Sitting of 26 January 1971

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

MR. SPEAKER KING'S RETIREMENT
The Vice-Chamberlain of Her Majesty's Household (Mr. Jasper More): I have a message from Her Majesty The Queen in reply to a Loyal Address from this House.
I have to inform the House, on behalf of the Prime Minister, that the Address of Wednesday, 13th January, to Her Majesty, praying Her Majesty
"That she will be most graciously pleased to confer some signal mark of Her Royal Favour upon Dr. the Right Honourable Horace Maybray King for his eminent services during the important period in which he has with such distinguished ability and dignity presided in the Chair of this House, and assuring Her Majesty that whatever expense Her Majesty shall think fit to be incurred upon that account this House will make good the same."
has been presented to Her Majesty, and Her Majesty has been pleased to receive the same very graciously, and has commanded me to acquaint this House that Her Majesty is desirous, in compliance with the request of Her faithful Commons, to confer upon Dr. The Right Honourable Horace Maybray King some signal mark of Her Royal Favour; but as the same cannot be effectually granted and secured without the concurrence of Parliament, Her Majesty recommends to the House of Commons the adoption of such measures as may be necessary for the accomplishment of this purpose.

PRIVATE BUSINESS

  PAISLEY CORPORATION (CART NAVIGATION) ORDER CONFIRMATION BILL
  Order for consideration read.
  Hon. Members: Object.
  Consideration deferred till Tuesday next.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Governor of the Bank of England (Official Meetings)
    Dr. Gilbertasked the Chancellor of the Exchequer how many official meetings with the Governor of the Bank of England he has had since 18th June, 1970.
    The Chancellor of the Exchequer (Mr. Anthony Barber): Since becoming Chancellor, I have had frequent meetings with the Governor.
    Dr. Gilbert: Would the right hon. Gentleman say what proposals he has for resolving the dilemma in which his present reliance on monetary policy has landed him, namely, that the high interest rates in this country are so far out of line with those elsewhere in the world and are bringing in "hot" money which will defeat his restrictions on any increase in the monetary supply? For example, does he have any proposals for taxing foreign bank deposits?
    Mr. Barber: Obviously the discussions I have with the Governor are, first, confidential, and second, cover a wide range of matters. There is a later Question on the Order Paper, which I expect will be reached, which concerns the level of interest rates in this country and its comparison with others.
    Sir G. Nabarro: I warmly support my right hon. Friend's reply. Would he confirm that his reappointment of the Governor of the Bank of England for a further period of five years is intended to denote the utmost financial rectitude on the part of the Governor, as in the past warmly supported by my right hon. Friend throughout?
    Mr. Barber: I am sure that the Governor of the Bank of England will take note of my hon. Friend's felicitous language.

    Devaluation (Price Increases)
    Mr. Martenasked the Chancellor of the Exchequer what is his estimate of the extent of the increase in domestic

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    prices between 1967 and now which is the direct consequence of devaluation.
    The Chief Secretary to the Treasury (Mr. Maurice Macmillan): I estimate that of the increase of 21 per cent. in the retail prices index between the third quarter of 1967, before devaluation, and the last quarter of 1970, between 2 and 3 percentage points was attributable directly to higher import prices caused by devaluation.
    Mr. Marten: In that case, would it not be wise of the Chancellor to emphasise this fact so that actions which are tending towards inflation and possibly tending towards ultimate devaluation are opposed by the Government, so that we do not end up in the sort of situation which pertained when we took office?
    Mr. Macmillan: It is one of the objectives of the Government's policies to avoid making the mistakes of the past.
    Mr. Evelyn King: Is my hon. Friend aware that shop assistants are reported in the last few days to have gained a wage increase in the region of 21 per cent. and that this must have a direct influence on the cost of food, which will exceed any possible counter-influence which might come about as a result of S.E.T.? Has my hon. Friend any comment on that?
    Mr. Macmillan: It is widely accepted that one of the main pressures resulting in rising prices is the excessive rate of wage settlements. However, sight unseen, I would not care to comment on any specific settlement. But my hon. Friend's general proposition cannot be doubted.
    Mr. Fernyhough: Is the hon. Gentleman aware that, despite this substantial percentage increase, our distributive workers are still amongst the lowest paid?
    Mr. Macmillan: I repeat what I said to my hon. Friend. Sight unseen, and without reflection, I would prefer not to comment on any wage settlement. That does not alter the fact that excessive wage demands are a major cause of the present inflationary situation.
    Mr. Barnett: Would not it be more honest of the hon. Gentleman to say that he proposes to do nothing whatever about it?
    Mr. Macmillan: It would not only be dishonest, it would also be misleading
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    and contrary to the practice of this House to answer questions which are entirely different from that on the Order Paper and which arise from a supplementary question.

    Inflation
    Mr. Horamasked the Chancellor of the Exchequer what measures the Government are at present using to combat price inflation; and what consequences these will have for employment, investment, and economic growth.
    Mr. Barber: The Government's policy is to secure a progressive de-escalation of the level of pay settlements, against the background of a firm control of demand. This will reduce the upward pressure on prices and, compared with what would otherwise be possible, will enable us to have higher employment, higher investment and faster economic growth.
    Mr. Horam: Surely the Chancellor of the Exchequer must consider it a pretty inadequate anti-inflationary policy which, if it succeeds, on the evidence of his civil servants to the Wilberforce Committee, will allow prices to rise by 6½ per cent. this year.
    Mr. Barber: The hon. Gentleman will recall that, when we took office in June last year, prices were rising at a rate faster than at any time since 1951. It is impossible to get the situation right in a few months. But we are doing it, and we are succeeding.
    Mrs. Knight: Will my right hon. Friend bear in mind that the reduction or abolition of the petrol tax might be one effective way of combating price increases?
    Mr. Barber: At this time of the year, I will bear everything in mind.
    Mr. Sillars: Why does the right hon. Gentleman take refuge in jargon? Why does not he tell us that, when he refers to the de-escalation of wage increases, he means cutting the real wages of working people?
    Mr. Barber: That is precisely what I do not mean. If the hon. Gentleman looks at the figures, he will find that it is possible to have a de-escalation of the level of wage settlements and, at the same time, an increase in the real earnings of people. That is what we are aiming at,

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    and I am surprised if the hon. Gentleman thinks that the present level of wage settlements is tolerable.
    Mr. Redmond: Does not my right hon. Friend agree that the most important contributory factor to inflation was the high level of direct taxation left behind by the previous Government on companies, especially on close companies?
    Mr. Barber: There is no doubt that direct taxation contributed to the situation that we inherited. It is also true, as the T.U.C. pointed out in its recently published document, that one of the principal causes of the rate of increase in prices under the previous Government and the holding down of real incomes' effective purchasing power was the increase in indirect taxation deliberately imposed by the previous Government.
    Mr. Roy Jenkins: On the point about unemployment, does the right hon. Gentleman endorse the views of his predecessor, Mr. kin Macleod, who, when the unemployment level was a little more than 150,000 lower than it is at present, told us that it was quite unacceptable? What is the right hon. Gentleman's attitude to the present level? Does he intend to bring it down, or does he intend to cure inflation by putting it up?
    Mr. Barber: There is no doubt that the present level of unemployment is too high. But of course it must be generally accepted now that the greatest threat to employment is the present level of cost inflation.

    United Kingdom Overseas Debt
    Mr. Michael Shawasked the Chancellor of the Exchequer how much United Kingdom official medium and short-term overseas debt was outstanding at the end of September, 1970.
    Mr. Maurice Macmillan: £1,611 million.
    Mr. Shaw: Does not that figure continue to show the true inheritance of the present Government, when one bears in mind that the figure was some £71 million in 1964? What change does my hon. Friend expect to have taken place since September?
    Mr. Macmillan: This reflects the very heavy burden of debt inherited by the
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    present Government. The levels of outstanding debt are lower. We have made some repayment and, although in the third quarter there was a slight increase in debt, it was a temporary setback. In the fourth quarter, we seem to be getting back to repaying the debt and continuing to improve the position.

    Bank Rate
    Mr. Roperasked the Chancellor of the Exchequer which member countries of the Organisation for Economic Co-operation and Development had bank rates, or equivalent rates, higher than the United Kingdom in May, 1970; and how many had higher rates on 1st January, 1971, from information available from international sources.
    Mr. Barber: I will, with permission, circulate a table which gives this information. Absolute levels of Bank Rate or its equivalent are not good guides to the actual cost of commercial borrowing in different countries. Costs to good borrowers in this country are lower than the O.E.C.D. average.
    Mr. Roper: While thanking the right hon. Gentleman for that reply, does not it suggest that there is now no argument on the basis of the international position of sterling for keeping interest rates at a level which discourages industrial investment and house building, so giving another twist to the inflationary spiral?
    Mr. Barber: Obviously it is not the practice of Chancellors of the Exchequer to discuss interest rates or to forecast their future in the House. Costs to good borrowers in this country are lower than the O.E.C.D. average. The hon. Gentleman should consider the table.
    Mr. Taverne: On Bank Rate, will not the table show how ill-founded and insincere were the continual criticisms of right hon. and hon. Gentlemen opposite during the period of office of the previous Government, when they complained about Bank Rate being high when it was relatively low or average, whereas they now defend it when it is high in comparison with other countries? On the point asked by my hon. Friend the Member for Dudley (Dr. Gilbert), when Bank Rate reflects a situation which is attracting "hot" money, what policy will the

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    right hon. Gentleman pursue to prevent an influx of this undesirable money?
    Mr. Barber: As the hon. and learned Gentleman knows, certain action was taken and announced by the Bank of England a short time ago in connection with British companies borrowing abroad for domestic use. As for Bank

    INTEREST RATES IN O.E.C.D. COUNTRIES

    Bank rate

    Prime lending rate

    Country

    End May, 1970

    31st December, 1970 or latest convenient date

    End May, 1970

    31st December, 1970 or latest convenient date

    Austria

    5

    5

    n.a.

    n.a.

    Belgium and Luxemburg

    7½

    6½

    9½

    8½

    Canada

    7½

    6

    8½

    7

    Denmark

    9

    8

    9½–11½

    8½–10½

    Finland

    7

    7

    7½

    7½

    France

    8

    6½

    8⅝–13⅛

    7⅛–11⅝

    West Germany

    7½

    6

    11¾–12¼

    9¾–10¾

    Greece

    6½

    6½

    8

    8

    Iceland

    5¼

    5¼

    n.a.

    n.a.

    Ireland

    7 5/16

    7¼

    9½

    9½

    Italy

    5½–7

    5½–7

    9¾

    9¾

    Japan

    6¼

    5¾

    7¼

    6¾

    Netherlands

    6

    6

    9·3

    9·3

    Norway

    4½

    4½

    n.a.

    n.a.

    Portugal

    3½

    3½

    5¼

    5¼

    Spain

    6½

    6¼

    8

    8

    Sweden

    7

    7

    9¾

    9¾

    Switzerland

    3¾

    3¾

    7

    7

    Turkey

    7½

    9

    n.a.

    n.a.

    United States

    6

    5

    10*

    7½*

    United Kingdom

    7

    7

    8

    8

    Sources: The figures of prime lending rates for Greece and Ireland are from national sources. The others are Bank of England estimates based on the figures in the O.E.C.D. Financial Statistics Bulletin, and subject to the qualifications in that bulletin.

    * The basic prime rates have been increased to take account of the redeposit requirements which raise the effective rate of interest.

    Money Supply
    Mr. Barnettasked the Chancellor of the Exchequer if he will make a statement on the extent to which he is using control of the money supply to control inflation.
    Mr. Barber: A firm control of credit and money supply is an important part of our strategy for controlling inflation.
    Mr. Barnett: Will the right hon. Gentleman now answer the question put to him by my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins)? What does the right hon. Gentleman estimate the effect of his monetary policy will be on unemployment? Will it increase it or reduce it?
    Rate, the hon. and learned Gentleman referred to the past. The Question asks about the position at the end of May, 1970, and how many O.E.C.D. countries had higher rates on 1st January of this year. On both dates, Bank Rate was 7 per cent.
    The information is as follows:
    Mr. Barber: I have said in the past, and I adhere to it in present circumstances in the light of the latest figures of unemployment and the information available, that we shall continue to pursue a tight money policy, which is essential if we are to get a grip on the present rate of inflation.
    Mr. Sheldon: Answer the question.
    Mr. Barber: That is our first task, and we shall succeed.
    Mr. Cant: Is the right hon. Gentleman aware that, whatever our views on the Government's monetary policy and monetary supply, his speech to the Finance Houses Association suggests that that policy is in a state of almost total

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    dither? Has the right hon. Gentleman given the Governor of the Bank of England a directive to follow a policy of the aggressive selling of gilt-edged stocks, or has he accepted the issue of these tap stocks because he believes, as the Governor believes, that it is important to have a healthy gilt-edged market?
    Mr. Barber: Here again, the hon. Gentleman knows that Chancellors of the Exchequer do not answer questions about the management of the gilt-edged market. This question is concerned with the control of the money supply. The facts are simple. I have given them before, and I am pleased to see the ex-Chancellor with us and no doubt ready with another supplementary question. I repeat the facts to the House. Between April and June of last year, when the right hon. Gentleman was responsible, the money supply, seasonally adjusted, rose by £646 million. In the next quarter, for which the present Government were responsible and for which we have the latest figures, it rose by only £240 million, which is a pretty good comparison.
    Mr. Roy Jenkins: Yes, but the right hon. Gentleman would surely be aware that the make-up date for banks was 17th June and not 30th June. Will he tell us by how much the money supply increased to 17th June as opposed to 30th June?
    Mr. Barber: It is perfectly clear that, while it might make some minor difference to the overall figure in the total of money supply, there can be no doubt at all that there was a very considerable increase in the money supply in the three months to which the right hon. Gentleman refers and for which he is responsible. It will be recalled—he is referring to bank lending—that the bank lending guide lines which he issued were those which would be effectively operating at that particular time.
    Mr. Roy Jenkins: Will the Chancellor of the Exchequer tell us whether it is or is not the case that bank lending, a crucial element in money supply, increased by substantially less, indeed hardly increased at all, in the quarter to 17th June, and increased by very much less than it did in the quarter to 17th September?
    Mr. Barber: The right hon. Gentleman knows that bank lending is only one component of the money supply. [HON.
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    MEMBERS: "Answer."] The right hon. Gentleman knows full well, because he was responsible for this particular period, that the overwhelming increase in the money supply in the period of the last three months when he was Chancellor of the Exchequer was due to his policies and was his responsibility.
    Mr. Hordern: Is my right hon. Friend aware that the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), does not appear to know the difference between d.c.e. and money supply, since bank lending has no part at all in the money supply. Is my right hon. Friend aware that the increase in the money supply to which he referred in those three months was largely a result of the sale of gilt-edged securities which occurred largely at the end of April and the beginning of June and for which the right hon. Member for Stechford was entirely responsible?
    Mr. Barber: I had assumed that, as the right hon. Gentleman was talking about bank lending, he was referring to d.c.e. If he would like the figures for domestic credit expansion and would consider them more relevant, 1 would remind him that in the last three months for which he was responsible they rose by £667 million, and in the first three months for which we were responsible by £347 million.
    Mr. Roy Jenkins: Will the Chancellor answer two questions, and answer them directly? First, does he agree with the extraordinary remark of his hon. Friend the Member for Horsham (Mr. Hordern) that bank lending has nothing to do with the money supply? Secondly, will he agree that bank lending rose more in the quarter to mid-September than in the quarter to mid-June? If not, will he tell us why he does not so agree?
    Mr. Barber: As the right hon. Gentleman knows, the main relevance of bank lending is in relation to domestic credit expansion, but the right hon. Gentleman is surely not pretending that the considerable increase in d.c.e.—[HON. MEMBERS: "Answer."]—during the period April to June for which he was responsible was not far in excess of what he had in mind when he set the target in his Budget Statement. The right hon. Gentleman knows this perfectly well, and it is

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    apparent that he has a guilty conscience about this, otherwise he would not keep on about it.

    National Savings (Publicity)
    Mr. Cormackasked the Chancellor of the Exchequer what proposals he has for giving greater publicity for the various media of National Savings.
    Mr. Barber: The best publicity for National Savings is success and my hon. Friend no doubt knows that National Savings have been doing particularly well recently. But of course advertising has an important impact and substantial sums are being and will be spent on the various media.
    Mr. Cormack: Whilst thanking my right hon. Friend for that reply, and appreciating that he cannot say very much at the moment—[Interruption.]
    Mr. Speaker: Order. These noises make it impossible for the Chancellor to hear the questions.
    Mr. Cormack: —may I urge my right hon. Friend to give particular attention to greater incentives for savers when he comes to draw up his Budget?
    Mr. Barber: I will certainly hear in mind what my hon Friend says. He will be interested to know—and I am sure that right hon. and hon. Gentlemen opposite will cheer this—that, whereas in the last six months of 1969 there was a net withdrawal from National Savings of £99 million, in the comparable period of last year for which the present Government were responsible, there were net receipts amounting to £60 million.

    Purchase Tax
    Mr. Clinton Davisasked the Chancellor of the Exchequer whether he is aware that purchase tax is imposed on goods manufactured by disabled persons undergoing rehabilitation in factories or workshops administered by local government welfare authorities; and if he will seek to exempt such goods from purchase tax.
    Mr. Maurice Macmillan: I am sympathetic to the hon. Gentleman's motives in making this suggestion. But I could not justify such exemption because goods made in these circum-
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    stances are sold in competition with those of commercial manufacturers and importers who have to bear the tax.
    Mr. Clinton Davis: Is not the Chief Secretary aware that local welfare authorities are not making profits, in contradistinction to the other people about whom he spoke? Does not he also recognise that the manufacture and sale of these goods represents part of the therapy treatment that is available to disabled persons, and that purchase tax represents a serious discouragement to local authorities and disabled people?
    Mr. Macmillan: Yes, but there is a problem here. First, a number of voluntary bodies are also doing similar work. Secondly, quite a large number of commercial firms deliberately employ a high proportion of handicapped people. In these circumstances, an attempt to alter the purchase tax in relation to the type of employment and the type of employer would lead to more complications and unfairnesses than keeping the present system which relates exemptions from purchase tax entirely to the character of the goods.
    Sir B. Rhys Williams: In turning his attention to this problem, will my hon. Friend look at the precedent set already of special concessions for the blind and the positive payments for the constant attendance allowances? Will he consider the possibility of introducing a system of positive tax credits specially favourably slanted towards the disabled?
    Mr. Macmillan: As first sight that sounds a somewhat complicated approach to the problem, but I would like to consider it.

    £ Sterling (Purchasing Power)
    Mr. Kaufmanasked the Chancellor of the Exchequer what is the purchasing power of the £ sterling now, taking it as 20s. on 18th June, 1970.
    The Financial Secretary to the Treasury (Mr. Patrick Jenkin): Taking the value of the £ sterling as 20s. 0d. in mid-June 1970, its purchasing power in mid-December 1970, the latest date for which information is available, is estimated at about 19s. 4d. This figure is based on the movements in the General Index of Retail Prices.
    Mr. Kaufman: How can the hon. Gentleman square this decline of more than a penny per month in the purchasing power of the £ since hon. Gentlemen opposite were responsible for the nation's affairs with the Paymaster-General's statement in another place last month that the Government undertook to bring prices down? How do the Government intend to honour the Paymaster-General's undertaking—at a stroke?
    Mr. Jenkin: As the hon. Gentleman knows, the Government inherited a very rapid wage-cost inflation, and in the six months prior to mid-June the cost of living rose faster than in the six months referred to in my answer.
    Sir G. Nabarro: Does not my hon. Friend agree that the decline in purchasing power of 8d. in the £ is equal to 3⅓ per cent. over a period of eight months, which is a rate of 5 per cent. per annum, and that is already demonstrated as much below the rate of increase in the 12 months before 18th June, 1970?
    Mr. Jenkin: I am grateful to my hon. Friend, but I have already indicated that in the six months period before the election the cost of living rose faster than it did in the six months referred to in my Answer.
    Mr. Frank Allaun: Then how does the Minister explain the deliberate intention of the Government to raise council rents and private landlords' rents?
    Mr. Jenkin: That seems to me to be a question for my right hon. Friend the Secretary of State for the Environment.
    Mr. Dykes: Does not my hon. Friend agree that the preoccupation of hon. Gentlemen opposite with the purchasing power of the £ is an astonishing conversion, bearing in mind that in the period of the 1964 Labour Government the value of the £ fell at an unprecedented and record rate?
    Mr. Jenkin: Hon. and right hon. Gentlemen opposite have changed a great deal of their minds since 18th June.
    Mr. Taverne: Will the Financial Secretary perhaps answer the question which his right hon. Friend, the Chancellor of the Exchequer did not answer? What do the Government propose to do about the rise in prices and inflation in the
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    private sector, and how can they justify action against wages in the public sector while nothing is done about the Chrysler and similar claims?
    Mr. Jenkin: My right hon. Friend made it abundantly clear that the private sector is expected to have regard to the national interest in this matter. It would be a gross dereliction of the duty of the Government if they did not act directly in those elements which are within their control.

    Blood Sports
    Mr. Ashtonasked the Chancellor of the Exchequer whether he will introduce a prohibitive tax or levy on blood sports.
    Mr. Patrick Jenkin: No, Sir.
    Mr. Ashton: Does not the Minister think that the time has come to put an end to this barbarous practice by taxing it out of existence? Why does he think it fair to impose a tax on people playing bingo and backing racehorses but not on people taking part in blood sports?
    Mr. Jenkin: With the greatest respect, I think that the hon. Gentleman is confused about the revenue-raising purpose of a tax and the legislation which he has in mind to outlaw field sports. This is not a matter for the Chancellor of the Exchequer.
    Mr. Ramsden: Is my hon. Friend aware that a further tax on fishing in addition to the licences which anglers are already required to have would be widely resented?
    Mr. Jenkin: I entirely agree with my right hon. Friend, but the original Question of the hon. Member for Bassetlaw (Mr. Ashton), suggested the imposition of a prohibitive tax which, on that definition, would abolish fishing.
    Mr. William Price: Is the Minister aware that in my village last week the North Warwickshire Hunt got into a private garden and tore a fox to pieces in front of small children? Is it not time we got a grip on this, if not through the Home Office, then by fiscal means through the Treasury?
    Mr. Jenkin: That is the oddest reason for imposing a new tax that I have ever heard.

    Export Credit
    Mr. Tugendhatasked the Chancellor of the Exchequer if he will make a statement in regard to the current growth in export credit.
    Mr. Barber: Although no final figures are available, the growth of export credit outstanding in 1970 was probably of the order of £350 million, or about the same as in 1968 and 1969.
    Mr. Tugendhat: I thank the Chancellor for that reply, but does he expect a rapid increase now, in view of the healthier state of the balance of payments than in recent years?
    Mr. Barber: I have in the past expressed concern about the extent of export credit outstanding, which is a considerable burden on the balance of payments, and I have also pointed out to the House that we require a substantial continuing surplus in order to finance the growth of export credit which is outstanding. But the whole matter of export finance arrangements is under review.

    International Monetary Fund (United Kingdom Borrowings)
    Mr. Tugendhatasked the Chancellor of the Exchequer what is the timetable of repayments of United Kingdom loans still outstanding from the International Monetary Fund.
    Mr. Maurice Macmillan: The first repurchases are due on 18th June this year. Discussions have not yet been started on the rest of the timetable.
    Mr. Tugendhat: I thank my hon. Friend for his reply. In view of the great inflow of funds into this country which makes possible these repayments, does not he agree that the time has perhaps come to encourage an outward flow in the form of more overseas investment?
    Mr. Macmillan: The future of our balance of payments can be greatly sustained by overseas investment. On the question of repurchasing these drawings, we expect to start discussing the balance of the June, 1968, drawings with the fund during the coming months, and that has to be taken into consideration with other factors.
    Mr. Bruce-Gardyne: Will my how Friend tell the House whether accelerated and advanced repayment of international debts incurred by the last Administration would help to ease the strain on monetary policy imposed by the inflow of foreign funds which appears to have taken the Bank of England so completely by surprise?
    Mr. Macmillan: The whole question of the rate of repayment of debt in relation to the inflow of funds is something to be discussed with those concerned in the context of the International Monetary Fund. I do not think that I can go any further today.
    Mr. Le Marchantasked the Chancellor of the Exchequer what is the total of interest and charges paid to date by the United Kingdom on official short and medium-term borrowings made since October, 1964 from the International Monetary Fund and, under the various swap arrangements, from overseas central banks.
    Mr. Maurice Macmillan: In the period end September, 1964 to end September, 1970, interest and charges on all outstanding short and medium-term official debt totalled £354 million, of which £118 million was paid to the I.M.F.
    Mr. Le Marchant: Can my hon. Friend give his views on the extension of the 1968 Basle Agreements for sterling balances? Are they working satisfactorily for us with our fluctuating liabilities?
    Mr. Macmillan: The Basle Agreements come up for renegotiation this year. In view of those negotiations, I would prefer to say no more now.

    Exchange Control Regulations
    Mr. Dixonasked the Chancellor of the Exchequer whether he will review the working of Exchange Control Regulations in so far as they relate to what is commonly called the 25 per cent. surrender rule.
    Mr. Patrick Jenkin: Like all exchange control rules, this rule is kept under review. But my right hon. Friend has to weigh against the disadvantages the inflow of foreign currency which it brings to our official reserves, running at about £100 million per year.
    Mr. Dixon: Does not my hon. Friend agree that the present regulations, far from helping our balance of payments, inhibit British investors in trying to increase their income from overseas sources and to increase the capital value of their investment, and, therefore, in the long run, positively harm our balance of payments?
    Mr. Jenkin: I recognise that point of view, but we do not hold it at present. We realise that the rule has an inhibiting effect on the management of overseas portfolios, but one must bear in mind the advantage to the reserves that it brings in the short and medium-term.

    Import Deposits Scheme
    Mr. Madelasked the Chancellor of the Exchequer what effect he estimates the termination of the Import Deposits Scheme will have on the balance of payments.
    Mr. Dykesasked the Chancellor of the Exchequer what is his estimate of the effect of the Import Deposits Scheme both on the volume of imports and on currency flows into the United Kingdom.
    Mr. Maurice Macmillan: Ending the Scheme is not likely to cause any signicant increase in imports. Therefore the effect on currency flows should also be insignificant.
    Mr. Madel: Would my hon. Friend accept that the immediate requirement is for rapid industrial expansion? Will he consider immediate adjustments in purchase tax and hire-purchase restrictions so that industries such as the motor industry may run at much nearer full capacity?
    Mr. Macmillan: That is an entirely different question, as I hope my hon. Friend is aware. As he is concerned about liquidity, I will point out to him that the effect of ending this Scheme and the progressive release of deposits over the six months from 4th December will have a beneficial effect on company liquidity.
    Mr. Dykes: Since it appears, on all the evidence, that the Import Deposits Scheme's main characteristic was that it had no effect on import flows into the country, either at the beginning, at the
    308
    middle or at the end, does not my hon. Friend agree that the economic management authorities may be in a position to take more of a risk with the economy than they have so far by faster expansion?
    Mr. Macmillan: I do not think that the Scheme had very much effect one way or the other and I do not think, therefore, that its removal has very much effect one way or the other.

    Private Investment Overseas
    Mr. Dykesasked the Chancellor of the Exchequer what was the cause of the rise in the United Kingdom private investment overseas in the third quarter of 1970.
    Mr. Barber: This was largely due to an increase of £75 million in direct investment overseas which rose to an exceptionally high level. It was mainly attributable to a coincidence of several large transactions.
    Mr. Dykes: I am grateful for that statistical reply, but would not my right hon. Friend agree, since the balance of payments is no longer in a mess as it was previously—[HON. MEMBERS: "Oh."]—and, of course, paying tribute for that wherever it may be due—that there is opportunity now to consider a somewhat more forward-looking programme in connection with overseas investment, bearing in mind what happened in the third quarter and the desire of investors in this country to build up valuable assets for the country overseas?
    Mr. Barber: I agree in stressing the importance of overseas investment as a basis for future income for the country, but there are limits to what we can afford to finance from the reserves in the present situation, particularly in view of the very heavy burden of debt we inherited.
    Mr. Barnett: Would it not be better to restrain the flood of "hot" money by lowering the unnecessarily high interest rate, with the effect this has at present on unemployment?
    Mr. Barber: I have already been asked about Bank Rate.
    Mr. Barnett: The right hon. Gentleman did not answer.
    Mr. Barber: Of course 1 did not. It is impossible to suggest that any Chancellor of the Exchequer will answer Questions in the House about the future course of Bank Rate.

    Sterling Area Balances
    Mr. Costainasked the Chancellor of the Exchequer to what he attributes the rise in the gross balances of the sterling area countries in the third quarter of 1970.
    Mr. Patrick Jenkin: Preliminary figures indicate that there was a small surplus in the balance of payments of the overseas sterling area as a whole in the third quarter of 1970, and some of the resulting increase in their reserves was held in the form of additional sterling balances.
    Mr. Costain: Why is my hon. Friend so modest about the success of the Government's policies? Does not he realise that the increases in sterling balances and national savings are the result of the policies the Chancellor is putting across? Cannot he get across to the Opposition that this is a political matter, a national issue?
    Mr. Jenkin: I hope that Treasury Ministers will always be suitably modest. My hon. Friend is right, however. This small increase in the sterling balances was in contrast to the usual seasonal fall that happens in the third quarter. The balances of most of the countries in the overseas sterling area did fall as usual, but one or two rose, for exceptional reasons.

    United Kingdom Banks (Foreign Currency Transactions)
    Mr. Costainasked the Chancellor of the Exchequer to what he attributes the foreign currency transactions of United Kingdom banks that resulted in a net currency outflow in the third quarter of 1970.
    Mr. Patrick Jenkin: I cannot give precise explanations for the activities of the banks. However, interest rate comparisons were generally unfavourable to sterling in this period.
    Mr. Costain: Again, does my hon. Friend appreciate that the long-term
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    policies the Government are carrying out are showing success even in this sector?
    Mr. Jenkin: I hope that all the Government's policies will show long-term success.

    Finance Ministers of France and West Germany
    Dr. Gilbertasked the Chancellor of the Exchequer if he will make a statement on his recent talks with the Finance Ministers of France and West Germany.
    Mr. Barber: These talks were confidential. The subjects discussed included the economic situation in our respective countries, and other matters of mutual interest.
    Dr. Gilbert: In view of the notorious dissension between the French and West German Governments on the attitude they should adopt to the later stages of the Werner Report, can the right hon. Gentleman explain the curious fact that the reports of his discussions were unanimous that when he was talking to the West German Finance Minister he was taking his side against the French, and when talking to the French Finance Minister he was taking his side against the West Germans? Can the right hon. Gentleman for once come clean with the House and tell us whose side he is on in this matter?
    Mr. Barber: I told both Finance Ministers that, while Her Majesty's Government are in favour of closer European economic and monetary integration, we do not feel it appropriate for the United Kingdom, as an applicant country, to express a detailed view while the subject is still under discussion among members of the E.E.C. themselves.

    Manufacturing Investment
    Mr. Sheldonasked the Chancellor of the Exchequer what estimate he has made of the trend in manufacturing investment in 1970 and 1971.
    Mr. Kenneth Bakerasked the Chancellor of the Exchequer what was the increase in industrial investment in 1970; and what he expects it to be in 1971.
    Mr. Maurice Macmillan: The volume of manufacturing investment in the first threequarters of 1970 as a whole was

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    about 4 per cent. higher than in the corresponding period of 1969. The latest official survey of investment intentions, conducted by the Department of Trade and Industry in November-December, 1970, showed that manufacturers were then expecting a small fall of about 2 per cent. between 1970 and 1971.
    Mr. Sheldon: Is it not an extremely serious matter that manufacturing industry, so far from increasing investment, is allowing it to decline? Is the hon. Gentleman sure that the ending of investment grants was the right approach to this problem?
    Mr. Macmillan: I think that the hon. Gentleman is right in that the intentions expressed would indicate a very unsatisfactory situation, but they are intentions. I think that the Government's policy of replacing investment grants will help, together with our general economic policies, to create a climate more favourable for investment which we shall see not in intentions but in practice in due course.
    Mr. Baker: While appreciating that the survey of investment intentions is disappointing, may I press my hon. Friend to be determined to bring in the scheme of investment allowances, since this will stimulate effective investment? It is the effectiveness, through profitability and productivity, of investment which is important rather than its overall level.
    Mr. Macmillan: I agree that the outlook revealed by the survey is disappointing but the White Paper on Investment Incentives made it clear that the Government intend to take my hon. Friend's advice—if I may put it like that—and I emphasise that the quality of investment is extremely important. It is quality as much as quantity which has been defective in the past which we have inherited.
    Mr. Dell: Has the hon. Gentleman noted the postponement of a very high quality investment which Shell was to make at Carrington? Does he consider that Shell's change of mind had anything to do with the change in investment incentives?
    Mr. Macmillan: As I understand it, it is a temporary suspension, and I cannot possibly interpret the reasons for any
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    particular company's investment decision in the light of its own general circumstances.

  WORLD INFLATION
  Mr. Barnettasked the Prime Minister what discussions he had on his recent talks with President Nixon about international co-operation to deal with the world problem of inflation.
  The Prime Minister (Mr. Edward Heath): The details of my discussions with President Nixon are confidential.
  Mr. Barnett: While the right hon. Gentleman was away, did he notice that the Government's policy of attempting to beat inflation by acting directly on the public sector was not providing the example they expected on the private sector, in so far as wage settlements—the Chrysler settlement, for example—were not being affected at all? Does he confirm that he still does not intend to do anything about inflation?
  The Prime Minister: The hon. Gentleman's Question was about international co-operation with other countries. It is not possible to compare exactly the circumstances of one country with those of another in relation to inflation. I believe that the policy which we are carrying out—that of dealing with those sectors for which we are, directly or indirectly, responsible—is right. If the Opposition want another period of direct statutory wage and price control, they had better say so.
  Mr. Bruce-Gardyne: Did my right hon. Friend have any discussions with President Nixon about the possible desirability, at any rate for a time, of suspending the upper limit of the parity of the £ sterling in order to discourage a flow of funds across the Atlantic resulting from differential interest rate policies on either side of the Atlantic, since such a flow might have a deleterious effect on the Government's domestic monetary policies?
  The Prime Minister: No, Sir. We did not discuss that technical matter.
  Mr. Roy Jenkins: Can the right hon. Gentleman tell us whether the Government's policy for containing inflation in the private sector is based primarily upon

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  general monetary controls? If so, does he regard this as being effective upon an international company like Chrysler?
  The Prime Minister: We shall make use of all the economic weapons freely available to us. International companies must reach their own conclusions but they also are bound to be affected by the general economic situation, especially in relation to exports.

  CONFERENCE OF COMMONWEALTH HEADS OF GOVERNMENT
  Mr. Barnesasked the Prime Minister if he will make a statement about the Commonwealth Prime Ministers' Conference.
  The Prime Minister: With your permission, Sir, I propose to do so later this afternoon.

  RESEARCH AND DEVELOPMENT
  Mr. Carterasked the Prime Minister if he is satisfied with the various Departmental responsibilities in the fields of Government-sponsored research and development; and if he will make a statement.
  The Prime Minister: As announced in the White Paper on the Reorganisation of Central Government, each Department is now carrying out a review of its functions, including this field.
  Mr. Carter: That hardly seemed like a reply to my Question. When the Secretary of State for Trade and Industry makes a statement in the near future on the subject of research and development in industry, will he resore the quite savage cuts made in the White Paper referred to by the Prime Minister?
  The Prime Minister: I have no knowledge of my right hon. Friend saying that he expected to make a statement on this subject in the near future. However, there has, of course, been a transferrence of certain establishments from the Department of Trade and Industry to the Department for the Environment because I was certain that the responsibility should lie there.

  M. EMILE VAN LENNEP
  Mr. Sheldonasked the Prime Minister if he will invite M. Emile van Lennep, the Secretary General of the Organisation for Economic Co-operation and Development, for official talks at No. 10 Downing Street.
  The Prime Minister: No, Sir.
  Mr. Sheldon: When he eventually meets him, will the right hon. Gentleman discuss with him the Prime Minister's speech of 16th June of last year in which, apart from his famous references to prices, he promised to reduce unemployment and to increase production immediately? Has the right hon. Gentleman any more of his favourite prophecies to make to us?
  The Prime Minister: The question of dealing with M. Emile van Lennep on matters of policy is for my right hon. Friend the Chancellor of the Exchequer.

  U.S.S.R. (PRIME MINISTER'S VISIT
  Mr. Martenasked the Prime Minister what plans he has to visit the Union of Soviet Socialist Republics.
  The Prime Minister: I have accepted in principle an invitation from the Soviet Government, but no firm dates have yet been fixed.
  Mr. Marten: While there is probably no great need to rush this meeting, may I ask my right hon. Friend to take up with the Russians, when the meeting takes place, the persistent imbalance in our trade with them?
  The Prime Minister: Yes, Sir. This matter has been taken up by each Government in turn on many occasions, going back to the 1945–50 Parliament. In 1964, when I was President of the Board of Trade, I secured an agreement or commitment from the then Russian Minister of Trade, Mr. Patolitchev, and the Soviet Government, that they would balance up our trade. It is to my great regret that this has not happened.
  Mr. Crawshaw: When the Prime Minister goes there, which I hope will be at the earliest possible opportunity, will he raise with the heads of the Union of Soviet Socialist Republics the question of

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  the treatment of the Jewish community in that country now and point out that the repressive measures which are being taken there are abhorrent to all British people?
  The Prime Minister: Yes, Sir. We have done this on many occasions. The last occasion when I did it personally was when Mr. Gromyko paid a visit to London.
  Sir A. V. Harvey: Does my right hon. Friend recall that the Leader of the Opposition said that he had brought about a treaty of friendship with Soviet Russia, though he did not tie it up? Will my right hon. Friend try to finalise what was done at that time?
  The Prime Minister: I am not sure that I would want to tie up anything that the right hon. Gentleman left untied. However, I am very much in favour of a treaty of friendship.
  Mr. Maclennan: What replies have the Government received to the approaches to the Soviet Union about Berlin?
  The Prime Minister: Discussions are going on between the four Powers about the whole question of Berlin, including access to the Western part of Berlin and access between the two parts of the city. These discussions are continuing.

  DRUG-TAKING (DEPARTMENTAL CO-ORDINATION)
  Mr. Dalyellasked the Prime Minister what steps he is taking to coordinate the efforts of the Secretary of State for the Home Department, the Secretary of State for Education and Science, and the Secretary of State for Social Services to combat the increase of drugtaking among school pupils, and those between 15 and 18 years who have left school.
  The Prime Minister: There are standing arrangements to co-ordinate the work of the Departments concerned.
  Mr. Dalyell: Which Department has the final say in this matter?
  The Prime Minister: It would depend on the particular aspect of the matter with which one is dealing. It is surely important that the various Departments
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  should, in their work, co-ordinate their activities. The advisory and inter-Departmental machinery includes representatives of all the Departments, on similar lines to the steps announced by the previous Administration, which the hon. Gentleman supported.

  POPULATION POLICY
  Sir D. Rentonasked the Prime Minister (1) what steps are taken to co-ordinate the responsibilities in relation to population of the Secretary of State for Social Services for family planning and abortion, the Secretary of State for the Home Department for immigration, and the Secretary of State for Foreign and Commonwealth Affairs for emigration; and what steps are taken to formulate the Government's population policy in that way;
  (2) whether the population studies under the chairmanship of the Chief Scientific Adviser, which were started by his predecessor, are still continuing; what stage they have reached; and whether he will make a statement.
  The Prime Minister: There is already close co-ordination between the Departments concerned with family planning and abortion, immigration and emigration. The implications of population growth and its probable distribution are already under study within the Government, but I am in addition considering whether the previous Administration's proposal to set up a study unit on population growth should be pursued.
  Sir D. Renton: Is my right hon. Friend aware that there is growing anxiety in this country about the prospect of a population growth in the next 30 years equivalent in size to 20 times the present population of the city of Leeds? Will he bear in mind the need to stabilise the population by voluntary and moderate methods over the next 30 years so that we may still have some environment in which to enjoy a good quality of life?
  The Prime Minister: I am well aware of the importance as well as of the difficulties of this problem. This is why I am considering setting up a study unit, and I hope to reach a conclusion in the very near future.
  Mr. David Steel: When the right hon. Gentleman does that, will he consider including a financial discussion of the relative costs of providing family planning provisions free within the National Health Service as against the considerable social cost of dealing with unwanted births?
  The Prime Minister: Yes. This is an important point and my right hon. Friend the Secretary of State for Social Services is examining this group of problems now. I am sure that he is giving attention to the point which the hon. Gentleman raised.
  Mr. St. John-Stevas: Is not example in these matters more important than precept? Are not my right hon. Friend and myself making an effective contribution to zero population growth?
  The Prime Minister: I am sure that my hon. Friend is doing his best.

  CONCORDE
  Mr. Adleyasked the Prime Minister whether he himself will make an early flight in Concorde. in view of the fact that the French Prime Minister has already done so.
  The Prime Minister: I understand that the French Prime Minister has not, in fact, flown in Concorde, though certain French Ministers have done so. I shall certainly be glad to consider doing so myself.
  Mr. Adley: I am grateful to my right hon. Friend for that answer. Does he appreciate that now is the critical time for the British and French Governments to show their confidence in Concorde because its customers, the world's airlines, are waiting to see what will be the attitude of these Governments to this aeroplane? Does he agree that this great British and French adventure, achievement and investment has a golden future which he could bless by taking a flight in it now?
  The Prime Minister: I was expecting a rather warmer welcome back from my hon. Friend. [Laughter.] I shall certainly discuss with those concerned the best time for me to take a fight, if they would like me to do so.
  Mr. Hugh Jenkins: While I would not in any way wish to dissuade the hon. Gentleman from accepting his hon. Friend's invitation to take a flight in Concorde, may I ask him to agree that it might be even more important for him to subject himself to the sonic boom of Concorde? Is it not a fact that while relatively few people will fly in this aeroplane, large numbers are likely to experience its boom?
  The Prime Minister: This is a matter of great importance which, as the hon. Gentleman knows, is under examination now. Many countries have come to the conclusion that in the interests of the environment and the well-being of the people of their countries, this matter must be satisfactorily explored and dealt with.

  AGRICULTURAL POLICY (MINISTER'S STATEMENT)
  Mr. Marksasked the Prime Minister if the statement by the Minister of Agriculture, Fisheries and Food broadcast on independent television on 8th December, 1970, on the cost of living represents the policy of Her Majesty's Government.
  Mr. David Watkinsasked the Prime Minister if the broadcast statement made by the Minister of Agriculture, Fisheries and Food, on prices on 8th December, 1970, on independent television news, represents the policy of Her Majesty's Government.
  The Prime Minister: I would refer the hon. Members to the reply which my right hon. Friend the Home Secretary gave on my behalf to the hon. Member for Newcastle-under-Lyme (Mr. Golding) and the hon. Member for Ilkeston (Mr. Raymond Fletcher) on 19th January.—[Vol. 809, c. 263.]
  Mr. Marks: That Answer was "Yes". Is the right hon. Gentleman aware that the statement quoted the Minister as saying that it would take a whole Parliament to get prices stable again? In view of his other famous remarks about prices, will the right hon. Gentleman make a fresh start on prices and say what his Government have done about price rises in the last seven months and what they propose to do about them in the next 12, particularly in the private sector?
  The Prime Minister: My right hon. Friend was referring to the manifesto and said that this was a programme for a Parliament; and that has never been questioned by any hon. Gentleman opposite.
  Mr. Watkins: Is the right hon. Gentleman aware that his right hon. Friend's statement was a complete contradiction of his own statement, made two days before the General Election? Are these serious divisions of opinion among Members of the Government the reason why the Government have no effective policies to reduce prices?
  The Prime Minister: Neither of the statements made by the hon. Gentleman represents the facts.
  Mr. Peter Mills: Does my right hon. Friend agree that even now the British consumer is still having some of the cheapest and finest food in the world and that, as a result, agriculture should have a fair return for what it does for the nation?
  The Prime Minister: I agree with my hon. Friend that it is important that agriculture should get a fair return for its labour and investment and this is the object of our agricultural policy.
  Mr. Harold Wilson: Does the reply to my hon. Friend the Member for Consett (Mr. David Watkins) mean that the right hon. Gentleman still seeks to deny what he said on 16th June, as he has once tried to deny it in this House—that he would take action "at a stroke" to deal with this question? Does he still seek to deny that in the same statement he said that he would immediately break into the prices-wage spiral to reduce prices and unemployment? Did he use those phrases, does he stand by them and how can he relate that to talking about taking action over a whole Parliament?
  The Prime Minister: If the right hon. Gentleman will study the two statements quoted he will find that they are not incompatible.
  Sir G. Nabarro: Would my right hon. Friend bear in mind that earlier in the proceedings today it was revealed that the rate of inflation since 18th June last has amounted to about 3⅓ per cent.
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  for eight months or 5 per cent. per annum? Would he agree that the concerted efforts of Her Majesty's Government are flattening out the upward course of prices? Will he persist vigorously in all of these policies?
  The Prime Minister: We shall certainly persist most vigorously.
  Mr. William Hamilton: Is it not deliberate policy of Her Majesty's Government to put up food prices and to put up the rents of private and public house tenants? Does he not agree that decimalisation, to be introduced in a few weeks, will add a further increase to the cost of living? What will he do about rents and food prices and the escalation consequent on decimalisation?
  The Prime Minister: The specific question of the agricultural policy and food prices was dealt with fully at the election and criticised by hon. and right hon. Gentlemen opposite. As far as I know we made no reference to public house prices. [Laughter.] If the hon. Gentleman merely meant the specific case of rents he had better look at the whole of the housing policy, which was also put before the electorate at the election.

UGANDA
Sir F. Bennett(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs whether any loss or damage to British lives or property have been involved in the disturbances in Uganda.
The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): There has been no report of any injury to United Kingdom citizens or of damage to British property. The High Commissioner continues to be in touch with the British community.
Sir F. Bennett: While we are naturally delighted to hear the news that we have not been directly damaged, may I ask my right hon. Friend to tell us whether, recalling the events of a few years ago, there has been any request from Mr. Obote for his British friends to restore law and order and his own position in the country? Can my right hon. Friend say whether Mr. Obote has applied for

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political asylum here and if he does what will be my right hon. Friend's reply?
Sir A. Douglas-Home: The latter part of my hon. Friend's question is hypothetical and I cannot answer it. The answer to the first two parts of his question is "No".
Sir G. de Freitas: Will the right hon. Gentleman remember in his dealings with the military regime in Uganda that a similar military coup in Ghana a few years ago resulted in the restoration of civil government with the rule of law and the ballot box?
Sir A. Douglas-Home: I hope that whatever has happened in Uganda will result in the rule of law being applied.
Mr. Biggs-Davison: Can my right hon. Friend say something about the report of the death of two Canadian priests in the course of these disturbances? Is Canada separately represented in Uganda or does the term "British subject" cover Canadians as Commonwealth citizens?
Sir A. Douglas-Home: I will have to look into this question about the two Canadian citizens. It would be for the Canadians to make representations.
Mr. David Steel: Can the right hon. Gentleman say whether any advice has been given by the Government to British airlines who use Entebbe Airport quite regularly as a staging post to Kenya, Zambia and other points south?
Sir A. Douglas-Home: No advice has been given to British airlines as yet. The High Commissioner is reporting on the circumstances and we will keep closely in touch with the position.
Mr. Maclennan: Have the Government considered yet whether they will recognise the new regime?
Sir A. Douglas-Home: No, Sir; it is too early to say.

CONFERENCE OF COMMONWEALTH HEADS OF GOVERNMENT
The Prime Minister (Mr. Edward Heath): With your permission, Mr. Speaker, and that of the House, I wish to make a statement.
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I left London on 6th January to travel to the Conference of Commonwealth Heads of Government in Singapore, stopping on my way in Cyprus, Pakistan, India and Malaysia.
In Cyprus, I visited the British Forces in the Sovereign Base Areas. I should like to tell the House how greatly I was impressed by the outstanding services being rendered by the Army and the R.A.F. I also took the opportunity to have discussions with the President of the Republic and to call on the Vice President. In addition I met the Commander of the United Nations force in Cyprus and the Secretary General's representative.
In Pakistan I had discussions with President Yahya Khan and Pakistani Ministers.
During my three days in Delhi I had meetings with Mrs. Gandhi and her Ministers; I also had an opportunity of speaking to the Indian Council of World Affairs.
In my visit to Kuala Lumpur, I had discussions with the Prime Minister of Malaysia, and members of his Government. Here, as also in Pakistan, I was greatly touched by the gratitude expressed to me for the contributions which the British Government and people had made to the relief of the distress caused by the recent floods.
Both in Singapore where I visited units of Her Majesty's Forces, and in Malaysia, I found a warm welcome for our decision to keep a continuing British presence in the area, as part of the five-Power arrangements which are shortly to be concluded.
In all these countries, I took the opportunity of meeting members of the British communities and representatives of British business and other interests. I was much impressed by the British investment and aid contribution to economic development in the area.
I am glad to be able to report to the House that bilateral relations between Britain and each of these countries are now close and will, I hope, become more fruitful.
The Heads of Government of the Commonwealth met in Singapore from 14th to 22nd of January, under the chairmanship of the Prime Minister of Singapore. My right hon. Friend the Foreign and Commonwealth Secretary was present with

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me throughout the Conference. I will circulate in the OFFICIAL REPORT the texts of the Communiqué and the declaration agreed by the Heads of Government.
In addition to the normal reviews of the international, political and economic scene, the agenda included items on the implications for the Commonwealth of the United Kingdom's negotiations for entry to the E.E.C.; on the future of the Commonwealth in the next decade; on the situation in Southern Africa; on the security of the Indian Ocean; on comparative techniques of government; on various items connected with schemes of technical co-operation and on the Commonwealth Foundation; and the Secretary-General's report.
The problems of Southern Africa overshadowed the Conference and dominated the discussion. But, important though these problems are, there are many other questions, concerning other continents, both in the political and the economic spheres as well as in the whole field of Commonwealth co-operation, to which we could usefully and constructively have given more time.
In the discussion of Southern Africa 1 took the opportunity of explaining why we think that there is a threat from growing Soviet naval power in the Indian Ocean, as elsewhere. I explained why we thought that the issues of apartheid, which, with the other Heads of Government, we condemned, and the sale of arms were two separate questions. And I explained why we considered it necessary to retain our right to use the facilities granted us under the Simonstown Agreements, and therefore to discharge our own obligations under those Agreements. I set out fully the grounds on which, for reasons of practical commonsense and straightforward dealing, it has seemed to us that it would be in the spirit of these joint arrangements, which remain valid and relevant, and which no Commonwealth Government asked us to abandon, to continue to supply the limited categories of equipment needed to enable South Africa to play her part.
I also made clear the nature of our legal obligations under the Simonstown Agreements——
Hon. Members: What are they?
The Prime Minister: These obligations arise under the Agreement for the defence of the sea routes round Southern Africa. I am advised that the obligation is to permit the export of equipment and spare parts required to keep operationally efficient the vessels purchased under the terms of that Agreement. The obligation extends to licensing the purchase of Westland Wasp helicopters to equip three antisubmarine frigates that were purchased under the Agreement and were, with our agreement and assistance, converted to carry helicopters. My right hon. and learned Friend the Attorney-General——
Hon. Members: Where is he?
The Prime Minister: —proposes to advise Parliament on these legal obligations in a White Paper to be published shortly.
I explained clearly the views of Her Majesty's Government; I listened carefully to the views of other Commonwealth Heads of Government on these matters; and I undertook to convey all those views to my colleagues.
One of the anxieties expressed by Commonwealth leaders concerned the future intentions of the South African Government towards them. To allay these anxieties I informed the Conference of the assurances we have had from the South African Government that they will not use any items of maritime equipment which we may supply to them, for purposes other than the protection of the sea routes. I made it clear that I did not expect the South African Government to breach this assurance, but that, if they did, we should at once refuse any further supplies of equipment or spares.
I accepted the proposal for a group to study the defence of the trade routes in the Indian Ocean and South Atlantic, since this clearly showed the importance which many Commonwealth countries attached to the trade routes in those areas. We will play our part in the work of this study group. At the same time, I have fully reserved the right of the British Government to take such action as they think necessary in defence of British interests. These words mean what they say, no more no less. Our position is quite clear and straightforward, and there are no secret understandings.
It was on the same basis that we were concerned to ensure that the declaration

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of principles explicitly recognised that each country is responsible for its own policies.
This was not an easy meeting. For the first time there were 31 Commonwealth countries represented, including three new members from the Pacific. Inevitably much of the old intimacy of discussion has disappeared. Regrettably, the public release of statements seems to have become a regular practice, thus detracting from the freedom and frankness of the discussions. I think that all the Heads of Government were aware of this weakness and we shall all be giving thought to this and other problems connected with our Commonwealth discussions in the seventies and beyond. I was deeply impressed by the strength of feeling, which this Government fully share, that the Commonwealth, with its distinctive tradition and procedures, if they can be preserved, has a vital role to play in helping to promote better relations and closer understanding between the nations of the world.
Mr. Harold Wilson: Is the Prime Minister aware that we on this side of the House, who also have reason to know how tough a Commonwealth Conference can be, most strongly criticise the right hon. Gentleman because in this case it was he who laid the strains on the Conference, and indeed on the Commonwealth, by his obsession about supplying arms to South Africa? He was quite right to remind Commonwealth colleagues, as I had to do in almost exactly the same terms—[Interruption.]—as I had to do in almost exactly the same terms, and I am very glad that he borrowed my words, that this country is also sovereign and independent, just as the rest of the Commonwealth countries are, and that we are right to pursue British interests—we had to tell them that, as he did. But his doctrinaire insistence on arms to South Africa is not a British interest but is detrimental to British interests, totally against British interests, including British commercial interests, and is only in the interests of further Soviet and Chinese penetration of the African continent.
Is he aware that we welcome his announcement that the Attorney-General will lay a White Paper on the legal obligations under the Simonstown Agree-
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ment, which we understand and have studied as fully as the right hon. Gentleman or his Attorney-General have? Will he today, in advance of the White Paper, point to the exact paragraph or clause in the Simonstown Agreement which places any obligation on Britain today to supply arms asked for by South Africa in 1971 over and above the obligation in the Agreement to supply arms due for shipment between 1955 and 1963? Will he tell us where he can find the Clause requiring us, as he said in Singapore and in public in Ottawa, to supply British arms today, apart from the spares to which he has referred? Will he tell us that today, because we understand that he said that in Singapore and in Ottawa?
Does the Prime Minister recall his own words and those of his right hon. and hon. Friends at the end of the 1969 Commonwealth Conference in London about the success of that Conference, to which he paid tribute? Is he aware that but for his South African obsession the Commonwealth Conference in Singapore could have moved forward from the 1969 achievements instead of back? We recall the words of Sir Winston Churchill about the liquidation of the old Empire. Is the right hon. Gentleman proud to think that if he goes on with his reckless course—and no one so far has been able to persuade him to change his mind—he will go down in history as the British Prime Minister who, because of his own insistence and his own policies, presided over the liquidation of the Commonwealth of Nations?
The Prime Minister: Such strains as there were at the Conference were imposed on it by an attempt to bind certain countries over their own policies. This attempt was in no way disguised but was openly and frankly declared. It was that attempt which I resisted in British interests, in contrast to the right hon. Gentleman, who inevitably gave way at every Commonwealth Conference and then found himself bound by N.I.B.M.A.R,. which he knew was impossible and which was against his will.
The White Paper of my right hon. and learned Friend the Attorney-General will set out in detail the considerations on which he advises Parliament about the legal obligations under which we find ourselves.
Mr. Harold Wilson: The Prime Minister has not answered three of my questions. He prefers to falsify the facts of a previous Conference rather than answer the questions. Will he now answer my question about legal obligation? Since he wants to falsify the facts about 1966 will he now, with my full agreement and willingness, look up the records of that Conference? I hope that he will do that. Will he note that at that Conference it was not for two days that we were subjected to pressure on British policy, on Rhodesia, but eight days, and that what I did was to reject a demand made over eight days that we should use force in Rhodesia? In those circumstances, how can the right hon. Gentleman talk about giving in to Commonwealth pressure?
After nearly wrecking the Singapore Conference, will the right hon. Gentleman have the decency to admit that that is what he set out to do?
The Prime Minister: I heard all about those Conferences in Singapore, and anything which Heads of Government may have said about me was nothing compared with what they said about the right hon. Gentleman.
As to the right hon. Gentleman's specific points, I should have thought that he would prefer to see the advice of my right hon. and learned Friend the Attorney-General to Parliament in full.
Hon. Members: Answer.
The Prime Minister: The hon. Gentleman also misquoted what I said both in Ottawa and Singapore. I checked very carefully the script of what I said, and he is misquoting it.
As to the specific question of spares and helicopters to which I referred, perhaps the right hon. Gentleman will recall that his own Minister, the right hon. Member for Dundee, East (Mr. George Thomson), told the House on 26th January, 1965, that it was an accepted principle that a contract to supply equipment carried with it an understanding that the necessary spare parts would normally be provided.
That is a continuing obligation, and that is the obligation which I have quoted.
What is more, the noble Lord, Lord Chalfont, informed the South African Government, or they were informed on
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his behalf, that the specialised aircraft to which I have also referred are integral parts of a complete anti-submarine weapons system supplied to South Africa under the Simonstown Agreement. It is a continuing obligation. Now perhaps the right hon. Gentleman will withdraw his allegations.
Mr. Harold Wilson: The right hon. Gentleman asked me to withdraw. Everything he has stated is what we did and what we honoured, but what I asked him to answer was not the question of spares, which, as I said in my original question, we accepted as part of the Simonstown Agreement, but to tell me what clause in the Agreement requires him to supply not spares for the 1963 arms but new arms. That is what the right hon. Gentleman has not answered and what he refuses to answer because he cannot answer it.
The Prime Minister: The right hon. Gentleman really might have done me the courtesy of reading the statement, of which he had an advance copy, which is in accordance with everything I told the Heads of Government in Singapore and have stated in every Press statement thereafter.
An Hon. Member: Answer the Question.
The Prime Minister: I will answer the Question again. There are legal obligations which I have stated to the House.
Hon. Members: What are they?
The Prime Minister: They are for spares and helicopters, which I have described. [Interruption.] Of course, if it is a new helicopter it is a new arm. What is the right hon. Gentleman arguing about? If he reads my statement he will see that I describe very carefully what we believe to be the practical consequence of Simonstown and the means of keeping that arrangement in operation. Those are the two categories in which we have always discussed this subject. The right hon. Gentleman went out on a limb and made a totally misleading statement, and he should withdraw it.
Mr. Turton: Did my right hon. Friend make it clear to the Commonwealth Prime Ministers that it is the Government's policy to continue the Labour Government's policy of conducting joint naval exercises with the South African Navy

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and to supply live ammunition for these purposes?
The Prime Minister: Yes, Sir, I did indeed, and I pointed out to the Heads of Government that they were not asking us to give up the Simonstown Agreement; they were not asking us to give up the use of the base; they were not asking us to abandon manoeuvres which are carried on and which were carried on by both Administrations. The difference was as to whether we should carry out the legal obligations concerning spares.
Hon. Members: What are they?
The Prime Minister: The right hon. Member for Huyton (Mr. Harold Wilson) has just said that he carried out that obligation. Why then is he objecting to our carrying out the obligations?
Second, the difference was as to whether what is required to carry on those naval activities should be supplied to South Africa or not.
Mr. Alexander W. Lyon: Is there any legal obligation to supply anything other than the spares and the Wasp helicopter to which the Prime Minister referred? Since some of us have grave doubts about whether there is a legal obligation even to supply those, will he be prepared to test the Attorney-General's opinion by submitting it to the Privy Council so that the matter can be decided by an impartial body at the highest level?
The Prime Minister: I have always described the legal obligations as I have described them today. That is how they were described to the Heads of Government of the Commonwealth meeting in Singapore. There is no point in the hon. Gentleman's shaking his head. He was not there, and he is not a Head of a Commonwealth Government.
Mr. Richard: I am a lawyer.
The Prime Minister: The hon. Gentleman may be learned. I just take leave to doubt his legal qualifications. He can read my right hon. and learned Friend's White Paper when it is published. As to the hon. Gentleman's suggestion, he had better await the White Paper.
Mr. Braine: In view of the line now being taken by the Leader of the Opposition, will my right hon. Friend take this opportunity to confirm that despite the
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one obvious difference in Commonwealth relations—and it really was only one difference—the Commonwealth remains what it always was, a vitally useful and beneficial network of trade and investment, and of professional and indeed parliamentary relationships, which it is in the interests of all of us to preserve?
The Prime Minister: When we discussed the Commonwealth in the 1970s—in, I regret, all too short a space of time —many Heads of Government said that they feared there was a danger that the Commonwealth was developing into a mini-United Nations, and there was no point in having an organisation like that when there was already a complete United Nations. Therefore, they wished the Commonwealth to adopt a different form of conference and to change the way it conducted its meetings. As a result, the Secretary-General was asked to obtain the views of Governments as to how that could best be done.
When I concluded my statement, I emphasised that if the Commonwealth can maintain its own characteristics and enable free and frank discussion and exchange of views between its members it can go on being not only a very valuable organisation but a unique kind of organisation. That we fully support, and I believe now that it is what most Heads of Government want the Commonwealth to become.
Mr. Healey Mr. Healey rose——
Mr. Speaker: Order. I should like to make it clear that I do not necessarily call right hon. Gentlemen on the Front Bench when they rise. I mean no discourtesy to them by this, but try to call as many other hon. Members as possible who may have risen earlier. I will call the right hon. Gentleman in due course. Mr. Grimond.
Mr. Grimond: As the Prime Minister will remember, my right hon. Friend the Leader of the Liberal Party twice asked if he would extend the defence conversations in the Commonwealth to cover the Indian Ocean. He replied that they ware concerned only with Singapore and Malaysia. Do we understand now that he is agreeing that the defence of the Indian Ocean is a Commonwealth matter and so is the defence of the coast of Africa?

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Furthermore, he says he believes that the South African Government will not use arms supplied to them on matters other than the protection of their country, but did he discuss the situation of Rhodesia? Is it not a fact that South Africa is supplying or lending arms to the rebels in Rhodesia at this moment?
The Prime Minister: The five-Power arrangements came into being because the five Commonwealth countries concerned specifically wanted it. There has been no desire that 1 know, and it was not shown in Singapore, by countries bordering on the Indian Ocean, other than those four and ourselves, to extend the defence arrangement. This is understandable because they are non-aligned. There was no proposal at Singapore that there should be a similar defence arrangement of that kind. What they did say was that they were interested in the problems of the Indian Ocean and Southern Atlantic. These problems were specifically mentioned by some Heads of Government. I explained the situation to them and it was agreed to set up a study group to look at the matter further and I willingly agreed to it. So far as the assurance in regard to South Africa is concerned, this was based on the understanding that the equipment was not to be used other than for purposes specified by Her Majesty's Government. Therefore, the definition is in the hands of Her Majesty's Government.
Mr. Dodds-Parker: Will my right hon. Friend confirm that among our Commonwealth friends, particularly in Indonesia, there was great satisfaction in the strengthening of our interests in the five-Power conference and in the stability of South-East Asia.
The Prime Minister: I received an invitation from the President of Indonesia to go to Jakarta for talks with him, but unfortunately I was unable to accept it. Therefore, I am afraid I cannot give immediate first-hand information about the views of the President of Indonesia on the five-Power arrangement, but so far as I know Indonesia welcomes every move to help to keep stability in the area.
Mr. James Johnson: Although not forgetting the Prime Minister's stubborn and inflexible behaviour which so antago-
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nised the African leaders, it is obvious that they gained by meeting him and discovered what he is like. Is he prepared to educate himself by going out to Africa, which I understand he has visited only for a few short days in the past? Will he go to middle Africa and meet Kaunda, Kenyatta and Nyerere and take the opportunity to discuss with them what they feel on the spot about the dangers and difficulties of South Africa?
The Prime Minister: I have had an invitation from President Nyerere to go to Tanzania. I have indicated that I would gladly accept this invitation as soon as it is possible to do so. When the hon. Gentleman said that I had been to Africa for only a few days, I would point out that I was there for some three months, although it was 15 years ago, but I have had the opportunity of discussions with all the African leaders at the Commonwealth Conference and also in London and in New York.
Mr. Tapsell: In addition to the establishment of the Commonwealth Study Group, has my right hon. Friend any plans to initiate talks with the United States and Australia and our other friends in the area with a view to establishing a South Atlantic Treaty Organisation which will effectively protect our sea routes in the Indian Ocean and South Atlantic?
The Prime Minister: I think that it is known that the United States Government are now studying the problems in the Indian Ocean, and perhaps we could wait their conclusions. So far as Australia is concerned—and of course today is Australia Day—Australia is well aware of the problems of the Indian Ocean and appreciates the actions we are taking in dealing with it, but she herself is committed to her own defence and also to the five-Power arrangement in the Far East.
Mr. Strang: Is the right hon. Gentleman not aware that if the Government were to announce a decision to sell arms to South Africa while the Commonwealth Study Group was looking at this question, it would be an intolerable affront to those Commonwealth countries who are members of that Study Group? Will he now have the elementary courtesy to give an assurance that, in the absence of unforeseen developments in the

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Indian Ocean, the Government will not announce a decision to sell arms to South Africa while the Commonwealth Study Group is investigating the matter?
The Prime Minister: I do not accept the hon. Gentleman's thesis, and I am not prepared to give such an assurance. It was made plain to the leaders in Singapore that this assurance would not be given, and it was specifically stated in the Conference itself in what was called the plenary session, and also to the Press, by the Secretary-General that so far as British defence interests and the carrying out of our legal obligations under the Simonstown Agreement were concerned, the British Government were free to take what action we decided right to take whenever we so decided.
Mr. Walters: When discussing Europe was my right hon. Friend able to persuade the Commonwealth Prime Ministers that Britain joining Europe on the right terms would be in the long-term interests of the members of the Commonwealth, both of the rich and also of the poorer Commonwealth countries?
The Prime Minister: I think that many Heads of Government appreciated this and fully agreed with what my hon. Friend has said—in particular the Prime Minister of New Zealand who, before he left for the Conference and indeed at the Conference, stated that if we were able to carry through a successful negotiation he had no doubt that it was in the interests of the whole Commonwealth in the long term.
Mr. Healey: Is the right hon. Gentleman aware that Malaysia and Singapore are no less non-aligned since they attended the Lusaka Non-Aligned Conference, as did Nigeria and India, and as the Prime Minister of Singapore made clear in rejecting the attempts of the British to exploit the presence of two Soviet ships in the Straits of Malacca during the holding of the Conference, which many of us saw on television? On the question of our legal obligations, is he aware that the Opposition welcome the readiness of Her Majesty's Government to break what the Prime Minister has defined as our obligations under the Simonstown Agreement if the South African Government use equipment for purposes of which Her Majesty's Government do not approve? Is he further
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aware that the South African Government differ from Her Majesty's Government in their interpretation of the Simonstown Agreement because on 10th July last year, after the General Election, following the refusal of the then Labour Government to supply Wasp helicopters in December, 1969, Mr. Botha, the South African Minister of Defence, stated—I quote a speech on 10th July—
"The Simonstown Agreement can be interpreted by alternative British Governments as it suits them."
The Prime Minister: The right hon. Gentleman the Leader of the Opposition and the right hon. Gentleman the former Secretary of State for Defence will recall that twice in 1970 before the June election the South African Government protested to them that they were not carrying out their obligations under the Simonstown Agreement and the aides mémoire were sent in February and again in May. This answers the question as to why, if the Agreement was not carried out, South Africa took no action on it. The South African Government protested formally on two occasions through aides mémoire to the British Government.
In regard to any understanding about the use of equipment, that assurance is quite clear. It is not open to two views and does not refer to any particular part of the Simonstown Agreement. It says, "For purposes specified by the British Government." Therefore, the definition which we give is quite clear. As for the Russian ships, it shows how singularly ill-informed the right hon. Gentleman is, because I specifically told the Conference that we did not attach any importance whatever to this manoeuvre.
Mr. Healey: We understand the Prime Minister's embarrassment that the Soviet Government should be so keen for the British Government to go ahead with the supply of arms to South Africa and should have provided him with visual aids for the Conference. On the earlier question, is he aware that he is totally incorrect in what he said and that in fact when we were in power the South African Government twice asked for a revision of the Simonstown Agreement precisely in order to impose obligations which the present Prime Minister now claims were already imposed on Her Majesty's Government.
The Prime Minister: The right hon. Gentleman would have done better to have stuck to his own plan for supplying all arms to South Africa.
Mr. Healey: Is the Prime Minister aware that his loutish disregard for serious argument is one of the reasons he is regarded in the Commonwealth as a one-man walking disaster area? [HON. MEMBERS: "Sit down."] But the fact that he has already refused —[Interruption.]— to make clear Her Majesty's Government's policy on arms to South Africa is itself proof—[Interruption.]
Mr. Cranley Onslow Mr. Cranley Onslow(Woking)rose——
Mr. Speaker: Order. If I could hear, I think the hon. Member for Woking (Mr. Onslow) wants to raise a point of order.
Mr. Onslow: On a point of order. Mr. Speaker, you were earlier this afternoon kind enough to indicate some wish to accede to the natural desire of back benchers to share in these exchanges. Could I now invite you to tell the Opposition Front Bench that if they have lost the argument, they must not presume on the House by trading in insults in this way?
Mr. Speaker: That is not a point of order. Mr. Healey.
Mr. Healey: Thank you, Mr. Speaker. I think possibly the last words you heard were that the Commonwealth regarded the Prime Minister as a walking one-man disaster area. What I said following those remarks was that the fact is that the Prime Minister has already revised a "decision" into an "intention" and "informing" the Commonwealth into "consulting" the Commonwealth. We welcome his decision to further delay a decision on the South African arms and we hope that he will take account of opinions in the Commonwealth and will not take a decision until after the Study Group has reported, and that he will then in fact take a negative decision.
The Prime Minister: The right hon. Gentleman should not confuse hopes he may have with actualities.
Mr. Speaker: It is quite clear to me that the time has come for us to move on. Mr. Alexander Lyon.
Mr. Barnes: On a point of order. Mr. Speaker, I had down for answer by the Prime Minister Question No. 2 on the subject of the Commonwealth Prime Ministers' Conference, and I did not seek to put a supplementary question at that point. I had hoped that I would have had an opportunity to raise that matter. I do not wish to detain the House any further now.
Mr. Speaker: In these special circumstances, if the hon. Member wants to put a supplementary question he can do so.
Mr. Barnes: Thank you very much, Mr. Speaker, but I think that the matter has run on long enough.
Mr. Speaker: So do I.
Following is the Communiqué and the Declaration:

CONFERENCE OF COMMONWEALTH HEADS OF GOVERNMENT
  COMMONWEALTH HEADS' OF GOVERNMENT MEETING
    SINGAPORE, 14TH–22ND JANUARY, 1971

      FINAL COMMUNIQUE
      Commonwealth Heads of Government met in Singapore from 14th to 22nd January. All Commonwealth countries were represented, 7 by their Presidents, 17 by their Prime Ministers, 1 by the Vice-President, and 6 by senior Ministers. The Prime Minister of Singapore was in the Chair.
      2. This was the first Heads' of Government Meeting to be held in Asia. Heads of Government welcomed this and expressed gratitude to the Government of Singapore for the hospitality it had provided.
      3. This Meeting expressed a warm greeting to the Prime Ministers of Tonga, Western Samoa and Fiji whose countries had become members of the Commonwealth during 1970, and particularly welcomed their membership as it brought to Commonwealth consultations additional views of the peoples of the southwest Pacific.
      COMMONWEALTH DECLARATION
      4. Heads of Governments approved unanimously and issued a Commonwealth Declaration.
      INTERNATIONAL AFFAIRS
      5. Heads of Government reviewed the world political situation and trends. Views were exchanged on: East-West relations; Chinese representation in the United Nations; the steps required to end the conflict in Indo China; the neutralisation of South-East Asia; the conditions necessary for achieving a durable settlement in the Middle East; the violation of the security and sovereignty of the Republic of Guinea by the military and naval forces of

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      Portugal in conjunction with other elements; the need for general and complete disarmament under effective international control, the cessation of the nuclear arms race and the conclusion of collateral measures with particular attention to nuclear disarmament until general and complete disarmament is achieved; the staging of nuclear weapons tests and the dumping of chemical weapons in the peaceful south-west Pacific area; and the complementary role of regional organisations and such trans-regional groupings as the Commonwealth.
      SOUTHERN AFRICA

      6. The Meeting reviewed major developments in southern Africa, including in particular those in South Africa and Namibia (South West Africa), the Portuguese colonies and Rhodesia, and noted that tensions in that region were likely to increase rather than decrease unless there were fundamental changes in the conditions now prevailing. Earlier discussions on N.I.B.M.R. were recalled There was unanimous reaffirmation of the importance of the principle that any proposals for settlement must be acceptable to the people of Rhodesia as a whole.

      7. The Meeting had before it the report of the Commonwealth Sanctions Committee which reviewed the working of economic sanctions over the last two years. Heads of Government authorised the Committee to continue to review the situation.

      8. Heads of Government discussed fully the question of the sale of arms to South Africa.

      9. Heads of Government considered the factors affecting the security of maritime trade routes in the South Atlantic and Indian Oceans. which are of vital importance for a large number of Commonwealth countries. They decided to set up a Study Group, consisting of representatives of Australia, Britain, Canada. India, Jamaica, Kenya, Malaysia and Nigeria, with instructions to consider the question further and report to them through the Secretary-General as soon as possible.

      10. Certain Heads of Government stipulated the understandings on which they agreed to support the proposal to set up the Study Group.

