Sitting of 30 June 1971

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

  EDINBURGH CORPORATION ORDER CONFIRMATION BILL
  Mr. Gordon Campbell presented a Bill to confirm a Provisional Order under Section 7 of the Private Legislation Procedure (Scotland) Act, 1936, relating to Edinburgh Corporation.
  To be considered upon Tuesday next and to be printed. [Bill 204.]

ORAL ANSWERS TO QUESTIONS
  POSTS AND TELECOMMUNICATIONS

    Postal Services
    Mr. William Priceasked the Minister of Posts and Telecommunications what recent discussions he has had with the Post Office about the future of postal services.
    Sir G. Nabarroasked the Minister of Posts and Telecommunications whether he will make a statement on postal services reorganisation to avoid increased postal rates.
    The Minister of Posts and Telecommunications (Mr. Christopher Chataway): I have as yet nothing to add to the reply which I gave on 15th March to my hon. Friend the Member for Cambridge (Mr. Lane).—[Vol. 813, c. 888.]
    Mr. Price: The Minister will recall the wide variety of threats which he made earlier this year about a likely increase
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    in postal charges. When does he expect to introduce the "ninepenny" post?
    Mr. Chataway: I have no proposal to put to the House about increases.
    Sir G. Nabarro: My right hon. Friend will recall that I have been pressing him on these matters for months. Is not knowledge widespread that the first-class rate is to go from 3p to 4p this autumn and to 5p next year? May we be assured, in view of the calamitously inflationary consequences of increases of this kind, first, that any announcement will be made in the House of Commons, not surreptitiously, as with the overseas postal charges, direct to the general public and circumventing the House, and second, that it will be made before the Summer Recess, not being tucked away while we are all paddling at the seaside?
    Mr. Chataway: I assure my hon. Friend that any proposals for major tariff increases would, of course, be notified to the House.
    Sir G. Nabarro: I have cited one which was not.
    Mr. Chataway: The example which my hon. Friend gave was of the overseas parcel rates, notification of which had been made in general terms months before and which, as he knows, were entirely consequential upon the international agreements reached at the Tokyo Convention. But I can go further and assure my hon. Friend that tariff increases on the scale he suggests over these coming years will not be introduced.
    Mr. Charles R. Morris: Is not the Minister aware that the Hardman Committee itself looked at the possibility of an increase in postal rates in April, 1972, and it considered whether such an increase might well produce a shortfall of £76 million on the five-year estimates which the Post Office has made for the period to March, 1973? Against that background, what increases in postal rates are envisaged in the immediate future?
    Mr. Chataway: As the House knows, the Chairman of the Post Office has indicated on a number of occasions that he will be likely to put to the Government and the Post Office Users National Council proposals for further increases. But I

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    have no details of any of those proposals as yet.
    Mr. Soref: Does my right hon. Friend realise that, coincidental with the increased charges, there is a worsening service by the Post Office which is affecting all classes of the community, a not entirely untypical instance of which is as follows: only yesterday, a letter posted at the post office of the House to my constituency—not by first-class mail but by express mail at a surcharge of 20p—did not arrive by the first post this morning? Is not this sort of thing, as a result of the improvidence of the Post Office, having a serious effect generally on the economy?
    Mr. Chataway: I am sure that the Post Office will take note of my hon. Friend's strictures and will be prepared to investigate most carefully the incident to which he has drawn attention.
    Mr. Richard: Has the right hon. Gentleman—as he seemed to indicate a moment ago—received no proposals for tariff increases from the Post Office Corporation, or is it merely that he is not at the moment prepared to announce any increases to the House?
    Mr. Chataway: I have received no proposals.

    Telephone Kiosks
    Mr. Dempseyasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to increase the amount of research into telephone kiosks which would deter vandalism.
    Mr. Chataway: No, Sir. A general direction would not be appropriate.
    Mr. Dempsey: Is not the right hon. Gentleman aware that there are parts of the country where more than 80 per cent. of public telephone kiosks lie in a shambles because of repeated acts of senseless vandalism? How long has the silent majority to suffer—with no emergency facilities to cater for them—at the hands of a wicked few? Is it not time something was done to provide some form of vandal-proof telephone kiosk?
    Mr. Chataway: That is a matter which engages the attention of the Post Office, which has recently developed a new type
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    of kiosk embodying features such as strengthened equipment, fluorescent lighting and a greater use of glass to give a clearer view of the interior. It is continuing its research.
    Mr. Adleyasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to discontinue the practice of providing telephones in public call-boxes which are able to receive incoming calls but which are doctored so that the bell does not ring, and where, on inquiry, the user is advised that the box concerned is not able to receive incoming calls.
    Mr. Chataway: I would refer my hon. Friend to the reply I gave the hon. Member for Dudley (Dr. Gilbert) on 15th February.—[Vol. 811, c. 1176.]
    Mr. Adley: I do not have that reply in front of me. Is my right hon. Friend aware, that, particularly on housing estates where most people do not have private telephones, the telephone is a vital link and lifeline, and that this practice by the Post Office in a monopoly situation is particularly to be deplored? Will he take the opportunity to advise the Post Office against that sort of operation?
    Mr. Chataway: I have again made inquiries of the Post Office about the practice of suspending the incoming call facility. It has again assured me that that is done only in exceptional circumstances and for a particular reason, as where, for example, a call box is being monopolised by someone waiting for incoming calls.
    Dr. Gilbert: Surely the remedy is to have more call boxes? Apart from that, will the right hon. Gentleman consider giving a directive to the Post Office to indicate inside the telephone box whether it will take an incoming call? There is nothing more infuriating than standing in a box thinking that it will take an incoming call when nothing happens.
    Mr. Chataway: These are management matters for the Post Office, which I am sure will take note of the hon. Gentleman's suggestion.
    Mr. Gregor Mackenzie: Is the right hon. Gentleman aware that coin-operated boxes of that kind are grossly uneconomic for the Post Office? In the Hardman Report we learn that the Post

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    Office provides social services to the extent of about £20 million a year, many of them operating in local housing schemes. Will the right hon. Gentleman consider—I ask no more—whether other Departments, particularly the Department of the Environment, might be willing to look at the problem with him to consider the financial implications?
    Mr. Chataway: I see very little prospect of a direct subvention to the Post Office from that quarter or any other.

    National Giro
    Mr. Leslie Huckfieldasked the Minister of Posts and Telecommunications whether he will now make a further statement about the future of the National Giro.
    Mr. Rostasked the Minister of Posts and Telecommunications whether the National Giro is now trading profitably.
    Mr. Chataway: I am still reviewing this service, which is currently incurring losses.
    Mr. Huckfield: While I am grateful to the Minister for giving us some assurance that he is still considering the matter, does not he think that the time is long overdue for him to do something to inject a small measure of certainty into the future of Giro? The large accounts have been teetering on the brink for a long time and the ordinary man in the street does not know whether he will be able to use Giro. The service can never be profitable while it continues in that kind of uncertainty, which is the Minister's own fault.
    Mr. Chataway: I note the hon. Gentleman's views and assure him that there will be no unnecessary delay.
    Mr. Rost: Can my right hon. Friend confirm that the losses are still running at about £6 million a year? At what stage are we expecting the losses to end now that the system has reached about the halfway mark towards its initial launch target? What has been the total capital investment in the Giro since it started? How long will it be before the taxpayer sees a return on that capital? Is not it about time we called an end to this extravagance, which only a
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    Socialist Government can afford, and not a Conservative Government determined to have their priorities right?
    Mr. Chataway: When the review is concluded, I will make available all the facts for which my hon. Friend asks. I hope that he will agree that it would be more convenient to the House to debate the question on a later occasion.
    Mr. Simon Mahon: Is the Minister aware that any statement he makes on the future of Giro is of tremendous concern to my constituents, in whose area the Giro head office is situated, and also on Merseyside, where we have an unemployment rate of 5·6 per cent., which is very serious? Will he assure the House that he is receiving every co-operaion from the staff of Giro in Bootle and that the industrial relations are of the highest order?
    Mr. Chataway: I can say that I am getting every co-operation from the staff of Giro in the review that is being undertaken.
    Mr. Money: I hope that in this connection my right hon. Friend will also bear in mind the position in Suffolk, where Giro is relevant to our high unemployment and the fact that we are a low-wage area.
    Mr. Chataway: I certainly take that factor into account.
    Mr. Richard: May I revert partially to one of the Minister's earlier answers? Is he saying that whether or not Giro is making money, he has given the House an undertaking this afternoon that postal tariffs will not be raised to the extent which his hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) put to him and which some of us have cause to fear? Is he telling us that he would not sanction a proposal for an increase to 4p and 5p?
    Mr. Chataway: Yes, Sir. I was telling the House that I see no prospecst of increases in postal charges on the scale feared by my hon. Friend.
    Mr. Rostasked the Minister of Posts and Telecommunications how many cheques drawn on accounts in credit with National Giro have not been honoured; what is the estimated cost of damages

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    claimed by account holders; and what action is proposed to prevent such errors.
    Mr. Chataway: These are matters for the Post Office.
    Mr. Rost: Has my right hon. Friend inquired into the recent case publicised in the newspapers of a small business man with a credit on his Giro account who presented cheques in the course of his business which were not honoured, as a result of which he suffered considerable embarrassment and damage to his business standing and is, I understand, taking legal action against Giro? Cannot something be done to prevent that type of occurrence?
    Mr. Chataway: As my hon. Friend says, there is a legal action pending at the moment, and I do not think, therefore, that it would be proper for me to comment.

    Subscriber Trunk Dialling System
    Mr. Peter Reesasked the Minister of Posts and Telecommunications how many areas of the country are not covered by the subscriber trunk dialling system.
    Mr. Chataway: Extension of Subscriber Trunk Dialling is a matter for the Post Office. I am informed however that S.T.D. facilities have now been provided for 90 per cent. of telephone customers.
    Mr. Rees: I am grateful to my right hon. Friend for that answer. When he is discussing its implications with the Post Office, will he bear in mind that the 10 per cent. not yet covered include those in the towns of Dover, Deal and Sandwich, and that it is absurd that the gateway to England and to the Common Market should be one of the last areas to have an up-to-date telephone system?
    Mr. Chataway: I am sure that the Post Office will take note of that remark. I understand that Dover is one of the places where the Post Office has had site difficulties, and further delay has been caused by teething troubles over the development of the new type of exchange equipment.
    Mr. Gardner: Will my right hon. Friend do something to help the people who use the S.T.D. system and find themselves afflicted with automatic telephones
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    that automatically get the wrong number? Will he impress on the manufacturers of telephone equipment and the Post Office, which installs and maintains that equipment, that many people, including some in my constituency, do not enjoy being constantly reminded of the electronic Stone Age?
    Mr. Chataway: On occasion misdial-lings are the result of human error, although I am sure that those are not the mistakes that have afflicted my hon. and learned Friend. I am sure that the Post Office will take note of his remarks.

    Hardman Report (Recommendations)
    Mr. Charles R. Morrisasked the Minister of Posts and Telecommunications what progress has been made in his discussions with the Post Office regarding implementing the recommendations of the Hardman Committee of Inquiry into the recent Post Office industrial dispute.
    Mr. Chataway: I understand from these discussions with the Post Office that revised scales of pay based on the recommendations of the Hardman Report are being introduced from 1st January this year.
    Mr. Morris: In view of the Minister's declared interest in increased productivity in the Post Office, can he say what progress has been made with regard to the Hardman Committee's recommendation on linking productivity to pay increases?
    Mr. Chataway: Those are matters for discussion between the Post Office and the Union of Post Office Workers.

    Commercial Broadcasting
    Mr. Whiteheadasked the Minister of Posts and Telecommunications when he will announce plans for legislation to implement the Government's proposals for commercial broadcasting.
    Mr. Chataway: Not before the next Session of Parliament.
    Mr. Whitehead: While I welcome the fact that we are to be spared commercial radio for a little longer, is the Minister aware that each delay brings us nearer to 1976, when the whole structure of broadcasting in this country will have to be reviewed, as will the Copenhagen

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    Agreement? Will he say now that in view of the delays it would be better to have an inquiry into the whole future structure and ownership patterns of broadcasting rather than bringing in piecemeal legislation in just one area?
    Mr. Chataway: There has been no further delay. I have noticed that on the Opposition benches there is an inclination to put off until after 1976 every broadcasting question, including solving the severe financial difficulties of both broadcasting organisations. But that is a propensity for procrastination which is not shared on this side of the House.
    Mr. Richard: In the recent debate on broadcasting, the Minister said that he was anxious to hear views on the future structure of commercial broadcasting. We hear disturbing rumours about the sort of Bill he may be thinking of introducing. Hon. Members on this side, and, I suspect, many Conservative hon. Members, too, will take it very unkindly if all that happens is that a very short enabling Bill is introduced, without giving the House the opportunity to discuss a great number of details, such as how much advertising there should be per hour, what sort of advertising, and the method of enforcing balanced programmes.
    Mr. Chataway: I am sure that there will be ample opportunity to discuss all those matters.

    Local Radio
    Mr. Gorstasked the Minister of Posts and Telecommunications whether he will detail the technical studies he is carrying out into the availability of frequencies for local radio; and whether he will publish the results when the studies have been completed.
    Mr. Chataway: I would refer my hon. Friend to the recent White Paper and particularly to Appendices A and B. The Independent Broadcasting Authority, after it has been set up, will publish the results of the technical studies, by giving the locations and technical characteristics of stations I have authorised.
    Mr. Gorst: Would my right hon. Friend agree that most of the decisions which will be taken with regard to frequencies will affect not merely the 60 stations contemplated in the White Paper
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    but also possibilities for a long time in the future? Is there a possibility, therefore, that he will consider setting up an advisory committee similar to the Television Advisory Committee, which used to advise previous Postmasters-General on television technical matters, and on which would be represented not merely the Minister, the Ministry and the Authorities, but other users and, possibly, the industry, too?
    Mr. Chataway: I will bear that suggestion in mind, although I think that the work done on frequency plans would principally have to be a matter between the Ministry, the I.B.A. and the B.B.C.

    B.B.C. Programmes
    Mr. Evelyn Kingasked the Minister of Posts and Telecommunications why he does not intervene in matters of programme content in regard to the British Broadcasting Corporation.
    Mr. Chataway: Because I believe the long-standing convention not to do so is necessary in order to keep broadcasting in this country free from political control.
    Mr. King: Has my right hon. Friend heard of the television film called "Yesterday's Men"? I think that he has. Would he agree that, where trickery on this scale is perpetrated, as it was, it should be resented not merely by the Labour Party or the Conservative Party but by Parliament as a whole? Will he also bear in mind that he, as Minister, has, ultimately, responsibility to Parliament for what is done and that he may one day have to live up to his responsibilities?
    Mr. Chataway: I am not in a position to say whether deception was practised on this occasion, but my hon. Friend knows that the B.B.C. has set up its own inquiry. I am, I hope, alive to all my responsibilities. I do not believe that it would be a happy precedent to set, by this Government or any other, or by someone in my position, to seek to take control of matters of programme content of the broadcasting authorities.
    Mr. Loughlin: While one does not wish to interfere with the independence of either of the broadcasting authorities, may I ask the right hon. Gentleman

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    whether he will draw the attention of the B.B.C. to the fact that there is an essential difference between freedom, to which it is entitled, and licence, to which it is not?
    Mr. Chataway: That is a proposition to which I am sure both broadcasting authorities would subscribe.
    Mr. St. John-Stevas: While I think that everyone would agree that there was an error of taste in the programme, surely, as politicians, we should not be too sensitive to criticisms made of us.
    Mr. Arthur Lewis: The hon. Gentleman is on the pay list of the B.B.C.
    Mr. St. John-Stevas: After all, we are representatives of the public and, therefore, open to criticism.
    Mr. Tebbit: On a point of order, Mr. Speaker. Is it in order for an hon. Member opposite, from a seated position, to imply that another hon. Member's views are distorted by being on the pay list of a public corporation or any other corporation?
    Mr. Speaker: If I hear anything out of order, I will rule accordingly.
    Mr. St. John-Stevas: I heard what was said. I only wish that my views had a chance of being distorted by being on the pay list of anyone other than the taxpayer. I return to my point. Is not the possibility of an error of taste of this kind a worth-while price to pay for freedom from censorship, which would be infinitely worse in its effects?
    Mr. Chataway: I agree with my hon. Friend about censorship, and I admire the openness of his remarks about the source of his income.
    Mr. Richard: I am sure the right hon. Gentleman appreciates that on this side of the House there is strong feeling that, on this occasion, the major participants in the programme were deliberately deceived, not least by the interviewer himself. I must say to him—I hope he will consider this—that the time may come when it may become necessary for him to use the powers he has, residual though they are, if this sort of treatment continues.
    Mr. Chataway: I hope that there will be an opportunity to go further into that
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    remark by the hon. and learned Member for Barons Court (Mr. Richard) because, if it represents the policy of the Opposition, it may have some very ominous implications for the broadcasting authorities. We believe that one of the answers to some of these problems is the existence of diversity and of competition.
    Mr. Ashtonasked the Minister of Posts and Telecommunications how many letters he has received since 18th June relating to alleged breaches of the Licence and Agreement in respect of British Broadcasting Corporation programmes.
    Mr. Chataway: None, Sir.
    Mr. Ashton: Nevertheless, will the right hon. Gentleman admit that as is shown by earlier Questions, there is great concern about this programme on 18th June? Does not he accept that we have a situation in which politicians cannot interfere with or try to control television, whereas television can interfere with or try to control politicians? What answer should politicians have to this? We cannot debate it or raise it in the House, except at Question Time like this.
    Mr. Chataway: One of the sources to which the Governors of the B.B.C. and the Members of the I.T.A. ought to look for guidance and opinion is debates in this House, and it is certainly important, therefore, that opinions should be expressed in this House. But there may be a feeling that undue sensitivity is being shown by some hon. Members about one particular programme.
    Mr. Cooke: Will my right hon. Friend explore the possibility of another channel for Independent Television and generally widening the means of communication through the air? No one complains about bias in newspapers, and, if there were more channels on the air, more politicians of all colours could have their say and the people could form a wise judgment.
    Mr. Chataway: The argument my hon. Friend advances is an important one. The greater the number of sources from which programmes and news services come, the less power is wielded by any one source. I believe that the argument which my hon. Friend advances would command a good deal of support.
    Mr. Richard: The right hon. Gentleman is treating this serious matter in an extraordinarily trivial way. Does he agree on these two points—I think a number of hon. Gentlemen on the Government benches would accept them: first, that it is the duty of television authorities, whether B.B.C. or I.T.V., to maintain a proper, fair and equitable balance between both political parties in the presentation of matter; secondly, that if on this occasion the British Broadcasting Corporation fell short of this standard, it is utterly right that Members of Parliament on both sides of the House should say so, and there is nothing whatsoever wrong in that?
    Mr. Chataway: The hon. and learned Gentleman has said nothing that I have not already said.

    Radio and Television (Political Interference)
    Mr. Fowlerasked the Minister of Posts and Telecommunications whether he will introduce legislation to protect radio and television reporters from political interference.
    Mr. Chataway: No, Sir. I do not believe legislation to be necessary.
    Mr. Fowler: May I revert to the question of "Yesterday's Men" and the complaints arising from it? Does not my right hon. Friend agree that it is a highly unsatisfactory situation that such well-publicised complaints should be dealt with as an internal matter by the B.B.C. rather than by the more open procedure of a broadcasting council? Does not he also agree that such a broadcasting council would not only be fairer to the public but might also be fairer to reporters who might believe that they are being unjustly attacked?
    Mr. Chataway: It must be faced that if a broadcasting council were set up, it would, to an important extent, alter the functions of the Governors of the B.B.C. and of the Members of the I.T.A. At the moment, they are appointed to act as trustees for the public. If it were held that some outside body should be there to protect the public, presumably those in charge of the B.B.C. and the I.T.A. would be responsible only for the running of the B.B.C. and the I.T.A. I do not
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    think that that would necessarily be an advantage.
    Mr. Kaufman: Is it not equally important for radio listeners and television viewers to be protected from political interference by radio and television reporters? [HON. MEMBERS: "Who are they?"] They are such as David Dimbleby and Ian Mclntyre. While those of us on this side who have consistently opposed any kind of political intervention in the B.B.C.'s affairs maintain that opposition, and believe that the B.B.C. should be entirely independent, it is made very much more difficult for us when the B.B.C. televises a vilificatory programme about one party on one night and two programmes of a reverential nature about the other party on another night. Will the right hon. Gentleman tell Lord Hill that the task of those of us who wish to ensure that there is no political interference would be greatly assisted if the B.B.C. imposed some sensible internal editorial control?
    Mr. Chataway: If the hon. Gentleman counts himself among the foremost of the friends of the B.B.C., I am not sure, on the basis of his remarks, that that will necessarily be a tremendous source of satisfaction to the Corporation.

    Public Communications Complaints Board
    Mr. Edelmanasked the Minister of Posts and Telecommunications whether he will seek to establish a public communications complaints board to receive and investigate complaints of alleged abuses by the public communications media in connection with private individuals.
    Mr. Chataway: No, Sir.
    Mr. Edelman: Is the right hon. Gentleman aware that, while politicians can protect themselves, there are many private citizens who are completely at the mercy of the enormous power wielded by the B.B.C. and the I.T.A. which, although it stops short of slander, can still be abusive to the individual? Will not the right hon. Gentleman consider the appointment of an ombudsman or ombudsmen from whom individuals can seek specific redress?
    Mr. Chataway: I agree with the hon. Gentleman that the power of television

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    can be frightening in this respect, and I am sure that we can all think of instances in which we believe that individuals have been extremely unfairly treated. It must, therefore, be a continuing responsibility for those who are charged with the task of acting as trustees for the public thoroughly to investigate any complaint of that kind, but, as I say, I do not necessarily believe that that would be better done by an outside body than by the Governors of the B.B.C. and the members of the I.T.A.

    Telecommunications
    Mr. Gorstasked the Minister of Posts and Telecommunications what progress he has made in his review of the Post Office's monopoly in the field of telecommunications; and when he expects to be able to make a statement.
    Mr. Goldingasked the Minister of Posts and Telecommunications what recent discussions he has had with the Post Office about the future of the telecommunications services.
    Mr. Chataway: I have been discussing with the Post Office measures to liberalise the supply of customer apparatus. I hope it will soon be possible for private enterprise to supply 10 types of large private branch exchanges instead of two as in the recent past.
    The Post Office is exploring with the telephone industry the joint marketing of special designs of telephones for customers who want to pay for them. Restrictions are being withdrawn on the supply and attachment of equipment like certain answering machines which were formerly obtainable only from the Post Office. Over 400 types of apparatus can now be attached to telephone lines, and private firms are being encouraged to market and maintain apparatus such as recording machines and burglar alarms which are considered not to be an integral part of the network.
    I propose to keep the situation under review.
    Mr. Gorst: I congratulate my right hon. Friend on the liberalisation which he has just announced. Will he bear in mind that, so long as the wide monopoly powers of the Post Office exist in areas
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    which have not yet been technically developed or commercially exploited, there is a dampener on the development of new projects by private enterprise firms which might otherwise, were the monopoly not so tight, be interested in exploiting these possibilities?
    Mr. Chataway: I will certainly bear in mind my hon. Friend's point, which is a fair one. As he knows, it is necessary for the Post Office to safeguard the main network system, and there are difficulties, therefore, in allowing the free attachment of any apparatus direct to the network.
    Mr. Golding: Will the Minister tell the House how much revenue the Post Office has lost in the last year and how much it will lose in the next year because the private equipment manufacturers, to whom more work is being given, have failed to deliver equipment on the dates promised?
    Mr. Chataway: It would not be possible to make a calculation on that basis, because it would be wrong to assume that all delays are due solely to the manufacturers. Certainly there is blame attaching to some of the manufacturers for some of the delays that have been experienced in the delivery of exchange equipment but, as the hon. Gentleman knows, a good part of this delay is due to development difficulties for which there is a share of responsibility between both parties.
    Mr. Geoffrey Finsberg: My right hon. Friend referred to some 400 items which have been freed from restriction. Would it be possible for this lengthy list to be included in the OFFICIAL REPORT?
    Mr. Chataway: I think that it would be too lengthy a list to be included in the OFFICIAL REPORT, but full details can, of course, be made available to my hon. Friend.
    Mr. William Hamilton: Reverting to the supplementary question put by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding), does the right hon. Gentleman recollect the strictures made a few years ago by the Public Accounts Committee on the ring that operated then—and which probably operates still—in the provision of telecommunications equipment? Will he give a firm assurance that that ring has been

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    broken or will be broken at the earliest opportunity?
    Mr. Chataway: The ring does not operate today, and the Post Office is well aware of the advantages of encouraging the maximum amount of competition between manufacturers which is consistent with the Post Office securing the orders it needs.

  ENVIRONMENT

    Rural Bus Services
    Mr. Awdryasked the Secretary of State for the Environment whether he will consider reducing the amount of rate support grant to local authorities which fail to provide grants for their unremunerative rural bus services.
    The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): No, Sir. My right hon. Friend is certainly anxious that these grant powers should be widely exploited and one powerful inducement is a 50 per cent. contribution by the Government; but the final decision to assist these services rests with the local authorities.
    Mr. Awdry: I have no complaints about Wiltshire County Council, but does my hon. Friend agree that local authorities should make better use of their powers for making grants for rural bus services, and will he say how many local authorities are providing grants at the present time?
    Mr. Griffiths: I cannot give my hon. Friend the exact number, but I will write to him. I agree that local authorities could and should make better use of their powers. I emphasise that my Department makes available the Government's share of the grant with the minimum red tape and form-filling, and that the Section 34 grant can be made available not only to existing bus services but also to private operators running mini-buses and where appropriate, even to taxis and private cars.
    Mr. David Clark: When does the Minister hope to publish his study of public transport in rural areas, and will the study provide solutions for semi-rural areas?
    Mr. Griffiths: My right hon. Friend hopes to publish both surveys, for Devon
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    and West Suffolk, before long, and I think the hon. Gentleman will not be disappointed with the suggestions put forward for help for both rural and semi-rural areas.
    Mr. Mulley: I am sure the Minister agrees that it is very important to try to halt the decline in rural bus services. Will he consider sending to local authorities a circular setting out what he has just told the House and urging them wherever possible to make grants available?
    Mr. Griffiths: As the right hon. Gentleman knows, my right hon. Friend has already circularised local authorities urging them to make use of this power, but I take the point which he makes. At the time of publication of the two rural transport surveys, my right hon. Friend may be minded once again to draw the attention of local authorities to the availability of the grants.

