the Amendments agreed to, with Amendments: the said Commons Amendments to the Lords Amendments considered and agreed to.
  INNER LONDON SESSIONS TRIAL DELAYS
  INNER LONDON SESSIONS TRIAL DELAYS
  LEGACIES OF FOREIGN SECURITIES AND EXCHANGE CONTROL
  LEGACIES OF FOREIGN SECURITIES AND EXCHANGE CONTROL
  NORTHERN IRELAND: PAYMENTS FROM TREASURY
  NORTHERN IRELAND: PAYMENTS FROM TREASURY