      THE SECURITY OF THE INDIAN OCEAN
      11. In their discussion of a paper presented by the Prime Minister of Ceylon on the security of the Indian Ocean, Heads of Government agreed on the desirability of ensuring that it remains an area of peace and stability.
      ECONOMIC AFFAIRS
      12. Heads of Government held a full and frank discussion on the world economic situation and broadly reviewed recent developments and trends. Among the items discussed were: liberalisation of trade and access to markets; the special problems relating to exports of developing countries; the generalised preferences system and the problems connected with it; international commodity problems; high freight rates, inflation and its consequences; debt servicing problems of developing countries; targets for the transfer of resources to
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      developing countries; terms and conditions of assistance, including the untying of aid; supplementary financing; the possibility of a link between Special Drawing Rights and development finance; and, the lending policies of international financial institutions.
      13. Heads of Government expressed their satisfaction that agreement was reached on the International Development Strategy for the Second Development Decade at the United Nations General Assembly. They reaffirmed their Governments' resolve to take the measures to translate into reality the goals and objectives of the Decade. In summarising their discussions, they also reaffirmed their conviction that fulfilment of the economic and social aspirations of the peoples of the developing countries was a matter of vital concern not only to the developing nations but to the world at large.
      POSSIBLE BRITISH ENTRY INTO THE E.E.C.
      14. Heads of Government discussed Britain's possible entry into the European Economic Community and the implications of this for other Commonwealth members. Among the matters discussed were the questions of: the effect of the Common Agricultural Policy on the exports of Britain's traditional suppliers; the need for any enlarged Community to be outward looking; standstill arrangements for those countries which desired or may be offered association or other trading arrangements with an enlarged Community; reverse preferences and their impact on international trading arrangements; the potential advantages and disadvantages for the Commonwealth in the event of Britain's accession; and methods of consultation during negotiations. They welcomed the resolve of the British Government to continue to press during the negotiations for measures to safeguard the interests of Commonwealth countries.
      COMMONWEALTH CO-OPERATION FOR DEVELOPMENT
      15. Heads of Government welcomed the establishment of the Commonwealth Fund for Technical Co-operation and noted that the way was now open for it to be made operational.
      16. Heads of Government discussed the recommendations embodied in a study on Commonwealth Export Market Development. They decided that these recommendations should be given further consideration at an early meeting of trade and finance officials.
      COMMONWEALTH INFORMATION PROGRAMME
      17. Heads of Government agreed in principle on the proposals submitted to them for a Commonwealth Information Programme.
      COMMONWEALTH CO-OPERATION ON YOUTH QUESTIONS
      18. Heads of Government noted with approval the Secretariat's activities in the youth field and agreed that such activities he expanded. They noted that a number of related matters would be discussed at the forthcoming Commonwealth Education Conference in Canberra. They decided that a meeting of Ministers concerned with Youth matters be convened as early as possible.
      COMMONWEALTH BOOK DEVELOPMENT AND GIFT VOUCHER SCHEME
      19. Heads of Government approved in principle the establishment of a Commonwealth Book Voucher Scheme.
      SPECIAL COMMONWEALTH PROGRAMME FOR ASSISTING THE EDUCATION OF RHODESIAN AFRICANS
      20. Heads of Government took note of the development of the programme and supported its continuation.
      COMMONWEALTH FOUNDATION
      21. Heads of Government noted the progress of the Commonwealth Foundation and agreed to its proposed expansion.
      COMPARATIVE TECHNIQUES OF GOVERNMENT
      22. The Conference agreed that the item on "Comparative Techniques of Government", which was introduced by the Prime Minister of Canada, should be the subject of further discussion at the next meeting of Commonwealth Heads of Government. It was proposed that the Secretary-General should facilitate such discussion by arranging for preliminary study of the subject by appropriate officials.
      REPORT OF THE COMMONWEALTH SECRETARY-GENERAL
      23. Heads of Government took note of the Third Report of the Commonwealth Secretary-General.

  COMMONWEALTH DECLARATION
  The Commonwealth of Nations is a voluntary association of independent sovereign states, each responsible for its own policies, consulting and co-operating in the common interests of their peoples and in the promotion of international understanding and world peace.
  Members of the Commonwealth come from territories in the six continents and five oceans, include peoples of different races, languages and religions, and display every stage of economic development from poor developing nations to wealthy industrialised nations. They encompass a rich variety of cultures, traditions and institutions. Membership of the Commonwealth is compatible with the freedom of member governments to be non-aligned or to belong to any other grouping, association or alliance.
  Within this diversity all members of the Commonwealth held certain principles in common. It is by pursuing these principles that the Commonwealth can continue to influence international society for the benefit of mankind.
  WE BELIEVE that international peace and order are essential to the security and prosperity of mankind; we therefore support the United Nations and seek to strengthen its influence for peace in the world, and its efforts to remove the causes of tension between nations.
  WE BELIEVE in the liberty of the individual, in equal rights for all citizens regardless of race, colour, creed or political belief, and in their inalienable right to participate by means
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  of free and democratic political processes in framing the society in which they live. We therefore strive to promote in each of our countries those representative institutions and guarantees for personal freedom under the law that are our common heritage.
  WE RECOGNISE racial prejudice as a dangerous sickness threatening the healthy development of the human race and racial discrimination as an unmitigated evil of society. Each of us will vigorously combat this evil within our own nation. No country will afford to regimes which practice racial discrimination assistance which in its own judgment directly contributes to the pursuit or consolidation of this evil policy. We oppose all forms of colonial domination and racial oppression and are committed to the principles of human dignity and equality. We will therefore use all our efforts to foster human equality and dignity everywhere and to further the principles of self-determination and non-racialism.
  WE BELIEVE that the wide disparities in wealth now existing between different sections of mankind are too great to be tolerated; they also create world tensions; our aim is their progressive removal; we therefore seek to use our efforts to overcome poverty, ignorance and disease, in raising standards of life and achieving a more equitable international society. To this end our aim is to achieve the freest possible flow of international trade on terms fair and equitable to all, taking into account the special requirements of the developing countries, and to encourage the flow of adequate resources, including governmental and private resources, to the developing countries, bearing in mind the importance of doing this in a true spirit of partnership and of establishing for this purpose in the developing countries conditions which are conducive to sustained investment and growth.
  WE BELIEVE that international co-operation is essential to remove the causes of war, promote tolerance, combat injustice and secure development amongst the peoples of the world; we are convinced that the Commonwealth is one of the most fruitful associations for these purposes.
  In pursuing these principles the members of the Commonwealth believe that they can provide a constructive example of the multinational approach which is vital to peace and progress in the modern world. The association is based on consultation, discussion and co-operation. In rejecting coercion as an instrument of policy they recognise that the security of each member state from external aggression is a matter of concern to all members. It provides many channels for continuing exchanges of knowledge and views on professional, cultural, economic, legal and political issues among member states. These relationships we intend to foster and extend for we believe that our multi-national association can expand human understanding and understanding among nations, assist in the elimination of discrimination based on differences of race. colour or creed, maintain and strengthen personal liberty, contribute to the enrichment of life for all, and provide a powerful influence for peace among nations.

DEAN OF JOHANNESBURG (ARREST)
Mr. Alexander W. Lyon: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the arrest of the Dean of Johannesburg in South Africa."
The matter is specific enough. It is the detention of a British subject in South Africa under an Act of the South African Government which is reviled throughout the world as being against all judicial principles. The Dean has now been in detention for some six days without any charge having been preferred against him. He was initially refused any access by consular officials. Even now there have been only two visits. So far as I am aware, he has not yet received any ministrations of any kind. The matter is specific enough.
Is the matter important enough to warrant the Adjournment of the House? I submit that it is on two grounds. The first is that the detention of any individual for whom this country has the duty of protection is of immense importance to this House. If we decline to act now, then the difficulty will increase for any British subject in any other country where laws of this nature abound and which thinks it can get away with imprisoning a British subject without circumspection. It is of considerable importance for this House to discuss the matter and express its views in order that the South African Government should be in no doubt about the concern felt in this country about their actions.
It is important in an even wider context. We have been discussing the subject of the South African arms deal which is at the root of the Government policy, and of course the policy of apartheid in South Africa is under constant attack. If the fate of this distinguished British subject who has been working in Southern Africa for so many years is typical of the way in which that kind of fruitful contact is to be treated, it undermines the whole case for the Government's present Southern African policy. It is, therefore, of considerable public importance that these matters should be discussed.
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Is it urgent? I submit that it is indeed extremely urgent. When the Dean was arrested there were initial comments by the head of the Security Services that he had been arrested under the Terrorism Act, which allows indefinite detention without trial and without charges, and that no charges were to be preferred against him.
That was changed, because there were then announcements by the Ministry of Justice suggesting that charges would be preferred. That announcement was made at the weekend, but no charges have yet been preferred. Therefore, it seems likely that for some time the South African Government will play this cat and mouse game with this distinguished British Anglican priest in order that they can get away with what they have inevitably got away with in South African prisons —namely, torture and interrogation which goes beyond the normal questioning of a witness.
It is highly important that this gentleman should be brought to trial upon charges which can be recognised as specific offences against South African law or that he should be released. If that is not done, there is real danger to the life of this man who, after all, suffers from a heart condition and may suffer the fate of another internee of the South African Government who died of a heart attack whilst under detention.
I submit that it is of vital and urgent importance that this whole matter should be discussed by this House.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the arrest of the Dean of Johannesburg in South Africa".
The House knows that, under Standing Order No. 9, Mr. Speaker is directed to take into account the several factors set out in the Order, but to give no reason for his decision.
I have given careful consideration to the representations that the hon. Member has made, but I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

HEAD TEACHERS (TERMS OF EMPLOYMENT)
4.12 p.m.
Mr. Timothy Raison: I beg to move,
That leave be given to bring in a Bill to place head teachers in maintained schools in England on contracts renewable or terminable at stated intervals.
As the tumult and the shouting die and the captains and the kings depart, I seize this rather quiet moment to try to put forward a proposition which, I concede, is not of world wide interest compared with the topics about which we have lately been talking, but which I nevertheless believe to have very real importance. It is a topic to which I referred briefly in my maiden speech to this House last summer and which I should like now to develop.
I am fully aware that it is unlikely that the Bill will find its place on the Statute Book in the form in which I put it forward, but I have no doubt that it is a subject of serious importance in the realm of education. Therefore, I hope that the House will support me in acknowledging that this is a serious topic which it is worth looking into fairly closely.
I might add that the principle which I am seeking to raise is of fairly general application throughout the public service, although I am only considering one aspect of it this afternoon.
What is the problem? Essentially it is that once a head teacher is appointed in a State school he is there until he retires. In effect, he can be dismissed only for crime, misdemeanour or really gross negligence of his duties.
In theory, that is not the case. The Association of Education Committees has a model agreement for the appointment of head teachers which says that the agreement may be determined at the end of any school term by the Committee or by the teacher on three or four months' notice, depending on the time of the year. So, in theory, it is possible to replace a head teacher, if necessary.
In practice, this does not happen, for a variety of reasons. One reason certainly, and I think quite reasonably, concerns union opposition. Another reason, equally reasonably, is due to the fact
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that nobody has ever got round to thinking what to do when this takes place. Anyway, it does not happen: as I say, a head, when appointed, is there for life.
On the whole, this matters not a whit. I believe that we can claim a genuinely high standard among our head teachers. Most of them are good—I can claim to have seen quite a lot of schools over the last few years—and some are quite exceptional. I believe that this is because we very sensibly give our heads great responsibility, and, as generally happens when people are given responsibility, they live up to it. Therefore, I am not in any sense trying to paint a picture of a profession made up of a series of Captain Grimes and Wackford Squeers, or what have you. I believe that we can be proud of the quality of our head teachers.
But we ought also to be realistic and accept that some are not up to it. Perhaps they were up to it initially when appointed, but have then declined, as happens in all walks of life, with the passing of the years. This is inevitable, but it can be very damaging indeed both to the children and to the staffs of schools when it happens.
It is also true that, as schools tend to get larger, so the risk that we may run tends to increase. It is a matter of common sense that in schools of 2,000 or more children, with staffs of corresponding size, the role of the head teacher becomes more than ever important.
I will not give examples of where I think the kind of failure about which I am talking has happened. I know from my own experience of some examples and, since I put down this request for leave to bring in the Bill, other people have mentioned examples to me. If we are honest, we must realise that this happens. I simply stress that in our system the head is crucial and we cannot afford the inadequate.
The question is: what can we do about it? We could try to implement the conditions which I outlined earlier. But, in reality, I think that that is impracticable because of the union objections and the fact that we have no proper system of compensation.
I propose, therefore, a scheme of contracts by which normally a head teacher

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would be appointed for, say, five years and, at the end of that time, his contract would be due for renewal. The education authority would consult the governors of the school and make its own decision. I have no doubt that in the vast majority of cases the head teacher would be reappointed. But, equally, it should be possible, if an education authority does not want to reappoint a head teacher, not to do so when the contract expires without having to go through the elaborate system of dismissal which now exists. As I say, normally education authorities would reappoint.
Obviously if a system of this kind is introduced we must have a proper system for compensation. In bringing forward the Bill I shall offer some tentative proposals on how that might be done. However, this is really a matter for detailed negotiation. I am seeking leave to bring forward the Bill to raise this issue. I acknowledge that this topic cannot be fully covered without detailed negotiations with the unions. Clearly, we should have to have substantial terminal payment, plus pension rights, or perhaps think of preserving the existing salary. It would also be worth considering some kind of emeritus status. There is no doubt that status is an important ingredient in the problem.
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I hope that somehow we could have the idea accepted that if a head teacher, towards the end of his career, decided to switch, or was switched, from being a head teacher to an ordinary subject teacher, there would be nothing wrong or degrading about it. It is a natural thing, comparable to what happens in many other professions.
I repeat that this seems to me to be a matter for negotiation, but I believe that the topic I am raising this afternoon is one which, sooner or later, has to be faced. It is important and serious and it is for his reason that I have asked for leave to bring in the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Raison, Mr. Maude, Mr. Hornby, Mr. Lane, Dr. Vaughan, Mr. Kenneth Clark, Mr. Grylls and Mr. Shelton.

HEAD TEACHERS (TERMS OF EMPLOYMENT)
Bill to place head teachers in maintained schools in England on contracts renewable or terminable at stated intervals, presented accordingly, and read the First time; to be read a Second time upon Friday, 23rd April and to be printed. [Bill 91.]
ORDERS OF THE DAY

  INDUSTRY BILL
  Order for Second Reading read.
  4.21 p.m.
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): I beg to move, That the Bill be now read a Second time.
  The Bill relates to decisions announced by my right hon. Friend the Chancellor of the Exchequer on 27th October last and amplified by me in my statement on 30th of that month. The principal proposals are, first, to repeal the Industrial Reorganisation Corporation Act, 1966 and, as a result, to wind up the Corporation. Second, to terminate those powers which, under Sections 1 to 7 of the Industrial Expansion Act, 1968, entitle the Government to involve themselves in industrial investment schemes on diverse counts.
  The Industrial Reorganisation Corporation was first mooted in a White Paper laid before the House in January, 1966, Cmnd. 2889. The White Paper gave as its reasons for instituting a new kind of organisation, the Industrial Reorganisation Corporation, an apparent lack of ability in British industry to move towards that necessary degree of concentration and rationalisation which seemed, in the terms of the White Paper, to be appropriate in order to do two principal things: first, to face the exigencies of foreign competition; second, to take full advantage of the pace of technological change. The White Paper maintained that production units in this country were too small to undertake these tasks in general, and it postulated the thought that where mergers had taken place, where there had been reorganisation, this had tended to lie more in the field of diversified activities rather than in any thought of concentration.
  The White Paper referred also to the activities of merchant banks. It recognised that merchant banks played a vital part in carrying through mergers on behalf of their clients in a wide range of industries, but it suggested that this activity, wide as it was, was not sufficient
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  to ensure the filling of the gap to which it made reference because the merchant banks were seen, not as initiative-takers, but as people who followed tip the initiative taken by their clients and others. It identified what it said was a gap in the institutional framework, and it proposed to constitute this Industrial Reorganisation Corporation to fill that gap. It stated that thereby it was confident of securing
  "a lasting improvement in the structure and competitive strength of British industry."
  Those were, of course, bold words and did, perhaps, credit the new organisation with capacities which in fact might reasonably be seen as being more widely shared. Indeed, I think the I.R.C. itself recognised that the major regrouping activities within British industry were due to factors arising from the market, rather than from its endeavours. Moreover, I think it is necessary to say that the context within which this organisation was created was by no means one in which the merger activity was seen to be excessively sluggish. On the contrary, throughout the 'sixties there had been a growing momentum of merger movements, and it should be seen, therefore, that the organisation was only extending that momentum not creating it.
  The White Paper to which I have been, referring was extensively debated in the House, and subsequently, at the end of 1966, the Bill to give effect to its proposals was also thoroughly debated. We on this side of the House remained unconvinced of the need for such an organisation. We were, moreover, critical of the powers which it was proposed to give to it. They were exceedingly extensive, and allowed a wide range of activities to be undertaken, over and above those of structural reorganisation. We objected to the principle of the whole organisation being borne as a charge on public finance, and we objected even more to the extent of the public finance involved, amounting as it did in the original proposal to a ceiling of —150 million.
  Industry itself watched this development and remained, I think I might say, frigidly watchful of it. It was not deliberately against, but it was suspicious, and this suspicion was undoubtedly heightened by the real want of consultation which preceded the institution of the I.R.C.

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  Since the passing of the Act and the creation of the I.R.C., it has remained consistently in the public eye. It has been very active in a number of ways, and it has undoubtedly given rise to great thought and interest in a variety of different occupations and activities in which it has been engaged. It recruited a high calibre board, drawn largely from industry, and it was able, equally, to find a dynamic and zestful executive, led by a purposeful management. I believe that those factors led to the suspicions and apprehensions which had existed at the outset being somewhat allayed in the early years of its performance, but there is no doubt that some concern about a number of activities in which the I.R.C. engaged was voiced by various people, by interested parties and, in particular, by hon. Members in the House. There was concern at the I.R.C.'s own operations in the market when it was in support of one of the parties to a contested bid.
  The upshot of all that was that we remained dubious of the justification for such a body, particularly one drawing so heavily on public funds. Accordingly, in the formulation of the party's policies in anticipation of the General Election we embodied in our manifesto a statement of an intention not specifically to bring the I.R.C. to an end, but drastically to modify its constitution. This occasioned us, when we came to power, in undertaking a major review of its whole work and purpose.
  We saw that review surrounded by three principal factors. The first, it seems to us, was that the problem in mid-1970 was more one of digesting the spate of national mergers which had taken place in the 'sixties rather than seeking specifically to engineer new ones. The right hon. Member for Grimsby (Mr. Crosland)——
  Mr. Dick Douglas: In relation to mergers, would the right hon. Gentleman clearly identify what he means by a "spate" of mergers? What we were concerned about in market operations in the 1960s was a spate of conglomerate mergers. The I.R.C. went specifically for horizontal or vertical mergers. Would the right hon. Gentleman distinguish clearly between the two, please?
  Mr. Davies: There was no doubt that horizontal mergers took place, of course,
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  but many vertical mergers were engineered through the market process—far more than by the I.R.C., indeed. I would draw the hon. Member's attention to the quotation which I was about to make from the right hon. Member for Grimsby, who, speaking in early 1969 as President of the Board of Trade, told Manchester Chamber of Commerce:
  "There seems to me a danger that mergers may become too much of a fashion. There have been signs recently of merger fever."
  It seems clear, too, that the I.R.C. itself may have been thinking along these selfsame lines. In its last, most recent Report, the emphasis was undoubtedly shifting away from reorganisation and development and heading far more towards stimulation and selective investment. This also seemed to show a shift of opinion which we certainly shared.
  Second, it seemed irrational to us that, during a period of sustained credit squeeze such as had taken place, there should be an organisation funded from public funds which seemed capable of evading, in selective cases, the credit squeeze in question.
  Third, we put a great deal of emphasis in our policy, and do still, on the need to contain the ever-increasing scale of public expenditure. Not only did we very seriously doubt the wisdom of moving on towards the ceiling of —150 million which had initially been provided in this case, but we saw that to continue would fatally involve us in allocating great sums for subsequent years, rising to about —40 million per annum. This was wholly not in conformity with our endeavour to contain public expenditure.
  Mr. Tam Dalyell: Could the right hon. Gentleman give an example of his seconds point—namely, the evasion of the credit squeeze in certain instances?
  Mr. Davies: I think that there were several cases, but I should have thought that one or two of the terms of loan to some of the subjects off the I.R.C.'s activity were on terms—[interruption.] I would quote British Leyland, which was probably on terms which were not obtainable straightforwardly in the market at the time. I doubt whether, in the terms of the then credit squeeze, it would have been practicable or reasonable for the company in question to have obtained

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  that kind of money on that kind of rate. There are other illustrations.
  To my mind, this casts no particular criticism on the I.R.C. or the company. They were doing what the I.R.C. was set up to do, but it seemed a strange paradox in the state of the money market as it then was.
  Mr. Dalyell: As the representative of British Leyland at Bathgate, which is one of their plants directly affected, may I ask whether the right hon. Gentleman would care to comment on what would have been the effect on, for example, the Bathgate plant, if something of a rescue operation had not been conducted at that point in time? It is all very well having hindsight.
  Mr. Davies: This is entirely a different point. I am simply saying that it seemed irrational in a period of intense money squeeze, applied broadly across the whole field of industry, that there should be available from public funds access to concessional terms or advantageous terms not readily available within those conditions in the market.
  In the light of those considerations, it seemed to us that the case for continuance was very doubtful and that, even if the Labour Party had remained in power, it would itself have been led to make some major reappraisal of the purpose and future of I.R.C. Where this would have led them is a matter entirely for conjecture, but in view of the widely-drawn nature of the I.R.C.'s statutes, it was more than possible that reappraisal might have led them down the road of greater and greater selective intervention in industry at the Government's own option and desire.
  It seemed clear, too, that, in making such a reappraisal with an open mind on the subject of the continuance of the I.R.C., but not based upon extensive use of public money, it would be wise to consider the likelihood, first, of its being able to continue in some sense as an advisory body, with no benefit whatever of capital help. But all those with whom consultations were held were of the opinion that this was not a feasible alternative, that shorn of financial backing the I.R.C. would not be effective within the field of work which had been identified for it.
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  So we sought, then, to see whether it was practicable to find private finance itself to take over in some sense the weight of the financial load of this organisation—but we were unsuccessful. The conclusion of all that was that drastic modification was clearly inadequate and impossible and that dissolution was the only satisfactory course, to which, therefore, we came.
  I would turn now to the second part of this proposition, which concerns the Industrial Expansion Act, Sections 1 to 7. In this case, I would make a sharp contrast between our attitude towards this part of the Industrial Expansion Act and our attitude towards the Industrial Reorganisation Corporation. I sought to show that, in relation to the I.R.C., we reached a balanced judgment, having taken fully into account all the factors—its possible future, how it might alternatively be organised or financed—and concluded that it could not be.
  With regard to the Industrial Expansion Act, we did not need so deep a reappraisal. It was a piece of legislation which had been greeted widely by uncompromising condemnation, both on this side of the House and in industry. It had a kind of euphemistic purpose, as described in the White Paper:
  "… to provide direct assistance to projects designed to promote efficiency, to support technological advance, or to create, expand or sustain productive capacity."
  The right hon. Member for Bristol, South-East (Mr. Benn), who was then Minister of Technology, said in the debate on 1st February 1968:
  "I shall go a little wider in putting the Bill in its context and relate the work that will be done under it to the central economic problems facing Britain." —[OFFICIAL REPORT, 1st February 1968; Vol. 757, c. 1577.]
  This was rather grandiloquent phrasing to characterise what has proved to be a pretty hollow shell of a piece of legislation.
  It may be that the Act was to some degree the outcome of the very restraint which had been exercised by the I.R.C. in its earlier period, and this had provoked a feeling that something more intense and direct had to be provided on the Statute Book. But the Industrial Expansion Act proved to be something very like a damp squib. It covered

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  operations in the field of the two aluminium smelters schemes and of the computers merger scheme, but both of these were in the final stage of negotiation before the Act was passed. It had no new project attaching to it or any development when we came to power. We could only conclude, therefore, that the rather noble objectives which had been stated for it had either been abandoned or had proved impracticable. Our experience of it justified our opposition to the Bill on the score of its being irrelevant to the requirements of the economy and being undoubtedly very unsettling to industry, which had greeted the Bill with implacable hostility. I had some personal experience of that in another capacity.
  Mr. Arthur Palmer: Would the right hon. Gentleman try to explain why the House should not do things which are necessary simply because industry is hostile? In the view of the right hon. Gentleman, does industry determine public policy?
  Mr. Davies: The point 1 was making was that industry was very hostile and it was curious that industry's hostility to the Act was rather borne out by the fact that the Act proved futile. In this particular case at least, industry was right. Parliament is the proper place for decisions of the country to be made. Industry has its right to be consulted, too. Industry was consulted. It gave a very firm opinion which proved to be correct in the event. That opinion was warmly held on this side of the House too.
  One essential objection common to both measures was the freedom which they gave to dispense public money upon a selective and discriminatory basis without submitting to the full discipline of Parliament. By no means do I say that never again will a case arise which would not have qualified for treatment under one or two of those enactments. It may well be that at some future date we shall be faced with a similar problem. When we are, we should submit ourselves to the full discipline of Parliament and not be prepared to have the means at our disposal of acting virtually in the ignorance of Parliament, only submitting ourselves to it subsequently and not previously.
  Mr. Anthony Wedgwood Benn: Would the right hon. Gentleman comment on the relationship between the provision of those Acts and the provision of launching aid, where there is absolutely no provision for parliamentary supervision, and recognise that this is an advance in this direction and not a reduction of parliamentary authority?
  Mr. Davies: Even in the case of launching aid, there is a real and necessary compliance with the requirements of Parliament that a substantial matter should come before it and be declared openly. This is not the case necessarily within the framework of these activities. In the case of the Industrial Expansion Act it would have been so, but not in the case of the I.R.C. As the right hon. Gentleman knows, there are activities which the I.R.C. quite properly carried on with his knowledge, when he was the Minister of Technology, but without the knowledge of the House.
  I come now to the provisions of the Bill. Clause 1 provides, first, for the repeal of the I.R.C. Act of 1966. Second, it provides for the transfer of the Corporation's assets and liabilities to the Government. Third, it provides for the dissolution of the Corporation. The first two items, the repeal of the Act and the transfer of the assets and liabilities, would take place on a day to be appointed by Order. The dissolution of the Corporation would follow one month later. The delay between the two dates is required so that the Corporation may comply with certain requirements which the Bill will lay on it, such as preparing final reports and accounts up to the appointed day.
  It has already been made clear, but I repeat that the Government will honour all financial and other obligations entered into by the I.R.C. and not discharged when the assets and liabilities are transferred. The Bill also provides for outstanding financial obligations to be met from monies voted by Parliament. The extent of such further requirements of money clearly depends to a large degree on the date of transfer, but presently it is assumed that about —20 million will be needed to meet these outstanding obligations.
  The assets in question consist principally of investments, of loans of a fixed

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  interest and normal kind, loans of a convertible kind and equity participations. All these assets will be transferred to my Department, save only those of Rolls-Royce and Lucas, which will go to the Department of my right hon. Friend the Minister for Aviation Supply, in the light of the nature of the investments and their greater application to that Department.
  Investments will be recovered in accordance with agreements undertaken by the I.R.C. or as opportunity offers. Provision is not made in the Bill for specific management arrangements for the portfolio, though I assure the House that I shall have recourse to expert professional advice in the management of those assets.
  The liabilities of the Corporation arise from issues from the Consolidated Fund and the National Loans Fund. As the assets are recovered, the funds in question will be repaid to the Consolidated Fund.
  The rights attaching to the I.R.C. and similarly transferred arise mainly from agreements reached with firms. They comprise, on the one hand, the conversion of loans to equity, and on the other hand, nomination of directors to company boards. On the question of the conversion, again I shall have expert advice as to the best course to take. On the board appointments problem, appointments which have been made in relationship with the I.R.C. will be subject to individual consideration in the light of all the circumstances of each case, involving the size of the investment, the nature of the security and the original objectives which the I.R.C. may have had in making such an investment. Generally speaking, the first concern of the Government will be that of safeguarding public funds and their earliest recovery. But due consideration will be given, as I said on the 30th October, to the industrial circumstances of each case, as entered into by the I.R.C.
  The Bill includes certain safeguards in respect of pensions for members and employees. Moreover, I am planning to take within the Bill powers to deal with redundancy payments, though as I informed the House on 30th October, I do not expect there to be any terminal redundancy payments.
  Mr. Benn: Before the right hon. Gentleman leaves the subject of the size of the business which he is proposing to dispose of, could he give us the figure —I believe it is about £120 million—and could he divide it between loans, equity and other holdings, and give us some idea of the totality that he is discussing?
  Mr. Davies: The breakdown I could give separately, but it is rather confusing. There are a number of different headings under which the various investments are made. The figure of £120 million is not far from the mark. There are recoveries taking place constantly, as the right hon. Gentleman will know, and there are commitments being exercised. But broadly speaking, I estimate the size of the business to lie between £120 million and £130 million.
  Mr. Edmund Dell: Before the right hon. Gentleman leaves the subject of the I.R.C., and in view of what he has said about the need for parliamentary control, can he say why Clause I makes no provision whatever for parliamentary control over the disposal of the assets?
  Mr. Davies: The disposal of the assets is largely consequent upon the various industrial considerations which led the I.R.C. to invest in them. I have tried to give a guide to the policy which will be followed. It will be to safeguard public money and to achieve the earliest realisation compatible with the whole industrial background of the investment being taken. Clearly, there will be means whereby Parliament can inform itself and be satisfied of the way in which matters are conducted.
  Clause 2 will terminate the power to make industrial investment schemes under Sections 1 to 7 of the Industrial Expansion Act, 1968. The Bill provides for meeting commitments under existing schemes. The total sums committed to date are of the order of £80 million, of which about £49 million has already been advanced. There are payments scheduled over the next few years, and therefore it is prudent to provide in the Bill for power both to vary and to revoke any of the undertakings. Such changes would come before the House. It is provided specifically that no scheme can be varied within these arrangements to increase the aggregate expenditure over the total of

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  that originally committed. Therefore, in practice, the remaining £20 million of the statutory ceiling of £100 million voted for the purposes of the Act will not in fact be required.
  There has been a suggestion that the contents of the Bill are provoked by discriminatory, doctrinaire policies. That is not the case. It is true that both the provisions that the Bill seeks to revoke are ones which ill accord with the purposes of economic policy outlined by various members of the Government. We adhere strongly to those purposes. They will result in a very much more self-reliant economy and a very much tauter economy. In the end, they will provide evidence of the prosperity which will ensue from their prosecution.
  4.53 p.m.
  Mr. Anthony Wedgwood Benn: The right hon. Gentleman has introduced a miserable Bill in a speech utterly lacking in conviction. I have heard him speak at N.E.D.C. meetings, on television and in the House. I have never heard him deliver a speech in which he chose always to address himself in the third person— "We were dubious", "Some concern was voiced", and so on. But certainly on I.R.C., no one who knows anything about the right hon. Gentleman could believe that the recommendation that he was putting forward was his own. He warmed to his attack on the Industrial Expansion Act because, at the time, he was looking for a constituency and made a fight on behalf of the C.B.I. The truth is that the Industrial Expansion Act allowed Rolls-Royce to get the order to which I referred in our recent debate. It was the fact that an Act of this kind was on the Statute Book which allowed us to give it support.
  The sole object of the right hon. Gentleman's Bill and his speech introducing it is to destroy two positive instruments, the I.R.C. and the Industrial Expansion Act, through which Government and industry have been co-operating in one form or another over the past four or five years.
  I had to draw the figures out of the right hon. Gentleman. He was about to make a theoretical speech without referring to the total sums involved. The Bill deals with nearly £170 million of public money. This is a major piece of
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  policy, and it might have been presented in a different way.
  Even if one shared the right hon. Gentleman's philosophy, which obviously we on this side do not, there was no need for this Bill to be introduced. The Industrial Expansion Act could have remained on the Statute Book. I shall be surprised if the right hon. Gentleman himself, at some stage or another, for one reason or another, will not want to provide support for an industrial project. If he decides to do it in the old way, it will probably be by launching aid, which requires no reference to be made to the House. Contrary to what the right hon. Gentleman said, launching aid does not have to be approved in the House. It is given under another Act of Parliament at the discretion of the Minister, and his only accountability is part of his total accountability. There is no provision for launching aid on individual projects to be approved by Parliament.
  If it is launching aid, there is less accountability. If he does what has been done in the past by both parties and as was done by a Conservative Government in the case of the Wiggins Teape pulp mill at Fort William, what happens is this. The Minister gives an assurance to the firm and, in some cases, may provide the money. When the money is being spent, he produces a Bill and brings it forward.
  There was no cause to repeal the Industrial Expansion Act. Many Acts are reserve in character. As for the I.R.C. in the passage in which he dealt with its change of emphasis he welcomed it. Then he told us that he tried to sell off I.R.C. to others or get other money to take it on, as if he saw a continuing function for I.R.C. But in neither case did he choose to comment on a single project on which these two Measures had been used. He discussed our White Paper of 1966, which we have all read. He spoke about his manifesto of 1970, which we have all read. But he found it more convenient to omit all the experience of the use of these two instruments in the intervening period.
  Neither I.R.C. nor the Industrial Expansion Act contained any compulsory powers. Therefore there were no grounds for anxiety on the score that they were instruments of selective intervention which frightened industry. This Bill is purely

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  destructive. He spoke about the dubiety of the methods that we adopted. But this is an ideological Bill presented by a Minister who, judging from his demeanour when he was speaking, may not be altogether convinced by the argument that he was advancing.
  There is an important principle involved in the Bill. It is that this method, which was adopted by the previous Government, rested solely upon consent and upon twin principles of public accountability which are now to be thrown overboard. I have referred already to the first principle. It was that, where there was to be an intervention in industry by a Minister by means of giving support for a project, it should be subject to specific parliamentary acceptance and accountability. I do not imagine that the right hon. Gentleman has had time, but if he had read the long debates when the Industrial Expansion Bill was considered in Committee, he would have discovered that the provision for tabling an Order with the full details, as happened with the I.C.L. merger, was the first time that any real ground rules were laid down giving Parliament any say. Moreover, Parliament was in a position to say no and the investment would not have gone forward.
  The second principle of accountability was that, where public money was put into a firm, it was considered right that the Government and the taxpayer should get a return from their investment and that in certain circumstances there should be a Government director on the board, as there was in I.C.L. and other companies to which I shall refer.
  Despite the right hon. Gentleman's words about industrial doubts, these methods won wide acceptance in industry and, in his speech, he was quite unable to find that, in the working out of these arrangements, any of the doubts that he expressed when he was at the C.B.I. or that his right hon. Friends expressed in the House on the Industrial Expansion Bill ever turned out to have any justification——
  Mr. Dalyell: He gave one example.
  Mr. Benn: He gave one poor example. He said that British Leyland got money on more favourable terms.
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  The point is that none of the schemes under the Industrial Expansion Act which he chose for special disapproval are to be altered. The smelters are going ahead. The Q.E.2 would have been a rusting hulk on Clydeside at a time when the Queen was scheduled to launch it if the Industrial Expansion Act had not been used to allow the Q.E.2 to be completed He made no reference to that.
  Mr. Davies: Will the right hon. Gentleman confirm or otherwise that both the smelters and the Q.E.2 were a long way down the road of negotiation before this Act was on the Statute Book?
  Mr. Benn: Of course, because the Bill was prepared two years before it was introduced. I began work on the Bill in September, 1966, before even the I.R.C. Act had passed into law. The right hon. Gentleman says, why should some type of investment escape from the general restriction on investment? The whole object of this was that where investment in the national interest would be adversely affected by the general squeeze it could be proceeded with. Did the right hon. Gentleman want the Q.E.2 to be scrapped because of the general squeeze? Did he want the smelters not to go ahead because of the general squeeze? Did he want British Leyland to collapse because of the general squeeze? The right hon. Gentleman has not even followed the argument. He is not answering the argument. The truth is that the I.C.L. merger, which was an Industrial Expansion Act scheme, is not to be affected only in the sense that the right hon. Gentleman says that he will try to sell the shares, but I will come back to that later.
  That I.R.C. work is to go on. I.R.C. had always intended to rotate its investments. One hon. Gentleman who participated in these debates said that this was creeping nationalisation, but we made it clear that we regarded these as public funds that did their business by rotating in and out of industry. The existing work of I.R.C. will not be affected, except that new work will simply be stopped. Here is a Minister presenting a total, 100 per cent., 180 degree change of direction without citing a single example from 5 years' experience of industrial policy, and then denying that this change is motivated by ideological considerations.

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  I should like to go a little further than the right hon. Gentleman in my tribute to the members of the I.R.C. The convention of the House is that people who have been engaged public work even under another Government are recognised as having given a public service. Lord Kearton, Sir Joseph Lockwood, Charles Villiers, Lord Stokes and Les Cannon, whose death we all regret, and the small staff of 30 who pioneered the technique of industrial relations which has been copied abroad, merit a genuine tribute. They operated freely in the I.R.C. within a broad framework of policy. As the responsible Minister, I was accountable to the House for the policy which they were free to negotiate within that broad framework. It was exactly the right balance between policy, for which Cabinets are held responsible, and negotiation and execution where business men and trade union leaders who have a sense of public service, as these men did, ought properly to operate. It is a great tragedy that an instrument in this area which has been studied all over the world and copied in other countries should have been thrown away for political reasons by him and his right hon. Friends.
  The right hon. Gentleman made a mockery of me for saying, in introducing my Industrial Expansion Bill, that I wanted to set it in a proper framework. He mocked me for what he called my grandiloquence by suggesting that this had nothing to do with Britain's economic performance. In politics we are all engaged in statistic exchanges on the hustings—our 5 years against their 5 years and how we did in this and that area—but the right hon. Gentleman knows as well as I do that for 140 years this country has been progressively falling behind its major competitors. We were overtaken by the Americans in the 1880s, by the Germans in the 1960s, by the French now, the Japanese in the 1970s, and the Italians are nudging forward. This is not a matter which can be dealt with by broad framework policies originating from the Treasury. Everyone knows what the Treasury does when there is inflation. Like the old-fashioned medieval surgeon who pulls out a hacksaw and cuts off a leg, the Treasury introduces deflationary measures.
  This country has suffered from the weakness of management and industrial
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  structure, as is self-evident to anybody who studies this matter. It is not just a question of mergers. Anybody can merge if it is in the financial interests of the companies involved. We wanted minds brought to bear on the problem of strengthening the British competitive position abroad. For a Minister who lectures us time and again on competition, the right hon. Gentleman shows precious little concern for the competive strength of Britain visà-vis its foreign competitors. In all the areas in which the I.R.C. worked there was a distinct, deliberate and conscious partnership by Government with firms that were facing foreign competition.
  The House is engaged in long debates upon the Industrial Relations Bill. Since in these debates many criticisms are made of the trade unions, let me say frankly to the House what I know was the view of the I.R.C. at the time when I worked with it. The view of the I.R.C. was that poor management in many areas of British industry, handicapped by a weak industrial structure, was one of the major problems facing the country. It was not lack of scientific research. We are the brainbox of the world, measured by the number of Nobel prizes for science per million population. We are not lazy as a nation. We work longer hours than most people and have fewer public holidays. It is not industrial disputes stretching back to the 1840s which have caused our relative decline. It is that the industrial structure of Britain and the management underlying it have not been as good as they have been abroad. This is the problem to which the I.R.C. directed its attention, and it is a poor showing for a Minister, after five years of an attempt to tackle this problem, to brush it aside without seriously considering any of the practical examples, to which I shall now turn.
  In the motor industry in the autumn of 1966 Rootes had got into financial difficulties and Chrysler wished to acquire Rootes. It seemed that we were to be the only country which would have the three American giants in our territory—Ford, General Motors and now Chrysler. This posed for anyone examining Britain's competitive position visà-vis foreign competition, a serious problem.
  The rôle of I.R.C. in tying Chrysler down to certain conditions about access for Rootes to the Chrysler worldwide

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  marketing organisation, safeguarding the employment at Lynwood which, like Bathgate, was a matter of concern to us, was an important, though unusual, one for I.R.C. But, more important than that, if Leyland and British Motors had not been brought together first in export co-operation, which I.R.C. worked on, and then in the merger in which I.R.C., the Ministry, and ourselves worked, there is little doubt that there would have been a major tragedy for the British-owned motor industry.
  It is no good coming along like a minicomputer and saying that because the terms were more favourable than were obtained by another firm in the open market, that support by the I.R.C. should have been ruled out. Tens of thousands of jobs were involved in the motor industry and big export earnings, and it was absolutely right for the British Government, acting with the help and guidance of the I.R.C., to make it possible for this merger to come about.
  It is easy to laugh because British Leyland are in difficulties today, but there are formidable problems with 70 factories, thousands of piece rates and new models to be introduced at a time of domestic pressure when the squeeze is still on. If the right hon. Gentleman had been there at that time I do not think that he would have taken any alternative view of the need to bring about a merger between Leyland and British Motors. We have talked about Rolls-Royce, and I will not go over it again, except to say that the right hon. Gentleman might have made reference to the extent to which the Industrial Expansion Act gave support at a critical time when needed for that big order, which he himself is now funding to an even greater extent than I did.
  The right hon. Gentleman did not mention General Electric/A.E.I./English Electric, but he knows that, faced with the huge combines of Siemens and Philips, those firms were too small to compete. Nobody thinks that size is the answer. Size, good management and good quality of work and good export marketing would have been no good without the role of the I.R.C. in bringing about a new British electrical engineering firm that could stand up to competition.
  The right hon. Gentleman made no mention of I.C.L. He must know that if
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  in 1965 that original £5 million had not been available to I.C.T. it would have gone under. He may not know that, because my Department was ready in 1967 to offer about £25 million for computer leasing, that offer released money for computer leasing from private funds. I had no interest in providing money that would come from elsewhere.
  It is no good the right hon. Gentleman saying that the banks and the merchant banks are always there. The British system of providing money for high technology is defective, Many banks, if not all, lack proper technical engineering assessments, and they used to rely upon our word that a scheme was effective and that we would fund it. That was the case for the Industrial Expansion Act and for I.R.C.
  As to the complicated conclusions reached which brought I.C.T., English Electric and Plessey together, involving I.R.C. resources and the Industrial Expansion Act procedure which was being legislated as this went through, this was the right course of action. Facing I.B.M., how can the right hon. Gentleman talk about the maintenance of competition between penny-piece British computer firms when these giants loom from the other side of the ocean? He should have referred to this before he dismissed the instrument that made possible the success of the British computer industry.
  On nuclear reorganisation, the right hon. Gentleman recently introduced an Atomic Energy Bill in which the role of the I.R.C. in reorganising the nuclear industry was a key role. This rôle lies behind what was my Bill and is now his Bill. He made no reference to the I.R.C. in that.
  As the right hon. Gentleman knows, the Skefco case aroused a great deal of anxiety. He may not know why we took the line we did, but when we analysed Skefco's reputation in other countries of buying up their ballbearing industry, as happened with the Italian industry, we found that the exports from that company in Italy ceased and were absorbed into the Skefco global planning. We took the view—and I am talking collectively here—when we had Ransome and Marles and Pollard and Hoffman that a British ballbearing industry was in our national interest——
  Mr. J. Bruce-Gardyne: I am interested that the right hon. Gentleman should come to I.R.C.'s frustration of the Skefco bid. Is it not a fact that the I.R.C. made no attempt whatsoever to take on any of Skefco's operations in Italy, that it was proved that Skefco had been totally misinformed on what had happened in Italy and that no attempt was made to correct these false impressions once they were exposed by Skefco?
  Mr. Benn: I cannot speak on that. It was the nature of the business that I.R.C. operated in this area. We were faced with the possibility that our ball-bearing industry, which is important, was to be effectively acquired from abroad, and it seemed right to take the line which I did to build up the British ballbearing industry. I am not trying to push my responsibility on to others. I am simply saying that I think this was right, I stand by it, and the instruments were there for bringing it about.
  Take some of the other cases where judgment has to stand the test. There was the Reed Paper Group de-inking process which was supported by the I.R.C. and was a big import saving operation.
  I want to come to the rôle of the I.R.C. in dealing with international companies, because there is misunderstanding about the international company and its relations with the nation's stake. Charles Wilson in the United States is alleged to have said, "What is good for General Motors is good for the United States". I do not know whether he said it any more than Lord Thomson said, "Television is a licence to print money", but it is part of the mythology of the big company. If that is true of the United States—and I am not sure that it is—it is certainly not true that the interests of international companies are necessarily always or even regularly synonymous with the nation's stake. I have cited the example of Chrysler and the need to use the I.R.C. to see that Chrysler did not keep Rootes' products out of its worldwide marketing organisation. I might have referred also to Philips and Pye, where there was a desire to take over a British industry and where there were certain consequentials to be acknowledged. We have debated the Skefco case and I have put my view.
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  The fact is that no one should know better than the right hon. Gentleman, with his experience of the oil industry, that international companies, by varying the amounts of money they pay internally for their royalties, profits and components, and by organising themselves in different ways, can make a profit or loss in any country and make a balance of payments surplus or deficit in any country. One well-known international company, which I do not propose to name, was revealed by the I.R.C. to have been running a deficit in this country. It is no good Ministers at big dinners in the City, and it is no use industrialists in white tie and tails lecturing their workers and telling them to work harder if an international company can maintain a balance of payments deficit which helps to keep the squeeze on to the damage of those workers and to the British economy itself. In dealing with international companies on the balance of payments side, I took this point up with them.
  I want now to deal with one or two other aspects which the right hon. Gentleman ignored. One is, of course, that the I.R.C. and the Industrial Expansion Act were both instruments of regional policy. They were not only instruments of national policy, but of regional policy, not principally, but importantly. I give three examples from Scotland. There were the Donside mill, Wier's and the pump industry, and Nuclear Enterprise in Edinburgh. These were notable examples of the I.R.C.'s work in Scotland. A more complex example is the Leyland-National Bus Company deal in Cumberland, made possible in part by I.R.C. support for Leyland and by other measures, which gave us an integrated bus manufacturing capacity in Britain, which was what Leyland wanted and provided employment in a part of the country where unemployment was serious.
  I warn the right hon. Gentleman that if, in addition to abandoning investment grants, phasing out the regional employment premium and easing up on industrial development certificates for the South and the Midlands, the Government wind up an instrument which is capable of regional use, the long-term consequences for the regions could be serious. I spent a lot of time visiting factories where closures were in mind or serious problems had arisen and could ask the I.R.C. to help

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  to see whether it was possible to make arrangements that would bring this productive capacity back into use which was of great value.
  Mr. Robert Redmond: The right hon. Gentleman refers to the I.R.C. assisting with regional policy. I think I am right in saying that the I.R.C. had something to do with the G.E.C.A.E.I. merger. If so, why did the I.R.C. let G.E.C. close down the Napier factory on Merseyside, thus creating unemployment in a development area, and take the work to the south of England?
  Mr. Benn: The fact that mergers were followed by some redundancies in certain cases led some people to conclude that the one was the consequence of the other. I was regularly asked that question. I visited the Netherton Road and Napier factories when they were closing. But without the mergers, these shaky companies would have faced far more serious redundancies than if the mergers had not occurred.
  Mr. William Hamling: There was the Woolwich closure as well.
  Mr. Benn: I went to Woolwich, too. When there was the Woolwich closure, tremendous anxieties were expressed at the loss of 5,000 jobs.
  Mr. Hamling: More.
  Mr. Benn: Perhaps there were more—perhaps 10,000. I do not remember the exact figure. But I remember that, a year later, unemployment was lower in Woolwich than it had been. I discussed the situation with Sir Arnold Weinstock, and I pay tribute to him for what he did. There were discussions between him, G.E.C. and the I.R.C. on the reasons for the closure, which was to follow rationalisation. The fact is that the same thing would have occurred if the matter had been left to pure market forces.
  I do not pretend that weak firms will avoid closure if they join bigger units, but it would be wrong to suppose that the I.R.C. or the firms which co-operated with it operated without regard to regional factors. I mention this because it was an aspect of my work and it was a great comfort to me to be able to invite
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  the I.R.C. to look at the problems of redundancy which occurred and consider whether it was possible for it to help, as it so often did.
  Mr. Hamling: Does not my right hon. Friend agree that the philosophy of the Government of not intervening in market forces will lead directly to the sort of situation the hon. Member for Bolton, West (Mr. Redmond) fears?
  Mr. Benn: That is my fear—and not only mine. I have seen some of the consequences of the Government washing their hands of concern for the human consequences of technical change.
  The other point is that the I.R.C. was copied by other countries. The French I.D.I. was based on it and came into existence about six months ago. The Italians are about to copy it. Signor Colonna, Industrial Commissioner of the E.E.C. Commission, had the benefit of conferences on the work of the I.R.C. in Brussels and London, and he has now recommended the European Investment Bank to earmark funds for exactly this sort of purpose.
  The right hon. Gentleman is always saying that we have to align our policies of levies on agriculture, imports and on value added tax in order to bring us closer to Europe. Yet he is abandoning the thing that we pioneered and which our European partners are copying. If that is not sheer ideology, I do not know what it is. There is no justification for it.
  There are two other aspects which bear on some of the other matters we are discussing in the House. One is that the I.R.C. provided some sort of instrument, in addition to restructuring and selective investment, for supervising managements, and one of the reasons there was industrial opposition was that many of the managements in industry, the boards of directors which run a self-perpetuating hierarchy, greatly resented the I.R.C.'s interest in what they were doing. But the shareholders have long ago, like the appendix in the human frame, given up performing their function. Anyone who has listened to the I.R.C.'s directors speaking of their task will know that one of the things they saw as of greatest importance in looking ahead was management vetting and supervision, which they thought necessary in order to follow up the mergers they had promoted, and more generally in industry.

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  There is no accountability really for anybody in many of the boards of directors which run our major companies. I believe that it was not ideological but practical scope that was offered to us for constructive public supervision, not only through our investment but in the discharge of responsibility by management in some of the firms which one could see were getting into difficulties. That activity was right. Yet it is to be entirely liquidated.
  That is in marked contrast with the policy of the Government to clamp new curbs upon the trade unions. It would be out of order to spill over into another debate, but the I.R.C. had developed relations with the trade union movement which are now to die with it. I have made reference to Sir Leslie Cannon and have paid tribute to him. He saw to it, in all the cases of the kind just referred to, where there were consequences of mergers, that the T.U.C. was brought in, with the Confederation of Shipbuilding and Engineering Unions and the shop stewards. That was my policy too. I have referred to my visits to places where it was hurting. They were very difficult and unpleasant meetings because the men said what they thought about what was happening and we were engaged in trying to help.
  In many ways, the most serious condemnation of the Government is that they have abandoned the relationship with the trade union movement on everything except industrial disputes, as if the only relationship which the trade unions could have with the Government is when there is a strike. We took a totally different view, both through the I.R.C. and directly by going round to talk to the executive of the major trade unions and at their conferences.
  The real way ahead to improve relations in industry, we believed, was to allow the trade unions and their members to take a growing part in the development of industrial policy. All this is to stop. I shall never forget hearing that the men at Palmer's Yard in Jarrow, who were allowed to go into unemployment, heard the news from the Press five minutes after they had left the management. There was no consultation with the Government about that. It was a symbol of the way the Government tackled this sort of thing.
  Mr. Arthur Blenkinsop: The Secretary of State refused to join with the trade unions in a positive investigation of alternative methods of development on Tyneside.
  Mr. Benn: I recall that. There were occasions when I, as Minister, could not help, but I never allowed people to hear from newspapers the results of the requests they had made to me.
  I turn now to the future, because we are talking about £120 million to £130 million of assets of the I.R.C. and £49 million under the Industrial Expansion Act. Despite what the right hon. Gentleman said about parliamentary accountability, there will be none, effectively, for the disposition of these funds. We do not know whether the Government are to give prior rights to existing shareholders or whether they are to go on the open market. We do not know the way the shares are to be valued. We shall press the right hon. Gentleman on these matters in Committee. We do not even know the Government's policy now on relations with industry. Is it to be that all investment by the Government is to end? Apparently not, in view of the Rolls-Royce case and the fact that the Shipbuilding Industry Board is to be continued. What are the right hon. Gentleman's criteria for high technology problems, regional interests and national interests? How are the Government's relations with industry to develop? We have had no answer but at some stage the right hon. Gentleman will have to put away his scythe and stop cutting down the harvest we left to him, and tell us where we are to expect his own ideas to grow from.
  The philosophy of the Government is really 100 years out of date—not just ten or 15 years. Whenever I hear the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) acclaiming Marshall's works on free buyers and sellers negotiating in free competition, it seems less and less relevant to the real world in which we live. It is totally lacking in imagination. There is no attempt to relate it, grandiloquently or not, to the broader nature of the problem. No lessons are learned from abroad. There is nothing but the balance sheet to guide them and it has no relation to the reality of modern industry. Nor has it any real human

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  concern—in contrast to modern management's increasing recognition of its real assets—for the people who work in the firms they manage.
  Britain is not a company and the right hon. Gentleman is not a managing director. Nor is he an official receiver whose job it is to dispose of public assets. He is not here to give money away either by hiving off nationalised industries or disposing of valuable investments for less than their true value, while at the same time imposing tight controls on people. This Bill exactly reflects the Government. I say that it is negative, unimaginative, secretive in form, unfair and will not work, and I hope that the House will reject it.
  5.26 p.m.
  Mr. Christopher Tugendhat: I am grateful to you, Mr. Deputy Speaker, for calling me to make my maiden speech, because this is an important subject. However, I may be biased in my view because I wrote about it for many years as a journalist of the Financial Times. As the right hon. Member for Bristol, South-East (Mr. Benn) said in his peroration, we are dealing with a matter of major economic interest now and in the future. But before I deal with that, I should like to follow the traditions of the House and say a few words about my constituency.
  The Cities of London and Westminster really speak for themselves and need little said about them. They have been at the centre of the country's political, cultural and commercial life for over 1,000 years. They were very old before this Parliament was even born. They are, in my opinion, two of the most distinguished cities in the world. I have every confidence that their future will be as distinguished as their past. There is only one aspect of their future about which I have any doubt, and that, I must confess, is in relation to their parliamentary representation.
  Famous as they are, they have had very famous representatives in this House. Charles James Fox was a Member for Westminster; so was John Stuart Mill. Arthur James Balfour was Member for London. Alfred Duff Cooper was one of the Members for the Westminster constituency before the war. Speaker
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  Hylton-Foster also came from the Cities of London and Westminster, and then came my own immediate predecessor, John Smith.
  Unfortunately, John Smith did not spend very long here. He is a man of remarkable charm and wit and I know that during his time in this place he impressed his personality, character and enormous ability on hon. Members on both sides. He is one of the nicest people I know and I feel that I shall have a difficult job to follow him. He set standards which are quite legendary. I chose this debate in which to make my maiden speech because I felt it appropriate in that it is also an area in which John Smith was extremely interested.
  Before speaking of why I am in favour of winding up the I.R.C., I wish to pay tribute to the Corporation, and I hope the right hon. Member for Bristol, South-East will consider that I have done so in as munificent a fashion as he did. The White Paper which set up the I.R.C. said that it was designed
  "… to help the country to make effective use of its resources of skill, management and capital."
  That was a desirable aim, we all agree, and we also agreed with many of its aspirations. However, where we disagree is not with the aim but with the manner in which it was carried out. There are both political and technical objections to what the I.R.C. was doing, and I will deal with the political objections first.
  Its powers were far too wide and vague. It is the job of Government to promote and foster the national interest and of Parliament to decide it. To use a fashionable term, the national interest is not something which can easily be hived off. Yet in setting up the I.R.C. the Labour Government were hiving off the national interest. They gave it a budget or reserve of £150 million and carte blanche to go through industry with, as someone once said, a shot gun in one hand and a Bible in the other.
  It cajoled, bullied, persuaded and merged. It used its money to promote mergers which would not otherwise have taken place, sometimes giving loans where it thought the recipients were desirable and sometimes intervening in contested takeover bids, which meant that it was buying off one set of shareholders at the

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  expense of another; a remarkable use of public funds.
  An example of this was the bid of George Kent for Cambridge Instruments, The I.R.C. intervened to help Kent against Rank, which meant the Corporation buying off one set of shareholders at the expense of another. I do not think any of us will deny that there are occasions when there is need for the government to intervene. where we differ from hon. gentlemen opposite is that we regard it as an unfortunate last resort, whereas they sometimes regard it as something good in itself. Suffice to say that we agree that there is sometimes a need for Government intervention, and the present Government demonstrated this by their intervention over Rolls-Royce.
  However, when the Government wish to intervene and use public money to bring about certain developments in industry,I consider it to be of the utmost importance that these decisions are arrived at openly and are debated on the Floor of the House. This is a crucial point.
  In the case of the I.R.C. almost had to work in secret. This brought about results the reasons for which were never revealed, perhaps necessarily, though this is not the way that public money should be spent. I confess— this is no doubt because I am a new hon. Member and unfamiliar with the ways of the House— to have been a trifle surprised at the Opposition's case on this point because I have the honour to be a member of the Standing Committee upstairs which is dealing with the Coal Bill. Labour hon. Members on that Committee are making it clear that they believe that before any of the National Coal Board's subsidiary interests are hived off, the matter should be debated on the Floor of the House, which I regard as a reasonable attitude for them to be taking. I am surprised that they do not take the same view about the Government's responsibility for spending public money in this case.
  These are, in my view, the political objections. I come to the technical objections. The characteristic approach of the I.R.C. was the merger. Indeed,
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  it is for the merger that it will be remembered. It was especially interested in the very big merger, a few examples of which are Leyland and B.M.C., G.E.C. and A.E.I.-English Electric. These were some of the big set pieces, but over a dozen were listed in its last Annual Report.
  One gets the impression that the I.R.C. looked about the world, saw the great success of some of the large companies in the United States and elsewhere, was dazzled by what it regarded as the benefits of size and thought that, size being synonomous with success, it was necessary for it to create similar very large organisations in this country.
  In fact, one need only to look at the Fortune of the 500 largest companies outside the United States to see that this country does not do too badly. The I.R.C. forgot that mergers themselves create difficulties which are often much greater than any advantages that result. The advantages of a large company— of economy of scale and so on— are obvious, are grand and are easily seen. This applies to many British companies which are, perhaps, the second in the world in their fields, or in some cases the first.
  However, problems are created which are tremendously complex and numerous but from which many somewhat smaller companies do not suffer. Indeed, some of these problems tend to hold down the very large organisations in the way that Gulliver was held down by the many tiny strings of the Lilliputians. Though they were much smaller, they were able to out-manœuvre Gulliver, primarily because he faced a multiplicity of problems.
  I will not burden the House with statistics, except to give two which show the way in which in many cases the problems of mergers are very much greater than the advantages. There is an American expert called Mr. Forest Wallace who estimates that a moderate amount of integration between companies requires something like 10,000 major, non-routine decisions. When the Pennsylvania Railway merged with the New York Central Railroad, so that the two integrated their equipment and maintenance functions, the critical path programme contained more than 400 steps.
  These are extraordinarily complex matters involving the laying off of men,

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  the closing down of factories and the re-organisation of the whole chain of communication. They also involve the changing of county procedures and alterations in company structures. So difficult and complex are they that the result often means the merged organisation being less successful as one entity than the sum of the parts.
  I do not ask hon. Members to take what I say as a matter of faith. There are striking examples of mergers in recent years, not only abroad but in this country, which demonstrate the truth of my remarks. Perhaps the most obvious example is the one I mentioned, the merger between the Pennsylvania Railway and the New York Central Railroad. It was designed to achieve economies of scale. In the event, it led to bankruptcy within a matter of months.
  In Italy the largest chemical company in Europe, Montecatini Edison, avoided bankruptcy by the skin of its teeth and is always at the bottom of the list giving the rate of return not only compared with other firms in the chemical industry but compared with other industries.
  In this country we have B.M.C., which was formed in 1952 between Austin and Morris. That merger brought together the two greatest names in the British motor industry. The right hon. Member for Bristol, South-East pointed to the merger between Leyland and B.M.C. The two companies were less successful than they had been apart, and a striking fact is that the smaller Leyland company emerged to take over the larger one. It is regrettable—this is not said with any disrespect for the management of the company—that the performance of Leyland since that time has not compared favourably with the past, and this is worrying.
  I admit that the scale of industry is getting larger, both nationally and internationally, and that in all industries there is a minimum size beneath which it is impossible for companies to compete by mounting the necessary research programmes, launch new projects and so on. Be that as it may, there are no short cuts to achieving success and a position from which one can compete satisfactorily on the world stage. When one looks at the most successful large companies—be they American, such as I.B.M. or General
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  Motors; or British, such as B.P.; or Continental companies— one sees that they are all the result of organic and gradual growth.
  They are not things which have been thrown together like shot-gun marriages. Merging is a complex and difficult business. Mergers are not things that an organisation notches up like Jesse James notched up killings on his six-shooter. It is not a suitable occupation for an organisation simply to secure points and lay them out in its annual report. There are no short cuts. One has to move gradually and the only way to do that is to create a competitive environment in which companies can compete, become efficient and hold their own across the world. I know that hon. and right hon. Gentlemen opposite are often very doubtful of this philosophy.
  I would like to draw their attention to one example of a high technology industry, the sort of thing about which we are always talking in relation to the American challenge and the need to withstand it. It concerns the German chemical industry. Hon. Members will remember that there used to be a great firm called I. G. Farben which dominated the German chemical industry and was widely held to be one of the industrial wonders of the world and to have played a large rôle in the industrial strength of Nazi Germany.
  After the war the Allies destroyed the I.G. Farben and it was believed that when it was destroyed and broken down into its component parts, the German chemical industry would not be able to compete with other countries again. The I.G. Farben was the kind of trust which the I.R.C. was endeavouring to create in so many industries. We see now that there are three German chemical companies operating, not one, and while the German market is very much the same size as ours, from year to year they lead the table for the rate of return on assets, for the most efficient operators, for their invasion of the American market.
  No other firms are more successful at withstanding the American invasion in their home market. We see that a competitive environment, with companies which are not too large to be unmanageable, where they have to fight for markets at home and abroad, is the most successful. Many other examples could be

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  brought to mind. I take that one because it is the kind of capital-intensive high-technology industry with which the right hon. Member for Bristol, South-East was so concerned when he was in Government. The I.R.C. was a brave experiment, its aspirations were good but the manner in which it operated was one which in the long run was likely to lead to far more pain than benefit.
  The CLERK AT THE TABLE informed the House of the unavoidable absence of Mr. SPEAKER.
  Whereupon Miss HARVIE ANDERSON, The DEPUTY CHAIRMAN OF WAYS AND MEANS took the Chair as DEPUTY SPEAKER, pursuant to the Standing Order.
  5.43 p.m.
  Mr. Austen Albu: It is a great pleasure to congratulate the hon. Member for Cities of London and West-minister (Mr. Tugendhat) on his maiden speech. Not surprisingly, because he comes from a very distinguished stable— in which opinions are fairly broad and generous and political opinions very wide — he spoke with much distinction. In the modern tradition he spoke in a fairly controversial manner but none of us minds that, indeed we are quite used to it. Since the hon. Member comes from the City I suppose we might have expected it on this Bill. I could not help feeling that to some extent he was putting up Aunt Sallys to knock them down. I also had the feeling, and this may be due to the manner in which he spoke, that he could very well have argued the opposite case in just as distinguished a manner.
  What the Government are doing is disastrous. We have not had such a doctrinaire set of Ministers for years. I do not know whether this applies to the right hon. Gentleman but it certainly applies to his colleagues. It is not a return to Conservative traditions that they appear to want but to those of Cobdenite Liberalism. I cannot believe that that is really the case but that is the impression they give. Their views are based not only on bad economics but as my right hon. Friend the Member for Bristol, South-East (Mr. Benn) said, on a completely false reading of history.
  The industrial revolution which made us the workshop of the world took place
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  at the end of the 18th century and the first half of the 19th century, not in a period of laissez faire and free trade but in a mercantilist era of considerable Government intervention. It was only later as we adopted what appear to be modern Conservative principles that our decline began. Our relative position became worse from that time and from the middle of the 19th century, certainly the last quarter of the 19th century until modern times, the story has been one of government taking far too little action and generally far too late.
  At the turn of the century the country wavered between complacency and hysteria in the face of growing foreign competition especially from Germany and America. Anyone who looks up the writings of the time, who reads the debates in the House of Commons at the time, or who reads the reports made by consuls overseas or the Reports of Select Committees and so forth, as well as the books written at the time, will find that what I say is true. Report after report came out, warning after warning was given about the inadequacy of British business methods but the traditions of laissez faire prevented anything from being done. I am surprised that Conservative policy should be to adopt the present attitude in view of the attitudes they adopted at that time.
  The causes of our relative decline can no doubt be based to a certain extent on social attitudes but there are three factors by which they were demonstrated and have to some extent been demonstrated ever since. The first factor was a lack of any tariff protection for British industry in the face of growing competition from our competitors who were protected by tariffs. Secondly, there was a lack of any financial arrangements for industry which would encourage innovation, rationalisation or good management, compared with our competitors, particularly Germany. Thirdly, there was a lack, until incredibly late in our history, of any adequate system of public education and especially of any adequate system of technical education.
  For some time tariff protection and the question of public education were treated as alternatives, so much so that the Liberal party produced a pamphlet entitled "Brains or Tariffs". I think it

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  was Chamberlain who made a violent attack on Rosebery for advocating more and better technical education but he said that this was no alternative to tariff protection, as if the two were somehow incompatible alternatives and the nation could only have one or the other, the two being unnecessary at the same time.
  The lack of tariffs meant that we had no bargaining weapons but eventually the tariff reform movement became muddled up with the wave of imperialist fervour and with the illusions of creating a Zollverein— a great Empire free trade area which was about as completely out of date as that monument of British imperialism, New Delhi, which came into existence at about the same time. Imperial preference was established in 1932 but no one believes that that system had anything much to do with the structural changes which belatedly took place in British industry in the second part of the 1930's.
  As to education and training, we resisted this longer than anything else. It was not until the 1950's— and here I give some credit to the party opposite who were in Government at the time— that we began to get a better system of technical education, higher education and university education— a system in any way comparable with that of our competitors who for years had trained their businessmen in this way.
  At the beginning of this century and up to 15 or 20 years ago hardly any businessman in England had had any education other than a secondary education. We were enormously behind our competitors simply because of the lack of Government intervention to assist industry by education. The last Conservative Government made enormous improvements in the technical education system and they also introduced the Industrial Training Act. This is something else about which we must take care. It looks as if there is to be a further attack on the Industrial Training Boards and that sooner or later they will follow into the limbo of the movements for the improvement of industrial efficiency which the present Government have started. It would be a tragedy if that were to happen. They have hardly had time to get going and there is no doubt that before they were introduced
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  the standard of much of our industrial training was deplorable.
  As a sort of cumulation of this and some other things, such as previous Governments rationalisation of the cotton industry, the aircraft industry and so on, the last Government set up the corporation to deal with the third problem. This is not only a question of mergers and not only a question of financing industrial expansion. It is also a question of dealing with the problem of the failure of institutional shareholders to promote rationalisation and more efficient management. The setting up of the Corporation was only one of several methods the last Government introduced to improve the performance of British industry.
  The Corporation had a very good record in its short life, certainly in the engineering industry, where it was very badly needed. It had more difficulty in textiles, which is a traditionally backward and conservative industry, though I understand that it recently had success— this does not appear in the last report, but has happened since— in assisting the formation of an independent group in the household textile industry. This was very necessary in view of the excessive vertical integration in the industry. I believe that the company which is being set up is very active in Europe.
  The hon. Member for Cities of London and Westminster made a great attack on the fashion for mergers. But mergers are not the sole purpose of the Corporation, which made that very clear in its last report. Nevertheless, the hon. Gentleman will not deny that there were some parts of British industry, such as the heavy electrical engineering industry, where mergers were necessary because their scale was quite inadequate.
  But rationalisation can take the form of hiving off, breaking up, moving groups from one firm to another to bring about a more rational managerial structure. Having dealt with some of the large merger schemes that were belatedly brought about, the Corporation was turning to this other form of rationalisation to produce a rather better company structure and rather better management for particular industries.
  One of the Corporation's best features was its scheme of twice-yearly follow-up visits where there was no I.R.C.-nominated director on the board, for the

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  purpose of monitoring the performance of companies and management. This job is not performed in this country by the banks or insurance companies. Many people, including the hon. Gentleman, I am sure, have many times criticised the inadequacy of the control by the institutional shareholders of the companies in which they very often have large investments.
  The quality of the I.R.C.s staff has been mentioned. Perhaps it is exemplified by the fact that I understand that most of them— and there is only a small number of them— have been offered very fine jobs in the City or in industry once the Corporation has been broken up.
  That the work they have been doing needs to be done has been recognised by the Secretary of State. I should like to read out what he has said, because it underlines what my right hon. Friend said about the obvious doubts the Secretary of State has about abolishing the I.R.C. before it has really got going. Speaking at the annual dinner of the Industrial and Commercial Finance Corporation on 5th November 1970, the right hon. Gentleman said:
  "The disappearance of the I.R.C. is one of the factors which poses new problems to the City of London …
  I would like to ask you tonight whether the City of London has sufficiently modernised its structure and its facilities to meet the present-day needs of industry. Is it fully ready to meet the increased responsibilities which will devolve upon it following the disengagement by Government from intervention in industry?"
  Is it? Perhaps the hon. Member who represents the City can answer. Does he believe that it is? The right hon. Gentleman went on:
  "I believe you should look more closely at what is now going on in Europe. There are many institutions, for instance in France and Germany, which have now acquired most if not all the skills and expertise which you in the City of London have developed, but they have in sonic cases gone further, not just by learning each other's languages. They are prepared to acquire technical expertise to enable them to assess and advise on proposals for new investments put to them by industry … The danger as I see it is that the traditionalists amongst you will look upon these more enterprising institutions as not quite proper, and the powerful effect this kind of collective atmosphere of disapproval can have in a closed community like that of the Square Mile can be damaging to the long-term interests not only of the City itself but to industry and to the country."
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  The comparison the Secretary of State was making was with the attitude of similar institutions in our competitor countries, particularly Germany and France, which have been overtaking us rapidly. It is no good our satisfying ourselves that we are not doing too badly now and that we have a fairly good balance of payments, thanks to the policies of the previous Government. In the past the problem has always been that we have been satisfied with our position and have not observed that other people were overtaking us. It is to the trend, the movement, the direction in which expansion is taking place, that we must draw attention.
  It looks as though the Government are destroying the I.R.C. before the results of its activities can be assessed, and knowing, as the right hon. Gentleman admitted, that existing free market institutions are quite inadequate to carry out the task which it was set up to perform, and which he apparently admits is absolutely necessary.
  What could be more tragic? There are signs at last of an improvement in British management and a growth in productivity in British manufacturing industry. Most of us have had the experience in the past few years of meeting people from overseas, particularly Americans, who say that maybe in a short time we shall have some of the most professional management in the world and that maybe at last the measures of successive Governments over the past 10–15 years are beginning to have their effect.
  It is not possible, and nobody can believe that it is, to effect the improvement required in British industry, British management and British attitudes by macro-economic methods alone. Yet those are exactly what the Government are to rely on. They are to withdraw from micro-economic intervention and rely on short-term monetary methods to bring about the change in efficiency, the rationalisation, improved innovation, and better training that we need. The right hon. Gentleman's speech seems to make it absolutely clear that that is the case. The Government of which he has become a member are content to rely on short-term monetary policy at the expense of the long-term improvement of the British economy, which for so many years has

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  been badly needed and to which we at last thought we had put our hands.
  5.57 p.m.
  Sir Brandon Rhys Williams: We have spent a number of hours in recent weeks, and are likely to spend many more in coming weeks, debating the relationship between workers and management. It is all too rare for us to have a serious debate on the relationship between management and capital.
  I have often said— but having heard the contribution of my hon. Friend the Member for Cities of London and Westminster (Mr. Tugendhat) I begin to think that I may not be entirely right— that the reason why our debates on management are so relatively thin is that all too few Members have practical management experience or sufficiently extensive knowledge of the actual problems of modern management to feel themselves capable of making a really valuable contribution. All hon. Members who heard my hon. Friend's maiden speech will feel that here we have someone who has not only the power to express himself convincingly but a very wide store of knowledge of the industry and commerce both of this country and other countries. We look forward to his contributions to our debates, which will certainly be enlightening and, I do not doubt, controversial. He has made a very interesting start.
  I hope that the House will turn its attention increasingly to the problem of the relationship between management and capital, and that in particular we shall try to escape from the rather arid and doctrinaire approach which has been taken not only in debates since the war but in the whole evolution of the concept of the way in which our political institutions should intervene in the management of industry and commerce.
  I think that we all feel that the Bill, when it becomes law, will leave gaps in the relationship between management and capital. There will certainly be a gap in the financial system in this country. Every industrialist must agree that the financial background of industry today leaves much to be desired; and there will also be gaps in the supervision of management.
  I should like to spend a few moments considering the various solutions which have been tried to rectify the deficiencies
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  in the relationship between capital and management. The overt systems of political intervention obviously come first. Nationalisation was talked of for many years. It was tried for many years, and now it has very few friends. Many people have said that nationalisation is bound to fail for doctrinaire reasons. They feel that political intervention in the management of industry is bound sooner or later to lead to the taking of wrong decisions. My own view is that there are far more practical reasons why nationalisation has not proved a very great success. Very large organisations, whether owned by the Treasury or by remote and uninterested shareholders, can be highly efficient if they are well managed; they can be very inefficient if they are badly managed; and who the ultimate shareholders may be is virtually irrelevant.
  Mr. Ted Leadbitter: The hon. Gentleman said that nationalisation had very few friends. That sounds very nice in the House, unless it is challenged. What nationalised areas of the economy are lacking, we are told, is friendship. If the Secretary of State carries on in his present way, would he de-nationalise in order to gain some friends?
  Sir B. Rhys Williams: If the hon. Gentleman will allow me to pursue my way, he will see that I am giving him an answer, though possibly not the answer he expects.
  When I listen to debates on nationalisation and de-nationalisation both inside and outside the House, I feel a great sense of emptiness, because it is so rare to hear speakers in this rather highfalutin' dispute get down to the brass tacks of what management is about, to the relations between the white-collar and blue-collar workers, to the real problems of organising large work forces and organising large volumes of capital, of planning investment, and so on.
  I should like to put one humble theory to the House, that it is not the question of who owns the shares that ultimately decides whether an industry is efficient but the adoption of the pyramid organisation of management. It is nearly always fatal, whether a company is privately-owned or publicly-owned. In the large publicly-owned institutions it has almost invariably been the practice to adopt the

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  pyramid system in obedience to conventional Civil Service practice.
  In an organisation that is expanding very fast a large number of young people who are hoping for promotion may well get it as time goes by, if they deserve it, because new opportunities are being created all the time. So the manager starting at the bottom and hoping to attain something in the course of his life may succeed in doing so simply because as he works his way up the pyramid it increases in size. But if an organisation depends on the hope of promotion as its incentive to self-improvement, the taking of risks and hard work in its managerial grades high and low, it must be able to offer it. The organisation must be able genuinely to offer promotion to the man who deserves it.
  Mr. Arthur Palmer: I think I can claim to have a fair knowledge of the electricity supply industry which has been nationalised for about 20 years. Is the hon. Gentleman aware that the number of independent management positions within that industry today in which there is a vast amount of individual initiative and power of control is greater than in pre-nationalisation days?
  Sir B. Rhys Williams: It is not necessarily giving people satisfactory promotion if one creates more jobs which are not germane to the main function. But in view of the hon. Gentleman's much greater knowledge of that particular industry, I would prefer to generalise on the point, but on another occasion I would be happy to learn from him on questions of detail.
  Mr. Eddie Griffiths Mr. Eddie Griffiths (Sheffield, Brightside)rose——
  Sir B. Rhys Williams: Perhaps I could be allowed to complete my point. Nationalised industry tends to copy private enterprise in holding out to its management, particularly young management, the concept that by hard work they can better themselves. Then the sickening truth dawns on the aspiring manager who thinks that hard work will get him to the top. He finds he has to wait for vacancies which in a pyramid structure may never arise. Therefore one finds a number of men in their forties who realise that no matter how hard they
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  work they cannot get any further. When the organisation reaches its maximum size, managerial efficiency inevitably tends to falter. The managers throughout the organisation lose their keenness because they realise that there is no incentive to work and to take risks.
  I am putting forward a suggestion based entirely on personal observation of the motivational failure in management which I believe is more likely to be the cause of inefficiency in a large organisation than the fact that the Treasury may have acquired shares. I hope that the hon. Member for Sheffield, Brightside may feel that I have made his point for him. If not, I will give way.
  Mr. Eddie Griffiths: My experience in the steel industry, having worked both for a private steel company and also in the British Steel Corporation, is the opposite to what the hon. Gentleman said. Up-and-coming young managers with ability are now flourishing under the British Steel Corporation and I could give chapter and verse of individual cases. However, in the private steel companies the higher strata of directors and upper management were riddled with nepotism. A prolific director may have five sons in the business, all directors by the time they are 28 or 30. Therefore, in such a situation there is not much chance for the independent man with ability.
  Sir B. Rhys Williams: The difference between us is not as great as it appears. A junior manager may see no hope of advancement and therefore inefficiency results; but when an organisational change is brought about and the situation is rectified, there again begins to be a spark of life in the management. if that is happening in the steel industry today I am glad to hear it, but in general it must be said that the Civil Service tradition is still followed, with promotion and assessment over a period of years. This idea has crept into the nationalised industries and it has been the hand of death.
  If we are to escape from an arid dingdong between nationalisation and denationalisation, where else can we go?
  Mr. Leadbitter: What do propositions about nationalisation and private enterprise have to do with the I.R.C? I

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  had understood that the I.R.C. was working in accordance with its terms of reference in complete harmony with the private sector. I was wondering what was the hon. Gentleman's point in connection with the Bill.
  Sir B. Rhys Williams: The hon. Gentleman is simply asking me to get on with my speech, which I shall now try to do.
  The Labour Government recognised, although they perhaps did not act upon this openly, that nationalisation on the pre-war pattern would not be acceptable to the public and was not likely to produce results. Therefore they devised other schemes, involving the I.R.C. and the Industrial Expansion Act. These measures were described by hostile elements as "nationalisation by the backdoor", though I myself did not so describe them. I think there was good and ingenuity in these schemes but they were still highly controversial in operation. Many people felt, and I believe rightly, that the use of public money in large amounts to coerce changes in the private sector could not always be unattended by controversy. What is at the back of public doubt about both the Industrial Expansion Act and the operations of the I.R.C. was the question in the public mind whether politicians were the right people to take decisions about industry.
  Mr. Albu Mr. Albu rose—
  Sir B. Rhys Williams: I think that it would be in the interests of the House if I were allowed to make my point. [Interruption.] Hon. Gentlemen who are protesting opposite have not appreciated the extent to which I am making their own case for them. I have felt doubt about a number of the activities of the I.R.C., although I had the highest respect for its personnel. Personal friends of mine joined the Corporation, people I admire and who I felt had a great future in industry. I know how much they felt they would be able to do in the Corporation. I pay particular tribute to Charles Villiers, who is a man of outstanding capacity and with extensive experience in the private sector and in the City before he accepted this post.
  Mr. Hamling: Was he a politician?
  Sir B. Rhys Williams: I do not know his political views. He was appointed by the Labour Party. It seems to me that the evolution of our political system by British genius over the hundreds of years which have gone into the creation of the House of Commons has not produced an organ ideally suited to detailed day-to-day intervention in the workings of private companies. Nor am I particularly satisfied with the performance of any Government since the war in regulating the country's finances.
  I listen with admiration to the glibness and facility of hon. Members in dealing with industrial matters. I am sometimes amazed at the speed with which they master facts. I have not gained very rapidly such knowledge as I have of industry. Perhaps I should mention that I spent 14 years in I.C.I. and about eight years in consultancy. The longer one works in industry and in consultancy, the more humble one becomes when trying to decide the circumstances in any particular industry.
  One reads what is said in the newspapers about a particular company in which one may have an interest and it is rare that one reads the whole story or indeed an accurate one. If the newspapers are accurate in their information, they are often out of date. But although the specialist financial Press in particular may be impeccably accurate and unquestionably correct, anybody who has worked with management and who knows a factory, has handled its products and met the firm's customers, knows that the ideal solution to a firm's problems will not be found simply by reading published data. Although much can be done by airing the circumstances of a company, even more can be done by confidential inside work. I am unashamedly on the side of people who say that direct political intervention in private industry is not likely to produce results.
  I differ also from those people who feel that there are automatic solutions; that if politicians cease to interfere in an industry it will right itself like a ship coming out of a storm. I have never been one who follows laissez-faire doctrines and I distrust people who use the word "competition" as though it is some form of abracadabra. They think that once competition is introduced, any situation will automatically come right.