  Council House Sales
  Mr. Geoffrey Finsbergasked the Secretary of State for the Environment if he is satisfied with the working of his present policy on the sale of council dwellings to tenants; and if he will make a statement.
  Mr. Tebbitasked the Secretary of State for the Environment what advice he has now given to local authorities who have recently ceased to sell council houses to sitting tenants.
  The Under-Secretary of State for the Environment (Mr. Paul Channon): Since the Government removed all barriers to the freedom of action of local authorities to sell their council houses, the quarterly rate of sales has doubled.
  I regret, however, recent decisions by certain local authorities to discontinue sales despite the wish of tenants to own their homes. As the law stands, the decision whether or not to sell rests with the local authorities themselves.
  Mr. Finsberg: I thank my hon. Friend for that reply. Is he aware that the practice by some local authorities of going back on their word is deprecated by hon. Members on both sides of the House? Would he confirm that in the past the view has been that when political decisions are taken it is usual not to allow the innocent to suffer?
  Mr. Channon: I agree with my hon. Friend. It is true that our predecessors in 1968 exempted from the restrictions imposed in that year any transaction where a firm price had been offered by the authority and accepted by the purchaser. I hope that all local authorities will take that line now.
  Mr. Tebbit: Is my hon. Friend aware that when the council of the London Borough of Waltham Forest changed hands, the decision to end sales was made before the council had even met, and it was not until it was pointed out that two Labour councillors had themselves purchased their council houses during the period of Tory rule in the borough that the Labour Council backtracked sufficiently to allow sales in the pipeline to go through? Would he advise councils that what is good for Labour councillors who wished to buy their council houses is good for the electorate as well?
  Mr. Channon: I am extremely glad to hear that, no doubt owing to my hon. Friend's pressure, that London borough reversed its previous policy.
  Mr. Crawshaw: But surely the hon. Gentleman must hope that this policy would fail in Liverpool? Does he realise that each year we get into the pool about 2,500 houses which come up for re-letting? If one takes the argument to a logical conclusion, those 2,500 would not now be in that pool and the cut-back in the Liverpool programme at the moment would have been based on a false premise if the council were successful in selling off all the houses.
  Mr. Channon: The hon. Gentleman bases his remarks on a misapprehension. If authorities did not sell their houses, there is no guarantee that those houses would become vacant, as he appears to assume. In fact, I regret that any borough or authority should refuse to sell houses to people who wish to own their homes and who have been led to believe they could do so.
  Mr. Crosland: Is the hon. Gentleman in favour of greater or less freedom for local authorities to do as they wish?
  Mr. Channon: I am in favour of local authorities acting in the interests of ratepayers and tenants.

  Housing Waiting Lists
  Mr. Deakinsasked the Secretary of State for the Environment if he will issue a circular to local authorities with a view to placing applicants on their housing waiting lists in centrally determined categories based on degree of priority, and to publicise locally the criteria used to assess priority so that potential applicants in housing need can assess their eligibility for, and chance of obtaining, local authority accommodation.
  Mr. Channon: Advice on these matters was given in the Central Housing Advisory Committee Report, "Council Housing: Purposes, Procedures and Priorities", a copy of which was sent to all housing authorities in November, 1969, with a circular generally commending it to them.
  Mr. Deakins: Since the Minister in a previous answer has admitted that many people are in housing need but are not on local authority waiting lists, surely the purpose of that circular has not been fully served. Should not a further circular go out to ensure that all people in housing need will be able to assess their eligibility for, and chance of, obtaining local authority accommodation?
  Mr. Channon: I will consider the point about a further circular, but, as the right hon. Member for Grimsby (Mr. Crosland) has just pointed out, these are matters for the local authority. It is for a local authority to decide on the appropriate criteria to be applied to people on waiting lists in the light of local needs, and these criteria vary greatly.

  Housing Finance
  Mr. Frank Allaunasked the Secretary of State for the Environment if he will now make a statement on his discussions with certain local authorities about fair rents, and the ending of the 4 per cent. loans and the present subsidies; and if the subsidy to be paid to some private landlords' tenants when their rents are taken out of their present controls is to be subtracted from the total subsidy available to council tenants.
  Mr. Channon: I would refer the hon. Member to the reply given by my right hon. Friend to the hon. Member for

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  South Shields (Mr. Blenkinsop) on 16th June, 1971.—[Vol. 819, c. 420–1.]
  Mr. Allaun: If the second part of my Question is soundly based, as I believe it to be, does it not mean that millions of council tenants will suffer a threefold blow: first, by the reduction of £150 million a year in subsidy, compared with what the figure would have been; secondly, by having to subsidise the very poorest council tenants; and, thirdly, by also having to subsidise private landlords' tenants or, as many of us believe, in the outcome, the landlords themselves?
  Mr. Channon: The hon. Gentleman must not assume that his Question is accurate. As a supporter of a Government who introduced the fair rents principle, I am sure he will be glad to see an extension of it.

  Rent Rebate Schemes (War Pensions)
  Mr. David Stoddartasked the Secretary of State for the Environment if he will advise all local housing authorities that in formulating their rent rebate schemes they have absolute discretion to disregard war disablement pensions as assessable income.
  Mr. Channon: I believe that local authorities understand that they have discretion to disregard war disablement pensions in full, but if the hon. Member has any evidence to the contrary, I will gladly consider it.
  Mr. Stoddart: I thank the hon. Gentleman for that answer. It would be useful if he could circularise local authorities about this matter since there is some doubt about it. But I am most anxious that when he publishes his White Paper containing his proposals about rents in future, he will include provision in any rent rebate scheme that local authorities should disregard the whole of war disability pensions.
  Mr. Channon: I assure the hon. Gentleman that we have this point very much in mind, and I hope that in due course he will not be too disappointed.

  Colne Valley
  Mr. David Clarkasked the Secretary of State for the Environment if he will pay an early official visit to the Colne Valley constituency.
  The Secretary of State for the Environment (Mr. Peter Walker): I have no such plans at present.
  Mr. Clark: I am sorry that the Minister is not coming to Colne Valley since I hoped that he would have the opportunity to meet representatives of the urban district because, as he knows—[HON. MEMBERS: "Question."]—they are most upset about the discussions his hon. Friends have had with Huddersfield Borough Council. Would he not see a delegation from the urban district to discuss this problem?
  Mr. Walker: I assure the hon. Gentleman that any discussions my hon. Friends have had with various authorities will not prejudice submissions made by his urban district council, which will be carefully and objectively considered.

  Council House Building (Leicester)
  Mr. Greville Jannerasked the Secretary of State for the Environment how many council houses have been completed in the city of Leicester during each of the last three years for which records are available.
  Mr. Channon: The information is published in Local Housing Statistics, the relevant copies of which are available in the Library.
  Mr. Janner: Is the hon. Gentleman aware that, no doubt in common with other hon. Members, the single largest category of complaints that I receive in Leicester concerns housing problems? Is he aware that the council have completed 200 or 300 houses in each of the past two years and that the housing manager estimates that 23,000 people are involved in housing lists? Would he not do something to stimulate the building of low-cost housing in Leicester for people who need homes?
  Mr. Channon: The whole purpose of our reform of housing finance is aimed at directing subsidies to those areas and people who are most in need of them. I will bear the hon. and learned Gentleman's point in mind.

  House Building
  Mr. Greville Jannerasked the Secretary of State for the Environment how

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  many houses he estimates have been completed in England and Wales during the 12 months ended 17th June, 1971.
  Mr. Channon: Some 260,000 dwellings were completed between 1st July, 1970, and 30th April, 1971, inclusive. Statistics for May and June, 1971, are not yet available.
  Mr. Janner: How many people does the hon. Gentleman estimate are on housing lists awaiting decent homes, and will he say whether he is prepared en a national basis to take some steps to stimulate the building of low-cost housing?
  Mr. Channon: Yes, indeed, I can give the hon. and learned Gentleman that assurance; we are anxious to do that. He will be pleased to know that the housing starts are considerably up; the amount of slum clearance is considerably up; and the amount of improvement grant is also considerably up.
  Sir D. Walker-Smith: Would my hon. Friend confirm that the unsatisfactory figures he gave in the original Answer reflect the policies of the previous Administration, whereas the satisfactory picture of starts which he has just given in a supplementary answer reflect the policies of the present Government?
  Mr. Channon: It is inevitable that, owing to the time lag between starts and completions, the figure of completions is due to the policies of the previous Government whereas the satisfactory increase in starts is entirely due to our own policies.
  Mr. Skinner: Although the statistics are all up, rent and rates are up as well—[HON. MEMBERS: "Question."] I will get to that; do not get so excited. On the matter of starts, will the hon. Gentleman confirm that in the first four months of this year, despite all the figures he has already given us, the public sector building starts in money terms have fallen by 18 per cent?
  Mr. Channon: What I can tell the House, as I said a moment ago—[HON. MEMBERS: "Answer the question."] I notice that Opposition hon. Members are not at all anxious to welcome the improvement in the number of starts. In fact, in answer to the hon. Gentleman's
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  question, the starts this year in England and Wales in the comparable period about which he asks are some 15,000 up.

  Council House Rents
  Mr. Marksasked the Secretary of State for the Environment what is the estimated average weekly rent, exclusive of rates, of council houses in England and what is the estimated gross rateable value.
  Mr. Channon: I would refer the hon. Member to the latest Housing Statistics (England and Wales) Part I, published by the Institute of Municipal Treasurers and Accountants, a copy of which is in the Library.
  Mr. Marks: Does the hon. Gentleman consider that gross rateable value is a reasonable basis for establishing a fair rent? Is it not possible for rent officers to examine individual houses before fixing rents?
  Mr. Channon: I must ask the hon. Member to await the detailed consultations going on at the moment. The whole purpose of reform will be that for the first time the rents of council houses will depend on their size and location and amenities and that that will be a genuine basis for a fair rent.
  Mr. Crosland: Can the hon. Gentleman tell us how he thinks that the fair rent level will compare with the present average rent level to which he made reference? Secondly, can he tell us when we may expect a statement on housing finance?
  Mr. Channon: As soon as the consultations are complete. As my right hon. Friend has told the right hon. Gentleman on many occasions, we are only too anxious to report to the House of Commons about these matters. In future the only criterion for the rents of council houses will be the fair rent.

  Waltham Abbey Town Centre Development Scheme
  Mr. Tebbitasked the Secretary of State for the Environment when he now expects to announce a decision on the Waltham Abbey Town Centre Redevelopment Scheme.
  The Minister for Local Government and Development (Mr. Graham Page): Very soon, Sir.
  Mr. Tebbit: Is my hon. Friend aware that I very much hope that he means that, because we have heard it before, and this very lovely and prosperous old town is dying for the want of a decision on this scheme? If we can have a decision shortly we can restore it to prosperity again. It is a very important town because, as he knows, the Abbey there holds the body of a previously defeated Harold, and that makes it almost a national monument.
  Mr. Page: Yes, indeed, I know the importance of this decision to the town, and I really do mean "very soon".

  Local Government Reorganisation
  Mr. Hardyasked the Secretary of State for the Environment what is the number of meetings which has been attended by Ministers in his Department in the last four months where they have met elected members of local authorities to discuss local government reorganisation, other than meetings with representatives of national associations of authorities or with members of local authorities in their own constituencies.
  Mr. Peter Walker: When visiting an area Ministers of my Department often meet elected members of the local authority to discuss any matters which those members wish to raise including the reorganisation of local government; but the number of occasions on which this particular subject has arisen cannot readily be assessed.
  Mr. Hardy: Will the Secretary of State recall his refusal to meet representatives, including councillors from my own constituency, who were extremely anxious about the future of education in the metropolitan area? Is it not the case that members of local authorities which are Conservative-controlled are having a great deal more opportunity to meet Ministers from his Department to discuss the implications for local government than are councillors belonging to any other party. Will he explain that?
  Mr. Walker: If I may say so, that is completely untrue. We have been to many areas. For example, I have had discussions with a great number
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  of councils in the County of Durham, the majority of which cannot be described as being Tory.

  Rate Rebate Schemes (War Pensions)
  Mr. David Stoddartasked the Secretary of State for the Environment if he will introduce legislation to exempt war pensions as assessable income for the purposes of the rate rebate scheme.
  Mr. Graham Page: This point is being considered in the current review of local government finance on which we hope to publish a Green Paper before the Summer Recess.
  Mr. Stoddart: Whilst appreciating that answer, could I remind the hon. Gentleman that it will be 1974 at the earliest before any reform of local government finance can come into operation? In view of the commitments which were given by his party when the Rating Bill was being discussed, would he not now introduce legislation to ensure that war pensioners get the benefits between now and 1974?
  Mr. Page: No. I think it would be right to consider the reform of rating as a whole rather than make piecemeal reforms. When we have had public discussion on the Green Paper, of course we will think about it again.

  Peak District National Park
  Mr. David Clarkasked the Secretary of State for the Environment what representations he has received about the lack of access to the Peak District National Park in the area of Meltham.
  Mr. Graham Page: I am not aware of any representations referring specifically to lack of access in the Meltham area of the Peak District National Park. The Holme Valley Moorland Rescue have made representations to me about lack of access generally in the Peak Park for their work.
  Mr. Clark: While thanking the hon. Gentleman for that reply, may I ask whether in representations he has received—since I was led to understand that there have been representations—some concern has been raised about areas in the national park which were un-fenced now being fenced? Can he do anything to resolve this aggravating

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  problem that, in the national park, people cannot walk freely on the open moor?
  Mr. Page: Yes, I have put these matters to the National Park Planning Board and I am awaiting the results of those representations to the Board.

  Inter-urban Road Programme
  Mr. Goldingasked the Secretary of State for the Environment whether he is yet able to announce firm decisions for an extension of England's motorways and trunk roads.
  Mr. Graham Page: I would refer the hon. Member to the Answer that my right hon. Friend gave to his hon. Friend the Member for Exeter (Mr. John Hannam) on Wednesday, 23rd June.—[Vol. 819, c. 288–292.]
  Mr. Golding: Is the Minister aware that the plans announced last week should have been announced in Parliament and should have been announced many months ago? Further, is the Minister aware that under these plans communications between North Staffordshire, North Wales and Chester would hardly be improved, and that they should be improved?
  Mr. Page: To deal with the last part of the supplementary question first, the communications there will be a great deal improved under the plans put forward by my right hon. Friend on 23rd June. He put them forward in answer to a Parliamentary Question, so they were announced in Parliament.

  Heavy Lorries (Safe Loading)
  Mr. Leslie Huckfieldasked the Secretary of State for the Environment whether he will introduce legislation to clarify the position regarding heavy lorries using ropes to secure containers.
  Mr. Eldon Griffiths: No, Sir, but it will be covered in a Code of Practice on Safe Loading now being drawn up in consultation with industry.
  Mr. Huckfield: While I am grateful to the Minister for that information, may I ask him, does he not think that the recent court decision which was overruled by a higher court has introduced some uncertainty into the situation, and is he entirely happy about the continued practice of
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  containers of over 10 tons being tied on merely with ropes? Does he not feel that legislation is necessary to insist on the use of twist locks?
  Mr. Griffiths: I am very well aware of the decision to which the hon. Gentleman draws attention. I am quite sure that the code of practice intended to be published in consultation with the industry will deal with the problem. I would hesitate very much before seeking to gear up the whole engine of Parliament to legislation on how people should tie ropes on to containers.

  HOUSE OF COMMONS

    Members' Acknowledgement Cards
    Mr. Arthur Lewisasked the Lord President of the Council whether he is aware of the favourable response on the part of Members of Parliament to the introduction of the pre-printed, pre-stamped acknowledgement cards as now issued to Members; and, as a means of assisting Members to deal with the large amount of correspondence they are getting for and against Great Britain's entry into the European Economic Community, if he will have some specially printed acknowledgement cards issued dealing with this subject.
    Mr. Lewis: On a point of correction. The words "for and" should not be included before the word "against" as my Question is printed on the Paper. They are all against.
    The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): I am glad to hear that the general acknowledgement cards have proved useful. I would not have thought it necessary to printed special acknowledgement cards relating to particular issues.
    Mr. Lewis: The Leader of the House has not seen anything yet, because hon. Members and, no doubt, members of the Government, are getting dozens of letters against our entry into the Common Market and I can assure him that it has not really started yet. It would be very helpful if he would have cards with just a statement saying
    "This is just one of hundreds of such letters Members of Parliament are receiving."

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    A pre-paid card to that effect would help hon. Members enormously.
    Mr. Whitelaw: Whether I see anything or not does not seem relevant at all. What is relevant is that the general acknowledgement cards are valuable, and we should stick to them on this occasion.
    Sir C. Taylor: Would my right hon. Friend consider printing three forms of card—one sort for, one against, and one undecided, so that the hon. Member could send the appropriate card to the appropriate constituent?
    Mr. Whitelaw: I am quite clear that the best principle in the circumstances is to remain where we are with the general acknowledgement cards.

    Top Salaries Review Body
    Mr. William Hamiltonasked the Lord President of the Council if he will request the Committee now considering the emoluments of Members of Parliament and related matters to issue an interim report and recommendations be fore the end of 1971.
    Mr. Whitelaw: I hope that such an interim report will not be necessary, but it is of course for the Review Body itself to decide.
    Mr. Hamilton: Can the right hon. Gentleman explain why the Government intend to deal more expeditiously with some claims than others and would he not perhaps speed up matters more if there were a gracious message from back bench Members?
    Mr. Whitelaw: Frankly, I do not think that entirely fair. The review body are speeding up their proceedings as fast as they possibly can, and I can only say that I hope the hon. Member will play his part in speeding up other proceedings.

    Expenditure Committee
    Mr. du Cannasked the Lord President of the Council what arrangements he is making to assist the continuity of the work of the Expenditure Committee after Prorogation.
    Mr. Whitelaw: The Expenditure Committee, like the former Estimates Committee, is embodied in the Standing Orders of the House, and it is the Govern-
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    ment's intention that it should have a similar status. I can assure my right hon. Friend that in order to assist the continuity of its work I shall arrange for the Motion reappointing the Committee to be put to the House as soon as possible after the start of the next Session.
    Mr. du Cann: Is my right hon. Friend aware that the members of the Expenditure Committee will be much encouraged by that reply to continue with the diligent work which, I hope, as time goes on, will be increasingly significant in this House? May I ask him a second matter? May I assume his equal good will in dealing with a second recommendation of that Committee in a Special Report recently made to the House, namely, that in order to enable them to do their work adequately they should have a small secretariate?
    Mr. Whitelaw: That does not strictly arise on the Question that I was asked. However, in the exceptional circumstances of the case, I can tell my right hon. Friend that I am prepared to discuss the matter with him.
    Sir H. Legge-Bourke: While I welcome what my right hon. Friend said about the Expenditure Committee, I hope that he will consider giving similar treatment to some of the other Select Committees, not least that concerned with Science and Technology, in order to ensure that we do not waste weeks and sometimes months between Prorogation and the new Session, bearing in mind that sometimes we have to continue our work from one Session to another.
    Mr. Whitelaw: Yes, of course.

QUESTIONS TO MINISTERS
Mr. Ashton Mr. Ashton On a point of order, Mr. Speaker. I wish to draw your attention to the fact that on two occasions today the Under-Secretary of State for the Environment answered Questions by saying that the answer could be obtained from the statistics section of the Library. If a precedent of that sort is set there will be little point in hon. Members tabling questions, as probably 90 per cent. of them can be answered in that way. May I ask you, Mr. Speaker, to protect the rights and privileges of hon. Members on the back benches?
Mr. Speaker: The hon. Gentleman will have noticed that on each occasion I allowed a supplementary question. Instead of doing that, I could have acted in accordance with a recent Select Committee recommendation on the ground that the information sought could have been ascertained with a little diligence. However, I have no doubt that account will be taken of the hon. Gentleman's point.

STEEL INDUSTRY
Motion made and Question proposed,
That this House do now adjourn.—[Mr. Pym.]
3.32 p.m.
The Secretary of State for Trade and Industry (Mr. John Davies): I am very glad to have an opportunity this afternoon to elaborate somewhat on the rather bald statement that I had to make on Monday. It was bald, but rather lengthy, and clearly I could not put into it all that I would have liked to say. The debate today provides me with an opportunity to fill it out somewhat.
I am very conscious of the anxieties on both sides of the House about the future of the steel industry and of the impatience that some hon. Members feel about what they consider to be delay in coming to conclusions about its future. I stress that I am as keen as anyone in this House to avoid uncertainty and delay.
The industry in question is one which is not only beset with a certain number of problems, but one which worldwide has some of the biggest single decisions to make. It is an industry which permeates the whole range of industrial activity in every industrialised country. For that reason, it constitutes a situation of an exceptional kind which requires special treatment in many ways.
When one adds to the worldwide problems facing the industry the special ones confronting our own, the situation becomes even more complex. We have an industry which looks back on a very perturbed and troubled last generation of change and uncertainty, and one which today, as a result perhaps of those circumstances, consistently fails to achieve the level of investment which it needs to maintain its position and competitive standing in the world at large.
These factors undoubtedly cause one to take a very careful and deliberate look at the future of the industry and at the way in which, from our point of view, we can best ensure that that future will be compatible with what we need from it in terms not only of itself but of the generality of industry.
The background of the industry, with its shortfall of investment, has given rise

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in recent years to one which is not performing in profit terms as we should like and which is giving a great deal of disquiet in terms of the generation of the resources that it needs to ensure its own future. It is necessary, therefore, that the review which has been going on for some time and which will continue for some time to come should be thorough and able to enlist the confidence not only of those involved in the industry but of people in Parliament and outside it who have to make major decisions about its future.
Throughout this arduous period of study, the consistent objective has been to try to define the kind of form and pattern that the industry needs, not from the point of view of political, doctrinaire views, but from that of a healthy industry. This has been the substance of our discussions with the British Steel Corporation and with outside private industry. When we come to conclusions, as we have recently, they are conclusions which are necessary to ensure a sound and healthy industry for the future, and ones to which all concerned with its health can subscribe.
The position that we have just reached is that the second stage of our studies has been completed. I dealt with the first stage in my statement to the House on 27th April about bulk steel making activities. The second stage has concerned itself with two factors: on the one side, the short-term financial performance of the British Steel Corporation in the current financial year 1971–72; and, on the other, the longer-term structure of the industry, having taken the major decision related to bulk steel making activities, which I remind hon. Members are by far the biggest part of the industry, representing between 80 and 90 per cent. of the total activities of the Corporation.
The third stage, which will take much more time to complete, is concerned with the longer-term future of the industry, beyond the present decade. In saying that, I do not just mean the outturn of the industry only in this decade. The decisions that we shall take will affect the health of the industry to a large degree through to the end of the century.
A group comprised of people from Government Departments and the British Steel Corporation has been looking at the performance characteristics of the industry
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in the medium term. I announced before the Whitsun Recess that I had just received the first phase report on that subject. That report revealed some major problems which needed very careful consideration before I could declare to the House the conclusions which were reached therefrom, since they gave rise to some new situations.
First and foremost, we have to recognise that, after nearly breaking even in the financial year 1970–71–though it is difficult to be precise about this because of the exceptional depreciation provisions in that year—the present year 1971–72 will involve the Corporation in a loss of as much as £100 million after depreciation.
The causes of that big change in the fortunes of the Corporation in its annual performance are occasioned by two factors primarily. On the one side there has undoubtedly been a slackening of the market which is giving rise to forecasts for this year's operations which are not as satisfactory in market terms as had been hoped. On the other side it takes account of the fact that costs have risen steeply in the Corporation. Those costs derive not only from material and labour costs which have risen steeply, but also from the continuing high costs of keeping in operation plant which is not modern and which is not likely to give the best performance for the industry.
This level of loss is unlikely, in the light of the review, to be materially offset during the course of this financial year, either by substantial cost reductions, or by price increases at a level which would be compatible both with competitive price levels abroad, and with the fortunes of British industry generally. Hon. Members do not need reminding just how penetrating an effect steel price increases have on the whole export performance of British industry.
Looking to the future, the cost reductions will be most effectively dealt with through the progressive bringing into play of more modern plant. That implies a high level of investment, in contrast with a generation which, on the whole, has under-invested in the steel industry.
The inevitable consequence of the improvement of cost performance by the route of improved investment—and neither party has been able to doubt the

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impact of this—must inevitably fall upon redundancies and upon a lessening of the work force, with all that that implies, and these matters therefore have to be given the most careful thought. The industry must have investment if it is to stay in the hunt competitively and internationally, and the short-term review to which I have referred, and about which I made some comments on Monday, clearly points the way to that.
Despite the loss, we must proceed with a high level of investment in the industry. That high level of investment is concerned not only with the improvement of plant generally, but also with the introduction of major new plant of a modern character. I have therefore agreed to the investment for this year, 1971–72, being at the unprecedentedly high level of £225 million in 1970–71 values, and that is worth about £258 million in present-day values, a figure which exceeds by about £40 million, in 1970–71 values, the programme agreed last time.
The new programme which has been accepted and agreed allows the British Steel Corporation to proceed with all the existing projects that it had in its plan, including those at Llanwern and Ravenscraig. As I know that hon. Gentlemen opposite have been keenly concerned about this, may I tell the House that, as a result of the decisions taken, the control of the operation of that programme of investment is wholly in the hands of the Corporation. It will go through with that investment programme as it considers best, subject always to the normal communications that it has with the Department of Trade and Industry, whereby it lets the Department have foreknowledge of the major initiatives that it takes in major projects.
The combination of the loss to which I have referred, and the higher investment programme about which I have been speaking, obviously implies a very heavy commitment in additional borrowings, and I have had to agree to the Corporation's being able to extend its borrowing capacity during the current financial year by no less than £300 million. The result of that is that the ceiling allowed within the Iron and Steel Act, 1969 of £650 million in terms of borrowing capacity of the Corporation is needed, and an Order
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giving effect to that has been placed before the House for its consideration.
The combined effect of those factors also has clear implications for pricing problems and policy. The Corporation and the Government are anxious to see a return to profitability as early as possible, and in pursuit of that the Corporation has put before the Government proposals whereby, as against the past, where, broadly speaking, steel prices moved on an across-the-board basis, and from time to time there were great changes in the whole level of steel prices, the Corporation now wishes to move to a system under which it can change prices individually, having regard to the individual circumstances in the market of the product concerned. It seems that that is a sensible change, and it is one to which I am very much disposed to agree.
It will, in any case, still be subject to the provisions for consultation which exist informally with the Department, and also the provisions, provided by statute, relating to the position of the Iron and Steel Consumers Council and the references which that Council can make to me. I know that there has been a good deal of speculation in the Press about the position of pricing in the event of Britain's becoming a member of the Common Market. It is correct that under the Community's provisions the activities of the Consumers' Council will have to stop, and that the practice which is followed now, which is that as a result of any recommendation it may make to me I may have to intervene in matters of pricing by the Corporation, will equally cease. Those factors are correct. They are, however, the limits of the changes that are liable to take place as a result of membership.
Mr. John Morris: Will the right hon. Gentleman confirm that had we joined the Common Market he would not have been able to take the step that he took a few months ago in turning down the application by the B.S.C. to increase prices?
Mr. Davies: I should not have been in that position, although the B.S.C.'s position in relation to its own assessment of the pricing system would have been somewhat different, too, so it is not necessarily right to assume that one would have been dealing with a 14 per cent. proposal.
Mr. James Callaghan: The right hon. Gentleman has made a most important statement that will need to be examined very closely. When he said that that was the limit of the changes that would be necessary, was he referring only to pricing, or was he saying that no changes would be necessary in relation to investment policy and other important issues such as the location of the industry?
Mr. Davies: I was referring specifically to pricing then, and would limit my reference in that context to that matter only.
I think that this is not an appropriate moment to try to deal with the whole impact of Community regulations in relation to investment in this and other industries, which obviously have a profound effect. I think that, even on a Motion for the Adjournment, the House would like me to stick to what I was dealing with, and that was the pricing issue.
Mr. Brian O'Malley: We are told in The Guardian this morning that the Government have received a detailed memorandum from the E.E.C. about both steel and coal. Does not the right hon. Gentleman think that it would be helpful to the House if the Government were to make that memorandum available to hon. Member so that they could consider these matters in detail?
Mr. Davies: Of course, an enormous number of matters of detail concerning the relationship of this industry and other industries and many other elements of life in relation to the regulation requirements of the Community are being studied and are the subject of memoranda. It is not relevant to refer to this specifically in this debate.
The great difficulty that I have in the light of the short-term review of the industry is to do the thing that I was most anxious to do—to agree with the Chairman of the Board of the Corporation specific targets for the Corporation over the immediate future, particularly in the current year. Clearly, with a prospective loss at the level of which I have been speaking and with the prospective needs of the Corporation, that does not seem practicable.
However, I have agreed with the Corporation that these figures to which I have referred—£100 million of loss after depreciation and £300 million extra
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borrowing capacity in this financial year—will be regarded by the Corporation as the limits within which it is bound to operate, short of some major and absolutely unpredictable event. These will therefore be the targets which it has readily agreed, and which I will expect it, to operate within.
In conformity with what I told the House on 24th May, I have asked the Corporation to institute a system of quarterly reports on its performance in relation to these limits. This is not to try to add to the interventionary capacity of Government in the Corporation's affairs. On the contrary, it is a simplification of the reporting system which I hope will prove as useful to us as it will prove simplified to the Corporation.
I should like to turn now to the structural side of my statement on Monday and the structural problems with which we have been faced.
Mr. John Mendelson: Whether or not the right hon. Gentleman intends to refer to any probings which may have been received from the E.E.C, will he not say more about the report on the long-term investment and the requirements of the Corporation, which was submitted to him months ago?
Mr. Davies: The hon. Member may be reassured. I shall have something to say about that in due course.
On the structural position of the industry, the work which has been going on should be seen in the context of the statement which I made to the House on 27th April about the bulk steel-making activities of the Corporation. It is worth repeating that these activities constitute by far the greatest part of the Corporation's activities. I have quoted the figures of 80 to 90 per cent., which give a fair idea of the preponderant effect which they have.
At the time of that statement, I was pressed very strongly to define more closely what I meant by bulk steel-making activities. I refrained from doing so, largely because the Corporation's plants are not easily assessable within theoretical definitions. They are composite plants of various kinds and therefore require consideration virtually plant by plant to assess on which side of a particular line they lie. But the activity which has been

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going on has confirmed the broad allocation of this vast preponderance of the activities of the Corporation on the bulk steel-making side.
It is on that point that the Minister for Industry has, since then and before, been engaged in the most intensive discussions with the Corporation and private steel-making interests to try to define the remainder of the activity and how, in terms of the structure of the industry, it should best be seen in future.
Mr. Eddie Griffiths: So that the right hon. Gentleman should not be thought to be misleading the House, would he confirm that his statement refers to the capacity and not the profitability—that the 80 to 90 per cent. is capacity and not profitability?
Mr. Davies: I think that my statement would refer correctly both to capacity and to the investment involved. But the hon. Member is right: the proportions in regard to profitability are not the same.
I have referred to the very heavy work in which the Minister for Industry has been involved in trying, first of all, to determine with what other area he was dealing in the steel industry at large and what was the structure most likely to give a healthy future to the industry in discussions with the various interests concerned.
I sympathise with the anxieties of hon. Members to have precise knowledge of individual plants which concern them in their constituencies, but it is very difficult to meet their requirements at this stage. The work which has been going on has not been an attempt to identify a whole series of individual small plants or to decide on their future. It has been to study the guide lines from which the Corporation, the party primarily concerned, and then the private steel interests, can work in order to rationalise and improve the structure of the industry. Therefore, my hon. Friend has not been concerned with specific individual plants, one by one. He has been concerned with stating broad rules which will be observed in trying to bring about this improvement in structure.
Moreover, it is right to say that the work concerned in putting into effect
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the conclusions which have been reached is for the Corporation and not the Government. The Corporation is the party which will now discuss with a variety of private interests how to bring about this improvement.
Equally, I am sure that hon. Members will understand that I am in great difficulty in talking about certain projects when there are at this stage only the beginnings of discussions. Very delicate issues are involved. All I can say is that, as soon as it proves possible to deal with it on an individual plant basis, the Chairman of the Corporation is fully seized of the need to do so.
What are the conclusions reached by this study? The first, a very important one, is that the Corporation has recognised that there is a valid point in the view of private interests which are concerned with re-rolling of steel products in not being tied to their principal competitor for the supply of their principal raw material. That is obviously an uncomfortable position.
The B.S.C. therefore understands this point and is prepared to try to find means of accommodating the private interests concerned. It plans to do so in three ways. The first is with regard to a specific case, to negotiate about the future of Guest Keen and Nettlefolds, and the Brymbo Steel Works. The second is to examine with private interests in the steel industry how to set up one or two joint ventures in billet-making with private industry which will give the kind of assurances which are sought. The third, very important, way is to consult with private industry to ascertain what other steps can be taken to make certain that there is fair competition, particularly in high grade billets.
Sir Gerald Nabarro: My right hon. Friend is aware of what has happened in the coal industry, when important private producers of smokeles fuel, like Coalite or Rexco, have to get their raw materials from the Coal Board. In the event of there being no agreement between the private sector and the Corporation on very contentious issues, are there provisions for arbitration by the Minister, and would he then come to the House with an appropriate instrument for approval of Parliament?
Mr. Davies: At this stage I am seeking to proceed by consent, which I believe is the appropriate way to proceed. There is consent, broadly speaking, on all sides to achieve these purposes. If there should prove to be great difficulty, then I would, of course, have to reserve any action I might have to take at that time.
Mr. O'Malley Mr. O'Malley rose——
Mr. Davies: Time is advancing and many hon. Members are anxious to speak in this debate. I hope the hon. Gentleman will forgive me for not giving way.
In connection with special steels, it has been well known for a long time that anomalies were left by nationalisation. It is now the firm determination of the British Steel Corporation and the private interests concerned to try to resolve those anomalies. A joint statement has been made on this subject by the Corporation and Firth Brown, and this, with further actions which may be contemplated in the sphere of special steels, will help to resolve these anomalies.
A not dissimilar situation exists in connection with wire-making, in which field the industry is fragmented between the public and private sectors. It does not feel itself of a stature and ability to compete internationally as it would wish. Here again, it is the Corporation's intention to seek a rationalisation of the private sector, and this may well give rise to joint operations.
In constructional engineering, in which the Corporation has an important stake—in derivative chemicals; essentially those associated other than directly and physically with iron and steel plants—it is proposed that the Corporation should set up Companies Act companies with a view to attracting private capital into them, that private capital going in by way of direct participation or by mergers which the Corporation would negotiate. Thus, for billets or special steels and constructional engineering chemicals, there will be individual companies set up into which private capital can flow by one means or another.
It is also the intention of the Corporation to set up a holding company, incorporated under the Companies Act, to group together all these joint interests of
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the Corporation, which itself will be prepared to entertain the introduction of private capital.
By all these means it is hoped—it is a firm purpose which is well understood by the Corporation and the private sector concerned—that there will be a determined effort to reduce as far as possible the very great call of the Corporation on public funds for its finance.
There are certain peripherals about which the Corporation is prepared to entertain proposals for sale at a fair price. These include bright bar, stamping, tool and tool-steel making, small engineering works, industrialised housing and some brick-making.
I take this opportunity to say that everything I have been saying about the restructuring of the industry has the full support of both the Corporation and the private interests involved. I return to what I said earlier; that the intention has been, and I believe is being realised, to achieve a structure in the industry which will stand the test of time, which is an industrially sensible structure and which will give the Corporation and the industry at large an opportunity of progressing without feeling that it is constrained from doing so in an effective way.
Mr. Peter Hardy: Is the right hon. Gentleman aware that when any part of the Corporation's undertaking is transferred, either to a joint company or entirely to private enterprise, immediately or soon after the transfer there may be rationalisation and redundancy? The men who are at present working for the Corporation have considerable benefits if they are declared redundant. Will they lose those benefits upon transfer, or will the Secretary of State ensure that they receive firm guarantees that their position will be secured?
Mr. Davies: The Chairman of the Corporation is absolutely aware of the problem which the hon. Gentleman raises and will be anxious to ensure that those interests are looked after. I would find it difficult to give an absolute guarantee on his account. [Interruption.] It is his problem, but he is well advised about it and will certainly be concerned with it.
I will refer only briefly to the additional nominations I have made to the Board of the Corporation. I was concerned to see in one Press report these

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gentlemen referred to as "watchdogs". I regard them as very valuable proponents of good advice to the steel industry. Sir Matthew Stevenson has a remarkable background in this whole field and has deep knowledge of the relationship between the industry and the Government. Sir David Barran and Mr. Ralph Bateman have profound experience in large-scale organisations which are dependent on external sources for their raw material supplies. They are not only very much welcomed by me but by the Chairman of the Corporation.
Mr. Eric S. Heffer: The right hon. Gentleman will be aware that Sir Matthew Stevenson is also Deputy Chairman of the newly constituted Mersey Docks and Harbour Board. How much time will he be able to give to the Mersey Docks and the interests of the Mersey people as well as to the Steel Board?
Mr. Davies: I am sure that Sir Matthew and the other gentlemen to whom I have referred will find it quite possible to be of great positive value to the Corporation in any circumstances—[Interruption.]—and the precise amount of time they devote to these duties is clearly a matter for them and the Corporation.
Having dealt with these rather shorter-term issues, the time has come for us to lift our eyes from the immediate foreground and look at the broader horizon beyond. We must look at the shape of worldwide industry in steel in the years to come, in the next decade or two, and see what part the British industry has to play in it.
That part must be assessed in regard to three big criteria. The first is the requirements of a great industrial country like ours. The second is the amount of resources which a country like ours can put in to the sustaining of an industry of this kind. The third is the need to have due regard to the fortunate access that we have to a highly experienced and competent body of men and women who are equated with the industry.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. This might be an opportune moment for me to comment on the length of speeches. There is talk of placing compulsory limits on
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hon. Members speeches, but I am at present against that idea. I believe that the purpose can be achieved by voluntary self-discipline. Over 20 hon. Members, in addition to Front Bench speakers, have indicated to me their desire to speak. I may be able to call all of them if hon. Members impose reasonable self-discipline.
Mr. Ted Leadbitter: On a point of order, Mr. Speaker. May I seek your guidance for the benefit of the House. The Secretary of State gave a firm undertaking that he would comment on the long-term investment policy that will apply to the steel industry. Are we to understand that his final few words were meant to fulfil that undertaking? If not, may I ask you, Mr. Speaker, to ask him to carry out his undertaking?
Mr. Speaker: That is not a point of order for me.
Sir G. Nabarro: On a point of order, Mr. Speaker. Further to your appeal for short speeches, may I ask you to confirm that your strictures apply to the three forthcoming Front Bench speeches and to Privy Councillors? In other words, may we be assured that we shall be treated on terms of parity following your appeal for brevity?
Mr. Speaker: I am not sure that the principle of strict parity would assist the hon. Member. Mr. Michael Foot.
4.9 p.m.
Mr. Michael Foot: It seems——
Sir G. Nabarro: Only 15 minutes from you, Michael!
Mr. Foot: It seems, Mr. Speaker, that your words may have the effect of curtailing my remarks without my even opening my mouth. Perhaps I might be permitted to say, however, that in my judgment, which may be a very peculiar one, longer speeches from back benchers are sometimes the only way in which back benchers can answer what is said from the Front Benches, and that is one of the reasons why I as a past back bencher, and possibly as a future back bencher——
Sir G. Nabarro: Hear, hear.
Mr. Foot:—think it might well be that we should be very careful about curtailing the opportunity of back benchers to exercise their rights as those on the Front Benches do also.
When I commented on the Secretary of State's statement on Monday he may have thought I was a little churlish in my response to some of his proposals, and I should like to assure him at the very start that I am certainly not actuated by any personal animosity against him. It is hardly necessary for me to say it, but I do say it. I think he is just about the best of the bunch. I see I have almost brought a blush to his cheek. If he is to stick with that crowd he will have to cultivate a brass face like the rest of them. I will assist him, if I may, in the course of my remarks in the promotion of his political carer. Again I assure him that my remarks on Monday were not actuated in any way by a sense of animosity.
If I was churlish, and I should like to rectify that impression, it was in not referring at any length at all—and I am glad to have the opportunity of doing so now—to those parts of the right hon. Gentleman's statement which referred to the Corporation's immediate investment programme. We from the steel constituencies are extremely glad to hear that the Government have agreed that the industry's present investment programmes shall go forward in every particular, as I understand the right hon. Gentleman's statement, along the lines which the Corporation put forward some months ago.
I congratulate the Government on having reached that situation. In other words, the Government now seek to congratulate themselves, and to ask for our approval, because they have reprieved the steel industry and the firms concerned from the threat which the Government themselves made some months ago. That threat is now withdrawn, and I am glad that it is. If I may say so to the right hon. Gentleman, the threat in this respect reminds me of what Talleyrand said of Madame de Stael—although I admit that the likeness is not immediately apparent. Talleyrand said:
"She greatly enjoys rescuing people she has tried to drown the night before."
This is like the right hon. Gentleman: he pats himself on the back because he
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has agreed to investment programmes which he had previously held up.
None the less we are extremely glad that the whole immediate investment programme in general and in particular has been approved by the Government after the deep studies they have made of the whole subject. I hope the right hon. Gentleman will be the first to agree that that is creditable to the Corporation, in the sense that the deep study the Government had conducted has proved the original case which the Corporation had put forward and which many of us had supported many months ago.
But I am sure the right hon. Gentleman, with his expert business knowledge which I cannot share at all, will agree that the delay is costly. In Ebbw Vale we have been waiting for the go-ahead for a new pickle line. We were ready to go ahead with it six months ago, perhaps nine months ago. Now, we shall get the go-ahead within a few hours as a result of the Government statement. But the extra cost of that proposition having been held up for a considerable number of months is something which the Government should have taken into account when they embarked on the whole exercise, and, of course, the amounts that have been involved in Ebbw Vale can be multiplied greatly in different parts of the country.
So when right hon. Gentlemen tot up the figures and come in a year's time, or six months' time, and instruct us how the Corporation has conducted its financial affairs, they should take into account the fact that some millions of pounds should be debited to the action of the Government themselves in holding up for this period a considerable number of these investment programmes.
I was glad to hear the right hon. Gentleman's statement—which was something I asked for in our last debate, when he said that he would try to give it to me: he has given it quite clearly today, and I am glad to hear it—that the operations of the Joint Steering Group, this constitutional abortion of civil servants and people from the Steel Board being compelled to meet under the aegis of the Government in some vague way to find out what is happening to the industry, is to come to an end in respect of the immediate programme.

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The group was a proposition which, as I said earlier, is in my opinion of dubious constitutional propriety, but certainly from a Government which have advocated the advantages of disengagement of Government from industry—and if there are advantages from disengagement they are that responsibilities should not be blurred—everyone should know the responsibility of the Corporation, the Government and the Civil Service. But the joint steering group process is one in which those responsibilities are so blurred that no one can fix them exactly. At any rate, we are glad to hear that it is entirely out of the way now—dead and buried: Joint Steering Group No. 1, dead and buried.
But what about Joint Steering Group No. 2? That is still in operation, or so I understand, and is to continue in operation until the Government have completed the study of the long-term programme. The right hon. Gentleman said in his peroration that he would tell us about the long-term programme, and if the study is as brief as was his peroration Joint Steering Group No. 2 ought to come to an end pretty soon. [Interruption.] Someone says that it finished yesterday.
I say quite seriously that in the interests of the steel industry as a whole I trust that the Secretary of State will use all his powers to bring this method of conducting the industry, or Government intervention in the steel industry, to an end as swiftly as possible. I believe that, whatever may be our political views on the steel industry on one side or the other, this half-and-half affair, with a civil servant presiding over a committee composed partly of people from a nationalised industry, is a method of conducting day-to-day operations which the right hon. Gentleman must surely condemn. I hope that it will be brought to an end as swiftly as possible.
I come to another part of the right hon. Gentleman's statement, over which he skated very skilfully. Again, I do not blame him—I am today looking after his interests, as he knows. He spoke of prices policy. I am very glad that the right hon. Gentleman has made his statement about the desirability of the Corporation having restored to it the right
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to decide its prices. That is not because I am against, in certain circumstances, Governments intervening in the fixing of prices. If done on a fair basis over a wide range of industry it is a very good idea, in certain circumstances.
What I am thoroughly opposed to is the erratic, arbitrary intervention of price controls by a Government against particular industries, and particular industries in the public sector when all private sector industries are left out of account. So I was glad to hear the Secretary of State say that price choice by the Corporation is to be restored. My simple question is: when? Is it today? Does it start now? Will the Corporation be empowered to make its own decisions on prices, subject to the provisions that prevail under the Iron and Steel Act? I hope that when the Minister comes to reply he will give us an absolutely clear assurance on that subject.
I do not want to trespass into matters which I know are of extreme delicacy. I do not want to cause difficulty in this respect, because it was in this area of price control over steel that the Prime Minister scored his great victory. Whenever we have asked the Prime Minister about price control and what he promised on 16th June, this was the one example he could give. All the rest have been defeats. This was the Prime Minister's single victory in price control. This is the sole Austerlitz on the Arc de Triomphe of our new Napoleon. The rest are all Trafalgars and Waterloos.
So, of course, it is a delicate matter for the Minister to come along and say that the Prime Minister's policy has gone down the drain; that it has ended. He will never be able to use his terrible swift sword of 16th June with all that flourish, because it has gone.
I would give this advice to the right hon. Gentleman—I said that I would help him. I have never been a member of a Government—no doubt that moment of national salvation is still to come. But I would say to him that it is a good rule when a Prime Minister is making a fool of himself not to be the first to point it out, or the last. Try to get lost somewhere in the raucous middle. We all know that he tried his best to stop the Prime Minister doing it but was defeated. We know that he does not want to refer

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to the matter too awkwardly again. I promise that I will never refer to it again as long as the Government give to the Steel Corporation the same freedom in fixing its prices as is exercised, for example, by Shell. Sir David Barran might be able to bring some interesting information on this to the Corporation. He may be able to explain to them how Shell managed to push up oil prices without Government intervention. I hope that we can dispose of that question, but it depends on the assurance we get from the Government in the interests of the steel industry.
I now come to the hiving-off, or structuring of the industry as the right hon. Gentleman prefers to call it. First I should like to deal with the matter from the point of view of the trade unions. The right hon. Gentleman spoke as if all the responsibility rested with the Steel Corporation. It is easy for him to say that, but it is not fair. The right hon. Gentleman gave me an undertaking about structure on 9th November, 1970. I put it to him that people in the steel industry were concerned about stories which were going about to the effect that the industry would be carved up. I asked him for this undertaking:
"Will he give a clear guarantee that before bringing to the House any proposals for changing the structure of the industry he will have consultations with the workers in the industry? …"
His reply was:
"I will, of course, have discussions with the trade unions involved before any attempt is made to finalise arrangements to the point of bringing them to the House or elsewhere."—[OFFICIAL REPORT, 9th November, 1970: Vol. 806, c. 27.]
On Monday of this week, prior to the hon. Gentleman's statement, a meeting took place with the Minister. That meeting, I understand, might have taken place two or three days before, but whether or not it did would not have done much good because the Minister said to the representatives of the trade union that he could not tell them what would be in the statement. The pledge has not been carried out. I do not merely say that. I took the precaution this morning of asking the representatives of the Steel Committee of the T.U.C. whether they thought that the pledge had been carried out. They said the opposite, that they felt that the promise had been broken. That is seri-
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ous, because the trade unions have an important part to play if any of these structural changes are to be carried through.
These changes in structure ought to be acceptable to the people who work in the industry as well as to those who hope to own them in the future. As far as I can see, very little effort has been made. Today we have crowds of workers in the House from Sheffield. They have come to lobby Members of Parliament, as is their right, because of the statement the right hon. Gentleman made on Monday. If the pledge had been carried out their representatives would have had a chance of discussing some of these matters before. Discussions could have taken place with the unions. It is no good the Minister saying, "Ah, we had to make the announcement here". The point of having consultations was to take some account of their views and not to face them with a fait accompli and to say, "This is what we are determined to do and it has to be pushed through".
The right hon. Gentleman is in danger of damaging the most precious asset which the Corporation can have, particularly when trying to carry out a major development programme, and that is the readiness of the unions to co-operate and to combine in the reduction of manpower in the industry which will be required to make that development programme successful. That is extremely difficult to secure, and these discussions could have helped. They should have taken place in Sheffield and all the other places long before the right hon. Gentleman's announcement.
I come to the question of the attitude of the Steel Corporation towards the structural proposals made by the right hon. Gentleman. I thought he was awkward on this. Very naturally, he says that these are not only the Government's proposals, and we know that no one will accept them on those grounds, these are the proposals of the Steel Corporation. The right hon. Gentleman usually goes into battle behind Lord Melchett's shield, and he is wise to do so. Let us have a look at this. None of us on this side of the House who are interested in the steel industry or come from steel constituencies have ever said that the demarcation line drawn in the nationalisation Act was perfect and that

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it should never be looked at again, should never be revised or rationalised, whatever may be the phrase of industrial logic used by the right hon. Gentleman.
The right hon. Gentleman is aware that in the days of the Labour Government the Corporation was drawing up certain plans to put to the Government. It had only just come forward with them a week or two before the election, so there had not been any question of whether the Labour Government would accept them in that form. Discussions, including discussions with the trade unions, had been initiated. The Labour Government never said to the Corporation, "You must leave the frontiers exactly as they are, we are not in favour of alterations".
There is all the difference in the world between saying to the Corporation or to the private steel firms, "Here, you can put forward proposals for altering the arrangements and the divisions between us, you can put forward whatever course you wish," and the kind of duress which has been exerted against the Corporation over these past months. In case the right hon. Gentleman should say that there has not been duress, I say in advance that he knows full well that there were discussions first about whether the Corporation should be split in two or split in three. There were discussions then about hiving off the whole of the chemical division or the whole of the constructional engineering division.
Sir G. Nabarro: Hear, hear.
Mr. Foot: I know that some hon. Gentlemen advocated these measures.
Then there were discussions about dividing up the industry on a much bigger basis altogether. So the Corporation is somewhat relieved that the right hon. Gentleman's proposals have shrunk to this extent. Of course the Corporation is relieved. If a doctor says to a patient, "You have malignant cancer and it will have to be cut out" and then tells the patient three or four months later, "It is all right. It is only a severe attack of inflamation of the bowels ", of course the patient is relieved. The Corporation is relieved in this situation. The Corporation co-operates with the doctor in this situation until perhaps it can get a new doctor. That is the best solution to
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the problem. The right hon. Gentleman knows that that is the position.
Up to a fortnight or so ago the Government were trying to twist the Corporation's arm to such a degree that it should hive off the Rotherham works group. That was under discussion. So there have been discussions of a much wider character. I am very glad that the Government have been forced by the facts of the situation and by pressures from other quarters, also by the way in which Lord Melchett has stated his case against the major measures which the right hon. Gentleman and his friends were suggesting, proposing or advocating, to reduce the extent of their proposals.
I am glad that the big carve-up has been stopped, but it does not mean that we have to approve the small carve-up, particularly as we are not prepared to accept the right hon. Gentleman's statement that the Government have been actuated solely by the attitude of industrial logic and with a desire to make an industrial solution and have not been influenced by political considerations.
I have here the Report of the Steel Industry Management Association, whose representatives saw the Minister for Industry on 4th May. The association is not a Left-wing organisation, as all my hon. Friends know. Representatives of the association asked the Minister for Industry what he was up to. They made very severe protests about everything they had heard about the Government's policy for the steel industry. These are people who have worked in the industry all their lives. Incidentally, they paid some tribute to the way in which the Corporation has reorganised the industry in the past two or three years.
In the discussions the representatives of the Steel Industry Management Association tried to extract from the Minister for Industry a statement about why he was doing it. The hon. Gentleman did not say, "I am concerned solely about industrial logic" —whatever that may be —"and about how we draw the lines." The hon. Gentleman said that
"the Government was concerned about the growing proportion of the total economy, not simply of the steel industry, within the public sector, and considered that a reduction in the size of the public sector was required in order to redress the balance."
That is not just demarcation lines in the steel industry. That is the political