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  I can see hon. Members opposite pointing their fingers. But there is nobody on these benches who does not agree with me. Everybody knows that where there is competition there is likely also to be efficiency, but that the question we must concern ourselves with is "Why?" We should not be content just to use the word "competition". I would rather ask the question, "After competition, what?" When a firm finds it is facing competition, what happens then? What do the managers get down to that possibly they are not doing already? How do we encourage firms to follow such a course without introducing a blast of competition, a flood of imports, or whatever it may be?
  In consultancy one learns to look at particular things in a firm and sometimes one comes to the view that a firm of a certain size is not doing something that other firms of a similar size or situation are doing. Therefore, one asks if they have taken such a matter into consideration. Sometimes the firm says, "Yes, we have and we have chucked it out." Sometimes they say, "We will have another look at the matter." Sometimes they smack their heads and say, "Splendid idea, why have we not thought of it before?" It is not competition that makes them more efficient, but the readiness to take the sort of decisions which are needed. I believe that one can induce such a readiness without introducing destructive forces. But how is this to be done? Is it to be done by leaving industry entirely to itself? I prefer to explore the organic alternatives to the I.R.C. and the direct intervention of government funds.
  First, I should like to make one or two suggestions in regard to the financial background against which industry is working. For many years, possibly since 1931 and possibly indeed since the 1880s, we have been living in a financial climate in which there has been a tendency towards too great consumption in relation to the volume of investment. Or, possibly too much of our investment potential has gone abroad and there has been too little modernisation of our own industries. We have allowed ourselves to divert too much of our creative effort into the production of goods for consumption. Insufficient has gone into modernisation and invest-
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  ment. Is this a matter we can leave to the City or to financial pundits to put right? I am not against Government action, but such action must not be hamhanded.
  There are two things I should like to recommend. If the Government are to produce a suitable financial background against which industry can operate efficiently, there must be continuity of policy. In taking long-range investment decisions, one of the most cramping obstacles is uncertainty about Government intentions. This uncertainty has related to the course of interest rates, exchange rates, quotas, tariffs and many other factors. While the Government are constantly preoccupied with these things it is impossible for a business man to take a realistic long-term view about what his industry demands. I urge on both Front Benches to settle before anything else the achievement of continuity of policy in financial matters.
  The Government have a responsibility to act to increase the flow of funds for investment. But it must be done in such a way that there will be no inflationary results. I would like to put one particular recommendation. 1 believe that companies ought to put much more into pension schemes than they are doing at the moment. The reason that the treatment of our pensioners as a whole is so shoddy is that most pension schemes are far too short of funds. The only way to rectify the situation is to put more money into pension schemes. Some firms put in as much as 20 or 25 per cent. But many put no more than the minimum required under the Boyd-Carpenter Act, i.e., about 4½ per cent. That is plainly insufficient provision for the future for pensions. I believe that the Government would do well to insist that all firms put not less than 10 per cent. on top of wages into the provision of pension schemes.
  What would happen if they did? There would be an enormous extra access of money to the capital market in the private sector because schemes contracted out of the State scheme would have a great increase in funds. These funds would go into the hands of trustees who would in turn place them in the capital market. Firms which had contracted in would also produce for the Treasury large sums

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  of fresh real capital which the Government could use in financing public sector investment.
  So much for the financial background. I do not favour dribs and drabs or even large sums of, say, £150 million being put into the hands of experimental bodies. This is not the time for experimenting in the economy with new faces and people. I should like to see existing institutions strengthened and corrected.
  Mr. Raymond Gower: I agree with what my hon. Friend has said about pension funds. But does my hon. Friend also agree that it is highly desirable that positive steps should be taken to make these schemes completely interchangeable or transferable?
  Sir B. Rhys Williams: My hon. Friend could not have said anything more dear to my own interests. This morning I secured a Ten-Minute Rule space to introduce a Bill for the protection of pension rights, for which I hope to win the approval of the House three weeks from today.
  How can one intervene in the general organisation of management, so that it will tend to be self-rectifying when problems of inefficiency have to be tackled, without the necessity for the introduction of cruel or artificial competition? Some people feel that all that is required is to make it bigger; that when an organisation the size of I.C.I. or the Electricity industry reaches proportions where there is no rival in the whole market it is getting near to being on the scale of modern life. Unfortunately, if we study the effectiveness of the use of capital in small and large companies, almost invariably we find that the small companies use capital more effectively than large ones. Large firms tend to be set up more like the Civil Service and are therefore less efficient in the industrial context.
  I do not therefore place much emphasis on changing the scale of our industrial enterprises. We cannot hope for too much from tiny enterprises; but a medium-sized organisation employing 500 or 1,000 people can sometimes be more human, inventive and flexible than the vast structures with international prestige, complicated rule books for management and workers, and so on. The pace at which mergers were taking place a few
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  years ago left me with a sense of anxiety. Many people in the City are now beginning to question whether hectic mergers are likely to lead to efficiency. I am glad that these questions are being asked.
  We still return to the problem of the supervision of management. On the Continent, because of many factors—some accidental, others the result of deliberate national policy—the supervision of management has evolved on a different basis.
  We should certainly consider the German system, because the German economy is not too inefficient. In Germany, company law specifies that the supervision of management must be carried out by a board which shall not itself be executive. What a great thing it would be in this country if boards of directors were able to be more independent when criticising their own operations. All too often, since the war, there has been a trend away from the appointment of outside experts, to company boards, towards the promotion of people who have given their working lives to the service of the company. It is difficult to find fault with it in principle, but it has led to situations where boards of directors have ceased to be responsible for supervision and have ceased to feel that their loyalties belong primarily to the shareholders. Instead, directors' meetings have become simply regular meetings of heads of departments.
  Some companies have attempted to cure this deficiency by recruiting outside directors. But, from my limited knowledge, the outside director tends to be a messenger boy to a particular sector or market. If the chairman wants a legal opinion or wants to know what the bankers are likely to be thinking, it suits him to have, for £500, £1,000 or £2,000 a year, a man who regularly attends board meetings and speaks only when spoken to. A man appointed as an outside director on that basis will not exercise a supervisory function.
  I believe that the Government would be doing something constructive if they changed our company law to make it easier for shareholders to insist on the adoption of the German system of a supervisory board. Suspicion is often expressed in this country about the German Aufsichtsrat. All German firms

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  of a certain size must have worker representation on the board. Some hon. Members present will remember that we discussed this point a few nights ago in Committee on another Bill. I have no sense of hostility to the concept of worker representation on the board, but it must be in a supervisory rôle, not executive. If workers want to take part in the executive management of their company, the right way is to get to the board through promotion, not by changes in company law. But I am well disposed towards worker participation in the supervision of management. I hope that more study will be given to that concept in this country.
  I hope that I may have led some hon. Members to the feeling that direct political intervention in industry or in finance is unlikely to lead to satisfactory results either in the short or long term. That does not mean that political action of an indirect kind is not required.
  I hope that my right hon. and hon. Friends on the Front Bench will give serious consideration to the early introduction of a major new Measure of company law reform. I hope that they will give active study to the audit system in this country, which many people feel is in a highly unsatisfactory state. I hope that they will also look at the possibility of extending the audit system to include reports to shareholders on matters other than the sheer arithmetic of the business. I hope that they will take a long look at the rôle of the shareholder, and particularly the ways in which he can express himself at meetings and in his other relationships with the board.
  I hope that my right hon. and hon. Friends will also look at the rôle of the professional institutions. I speak not only of accountants, but of other consultants, the qualified engineers, the chemists, and all the other members of organisations ancillary to management who can do more than they are now doing to induce efficiency.
  I particularly ask my right hon. and hon. Friends to consider the rôle of the institutional shareholder, the banks, the merchant banks, the big pension funds, the unit trusts, and all the other bodies which, in effect, have now taken over from the private shareholder but have not taken over his responsibilities. We want a new Companies Bill which will put the
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  relationship between capital and management on a new and living basis.
  6.29 p.m.
  Mr. William Hamling: My right hon. Friend the Member for Birkenhead (Mr. Dell) has told me that I must not be rude to the hon. Member for Kensington, South (Sir B. Rhys Williams). I shall try not to be rude.
  The context of the hon. Gentleman's speech, that political intervention in industry and trade is not desirable, takes me back many years—even before my hon. Friend the Member for West Lothian (Mr. Dalyell) was born—when we used to talk about capitalism. I intend to prove not only how far the hon. Gentleman has missed the mark, but how far the Government have missed the mark.
  When we talk about intervention, we are not talking about intervention in trade and industry. This debate is not about management and capital. This debate is about the economic life of the nation. It is about people who work in industry. I know that there is no industry in South Kensington, and very little in the Cities of London and Westminster. There is a lot of parasitism, but very little industry. This is not where one finds steelworkers, as my hon. Friend who has left the Chamber, worn out by this long non-intervention in industry and trade, knows from bitter experience.
  The coalminers who have been made redundant in their thousands are not concerned with these academic third-rate lectures on management. They are concerned with the realities of industry, and the reality of capitalism which does not give a damn about humanity, but thinks only in terms of profitability, balance sheets, and narrow industrial accountants' efficiency. What we are concerned with in this debate is people, the economic life of the nation, flesh and blood; not statistics, not balance sheets, but people.
  It is all right for the Under-Secretary of State to giggle when people talk about A.E.I., but the fact is that 10,000 people in my borough went unemployed. I defended the Government's policy then, because I said that it was right that we should shift industry to Durham, to Scotland, to Yorkshire and to Lancashire where there was unemployment. That is what we mean by economic intervention. We are talking about people. We

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  are talking about areas such as South Wales—[Interruption.] The hon. Gentleman knows damned well that the situation is now quite different.
  Mr. Gower: Is the hon. Gentleman perhaps inadvertently doing an injustice to my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), who was pleading——
  Mr. Hamling: Nobody could do him an injustice.
  Mr. Gower: —for a form of enlightened capitalism which, in most parts of the world, has ensured a higher standard of living than any alternative system yet devised by man?
  Mr. Hamling: The hon. Gentleman was talking about management and about capital. He never once mentioned humanity. He never once mentioned the question of the location of industry. He never once talked about the philosophy behind industry. He talked only in accountants' terms, and in management consultants' terms.
  The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): Is not the hon. Gentleman choosing a rather unfortunate analogy in talking about the coalminer whose pit has been closed? He may have heard that the coal mines had been nationalised and were not operating under a capitalist system at all. Might not the truth be that industrial change and innovation are always painful, whether in a capitalist or a State-owned industry?
  Mr. Hamling: The hon. Gentleman has made a smart debating point worthy of the Cambridge or Oxford Union, but it is only a smart debating point, and I shall tell him why. I know the hon. Gentleman's industrial experience. I know his industrial background. Certainly there has been redundancy in a nationalised industry. My hon. Friend the Member for Chester-le-Street (Mr. Pentland) could go to the Tea Room with the hon. Gentleman and tell him the reality of the difference between the concern shown for people by private ownership and capitalism and that shown by a nationalised industry. I have been down a pit in my hon. Friend's constituency.
  Mr. Ridley: So have I.
  Mr. Hamling: Haraton?
  Mr. Ridley: No.
  Mr. Hamling: Washington?
  Mr. Speaker: Order.
  Mr. Hamling: I am responding to interventions from a seated position.
  I know that under the Labour Government there was intervention to protect the lives of industrial workers. What is the philosophy of the Bill? Perhaps I may now come back to the Bill, which we seem to have forgotten. We heard in a two-sentence peroration what the Bill is all about. We had a long speech from the Secretary of State saying what the Bill was going to do. We did not know why, until the last two sentences. What is the philosophy of the Bill? It is that we shall not intervene, that we shall allow industry to be competitive. But when we say that, we are not talking about allowing industry to be competitive. What we are saying is that we shall allow the lives of the people of this country to be determined entirely by industrial and economic competition. There is no question of human welfare, and that was our indictment of the Government about 30 years ago.
  I am old enough to remember some of the economic discussions of 35 and 40 years ago. I took part in them. I come from Lancashire, although I represent a London seat—[Interruption.] I hope that the hon. Gentleman who said that will get up and identify himself, if he has the courage to do so. Apparently he has not, so I shall tell him something about unemployment in Lancashire.
  Mr. Peter Rost: Perhaps the hon. Gentleman would tell us something about the I.R.C.
  Mr. Hamling: That is a very smart intervention. I am telling the hon. Gentleman the economic philosophy behind what the right hon. Gentleman was saying. The hon. Gentleman can go upstairs and read the last two sentences of the Minister's speech in order to remind himself what this is all about. The Government's philosophy is to have a policy of non-intervention. They have a policy of letting the weak go to the wall, and

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  of rewarding success. That is what it means. They have a policy of abandoning the failures. When we talk about abandoning failures, we are not talking about pieces of machinery. We are talking about people. We are talking about firms in which men and women have invested, not just five bob or so many pounds, but their lives, and the future of their families. That is what we are talking about in the Bill. Let us have no more smart debating tactics and no more Smart-Alec interventions.
  I mentioned A.E.I. in which 10,000 families were affected by the closure. The hon. Member for the Cities of London and Westminster talked as though mergers took place only as a result of the I.R.C. What was significant about the I.R.C. and about the Labour Government's policy in relation to mergers was that for the first time we began to ask questions about the welfare of the people concerned. I was very much concerned with that. My right hon. Friend talked about consulting the trade unions. We consulted not only the trade unions in Woolwich but the chamber of commerce and the borough council. We had a town meeting about it, at which all these human questions were discussed. We set up a special staff to find work for the men and women displaced, and of course we had the redundancy payments scheme. No doubt that was, as it were, rewarding failure, but we were dealing with people, and that is the difference between the two sides of the House.
  There were mergers long before the I.R.C., and there will be mergers under the present Government—and what human guarantees will there be then? Will the trade unions be consulted? We know how little they have been consulted recently. We have learned recently how little the Opposition were consulted, so God knows what will happen to the poor souls who will be faced with mergers in future under this Government.
  Let us put the Bill in its right perspective. What worries me is the blind working out of economic forces which take no note of human frailty and weakness, which in the long run might bring economic and financial success and perhaps human welfare—and how many people will have died and starved in the meantime——
  Mr. Ridley: Oh, come off it.
  Mr. Hamling: It is all right the hon. Member being damned clever about this. We are talking about people who are unemployed, and in my family I have had experience of it. I am not talking theory in this. I am talking about the philosophy of this Government. Let the hon. Gentleman look at what his right hon. Friend has said, that they do not intend to intervene, that their economic philosophy is that, if firms are going bankrupt, they will go bankrupt—which will mean that men walk out of the front door unemployed.
  Mr. Rost: Would the hon. Gentleman like to tell us how many firms have gone bankrupt in the past three or four years under the previous Government's extremely severe economic climate of squeeze and freeze, compared with how many went bankrupt in previous years?
  Mr. Hamling: A damned smart debating point that is. That is brilliant—[HON. MEMBERS: "Answer."] Shut up and I will answer it——
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. We must remember that we are not in Committee. This is a Second Reading debate and we should carry it out with the utmost dignity.
  Mr. Hamling: Maybe, but I am replying to an intervention, and I hope that I may be allowed to reply to one intervention without five others at the same time from seated Members.
  The hon. Member must remember the economic context in which we are working. Let him remember the balance of payments surplus which we left his Front Bench, as against the economic problems which we faced.
  Mr. Tom Boardman: Get on with it.
  Mr. Hamling: I am replying to the intervention of the hon. Member for Derbyshire, South-East (Mr. Rost). If the hon. Gentleman does not like it, he can get out: he does not have to listen.
  Mr. James Hamilton: The hon. Gentleman's question was a fair one and perhaps it should be answered by my hon. Friend. It is true that, under a Labour Government, many firms went bankrupt, but one can surely not blame

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  the Government's intervention or non-intervention for that. In many instances, surely one should blame bad management.
  Mr. Hamling: My hon. Friend can no doubt get together with the hon. Gentleman and they can sort this out between them. I was just replying briefly to the intervention.
  The Labour Government provided an enormous amount of financial assistance to firms to prevent them from going bankrupt, and a redundancy payments scheme which was the best that we have ever had in history. I am not sure whether that sort of economic intervention is welcomed by the Conservative Party. They believe in competition and in letting the weak go to the wall.
  Mr. Norman Pentland: I agree entirely with the tone of my hon. Friend's speech to this point, but would he not also agree that the present Government are now advancing a philosophy of non-intervention, yet they intend to intervene to lop off the most profitable parts of the nationalised industries—the coal industry and the breweries—where thousands of men are employed, which will come back to management and men by discouraging the men in the industry which is left to the nationalised boards?
  Mr. Hamling: Certainly, their intervention in wages illustrates the same point. That is a good intervention which I hope the Minister will deal with. If he does not believe in intervention there, why have interventions in wages?
  The Bill is part of the reality of the Government's economic policy. They intend to free industry from Government intervention and to provide that the Government shall not intervene in the economic life of the nation, which shall be left to competition. This philosophy entirely omits the human element.
  We saw this philosophy in operation 40 years ago. I was brought up in student debating societies debating the Conservative doctrine of non-intervention and we saw the results in Lancashire, Scotland and Wales. Do we want to go back to that kind of economic philosophy? Is that what the Government intend—to let bankruptcy take its course, to let the unemployment figures creep up?
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  Of course they are trying to conceal the reality of this policy. One significant thing is the attendance today as against the attendance yesterday. Today we are dealing with the reality of the Government's policies; yesterday we were dealing with a political myth, the Industrial Relations Bill. This is the reality: unemployment for the regions, more bankruptcies, a greater disparity of life between the various parts of the country. A policy of non-intervention will mean that the South-East, where I live, will prosper at the expense of South Wales, as the hon. Member for Barry (Mr. Gower) knows only too well.
  Mr. Gower: Why does the hon. Gentleman distort this picture so tremendously? He knows that successive Governments of all parties have devoted a great deal of attention to evening out the harshness of failure in industry by instituting training schemes, by improving facilities for giving people benefits in unemployment and so on. Does he not accept that inefficiency in industry, in this country or any other, can help neither his party nor ours?
  Mr. Hamling: I certainly take the hon. Gentleman's point, that successive Governments have intervened, but the present Government are different.
  Mr. Gower indicated dissent.
  Mr. Hamling: It is no good the hon. Gentleman shaking his head. We are continually told that the present Government are different, that they are no longer a Butskellite Government, that we are getting away from a Government occupying the centre of the political spectrum, that the Government are abrasive and harsh, that we shall have the economic realities now, not the soft interventionist policies of previous Governments, whether Conservative or Labour.
  The Secretary of State is a poor man's Powellite. He has not the guts to go all the way with the right hon. Member for Wolverhampton, South-West (Mr. Powell), but he is going part of the way, and eventually he will be forced, by the inevitability of his party's progression, to go all the way. The hon. Gentleman has been in Parliament a long time. Let him look at the political credentials of some of the bright characters who came in on the Government side at the last

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  election, the non-interventionists who believe in the harshness of the economic realities which the hon. Gentleman remembers when he was young and knows very well in his native South Wales. That is what the debate is about.
  The Government's philosophy was contained in the last two sentences of the right hon. Gentleman's speech. Quite different from the days of Butler, Harold Macmillan and Heathcote Amory, these are the days of the realities of economics and of facing the facts. What facts? Not human facts but statistical facts.
  Do the Government intend to let economic forces work regardless of the human consequences? Will they let the weakest firms go to the wall? Is their philosophy, "Make them lean and keep them keen"? What will the Government do about more bankruptcies, redundancies and unemployment? Will they assist the regions and maintain the regional policies about which the hon. Member for Barry has been talking? Will they assist industry or let it stand alone? We have not been told. The Bill provides only some of the answers.
  In my part of the world we have increasing unemployment. From the figures given by one employment exchange in Erith, unemployment is already several times greater than it was a couple of years ago. It is rising. That is in the prosperous South-East. What will happen in Durham, South Wales, Scotland and Northern Ireland? I wonder what the hon. Member for Belfast, East (Mr. McMaster) will say in eighteen months time about the Government.
  Do the Government want all industrial success to go to the South-East? Do they want it to polarise in the wealthy areas? Do they want to help the successful but not the unsuccessful? That is where the logic of the Government's philosophy will lead.
  I said earlier that I came from Lancashire. I went to university because of unemployment. I could not get a job when I was 16. At that time there were over 100,000 unemployed in Liverpool. I stayed on at school until I was 18. I tried unsuccessfully to get a job again at that age, and I went to the university. All the time I was at university, the eldest boy in a working-class home, my father was on a means test. These are
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  the realities of this subject to people in the provinces. They are not statistics. They are not economic lectures but economic realities.
  I left university in 1935, the eldest son in a poor family, and I had hopes of helping my family, who had helped me. Right hon. and hon. Gentlemen opposite know that I am not a bitter person or given to hatreds, and that I like life and enjoy it. I have had a happy life. I thought that I could make a contribution, but my mother died only three months after I left university. She had been worn out by bringing up a large family in poverty. We do not forget these things.
  I ask the right hon. Gentleman to look again at the philosophy embodied in his peroration and to ask himself, honestly and sincerely, how different is this from the policies of despair which sacrificed thousands and thousands of lives in Lancashire, Yorkshire, Scotland, Northern Ireland, Wales and Durham 40 years ago. We on this side of the House say that this is what the right hon. Gentleman will be going back to if he is not careful. We regard the Bill as one instalment in the road back to ruin.
  6.55 p.m.
  Mr. John Hannam: I am grateful indeed to have the opportunity of making a humble contribution to the debate on the Industry Bill.
  As is the custom with maiden speeches. I shall endeavour to be brief and uncontroversial, but I crave the forgiveness of the House if I fail to tread that delicate path of uncontroversiality constantly throughout my speech. The rôle of Government in industry is a subject of such deep importance to me that I must declare a stand on one side or the other of the principles involved.
  I have the honour of representing a West country constituency, the City of Exeter. It is not an industrial centre in terms of heavy manufacturing industry, but it is the true centre of the West region, with rapidly developing light industrial estates, sub-contracting out to the heavier Plymouth and North Devon manufacturing areas.
  Since Roman days, Exeter has occupied a special place in British history, and today, with its beautiful cathedral, the River Exe, and its fine university—sitting

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  probably in one of the most impressive modern campuses in the country—we see the final stage being undertaken of the rebuilding of the city centre, which was so appallingly blasted in the Baedaker bombings of the war. I need not extol the virtues of this fine city, for so many hon. Members have felt unable to pass by or through my constituency without a pause of a few hours, usually spent in that well-known parking lay-by, the Exeter by-pass. Perhaps sadly, they will learn of the advent of the M5 motorway, which by 1975 will deprive them of such a haven of rest.
  Exeter has been served by a long line of worthy Parliamentary representatives. Indeed, my immediate predecessor, a young lady from a talented political family, occupied a position in the previous Government. I have no doubt that her natural disappointment at being deprived of her seat was mollified slightly by the knowledge that the family flag would continue to fly so vigorously in the other place.
  I am proud to serve such a fine constituency in the west region, which returned my namesake and ancestor for the constituency of Poole and Weymouth in the sixteenth century, although I fear that the absence of any record of his parliamentary activities probably accounts for the complete absence of further family politicians during the ensuing 300 years.
  In taking part in the debate, I wish to represent the views of many people in my constituency and in the West Country. I am conscious in the House of the weight carried in industrial debates of this nature by contributions from Members representing industrial areas. Yet many problems facing the country manifest themselves most acutely in the regions, where we have higher-than-average unemployment and lower-than-average wage levels and growth. They are the keynotes of the present-day state of affairs.
  In the South-West there has existed growing concern at the economic prospects for the region. In the public media and in major economic pronouncements, the emphasis is always laid on the major industrial companies. Yet I believe that it is only when British economic policy is directed at giving full and free rein to the 80 per cent. of
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  our industrial sector which is comprised of the smaller companies and businesses of around 500 to 1,000 employees that we shall see the vast backbone of the country developed, and the national growth which will bring us in line with our rivals in Europe and throughout the world.
  I can fully understand the economic theorists leaping at the opportunity of having such toys as the Industrial Reorganisation Corporation with which to play around. A sum of £150 million and a free hand to pick and choose amongst the vast network of British industry—certainly a juicy prospect for the economic gourmet, and without a doubt one would have some degree of success in the financial manipulations engaged in.
  Yet, in the wide perspective of overall economic policy, of what significance can such an interventionist body be? We have ploughed along, getting deeper and deeper into the mire of stagnation and "stop-go". Surely the lesson to be learned is that it is the very extravagance of such Government forays into the normal market which produces the escalation of Government spending which in itself is the main contributor to the shortage of continual investment which our industries need so desperately.
  I recall making another maiden speech in proposing a motion at a party conference three years ago on trade and industry. At that time, I felt that there was a limited rôle for such a body as the I.R.C. to play in assisting and encouraging the restructuring of industry. But, at that time, there was not the evidence before us of the complete failure of such interventionist policies as that before us now, with the pile-up of company bankruptcies and liquidations due to the over-spending of the nation's assets by Governments.
  So it is in the broad analysis of urgent and essential cut-backs in Government spending that I support the Bill. At a time when our hard-pressed old-age pensioners are desperately hoping for an increase in pensions and when our social services, housing and regional problems are at an acute crisis stage, such outlets for taxpayers' expenditure as this Corporation cannot be seriously supported.

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  The record of the I.R.C. is not all failure. Some of the 50 or more projects involving nearly 150 companies have produced successful mergers or avoided financial breakdowns. But I warrant that those very companies which have been bailed out by the I.R.C. are now in many instances back in the same situation as the many thousands of other businesses in the country.
  We have as fine a market mechanism in the British financing sector as can be achieved anywhere in the world by any alternative means. What is needed for a good, long, stable period of time is sensible direction of our economic policies to allow the British worker, his management and his investors to balance their joint contributions towards the clear objectives of higher productivity, higher profits and, therefore, higher wages for all.
  I suppose that, of all the I.R.C. ventures, the G.E.C.-A.E.I. takeover and the emergence of Sir Arnold Weinstock as the electrical manufacturing industry's catalyst-man was the most exciting. Yet, since then, profit per employee has dropped sharply and the return on capital has declined by over 4 per cent. In fact, of the biggest I.R.C. mergers, 10 have shown drops in capital return since 1967. Looking at the state of British industry in 1971, it is obvious that many of the so-called mergers that have taken place during the last few years in reality have been company liquidations.
  The need now in British industry is for stability and growth backed by strong investment and liquidity. We do not need a further spate of mergers and takeovers. Therefore, I can see the I.R.C. continuing only as a kind of Government merchant bank. But how can one contemplate the amount of finance needed for that kind of operation, except in terms of £1,050 million rather than the £150 million that was allocated in 1966?
  In some countries where the depth of merchant and investment banking is far less than in Britain, various different forms of restructuring banking organisations have been and are being tried. But they are very different from the I.R.C., and they contain large proportions of private capital. In this country, with such agencies as I.C.F.C. or the Finance Corporation for Industry, the means for
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  assisting in mergers or expansion schemes already operate most successfully and in an indiscriminatory fashion.
  That leads me to my final objection which I have to this form of government intervention. It is that it is bound to be discriminatory. It has to be. Its funds are not the bottomless well that finances statutory grant schemes. As more money is poured into selected projects, so other less fortunate claimants face a diminishing money supply.
  I return finally to my own region, where there is great support for the end to such discriminatory policies as S.E.T., selective grant systems and bodies like the I.R.C. I am sure that we shall experience a rebirth of confidence throughout industry and commerce in the regions when our whole economy is given the chance to expand under the more attractive but possibly less engaging policies of this Government.
  7.5 p.m.
  Mr. Ted Leadbitter: This is the second occasion on which I have had the honour and privilege to follow a maiden speaker. On the previous occasion, I sought to do what was best in accordance with the accepted courtesies of the House and, as a result, I was as nervous as when I made my own maiden speech.
  It is proper that I should congratulate the hon. Member for Exeter (Mr. John Hannam) on making an exceptionally well-balanced speech in which he brought out several points of importance without becoming too controversial and succeeded in demonstrating that he has the mark of an exceptionally forceful and forthright debater. I hope that his constituents will receive a good report of the hon. Gentleman's initiation and acceptance in this House, the finest place in the democracies of the world.
  I hope that what I have said to the hon. Gentleman in all sincerity will in no way be diminished if I go on to refer to his predecessor. Mrs. Gwyneth Dun-woody served this House exceptionally well. If the hon. Gentleman continues her diligent work, he will serve his constituency to the full and gain that satisfaction which comes to us all when we have done a good job. As a junior Minister, moreover, Mrs. Dunwoody took

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  a great interest in the regional development areas, especially those of the Northern region.
  Having said that, I must now turn to more controversial matters and indicate to the hon. Member for Exeter the varied opinions and emotions likely to be expressed in this House. However, the hon. Gentleman must appreciate that, while we have controversy in this Chamber, that does not mean that we sulk when we get outside it. I will refer with some pertinence to our new Secretary of State presently. But, before I do that, and having wished the hon. Member for Exeter the best of good fortune, I must refer to the hon. Member for Kensington, South (Sir B. Rhys Williams), who detained us for almost half an hour with the most rambling, woolly speech that I have heard for many years. It was punctuated with antiquated, doctrinaire nonsense. Hon. Members listening to him were kept above the level of boredom only by the anticipation that he would make at least some reference to the Bill. Unfortunately, he did not. I am sure that the Secretary of State would have been interested to learn that, in his absence from the Chamber, one of his hon. Friends on the back benches had said something useful about the Bill.
  No backbencher can find any justification for the Bill. The Secretary of State has not received from industry or any other source information about finance or about results to persuade him to introduce the Bill. Nor could he have had information to persuade him to get rid of the pertinent parts of the Industrial Expansion Act. Nor can the Opposition charge him with helping his party's friends who filled the Conservative coffers before the election. It is an embarrassing situation. Is the Bill before the House purely because of a political obsession that anything that the Labour Government did to improve industry has to be wiped away? Is it a corollary of the Prime Minister's wishing to create the image of being a strong man that this completely independent body which is accepted by industrialists should have to go by the board?
  Mr. Eddie Griffiths: I remind my hon. Friend that one notable absentee from the Government side of the House is
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  the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), who is usually in his place when industry is being debated. He is a big industrialist in Sheffield and he could have told us at first hand how Osborn's of Sheffield, with which he is closely associated, received £750,000 from the I.R.C.
  Mr. Leadbitter: My hon. Friend in his second intervention in the debate has put his finger on the pulse of this problem. The policies propounded by Ministers show a lack of consistency. The philosophy of non-intervention conflicts with the philosophy of intervention only in disputes with trade unionists. My hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) has mentioned another contradiction which betrays a lack of good faith by the Government.
  Will the Secretary of State tell us what representations were made to him by industrialists. He must not be afraid to do so. After all, he is the child of the C.B.I.—not particularly successful at that, but nevertheless he was in the club. Upon what criteria did the Secretary of State decide upon this policy of bringing the I.R.C. and the pertinent parts of the Industrial Expansion Act to an end? On what financial argument did he come to this conclusion? I have read the reports of the I.R.C., of which there are three. One of the financial obligations of the I.R.C. was to invest on commercial terms which at the end of the day would not cost the country a penny piece. The reports show that £130 million has already been invested, and that no "soft" money is provided. Money is never used to help industry unless it is shown to be needed.
  The Secretary of State must not try to get away with it by persuading those who are naïve, or who have not had time to examine what he says, with the necessary care, that the I.R.C. was politically motivated. The first chairman, the then Sir Frank Kearton, the second chairman, Sir Joseph Lockwood, were businessmen, as were the members of the board, and the trade union representative, Les Cannon, has already been mentioned. The industrial judgment and actions of these men were completely free.
  If the House has been led to believe that the Opposition are convinced that there is a finality about any solution to

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  our economic problems and that because we set up the I.R.C. and the Industrial Expansion Act those measures must remain for ever, let me dissuade them. We have no objection to continuous scrutiny by the legislature and the executive of these measures and their relevance in changing circumstances. There may be a need to change the rôle of the I.R.C. so that it is up to date and able to deal with changing conditions. We want no finality. We need resilience in dealing with our economic affairs. Good arguments can always be advanced for reviewing and reforming, but here the Secretary of State just shrugs it off, and we have to listen to the hon. Member for Kensington, South saying that the greatest difficulties in the management of industry are caused by the changing financial policies of Governments.
  Every time a member of the Government opens his mouth there is trouble. From the moment when the Prime Minister mounted the step of 10 Downing Street and talked about "one nation" we have had disintegration and division nationally which, unless it stops, will cause chaos. From the moment he received the adoration of those lovely ladies in the conference hall at Blackpool in reply to his speech about lame ducks, the Secretary of State has not done a single thing to bring credit to the country. He and his colleagues must rid themselves of political prejudice and realise that the days of laissez faire and of the entrepreneur are gone. They must realise that in a highly competitive world the national interest is best served by the full use of the country's resources. Where laissez faire and private enterprise fall short, as they did in the development areas, Government interest and encouragement can persuade industry to redeploy its activities so that material and money can be put to the best national use. Unless the right hon. Gentleman comes round to thinking along these lines, as sure as his name is what it is, he will leave office with any ambitions he ever had completely unfulfilled.
  The White Paper of January, 1966, made clear the terms of reference of the I.R.C. It was emphasised that there was need for more concentration and rationalisation to promote the greater efficiency of British industry, and that the changes hitherto had not matched the
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  economic requirements. Excluding the substantial balance of payments surplus that the Government inherited, we have had two visible balance of payments surpluses this century. Before that, our only visible balance of payments surplus was in 1822. As the momentum of world activity gathered speed there was a crying need for this country to give guidance on marketing. A large part of our industrial activity was geared to the domestic market, the soft market. We had not got round to boosting exports.
  Last year I was the Chairman of a Sub-Committee of the Estimates Committee which dealt with exports, and one figure from the report which I gave to the House will tell the tale. In that year this country earned £10,000 million in foreign earnings, and that is more per head of the population than was earned by any other country in the world, including America. The I.R.C. and the Industrial Expansion Acts existed then and that result was influenced also by many measures brought in by the Labour Government. Hon. and right hon. Gentlemen opposite cannot say that the actions of the Labour Government were not successful.
  One thing is certain. If there had not been a Labour Government in 1964– and the policies of the Conservatives had been pursued, we would merely have had a further projection of the £800 million deficit which the Conservative Government left behind in 1964.
  Mr. Anthony Fell Mr. Anthony Fell(Yarmouth)indicated dissent.
  Mr. Leadbitter: The hon. Member for Yarmouth (Mr. Fell) and I got to know each other quite well in the 1964–66 Parliament. He has been away for a while. I had hoped that he had mended his ways. He must respond to a reasonable statement even if it comes from this side of the House. He must recognise the truth. The fact is that the Conservative Government left the country in a mess in 1964. The present Government have inherited a surplus but, through stupidity, lack of policy and inability to think out the proper rôle of government, we are getting to a situation where that surplus will be dissipated, and the day will come when we shall have to take over and do the job all over again.

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  The I.R.C. had two principal objectives. They were
  "… promoting or assisting the reorganisation or development of an industry and establishing or developing, or promoting the establishment or development of, any industrial enterprise. …"
  The first job was to gain the confidence of industry, and it succeeded in doing so. It had a remarkably small staff, and in the three years requests were made to it which brought it into practically every facet of every main economic activity of the country. There was the G.E.C.-A.E.I. merger; there was the work in textiles, mechanics, steel, nuclear power—indeed, over a very wide range of industrial activity. I am proud to say—I had a fight about it—that my constituency has the only nuclear power station in the world which is in the middle of a population. It was produced by the British Nuclear Design Company. The other big nuclear power enterprise is the Nuclear Power Group. Both these enterprises were created under Ministerial guidance and advice from my right hon. Friend as Minister of Technology and with the support of the I.R.C. The Secretary of State must know the long list of achievements by the I.R.C.
  I have now dealt with the objectives and the functional tasks of the I.R.C., its independence and its lack of veto from the Government. I want to conclude my speech by dealing with the development areas. I come from an area which has had such a long history of neglect that it appalls me that, even now, a Conservative Government can be so indifferent. One would have thought that, for political reasons, if nothing else, they would like to make some gains in the northern area, where they have failed to make any mark except at the mouth of the Tyne.
  Under the Labour Government, the Northern Region was enjoying Government aid to the extent of £300 million. It had as much as £50 million a year for road construction where no motorways were ever built under the Conservative Government. Another £163 million was produced for industrial attraction. A further £43 million was produced for reconstruction work. We had the regional employment premium. Sir John Hunter knows of that aid. He got some good buys out of the Labour Government. I
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  do not think that he will stretch friendship with the Conservative Party too far. Even if his political philosophy is not ours, he knows that the Labour Government played the game with the Tyne, with Palmer's Yard and the rest. But all the Secretary of State can do is sit in his office in a great big ivory tower looking nice and indifferent.
  We have already lost a lot of that aid. Since the present Government took office, inquiries for industrial development in the Northern Region have fallen off. Under the Labour Government, the Hartlepools, which is the most beautiful part of the United Kingdom, succeeded in getting some 30 new industries and extensions to existing ones, with 4,000 new jobs. Everything was going fine until this crowd came along. We have not had an inquiry for months.
  We still have unemployment there. I still have to fight for the unemployed and I will continue to do so. The Secretary of State must wake up because, somehow or other, he must learn. When I was a young parliamentary prospective candidate, I was once told, "Do not fight for new industries because we have a lot of unemployment and you will get elected." I replied, "What kind of foreign language is that?" If the Secretary of State would stop his nonsense and get some industries into my area and the Northern Region generally, would give us our aid back, I would be as grateful to him as to a Labour Minister. I do not care where aid comes from, as long as it comes from right thinking.
  Now, apart from losing that aid, we are losing the excellent offices of the I.R.C. We are also losing a pertinent part of our assistance under the provisions of the Industrial Expansion Act. If it was possible to get 116,000 new jobs in the Northern Region in the six years of Labour Government, with the level of aid they provided, with the I.R.C. and with the Industrial Expansion Act, was it not likely that, with the continuance of such help, we would have got the 281,000 jobs we need by 1981 to make the region viable? If it was likely, why change it? The corollary of that is to remove the aid, the investment grants, the I.R.C. and the Industrial Expansion Act. Does the right hon. Gentleman really believe that, voluntarily, industrialists will go into the Northern Region? If he thinks that, how does he arrive at such a conclusion?

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  It did not happen when the present Prime Minister was Secretary of State for Industry, Trade and Regional Development. The only new thing which happened then in my region was that he came to Durham Cathedral to play the organ. He got a free lunch out of my council. I resented it. The ratepayers had to pay for it.
  Those last remarks have been flippant, but this is a very serious question. My hon. Friend the Member for Woolwich, West (Mr. Hamling) talked about people. Some of us can mix practice and theory to substantiate the truth of an argument. My hon. Friend talked about practice in the most heart-warming way I have heard for a long time in this House and of how it affects people. I have put other arguments complementary to his.
  Can the Secretary of State honestly say to my people, to the people in Wales, on Merseyside, in Northern Ireland and Scotland, that a withdrawal of all this aid, help and advice will bring the same levels of new industrial development as we have enjoyed in the last six years, or that it will bring more, or that, as I believe, it will bring less? On what grounds will he arrive at his answer? He must not forget that the answer given tonight, if we get one at all, will be remembered every day he is in office.
  For the right hon. Gentleman, the halcyon days of the Tory Party conference are over. As my hon. Friend said, the right hon. Gentleman must face realities. There is no need to withdraw the I.R.C. and the Industrial Expansion Act. I have charged him with questions which are important and I hope that, for once, he has the guts to get away from generalities and to be specific.
  7.36 p.m.
  Mr. Tom Boardman: It is a unique experience for me to be able to start with one note of agreement with the hon. Member for Hartlepools (Mr. Leadbitter). He paid tribute to my hon. Friend, the Member for Exeter (Mr. John Hannam) for his maiden speech, and I endorse everything he said about it and add my congratulations. But from that moment onwards I could find no common ground with the hon. Gentleman. I wondered whether he and the hon. Member for Woolwich, West
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  (Mr. Hamling) were talking about the Bill we are debating.
  I have heard the heat and passion and emotion engendered by both hon. Members from time to time. It is something they turn on on practically every occasion. I have the history of the hon. Member for Woolwich, West engrained on my mind and memory and have witnessed the thumping and emotive appeal so eloquently made by the hon. Member for Hartlepools. But the relevance of their speeches to the Bill escapes me.
  The hon. Member for Woolwich, West talked about death resulting from the Bill. The hon. Member for Hartlepools devoted the last 15 minutes of what must have been a speech lasting 1¼ hours—perhaps it was not that long, but it felt like it—talking about a motorway in some part of the country which I should know but do not. I can see no connection between that and the Bill.
  At times I also wondered whether the right hon. Member for Bristol, South-East (Mr. Benn) was talking the same language as he talked when the I.R.C. and the Industrial Expansion Act were introduced by the Labour Government. The motive seems to have changed. He started with his usual attack upon managements. If managements paid any weight to his words—and fortunately they know him by now fairly well—they would suffer an inferiority complex, because he never fails to have a go at them. He knows, as we all know, that there are bad managements, indifferent managements, good and very good managements in this country, but that by and large our managements are better than in any other country in the world. It is time that hon. Gentlemen opposite stopped knocking management and began praising it, because it comes ill from them constantly to attack it in this way.
  Mr. Benn: I am sure that the hon. Gentleman wishes to be fair. I was saying that the problems of competitiveness were the problems of management and that the I.R.C. had identified poor management as one of the major barriers in the areas where it was operating. Considering what the hon. Gentleman regularly says about the trade unions, he should not be worried when we point out that there is bad management in

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  certain areas, though my hon. Friends and I regularly pay tribute to good management.
  Mr. Boardman: I do not wish to misrepresent the right hon. Gentleman and I hope that he accepts that the average management in Britain is unequalled anywhere in the world.
  Mr. Lawson: Rubbish!
  Mr. Boardman: What does that mean?
  Mr. Lawson: Everyone agrees that this country has been towards the bottom of the industrial league for half a century. We have been dropping behind one country after another. The onus for taking decisions and guiding industrial policy at present rests with the Conservatives. Considering the history of this matter, how can the hon. Gentleman say that we have had efficient management?
  Mr. Boardman: The hon. Gentleman is wrong in saying that we have been dropping behind for the last 50 years. He is also wrong to put the blame for the recent decline solely on management. There is good, bad and indifferent management. We have our fair share of good and very good management. We should be proud of that body of people and encourage the bad and poor to come up to the standard of the best. However, I did not intend to get involved in a management exercise and I will leave the matter there.
  The right hon. Member for Bristol, South-East then prayed in aid in support of the Act which we are repealing some peculiar instances. He said that one motive was to keep the Rootes Company British. He referred to the number of Ford factories in this country and then said that about Rootes.
  Mr. Benn indicated dissent.
  Mr. Boardman: I seem to recollect him saying that one of the objectives was to prevent the loss of the whole of the Rootes Company to America.
  Mr. Benn: In the interests of accuracy, may I point out that I said that the problem was to avoid damage being caused to our interests when the three American giants were here. I then referred to the I.R.C. having a duty to preserve our interests in this matter.
  Mr. Boardman: The right hon. Gentleman went on to refer to British Leyland as something of a success story. While recognising the difficulties that that company has been having, one must praise it for the way it has been tackling them. I endorse what my hon. Friend the Member for Cities of London and Westminster (Mr. Tugendhat) said in his excellent maiden speech. I do not think that the injection of money into British Leyland can be put forward as a strong justification for the I.R.C.
  Nor can one say that the G.E.C.-A.E.I.-English Electric merger was a great success story. One might ask whether Sir Arnold Weinstock would not have done better without the I.R.C. being in the field. The right hon. Gentleman then quoted the case of Skefco, a rather unusual one to mention in justification of the I.R.C. When challenged on this point by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) he ran for cover and said that he could not speak for the I.R.C., and the matter was left there.
  The right hon. Gentleman then moved to the other motive which, in his view, would justify the existence of the I.R.C. I refer to the support that it had given to regional policy. Indeed, the hon. Member for Woolwich, West made some play about this. Are they aware that when the original Acts were introduced they were never said to be weapons for regional policy? Nowhere at that time was it said that those Measures would give authority for public funds to be used for this purpose. At the time they were said to be designed to make for greater industrial efficiency, but they were certainly not put forward primarily as weapons for the development of regional policy.
  It is wrong now for hon. Gentlemen opposite to say that it does not matter whether or not the I.R.C. has increased industrial efficiency—the right hon. Gentleman did not say this, but one must consider the argument as a whole—because regional policy is a justification for the Acts being retained. Aid for the regions is certainly the responsibility of the Government, but it is not our purpose tonight to discuss aid generally or the variations that might be made in the giving of aid.
  It is clear that the appropriate method for giving aid to the regions is not through

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  Acts intended to provide funds for the promotion of mergers and to increase industrial efficiency. If aid is necessary to the regions—it is, and it is being given —let it be allocated and approved in the right way.
  Mr. Douglas: The hon. Gentleman is confusing two issues. First, there is an element of aid which might be called comprehensive. Secondly, if he examines industry in the regions he will find that a great deal of restructuring is necessary. How can that take place without financial aid being given to the firms and industries concerned?
  Mr. Boardman: I must not digress into the whole question of regional policy. I would soon be called to order if I did. Hon. Gentlemen opposite cannot have it both ways. They cannot argue, on the one hand, that it has or has not been a success in promoting industrial efficiency, and then go on to argue, on the other, that in any case the I.R.C. has done something for the regions. In fact, what it has done for the regions is questionable because, as my hon. Friend the Member for Bolton, West (Mr. Redmond) said in an intervention, the regional aid given by one I.R.C. subvention resulted in much unemployment in the Liverpool area.
  The right hon. Member for Bristol, South-East went on to suggest that I.R.C. investment could be justified because it secured the proper vetting of management. It is important to see that those who provide the capital for industry take an active interest in how it is looked after. This is a rôle undertaken by those who put new capital into any industry. The comparison the right hon. Gentleman the Member for Bristol, South-East was making was between the inactivity of existing shareholders and the interest which a new investor, be it the I.R.C. or anyone else, takes before putting money in. The comparison that should be made is between the interest taken by the I.R.C. in putting new money into a venture and the interest that would be taken by a merchant bank or anyone else subscribing new capital to a venture. They would make sure, as would the I.R.C., that the management was good.
  The lack of interest displayed by many present shareholders in a company is a different subject. I hope that it is some-
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  thing that will be pursued by my hon. Friend and that he will consider how to create further interest. To put forward, as a justification for the retention of the I.R.C., the suggestion that it provides machinery for vetting management just does not stand up. The private investor or the merchant bank putting up new capital, will have a greater incentive to vet management than the person putting up public funds. In saying that I would not dream of casting doubts upon those engaged in the I.R.C. or of making any criticisms of them. As has been said, they were men of integrity, quality and ability and I make no criticism of them. It is the system that I criticise.
  The right hon. Gentleman put forward as a further justification for the retention of the I.R.C. the suggestion that it provided a link between the T.U.C. and the Government—again I paraphrase. What a devious route. To ensure that government can have some form of contact with the T.U.C. have we to set up a great corporation, put £150 million into it, allow it to invest that money into enterprises which are failures—because it is only if they fail that this form of consultation arises over the question of redundancy and relief? Such a circuitous route is said to be for the purpose of ensuring that the Government have a closer link with the T.U.C.
  Mr. Benn Mr. Benn indicated dissent.
  Mr. Boardman: The right hon. Gentleman shakes his head but I find it difficult to follow how he could claim such a link as the justification for the I.R.C. The right hon. Gentleman said that competition is not the answer in the modern world. I am sure that the Under-Secretary to whom that remark was addressed will relish the opportunity of replying to it. Competition may be imperfect, no one thinks otherwise, but no better way has yet been found.
  Mr. Douglas Mr. Douglas rose——
  Mr. Boardman: I am sure that the hon. Gentleman will not produce a solution by the short intervention he wishes to make. If he has an alternative which will work I would suggest that he puts it forward to his Front Bench and they will no doubt launch it. If competition is not the complete answer, subsidising failure obviously is not. The record of

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  the I.R.C. has been pointed very much in the direction of subsidising failures.
  Mr. Douglas: Examples?
  Mr. Boardman: One of the purposes was to enable companies—[Interruption.] —the right hon. Gentleman and hon. Gentlemen opposite, when they touched upon the Bill at all, suggested that it was necessary and right that in certain circumstances, where private capital could not be found and where a business would otherwise go down, the Government should have some means of coming to the rescue.
  Mr. Patrick Gordon Walker: Like Rolls-Royce.
  Mr. Boardman: This is the inference. I will come to the question of Rolls-Royce. The I.R.C. is not the vehicle by which such operations should be launched. As I understand the argument from the Opposition it is that we should have this Corporation so that various lame ducks and so on which arise could be supported and propped up.
  Mr. Ray Carter: Would the hon. Gentleman not agree that quite apart from the economic issues involved over the I.R.C. there are social implications? He mentioned British Leyland earlier, which went £8 million in the red. There is a factory in my constituency belonging to that firm, which employs 25,000 people. Is the hon. Gentleman saying that the Conservative Government, given that same situation, would do absolutely nothing in terms of Government aid?
  Mr. Boardman: Of course there are social implications in these matters and of course they are recognised on this side of the House as deeply as they are opposite. We do not need emotive speeches such as we had from the hon. Member for Woolwich, West and the hon. Member for The Hartlepools. We need no reminding of our social obligations and the fact that business is made up of human beings who count. They count just as much on this side of the House as on the other.
  The tool which must be used to reach a decision about rescuing an industry is not the subject of this debate. My argument is that there are operations when the Government cannot stand aside and
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  do nothing. Rolls-Royce was a case in point. If those cases do arise they should be dealt with before this House, and not done through the delegation of large funds to a separate body such as the I.R.C. Let this House decide whether there is a case for public funds to be used to be used in a rescue operation.
  The other purpose of the I.R.C. was procuring marriages. I have never felt happy that marriages, in the industrial sense or perhaps the human sense, should be brought about by an offer of a large dowry. I do not believe that they will necessarily be the happiest marriages. There was that influence to bring together two companies by the promise of funds to sweeten their bridal bed, and marriages were secured in that way. But however successful that may be in getting Companies A and B into the same bed, what about poor old Company C? It is the discriminatory effect of this type of aid that is so objectionable. Neither Company A nor Company B may be very efficient, but they may become efficient when put together. But they are being put together out of funds supplied by Company C and set up in competition with it. That form of selectivity and discrimination is wrong.
  What will not happen without I.R.C. that could happen with it? There may be companies unable to raise capital in the market that would have been able to go to I.R.C. for it. But should companies that cannot raise capital in the market be able to raise it out of public funds? Why cannot they raise it? Is it because they are not viable? If so, should the public subsidise such companies? Should we in this House subsidise businesses that are not viable, are inefficient, or have inadequate management?
  Hon. Members: What about Rolls-Royce?
  Mr. Boardman: Some mergers may not take place that would have occurred if the dowry had been available to get the two partners together. If so, are the country or the companies concerned necessarily worse off? Mergers that make industrial sense and are necessary will come about in due course. Whilst they might come about quicker sometimes if there is the dowry, putting them together against their real inclination will lead to

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  many mis-marriages and financial bad judgment.
  There is plenty of scope in the City. After all, we are the leading financial city in the world. The City has the institutions and men with the skills, and we have the resources in this country to fulfil this rôle. It is not one that should be fulfilled by Government.
  The passion generated by hon. Members opposite would have been more appropriate if the Government were introducing a Bill proposing that £150 million of public money should be made available. I could perhaps then have understood the emotive sounds from Labour Members. They would have said, "You are taxing the worker and the widow to provide cash to feed the inefficient in industry". But we are doing quite the reverse. We are saying that public funds will not be provided. Yet we have the same emotive sounds from Labour Members.
  There will be some who like cheap money to prop them up. They will mourn the passing of the I.R.C., but I believe that the vast majority, and those who pay the bill, will, like me, welcome it.
  8.4 p.m.
  Mr. Arthur Palmer: The hon. Member for Leicester, South-West (Mr. Tom Boardman) was a little too sensitive about managers in British industry. It is true that there are good managers and bad. One would not know anything about the bad managers unless one had met the good managers. Managers are responsible for the running of industry. They often wish to he. It is their career, and therefore they must take the responsibility.
  Napoleon had some experience of management, military management at any rate, though he ended up with a rather small institution: It was he who said that there were no bad troops, only bad officers. That is a fact of life if one takes on responsibility. The hon. Gentleman must not get quite so sensitive if occasionally we on this side say that British management could be improved. He said that perhaps we were not paying enough attention to the Bill. I should like to deal with that criticism and to say why I think it is a bad Bill.
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  My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) who, as usual, made an eloquent speech, was a little unfair on the hon. Member for Kensington, South (Sir B. Rhys Williams). It is true that the hon. Gentleman's speech was obscure. I had some difficulty in understanding it, but there were one or two flashes of illumination, and when the light came I made a note. The hon. Gentleman said that it would be a good thing for British industry if there were greater continuity of public industrial policy, presumably between Administrations. He thought that so much uncertainty and change was generally bad for industry. That is precisely why I think that the Bill is bad. It breaks the continuity of political-industrial development.
  I am sad about the Bill, because it marks the end, I hope temporarily, of an era. It was an era when there was a genuine attempt by Government, industry —both public and private, trade unions, management, and hon. Members on both sides of the House, often working through Select Committees such as the Select Committee on Nationalised Industries and the Select Committee on Science and Technology, to understand each other rather better and to introduce practical policies for improving the efficiency of British industry.
  To me the I.R.C., with all its imperfections, was a symbol of that new era, which started in 1964. I am not anxious to make any party point about it though that is the era which is now under criticism. It is a great loss to the country that it has apparently temporarily come to an end.
  My interest in industry is that of someone with some experience of management, but primarily as an engineer. Engineers are not always regarded by accountants as very good managers. I am also a Socialist with a Socialist's philosophy of industry. I should hardly have thought that the I.R.C. was a very powerful instrument of socialisation, though it was often represented as such by Conservative Members, particularly at their party conferences.
  When we discussed the Atomic Energy Bill recently and I complained about the failure of my right hon. Friend the Member for Bristol, South-East (Mr. Benn) to carry through a fundamental

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  and necessary reorganisation of the whole nuclear reactor industry, he said in his defence, I think reasonably, that the Ministry of Technology, working through instruments like the I.R.C. and the Industrial Expansion Act, tried to do everything by consent. That was broadly true of the I.R.C. It has not been alleged in the debate that the I.R.C. imposed its will. I have read through the three Reports it issued in its short life. The 1970 Report talks of the relationship of trust built up with the private industrial sector over the previous 2½ years. Therefore, it seems to me that the whole work and interest of the Corporation in industrial questions was sensible, cautious, and on the whole, as far as I can judge, necessary.
  The hon. Member for Leicester, South-West seemed to say that the record of the I.R.C., in spite of the great ability of those running it, to which he paid tribute, was one of failure. Studying some of the mergers, amalgamations and rationalisations it brought about, as far as it is possible for anyone outside to study them, I believe that quite a number were a considerable success, and they probably would not have come about at all but for the I.R.C.'s initiative.
  Mr. Tom Boardman: What I should perhaps more accurately have said is that I would not call it a great success story upon which a merchant bank or similar body would go to town.
  Mr. Palmer: But surely it is a criticism made not only by those who take my political point of view but by many others that the merchant banking system in this country is not perfect and does not always provide at every stage the capital for necessary expansion or mergers of enterprises which time proves was necessary, or for a change which time proves was necessary, and that there is a gap in our financial arrangements. The I.R.C. was surely trying to fill that gap.
  Anyway, the I.R.C. is now to stop and we must all ask, "Why does it have to come to an end?" No doubt the Minister who is to reply will try to answer that question. His right hon. Friend the Secretary of State gave no convincing answer this afternoon, except that the Conservative Party did not particularly like the I.R.C.
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  The I.R.C. is to come to an end almost entirely because right hon. and hon. Members opposite have a theory about what should be the nature of industry, because they have a certain special view of industry. My hon. Friend the Member for Edmonton (Mr. Albu) said that it was not classical benevolent Conservatism of the type that we once knew. I think that he said that its origins went back to cobdenite liberalism. I do not think that its ancestry is as long or respectable. I think that we are dealing with what I hope will be a passing phase. It is a kind of new, not very pleasant——
  Mr. Carter: Reaction.
  Mr. Palmer: Yes, reaction if you wish. It is the economic wind of the radical right that is being wafted across the Atlantic. One can find people in the Republican party who talk like this. This theory is based on a radical anti-state view of society which it is thought will succeed here where in their view social democracy and its interventionist policies have failed.
  If this view of society is injected into industry, it does not appear to matter whether or not it fits the facts. The facts must be bent to fit the theory. This is a novel approach when one remembers that the strength of the Conservative Party in this country has been—and this is perhaps why they have been so difficult to defeat—in the pragmatic and empirical approach. The new theory is absolute and anything that is untidy and spoils the ideal picture must go. Therefore, out goes the National Board for Prices and Incomes. One could look ahead, if that were in order, and I know that it is not, to see what the result will be in practice. We can see a little of it in the terms of reference of the Wilberforce Inquiry. However, I move away from that matter very quickly.
  Anything done by a nationalised industry which is not a part of its fundamental task as defined according to the theory must go. In the electricity supply industry I understand that it is talked about doing away with things that have been done since the foundation of the industry long before it was nationalised. This is where the application of hard, rigid, theory leads. Today the victim is the I.R.C. which has, so far as I know, committed no crime, and the indictment against it

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  has contained nothing. The I.R.C. has done some good admittedly say the theorists, but the point is that it was brought in by a Labour Government; it is a social democratic institution, and therefore must be scrapped.
  During the last Parliament I was Chairman of the Select Committee on Science and Technology which carried out two investigations into the reorganisation of the Nuclear Reactor industry. We heard evidence from Mr. Charles Villiers and he and others from the I.R.C. answered a number of penetrating questions. This gave the House an accountability and a look at that particular reorganisation through the medium of the I.R.C. I have never known that to take place before.
  I thought that the work of reorganising the nuclear reactor industry was given to I.R.C. mistakenly and I have challenged that reference. I thought there was a powerful case for the Minister to act independently. Nobody is suggesting that the I.R.C. was necessarily the right instrument, and I thought that it tended to lean too much towards the private companies involved in the reorganisation and did not pay sufficient attention to the great contribution which the Atomic Energy Commission made. However, no one could doubt the quality of the technical work done by the Corporation, certainly not the big electrical manufacturing companies involved. Therefore, I ask the Government to say exactly what the I.R.C. did wrong.
  I would ask the Government what is to happen now. What new radical solution for the often low productivity and poor management of part of industry have the Government to offer? The hon. Member for Leicester, South-West took refuge in the phrase "competition" and when challenged said that there was nothing better—and that is all he said. I have never been taken in by this glib gospel about competition and market forces. There must, of course, be competition in life, and indeed there is competition among hon. Members in this House for the opportunity to speak. Nobody is speaking against competition in the practical human sense. But when people talk about competition and market forces, I often wonder whether they know what they are saying.
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  I came into politics in the late 1930's. Then, presumably, market forces were working about as freely as they have ever worked in my time. What sort of economic system were they producing then? If competition of that kind is the best the world can offer, all I can say is that people are easily satisfied. All postwar experience in British industry shows that British private industry, when left to itself, does not change fast enough under the influence of market forces, as my right hon. Friend said when he opened the debate. It does not change fast enough to remain internationally competitive.
  Although we may discard these instruments of State intervention other countries will not if they are much more up to date, and we shall have to compete with them. Consider our difficulty in this matter is to be left to the play of market forces, working within the confines of this island, overborne by the winds of international competition, but not adjusted according to the methods of our competitors. I realise that the efficiency of British industry did not rise fast enough under the Labour Government, but in the future it may well be worse.
  In view of the new vacuum that will be left with the passing of such legislation as this, it makes me feel—though it may be the effects of the all-night sitting—mournful about the future. When in the Labour Party we have discussed industrial policies, to provide a measure of continuity, we have argued that there is a great deal to be said for a mixed economy and that we should not move too fast in the direction of socialisation unless unavoidable. However, if that theory of the mixed economy is to have any reality in British political life, we must have some kind of response from the other party. if the Conservative Party, for doctrinaire reasons, is prepared to throw out the instruments which we have brought in —no party remains in power for ever in a free society, and we shall inevitably come back to power—then we shall perhaps need to look at our own more radical ways of dealing with the reorganisation of British industry. We shall have to look not simply at intervention but at extending perhaps the whole area of State ownership.
  It has practical attractions as I shall show by quoting what was said by the

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  Chancellor of the Exchequer on 14th December last when I asked him to give the comparative figures for the increase of output per man-year in the nationalised industries and for the private sector of industry in the period 1963 to 1969. The answer, in summary, was this:
  "… output per man-year in manufacturing industries—which are predominantly in the private sector—showed a 25 per cent. increase between 1963 and 1969. Output per man-year for mining and quarrying, and for the gas, electricity and water industries—which are mainly public corporations—showed a 31 per cent. increase over the same period."—[OFFICIAL REPORT, 14th December, 1970; Vol. 808, c. 252.]
  Clearly figures of this kind can be qualified, and one must examine them carefully in their context. I will not attempt to do so now, but there is plenty of evidence to show that, far from private industry being the highly efficient sector which hon. Gentlemen think, the argument is the other way round. Therefore, as I have said, if there is no continuity of policy in regard to a mixed economy, we on this side of the House shall be inclined to look once again at the need for extending the whole scope of public ownership.
  8.25 p.m.
  Mr. Peter Rost: It puzzles me that so many hon. Members opposite have been sniping at my right hon. Friend the Secretary of State for Trade and Industry. This applies particularly to the hon. Member for The Hartlepools (Mr. Leadbitter), who unfortunately has sneaked out of the Chamber, and who was particularly abusive and insulting. I would have thought that hon. Gentlemen would have been pleased that we now have a Minister of Trade and Industry who knows something about trade and industry, and not one who talks about the "white heat" of technology but lacks any effective policies to do anything other than land the nation with the highest unemployment for many years, stagnation, and a serious general decline in economic activity.
  I am also puzzled that over the past few years there seems to have been a remarkable turn-about in the opinions and views of hon. Members opposite about takeovers and mergers. Some years ago the thought of a large merger or takeover produced screams of outrage from the Labour Party. Accusa-
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  tions were made that another monopoly was being created and that capitalism was at work again. I wonder whether some hon. Members have been attending business schools and have started to find out something about the world of business mergers and takeovers and have become converted, so that the I.R.C. has swung round in order to create artificial mergers, monopolies, controversial takeovers and backdoor nationalisation.
  It seems odd that when private enterprise arranges a merger or takeover it is regarded as in some way sinful or against the public interest—probably because it makes economic sense. Yet when the Government prod and interfere or bribe their way with public funds to arrange a merger or takeover, it is regarded as a good thing, although it is probably creating a monopolistic and uneconomic enterprise.
  I want to explain why I regard the decision to abolish the I.R.C. as correct. First, it is not the Government's function to operate in this sphere. Like other hon. Members, I do not wish to be critical of the staff of the I.R.C. They have obviously got high qualifications and have done what the Government asked them to do. But, looking at the individual mergers and takeovers, a number of them require questions to be answered.
  As some hon. Members have stated, the G.E.C.—English Electric merger would certainly have taken place without any prodding from a Government agency.
  I also believe that the money which was pumped into the Austin Morris—British Leyland merger has, to some extent, allowed feather bedding to continue in that industry than produce a more radical commercial and economic reorganisation of management and production which would have provided more efficient industry more quickly. I think that the facts establish that the industry is still in this phase of reorganisation. If it had not had substantial Government funds it might have had to reach this stage of reorganisation more rapidly on its own.
  The George Kent takeover, in which the I.R.C. played a most extraordinary rôle by intervening between two rival bidders, caused a great deal of resentment. That is an example which justifies the type of accusation which we are now

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  entitled to make that the I.R.C.s decisions are, to some extent, arbitrary and sometimes unfair and discriminatory.
  The second major reason that the Bill is right is that the I.R.C. is applying wasted resources. I am not referring now to the £300,000 a year which it costs to run the organisation, but primarily to the capital which has been employed in financing mergers and takeovers—about £120 million. I believe that this capital could have been more efficiently and effectively used in the private sector through the natural market mechanism by providing more risk capital and incentive for industry to achieve its own reorganisation through mergers and takeovers. I am not convinced that the I.R.C.s interference in mergers and takeovers has played any major rôle in providing more efficient management. In fact, examples illustrating the opposite effect have been justifiably quoted.
  The third major reason against the continuance of the I.R.C. is its unfairness. It has obviously got to pick and choose which mergers and takeovers it should promote, and which it should not—in other words, which companies should get the subsidies and which should not. This discrimination and interference in the private sector must have an adverse effect on the natural functions of the market mechanism.
  I want to make one or two suggestions, which I hope my hon. Friend will consider, concerning the disposal of the assets which will be taken over when the I.R.C. is abolished. I believe that we have to think carefully about how these assets are disposed of, bearing in mind that the Government are obviously most anxious to lighten the load and not maintain the portfolio of investment which they inherited. It would be a mistake—in fact. I should oppose it most strongly if these assets were to be disposed of simply to the highest bidder as quickly as possible, because I believe that there are important considerations here, apart from disposing of the assets as quickly as possible and obtaining the highest price for them.
  Mr. Edmund Dell: The hon. Gentleman says that he would oppose most strongly the disposal of the assets in accordance with principles which he dislikes. How will he oppose such disposal? The Bill gives no parliamen-
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  tary control over the disposal of the assets.
  Mr. Rost: The assets ought not necessarily to be disposed of to the highest bidder or to the first bidder, and I hope that this can be debated in Committee. What I meant by my statement was that I was hoping to express my argument in more detail in Committee.
  I believe that we ought to consider spreading the ownership of these assets as widely as possible throughout the nation, rather than allow them to fall into the hands of the highest bidder at the earliest opportunity. I hope that we can allow a wide cross-section of the public to take shares in these assets. This is a practical proposal which has been applied with considerable success in Germany, particularly where sectors of nationalised industries have been sold off. I am thinking of Volkswagen and Lufthansa, where the investments have been disposed of at less than their real worth by allocating small holdings of £10 to £20 per family. This has provided a strong incentive for individuals, and particularly low-income families, to subscribe for their allocation of shares in what were formerly nationalised industries. I suggest that the disposal of the I.R.C.'s investments might provide a pilot scheme for that type of disposal, rather than selling the assets in larger lumps to more substantial institutional investors.
  Mr. Neil Kinnock: I am intrigued by the hon. Gentleman's suggestion to import from Germany a system for the disposal of these assets. What kind of salary bracket has the hon. Gentleman in mind for the people who will purchase these shares? Does he link this with another aspect of the Government's policy and envisage that people will buy these assets out of their Family Income Supplement?
  Mr. Rost: I take that interjection in good faith. I do not wish to rule myself out of order, or to be ruled out of order, by going into detail, but I believe that the disposal of these investments, and, in due course, those of other nationalised sectors, can be achieved by means of a save-as-you-earn scheme which will allow families on the lowest incomes to subscribe, on an instalment basis, for the

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  allocation of formerly nationalised assets. I shall be glad to develop this on another more suitable occasion.
  To summarise what I have been trying to say, I believe that there is no rôle today in a free enterprise economy under this Government for the I.R.C. If there are individual cases in which special help is justified, these ought to be discussed and debated on the Floor of the House. I believe that the State's function ought not to be delegated to an independent agency like the I.R.C., where there is no proper parliamentary scrutiny or control. So the question of parliamentary accountability is fundamental to this whole issue——
  Notice taken that 40 Members were not present;
  House counted, and, 40 Members being present—
  8.41 p.m.
  Mr. Rost: If I may be forgiven for repeating my summary, I believe that the Bill is right in its major proposal to abolish I.R.C., first, because of the question of parliamentary accountability, and second, because there has been no evidence that I.R.C. has been of any major assistance to regional development, or that it has provided the function of a watchdog for companies, as has been suggested by hon. Members opposite. Nor can it be said that it has helped employment.
  On all grounds, there is no justification for its continuation, provided that we establish an economic climate—which our policies are now designed to do—of greater competition and free enterprise through taxation reform primarily, in which there will be greater profitability and cash flow, where capital investment will once again produce an adequate return.
  In this sort of economic climate, one of expansion and higher productivity, one which we will expect this Government to achieve once their policies have taken effect, there is absolutely no reason why the existing machinery, operating in the City, through the merchant banks and other institutions, and the free market operation should not be perfectly capable an dfar more adequate to function in the
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  way that I.R.C. was designed to do but is no longer required to do.
  8.43 p.m.
  Mr. Tam Dalyell: When others wish to speak, at this time of night, speeches should be short.
  I listened with great interest, like the Secretary of State, to the speech of the hon. Member for the Cities of London and Westminster (Mr. Tugendhat). As he said, an issue arises from the way in which certain medium-sized firms suddenly become big firms, with resultant management problems. I agree that there is, regardless of party doctrine, a genuine issue of mergers and size and the whole issue of optimum size. I suspect that it varies from company to company and that there is no overall rule or panacea.
  But it may be worth setting up some kind of a study in the Department, if it is not already underway, of how management behave when it moves from being a medium-sized management, like Rolls-Royce, to a huge one, such as Rolls-Royce and Bristol-Siddeley. In the modern world this seems to be something which is relevant to examine. Perhaps at some convenient time we could have a statement from the hon. Gentleman—not tonight—whether he wishes to pursue this subject.
  I speak against a background of increasing unemployment in Scotland. We have had the unemployment at "Golden Wonder", Broxburn, and at N.C.R., and now Lovell's, the paper works in my constituency, is closing down. Indeed, ultra-modern industry is having lay-offs. The Under-Secretary of State for Trade and Industry recently visited S.G.S. in Falkirk, who are at the real frontiers of electronic knowledge. When this firm, with good management, comes to the conclusion, on the semi-conductor side, that it has to have fairly serious redundancy, then there are real problems.
  It is against the background of those problems that I wish to raise the issue of Leyland, vital to employment in Central Scotland. I represent 5,500 who work at British Leyland. With my hon. Friend the Member for Birmingham, Northfield (Mr. Carter), who represents 25,000, perhaps we could best use our time by asking not sniping but direct questions. I refer the Secretary of State to the speech of the hon. Member for