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gospel of the Minister for Industry. If the Secretary of State would like to know about the others in his Department, I can enlighten him, particularly in view of his manner of dealing with the question of the long-term programme. I shall come to that in a few moments, even if the right hon. Gentleman failed to come to the question of the long-term programme, because I think that it is much the most important part of the whole question.
What we are concerned about is: who is to decide the question of the long-term programme? The Steel Corporation has put forward a good development plan. I do not say that the plan is perfect in every particular. I do not say that it does not have to be looked at. I think it will have to be expanded, if anything. But it is a good programme, and it holds the field.
There are some hon. Members opposite who are not so much interested in that. They may be interested in reducing the size of the public sector, as is the Minister for Industry and as is the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). We remember what has happened in some of our previous steel debates. On 12th June, 1969, the hon. Member for Cirencester and Tewkesbury denounced the whole steel industry because of its size—like these people in the Common Market, and I will come to that question in a moment. The hon. Gentleman said:
"It is much more sensible to make an investment in a bowling alley than in a steel mill if the investment in the bowling alley will yield the highest return."—[Official Report,Standing Committee A. 12th June, 1969; c. 157.]
I am concerned about whether these bowling alley boys will have anything to do with us in the steel programme, because they are not to be trusted. I once called them "popinjays in office". I think that "bowling alley boys" is an even better name. So far from leaving them in charge of the steel industry, I would not leave them in charge of a bowling alley if I had my way.
However, this is a serious matter. The two Ministers in the Department are fervent believers in the idea that there should not be a greatly expanded steel industry, or at any rate that the steel industry must be subjected to even more severe tests than most other industries, or at any rate
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that the expansion of the industry must not be allowed to go ahead without the same kind of consideration for the return on capital that is given to bowling alleys, bingo halls and all the rest.
That is one of the reasons why we are not content that the right hon. Gentleman and his friends should settle this matter. We want to ensure that the expansion of the industry is undertaken in the interests of a greatly expanded industry. We believe that the plan of raising the programme for the production of steel in Britain to 40 million tons and more is a good one and that it should have Government backing. The sooner the Government make up their mind to give that backing to the Corporation the better.
I know that there are other difficulties that the right hon. Gentleman has to face, difficulties that arise from the prospect of entry into the Common Market. The right hon. Gentleman, almost for the first time in this Parliament—indeed, it was the first time from any Minister—has admitted today that entry by Britain into the European Economic Community would have—I have his exact words—profound effects—enormous effects—on the steel industry and our other nationalised industries.
That is quite true, and I think that we are entitled to try to discover what those effects are. We do not get much assistance from the Government. I quote from the Financial Times of 22nd June, following the last negotiations on steel and coal with the representatives of the Community:
"Speedy agreement was reached between Mr. Rippon and the Six yesterday on two' easy' issues of the entry negotiations—U.K. membership of the European Coal and Steel Community and British participation in the Common Market institutions. The agreement on the E.C.S.C. was regarded as extremely satisfactory by British officials in Luxembourg. Only minor details now remain to be settled by the Ministers' deputies.
"The agreement means that the U.K. will be allowed to maintain its existing controls on scrap metal exports for two years after community membership if necessary (Britain had originally asked for five years)."
I can understand that the negotiations are eased if having asked for five years one agrees to only two years: of course it speeds up the negotiations.
All these matters should have been explained to us. I suppose the abolition of the controls on scrap metal exports will

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cost the Corporation about £25 million a year, but what is that when the Government have taken about £300 million from the Corporation in investment grants and have done other injury to the abolition of controls on the export of Corporation? I do not suppose the Corporation worries too much about the scrap, although such export has been of great benefit to the industry.
There are many other factors to be taken into account.
I know that the right hon. Gentleman again may try to go into battle bravely behind Lord Melchett's shield and say, "It is no good quarrelling with me about whether we should go into the European Economic Community or what the effects will be on the steel industry, because several people at the Corporation are in favour of this".
That may be. They are free men and are entitled to make up their minds like anybody else. Perhaps they feel— "For the Corporation better the fire of the Brussels bureaucrats than the frying pan of Whitehall", particularly when they have got this lot of Ministers in charge. I can understand their feelings, although I think it is a great mistake.
The matter must be examined much more carefully than that. As we have seen from The Guardian today, the document has been published which was submitted, if this document is accurate, at the nineteenth meeting of the conference at deputy level with the United Kingdom on 5th May.
Coincidentally, on almost exactly the same day as the Minister for Industry was telling representatives of the managers of the industry that he thought that it should be cut in size because he wanted to see the public sector reduced, this document was being presented to the British negotiators in Brussels outlining a whole series of changes which would have to come in the way we conduct our affairs in the steel industry if we went into the Common Market.
I am opposed to Britain's entry into the Common Market, but, whether one is opposed or not, all these documents should have been presented to the House. The right hon. Gentleman may say that it will all go in the White Paper. Very well. If that is his answer, let us have
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this document printed in the White Paper, and let us have in the White Paper the Government's answers on all the questions about prices, investment and location. These are matters of great concern to people in the steel areas.
One of the major decisions of Governments in the past, Tory as well as Labour, has been to influence or exercise power eventually over investment in such a major industry as steel. They have been right to do that. I do not say that their decisions have always been right, but it is right that they should have the power to do so, because the location of steel plants affects the life of the whole community. This is certainly true in Wales.
How will our entry into the European Community affect, for example, the building a a new steel works in Scotland, in Wales, in the North-East or the Northwest—some of the areas most afflicted by the savage unemployment of today? If our entry into the Community would mean either that we did not build it at all, which might be enforceable under the rules, or that we had to build it at a place convenient to the Community's ideas, that would be a very serious matter.
The right hon. Gentleman must answer all these questions in the White Paper. Of course, if the Government care to answer them tonight, we shall not mind, but let them tell us either now or in the White Paper. Did they ask the Coal and Steel Community to give an absolute guarantee that there would be no interference with the development plan of the Steel Corporation to build up steel production in this country over the next decade to 40 million tons or more? Did the Government ask the question, and, if they did, what was the answer? We want that in the White Paper.
To take a specific example, under the rules of the Community not merely can control of some sort be exercised over the general expansion of the industry but there is power to influence the position of individual products if it is considered that those products have a dominant position in certain parts of the Common Market. We have a good example of that in British tinplate production. The British Steel Corporation produces 100 per cent. of our tinplate requirements. If we want to produce more tinplate in this

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country, can the Coal and Steel Community interfere if it wishes?
Sir G. Nabarro: Of course it can.
Mr. Foot: Very well. Let that be put in the White Paper. This is of great interest to Ebbw Vale, because the Steel Corporation has given an undertaking under its development plan that we shall have a new tinplate complex in Ebbw Vale. The hon. Gentleman tells us that, if we go into the Community, we may not have it. So people in Ebbw Vale are closely interested in these issues—and not merely people in Ebbw Vale; I instance them only as an example. Everybody in all steel constituencies will in these circumstances have to consider the situation, and, if they are to consider it properly, they must have all the facts in the White Paper, not just a few selected facts.
After this debate, therefore, the right hon. Gentleman should, as one of his major responsibilities, approach whoever is preparing the White Paper and demand that a full account of the negotiations which have taken place with the Community be disclosed and discussed. What requests did the Government make to the Coal and Steel Community? What have been the answers? What are their estimates, and what do they think will be the effect on the Steel Corporation's development plan, which some of the Secretary of State's hon. Friends have been trying to reduce?
What requests have been made to us, and what has been the response? What have been the demands of the Community upon us? What have we agreed? We know that we have already agreed to abolish our own control over the export of scrap, but what about all the other concessions which have been made? They must be listed.
All these matters should have been published before the champagne was drunk—perhaps while they were still on on the cognac. There are some people in this country who say—I do not—that the British people have no right to pronounce upon these matters. In my view, the British people have every right to do so, and they have every right to have all the facts at their disposal. In this debate, we are dealing with a Government who have hobbled and restrained the Steel Corporation during all these months, and
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we have the right to full publication of all the facts.
Sir G. Nabarro: Get on with it.
Mr. Foot: I was about to finish, but the hon. Member for Worcestershire, South (Sir G. Nabarro) has reminded me of another point to which I should direct attention. It was with the hon. Gentleman's assistance that, during the Committee stage of the Coal Industry Bill we extracted from the Government an undertaking that they would submit to the House of Commons any individual proposal for hiving off a part of that industry. If that is proper for the coal industry, it is proper for steel, and I am grateful to the hon. Member for Worcestershire, South for having ensured that I did not overlook the point.
We are glad that the investment programmes are to go ahead in precisely the manner we urged they should many months ago. We are glad that the Government have abandoned the Prime Minister's erratic and arbitrary method of interfering with steel prices, when he is not interfering with any other prices. We are shocked—if anything done by this Government can shock us now—by the Government's scandalous attempt to proceed with their plans for changes in the structure without carrying out their pledge to the unions. They should have the nerve to come out from behind the shield provided for them by the British Steel Corporation and try to defend themselves. They should, above all, put in their place the bowling-alley boys who would prefer to see Britain escape from its responsibilities towards a major industry.
In short, when the time comes tonight, in voting against the Government we shall be voting for a greatly enlarged and expanded steel production, which we believe is an essential pillar of a healthy British economy.
4.49 p.m.
Mr. Patrick McNair-Wilson: The hon. Member for Ebbw Vale (Mr. Michael Foot) should realise that the mere production of steel, unless one can sell it at the right price, will be of little use to people in the industry.
This debate has been generated by the statement of my right hon. Friend the Secretary of State, that statement being, in essence, part of a trilogy of statements

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on the industry. Those hon. and right hon. Members opposite who have criticised my right hon. Friend for not dealing with the industry's long-term investment plans should have read more carefully his statement on 28th June, in which he said:
"In due course, I look forward to completing this series of announcements when the longer-term plans for the industry have been appraised and agreed."—[Official Report,28th June, 1971; Vol. 820, c. 33.]
I am happy to wait for that third episode in this important saga when my right hon. Friend and his colleagues have had an opportunity of examining those long-term plans in more detail.
One very satisfactory aspect of the statement, in addition to its being well received by hon. Members on this side, was that it is clear that those Labour critics who suggested that it was a doctrinaire statement, made against the wishes of the Corporation, will, having heard the remarks of the Corporation's Chairman, realise that it is very much in line with the Corporation's thinking and is supported by it. It is not a doctrinaire document at all. I regard it as an important piece of common sense.
I should like first to address myself to that part of the statement which deals with the restructuring of the industry. My right hon. Friend has made it clear that the industry may well look at those areas which are not directly concerned with steel making and examine their future in a critical light. This thrusts into sharp relief the problem of nationalised industries and of the mix between private and public concerns.
There used to be a fashionable philosophy in business circles in favour of the conglomerate business. I believe that it is essential for the nationalised industries to be agglomerate businesses, dealing with those matters directly related to the purpose for which they were statutorily set up. The steel industry was not set up to make cement, bricks or chemicals but should devote its attention to those matters related to steel production and steel sales.
Those who make the most money out of steel are those who sell pins and needles, because more money is paid for a ton of pins and needles than for a ton of billet. The more air a producer can get around his product, the more money
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he is likely to make. Therefore, I am more than happy to see a nationalised concern getting down into the market, but the market for which it has been given a responsibility. Since there are about £60 million-worth of businesses owned by the Corporation but in no way related to steel, it was high time that a statement such as my right hon. Friend's was made.
I am delighted that the statement refers to flexibility in pricing. It has always seemed to me to be wrong that we should expect a nationalised industry to compete effectively with private industry if we are arbitrarily to fix the prices at which it may sell. It is wise that those prices should be the market prices applying at the time. I hope that the flexibility now being introduced will make certain that we do not again fall into the situation we had last year, when there was a shortage of structural steel and yet we could do nothing about changing our prices to take advantage of the market. I hope that with flexibility there will be an opportunity for the Corporation to reap its reward when that commercial opportunity occurs.
The statement refers to the problems of the billet-makers and the re-rollers, which are major problems. I have here the figures for 1969–70. The 1969–70 sales of semi-finished products which are essentially the sort of products we are talking about, represented 3·8 million tons out of a total of home sales by the B.S.C. of 16·29 million tons. That means that 22 per cent. of all the Corporation's home sales were of semi-finished products. Of these, about 40 per cent. went to one customer, which I understand was also a large potential importer. Such a customer must clearly be in a very strong position to affect the prices of billets. For that reason I am delighted that the statement tells us that it has been agreed that two new jointly-owned companies should be set up.
The investment figures my right hon. Friend has announced are encouraging but, as I said in an earlier debate, they are very small compared with the size of the problem that the Corporation must ultimately face. First, some of the money must go to the replacement of plant. There are 15 works in the country with out-of-date, open-hearth plant. I do not wish to pray in aid the problems of

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those at the Irlam Steelworks, but within the past two days I was circulated with a document supplied by them, and it sets out in sharp relief the very point I am making. It states:
"The Irlam blast furnaces were originally operating in Germany and were re-erected at Irlam in the mid-1950s as post-war reparations. They are small and old and cannot produce iron economically. … The No. 1 steel plant with its small 90-ton furnaces was built in the 1920s and, though modernised where possible in recent years, cannot compete against large modern furnaces and particularly against basic oxygen processes."
That is common knowledge to all of us who know the industry reasonably well. Those are the problems faced by those who wish to close the works. With that background of small, old plant, much of which came from Germany as war reparations, we cannot hope to compete against the modern plants of the world.
I am advised that there are now about 10 new works overseas with a capacity of over 7 million tons a year. By 1980 there will be another 15. The world is moving towards the bigger plant, but in this country we have nothing bigger than a 3-million ton plant. Much of the money that my right hon. Friend mentioned in his statement will be taken up merely in refurbishing existing equipment, making certain that new converters and the like are put in to replace outdated equipment. But that does not deal with the bigger, long-term problem. Overseas producers are already talking about plant of 16 million tons to 20 million tons a year capacity, with great deep-water terminals to which they can bring their ore cheaply and conveniently, and where the process can be carried out with an economy of scale unlike anything we have ever dreamt of. In that situation, very great costs are involved. A 10-million tons a year plant will cost about £1,000 million, so we can see how, with respect to my right hon. Friend, the figures he has given will go only a very small way. We must face the fact that in the future we shall need a great deal of money.
Therefore, I congratulate my right hon. Friend on his belief that by divesting the Corporation of some of its peripheral activities, which are not directly related to its main purpose—and the Corporation has already sold off bits and pieces which it did not want—we are at least helping to provide money for that essential
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investment. We must make sure that the whole weight of the new investment does not fall on the back of the taxpayer. From whatever source it can be found, we must welcome that investment money.
My right hon. Friend told us something about the profitability or otherwise of the Corporation. He used the word "depreciation" when referring to the £1,000 million. I was encouraged by the fact that he said that the industry was now showing signs of breaking even. I believe that the Corporation has a great future. I do not think that there is anything in the future which need cause concern to it. Like so many of the great traditional industries—mining and shipbuilding, for example—the steel industry has been under-capitalised in the past. Great changes have come about—for example, the blowing of oxygen converters at Linz in the 1940s and a new way of winning coal at the face without a man with a pick. All these things cost money. I think that we have now begun to take the right steps to ensuring that the steel industry has the money it requires. I believe that, if the industry requires anything at the moment from Parliament, it is that we should leave it at peace and not constantly use it as a political football. Leave it free of political pressure and it will provide the performance we need.
5.0 p.m.
Mr. Frederick Lee: I am grateful to the hon. Member for New Forest (Mr. Patrick McNair-Wilson) for his reference to the document produced by the Irlam Action Committee. As he said, it outlines the kind of conditions in which the men at Irlam have to work. It is disgraceful to expect any body of men to be able to compete with modern plant in conditions of that sort. I agree with a great deal of what he said about the need for new capital and about the way in which the industry was starved for so many years in the past and the need to catch up.
I congratulate the Secretary of State on his decision on the capital programme of the British Steel Corporation. As Minister of Power, I made a deep study of the steel industry with the aid of my right hon. Friend the Member for Aberavon (Mr. John Morris), who was then Parliamentary Secretary. We came up

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with the White Paper of 1965 and, indeed, with legislation. We were ready to embark upon it but other—I will not say wiser—counsels in the. Cabinet prevailed. My colleagues thought that a majority of two was not enough. I did not agree, but the legislation was deferred until after the 1966 election.
My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) asked about capacity. I hope that the Secretary of State will tell us what the Government are aiming at. We still think in terms of 40 million tons. The possibility of achieving such a target, of using a big greenfield site, of building a 10 million tonner, and so forth, all ultimately depend upon what we are aiming at in capacity. While we are happy to know the investment programme for next year, we need to know what the Government are aiming at.
There is great irony in the present policy of introducing private capital. In my day, the problem of obsolete plant was brought about mainly because the private owners either would not or could not invest enough in modern equipment. I recall the argument about the plant in South Wales—the Spencer works, as it is now—which was deferred for a long time by the private steel owners. Consequently, our balance of payments was put in great difficulties because of the amount of sheet we had to import. It is strange that we are now expecting private capital to redress the balance. I asked the right hon. Gentleman on Monday how the Corporation would become profitable from its losses of £100 million by selling off the profitable sections of its enterprise. We cannot expect private enterprise to want to invest in loss makers.
I turn now to the question of the Irlam works. Since 21st April, a black cloud has hung over Irlam. I was hoping that, either in his statement on Monday or in his speech today, the right hon. Gentleman would say something to eliminate some of that gloom. He told us that as yet the Corporation is not in a position to itemise the situation of various individual works. In correspondence on the subject with Lord Melchett recently, I have an assurance that the alternative proposals to shut down—proposals which the trade unions or the Action Committee may be able to make—will be
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considered very seriously by the Corporation and that the offer made by a private consortium to purchase Irlam and other parts of the wire group is receiving serious consideration.
Following the right hon. Gentleman's statement on Monday, I assume that discussions on conditions of sale are now taking place. That being so, I cannot understand why the announcement of the closure, under which thousands of people are being rendered redundant, is not now immediately withdrawn. How can one discuss with private employers or any other interested parties the future of a great works when they do not know what the condition of the labour force will be within a few weeks from now? Even after all the discussions we have had in this House about the vital importance of labour relations, many employers still do not realise that the greatest asset they can have is a highly-skilled, interested labour force kept together over the years. If the proposals by the trade unions will be seriously considered, and if the offer by the private consortium is under serious consideration, surely the concomitant is to assure the labour force that the announcement of closure, which involves 4,350 jobs being lost, is now at least in abeyance so that discussions can begin from that position.
I have said that the labour force at Irlam is highly skilled and very experienced. I remind the House that it is the Government who decide what is to happen to Irlam and to all the plants. It is time that the people of Irlam were given a public assurance about their position instead of being expected to go on enduring the misery which they have suffered for months now. Strangely enough, until a few days ago, we had never actually been told the real reasons for the threatened closure of the Irlam works. We had been vaguely informed that there were different reasons. For example, the geographical position was cited. Despite the fact that we have been successfully manufacturing steel there for 60 years, it suddenly became the wrong position.
We answered that by saying that we were in the middle of one of the greatest steel-consuming conurbations in Britain, and that over 60 per cent. of our products were sold within a 10-mile radius of the works, and practically all within a

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60-mile radius. So the argument about geography was played down. There has been a suggestion of obsolete machinery, and we know all about that. Then there were arguments about loss making, but we have proved that the wire division is profitable, and Irlam is the biggest component of it. Private consortia do not ask for it unless they are sure that they can make pretty good profits from it. Therefore, we answered the arguments adduced by the B.S.C.
In Steel News of 17th June, Mr. Morley, the managing director of the General Steel Division, told us the sole reason for the closure. I ask the House and the country to judge between our case, part of which has been put so well by my friends on the Action Committee at Irlam, and what the B.S.C. has done. I have the feeling that the decision to close Irlam was snatched at, and not at the highest levels. Under the headline:
"The Reasons Behind Proposed Plant Closures"
Mr. Morley told us, speaking of Irlam, under the heading "Old Plant":
"The Irlam blastfurnaces were initially operated in Germany and were re-erected at Irlam in the mid-1950s as post-war reparations. They are old, small and cannot produce iron economically. The open hearth steel plant dates from the 1920s and, although added to in the 1950s, it cannot compete with the newer steel making methods, with the result that the primary end at Irlam is comparatively uneconomic. The existence of low cost capacity at Rotherham and the commissioning of BOS steel making at Scunthorpe in 1973 has led inevitably to our proposals to close both iron and steel making at Irlam."
That is the case of the corporation. With great respect to Mr. Morley, he need not have told us about obsolete plant. We knew all about what came in in the 1920s and 1950s. I raised this issue with Sir John James time after time, but nothing happened except for the rod mill being brought along.
I have had a long association with industry, and this is the first time that I have heard advanced the theory that when plant in a great works becomes obsolete the works should be closed down. This is an expensive theory to work on. I may be a little old-fashioned, but I think there is something to be said for ripping out the old plant and getting in new plant. The right hon. Gentleman has made an announcement about the capital which is now at the disposal of
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the B.S.C, and some of that could be spent on modernising the plant at the old works. The Irlam Action Committee has produced a highly constructive alternative to closure. It would enable a goodly labour force to be employed at Irlam and it would enable the Irlam works to become a highly profitable venture for the B.S.C.
In my speech on 29th April I said that the second phase should not take place but that instead we should begin to build. We should implement the report—which has never seen the light of day—which recommended the installation of two new electric arc furnaces, and probably a third, and we should build on that after the first phase has gone through. On the other hand, a closure would produce the position where, within a short time, the Government would be paying out more in unemployment and other benefits than the B.S.C. would need to expend on new plant. What an utterly ridiculous situation to get ourselves into!
Hon. Members who have read the document to which I have referred will know that the Secretary of the Steel Corporation in a letter of 14th May, 1971, said that the decision was made:
"… only after the most serious consideration of the social consequences."
That almost leaves one speechless.
Reference is made in the document to the Greater Manchester "travel to work" area. Within the last 12 months, unemployment in that area has increased by 50 per cent. If this closure takes place, there will be in Irlam 21·2 per cent. unemployment; between one in four and one in five breadwinners will be out of work. The same will happen in other parts of my division from which steel workers travel to Irlam to work. A general depression and malaise will hit the whole area and, by God, we do not want the 1930s again in Irlam or in South Lancashire——
Mr. Eddie Griffiths: Or anywhere.
Mr. Lee: Or, as my hon. Friend says, anywhere. I do not undstand how any responsible person can say that this decison was made "only after the most serious consideration of the social consequences".

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The Government just cannot contract out of their responsibilities. We are not asking the Steel Corporation to take over social responsibilities. I assert, and challenge contradiction, that Irlam is profitable, and can be far and away more profitable given modern plant. When the offer to purchase was made by Schwarz the company said in a letter to the Corporation that the vast majority of the product the company would turn out would go to the export market. If, as the right hon. Gentleman says, he is looking for international competitiveness, the Schwarz organisation believes that it can achieve this in the Irlam works.
I am hoping that the Corporation will have second thoughts. My preference is that the Corporation should stay and that the plant should be modernised. The letter from Schwarz suggested that the Corporation might care to keep a minority shareholding, and that offer should be accepted. In any event, I should like the Corporation to maintain a financial holding in Irlam, and I hope that that will be seriously considered.
This afternoon 300 of my constituents from the Irlam works have been here, and the feeling they expressed to me was that the B.S.C. is not interested in selling to a private consortium. This feeling comes from discussions my constituents have had with the Chairman of the Corporation and trade union organisers. I was very worried about the situation and wrote to Lord Melchett. He assured me that this was not the case and I accept his word without reservation. I assure him and the right hon. Gentleman that my 300 constituents who have been lobbying the House today believe that there is grave apprehension on this matter among the people who work at the Irlam works. It would be unforgivable for an employer to say to men who have worked for a company for a very long time "We do not want to employ you and we will refuse point blank to let anybody else employ you." I hope this issue can be speedily cleared up.
My constituents have followed their fathers into the Irlam works. We have been making steel in Irlam for 60 years. It is a splendid labour force and the works is regarded as almost a family concern. The hon. Member for Manchester, Withington (Sir R. Cary) knows as well
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as I do that the people of Irlam look on the works as their own. Irlam without steel is almost inconceivable. The people have been bred on it, and it is the work that people want to do. It would be an enormous loss to the B.S.C. to dissipate such a labour force.
The right hon. Gentleman referred to the important matter of finance. I do not decry the rôle of finance since I have had to deal with these matters myself, but this is not only a matter of money. These men have sunk the whole of their beings into steel and it is their whole life. If we are to get a constructive discussion at national level and at Irlam itself, the first thing the Corporation should now do is to withdraw its statement of 21st April and to tell the men that the 4,300 redundancies are now off and that we should now begin again. They will find that there is no dog-in-the-manger attitude at Irlam. We know all about the need to get rid of old plant but, instead of annihilating the labour force and destroying a great works, let us begin again. Let the trade unions and the B.S.C. discuss the matter constructively. Let us examine how, in combination, they can go in for a modernised plant that is capable of giving great and profitable return to the British Steel Corporation.
5.35 p.m.
Sir Robert Cary: I intervene briefly in the debate to reinforce the eloquent speech by the right hon. Member for Newton (Mr. Frederick Lee. I should like to apologise to my right hon. Friend the Secretary of State for Trade and Industry for not being in the Chamber during his speech because I had to preside over an important Committee of the House and could not be here.
I made a speech on this matter in the House on 29th April on an occasion when the House discussed unemployment and was allowed by the Chair to discuss the question of Irlam. I agree with the right hon. Member for Newton that, if these works are closed, the area of Irlam as a whole will suffer a most serious disability. The total of unemployment in the Manchester area is high enough, and the closure of the Irlam steel works will add another 5,000 to the figure. I said in my earlier speech that a point may

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be reached when the level of unemployment was unacceptable. It is unacceptable in Irlam. I had the privilege of representing that area before the war. I regarded the township of Irlam as almost a sovereign body with its fine steel works, which was well-employed even though the rest of the area suffered all the disabilities of mass unemployment.
The information contained in the excellent document produced by the Irlam Action Committee should be read by every M.P. who wishes to inform himself about the critical situation which may arise in the area. The document is a superb piece of work. It is cogent, clear, to the point and instructive. Many hon. Members will be familiar with its conclusions, but the simple point to be considered is whether we can afford to see an important area like Irlam, which lies along the Lancashire—Cheshire border, almost to sink through the earth because of the degree of disability that will be conferred on it, which will be tantamount to mass unemployment.
The right hon. Gentleman said that one in five of the 20,000 to 25,000 people in that buoyant, happy town will become unemployed if this closure comes about. The possibilities of the older working population ever obtaining other employment will be almost minimal. I ask my right hon. Friend to consider whether the situation could be partly saved by the installation of two electrical furnaces at Irlam, but to be run at a lower level of profit than would be involved in the installation of such furnaces elsewhere. In any scheme of rationalisation no doubt such electrical furnaces could be installed in some other parts of the country at a higher level of profitability, but a reorganisation of that sort can be a little too concentrated. I would rather see the situation a little more fragmented to enable two of these furnaces to be installed at Irlam, to give employment to up to 2,000 persons. It is important for the Government and for the House of Commons to admit that the social responsibility of maintaining employment is as great as the economic need to make higher profits elsewhere.
Mr. Eddie Griffiths: I appreciate the hon. Gentleman's concern about Irlam, but does he put forward that theory as a new Conservative policy which will apply across the board in other places
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as well as at Irlam, which I know he loves so dearly?
Sir R. Cary: I am grateful for what the hon. Members says, but I would not be so presumptuous as to pronounce on Conservative policy. I am intervening on the special and single point of the future of Irlam, which was an area with which I was so concerned before the war. To apply what I am now saying across the board would raise other matters involving other Ministries and individuals, and I should not like to trespass on the time of the House.
If my right hon. Friend will look at the matter in that way and will consider again the question of withdrawing the notice to the 5,000 men involved, we could begin again at a new point. There is the question of the morale of the area to be considered. After all, the area is not a thriving one and there is no great upsurge of production on that part of the Lancashire-Cheshire border. This will surely come, but it has not yet happened. I want to save Irlam, which is a town I have known for many years.
I hope that we shall be able to find some solution or even a part solution on the lines which have been proposed by the right hon. Member for Newton and in line with the suggestions made in the document which I have mentioned. If towards the end of the debate my hon. Friend can give some indication that he will invite the Britsh Steel Corporation to look at this matter again he will render a great service to the area concerned.
5.30 p.m.
Mr. E. L. Mallalieu: I think that many of us on this side of the House will have been extremely interested in the very general proposition put forward by the hon. Gentleman the Member for Manchester, Withington (Sir R. Cary), that the social cost of making steel in a particular area is more important than the making of profits by making steel elsewhere.
Sir R. Cary: As important. Not more important; as important.
Mr. Mallalieu: As the hon. Gentleman pleases. That is good enough. I think it will be very interesting to most people on this side of the House, and we shall be looking forward to hearing

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him propound this proposition on future occasions in other connections.
I shall follow the hon. Gentleman in one respect, and that is in being short. I think five minutes will be enough to say what I have to say on this subject, because I want to deal with only one aspect of the relationship between the Government and the British Steel Corporation. That aspect is the creation of conditions in which it is possible for the B.S.C. to earn enough for adequate reinvestment. By adequate reinvestment I mean enough to produce the steel which is demanded of it and to keep its head financially above water.
I have always thought that it was extremely unfair to bandy accusations about loss in a particular area against the Steel Corporation when at the same time the Government had taken steps to prevent the Corporation from fixing prices which it regarded as economic. I know it is useful, of course, for the Government to have at least one price of which it has been able to stop a rise, especially when it is the price of a commodity so completely basic to all our lives as steel. That is certainly not the way to hold the ring between public and private enterprise, but I must say that the right hon. Gentleman, in his explanation today of the statement he made the other day in the House, did not adopt that, and I personally am very grateful to him for that. He even went so far as to draw attention to many of the difficulties which the Corporation had laboured under in its first months and years of existence—the under-investment which has taken place and which now must be made good, the fact that it was struggling with a new structure, the fact that costs were going up against it, that the engineers whom it employed were allowed to put up their costs against the Corporation but the Corporation could not put up its costs against them. I think myself that it would have been a miracle had it been profitable in the initial stages. As I say, the right hon. Gentleman has tried to put things as fairly as he could, as far as I can see.
The B.S.C. surely needs encouragement. By that I mean that it must be allowed to generate as much funds for reinvestment as it feels it needs at least to maintain its present position, and be
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allowed to fix its prices accordingly. I welcome the statement about prices which has been made by the Minister and what he had to say about that this afternoon.
This is the point I want to make. Surely, rather than to drive the Corporation further into the hands of the moneylenders, is it not better that it should be allowed, by fixing its prices, as I hope it will be independently in the future—that is one thing I am not quite sure about and upon which I should like reassurance—to generate a very much higher proportion of the money necessary and needed for investment in its own industry than to make the Corporation obtain it elsewhere?
I am certainly not one of those who want to believe that the Government are depriving the Steel Corporation of its means of succeeding merely because the Government do not like the sight of a public corporation which is succeeding. I do not want to have to say that, or believe it, and I do not want to have to believe that, for doctrinaire reasons on prices, the Government do not wish to see the Corporation maintain success. If the Minister does not want these things said I hope he will stick to his guns with his colleagues if necessary.
So, while I very much welcome much of the statement which has been made by the Minister, I still want assurance on one matter, and that is, is the present investment, all of it, going to be intact? Will it be allowed to go ahead? Are the remaining companies of the Anchor project in Scunthorpe to be interfered with, or are they to be allowed to go ahead? If the hon. Gentleman who will reply to the debate can reassure me on this I shall be most grateful.
5.37 p.m.
Mr. John H. Osborn: We have had a long debate on investment and on return on capital in the steel industry. I intervene because I consider Monday's statement as well as the clarification we have had today an important milestone for the future of the British steel industry and a strong steel industry. I therefore intervene to support the action and the second statement by my right hon. Friend. I also intervene because of the consequences which the statement will have, with the large

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changes in Sheffield possibly affecting 4,500 jobs—or more, so it has been said—and also, because the unemployment level in Sheffield which has risen and is some 3·1 per cent.
Some five years ago my right hon. Friend the Chancellor of the Exchequer, when we were debating steel, said that if steel were to be nationalised the Conservative Government would denationalise it so far as would be possible. My right hon. and hon. Friends on the Front Bench should realise that there are many who expect a Conservative Government to go further as regards denationalising steel and find the setting up of Companies Act companies a poor second best. They want as alternatives, if there is not outright denationalisation, hiving off and outright sale to take place much more dramatically.
To those people who have expressed this view to me, I make a number of comments. First, it is a matter of regret to me that in Sheffield, for instance, as a result of the actions of the last six years the proudest steel company in Sheffield, the United Steel Companies, including Steel Peech and Tozer, Ltd., which, 10 years ago, were among the most successful, the most progressive, the most forward-looking companies, are in the midst of the shambles which we have to retrieve.
Mr. George Darling: Nonsense.
Mr. Osborn: The right hon. Gentleman the Member for Newton (Mr. Frederick Lee) and my hon. Friend the Member for Manchester, Withington (Sir R. Cary) have been talking about the problem in Irlam.
The right hon. Member for Newton made an impassioned plea about the important spirit affecting the steel workers of Irlam. I wish that his plea had been as assiduous some four or five years ago when many workers in the Sheffield industry were being churned upside down for different reasons. Whereas at one time there was certainty and security amongst management, and on the shop floor, in the Sheffield steel industry that feeling has now gone. The situation is not the result of the past 12 months but of the last three or four years. The events that we are debating today are a
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direct result of the policies of right hon. and hon. Gentlemen opposite and the very process of nationalising steel. That is why my right hon. Friend has been confronted with an appalling set of problems to resolve. They are problems for which the last Government must accept a share of responsibility.
To those critics who ask why my right hon. Friend has not gone further, I say that my right hon. Friend has taken steps to create a healthy and viable steel industry which are realistic and which can help put it on its own feet. To my critics, I also say that, because of doctrinaire policies and the fact that outright denationalisation brings back once again a threat of renationalisation, it would be suicide to contemplate doing this at the present time. Although I have pressed my right hon. Friend to go further, he was realistic to make the statement that he did earlier this week.
There are those critics who regret that my right hon. Friend did not go further in April and break up the sites of the bulk steel industry. This would have been difficult. Already my right hon. Friend has announced a £100 million loss in the British Steel Corporation. My critics will no doubt say that, because of that, the Chairman of the British Steel Corporation and his Board should not be allowed to remain. Lord Melchett may not be a steel manufacturer. However, in a previous debate I indicated that he had the support of many Conservative back benchers, as well as of many hon. Gentlemen opposite, and there is evidence of understanding and realistic co-operation with my right hon. Friend the Secretary of State.
Sir G. Nabarro: Not everyone.
Mr. Osborn: It may be that my hon. Friend does not share my view, and possibly I shall go some of the way with my hon. Friend later on. Lord Melchett has been criticised for accepting an impossible undertaking. But in my view he should remain in his position, since he and his board, now that it has been strengthened, are coming to understand the problems with which they are confronted. My right hon. Friend no doubt is aware of this growing criticism. However, those closely involved in the industry accept Monday's statement as an important milestone.

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There has been criticism from the Opposition Front Bench accusing my right hon. Friend of unwarranted delay and prevarication. That has come especially in previous debates. But surely it displays a lack of appreciation by right hon. and hon. Gentlemen opposite of the changing conditions that have resulted from their own actions when they were in Government. The actions of four years ago have created the problems that we face now.
I shall discuss the restructuring of the industry and the likely changes in Sheffield in more detail presently. But my hon. Friend the Member for New Forest (Mr. Patrick McNair-Wilson) asked for the steel industry to be left in peace. I am one of those Parliamentarians who deplore the need for a series of statements followed by emotional and, to many outsiders, irrelevant debates about an industry whose future should be so much better decided outside Parliament by businessmen and management.
Sir G. Nabarro: These statements of pious intention may be of academic value. They are of no value to hon. Members on both sides of the House who want proper accountability for publicly-owned industry where vast sums of money are invested. Like many other Conservative hon. Members, I do not accept that the steel industry is inviolate and must not be debated in Parliament or criticised when the occasion arises.
Mr. Osborn: My hon. Friend is entitled to his opinion, but I agree we have to accept that the steel industry is nationalised and is now and has been in the cockpit of politics.
The hon. Member for Ebbw Vale (Mr. Michael Foot) spoke about Steering Committee No. 1 and Steering Committee No. 2. Right hon. and hon. Gentlemen opposite should decide where they stand. The object of nationalisation is ownership by the public of the means of certain types of production, which, in the case of the steel industry, means steel. The very consequences of that lead to ministerial control. There will be machinations of Select Committees and convulsions in parliamentary debate. There will be, as I see it, more steering committees. But they are no substitute for proper management, outside Parliament, where the disciplines
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of the market apply and where the supply of private capital provide those disciplines.
My right hon. Friend has been criticised for not permitting full price increases. In the circumstances, he had no option but to allow an increase of only 7 per cent. as against 14 per cent. So long as the industry is making an annual loss of £100 million, I have to agree with my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) that my right hon. Friend has no option but to act as banker and to balance the interests of shareholders, in this case the taxpayers, against those of the consumer.
Disengagement has been pressed by hon. Members on both sides of the House. I should welcome a trend towards disengagement. But that means a diminution of public investment in the steel industry. A number of hon. Members have referred to the need for capital expansion on a vast scale. We have been assured that £225 million is to be spent this year on a continuing and rising programme, which represents an increase of £40 million on the figure of £185 million that we discussed previously. This will involve the House in increased borrowing powers which we shall be discussing after this debate.
My hon. Friend the Member for New Forest talked about markets for the steel produced and the need for a large green acre site for the 10-million ton plant. In that connection, I ask my right hon. Friend a number of questions. What are the forecasts of output of and demand for world steel? What are the forecasts of steel production and demand in Europe? How accurate and relevant is the forecast of 43 million tons in this country by the mid-1980s?
The House ought to have more knowledge of the plants which are competing against British plants. I have asked questions about this, and I have been referred to "Iron and Steel Works of the World", a book which it to be found in the Library. However, I want to draw my right hon. Friend's attention to an article in The Times by Mr. James Tayler, an economic consultant, headed,
"Is B.S.C. taking a £2,000 million gamble?",
in which it is said:
"In such circumstances it would (unless B.S.C. can produce sound detailed reasons to

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the contrary) be imprudent to bet on any considerable increase in the rate of domestic steel accumulation."
This is but one article among many which advise caution in the future capital investment programme for steel. A number of my hon. Friends have drawn attention to the importance of the capital investment programme. However, the markets for the steel industry, when that investment has been made must be certain and sure if there is to be return on capital.
Reference has been made to the negotiations to join the European Coal and Steel Community. The British Steel Corporation is the largest steel company in Europe. The second largest is Auguste Thyssen Hutte, whose production is between 4 and 4½ million tons. The British Steel Corporation enjoys a virtual monopoly position, especially in this country. Ultimately, I believe that the General Steels Division will be found to be too large. However, for the present, I accept the decision made this April that the bulk steel industry should remain in public hands.
The position of the re-rollers in Sheffield and elsewhere has been recognised, and that must be welcomed. The jointly owned Companies Act companies are to be welcomed, as is the fact that billets are to be made available from sources other than the British Steel Corporation. But fair competition will not be the case because, although the re-rollers will have alternative sources of supply, private enterprise billet producers will still be in competition with public enterprise billet producers, though there may be some joint shareholding. The issue of unfair competition will be with us for some time, and I very much hope that my right hon. Friend will consider further measures to deal with this situation.
I come next to the position in Sheffield where last night considerable concern was expressed by shop stewards about the announcement that had been made. The Sheffield Star, in its leader under the heading
"Steel: The price of efficiency"
said:
"Both the British Steel Corporation and Firth-Brown will gain from the sorting out of the areas in which their activities overlap.
But unfortunately the casualty list is a large one for Sheffield to face."
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It has been implied that the unions have not been consulted. Can my hon. Friend clarify the position? The negotiations are starting. They are not complete. I appeared on a television programme last night, and I gained the impression that the go-ahead had been given for negotiations to take place to bring about a rationalisation between Firth-Brown and the B.S.C., but that nothing had been signed, sealed and delivered. I hope that my hon. Friend will clarify the position because, as I understand it, there is still time for consultations. As I see it, all that has happened is that the go-ahead has been given in principle.
Rationalisation between Firth-Brown and the old English Steel Corporation has been talked about for years, even before nationalisation. To have two forges of similar size competing with each other has proved to be illogical in the last decade, and in fact even since the war. Rationalisation between those two organisations is the logical—[Interruption.]—if the hon. Member for Bassetlaw (Mr. Ashton) will allow me to go ahead with my speech, no doubt he will get an opportunity to make his own later.
The Corporation has gained an importan asset in the Shepcote Lane Rolling Mills, and it will be an almost monopoly producer of stainless steel strip. On the other hand, the old English Steel Corporation, now the River Don works of the British Steel Corporation, will retain a large heavy forge, and this will in no way be competing with the lighter and medium activities at Firth-Brown. As I see it, the bargain is about 50–50, and Firth-Brown has not gained unduly from the public sector, but it will be interesting to note what the bargain is when the negotiations have been completed.
Mr. Eddie Griffiths: The hon. Member is very fond of talking about the monopoly enjoyed by the Corporation with regard to Shepcote Lane. Why does he not tell the House that the transfer of the River Don Works to Firth-Brown will give it a monopoly position in that sphere?
Mr. Osbora: Will it? But I am talking about rationalisation. In a European context, that will be far from the case.
Sir G. Nabarro: We are not in yet.
Mr. Osborn: I think that we would welcome——
Sir G. Nabarro: Having said it first from a sedentary position, I wish to repeat loud and clear from a standing position that we are not yet in Europe, and to presume that we are is a little more than imprudent in present circumstances.
Mr. Osborn: Perhaps I may continue with my speech after that intervention, because what I have stated is relevant whatever the outcome of the Common Market negotiations.
Sir G. Nabarro: A very good one.
Mr. Osborn: Various other announcements have been welcomed. The fact that construction, chemicals, including the wire group, are to be Companies Act companies is welcomed. But what has happened to the Corporation's intention to establish industrial estates? Surely that is an activity, which was promised for the Renishaw area, that could be hived off and exploited by someone else?
If I may conclude, my right hon. Friend has had to make difficult decisions. In some directions he has not gone far enough, and I regret the inheritance that he has had to face. In spite of the intervention of my hon. Friend the Member for Worcestershire, South, I suggest that we are debating an issue with which the House is ill-suited to deal. How much more fortunate are the large companies, such as I.C.I., Unilever, Shell, Imperial Tobacco, and so on, which can go ahead with their own business without interference from the State or elsewhere. I therefore welcome my right hon. Friend's statement and look forward, at the end of this year, or early next year, to a further statement provided providing for the complete restructuring of the industry, and outlining the long-term capital investment programme.
5.56 p.m.
Mr. George Darling: The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) has been talking about his critics. The critics to whom he referred are those who criticise the Government, and perhaps himself as a Conservative Member of the House, for not going further with the denationalisation of the steel industry. I assure the hon. Gentleman that after his speech his critics will come from the right, left and centre in Sheffield, because his disregard of the facts is typical of the economic
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essays which he tries to inflict on us both in the House and in Sheffield.
The idea that the steel industry has been until recently a free enterprise industry, free from public control, and that only Labour Governments have interfered with it is a lot of nonsense. The steel industry has been under a measure of public control since 1932, and it had to be because a competitive, free enterprise system could not go ahead with planning and developing a steel industry on the lines and of the shape that the country required.
The hon. Gentleman spoke about Steel Peech and Tozer having a better organisation and a more profitable future before it was nationalised, and said that it is now a shambles. What he did not say was that it was originally part of the ramshackle empire which Clarence Hatry built up. That is another indication of how he gets away from the true facts of the case.
Mr. J. H. Osborn: Do I take it that the right hon. Gentleman is implying that the United Steel Company was a ramshackle company before it was nationalised?
Mr. Darling: I said that originally it was part of Clarence Hatry's ramshackle empire. During the war it had to get on with the job in a better way, and in the period of nationalisation after the war it was put into better shape, and it has since been progressive and profitable.
I intended to be brief, but I can be briefer still because of the excellent speeches of my right hon. Friend the Member for Newton (Mr. Frederick Lee) and my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot).
I want to correct one observation made by the hon. Member for Hallam, and then to concentrate on one or two of the omissions from the Secretary of State's statement and his speech today.
The first issue that I propose to raise is that of profits and prices. I put down Questions to elicit information. The Minister for Industry replied, and as he produced the figures I am sure that they are correct. I want to get rid of the idea that after nationalisation the 14 major companies that were taken into public ownership were less profitable than they were before. The Minister provided me with the figures. I will not go into detail since they are recorded in HANSARD

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for 8th April this year. They show that in the year preceding nationalisation the 14 companies made a profit of £23 million after depreciation, and in the year after a profit of £26 million after depreciation.
Of course, what was going on was a general expansion of trade and business, and one would expect that the profit figures would be very much the same. They were certainly not sufficient either before or after nationalisation to provide the Corporation with the capital out of profits which was needed for expansion. Something had to be done, and, of course, public funds come in to provide for developments. I am very pleased that the short-term investment programme is now to go ahead and that the Government are providing the necessary finance.
I also asked for information on prices, which is provided in a Written Answer on the same day. The idea that the Corporation was making these losses because it was not competitive in European markets is, of course, untrue. If we compare the prices of the main items of steel production at home with those of the steel industries of the Common Market countries we get some interesting results.
On the figures up to March of this year the price in West Germany for billets is 17 per cent. higher than the price in this country, in France it is 9 per cent. higher and in Belgium it is 20 per cent. higher. For medium plates the West German price is 23 per cent. higher than ours, the French 26 per cent. higher and the Italian 14 per cent. higher. On heavy plates in West Germany the price is 35 per cent. higher than ours, in France 32 per cent. higher, in Italy 20 per cent. and in Belgium 29 per cent. higher.
For beams the prices were even higher than the ones I have given, going up to 43 per cent. higher in the case of the Luxembourg steel industry. Only for reinforcement steel and hot rolled strip are European prices at much the same level as, or marginally lower than, B.S.C. prices.
This is a measure of the efficiency and not the inefficiency of the British Steel Corporation. If prices are to be a guide, the Corporation is the most efficient steel producer in Europe. But these prices are artificial, because the Secretary of State prevented the Corporation from having the prices which its circumstances required.
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This is why the Corporation got into difficulties.
The Secretary of State knows all the facts. He knows very well that if there had been selective price increases which the Corporation wanted—I agree with him that it should not have been across the board—we would not now be talking about a £100 million loss; we should still be talking about the Corporation making a profit this year.
There are other omissions to consider, for instance, I hope that the Minister for Industry will tell us a little more about how these joint companies that have been mentioned will be set up. Who will exercise control over them, and deal with the peripheral areas which will be hived off? Who will be the shareholders, and what kind of control will the shareholders exercise if they are to be registered under the Companies Acts? We require answers to all these questions: we need a good deal more information.
I was glad to hear the Secretary of State say that he wanted to elaborate on the bald statement which he made on Monday. My goodness, it was bald. It was full of omissions—if I may use that phrase. There are many items on which we need more information.
One such is scrap. For years the steel industry, under both private and public ownership, has been operating a scrap arrangement which requires very serious examination. It is a system which the Corporation inherited, whereby three major scrap processing firms are given —what do they call it?—a commission. They are supposed to be the advisers, I think——
Mr. O'Malley: Consultants.
Mr. Darling: —yes, consultants on scrap supplies. On every ton of scrap which goes into steel works they draw, or used to draw, 9d. a ton for giving advice. I do not know what it is now. How does the advice work out? Again, one of the Minister's colleagues gave me the figures. I can quote them from memory. The amount of steel scrap, some of it low grade scrap, for which we paid high grade prices—[Interruption.] Yes, this can be proved. If the Secretary of State looks at some of the trade journals and sees photographs of some of the low grade scrap which is coming

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in from America and for which high prices have been paid, he will see that I am not exaggerating. We have been paying for American scrap twice the cost of home-produced scrap, when there has been plenty of scrap in this country available for the steel works. There may be reasons for it, but no one has ever explained them to me, and I consider that this needs to be inquired into.
I am glad that the Secretary of State is now considering having a free market for scrap. This may come as a shock to some of my hon. Friends, but, although I do not mind control of the scrap business provided that it is proper control honestly exercised for the benefit of the industry, I would rather have a free market than the arrangement which operates now.
Mr. O'Malley: I assume that my right hon. Friend would not want a situation in which the electric arcs in Rotherham, for instance, would be paying £3 a ton more for scrap than they are at the moment—as would happen if we were under the scrap arrangements which exist in the E.E.C.
Mr. Darling: I do not know what the price would be——
Mr. O'Malley: Three times as high.
Mr. Darling: I am not suggesting that we adopt the E.E.C.'s scrap price arrangement——
Mr. O'Malley: They are.
Mr. Darling: All I want to ensure is that we do not go on importing this very expensive American scrap when we have scrap in this country——
Sir G. Nabarro Sir G. Nabarro rose——
Mr. Darling: Now, Gerald, sit down: let me get on.
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Gerald is not my name.
Mr. Darling: I am sorry, Mr. Deputy Speaker, but what I said had the desired effect.
Sir G. Nabarro: The right hon. Member is being very equivocal in what he is saying about scrap arrangements. It is evidently the policy of Her Majesty's Government to go into Europe. If we
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go in, the position will pertain in regard to scrap exactly as his hon. Friend the Member for Rotherham (Mr. O'Malley) said. Will he not confirm that?
Mr. Darling: I do not know whether we are going into Europe or not. I am not discussing that issue. I am discussing the price of scrap at the moment.
I should now like to turn to the situation in Sheffield. Some of the remarks of the hon. Member for Hallam will, I think, be contradicted in a few moments. I could hardly believe my ears when the Secretary of State said that it was unreasonable to suggest that his statement on Monday had created any uncertainty. I do not know what the Secretary of State thinks about the state of mind of the Sheffield steel workers just now. They received his vague, uncertain and ill-advised package of proposals with dismay, apprehension and, as the hon. Member for Hallam said—if he quoted the local newspapers correctly—with disgust. This is typical of the way in which the Government have been handling the issues involved in the reorganisation of the steel industry.
The right hon. Gentleman said in his statement—a statement which he has not since amplified to any degree—that steps were under negotiation to strengthen the Sheffield steel industry. He did not give even a rough indication, when that statement was made on Monday or today, of what is in store for Sheffield.
Mr. J. H. Osborn: Let us get this right. My right hon. Friend actually said:
"First, in the boundary area between B.S.C. and private industry, agreement in principle has been reached between the Corporation and Firth Brown Ltd. as to the initial steps necessary to rationalise their overlapping interests."—[Official Report,28th June, 1971; Vol. 820, c. 34.]
That is not what the right hon. Gentleman just said my right hon. Friend said.
Mr. Darling: Of course it is. If I had been given the job of providing a vague, inconclusive and more or less meaningless statement, I could not have improved on what the Secretary of State produced. There was nothing concrete in what he said.
The right hon. Gentleman as good as agreed that his proposals were being received in Sheffield with great concern. The people there are anxious to know

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what will happen. We are told, for instance, that the B.S.C.'s River Don drop forge plant will be merged with the Firth Brown forge next door and that it will be the B.S.C. plant that will be closed. We are also told—no evidence has been provided on this score—that the River Don plant is the older one, that it is relatively inefficient compared with the Firth Brown plant, that it should therefore be closed down and that some ancillary activity will also be closed down. We do not understand what this means. How much plant is to be closed down?
The figure of 4,000 to 5,000 redundancies came not from the trade unions but from the officials of B.C.S. They are clearly contemplating closing down more than the forge at the River Don plant. We want to know the economic reasons for it. Neither the Secretary of State nor his colleagues in the Government have the right to place the steel workers of Sheffield in this state of uncertainty.
No evidence has been provided to hon. Members and the Press, let alone the workers of Sheffield, about what these proposals will mean and how the workers will be affected by them, and the trade unions have not been consulted over these proposals.
Mr. J. H. Osborn: They have known about them for years.
Mr. Darling: The hon. Gentleman's interruptions are only prolonging my speech. Perhaps he would care to ask the unions whether they have known for years about these proposals and the circumstances in which the changes are to be brought about. I assure him that the trade unions have not known about this package of proposals.
Mr. Joseph Ashton: My father is among those who are likely to be made redundant as a result of these proposals. I assure the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) that he has not been aware for long, certainly not for years, of these proposals. I, too. worked in the steel works there for many years before coming to Parliament. There has been confusion for a long time, but to say that the situation has been known for many years is arrant nonsense.
Mr. Darling: It is true to say that the unions have appreciated for a considerable
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time—not in the terms used by the Secretary of State but in far more constructive terms—that some of the steel plants in Sheffield, and especially those concerned with re-rolling and special steels, required rationalisation. Indeed, the I.R.C. arrangement based on Brown Bayley's was designed to provide the nucleus for such a reorganisation or rationalisation of what we euphemistically refer to as the private steel concerns in Sheffield. I say "euphemistically" because most of them have some public money in them in one way or another.
The trade unions have been in favour of these rationalisation arrangements because they are not Luddites. However, they have adopted a different approach from the Secretary of State's. They have said that if reorganisation must come—they have agreed to it in terms of new technology and techniques—and if, as they expect, between 5,000 and 7,000 redundancies must occur, then that must happen over a proper time-scale. They insisted, and received assurances from the Corporation, that these technical changes should be phased and that as much as possible should be done to bring in new job opportunities so that serious redundancy and hardship should not occur.
However, all that has now gone by the board. If the Secretary of State expects the steelworkers of Sheffield to give the new set-up the sort of co-operation they have given in the past, he will have to change his policies and adopt an entirely new approach to the problem.
The Minister for Industry's cavalier treatment of what he called "consultation" will be known to the Secretary of State. The trade unions feel that they have been treated with undisguised contempt by the Government, who now have an opportunity to put things right. I trust that when the Minister replies to the debate he will say that proper consultation will now take place.
What do we mean by proper consultation? It is not a matter of informing the unions and their leaders of decisions already taken. The union representatives must be brought into meaningful discussions before decisions are reached. Their views must be sought. I do not share the view of the hon. Member for Hallam