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  Derbyshire, South-East (Mr. Rost). He said that in the matter of Leyland and Austin-Morris there had been featherbedding. This was the charge which the hon. Gentleman put forward to the House. Then he said that if they had not had Government funds, these firms would have reached a better state on their own account. That is a fair paraphrase of what the hon. Gentleman said.
  Mr. Rost: The emphasis which I placed upon my remarks was that the stage of a reorganisation of management and higher productivity would have had to be reached more quickly because the free enterprise system would have had to operate more effectively and more rapidly.
  Mr. Dalyell: Really? How? In that case, I ask the Secretary of State to clear up this matter. Does he accept the suggestion that there was feather-bedding of Austin-Morris and Leyland by the I.R.C.? Does he agree with his hon. Friend the Member for Derbyshire, South-East? Perhaps the Secretary of State would like to answer those questions now.
  Mr. John Davies: I mentioned the question of British Leyland earlier in the course of the debate. I suppose I can respond to that. The point I was making, and which is correctly made, is that the I.R.C. constituted a body of finance available to concerns which otherwise, in the state of the credit squeeze, would not have had access to that same body of finance. That was the point I made and which my hon. Friend probably emphasised. It is undeniably true. It is not true to say that the I.R.C. acted improperly. That was far from my suggestion. Firms had access during a period of credit squeeze to a source which was not available to an equivalent concern in the market.
  Mr. Carter: Far from agreeing with the hon. Member for Derbyshire, South-East, the Secretary of State seems to have contradicted him. Is the right hon. Gentleman aware that had the I.R.C. not supported British Leyland when they were in difficulties, they would not have fallen into the hands of a British company? They would probably have gone bankrupt, or, failing that, they would have fallen into the hands of a European car company. It would not have been an American company, because all three
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  major American car manufacturers had a hold in this country. It is almost a certainty that we would have lost the last remaining area of capacity in British hands.
  Mr. Dalyell: Perhaps the Secretary of State would like to answer my hon. Friend's question. Is it not a fact that, at that critical moment, had there not been Government action, Austin-Morris would have been taken over by Mercedes-Benz? Is that contradicted, in the light of what we know now? Would the Secretary of State care to answer that?
  Apparently not, in which case he puts himself in a very weak position.
  The worry of many of us about the abolition and dismantling of the I.R.C. is that, because of the nature of their industries, certain firms must have a smooth flow of investment. If there is a jagged input of investment, they get into great difficulty. In terms of modern technology, we are talking not about the next three or six months but about a rolling plan. When the rolling plan is interrupted by shortage of investment funds, a firm is in real difficulty.
  I make no charge of wickedness or even of evil intent against right hon. and hon. Gentlemen opposite. It is a charge of naivety about the way that a modern technological situation works. I say this in no impertinent way, and certainly I intend no insult, but I cannot understand how men of the experience of the Secretary of State are able to act in this way when they must know far beter than I the reality of modern industry, especially of an industry like Leylands.
  I gave a voluntary undertaking that I would sit down as quickly as possible, but perhaps the Secretary of State will agree to comment on the rather sharp remarks that I have made.
  8.52 p.m.
  Mr. Charles Simeons: The very fair question has been asked: why change the system? Different systems are needed for different times and, whatever points we may disagree about in this House, there are a number of basic matters about which we agree. We agree about the end. What we disagree about is how we are to get there. That, surely, is what the argument is about today.
  The I.R.C.'s function was to perform two tasks in the then existing climate

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  It acted as a company marriage broker, and it provided company finance. It was a case of outsiders using other people's money in ways in which, very properly, they thought fit. However, the background must be different when people are personally involved and are using their own money.
  Among the marriages which took place, without doubt there were some in which the bride was carried into the nuptial chamber screaming that she would prefer not to join. While I cannot say that it is a typical example, my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) referred to the firm of George Kent in my own constituency. That firm was in danger of being a bride. Suddenly, it was given a large sum of money and became the bridegroom. Looking at the profit record of the prospective bridegroom since that date and at what has happened to the bride, for whatever reasons, one sees an example which cannot go by unnoticed.
  The I.R.C. has assisted a number of companies which should not have been helped had people with their own money been putting a stake in them.
  The circumstances that I refer to are those that my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) mentioned and which the hon. Member for The Hartlepools (Mr. Leadbitter) doubted. That was the change in financial conditions during this period. I do not know what my hon. Friend had in mind, but I suspect that it was probably the change in taxation. In case any hon. Member doubts the feasibility of that argument, let me mention three or four of the factors which changed.
  The 1965 Finance Act revolutionised our financial thinking. I heard one High Court judge, an expert in taxation, say in public at the time that the only Section of it about whose meaning he was in no doubt was that by which holders of the George Cross received their emoluments untaxed. No one could pretend that the 1965 Finance Act did not have a profound effect upon our whole financial thinking. Then there was the switch from investment allowances, which are a recognition of profit earned, to investment grants. If we consider these and the incentives to go into the regions we find that, far from reducing unemploy-
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  ment, the companies which settled there were capital intensive industries, very low in labour use—which was exactly opposed to what was needed.
  The Redundancy Payments Act, 1965, in its general intent was highly commendable, but then we had the selective employment tax which ensured that people became redundant. In addition, we had the 1966 Measures which were highly restrictive. We need look no further than my constituency to see that the motor industry is producing about half the number of vehicles it could produce, and that the number now produced is well down on the figure for 1964. So these financial measures have proved to be wholly restrictive.
  The hon. Member for The Hartlepools cast doubt on the viability of our financial state then and now. I remind him that in 1964 we had a dollar portfolio of £1,100 million which seems now to have disappeared completely. Today our accumulated debts are over £1,600 million. There has been a fundamental change.
  The Bill is an indication that the Government are changing the direction. We have committed ourselves to reducing taxation, and once people become aware that they will retain more of their earnings than before they will have much more incentive to invest. It is easier to raise cash from the market because it is known that there will be profits which can be retained to a greater degree than before. The Bill is saying that the method which was applicable in a period of rising taxation and restriction of output is no longer applicable now that we have changed course. We are now able to raise large funds from the market which will flow in much more freely than before. But the Secretary of State can hang out a safety net, and he will be accountable to the House. The Bill should be seen in the light of this complete change in climate.
  8.58 p.m.
  Mr. Dick Douglas: I am grateful for the opportunity to intervene. I should like to follow the hon. Member for Luton (Mr. Simeons), but I wish to put one or two brief points to the Minister who will reply to the debate.
  Where is the market mechanism so gorgeously set up ready to interfere to

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  give to companies this capital which, particularly in areas like Scotland, they require? In total terms the I.R.C. gave to companies in Scotland nearly £10 million, and that figure does not take into account the other organisations which have been mentioned, such as Leylands and Rootes, to say nothing of Rolls-Royce. The Minister responsible for this shabby little Bill knows in his heart of hearts, because of his interest in industry, that there is no City of London mechanism available to provide the rôle that the I.R.C. was specifically designed to provide. He knows this because in a speech at the dinner of the I.C.F.C. he put this to the City. I challenge him to tell us what deliberations he has had with the City since then to get an organisation of similar intent to provide the merchant banking and consultative rôle which he is now denying the country.
  The I.R.C. was not a perfect organisation. I agree with the Minister that at the beginning industry was suspicious of its rôle and function, but when industry knew that it could go to this organisation and discuss confidentially the possibility of mergers to get industry restructured, then industry began to trust and use the I.R.C. I can speak with particular emphasis about what has happened in my constituency. There has been a merger between Weir's Pumps and Harland Engineering which cost this country nothing. Hon. Members opposite talk in terms of competition, and comparison has been made between the structure of industry in this country and in Germany. Even with restructuring, there are still 296 pump companies in this country whose total turnover is less than that of their German competitors.
  The country needs an organisation like the I.R.C. to provide for the restructuring of industry. We have had restructuring of industry in Scotland and, if time were available, I could describe it in graphic terms. We know that restructuring of industry causes pain, and it is no good right hon. and hon. Gentlemen opposite coming to Scotland and saying that there is a high level of unemployment. To have 96,000 was inexcusable and wasteful, but we now have 150,000 unemployed in Scotland. There are 11 people looking for every job that is available. These measures were designed to assist these people.
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  Scotland is away from the London capital market. I am casting no aspersions on the nature of the Scottish capital market, but Scotland above all needs this type of organisation, and I indict the Secretary of State for bringing in this petty, squalid, unnecessary Measure.
  9.2 p.m.
  Mr. Edmund Dell: It is my first duty to congratulate the two hon. Members opposite who have today made their maiden speeches. I must warn them that I have only on one previous occasion congratulated a maiden speaker, and he lost his seat at the next election. Both hon. Members made eloquent and persuasive speeches. We had no need to wait for the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) to make his maiden speech for us to know his views. I noticed that he referred to one of his predecessors, Charles James Fox. Fox is in our memories for many reasons, one among them that he once bitterly opposed and demonstrated in this House against a tyrannical Tory majority.
  This is a totally negative Bill, abolishing the I.R.C. and Sections 1 to 7 of the Industrial Expansion Act. We have heard half-hearted support for it for a simple reason—that there has been no systematic or consistent philosophy on the part of the Government. Sections 1 to 7 of the Act provide Parliament with an opportunity of considering proposals for industrial investment schemes in which the Government are involved. It is a device, an enabling power. The Government can use it or not as they like. They need not repeal it for it not to be used. But they are repealing it, despite the fact that, again and again in the debate, virtually every hon. Member opposite who has spoken has admitted that there are occasions on which it is necessary for the Government to intervene in industry. Despite the fact that here is a parliamentary device giving Parliamentary control over such interventions and without excessive delay, the Government are repealing Sections 1 to 7.
  We have frequently been told that it is the view of hon. Members opposite that, if there is to be Government intervention in industry, which is sometimes necessary, it should be done not through an agency like the I.R.C. but directly by the Government. Sections 1 to 7 of the

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  Act provide a means of so doing. Yet they are repealing them. What we have not heard from hon. Members opposite is the criteria which they would feel appropriate for these acts of Government intervention. They admit that they are sometimes necessary. When are they necessary? Are they necessary for social reasons, or for reasons of industrial structure or for reasons of regional policy? I hope that we shall be told. I suspect that there will be one criterion which is not a suitable criterion but one that will be admitted only too easily by the Government—the criterion of what is politically popular.
  I take one example of something that could be done and may need to be done under Sections 1 to 7. The Act was worded so that it could not intervene in the shipbuilding industry until the final date—the end of 1971—for the life of the Shipbuilding Industry Board, but after that date it can do. We were to have a debate—I hope that we shall still have it —tonight on the question of extending the life of the Board. On the other hand, we have an important piece of legislation beforehand and, under the rules of the House, who knows that we may not reach it.
  Therefore, it is of interest that we should be told what are the Government's intentions in respect of the shipbuilding industry, because if they do not use the Industrial Expansion Act—and they cannot do so if they repeal these Sections—they will have to introduce other legislation to do things which they could perfectly well have done under the Act. They are repealing what is simply an enabling power. Evidently, the Government cannot trust themselves with this enabling power. Evidently, they suspect that they will be tempted into sin if they allow it to remain on the statute book.
  With great eloquence, the Secretary of State told us that there was no ideology in this. I do not believe him. But there is a great deal of history in the matter. As Director-General of the C.B.I., the Secretary of State took a view of the Act which has proved to be wrong on all counts. Because he and the C.B.I. took that view, he refused to consult the then Government about the Bill, as it was then. He refused to help us to
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  improve it. He was the original non-co-operator with the Labour Government, the original non-consultor. There are criticisms sometimes of the T.U.C. for refusing to consult the Government about the Industrial Relations Bill, but that Bill seriously damages trade unions in general. The Industrial Expansion Act assisted industry, and industry has co-operated. We should not have had the two important schemes we have had under the Act without that co-operation. But the right hon. Gentleman, as Director-General of the C.B.I., refused to co-operate with the Labour Government on this piece of legislation.
  The Government have been similarly doctrinaire about the I.R.C. The hon. Member for Kensington, South (Sir B. Rhys Williams) admitted that the abolition of the I.R.C. will leave a gap in Government-industry relations. I agree, and it is a larger gap than he believes.
  Like industry, we had reason to expect that if a Conservative Government were returned, the I.R.C., though possibly modified, would continue to exist. After all, that was promised in "A Better Tomorrow". It informed us that a Conservative Government would drastically modify the Act but that, rather than abolish the I.R.C., it would be modified. We were led to expect that from what was said in debates on the subject by hon. Gentlemen opposite when they were in opposition.
  Indeed, the present Secretary of State for Social Services was said by the present Under-Secretary of State for Trade and Industry, the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), to have told the House in a debate on this subject some time ago that an I.R.C. facilitating market mechanisms might be useful. We were, therefore, entitled to believe that the Corporation would continue to exist.
  The Government have gone directly contrary not only to the belief which everybody was entitled to have but, as my right hon. Friend the Member for Bristol, South-East pointed out, equally contrary to the gathering experience in Britain and abroad that such organisations are useful if we are to have the right industrial structure for international competitiveness.
  They are also breaking with their own argument on another subject, and this I

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  regard as particularly serious. Hon. Gentlemen opposite have referred many times to the importance of Parliamentary scrutiny. I intervened in the speech of the hon. Member for Derbyshire, South-East (Mr. Rost) when he said that he would oppose certain possible ways for the disposal of the assets of the I.R.C. I pointed out that there would be no means by which he could do so because the Bill gives no Parliamentary control over what the Secretary of State intends to do.
  This is a significant fact, because my right hon. Friend the Member for Bristol, South-East was attacked over the Industrial Expansion Act when he was trying to increase Parliamentary control. Now hon. Gentlemen opposite introduce a Measure to repeal the I.R.C. without giving a thought to Parliamentary control. This shows the real importance they attach to the arugment they used to advance on this subject.
  Governments must sometimes act to create and support industries which are dominated by foreign competition, and sometimes by subsidised foreign competition. There are many ways in which subsidies can be given, including military purchasing on an enormous scale and space agencies. If we are to have competitive industries, this will be achieved only with the assistance of the Government.
  One example I have given is the shipbuilding industry, and there it was necessary for the Government to take action. I believe that it will be necessary for the present Government to take further action to support this industry; that is, if we are to have a shipbuilding industry. Other examples have been given, including computers, the motor car industry and aluminium smelters.
  It was in the creation of an aluminium smelter that the largest single act of Government intervention occurred under Labour, outside the aircraft industry. Considering what a non-interventionist, disengagement Government we have at this time, it is interesting to recall the reaction of hon. Gentlemen opposite to the aluminium smelter project when they were in Opposition. They did not criticise it, attack it or vote against it when it came before the House. They supported it. I am not speaking of the Under-Secretary. I remember that famous occasion when I
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  introduced the Orders to the House and he opposed them. We know his views well. Others of his hon. Friends did not oppose it. They welcomed it, they supported it—this discriminatory act.
  The hon. Member for Exeter (Mr. John Hannam) dislikes Government discrimination, so does the hon. Member for Derbyshire, South-East. This was an act of deliberate Government discrimination, to create an aluminium smelter industry. The right hon. Member for Moray and Nairn (Mr. Gordon Campbell), now the Secretary of State for Scotland, was overjoyed that the site for British Aluminium was Invergordon in Scotland. The only regret he had was that it was done by a Labour Government. The right hon. Member for Argyll (Mr. Noble), now Minister for Trade—and may I say how much we regret to hear that he is ill and hope that he makes a rapid recovery—congratulated my right hon. Friend the Member for Grimsby (Mr. Crosland) then President of the Board of Trade, on the success of the negotiations.
  These were fine sentiments from members of a non-interventionist, disengagement Opposition who now constitute the Government. Their philosophy of disengagement, the philosophy upon which this Bill is based, should in all honesty have led them to vote against the aluminium smelter project. But they did not have the political courage. They supported the smelters because they were politically popular. This, I suspect, will be the real criterion for Government intervention in industry, particularly as elections draw near. What is popular will be done, without any of the safeguards which we deliberately built into Government intervention in industry through agencies like the I.R.C. That will be the criterion, and I await the comments of the Under-Secretary. Perhaps he can provide us with other criteria which the Government will operate in respect of their exceptions.
  Let me put a question to him. If Anglesey Aluminium or British Aluminium want to expand their smelters to 120,000 tons, what will be the attitude of the Government? Will they co-operate and introduce special legislation, the Industrial Expansion Act having been repealed?
  I pass to the fundamental problem of size, whether it is necessary in industry,

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  to what extent, whether we should have an agency to promote industries of greater size so that we may have economy of scale, and all the other arguments. What hon. Members opposite seem to have forgotten is that we have a major and recent authority on the subject in the person of the Secretary of State. I quote from The Times of 23rd January, 1971 when at a special meeting of Dutch industrialists the right hon. Gentleman said:
  "We need and wish for size and yet we fear it. We must find, in Continental terms, the appropriate measures to guarantee us against abuse whilst encouraging the development of concerns able to face the demands that modern technology and the hungry market pose. How often have I been told by men I know, and whose judgment I respect. that the next plant they should build will of necessity, be of such a scale as to make its outlets profitless if seen in a purely national context."
  This is what the right hon. Gentleman said. The hon. Member for Cities of London and Westminster made some criticism of this sort of argument being too easily used, and I agree with him; indeed, it is too easily used. But although the phrase "industrial logic" has frequently been overdone, the fact remains that size is often necessary to achieve the necessary economies of scale.
  Mr. Tugendhat: The right hon. Gentleman may be misunderstanding one thing. There is a distinction between the size of a company and the size of a plant. One may well be sceptical of very large size beyond a certain point in a company while believing that companies should build very large plants.
  Mr. Dell: I entirely agree with the hon. Gentleman. If he studies the debates in which I took part on the Industrial Reorganisation Act, he will see that that was precisely a point of disagreement between the two sides, with Conservative hon. Members referring to Fortune's 500 largest non-American companies and my hon. Friends emphasising the importance of economies of scale in production and size of plants. I entirely accept the hon. Gentleman's point. That is a fundamental aspect of the matter.
  The argument of industrial logic has been too easily used sometimes in recent years, but it is increasingly necessary to achieve economies of scale in marketing
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  and research and development. The Secretary of State, in his speech in Holland, gave various examples where he thought it necessary that economies of scale should be achieved. He also said on 30th October, when announcing his intention to introduce the Bill:
  "The Government take, and will continue to take, an active interest in the reorganisation and restructuring of industry. They will be in close consultation with industry. They will seek, in their own way, to assist industry to do what industry wishes. They will not seek to force down the throat of industry measures that industry does not want."—[OFFICIAL. REPORT, 30th October, 1970; Vol. 805, c. 568.]
  What the right hon. Gentleman did not tell us today is how that job of encouraging is to be done. I think that I know his answer. He would probably say, as some of his hon. Friends have said, "Let us have a competitive economy with adequate incentives and market forces will do the rest."
  I have never had the Government's impressive verbal faith in market forces. Market forces, particularly without financial disclosure, are blind, and the right hon. Gentleman evidently does not intend to do very much about financial disclosure in the near future. I have never thought that knowledge added to market forces was a loss. On the contrary, I believe that a thorough investigation of a problem by an organisation like the I.R.C. is a positive asset—the facilitation of market forces, as the Secretary of State for the Social Services once called it.
  Even the Government do not have a wholehearted reliance on market forces. The hon. Member for Cities of London and Westminster attacked the I.R.C. as being a hiving-off of the national interest. It was only the strong tradition of the House that maiden speeches are not interrupted that prevented my leaping to my feet at that moment. He was making that statement in support of a Government who are hiving-off the determination of the national interest to the Wilberforce Committee, and yet he criticises the I.R.C. on the ground that we should not hive-off the national interest to an agency.
  Another example of poor faith in market forces is the system of investment incentives that the Government have introduced. A system of investment incentives is intended to distort market forces. It diverts resources towards capital-intensive industries in the form

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  in which the Government have introduced the system, presumably because they intend it to do so. So the Government have, like us, some doubts about the efficacy of market forces. All that they have done in the case of investment incentives is to introduce a less effective system, as we can see from the recent forecasts of industry's investment intentions. They try to do the job, but they make sure that they do it in the least effective way.
  Another part of the right hon. Gentleman's answer to the question of what is to be done to encourage size in the right circumstances was "a competition policy", though this came from his hon. Friends and not from him. That is why we were waiting with such interest to hear his statement on his competition policy. It is quite clear that the right hon. Gentleman has not the faintest idea what to do. He is to have no legislation until the next Session at the earliest, because he is waiting for ideas to occur to him.
  This is rather like the introduction of value-added tax which we heard about at the General Election. The Tories said, "We cannot say definitely about it until we have consulted the Civil Service." We were given before the election very clear assurances on what the right hon. Gentleman would do on competition policy, all of which have been broken. There was to be a registrar of monopolies and mergers. There is no registrar. There was to be frequent resort to the Monopolies Commission. There has been no resort, except in the case of one merger. The right hon. Gentleman's competition policy is not standing up very well today. In any case, vital as a competition policy is, it is not enough. We also need more information, an agency like the I.R.C., and ultimate powers of control.
  An important aspect of the debate has been the relationship between the two Acts which are being repealed—the Industrial Reorganisation Corporation Act and the Industrial Expansion Act—and development area policy. We had a series of instruments which were actively used—industrial development certificates, the investment grant differential, the investment grant system—which has been abolished—and the regional employment premium, which is being phased out. Hon.
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  Members opposite complained about the capital intensiveness of our incentives. Regional employment premium was intended to counter-balance that, and the Government system is no less capital-intensive.
  We also had rapidly-expanding expenditure under the Local Employment Act, and action could be taken under the Industrial Expansion Act and by the I.R.C. The Government have eliminated these methods. They have cut aid to the development areas. The Chancellor of the Exchequer told us on 27th October that at any rate the differential in the investment incentive had not been cut. That is not true. It has been cut by a substantial amount. The whole effectiveness of development area policy has been undermined and now, in addition, these two instruments of specific help to the development areas are going.
  My hon. Friend the Member for Bristol, Central and the hon. Member for Kensington, South emphasised the need for continuity in industrial policy. This legislation certainly does not provide continuity. Under this system, with these major changes, what is happening is that under the Labour Government there was massive assistance to get industry into the development areas, whereas the Conservative Government have completely undermined the understanding under which industry has gone there. This undoubtedly will make it far more difficult in the future to develop the sort of development area policy we need if we are at last to answer the problem of poverty and growing unemployment which the Government have increased in the development areas. The fact is that the development areas have been abandoned by the Government, and this Bill shows that quite clearly.
  The Bill is called an "Industry" Bill. Apparently the total policy of the Government towards industry is to be expressed in this negative Bill, which abolishes the I.R.C. and repeals Sections of the Industrial Expansion Act. The Government should at any rate have had the courtesy of calling it the Disengagement from Industry Bill. The sheer negativeness of the Bill is a symptom of the complete disarray and incompetence of their industrial policy. They have no effective competition policy, no effective investment incentive policys nor have they

  447
  any criteria for when to intervene and when not to intervene. It is complacency supplemented by bungling. It is not an Industry Bill. It is an Abdication of Responsibility Bill, and as such we shall vote against it.
  9.29 p.m.
  The Under-Secretary of State for Trade and Indastry (Mr. Nicholas Ridley): On the day that the Industrial Reorganisation Corporation and the Industrial Expansion Act begin to meet the end of their days, it is pleasant indeed to be able to replace them with my hon. Friends the Member for the Cities of London and Westminster (Mr. Tugendhat) and the Member for Exeter (Mr. John Hannam). Both made excellent speeches his afternoon.
  My hon. Friend the Member for the Cities of London and Westminster was clear, experienced and powerful, and every hon. Member who has read his writings will now know that hearing him is no less a pleasure. We look forward to hearing him a great deal in the near future. My hon. Friend the Member for Exeter put the interests of his constituents high in what he said and he follows an honourable tradition in that political shuttlecock of a city. He again gave very sound views, with an eloquence and clarity that delighted the House.
  What has to be proved by the Opposition is that the Industrial Expansion Act and the I.R.C. have achieved even a tithe of the high expectations set out for them when they were brought in. They were conceived in the white heat of the technological revolution. They were nurtured on large quantities of public money. They were supposed to bring about a sort of second industrial revolution. But few will say—even few in this House—that they have had the reinvigorating effect on British industry which was expected of them. Indeed nobody has claimed very much for either. In saying goodbye to them today, however, we should emphasise that no criticism whatever is made of the men who ran them. Indeed, the reverse. These men tried with skill, enthusiasm and imagination to do their jobs. It was the job descriptions that were wrong, not the men. Indeed, it is possible to say that the job descriptions hardly existed at all.
  Before coming to that matter, I shall attempt to answer one or two factual
  448
  points, particularly those put to me by the right hon. Member for Bristol, South-East (Mr. Penn). The total investments and commitments of I.R.C. at present are £122 million of which £87 million went into loans; £22 million into loans convertible into equity; and £13 million went straight into equity. One thing the right hon. Gentleman said that I must rebut is that we have not in the Department of Trade and Industry close relations with the T.U.C. and the relevant trade unions. My right hon. Friend has had discussions and has outlined further programmes for more discussions with all the main unions concerned in the work of the Department.
  I should also like to rebut entirely one other thing said by the right hon. Gentleman. In fact, the unions from Belfast, at my invitation, have been to see all the four contenders for the shipyard to satisfy themselves about their intentions. I think he will recognise that this is something that has not happened before, and I hope that in future he will not make the sort of wild charges he made this afternoon about our intentions to consult the trade unions.
  There was one other thing he said that I am sure he will think was not wise. He said we needed an industrial reorganisaton corporation with £150 million of public money to keep a watchful eye on those multi-national companies overseas, which indeed present problems and which the House might like to discuss on some other occasion; but I cannot see what rôle the I.R.C. could have in these complicated problems of taxation and policing of international companies, when clearly this is a matter for Government and not for the As I said, the job description was wrong.
  There were same amusing suggestions from the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) about what the I.R.C. was to do when it was brought in. It was:
  "to lead in the modernisation of industry, to promote the export competitiveness of private firms and import substitution by private enterprise."
  The right hon. Gentleman then described it in this way:
  "Only good can result from this flow to and fro, using the Corporation as a conduit pipe." —[OFFICIAL REPORT, 1st February, 1967; Vol. 740, c. 660–1.]

  449
  On the Second Reading the right hon. Gentleman referred to
  "the moral authority and impartiality of the kind of institution we are bringing into being."
  These strange claims for the Corporation seem rather odd now.
  Mr. Douglas Mr. Douglas rose——
  Mr. Ridley: I will give way to the hon. Gentleman when I have finished this part of my speech.
  There was then the odd claim of the right hon. Member for Bristol, South-East that a task of the Corporation was to start new enterprises. On Second Reading the right hon. Gentleman said:
  "In practice, the creation of new enterprises may well be—I will not say the most important, but a very important element in what we hope to do."—[OFFICIAL REPORT, 19th October, 1966; Vol. 734, c. 291–353.]
  Mr. Douglas: I am grateful to the hon. Gentleman for giving way. I am interested in his job description. Will the hon. Gentleman refer to the job description which the I.R.C. gave itself in its first annual report, particularly paragraph 3? Will the hon. Gentleman refer to that and not, for debating purposes, be so amorphous?
  Mr. Ridley: If the hon. Gentleman reads all the reports of the I.R.C. he will find that the job description changes from year to year. That is the point which I want to make.
  Mr. Benn: Before the hon. Gentleman leaves those characteristically entertaining quotations from my right hon. Friend the Member for Manchester, Cheetham, may I ask him to remind the House that when my right hon. Friend made those remarks he was a Government backbencher, not a Minister, and was giving his own colourful interpretation of a Bill for which he claimed no paternity?
  Mr. Ridley: I thought that I was paying due tribute to the eloquence of the right hon. Gentleman, even when on the back benches. The right hon. Gentleman has always been the best interpreter of the Labour Party's policy, whether on the back or the Front Benches.
  So we come to this important function of "restructuring" industry. This the I.R.C. undoubtedly undertook.
  Let us look at the proportion of industrial mergers which had anything to do with the I.R.C. The reported figures vary slightly, but during 1967 to 1970 the
  450
  total number of mergers and acquisitions amounted to between 2,500 and 3,000. The total financial consideration involved in these transactions is reported to be in the region of £5,000 million.
  In this period the I.R.C. was involved in 20 to 25 mergers per annum, about 100 all told, which is 4 per cent. of the total. The money spent by the I.R.C. amounted to about £100 million, and not all was spent on merger activity. The total financial consideration in the mergers promoted by the I.R.C. was very much larger. Nevertheless, this shows what a tiny proportion of mergers activity was promoted by the Corporation.
  For anybody to claim that either to continue or to withdraw the Corporation will make a great difference to the volume of merger activity in the light of those figures, the fact that merger activity was popular and was welcomed by the Government of the day and that the I.R.C. was, as it were, a new broom in the field, is grossly exaggerating the importance of the Corporation.
  The question which now arises—many hon. Members have asked it, particularly the hon. Member for Edmonton (Mr. Albu) and my hon. Friend the Member for Derbyshire, South-East (Mr. Rost)—is: what will happen? Will the City now undertake this task?
  On my figures, the City has undertaken 96 per cent. of mergers in the last five years, in any case. There is no reason to believe that the City will not go on financing and arranging mergers of this sort. All that we are here arguing about is the fact that the City judged that during this period this 4 per cent. of mergers were perhaps ill-founded and it was not prepared to put its money into them, so the corporation had to do it instead.
  What matters in relation to this 4 per cent. is the results, as my hon. Friend the Member for the Cities of London and Westminster said. Perhaps the City was right. Perhaps the mergers which we are considering are not going to be as successful as the Corporation hoped. The only test is whether in the fullness of time, the market was right to be shy of putting its money in, or whether the corporation was right to be bold, and these marginal questions cannot yet be answered.

  451
  Several companies which have been formed as a result of mergers arranged by the Corporation are already in poor shape. I do not want to put too much strength in this, but the value of the equity investments which the Corporation has made have fallen. The corporation purchased these investments for almost exactly £20 million. The current market quotation of those shares is between £16 million and £17 million. I immediately acknowledge that equity values have gone down during this period, but there is no great evidence to show that the market was wrong in deciding not to touch these investments, while the Corporation was right to put public money into them.
  Mr. Dell: Will the hon. Gentleman say in how many of the 96 per cent. of cases promoted by the market the market was right? Judging from reports made subsequently by the chairmen of companies involved in takeover bids, the market has had a pretty poor record, too.
  Mr. Ridley: I made the point that the whole equity market had gone down, but the right hon. Gentleman is getting rather close to my thinking on this. Some privately fostered mergers were wrong, so perhaps the right hon. Gentleman will admit that some publicly fostered ones were wrong, too. The point is that it is difficult to be sure of a judgment in a matter like this, and who is the right hon. Gentleman, and who am I, to be certain that one person's judgment is better than anybody else's?
  There has been running through the debate a serious dilemma in the minds of hon. Gentlemen opposite. It was very well expressed by the hon. Member for Edmonton (Mr. Albu) when he said during the Committee stage of the Bill:
  "We have to keep a nice balance between ensuring that the Corporation has proper targets of profitability and performance and that it is not inhibited from undertaking structural changes in British industry which would not be undertaken if the market forces were left to operate on their own."-[OFFICIAL REPORT, Standing Committee E, 10th November, 1966; c. 237.]
  What does that mean? The hon. Member for Woolwich, West (Mr. Hamling) and the hon. Member for The Hartlepools (Mr. Leadbitter) said that it meant that we must take into account
  452
  the social effects of industrial events, the regional effects of industrial investment, mergers and activities, and the balance of payments position. The right hon. Gentleman made much of the importance of increasing exports and saving imports. These things are important, but they are not the paramount consideration in deciding whether a merger should take place.
  The policies which apply to the social effects of industrial change, regional policies, and balance of payments policies, are not matters which should be considered in relation to industrial investments and mergers, they are the subject of separate legislation, and some Gentlemen opposite have, as I see it, been stretching the rules of order in raising these matters on the debate today, because they are not even mentioned in either of the Measures that we are seeking to repeal. Hon. Gentlemen opposite have to decide whether the motive of these two Measures was to increase the industrial efficiency of the country, or to promote other policies, such as social and regional policies, and this is where they have got into trouble over their whole approach to this matter.
  There is one other point that I should like to make to reinforce what my right hon. Friend said in opening the debate this afternoon. Over and over again in 1966 the Government stressed that the corporation should turn its money over quickly. The right hon. Gentleman came back to this today. The then Minister, the present Lord George-Brown, said:
  "As to how long the money will last, this will turn upon the success of the Corporation in picking the right exercises and its success, and in putting its money in, getting things started, turning it over and being able to start again. If the Corporation can do that really well, the money will last for a very long time."—[OFFICIAL REPORT, 25th January, 1966; Vol. 723, c. 58.]
  Yet in four years, the Corporation has turned over only a small proportion of its capital, and it is evident that it could not continue simply by turning over the funds it has within its existing statutory ceiling of £150 million.
  The continuation of the Corporation's activities at something like the same level as in the past would have required a raising of the limit to provide for up to a further £40 million per annum in the years ahead. Indeed, the Labour Government were intending to increase

  453
  the ceiling by a substantial amount. So one of the reasons why the Government concluded that it should not proceed with the I.R.C. was the fact that it had not been able to turn over its money quickly enough, due to the fact that its investments had not enabled it to do so, and that it would require more money.
  I should now like to turn to the question of altering management, which has played a central part in this debate. My right hon. Friend said that the I.R.C. changed towards the latter half of its life to trying to make board changes in a few cases—some, indeed most, in connection with particular mergers, and some not. Of course, one agrees that there is a large amount of management that can be improved, but I would also like to stress the truth of what my hon. Friend the Member for Leicester, South-West said, that most management is well up to the mark in this country.
  Surely the point at issue is what is the right way to effect changes in management, where it is thought that bad management exists. Both the right hon. Gentleman and the hon. Member for Edmonton wanted the I.R.C. to undertake this rôle. It was part of their policy that it should go to a company in the private sector and say, "We do not think that you are doing very well and we will change your managers".
  Suppose that this is wrong. Suppose they remove a manager who is very good and put in one who is very bad. What will the shareholders say to this? Indeed, what right would there be for the Government representatives, in the form of the I.R.C., to intervene, to change the management in companies belonging to private shareholders without being requested to do so in the first case, or any contact being made with them? Where is the responsibility for taking action of this sort to lie?
  I agree that it would be helpful to find ways to evolve organic solutions to this problem, ways to connect the shareholders more closely with the management of companies. But these problems have been studied often and deep and long, and no ready and easy solution has been found. But the main disadvantage is that the I.R.C. has managed to investigate only a very small number of managements and what we need is to
  454
  work across the whole field in every sort of area, and not confine ourselves to arbitrary projects singled out by certain people.
  To sum up, and to answer the hon. Member for Bristol, Central (Mr. Palmer), the terms of reference of the I.R.C. were hopelessly confused and vague. We were not sure whether they were to achieve social or balance of payments or regional objectives, whether restructuring or management change was the most important thing. In its four years, the Corporation has assisted 100 mergers and changed a few managements. It then turned to selective investment and to a form of rescue operations. These new fields were more and more unwelcome to us, and it was clearly drifting, looking for new work, and needed to be examined closely. The truth is that the Industrial Reorganisation Corporation has not revitalised British management.
  On the Industrial Expansion Act, it is curious that only three schemes were ever made under that Act. Despite the extravagant claims made for it, the Labour Government never found any excuse for using it, apart from the two smelters and the computers scheme. If it was so necessary and if, as the right hon. Gentleman said, it had a great rôle to play in the Government's economic policy, why was it that none of the candidates could be found to be used under the general enabling powers of the Act? The fact that not even the Labour Party could find any uses for the Industrial Expansion Act, after those projects which were already prepared, shows that they did not really believe in its efficacy and that they are not sorry to see it go at present.
  The hon. Member for Woolwich, West touched on the question of rescue operations and talked about the human problems in such matters. The next question is what safeguards there are against the support of lame ducks. It is a perfectly fair question, and one to which the Government are more interested in finding an answer than even the Opposition. We do not intend to use the industrial schemes to finance lame ducks. The House may be interested to know that those words were used by the right hon. Gentleman the Member for Bristol, South-East in the debate on 1st February, 1968, on the Industrial Expansion Bill. To those who have detected the same attitude in my

  455
  right hon. Friend, I should be interested to hear them ponder how it is that the right hon. Gentleman can use the identical words of my right hon. Friend about this and not be barracked in the way in which my right hon. Friend was. It is an exactly similar situation—[Interruption.] We do not intend to use the industrial schemes to finance lame ducks. Perhaps we can now have no more on that one from the hon. Gentleman opposite.
  Mr. Dalyell: Mention has been made during the debate of Leylands. My hon. Friend and I would not accept that Ley-lands is a lame duck. If there is difficulty in it getting credit in situations which have been fully discussed in the debate, what will the Government do about that?
  Mr. Ridley: The hon. Gentleman knows full well that after the Schemes are dispensed with, we shall have no powers to advance special sums of money of the sort he is suggesting. If we want to inject money into any particular firm or industry, we shall take full political responsibility for doing so, take it on our own shoulders, and make what arrangements seem appropriate for the payment of the money. It is a very different thing to consider the full political responsibility than to talk about political accountability. The right hon. Gentleman went on and on about political accountability. We strongly criticise the I.R.C. pattern because it absolves the Government from political responsibility for their acts. The I.R.C. Act allowed the I.R.C. to do as it wished, to discriminate and to change from one emphasis to another, and the Government did not have to justify it at all. The Industrial Expansion Act was all right because it forced the Government to make an order in each case, coming before the House, to justify what it was doing.
  It is curious that when the right hon. Gentleman gave money to Rolls-Royce he did not do so under the Industrial Expansion Act, but under the Civil Aviation Act 1949, which absolved him from the need to come to the House and to be accountable for what he had done. All his brave words about accountability do not seem to ring true.
  The Government is accountable to Parliament for everything they do, by Parliamentary Question, Adjournment Debates, Supply Days, or Votes of
  456
  Censure. It is possible for the Opposition to make the Government answer for any action which the Government take. We intend to take full political responsibility for our actions and the full burden of everything which we do upon our own responsibility.
  Then there is this matter of money. In all £105 million has been spent by the I.R.C., and £50 million has been spent under the Industrial Expansion Act, making £155 million expended to date. As my hon. Friends the Members for Exeter and Derbyshire, South-East said, this is a sizeable distortion of the capital market. Inherent in a policy whereby these agencies receive money is the preemption of these resources for other firms who would have had them for making investments. Money of this order cannot be taken out of the system without denying it to other potential investments, because it is money raised on preferential terms from the capital market. I doubt whether the Government or the I.R.C. have the wisdom to know how best to use this money, so I agree with my hon. Friends that it is better to leave the money in the system and to develop the capital market in such a way that there will be money available for firms who wish to borrow, irrespective of the preference or otherwise that they receive from the Government.
  The ending of these two Acts fits into a positive policy of the Government. We do not believe that we have any superior knowledge over what mergers are or are not in the national interest. We shall leave it to the market, subject to the monopoly considerations—an area where the past Government's policy was in conflict with their own monopoly policy. Regional policy, social policy and trade policy must be considered on their merits and separate from industrial efficiency.
  We also wish to encourage the development of an effective capital market where capital is available to firms on their merits. We recognise that liquidity is tight in the economy. But that is what the former Chancellor of the Exchequer was about: the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) was trying to achieve a reduction in company liquidity through his reduction of the money supply. It is necessary to squeeze company liquidity if wage inflation is to be brought under control. It

  457
  is discriminatory if not inflationary to make privileged exceptions. We will help investment most if we can get wage inflation under control.
  Our policy is to reduce corporation taxation which will increase the funds available to industry for further investment, and we will get much sounder investment if we concentrate on the market
  rather than making diversions of our scarce capital resources.
  Therefore I ask the House to give these two Acts the finishing touch by giving this Bill a Second Reading.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 315, Noes 272.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  BUSINESS OF THE HOUSE
  Motion made, and Question put:—
  That the Proceedings on the Fire Precautions Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Humphrey Atkins.]
  The House divided: Ayes 316, Noes 269.

  Division No. 73.]

  AYES

  [9.59 p.m.

  Adley, Robert

  Davies, Rt. Hn. John (Knutsford)

  Hill, John E. B. (Norfolk, S.)

  Alison, Michael (Barkston Ash)

  d'Avigdor-Goldsmid, Sir Henry

  Hill, James (Southampton, Test)

  Allason, James (Hemel Hempstead)

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

  Holland, Philip

  Amery, Rt. Hn. Julian

  Dean Paul

  Holt, Miss Mary

  Archer, Jeffrey (Louth)

  Deedes, Rt. Hn. W. F.

  Hordern, Peter

  Astor, John

  Digby, Simon Wingfield

  Hornby, Richard

  Atkins, Humphrey

  Dixon, Piers

  Hornsby-Smith,Rt.Hn.Dame Patricia

  Awdry, Daniel

  Dodds-Parker, Douglas

  Howe, Hn. Sir Geoffrey (Reigate)

  Baker, Kenneth (St. Marylebone)

  Drayson, G. B.

  Howell, David (Guildford)

  Baker, W. H. K. (Banff)

  du Cann, Rt. Hn. Edward

  Howell, Ralph (Norfolk, N.)

  Balniel, Lord

  Dykes, Hugh

  Hunt, John

  Barber, Rt. Hn. Anthony

  Eden, Sir John

  Hutchison, Michael Clark

  Batsford, Brian

  Edwards, Nicholas (Pembroke)

  Iremonger, T. L.

  Beamish, Col. Sir Tufton

  Elliot, Capt. Walter (Carshalton)

  Irvine, Bryant Godman (Rye)

  Bell, Ronald

  Elliott, R. W. (N'c'tle-upon-Tyne,N.)

  James, David

  Bennett, Sir Frederick (Torquay)

  Emery, Peter

  Jenkin, Patrick (Woodford)

  Bennett, Dr. Reginald (Gosport)

  Farr, John

  Jennings, J. C. (Burton)

  Benyon, W.

  Fell, Anthony

  Jessel, Toby

  Berry, Hon. Anthony

  Fenner, Mrs. Peggy

  Johnson Smith, G. (E. Grinstead)

  Biffen, John

  Fidler, Michael

  Jones, Arthur (Northants, S.)

  Biggs-Davison, John

  Finsberg, Geoffrey (Hampstead)

  Jopling, Michael

  Blaker, Peter

  Fisher, Nigel (Surbiton)

  Joseph, Rt. Hn. Sir Keith

  Boardman, Tom (Leicester, S.W.)

  Fletcher-Cooke, Charles

  Kaberry, Sir Donald

  Body, Richard

  Fookes, Miss Janet

  Kellett, Mrs. Elaine

  Boscawen, Robert

  Fortescue, Tim

  Kershaw, Anthony

  Bossom, Sir Clive

  Foster, Sir John

  Kilfedder, James

  Bowden, Andrew

  Fowler, Norman

  Kimball, Marcus

  Boyd-Carpenter, Rt. Hn. John

  Fox, Marcus

  King, Evelyn (Dorset, S.)

  Braine, Bernard

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

  King, Tom (Bridgwater)

  Bray, Ronald

  Fry, Peter

  Kinsey, J. R.

  Brewis, John

  Galbraith, Hn. T. G.

  Kirk, Peter

  Brinton, Sir Tatton

  Gardner, Edward

  Kitson, Timothy

  Brocklebank-Fowler, Christopher

  Gibson-Watt, David

  Knight, Mrs. Jill

  Brown, Sir Edward (Bath)

  Gilmour, Ian (Norfolk, C.)

  Knox, David

  Bruce-Gardyne, J.

  Gilmour, Sir John (Fife, E.)

  Lambton, Antony

  Bryan, Paul

  Glyn, Dr. Alan

  Lane, David

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

  Goodhart, Philip

  Langford-Holt, Sir John

  Buck, Antony

  Goodhew, Victor

  Le Marchant, Spencer

  Bullus, Sir Eric

  Gorst, John

  Lewis, Kenneth (Rutland)

  Burden, F. A.

  Gower, Raymond

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

  Butler, Adam (Bosworth)

  Grant, Anthony (Harrow, C.)

  Longden, Gilbert

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

  Gray, Hamish

  Loveridge, John

  Carlisle, Mark

  Green, Alan

  McAdden, Sir Stephen

  Carr, Rt. Hn. Robert

  Grieve, Percy

  MacArthur, Ian

  Cary, Sir Robert

  Griffiths, Eldon (Bury St. Edmunds)

  McCrindle, R. A.

  Channon, Paul

  Grylls, Michael

  McLaren, Martin

  Chapman, Sydney

  Gummer, Selwyn

  Maclean, Sir Fitzroy

  Chataway, Rt. Hn. Christopher

  Gurden, Harold

  McMaster, Stanley

  Chichester-Clark, R.

  Hall, Miss Joan (Keighley)

  Macmillan, Maurice (Farnham)

  Churchill, W. S.

  Hall, John (Wycombe)

  McNair-Wilson, Michael

  Clark, William (Surrey, E.)

  Hall-Davis, A. G. F.

  McNair-Wilson, Patrick (NewForest)

  Clarke, Kenneth (Rushcliffe)

  Hamilton, Michael (Salisbury)

  Maddan, Martin

  Clegg, Walter

  Hannam, John (Exeter)

  Madel, David

  Cockeram, Eric

  Harrison, Brian (Maldon)

  Maginnis, John E.

  Cooke, Robert

  Harrison, Col. Sir Harwood (Eye)

  Marples, Rt. Hn. Ernest

  Coombs, Derek

  Harvey, Sir Arthur Vere

  Marten, Neil

  Cooper, A. E.

  Haselhurst, Alan

  Mather, Carol

  Cordle, John

  Hastings, Stephen

  Maude, Angus

  Corfield, Rt. Hn. Frederick

  Havers, Michael

  Maudling, Rt. Hn. Reginald

  Cormack, Patrick

  Hawkins, Paul

  Mawby, Ray

  Costain, A. P.

  Hay, John

  Critchley, Julian

  Hayhoe, Barney

  Maxwell-Hyslop, R. J.

  Crouch, David

  Heseltine, Michael

  Meyer, Sir Anthony

  Crowder, F. P.

  Hicks, Robert

  Mills, Peter (Torrington)

  Curran, Charles

  Higgins, Terence L.

  Mills, Stratton, (Belfast, N.)

  Dalkeith, Earl of

  Hiley, Joseph

  Miscampbell, Norman

  Mitchell, Lt.-Col.C.(Aberdeenshire,W)

  Rawlinson, Rt. Hn. Sir Peter

  Taylor, Frank (Moss Side)

  Mitchell, David (Basingstoke)

  Redmond, Robert

  Taylor, Robert (Croydon, N.W.)

  Moate, Roger

  Reed, Laurance (Bolton, E.)

  Tebbit, Norman

  Molyneaux, James

  Rees, Peter (Dover)

  Temple, John M.

  Money, Ernie

  Rees-Davies, W. R.

  Thatcher, Rt. Hn. Mrs. Margaret

  Monks, Mrs. Connie

  Renton, Rt. Hn. Sir David

  Thomas, John Stradling (Monmouth)

  Monroe, Hector

  Rhys Williams, Sir Brandon

  Thomas, Rt. Hn. Peter (Hendon, S.)

  Montgomery, Fergus

  Ridley, Hn. Nicholas

  Thompson, Sir Richard (Croydon, S.)

  Morgan, Geraint (Denbigh)

  Ridsdale, Julian

  Tilney, John

  Morgan-Giles, Rear-Adm.

  Roberts, Michael (Cardiff, N.)

  Trafford, Dr. Anthony

  Morrison, Charles (Devizes)

  Roberts, Wyn (Conway)

  Trew, Peter

  Mudd, David

  Rodgers, Sir John (Sevenoaks)

  Tugendhat, Christopher

  Murton, Oscar

  Rossi, Hugh (Hornsey)

  Turton, Rt. Hn. R. H.

  Nabarro, Sir Gerald

  Rost, Peter

  van Straubenzee, W. R.

  Neave, Airey

  Royle, Anthony

  Vaughan, Dr. Gerard

  Nicholls, Sir Harmar

  Russell, Sir Anthony

  Vickers, Dame Joan

  Normanton, Tom

  St. John-Stevas, Norman

  Waddington, David

  Nott, John

  Scott, Nicholas

  Walder, David (Clitheroe)

  Onslow, Cranley

  Sharpies, Richard

  Walker, Rt. Hn. Peter (Worcester)

  Oppenheim, Mrs. Sally

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

  Walker-Smith, Rt. Hn. Sir Derek

  Orr, Capt. L. P. S.

  Shelton, William (Clapham)

  Wall, Patrick

  Osborn, John

  Simeons, Charles

  Walters, Dennis

  Owen, Idris (Stockport, N.)

  Sinclair, Sir George

  Ward, Dame Irene

  Page, Graham (Crosby)

  Skeet, T. H. H.

  Warren, Kenneth

  Page, John (Harrow, W.)

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

  Wells, John (Maidstone)

  Paisley, Mr. Ian

  Soref, Harold

  White, Roger, (Gravesend)

  Parkinson, Cecil (Enfield, W.)

  Speed, Keith

  Whitelaw, Rt. Hn. William

  Peel, John

  Spence, John

  Wiggin, Jerry

  Percival, Ian

  Sproat, Iain

  Wilkinson, John

  Peyton, Rt. Hn. John

  Stainton, Keith

  Wolrige-Gordon, Patrick

  Pike, Miss Mervyn

  Stanbrook, Ivor

  Wood, Rt. Hn. Richard

  Pink, R. Banner

  Stewart-Smith, D. G. (Belper)

  Woodhouse, Hn. Christopher

  Pounder, Rafton

  Stodart, Anthony (Edinburgh, W.)

  Woodnutt, Mark

  Powell, Rt. Hn. J. Enoch

  Stoddart-Scott, Col. Sir M.

  Worsley, Marcus

  Price, David (Eastleigh)

  Stokes, John

  Wylie, Rt. Hn. N. R.

  Proudfoot, Wilfred

  Stuttaford, Dr. Tom

  Younger, Hn, George

  Pym, Rt. Hn. Francis

  Sutcliffe, John

  Quennell, Miss J. M.

  Tapsell, Peter

  TELLERS FOR THE AYES:

  Raison, Timothy

  Taylor, Sir Charles (Eastbourne)

  Mr. Jasper More and

  Ramsden, Rt. Hn. James

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

  Mr. Reginald Eyre.

  NOES

  Abse, Leo

  Coleman, Donald

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

  Albu, Austen

  Concannon, J. D.

  Fitch, Alan (Wigan)

  Allaun, Frank (Salford, E.)

  Conlan, Bernard

  Fletcher, Raymond (Ilkeston)

  Allen, Scholefield

  Corbel, Mrs. Freda

  Fletcher, Ted (Darlington)

  Archer, Peter (Rowley Regis)

  Cox, Thomas (Wandsworth, C.)

  Foley, Maurice

  Armstong, Ernest

  Crawshaw, Richard

  Foot, Michael

  Ashley, Jack

  Cronin, John

  Ford, Ben

  Ashton, Joe

  Crosland, Rt. Hn. Anthony

  Forrester, John

  Atkinson, Norman

  Grossman, Rt. Hn. Richard

  Fraser, John (Norwood)

  Bagier, Gordon A. T.

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

  Freeson, Reginald

  Barnes, Michael

  Cunningham, Dr. J. A. (Whitehaven)

  Galpern, Sir Myer

  Barnett, Joel

  Dalyell, Tam

  Garrett, W. E.

  Beaney, Alan

  Darling, Rt. Hn. George

  Gilbert, Dr. John

  Benn, Rt. Hn, Anthony Wedgwood

  Davidson, Arthur

  Ginsburg, David

  Bennett, James (Glasgow, Bridgeton)

  Davies, Denzil (Llanelly)

  Golding, John

  Bidwell, Sydney

  Davies, G. Elfed (Rhondda, E.)

  Gordon Walker, Rt. Hn. P. C.

  Bishop, E. S.

  Davies, Ifor (Gower)

  Gourlay, Harry

  Blenkinsop, Arthur

  Davies, S. O. (Merthyr Tydvil)

  Grant, George (Morpeth)

  Boardman, H. (Leigh)

  Davis, Clinton (Hackney, C.)

  Grant, John D. (Islington, E.)

  Booth, Albert

  Deakins, Eric

  Griffiths, Eddie (Brightside)

  Bottomley, Rt. Hn. Arthur

  de Freitas, Rt. Hn. Sir Geoffrey

  Griffiths, Will (Exchange)

  Boyden, James (Bishop Auckland)

  Delargy, H. J.

  Grimond, Rt. Hn. J.

  Bradley, Tom

  Dell, Rt. Hn. Edmund

  Gunter, Rt. Hn. R. J.

  Broughton, Sir Alfred

  Dempsey, James

  Hamilton, James (Bothwell)

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

  Doig, Peter

  Hamilton, William (Fife, W.)

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

  Dormand, J. D.

  Hannan, William (G'gow, Maryhill)

  Brown, Ronald (Shoredith & F'bury)

  Douglas, Dick (Stirlingshire, E.)

  Hardy, Peter

  Buchan, Norman

  Douglas-Mann, Bruce

  Harrison, Walter (Wakefield)

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

  Driberg, Tom

  Hart, Rt. Hn. Judith

  Butler, Mrs. Joyce (Wood Green)

  Duffy, A. E. P.

  Healey, Rt. Hn. Denis

  Callaghan, Rt. Hn. James

  Dunn, James A.

  Heffer, Eric S.

  Campbell, I. (Dunbartonshire, W.)

  Dunnett, Jack

  Hilton, W. S.

  Cant, R. B.

  Eadie, Alex

  Horam, John

  Carmichael, Neil

  Edelman, Maurice

  Houghton, Rt. Hn. Douglas

  Carter, Ray (Birmingh'm, Northfield)

  Edwards, Robert (Bilston)

  Howell, Denis (Small Heath)

  Carter-Jones, Lewis (Eccles)

  Edwards, William (Merioneth)

  Huckfield, Leslie

  Castle, Rt. Hn. Barbara

  Ellis, Tom

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Clark, David (Colne Valley)

  English, Michael

  Hughes, Mark (Durham)

  Cocks, Michael (Bristol, S.)

  Evans, Fred

  Hughes, Robert (Aberdeen, N.)

  Cohen, Stanley

  Fernyhough, E.

  Hughes, Roy (Newport)

  460

  461

  Hunter, Adam

  Marsh, Rt. Hn. Richard

  Ross, Rt. Hn. William (Kilmarnock)

  Irvine,Rt.Hn.Sir Arthur(Edge Hill)

  Mason, Rt. Hn. Roy

  Sheldon, Robert (Ashton-under-Lyne)

  Janner, Gneville

  Meacher, Michael

  Shore, Rt. Hn. Peter (Stepney)

  Jay, Rt. Hn. Douglas

  Mellish, Rt. Hn. Robert

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

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

  Mendelson, John

  Short, Mrs. Renée (W'hampton,N.E.)

  Jenkins, Rt. Hn. Roy (Stechford)

  Mikardo, Ian

  Silkin, Rt. Hn. John (Deptford)

  John, Brynmor

  Millan, Bruce

  Silkin, Hn. S. C. (Dulwich)

  Johnson, Carol (Lewisham, S.)

  Miller, Dr. M. S.

  Sillars, James

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

  Milne, Edward (Blyth)

  Silverman, Julius

  Johnson, Walter (Derby, S.)

  Molloy, William

  Skinner, Dennis

  Johnston, Russell (Inverness)

  Morgan, Elysian (Cardiganshire)

  Small, William

  Jones, Barry (Flint, E.)

  Morris, Alfred (Wythenshawe)

  Smith, John (Lanarkshire, N.)

  Jones, Dan (Burnley)

  Morris, Charles R. (Openshaw)

  Spearing, Nigel

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

  Morris, Rt. Hn. John (Aberavon)

  Spriggs, Leslie

  Jones, T. Alec (Rhondda, W.)

  Moyle, Roland

  Stallard, A. W.

  Kaufman, Gerald

  Mulley, Rt. Hn. Frederick

  Steel, David

  Kelley, Richard

  Murray, Ronald King

  Stewart, Rt. Hn. Michael (Fulham)

  Kerr, Russell

  O'Halloran, Michael

  Stoddart, David (Swindon)

  Kinnock, Neil

  O'Malley, Brian

  Stonehouse, Rt. Hn. John

  Lambie, David

  Oram, Bert

  Strang, Gavin

  Lamond, James

  Orbach, Maurice

  Strauss, Rt. Hn. G. R.

  Latham, Arthur

  Orme, Stanley

  Summerskill, Hn. Dr. Shirley

  Lawson, George

  Oswald, Thomas

  Swain, Thomas

  Leadbitter, Ted

  Owen, Dr. David (Plymouth, Sutton)

  Taverne, Dick

  Lee, Rt. Hn. Frederick

  Padley, Walter

  Thomas,Rt.Hn.George (Cardiff,W.)

  Leonard, Dick

  Page, John (Harrow, W.)

  Thomas, Jeffrey (Abertillery)

  Lestor, Miss Joan

  Palmer, Arthur

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

  Lever, Rt. Hn. Harold

  Pannell, Rt. Hn. Charles

  Tinn, James

  Lewis, Arthur (W. Ham N.)

  Parker, John (Dagenham)

  Tomney, Frank

  Lewis, Ron (Carlisle)

  Parry, Robert (Liverpool, Exchange)

  Torney, Tom

  Lipton, Marcus

  Pavitt, Laurie

  Urwin, T. W.

  Lomas, Kenneth

  Pearl, Rt. Hn. Fred

  Varley, Eric G.

  Loughlin, Charles

  Pendry, Tom

  Wainwright, Edwin

  Lyon, Alexander W. (York)

  Pentland, Norman

  Walker, Harold (Doncaster)

  Lyons, Edward (Bradford, E.)

  Perry, Ernest G.

  Wallace, George

  Mabon, Dr. J. Dickson

  Prentice, Rt. Hn.

  Reg. Watkins, David

  McBride, Neil

  Prescott, John

  Weitzman, David

  McCartney, Hugh

  Price, J. T. (Westhoughton)

  Wellbeloved, James

  McElhone, Frank

  Price, William (Rugby)

  Wells, William (Walsall, N.)

  McGuire, Michael

  Probert, Arthur

  White, James (Glasgow, Pollok)

  Mackenzie, Gregor

  Rankin, John

  Whitehead, Phillip

  Mackle, John

  Reed, Laurance (Bolton, E.)

  Whitlock, William

  Mackintosh, John P.

  Rees, Merlyn (Leeds, S.)

  Willey, Rt. Hn. Frederick

  Maclennan, Robert

  Rhodes, Geoffrey

  Williams, Alan (Swansea, W.)

  McMillan, Tom (Glasgow, C.)

  Richard, Ivor

  Williams, Mrs. Shirley (Hitchin)

  McNamara, J. Kevin

  Roberts, Albert (Normanton)

  Wilson, Alexander (Hamilton)

  MacPherson, Malcolm

  Roberts,Rt.Hn.Goronwy(Caernarvon)

  Wilson, Rt. Hn, Harold (Huyton)

  Mahon, Simon (Bootle)

  Robertson, John (Paisley)

  Wilson, William (Coventry, S.)

  Mallalieu, E. L. (Brigg)

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

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

  Rodgers, William (Stockton-on-Tees)

  TELLERS FOR THE NOES:

  Marks, Kenneth

  Roper, John

  Mr. William Hamling and

  Marquand, David

  Rose, Paul B.

  Mr. Joseph Harper.

  Division No. 75.]

  AYES

  [10.27 p.m.

  Adley, Robert

  Eden, Sir John

  Jopling, Michael

  Alison, Michael (Barkston Ash)

  Edwards, Nicholas (Pembroke)

  Joseph, Rt. Hn. Sir Keith

  Allason, James (Hemel Hempstead)

  Elliot, Capt. Walter (Carshalton)

  Kaberry, Sir Donald

  Amery, Rt. Hn, Julian

  Elliott, R. W. (N'c'tie-upon-Tyne,N.)

  Kellett, Mrs. Elaine

  Archer, Jeffrey (Louth)

  Emery, Peter

  Kershaw, Anthony

  Astor, John

  Farr, John

  Kilfedder, James

  Atkins, Humphrey

  Fell, Anthony

  Kimball, Marcus

  Baker, Kenneth (St. Marylebone)

  Fenner, Mrs. Peggy

  King, Evelyn (Dorset, S.)

  Baker, W. H. K. (Banff)

  Fidler, Michael

  King, Tom (Bridgwater)

  Balniel, Lord

  Finsberg, Geoffrey (Hampstead)

  Kinsey, J. R.

  Batsford, Brian

  Fisher, Nigel (Surbiton)

  Kirk, Peter

  Beamish, Col. Sir Tufton

  Fletcher-Cooke, Charles

  Kitson, Timothy

  Bell, Ronald

  Fookes Miss Janet

  Knight, Mrs. Jill

  Bennett, Sir Frederic (Torquay)

  Fortescue, Tim

  Knox, David

  Bennett, Dr. Reginald (Gosport)

  Foster, Sir John

  Lambton, Antony

  Benyon, W.

  Fowler, Norman

  Lane, David

  Berry, Hon. Anthony

  Fox, Marcus

  Langford-Holt, Sir John

  Biffen, John

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

  Le Merchant, Spencer

  Biggs-Davison, John

  Fry, Peter

  Lewis, Kenneth (Rutland)

  Blaker, Peter

  Galbraith, Hn. T. G.

  Lloyd, Ian (P'tsm'th Langstone)

  Boardman, Tom (Leicester, S.W.)

  Gardner, Edward

  Longden, Gilbert

  Body, Richard

  Gibson-Watt, David

  Loveridge, John

  Boscawen, Robert

  Gilmour, Ian (Norfolk, C.)

  MacArthur, Ian

  Bossom, Sir Clive

  Gilmour, Sir John (Fife, E.)

  McCrindle, R. A.

  Bowden, Andrew

  Glyn, Dr. Alan

  McLaren, Martin

  Boyd-Carpenter, Rt. Hn. John

  Goodhart, Philip

  Maclean, Sir Fitzroy

  Braine, Bernard

  Goodhew, Victor

  McMaster, Stanley

  Bray, Ronald

  Gorst, John

  Macmillan, Maurice (Farnham)

  Brewis, John

  Gower, Raymond

  McNair-Wilson, Michael

  Brinton, Sir Tatton

  Grant, Anthony (Harrow, C.)

  McNair-Wilson, Patrick (New Forest)

  Brocklebank-Fowler, Christopher

  Gray, Hamish

  Maddan, Martin

  Brown, Sir Edward (Bath)

  Green, Alan

  Madel, David

  Bruce-Gardyne, J.

  Grieve, Percy

  Maginnis, John E.

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

  Griffiths, Eldon (Bury St. Edmunds)

  Marples, Rt. Hn. Ernest

  Buck, Antony

  Grylls, Michael

  Marten, Neil

  Bullus, Sir Eric

  Gummer, Selwyn

  Mather, Carol

  Burden, F.A.

  Gurden, Harold

  Maude, Angus

  Butler, Adam (Bosworth)

  Hall, Miss Joan (Keighley)

  Maudling, Rt. Hn. Reginald

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

  Hall, John (Wycombe)

  Mawby, Ray

  Carlisle, Mark

  Hall-Davis, A. G. F.

  Maxwell-Hyslop, R. J.

  Carr, Rt. Hn. Robert

  Hamilton, Michael (Salisbury)

  Meyer, Sir Anthony

  Cary, Sir Robert

  Hannam, John (Exeter)

  Mills, Peter (Terrington)

  Channon, Paul

  Harrison, Brian (Maldon)

  Mills, Stratton (Belfast, N.)

  Chapman, Sydney

  Harrison, Col. Sir Harwood (Eye)

  Miscampbell, Norman

  Chataway, Rt. Hn. Christopher

  Harvey, Sir Arthur Vere

  Mitchell,Lt.-Col.C.(Aberdeenshire,W)

  Chichester-Clark, R.

  Haselhurst, Alan

  Mitchell, David (Basingstoke)

  Churchill, W. S.

  Hastings, Stephen

  Moate, Roger

  Clark, William (Surrey, E.)

  Havers, Michael

  Molyneaux, James

  Clarke, Kenneth (Rushcliffe)

  Hawkins, Paul

  Money, Ernie

  Clegg, Walter

  Hay, John

  Monks, Mrs. Connie

  Cockeram, Eric

  Hayhoe, Barney

  Moontgomery, Fergus

  Cooke, Robert

  Heseltine, Michael

  More, Jasper

  Coombs, Derek

  Hicks, Robert

  Morgan, Geraint (Denbigh)

  Cooper, A. E.

  Higgins, Terence L.

  Morgan-Giles, Rear-Adm.

  Cordle, John

  Hiley, Joseph

  Morrison, Charles (Devizes)

  Corfield, Rt. Hn. Frederick

  Hill, John E. B. (Norfolk, S.)

  Mudd, David

  Cormack, Patrick

  Hill, James (Southampton, Test)

  Murton, Oscar

  Costain, A. P.

  Holland, Philip

  Nabarro, Sir Gerald

  Critchley, Julian

  Holt, Miss Mary

  Neave, Airey

  Crouch, David

  Hordern, Peter

  Nicholls, Sir Harmer

  Crowder, F. P.

  Hornby, Richard

  Normanton, Tom

  Curran, Charles

  Hornsby-Smith,Rt.Hn.Dame Patricia

  Nott, John

  Dalkeith, Earl of

  Howe, Hn. Sir Geoffrey (Reigate)

  Onstow, Crantey

  Davies, Rt. Hn. John (Knutsford)

  Howell, David (Guildford)

  Oppenheim, Mrs. Sally

  d'Avigdor-Goldsmid, Sir

  Henry Howell, Ralph (Norfolk, N.)

  Orr, Capt. L. P. S.

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

  Hunt, John

  Osborn, John

  Dean, Paul

  Hutchison, Michael Clark

  Owen, Idris (Stockport, N.)

  Deedes, Rt. Hn. W. P.

  Iremonger, T. L.

  Page, Grahm (Crosby)

  Digby, Simon Wingfield

  Irvine, Bryant Gagman (Rye)

  Page, John (Harrow, W.)

  Dixon, Piers

  James, David

  Parkinson, Cecil (Enfield, W.)

  Dodds-Parker, Douglas

  Jenkin, Patrick (Woodford)

  Peel, John

  Douglas-Home, Rt. Hn. Sir Alec

  Jennings, J. C. (Burton)

  Percival, Ian

  Drayson, G. B.

  Jessel, Toby

  Peyton, Rt. Hn. John

  du Cann, Rt. Hn. Edward

  Johnson Smith, G, (E. Grinstead)

  Pike, Miss Mervyn

  Dykes, Hugh

  Jones, Arthur (Northants, S.)

  Pink, R. Bonner

  470

  471

  Pounder, Rafton

  Simeons, Charles

  Tugendhat, Christopher

  Powell, Rt. Hn. J. Enoch

  Sinclair, Sir George

  Turton, Rt. Hn. R. H.

  Price, David (Eastleigh)

  Skeet, T. H. H.

  van Straubenzee, W. R.

  Proudfoot, Wilfred

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

  Vaughan, Dr. Gerard

  Pym, Rt. Hn. Francis

  Soref, Harold

  Vickers, Dame Joan

  Quennell, Miss J. M.

  Spence, John

  Waddington, David

  Raison, Timothy

  Sproat, Iain

  Walder, David (Clitheroe)

  Ramsden, Rt. Hn. James

  Stainton, Keith

  Walker, Rt. Hn. Peter (Worcester)

  Rawlinson, Rt. Hn. Sir Peter

  Stanbrook, Ivor

  Walker-Smith, Rt, Hn. Sir Derek

  Redmond, Robert

  Stewart-Smith, D. G. (Belper)

  Wall, Patrick

  Reed, Laurance (Bolton, E.)

  Stodart, Anthony (Edinburgh, W.)

  Ward, Dame Irene

  Rees, Peter (Dover)

  Stoddart-Scott, Col. Sir M.

  Warren, Kenneth

  Rees-Davies, W. R.

  Stokes, John

  Weatherill, Bernard

  Renton, Rt. Hn. Sir David

  Stuttaford, Dr. Tom

  Wells, John (Maidstone)

  Rhys Williams, Sir Brandon

  Sutcliffe, John

  White, Roger (Gravesend)

  Ridley, Hn. Nicholas

  Tapsell, Peter

  Whitelaw, Rt. Hn. William

  Ridsdale, Julian

  Taylor, Sir Charles (Eastbourne)

  Wiggin, Jerry

  Roberts, Michael (Cardiff, N.)

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

  Wilkinson, John

  Roberts, Wyn (Conway)

  Taylor, Frank (Moss Side)

  Wolrige-Gordon, Patrick

  Rodgers, Sir John (Sevenoaks)

  Taylor, Robert (Croydon, N.W.)

  Wood, Rt. Hn. Richard

  Rossi, Hugh (Hornsey)

  Tebbit, Norman

  Woodhouse, Hn. Christopher

  Rost, Peter

  Temple, John M.

  Woodnut, Mark

  Royle, Anthony

  Thatcher, Rt. Hn. Mrs. Margaret

  Worsley, Marcus

  Russell, Sir Ronald

  Thomas, John Stradling (Monmouth)

  Wylie, Rt. Hn, N. R.

  St. John-Stevas, Norman

  Thomas, Rt. Hn, Peter (Hendon, S.)

  Younger, Hn. George

  Scott, Nicholas

  Thompson, Sir Richard (Croydon,S.)

  Sharpies, Richard

  Tilney, John

  TELLERS FOR THE AYES:

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

  Trafford, Dr. Anthony

  Mr Hector Monro and

  Shelton, William (Clapham)

  Trew, Peter

  Mr. Keith Speed.

  NOES

  Abse, Leo

  Darling, Rt. Rn. George

  Hannan, William (G'gow, Maryhill)

  Albu, Austen

  Davidson, Arthur

  Hardy, Peter

  Allaun, Frank (Salford, E.)

  Davies, Denzil (Llanelly)

  Harrison, Walter (Wakefield)

  Allen, Scholefield

  Davies, G. Elfed (Rhondda, E.)

  Hart, Rt. Hn. Judith

  Archer, Peter (Rowley Regis)

  Davies, Ifor (Gower)

  Healey, Rt. Hn. Denis

  Armstrong, Ernest

  Davies, S. O. (Merthyr Tydvil)

  Heffer, Eric S.

  Ashley, Jack

  Davis, Clinton (Hackney, C.)

  Hilton, W. S.

  Ashton, Joe

  Deakins, Eric

  Horam, John

  Atkinson, Norman

  de Freitas, Rt. Hn. Sir Geoffrey

  Houghton, Rt. Hn. Douglas

  Bagier, Gordon A. T.

  Delargy, H. J.

  Howell, Denis (Small Heath)

  Barnes, Michael

  Dell, Rt. Hn. Edmund

  Huckfield, Leslie

  Barnett, Joel

  Dempsey, James

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Beaney, Alan

  Doig, Peter

  Hughes, Mark (Durham)

  Benn, Rt. Hn, Anthony Wedgwood

  Dormand, J. D.

  Hughes, Robert (Aberdeen, N.)

  Bennett, James (Glasgow, Bridgeton)

  Douglas, Dick (Stirlingshire, E.)

  Hughes, Roy (Newport)

  Bidwell, Sydney

  Douglas-Mann, Bruce

  Hunter, Adam

  Bishop, E. S.

  Driberg, Tom

  Irvine,Rt.Hn.SirArthur(Edge Hill)

  Blenkinsop, Arthur

  Duffy, A. E. P.

  Janner, Greville

  Boardman, H. (Leigh)

  Dunn, James A.

  Jay, Rt. Hn. Douglas

  Booth, Albert

  Dunnett, Jack

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

  Bottomley, Rt. Hn. Arthur

  Eadie, Alex

  Jenkins, Hugh (Putney)

  Boyden, James (Bishop Auckland)

  Edelman, Maurice

  Jenkins, Rt. Hn. Roy (Stechford)

  Bradley, Tom

  Edwards, Robert (Bilston)

  John, Brynmor

  Broughton, Sir Alfred

  Edwards, William (Merioneth)

  Johnson, Carol (Lewisham, S.)

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

  Ellis, Tom

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

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

  English, Michael

  Johnson, Walter (Derby, S.)

  Brown, Ronald (Shoreditch & F'bury)

  Evans, Fred

  Johnston, Russell (Inverness)

  Buchan, Norman

  Fernyhough, E.

  Jones, Barry (Flint, E.)

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

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

  Jones, Dan (Burnley)

  Butler, Mrs. Joyce (Wood Green)

  Fitch, Alan (Wigan)

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

  Callaghan, Rt. Hn. James

  Fletcher, Raymond (Ilkeston)

  Jones, T. Alec (Rhondda, W.)

  Campbell, I. (Dunbartonshire, W.)

  Fletcher, Ted (Darlington)

  Kaufman, Gerald

  Cant, R. B.

  Foley, Maurice

  Kerr, Russell

  Carmichael, Neil

  Foot, Michael

  Kinnock, Neil

  Carter, Ray (Birmingh'm, Northfield)

  Ford, Ben

  Lambie, David

  Carter-Jones, Lewis (Eccles)

  Forrester, John

  Lamond, James

  Castle, Rt. Hn. Barbara

  Fraser, John (Norwood)

  Latham, Arthur

  Clark, David (Colne Valley)

  Freeson, Reginald

  Lawson, George

  Cocks, Michael (Bristol, S.)

  Galpern, Sir Myer

  Leadbitter, Ted

  Cohen, Stanley

  Garrett, W. E.

  Lee, Rt. Hn. Frederick

  Coleman, Donald

  Gilbert, Dr. John

  Leonard, Dick

  Concannon, J. D.

  Golding, John

  Lestor, Miss Joan

  Conlon, Bernard

  Gordon Walker, Rt. Hn. P. C.

  Lever, Rt. Hn, Harold

  Corbet Mrs. Freda

  Gourlay, Harry

  Lewis, Ron (Carlisle)

  Cox, Thomas (Wandsworth, C.)

  Grant, George (Morpeth)

  Lipton, Marcus

  Crawshaw, Richard

  Grant, John D. (Islington, E.)

  Lomas, Kenneth

  Cronin, John

  Griffiths, Eddie (Brightside)

  Loughlin, Charles

  Crosland, Rt. Hn. Anthony

  Griffiths, Will (Exchange)

  Lyon, Alexander W. (York)

  Grossman, Rt. Hn. Richard

  Grimond, Rt. Hn. J.

  Lyons, Edward (Bradford, E.)

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

  Gunter, Rt. Hn. R. J.

  Mabon, Dr. J. Dickson

  Cunningham, Dr. J. A. (Whitehaven)

  Hamilton, James (Bothwell)

  McBride, Neil

  Dalyell, Tam

  Hamilton, William (Fife, W.)

  McCartney, Hugh

  472

  473

  McElhone, Frank

  Paget, R. T.

  Spearing, Nigel

  McGuire, Michael

  Palmer, Arthur

  Spriggs, Leslie

  Mackenzie, Gregor

  Pannell, Rt. Hn. Charles

  Stallard, A. W.

  Mackie, John

  Parker, John (Dagenham)

  Steel, David

  Mackintosh, John P.

  Parry, Robert (Liverpool, Exchange)

  Stewart, Rt. Hn. Michael (Fulham)

  Maclennan, Robert

  Pavitt, Laurie

  Stoddart, David (Swindon)

  McMillan, Tom (Glasgow, C.)

  Peart, Rt. Hn. Fred

  Stonehouse, Rt. Hn. John

  McNamara, J. Kevin

  Pendry, Tom

  Strang, Gavin

  MacPherson, Malcolm

  Pentland, Norman

  Strauss, Rt. Hn, G. R.

  Mahon, Simon (Bootle)

  Perry, Ernest G.

  Summerskill, Hn. Dr. Shirley

  Mallalieu, E. L. (Brigg)

  Prentice, Rt. Hn. Reg.

  Swain, Thomas

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

  Prescott, John

  Thomas,Rt.Hn.George (Cardiff,W.)