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that all the managers in the steel works in Sheffield are such paragons of efficiency that they have nothing to learn.
One constant factor ever since the steel industry was first established in Sheffield has been the quality of the steel workers, who have a great deal to contribute in the future, just as they did in the past, to the making of decisions affecting this industry, and their views should be heeded. As against that constant factor, we have had the inconsistent behaviour of management, some of whom have been good, some bad and many indifferent.
I must issue a word of warning to the Secretary of State. Next Friday evening trade union officials from the steel and engineering industries in Sheffield will be meeting to discuss the situation that has been created by his proposals. They will have in mind the uncertainty that has been aroused and the fact that the future of many of the people they represent is in jeopardy. I am sure that they will make a demand for proper consultation, and this will mean providing them with the necessary information they want.
This information must include all the evidence about the need to make the changes that the Government propose. They will require proof that these changes should be made. They will want to see all the evidence, including the balance sheets, and financial statements, and they will want some idea of the state of the order books and future prospects.
They want a guarantee that their views will be listened to, and that any contribution they care to make will be taken into consideration before decisions are made. If they cannot get a guarantee that that sort of consultation will now go on, and that no other changes will take place in Sheffield until those consultations are undertaken, there will be trouble. I shall be present at the meeting, and I will support—and indeed actively encourage—any action that those trade union leaders there may care to take in order that their demand for full consultation is properly recognised and the guarantee for which I am asking is given to them.
As the Secretary of State knows, I am not given to making immoderate statements, and he will appreciate that I feel very deeply about this issue. I must
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therefore warn him that unless the workers of Sheffield are to be properly treated from now on, he is asking for trouble in putting forward these proposals and ignoring the undoubted rights of trade unionists, as has obviously been the case in the proposals for which he is pressing. I repeat: the right hon. Gentleman is asking for trouble unless we get the assurances for which I have asked.
6.20 p.m.
Sir Gerald Nabarro: It is now more than 20 years since the Labour Party nationalised the steel industry for the first time, and the narrow majority in this House in February, 1951, gave it a mandate to do so. But the General Election of 1951 overtook the intentions of the Labour Party and, effectively, the industry was never completely nationalised.
In the 'fifties such parts as were in public ownership, except for Richard Thomas & Baldwins, were denationalised through an instrument called I.S.H.R.A. In 1967 the Labour Government proceeded with complete nationalisation, save only a private sector of about 5 per cent. of the total industry.
I was one of the 11 Conservative Members who sat throughout the marathon Standing Committee on the steel nationalisation Bill in 1967, reported in 2,569 columns of HANSARD. Every Conservative Member on that Committee, save only two, are now members of the Government. My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) was for special reasons excluded, and, due to an aberration on the part of the Prime Minister, I have been excluded. I forgive my right hon. Friend that, especially when my hon. Friend the Minister for Industry comes to the House with intelligent proposals for dealing with a most unsatisfactory position in one of our most important industries. All of us gave as our unanimous view in 1967 that the structure for nationalisation created by the Labour Party was grossly impracticable. Events have proved that we were exactly right.
It is no good going back to the period immediately before nationalisation for an estimate of profits that the 14 now nationalised steel companies then made, because they were then under a threat of nationalisation which affected the

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whole of their judgment and the whole of their output. To make a proper comparison one has to go back about 10 years, when those 14 companies were operating fully as non-publicly owned major companies in the private enterprise sector. Those 14 companies in the year 1960–61 made a profit of approximately £100 million before tax: this year the same companies make a loss of £100 million after depreciation. That is a true and valid comparison—[HON. MEMBERS: "No."]—between private enterprise operation and the operation of nationalised undertakings.
It is always a feature of nationalised undertakings that they lose illimitable sums of the taxpayers' money: £450 million of Coal Board losses have been written off; £420 million of railway losses have been written off. No doubt 10 years hence there will be £1,000 million of steel losses written off, because steel, as a highly competitive productive industry in the international field, is singularly ill suited to public ownership.
But we have to take the Tory Government as we find them and we have to take the nationalised steel industry as we find it. The Tory Government in their statement of 28th June have announced two intelligent things which are exactly in consonance with their election promises. First, they seek to inject substantial sums of private capital into a major sphere of the present nationalised steel industry undertakings. I refer to constructional engineering and chemicals.
I am not sure how the Government will attract the private capital. It will be very difficult to attract the private capital and the private investors if the British Steel Corporation owns a majority of the shares in the new Companies Act companies, as they are now called, which are constructed. No private investor will put money into a company of this kind, a sort of hybrid, if he feels that the return on his capital will be overlooked by a character like Lord Melchett.
I do not approve of Lord Melchett. [Interruption.] I am glad that there are many hon. Members opposite who do not approve of Lord Melchett [HON. MEMBERS: "Where?"] Perhaps I may continue. The right hon. Member for Aberavon (Mr. John Morris) keeps bawling at me, but he can make his own speech in a few minutes. I have listened
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to his leader in this debate for 38 minutes and to my own leader in this debate for 38 minutes—76 minutes combined, in response to Mr. Speaker's invitation for brief speeches.
I do not approve of Lord Melchett as Chairman of the British Steel Corporation. I should have preferred the Chairman of the British Steel Corporation to be a person versed and experienced in the making of steel. [HON. MEMBERS: "Sir David Barran?"] No, I do not approve of Sir David Barran being appointed to the Corporation. I think that one of many things wrong with U.C.S. was the fact that we did not appoint to the top executive positions men who knew how to make ships, and the steel industry ought to be run by men who know how to make steel.
My point is that the private investors sought by my right hon. Friend for these new Companies Act companies—admirable and pious though the intention is—are not likely to be attracted unless he secures that the private investors are in the majority and that the steel Corporation is in a minority. I do not believe that he will be very successful otherwise. I do not want Lord Melchett overlooking the private investment, the return on capital, the distribution of dividends, and the rest. However, I congratulate my right hon. Friend on an intelligent venture in these new companies. It is one way of injecting commercial methods, new capital and an element of private enterprise into what has been a high monopoly, publicly owned industry.
The second matter on which I congratulate my right hon. Friend is his statement in regard to the so-called peripheral activities. I hope that they will be a good deal larger than he indicated on 28th June, when he stated:
"Fourthly, the B.S.C. sees industrial advantage in disposing of a certain number of peripheral interests at a fair price: these include its bright-bar, stamping, tool and tool-steel making, a small engineering works, some industrialised housing and certain of its brick-making operation."—[Official Report,28th June, 1971; Vol. 820, c. 35.]
They are not very significant. Even the hon. Member for Ebbw Vale (Mr. Michael Foot) could not get very excited about them. Page 8 of the Corporation's Annual Report and Accounts for 1969–70 shows that the share of the market occupied by forgings, for example, is 15·6

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per cent., by bright-bars 9·3 per cent., by tool and magnet and high speed steel 7·3 per cent., and by castings, 7·7 per cent.
These are relatively very minor activities compared with the general run of steel making, which is a heavy industry, and this is the light end of the industry. It will not command very much support because it is so small, and I do not think that members of the Opposition need get as steamed up about it as they did about the proposals to hive off certain of the National Coal Board's peripheral activities.
Here I join forces again with the hon. Member for Ebbw Vale. In a combined exercise in the Standing Committee on the recent Coal Industry Bill we defeated the Government to assure proper accountability for these hiving-off operations. In other words, I say to my right hon. Friend that when he wants to sell the small engineering works he should present a Statutory Instrument to the House so that it can be seen to be a respectable operation. I hope that he will not carry it out surreptitiously—sub rosa—from the bureaucratic fastnesses of the corridors in his Ministry. I want my right hon. Friend's nefarious activities to be seen to be above reproach, because my right hon. Friend is always above reproach and I want him to act in a manner which is above reproach in this matter.
Therefore, I support my right hon. Friend's ventures in the steel industry, but I do not regard them as highly significant or even very important. I propose to address myself to two points which are of fundamental importance.
First, I hope that in the next few months my right hon. Friend will tell the House something about the Government's plans for increasing the output of steel in Britain. I want to know whether it is really the intention of the Corporation, fully supported by Government policy, to raise our output of steel from its present turgid level of approximately 28 million ingot tons this year to a figure of 45 million ingot tons about 10 years from now, having regard to what is happening among our principal international competitors.
It is probable that the figures that I now quote will not be known to every
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hon. Member listening to me, but they are figures of the greatest importance to all men and women who have the future fortunes of British industry at heart. In 1961 Britain produced 22 million ingot tons of steel; Japan produced 28 million ingot tons of steel. Thus, Japan's output was about one-quarter larger than ours.
The recorded figures for 1970 are as follows: Britain turned out 28 million tons of steel, an increase of 6 million tons over the 1961 figure and a figure equal to Japan's output in 1961, but Japan turned out 93 million ingot tons in 1970. In other words, in a single decade Britain's steel output has increased by just over one-quarter—both parties have been in power for roughly equal periods during that decade—but Japan's steel output increased by 232 per cent.
Mr. T. H. H. Skeet: Will my hon. Friend compare the growth achieved by the two countries, because if there is growth in the economy there will be a vast expansion in the output of steel?
Sir G. Nabarro: The growth in Japan's economy in the last 10 years has been enormous. No doubt this great increase in the output of steel in Japan can be attributed in some measure to the great advances Japan has made in the launching of new ships, notably mammoth tankers, which take large quantities of steel. However, I am not talking about a general economic comparison. I am now talking about the steel industry. In the 10 years 1961–70 Britain increased her steel output by one-quarter and Japan increased hers by 232 per cent.
People sometimes say to me that Britain has to belong to a large group such as the European Economic Community to grow. My right hon. Friend uses over and over again—ad nauseum, with utter monotony—the word "dynamic"; he is always talking about dynamic growth if Britain enters Europe. I say to my right hon. Friend and others who talk in like vein that Japan is not part of a larger group. Yet Japan has achieved this phenomenal increase in economic growth in the last 10 years. There has been an increase of 232 per cent. in the output of steel in Japan

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compared with an increase of 25 per cent. in Britain. In other words, the growth of the Japanese steel industry is 10 times faster than that of the British steel industry measured 1961 to 1971. That is all that I have to say about it. I am sad to relate these grievous figures.
I turn to my second and last point. My right hon. Friend made a splendid, incisive and, in response to your request, Mr. Speaker, very brief speech lasting only 38 minutes in opening the debate. He was not very forthcoming on the question of the European Economic Community. Let me state beyond peradventure—this cannot be faulted—that if Britain joins the European Economic Community and becomes a member of the European Coal and Steel Community all prices for British steel are controlled from Europe—from Luxembourg, to be precise—all output of British steel is controlled from Luxembourg, the location of all new steel works is controlled from Luxembourg, and every other facet of the operation of our basic coal and steel industries is utterly in the hands of European bureaucrats, including scrap.
Mr. Leadbitter Mr. Leadbitter rose—
Sir G. Nabarro: Mr. Speaker is watching closely. I will give way, but keep it short.
Mr. Leadbitter: I will keep it short. What I rose to say was "including the rate of expansion in the industry".
Sir G. Nabarro: I concede at once that among the matters that would be controlled from Luxembourg would be the rate of expansion of the steel industry. We are bound hand and foot by Luxembourger bureaucrats: we have no autonomy or independence whatever in the conduct of this basic industry once we sign the Treaty of Rome.
I wish to make this important point today. I just want my fellow countrymen to understand that we are handing over, utterly, the control of our most important industries, coal and steel, to distant and remote jurisdiction from Europe.
The Guardian has it quite right this morning—
"United Kingdom to lose control of coal to Six."
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I respect Mr. Mark Arnold-Forster as one of our best economic journalists. In the article he says this:
"The rules, and their application to Britain, were described in a memorandum which was given to British diplomats last month and is now available in London. The main requirement concerns the Government's power to direct or influence the British Steel Corporation and the National Coal Board.
'The Community delegation', the memorandum says, 'considers that the power held by the Secretary for Trade and Industry … to give general directives to these bodies under the terms of the Coal Industry Nationalisation Act, 1946, and of the Iron and Steel Act, 1967, is inconsistent with the European Coal and Steel Community Treaty.' …
The memorandum says that Britain would not, as a member of the Community, be allowed to prevent the import of coal from Europe. 'The Community delegation emphasises that the provisions subjecting imports of coal into the United Kingdom to an import quota system are not compatible with the Treaty as far as trade between Member States is concerned.'
But, the memorandum says, the present temporary arrangement whereby imports are free, subject to Customs control, is compatible with the Treaty. The Memorandum points out, however, that the arrangement ends in March, 1972. … Both the B.S.C. and private steel producers do not at present publish price lists as required by Article 60 of the Treaty."
I refrain from reading any more of the statement. The fact remains that there is absolute proof that the present rules of the European Coal and Steel Community would remove totally any control of this House—and of Ministers responsible to this House—from Westminster to Luxembourg. I submit that that is a very grave consideration, and I want my right hon. Friend, if not today, on an early occasion to print clearly—whether in the forthcoming White Paper on the European Economic Community or in another similar document—for the edification of every section of British industry, trade and commerce, what will be the influences and effects of Britain's joining the European Coal and Steel Community.
I have endeavoured to deal with those effects today. I hope that before Christmas the Minister will give us a much more detailed statement of the medium and long-term plans for the expansion of the British steel industry and the restoration of profitability—because even he, with the best intentions in the world, cannot go on assenting to a loss at the rate of £100 million a year. When my right

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hon. Friend brings this more detailed statement to the House I hope that he will include in it a precise assessment of the effects of our going into Europe and joining the Coal and Steel Community.
Mr. Speaker: Order. That speech took 23 minutes. The speech before it took 24 minutes. A number of hon. Members were not able to catch my eye in either of our previous debates on the subject. I hope, therefore, that hon. Members will be rather more brief.
6.43 p.m.
Mr. A. E. P. Duffy: I shall try to obey your request, Mr. Speaker. Although I take a more hopeful view of Britain's possible entry into the E.E.C. than does the hon. Member for Worcestershire, South (Sir G. Nabarro), I echo his invitation to his right hon. Friend to make much more information available to the House on the possible consequences of our entry into Europe not merely for the steel industry but for all our other industries, and especially our more important enterprises. Without that kind of information the debate that we all look forward to from now, right through the autumn, until the early winter, cannot be a real one. It certainly cannot enable us to make—in all our individual ways—the best judgment that we can.
I want to touch briefly upon the more important aspects of the right hon. Gentleman's statement on Monday and then to dwell on the implications for Sheffield. Given the proposed level of investment, I could reasonably ask the Minister to speed up his next review. It seems that he has already gone some way to declaring his views about the future shape of the industry. Although the Department of Trade and Industry seems determined to transform the British Steel Corporation into a basic steel corporation, with all the demoralising effects that that is bound to have in certain parts of the steel industry, nevertheless it has come as a small consolation to some of us that the Secretary of State is seemingly prepared to preserve the bulk of the industry. I trust that he will let the House has his ideas on the matter as soon as possible.
In view of what the Minister said in his statement on price policy, will not
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the Government become even more involved than before, despite the impression that they have been concerned to give that they are withdrawing? They have already brought the Corporation into deficit by chopping B.S.C.'s proposed pricing policy in half. Are they to indulge in similar antics in detail? At the last General Election the Government boasted that they would reduce central Government control in detail. They reject a prices policy, but by "informal consultation with the Government"—as the right hon. Gentleman says—they intend to keep the B.S.C. subject to their views, not only on an across-the-board basis but by means of consultation about—to use the Secretary of State's words—"individual products". Is the Minister not planning—to paraphrase what was said by the hon. Member for the New Forest (Mr. Patrick McNair-Wilson)—"to price steel billets or safety pins"? The Minister seems to have forced the Corporation to do both, and much more.
I now turn to the question of restructuring. First, when will the Minister be in a position to report on his negotiations "to strengthen the Sheffield steel industry". I ask his hon. Friend: who is involved in these impending negotiations? What is to be the future position of Brown Bayley's Steel? Are any foreign interests involved? If so, who are they? Drawing on recent Press reports—notably a report in the Sunday Times a fortnight ago—I ask: is it true that in the heartland of high-grade British steel the Government now intend to introduce large-scale foreign capital?
I now want to deal with the question of restructuring as it may affect Sheffield. First, there is the question of the frontier between the public and the private sectors. Many people in Sheffield could understand and follow the argument of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) about the adjustment between the public and private sectors, because it is well known that such a possibility was considered by the last Government. An adjustment in the mutual interests of both sides—yes: but what the people of Sheffield will not easily understand is an adjustment at the expense of the public sector.
I want to tell the House about the east end of Sheffield, where my constituency is located. Large areas of Attercliffe are owned by the Corporation. They

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have been earmarked for industrial development by the city council to fit in with the expansion plans of the Corporation. All the evidence that we have suggests that the future expansion of the Corporation in that area will be restricted, and perhaps even restrained. Indeed, other areas have been cleared of housing—not without some private regrets on my part—in anticipation of the future needs of the Corporation. Given the statement on Monday, it seems certain that gaps will now open in the planning map of the City of Sheffield. There seems to be no likelihood of private steel filling these gaps. I doubt that the city council would wish private steel to do so, and I can speak with confidence on behalf of the majority of the people of Attercliffe when I say that Attercliffe certainly does not wish private steel to do so.
I come now to the question of the consequences of the adjustment which is about to take place between Firth Brown and the British Steel Corporation, as a result of which Firth Brown will have the right to take over the River Don works, and Firth Vickers, which also is in my constituency, returning to the British Steel Corporation as part of the deal the Shepcote rolling mill.
There is a general expectation on all sides, apparently—I have here the minutes of the meeting of the works council at Firth Brown held only last Monday afternoon—that the firm will have the pickings of the River Don Works, and then the remainder, which is expected to amount to the bulk, will have no future; it will be terminated.
That is not a hiving-off. It is a hijack. Worse than that, there are 4,500 jobs in jeopardy. I am sorry that there was no mention of this by the hon. Member for Hallam. I want the Minister to tell us tonight what thought his Department has given to, and what consultation it has had with the Department of Employment about, the phased rundown of the labour force at the River Don Works, about the redeployment of men laid off through no fault of their own, about their retraining, and about future compensation.
When he has such consultations with the Department of Employment, will the Minister bear in mind that the employment position in Sheffield is deteriorating fast? From being an area of low unemployment,
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it has become increasingly an area of growing unemployment. During the past year alone, unemployment has doubled. At the time of last month's figures, when there seemed to be a fall in unemployment in many parts of our economy, there was no such let-up in the seemingly inexorable climb in Sheffield's unemployment figures.
I could say a good deal more, but I shall not because of the time. I know that some of my hon. Friends will wish to enlarge on this aspect of the matter. They know as well as I do that employment opportunities in Sheffield and South Yorkshire generally are narrow enough as things are and that the opportunities for alternative employment are, therefore, almost nil. It seems certain, in the light of Monday's announcement by the Secretary of State, that I shall soon have to take steps, in concert with Sheffield City Council, to apply to the Department of Employment for my constituency to have intermediate area status. Indeed, the position may be much worse. It is possible that, within a year, an emergency situation will be reached in Sheffield. This certainly seems to be the view of the Sheffield Trades and Labour Council which, in an emergency resolution passed only yesterday, expressed itself as follows:
"With an unemployment total in May of almost 8.000 in Sheffield—the highest figure since 1939–the additional redundancies mean that Sheffield will be back to the hungry 1930s."
It goes on:
"This Council has no intention of being the leadership of the unemployed masses. We do not intend to allow unemployment in Sheffield to reach massive proportions. Our battle will be fought through the shop steward movement in unity with the political arm of our movement from within the factories, not outside."
So I can go further than my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) and say that, at the further meeting of the Trades and Labour Council which is scheduled for Friday evening this week, there may well be a demand for workers' control. This has already been anticipated by the Sheffield Star in its headline last night—
"'We will take control of works' say City steel men."
I say that in order to convey to the Minister something of the bitterness of

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the steel workers of Sheffield, and especially those who are expecting to be affected by the consequences of the Secretary of State's statement. I wish to convey something, moreover, of their militancy. The time may be approaching when further Ministerial announcements about the restructuring of our industry, with seeming disregard of the consequences for the workers, for human beings, for wage earners, will be likely to strain the social compact to which all of us, basically, subscribe.
Now, a word about that part of the statement which refers to constructional engineering and chemicals, again an important constituency interest of mine. This part of the statement, despite its muted phraseology, suggests a degree of hiving off which, if less politically dramatic than, presumably, some of the Secretary of State's hon. Friends would wish, is nevertheless potentially more damaging to the structure of the British Steel Corporation. As Lord Robens has argued over the years—indeed, he took the lead in so doing—nationalised industries must be allowed the freedom of ordinary industry to move into fields in which their basic interests lead them. Good business managers learn to realise where not to let those interests lead them. Are the Government proposing that the B.S.C. should not have the same right?
Now, a word about the wire group proposals, which are equally important, in my view. This is a sector built up and dominated since its inception by private enterprise, lacking, save for a few honourable exceptions, any forward-looking attitudes, and riddled with small companies and small men. The need here, therefore, is for a strong wire group.
As for the disposition of peripheral interests at a fair price, given the cash flow position this may be a reasonable thing to do voluntarily. But it brings one down to the fundamental question of what goes to whom, and at what price, the price being measured in real terms of productive capacity, potential earnings, industrial significance, and so on. The economics of hiving off, therefore, deserve special study along those lines, and I hope that we shall have from the Minister tonight some comment and statement of criteria in this connection.
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Now, the question of part-time members of the board. I have always taken the view that part-timers were a waste of time, except on charitable do-gooding committees and so on. I do not see the purpose of the right hon. Gentleman's appointments. The gentlemen concerned demonstrably do not need the money. The Minister has not yet explained their responsibilities or their purpose. Perhaps, in deference to the great interest in these matters on this side, his hon. Friend will do so when he winds up.
6.58 p.m.
Mr. John Morris: The 18th of June last year was a black day for all of us who care about the steel industry. Many of us have played a small part in trying to ensure that the industry was organised in the national interest and not in the interest of the few. We knew, since 18th June, that all of that was at risk. Everyone in the steel industry knew it. The Secretary of State was not himself involved in those controversies, but his acolytes were. They want to turn the clock back as far as they possibly can.
What we had in Monday's statement was the best possible attempt to turn the clock back in the face of growing realisation it was not possible. What have we instead? What is the Government's stewardship regarding the steel industry? We have had months of uncertainty, and the real decisions for the steel industry have been taken out of the hands of the British Steel Corporation, charged by Statute with the managing of the industry, and have been put instead in the hands of the Joint Steering Group No. 1. That is a very strange animal. We do not find it in any Statute. It is odd that, while the B.S.C. is obliged by Statute to have vested in it the assets and manage them, that extraordinary body could do more than to study the affirs of the Corporation and could stop any development and take over some of the responsibilities of management. It is a constitutional outrage.
It is also odd that no Minister was allowed to preside over that body. When there was something remotely comparable, a study of the future problems of British Rail, I had the privilege of chairing the joint steering group of British Rail and the Ministry of Transport, together with various other Departments

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and some outsiders. We were by no stretch of the imagination taking over the management of the industry but were analysing and studying its problems and preparing for legislation. It may well be that the Minister was not allowed to preside over that body because he was not trusted by his right hon. Friend, since he would not know what he was up to.
But we know, since Monday's announcement and the previous announcement, that the bulk of steel-making is to remain in public hands, and that is a complete retraction of the Government's opposition to the Iron and Steel Act which we introduced.
We are also glad that the investment for 1971–72 is to be allowed to continue. The blanket is now lifted, and we see that it will be increased—all praise for the eleventh-hour conversion of right hon. and hon. Members opposite.
On Monday we heard the strange statement that the present plans for hiving off have been agreed by the Corporation. We have heard of shotgun marriages. That is a shotgun divorce or a shotgun judicial separation, agreed in the sense that the situation could have been much worse for the Corporation. It has agreed under duress to make the best of a bad job. When we read this morning's newspapers we do not know how different parties regard the agreement. I understand that the Department of Trade and Industry put out information that the hiving off of billeting would amount to 6 to 7 per cent. of the total crude capacity of the industry. But Lord Melchett said at his Press conference that there was no question of doing anything on that scale. What are the terms of the agreement? What are the refinements of the understanding between the two sides?
I have congratulated the Government, but what else could they have done in present circumstances? Is it realistic to expect them, in the present market conditions, with the lack of capital, to announce any major denationalisation measure? They are being realistic, and they did no more than they could. Our fear is that while there is to be this small measure of hiving off now, if conditions change they might well announce something much bigger.
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The tragedy is that we have had uncertainty for months, ever since the Government have been in office, and now scarce managerial talent is to be preoccupied for the next few months with working out the private company arrangements with those organisations which will share responsibility for that portion of the industry which is hived off.
The Secretary of State said on Monday that the need to be more profitable was recognised by both the Government and the B.S.C. That borders on hypocrisy coming from a Government and Secretary of State who denied the Corporation the right to put up its prices. That was the sole stroke of the Prime Minister to deal with prices. Now it is recognised as a blunder, in the sense that what was done was contrary to what might have been done if we had had the misfortune already to have entered the Common Market at that time. We had a major concession from the Secretary of State today that that step would not have been permissible if we had been in the Common Market. That is one of the "profound effects" on entry that he indicated to us, and there are others.
The Secretary of State said on Monday:
"The targets set in this financial year are difficult to put in normal form, because they are negative."—[Official Report,28th June, 1971: Vol. 820, c. 34.]
That is a patronising attitude to the House. The House is not completely illiterate, and it can understand a presentation of what the aim of an industry should be. If it was not possible for the right hon. Gentleman to explain in his long statement on Monday what he had in mind by that negative form of targeting, he might have extended his speech by a few minutes today to tell us what he meant.
In the stewardship of this Government since they have been in office—now for a year too long—they have made a mess of the steel industry. They have created uncertainty, and from now on the industry will have to do its best to repair the damage and meet the expense of the delays that have undoubtedly occurred.
We have fears of what might well happen to the industry if we enter the Common Market. It is incumbent upon the Government to expand and elaborate upon the words used by the Secretary of State today about the "profound