  Marks, Kenneth

  Price, J. T. (Westhoughton)

  Thomas, Jeffrey (Abertillery)

  Marquand, David

  Price, William (Rugby)

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

  Marsh, Rt. Hn. Richard

  Probert, Arthur

  Tinn, James

  Mason, Rt. Hn. Roy

  Rankin, John

  Tomney, Frank

  Meacher, Michael

  Reed, D. (Sedgefield)

  Torney, Tom

  Mellish, Rt. Hn. Robert

  Rees, Merlyn (Leeds, S.)

  Urwin, T. W.

  Mendelson, John

  Rhodes, Geoffrey

  Varley, Eric G.

  Mikardo, Ian

  Richard, Ivor

  Wainwright, Edwin

  Millan, Bruce

  Roberts, Albert (Normanton)

  Walker, Harold (Doncaster)

  Miller, Dr. M. S.

  Roberts,Rt.Hn.Goronwy(Caernarvon)

  Wallace, George

  Milne, Edward (Blyth)

  Robertson, John (Paisley)

  Watkins, David

  Molloy, William

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

  Weitzman, David

  Morgan, Elystan (Cardiganshire)

  Rodgers, William (Stockton-on-Tees)

  Wellbeloved, James

  Morris, Alfred (Wythenshawe)

  Roper, John

  Wells, William (Walsall, N.)

  Morris, Charles R. (Openshaw)

  Rose, Paul B.

  White, James (Glasgow, Pollok)

  Morris, Rt. Hn. John (Aberavon)

  Ross, Rt. Hn. William (Kilmarnock)

  Whitehead, Phillip

  Moyle, Roland

  Sheldon, Robert (Ashton-under-Lyne)

  Whitlock, William

  Mulley, Rt. Hn. Frederick

  Shore, Rt. Hn. Peter (Stepney)

  Willey, Rt. Hn. Frederick

  Murray, Ronald King

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

  Williams, Alan (Swansea, W.)

  O'Halloran, Michael

  Short, Mrs. Renée (W'hampton, N.E.)

  Williams, Mrs. Shirley (Hitchin)

  O'Malley, Brian

  Silkin, Rt. Hn. John (Deptford)

  Williams, W. T. (Warrington)

  Oram, Bert

  Silkin, Hn. S. C. (Dulwich)

  Wilson, Alexander (Hamilton)

  Orbach, Maurice

  Sillars, James

  Wilson, Rt. Hn. Harold (Huyton)

  Orme, Stanley

  Silverman, Julius

  TELLERS FOR THE NOES:

  Oswald, Thomas

  Skinner, Dennis

  Mr. William Hamling and

  Owen, Dr. David (Plymouth, Sutton)

  Small, William

  Mr. Joseph Harper.

  Padley, Walter

  Smith, John (Lanarkshire, N.)

  INDUSTRY [MONEY]
  Queen's Recommendation having been signified—
  Motion made and Question proposed,
  That, for the purposes of any Act of the present Session to repeal the Industrial Reorganisation Corporation Act, 1966 and dissolve the Industrial Reorganisation Corporation, it is expedient to authorise—

  (1) the payment out of moneys provided by Parliament of—

  (a) any sums required by the Minister of Aviation Supply or the Secretary of State for Trade and Industry for meeting any liability to which he becomes subject in consequence of the vesting in him by virtue of the said Act of the present Session of any property, rights or liabilities of the said Corporation; and

  468

  (b) any expenses incurred by the Secretary of State under or in consequence of any transitional or consequential provisions included in the said Act of the present Session in connection with the repeal of the said Act of 1966 or the dissolution of the said Corporation;

  (2) the payment into the Consolidated Fund of any sums required by the said Act of the present Session to be paid into that Fund.—[Mr. Patrick Jenkin.]

  10.25 p.m.
  Mr. Edmund Dell Mr. Edmund Dell (Birkenhead): It is clear that this Financial Resolution has been drafted deliberately to exclude an Amendment in Committee that would, for example, make it possible to specify a single industry, such as the shipbuilding industry, in respect of which the

  469
  powers and funds under the Industrial Expansion Act would be retained. That being the case, I recommend my right hon. and hon. Friends to vote against it.

  FIRE PRECAUTIONS BILL
  As amended (in the Standing Committee), considered.
  FIRE PRECAUTIONS BILL
    Clause 2

      PREMISES EXEMPT FROM S. 1
      10.38 p.m.
      The Minister of State, Home Office (Mr. Richard Sharples): I beg to move Amendment No. 1, in page 2, line 44, leave out paragraphs (d) and (e) and insert:
      (d) any premises appropriated to, and used solely or mainly for, public religious worship.
      Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I think that the House should realise that with this Amendment we are taking Government Amendment No. 4 and the Official Opposition Amendment No. 5, in page 17, line 43—Clause 12—at end insert:
      Provided that no premises which fall within section 2(d) and (e) of this Act shall be used for any purpose falling within section 1(2) unless the Secretary of State shall have made regulations governing the said use and the fire authority shall have satisfied itself that
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      the said premises conforms with the regulations in respect of the said use.
      Mr. James Wellbeloved: On a point of order. May I take it that, although the Amendments are being taken together, we shall be able to have separate Divisions?
      Mr. Deputy Speaker: Yes, if so desired.
      Mr. Sharples: In Committee there was quite a lot of discussion about the exemption, in Clause 2, of churches, although special provisions for including churches, if required, were made under Clause 12. I undertook to have another look at this matter in the light of comments which had been made.
      Two points seemed to bother hon. Members. One was that the definition of "churches" was not sufficiently accurate. In particular, the hon. Member for Rutherglen (Mr. Gregor Mackenzie) said that there was difficulty about the particular definition of "churches" in Scotland. In the light of that discussion, I put down this Amendment which meets, is intended to meet, and, I am advised. does meet, the points raised by hon. Gentlemen.

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      First, I think it is generally agreed that the conventional church as we know it presents a very small, if any, fire hazard to the people who go into it. I am told that the records for the last hundred years show that there has not been one instance of a person being burned inside a church.
      Second, there was a feeling and worry that some church halls might inadvertently come under the exemption provisions. The Amendment ensures that three tests have to be satisfied before premises can be exempted. First, the premises must be appropriate to public worship; that is to say, the building must be consecrated for that purpose or otherwise shown to be so appropriated. Second, the premises must be used solely or mainly for public religious worship, and this rules out halls and meeting places normally used for other purposes and used only occasionally for religious services, whether attached to a church or not. Third, the premises must be used for public religious worship. Premises in which religious services are held but to which the public are not freely admitted would not be exempt.
      Mr. Brynmor John: I hope that I shall not be considered discourteous if I say to the hon. Gentleman that his speech was very perfunctory indeed, in fact terse, because it presupposed a detailed knowledge of the debate, and, indeed, of the intention behind it, which is wholly unwarranted in the circumstances. I found particularly complacent the Minister's reference to the fact that churches do not present a high fire hazard. I do not think that we need an ecclesiastical James Watt Street fire before we introduce precautions against such a happening. The reality of the situation is that churches and chapels, by their very nature, constitute a fire hazard.
      For example, churches contain wooden pews which are highly varnished, and there is an excessive concentration of hymn books, bibles, and so on. All these things add to the fire hazards, whether there has never been a fire in a church, or not. One has to consider also the recent developments in heating churches and chapels. They now use forms of heating which were not formerly used, and these, too, add to the problems.
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      Another point to remember—and this was the hon. Gentleman's point in Committee—is that because of the inadequacy of their finances many chapels and churches find it difficult to carry out the expensive modifications necessary to provide safety. This lack of money not only provides an excuse for not carrying out the necessary modifications, but it also ensures that many churches and chapels continue to have heating systems which are inadequate from the point of view of safety.
      Far from welcoming the Amendment, we must press the Minister somewhat further, and I turn from discussing the inadequacy of the exits and entrances in many chapels and churches to deal with the Amendment tabled by my hon. Friends and myself, Amendment No. 5, which says:
      "Provided that no premises which fall within section 2(d) and (e) of this Act shall be used for any purpose falling within section 1(2) unless the Secretary of State shall have made regulations governing the said use and the fire authority shall have satisfied itself that the said premises conforms with the regulations in respect of the said use."
      The situation is that even under the Government Amendment, church and chapel buildings can be used for purposes other than public religious worship. When they are being so used, Parliament's main aim is to protect life. The main purpose is to avoid a repetition of the tragedies which have affected other types of public buildings.
      10.45 p.m.
      The cause for our concern and the reason for our Amendment is that there is no legal liability, for example, when a building which is properly part of a church or chapel is used for another purpose, such as education. When the local education authority maintains the fabric of a building it is responsible for fire precautions. But when the local authority uses part of a church or chapel for educational purposes there is no such liability on the local authority. The result is that children using the building may be unprotected. In my county, Glamorgan, no less than 24 churches or chapels, or parts of them, are used in connection with education. A dozen are used as dining centres, so that the period of highest concentration of pupils is at the meal time, which is therefore also

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      the maximum danger period. This is by no means uncommon.
      The incident at Brent the other day exemplified that in other parts of the country churches and chapels are used similarly. Unless regulations are made to cover that use, under Clause 12, they will be unprotected. The present power under Clause 12 is that the Secretary of State may do so if he thinks fit.
      This is a permissive Bill. What our Amendment seeks is not to compel the Secretary of State to make regulations, but to prevent premises being used for educational or other purposes coming within the ambit of Clause 1 until the Secretary of State has made regulations governing such use of those premises.
      Mr. Bob Brown: Would my hon. Friend not agree that, due to the cheeseparing attitude of the right hon. Gentleman the Secretary of State for Social Services in refusing loan sanctions for the building of midwifery and child welfare centres, in very many old church halls which are having to be used as midwifery and child welfare centres there are serious fire hazards to many people, especially to women in advanced stages of pregnancy, who would find the utmost difficulty in escaping from a fire?
      Mr. John: I thank my hon. Friend for his intervention. I agree. I was merely exemplifying the most common of such uses. As well as clinics, one could exemplify the use of these buildings as libraries, with the added high fire risk of books on the premises.
      The purpose of the Amendment is that until the Secretary of State has made regulations covering the premises for this type of use, the premises shall not be used for any of the purposes listed in Clause 1, and until the fire authority has examined the premises and seen them to be fit for the purposes from the fire risk viewpoint.
      The Amendment is moved with no spirit, at least, not for my part, of trying to penalise chapels and churches—they certainly owe a duty to those attending to make arrangements for any eventuality in the case of fire—but, as we believe that the main purpose of the Bill is the protection of life and the saving of unnecessary loss of life, the church or chapel should not be used for other pur-
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      poses unless regulations are in being and unless it is thought safe for that purpose.
      If the Government are not able to see a way to help the chapels and churches, let them undertake to consider this matter further and consult the chapels and churches with a view to providing some means whereby steps can be taken when chapels and churches are used for these purposes. The alternative is for the Government to withdraw the exemption given by this Measure.
      I am still not clear whether, under the Government's Amendment, a church hall is part of a place of public worship. It might easily be mainly devoted to that purpose, in which case the Amendment would seem to be weaker than the original Clause.
      Mr. Sharples: I thought that I had made it clear that a church hall is not covered by the exemption, assuming that the Amendment is accepted.
      Mr. Ray Carter: On a point of order, though it might appear to be an obscure one. The House will know that insurance companies will use this legislation as the basis for drawing up——
      Mr. Deputy Speaker (Miss Harvie Anderson): Order. That is not a point of order, as the hon. Gentleman will know.
      Mr. Carter: I say that by way of preamble to my point of order, and it is relevant to what I wish to say. Insurance companies——
      Mr. Deputy Speaker: Order. The hon. Gentleman knows that that is not a point of order for the Chair. It may be a point of debate at a later stage.
      Mr. John: I accept the Minister's assurance that a church hall is not exempted. In view of that, I hope that, under the Bill, the most stringent examination will be given to ensuring that church halls are fit for the purposes for which they are used.
      In many Nonconformist chapels, there are vestries and other parts used for just the purposes that I have described. Often they are below ground level, and the only access is a narrow flight of steps. Clearly, there are serious risks when such buildings are used for educational purposes, as clinics, and as libraries.

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      I hope that our Amendment will be accepted, because it is one about hon. Members on this side of the House feel strongly.
      Mr. John Golding: I, too, was disappointed when I heard the hon. Gentleman moving the Government's Amendment. There seemed to be not only a paucity of argument in support of it, but the argument itself was misleading.
      The Minister said that two matters bothered hon. Members about the subsection. One was the definition. The other was the separation of Scotland. We are now talking about a third objection which was raised by a number of hon. Members in Committee. Their objection was somewhat stronger. They said that churches and chapels should not be excluded. My hon. Friend the Member for Islington, South-West (Mr. George Cunningham) devoted a lot of argument in Committee to making sure that churches and chapels were included fully within the ambit of the Bill.
      The new definition is an improvement in two ways. First, it avoids the separation of England and Wales from Scotland. Secondly, it ensures that the Church of England and the Church of Wales are not named first, leaving the chapels to be covered as an afterthought at the end of the sentence, although to some extent the Bill still treats the chapels as an afterthought. I am reminded of the old saying that the Church of England is the Tory Party at prayer.
      The Minister said that there was no record of any person being burnt in a church since a certain date. He did not say "church or chapel", but "church" —a point of some significance. I do not think the Minister will argue that chapels do not burn. They do. There is in my constituency the remains of a chapel which was burnt down—fortunately with no people in it. My right hon. Friend the Member for Cardiff, West (Mr. George Thomas) told me tonight of a chapel caretaker who, on searching for a gas leak with a match, found one. Fortunately, the caretaker was alone in the chapel, and the explosion caused no loss of life.
      The Minister spoke of churches and he spoke in terms which I as a member of the Church of England could understand,
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      but which a person brought up in the chapel would not necessarily understand. He has said that church halls will be treated separately, but chapels do not have church halls. The difference between chapels and churches has been of wealth. Churches have often been built with donations from the owners of mineral rights, and churches have been able to afford separate halls. Because of their lack of wealth and funds—that is as true today as it ever was—chapel people often have to use one room for a variety of purposes.
      11.0 p.m.
      Mr. Gerald Kaufman: I am following my hon. Friend's argument with great care. Although I accept what he says and the charges he is making against the Government, I hope I am wrong in thinking that he is being a little exclusive. I hope that he will come to the question of mosques and Sikh temples.
      Mr. Golding: This I will not do.
      Mr. Joseph Ashton: My hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) has raised a very important point. Is my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) aware that, in many northern towns, Pakistanis have converted dwelling houses for religious use? For example, in the middle of a row of terraced houses, they could convert two houses for use as a mosque. In old houses there is great fire risk and they are concentrated in areas of heavy population. Should there not be adequate fire precautions in such premises?
      Mr. Bob Brown: I have been sympathetically listening to the case put by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), and with all due deference to him, I think that it is a first-class case. But I am sure that he would not wish to offend Methodists, Presbyterians and others who, like myself, were baptised as Anglicans but in adult life changed their Church. I myself, baptised an Anglican, in adult life went to a Methodist chapel. When he spoke of how the Minister had made his case, I took him to mean that Anglicans would understand it but that chapel-goers like myself would have the greatest difficulty in doing so. I hope that he will

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      put this matter into proper perspective, because I am sure that he does not want to give offence to chapel people or Anglicans turned chapel people.
      Mr. Golding: When I said that I would not talk about the problems of mosques, it was because I hoped that my hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) would put the case himself.
      Mr. Kaufman: I do not know whether I shall be able to catch the eye of the Chair. Since I have the privilege of representing several thousand Pakistanis, and since in Manchester we are in the happy position of having a new mosque being built, this is an important matter and not one to be taken lightly.
      Mr. Golding: I hope that my hon. Friend will deal with the question of mosques and synagogues. I represent a North Staffordshire constituency, and it is against the background of that experience that I must speak. I leave it to other hon. Members to speak for their own constituents against the background of their own experiences. I must make it clear to my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) that I would not want my position to be misunderstood. Before turning to the Church of England, I want to express the particular difficulties within the Nonconformist movement.
      Mr. Albert Booth: Before my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) turns to the long and complex problem of fire risks in the Church of England, since he has drawn a proper distinction between chapels in this matter, would he agree that it is appropriate to spend some time in drawing a distinction between those places where candles are lit so that persons can engage in prayer and those places where matches are struck to see if there is a gas leak?
      Mr. Golding: I wish to talk about the problems of candles later.
      Mr. Kevin McNamara: As one who was lighting candles in church only last week, and having burned my fingers, I should be grateful for any opportunity to develop this point later.
      Mr. Golding: There is often only one room in the chapel, and it is used not only for religious observances but for children's anniversaries, which will take place only once a year——
      Mr. James Callaghan: I hope that my hon. Friend will allow me to correct that inaccuracy. There are Sunday school anniversaries, church anniversaries, harvest festivals and festivals of the sea. I know of at least seven separate anniversaries which take place every year.
      Mr. Golding: But there would be one children's anniversary——
      Mr. Kaufman: I trust that my hon. Friend would include synagogues in this definition. Is it not a fact that Jews operate not only on the Gregorian Calendar but on their own calendar, in which the New Year occurs in September or October, so that Jews celebrating the anniversary of the State of Israel can celebrate it on two different days and have two anniversaries in the same year?
      Mr. Golding: I will speak from my own experience. I would stray if I talked about Sunday schools and taking home cake to one's brothers and sisters. These rooms, in the Welsh valleys and North Staffordshire at least, are used for political meetings. A Labour Member in a constituency like mine is expected, in a small village like Wood Lane, the birthplace of my hon. Friend the Member for Jarrow (Mr. Fernyhough), to speak at the chapel as well as the club.
      Discussing this matter with some Welsh Members tonight, I found that this room can also be used for concerts. The picture emerges of a room used for religious observance, but also the social and cultural focus of community life.
      Mr. Eddie Griffiths: In his references to concerts in places of worship in Welsh valleys, would my hon. Friend distinguish between a concert and the usual Welsh cultural activity which we call eisteddfod?
      Mr. Golding: Never in my life have I spoken for Wales and I do not think that any English Member would dare to do so.
      Mr. Ashton: My hon. Friend is perhaps aware that the Bill does not apply to

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      Northern Ireland where chapels are often places of great distress, incendiary places where all sorts of prevarications take place. Yet the Bill recommends that the Northern Ireland Parliament take account of what is in the Bill. Are we not setting a bad example of Northern Ireland?
      Mr. Golding: My lion. Friend the Member for Ardwick will not only speak for the minority interests here, but for Northern Ireland, if he is able to catch the eye of Mr. Deputy Speaker. I have drawn a picture of the room in the chapel. Then a lawyer comes along and says "Look at this room." So we have the words
      "… any premises appropriated to, and used solely or mainly for, public religious worship."
      That is meaningless in the type of chapel situation I have described. The Minister has been thinking of a Church of England church with separate buildings and has not had the single room in his mind. That was the point made in Committee which the Minister obviously did not take. He does not understand the subtleties and differences.
      We have a problem in establishing the exemption of a room used for a kiddies' anniversary. Can anyone imagine someone coming along and saying, "Clause 12 will apply to the chapel and we will draw up rules and regulations, because once a year this is used not as a chapel but as a place for a kiddies' anniversary"? Clause 12 will not be operated. Assume the place is used for election meetings. If there is this minority use, will someone come along and say that, because once every so often the room is so used Clause 12 should be invoked? They will not bother; they will take a chance and that is the indictment of the Clause.
      11.15 p.m.
      Mr. Ashton: Does my hon. Friend agree that the inclusion of the Clause could very well increase insurance premiums on places of worship, because they are not compelled to provide safety precautions against fire?
      Mr. Golding: That is another valid point. I hope that my hon. Friend has the opportunity to explain it in detail later. I am not so worried about the insurance premiums. What I am worried about are assurances. Why were the churches and
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      the chapels exempted from the legislation? This is not very clear from the Second Reading debate or the exchanges in Committee. One reason put forward was that assurances had been given to the leadership of the churches and chapels that they would not be included. Some hon. Member felt very strongly about this. When we were discussing the Merchant Shipping Bill last year several hon. Members on this side were infuriated to be faced with the argument that changes could not be made because promises had been made to people outside the House before the Measure came before the House.
      Mr. McNamara: When the Labour Government had this brought to their attention they tried to accommodate hon. Members on many occasions on particular things in that Bill. That could well be an example for any other Government.
      Mr. Golding: I am pleased that my hon. Friend has corrected me. It is true that the Government then were willing to tell people outside, "We have received even stronger representations from Members of Parliament."
      Mr. Booth: Has my hon. Friend overlooked that if the Government tried to accommodate hon. Members on this matter by a subsequent change in another place there is a very special body of church representation in that other place, and we could not be assured that it would receive the objective consideration that it has in this House?
      Mr. Golding: That is a very valid point. I would never on principle accept a situation whereby we were told in this House that the changes must be made elsewhere. We are here to bring about changes in this House. That is why we must tonight draw attention to the inadequacy of this provision in so far as it relates to churches. We understand that assurances have been given to church leaders. What considerations have led those leaders to ask that churches and chapels be exempted from the full provisions of the Bill? We can only surmise. We can appreciate that perhaps not the Church of England so much but certainly the chapels would be faced with crippling bills if the Measure were applied to them. It is a possibility that the cost of applying the Bill has led the church leaders to take a chance. Also, the Bill imposes

      485
      certain obligations; it will make life more difficult for the people upon whom the responsibilities are being put.
      Again, this can be a reason why the leaders have come and said, "Please do not apply this legislation to the churches and chapels." Of course, we have to appreciate their difficulties, because the chapels have not a great deal of money. One reason they are prepared to take the chance is that there has not been a major disaster there. What we want to argue tonight is that one should not take that chance; the leaders of the churches should not be taking that chance, because they are literally playing with fire. Often, it would not be they who would be taking the chance. What they are asking is that their congregations take the chance. I take the point my hon. Friend the Member for Newcastle-upon-Tyne, West was making, that we may be misunderstood by the chapels. It must be driven home that we are not concerned to add additional burdens to the deacons or anyone else, and that what we are concerned about is that they explain very carefully to their congregations the type of risk which is taken and the type of risk they are asking the Government to take on their behalf.
      Mr. Charles R. Morris: I am impressed by the clarity of my hon. Friend's mind, and I am sure he would not wish to be unfair, but there does seem to be a difference between his approach to the financial position of the chapels and his approach to the financial position of the churches. We have all heard the expression, "Poor as church mice." Quite frankly, speaking as an Anglican, I am surprised by the way he constantly refers to the Church of England. I think of my local parish church on a council house estate. It is the only parish hall on the estate. It is the practice for that parish hall to be used for a variety of purposes. Yet that church is beset with continual financial problems. I hope that, in his wisdom, my hon. Friend will take that point into consideration.
      Mr. Golding: I am most impressed by that intervention, although I confess that I have in mind, when talking of the finances, the relative poverty of the chapels, for they are poor, and have not the wealth one realises is behind the
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      Ecclesiastical Commissioners. I apreciate that individual churches are poor; I appreciate that vicars and curates are among the most badly paid men in our society, though they are men doing a useful job in our society; but, above that level—in the cathedrals—there is wealth. The Ecclesiastical Commissioners have great wealth at their disposal. This is why it is important to separate out the church and the chapel, because I shall be arguing later that there is no reason for the Church of England to have asked for this exemption.
      Mr. Kaufman: Surely my hon. Friend is being a little exclusive, "Church" does not necessarily mean a Church of England church; there are Catholic churches as well. I hope that his attack —with which I should not associate myself—upon the Church of England does not include the Catholic Church, to which his remarks do not apply. Indeed, in my constituency it is labouring under grave disabilities, because of the failure of the Government to amend the law satisfactorily in order to help it raise money for school building.
      Mr. Golding: I was distressed to hear my hon. Friend the Member for Ardwick, use the word "attack". I have not attacked the Church of England; I have merely said that it is wealthy. If every time we described a man as wealthy we were accused of attacking him, we should live in a state of war—and I say that looking at the benches opposite.
      Mr. Ashton: Is my hon. Friend aware that one of the reasons why the churches are now having difficulty is the dilatoriness of the present Government about amending the Gaming Acts? Somebody has found a loophole in the Acts with regard to whether or not churches are taxed as charities and so on, and every charitable organisation is now distressed. We on this side of the House have been waiting for some months for the Home Secretary's Department to amend the legislation, to enable those people to install proper fire equipment, and much of the poverty that exists in the churches is the fault of the Government.
      Mr. Golding: It is very important indeed that church and chapel, and the Roman Catholic church, obtain a reasonable income from which they can not

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      only pursue their own faiths, but can also meet the provisions of this Bill. What one must think carefully about is the fact that it is probably because of lack of money—and we have not been told; I am having to test the Minister by speculating—that the chapels cannot provide adequate safeguards against fire. I am saying that there appears to be a lot of money in the Church of England, but I am not saying that that is a bad thing.
      Mr. David Stoddart: My hon. Friend has been very tolerant, and I thank him for that. But I am quite sure that he would not wish hon. Members to feel that he was in any way antagonistic towards the Church of England. He will especially bear in mind that the Church of England may very well be moving to the left in view of the recent pronouncements by the Archbishop of Canterbury about apartheid. He will perhaps want to modify his view that the Church of England is a place for the Tory Party to pray, and if the Church of England carries on with its progressive pronouncements the Tories may very well have to find somewhere else to pray.
      Mr. Golding: I hesitate over the intervention of my hon. Friend the Member for Swindon (Mr. David Stoddart), because he has introduced a sour political note into the debate this evening. I do not think that this is a matter of any significance. I take the point that we must not be antagonistic towards the Church of England, and I acknowledge that in speaking strongly for the chapels I had my own interests in mind. But we must have better reasons than we have been given for the exclusion of churches and chapels from this Bill. We must be given better reasons for taking chances. If it is thought necessary to take parlimentary time to legislate for other buildings, it is necessary to legislate for chapels and churches, too. The onus of proving that they should be exempt lies four-square with the Government.
      11.30 p.m.
      I want to suggest a few reasons why it is important to include them in the Bill. My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) asked me not to mention candles, but he was not the first to use
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      this argument and draw attention to its importance. In Committee, my hon. Friend the Member for Islington, South-West drew attention to the problem that exists where candles are lit and where there is an abundance of cloth and other material. Anybody will appreciate that where there is a fire, there is a fire hazard. With the burning of candles, one has a situation which could lead to a fire hazard.
      There is one difference today from 50 years ago. In lighting a candle where there is oil central heating, there is the possibility of hazard. Fifty years ago, there was no hazard with the pile of coal in the corner. Oil is a new hazard. Natural gas is a new hazard.
      Hon. Members: Hear, hear.
      Mr. Michael English: I would like to correct my hon. Friend. On two occasions, as I recollect, rather than on merely one occasion, Canterbury Cathedral was burnt down in the Middle Ages, when fire was a considerable hazard to churches. We can assume that in this day and age, when oil has been added, the hazard has not become any less than it was in the Middle Ages.
      Mr. Golding: Representing a coal mining constituency, I would say that the hazard from gas and oil is infinitely greater than the hazard from coal. When I spoke of the hazards of natural gas, hon. Members opposite said "Hear, hear"—
      Mr. James Hill: When talking of the danger of lighting a candle, would not the hon. Member agree that if he lights it at both ends, the danger is at least doubled? This is the most dangerous part of what he has said.
      Mr. E. Fernyhough: I was asked to come in because my hon. Friend was making a significant contribution. A moment or two ago, he said that where there was a fire, there was a fire hazard. I submit to him that where there is a fire, there is a fire. There could be a fire hazard—that is, the possibility of a fire—without a fire having occurred. Will my hon. Friend, who is well-informed on this subject, explain the difference between a fire and a fire hazard?
      Mr. Golding: When he speaks of burning the candle at both ends, perhaps the

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      hon. Member for Southampton, Test (Mr. James Hill) is referring to events in Manchester during the past fortnight.
      Mr. Kaufman: What does my hon. Friend mean by that? These are serious matters, and there are several hon. Members from Manchester who would like to know.
      Mr. Golding: I think that the difficulty which my intellectual hon. Friend the Member for Ardwick has is that he starts his reading of the newspaper from the front page, whereas most of us start at the back page.
      Mr. English: As regards a paper in Hebrew, my hon. Friend may not be correct.
      Mr. Golding: I cannot allow to pass unnoticed the conundrum posed by my hon. Friend the Member for Jarrow (Mr. Fernyhough). I have referred already to the situation in Wood Lane, the village where he was born and in which he is much revered. As he says, there is a difference between a fire and a fire hazard. There can be a fire hazard without fire, but not, I think, in the circumstances we are discussing. If my hon. Friend had been listening for the last half-hour, he would have realised that we are arguing on a narrow point.
      Mr. Fernyhough: Although I have been denied the privilege of listening in person, my envoys have been constantly moving back and forth to keep me well informed of every observation by my hon. Friend.
      Mr. Golding: To return to the——
      Mr. Clinton Davis: In the smaller places of worship, a fire risk is often created by the use of a paraffin stove. Will my hon. Friend direct his attention to that before returning to whatever it was he was about to return to?
      Mr. Golding: By a strange chance, that was the very next point I had noted down.
      Mr. Kaufman: Before he passes from the question of candles, may I direct my hon. Friend's attention to the situation in this House? Worship takes place here on every sitting day. There are many places which, under the Amendment, might be regarded as established
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      places of prayer in which worship takes place far less frequently than once a day. If they are defined as places of religious worship, might not this House also be regarded as a place of religious worship? During the recent work to rule by the electricity workers—or should I say the dispute provoked by the Government—electric lighting was not available in this Chamber and hon. Members brought in candles and thereby exposed this building to fire hazard. The Wilberforce Committee, a loaded committee consisting of two known supporters of the Conservative Party, one a former candidate for Hull, is considering its report. Lord Wilberforce said it would report——
      Mr. Speaker: Order. Interventions must be brief.
      Mr. Kaufman: If the Wilberforce Committee reports in a way that is unsatisfactory to the power workers, it may be necessary for them to resume working to rule, in which case hon. Members may have to bring in candles to the Chamber once again.
      Mr. John Gorst: Mr. Speaker, is it not necessary for interventions to be relevant to the matter under discussion?
      Mr. Speaker: Order. What I have been waiting anxiously for is somebody to talk about the Amendment.
      Mr. Golding: Possibly, Mr. Speaker, you are at some disadvantage in that you were not present when I started the argument.
      Mr. Speaker: Order. I was referring only to what I have listened to since I have come into the Chamber.
      Mr. Golding: This places me in some difficulty. I do not want to go over all my arguments again.
      Mr. Bob Brown: On a point of order. I am sorry that you were not in at the commencement of the debate, Mr. Speaker. Had you been here to hear the Minister's speech, you would understand why hon. Members on this side of the House are putting probing points, as it were, to try to elucidate some information for the hon. Member for Newcastle-upon-Lyme (Mr. Golding), who in his turn is trying to draw from the Minister the type of thing we ought to have had from the Minister if he had treated the House properly.
      Mr. Speaker: Order. That is not a point of order. What was puzzling me was that the hon. Member for Newcastle-under-Lyme needed so much help.
      Mr. Golding: I have thought about that matter on several occasions, Mr. Speaker, and I intend to raise it in another place as a slight on my professional competence.
      I was trying to get away from candles and had been reminded about paraffin, although we do not call it paraffin any longer. We refer to oil stoves. If I use the phrase oil stove, the House will appreciate that I mean paraffin stoves.
      Shortage of money—and this, Mr. Speaker, is where you have not quite seen the argument—may itself be a fire hazard. It may be the very reason why the chapels should not take the chance. It may be the reason this Bill should be applied to all places in which religion is practised.
      Where there is a shortage of money in the coffers, there could be faulty heating apparatus. This was a point constantly made in Committee to the Minister. He has not mentioned this argument at all tonight. In fact, what distressed us was the way in which he failed to consider and answer the serious points put to him in Committee. It was derisory treatment of his own Amendment. Because of the lack of money, it may well be that one will get faulty heating apparatus.
      11.45 p.m.
      Another point concerns the paraffin stove, the oil stove. We all know that oil stoves are used in many religious buildings. We know from the statements of coroners and articles in the Press that oil-burning appliances are very hazardous indeed. They are dangerous. They can be particularly dangerous to two classes of person who tend to be in the majority in their use of churches and chapels. I refer to the young and to the old. I do not think that this point has been made before. When dealing with the normal congregation, we are not dealing with a cross-section of the population; we are dealing with a group which is often comprised of the elderly and the very young. It is in these circumstances that we must pay attention to fire hazards.
      Mr. Clinton Davis: I am grateful to my hon. Friend for giving way in this generous manner. It is true, is it not, that in these small places of worship,
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      particularly with small groups of the population, displays of evangelical fervour, often in crowded rooms, can add to the fire hazard? Does my hon. Friend agree?
      Mr. Golding: At an early age I worked for the Cheshire County Fire Service as a clerk on the switchboard. I could tell hon. Members of my experience. However, if I did so, you, Mr. Speaker, would probably consider it irrelevant. There is no need for me to make such a personal contribution tonight, because we have with us an hon. Member who has great experience of the Fire Service which he will no doubt relate to us if he catches your eye, Mr. Speaker.
      Mr. Ashton: Does my hon. Friend agree that one of the biggest disasters in recent months was the tragedy at Ibrox Park which took place when people were in a very emotional state because of goals being scored? Is that not a parallel with chapels and churches where people also get emotional through religious fervour, the singing of hymns, and so on? If a tire occurs it becomes a dangerous place.
      Mr. Golding: I do not accept that. This is the kind of matter about which the expert whom we have with us tonight, my hon. Friend the Member for South Ayrshire (Mr. Sillars), will be talking later.
      I recall that an earlier interruption concerned the smallness of the room. Wherever a number of people gather together, particularly where they are very young and very old, and there are oil burners or paraffin stoves, there is a fire hazard. It is important that in these places certain basic rules should be applied.
      I was told tonight of two fire hazards that could exist in Welsh chapels.
      Mr. Kaufman: Earlier on my hon. Friend said that he would not deal with Wales because he did not feel equipped to deal with that country. I am interested to know why he has changed his mind.
      Mr. Golding: It could be because of growing confidence. I shall not deal with the Welsh problem, but merely take an example from Wales.

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      A Welsh lady told me tonight about what she considered to be a fire hazard in Welsh chapels. She had in mind the ladies' gallery in those chapels. As there is normally only one door for entry and exit in a chapel, there can be a fire hazard in the most normal circumstances.
      Interjections apart, I think that I have made out a prima facie case for the Government's accepting the onus of proving that there is no reason for chapels and churches to be fully covered by this Measure. We are not satisfied with the reply that Clause 12 can be invoked if necessary because, when a discretion of this sort is given to people who are badly overworked—and I am sure that my hon. Friend the Member for South Ayrshire (Mr. Sillars) will have a lot to say about the overworked Fire Service—one has reason to think that it will not be used as it should be. In those circumstances, the onus is on the Government to demonstrate clearly why the Bill should not be applied to chapels and churches.
      There has been a certain amount of hilarity during my contribution. This was inevitable in the circumstances, but there is a serious point to be made. If there is a disaster of the kind to which I have referred, we on these benches will place the responsibility for it full square where it should rest. We feel very strongly about anyone taking a chance by not providing proper safeguards, merely to save himself the trouble of doing so, or to save expense.
      I have dealt with the genuine chapels and churches, but in Committee another point was raised, and it has not been dealt with by the Minister tonight.
      An Hon. Member: He did not deal with anything.
      Mr. Golding: That is true. The hon. Gentleman tried to mislead us. His speech showed his contempt for the House. In Committee several of my hon. Friends argued that it would be very easy for groups wanting to claim exemption from the provisions of this Measure to establish themselves as religious groups. This would be easy. We are not clear who has the responsibility. The duty of a Government spokesman is to bring in some clarity, and not to mumble at the Dispatch Box for two minutes and then sit down. That is contempt.
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      On this point we are not clear as to how the situation has been changed by the introduction of the new wording. In Committee, hon. Members were told that, for the purposes of the Bill, religious groups would be determined in the same way as in the rating process. Will the new wording alter that? If it does not, a serious situation will easily arise by the use of village halls by hippy-type individuals claiming that they are a manifestation of some new cult or religious community. if one establishes oneself in a shack, only Clause 12 will apply. The whole Act will not apply. I am not sure that these hippy groups exclude lawyers, and if the hippy lawyers were to argue in this way—there are many worse things which I could say about the lawyers in the House——
      Mr. Clinton Davis: I agree with much that the hon. Gentleman has said, but it is a little cheap to mount yet another assault on the profession which I represent, which at present is fighting desperately for its rights on the Courts Bill. My hon. Friend the Member for Barons Court (Mr. Richard) represents the Bar. It seems that the hon. Gentleman is spoiling his speech by constant unjustified attacks upon the legal profession.
      Mr. Golding: The interjection puts the matter in perspective. The viciousness of my attack was not directed at the lawyers who litter these benches but at the hippies. We should have to apologise to them for even suggesting that they would take into their communities the professional lawyer.
      The point was seriously put in Committee, and it has not been answered, that if a pop group, a hippy group or any group says to whoever has the responsibility, "We are a religious community". what will be the response? What procedures are there under this Measure for determining what is a religion? The legislation is badly drawn if it empowers an inspector to decide whether a person's beliefs should be dignified by the word "religion".
      12 midnight.
      I feel strongly that the Government would be well advised to put the same restrictions and controls on churches and chapels that they are putting on other buildings. If they are not prepared to do that, they owe us a full explanation

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      of their reasons for putting at risk all those who go to churches and chapels.
      Those are my points. I have spoken briefly because I wanted to echo the brevity of the Minister, and I am sure that my points will be developed by many of my hon. Friends.
      Several Hon. Members Several Hon. Members rose——
      Mr. Speaker: Mr. Sharples.
      Mr. McNamara: On a point of order, Mr. Speaker. You have called the Minister, who was the last hon. Member to speak from the benches opposite, when clearly a great many of my hon. Friends wish to speak and to examine carefully the definition given by the hon. Gentleman in moving his first Amendment. This is of tremendous importance. In addition, my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees), who has an Amendment in his name, did not rise, knowing that other hon. Members wished to speak. With respect, is it not against the conventions of this House to call the Minister to reply to the debate when other hon. Members wish to speak?
      Mr. Speaker: Order. The selection of speakers is a matter for the Chair. It is a difficult responsibility, not made easier by this sort of point of order. It is not for me to criticise the content of speeches, but I can take a certain view of their length.
      Mr. Hugh Jenkins: Further to that point of order. My hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) has raised a number of points of a general character. However, some of us were members of the Standing Committee which considered the Bill, and I, for one, wanted to raise a number of rather more detailed matters. There is considerable doubt about the meaning of some of the words in the Government's Amendment, for example. In addition, I wanted to raise two specific matters, hoping that the Minister would clarify the position in his reply. Though I always hesitate to question a Ruling from the Chair, I hope that you will feel able, in view of what I have said, to give hon. Members on this side of the House the opportunity to raise points on which they would like clarification.
      Mr. Speaker: It may be that the Minister will give way to hon. Members, when they will be able to put their points to him. But hon. Members have to realise that very, very long speeches have the effect of squeezing out other hon. Members who may want to speak.
      Mr. John Mendelson: Further to that point of order——
      Mr. Speaker: There can be no further point of order on my selection of speakers.
      Mr. Mendelson: On a new point of order——
      Mr. Speaker: On a new point of order. Mr. Mendelson.
      Mr. Mendelson: Many of my hon. Friends and hon. Members opposite will bear me out when I say that one's experience of Committee stages is that, if a Minister makes only a brief speech in moving an Amendment, it is customary for hon. Members on the back benches to have an opportunity to deploy their arguments, not merely by interrupting the Minister's reply, as you have suggested, but by making their points in their own way. Then it is for the Minister to wait a little before rising to speak a second time. That is the point of order that I put to you, Mr. Speaker.
      Mr. Speaker: That is not a point of order. The Chair must form its own judgment on these matters. I have heard repeatedly encouragement to the Minister to answer certain questions, and I am now giving him the chance to do so. Mr. Sharples.
      Mr. Wellbeloved: On a point of order.
      Mr. Speaker: if it is to do with the selection of speakers I will not take it. No point of order arises.
      Mr. Wellbeloved: My point of order is to do with the procedure. So far only two hon. Members on the Opposition side have spoken. I am not querying the selection of speakers. I only hope that this is not a prelude to a Closure Motion on a matter of such vital importance as this.
      Mr. Speaker: That again is not a point of order. These are not matters on which the Chair makes its own rules. The House makes the rules; in entrusts

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      certain authority to the Chair. The selection of speakers and the decision when the Chair should accept a Closure Motion are invested in the Chair by the rules of the House. The Chair does not take upon itself these matters. Mr. Sharples.
      Mr. Carter: On a further point of order. You said, Mr. Speaker, that those Members on this side of the House who had not had an opportunity to put their point of view could ask the Minister to give way. How do we know that he will give way?
      Mr. Speaker: The hon. Member does not know. Mr. Sharples.
      Mr. Kaufman: On a further point of order. Totally accepting what you say, Mr. Speaker, and not challenging it in any way, am I to understand that the fact that you have called the Minister does not necessarily mean that that is the end of the debate and, if in your judgment you think it appropriate, you will, after the Minister has finished speaking, perhaps decide to call other speakers from both sides?
      Mr. Speaker: No Motion has yet been made. I will form my own judgment at the time. Mr. Sharples.
      Mr. Sharples: I think it would be convenient if I intervened at this stage. We have spent some time on this question of churches. I put down my Amendment in the genuine belief that it would meet the reasonable points which were discussed in Committee in a reasonable way—perhaps not in the way in which they have been discussed this evening——
      Mr. Callaghan: I am obliged to the hon. Gentleman because he has said that he is intervening, and that means that he is not winding up the debate. We are a little concerned because the sinister figure of the Patronage Secretary has flitted across the House, and there are other points which hon. Members wish to take up. All I ask the Minister to do is to represent to his hon. Friend the Patronage Secretary that, if he wants to make progress on the Bill, in view of other things that have happened, he should not move the Closure Motion, and I recommend him not to do so at the end of the Minister's speech.
      Mr. Sharples: I am sure my hon. Friend the Patronage Secretary will have overheard what was said by the right hon. Gentleman, but that is not a matter for me.
      The hon. Member for Pontypridd (Mr. John) spoke about the Amendment in the names of the hon. Member for Leeds, South (Mr. Merlyn Rees) and himself, which goes much further than my Amendment. I am not sure that it was appreciated by those who put down the Amendment that its effect is that as soon as Clause 1 comes into effect—which would happen very quickly after the Bill is passed—worship in all churches and chapels will have to stop until regulations are made under Clause 12 relating to the use of churches for worship, and until all churches had been inspected for the fire authority to see that they complied with these regulations.
      Mr. John: I do not think the hon. Gentleman can have read the Amendment with the great care that he habitually uses. It provides that
      "… no premises which fall within section 2(d) and (e) of this Act shall be used for any purpose falling within section 1(2) …"
      Those purposes include:

      "(a) use as, or for any purpose involving the provision of, sleeping accommodation;

      (b) use as, or as part of, an institution providing treatment or care;

      (c) use for purposes of entertainment, recreation or instruction or for purposes of any club, society or association;

      (d) use for purposes of teaching, training or research;".

      It is not our purpose to prevent the use of premises as churches, but to try to prevent their being used for outside purposes when they are unfit by reason of being a fire hazard for such use.
      Mr. Sharples: I appreciate that point but the hon. Gentleman has overlooked the terms of Clause 1(2)(e), which reads:
      "use for any purpose involving access to the premises by members of the public, whether on payment or otherwise."
      I am advised that, if the Amendment were accepted, it would mean that worship in all churches would have to cease until regulations were made under Clause 12. I am sure that is not what he intended.
      The hon. Gentleman for Pontypridd and the hon. Member for Newcastle-under-Lyme (Mr. Golding) spoke about

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      church halls and buildings which might be used as libraries or for school meals and so on. These buildings would not be premises appropriate to a use solely or mainly for public religious worship. They would be caught by the Bill if they were used mainly or even largely for purposes of that kind. There is provision in Clause 12 to catch any premises which might be used for purpose of that kind occasionally. The generality of buildings used in that way and not solely or mainly for worship would be caught by Clause 12 as it stands.
      Mr. Carter: I tried to raise a point of order earlier which I concede was rather obscure. Nevertheless, it is a point which requires answering at this early stage in the debate. It concerns fire insurance. Chapels and church halls require to be insured. The Bill will be used by the insurance companies to determine their insurance policies. But nowhere in the Bill is "fire" defined. This must be answered because it is critical to the Bill. What constitutes fire? I looked up the legal definition in "Words and Phrases":
      "There is no fire within the meaning of a policy of fire insurance unless there is ignition either of the property insured or of the premises where it is situated. Heating or fermentation not accompanied by ignition is not sufficient. That which is ignited must be something which was not intended to be ignited. Hence, if property which is in proximity to a source of heat in an ordinary house is damaged by the excessive heat thrown out but is not actually ignited, the damage is not within the policy, since there is no ignition, except such ignition as was intended, and nothing has been burned except that which ought to have been burned."
      This is a critical point for the Bill——
      12.15 a.m.
      Mr. Speaker: Order. If the Minister gives way, the hon. Member must make a short intervention. I think that he has already gone his whole length.
      Mr. Carter: Thank you, Mr. Speaker. This is, nevertheless, a critical point for the Bill and may cause considerable confusion within insurance policies unless we write in a precise definition of what constitutes fire. At this early stage in the debate, the Minister should make his intentions clear.
      Mr. Sharples: That point, of course, goes far wider than the simple question
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      of churches. Also, the Bill is not concerned with the protection of property but with the protection of life. The insurance question arises almost wholly in respect of property.
      Mr. McNamara: I am concerned about the Minister's definition of "solely or mainly", because of the developments in ecclesiastical architecture, whereby the main body of what is generally used as the church for appropriate services is used for other purposes as well, but the altar area may well be partitioned off. Is the criterion the main purpose for which it is built—the holding of religious services or is it the fact that it may be used for other purposes, which may take up more time than the services?
      Mr. Sharples: It is not the purpose for which the building is built but the use to which it is put. A building may be built as a church and would not be exempt for that reason if it were used for other purposes.
      The main theme of the amusing but somewhat long speech of the hon. Member for Newcastle-under-Lyme was simply that churches and chapels should not be excluded in this way. We rambled into different kinds of churches and things like that. This is a straight difference of opinion between us. We believe that churches and chapels should be excluded because there is no appreciable fire hazard to people inside them. The hon. Member has different views. It will be for him and his hon. Friends to express their opinion in the Lobby.
      The Parliamentary Secretary to the Treasury (Mr. Francis Pym)rose in his place and claimed to move, That the Question be now put.
      Mr. Speaker: The Chair is very much affected by the length of speeches in a matter of this sort. I am not prepared to accept the right hon. Gentleman's Motion now. I am prepared to allow one or two short speeches.
      Mr. Hugh Jenkins: I will keep my speech brief but I want to press the Minister to reply in a little more detail on the wording in the Amendment. I accept what he has said, that the Amendment is tabled with the object of meeting points made in Committee by hon. Members. The question to which I wish to

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      address myself is whether it succeeds in meeting our objections. I rather suspect that it does not, although it probably was intended to do so.
      I want to press the Minister on two matters. First there is the question of "soley or mainly". He has given us an example of the question of use and I would invite him to intervene during my speech to answer my question. Often a church has attached to it, or adjacent to it, a memorial hall, which may be built in materials inferior to that in which the church is constructed, from a fire hazard point of view. The church is being used regularly for normal religious purposes, two or three times on Sundays, once or twice a week for choir practice and so on. As against that the church hall is used fairly frequently for dances, gatherings, and so on. In these circumstances, does the Minister say that such a building would or would not be excluded from the operation of this Measure, as a result of the Amendment?
      Mr. Sharples: It would be excluded.
      Mr. Jenkins: That is a satisfactory answer but I wish it could be more clearly expressed in the Bill. Perhaps the hon. Gentleman will undertake to look at this again between the time when the Bill goes to another place and returns to this House. That assurance is entirely acceptable, but it would be better if it were spelled out a little more clearly.
      The only other point is the question of a public religious service and what accurately constitutes such a service. At one time it was possible to be fairly clear about what a religious service was. With the increasing informality in religion it seems that from time to time there are occasions, one might almost say happenings, which may or may not be regarded as religious services. Perhaps some definition of what constitutes a religious service is necessary.
      What I would commend to the hon. Gentleman is that there should be included in another place some definition Clause which will define what is meant by "solely or mainly" and what is meant by a religious service. If this were done the hon. Gentleman would have gone a considerable way to meeting our objectives. At the moment I do not think that he has gone as far as he thinks he has.
      Mr. Booth: We should be less than fair to the Minister if we did not recognise that the Amendment is a genuine attempt to improve the Bill, and was made very properly in response to representations in Committee.
      It is a measure of the great interest in the Bill that we see so many hon. Members here tonight who did not serve on the Committee, including myself. We have become accustomed over several years to find that Report stages have been almost a club for those who serve on the Committee, but that is not the case tonight. I therefore feel justified in pressing upon the Minister certain points that seem to me to be direct and pertinent.
      First, we need a better definition of what is meant by the expression "mainly for". If it means that the building's use for any one other purpose is not greater than its use for worship, that will be clear. But we are not clear whether it would cover the case whether, for example, the building was used eight hours a week for worship, six hours a week for bingo, five hours a week for whist, and three hours a week for the women's sewing circle, so that all activities other than worship combined made up a much longer time than that spent in worship.
      Second, when the Minister initially referred to the low fire risk that is generally assumed with churches and other places of worship, he must have been referring to traditional church buildings. But we are moving into an era in which it is possible that there will be many new forms of church construction, with many new building materials brought into use. Therefore, it is only fair to urge that caution be used in making references to past, known fire hazards when preparing a Bill that will operate into the future.
      Third, why does the Amendment refer to
      "public religious worship"?
      I accept that we can make a legal distinction between public and private religious worship, but I cannot understand how we can define a difference in fire hazard to human life in those terms. I cannot see that the fire hazard will have greater respect for human life if it is in a place where there is private religious worship than in a place where there is public religious worship. Therefore, it seems to me that the word "public" in the

      503
      Amendment is unnecessary or dangerously misleading.
      Fourth, central heating used in church buildings is somewhat different from that used in other public places. Many of us can think of places of worship in our constituencies that require rapid heating for the weekend after having stood cold for five or six days. This introduces a special aspect of fire risk.
      Last, I return to the point so eloquently raised by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding). Is it right to distinguish on the ground that a place is used for worship, if one is really seeking, as the Minister is properly seeking in the Bill, to safeguard human life from fire hazard? If we are to recognise that as the prime purpose of the Bill, we must recognise that in the Amendment the Minister is departing
      from a principle on which he claims the Bill is based.
      Mr. Pym Mr. Pym rose in his place and claimed to move, That the Question be now put.
      Question put, That the Question be now put:—
      The House proceeded to a Division—
      Mr. Wellbeloved: On a point of order, Mr. Speaker. Is it not unprecedented for a Closure Motion to be moved before the Opposition's chief spokesman has joined in the debate?
      Mr. Speaker: There can be no possible point of order at all on my acceptance of the Closure.
      The House divided:—Ayes 143, Noes 36.

      Division No. 76.]

      AYES

      [12.28 a.m.

      Adley, Robert

      Hannam, John (Exeter)

      Normanton, Tom

      Alison, Michael (Barkston Ash)

      Haselhurst, Alan

      Onslow, Cranley

      Allason, James (Hemel Hempstead)

      Hastings, Stephen

      Oppenheim, Mrs. Sally

      Archer, Jeffrey (Louth)

      Hawkins, Paul

      Page, John (Harrow, W.)

      Atkins, Humphrey

      Hicks, Robert

      Parkinson, Cecil (Enfield, W.)

      Baker, W. H. K. (Banff)

      Higgins, Terence L.

      Pink, R. Bonner

      Bennett, Dr. Reginald (Gosport)

      Hill, James (Southampton, Test)

      Powell, Rt. Hn. J. Enoch

      Biggs-Davison, John

      Holland, Philip

      Price, David (Eastleigh)

      Blaker, Peter

      Hornsby-Smith,Rt.Hn.Dame Patricia

      Pym, Rt. Hn. Francis

      Boardman, Tom (Leicester, S.W.)

      Howe, Hn. Sir Geoffrey (Reigate)

      Raison, Timothy

      Boscawen, Robert

      Howell, David (Guildford)

      Redmond, Robert

      Bowden, Andrew

      Howell, Ralph (Norfolk, N.)

      Reed, Laurence (Bolton, East)

      Brown, Sir Edward (Bath)

      Hunt, John

      Rees, Péter (Dover)

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

      Iremonger, T. L.

      Rhys Williams, Sir Brandon

      Butler, Adam (Bosworth)

      James, David

      Ridley, Hn. Nicholas

      Carlisle, Mark

      Jenkin, Patrick (Woodford)

      Roberts, Michael (Cardiff, N.)

      Chapman, Sydney

      Jessel, Toby

      Rossi, Hugh (Hornsey)

      Chichester-Clark, R.

      Kershaw, Anthony

      Sharples, Richard

      Churchill, W. S.

      Kilfedder, James

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

      Clark, Kenneth (Rushcliffe)

      King, Evelyn (Dorset, S.)

      Shelton, William (Clapham)

      Cooke, Robert

      King, Tom (Bridgwater)

      Soref, Harold

      Coombs, Derek

      Kinsey, J. R.

      Speed, Keith

      Corfield, Rt. Hn. Frederick

      Knight, Mrs, Jill

      Spence, John

      Cormack, Patrick

      Knox, David

      Sproat, Iain

      Critchley, Julian

      Lane, David

      Stanbrook, Ivor

      Crouch, David

      Le Marchant, Spencer

      Stokes, John

      Curran, Charles

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

      Stuttaford, Dr. Tom

      Dalkeith, Earl of

      Loveridge, John

      Sutcliffe, John

      Deedes, Rt. Hn. W. F.

      MacArthur, Ian

      Sutcliffe, John

      Dodds-Parker, Douglas

      McLaren, Martin

      Taylor, Sir Charles (Eastbourne)

      Dodds-Parker, Douglas

      McLaren, Martin

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

      Drayson, G. B.

      Maclean, Sir Fitzroy

      Taylor, Robert (Croydon, N.W.)

      Dykes, Hugh

      Macmillan, Maurice (Farnham)

      Tebbit, Norman

      Edwards, Nicholas (Pembroke)

      Maddan, Martin

      Thomas, John Stradling (Monmouth)

      Elliott, R. W. (N'c'tle-upon-Tyne,N.)

      Madel, David

      Tilney, John

      Eyre, Reginald

      Marten, Neil

      Trafford, Dr. Anthony

      Fenner, Mrs. Peggy

      Mather, Carol

      Vaughan, Dr. Gerard

      Fidler, Michael

      Maudling, Rt. Hn. Reginald

      Vickers, Dame Joan

      Finsberg, Geoffrey (Hampstead)

      Maxwell-Hyslop R. J.

      Walder, David (Clitheroe)

      Fortescue, Tim

      Meyer, Sir Anthony

      Walker, Rt. Hn. Peter (Worcester)

      Gibson-Watt, David

      Mitchell,Lt.-Col.C.(Aberdeenshire,W)

      Weatheril, Bernard

      Gilmour, Sir John (Fife, E.)

      Mitchell, David (Basingstoke)

      Whitelaw, Rt. Hn. William

      Goodhart, Philip

      Moate, Roger

      Wilkinson, John

      Goodhew, Victor

      Molyneaux, James

      Wolrige-Gordon, Patrick

      Gorst, John

      Money, Ernie

      Woodnutt, Mark

      Gower, Raymond

      Montgomery, Fergus

      Worsley, Marcus

      Grant, Anthony (Harrow, C.)

      More, Jasper

      Green, Alan

      Morgan-Giles, Rear-Adm.

      TELLERS FOR THE AYES:

      Grieve, Percy

      Morrison, Charles (Devizes)

      Mr. Walter Clegg and

      Gummer, Selwyn

      Mudd, David

      Mr. Hector Monro.

      NOES

      Booth, Albert

      Jenkins, Hugh (Putney)

      Rees, Merlyn (Leeds, S.)

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

      John, Brynmor

      Richard, Ivor

      Brown, Ronald (Shoreditch & F'bury)

      Kaufman, Gerald

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

      Callaghan, Rt. Hn. James

      Kinnock, Neil

      Sillars, James

      Carter, Ray (Birmingh'm, Northfield)

      McCartney, Hugh

      Skinner, Dennis

      Cocks, Michael (Bristol, S.)

      McElhone, Frank

      Stoddart, David (Swindon)

      Concannon, J. D.

      Mackenzie, Gregor

      Swain, Thomas

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

      McNamara, J. Kevin

      Tinn, James

      Dalyell, Tam

      Marks, Kenneth

      Walker, Harold (Doncaster)

      Davis, Clinton (Hackney. C.)

      Mellish, Rt. Hn. Robert

      Whitehead, Phillip

      Eadie, Alex

      Mendelson, John

      Gilbert, Dr. John

      Morgan, Elystan (Cardiganshire)

      TELLERS FOR THE NOES:

      Golding, John

      Morris, Charles R. (Openshaw)

      Mr. James Wellbeloved and

      Hamling, William

      Moyle, Roland

      Mr. Michael English.

      Harrison, Walter (Wakefield)

      O'Halloran, Michael

      Question, That the Amendment be made, put accordingly, and agreed to.
      Motion made and Question proposed,
      That further consideration of the Bill, as amended, be adjourned.—[Mr. Maudling.]
      Mr. Callaghan: Mr. Speaker, I am very grateful indeed to the Home Secretary for that swift movement to the Dispatch Box. It was the fastest I have seen him move in the last 25 years. He managed to beat me to it by about a tenth of a second, because, oddly enough, the same thought had crossed my mind.
      It was quite clear that the Government Benches were in revolt and that they could not bear the sight of cold steel. There were 143 of them kept out of their beds, and 143 to 36 is a very good dividend.
      It reminds me, Mr. Speaker—and you have listened patiently to our previous debate on fire hazards in churches—of the Mission and Soapy Smith in Alaska. He preached in a church—indeed, it was a tent—which did not have many precautions against fire hazards. During the summer when the mosquitoes were troublesome he held his congregation very well indeed, but when the winter came they thought it was necessary to get out of the tent and into a church which had proper fire precautions. So that Soapy Smith, who was a very great gambler in Alaska, started off by contributing 1,000 dollars so that he could get the church built with proper fire precautions. The Mission spent the whole day going round the place collecting money. He finished up at night with 36,000 dollars. On his way home, he was set upon, knocked down and robbed of the lot.
      Mr. Thomas Swain: By a Tory.
      Mr. Callaghan: No. Everybody commiserated with him. Next day, however.
      506
      Soapy Smith was seen walking round Yukon saying, "Not bad odds, 36 to one." That is what we have done to the Government benches tonight.
      Mr. Speaker: Order. I hesitate to interrupt the right hon. Gentleman, but I do not think that the Bill deals with fire precautions in Alaska.
      Mr. Callaghan: That is a great pity, Mr. Speaker; nor in Northern Ireland, I understand.
      We want to give the Government our wholehearted support on this. There have been no lengthy speeches. There was one complaint of a lengthy speech. Whoever said that should have seen my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) in full flight a few years ago and, seconding him very closely, Mr. Leslie Hale. Hon. Members would then have a taste of what long speeches really are.
      The Bill should come on at 3.30 in the afternoon. It is an important Bill. It should never have been put on at 10 o'clock at night after an all-night Sitting. If only the Government would get their priorities right and get rid of the miserable and irrelevant anti-strike Bill that they are peddling, they would find that business in the House would be able to start at a reasonable time in the afternoon and discussions could be held in a convenient, decent and civilised manner.
      That cannot be, however, and as it is clear that the occupants of the Government benches look tired and wilted, as they do, clearly in a state of revolt against the Whips—they cannot hold a House —the only decent thing in mercy is that we should allow the Government to go home and refresh themselves for the morrow. They have more battles to fight, more debates to conduct. We

      507
      should give them the opportunity of replenishing their batteries. Although they cannot have a good night's sleep in terms of conscience, nevertheless they will be able to get themselves recharged for the further long Sittings that, no doubt, we shall have to have as long as the Government insist on putting on important business at 10 o'clock at night. On the whole, I recommend my hon. Friends not to vote against the Home Secretary's Motion.
      Question put and agreed to.
      Bill, as amended, to be further considered this day.

  FISHING VESSEL (TRISTAN DA CUNHA)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]
  12.43 a.m.
  Mr. Patrick Wolrige-Gordon: I am grateful that the House has gone on to the Adjournment at an earlier hour this morning than we might have expected a little earlier. I hope that that will help the Government to look favourably on the request for which this debate has been sought.
  This is a story of a modern Treasure Island, except that the pirates tend to wear bowler hats and striped shirts and the treasure is not diamonds and rubies, but crayfish. The island is called Tristan da Cunha. It is administered by the Governor of St. Helena on behalf of the Foreign Office, and I am grateful that my hon. Friend the Under-Secretary of State, a distinguished Minister from the Foreign Office, will be replying to the debate.
  I should like to start by dealing with the rôle of the Foreign Office in this matter. From 1961 onwards, it started a series of agreements between the Governor of St. Helena and a company called the South Atlantic Isles Development Group about the exploitation of the crayfish grounds off Tristan da Cunha. In this matter the South Atlantic Isles Development Group was the successor to a South African company which had had somewhat similar rights since 1948 but which had gone into liquidation, although I understand that many of the directors
  508
  and the personnel of the two companies are the same. Nevertheless, under this fresh series of agreements, various obligations were imposed upon the company, such as an obligation to rebuild the factory following the islanders' return in 1963 after the volcanic disturbances in 1961, which we all remember, in return for a cash agreement and exclusive fishing rights.
  I should have thought that the Foreign Office would have been extremely pleased at its success in effectively obtaining the services of a commercial enterprise of this kind prepared to undertake developments and to contribute in that way to the well-being and welfare of Tristan da Cunha and its inhabitants. But not so. The Foreign Office has been extremely shy of letting the details of these agreements be known.
  When I first became interested in the matter, I asked for a copy of the contract, in a letter dated 2nd August, 1970. In a reply dated 10th September, I was told that these were not "public" documents—an interesting word which, to me, means that they were at least not secret documents—and I was sent only a copy of clause 2 paragraphs (1) and (2) of the main agreement which had been made in 1963 and a copy of clause 1 of the supplemental agreement, which, I was told, constituted the substance of the agreements which had been entered into.
  Those clauses said nothing about the real heart of any agreement in my experience, namely, the financial details. However, fortunately for lovers of the whole truth, the financial details in the contract and supplemental agreements had to be lodged with the court in South Africa as a result of the court action taken against my constituent's fishing boat "The Golden Promise" at the instance of the South Atlantic Isles Development Company. Consequently, it has become much easier to see why the Foreign Office has been so shy about the details of the agreements. In fact, it has been taken for a monumental ride.
  I shall not go into that further at this stage. I have the figures for those who want them, but I am much more concerned—this is the reason why I am raising the whole matter tonight—about my constituent Andrew Buchan and his family, who own the fishing vessel "The Golden Promise".

  509
  Early in 1970, my constituents were contacted by another South African company, Delfi Produkte, with a view to their going fishing outwith South African territorial waters. It is not uncommon for fishing boats from my part of the world to travel very far to prosecute their trade. It was then suggested that the skipper of this boat might go fishing between three and 12 miles off Tristan da Cunha, and he was shown a letter dated 17th April, 1970, signed by a Mr. E. H. Robins of the Foreign Office, enclosing a copy of an ordinance No. 3 dated 1967 which specifically controlled fishing up to three miles off Tristan da Cunha but not beyond three miles.
  So off he went. When he arrived he got a rough reception. Although Mr. Robins' letter, written in 1970, specifically stated that there was no other ordinance regulating fishing within territorital waters, this was not true. There had been another ordinance the following year which had put the limits and the controls thereof out not to three miles but to 12 miles. Mr. Robins' letter had been written in April. If he and the Foreign Office had been accurate, then I doubt whether my constituent would ever have put himself in the unfortunate position in which he finds himself today. In fact, I am certain he would not. Although the Foreign Office corrected its mistake on 29th May, some six weeks later, by that time "The Golden Promise" was in South Africa.
  The ship had been at sea for only a week when the first letter was written, and it would have been extremely simple to have turned back once they had received this most important news. As it was, they went ahead and the ordinance of 1967, which encouraged them to go ahead, only confirmed their decision to go to Tristan since it made it so specifically clear that a licence to fish was needed only up to three miles. So "The Golden Promise" arrived in Tristan on 25th June. It had a very cool reception from the Administrator, who was, of course, only doing his duty.
  On 26th June there came this extraordinary episode of a telegram from the Foreign Office to that Administrator—or rather the acting Administrator—saying inter alia that the owners of "The Golden Promise" would prefer her to return to Scotland immediately. This was such a
  510
  lie that it may be untactful to repeat it, except as an indication of the line the Foreign Office was to pursue from then on, throughout this whole affair, namely to that he should give up and go home, with only one deviation. That was to suggest that Mr. Gaggins, the chairman of the South Atlantic Isles Development Group, might be persuaded to share his exclusive concession with "The Golden Promise". However, at that point their efforts at diplomacy in this direction had failed completely and "The Golden Promise", after one abortive sortie to Tristan, had no option but to return to Cape Town, where she has been ever since.
  The vital question is, what happens to my constituents and the ship now? My constituents are more or less ruined. Mr. Buchan had to sell his new home. Understandably, he feels quite bitter that he had been allowed to get in so bad, while the Foreign Office appears to be interested only in a South African business man, and the ex-Administrator on Tristan, who is now that South African business man's righthand man. Mr. Buchan's only remaining asset is, I believe, his boat, "The Golden Promise", fully equipped to participate in the valuable cray-fishing development at Tristan, and the only chance for him and his family to return from ruin is to participate in that fishery.
  I know quite well that the Foreign Office does not like that suggestion because it is highly compromised by the agreements. In the important agreement of 1963, paragraph 2 of clause 2 contains an undertaking by the Governor that he will not grant to any other person, firm or company any concession or any other facilities in respect of fishing rights. A later clause, clause 12, suggests that the Governor may terminate the agreement, if the company does not comply with its obligations, provided that he first lets the company know what remedy it can make.
  The document completely ties the Foreign Office in its own swaddling clothes, and the later ordinances are not much better. However, in those later ordinances there is definitely a slightly different note. The 1967 ordinance, in paragraph 4(1), says that the Governor may grant to any person, on such terms and conditions and for such areas within Tristan da Cunha as he may, in his discretion, decide, a licence or licences to

  511
  take and process fish for export. But even this is hedged by paragraph 4(2) enabling the Governor to grant an exclusive licence.
  Nevertheless, it is plain that the question of licences is still within the powers of the Governor. That, at least, is something, because we are, after all, discussing what is still a British possession.
  The question arises: could the South Atlantic Isles Development Group afford to allow the British Government to give "The Golden Promise" a helping hand? I think that it could not only afford it but it is in its own interests, and, of course, it is absolutely essential for my constituents.
  The Foreign Office makes much of the benefit to Tristan da Cunha of the benevolence of this company, because it is benevolence, in the sense that there was nothing in the agreements to force the company to do the splendid things which I shall shortly describe, beyond paying the royalties on its profits, which largely meet the cost of administering this tiny population. Otherwise the company has provided such benefits as electricity for the island, available only during factory hours; a harbour, which is a beach with two small breakwaters, usable only by dinghies, which have to be beached before another can enter; a hospital, which is a corrugated hut; and an island store.
  When one realises that this company gets the exclusive return on all investment in Tristan, my own surprise is that it has done so little. I fear that the Foreign Office may have a Victorian idea of modern convenience, especially as it admits the knowledge, which is plain to anybody who knows the shellfishing industry, that the company is making enormous profits —so enormous, in fact, that it had a new boat costing 300,000 rand sailing on its maiden voyage this week, has another new boat ready next month, and has yet another building in Durban at the moment, in addition to the two at work now.
  Why cannot "The Golden Promise" be included in this operation in a British possession which is being most gainfully exploited by a foreign company. The company's new boats are 250 gross registered tonnage, so they are big boats. The directors admit that they are working
  512
  within the three-mile limit. "The Golden Promise" would fish between the three-mile and the twelve-mile limit, so that it would not affect the stocks, as crayfish breed only in shallow waters. It would not affect the stocks caught tradtionally by the islanders or, of course, by the licensee. It would fish only between the three- and the twelve-mile limit as in April, 1970, it understood that it could. Thereby it has the only chance open to it to get as near as fishing boats can, back on the path of financial rectitude, and to give these unfortunate constituents of mine a chance to make their recovery.
  I beg the Minister to consider their desperate case favourably. If my hon. Friend will not grant my request, may I ask him to tell me how he sees their future? They cannot get work and they are extremely vulnerable. I believe that the Government have a responsibility to help our own people abroad, or of course at home, which they will rightly not lay down.
  1.0 a.m.
  The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Kershaw): I am grateful to my hon. Friend the Member for Aberdeen-shire, East (Mr. Wolrige-Gordon) for raising this important matter tonight. I expected him to do so, because he has such a good reputation in the House for looking after the interests of his constituents that I knew that if any one of them were in trouble he would soon be on his feet here on his behalf. I knew also that the fact that the Buchans, his constituents, were in trouble far away in South Africa would only make him the more diligent on their behalf.
  I am grateful also because it gives me the chance to do what I can to clear up some unfortunate misunderstandings. The first is this. My hon. Friend complains that his constituents were misled into believing that they were free to fish off Tristan da Cunha, but what I think happened was this. On 20th March, 1970, a firm of solicitors inquired of the Foreign and Commonwealth Office in general or, as the firm described it, hypothetical terms, whether a British flag ship was entitled to fish within the territorial waters off Tristan da Cunha. They did not mention names. As a matter of fact, to this day I have only my hon.

  513
  Friend's assurance that this letter referred to his constituents. In particular, they did not refer to any waters other than territorial waters.
  On 17th April, 1970 the Foreign and Commonwealth Office replied by sending them a copy of the ordinance relating to fishing in territorial waters. They replied in fact to the question they were asked, and to no other. The ordinance makes clear that to export fish from territorial waters requires a licence.
  My hon. Friend complains that his clients were misled, but I cannot accept that the Foreign and Commonwealth Office was at fault. It knew nothing of his constituents, and had been asked only one hypothetical question, which it had answered correctly.
  Furthermore, whatever inferences the Buchans may have drawn, by 17th April, when the letter was written, they had already, on 31st March, signed an agreement to charter "The Golden Promise" and, so far as I know, had left Scotland for Tristan da Cunha. Clearly the letter of 17th April can have had no influence on their judgment.
  On 1st May, the Foreign and Commonwealth Office had a further letter from the solicitors concerned asking, amongst other things, about fishing for export in an area from three to 12 miles from Tristan da Cunha. They were told on 29th May, as my hon. Friend has said, that it was not allowed without a licence. The Foreign and Commonwealth Office still knew nothing about the Buchans or "The Golden Promise", but on 12th June "The Golden Promise" at last swam into our ken.
  A telephone call from Fraserburgh, which I am given to understand, but I do not know for certain, was either from a firm of solicitors, or possibly from Mr. Buchan senior, who I believe was still in Scotland at that date, told us that "The Golden Promise" was on its way to fish at Tristan da Cunha and that it was now realised that it was not allowed to do this. Could we therefore, the speaker asked, make an exception? The Foreign and Commonwealth Office had to say "No", whereupon the speaker said that "The Golden Promise" would return to Scotland.
  That was duly telegraphed to the acting Administrator of Tristan da Cunha,
  514
  and this seems to be the origin of the episode to which my hon. Friend has made reference and to which he takes such exception, but again I must disclaim any responsibility on behalf of the Foreign and Commonwealth Office.
  There are one or two general points which time does not allow me to develop in full but which I feel I ought to mention quickly. Perhaps I should say in passing that the Foreign and Commonwealth Office is not shy about the agreement which it has entered into with the concessionaires, but that agreement is, after all, a commercial agreement between the South Atlantic Islands Development Corporation and the Governor of St. Helena. It is true that the present concessionaries have a monopoly. Might I say also, in passing, that they are not South African. It is a Bermudan company and most of the personalities concerned are British. It is true that the present concessionaires are making good money. But I must add that before their time no one ever made the fishing pay. They all went broke one after another. No other fishing interests—until "The Golden Promise" hove in sight—have shown the slightest interest in this fishing.
  Crayfish are the only natural resource of the Island of Tristan da Cunha. The revenue from it, as my hon. Friend mentioned, pays for almost all the cost of the administration. It is vital, therefore, that it is not over-fished and that it is exploited efficiently. Competition between several fishers on those grounds would surely result in over-fishing, as it has in other crayfish grounds in the area of South Africa. The concessionaires are bound by their undertaking not to over-fish. They are also in pursuit of greater scientific knowledge than we have at present about the crayfish in that remote part of the world, undertaking scientific studies and appointing a full-time officer for that purpose, so as to preserve the stocks of crayfish which are so valuable to the island.
  The islanders themselves freely negotiate their prices, and I am told that they are well satisfied with the arrangement. For example, in recent correspondence I am told that during the first fortnight of November last, during which there were six fishing days, four fishermen earned a total of £358 for lobster caught, exclusive of their daily pay and overtime, and

  515
  all their gear was supplied by the concessionaires. For such reasons and for others which my hon. Friend has mentioned, the islanders are not prepared to welcome new fishermen. I understand that the facilities which have been installed on the island by the proceeds from the crayfish industry are not exactly what we should expect in this country, but nevertheless they are a start.
  The Governor of St. Helena, having given a sole concession, cannot without bad faith revoke it. To sum up the position, I must unfortunately make it clear beyond any doubt that "The Golden Promise" will not be given a licence to fish off Tristan da Cunha.
  Lastly, I come to what we can now do for the Buchans and their friend. Owing to my hon. Friend's good offices, the Consul-General in Cape Town has contacted them—they did not recently contact him—and he has told them that he will do his best to put them in touch with interests who may be able to give employment to "The Golden Promise", or to the Buchans and their colleague, Mr. Sutherland, individually. Whilst I
  516
  understand their reluctance to be parted for even a short time from that boat, I understand nevertheless that for individual employment there is really no problem for these skilled and expert fishermen.
  Unfortunately, they have, up to now, refused to entertain any proposition. They say that Her Majesty's Government are responsible for their plight and must remedy it. I am afraid that I must say to them that, despite the able and devoted advocacy of their case by my hon. Friend, Her Majesty's Government are not responsible for their misfortunes and that they would be well advised now to listen to the advice of Her Majesty's Consul-General in Cape Town and to take such steps as are open to them to improve their position.
  I am sorry not to be able to give my hon. Friend, who has pursued this question most closely and diligently, a more satisfactory reply, but I am afraid that the facts are compelling upon me, and I have to speak as I have spoken.
  Question put and agreed to.
  Adjourned accordingly at ten minutes past One o'clock.