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effects", other than price. We know the figures. The Corporation is now producing 26 million tons a year, 50 per cent. for e than its largest European competitor, and it plans to invest up to £4,000 million to expand production to 35 millions tons in 1975 and 45 millions tons in 1980.
We were deeply shaken by the article by Professor Lindsay in The Guardian of 9th June, when he spoke about the plans to cut B.S.C. down to size, and splitting it, all of which were totally unacceptable to Whitehall at that time. Then we had the denials. He added:
"The E.C.S.C. next move was more realistic. The maximum annual production of 20 million tons envisaged under its overall plan for a single producer was only 6 million tons less than the current annual production of B.S.C. Such a discrepancy, it decided, might be tolerable provided that further expansion of B.S.C. was stopped."
The Prime Minister and the Government were deeply moved by that heinous statement, and denied that there was any suggestion in the course of any negotiation to split the Corporation. They said that it had never been put officially to them. But certainly it had been considered by the E.C.S.C. It had tested the water on the matter. We were told in The Times of 18th December, 1970, how the E.E.C. Executive Commission was concerned about the size of the Corporation and the triggering effect of its policies, because of its sheer size compared with its European competitors.
On 5th May this year a Frenchman on behalf of the E.E.C. said that it had officially informed the British negotiators that neither the size nor the national ownership of the B.S.C. and the National Coal Board would be an obstacle to British membership of the Community. Why was it necessary to make that statement if the matter had never been raised?
All the documents in the matter should be laid before the House so that we can examine the to-ing and fro-ing, the proposals made on both sides. Otherwise, how can we judge the dangers, both present and, much more important, future, of the attack on the B.S.C?
It was strange that last Thursday the Chancellor of the Duchy of Lancaster, reporting to the House, said:
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"In the first place, the Community delegation confirmed that they had no intention of calling in question the size or the legal position of the British Steel Corporation or the National Coal Board."—[Official Report,24th June; Vol. 819, c. 1605.]
That is word for word the same as the statement of the French delegate on 5th May. If the matter had not been raised, why was it necessary to make that statement? Some hon. Members on both sides were pleased with it. I am not. The statement makes no reference to expansion. It deals only with the present size and legal position of the British Steel Corporation. There is no suggestion that there will be no shackles on the expansion of the Corporation—that is studiously ignored in both statements. That is our fear.
We are concerned with the plans of the Corporation to expand. I am convinced that any talk about a green field new site in Britain is moonshine if we enter the Common Market. The whole concept in the E.E.C. is to limit the size of individual components of the European steel industry. I hope that the Government will face my challenge—that the pricing policy of the Community will be a serious handicap to the development of our steel industry and particularly any new part of it in any development area. I am sure that, if the hon. Gentleman has studied this matter, he will realise that that must follow. Those of us who represent development areas will know that any hopes we may have for major expansion of the steel industry in any area far from the Foulness or Sheerness part of the country must diminish rapidly if we enter the E.E.C. I hope that the Government will answer this point. It is a problem which must concern all of us.
May we have an assurance that, if we enter the Community, not only will there be no question of the legal position or existing size of the British Steel Corporation, but that there will be no question, no inhibition, regarding its expansion? Many of us on this side have fought hard for many years to ensure that this great commanding height of the economy should be managed in the national interest. We fear that this great commanding height will no longer be at our hands but rather dominated by the plains of Waterloo and the bureaucrats of Luxembourg.
7.13 p.m.
Mr. Ronald Bray: In deference to your wishes, Mr. Speaker, I will be brief, and I will, therefore, defer my eulogy on the many advantages which will accrue for this country should, when and if we join the E.E.C.
I welcome the Secretary of State's statement on the amount of investment which will be made in this coming year in the steel industry. A total of £280 million shows the confidence of the Government in the industry, and I am convinced that it is only a start. I also welcome the comments and statement on its restructuring and the disposal, by various legitimate means, of certain fringe activities, what I call second-tier activities.
Over the years I have developed a great mistrust for large undertakings—or what I call "mono-block constructions"—such as the steel industry, in so far as they do not give the sufficient attention to details of cost accountability that one would like. The suggestion of hiving off these units within the meaning of the Companies Act will enable them to have a definite financial target to which they shall work and also make them financially accountable. There is a great deal to be said for that because we all want to see which parts of the various nationalised industries are in the red and which parts are doing a good service to the community and showing a profit as well.
Irrespective of whether any unit of the British Steel Corporation is to be sold or disposed of by any means, it is only right that it should be shown to stand on its own feet. Why should it not? Why should these units be protected amongst themselves? If private enterprise, or a combination of private enterprise and State investment, can produce the goods better than 100 per cent. State investment, let it be shown to do so. Let us bring in people who are cost conscious and are prepared to look at expenditure as though it comes out of their own pockets rather than out of the national pocket. This is where many of our industries in the public sector have failed us over the years and will continue to do so unless they are made accountable for their accounts. The larger the undertaking, I think we can say without reservation, the more the law of diminishing returns applies—and
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where an undertaking is nationalised the law of increasing loss invariably applies. These are factors which have come home to us and which have been referred to in detail on this side in the debate.
There were squeals on Monday when my right hon. Friend mentioned the Brymbo Steel Works in Wales and its proposed association with G.K.N. I see no reason why any progressive, responsible firm should not wish to operate or control its major source of supply in some particular material. That is all that is being asked in this case, and it is logical. I see everything to be gained for the country in overall efficiency and for the company in so far as it has control of its own supplies.
Let us take the point about control of its supplies by a company further. I would like an assurance that materials sold by the British Steel Corporation outside its own immediate orbit—in other words, to firms which may be re-rollers or wish to process materials in other ways—will be sold on strictly equitable terms as they would be to firms or sections within the Steel Corporation itself. That is not an unreasonable request.
If we are to hive off or segregate these fringe companies, we shall see another advantage—that of flexibility. At the moment, with the major rolling programmes and the like—as those directly involved in steel know to their cost—the time cycle tends to be rather longer with a large organisation, whereas more flexible units can give better deliveries on the smaller tonnages. That is a great advantage when it comes to stock holding amongst the various firms. There is also the factor that when special steels are required—I am referring not to very high tensile steels but to medium tensile or high carbon steels—for certain construction projects the larger producers are unable to cope because of the limited quantities. I have had cases reported to me in the last month or so where firms which have been using such steel from British sources have been informed that, owing to the tonnages involved, it will no longer be available, with the result that it has to be imported. That difficulty can be overcome by virtue of the policy which has been laid down. There is everything to be said for ending that state of affairs.

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I make my final point from my heart because it refers to the Irlam Steel Works and I represent a Lancashire constituency. The right hon. Member for Newton (Mr. Frederick Lee) has covered the points admirably, and his views were strongly supported by my colleague. We have to look at this from the social angle. Reference has already been made to the money which it was alleged should have been spent on providing opportunities for other jobs. I should like some of that money to be concentrated in the Irlam area.
Irlam is quite a large supplier of smokeless fuels. Will the Minister tell us what will happen to the supply of smokeless fuels when this closure takes place, and will he guarantee that smokeless fuels will be made available from other resources? Furthermore, how will he square his number with the Secretary of State for the Environment on the question of old cars? Irlam has a great capacity for suitably compacted old cars. The social and environmental factors should weigh heavily in getting results for the people who are out on a limb.
The B.S.C.'s policy in respect of Irlam was disgusting, to say the least. It took no account of the opportunity for the further use of the plant. It was "close down and get out", no more. Whatever efforts are made to salvage that plant the people will remember this for years to come. I sincerely hope that alternative means will be found—and they have been expounded today—to keep Irlam to a large extent in use, and we on this side of the House will be happy to make every effort on this behalf.
I have greatly appreciated entering the debate in support of the Secretary of State, and I wish the programme for denationalisation speedy success.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: Order. I am grateful for the rather shorter speeches, but there are still nine or 10 hon. Members who wish to speak.
7.22 p.m.
Mr. John Mendelson: When discussing some of the changes he is proposing, the Secretary of State must have been aware of the human and social consequences of his policies. I want to
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begin with what I consider to be the most important aspect of the Sheffield situation that has developed as a result of his decisions. I attended a meeting in Sheffield last night where I spoke to a considerable number of people who were directly affected. In my many years of association with the city and the trade unions in the city, I have never seen the people so concerned. Today, a group of those people came to London, and I will quote one sentence from what a still youngish man said to me at lunch-time:
"It means the end of a career."
He was referring to the announced intention to close down the River Don Works. He does not believe that he and many of his colleagues with special skills will be required in the immediate future in a similar position.
The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) always on these occasions refers to the attitude of individual people in the industry, but I noticed a marked absence from his speech of any expression of real concern for the 4,500 people who are so seriously and immediately affected by this announcement.
It is not good enough for the right hon. Gentleman to stand at the Box and say, three times over, "Of course, all this is agreed with the B.S.C." If these policies which have been imposed by the Government upon the B.S.C. are pursued, not only will the right hon. Gentleman be discredited, as he already is, in the steel industry and amongst steel workers, but the Chairman of the B.S.C. will also become discredited. The right hon. Gentleman owes it to the House and to the people who work in the steel industry to come clean on this matter. It is more than evident that the Government have used their power of delaying the investment intentions of the B.S.C. and the difficulty over financial liquidity to coerce the B.S.C. into a change of policy the consequences of which we are beginning to see. He will not get away with the kind of excuses that he tried to make today.
The B.S.C. had announced and had arranged with the previous Administration, and the Chairman of the Corporation had told union representatives of the steel workers and groups of Members of Parliament, that the modernisation and rationalisation needed—and that is common ground between all people in the

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industry—would be so phased and timed that new steel making capacity would come into existence at the time the old capacity went out of use. That is the answer to the still youngish man I quoted at the beginning of my speech. If new steel-making capacity came into existence just before closures took place, this young man would have hope and would not be in the mood in which I found him today. That is the human aspect of this change of policy.
The first requirement is to think of the interests of the 4,500, or perhaps 5,500 men involved and not to talk about the larger aspects of the general situation. That could come later. Anyone who speaks for any part of Sheffield has a duty to put that on record. The Government should call a halt. They should get together with the B.S.C. and respond to the demand of the steel workers at the River Don Works and their trade union and parliamentary representatives for full negotiations with the representatives of the men.
I have in front of me a statement drawn up as a set of minutes of an extraordinary meeting of the works council on 28th June, 1971, from which I will read an extract:
"Mr. Howarth asked what arrangements had been made to talk to full time union officials.
Mr. Lewis replied that a meeting had been arranged at 11 a.m. on 29th June at River Don Works to which all full time trade union officials had been invited. The short notice of these invitations had arisen because the Minister was only disclosing this information in principle to the House of Commons this afternoon and earlier intimation would not have been possible."
There is evidence that the people most directly concerned were not negotiated with and not consulted, and they could not even be informed a little earlier because the right hon. Gentleman had not yet made his statement. Because of this complete failure to live up to the undertaking that the Government and the right hon. Gentleman personally had given of advance consultations and discussions, I ask him to undo the damage that has been done by the absence of proper procedure. The right hon. Gentleman well knows that in trade union and working men's circles adherence to proper procedure is regarded as a bond.
Let the right hon. Gentleman reverse the process. Let him get together with
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Lord Melchett and call a halt in this situation. Let him say, "We realise that an error has been committed and we shall not proceed with any decisions or begin any detailed discussions about hiving off." Let the right hon. Gentleman get together with the proper representatives of the people so that he may have proper discussions with them. A meeting is to take place in Sheffield on Friday evening consisting of the trade union leaders in Sheffield, the leader of the city council and the Members of Parliament who represent the city. Cannot the right hon. Gentleman send a message to that meeting on the lines I have suggested? If he does so, he would be beginning to do his duty in this serious and tragic situation.
I put this forward as a practical proposal. This matter will take some time, even if the Corporation carries out its original intention. It is possible for the right hon. Gentleman to make a practical move on the lines I have outlined. It would have an effect in Sheffield among the people who are most directly concerned and would go towards undoing a situation which has been handled in the most irresponsible and extraordinary way.
Mr. J. H. Osborn: The hon. Gentleman referred to my remarks, and I referred to the situation in Sheffield. Is this not a problem which we must resolve? So far as I understand the situation, the decision has been made in principle, and is it not now time for a discussion to work out how it is to be implemented? I hope that my hon. Friend will clear up this matter when he replies to the debate.
Mr. Mendelson: The hon. Member for Hallam must not pretend that if the Government do not respond to the requests that I and my hon. Friends have made, there will be any possibility of changing the policy decision which has been announced, without consultation. What is required is to call a halt and to countermand the beginning of the implementation of the announcement. It would then be possible, in consultation with the workers' representatives, the city council and Members of Parliament responsible for the area—and I do not confine this to one particular party—to see that the decision is not implemented and that a better solution is found. That is my

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request, and the hon. Member for Hallam has not responded to it, as I still hope the Minister might respond. There is a lot at stake if this kind of irresponsible procedure is to be followed as a way in which both the Government and the Corporation will deal with these matters from now on.
I turn to consider a wider point of the policy of reorganisation and rationalisation. When my right hon. Friend the Member for Barnsley (Mr. Mason) was Minister of Power—and I do not believe in referring only to events which have happened in the last few weeks or months, because these problems are continuing problems—a proposal was put forward concerning the Sheffield rolling mills in which the majority interest was to be sold to a private firm. Along with many people in the city, I was opposed to the arrangement of a 51–49 per cent. private ownership that was then proposed.
Other hon. Members and I invited my right hon. Friend as the Minister concerned and the Chairman of the Corporation to come to Sheffield. My right hon. Friend came to the city and met senior trade union leaders and local M.P.s. I believe it was the first time that the procedure was carried out in this way. At the time, we were told that this was a way of rationalising some of the sections in the industry, and we were told that there might be certain minor adjustments in relation to the private sector. Those representing the unions were not unreasonable about this matter. We were told that in future some sections of the industry would be transferred from the private to the public sector.
I suggest that the Secretary of State for Trade and Industry should do what was done by my right hon. Friend the then Minister of Power at that time. He should come to Sheffield and meet the representatives of the trade unions and local M.P.s. He should have discussions with them and defend the policy which he has now instructed the B.S.C. to carry out. I want him to face the arguments put forward by the people in the area, and I want him to see the sort of human experience that is represented at such a meeting. I want him to meet men of the calibre of the young man whose words I quoted to the House a short time ago.
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The Government have agreed with the British Steel Corporation to allow its borrowing powers to be increased and to allow projects for immediate development to go ahead, although we are not sure whether they have authorised all of them or whether there has been some change. We do not know whether the policy involves a gradual phasing-out of some of the works with at the same time the creation of new employment opportunities.
I turn to the long-term prospects for the industry. Considerations affecting the steel industry should not be made part of the White Paper on the Common Market. We wish to see it as part of another Government Paper. This concerns the working and the methods of the steel industry and those who work in it. The Minister would not be fulfilling his responsibilities if he merely went along to the Chancellor of the Duchy of Lancaster and asked him to introduce some reference to the future of the steel industry. This will have to be done in some way, but it should be undertaken separately. The Government are under obligation to disclose all the negotiations in which they have been engaged in regard to the future policy of the British steel industry.
The Government must now answer a question that they have never answered before, and I shall be glad if the Minister could answer this question tonight. The Foreign Office has said that no request has been received from the Commission or from the Six Ministers for the British Steel Corporation to change its present arrangement, and that there has been no demand to interfere with its operations. We know that a document has been received which supersedes this Foreign Office statement—a document from the Six laying down certain specific requirements from the British Government. We need an assurance that the United Kingdom Government intend to allow the B.S.C. to proceed with its expansion towards a target of steel production of 35 million tons in 1977–78 and towards 41 million tons in 1982. In no circumstances should the Government be diverted from that course because of any action among the Six, and I should like an assurance on this matter.
Finally, the long-term uncertainty that exists in the industry should be removed in respect of any decisions that are taken between now and the autumn. I do not

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expect the Minister to announce the details this evening, but I would ask him to remove the uncertainty in the industry so that he may be guided only by the practical considerations of providing a base for the future of steel production in this country, to make our industry competitive with countries such as Japan and the United States. Further, we should like to be assured that he will not allow any other considerations to interfere with his decision when he makes it.
I have deliberately confined myself to a series of practical points. All those who work in steel and all those who are interested in the future of British industry will expect a serious and considered reply from the Government tonight.
7.40 p.m.
Mr. Brian O'Malley: The Secretary of State began the debate this afternoon by admitting that the statement which he made on Monday was a bald statement, and saying that he hoped to give the House further information arising from his statement. If that was his intention then I have to say to the right hon. Gentleman that he failed lamentably. All the confusions and the doubts and the need for information remain exactly or almost exactly as appeared in his statement on Monday. Indeed, as a result of the very brief comments of the right hon. Gentleman regarding the longer-term investment plans for the steel industry, I can only assume that either he left his notes behind or he deliberately decided before he came to the House that this was not a subject he wished to discuss, for he treated the House with less than the respect which he should have by not dealing in much greater detail with the longer term investment of the steel industry.
The Secretary of State is establishing an unenviable reputation in this House. Whenever he makes a statement in the House thousands of men can expect to lose their jobs. In March, arising from the Secretary of State's then statement, 1,300 men in my constituency, at Rotherham Steel Works, discovered they were to lose their jobs, most of the job loss arising from plant closures which would not have arisen till much later into the future, had it not been for the deliberate policies of the present Government. Now we are faced with another instalment of
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that pattern, and 4,500 men at the River Don works in Sheffield, including some of my constituents, are being sacrificed to Tory dogma. I shall attempt to demon-trate that a little later.
What makes these proposals even more objectionable is that it is quite clear that there has been no consultation whatsoever with the trade unions involved in the Sheffield area. My hon. Friend the Member for Penistone (Mr. John Mendelson) has just demonstrated that. We had a number of trade unionists, representing virtually all the trade unions involved, at the House of Commons this afternoon, and one of their first and major complaints was that they thought that the situation was absolutely disgraceful that there had not been proper consultation, that it had been entirely lacking in this case.
It is certainly the case that reorganisation in the private sector of the steel industry in Sheffield, particularly in the re-rolling section, is needed and has been needed for some years. That is precisely the reason why the I.R.C., set up by the last Government, put money into Brown Bayley, and that was why Mr. Kilpatrick moved from the British Steel Corporation to Brown Bayley so that Brown Bayley could provide the nucleus from which the reorganisation of the private sector in Sheffield could emerge. It is also perfectly clear, and has been for some time now, that there is need to tidy up the boundaries between the public and the private sectors, arising out of the 1966 nationalisation Act.
However, we should be aware of one thing in discussing the current situation as described by the Secretary of State during his statement on Monday, and that is, that the decisions announced by the Secretary of State, broad as they were, were certainly not those which the British steel Corporation was proposing to the previous Government.
Moreover, when hon. Members on the other side of the House, like the hon. Member for Worcestershire, South (Sir G. Nabarro) and the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) take the view they do that what is being reorganised or hived off from the Corporation is 'minimal"—which is the sort of phrase they use—all the information I have seen suggests that the total amount hived off, or the total amount opened up to private

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capital, will be between 10 per cent. and 15 per cent. of the total annual turnover of the Corporation.
The Secretary of State talked as though his proposals were to obtain sound industrial logic. This was not the attitude of the hon. Member for Hallam; it was not the attitude of the hon. Member for Worcestershire, South. It is certainly not the attitude, if all the reports around Whitehall are true, of the Minister for Industry and the Under-Secretary of State. I have seen those two hon. Gentlemen in Committee on the Steel Bill and other occasions. The Secretary of State should know that those two hon. Gentlemen are not concerned with industrial logic. Their sole, open, declared aim over the years has been to cut back the activities of the public sector, whether it be the steel industry or any other publicly owned industry.
The British Steel Corporation was certainly not talking about hiving off or coming to arrangements with private capital about the constructional engineering or chemical divisions. It was certainly not talking about selling off or entering into agreements with other people about the wire group. The Secretary of State must know that two or three years ago the Corporation set up a highly confidential working party within B.S.C. headquarters to examine the whole question of the wire group. This enquiry arose largely as a result of representations from the private sector that the Corporation should sell out the wire section of the old Lancashire Steel Corporation. The B.S.C. considered those proposals over a period of months in an experienced working party and came to the conclusion that it was not in the interests of B.S.C. or of the wire industry in this country that it should so do. Certainly B.S.C. was not proposing to the previous Government that billet production should be taken out of the hands of the Corporation and put into private sector or into some kind of joint arrangements.
It was the case that the Corporation was considering, and had been discussing for a very long time, with other interests in Sheffield the whole question of what the proper boundaries should be and whether tidying up was needed, but at no time was it proposing to do this kind
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of deal with Firth Brown affecting the River Don Works. As late as two or three weeks ago the management of the River Don Works were still living in high hopes of getting capital investment of £4 million or £5 million for one section of the works. So these proposals which have now emerged have come from a great deal of arm twisting either by the Secretary of State or by the two Ministers who work under him.
The Secretary of State says in defence of his case that Lord Melchett agrees with him. It is perfectly clear what has happened. Every industrial correspondent in London and every Member of Parliament knows that there has been a major battle between the Steel Corporation and the Department of Trade and Industry.
What is the history of this? First what is clear is that the Government by their policies have put B.S.C. into an impossible financial position. First of all, the change-over from investment grants to investment allowances was a very serious blow. My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) mentioned the figure of £300 million. Secondly, the Government cut the proposed price increases by half, when the Corporation's prices were clearly competitive with those in Europe. Thirdly, as a result of Tory economic policy, the level of capacity working in the steel industry was cut back so that, in the first five months of 1971, the production of the industry was 8·7 per cent. down on what it had been in the first five months of the previous year. Lastly, the Government must be costing the steel industry a lot of money and causing it a lot of inconvenience by holding up development programmes.
It is the present Government who have created this situation in the industry and forced it into increased borrowing. It is clear what has been said to Lord Melchett. He has been told that he can have the investment that he wants only if he is prepared to take a number of steps. The first is to sell off profitable divisions. I have described this in the House as loot for the big business friends of the Tory Party. I see no reason to change that view.
The hon. Member for New Forest (Mr. Patrick McNair-Wilson) spoke about this situation. What is clear, whether we have joint companies or hiving off, is that the seed corn of the Corporation

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is being taken. Private industry does not want to go into some sections of the Corporation. It wants its share of the most profitable parts. The right hon. Gentleman intends to leave the Corporation with the less profitable parts, for example, certain sections of bulk steel production, and to hand over a great deal of valuable assets in one form or another to private interests.
I come from the Rotherham-Sheffield area. The right hon. Gentleman is allowing Firth Brown virtually to cannibalise the River Don Works and put more than 4,000 men out of work. I ask the right hon. Gentleman one question which affects my constituency vitally. Nearly a fortnight ago, it was believed all over Rotherham that the Government wanted to sell off or take out of the Corporation's 100 per cent. control the Rotherham works. The Guardian this morning confirms that. Is the right hon. Gentleman prepared to settle the unease and worry in my constituency? He said the other day:
"B.S.C. is prepared to open discussion with interested parties with a view to the creation of one or two new jointly-owned steel and billet-making companies."—[Official Report,28th June, 1971; Vol. 820, c. 34.]
Will the right hon. Gentleman say whether the Rotherham Works of Steel Peech and Tozer or Parkgate, or both, are possible candidates for a sell-off of this kind? If the right hon. Gentleman can say that it has been decided that they shall remain with the Corporation in their entirety, many people in my constituency will heave a sigh of relief. There is great uncertainty. Morale has been damaged seriously in the last 12 months. I hope that the Secretary of State can help in this respect.
As for the possibility of this country entering the European Economic Community, there is already enough evidence to make it clear that it is not in the interests of the British steel industry, especially the northern areas of the industry, to be hamstrung by a pricing structure which fell to bits in the early 1960s and would fall to bits again if a similar crisis arose in the E.E.C. It is not in the interests of the industry to join a Community where scrap prices will be considerably higher than we pay at the moment, and where investment policy would clearly be controlled not by a British Government but, to quote
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the hon. Member for Worcestershire, South by "the bureaucrats of Brussels".
Will the right hon. Gentleman consider publishing the memorandum which is referred to in The Guardian? When I asked him earlier, I got the impression that he did not give a definite "yes" or "no". I shall be grateful if he will consider this, and perhaps the Minister for Industry will tell us whether the Government can let us have the information. It is not only the Government's assessment that we want. We want the documents that the E.E.C. have been passing over, and we want to see in their language what they have been demanding of us.
The proposals for hiving off and the joint arrangements which the right hon. Gentleman has been discussing do not make financial sense, especially when we consider the long-term interests of the Corporation. Secondly, the proposals show a blatant disregard for the interests of the workpeople, especially those in the River Don Works in Sheffield. Thirdly, throughout the steel industry there is the fear that this is only the beginning and that we shall get more of this kind of nonsense in the future as a result of the pressures of people like the Minister for Industry, the Under-Secretary and the hon. Member for Hallam. We on these benches intend to do all in our power to prevent the right hon. Gentleman implementing that kind of policy.
The Secretary of State has said that he hopes that these proposals will take steel out of politics. I can assure the right hon. Gentleman that they will not. They will bring steel right back into politics. To the steel areas, they are merely another indication that they have to get rid of this Tory Government as quickly as possible.
7.55 p.m.
Mr. T. H. H. Skeet: The hon. Member for Rotherham (Mr. O'Malley) has made an interesting speech. However, he cannot sustain the argument that the arm of Lord Melchett has been twisted, especially when he has been reported in the Financial Times as saying that he
"… welcomed the Government's measures as a good, sane, logical industrial solution to the problems that the steel industry has to face'."
I think that that is a sincere observation.
Mr. W. T. Williams: What else could he say?
Mr. Skeet: He could have indicated clearly that he disapproved thoroughly of the proposition, or he could have used words which did not come through quite as clearly.
It has been said that bulk steel making is to remain with the Corporation and that bulk steel production represents between 80 and 90 per cent. of total production. If one considers the Government's proposals on a turnover basis, with an annual turnover of £1,400 million, it means that a turnover of something like £200 million is to be exposed to private capital. I am disappointed at that. It is so small. However, it means that a start has been made.
My right hon. Friend must face the fact that he has one steel structure in the United Kingdom which may become ossified in the future and which has little opportunity to adapt itself. However, my right hon. Friend sees prospects in his proposals.
I should prefer to see a number of enterprises working in competition than a single structure in the United Kingdom economy. I fear that the Corporation could become the Montecatini Edison of the United Kingdom, with disastrous consequences. With United States steel, while net sales increased from 3,649 million dollars in 1960 to 4,883 million dollars in 1970, earnings per share fell from 5·16 dollars to 2·75 dollars over the same period.
It is interesting that the 1967 production of United States steel is comparable with that of the British Steel Corporation. One finds in the United States and elsewhere, especially in Europe, that steel companies have not been doing well. The return on capital investment of the British Steel Corporation in 1969 was under 1 per cent. It was only seven years ago, in 1967, that, whereas the largest American company produced 31 million tons, the largest Japanese company produced only 12·8 million tons. A similar example is Thyssens in West Germany, which is a comparatively small producer. But the trend in Germany has been towards a diminution of the number of larger companies and the expansion of smaller companies. They tend to be more thrusting and easier to manage, and greater
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steps should be taken here to achieve that kind of set-up. To give some words of encouragement about the rate of return on capital investment in the steel industry, may I inform the House that one company in Luxembourg has reported the highest return in Europe—that is, 6·6 per cent.—and the interesting thing is that it is a small producer of 5 million tons.
I think that I have proved one point. I must be economical in time, because we are enjoined to be short. I think I have proved that the large structure is not necessarily successful. I do not think that my right hon. Friend has made any vast alterations. He has only looked at the periphery of the Corporation, and perhaps I could make some recommendations.
I am very concerned about unemployment in this industry. Where the Corporation has decided on plans which were brought to fruition before the Government took office, and which are being deployed, resulting in plants being closed, those sites should be offered to private enterprise, be it in the form of consortia or in some other form. If the consortia feel that they can hold the labour and guarantee employment, in the Irlam works near Manchester, for example, that might be a suitable answer. Grass roots plants, be they in the South of England, Wales, or Scotland should also be offered to private consortia to provide effective competition within the British economy. Nothing could be sounder than that.
So far as existing works are concerned, a franchise should be granted to private consortia. A step has been made by introducing private capital, but I do not feel that it has gone far enough. One other advantage of that is that while in the United States, and elsewhere, it is possible to have vertical integration in raw material supplies, that is not possible here.
Some people have suggested workers' control. That has not commended itself to me. Might we not make an equally radical suggestion? In Western Germany the supervisory and management board systems have worked well. Might they not be tried in the United Kingdom?
I realise that the Corporation has had certain difficulties in connection with pricing. My right hon. Friend, for reasons best known to himself, cut back the suggested increase of 14 per cent. to