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  Inland Revenue Computer Centre, Portsmouth
  Inland Revenue Computer Centre, Portsmouth
  Wilberforce Court of Inquiry
  Wilberforce Court of Inquiry
  Economic Policy
  Economic Policy
  Reflective Fluorescent Armbands (Purchase Tax)
  Reflective Fluorescent Armbands (Purchase Tax)
  Income Tax
  Income Tax
SOCIAL SERVICES
  Medicinal Preparations
  Medicinal Preparations
  Health Centres (Design Guide)
  Health Centres (Design Guide)
  Family Income Supplement
  Family Income Supplement
  Psychiatric Beds
  Psychiatric Beds
  Royal Northern Hospital, Holloway
  Royal Northern Hospital, Holloway
  Whittington Hospital, Archway
  Whittington Hospital, Archway
  Member's Letter (Mr. P. V. Gayler)
  Member's Letter (Mr. P. V. Gayler)
  Children's Welfare
  Children's Welfare
  Leaflet "Wanted, A Home"
  Leaflet "Wanted, A Home"
  Prescription Charges
  Prescription Charges
  Juvenile Delinquents
  Juvenile Delinquents
  Children (Foster Parents)
  Children (Foster Parents)
  Centre for Architectural Design for the Retarded
  Centre for Architectural Design for the Retarded
  Children (Accidental Poisoning)
  Children (Accidental Poisoning)
  Improvement of the Dental Conditions of Populations
  Improvement of the Dental Conditions of Populations
  Pensions and Benefits (Payment)
  Pensions and Benefits (Payment)
  Hysterectomies
  Hysterectomies
  Family Incomes
  Family Incomes
AGRICULTURE, FISHERIES AND FOOD
  Cows, Lambs and Young Pigs (Unicar System)
  Cows, Lambs and Young Pigs (Unicar System)
  Anglo-Eire Free Trade Agreement
  Anglo-Eire Free Trade Agreement
  White Paper (Press Statements)
  White Paper (Press Statements)
TRADE AND INDUSTRY
  Competition
  Competition
  Television (Rental Restrictions)
  Television (Rental Restrictions)
  Upper Clyde Shipbuilders
  Upper Clyde Shipbuilders
  Air Transport Industry (Non-Scheduled Inclusive Tour Market)
  Air Transport Industry (Non-Scheduled Inclusive Tour Market)
  B.E.A. Airtours (Aircraft)
  B.E.A. Airtours (Aircraft)
  Petrol (Price Increases)
  Petrol (Price Increases)
  Gas and Oil Strikes
  Gas and Oil Strikes
  Natural Gas
  Natural Gas
  Polaroid Limited (Film Prices)
  Polaroid Limited (Film Prices)
  Mr. A. G. Hughes (Letters)
  Mr. A. G. Hughes (Letters)
  Motor Cars (Hire Purchase)
  Motor Cars (Hire Purchase)
  British Steel Corporation
  British Steel Corporation
  B.E.A. (Air Tours)
  B.E.A. (Air Tours)
  B.O.A.C. (Charter Subsidiary)
  B.O.A.C. (Charter Subsidiary)
  Dan Air Comet Aircraft (Accident)
  Dan Air Comet Aircraft (Accident)
  Queen's Award to Industry
  Queen's Award to Industry
ENVIRONMENT
  Shale Tips (Rates)
  Shale Tips (Rates)
  Holbeach Bypass
  Holbeach Bypass
  Loan Sanction (Direct Labour Projects)
  Loan Sanction (Direct Labour Projects)
  Use of Land
  Use of Land
  Local Government Finance (Rates)
  Local Government Finance (Rates)
  Yachting and Boating Facilities
  Yachting and Boating Facilities
  British Railways Level Crossings (Incidents)
  British Railways Level Crossings (Incidents)
  M1 Motorway (Accidents)
  M1 Motorway (Accidents)
  Pensioners (Concessionary Bus Schemes)
  Pensioners (Concessionary Bus Schemes)
  Continental-based Lorry Drivers (Log Books)
  Continental-based Lorry Drivers (Log Books)
  Motor Vehicle Licensing (Review)
  Motor Vehicle Licensing (Review)
  Unremunerative Railways
  Unremunerative Railways
  Skyways Coach Air
  Skyways Coach Air
  Bristol Docks (Expansion)
  Bristol Docks (Expansion)
  South Wales Ports (Investment Projects)
  South Wales Ports (Investment Projects)
  CONSUMER PROTECTION
  CONSUMER PROTECTION
  PRIME MINISTER (OFFICIAL ENGAGEMENTS)
  PRIME MINISTER (OFFICIAL ENGAGEMENTS)
  CONFERENCE OF COMMONWEALTH HEADS OF GOVERNMENT
  CONFERENCE OF COMMONWEALTH HEADS OF GOVERNMENT
  YOUNG PEOPLE IN TROUBLE (DEPARTMENTAL RESPONSIBILITY)
  YOUNG PEOPLE IN TROUBLE (DEPARTMENTAL RESPONSIBILITY)
  CHILDREN AND YOUNG PERSONS ACT, 1969
  CHILDREN AND YOUNG PERSONS ACT, 1969
  CROWTHER COMMISSION ON THE CONSTITUTION
  CROWTHER COMMISSION ON THE CONSTITUTION
DEFENCE
  Siai Marchetti S260 Aircraft
  Siai Marchetti S260 Aircraft
  R.A.F. (New Jet Trainer)
  R.A.F. (New Jet Trainer)
  Northern Ireland
  Northern Ireland
  Land (Inquiry)
  Land (Inquiry)
EDUCATION
  I.L,E.A. (Pupil-Teacher Ratio)
  I.L,E.A. (Pupil-Teacher Ratio)
  Education Costs (Rate Contribution)
  Education Costs (Rate Contribution)
  Research and Development (Expenditure)
  Research and Development (Expenditure)
FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia (Former Public Servants)
  Rhodesia (Former Public Servants)
  HOUSES (CONVEYANCING CHARGES)
  HOUSES (CONVEYANCING CHARGES)
  HIGH COURT AND CROWN COURT CENTRES
  HIGH COURT AND CROWN COURT CENTRES
CIVIL SERVICE
  Staff
  Staff
  Industrial Civil Servants (Pay)
  Industrial Civil Servants (Pay)
EMPLOYMENT
  Conciliation
  Conciliation
  Unemployment
  Unemployment
  Wilberforce Court of Inquiry
  Wilberforce Court of Inquiry
HOME DEPARTMENT
  United Nations Year Against Racial Discrimination
  United Nations Year Against Racial Discrimination
  Children and Young Persons Act, 1969
  Children and Young Persons Act, 1969
  Plastic Foam (Fire Hazards)
  Plastic Foam (Fire Hazards)
  M1 Motorway
  M1 Motorway
  Carlisle and District State Management Scheme
  Carlisle and District State Management Scheme
  Referenda
  Referenda
  Young Offenders
  Young Offenders
  Government by Referendum and Proportional Representation
  Government by Referendum and Proportional Representation
  Road Traffic Offences (Council of Europe Convention)
  Road Traffic Offences (Council of Europe Convention)
HOUSE OF COMMONS
  W.E.U. Delegation (Expenses)
  W.E.U. Delegation (Expenses)
  W.E.U. Delegates (Embassy Cars)
  W.E.U. Delegates (Embassy Cars)
POSTS AND TELECOMMUNICATIONS
  Postal Delivery Licences
  Postal Delivery Licences
  Post Offices (Cash Supplies)
  Post Offices (Cash Supplies)
SCOTLAND
  Employment
  Employment
WALES
  Agriculture and Horticulture (Co-operative Enterprises)
  Agriculture and Horticulture (Co-operative Enterprises)
  Agriculture (Ministry Employees)
  Agriculture (Ministry Employees)
  Council Houses, Newport
  Council Houses, Newport

Preamble
The House met at half past two of the clock: The EARL OF LISTOWEL on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.
The Viscount Leverhulme—Took the Oath.

BUILDING SOCIETIES AND COMMONWEALTH INVESTMENT
LORD OGMORE: 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 take the necessary steps to add the Commonwealth Development Corporation to the list of investments in which British building societies may, if they so desire, invest a portion of their liquid funds and also whether they will take the necessary steps to permit British building societies to enter into joint projects with the Commonwealth Development Corporation in the development of building societies in those parts of the Commonwealth where the Commonwealth Development Corporation is entitled to operate.]
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, the noble Lord's suggestions would seem to require an order made under Section 58 of the Building Societies Act 1962 by the Chief Registrar of Friendly Societies, with the consent of the Treasury. At their request the building societies have discussed this possibility with the Chief Registrar. These discussions are still at a preliminary stage, and no definite proposals have been made. I am sure that the Chief Registrar and the Treasury would give careful consideration to any specific request by the societies for additional powers of the kind which the noble Lord proposes.
LORD OGMORE: My Lords, while thanking the noble Earl for that Answer, may I ask him, first, whether he is aware that the building societies have assets of over £10,500 million and that those assets are rising rapidly? Secondly, may I ask him whether he is aware of the splendid work which the Commonwealth Development Corporation has done in developing housing societies in the Commonwealth without any help from building societies in this country, because building societies have not been able to assist the Commonwealth Development Corporation in this important work?
EARL JELLICOE: My Lords, the answer to both of the noble Lord's questions is, Yes. But there are a great number of considerations and, possibly, difficulties, both legal and technical, involved. Whether or not they can be resolved, we must await definite proposals put by the building societies to the Chief Registrar. They have not been put up to the present.
LORD SHEPHERD: My Lords, the noble Earl said that the Chief Registrar and the Treasury would give careful consideration to a proposal. May we take it that there would be sympathetic consideration if an approach were made by the building societies, bearing in mind the urgent need for housing within the Commonwealth?
EARL JELLICOE: My Lords, I can certainly assure the noble Lord that the reception of the approach would be sympathetic. Whether the results would be sympathetic would of course depend upon the approach.
LORD ROYLE: My Lords, does the noble Earl remember that when what is now the Building Societies Act was passing through Parliament in 1962, some of us in another place moved an Amendment along exactly these lines, and that the noble Lord, Lord Brooke of Cumnor (as he now is), resisted it with exactly the same arguments as the noble Earl is now using?
EARL JELLICOE: My Lords, I always have very great respect for my noble friend's argumentative powers, but I must confess, in answer to the noble Lord, Lord Royle, that I was not aware of that particular incident in history. I shall

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immediately look it up and try to produce some new arguments, if necessary. But I am not resisting this proposal and the Government are not resisting it; we are awaiting definite proposals.

MENTALLY HANDICAPPED: HOSTEL PROVISION IN NEW TOWNS
2.38 p.m.
LORD GRENFELL: 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 consider giving directions to the development corporation of any future New Town that hostels for the mentally handicapped should be incorporated in the initial plans of the New Town.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT FOR THE ENVIRONMENT (LORD SANDFORD): My Lords, the provision of community services for the mentally handicapped in New Towns is a statutory duty of the local authority in whose area the New Town is being built, not the responsibility of the New Town development corporation. But local authorities are consulted by the development corporation in the initial stages of the preparation of the master plan which provides the basis for the development of the New Town. This plan makes provision for major land uses such as schools and hospitals; and the siting of buildings for other services, to which my noble friend referred, such as the care of the mentally handicapped is worked out subsequently in the more detailed planning of districts and neighbourhoods.
LORD GRENFELL: My Lords, while thanking my noble friend for that Answer, may I ask him one supplementary question? Is he aware that, sadly, there is still a prejudice among many of the public against having hostels adjacent to their homes? Would not directions of the type referred to in my original Question ensure not only that hostels could be built without undue delay, but that after they were built the minds of the public could be set at rest as to the
814
behaviour of the mentally handicapped who were admitted to those hostels?
LORD SANDFORD: Yes, my Lords, My right honourable friend is aware of difficulties of this sort over establishments of this kind. But he is not satisfied that my noble friend's proposal would necessarily solve the problem in the way that he hopes.
LORD SHACKLETON: My Lords, may I ask the noble Lord whether he will consider even more carefully what has been said?—because the development of so-called "halfway houses" is dependent so much on voluntary action. May I therefore ask him, not to bring pressure but to continue the education and, perhaps, to stimulate both the development corporations and the other authorities to consider this matter further?
LORD SANDFORD: Yes, certainly, my Lords.
LORD SLATER: My Lords, will the Minister state how many New Towns have land available for the development of these hostels, as requested by local authorities up and down the country?
LORD SANDFORD: My Lords, I can answer that question to some extent, but not perhaps to the full extent which the noble Lord would like. Local authorities overall have plans to provide additional places for 2,400 adults and for 500 children within the next three years. I can write to the noble Lord and tell him how many of those local authorities are in the New Towns.
LORD STONHAM: My Lords, if the proposal of the noble Lord, Lord Grenfell, is not suitable in the circumstances described 'by the noble Lord, Lord Sandford, how is it intended to get over planning difficulties and avoid carrying a great deal of unnecessary trouble to voluntary bodies, who sometimes spend years acquiring property and are then unable to use it because they cannot get planning permission?
BARONESS SUMMERSKILL: My Lords, will the noble Lord agree that the overall figure of 2,000-odd which he has given is very small considering the demand for this kind of accommodation?
LORD SANDFORD: My Lords, it may well be insufficient, but the Government

815
have already stated that they are comitting an extra £110 million for the health and welfare services over the next four years. Part of this sum will be devoted to improving services for the mentally handicapped.
BARONESS SUMMERSKILL: My Lords, how can the noble Lord reconcile this very small figure with the statutory responsibility which I believe was incorporated in the Mental Health Act? Surely this is evading their responsibilities.
LORD SANDFORD: My Lords, I would not agree that this is a small figure. It is a very considerable increase.
LORD SHEPHERD: My Lords, does the noble Lord intend to reply to my noble friend Lord Stonham?
LORD SANDFORD: My Lords, I am as aware as the noble Lord is of the difficulty of providing half-way hostels of all kinds—for prisoners, after-care, gipsies, mental patients and so on—but I am not satisfied, nor is my right honourable friend, that transferring responsibility from the local authorities to the development corporation is the best way of solving these problems.
LORD STONHAM: My Lords, will the noble Lord say what is the best way to get over a difficulty which we are agreed affects thousands of people?
LORD SANDFORD: The best way, my Lords, is to persevere along the way we are now going.
LORD SHACKLETON: My Lords, may I ask the noble Lord whether he is aware that your Lordships are likely to encourage his own perseverance in this matter?

AIR TRANSPORT FARES
BARONESS BURTON OF COVENTRY: 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 are aware of increasing consumer dissatisfaction at the exclusion of regular travellers from the financial benefits of new air traffic at lower fares and whether, within the
816
International Air Transport Association, they will take steps to ensure that some encouragement is offered to travellers using normal services.]
LORD DENHAM: My Lords, as the noble Barones knows, air fares on scheduled services may vary in accordance with such factors as the season, the time of the flight or the length of stay, and special rates are offered for inclusive tours and other forms of bulk travel where higher passenger load factors can be achieved. While the Edwards Committee of Inquiry into Civil Air Transport recommended that there should be a different approach towards the regulation of inclusive tour prices in relation to public fares on scheduled services, any such approach has to take into account differences in the quality of air travel, including comfort, convenience and any restriction on the choice of flights.
BARONESS BURTON OF COVENTRY: My Lords, I have no wish to be offensive, but the noble Lord will realise that that did not add much to my knowledge. I wonder if I might ask him whether he is aware that consumers take the view that airlines are selling lower non-public fares in an attempt to meet charter competition?
LORD DENHAM: My Lords, I would say, in fact, that airlines are selling fares lower in off-peak times, et cetera, in order to make the airlines pay.
BARONESS BURTON OF COVENTRY: My Lords, may I ask the noble Lord one other question? Is he aware that the London/Paris yields to B.E.A., on average, only 75 per cent. of the published fares, and that if this is so then it must mean that normal fares are pushed up to compensate? Would the noble Lord have a look at that information and see if it is correct?
LORD DENHAM: My Lords, I will certainly have a look at that information.
LORD BALFOUR OF INCHRYE: My Lords, arising out of the Question and Answer, may I ask my noble friend whether Her Majesty's Government do not think that it is about time we had a hard look at this International Air Transport Association—its powers, administration and relationship with Her Majesty's Government—so far as this country is concerned?
LORD DENHAM: My Lords, no doubt my right honourable friend will consider what my noble friend has to say, but I would draw to his attention that there is an Unstarred Question down in the name of the noble Baroness, Lady Burton of Coventry, on very much the same point, slightly wider than that which she has raised to-day, and perhaps this is one point which can emerge from that debate.
BARONESS BURTON OF COVENTRY: My Lords, should I be in order in asking, through the Minister, whether the noble Lord, Lord Balfour of Inchrye, would do me the great pleasure of being in the House on February 18 and taking part in the debate?
LORD DENHAM: My Lords, I am advised that the noble Baroness would not be in order.
LORD SHACKLETON: My Lords, may I ask the noble Lord whether, since this is a complicated subject—it is in fact a complete jungle, and the dissatisfaction is getting so grave and the bureaucracy that is involved in administering all this is getting so great—he will now go very fully into it himself, so that when he comes to reply he will perhaps be able to give a rather more encouraging answer than he has yet been able to give?
LORD DENHAM: My Lords, if I am to answer the debate I shall certainly go into it very fully indeed. But whether the noble Lord will be encouraged by my answer is a different matter.

NORTHERN IRELAND AND UNION WITH EIRE
2.48 p.m.
LORD CLIFFORD OF CHUDLEIGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the cost of Northern Ireland to the United Kingdom of over £300 million per annum, it would not be profitable to the United Kingdom for them to promote the union of Northern Ireland with Eire.]
THE MINISTER OF STATE, HOME OFFICE (LORD WINDLESHAM): My Lords, it is far from the case that Northern Ireland costs the United Kingdom over £300 million a year. Northern Ireland is part of the United Kingdom, and the greater part of the money paid from the United Kingdom Consolidated Fund to the Northern Ireland Exchequer represents the yield of taxes paid by the inhabitants of Northern Ireland itself. As for the remainder, there are other parts of the United Kingdom where the yield of taxation does not fully meet the cost of the services. Nor is this a matter of finance. Section 1 of the Government of Ireland Act 1949 affirms that in no event will Northern Ireland or any part thereof cease to be part of the United Kingdom without the consent of the Parliament of Northern Ireland. Her Majesty's Government have reaffirmed on a number of occasions that this issue is solely a matter for the people of Northern Ireland themselves.
LORD CLIFFORD OF CHUDLEIGH: My Lords, while thanking the noble Lord for his Answer, may I ask him whether he is aware that those of us who were hoping for a shilling off income tax and at the same time to teach Dublin to laugh in church will be somewhat disappointed? Is the noble Lord also aware that on November 18 I got from his noble Leader some figures in a rather complicated document in answer to a Written Question? Would the noble Lord not agree that if both the Republic and this country enter the Common Market we shall in effect be back to square one? If so, would it not be efficacious, a good idea, a wise precaution or whatever you like to call it, to hand the responsibility over to Dublin before that takes place; otherwise, we shall be saddled with the expense and tribal warfare for ever?
LORD WINDLESHAM: My Lords, we cannot speculate in that way on what might happen if the United Kingdom or Eire acceded to the Treaty of Rome.
LORD O'NEILL OF THE MAINE: My Lords, is the noble Lord aware what satisfaction Her Majesty's Government's reply will give in Northern Ireland? May I further add that I feel that this Question is a little unfortunate at the present time; for is the noble

819
Lord aware that the implication behind it is that the Army should be withdrawn? But for the presence and involvement of the troops in Northern Ireland to-day we should have something aproaching a civil war, and then the Government in Dublin—the moderate, sensible Government in Dublin—would fall and the extremists would take over in Northern Ireland.
LORD WINDLESHAM: My Lords, the Question referred to the cost of services provided in Northern Ireland; but I think that all noble Lords in this House would like to support what is done by the Armed Forces in Northern Ireland. They are to be visited shortly by my noble friend the Secretary of State for Defence.
LORD GLADWYN: My Lords, would not the noble Lord agree that if we go into the Common Market, in spite of what was said just now, any dispute between the Northern section and the Southern section of our neighbouring island would become increasingly meaningless? Would he not also agree that if we go into the Common Market any burden on this country to support the rather weak economy in Northern Ireland, in Ulster, will certainly be able to become, to some extent, the responsibility of the Community?
LORD WINDLESHAM: My Lords, I did say that we should not speculate on the future. What the noble Lord has said will be borne in mind, but it goes outside the Question.
LORD SHINWELL: My Lords, leaving aside the somewhat squalid, sordid and irrelevant subject of the Common Market, may I ask the noble Lord this question? Does anybody—including the noble Lord and his colleagues—believe that what Parnell, Gladstone, Arthur Balfour, Asquith and Lloyd George failed to achieve is within the capability of Ted Heath? Has he not enough trouble?
LORD HAWKE: My Lords, are the Government aware that if the pubs in Ulster were closed on Saturday nights Northern Ireland would become an asset and not a liability?
LORD SHINWELL: My Lords, will the noble Lord answer my question?
LORD REA: My Lords, could the noble Lord explain the difference between the Unionist Party and the Conservative Party? Most Members on the other side have the letter "U" before their names. What union does that refer to?
LORD WINDLESHAM: My Lords, I do not know what Question noble Lords have in front of them. I feared that the Question on the Paper would provoke a general debate on Ireland—and it has.
LORD KILBRACKEN: My Lords, a far more patent reason for the ending of partition is the already ardent desire for it of the great majority of the Irish people—and it will become the desire of the majority in Northern Ireland as the Catholic proportion inexorably rises.
LORD WINDLESHAM: My Lords, I should like to repeat what the Prime Minister said in answer to a Written Question in another place on November 10:
"The status of Northern Ireland as part of the United Kingdom will remain unchanged unless and until the people of Northern Ireland themselves want to change it."—[OFFICIAL REPORT, Commons, col. 129; 10/11/70.]
LORD STONHAM: My Lords, is the noble Lord aware that a large majority of citizens of Northern Ireland do not want it to be changed; that they want to stay with us?

UGANDA: SAFETY OF BRITISH NATIONALS
LORD SHEPHERD: My Lords, I beg leave to ask a Question of which I have already given Private Notice. The Question is as follows:
"To ask Her Majesty's Government whether they will make a statement on the safety of British nationals in Uganda."
EARL. ST. ALDWYN: My Lords, with the leave of the House, my noble friend Lord Lothian will be answering this Question at a convenient moment after 3.30.
After this statement on Uganda, my noble friend the Leader of the House will be making a Statement on the Commonwealth Prime Ministers' Conference.

THE LORD CHANCELLOR AND JUDICIAL BUSINESS
EARL ST. ALDWYN: My Lords, your Lordships will have noticed that two Consolidation Bills which were down for consideration to-day in the name of my noble and learned friend the Lord Chancellor are not now on the Order Paper and have been deferred unlit Tuesday, February 2. My noble and learned friend has asked me to explain to your Lordships why this has been done and why he has not been able to make the explanation himself. Yesterday my noble and learned friend found that an urgent appeal to your Lordships' House in its Judicial capacity, an adoption matter, would have to be postponed, with consequent hardship to the parties involved, because one of the noble and learned Lords of Appeal in Ordinary was indisposed. He has therefore decided to sit in the Appellate Committee himself so that the appeal may be heard without delay; and this hearing is now taking place. He has asked me to apologise to the House on his behalf for his absence from the Woolsack until the conclusion of the hearing of the appeal, which I gather is likely to be some time next week.
LORD GARDINER: My Lords, I am sure that the whole House will sympathise with the noble and learned Lord the Lord Chancellor in his difficulties. All Lord Chancellors are pressed by their colleagues from time to time to spare a judge for something, such as to take the chair at a Committee or a Tribunal, as in the case of the electricity workers' dispute. I do not think that our colleagues always realise the difficulties that this creates. I have not forgotten that I spared Mr. Justice Scarman to take the chair at a Tribunal in Belfast which I understood from the Northern Ireland Government would take about three weeks. This was in August of the year before last; and the Tribunal is still sitting.

ATOMIC ENERGY AUTHORITY BILL
2.57 p.m.
THE MINISTER WITHOUT PORT-FOLIO (LORD DRUMALBYN): My Lords, I beg to move that this Bill be now read a second time. Your Lordships will recognise this Bill as being almost identical with the one which was introduced by the previous Government into this House on April 14 last year. That Bill completed its passage through this House but was lost on the Dissolution of Parliament. Since the Bill is already familiar, I hope that your Lordships will forgive me if I do not explain its provisions in great detail. I shall confine myself in the main to developments that have taken place since the last Bill was before the House. Even that will take a little time, but I hope it will help to expedite the later stages of the Bill.
The Bill provides for the transfer of the nuclear fuel and radio-isotope trading business of the Atomic Energy Authority to two companies to be set up under the Companies Acts. This business has been carried on by the Trading Fund of the Authority since April 1, 1965; and the Bill represents a further step in putting these activities on to a fully commercial basis.
The radio-isotope business at the Radiochemical Centre at Amersham will be transferred to the Radiochemical Centre Limited. The Radiochemical Centre was first established in 1946 to provide radioactive substances for medical, industrial and research use. The amount of business has steadily grown. In the last full year, 1969–70, net sales of radioactive products increased by 22·6 per cent. to £4 million of which £2·4 million—60 per cent.—was exported. The Centre employs over 600 people, most of whom are non-industrial.
The nuclear fuel services business carried out by the Production Group of the Authority will be transferred to British Nuclear Fuels Limited. This business is carried on at Springfields, Capenhurst and Windscale in the North-West. It embraces not only the manufacture of fuel elements from uranium ore but also services at intermediate stages of the nuclear fuel cycle; for example: conversion of uranium ore into uranium hexafluoride at Springfields, which can

823
then be passed through enrichment plants; the enrichment process carried on at Capenhurst; and the reprocessing of irradiated fuel elements at Windscale. The reactors at Calder Hall and Chapel-cross which generate electricity for sale to the Generating Boards will also be transferred to the fuel company. The total numbers employed are about 8,800.
The turnover in sales of nuclear fuel services and electricity in 1969–70 amounted to £37·8 million of which £4·4 million was in exports. The value of sales of nuclear fuel services has increased by about 50 per cent. since the first financial year of the Trading Fund in 1965–66, as also has that of radio-isotopes. In the last financial year the overall surplus on trading before deduction of interest, tax and development expenditure was £9·3 million. This represented a return of 23 per cent. on trading capital of about £40 million. A target rate of return of 13 per cent. is specified for trading in nuclear fuel services with the home generating boards. In 1969–70 the return was 12·9 per cent. Combined with a slightly higher return in the previous financial year, this gives an average return in line with the target.
Your Lordships will no doubt wonder what is the value of the assets to be transferred to the companies. The assets have, of course, been subject to appropriate annual rates of depreciation and the accounts have been examined in the usual way by the Comptroller and Auditor General. In their accounts for the year 1969–70, the Authority wrote up the value of the fixed assets at Windscale because they considered that the six-year depreciation period which they had adopted was unnecessarily conservative. Windscale was transferred to the Trading Fund on April 1, 1970, and is not therefore shown in the balance sheet of the Trading Fund as at March 31, 1970. Taking account of the transfer of Windscale, on a rough estimate, the value of the net assets to be transferred to the nuclear fuel company is in the region of £50 million. The value of the net assets to be transferred to the Radiochemical Centre Limited, is about £4 million. Loan liabilities to be transferred will include about £36 million in the case of the fuel company and £3 million in that of the Radiochemical Centre Limited.
824
These figures for the value of the net assets refer, of course, to the value as shown in the books and not to a commercial valuation, which is an essential pre-requisite for private participation. About that I shall have something to say later.
Clause 24 of the Bill empowers the Secretary of State to appoint, by order made by Statutory Instrument, the day or days on which the transfers of the appropriate parts of the Atomic Energy Authority's undertaking shall take place; and it is intended that the appointed days for both the fuel and the radiochemical companies should be April 1. It is therefore appropriate that both companies should be registered in the near future. This will be done after the Bill has been considered in Committee in this House. The draft memoranda and articles are available for inspection in the Library. At least, they have been placed in the Library.
I should also comment briefly on one or two differences between this Bill and its predecessor. It will be recalled that there was some debate previously about the original provision that a majority shareholding should be retained by the Authority or the Government, and particularly about the precise words in which this was expressed. The Government have come to the view that, primarily because of the strategic importance of the fuel company, it is sensible to provide for retention of a majority public shareholding in it. Having reached that view, the Government felt it would make the transfer to both companies easier if they were treated alike. The opportunity has been taken however to improve the wording of Clause 11.
The Bill provides not only for transfer of certain Atomic Energy Authority establishments and assets, but also for transfer of the employees who are at present doing the work. As was appreciated in another place recently, these employees are themselves the principal asset of the two businesses; and both the previous and also the present Government, and the Authority, have gone to very considerable lengths to ensure that the conditions on which the employees are to be transferred are fair and reasonable. The staffing clauses are identical with those in the previous Bill but for

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changes in the references to clauses. But there has also been a great deal of consultation, both before and since the change of Government; and the extensive staffing safeguards in the Bill are now supplemented by a number of assurances and clarifications. Some of these assurances and clarifications have been given by the Authority, on behalf of the prospective managements of the companies; others, by the Government.
As I say, Clauses 8 and 9 are identical with the corresponding clauses in the earlier Bill. Clause 8 provides that immediately after their transfer to the companies staff are to be employed on terms and conditions appropriate to them immediately after transfer, and that means terms and conditions which correspond as nearly as the circumstances permit to those which they enjoyed in the Authority immediately before the transfer. Clause 9 then lays an obligation on the companies to establish negotiating machinery in consultation with representatives of the staff; and the clause goes on to lay down that the terms and conditions of employment to be negotiated in substitution for those deemed to be in force under Clause 8 shall conform with the principle that, taken as a whole, they are to be no less favourable than the terms and conditions which staff enjoyed immediately before the date of transfer.
The clause also provides for arbitration on the question whether this principle is adhered to. There is thus an interim period between the transfer and the adoption, in consultation and by agreement, of new terms and conditions of service. The staff have been concerned about this interim period. Assurances have accordingly been given that, for a period of up to two years from the appointed days, any Authority pay increases that would have applied to the staff concerned, had they remained in the Authority, would automatically be applied to them as members of the staff of the companies, from the same effective date, except to the extent that the managements and staff representatives may agree otherwise. This overlap of up to two years should be amply sufficient for setting up company negotiating and arbitration machinery and for negotiating most if not all the company terms and conditions of service.
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My Lords, as pension schemes give rise to transitional problems of a special character, the Bill deals separately with pensions. Clause 20 permits both staff transferred to the companies and also new recruits to the companies to be members of a pension scheme maintained by the Authority. If and when the companies set up their own pension schemes, the clause lays a duty on the Secretary of State to satisfy himself that the provisions of the company scheme are no less favourable, taken as a whole, than the Authority scheme. Supplementary assurances have been given that the Secretary of State will pay particular regard to the provisions relating to transferability of pensions to and from a company scheme; that the Government will consult representatives of the employees so dial: the Secretary of State, would be willing to consider seeking independent, authoritative and expert advice; and that, although the decision as to whom to turn to for advice must rest with the Secretary of State, he would take account of any firm views that the representatives of the staff had on this.
As was pointed out in the Committee stage of the previous Bill by the noble Lord, Lord Delacourt-Smith, who was the Government spokesman on the Bill, there are obvious objections to subjecting individual items of a superannuation code to arbitration; and what matters is the acceptability of the schemes as a whole. A pension fund scheme is, after all, a very complex and finely balanced set of provisions. The Government believe that the interests of the staff will be best safeguarded by the provisions in the Bill, together with the assurances which I have mentioned, and which will apply in the event that the companies decide to set up their own pension schemes.
Under Clause 7 of the Bill the companies will issue shares to the Authority in consideration of the property, rights, liabilities and obligations transferred to them. Your Lordships will except me to say a word about the Government's policy on private participation in the companies. Subject to the retention of a public majority shareholding, as now provided for in Clause 11, the Government favour private participation in both companies, as the Bill, like its predecessor, allows; provided that satisfactory agreements on the terms and on the price of shares can

827
be reached. The Government are commissioning a merchant bank to advise on this question in relation to the nuclear fuel company; and a similar policy will be followed for the radiochemical company.
In pursuing this policy the Government have two financial aims: first, the maximum realisation from the public investment in the nuclear fuel business, and second, the maximum contribution by private interests to the future financing of the business. The matters on which the Government and the Atomic Energy Authority are seeking advice from a merchant bank can be broken down into four elements. First, the possible approaches to valuation and determination of a price for the shares. Second, the desirable capital structure of the company and form of private participation, bearing in mind the need on the one hand for further substantial investment and on the other for the maximum incentive to increase the profitability of the fuel company. Third, the extent and nature of the interest in participation in the fuel company. Fourth, the amount of finance likely to be forthcoming from private participation, both initially and subsequently. The possibility of a public issue of shares at some stage is not ruled out. The merchant bank will have available an assessment of the financial performance of the Trading Fund by a firm of accountants. Before final decisions are reached on the basis of expert advice, Parliament will be given an opportunity to consider the Government's intentions.
I should draw attention to the fact that, compared with the previous Bill, the limits in Clause 13 for the aggregate of the issue of loans to the fuel company and purchase of further shares issued by the company are reduced. The change reflects the Government's belief that the fuel company can expect to raise a substantial proportion of its capital requirements from the private sector. The limit, which is still very substantial at the maximum figure of £75 million, is not expected to impose any restriction on the company's investment during the first five years of its life.
A new clause, Clause 19, has been included in order that the Government can implement the security annex to the
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Gas Centrifuge Agreement with the Netherlands and Germany which was signed by the previous Government in March last year. The clause permits certain of the security provisions of the Schedule to the Bill to be applied to any international company registered in the United Kingdom and established pursuant to the Centrifuge Agreement. The Government will be tabling a simple Amendment to this clause to improve security in one particular respect.
In connection with the Gas Centrifuge Agreement with the Netherlands and Germany, I should mention that before the Government can ratify the agreement, Clause 17 of this Bill must become law. The Agreement needs to be ratified within one year of its signature, which took place on March 4, 1970. I hope therefore that your Lordships will agree to give the Bill a fair wind. As matters stand now, only the Atomic Energy Authority may carry out enrichment of uranium or reprocessing of nuclear fuel elements for a purpose other than research and development—that is as a production business. The Amendment in Clause 17 will enable the nuclear fuel company or other bodies to carry out enrichment or reprocessing subject to licensing and safety controls. One of these other bodies will in due course be the Enrichment Organisation to be set up under the Gas Centrifuge Agreement. This organisation, in which the nuclear fuel company will have a one-third shareholding, will initially operate two enrichment plants—one at Capenhurst and one in the Netherlands.
In this introduction of the Bill I have not attempted to deal comprehensively with all its provisions. I know that there is some apprehension amongst the staff who will be transferred to the companies under the Bill. They will be leaving the Authority as their parent body and will be moving out into the private sector. But while it is natural that there should be some apprehension, I believe there is no real justification for it. The Radiochemical Centre and the Production Group have over the years established a firm base from which to exploit the rapidly growing markets both at home and overseas. I believe that the staff, as well as the management, will value the greater freedom and opportunities that the new status of companies set up under

829
the Companies Acts will provide. I have been impressed by what I have seen of the achievements of the people who have built up the isotope and fuel business, and I see no reason why they should not look forward to continued expansion and profitability. In moving the Second Reading of the Bill, I would wish them that continued expansion and continued profitability, and every success. I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Drumalbyn.)
3.15 p.m.
LORD DIAMOND: My Lords, I can certainly respond to the noble Lord's request for a fair wind by giving him an affirmative answer straight away. Certainly all of us on this side of your Lordships' House would wish to see this much-discussed Bill turned into an Act of Parliament as soon as may be convenient to your Lordships. I want first to thank the noble Lord for having explained the recent developments and having added to our knowledge of this matter, and also to congratulate once more all those concerned in the Authority for having achieved what is undoubtedly a great success story. What they have achieved in terms of increased sales, in terms of increased exports—in terms of increased proportion of exports, as I understand it, as well as merely increasing the absolute figure—in terms of having achieved their target and the 23 per cent. figure mentioned by the noble Lord: all these make up a real success story. Indeed they immediately pose the question: if everything is going so well, why not leave well alone? I should like to spend just a moment or two of your Lordships' time in explaining the attitude of those of us on this side of the House about that question.
One could, of course, have taken the view that this business was going very well indeed: that here was an example of an organisation which was suitably constituted and able to make great headway, in terms both nationally and internationally—because I have referred to the increase in the proportional exports. One could have taken the view that if there are certain skills or certain needs which are not available to a body constituted as the Authority is at the moment, those skills could be hired. One could have appointed agents; one could have
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consulted: in short, one could have left the constitution of the Trading Fund and the circumstances in which it operated exactly as they are at present.
It will be more in your Lordships' recollection than mine that this Bill has already come before your Lordships' House, put forward by the previous Government, and we on this side of the House—I hope I may be thought to be entirely non-contentious when I say this—took the completely undogmatic approach of saying that although this was a great success story, even more could be done; even more freedom could be made available to the enterprise in a commercial way if it were to take the form not merely of a public enterprise but of a partnership betwen public and private enterprise. That is, in fact, what is happening. Without wishing to draw too many conclusions, or indeed to preach to your Lordships—I should be incapable of doing that—I would suggest that this should be borne in mind in any sensible approach to developments, which ought to be looked at objectively in terms of what is to the benefit of the nation as a whole rather than in terms of preconceived and somewhat narrow dogma. That is what we have done; and if in due course we in your Lordships' House are to debate certain attitudes which seem to be developing with regard to public corporations as a whole, certain contrasts may appropriately be drawn.
Suffice it to say that I welcome this Bill. I welcome the development that is taking place. I am sure that it will be for the added advantage of all concerned and, indeed, for the welfare of the nation as a whole. I welcome, also, if I may be particular, the re-inclusion of Clause 11(3). That is perhaps the most moderate way of describing that subsection. I think that the arguments for its reintroduction were very solid indeed. As the Minister has explained, it is essential for strategic reasons. I should have thought it was also essential, having regard to the very sensitive technology involved; I should have thought it was also necessary, having regard to the promises originally made to the staff at A.E.A., and I should have thought that it was also essential in order to secure an effective, permanent, partnership. It is also wise as a recognition of a decade and a half of public enterprise.

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But there may have been, and there may still be, those who have an anxiety that the retention of a majority shareholding would result in Government interference in the day-to-day affairs of the two new companies. If that were so, then I agree that this would be not merely an unwise but a disastrous result. There is nothing which is so opposed and hostile to the healthy development of commercial enterprise of the kind that is needed to add to the Government enterprise and national enterprise which is already taking place, as people breathing over the shoulders of those who have a commercial task to perform, reporting on their day-to-day actions, either to this House or to another House. Therefore I wish to say straight away that we on this side entirely support the view that freedom from day-to-day interference in management is essential for the health of these two newly-constituted companies. If that freedom were not to be achieved there would be no point at all in the change which is taking up your Lordships' time.
As to the history of this clause I will not say any more than that there will be special joy in Heaven. I recognise that in your Lordships' House there are others who are much better equipped to describe what is going on in Heaven than I am, but there will be more joy in Heaven over the restoration of this clause than in relation to the nine-and-ninety just men behind me. There were two points that the Minister mentioned which I should like to underline. First, there is the question of the share valuation. He was careful to point out that the figures he gave to us indicated the order of magnitude of the book value of the assets. Naturally we are all extremely interested in the processes of valuation and the final recommendation—because I understand that it will be no more than a recommendation when it reaches us again. So we shall all be very interested in the processes of valuation and the recommendation of the final figure, which is to be a fair figure as between the contribution by private enterprise and the contribution by public enterprise.
We must not forget, and I am sure your Lordships will not forget, that as taxpayers (making assumptions that there are some taxpayers in your Lordships' House) we have all contributed, through public expenditure, considerable sums to
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the development of this body over the past 15 or 16 years, and it is right that there should be a full recognition not only of the past achievement of the Trading Fund but also of the future profitability of these two companies, when the valuation and the structure of the share capital are considered. I imagine that the Minister had it in mind to put before your Lordships' House not only suggestions as to valuation of the shares but also suggestions as to the gearing and general structure of the capital proposed, which would obviously affect the situation.
There are a number of minor points on which I do not wish to delay your Lordships to-day. The Minister was good enough to refer to discussions which are going on with the staff associations; I hope that by the time we reach the Committee stage it will not be necessary to deal with them in any detail. If not, we can raise those detailed points at that time, and we shall then want to be satisfied particularly about the superannuation provisions. A further point which the Minister may wish to delay referring to until that stage—although I should be happy if he could find it convenient to include it in his reply later to-day—is the future of the A.E.A. itself. I do not know yet whether he is able to tell your Lordships what proposal he has for that body, which will now, in terms of staff, be, I suppose, something of the order of two-thirds the present size. That is really all I want to say. We are grateful to the Minister for having explained the matter. I entirely support what he says in wishing a peaceful and profitable development to these two companies in their attempt to achieve the best that public and private enterprise can jointly contribute.
3.26 p.m.
VISCOUNT THURSO: My Lords, may I first of all associate those of us on these Benches with what the noble Lord, Lord Diamond, has said? We wish this Bill a fair wind, and I will confine the puffs of wind which I hope to give it now to being short and sharp. I should begin by declaring an interest: in the first place a local interest, in that atomic energy is by far the largest employer of labour in the town of Thurso. Atomic energy has trebled the size of the town in ten years, and is a very important part of the whole economy of the Northern Highlands of

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Scotland. I must also declare a personal interest in that, by a curious turn of circumstances, I happen to be, through the chairmanship of a small family company, the Atomic Energy Authority's landlord for its pensions office. Perhaps I may tell your Lordships a little more about that later.
In associating myself with the good wishes to this Bill, I have three points to make. It is interesting that in passing on the assets of Windscale in particular to the new fuel company, the Atomic Energy Authority will continue to be a tenant of those assets. As I read the Bill (and I should be grateful for clarification on this point later on), it is going to sit there rent free. I am not at all sure that I am happy about the idea of the Atomic Energy Authority sitting rent free.
The object of the Bill is to set up a commercial enterprise to handle the commercial side of atomic development in this country and to handle the selling of what we have developed and tested. If that is so, then relationships between the Atomic Energy Authority and the new companies should be on a commercial basis. I should like to be sure that the new companies will, where facilities and space are available on other atomic energy sites, commercially hire these facilities, if that is thought wise and desirable.
If I may deal for a moment with the Atomic Energy Authority pensions scheme, something has been said in this House, and much has been said in another place, about the desire to achieve a pensions scheme for the new companies which will be every bit as good as the scheme which employees of the Atomic Energy Authority already enjoy. In the early stages of the Atomic Energy Authority, pensions were handled individually at individual sites. But the then member of personnel on the Board of the Atomic Energy Authority, Sir Donald Perrott, looked at his organisation and thought to himself that, to strengthen the community which was dependent on atomic energy employment in the North—in other words, Dounreay—he could put together his pension schemes from all his different sites and locate them in one office in Thurso.
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This is the most imaginative dispersal of office accommodation that has ever been tried, and it has worked. The Authority is rightly proud at the way it has worked; at the way in which the building in Thurso is able to service the pension schemes of all its different plants throughout the country. I would hope that this imaginative scheme would not be weakened by splitting up the pension schemes as between the Atomic Energy Authority and the new companies. I would hope that the new companies would be able to have their pension schemes, if it is desired to make them different from those of the Atomic Energy Authority, administered in Thurso in the existing Atomic Energy Authority superannuation office. As I say, this is where I have to declare an interest, because the building in which this work is carried out was provided by us because no Government funds were available at the time, and in order to have an office located in the North we built the building and the Authority are our tenants. But this is a small matter compared with the job opportunities which it gives to the wives and daughters of people employed in atomic energy in Thurso, and we would not want to see these job opportunities diminished.
The third point that I should like to make, about which I should like to seek some assurances from Her Majesty's Government, relates to the structure of the new companies. As I read the Bill, the intention is in the first instance to set up shell companies, while an examination and a valuation is made of the assets and while consultation is undertaken with merchant banks to find how best to value the shares in the new companies. But I would hope that at the earliest possible opportunity, there would be a further public participation than merely to allocate blocks of shares to existing large firms who are interested in atomic energy. I feel that to construct a company which is solely answerable to the boards of other companies who have an interest in the work being done, and to the Board of the Atomic Energy Authority, is to remove the operations of these important new companies one stage further from direct accountability.
I feel also that if there is to be an object in setting up these new companies it must not only be, as the noble Lord,

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Lord Diamond, said, freedom from interference in day-to-day management, but also be to draw from the market, from business in general, the know-how on commercial matters that is available—to draw know-how in business accountancy, in salesmanship and so forth. This is not the sole prerogative of the public companies who will participate in the formation of the initial atomic energy companies; this is also the prerogative of the market. It is a good discipline that a public company should be accountable to shareholders and that it should be questioned by people who have knowledge of salesmanship and of accountancy.
May I close my words on this Bill, my Lords, by associating myself again with the praise that has been given on both sides of your Lordships' House to the Atomic Energy Authority? The Atomic Energy Authority is an Authority of which all who have worked in it, all who have been associated in establishing it, and the whole country, can be justly proud. It is one of the few areas in which Britain is still the greatest—in the words of Cassius Clay, "We are beautiful!" At Dounreay we have still the most exciting atomic energy plant in the world, to which the Russians come, to which the Americans come, the Japanese and the whole world come, to see the new generation of fast reactors. And I think we can congratulate all those who were associated with the Atomic Energy Authority, in setting it up, in managing it, in working it. Finally, may I say that if the new companies are able to do one fraction as well in the commercial field as the Atomic Energy Authority has done in the development and research field, we shall look forward to a very profitable era, which will be profitable to all of the country and will make worth while the investment which we put into the research.

UGANDA: SAFETY OF BRITISH NATIONALS
3.37 p.m.
THE MARQUESS OF LOTHIAN: My Lords, I wonder whether I might intervene at this point to answer the Private Notice Question put down by the noble Lord, Lord Shepherd, in which he asked whether Her Majesty's Government will make a Statement regarding the safety of British nationals in Uganda.
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My Lords, there has been no report of any injury to United Kingdom citizens or of damage to British property. The High Commissioner continues to be in touch with the British community.
LORD SHEPHERD: My Lords, I am most grateful to the noble Marquess for replying to that Private Notice Question. We must all have heard with very great concern and sympathy of the unfortunate events in Uganda during the last 48 hours. I think it would be wrong at this stage to press the Government any further as to any future action they may have in mind as a consequence of these events. Our immediate concern, and that of the Government, must be the safety of some 8,000 British nationals in Uganda. If I may say so to the noble Marquess, in anything said or done in relation to East Africa, in particular, and Africa as a whole, we must have in mind the safety of our people in Uganda.
I hope the noble Marquess will take careful note that, apart from the numbers of the business community in Uganda, there are many young people—nurses, teachers—who may need particular, special advice and perhaps encouragement in these difficult times. I have no doubt that the High Commission, and the High Commissioner in particular, have this in mind, and that we can rest confident that all that can be done will be done. But I hope that the Government will keep us informed of the safety and well-being of our people in Uganda during these difficult times.
LORD BROCKWAY: My Lords, may I ask the Minister whether Her Majesty's Government will also take into consideration the many British citizens who are in Uganda—people who may not be British nationals but Asians—and who are already in difficult circumstances but have been promised all the rights of British citizenship?
THE MARQUESS OF LOTHIAN: Yes, my Lords. I will certainly bear in mind what the noble Lord, Lord Shepherd, has said; and I completely endorse his remarks, and also those of the noble Lord, Lord Brockway. I will, of course, undertake to keep the House informed if there are any further serious developments. At the moment the indications are that life is returning to normal.

COMMONWEALTH CONFERENCE: PRIME MINISTER'S VISITS
3.40 p.m.
EARL JELLICOE: My Lords, I should like, with permission, to repeat a Statement which my right honourable friend the Prime Minister is making in another place. This is the Statement:
"With permission, Mr. Speaker, and that of the House, I wish to make a Statement.
"I left London on the 6th of January to travel to the Conference of Commonwealth Heads of Government in Singapore, stopping on my way in Cyprus, Pakistan, India and Malaysia.
"In Cyprus, I visited the British Forces in the Sovereign Base Areas. I should like to tell the House how greatly I was impressed by the outstanding services being rendered by the Army and the R.A.F. I also took the opportunity to have discussions with the President of the Republic and to call on the Vice President. I also met the commander of the United Nations force in Cyprus and the Secretary General's representative.
"In Pakistan I had discussions with President Yahya Khan and Pakistani Ministers.
"During my three days in Delhi I had meetings with Mrs. Gandhi and Her Ministers; I also had an opportunity of speaking to the Indian Council of World Affairs.
"In my visit to Kuala Lumpur, I had discussions with the Prime Minister of Malaysia, and members of his Government. Here, as also in Pakistan, I was greatly touched by the gratitude expressed to me for the contributions which the British Government and people had made to the relief of the distress caused by the recent floods.
"Both in Singapore where I visited units of Her Majesty's Forces, and in Malaysia, I found a warm welcome for our decision to keep a continuing British presence in the area, as part of the five-power arrangements which are shortly to be concluded.
"In all these countries, I took the opportunity of meeting members of the British communities and representatives of British business and other interests.
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I was much impressed by the British investment and aid contribution to economic development in the area.
"I am glad to be able to report to the House that bilateral relations between Britain and each of these countries are now close and will, I hope, become more and more fruitful.
"The Heads of Government of the Commonwealth met in Singapore from the 14th to the 22nd of January, under the chairmanship of the Prime Minister of Singapore. My right honourable friend the Foreign and Commonwealth Secretary was present with me throughout the Conference. I will circulate in the OFFICIAL REPORT the texts of the Communiqué and the declaration agreed by the Heads of Government.
"In addition to the normal reviews of the international, political and economic scene, the agenda included items on the implications for the Commonwealth of the United Kingdom regotiations for entry to the E.E.C.; on the future of the Commonwealth in the next decade; on the situation in Southern Africa; on the security of the Indian Ocean; on comparative techniques of government; on various items connected with schemes of technical co-operation and the Commonwealth Foundation; and the Secretary-General's report.
"The problems of Southern Africa overshadowed the Conference and dominated the discussion. But, important though those problems are, there are many other questions, concerning other continents, both in the political and the economic spheres as well as in the whole field of Commonwealth cooperation, to which we could usefully and constructively have given more time.
"In the discussion of Southern Africa I took the opportunity of explaining why we think that there is a threat from growing Soviet naval power in the Indian Ocean, as elsewhere. I explained why we thought that the issues of apartheid, which, with the other Heads of Government, we condemned, and the sale of arms were two separate questions. And I explained why we considered it necessary to retain our right to use the facilities granted us under the Simonstown Agreements, and therefore to discharge our own obligations under

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those Agreements. I set out fully the grounds on which, for reasons of practical common sense and straightforward dealing, it has seemed to us that it would be in the spirit of these joint arrangements, which remain valid and relevant, and which no Commonwealth Government asked us to abandon, to continue to supply the limited categories of equipment needed to enable South Africa to play her part.
"I also made clear the nature of our legal obligations under the Simonstown Agreements. These obligations arise under the Agreement for the Defence of the Sea Routes round Southern Africa. I am advised that the obligation is to permit the export of equipment and spare parts required to keep operationally efficient the vessels purchased under the terms of that Agreement. The obligation extends to licensing the purchase of Westland Wasp helicopters to equip three anti-submarine frigates that were purchased under the Agreement and were, with our agreement and assistance, converted to carry helicopters. My right honourable and learned friend the Attorney General proposes to advise Parliament on these legal obligations in a White Paper to be published shortly.
"I explained clearly the views of Her Majesty's Government; I listened carefully to the views of other Commonwealth Heads of Government on these matters; and I undertook to convey all those views to my colleagues.
"One of the anxieties expressed by Commonwealth leaders concerned the future intentions of the South African Government towards them. To allay these anxieties I informed the Conference of the assurances we have had from the South African Government that they will not use any items of maritime equipment which we may supply to them, for purposes other than the protection of the sea routes. I made it clear that I did not expect the South African Government to breach this assurance, but that, if they did, we should at once refuse any further supplies of equipment or spares.
"I accepted the proposal for a group to study the defence of the trade routes in the Indian Ocean and South Atlantic, since this clearly expressed the importance
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which many Commonwealth countries attached to the trade routes in those areas. We will play our part in the work of this study group. At the same time I have fully reserved the right of the British Government to take such action as it thinks necessary in defence of British interests. These words mean what they say, no more no less. Our position is quite clear and straightforward, and there are no secret understandings.
"It was on the same basis that we were concerned to ensure that the declaration of principles explicitly recognised that each country is responsible for its own policies.
"This was not an easy meeting. For the first time there were 31 Commonwealth countries represented including three new members from the Pacific. Inevitably much of the old intimacy of discussion has disappeared. Regrettably, the public release of statements seems to have become a regular practice, so detracting from the freedom and frankness of the discussions. I think that all the Heads of Government were aware of this weakness and we shall be giving thought to this and other problems connected with our Commonwealth discussions in the 'seventies and beyond. I was deeply impressed by the strength of feeling, which this Government fully share, that the Commonwealth, with its distinctive tradition and procedures, if they can be preserved, has a vital role to play in helping to promote better relations and closer understanding between the nations of the world."
That, my Lords, concludes the Prime Minister's Statement.
Following are the texts of the Final Communiqué referred to by Lord Jellicoe and, at the end, the Commonwealth Declaration:

FINAL COMMUNIQUÉ
Commonwealth Heads of Government met in Singapore from January 14 to 22. All Commonwealth countries were represented, seven by their Presidents, seventeen by their Prime Ministers, one by the Vice-President, and six by senior Ministers. The Prime Minister of Singapore was in the Chair.
2. This was the first Heads' of Government Meeting to be held in Asia. Heads of Government welcomed this and expressed gratitude to

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the Government of Singapore for the hospitality it had provided.
3. The Meeting expresseed a warm greeting to the Prime Ministers of Tonga, Western Samoa and Fiji whose countries had become members of the Commonwealth during 1970, and particularly welcomed their membership as it brought to Commonwealth consultations additional views of the peoples of the south-west Pacific.
Commonwealth Declaration
4. Heads of Government approved unanimously and issued a Commonwealth Declaration.
International Affairs
5. Heads of Government reviewed the world political situation and trends. Views were exchanged on: East—West relations; Chinese representation in the United Nations; the steps required to end the conflict in Indo-China; the neutralisation of south-east Asia; the conditions necessary for achieving a durable settlement in the Middle East; the violation of the security and sovereignty of the Republic of Guinea by the military and naval forces of Portugal in conjunction with other elements; the need for general and complete disarmament under effective international control, the cessation of the nuclear arms race and the conclusion of collateral measures with particular attention to nuclear disarmament until general and complete disarmament is achieved; the staging of nuclear weapons tests and the dumping of chemical weapons in the peaceful south-west Pacific area; and the complementary role of regional organisations and such trans-regional groupings as the Commonwealth.
Southern Africa
6. The Meeting reviewed major developments in southern Africa, including in particular those in South Africa and Namibia (South-West Africa), the Portuguese colonies and Rhodesia, and noted that tensions in that region were likely to increase rather than decrease unless there were fundamental changes in the conditions now prevailing. Earlier discussions on N.I.B.M.R. were recalled. There was unanimous reaffirmation of the importance of the principle that any proposals for settlement must be acceptable to the people of Rhodesia as a whole.
7. The Meeting had before it the report of the Commonwealth Sanctions Committee which reviewed the working of economic sanctions over the last two years. Heads of Government authorised the Committee to continue to review the situation.
8. Heads of Government discussed fully the question of the sale of arms to South Africa.
9. Heads of Government considered the factors affecting the security of maritime trade routes in the South Atlantic and Indian Oceans, which are of vital importance for a large number of Commonwealth countries. They decided to set up a Study Group, consisting of representatives of Australia, Britain, Canada, India, Jamaica, Kenya, Malaysia and Nigeria, with instructions to consider the question
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further and report to them through the Secretary-General as soon as possible.
10. Certain Heads of Government stipulated the understandings on which they agreed to support the proposal to set up the Study Group.
The Security of the Indian Ocean
11. In their discussion of a paper presented by the Prime Minister of Ceylon on the security of the Indian Ocean, Heads of Government agreed on the desirability of ensuring that it remains an area of peace and stability.
Economic Affairs
12. Heads of Government held a full and frank discussion on the world economic situation and broadly reviewed recent developments and trends. Among the items discussed were: liberalisation of trade and access to markets; the special problems relating to exports of developing countries; the generalised preferences system and the problems connected with it; international commodity problems; high freight rates, inflation and its consequences; debt servicing problems of developing countries; targets for the transfer of resources to developing countries; terms and conditions of assistance, including the untying of aid; supplementary financing; the possibility of a link between Special Drawing Rights and development finance; and, the lending policies of international financial institutions.
13. Heads of Government expressed their satisfaction that agreement was reached on the International Development Strategy for the Second Development Decade at the United Nations General Assembly. They reaffirmed their Governments' resolve to take the measures to translate into reality the goals and objectives of the Decade. In summarising their discussions, they also reaffirmed their conviction that fulfilment of the economic and social aspirations of the peoples of the developing countries was a matter of vital concern not only to the developing nations but to the world at large.
Possible British Entry into the E.E.C.
14 Heads of Government discussed Britain's possible entry into the European Economic Community and the implications of this for other Commonwealth members. Among the matters discussed were the questions of: the effect of the Common Agricultural Policy on the exports of Britain's traditional supplies; the need for any enlarged Community to be outward looking; standstill arrangements for those countries which desired or may be offered association or other trading arrangements with an enlarged Community; reverse preferences and their impact on international trading arrangements; the potential advantage and disadvantages for the Commonwealth in the event of Britain's accession; and methods of consultation during negotiations. They welcomed the resolve of the British Government to continue to press during the negotiations for measures to safeguard the interests of Commonwealth countries.
Commonwealth Co-operation for Development
15. Heads of Government welcomed the establishment of the Commonwealth Fund for Technical Co-operation and noted that the way was now open for it to be made operational.
16. Heads of Government discussed the recommenqdations embodied in a study on Commonwealth Export Market Development. They decided that these recommendations should be given further consideration at an early meeting of trade and finance officials.
Commonwealth Information Programme
17. Heads of Government agreed in principle on the proposals submitted to them for a Commonwealth Information Programme.
Commonwealth Co-operation on Youth Questions
18. Heads of Government noted with approval the Secretariat's activities in the youth field and agreed that such activities be expanded. They noted that a number of related matters would be discussed at the forthcoming Commonwealth Education Conference in Canberra. They decided that a meeting of Ministers concerned with Youth matters be convened as early as possible.
Commonwealth Book Development and Gift Voucher Scheme
19. Heads of Government approved in principle the establishment of a Commonwealth Book Voucher Scheme.
Special Commonwealth Programme for Assisting the Education of Rhodesian Africans
20. Heads of Government took note of the development of the programme and supported its continuation.
Commonwealth Foundation
21. Heads of Government noted the progress of the Commonwealth Foundation and agreed to its proposed expansion.
Comparative Techniques of Government
22. The Conference agreed that the item on "Comparative Techniques of Government", which was introduced by the Prime Minister of Canada, should be the subject of further discussion at the next meeting of Commonwealth Heads of Government. It was proposed that the Secretary-General should facilitate such discussion by arranging for preliminary study of the subject by appropriate officials.
Report of the Commonwealth Secretary-General
23. Heads of Government took note of the Third Report of the Commonwealth Secretary-General.

COMMONWEALTH DECLARATION
The Commonwealth of Nations is a voluntary association of independent sovereign states, each responsible for its own policies, consulting and co-operating in the common
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interests of their peoples and in the promotion of international understanding and world peace.
Members of the Commonwealth come from territories in the six continents and five oceans, include peoples of different races, languages and religions, and display every stage of economic development from poor developing nations to wealthy industrialised nations. They encompass a rich variety of cultures, traditions and institutions. Membership of the Commonwealth is compatible with the freedom of member governments to be non-aligned or to belong to any other grouping, association or alliance.
Within this diversity all members of the Commonwealth hold certain principles in common. It is by pursuing these principles that the Commonwealth can continue to influence international society for the benefit of mankind.
WE BELIEVE that international peace and order are essential to the security and prosperity of mankind; we therefore support the United Nations and seek to strengthen its influence for peace in the world, and its efforts to remove the causes of tension between nations.
WE BELIEVE in the liberty of the individual, in equal rights for all citizens regardless of race, colour, creed or political belief, and in their inalienable right to participate by means of free and democratic political processes in framing the society in which they live. We therefore strive to promote in each of our countries those representative institutions and guarantees for personal freedom under the law that are our common heritage.
WE RECOGNISE racial prejudice as a dangerous sickness threatening the healthy development of the human race and racial discrimination as an unmitigated evil of society. Each of us will vigorously combat this evil within our own nation. No country will afford to regimes which practise racial discrimination assistance which is its own judgment directly contributes to the pursuit or consolidation of this evil policy. We oppose all forms of colonial domination and racial oppression and are committed to the principles of human dignity and equality. We will therefore use all our efforts to foster human equality and dignity everywhere and to further the principles of self-determination and non-racialism.
WE BELIEVE that the wide disparities in wealth now existing between different sections of mankind are too great to be tolerated; they also create world tensions; our aim is their progressive removal; we therefore seek to use our efforts to overcome poverty, ignorance and disease, in raising standards of life and achieving a more equitable international society. To this end our aim is to achieve the freest possible flow of international trade on terms fair and equitable to all, taking into account the special requirements of the developing countries, and to encourage the flow of adequate resources, including governmental and private resources, to the developing countries, bearing in mind the importance of doing this

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in a true spirit of partnership and of establishing for this purpose in the developing countries conditions which are conducive to sustained investment and growth.
WE BELIEVE that international co-operation is essential to remove the causes of war, promote tolerance, combat injustice and secure development amongst the peoples of the world; we are convinced that the Commonwealth is one of the most fruitful associations for these purposes.
In pursuing these principles the members of the Commonwealth believe that they can provide a constructive example of the multinational approach which is vital to peace and progress in the modern world. The association is based on consultation, discussion and co-operation. In rejecting coercion as an instrument of policy they recognise that the security of each member state from external aggression is a matter of concern to all members. It provides many channels for continuing exchanges of knowledge and views on professional, cultural, economic, legal and political issues among member states. These relationships we intend to foster and extend for we believe that our multi-national association can expand human understanding and understanding among nations, assist in the elimination of discrimination based on differences of race, colour or creed, maintain and strengthen person liberty, contribute to the enrichment of life for all, and provide a powerful influence for peace among nations.
3.48 p.m.
LORD SHACKLETON: My Lords, we thank the noble Earl for repeating that Statement, and I am bound to say, in agreeing with the last part of it, referring to the importance and the strength of feeling of the Commonwealth, that it is indeed evidence of its strength that it has so far withstood the efforts of the Prime Minister.
First, however, I should like to say a word of congratulation personally to the Prime Minister on surviving his very arduous journey. I think we ought not to underestimate the strain that was placed upon him. But, I am afraid, having said that, that most of my congratulatory remarks come to an end, except in regard to the entirely proper tribute to the work of British troops, with which I am sure the whole House will agree.
It is always difficult to read such a Statement when it is thrust into one's hand at the last moment, and the noble Earl got through it very well. But I should like to make two or three short comments and to ask one question. Although we may be misled, I am inclined to receive this Statement with some relief.
LORD SHEPHERD: Hear, hear!
LORD SHACKLETON: It appears that while the Prime Minister is reserving the position of the Government—and we all accept that the independence of the British Government is a matter for the British Government and the British people—it seems as if there is perhaps some re-thinking, and it may well be almost better to say nothing about it but to let the process go on. None the less, there are one or two points that I would raise.
I agree with the Prime Minister when he points out the difference between the old Commonwealth Conference and the new, and the regrettable tendency to release public statements. I am bound to say that the Prime Minister seems to have matched it fairly well by a great deal of private briefing of his own opinions on some of these statements. I cannot say that that has contributed to good Commonwealth feeling. Of course, the crucial issue is what the decision is going to be on arms for South Africa, and it now appears that the gap between what appeared to be the Government's interpretation of the Simonstown Agreement and that which we were advised was the correct interpretation when we were in office is not so great as we at one time feared.
I should like to ask the noble Earl when in fact we shall have this White paper from the Attorney General. In this connection it would have helped us all, and would still help us, if we had some idea in rather more precise terms as to the type of arms that the Government were contemplating, or are still contemplating, or hesitating about, exporting to South Africa. The Statement talks about "replacement", and I take it that this will exclude Nimrod aircraft, and will exclude presumably new frigates, so that it really comes down to the question of helicopters. The noble Earl will be aware that the previous Government did in fact say in 1969 that they were not going to export helicopters, and this led not to a demand that we fulfil the Simonstown Agreement but that the Simonstown Agreement in this respect might be renegotiated. It may be that we shall be getting some clarification of this matter. It would be helpful to know when we are to have the White Paper.

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I would also ask the noble Earl whether he is contemplating—and we should discuss this through the usual channels—an early debate on the Commonwealth and the Commonwealth Conference. It is, of course, tragic that so much of the time of the Conference was devoted to this problem of South African arms. I would also ask the noble Earl whether the Prime Minister succeeded in convincing anybody else of the dangers which he foresees in the Indian Ocean, as opposed to the dangers which most of the Commonwealth, the United States of America and others, foresee from the export of arms to South Africa and the threat to the peace of Africa as a result.
EARL JELLICOE: My Lords, as we have had quite a long supplementary statement from the noble Lord, may I answer it straight away? I must say that I am grateful to him for his expression of sympathy with the Prime Minister and his pleasant references to the great physical strain of a very long trip of this nature and such an arduous Conference. I should also like to express gratitude to him for the words he has spoken, and which I am sure we all endorse in your Lordships' House, about the contribution which our Armed Forces are making worldwide, be it in Cyprus, which the Prime Minister visited, or in South-East Asia.
In answer to the noble Lord's specific questions, all I can say about the White Paper is that it will be published shortly. I understand "shortly" to mean in the near future, and that will be a matter of days, I think, rather than weeks. I cannot go further than that. I think the White Paper, which deals with complex legal and political issues, should be allowed to speak for itself and should thereafter be debated. I would not wish to be led on to the ground of the White Paper, and I think it would be quite wrong to debate it by way of exchanges across the Floor of your Lordships' House.
So far as the supply of helicopters is concerned, I would only remind the noble Lord opposite that it was in March. 1965, that a senior official of the Foreign Office, Sir Geoffrey Harrison, writing on behalf of the noble Lord, Lord Chalfont, confirmed that Her Majesty's Government were prepared to supply additional Wasp
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helicopters to meet South African naval requirements, and explained their decision by reference to the Simonstown Agreement; and in fact four further helicopters were supplied in 1965; that is, in the lifetime of the last Administration.
Having said that, I should like to say straight away in reply to the noble Lord the Leader of the Opposition that if there is a general demand and a feeling that this and the wider issues involved could usefully be debated at an early date in your Lordships' House, I am quite certain that suitable arrangements can be made through the usual channels. I should have thought that the ventilation of these great issues would be desirable, if that is indeed the feeling of your Lordships' House as a whole.
LORD BYERS: My Lords, I should like to endorse the suggestion that has been made that we should debate this matter at a suitable opportunity, if only to find out how many more skeletons there are in the cupboard that the House should know about. May I associate myself with the views expressed by the noble Lord, Lord Shackleton? One must sympathise with the Prime Minister in having to go to a conference which was conducted very largely by Press handout. I should like to ask whether the Government are going to take the initiative in suggesting to the Commonwealth Secretariat that a lot of deep thought should go into the way in which these Conferences are conducted in the future. If they continue to be conducted in this way, the Conference system in the Commonwealth is bound to break down.
There are many of us who feel that Commonwealth relations have been bedevilled by the error of judgment by the Government, immediately after the Election, announcing the sale of arms to South Africa. Even at this stage, may I make an appeal to the Government to make it clear that we cannot go on bedevilling Commonwealth relations month after month in this way. If the Indian Ocean and the South Atlantic are in jeopardy, it is not a matter for the British Government and the South African Government; it is a matter for the West as a whole. I would plead with the Government that they get rid of this haunting fear in the Commonwealth that we are going to sell arms to an apartheid Government.
EARL JELLICOE: My Lords, I should like straight away to say that I find myself in very considerable agreement with what the noble Lord, Lord Byers, said in the first part of his statement. I believe that, given the size of the Commonwealth—31 independent countries were represented at Singapore—a great deal of attention is needed to the organisation of Commonwealth affairs, and specifically a conference of this sort. I am sure that this will be a matter which will engage the attention, not only of Her Majesty's Government and the Commonwealth Secretariat but also the other Commonwealth countries, as the feelings the noble Lord expressed were not only the feeling of the British delegation at Singapore but those of a great many other Commonwealth countries represented there.
I do not think the noble Lord would expect me to endorse all the sentiments which he expressed in the last part of the questions which he addressed to me. All I would say is that the fact is that eight Powers have agreed to join the Study Group on the question of the Indian Ocean, and this is surely in itself a recognition of the fact that the problems of that area are thought to be problems by countries other than Her Majesty's Government.
THE EARL OF DUNDEE: My Lords, may I ask my noble friend whether he is aware that most people in this country are particularly grateful to the Prime Minister for the combined moderation and firmness with which he has upheld British interests at this Conference, with patient consistency on land and, so far as one can judge from Press photographs, with every kind of gallantry at sea? Since the question of skeletons has been raised, may I ask my noble friend whether he does not think that perhaps a useful by-product of these Conferences may be that they afford the subjects of a tyrannical ruler who really does practise racial oppression an opportunity to get rid of him during his absence?
EARL JELLICOE: My Lords, I find myself in considerable sympathy with what the noble Earl has said, at least in all save that I should not wish to comment on his last sentence or two. I feel that he was speaking for, I suspect, a majority of the people of this country in
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the tribute which he has just paid to my right honourable friend the Prime Minister.
LORD BOOTHBY: My Lords, may I ask the noble Earl a question which I think has an important bearing on this whole subject; namely, is it, or is it not, the fact that the French have sold 70 Mirage-Milan aircraft to the South African Republic during the last few days?
EARL JELLICOE: My Lords, I am not certain of the precise quantities, but it is certainly a fact that the French are in the process of supplying large quantities of arms to South Africa.
LORD BROCKWAY: My Lords, may I ask whether, with a view to saving the Commonwealth, Her Majesty's Government would agree to postpone any decision regarding the sale of arms to South Africa until there has been a Report from the Committee which has been established at Singapore to consider the security of the trade routes in the Indian Ocean?
EARL JELLICOE: My Lords, I will, of course, take careful note of what the noble Lord has said, but it would be quite wrong for me to go beyond the terms of the Prime Minister's Statement which I have just repeated, and which made it clear that, if requested, Her Majesty's Government would feel themselves to be under a legal obligation to supply at least certain categories of arms.
LORD ALPORT: My Lords, may I ask the Leader of the House whether, in view of the fact that the recent happenings in Uganda represent the beginning of a further penetration of Russian influence down the Nile Valley into the centre of Africa, the Study Group on the defence of the Indian Ocean will include a study of the strategic needs of Central Africa and of Commonwealth countries in that part of the world?
EARL JELLICOE: My Lords, my noble friend has put to me an interesting question. I am afraid that I do not know the answer to it, but I will try to find out whether the Study Group's terms of reference do extend as far as that, and will communicate with my noble friend.
THE EARL OF DUDLEY: My Lords, following upon the question of the noble Lord, Lord Boothby, may I ask whether the noble Earl can say whether the French Government have given any undertaking to their own people or to the African States that the Mirage jets will not be used by the South African Government to support anti-apartheid policies or to promote racialist policies; and secondly, whether there have been any representations or protests from African States associated with the French Government as a result of the sale of jets?
EARL JELLICOE: My Lords, here again I take note of what my noble Friend has said. I am not aware of the precise position here and, because this is delicate ground, it would be only right for me not to "chance my arm". But I will find out what is the answer to my noble friend's question and will communicate with him.
BARONESS WHITE: My Lords, will the Leader of the House do his utmost to expedite the issue of the White Paper? I am sure he will agree that it will be difficult to debate the matter intelligently unless we can distinguish clearly between the policy of Her Majesty's Government in relation to aid and succour to the South African Government and what they consider to be a legal obligation, which of course is quite contrary to the advice given to those of us who had the honour to be members of the last Administration.
EARL JELLICOE: My Lords, I have considerable sympathy with the point which the noble Baroness has just put to me. I will certainly see that her representations are passed on to those concerned.
LORD SHEPHERD: My Lords, would the noble Earl not agree that the letter to which he referred, written to my noble friend Lord Chalfont in 1955, was sent prior to the passing of a resolution at the United Nations on which the previous Administration's decision was made not to supply arms to South Africa? Secondly, would the noble Earl not agree that as a consequence of the Prime Ministers' Conference there are two issues which the House would, I think, like to consider, perhaps in isolation. First, there is the question of arms to South Africa—and here I would agree that perhaps that
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would be better left until the White Paper has been issued, although, if I may express a personal view, it is a debate that I hope we shall never have to embark upon. But there is a perhaps wider and even more important question, as to what is the future of the Commonwealth. What have the Government in mind in regard to the future of the Commonwealth? This may be a subject that this House would wish to debate as a separate issue, perhaps at an early date.
EARL JELLICOE: My Lords, so far as the letter from Sir Geoffrey Harrison is concerned, the noble Lord may be right. I would only point out that that letter was written after the 1963 and 1964 Security Council resolutions had been passed, on which our representative at the United Nations was most careful to reserve our position, reserving the right of Her Majesty's Government to sell those arms to South Africa which we held to be necessary for her own external defence. The exact context of the debate, if we are going to have a debate on the wider or the narrower issue here, is a matter which I think could usefully be pursued and that this could be done straight away through the usual channels.
LORD KILBRACKEN: My Lords, can the noble Earl explain how helicopters can be of any use whatever in keeping open the trade routes in the Indian Ocean against large, heavily armed Russian men-o'-war?
EARL JELLICOE: My Lords, this is not a Defence debate, and I therefore do not wish to give a lecture on Defence matters. All I should wish to point out to the noble Lord is that the helicopter is universally held to be one of the most important weapons of anti-submarine defence in the armoury of any Navy in the world to-day.
THE MARQUESS OF SALISBURY: My Lords, may I ask one question, namely, is not one of the main lessons to be learned from this Conference the fact that member States of the Commonwealth must expect, and must receive, the absolute right to manage their own policies in their own way? That was what was envisaged by the 1926 Resolution. If member States insist on interfering in the affairs of other member States, the Commonwealth cannot, in my view, survive.
EARL JELLICOE: My Lords, those are entirely my views. I think that one of the most important achievements of this Commonwealth Conference is that that has been recognised, not only for the other members of the Commonwealth themselves but also for Her Majesty's Government.
LORD MERRIVALE: My Lords, may I ask my noble friend one question regarding the survey of the Indian Ocean trade routes? Can he say whether the Malagasy Republic will be consulted during this survey, in view of the strategic position of Madagascar and also of the fact that Diego-Suarez, in North Madagascar, is one of the finest natural ports in that area?
EARL JELLICOE: My Lords, I entirely take my noble friend's point about Diego-Suarez. These are early days yet, and I am quite certain that the Study Group have yet to decide how they will carry out their studies; but I will see that the noble Lord's remarks on this matter are fully represented to Her Majesty's Government.
LORD LEATHERLAND: My Lords, a simple question. May I ask the noble Earl whether, when the Government issue their White Paper, there will be incorporated in it the text of the Simonstown Agreement? Is he aware that when I read the text of that Agreement I observed that it required us to provide 20 vessels and that the South Africans were to pay £18 million for them? Furthermore, is it not a fact that we did provide those 20 vessels, and were paid the £18 million? And did not that conclude the contract?
EARL JELLICOE: My Lords, if it were as simple as that it might not be necessary to issue a White Paper. However, I think the Simonstown Agreement is freely available. It is a perfectly public document, and I should have thought it was not necessary to lengthen what I suspect may already be a fairly lengthy White Paper by attaching a document whose contents are already well known. I will certainly pass on the noble Lord's suggestion, but that is my off-the-cuff reaction.
BARONESS WHITE: My Lords, could the noble Earl pursue that a little further? It was a Command Paper issued
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in 1955. Is he certain that it is still in print?
EARL JELLICOE: My Lords, I am not certain that it is still in print, but I have said I will look into it, and that is one of the points I will look into.
LORD LEATHERLAND: My Lords, may I press the noble Earl to publish the text of the Simonstown Agreement, if only because two separate sets of Law Officers, advising two separate Governments, have given two separate interpretations as to what the Agreement means?
BARONESS GAITSKELL: My Lords, would not the noble Earl agree that, while taking British interests always into account, one thing that has not emerged from the Commonwealth Conference is that the whole of the Commonwealth have a fear and terror about apartheid? Surely this is one of the things that also should have emerged from the Conference?
EARL JELLICOE: My Lords, I must confess that I do not entirely agree with the noble Baroness. I should have thought that the fears about apartheid and the views that are entertained about it, were made crystal clear at the Singapore Conference. The views of Her Majesty's Government in condemning apartheid have of course been made crystal clear on many occasions, including the Singapore Conference.

ATOMIC ENERGY AUTHORITY BILL
4.13 p.m.
Debate on Second Reading resumed.
LORD WYNNE-JONES: My Lords, I am sure that the noble Lord, Lord Drumalbyn, is glad to return to the relative clarity of the Atomic Energy Authority Bill after the discussions on the Commonwealth. In most essentials, this Bill is the same as that discussed by your Lordships last May, and which was I think passed last May. I have first to make the same objection that I made then by proxy (the proxy being no less than the able and very formidable noble Lord, Lord Conesford), when I objected to the first line, which uses the word "fuels" in what I consider to be an entirely incorrect and inappropriate way.

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A fuel is something which is combustible, and which supplies energy by the process of combustion, and that is exactly what is not done by the nuclear, so-called fuels. Therefore, it is quite incorrect to use the term "fuel", and I only wish that the present Government will be prepared to go a step further than the last Government and use a better nomenclature and refer to this as a "nuclear source" rather than as a "nuclear fuel", which it is not. The first word of the second line, "Limited", in connection with nuclear energy is a little odd too, though it may be appropriate for a company. But to refer to nuclear energy as "limited" seems the reverse of the truth.
This Bill is undoubtedly one which has the approval of this House, as was shown last May, and I personally am not prepared to speak against the Bill now. I think that in essence it is a good Bill. There is, however, one point which was brought out yesterday in the Guardian in an article by Anthony Tucker which refers to safety precautions. I think this is something which we want to take vary seriously, and I hope that the noble Lord in his reply will be able to tell us something about it, and tell us what the Government propose to do. At the present time, when any construction of a nuclear station takes place the contractor has available, and in fact must use, the advice of the Atomic Energy Authority. The Atomic Energy Authority has an extremely capable group of people in its Hazards and Safety Branch. It has built up, over a number of years, an immense amount of expertise on the subject of safety and security. In consequence of this, most of our reactors have really worked extremely well, but there have been, even with all the precautions that have been introduced at the design stage, occasions when trouble has arisen.
There was the very well known case of the Windscale accident, which occurred on October 10, 1957. A Court of Inquiry was set up with the late Lord Fleck as its chairman in order to inquire into the reason for that near-disaster. It was a very serious accident. It occurred through over-heating inside the pile. This overheating was due to certain peculiar circumstances at Windscale. Oddly enough, I think it was due primarily to the fact that the temperature of the pile was lower
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than the temperature at which the piles are run nowadays, and consequently, by an odd paradox, this allowed overheating because of the release of energy by means of what is called a Wigner release in the pile. This caused overheating, which they then tried to control. The physicist in charge at the time apparently had not available the complete manual of instructions, and consequently steps were taken which, in his view, were quite reasonable, but which resulted in causing further over-heating. A very dangerous situation arose. Some of the elements were damaged inside the pile, uranium became oxydised, and a very serious disaster could have occurred.
LORD SHERFIELD: My Lords, would not the noble Lord agree that this accident took place 15 years ago in the first air-cooled atomic pile; that technology has made tremendous strides since then, and that the accident is not really relevant to the present situation?
LORD WYNNE-JONES: My Lords, I agree entirely with the noble Lord. I was not quoting this incident to suggest that a similar accident would occur to-day. As he has quite rightly said, technology has advanced so much that this particular accident is almost impossible to-day. What I was trying to point out was, first of all, that we nearly had an accident of a major magnitude. Actually, even at that time one reason why the results were not worse was, I believe, because the late Sir John Cockcroft insisted on the installation at Windscale of filters which were more efficient than were generally thought to be necessary. It was those highly efficient filters which prevented a great deal of radioactive contamination from being spread around the country. I believe that we were saved then by the prescience of Sir John Cockcroft.
The point that I am trying to make is that at the present time we have, in the Atomic Energy Authority, a branch which is highly competent in this whole field, and which ought to be brought in to advise in the early stages of design. One might say that full provision is made for ensuring that everything will be looked after, but if one looks at the Bill one finds that the actual proposal is really for an inspectorate which can only inspect after the installations have been

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designed. It could then see whether something had not been done correctly. I believe that errors have recently been found at the Hartlepools station. In spite of the fact that we are 15 years on, as the noble Lord, Lord Sherfield, said, there have been errors in design which have been noted by the inspectorate.
What we have to realise is that, although we have a great deal of experience in the design of reactors, new ideas are coming forward all the time and new reactors are being proposed. At the present time we have the advanced gas-cooled reactor, but we can move on from that—and we shall indeed do so. The noble Viscount, Lord Thurso, referred to Dounreay, where we have an entirely different type of reactor. Unless we have the highest possible expertise on the safety side of the design of new reactors, we could have a disaster which would set back the whole development of atomic energy in this country. That would be appalling and the Government should ensure that we take every conceivable precaution to make certain that such accidents cannot occur.
I should like, therefore, to ask whether the Government are prepared to ensure that the present team which deals with hazards at the Atomic Energy Authority should be officially brought in at the early stages of design of all new reactors. I am not certain how far that can be covered by the Radiological Protection Act which was passed last year. In looking at that Act, I noticed that the responsibility for advising the board and telling them how they are to work and how they are to define their terms of reference is in the hands of the Secretary of State for Social Services. That will mean that what I am asking for cannot be done directly through the Secretary of State, who is responsible for the nuclear energy installations, and I wonder whether the Government can find a suitable way of ensuring that the services of this expert group of people will be used in order to make certain that the design is done correctly.
If I may make an aside on the matter of design, in recent years we have seen some very serious explosions in large tankers. I have a feeling—I cannot put it any higher than that—that those explosions were avoidable. I think that they could have been avoided, if knowledge on
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explosions of hydrocarbons, which was available at places such as the Royal Aircraft Establishment at Farnborough, had been adequately known by the people operating the tankers. In other words, the explosions in the tankers could have been avoided not by new research, but by the use of existing knowledge. What I am anxious to see is that in this field of atomic energy, which will be of vital importance to this country, we do not run the risk of any dangerous hazard, and that we make certain that we use our best existing knowledge.
4.25 p.m.
LORD DRUMALBYN: My Lords, on behalf of Her Majesty's Government I should like to thank those who have spoken for the way in which they have received this Bill. It was a pleasure to have the noble Lord, Lord Diamond, for once marching arm in arm with me, because one is accustomed to being at the opposite end of his rapier. I do not think I need comment (I hope he will agree) on anything he said, with which I found myself in complete agreement, but I should like to clarify one point that I made. We were talking about the availability of information to the House on any proposals for the disposal of shares. What I said was that before final decisions are reached on the basis of expert advice Parliament would be given an opportunity to consider the Government's intentions. Technically, I do not think the Government would be making recommendations to Parliament, because it will be within the power of the Government, once this Bill is on the Statute Book, to decide such issues.
The noble Viscount, Lord Thurso, was good enough to give me notice of some of the questions that he proposed to raise. He asked, first, whether the Atomic Energy Authority would be sitting rent-free in those research and development enclaves within the establishments to be transferred to the Nuclear Fuels Company. He seemed to be under the impression that this is some kind of bonanza for the A.E.A.; but that is not so. I can assure him that all transactions between the A.E.A. and the fuel company will be on a commercial basis as soon as this Bill comes into operation.
The point about these research and development enclaves within the Nuclear Fuels Company's establishments is really

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covered by subsection (3) of Clause 4. That subsection provides that the Authority will not be required to pay the Nuclear Fuels Company any rent in respect of the lands or premises which it occupies at Springfields and Windscale. That is because the lands and premises concerned were provided out of Vote funds, and under Clause 1 they are to be transferred to the Nuclear Fuels Company solely for administrative convenience; that is, to keep the whole site under one landlord. Of course the Authority is not relieved of paying other running costs, such as rates, maintenance, gas, electricity and so on. It is purely a matter of convenience that the premises go over for the continuing use of the Authority; and at the present time there is no consideration that has to be paid and therefore no rent.
VISCOUNT THURSO: My Lords, I am not concerned only with the question of rents; I am concerned also with the full use of their other establishments. I should not want establishments which were technically owned by a company to be used by the Atomic Energy Authority if the Authority had appropriate premises elsewhere.
LORD DRUMALBYN: My Lords, I quite sympathise with that point of view. I can only say that I have found from personal experience—as I have no doubt the noble Viscount has found—that between the Production Group and the research and development establishments there is the closest co-operation. They live literally cheek by jowl, and every kind of contact is encouraged. On research and development there will be a tremendous amount to be done. As the last Report of the Atomic Energy Authority showed, research has become more and more product-orientated and I am quite certain that there will be no tendency whatsoever to under-use the capacity of the Atomic Energy Authority. In addition to this very close contact which exists, there will of course be every advantage for the fuel company itself to get all possible advice from the research and development facilities within its area. For example, research and development at Springfields is concerned very largely with problems of production at Springfields. I do not think the noble
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Viscount need fear that any difficulty will arise here.
As to the noble Viscount's concern with rent, if I may revert to that subject for a moment, I am rather relieved that Dounreay is not being passed over to the fuel company, because if it were I do not know how one would disentangle this business of the premises that he built for the pension group up there. That brings me to the pension group point. The noble Viscount expressed the hope that the new companies would have their schemes administered in the Atomic Energy Authority office at Thurso. I am not sure that I can give any guarantee that this will be likely to happen. As he will realise, it is not definitely decided whether there will be separate pension schemes for the fuel company and the radiochemical company employees; but even if there were, I am advised that the effect on the numbers of employed at Dounreay would be very small indeed. So there again I think I can give the noble Viscount some consolation, at any rate.
VISCOUNT THURSO: My Lords, the effect on the women and girls at Thurso will be considerable.
LORD DRUMALBYN: I am sorry; I am talking about the employees at Thurso. As the noble Lord, Lord Diamond, said, it is a fact that more than two-thirds of the total employees will in any case be maintained in the Atomic Energy Authority employment and will therefore remain under the Authority's scheme. Knowing how the control of these schemes works, I am sure the noble Viscount will see that the mere addition of another 10,000 or so, or the taking away of 10,000 employees from that scheme, will not make a very substantial difference in the numbers employed at what I think is called the pension centre at Thurso, at the perimeter.
The noble Viscount then asked about the structure of the new companies and drew attention to the desirability of having a public shareholding in them at the earliest possible moment. This will, I think, be a matter for the merchant banks to consider, and I am certain that they will take account of what the noble Viscount has said in this regard. The general conception of participation is

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twofold. In the first instance, there will be a two-way process of advantage between the companies on the one hand, and the participants on the other. Each will be joining together to further some interest of their own by participation. One would expect that those outside companies who had a common interest of some kind would be the first to participate. As I said in my opening remarks, though, this certainly does not rule out public participation, either later or indeed from the outset. Circumstances may differ as between the two different companies; but, as I also said, we aim for the maximum participation so long always as there is a majority holding on the part of the public.
The noble Lord, Lord Wynne-Jones, raised the very important question of health and safety. I had already seen the article in the Guardian. Perhaps the best I can say about this subject is that there is no intention whatever of permitting any relaxation in safety standards. I was not certain whether the noble Lord was recommending a general tightening up of existing safety standards or just wanted an assurance that there would not be a relaxation of the existing ones. Does the noble Lord want to intervene?
LORD WYNNE-JONES: Only on that particular point, my Lords. I was concerned with not merely the maintenance of existing standards, but with the assurance that in the design stage the expertise from the Atomic Energy Authority should be brought in.
LORD DRUMALBYN: My Lords, perhaps the first answer to that must be the obvious one: that, so far as the Nuclear Fuels Company is concerned, their headquarters will be alongside where the health and safety division are housed at Risley, and one would expect the closest possible contact there. I know this is not by any means the whole answer, but it gives an indication. Since in any matter affecting the reactor the fuel company will have to provide the fuel for it, one would expect, both from the point of view of its own production interest and from the point of view of its own customers, who will be the
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C.E.G.B. and the S.S.E.B., that there would be the closest examination of design from the very start.
I should add, however, that the new companies, like all other operators in the nuclear industry, will have to satisfy the Inspectorate of Nuclear Installations, which is a part of the Department of Trade and Industry, as to the safety of their plants. The Inspectorate, under the powers contained in Section 4 of the 1965 Nuclear Installations Act, make completely independent safety assessments throughout all stages of design, construction and operation of commercial nuclear installations; not just after the design has been completed, and certainly not just when the construction starts on the ground. The section ensures that the licensee of a nuclear site complies with all the conditions that the Secretary of State considers necessary or desirable in the interests of safety. The Authority's Health and Safety Branch has made an important contribution to nuclear safety in this country, and it is expected that the nuclear fuel and radiochemical companies will continue to have recourse to the branch for independent advice on safety aspects of the design of new plant.
But this is not a matter which needs to be dealt with, or indeed that it would be appropriate to deal with, by legislation. I know that the noble Lord did not suggest that this should be included in the Bill, but I think he rather suggested that there should be some form of direction. Whether this would be appropriate or not is not really a matter for the Bill. All I am saying to the noble Lord is that there has been the closest contact in the past. Of course, as always with experts, you may get differing opinions from time to time, but there has been the closest contact; and since the companies will be subject to the licensing and inspection of the Inspectorate, they will have every incentive to get the most thorough and soundly-based advice at all stages. I hope that will satisfy the noble Lord, and I would once again thank the House for the reception it has given to this Bill.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

CARAVAN TOURING: PUBLIC HEALTH AND AMENITY
4.39 p.m.
THE EARL OF CROMARTIE THE EARL OF CROMARTIE rose to call attention to the serious difficulties being faced by local authorities caused by the ever-increasing number of touring caravans during the summer and to consider how best to finance the urgently needed services in the interests of public health, amenity, and the caravanners themselves; and to move for Papers. The noble Earl said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper. I should like to thank the Government for having given time for a debate on this subject, which is an extremely important one for all of us who dwell in the country, and indeed for everybody else. Its importance is shown by the number of speakers who have decided to put their names down, and I am delighted to see that practically all of them have some connection with, or some considerable knowledge of, the effects which the tremendous increase in the number of caravans is having on the whole countryside.
My Lords, caravans bring joy to a great many people, but no-one would be likely to describe them as things of beauty that enhance the amenity of, in some areas, our fast disappearing countryside. Having said that, I wish to make it abundantly clear that my Motion is not directed against the ever-increasing number of caravanners—at least, not against those who, like most members of the Caravan Club, have a sense of responsibility and duty to the countryside and to the regions of the country that they visit. It is self-evident that families, especially if they have a quiver-full of children, who want to visit the open country but cannot face the high charges of hotels—themselves burdened with rising costs, and often S.E.T. as well—see the answer in the caravan. No, my Lords: this Motion is put down in an endeavour to make the Government aware that, without some constructive participation by them, local authorities who have to cope with the problems raised by the summer invasions will be faced with a situation which they cannot handle.
The areas of maximum beauty, and the areas which attract the greatest number of tourists of all kinds, are those which almost always have the smallest rateable population and the most extensive areas of empty or nearly empty space. The people of these places are already very heavily rated and would find it an intolerable burden if they were called upon to meet, in addition, the growing drain on local finance during two or three months every year for the provision of amenities—water supply, lavatories, Elsan closet waste collection; and, last but not least, the collection of the vast amount of litter left behind. This is difficult enough when sites are organised and controlled, but it becomes more so when we take into consideration the huge increase in roadside litter, mainly due to tourists, particularly caravanners and campers, taking meals by the roadside and residing there overnight.
It may not surprise some noble Lords who have to deal with these matters on a local government basis, as I do, that we have here a very real health hazard, and I do not suppose that there is a single person, be he caravanner or camper, who wants to add to the risk of an outbreak of typhoid. I do not wish to go into unpleasant and sometimes unmentionable details, but I will give just one example of what may result from lack of facilities and the money to provide them. Two summers ago, there was a phenomenal increase in the number of caravans arriving at a certain seaside fishing village. The authorised caravan park was soon filled and new arrivals had to spread out into the most unsuitable places. Toilet facilities did not exist, and it was found at the end of the season that fish boxes had been taken into service.
I am not blaming the caravanners for all of this: there were campers, and others, who added to the unsavoury situation. But this kind of thing could be avoided if the necessary finance was available. Here I should like to draw the attention of the Minister who will be answering to a particularly "cock-eyed" bit of ill-digested legislation. On every approved caravan site the number of caravans is legally limited by the lavatory accommodation available for that site. Yet any number of campers residing in tents can pack themselves in

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or near the site without either let or hindrance—hence a midden can, and often does, result. Would the Government look into this very dangerous omission; and, indeed, into all the scrappy and ineffective legislation on this whole matter? I wonder how many noble Lords have any idea of the cost of providing latrines in out-of-the-way places solely for tourist use. It is usually a figure of between £3,000 and £4,000; but not seldom it reaches the great sum of £8,000 which, despite welcome help from the Countryside Commission, places a very heavy load on county rates.
Let us now consider how matters could be improved. To suggest a tax on caravans would, of course, raise a howl of protest—do they not already pay a heavy road and petrol tax? Yes, my Lords, they do. But this does not benefit the local authority, so far as providing amenities is concerned, nor has it over the years, so far as the Highlands are concerned, provided one first-class motorway to the North. Much of the A9, our one road link, is a disgrace and a constant source of danger and delay to road users during the summer months. From the use of the authorised caravan parks the local authority rates do benefit to a minimal degree. Outside these parks, however—and in the case of my own county the great majority of the areas used are both unauthorised and unsuitable—the rates do not benefit; indeed, the ratepayer is a heavy loser.
Why then are there not more authorised caravan parks, large and small? Because, my Lords—and I speak from personal knowledge and experience—to construct them requires considerable capital; and, although it may be news to some of your Lordships, capital for many of us is in short supply. Even so, there is a steady growth in the provision of authorised sites in my county, and I am sure that the same is so in others. I do not intend to co into figures that would illustrate the difficulties faced by my own county, which I am sure would be echoed by every other county in the Highlands and possibly everywhere else; but I should like to put before the Government certain suggestions.
The Government might well carry out a study of how these matters are handled in Western Europe, and in Scandinavia where, in my opinion, the whole position
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is dealt with in a far more efficient way, to the benefit of caravans, the local population and the country as a whole. In Switzerland, the Development Society, a local body independent of the municipality deals with all matters concerning hotels, chalets, shopkeepers and so on, and levies a small tourist tax calculated on a daily basis of approximately one shilling per adult and half that sum for children in the 5 to 15 years age group. The tax covers not only caravanners, but campers and hotel guests, while chalet owners pay a lump sum. In return, the Society is responsibile for a wide range of amenities. The French, through their Tourist Organisation and their local authority taxe de séjour, also seem to manage better. But if we are going to follow their example—and we might do worse—our tourist boards will have to be run by full-time professionals, and not, as often happens, by well-paid, part-time retired and semi-retired individuals appointed under the "Old Pals Act."
I would press the Government to take a long, hard look at what is becoming a very serious problem and a threat to some of the loveliest parts of Great Britain. Local authorities, through their planning and other departments, should be given statutory powers to deal with the location of all caravan sites, large and small; with the way these sites are laid out, and with matters of access ant so on. I should welcome some assurance by the Minister that this possibility will be considered. No doubt someone will say that local authorities already have these powers; but this is not true, as their powers do not cover all the points that I have raised—and too often when there is legislation it is indefinite, and anything but clear.
My Lords, there are many other problems which I have not mentioned, such as the hazards and obstruction caused by caravanners to other road users on roads which are often single track with passing places; but I will leave this aspect of the problem to be dealt with by other noble Lords. Finally, my Lords, how is the cleaning up of the Augean stables to be financed? I have put out some feelers and await with interest the suggestions which the wisdom of your Lordships may bring forth. I beg to move for Papers.
4.50 p.m.
THE MINISTER OF STATE, SCOTTISH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, may I first congratulate the noble Earl, Lord Cromartie, on giving us the opportunity to debate this vexed but fascinating subject of touring caravans and, if I may say so, to do so in a speech which, because of its lurid details, perhaps brought home to us in a better way what are the very real problems that confront this country. It was thought that as there are a large number of speakers taking part, it may be convenient if I spoke first; and of course my noble friend will reply on behalf of the Department of the Environment.
Having several personal friends and relatives who are ardent owners of caravans, and having been a very keen camper myself, I share with the noble Earl his understanding of the great attractions of this type of holiday, particularly for children. As my noble friend has been a former Convenor of Ross and Cromarty County Council and is now Vice-Convenor, he certainly understands the problems of caravanning from personal knowledge. It is difficult to estimate the exact number of caravanners, but including children as well as adults, there are probably about 1 million in Britain to-day, and the number is likely to increase steadily.
This afternoon we are not talking about those caravans which, although mobile, are left in one place for the whole summer and are let to a succession of tenants. The subject of this debate is the touring caravan which is towed behind a family car to one or more sites during the course of a holiday; and "touring" includes staying overnight on the way to and from a main holiday area. When sites are used primarily for this purpose they are described technically as "transit sites". One of the problems about catering for touring caravans is that, by the nature of things, they cannot supply the site operators with guaranteed rents for the whole season; and it is often this uncertainty in demand which results in too few licensed sites to meet everybody's needs. When there is a shortage of sites, as my noble friend has told us, people are driven to park illegally in road lay-bys or in fields. In Scotland we call this "wild" caravanning. If it is done
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on any scale, this, of course, is where the public health and amenity hazards lie.
However, I think we should be fair and concede that there are many caravanners and campers who take great care of their surroundings and clear their litter, and have hygienic facilities of their own. For what is, I admit, a minority of campers and caravanners, the whole point of going off on this kind of holiday is to get away from it all to the wild places. But nevertheless, the bulk of those who enjoy this kind of holiday want the facilities which have been described. The public health problems of touring caravans and camping, to which my noble friends referred, have been under study by the Camping Working Party under the Department of the Environment and it should report shortly. We shall then consider any recommendations as they could or should apply to Scotland; and of course we shall consult all the local authorities and the organisations concerned.
The statutory provisions concerning caravans in Scotland differ in one major respect from those in England and Wales. The main Act, the Caravan Sites and Control of Development Act 1960, applies also to Scotland, but an important way in which its application has been modified is in relation to the crofting counties. Schedule 1 to the Act allows up to three caravans to be placed for up to 28 days a year on land holdings of five acres or more in size without any requirement to obtain a licence. This concession has been extended by Order to any period during the six summer months and reduces the size of the qualifying land holding from five acres to two acres for the crofting counties. This means that many crofters can rent sites on their holdings to three touring caravans at a time and can get some economic benefit from tourists to supplement the proceeds of the croft.
There is now a wide variety of finance available in Scotland for providing and improving caravan and camping sites. Local authority finance and countryside grants are given to local authorities on the advice of the Countryside Commission. The Scottish Tourist Board and the Highlands and Islands Development Board give both grants and loans to private developers. The Small Industries Council

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for Rural Areas of Scotland can give loans and, lastly, there is the purely private investment.
At the weekend I was fortunate to have the opportunity of staying in the Borders with my noble friend Lady Elliot of Harwood, and we went together to see a private investment project at Lilliardsedge Park, at Jedburgh. It is extremely well laid out, both for touring caravans and also for campers. I was particularly interested in the charges, which are 10s. a night for caravans, and 3s. for each person in a tent, the minimum charge per tent being 8s. a night. We seem to have had a tradition in Scotland that a great many local authority sites should charge only 2s. 6d. a night. I should have thought that the 10s. charge was very reasonable indeed, considering the facilities provided. The great thing about this site was that it acted as an information centre for tourism for the Borders as a whole.
In Scotland I think that we have been fortunate, in that many local authorities have provided caravan sites with many pitches reserved for tourists. It is sometimes said that caravans are of no economic benefit because they are completely self-contained in their requirements; but in fact the caravanners buy a good deal of food locally and quite a lot of petrol. They also buy presents and other things which take their fancy. A recent calculation showed that touring caravans in Scotland alone bring in a total revenue of £1·5 million a year. Therefore local authorities who have established sites have received far more general benefits because of them than simply the revenue from charges.
My noble friend Lord Cromartie asked whether it was a fact that there were sufficient and good statutory controls on the location or licensing of sites. All the necessary controls for licensing are given in Section 1 of the Caravan Sites and Control of Development Act 1960, and planning permission must be obtained for all sites. Therefore, I think one can say that, so far as we can see at the moment, the legislation is sufficient. There has also been a steady increase in the number of touring pitches provided by private enterprise. If you take both the local authority and the private enterprise sources together, there will be an increase of 1,500 pitches in Scotland in the coming
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season compared with the number available last season.
As my noble friend has recalled, the Countryside Commission for Scotland who advise the Secretary of State on the payment of countryside grants at a rate of 75 per cent., have already recommended that nearly £100,000 worth of grants should be offered over the next three years for the provision or improvement of caravan sites. As noble Lords may know, the Scottish Tourist Board publishes a very good publication called Scotland for Caravan Holidays which is a very handy guide to the facilities which are available. The Board has done what it can to improve standards and increase the number of pitches. In 1970 it mounted a survey to discover the number and distribution of touring caravans, including the extent of "wild" caravanning. I understand that the Board also hopes to supplement this information by inquiring into the attitude and characteristics of caravanners and campers—which, I should think, will be a long and absorbing study. Both the Countryside Commission for Scotland and also the H.I.D.B. have helped to finance the survey and most of the detailed work is being undertaken by Edinburgh University. All the data is now being analysed at the University and interim reports have been made to the Tourist Board. The Board is starting to consider the policy implications. The complete Report will be ready for publication later this year. I do not think I can usefully say much about it as it is not entirely complete as yet, but there are some clear results. One interesting preliminary indication is that there were some 70,000 touring caravans on Scottish roads at some time during the 15 summer weeks, and that 60 per cent. of these came from South of the Border or overseas.
When the Tourist Board is ready to consider what action it should take, it will be able to use part of the £300,000 that it has been allocated to assist tourist projects in any part of the Scottish development area. This special allocation of funds will be an annual feature of the Board's project within their Great Britain total of £1 million. As noble Lords know, the H.I.D.B. has power to make grants or loans to hotels and privately-owned caravan sites provided that they satisfy the Board's criterion that

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they are viable and that they will make a contribution towards local employment.
To date the Board has centred its tourist grants and tourist promotion on improving hotels and other holiday facilities. But it is now starting research to find out the best methods by which it can assist touring caravans and those who go camping. The Small Industries Council for Rural Areas of Scotland is 100 per cent. grant-aided from development funds, and it operates in the rural parts of Scotland which are outside the area of the Highland Board. Unlike the Board, it has no power to make grants, but only loans. Until recently its work for tourists was confined to offering loans to small hotels and boarding houses that were too small to meet the Tourist Board's criteria for grant assistance other than hotel development and associate schemes, but it is now prepared to offer loans for development of private caravan sites catering for touring caravans. As noble Lords will know, there is one group of touring caravanners who will have all their needs pretty well looked after, and they are those who are members of the Caravan Club. The Club is spending a good deal of money and is expanding steadily every year.
The noble Earl, Lord Cromartie, was good enough to let me know that he was going to raise the question of a tax on caravans, and indeed several people in the Highlands, who have suffered from being behind a large caravan for a long time on a narrow road, have said to me: "Why not tax the caravan as well as the car which pulls it?" I think one must say, in the caravanner's defence, that many of these touring caravans are probably only used for about two or three weeks in the year. It is true, however, that there are arrangements for taxes of this nature in some countries, such as France and Germany, where there are special taxes, like road taxes, on caravans. Most other countries, however, have a composite tourist tax on each night's stay, which of course would cover hotels, chalets and also caravanners. We have not, as we all know, thought fit either to have a tourist tax or a tax on caravans as yet in this country, and I feel that it is not up to me to suggest or to speculate on what might be in the mind of the Chancellor of the Exchequer. But it is a
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question which is of great interest, and I shall listen carefully to see whether this particular point is pursued by other noble Lords in this debate.
The main point which the noble Earl sought to raise was that many caravanners want to go to the most beautiful parts of Scotland, and in many cases these are in the most remote areas and therefore areas which are of low rateable value. This is why the specific countryside grant is a way of redressing the balance in favour of local authorities with limited resources of their own as against those which have greater wealth at their disposal. As I said earlier, I think that all site owners could consider raising their nightly charge for caravans. Countryside grants are, of course, only paid where we consider that the charges are fixed at a reasonable level and where there will still be a loss on the cost of providing essential facilities. I should have thought that a higher site charge was certainly one way of getting increased revenue.
To sum up, my Lords, there already seem to be enough agencies in being who are interested in providing for the needs of touring caravans and of campers, and I think that they work very well together. I think that until we get the Working Party's Report the legislation is sufficient. There are also various sources of finance. I think that we shall be in a much better position to consider the priorities when these surveys are received. I agree with my noble friend that there is a great deal yet to do, because without doubt this is a great leisure industry. It is growing very fast, and we must ensure that better provision is made, not only for the comfort of touring caravanners themselves but to preserve what I certainly claim are some of the most incomparable and beautiful parts of our country.
5.7 p.m.
LORD HUGHES: My Lords, like the noble Baroness, Lady Tweedsmuir, I should like to start off by thanking the noble Earl, Lord Cromartie, for having raised this interesting subject this afternoon. I wish straight away to express to the noble Earl my apology that, as the debate has come on much later than I think either he or I anticipated, it will not be possible for me to stay until the end; but I give him the promise that I

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will read everything that is said after I leave. I cannot say that share with the noble Baroness any experience of caravanning, nor can I say that I was ever an enthusiastic camper—they are both pursuits which I am quite willing to allow other people to undertake so long as I am not myself compelled to take part in them. But, like the noble Baroness and the noble Earl, I have a number of friends who are enthusiastic followers of both forms of holiday-making, and I am willing to concede that they cannot all be wrong in thinking that there is something worth while in doing this.
It is obvious that the problems to which the noble Earl has directed our attention this afternoon will grow in number rather than diminish, because all the indications are that every year produces more people who purchase caravans and who follow camping holidays. I think he is right in emphasising the point that, whatever the difficulties that land on the shoulders of the Government or comparatively poor local authorities at the present time, they are going to be even greater in the future. One of the consequences of so many people taking holidays abroad is that some who would never have thought of having a camping holiday see some of the very desirable camping sites and caravanning sites abroad and come back thinking that they can get exactly the same here. The fact is, of course, as the noble Earl has said, that so far they cannot, except to a limited extent. Some of your Lordships will probably have seen some of the best of the caravan sites. One which was opened about two years ago in East Lothian, where they take a most enlightened view of their responsibilities to this type of holidaymaker, will, I think, bear comparison with anything that is provided on the Continent.
But the noble Earl's main concern, I think, was directed not to the well-organised official sites but to the problems which arise from their inadequacy, and from the overflowing of holidaymakers into sites that may be perfectly beautiful in prospect but are not so beautiful after they have been visited. I am not at all certain that what is provided under the legislation will necessarily be completely satisfactory from the point of view of the local authorities.
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Having said that, I would add that I doubt whether any Government will be in a position to provide local authorities, particularly those in the North of Scotland, with finances which would be satisfactory from their point of view. I well remember that when we were discussing the Countryside Bill, and the grants available for this and other purposes were set at a limit of 75 per cent., instead of the local authorities saying, "How good and generous the Government are to give us 75 per cent.," they screamed their heads off because they were not getting 100 per cent. I am quite certain that if we had offered them 100 per cent. some local authorities would have wanted to make a profit out of the transaction, and would have asked why the grant was not to be 125 per cent. So I do not expect that there will ever be satisfaction.
Even so, I am not quite certain that what may be available to local authorities to help them deal with this extra problem of keeping the unofficial sites tidy will be adequate. So far as I can remember from my own recollection, and from what the noble Baroness has said, probably the only resource available to the local authorities under that heading is what they may get under rate-support grant, in so far as that expenditure is counted as a reckonable expenditure. The poorest authorities are the ones who get most under rate-support grant. Some of them get a very large percentage indeed of their finance from that source, so it cannot be said that it is completely inadequate. Surely the right answer must be that we should step up as much as possible the provision of official sites. Charges—even the higher charge which the noble Baroness mentioned—cannot be regarded as unreasonable. I believe that the vast majority of people would prefer to go to a good site rather than make do with a bad one. As the noble Earl said, the resources of local authorities are limited. They cannot do all that they would like to do. Sometimes they cannot even do as much as they are prepared to do, because, as the noble Earl, Lord Cromartie, said, capital is restricted. It may not always be the case that the Government will give the necessary borrowing consent for all the things that the authorities want to do at a particular time. As always, it must be a matter of priorities.

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One of the advantages of sitting on this side of the House is that I have a better view of those occupants of the Official Box than I had when my back was towards them. Seeing who are sitting over there, I have a strong suspicion that if I had been sitting on the other side of the House the speech which I should have made would not have differed very much from the one which we have heard from the noble Baroness this afternoon. I find it, therefore, not surprising that for the third time I find it impossible, in speaking after the noble Baroness, to disagree with her, particularly as most of the benefits flowing from Government to which she referred all accrued from action taken in the past five and a half years. So it would not be appropriate for me to disagree with her.
However, there was one point on which I thought she was perhaps a little optimistic—I hope that she does not get into trouble under the Trade Descriptions Act. Although her second reference to the point I am thinking of modified the first one, she talked rather optimistically about the six summer months; and later in her speech she spoke of the 15 summer weeks. If this is an advertisement for Scottish holidays, then I wish to encourage it, but I do not wish necessarily to guarantee that the noble Baroness's arithmetic will be backed up by the weather clerk. However, it is the fact that the season up North tends to be growing longer. One of the difficulties of providing holidays was that everybody wanted to go North in July or August. People are now beginning to come up in May, and are still coming up in September, although whether they reckon that May is a summer month, and also September, I do not know. As the season lengthens, and the number of people using these facilities grow, obviously the problems will become greater.
I hope that when the Report to which the noble Baroness has referred comes out it will provide some of the answers to the problems to which the noble Earl, Lord Cromartie, has directed the attention of your Lordships' House. If it produces answers, I hope that the Chancellor of the Exchequer wil make it
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possible for something to be done about it. Having said that, I must admit right away that I am no enthusiast for any new tax for this purpose. A previous Secretary of State for Scotland (not unknown to the noble Baroness) had the idea of levying a tax of sixpence a night on tourists; but that suggestion fell by the wayside before the proposals were finally discussed. I doubt very much whether it would be any more popular to-day than it proved to be then. In any event, it does not seem to me to be any part of the present Government's remit to create new taxes; I thought their job was to try to get rid of some of the existing ones, including selective employment tax, which was referred to by the noble Earl, Lord Cromartie.
There was one remark by the noble Earl that I did not like. He appeared to criticise some of the existing Boards. He said that this job ought not to be done by well-paid, part-time people, but that professionals should be doing it. I thought that was a little less than kind. Perhaps he did not mean it to sound exactly as it came over, particularly when he made reference to the "Old Pals Act". I have noticed in recent months that the present Government have not rescinded the "Old Pals Act". The Government themselves in this country might be regarded as consisting of well-paid amateurs doing the job backed by professionals. That is the way Boards work. I do not want to refer to the Highlands and Islands Development Board. because we shall be discussing that to-morrow, but what is taking place in the Highlands, and in other parts of the country, in the Boards which have been set up shows that using interested people, prepared to give their time to a job, backed up by fully qualified and, I hope, well-paid professional servants, if not entirely civil servants, is a good way of doing the job.
The Tourist Boards have made a good start; the Countryside Commission have made a good start; the Highlands Board have made a good start in dealing with these problems. Given the necessary working together of local authorities and Central Government, and the not unsympathetic approach which the noble Baroness has given to the problem, I feel that if we have another debate on this subject in two or three years' time

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the noble Earl may be able to say, "I accomplished something by raising this debate in 1971".
5.17 p.m.
THE EARL OF DUNDEE: My Lords, I am glad that my noble friend Lord Cromartie has raised this subject, I promised him several weeks ago that I would support him in a debate, which I am delighted to do, but I have little to add to what has already been said. Therefore, I do not intend to take up more than a minute or two of the Parliamentary time which my noble friend has been lucky enough to secure. I want to hear what other speakers are going to say, particularly, if I may say so, my noble friend the Duke of Atholl. He has represented views, which I and others hold on this subject of caravans, on deputations to the Secretary of State. He has done this far more effectively than I could have done, and with far greater knowledge than I possess. So far as I am concerned my noble friend the Duke of Atholl is my top "pin-up" caravan authority.
There are three interests involved. There are, first, the interests of the holiday makers. Thousands of people—and in future it may be a great many more—can, by using a caravan, have a good holiday at a price which they can afford, whereas they would not have been able to have a good holiday in any other way. That is an important interest. Next there is the interest of the locality in which they have their camping or caravan holiday. It may be against the interests of the locality if they make a mess, but it is very much in the interest of the locality that they should spend their holiday there because they are bringing money into the locality, and are increasing the tourist trade. Thirdly, there is the general public interest, because it is a national interest that we should encourage urban and suburban dwellers to get as close as they can to nature, if they wish to do so, on their holidays. We need not go so far as the people in Stephen Leacock's book, who, anxious to get back to nature, threw off their clothes and plunged into the forest uttering savage growls. But we want them in a civilised way, if they like nature, to get close to it at a price which they can afford. That
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is to the benefit both of the country and of the town.
My noble friend has quite rightly said that caravans ought to be controlled to prevent them from being a nuisance because that, as he said, is in the interests of the caravanners themselves; it is to their interest that they should be reasonably popular in the locality where they want to spend a holiday. He has asked us to give him any suggestions we had on how to clean out what he referred to as the Augean stables. I remember one method, a year or two ago, by a big sheep farmer. Caravan campers had been making rather a nuisance of themselves in a certain area of his grounds, and he put up a huge notice-board on which was written, "Beware of adders". When the caravanners came the next time and saw the notice they hurriedly departed elsewhere full of apprehension that they might be attacked by savage, venomous snakes, although in fact I do not think there was an adder within fifty miles of the place. There must, of course, be controls.
My noble friend's other point was that of finance. That is something one always has to be careful about. You must not spend public money to subsidise holidaymakers unless it can be justified clearly in the public interest. I do not want to be at all didactic about this. There is only one point that I want to ask to be considered, and I do not want a reply to be given to me now. I think my noble friend Lady Tweedsmuir of Belhelvie said that, if there were only three caravans, they could camp without a licence and they do not have to have any sanitary buildings. That is quite reasonable because, after all, if there are not more than three, and if the people are reasonably careful and civilised human beings, they ought to manage without desecrating the territory round about them without any built-in sanitary equipment. If, on the other hand, there is a camp of 50, 100 or 150 caravans, then, of course, they have to have large sanitary installations built in. But with so many caravans, when the cost of this is spread out it does not come to a great deal for each caravan, and the campers can afford the charges which will cover it.

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However, supposing there is a site with five or six caravans, or ten or a dozen. In my own experience, the cost of erecting lavatories and other sanitary buildings which are probably necessary, although not as great in actual figures as a building for a huge site, is far more expensive in relation to each caravan, and the holidaymakers could not afford to pay enough charges to cover it. I do not know what the right answer is. It may be that the best plan is to leave things alone and have only either very big sites or very small, unorganised ones of not more than three caravans. But this would mean neglecting and wasting a great many good and beautiful sites which might prevent overcrowding in some areas and spread the thing out more evenly. Provided proper precautions are taken about tidiness, and so on, that would probably be a good thing. As I say, I do not want an answer now, but I suggest to the Government that it may be justifiable.
My noble friend Lord Cromartie said that these things were done much better in Sweden. I have no doubt they are. They always seem to manage things so much better in Sweden, including trade unions, I have been told. But he did not say whether any contribution was made towards the cost from public funds. That is something I just do not know. But it seems to me that if it is possible, if it is justifiable, to make any kind of public contribution, it should probably be concentrated on the expense of building expensive public lavatories which may be necessary on the caravan sites, and it should probably be mostly concentrated on the very small sites of half-a-dozen or ten caravans, where the occupants can-not afford to pay their share of the charges for these buildings.
5.26 p.m.
THE DUKE OF ATHOLL: My Lords, I have been looking forward to this debate and I should like to thank my noble friend Lord Cromartie for introducing it. I should also like to thank my noble friend Lord Dundee for the kind things he said about me, and assure him that my practical experience of caravanning is absolutely nil. My experience of camping was as a Wolf Cub in somewhat distant days, when one's object was to light a rather wet bundle of twigs
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with two matches, rather than to use a smart modern primus stove, with which I think all campers are equipped nowadays. So I feel that my interest in caravanning and camping must be said to be theoretical rather than practical.
I have, of course, another interest which I feel I must declare, and that is that I am starting a caravan site on my land which I hope will be open this summer. Although my plea is for financial assistance for certain kinds of site in certain places, I do not think mine would qualify. I want to put in a plea for assistance for small sites—and mine is going to have 200 pitches—in remote places. And I think that, with the best will in the world, it would be hard to say that within 100 yards of the main Perth-Inverness Road was a remote place.
I believe my noble friend Lord Dundee has rather underestimated the cost of setting up a caravan site of this size, because there are, under the Caravan Sites and Control of Development Act 1960, many regulations one has to obey in order to obtain a site licence; and in order to obey all these regulations the cost per caravan pitch is something like £300. I believe that two or three years ago the National Trust worked the cost out as between £200 and £250; but one would be very clever if one did it from a virgin site for a sum of money of that kind nowadays.
My major plea is going to be that there should be some financial assistance for private people who wish to start small caravan sites in remote areas. I consider that these sites are nearly always better run by private people than by local authorities, because besides looking after their caravan site private people usually have some other occupation, such as a market garden or small farm. But the snag at the moment is that it is almost impossible for them to obtain any form of financial assistance. I thought my noble friend the Minister of State said that a wide source of finance was available to people who wished to start caravan sites, and she quoted various sources, the first of which was the Small Industries Council for Rural Areas of Scotland. My noble friend is quite right: they will make loans—but at so near the "going rate" at which one can probably borrow from one's bank that it is really hardly worth while borrowing from them, unless, of course, your bank does not

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consider you a sufficiently good risk. In this case, I think that they, too, may be rather doubtful about your status or the viability of your project and so be reluctant to lend you money. Moreover, in remote areas, and on a small scale, it would be impossible to make a site pay. It simply would not be filled up for a large enough part of the year, and all the overheads could not possibly be covered.
As the speaker for the Scottish Landowners' Federation, I had a letter on this subject dated July 16, 1970, from the Scottish Development Department, because I had inquired into this question of finance. Having referred to the Small Industries Council for Rural Areas for Scotland, the Scottish Development Department then go on to say:
"The Secretary of State may make grants under the Countryside (Scotland) Act 1967 to local authorities for the improvement or development of municipal sites. The Countryside Commission for Scotland have power under section 7 of that Act to make grants or loans to persons other than public bodies for projects of a countryside nature. But the resources the Commission have available for this purpose are limited and they have not so far felt able to use them to assist commercial projects such as caravan site developments."
So that would seem to deal with that source of finance that my noble friend was suggesting the potential caravan site developer might have.
The third source she suggested was the Scottish Tourist Board. Indeed they have power under Section 4 of the Development of Tourism Act 1969 to give grants for more or less the same purposes as the Countryside Commission, but again they have only limited funds, and again the Board has not yet decided how to settle priorities for giving assistance of this sort. So far as I know, the Board still has not given any assistance of this kind.
The letter then goes on to say:
"There is virtually no prospect of assistance from the Ministry of Technology under the Local Employment Acts."
Those are no more, so now there is not only virtually no prospect; there is absolutely no prospect of any assistance. So, my Lords, I cannot see where anyone who wants to develop a small caravan site in a remote area can turn to for the sort of grant which would make such a project viable, and only in this way shall we start to get over the problem—unless, of course, one happens to be lucky
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enough to live in one of the six crofting counties. Then one may be able to get money from the Highlands and Islands Development Board. But, my Lords, that is only six counties out of the 31 in Scotland.
If grants for small sites in remote areas were given, one of the conditions should be that those sites should be used only for touring caravans and not for static caravans. One of the troubles is that the few existing sites are often full of state caravans which are used largely as week-end cottages, when they should, for the benefit of Scotland, be available for touring caravans. I would just point out that allowances will not really help in these cases, because it is unlikely that a site operator will make a profit, and in order to get benefit from investment allowances one has to make a profit in the first place. But for the large sites in the less remote areas obviously it would be an advantage if the caravan site operator were able to obtain the same allowances as all other industries receive.
I think, too, that in certain remote areas sites should be allowed which do not quite come up to the model standards of the Caravan Sites Act 1960. A survey was carried out by the Scottish Tourist Board and its results were published in 1969. This showed that many caravanners wanted only simple, basic sites. In fact the Caravan Club representative on the Scottish Tourist Board Committee is quoted as maintaining the point of view that the extent of the amenities laid down in the model standards of the Caravan Sites Act is unnecessarily high, and he represents 70,000 touring caravans. So surely what we want is plenty of sites with varying standards of amenities, well landscaped—and this is very important, because so often a caravan site is an eyesore for everyone else although it may be a marvellous site for the people in the caravans on that site. Local planning authorities are quite right to insist on high landscaping standards when they give a licence to a caravan site, and in the interests of all, including caravanners, I am convinced that we want a ban on caravans other than in authorised sites which are properly licensed. We are not anywhere near being able to achieve that at the moment, because there are not enough sites for all the caravans that are on the road in the summer.

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I would just point out that from the sanitary point of view campers are probably more of a problem than caravanners. People in caravans usually have their own lavatory which they can carry around until they come to a suitable disposal point; campers do not, and this is a point which should not be forgotten. It is surprising to me that the legislation, such as it is, is more restrictive so far as caravans are concerned than it is in regard to campers.
Other noble Lords have covered various other points that I should have liked to mention, but there is one quite important point upon which I feel I must touch. It is on a somewhat different subject, and that is the difficulty of getting planning permission, not from the local authority, who on the whole are usually only to keen for people to start caravan sites, but from what was the Ministry of Transport or the Scottish Trunk Roads Department. I believe that the Trunk Roads Department in England is now part of the Ministry of the Environment, and in Scotland it is no doubt still the Scottish Trunk Roads Department. They appear to want to make it as difficult as possible for anyone to have a caravan site within reasonable distance of a main road. I think they might be told that in the interests of getting caravans off the road and on to proper sites they must be a little more reasonable in their standards, because many of the roads in Scotland simply do not have a long enough straight stretch anywhere on them to be able to satisfy the planners in the Scottish Development Department, with their insistence upon having 800 feet of straight road (400 feet on each side) on your way in and out of the site. In many cases there is not a stretch of road that comes up to these standards, and I hope this will be brought to their attention. My Lords, I think we have had an interesting debate, and I look forward to hearing all the other speakers.
5.39 p.m.
BARONESS WHITE: My Lords, the noble Earl, to whom we are greatly indebted for initiating this debate, has not put any geographical limitation upon his question and therefore I think it might be appropriate if we have a voice from Wales. So far all the contributions have
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been from North of the Border, but we in Wales, of course, have problems every bit as acute, if not more so, as those which have been described with such experience and knowledge by the noble Lords who have already spoken.
Our Welsh coastline is some of the most beautiful in the Kingdom, and in the proposals made by the Countryside Commission for heritage coastal areas one-third of those proposed are in the Principality. Also, we are much nearer to the great industrial areas, both in South Wales and in the North to Merseyside and the Potteries, and in mid-Wales to the Midlands. Therefore, we are suffering most acutely in the peak summer periods from congestion of every kind, both on the roads and on the caravan sites themselves. I can speak from close experience, because for some time I was a Minister in the Welsh Office, concerned with these matters, and I think most of us in Wales would agree that we have already reached saturation point with static caravans in most of the coastal areas. Therefore, there is no room left unless we show great pertinacity and ingenuity in planning for the tourist or transit caravans which are the particular subject of this debate.
I have the greatest sympathy for the touring caravan family, because I think they are much more enterprising than those who go and sit down or sleep in the static caravan camps, although they pose very great problems. I have, for example, evidence which has been sent round to all the statutory and voluntary authorities concerned by the Glamorgan County Council, which is a very dedicated local authority where planning is concerned, about the danger they see in the Gower Peninsula, which is one of the most exquisite areas in Wales and which is being very seriously threatened. They say that visitors are still coming in, despite the lack of facilities. There is a tidal wave of day visitors from the industrial areas of South Wales. The Council reckon that, in addition to the static caravans on Gower, at a peak weekend in the summer there are some 1,000 touring caravans trying to find places to rest overnight. They say that there are very few small approved touring caravan sites, and as these clubs come in at the weekend the existing site operators and farmers have been opening up other unauthorised

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sites. Caravans have been parked on commons, verges and other open land, with all the attendant problems of visual intrusion, public health, traffic congestion, and in some areas ecological damage. So this is a very acute problem to all of us in Wales. Parts of the Gower Peninsula near the coast, certainly also Pembrokeshire and Anglesey, have very few trees and screening is very difficult. Therefore, any further sites which are authorised, however well managed or built, will be extremely intrusive on the landscape. It seems to me that we need a strategy in this matter.
One of our problems in Wales is that so often the territory which is just inland from the coast is also very beautiful and ought not to be spoiled. I am told that one of our major camping organisations are particularly gratified with the efforts made in Cornwall by the county council. But with the greatest respect to Cornwall, while their coastal scenery is superb, my own view is that a great deal of the inland scenery is not all that distinguished and is not very much spoiled if you have more caravan sites there. Where I live in Montgomeryshire, the beautiful Dovey Valley, the fact that you are ten miles from the coast would not be of any help if you had a badly sited caravan camp. There are some very sensitive areas, and very careful planning is needed if we are to provide what is absolutely right and proper accommodation for the touring caravans without spoiling the scenery for everybody else.
The distinction between the static caravans and touring caravans was, of course, marked in the legislation, the Countryside Act 1968. As we know, England and Wales have a different Countryside Act from Scotland, and we have a separate Countryside Commission. But under Section 34 of the English and Welsh Act provision was made for special grants to be available for transit caravan sites, as opposed to static, in an effort to deal with this problem, but the Act has not been in operation long enough to see how it is going to work. I understand, from inquiries that I have made, that for England and Wales there have been 75 applications so far from local authorities and private developers, about one-third from private developers. It seems to me—and I think the position is also the
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same in Scotland—that the Countryside Commission is a little hesitant as to disposition of its limited funds, and I do not think that any actual grants have so far been made under this section. But the powers are there, and I think all of us who are taking part in this debate will hope very much that they will be used, and that they will be used intelligently.
I also hope—although I admit that in many places this is bolting the door after the horse has gone—that planning authorities, in giving consent for any further static sites, will insist as a condition of the consent that there shall be provision also for touring caravans. I think it is a great pity that more was not done on these lines after the 1960 Caravans Act, when planning authorities could have used their powers to greater effect. But I am advised that they did not all wake up to this fact, and a number of opportunities have been lost of using planning consent as a way of ensuring that provision was made for the touring caravan as well as the static ones.
I think we have to look at further possible ways of mitigating the very great difficulties which face those in this country who want to take their caravans on tour. I may perhaps mention from our Welsh experience one or two directions in which we are making a little progress. I do not want to make too high a claim for it. I think one noble Lord earlier did mention information centres. It is very important that one should try as far as possible to make sure that those who are coming with the intention of camping should have some knowledge of where they may stay without breaking the law. In Pembrokeshire, with the assistance of the South Wales Tourist Council and the local authority, we have set up an information centre, and I am told this has proved invaluable in controlling the influx of tourists, by making known caravan sites which were formerly not always fully used and relieving the congestion in some areas, around Tenby in particular, which were becoming more than saturated. This seems to me an excellent idea.
It has been suggested that we should have strategic transit sites on the Borders as visitors are moving into Wales, so that they can spend the first night of their journey in satisfactory conditions. I was very much interested to see that

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the Countryside Commission and the British Tourist Authority have suggested that racecourses would be ideal for this purpose, because they are used only at certain periods of the year, there is quite a large area vacant, which is not by any means unsuitable for touring caravans, and water supply and toilet facilities are laid on. So far as I can see, we could have on our Welsh Border, starting in the North, Chester, Shrewsbury, Ludlow, Chepstow, which would provide the first helpful line of racecourse transit sites.
Then it is suggested that other purpose-built transit sites could be provided. At the moment, the local authority have a short-stay site at Cardiff, but suggestions have been made that Severn Bridge, Brecon and Llangollen would make good strategic transit or short-stay sites. I think they would be excellent, because it would mean that people coming into South, Mid, and North Wales respectively could find proper accommodation at the outset. In Pembrokeshire, too, the Countryside Commission and the local authority have used a disused airfield to provide 50 pitches for touring caravans. These are not taking up all the site, and there is room for expansion. I am sure that in other parts of the country there are still disused airfields which could be used for this purpose and which already have some of the basic facilities, though they may need some money spent on them. There is also hard standing. This is a way in which we might try to tackle this particularly difficult problem of finding places for touring caravans. I hope that any experience that we in Wales have had in this pioneering direction will be entirely at the disposal of people in other parts of the United Kingdom who wish to see what can be done.
I think one has to face the fact that provision for touring caravans is not as remunerative as it is for static caravans, and unless something is done by way of public inducement, by public pressure and planning and so on, we shall not get rid of this position which is so unsatisfactory for everybody concerned, including the innocent caravanner who comes into an area, peaceably hoping to have a wonderful time, but finds the place so crowded that he does not know where to turn. Thus we get all the
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troubles which have been described, of camping on verges and all the nasty mess that is sometimes left behind.
We need to do all that we can, because as a tourist country we are not by any means at the top of the league in this respect. Noble Lords have mentioned experience abroad. I was looking up information upon this point. It leaves one somewhat disquieted when one compares the small effort that we are making, not only for our own domestic holidaymakers but to attract tourists from overseas who are used to far better conditions on the Continent than at the moment they can normally find in this country. To me, this is most regrettable.
I am told that in the five years since the British Travel Association obtained the approval of the Ministry of Transport to issue signs for approved camping sites which reach international standards, there have been applications on behalf of only 172 sites. Of those, 140 applications have been granted to sites considered to be up to standard and the proprietors have been told that they may display the signs; but of that number only 102 have more than 20 pitches. This compares with more than 1,000 sites in France which are municipally operated and which always provide for tourist caravans, and some 3,000 privately operated sites. Of course in other countries, such as Italy, Switzerland and so on, there are large numbers of caravan sites.
We compare extremely badly with the Continent, both in the number and in the standards of our sites for touring caravans. It seems to me a great pity that this should be so. I know that there is in existence a Working Party in the Department of the Environment which is concerned with this matter. There is also the Working Party of the Countryside Commission whose report is now being circulated to various interested bodies. I fully appreciate that recent legislation on the countryside has not had much time in which to be operative, but I hope that the noble Baroness and the noble Lord, who I understand is the most expert camper in the House and who is to reply to the debate, will feel that we are all greatly interested and concerned in this matter, and that, where necessary, they will exert pressure on their colleagues to see that we make further progress.
5.54 p.m.
LORD LOVAT: My Lords, I shall be very brief because most of the things I wanted to say have already been said. In thanking the noble Earl, Lord Cromartie, for introducing this debate, I want to try to impress both on the noble Baroness, Lady Tweedsmuir, and on Lord Hughes, on the Opposition side of the House, that, in my opinion, unless something is done, we shall not in the future be able to cope with the problem of caravans and camping in the Highlands. There have been a certain number of generalities in the opinions expressed. I shall confine my remarks to a study group, of which I am chairman, in the County of Inverness, where for years we have been seriously perturbed over the problem of preserving the countryside and, of course, all the problems that go with litter, sanitation and camping by tourists.
In general terms, the tourist industry is one of the great assets in the North. The tourist industry in the United Kingdom brings in a total figure of £1,000 million, of which, on the most recent figures available, Scotland can claim about £97 million. The county of Inverness, which is the largest county and the most thinly populated in the North, stands to gain about £3½ million out of the total spent by tourists. In this county, which I know well, the trade brought in by caravanners and campers is about 10 per cent. of that total. May I say, here and now, that we welcome caravans and their occupants. On putting statistics through a computer we found that they spend more per head of the party, the family group, and stay about one and a half days longer, as well as being extremely well-behaved. So that in every sense they are welcome people. But we simply have not the facilities to deal with them.
This problem, my Lords, is going to get worse, because we also find that they are increasing in number at the rate of 15 per cent. per annum. This is a formidable and, I think, impressive increase. And with the roads improving (as I hope one day they will) this trend is going to continue, because we know that the desire "to get away from it all" is one that is found not only in Great Britain but in every part of the world. People cannot afford hotels, least of all bad ones.
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Frankly, there are not many good hotels in the Highlands, with their short season, S.E.T. and the rest. If anything, they are on a slippery slope. They are not going forward in their development, whereas the camper most certainly is.
An earlier speaker this afternoon said that we cannot build permanent sites. This is perfectly true, because the average person has not the capital to invest in a large site. There is also the fact that the season is very short. Despite what has been said by speakers on the Front Bench, I think the season for camping is a good deal less than six months or 15 weeks. If you are going to borrow, you will not get the interest on your money. If you have to "fit in" on a capital outlay of, say, £25,000, you are not going to get your interest rates on what I consider to be a three-months season. In the far North I put the season at 12 weeks. I think I am perfectly right in saying this because I am an interested party: I have a caravan site of my own.
I have just one more figure for the noble Baroness to digest. We took a census in the county of Inverness in the month of August. This was not a particularly good month, and we did not consider that the figures were unduly high. But shortly before the grouse shooting began it was found that on 817 miles of road in the county of Inverness there were 1,187 caravans and campers. That number was over and above the total on the authorised sites, which on the same day amounted to 5,884 people. These figures may not sound very big to people living in the Home Counties. But when one considers that in the landward area of the county of Inverness there are only 17,000 ratepayers, some of whom live in the Islands, one can readily understand that the tourist population greatly exceeds the number of local inhabitants.
On the Road to the Isles—the one immortalised in the song—in Lochaber on that particular evening for every mile of the road there were 3·3 caravans parked in lay-bys in places where they should not be. I think the chorus of that song runs:
"You've never smelt the tangle of the Isles".
But if you were wandering that way on a hot summer's day there would be a good deal more than "the tangle o' the Isles" coming from the Skerries and the "loos" if you had a good nose to cope

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with what was left behind. This is a serious matter, because if this calculation of a rise of 15 per cent. is a correct one—and I think it is—we are going to have something like 10,000 caravans on the Highland roads by 1974.
I suggest that we must seek practical ways and means of financing all that goes with preserving the beauty of the Highlands. This is our greatest asset, and it must be preserved. I should like to pay the highest tribute to one of our newest bodies, the Countryside Commission. They have done a great deal to provide sanitation. Very few lavatories existed—I can assure you of that. Only last week in the County Council we discussed the cost of putting something into Glen Nevis where winter climbers are sometimes in search of relief, in more than one sense of the word. I think there are four lavatories there which cost £8,000. This is something which no county can afford, especially if, as in Inverness-shire, a penny rate brings in only a few hundred pounds. How can one cope with this problem with the funds available, any more than the Countryside Commission, with £100,000 to spend, can provide sanitation?
There are very few public lavatories outside the villages. Certainly, although the big caravan sites are well equipped, there will not be enough space for things to come. I hope that the noble Baroness will bear this fact in mind. I felt that her speech tried to justify what was going on now—and perhaps it does. But it certainly will not cope with the future situation; and the ratepayers in the Highlands cannot do it. To my mind, it is rather unfair that the Countryside Commission should use all their money in providing toilet facilities in areas such as National Parks—which will be coming along soon; and I welcome them—when one thinks of the situation that arises from the opening up of the countryside and the provision of car parks and so on.
I have two practical suggestions. The first is that the static sites should be phased out, so far as possible, and that travelling caravans should take their place. This would provide ample space for parking and the right facilities, which already exist on static sites. Secondly, immediate steps should be taken to prevent parking in lay-bys. This is a shocking
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practice, and it should become a statutory offence to park in lay-bys. I hope that, if there is one message that I have succeeded in putting across this evening this is the one to be noted for our narrow country roads.
6.4 p.m.
VISCOUNT THURSO: My Lords, I must apologise to your Lordships for speaking twice in one Sitting, but I do so on what are indeed two important subjects, especially to the Highlands of Scotland. I hope, therefore, your Lordships will forgive me, and I promise to be as brief as I can. I share the gratitude of other noble Lords that the noble Earl, Lord Cromartie, has brought this discussion before us. I only wish that he had made his Motion include nomadic tourists, because it is my experience that tourists with tents and with Dormobiles are increasing more rapidly than those with caravans. I think we are seeing this trend, and we have to cope with it, because the needs and requirements of a tented site are not always exactly the same as those of a caravan site. There-for one must keep the layout of sites flexible, so that one can deal with the trade as the trade is, and cope with the change as the change comes.
I should be all against the taxation of caravans—let me say that to the noble Baroness right away. I always have been against taxing the tourist. We try hard enough to "milk" the tourist, and if we milk the tourist properly then those who drink the milk will be able to afford to pay the taxes; but I do not think we should tax the tourist first. I believe we should tax those who, we hope, make profits out of the tourist. Therefore, I should be against taxing caravans. I think it would be extremely difficult, for instance, to tax tents, and Dormobiles are already taxed as vehicles. I do not know that it would be fair to put an extra tax on them in view of the small period of time in which they can be used as Dormobiles. Therefore, I would come down against taxation. I think that an important thing we should consider is an examination by the Scottish Tourist Board and the Highlands and Islands Development Board into what is the requirement in the way of sites. As the noble Lord, Lord Lovat, has pointed out, we have not enough sites for the caravans that are with us now; we have not enough sites

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for the tents that are touring our Highlands now; and it is quite clear that the number of tents, Dormobiles, and caravans is growing with each year that passes.
I may tell your Lordships that in the municipal caravan site in Thurso the return from rents for pitches has increased in the last ten years eight and a half times. In cash it has gone up from about £165 a year to something over £1,400. This is a steady growth rate each year, with the exception of a slightly extra growth in particularly good summer seasons. We are convinced that this growth will continue. It represents a growth in the use of sites mostly during the months of July and August. We feel that it is important to provide facilities—especially for tents and Dormobiles, which have not so much space as caravans—for people to enjoy themselves in wet weather—places where they can watch television, play ping pong, wash their clothes, and that sort of thing, which they cannot do in a tent or a Dormobile.
It was suggested by the noble Lord, Lord Hughes, that the season is getting longer. That is not our experience in the Highlands. There is a small peak around Whitsun, but nearly all the tourist trade in the Highlands is still being carried on from the middle of July to the end of August, during the school summer holidays. If we are to expand our season, we must look to markets other than the home market. We have to think in terms of the touring caravan, the camper from the Continent and elsewhere, who is expecting better facilities. If we are to increase the length of our season we must try to increase the facilities, and the standards of the facilities, so that it is just as much fun and pleasure to camp and caravan in April, May and June as it is in July, August and early September.
The point has been made by more than one noble Lord that small sites should be helped. I am doubtful about it. I believe that in the Highlands a croft site of two acres or more could have up to three caravans without the standards of the large sites being applied to it. That is good for the crofter, for the touring caravanner and for the camper, because facilities for spending the night can readily be found, and at such
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sites there is usually sanitation at the croft house, where the needs of the caravanner or camper can be met.
But to encourage by grant sites that are admitted to be uneconomic before they start is a rather doubtful proposition. Also, even with marginal cases there would be a proliferation of sites, making the problem of landscaping and preserving the amenity in scenic areas more difficult. If you allow one person to have a site you will have to allow everybody to have a site. If you allow one person a grant, you will have to allow everybody a grant. So I should prefer that assistance be given to the large caravan sites, particularly municipal caravan and camping sites where full amenities are intended to be laid on, and municipal sites which have shown themselves to be efficient, liked by tourists and growing. The person who is providing a facility which is required should receive assistance to go on doing a good job. An examination by the Scottish Tourist Board and the Highlands and Islands Development Board might confirm this.
I could not agree more with the noble Lord, Lord Lovat, and the noble Baroness, Lady White, in disliking static caravans. I should like to see static caravans turned into well-designed chalets. They are a masquerade. They are wolves in sheep's clothing. They are not the real thing. Their wheels are rusted solid and there is no point in having those ugly objects polluting the view. So the phasing out of static caravans could be a very good tool in helping us to provide a number of extra sites for touring caravans. I promised to be as brief as possible and I have spoken long enough. I should like to end by asking the noble Baroness, Lady Tweedsmuir of Belhelvie, and the noble Lord, Lord Sandford, whether the Government will consider siting some racecourses in the Highlands of Scotland, so that we can turn them into caravan sites, because we have no racecourses at the moment.
6.14 p.m.
LORD BALERNO: My Lords, I am sure there is no need for the noble Viscount, Lord Thurso, to apologise for addressing your Lordships' House a second time. He is both knowledgeable and direct, and he speaks with such charm that we are delighted to hear

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him. In fact, we wonder whether he will consider addressing your Lordships' House a third time in the next debate.
We are indeed most grateful to the noble Earl, Lord Cromartie, for initiating this debate which will bring light to bear upon a problem which has not been fully appreciated nationally, though it is known by those who are devotees of touring caravanning. I am not going to follow the discussion, which has been so exhaustively taken up, on the question of sites, their drainage and their sanitary facilities. I have never in my life been to a caravan site, nor have I any wish to go to one. I stand confessed before your Lordships as an unrepentant "wild" caravanner. I started caravanning with my family over forty years ago and I have never pitched a caravan on a recognised site during those years.
I must confess to the noble Earl, Lord Cromartie, that after the war I penetrated with a caravan into the wilds of Wester Ross in places where no caravan had ever been before, and several times pioneered where one could say one was the first who ever burst into that silent sea. The noble Viscount, Lord Thurso, talked about milking the tourist caravanner. Perhaps I may relate the subject of milk and caravans in those early days. We used to go for milk to the croft or farm where we were parked for the night, and on more than one occasion payment for the milk was refused. They were surprised that we should offer payment, because it was a natural refreshment to give to the visitor in those parts. The reverse process seems now to be taking place.
What I have to say has been covered by implication, though not directly, by several speakers. I wish to stress first, the great social virtue of the caravan. It keeps the family together on holiday, which is of very great value at the present time when the tendency is for the family to splinter off at a very young age. As one noble Lord has said, caravanning develops the initiative and self-reliance of a family. The second virtue which I would emphasise, which is allied to the first, is that it is the cheapest possible form of family holiday.
As the noble Baroness, Lady Tweedsmuir of Belhelvie, has pointed out, caravans contribute very substantially to
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Scotland's economy, and the English caravans represent a major proportion of the tourist traffic. To put the noble Baroness's argument slightly differently, I understand it is estimated that the average family of four in a caravan in Scotland spends around £40 a week, excluding site fees at the caravan park. If they did not caravan, most of these families from England would not come to Scotland for their holidays; they would go elsewhere. Caravans are to my mind, therefore, a very important part of this section of our economy; and their possibilities can be easily extended. Scotland, my Lords, can do with more caravans. Better facilities for touring caravans will generate more money in Scotland, more employment and, most importantly of all, more happy families.
6.21 p.m.
LORD CLIFFORD OF CHUDLEIGH: My Lords, as a somewhat lonely Sassenach in this debate to-day, I feel rather like the chap who finds himself in a club of which he is not a member. However, I appreciate the problems of Scotland because before now I have stayed with the noble Earl, Lord Cromartie, in his part of the world. My purpose this afternoon is to bring to your Lordships' attention the fact that even in the depths of darkest Devon we suffer from this problem of the increasing number of caravans, their high concentration in some areas and the inadequate approach roads. In the November before last I drew your Lordships' attention, in a debate on the South-West, to the prolems of our approach roads. Who, coming to our part of the world (especially in the summer months, but almost at any time), has not been frustrated by finding himself behind a slow-moving queue with either a milk tanker or a caravan at the front? Eventually, somebody loses patience, he overtakes where he should not, there is an accident and the slow-winding snake comes to a halt.
The answer to part of that problem will come (but oh how slowly!) when the M.5 is extended to Exeter and the dual carriageway extension of the M.3, all of which we have been promised, is brought to that part of the world. We have also been promised dual carriageways on what are now the main roads. The trouble is that this merely gets the caravans and

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the other holidaymakers to their destinations quicker, and thereby aggravates the "in situ" problem, which is causing alarm and despondency in many areas at the moment. With us, the touring caravan is a problem along with motor caravans and tenting holidaymakers. Even so, the number of touring caravans coming to Devon is growing prodigiously. At the time of the survey last summer, there were 2,200 (and this does not include, naturally, those on the way in or on the way out, or hidden in farmyards or on parts of the Moor), whereas in 1960, when we had a survey at the same time of the year, there were 1,300. The annual increase is now running at 16½ per cent. plus, which I think is a little more than was quoted for Inverness. Another bit of information to show the trend is that during 1968 and 1969 112,000 new caravans were put on the road for the home market.
The problems arising, so far as we are concerned, are fairly obvious, and are the same, I think, as are experienced elsewhere, but I think we suffer from greater concentration. We have meetings between the planning authorities and the local authorities, and so on, but it does not really seem to get us anywhere; nor have we found an answer to the problem. I feel that one of the first things we ought to do is to have a system whereby, on their way down or into a specific area, holidaymakers could make contact to find out where there are vacancies. We had an awful experience last year, when the Torbay area was absolutely crowded and people had to be sent away.
To my mind we must have new caravan parks. Torbay and other seaside areas say that they are all full up, but I think there is scope for more caravans on Dartmoor. However, here we are up against a lot of what I call bureaucratic or institutional obstacles. There are parts of Dartmoor which are boggy and are probably known by only one person in a million. If we were permitted to build there nicely landscaped reservoirs with attendant caravan sites, boating facilities, et cetera, we could kill many of our problem birds with the same stone. We could save good land and homes elsewhere, supply badly needed water and take off the narrow roads 1,000 caravans which only block the local traffic. In the case of this particular site I am thinking
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of, every summer the roads are jammed with visitors and all they can do is sit and gawk at Princetown Prison. But somebody "nobbled" that Committee, so we lost that possibility.
The caravans are mainly congregated on the coastal areas, where they are too thick on the ground already for aesthetic comfort. If I may quote a case of my own, I have a field by a river not far from the coast which had been a council rubbish dump. My tenant cannot plough it, therefore, without bringing up tin cans. I applied for permission to build a caravan site. It has a nice hedge around three sides, and on the other it is down. I said to the planning officer, "I propose to build that hedge up so that it has high trees all around." As an example of the sort of difficulties one has when one tries to do these things, he said, "You cannot do anything until you have grown this hedge up", which I myself had proposed. Yet at the same time, on a hill not 500 yards away there is a permanent caravan park around which all the trees and hedges have been cut down. It stands out like the warts on Cromwell's nose; and for the next two years the land in between will be a mud bath, anyway, while they construct the Chudleigh by-pass. There are far too many examples of that sort of hindrance to our trying to catch up with this terrific increase in the number of caravans.
Caravanners, both mobile and static, spend, so we are told, only half as much on their holidays in Devon as do those who go to hotels and boarding houses. For that reason they are not the most popular element in the tourist set-up. For that and other reasons, the touring caravanner cannot really expect to have the front row of the stalls for "standing room only" prices. Local residents, who have paid and are paying considerable prices for their selected places, cannot have their interests ignored; and as a local resident I feel that I should be on the local residents' side. Club sites operated under paragraphs 4 and 5 of the Caravan Act are the sites generally most acceptable both to the planning authority and to the caravan clubs. As almost every speaker to-day has said, the grants which are available are generally thought to be inadequate.
I should like to make one or two suggestions. The problem of the site

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operator ought to be given a little more consideration. The nomad (I use that term for want of a better word), cannot stand too much of the frustration of being turned away—and there was a lot of that last year. Perhaps the law could be made a little less fierce in this respect, especially in the so-called "explosive" period when there really are too many caravans. If the operator were allowed a small extra number of caravans for that period, or if he were allowed to take on a little ground next door, it would save a great deal of disappointment—especially if the park and other facilities are available. This might help to solve that problem. It was because of the danger to public health, arising from the fact that the roving caravan has no set place to go to, that I applied for a caravan site licence. Last year I found four caravans parked in a very narrow lane. It meant that nobody else could get by; and my woods were being used as their lavatory and as a dumping ground.
It seems to me that at the end of every season the planning authorities must get together with the holiday trade and make sure they have learned the lessons of that season so as to cope with the problems of the next. At present, these protective policies are, I think, a little too inflexible and imprecise. If we could have more sites allied to maintenance areas, say on the M.5 and approach roads, we could devise a way of channelling the visiting caravanner to places where there are vacancies by connecting these sites by telephone to sites in various parts of the county, thus avoiding the trouble that we had last year. This would be of special importance in these explosive periods.
The only other thing I would suggest in that respect is that, in addition to having telephonic communication, there should be approved site directions for caravans. If we could get this sort of communication, the right sort of approach roads and the right sort of overnight halts close to those roads, we might be able to avoid a great many problems in the future. A very large proportion of the million and a half holidaymakers who come to Devon every year either arrive in caravans or stay in them during their holiday period. I shall be more than interested to hear what the noble
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Lord who is to answer for the Government has to say in respect of the various problems that noble Lords have raised this afternoon.
6.35 p.m.
THE EARL OF DUNDONALD: My Lords, we are all grateful to my noble friend Lord Cromartie for introducing this debate to-day. For a few moments I should like to focus our attention away from Devon back to Scotland. Tourism in Scotland is becoming more and more important. We have plenty of open space where the urban dweller can learn to love and enjoy the countryside. But, to reiterate what many noble Lords have said, the caravanner and the camper who tows a trailer—not to be confused with the camper who camps in the open countryside—are producing a very real problem.
I have listened attentively this afternoon (and my noble friend the Duke of Atholl "shot down" various forms of financial assistance to the local authority and caravanners) but I have not heard a word about what the Highlands and Islands Development Board have done. It would be helpful to me, and I am sure also to our county council in Argyll, to know what the Highlands and Islands Development Board have done or are able to do in helping the caravan camper. I will amplify that point in a moment.
In our part of Argyll the caravan camp is, on the whole, extremely well regulated. But having observed the situation over several years—and I have no personal interest in the caravan camps at all—I have come to the conclusion that they are too small in area and that it is important that the local authority (under the powers which I believe they have available under Section 49 of the Countryside (Scotland) Act) should have the funds to be able to enlarge these camps. We should not then have, as at present, numbers of permanently parked or touring caravans ranged in long rows inland or facing the sea in cooped-up situations where the children, were it to rain for six or seven days, have no recreational facilities of any kind. I think that further financial assistance should enable the sites to include recreational or amenity areas part of which, if possible, should be on a hill.

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Now we come to the other subject of camps—and I exclude the open camper, the man who camps well off the main roads and does not mind if he pitches his tent on the top of Ben Nevis. He is the real camper. My noble friend Lord Cromartie referred to those who come in Dormobiles or who have trailers carrying their camping equipment. It would appear to us in Argyll, and I think also to others, that they are allowed to park in large numbers practically anywhere—and without proper sanitary facilities. I am not talking about crofters and smallholders who can park within their acreage two or three caravans or tents. My noble friend Lord Lovat referred to this arrangement, which works extremely well. What we are concerned with is the Dormobile individual, the Dormobile species, or the man in the car with a trailer: it appears that he is able to park more or less anywhere without proper sanitary facilities.
I have listened carefully to what was said on the subject of taxes on caravans; and I feel that the caravanner would not object to a limited tax (I should not like to specify a figure) payable by day or by night, or by week or by fortnight, for the facilities of a proper, licensed caravan camp. It has already been said this afternoon that this situation exists in other countries where there is a sort of residence tax. I have no objection to caravanners, although, as I said, I have no personal interest in caravans. I have talked to a great many caravanners, and I do not think they would object to such a tax if the facilities of caravan camps could as a result be improved. Could not such a tax be collected by the licensed caravan camp and paid direct to the council in whose area the camp is situated, the money to be applied directly to the improvement of caravanning, rather than be collected by the central authority in the way that S.E.T. is collected? The caravan operator or owner would have to make a return to the Inland Revenue, and so would have to keep proper books; and each night, or each week, the money could be paid to the council. I would suggest a tax of say, £1; and I think this is something that the Government should consider.
My noble friends Lord Cromartie and Lord Lovat know the problem of the roads better than I do, but in our part
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of Scotland passing places on the roads are obstructed by caravanners who cannot get their vehicles off the road. Such a tax as I have suggested might be used by local councils to improve and enlarge licensed caravan camps, which would help to relieve the congestion on the roads. Possibly the Highlands and Islands Development Board might be able to help with road improvements. I am in favour of allowing the present situation to continue in respect of the siting of caravans on crofting land, where the croft provides lavatory facilities and there are no drainage or water problems. Help should be given to the larger caravan camps. Sites where there are only 10, 12 or 15 caravans should not be considered, since they are not economic.
6.43 p.m.
LORD SANDYS: My Lords, as the second Englishman to take part in this debate, I should like to thank my noble friend Lord Cromartie for providing this opportunity for me to address your Lordships. I come from a part of the County of Worcester, in the Midlands, about half-way between the Borders and Devonshire and on the M.5 which has already been referred to. The reason I am speaking in this debate is that our county has recently been awarded a Civic Trust Award for the design of a camp site. I feel that this is the sort of thing on which other local authorities might employ their expertise.
We had a derelict Army camp and no one knew what to do with it. It was full of weeds and a source of interest to hooligans. It belonged to the local authority and it was cleared, very much on the lines described by the noble Baroness, Lady White. It was not an airfield but an Army camp, and the facilities included hard standings which have been put to excellent use. The opportunity to improve this site was taken by Worcester County Council. There may be similar sites in our county and in other parts of England, Scotland and Wales. Our needs in England are precisely those which my noble friend the Duke of Atholl mentioned earlier. We need plenty of sites of varying standards which are well landscaped.
My Lords, it is the landscaping to which I should like to address myself particularly; it was referred to by my

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noble friend Lord Dundonald. Landscaping should provide two things, concealment and amenity. By "amenity" I mean amenity from the point of view of the outside observer, and also that the camp site should provide much more than is available on camp sites in this country at present. Camp sites should be fun. Given imagination and a will to make them so, this could be achieved.
So far as concealment is concerned, I would make a plea, not to the Government but to the caravan manufacturers: is there not another colour which caravans could be painted, other than cream or green? Equally, are there not substances which could be applied to the paint to give a matt effect, or provide slightly serrated or nobbled surfaces, so that the sunlight would not reflect from it? Is it not possible to construct camp sites in such a way that they are "dug in", rather along the lines adopted by Hampshire County Council? There they have used the gun-pit principle for their car parks by providing bunkers which are an amenity in themselves and provide a degree of privacy for the caravanner and would-be camper.
There are other ways in which amenities could be provided, but I do not wish to take up further time by discussing them. I would mention the opportunity which there is for the exchange of information among Government Departments. Now the Forestry Commission has very much enlightened views about State forests compared with the early attempts made after the First World War, when trees of only one variety were planted in rectangular slabs. As the Forestry Commission has now opened the door a chink, it might be persuaded to open it a little wider and consider planting more varieties, with a view not only to the final crop being profitable but also to landscaping as a national amenity.
Another Government Department which has a stake in this regard is the Ministry of Defence. I will not mention any particular camp site or area of derelict land which might well be disposed of in the forthcoming re-allocation of land, because I think it would be unfair to refer to a particular site which many of us might know. But undoubtedly such
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national resources which are in many cases along our coast line are awaiting Government action, and the caravanning community has a call upon them. Finally, my Lords, the Ministry of Transport comes into this. There are enormous areas of disused railway land, and also stations, which could be turned into places for caravan camps, and there sites could be established with great benefit.
6.48 p.m.
LORD BURTON: My Lords, I regret that there appears to have been some slip-up in the "usual channels", and my name has been omitted from the list of speakers. I make no secret of the fact that I find camping an extremely uncomfortable way to spend a holiday. Far from it keeping the family together, as was said by my noble friend Lord Balerno, whenever my family go off camping I certainly do not go with them. But I know that there are people who desire this sort of holiday, and I fully appreciate the position.
I am sure that we are all most grateful to my noble friend Lord Cromartie for initiating this debate about what is definitely a growing problem. To my mind, the main reason why it is a growing problem is because of the existence of the iniquitous selective employment tax which, by increasing the charges, has driven many people from the hotels. However, we hope that before many months the Government will implement their promise to do away with this tax. As the noble Lord, Lord Lovat, said, during the last two years the Inverness County Council has made a survey of campers. In 1970 the survey showed that there were 6,000 units which were almost equally divided between caravans and tents. Counting other units hidden away in remote glens, probably 11,000 persons were using this source of accommodation during that period in the Inverness area alone.
Perhaps one of the biggest problems resulting from caravans, as the noble Lord, Lord Clifford of Chudleigh, has said, is the obstruction caused to our vital communications by week-end and holiday drivers trying to weave their way over our narrow roads towing a trailer, a practice which becomes blatantly evident if for any reason they have to try to reverse.

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Owners of commercial lorries and trailers, usually driven by experienced and careful drivers, have to pay heavy road fund taxes for using our roads, but for some reason or other a caravan can be taken on our roads without any tax. It may be that our draftsmen have had difficulty in deciding "when is a caravan not a caravan". There are, indeed, problems, such as into which category a Dormobile would fall, or one of those tent-type contraptions which fall down into a trailer. But I am confident that if someone were to put their mind to it these problems should not be insuperable. On the other hand, one has to be careful that one does not drive more people out of caravan camping into tent camping. There can be little doubt that the caravan is a good method of providing the additional holiday accommodation required.
I have tried to establish three different camping sites in three different places in Scotland, and the first, and perhaps biggest, hurdle that one has to surmount is to try to satisfy the planners. I think, as other noble Lords, and particularly my noble friend the Duke of Athol], have said, this is most important. The planners desire a site to be out of sight of the main road, and yet they do not like advance direction signs as they are unsightly also. If one overcomes these two problems, one then has to surmount other problems about which some noble Lords have complained bitterly, such as the difficulty of getting over the trunk roads problem, where frequently we are told that we cannot have access.
Many speakers have emphasised the difficulty with capital in the setting up of these sites. It is probable that one cannot build a toilet block, even for a small site, for less than £1,000. The place from where the money should come is from the campers themselves. When a tourist tax was suggested, I was not greatly enamoured with the idea and I am afraid that I disagree with my noble friend Lord Dundonald in his suggestion that there should be such a tax. Presumably, this would have to apply also to hotels and would make them more expensive. It would make camping sites more expensive, and would definitely encourage a marked increase in indiscriminate camping so as to escape both site charges and tax.
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What is required is new legislation firmly to ban indiscriminate camping, as applies in many Continental countries. This ban is strongly enforced behind the Iron Curtain, and France applies it very strictly. The indiscriminate camper, apart from failing to provide revenue for the development of camping sites by the installation of such things as hot water, laundry facilities and the like, leaves litter and excreta, and the site becomes a general eyesore, fouling up the very scenery which people have come to see.
Urgent action must be taken to stop camping in lay-bys, woods, and even in one's arable fields and up one's private drives. As the law stands at the moment, I believe that the responsibility for preventing indiscriminate camping falls upon the occupier or owner of the ground; and indeed, the owner or occupier could be held liable for permitting camping in unauthorised places. I feel that this is grossly unfair, as the wretched owner has very little power to remove a camper, let alone someone obstructing one's roads, as I found to my cost. The Inverness County survey showed that in August, 1970, of the units found, 21 per cent. of caravans, 30 per cent. of motor caravans and 18 per cent. of tents were outwith licensed sites, and most of these were therefore polluting the countryside. I say this with due deference to my noble friend Lord Balerno; I do not know whether he was one of them.
I hope that I may digress slightly on to the question of tents, although the Motion specifies caravans. As my noble friend the Duke of Atholl has said, in the past there has been legislation for controlling caravanning, but the far greater problem of camping in tents seems to be ignored: indeed, if I may say so, I think my noble friend in putting down his Motion may have overlooked this point. Tent camping is far more likely to lead to a litter problem. Unlike many caravans, tents have no toilets, and tent campers are far more likely to make open fires. Indeed, the tents—multi-coloured monstrosities—frequently with a pair of underpants drying on the guy-ropes, are a far greater problem than caravans.
I know that if one tries to restrict camping there will be an outcry from mountaineers, asking why they cannot pitch their bivouacs in the remote areas.

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Perhaps there would also be an outcry from certain noble Lords. Whatever may be the position, it might be possible to permit a certain amount of camping by some form of special permit. If there is to be legislation, it is frequently the case that the few have to suffer for the benefit of the majority. So far as this particular piece of legislation is concerned, there can be no doubt that it is essential.
My noble friend Lord Cromartie was picked up by the noble Lord, Lord Hughes, on the question of the organisation by amateurs of tourist concerns. I think my noble friend probably had in mind a specific case—and I fully agree with him—when an amateur organiser very nearly wrecked a very large company of tourists in Wester Ross last year. With respect, I think that there should be some proper professional control.
Finally, may I digress on to a Highland problem which may well not be popular, but which has already been mentioned by my noble friend Lady Tweedsmuir and my noble friend Lord Thurso, on the special terms for crofters. I am afraid that I cannot agree that this is a good thing. I think it was probably felt that a caravan or two should be permitted near a croft house as additional accommodation to the house; but this is not in fact what transpires. Crofters have established small camping sites, frequently on their common grazings, where a number of crofters can combine, and you have a good number of caravans together in a completely unlicensed site without anyone able to control them. They are not subject to planning permission, and there are hardly ever any toilet facilities provided. Crofters are in a special category where they can secure grants which are not available to anyone else, and therefore there seems to be less excuse for them to have this dispensation than anyone else.
I therefore regret that I must disagree with my noble friend Lady Tweedsmuir when she says that no new legislation is required. I hope that, having listened to this debate, she will have heard from a number of noble Lords that there are certain aspects which do require legislation. Apart from substantial camping outwith licensed sites, particularly during the peak periods, almost every site in
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Inverness-shire is substantially overcrowded. It is therefore to be hoped that the Government will shortly introduce a camping Bill to cover the many problems discussed to-day and at the same time to stop the particular loopholes of indiscriminate camping.
6.59 p.m.
LORD HANKEY: My Lords, I should like to express the utter sense of shock with which I have listened to the speech of the noble Lord who has just sat down, and I wish here and now to begin the public outcry which he confidently and quite rightly anticipated. As economic advance continues, I believe it is more and more generally accepted that we should do more than we have done in the past to improve the quality of life. That means enabling people to get out and enjoy the natural beauties of this lovely country. While I am second to none in my admiration for Scotland, which I visit as often as I can, I should now like to say a word about good old England, because we have the most lovely countryside, but it is getting rather hard to enjoy it. I am greatly concerned at present trends. For instance, hotel prices are becoming inordinately expensive. If you want to stay in a nice hotel in England, Scotland or Wales, and if you take some of your children, you pay an astronomical price. I do not know how people manage to pay for the holidays that they like to enjoy. This, I believe, is retrogressive.
There is little doubt that the caravan and, for that matter, the tent, represents an excellent solution. It is good for young people to live fairly hard—I do not believe it does the old ones much harm either—and there is a great deal to be said for encouraging our countrymen to get out, get themselves fit, and enjoy nature in the way in which you can live closest to it. But the present trend is to restrict facilities. I have noticed on my peregrinations round this country that it is getting increasingly difficult to find anywhere to pitch a tent or lodge a caravan. The various municipal and rural authorities like to stick us into camp sites and to restrict us to camp sites which are mostly in the neighbourhood of towns. Personally, I like going out into the real country, but it is increasingly difficult to find a good site

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for a tent or caravan there. Of course, many local authorities are dominated by the local commercial and hotel-owning interests, and this has some influence on the situation. I do not want to impute unworthy motives to the local authorities, because I think they try very hard. Some of the camp sites I have visited have been beautiful, well organised and a credit to the locality.
The next point I want to make is that the National Trust property is getting more and more extensive, and covers more and more of our ranges of hills, with magnificent views and beautiful coastline round the United Kingdom. Unfortunately the National Trust property, with the exception of a few sites, is not available to tenters and caravanners. It is not a matter of whether you are an extremely clean tenter or caravanner, as I claim to be: there are no sites. That is a shame. These beautiful areas should not be closed to people who want to go and stay there, provided that they behave properly. It is a great pity from the point of view of all our countrymen that it is getting harder to visit these places. Personally, I would favour opening more camp sites. I strongly endorse the preference for the travelling caravan rather than the static one, which has been mentioned so much in this debate, and there should perhaps be a little more care taken about sanitation and lack of noise. Generally speaking, we want more facilities, not fewer.
One other matter, although it is only partially relevant to this debate, is that it seems to me, in my part of the country at any rate, South East of London, that much National Trust property is beginning to get overgrown with gorse and hawthorn bushes and unkempt bushes of all sorts. This is not altogether the fault of the National Trust, because they do not have the money to look after these places. It really is a shame when beautiful places, like Toys Hill for instance, get so grown over that although they have been given to the National Trust so that everybody may enjoy the magnificent view, yet unless you are able to climb a high tree and look out from it you cannot see what the view might be. If somebody could encourage the National Trust to look after these areas and restore their original amenities, it would be of great benefit.
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I should like to give another example of what is happening and which I believe is retrogressive. One of the most beautiful bays in the South of England is Cuckmere Haven, near Seaford. For a great many years, to my certain knowledge—because I have been there often—there has been a camp and caravan site, with water laid on and toilet facilities; and a beautiful place it is. Complaints have been raised in the neighbourhood because the caravans can be seen from some angles, and the caravan and camping site is going to be closed entirely in a few years, by order of the local authority. Let me make it perfectly clear that the local authority have the legal right to do this. I am not saying that they have done anything that they have not the right to do; all I am saying is that it is an attitude which is as dead as the dodo.
They have given orders not only to close, the site in a few years' time but also to destroy the toilet facilities. My Lords, this is a place which hundreds of people visit almost every day of the year. Now this beautiful place is going to be fouled—nothing else can happen. This matter is under consideration at the present time, and I hope that some arrangement will be made to continue the camping, caravan and toilet facilities, particularly if suitable landscaping arrangements can be made. The noble Lord, Lord Sandford, who is going to reply, knows all about this subject, because we have discussed it. He has been most helpful, and I greatly appreciate what he has done. It is important that in cases like this we should not encourage or help the local authorities to adopt what is really a retrogressive attitude in destroying the availability of the beauties of our countryside for the people that want to visit there.
THE DUKE OF ATHOLL: My Lords, before the noble Lord moves away from the National Trust, it is only fair to say that the National Trust, to my certain knowledge, have made several excellent caravan and camping sites in the Lake District. The National Trust for Scotland spend a great deal of money on both camping and caravan sites at nearly all their properties. If they had more money, I promise the noble Lord that they would do a great deal more. So I think he is being a little unfair.
LORD HANKEY: My Lords, I think I mentioned that there were exceptions, and I warmly endorse the remarks of the noble Duke, for they are entirely right. But what is wanted is more of them. There are not enough of these facilities, and I have said that it is not entirely the fault of the National Trust because they do not have enough money. I hope that they will be able to get more money to do this work.
My Lords, to conclude, I would say that improved facilities are really important in improving the quality of life. It is customary nowadays to say a great deal about the environment and pray for the survival of the insects. I should like to pray for the survival of the human race. I think it is important that we should be able to get out and enjoy our beautiful country, and that goes for all parts of it.
7.10 p.m.
LORD SANDFORD: My Lords, the Department of the Environment stretches far and wide, but its responsibilities do not normally extend to Scotland and Wales. It is, therefore, a particular pleasure for me to be taking part to-day in this debate, which has ranged from Ross and Cromarty down to the Gower Peninsula, and all over England, as well as Scotland.
I suppose that, as a Minister, one ought not to have any interests to declare, but the fact of the matter is that I have been a camper and a caravanner for some time. I am a member of both the Camping and Caravan Clubs, of which I will say more in a moment. It is quite wrong to suppose that I have any of the particular expertise with which the noble Baroness, Lady White, credited me. Furthermore, I have very scant first-hand knowledge of the ways things are run in Scotland. But I am consoled by the fact that if I omit one or two details about the workings of the Highlands and Islands Development Board Scottish Peers who are present will have the chance of another go to-morrow. I will, nevertheless, do my best to cover the ground.
It is one of the broad policy aims of the Department for which I speak that the beauty of the countryside should be safeguarded. This is a policy which is, of course, shared by my right honourable friends the Secretaries of State for Wales
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and for Scotland. But this protection is not just for those whose enjoyment of the countryside is secure, but in order that the greatest number of other people may share that enjoyment when they are on holiday; and share it to the full. I particularly welcome the theme which has recurred over and over again in this debate and which indicates how many of your Lorships share that policy and that aim, and in fact are taking practical steps to give effect to it.
Touring the country by car with a caravan in tow, or with camping gear on board, is proving an excellent way of enjoying the countryside, as more and more families are finding year by year. It is a sensible choice and we want to do nothing unnecessary to restrain the trend. But the speed and the strength of this very popular movement demand careful planning, careful management of sites and a great deal of consideration about legislation and other matters. For this reason this debate, initiated by my noble friend Lord Cromartie, is particularly welcome. The Motion refers to the "ever-increasing number" of touring caravans. The Caravan Club, who have considerable expertise in this field, can endorse that. I am indebted to them for a number of statistics, but one of the most telling is that their membership last year increased by 14,000—an increase of 20 per cent. in one year. Similar statistics could have been provided, if we were discussing the subject, by the Camping Club and many others whose main interest is recreation in the open air.
Faced with this situation, this buoyancy of demand, on the one hand, and a supply of plentiful, beautiful countryside all over the Highlands, on the other, and also the need in the Highlands for economic development, I should have thought it ought not to be our first concern to turn to methods of taxation and possibilities of grant-aid, but rather to look round for an expert entrepreneur to bring this demand and that supply together. In fact, we can turn to the Caravan Club and the Camping Club, and others like them, and find such entrepreneurs active and busy in the field. The Caravan Club (I refer to them because we are talking about touring caravans) are expending £200,000 annually on opening new sites and developing and improving existing ones. That sum, £200,000, is one-third of the

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total funds made available on the recommendation of the Countryside Commissions of England, Wales and Scotland for all countryside facilities—not just camping sites—over the period of a year. It is a sizeable sum and we ought to salute the Caravan Club for such vigorous activity.
This is the best possible way of bringing this demand and supply together and financing these schemes; it is better than taxing the caravanners and better than some of the grant-aid schemes which have been mooted, although I agree there is scope for grant-aid as well.
LORD BURTON: My Lords, would not the noble Lord agree that the trouble mainly arises from those who are not members of these clubs? I am afraid that a large percentage of campers are not.
LORD SANDFORD: My Lords, that is perfectly true, but perhaps it is not for me to advocate from this Box an increase of the membership of the Caravan Club. No doubt that is a point which will be noted.
It is clubs like these who know what their members want. They know the scale of the demand; they know where the sites are most needed; they know the problems of establishing sites and how to solve those problems; they know the problems of running the sites, and they are able to recruit wardens and others to overcome them and to raise the standards. That is not to say that the local authorities do not have a role—of course they have. They must control, and control carefully, the choice of places and development of the larger licensed sites. They must curb (several noble Lords mentioned this) unlicensed camping and caravanning and enforce the law. They must be able to influence and plan the provisions of all sites. It must be for the local authority to look after the landscape and the possible adaptation of derelict sites, which is an excellent idea. This is not to say that independent site operators do not have a role to play as well in providing and running large sites, particularly in appropriate places, for static caravans, which meet a demand for holiday-making of a different kind. But I believe that the main agents for the provision of what the touring caravanner needs, and the best agents for financing measures to meet these needs, are bodies
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such as the Caravan Club and, for the campers, the Camping Club.
There has been a good deal of talk during the debate of special dispensation for crofters in the crofting counties of the Highlands—most of the remote areas of Scotland. I can say that this is a matter which is being looked into, and all the points that noble Lords have made will be considered with great care in this connection. A plan is being prepared which may help to improve the situation here. I do not wish to make a judgment on the valuable points that have been made, first because this is really outside the scope of my Department, but mainly because the matter is under active consideration.
Several noble Lords, rightly and properly, raised the question of transit sites required by those people who are making their way to their holiday in distant parts of the Kingdom—the Pembroke coast, the Highlands and Islands, the far ends of the Cornish Peninsula, and so on. There is indeed a need for proper transit sites to meet their requirements. The noble Baroness, Lady White, sketched the nature of the problem, and her remarks will be heeded with great care. The British Tourist Association made a study as far back as 1965 and something has been done to implement the findings. There is also a further transit tourist study group now in session, initiated by the Countryside Commission, as the noble Baroness said. In addition to that, there is a movement, which she also mentioned, in the direction of using racecourses, when they are not required for racing, for temporary, seasonal caravan and camping sites. I am glad to pay tribute to the pioneering work that was done by the racecourse at Chepstow and also by the racecourse at Ayr. I think it is true to say that this is one racecourse in Scotland in which experiments of this kind have been conducted, but one has yet to be established in the Highlands.
Here again, there are considerable possibilities, but it does not follow immediately that because there are toilet facilities and catering facilities on the sites of racecourses they are necessarily suitable and ideal for caravanners, or that a racecourse is in the right place for a caravan transit site. But it is certainly

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something that needs looking into, and a development which is very welcome. Once again, I think the more that the Caravan Club and the Camping Club are drawn into the selection of these sites, and their detailed management, the better it will be for all concerned; and I am assured by the Racecourse Association that they are fully alive to the advantages of keeping in touch with these bodies.
LORD LOVAT: My Lords, if I may interrupt the noble Lord for one moment, I hope that he has not forgotten the point I made about parking on lay-bys. It would be a great help to the Caravan Club and to everybody else if this was made illegal.
LORD SANDFORD: My Lords, I have certainly not forgotten, but I am leaving the legislative matters to the end. A good deal was said, and I very much welcome it, about the relative merits of touring caravans and static caravans. I think there is a place for the static caravan site, and I would not want to go too far in running them down, but I agree that in the choicest areas, in the National Parks for example, it would be wrong to allow people to establish second homes, week-end cottages, by sleight of hand. It certainly would never be countenanced if planning permission was applied for in a straightforward way. If we allow too many of these static caravans in the National Parks, areas of outstanding natural beauty, and choice parts of the coast, we shall in fact be doing exactly this. It is most important, and I am most grateful to noble Lords who have mentioned it, that proper scope for touring caravans should be provided for on caravan sites in these choice areas. I understand, for example, that the Peak Park Planning Board normally require at least a third of the pitches in the Park to be reserved for touring caravans. I welcome this approach in trying to cater for the touring caravan.
I come now to the point made by my noble friend Lord Lovat, about parking on lay-bys and roadside verges. I think everybody will agree with him that this is undesirable and reprehensible, but there are considerable difficulties because, of course, parking—just parking—in a lay-by is not an offence. That is what
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a lay-by is for. On the other hand, it is true that over-night parking could conceivably be regarded as unreasonable, and technically as an obstruction under the Highways Act; but given this rather precise and narrow legal distinction, I think the noble Lord will agree that enforcement in any area would be difficult, and in the remote areas of the Highlands it would be almost impossible. I believe, therefore, that a more promising line would be to encourage the education of the caravanning public in the appropriate code of behaviour when they are caravanning—and the Caravan Club and the Camping Club of course are well fitted to assist in that—rather than to look for legislative remedies. But I agree with the noble Lord that here is a nuisance and a difficulty which ought to be dealt with in some way if at all possible.
Finally, my Lords, I turn to a number of legislative matters, not to go over them all in detail, but to assure noble Lords that a special Working Party is in session. It was initiated by our predecessors and is looking into the whole business of camping and caravanning legislation: the possibility of closing a number of loopholes in the legislation which have been mentioned this evening, bringing the legislation for camping and caravanning into closer harmony, and enabling local authorities to exercise the control which they want to exercise and which is so necessary. That Working Party is nearing the end of its work and will be reporting very shortly. Similarly, I have now ended my speech, my Lords, and I should like to thank all those who have taken part, and the noble Earl in particular.
THE EARL OF CROMARTIE: My Lords, I am not going to keep your Lordships long, because it is getting late, but before I say anything I should like to correct a slight mistake made by my noble friend Lord Burton. When I was referring to the Board of Management, I was referring to them quite generally and to no person in particular.
Having said that, I should like to thank all those, from all sides of the House, who have taken part in this debate. I am sure that it has done a great deal of good. It has shed a great deal of light on the considerable difficulties, which are going to get worse, and I only hope that

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it will be appreciated by the Front Bench and the Government, as I am sure it will be. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

SUSPENDED SENTENCES
7.28 p.m.
LORD CHORLEY LORD CHORLEY rose to ask Her Majesty's Government how the system of suspended sentences brought into being by the Criminal Justice Act 1967 is working. The noble Lord said: My Lords, the suspended sentence system has now been in operation for three full years, which means that a very large number of suspended sentences have been passed, and I think the time has obviously come when there should be a provisional review of the working of those sections of the Criminal Justice Act which brought this system into operation. In fact from the beginning the system has been very much under fire, and the weight of the artillery blast has, increased with recent months.
Your Lordships may have seen in the last edition of the Sunday Times two articles, one, very much of a journalistic character, by a Mr. Lewis Chester, headed "The Law Reform that Went Wrong". The appendant article to that was by the distinguished head of the Institute of Criminology at Cambridge, Professor Radzinowicz. I cannot say that I thought much of the journalism, which was superficial and one-sided, and it seems to me unfortunate that a responsible weekly paper like the Sunday Times should publish superficial and one-sided material of this type. I would exempt from these strictures Professor Radzinowicz, whom I have known for a long time, but I think that even his article merits some criticism. Possibly he did not choose the heading to his article, "Foreseeable Failure", but it seems to me quite absurd to write off an experiment of this kind as a failure after as short a period as two years.
I do not wish to go into the arguments adduced by Professor Radzinowicz. The main one seems to be that the system was introduced from the Continent, which would seem to be, coming from Professor
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Radzinowicz, a rather peculiar argument. He goes on to say that it has failed all over the Continent. I am quite sure that a substantial number of criminologists would not accept that view. Only yesterday I was talking to three well-known criminologists, among whom was the Reader in Criminology in the University of London, who disagreed very much with Professor Radzinowicz's view. And even from Professor Radzinowicz's own article it appears that those Continental countries which first adopted this system of suspended sentence realised that it was more appropriate as just one more weapon in an armoury of penology. They took the course of making it that, since when it has done rather better. Nor is it true to say that in no other part of the world has it succeeded. I am told that in Israel, where it has been working for some years, it is an unqualified success, and the Israeli Government is very satisfied with it.
I mention this article, my Lords, because it is symptomatic of the attacks which are being made on the suspended sentence, and it seems to me most unfortunate that a responsible head of an Institute of Criminology should condemn a system because it has not worked perfectly from the word "go". It is a new and complicated system, and at the best, even if it had been given as good a send-off as I think it deserved, there would undoubtedly have been serious teething troubles. I am not so pessimistic as to its future as Professor Radzinowicz is.
Mrs. Shirley Williams, at the time she was at the Home Office, in May of last year, addressing a meeting of probation officers, said that during the two years following the introduction of the system the number of suspended sentences meted out had been some 64,000, and that during that period only 13,000 defendants had been convicted again leading to the removal of the suspension. Of course, many of that total of 64,000 had not then come to the end of their periods. The Answer given to my noble friend Lady Wootton of Abinger only last week, when the Minister gave an estimate of 36 per cent. as being the likely proportion of failures in cases of suspended sentence, is obviously a rather more serious figure than the one given by Mrs. Shirley Williams. It is an estimate; but even

919
if correct it shows, in my submission, a considerable amount of success for the system, because it means that something like two-thirds of the people given suspended sentences may be expected to keep out of further trouble. Anybody who has had practical experience of dealing with criminals will know that that is a pretty good proportion. These men, instead of being in prison, are at work and adding something to the economic prosperity of the community.
My optimism is certainly a qualified one. I am not for a moment suggesting to your Lordships that all is completely well with the suspended sentence system. How far it is not well hardly anybody outside the Home Office is in a position to judge. The Home Office, with its admirable statistical department, which has added so much to our criminological knowledge over the last few years, is the only institution that is in a position to give us an unbiased opinion about the working of the system and to give us, in effect, an authoritative and scientific survey of the whole situation. That is really the origin of my Question, because I think it is very important indeed, with so much half-baked criticism being published in the Press, that we should have from the Home Office a really authoritative review of the position. Therefore, my Question is intended more to elicit information than for the purpose of making a critical attack.
I told the Minister, the noble Lord, Lord Windlesham when he asked me to indicate the main points of my speech, that I was not going to initiate the sort of mini-debate which has been referred to once or twice by the Procedure Committee. But the more I have been working on this speech the more it has tended to lead into something in the nature of a mini-debate, because I have for a long time been an adherent to the school of the suspended sentence, and I have been very much interested both in getting it on to the Statute Book and in the way in which it has been working since it got there. But so far as I make an attack it will not be an attack on the present Government, who really have not had time to operate the new system. If anything, it would be more an attack on my own friends in the late Administration, who I think might have done better
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in the Statute. But my arguments about that will appear later in my speech. I should perhaps note at this point that, in answer to the noble Lord's letter, I sent him a number of questions which I hoped he would be in a position to answer, because it was my view that if we could have the answers to those questions they would throw a good deal of light on the whole situation.
I suppose that in introducing this subject I ought to remind your Lordships of the main features of the suspended sentence, although I am sure that all those who have stayed to this late hour, to take part in or to listen to this discussion, will be familiar with them. So I shall not take more than a few minutes over this part of the matter. The suspended sentence was of course introduced—although there were inklings of it in the Criminal Justice Act of 1948—by the Criminal Justice Act 1967, in which there are three sections dealing with the matter.
Section 39 establishes the suspended sentence. It says that in cases where a sentence of imprisonment of not more than two years is meted out by the court the court shall have the power to suspend the operation of that sentence for a period of not more than three years and not less than one year. But that suspension is on the condition that during that period of suspension the prisoner does not commit a further offence of a serious character; that is to say, an offence which carries with it a sentence of imprisonment. If he does so, then the original sentence becomes reactivated, and the court which deals with the new offence must effect the reactivation. That is done in different ways, which I need not go into in detail: mostly it is by simply ordering that the suspension be removed and that the original sentence shall become operative, but there are other possibilities. And any new punishment which the second court feels is required because of the second crime will be added. That is the important point, because it means that the deterrent aspect of the suspended sentence is underlined by this provision of the Act.
My Lords, this is the gist, what one might call the theory, of the suspended sentence. But its operation, as provided for in the later subsections of Section 39,

921
have to be looked at, because those subsections throw light on other very important provisions of the system. It is here, I think, that the difficulties which the system has encountered so far are to be found.
Section 39 is a long and complicated section, taking up no less than two full pages of the official Statute. It is essential to examine at any rate part of Section 39, because it is the section which establishes the conditions under which it appears to me that, to some extent, the system has gone wrong. I think the gravamen of the whole matter is the fact that this section removes from the court its discretion to send a man to prison at once in a case where the sentence is within the six months to which of course magistrates' courts are limited in their powers of punishment. That means that this business of six months is aimed at magistrates' courts.
This ukase, as it has been called, means that in the ordinary case which comes before a magistrates' court, if the magistrates want to impose a term of imprisonment at all, the only way they can do so is to give a suspended sentence; in other words, by means of this six months ukase the Act creates a strait waistcoat. The reaction against this decision was strong from the very beginning, both on magistrates' benches and indeed in. Parliament. That this was going to fetter magistrates in the exercise of their duties and deprive them of a discretion which they had had in the past, was perfectly clear; and when this Bill was before your Lordships the noble Lord, Lord Brooke of Cumnor, moved an Amendment to delete this particular provision.
I moved another Amendment which was intended to provide the Government with an alternative which I thought they could accept with advantage to themselves and which would remove this difficulty. I was strongly supported by the noble and learned Lord the Lord Chief Justice, and also by my noble friend Lord Royle. But the Government would not accede to this solution. Had they done so, I think there would have been no difficulty. Lord Brooke's Amendment was accepted here, but when the Bill went back to another place the decision was reversed.
It became quite clear from Lord Stonham's reply for the Government to
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these Amendments, that the Home Office were greatly concerned with the problem of the prison population. I think the noble Lord made it very clear that one of the main considerations that the Government had in mind in taking away this discretion from magistrates was the large number of short sentences that were clogging up the prisons. This was a quite understandable point of view, but it seemed to me quite wrong that such a new and important penological method should be introduced for a side purpose of that kind. The Lord Chief Justice indicated in his speech that he thought it quite essential that the prison population should be reduced. It can therefore be said that there was a case for adopting this fundamental principle of the Act as it was passed; but in my view it has to some extent led to its going wrong.
Reaction among magistrates up and down the country has been continuously against this provision. They find that it hampers them greatly. At the last Annual General Meeting of the Magistrates' Association in October of last year, a resolution was passed calling on the Government to restore their full discretion in cases of this kind. In my view, most of the teething troubles which have befallen the system flow from this particular defect.
I wish to say just a few words about some of these defects which appear to me to be important. The natural inference which benches would draw from this command, from headquarters, so to speak, from the very Government themselves and from Parliament at Westminster—this command that in all the cases which came before them meriting imprisonment they were to apply the suspended sentence—was that they should apply it lavishly. The figure of 64,000 in two years which Mrs. Shirley Williams mentioned, and which was also given by the Home Secretary himself, I think, in answer to a Question in another place in May of last year, is a very large number, a much larger number than I and most of those supporting this new method ever expected to see imposed. It is that, I think, which has really run away with the system. To some extent it has got out of control as a result of the tremendously large number of suspended sentences which have been handed down.
The result has been perfectly clear, that suspended sentences have been awarded in a large number of cases in which they ought not to have been awarded. This has been reflected in the substantial falling off which I understand has taken place in the number of fines imposed in place of suspended sentences. The number of probation orders made over this period has been reduced substantially, too. This is most unfortunate, because the probation order is one of our great contributions to penology. That this provision should have led to such a decrease is most unfortunate. I am not sure, but I think there has also been a falling off in the number of conditional discharges. I should be grateful if, in due course, the Minister could give us the figures in all these matters. At first sight a conditional discharge has something of the appearance of a suspended sentence, but it is really altogether different when looked at more carefully. It is much more flexible, and it does not actually impose imprisonment. A suspended sentence does. Therefore, as a result of this ukase, I think the system got off to a bad start and it has not really effectively recovered.
Another result which was prophesied by the noble Lord, Lord Brooke of Cumnor, and indeed by myself, has been that magistrates' benches, when they have had to deal with cases where obviously an immediate prison sentence was called for, have been either committing defendants for trial or sending them forward for sentence, thus incurring a great waste of time and expenditure of money. It was obvious that this would happen. I think it is happening a great deal. If the Minister has any material on this aspect I should be grateful if he would let us have it.
In an interesting speech made in 1969 at the Annual General Meeting of the Magistrates' Association, Mr. Crossley, the magistrates' clerk at Uxbridge, gave a number of interesting examples of the sort of thing that happens in this connection. His court covers Heathrow, where all sorts of offences are committed—such as thefts from passengers and the bringing in of children who are not entitled to come in under the Immigration Acts. How are you to deal with these
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people if you cannot send them to prison? As Mr. Crossley said, the result has been that after a few months of feeling that they were dealing with an impossible situation, the magistrates, quite naturally and sensibly, began to send these cases forward to quarter sessions. Mr. Crossley, when he was making this speech to the Magistrates' Association, said that it had a salutary effect.
This brings me to the exceptions to the ukase. The Act does not lay it down that in every single case the suspended sentence should be applied by the magisstrates. There are a number of important types of case, such as assault, threats of violence, indecency cases, and some others, where the magistrates are still free to send a man to prison at once. I think it would be better to remove the fetters altogether, but if the Government do not feel like going as far as that, they could effect a very substantial improvement in the situation by considerably increasing the number of crimes in regard to which the discretion is not removed.
There is an interesting article in the current number of The Magistrate, which is the Magistrates' Association official journal, by Mr. Brian Leighton, who has been in the forefront of the movement for suspended sentences ever since the beginning. He points out that there are several of the motoring offences, some of which indeed I instanced in my speech at the Committee stage on this Bill in your Lordships' House—for example where a man whose licence has been taken away from him or suspended is found driving a motor car—and he asks: what can the magistrates do with him effectively except send him to prison and at once? However, under the law as it now stands, you cannot do that. Moreover, the terribly severe sentences which we were discussing here the other day for drug offences are going to be applied in all these cases because as the law stands at the present time a magistrates' court has to give a suspended sentence of, say, six months for being found with cannabis. In a number of cases it might be quite a venial offence. And yet what court in a case of this sort, which is so much in the newspapers, is going to content itself with giving a sentence of six months and suspending it, as it is now required to do? This sort of instance could be multiplied a great deal.
This situation should be looked at, and I should have thought that it would be wise to give the Home Secretary the right, subject possibly to Negative Resolution procedure, to add to the number of cases, because it is very difficult to foresee all the types of case where an exception is called for. Obviously the draftsman of the Act thought he was dealing with all the most important cases. In fact, he was not. Although some of us suggested cases which have, as I understand it, proved to be important, the Government were not prepared to make the necessary alterations.
Quite a number of cases where suspended sentences have been applied by the magistrates' court have been reviewed in the Court of Appeal. I could spend a long while on this subject, but I will not take up your Lordships' time. I think it is enough to say that the Court of Appeal evidently feel that a large number of benches lack a clear idea of the basic purpose of the system and how to go about using it. The noble and learned Lord the Lord Chief Justice—I wish he could have been here to advise us to-night—on a number of occasions has indicated the way that benches ought to go about using the suspended sentence.
I would ask the Minister whether the Home Office has ever drawn these matters to the attention of benches. Very often when a new Act of Parliament comes out, especially if it is of a complicated character requiring a good deal of knowledge and thought on the part of the people who are to administer it, the Department concerned issues guidelines. They are not legally compulsive but they are of very great help. I must say that I feel that magistrates' benches very much lack this sort of guidance on the suspended sentence. So far as I know, nothing ever came from the Home Office to help them, nor, so far as I know, have these statements from the Court of Appeal ever been brought to the notice of the benches. Of course, the good clerk of a bench reads about them and brings them to the notice of his magistrates, but there are a large number of benches in the country, and some clerks are better than others. I would ask your Lordships to remember that the suspended sentence system is a very complicated one, which is completely new to the part-time magistrates
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who administer the criminal law of this country.
Another point, which I shall only mention briefly but which I think is worth notice, is that the suspended sentence system has resulted in a tendency on the part of benches to give longer sentences, because they hope that the deterrent effect will be operative. That comes out in the article in the Sunday Times. I think it is correct, from what I have heard from much more authoritative sources, that a bench which would perhaps give three months in the old days, will now say, "We will give him six months, and that will teach him not to get into trouble again". That is a natural result, but it is not a good one. The result has been, in a rather interesting phrase of Mr. Crossley's in his address, "to fix a minimum limit for unsuspended sentences".
These are the main points in relation to the sections. I am not going to deal with the position which arises when the new offence is committed and the man comes up before the second bench. There are a number of interesting, and some of them important, points which could be raised. I hope I have said enough—although I rather doubt it because Parliamentary time is difficult to come by—to persuade the Government to introduce the short amending Act which I am sure is required. If, by any chance, they were to come to that decision, then obviously they must give careful consideration to the recent Report by the Committee under the noble Baroness, Lady Wootton of Abinger, on non-custodial and quasi-custodial sentences. The Wootton Report raises the question of the advisability of probation orders being made in these cases of suspended sentences.
At this stage I ought to point out—perhaps I ought to have done it earlier in this speech—that at present the law prevents a probation order from being made at the same time as a sentence of imprisonment is awarded, whether it is an ordinary sentence of imprisonment or a suspended sentence. Obviously, in the case of an ordinary sentence of imprisonment the point does not arise, but in the case of the suspended sentence there is an argument for giving the man the help and encouragement of a probation officer. But the framers of the Act deliberately did not take that course. On the whole, I think they were right, and I would still

927
argue, and will argue in a minute or two, that in the great majority of cases, at any rate, that is right.
The Wootton Committee (and obviously great attention must be given to what they say) think there is need for "compulsory supervision" in these cases of suspended sentences—compulsory supervision not necessarily through the Probation Service—and I think that is a point which ought to be noticed. I should be very loath to see the Probation Service having this enormous new amount of work put upon it. It is seriously stretched at the present time. I am not now actively engaged in magisterial work, but I am sure that the position is worse to-day than it was when I was active, not so long ago; and a new caseload of this kind might easily break the back of the Probation Service. The Secretary of State should certainly not decide to bring in probation orders in connection with suspended sentences without full consultation with, at any rate, the senior officers of the Probation Service.
But quite apart from this extremely important practical argument, a majority of those of us who have been protagonists of the suspended sentence have always considered that it should be meted out only to candidates who were quite clearly suitable for it. The candidate who is suitable for a probation order is ex hypothesi not the person who should go to prison; certainly not at that stage in his career. So that if a probation order is the right order to make, then it ought to be made and a sentence of imprisonment should not be given. That is why I regard the falling off in the making of probation orders since the Act came into force as possibly the most unfortunate part of the whole business.
The sort of persons to whom I successfully meted out suspended sentences on a number of occasions as a chairman of quarter sessions (I have already told your Lordships in the past that the Court of Appeal stopped me and other chairmen of quarter sessions by saying that we had no power to do it) were men who were obviously not suitable for probation orders: they were rather middle-aged or even elderly men, who were in employment, and with whom the threat of being called back and put into prison
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at a later stage worked very powerfully indeed. I do not think we ever did it without its succeeding.
I would not say that that was the only type of case to which a suspended sentence should properly be applicable. The man's personality, the sort of career he had, the work he was doing—all these things have to be looked at. It might well be that even a comparatively young man in a white-collar occupation, where freedom from gaol meant a tremendous lot, would be much better put on a suspended sentence than another type of man of the same age who was engaged in a very different type of work. We have always felt that the suspended sentence could be effectively applied to a rather small number of types. If I had to analyse them, I would say that they should satisfy two requirements. First, they should be people who because of their age or career, or other matters, were not so likely to benefit from the assistance and advice of a probation officer as the ordinary first offender; and, secondly, they should be people who were likely to be susceptible to the deterrent of an imposed sentence.
Obviously, the fact that you have been sentenced and will be put into gaol if you go wrong again will operate much more powerfully on some people than on others, and the suspended sentence ought to be reserved for those it will deter. However, I am sure that even some of those could be helped by support from a wise adviser. In my time I have had many friends who were prison visitors, and it is people such as these who might very easily help a man of that sort. If some scheme could be devised to keep such support out of the Probation Service, it would be a very valuable contribution. Obviously, if the Government take the steps which I have suggested, this unexpected growth of suspended sentencing will be very much diminished and it should become much more feasible to operate the system in a reasonable way.
If the Government are not prepared to do that and a tremendously large number of people, especially young people, are going to be given suspended sentences, then there is quite a strong case for the proposal of the Wootton Committee, to enable the court in a large number of cases to make a probation

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order at the same time as it imposes a suspended sentence. As I understand it, a suspended sentence plus a probation order has worked very well in Israel—I do not have much detailed information, but I am assured by a knowledgeable friend that that is so. So it may wall be that if we are to continue on our present lines, the advice of the Wootton Committee and the possible bringing in of the Probation Service might be very valuable.
My Lords, I think I have covered all the points that I wished to bring to the attention of the Minister. While I have not, perhaps, specifically asked him for answers to all the nine or ten questions which I sent to him, I hope that during the course of his speech he will be able to satisfy me.
8.6 p.m.
LORD WADE: My Lords, the noble Lord, Lord Chorley, has performed a very useful service in asking this Question on suspended sentences, and I should like to add a few words in his support. After the three years which have elapsed since the passing of the Criminal Justice Act 1967, I think we are able to make some assessment of its operation with particular reference to suspended sentences, and I propose to devote my few comments to magistrates' courts.
I certainly do not wish to attack suspended sentences. Their concept is sound, and that should be stressed. The suspended sentence is intended to act as a deterrent, and it was hoped that it would lead to a reduction in the prison population. I hope that the noble Lord, Lord Windlesham, will be able to tell us to what extent that hope has been fulfilled. The noble Lord, Lord Chorley, used the expression "qualified optimism" and I think that the word "qualified" is right. There are a number of reasons for that. First, there are a certain number of cases where the deterrent is not effective and the result of the suspended sentence is simply to put off the day when the convicted person has to go to prison. This is piling up trouble for the future, so far as the prison population is concerned. If the suspended sentence fails, it adds to the potential number of those who will ultimately serve a prison sentence. As I think the noble Lord, Lord Chorley, pointed out, a suspended sentence may
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be longer than the sentence which would have been given if there had been immediate imprisonment. If that is so, it will unfortunately, in the long run, tend to increase the prison population rather than otherwise.
But apart from the cases of failures, there are other considerations which are relevant to this Question. A court may be inclined—I am thinking of the magistrates' courts—to impose a suspended sentence as an alternative to a conditional discharge. There is a very great difference between the two and it is most important that the distinction should be maintained. The correct approach of the court in sentencing—and no doubt everyone will agree with me—is to eliminate all available remedies other than imprisonment. I should be the first to admit that the number and scope of penalties available are limited. The noble Lord referred to serious motoring offences, and I do not think we have yet found the right answer for dealing with them. In many cases a fine is not adequate; yet I am not satisfied that imprisonment is the right way to deal with the motorist who commits a serious motoring offence. That is a problem which has still to be solved, but I should be straying rather far from the Question asked by the noble Lord, Lord Chorley, if I were to pursue that.
What I was proposing to say was that the court must first eliminate all other available remedies and then decide, if it is to be imprisonment, whether it should be immediate or suspended. But here one comes to the question of the freedom of discretion in a magistrates' court. Of course there are circumstances when it is right and proper for the legislators to lay down some limitations on what a court may or may not do when sentencing, but as a general principle I think it is right that the magistrates' courts should have an unfettered discretion. The magistrates know the circumstances of a particular case, and that is of great importance in deciding whether or not there should be a suspended sentence, in deciding whether in a particular case the suspended sentence will act as a deterrent to further offences. It seems to me that the objections which have been made—and they are fairly widespread objections to the Act as it is at present—are that the mandatory suspended sentence

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is too limiting on the freedom of a magistrates' court to exercise its discretion.
I am advised by others who have had much greater experience of magistrates' courts in recent years than I have that there are other anomalies which have arisen. Owing to this limitation on the power of the court to impose an immediate sentence, there is a tendency to commit to quarter sessions for sentence. I think that point was made by the noble Lord, Lord Chorley. Then there are problems arising where there are two offenders, one of whom, by reason of a greater degree of complicity, is deserving of a more serious penalty, the other, on account of a lesser degree of culpability, deserving of more lenient treatment. In the one case, the court may impose a suspended sentence and in the other a fine. The suspended sentence should be regarded as the more serious penalty, but I am advised that there is a tendency to regard that as getting off and the other as not getting off, which is in fact the wrong way round. Then there is the case of the older and the younger persons who have been convicted. In the case of the older person a suspended sentence may be decided upon by the court, and in the other case the younger person (it might be a man or a woman), might be sent to a detention centre. The one who is sent to a detention centre will regard himself, and will be regarded by some of his fellows, as having received the more serious penalty than the one who is given a suspended sentence.
The important point is not to increase the number of prison sentences. I would be the last to wish to see the prison population increased, but it seems to me that the value of suspended sentences depends on selectivity in its application, and the mandatory provisions tend to remove that element of selectivity. If there is to be any amending legislation. I hope that this point will be kept in mind.
8.15 p.m.
LORD GARDINER: My Lords, as a member of the Government who introduced the Criminal Justice Act 1967 and who are therefore responsible if something has gone wrong here, I am personally grateful to my noble friend Lord Chorley for asking this Question this evening. I
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thought then, and I still think, that it is a useful power for a court to have to be able to suspend a sentence. I was then doubtful of the wisdom of the mandatory provisions, and I am rather more doubtful now. There have lately been a number of articles in various legal papers as to whether this system is working properly or not—in the Justice of the Peace of January 16, in the New Law Journal series and in an article in the Sunday Times. As to the latter, I am thinking not so much of the part written by Professor Radzinowicz as the main article written by Mr. Lewis Chester. Headed, "Prisons: The reform that went wrong", it says:
"Thousands of people are now in jail because of a liberal reform designed to keep them out. The introduction in 1967 of suspended sentences has had the extraordinary effect of increasing the prison population".
My Lords, in the issue of the New Law Journal of December 10, in an article headed, "The Suspended Sentence—What has gone wrong?", there are more detailed facts than I have seen elsewhere or, I expect, than are outside the Home Office. It is an article by Mr. Sherlock, of the University of Kent. His figures—and the noble Lord, Lord Windlesham, can no doubt tell us whether they are right—show that if one takes the cases in the magistrates' courts in the two years before the beginning of the Act (that is, 1966 and 1967) and compares them with the cases in 1968 and 1969, one finds that the proportion dealt with by a prison sentence was, in 1966, 8 per cent. and in 1967, 7 per cent.; and if one includes the sentences suspended, the proportion has now gone up to 12 per cent. in 1968 and 15 per cent. in 1969. So far as fines are concerned, before the Act 50 per cent. of the cases used to be met by fines. That proportion fell in 1968 to 46 per cent., though there has been a rise since then. So far as probation is concerned, in both the two years preceding the Act the percentage of cases dealt with by probation was 17 per cent., in 1968 it fell to 15 per cent., and in 1969 to 10 per cent. That is a drop of nearly 50 per cent. in the number of cases dealt with by probation.
In this context a lot has been said about the justices, but I think it should be made plain that the higher courts appear to have reacted in the same way. In the higher courts, in the two years

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before the Act came into force the proportion of offences met by a prison sentence was 42 per cent. and 41 per cent.; since the Act, it has increased to 52 per cent. and 54 per cent. Fines have decreased. In each of the two years before the Act, 20 per cent. of the cases were met by fines, and this proportion fell in both 1968 and 1969 to 13 per cent. Probation, again, which was 16 per cent. and 17 per cent. before the Act, has now fallen to 15 per cent., and last year to 13 per cent. So there can be no doubt at all that suspended prison sentences have been used where previously men would not have gone to prison at all, because they would have been either fined or put on probation.
I think one can understand the reason for this. A suspended sentence is a simple thing. Justices know that too high a proportion of fines are not collected; they have great regard for their probation officers, and do not want to overload them; and a suspended sentence means that, after all, a man is not going to leave court to go to prison. It is a very easy thing to pass a suspended sentence, but I think there is a considerable body of evidence that it is being used in the wrong cases. So far as probation officers are concerned, I have been told by justices that their probation officers have spoken to them regretting very much that probation cannot be combined with a suspended sentence, so the person concerned does not get any support.
What the writer of this article, who dug out all the facts, says is:
"Many probation officers and justices' clerks believe that it is the suspended sentence itself that is the trouble. Wrongly applied, it can have the reverse effect of that intended and send people to gaol for offences that would not normally carry imprisonment. The effect is not only to increase the numbers sent into custody, but to increase the average length of sentences—giving a cumulative rise in the average prison population.…
"Where things have gone wrong, it would seem, is that the courts (both the higher courts and the magistrates' courts) have looked upon the suspended sentence as a new weapon in their armoury, instead of a modification of an old one. It is clear, from the wording of s. 39(1) of the Criminal Justice Act 1967, that a suspended sentence is simply a prison sentence whose operation is held over on certain inscribed conditions.
"However, many courts use the suspended sentence as an admonition without being realistic about the chances of the sentence being brought into operation. It is now all too easy
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for a person to find himself in prison for committing two minor offences which previously would not have attracted prison sentences. A person convicted of a petty theft, for example, might be given a sentence of three or perhaps six months imprisonment suspended for a period of two years. The suspended sentence almost certainly predetermines the passing of a prison sentence for a second offence within the period, even though a petty one. This is all the more so since the second offence would probably be tried in a different court from the first."
My Lords, I do not want to take up more of the time of the House. If something has gone wrong it ought to be put right. It is the sort of thing that can be put right by a one-clause Bill; but the Home Office know so much more about all the facts that I await with great interest what the noble Lord, Lord Windlesham, is going to say. There is one other fact stated here: namely, that in 1969
"when the activation of suspended sentences imposed in the previous year would influence the statistics, the number received into prison with sentences over six months and under three years increased by 3,750 compared with 1968. There has never previously been a rise in a particular group comparable with this, and it is precisely in this area that one would expect to find the activated suspended sentence in operation."
I express no final view, my Lords, I doubt whether anybody outside the Home Office at present has the full facts. We shall be grateful if the Government can assist us, by telling us, first, what is their view of the facts, and, secondly, what course they propose to take.
8.24 p.m.
LORD MORRIS OF KENWOOD: My Lords, it is now possible to assess, to some extent at least, the practical workings of the suspended sentences incorporated in the Criminal Justice Act 1967. Two important points have emerged. First, the type of person who is given a suspended sentence is often an inadequate person and, even more often, one who is at risk. Nevertheless, there is no provision for any supervision during this period of suspension of the prison sentence or any portion of it. Granted that someone who is already on probation can continue to be supervised; but this does not deal with those who are not already on probation. The one who really needs help so that he will not commit another offence is left without any guidance at all. Courts can impose a fine at the same time as the suspended sentence. Often they do this solely so that the defendant

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shall not think that he has got away with his offence. Secondly, it is reasonably clear that a suspended sentence should be discretionary and not mandatory, which it has to be unless the offence is one of violence or the defendant has already been in custody for a previous offence.
One of the purposes of the suspended sentence was to avoid sending to prison a first offender or one who would be sent into custody for the first time, often for a short period; in other words, to keep out of prison those who can be saved from such a punishment and also in order that our gaols, which are already grossly overcrowded, should not be asked to look after prisoners for such a short period as four months—the six months sentence less remission—during which it is impossible to give them proper training and rehabilitation.
It is interesting to see what has happened. Of suspended sentences passed by magistrates, one in four has been activated; that is, those convicted have gone to prison for committing another offence punishable by imprisonment during the period of the suspension. Of sentences passed by the higher courts, one in two have been activated. It may appear surprising to some that the judgment of the magistrates appears to be better than the judgment of the higher courts. However, as a magistrate I should in fairness say that the more hardened criminals appear in the higher courts and therefore are more likely to commit other offences. While speaking of the higher courts, may I say that one of the drawbacks in their sentencing may be that on some occasions they do not have a social report to consider before passing sentence. I have proof of this. Thus, they punish someone for an offence and do not deal with the offender. I hope that this matter can be drawn to the attention of the Lord Chief Justice, as a social report on the offender's background, character and personality is surely a basic need for fair sentencing.
There are some offenders who are affected by heavy fines and others who are not. The record shows this. None the less, suspended sentences, where applicable, are mandatory. I want to refer again to defendants who have the
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idea that with a suspended sentence they have got off. This is another failure of the mandatory sentence. If courts had the option to impose a sentence, it would have a much stronger effect if the offender was not aware that the sentence of imprisonment which could be passed would automatically have to be suspended. This is something which the benches could make clear at the time they imposed such sentences.
We know that magistrates should not make suspended sentences unless they decide they would have made an immediate sentence of imprisonment. But magistrates are human; on occasions they must surely use the suspended sentence as an alternative to some other form of non-custodial sentence. Then the next court before which the offender appears on an offence punishable by imprisonment is bound to activate the sentence, except where the very limited reasons for not doing so allow the court not to activate it. The curbing of the discretion results in persons being sent to prison who might otherwise be at liberty. These are some of the reasons why I believe that the law should be amended and I hope that steps will be taken speedily in this direction.
8.29 p.m.
LORD JANNER: My Lords, we have heard this afternoon a debate in which practically every speaker, indeed every speaker, has taken the view that something must be done in order that an unsatisfactory position, which has arisen in respect of suspended sentences, might be remedied. It is true that we do not have before us the final figures which will be available of the criminal statistics to be presented later on, but I am sure that the Government will be able to supply the necessary evidence either one way or the other of how the system is working.
The Act was introduced with the best of intentions by a very humane person—I refer of course to Mr. Roy Jenkins—who had considerations of humanity and understanding in mind and hoped that the step he was taking would produce satisfactory results. I am quite satisfied that he, and all of us who supported the Bill at that time, felt that the introduction of this system would be a useful addition to the prevention of crime and would help

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to limit the prison population. From the evidence which has been produced from various sources, it appears that it has not worked in that way.
The article to which my noble and learned friend Lord Gardiner referred was very interesting. What impressed me most about the article in the Sunday Times was a history which was given as follows:
"Just under a year ago a young man was convicted of fraudulently attempting to withdraw money from the Post Office. As the sums involved were small and he was penitent, the courts adopted what seemed a humane policy.
Had there been no alternative to imprisonment he would probably have been sent down for a sharp salutary six months. However, as a result of the Criminal Justice Act of 1967 which introduced the suspended sentence, there was a beguiling alternative.
The young man was given a suspended sentence of a year. He left court a free man and with every prospect of staying that way, provided he kept out of trouble during the three year 'operational' period. He was happy. His defence lawyer was happy. The court felt it had been merciful.
A few months later the same young man momentarily 'forgot himself'. After having a bit too much to drink he had a row in a betting shop over the value of a bet. He lashed out angrily and broke a pane of glass over the counter. Its value was £4 10s.
Back before another court as a man with a 'record', he was naturally treated with a little more severity than would have been normal for such an offence. He was jailed for two months for malicious damage and, in accordance with the provisions of the 1967 Act, the 12-month suspended sentence was activated.
He is currently serving 14 months for what he feels was an isolated loss of temper. He burns with a sense of outrage, and it is easy to see why. Had the question of suspension never arisen he would most likely be at liberty having served six months for the original offence and perhaps a month for the second.
On the other hand, he was treated at every stage with elaborate fairness by the courts and they, in the end, only did what they had to do."
And in many ways what we would expect them to do.
My Lords, a case of that sort indicates clearly that there is something wrong, that something has gone awry. Although I would not be prepared, as my noble and learned friend Lord Gardiner also was not prepared, to say offhand what exactly should be done, in the circumstances it seems to me that we should be given particulars of what the situation is like now; and that the points that have been raised,
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particularly about the position in magistrates' courts, should be considered. After all, magistrates are accustomed to deal with cases, and now they have to take a course of training in order to be able to understand what are the duties of a magistrate. They deal with 98 per cent. of the criminal cases in this country. They have the experience and intelligence to understand and be able to weigh up the circumstances of each case which comes before them. I believe that the suspended sentence should be available, but I think that magistrates should be given a discretion in these matters so as to be able to decide whether a suspended sentence is an alternative to all the other possibilities before them and not be compelled to give such a sentence.
I do not entirely agree with my noble friend Lord Chorley in one respect. I believe, and I think that magistrates believe, that, together with the suspended sentence, some form of supervision, such as putting the person concerned on probation, would be effective. I have not been a magistrate but I have practised in the courts. I have found that magistrates are people of understanding and I think they ought to be given that discretion. I am quite certain that those who introduced the Act in the first instance would be prepared to consider the position with regard to suspended sentences anew, particularly in view of the fact that their idea of what the result of introducing it would be may now have been disproved. I hope that will be given extremely careful consideration and that the Government may suggest what provisions they have in mind for dealing with the matter.
8.38 p.m.
LORD WINDLESHAM: My Lords, I should like to apologise to the noble Lord, Lord Chorley, for not having been in my place when he began his speech. His Question was called a little earlier than had been anticipated. None the less, the hour is fairly late and I think it is unfortunate that such an important and well-informed debate on a subject of considerable topical relevance should come at the end of a rather long day's proceedings. The noble Lord, Lord Chorley, was good enough to give me advance notice of some of the points he intended to raise and I will do my best to answer these and the other questions

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which have been asked during the debate, on the basis of the information available to me.
One advantage of such a well-informed debate is that there is no need for me to include very much explanatory material in my reply to the questions asked this evening. So I shall omit any description of the form of the sections of the Criminal Justice Act 1967 which deal with suspended sentences. They were described by Lord Chorley and referred to by the noble and learned Lord, Lord Gardiner.
The noble Lord, Lord Chorley, discussed the aim of the Government of that day in introducing the suspended sentence; and he referred particularly to the practical consideration of reducing the pressure on prison accommodation. From what I have read of the debates, that undoubtedly seems to have been one of the reasons. But I think we should be wrong to overlook the words, chosen I think with some care, of the noble Lord, Lord Stonham, when he referred in his Second Reading speech on the Criminal Justice Bill, to this part of the Bill. He referred to his belief that
"the shock of appearance and trial before a court, and the infliction of a sentence, albeit suspended, will restore many offenders to rectitude without recourse to prison".—[OFFICIAL REPORT. 10/5/67, col. 1437.]
Thus it was hoped, in cases where the protection of the public did not make it imperative, to relieve the offender of the social hardships inseparable from actual imprisonment—loss of employment, disruption of family life, exposure to a criminal environment and problems of settlement on release. A further consideration, no doubt, was that short prison sentences are costly to the community. The cost works out at approximately £24 per week—more than £1,000 per year. Then there is the additional cost of supporting the family while the breadwinner is serving a term of imprisonment.
The use that has been made by the courts of the suspended sentence has, I think, exceeded the expectations of many people. In each of the first two years of operation, that is to say, January 1, 1968 to December 31, 1969 (and all that I have to say will refer to those two years), about 32,000 persons were given
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a suspended sentence of imprisonment; and about three-quarters of these sentences were imposed by magistrates' courts. The figure of approximately 32,000 persons per year receiving a suspended sentence compares with just over 34,000 persons given an unsuspended sentence of imprisonment, and just over 31,000 put on probation. The number of persons fined, of course, was much larger than that.
The noble Lord, Lord Chorley, and others who have taken part in the debate, have referred to the criticism of the mandatory provision when the Bill was under consideration in this House, in another place and subsequently. I should like to thank the noble Lord for the compliment that he paid to the Home Office Statistical Division, but to couple it, I am afraid, with the comment that the statistical information that we have available does not enable us to give a full answer to all the noble Lord's questions. I can answer a good many of them, and I can throw some light on the others; but I cannot claim that we can give him a complete answer to each of the fairly long and very relevant questions to which he has referred in his speech. I can say, however, that the number of offenders received into prison for the first time, or with no previous conviction, was substantially lower in 1968 and 1969 than in the years immediately preceding, and part at least of this welcome fall in reception figures is likely to be due to the introduction of the suspended sentence.
Among those who serve both in the higher courts, as has been pointed out by the noble and learned Lord, Lord Gardiner, and in magistrates' courts there seems to be a fairly widespread view that the mandatory provision has hampered their work and, so far from being extended, should be abolished. My right honourable friend the Home Secretary recognises the strength of this view, which has been put to him by both the Lord Chief Justice and representatives of the Magistrates' Association.
The noble and learned Lord, Lord Gardiner, and the noble Lord, Lord Janner, have asked what prospect there is of legislation if there are indications that the scheme has not worked out in the way its original supporters had hoped. There are a number of considerations to take into account. First of all, there

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is the need to look at the facts very carefully indeed and to weigh up the evidence. We have only two years' figures available at the moment, but we shall have the 1970 figures—the third full year—in the coming months. Then we have to keep in mind (and this has been referred to already) the possibility of other changes which are being currently considered. The most topical of these is the whole range of non-custodial penalties, or semi-custodial penalties, which were proposed by Baroness Wootton's Sub-Committee of the Advisory Council on the Penal System.
Next, there is the perennial argument (the noble and learned former Lord Chancellor must have come up against it many times while he was on the Woolsack) for and against legislating item by item, or alternatively, grouping changes together into a more comprehensive measure. Noble Lords will not expect me to be able to make any definite commitment tonight as to the Government's intentions. But what I can do is to repeat a recent Answer, given in another place by my right honourable friend the Home Secretary, to a Question on November 5, 1970. My right honourable friend referred to the provisions of the Criminal Justice Act, 1967, which, as he said,
"with certain exceptions require magistrates' courts to suspend sentences of imprisonment on first offenders and offenders in certain other categories. I am keeping under review these and other provisions relating to the suspension of sentences of imprisonment with a view to possible future criminal justice legislation".
As regards the effect of the suspended sentence on sentencing practice, there seems little doubt that there has been a significant increase in the use by the courts of imprisonment, if both immediate and ended sentences are taken together The percentage of convicted offenders given a prison sentence rose from 2·5 of all convicted offenders in 1967 to 4·1 in 1969. It has been calculated that, of the offenders given a suspended sentence in 1968 and 1969, only something between two-fifths and three-fifths would, but for the suspended sentence, have received a prison sentence.
It is clear that many suspended sentences have replaced non-custodial penalties. The figures (as the noble and learned Lord pointed out when he was quoting from the article in the New Law
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Journal, which I have seen and studied) show a reduction both in the number of those placed on probation and in the proportion of convicted persons dealt with by means of a fine. The use of the suspended sentence in this way is not what the framers of the Act intended. This has been said several times in the debate. Perhaps I might put on record that the first of these consequences—the falling off in the use of probation—was forecast in this House by the noble Lord, Lord Hamilton of Dalzell, who speaks with considerable experience on matters concerning magistrates' courts and the Probation Service, when the Criminal Justice Bill was being debated on Second Reading in this House in 1967. It is clear from the wording of Section 39 that the court is expected first to pass a sentence of imprisonment, when merited, and then, but only then, to consider whether or not it should be suspended. The noble and learned Lord the Lord Chief Justice has emphasised that the court should treat the suspended sentence not as a "soft option" but as a prison sentence, not to be imposed until all other possible alternatives, in particular probation, have been considered and eliminated.
I was asked by the noble Lord, Lord Chorley, in his very full opening speech, about guidance to magistrates. The statement of the noble and learned Lord the Lord Chief Justice (this was in the case of Regina v. O'Keefe) was widely publicised in the national Press, in the legal journals, and it was repeated again by the noble and learned Lord, Lord Chief Justice outside the court. It has been referred to by my colleague the Parliamentary Under-Secretary of State at the Home Office as recently as last week in discussing this subject with a group of magistrates in the North of England. As regards the Home Office giving formal advice to magistrates on this subject, this raises some difficulties. The Secretary of State has no power to direct courts on the sentences that they should impose. This must be a matter for the judiciary and for magistrates, and not for the Executive. The noble Lord, Lord Chorley, knows very well the limit of the Home Secretary's responsibility here, which is to make sure that the magistrates are properly and fully informed as to the content of the law. I can confirm

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that the Home Office circulated in the normal way an Explanatory Memorandum about the provisions of the Criminal Justice Act in 1967. I have no doubt that in this process of drawing wider attention to the remarks of the noble and learned Lord, the Lord Chief Justice on how the suspended sentence should be used, the Magistrates' Association, magistrates' clerks and others who follow these matters will study what has been said in this debate this evening by the noble Lord, Lord Chorley, and other noble Lords.
I am in rather a dilemma this evening because I know that your Lordships would like a good deal of information, which I have; but, at the same time, it is late and I do not want to make a long speech and take up your Lordships' time unnecessarily. I will, therefore, try to cover the main points. If, in the process, I leave out the answers to a number of questions, my Department and I will go through Hansard with considerable care and will write to any noble Lord who has raised a question which I fail to answer through shortage of time.
The noble Lord, Lord Chorley, asked whether or not the mandatory provision has led to an increase in the proportion of offenders convicted at magistrates' courts who are committed to quarter sessions for sentence. The statistics do not throw much light on this question. The proportion of convicted persons committed for sentence in 1968 and 1969 under Section 29 of the Magistrates' Courts Act 1952 showed a slight increase over the corresponding figures for 1966 and 1967. The increase was of the order of 2,000 persons per annum, but part of this may well have been due to annual variations, including the kind of offender being dealt with by the courts. For these reasons it is not possible to say with any certainty whether and to what extent the mandatory suspended sentence might have been a contributory factor.
The noble Lord, Lord Morris of Ken-wood, speaking with experience as a magistrate, and also the noble Lord, Lord Chorley, asked about the use of fines in combination with suspended sentences. We know that the courts sometimes combine these two sentences, just as a fine is sometimes combined with a sentence of immediate imprisonment. The matter
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has been before the Court of Appeal, who have held that it is a proper sentence. This was in the case of Regina v. Leigh. In one case, Regina v. King, it was suggested that it was sometimes necessary to combine the two, lest the person given a suspended sentence regarded it as a "let off." At the same time, the court warned that if the fines were to be combined with a suspended sentence, there was a need to make sure that the offender had the means to pay the fine; otherwise, non-payment might lead to a second term of imprisonment, in default of payment, for the same offence. The figures readily available do not show how common the practice is.
My Lords, I now turn to the question of breaches of suspended sentences which have been referred to by several noble Lords. The number of persons subject to a suspended sentence who were convicted of a further offence, punishable by imprisonment, was nearly 4,700 in 1968, and nearly 10,500 in 1969. Because of the variable length of the period of suspension these figures cannot be directly related to the number of suspended sentences imposed in each year. The number of persons failing is expected to continue to increase until it levels off, not before the end of this year, at about 42 per cent. of all persons receiving a suspended sentence. In 1968 and 1969 about 86 per cent. of offenders who breached a suspended sentence were committed to prison, the great majority of these being required to serve in full the term of the suspended sentence.
Let me move on to the effect on the prison population. It is true that when the suspended sentence was introduced it was expected that its introduction would lead to a substantial and permanent drop in the prison population. Had suspended sentences been imposed only in cases where, irrespective of the suspended sentence provision, a prison sentence would otherwise have been imposed, a permanent fall in the prison population would to some degree have been inevitable. But it has not occurred. There was an initial drop, but it is calculated that the size of the prison population now is about the same as it would have been if the suspended sentence had not been introduced. The number of persons received into prison is a fifth to a quarter less than it would otherwise have been,

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but there has been an increase in the average length of sentence. This is probably because, when an offender subject to a suspended sentence commits a further offence, not only is the suspended sentence brought into died, but the courts usually add a consecutive sentence for the further offence.
The noble Lord, Lord Chorley, also asked me about the Government's reaction to the proposals of the noble Baroness, Lady Wootton of Abinger, on non-custodial and semi-custodial penalties and, in particular, to the recommendation that the courts should be given the power to combine the suspended sentence with a compulsory form of supervision. The House may recall that in the debate on prison overcrowding on December 2 I announced our reaction to some of the recommendations in the Wootton Report. At that time I said that this recommendation was one of those still under consideration; and so it remains. We recognise the attraction of this proposal to the courts; and it is not difficult to construct cases where a combination of these two orders would make good sense. As the Sub-Committee recognised, there are arguments both ways, in particular about the impact which the proposed new power would have on the traditional idea of probation—in other words, the consequences of seeking to combine a punitive measure with a measure of support.
The noble Lord, Lord Chorley, also made the interesting suggestion that a sentence of imprisonment might be part served and part suspended; for example, after serving three months of a two-year sentence the offender would be released with the rest suspended. This is certainly a novel suggestion which deserves some thought. At this stage I will make only two comments. First, the objects of any arrangement on these lines would be different from the objects of the suspended sentence as we know it, which is intended to keep offenders out of prison altogether. In its effects Lord Chorley's suggestion would have some affinity with parole, but it would differ from parole in many respects, not least that in the case of parole early release from sentence is entirely a discretionary matter resting on careful assessment
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of the likelihood that the offender may respond to it. Second, with experience of the suspended sentence as it now exists in mind, we should have to consider the likely impact on sentencing practice. In particular, it would be necessary to look very closely indeed at any possibility that the introduction of this provision might lead to a greater tendency to impose relatively long sentences because the greater part would be suspended.
To sum up what I have said in reply, my Lords, the extent to which the courts have used the suspended sentence suggests that they regard it as a useful addition to their powers. They have felt that some difficulty has been caused by the provision requiring sentences to be suspended in certain categories. The extent to which the suspended sentence has replaced sentences other than imprisonment gives ground for concern. The object of introducing the suspended sentence was to keep offenders out of prison, especially if they were without a bad record and had not committed an offence requiring a long sentence. It might be said that the fact that the prison population is estimated to be about what it would have been if the suspended sentence had not been introduced is an indication that the suspended sentence has not fulfilled the expectations that existed when it was introduced. On the other hand, the fears that have been expressed that the suspended sentence is filling the prisons do not appear to be justified. The suspended sentence, as I have said, is being kept under review and our mind is open as to whether modifications or adjustments might usefully be made in the future.
My Lords, I hope that this account of the operation of the suspended sentence has been of some value to noble Lords. The final thought I should like to leave with your Lordships is that this is the kind of debate about which we can be particularly thankful that we have such a speedy and accurate reporting service as the Hansard reporters. I have quoted a lot of figures; the noble and learned Lord, the former Lord Chancellor, has quoted other statistics. This is the kind of debate which I believe is read by a small but informed number of people who take a particular interest in this

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subject, and therefore to have the information available in permanent form is especially useful.
LORD CHORLEY: My Lords, I know that I have no right to speak again, but I am sure your Lordships will permit me to thank the Minister for his very full and informative reply.

  COURTS: HIGH COURT AND CROWN COURT CENTRES
  COURTS: HIGH COURT AND CROWN COURT CENTRES