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7 per cent., and the Corporation says that it has been deprived of earning capacity. What one has to remember, though, is the increased costs derived from other nationalised industries. If one considers the total increased costs of about £113 million, one should realise how these are apportioned.
An additional £40 million went straight on due to the National Coal Board, a State industry, and £8 million went on due to electricity, another State industry. Fuel oil went up by £10 million, but a large part of that was tax, laid down by previous Governments, including this one. On the transport side, which is also State, there was an additional item of £30 million. On ore, which comes from abroad—very little of it is produced here—there was imposed an additional £30 million. The problem is that prices have been forced up against the Corporation. Wages have been going up continuously. The Corporation is loaded with debt. I enjoin my right hon. Friend to do something about flexibility of pricing, and I support his idea that one has to see that there are selective price increases.
I was impressed with the words of the right hon. Member for Sheffield, Hillsborough (Mr. Darling) when he said that we could be extremely competitive with Western Germany and France on certain items of steel making, that in those cases where we were competitive we could afford to put up prices, and that in others we may have to hold the line. If we are to look years ahead for the British steel industry, for goodness sake let us not specify a total figure for steel production when we do not have the markets in which to sell. But if we are determined to sell, let us be efficient. We shall not make the industry efficient if we keep the same structure as we have now. Size is no recommendation of efficiency at any time. It is the ability to work and the economy in which an industry lives that are the two main features necessary for a steel industry to operate successfully.
8.5 p.m.
Mr. Ted Leadbitter: There are two main features of the debate which must stand out in the minds of all hon. Members today, and which will, I imagine, stand out in the minds of people outside tomorrow. The first
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is the welcome change of attitude by the Secretary of State. The change is belated, but it is indeed welcome, because, after many months of uncertainty, at least we are left with a British Steel Corporation. I shall say something later about the peripheral parts of it, which raise certain question marks.
I welcome the change of attitude, but I doubt very much whether it would have come about without pressure from this side of the House and from the industry itself. The right hon. Gentleman has learned the lessons late, but I hope that he has done so in time to repair some of the grave damage that has been done.
As the right hon. Gentleman has shown a susceptibility to learn, perhaps I might raise the issue of Irlam. I do not doubt that his objectives must be for the good, even if his methods are wrong. I do not doubt his integrity, but may I suggest that he considers what happened when there was a determination to close another kind of industry in my part of the world?
At one time some people wanted to close a shipbuilding yard near my constituency, which would have meant about 3,000 men being declared redundant. The professionals in the industry said that the yard had to close. Some politicians took the same view because, they said, the yard was not viable. But those who had faith in the men and the equipment there persisted in their efforts, and we had in the Labour Government a Minister who was prepared to listen to us. It was not in our language a lame duck, and we were able to save that yard. The House may be interested to know that that yard, Haverton Hill, expects to need a further 1,000 men to meet its orders.
The judgment about Irlam cannot be final. In a year the right hon. Gentleman has learned a lot about the House, and I say to him that he must have regard to the families in that part of our country. He must also take into account the fact that there is something about the British character which cannot be denied. It has an intrinsic attachment to certain of our economic activities. One of these is shipbuilding, another is coal mining, and the third is the steel industry.
I am sure that if the right hon. Gentleman is willing to look at the situation again and say to the Corporation that there is a case to be heard, my right hon.

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Friend the Member for Newton (Mr. Frederick Lee) will be able to say that his preparation of the submission that he has made with the support of his colleagues in the House and the admirable report from the local authority, has been worthwhile. I hope that the right hon. Gentleman's conversion to the idea that we must have a Corporation, coupled with the need to consider the position of Irlam in particular, will lead to his accepting our suggestion.
Lord Melchett, the Chairman of the British Steel Corporation, when speaking to the American Chamber of Commerce in December, 1970, said that during the past three years there had been some achievements, and he pinpointed the fact that, from being a loss-making operation, in the first year of the life of the Corporation, and bearing in mind the fact that in the last year of existence of the 14 companies which formed the Corporation there was a total loss of about £56 million, there was a loss of £22 million, and therefore there was an improvement. He said that there had been a considerable turnround in the half year ended last September:
"… we made a profit of over £13 million. When we look back over the previous 12 months, the profit was £23 million. On a capital of some £700 million, it is not a startling result, but it represents a ' turn round ' of about £45 million … If we had not introduced a much more stringent depreciation policy than had been the practice in the industry in the past, the profit for those 12 months would have been over £20 million better."
In other words, it was a modest success story, from loss-making to reasonable profit-making.
But only two months later, on 16th February, 1970, the present Minister for Industry said in a debate on the steel industry:
"But, as he"—
the then Minister—
"knows, steel prices have been too low for too long, which is one reason why the Corporation has been in difficulties."—[Official Report,16th February, 1970; Vol. 796, c. 154.]
So we have two different postures—the Chairman of the Corporation expressing confidence and the present Minister for Industry saying that prices were too low because of difficulties in the industry. But who fiddled about with the prices? The present Government.
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Lord Melchett also told the American Chamber of Commerce of two major concerns about the industry. His first was the increasing protectionism of America, and secondly, and I quote,
"The new Government has singled out our industry for further political attention."
He went on to express the hope that, in future,
"… like most advanced countries, we will manage to keep politics out of the normal conduct of the industry's commercial affairs."
He was saying that he had been singled out for political attention and that he hoped there would not be political interference in commercial considerations in future.
So whatever the Secretary of State says, the past 12 months have been unfortunate. The finances of the Corporation have been clear. They have not been as happy as we would have liked; some of the hesitancy caused by the Government's political intentions has caused some considerable damage. Perhaps we might find out later how much some of the investment programmes have been held up, causing acceleration of redundancies. The Government cannot blame the industry for their own decision to withdraw investment grants. This was a fatal blow, coming on top of the prices decision, for a Corporation which was hardly four years old.
In my constituency, in three or four months, we have had an announcement of 609 redundancies, and about 280 at the steel pipe plants. I move now from criticism of the Secretary of State to criticism of the industry itself. It seems odd that, while the Gas Council can place orders for the production of pipes for the distribution of gas over a number of years, the industry has not been able to plan how to produce them in our own steelworks. A large number of these pipes come from Italy, and are made by Italian labour.
On 23rd December last year, the Corporation told me that the reason was that pipes of this quality could not be produced in this country, and on the same day, the Gas Council said that, if it had given the full order to the Corporation, it would not have been able to meet the timetable. There are British pipes, produced from British steel, now in the ground carrying gas, so I do not understand this argument about quality.

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The closure of a light plate mill in my constituency has been announced. Officials have been causing great confusion in the last few weeks by saying that it might close and then that it might not. All the evidence is that it will close. If only the plant manager would keep quiet for a while and let Lord Melchett handle it, we might get some sense into this matter.
There must be more consultation on general closures. Some of us are very sad that another problem of the Corporation, on top of Government interference, is too much bad plant management, with all their fringe benefits like trips abroad and practices from days gone by. We have some exciting management, but there are still too many bad managers.
On the question of foreign investment in the industry, the Sunday Times in May said that one group which had approached steel makers in Germany for financial support had been told:
"We see no point in investing in British steel, for once you are in the Common Market, we shall put your steel industry out of business anyway."
One of the E.C.S.C. rules is that it should determine the levels of steel production here or anywhere else in the Common Market where a unit is producing 13 per cent. of the total capacity. On one side of the balance sheet we must put the investment of about £4,000 million by the middle of the 1980s to boost the industry's capacity from 20 million tons to 40 million tons, and on the other we must put the controlling elements of the E.C.S.C.
That is enough to worry about but we in this House will have no say anyway. The Commission and the E.C.S.C. will have the say and the hon. Member for The Hartlepools—or any other steel constituency Member—will not be able to ask a question here or would be wasting his time if he did. The Commission has so much power that many of us are convinced that even the Council of Europe cannot look after the whole host of regulations and decisions coming from it.
The Secretary of State has made a considerable improvement, but I am very much in doubt about future policy. This might be a peace-making approach from him and not a real intention to
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expand the industry. He should answer our precise questions about the future. On hiving off, perhaps he might undertake that Statutory Instruments will be laid so that the House will be able to consider them before they take effect.
8.20 p.m.
Mr. Alex Eadie: The Secretary of Slate rather took our breath away when he said that the proposals contained in his statement were not motivated by political dogma. I wish that he could have seen the looks on the faces of some of his hon. Friends behind him. They found his remark almost as breathtaking as we did.
The most significant point to come out of this debate is the fact that overshadowing his proposals are the possible results of the long-term study which he told us is being carried out by his Department into the future of the steel industry. I have in the past found that the vast Department over which he presides is liable to be accident prone, mainly because of the magnitude of its field of administration. We do not want any accidents to occur this time.
Many hon. Members have referred to the possible effects on the steel industry of our entry into the Common Market. It is well known that fears on this score have been expressed by hon. Members on both sides of the House. I have tabled many Questions to the Minister responsible for negotiating our entry, and I am still waiting to be told why we abandoned the concept of a one-year transitional period.
As I have pointed out in the past, the Government have a responsibility to include in the White Paper the facts about the future relationship of the British steel industry to the steel industries of the E.E.C. member States. What will be the future rôle of the British steel industry if the Government take us into Europe, even with the consent of the people and Parliament? Will our industry be allowed to expand? How will we be able to determine our future rôle and expansion programme?
I appreciate that when he replies to the debate tonight the Minister may not be able to give precise answers to these questions. However, they should be spelled out in the White Paper so that we may be clear about our obligations.

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We do not want to take any more steps in the dark.
It would be churlish if, as a Scottish hon. Member, I did not express relief at the decision to go ahead with the Ravenscraig project, particularly as we in Scotland are now more job hungry than usual. We have the highest unemployment level in living memory. With more than 121,000 people unemployed, there is much talk about the hungry' thirties.
Although we welcome the decison to go ahead with the Ravenscraig project, That does not absolve the Government from responsibility for causing the difficulty in the first place. It was disgraceful that the Scottish people should have been left hanging on the hook of indecision for so long, wondering whether or not the project would go ahead. An element of callousness crept in——
Mr. Hector Monro: Rubbish!
Mr. Eadie: The hon. Gentleman does not represent a mainly industrial constituency. In any event, if he has something to say, let him get to his feet and say it.
The delay which occurred because of the Government's attitude to the Ravenscraig project will cause additional cost, and responsibility for this must be placed on the Government because of their interference with the proposals of the B.S.C.
In this connection Government policy has been, at least in part, responsible for the £100 million loss to which the Secretary of State referred. After all, the Government's change of policy from investment allowances to tax incentives has cost the B.S.C. not far off the loss to which the right hon. Gentleman referred. In addition, the Government's refusal to allow the Corporation to charge a proper price for its finished products undermined its profitability, particularly in relation to prices charged in Europe.
Much has been made of Lord Melchett's agreement to the policy announced by the Secretary of State, but the right hon. Gentleman cannot disguise the strong pressures which the Government placed on the Corporation and Lord Melchett in recent months. In any event,
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how much have the Government interfered in the plans of the Corporation? By how much have they amended the various propositions that the B.S.C. has put forward? If the Minister intends to be as foolish as to say that these matters are privy between the B.S.C. and the Government, then the workers in the industry will press to know how much interference there has been in the affairs of the Corporation.
The right hon. Gentleman is responsible for trade and industry. He must be aware, therefore, of the debates that have been going on in Committee on the Bill which is concerned with the so-called peripheral activities of the B.S.C. Even hon. Gentlemen opposite have not been prepared in discussing that Bill to allow the Government to hive off parts of the National Coal Board without adequate consultation. His hon. Friends invoked the principle of parliamentary accountability if such a situation should arise.
These industries belong to the nation. Some of the National Coal Board's peripheral activities were such that even private enterprise turned its back on them, but the Board made them profitable. Who is to say that the same thing will not happen about the Corporation's peripheral activities? We are talking of the taxpayers' money and of industries that belong to the nation, and we should be told tonight that there will be accountability to the nation and to Parliament if there is to be any selling of peripheral activities. If that is to happen, the Secretary of State should first ask the permission of the House.
Some may feel that, as a result of pressure applied by this side, the right hon. Government's proposals are not as bad as were originally suggested, but we in Scotland are still dissatisfied. Our priority is not to get a statement of policy on steel from the Government, but to get rid of the Government so that in their place we may have a Government which will be concerned with our living conditions.
8.30 p.m.
Mr. Peter Rost: I shall not take up the argument advanced by the hon. Member for Midlothian (Mr. Eadie). I know that he feels very strongly on the subject, and is probably anxious to catch the local Scottish newspapers——
Mr. Eadie: Too late.
Mr. Rost: The hon. Gentleman's personal and vicious attack upon my right hon. Friend was entirely unjustified, unwarranted and completely unfair.
I should like to welcome the statement on the future of the steel industry, but I have serious doubts whether it goes far enough, and I want to refer to one or two points that I hope may be given some consideration.
Can we have some clarification, because this seems to be one of the areas of indecision, of when the B.S.C. is likely to make profits again? Until that stage is reached, it seems quite unrealistic to talk in terms of raising outside, private, free enterprise finance for the industry. The profitability of the industry must be seen to exist The industry must generate its own cash flow in addition to raising extra finance. We ought to be told for how much longer the taxpayer is to be expected to subsidise and prop up a nationalised industry as it now exists.
The House ought to have debated at slightly greater length today the reason for the industry's productivity being so poor. This is not just a question of capital investment. Productivity is affected by the amount of capital investment, it is true, but that is only one factor. We ought to be seeking an answer to the question why productivity over the past five years in Japan, for example, has improved by 80 per cent., while that of our European competitor companies has increased by twice our rate of 12 per cent.
My right hon. Friend is grappling with the problem fairly thoroughly by strengthening top management, but on my excursions to, and discussions with, the management of one unit in my constituency—Stanton and Staveley—I found it very critical of the still top-heavy structure of the B.S.C. central management. Those at the centre might be described as the academics and bureaucrats of Grosvenor Place. I am curious to know whether the Minister is now satisfied that the management's strengthening moves will be adequate to ensure that the industry will be led in the right direction for the general benefit of its employees and of the nation as a whole.
That leads me to the capital investment programme which is related to management because it is management which
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makes the decisions. Is my right hon. Friend quite sure that the British Steel Corporation is getting its sums right? I know that the longer term capital investment programme is still under review but this is a most crucial question which must be answered. We must have the right solution too. Will we be assured of an adequate capital return on the vast investment programme which the industry has projected and are we quite sure that the more efficient units within the industry will not be used to subsidise the less efficient, because I am convinced that this is what has happened in one of the more profitable offshoots of the industry, the Stanton and Staveley units in my constituency?
This was part of the plum Stewarts and Lloyds group before nationalisation. There is not much doubt that the Stanton and Staveley group profits have been siphoned off and used in other areas of the Corporation through the centralised, bureaucratic system. There is not much doubt, at least not within the Stanton area, that that group could have expanded more rapidly, created more jobs and improved its own prosperity through natural growth if it had not become part of the nationalised Corporation. The whole question of how effective the capital investment programme will be and whether the management will be strong enough to take care of it is a crucial issue for the future of the industry.
I want to say a word now about the restructuring in the form of holding companies. Why are we being so timid? Admittedly it is a move in the right direction that part of the Corporation should be given the opportunity of a B.P. solution with private capital being reintroduced. What about the bulk of it, the other 90 per cent.? Are we really sure that competition will be restored in the present structure and, if it is not, what future can there possibly be for the steel industry against the increasingly severe competition, particularly from Germany, Japan and the United States?
Competition there is from the free enterprise steel industry primarily, which is more competitive, more efficient and which is expanding more rapidly. Unless we are prepared to adopt a structure which will allow us to become competitive once more, doubts raised by hon. Members opposite with regard to the

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Common Market are justified. The industry here would be under severe pressure and this is exactly why it is so imperative that the industry gets restructuring right.
In my view, this can be done only through a far more radical restructuring into three or four units with a longer term "B.P. solution ". I genuinely feel that the basic troubles of the steel industry in this country are due almost entirely to the 1967 nationalisation. It was the doctrinaire, fanatical obsession with nationalising the industry which is now the root cause of the industry's difficulties. Until we are prepared to tackle that in a more vigorous way the industry will continue to struggle against foreign competition with increasing risk of reduced employment opportunities, reduced efficiency and profitability.
This side of the House argued along exactly those lines at length and convincingly in 1967 against nationalisation. Yet we are now perhaps a little too timid to spell out the real solution.
I conclude by congratulating my right hon. Friend on having taken at least the first step. It is a brave move in the right direction.
8.40 p.m.
Mr. Eddie Griffiths: One of the worst features of a debate on steel is to witness the difficulties the Government had in providing sufficient speakers to match us. In these debates we have to sit here and listen to sanctimonious, nauseating political hypocrisy such as that just shown by the hon. Member for Derbyshire, South-East (Mr. Rost), who some weeks ago practically crawled and whined in his seat and asked the Secretary of State to save Rolls-Royce. At that stage the hon. Gentleman regarded nationalisation as a saviour for Rolls-Royce. Other hon. Members have jumped on the Irlam bandwagon. The "lame duck" philosophy of the Department of Trade and Industry that everyone must stand on their own two feet goes by the board because these hon. Members think that there might be a few votes in it for them, although they have no deep interest in the steel industry.
For nine months we have waited with bated breath for the short-term review
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which the Secretary of State promised us. Then we heard of the steering committee of civil servants and consultants who were vetting much of the Corporation's activity, going through the books and ensuring that the accounts, plans and development schemes were in order. Things were built up to a great crescendo such that we were expecting a startling exposé by the Secretary of State.
However, in the statement he made on Monday the right hon. Gentleman had to accept what the Corporation and what we on this side had been saying to him for months. The right hon. Gentleman in his wisdom—here I congratulate him—has allowed the Corporation its capital investment of £225 million for the current year. Had it not been for the delay, that would probably have been £170 million to £180 million; in other words, because of the inflation which has occurred in the intervening period some schemes will cost the Corporation more money.
Mr. John Davies: The hon. Gentleman would not wish to perpetrate that inexactitude. The £185 million had a clean addition of £40 million to make it £225 million in the same values because additional investment was involved.
Mr. Griffiths: I am grateful to the Secretary of State, and I accept his correction. Will he or his hon. Friend the Minister for Industry indicate where the £225 million is going? I assume that a large proportion of it will go on the Anchor scheme. The right hon. Gentleman mentioned in his statement Llanwern and Ravenscraig. They are substantial schemes. What other schemes to the value of more than £10 million are in the pipeline to be instigated during the coming year?
The general secretary of my union—the Iron, Steel and Kindred Trades Association—was Chairman of the Steel Steering Committee. He has complained bitterly about the shoddy treatment the Ministry has accorded the union over the announcement. Will the Secretary of State ensure in future that trade unions involved in the industry, at national level and, when there are local problems, at local level are consulted meaningfully at an early stage when announcements are to be made?
I welcome the right hon. Gentleman's assurances that during the coming year

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and for the future far greater flexibility will be allowed to the Corporation in its pricing policy. I hope that the Prime Minister will not find it necessary to interfere with the pricing policy of the Corporation. The Secretary of State ought not to allow him to do so.
On the question of hiving off, the right hon. Gentleman and I disagree about the philosophy of selling back some parts of the steel industry to private investors, or operating them on a joint basis with the Corporation. He is entitled to his opinion, and I am entitled to mine. I suggest that if he sells off certain assets to private investors, or merges them with private investors, the operation must be seen by the steel workers to be fair and equitable. In other words, whatever new company is formed must be formed for the purpose of expanding production and maintaining job security for the future.
In passing, I want to refer to the case brought to the right hon. Gentleman's notice about the proposed merger of the Shepcote Lane rolling mill and the Firth Brown organisation of Sheffield. For some time the Corporation has been keen for the rolling facilities to be entirely in its hands. As part of the deal the River Don Works is to be given to Firth Brown. The argument is that there is some overlapping of interests, and that the two plants are near enough adjoining as to lend themselves to rationalisation.
The men on the shop floor are saying what we have been saying: namely, that this is not rationalisation, or a merger between Firth Brown and the River Don Works for a future expansion of activities; the idea is that Firth Brown—a private company—should act as a sort of commercial vulture and pick those bones from the River Don Works that it wants and that will fit into its set-up.
The rest will go to the wall—the rest being the 4,500 or 5,000 workers. They are not labourers, or semi-skilled workers; they are craftsmen of the highest calibre. If that kind of workmanship and craftsmanship cannot be retained in the industry it will be a great loss to this country. We may have our political differences and dogmas, but I ask the right hon. Gentleman to heed the warning that the hiving-off operation in the case of Shepcote Lane and Firth Brown will bring his philosophy
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into disrepute within the industry. In that instance people will see it for what it is—a take-over of the River Don Works for one purpose only; namely, to take its order books and then to close it. I ask the right hon. Gentleman to consider the matter in that setting.
As for the general policy of hiving off, I hope that the Minister can assure us that the price to be charged to a potential buyer will be at the sole discretion of the Corporation; in other words, that there will be no artificial deflating of the price asked in a buyer's market. Will he also undertake that before an asset is sold off there are two potential buyers for it and not just one?
It is being said that the Brymbo Steel Works will go to Guest Keen and Nettlefolds, one buyer, at a give-away price. I hope that the Minister will consider that side of the question and ensure not only that the price is entirely in the hands of the Corporation but that there will be two potential buyers waiting and bidding for those assets which he may wish the Corporation to sell off.
Now, a word about the future growth of the industry. I have always tended to be pro-Common Market. I have never been fanatical about it, but I have always sincerely believed that it would be in the best interests of the British steel industry, the industry which I love particularly, that it should go into the wider market of Europe. But I have great misgivings at the moment. According to the information and reports coming out of Europe, the Community is saying, "We have no objection to the present size of the Corporation, and we have no objection to the present ownership of the British steel industry", but I suspect that an undertaking has been given, or may be given unofficially, that the expansion programme will go by the board and that the British steel industry will be retained at a level acceptable to the Community.
I suspect that words have gone out to the Community in the context of what the right hon. Gentleman proposed in his initial statement—I am sure that he will confirm that this is only a forerunner of things to come—indicating an understanding on the part of the Government, not the right hon. Gentleman personally, that by the time we are through with the British Steel Corporation, by the time

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we have picked a little bit off here and knocked a litle bit off there, it will be of a size acceptable to the Community.
I now offer an invitation to the Secretary of State. He has great experience of business, but I suspect that his experience is basically that of the boardroom, and I am sure that many of the voices which he hears as he goes about the country come from chambers of commerce and people at high company level. I ask him to come to Sheffield in the near future to meet not the chamber of commerce, not the Cutlers, not the people one meets in places where formal dress is worn, but the steel workers of Sheffield. If he can sell them his ideas for hiving off and forming companies between the public sector and the private sector, he will truly be a master of his trade and genuinely deserve to be in charge of the Department of Trade and Industry.
Now, a brief word about Irlam. I do not want to go into the arguments for and against Irlam, but I say this to my right hon. and hon. Friends as much as to the House as a whole. We on this side often say that we want a huge capital investment for the British Steel Corporation, that we want the £4,000 million, that we want large integrated steel plants and that we want to compete in world markets, but we are sometimes guilty of for-geting that the cost of rationalising and going into steel in a big way is often the closure of seemingly unprofitable and antiquated plants in various parts of the country. When that happens, we take a parochial attitude, and we try to destroy the system in which we believe because it does not suit our particular book at the time.
In the case of Irlam, it is all right to make speeches such as the one we heard from my right hon. Friend the Member for Newton (Mr. Frederick Lee). Any Member from a steel constituency could make a similar speech. My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) could say the same about the steel workers of Ebbw Vale. I suspect that the workers of Sheffield were making steel before Irlam had ever heard the word "steel". The clouds go over all of us in turn. What we have to do, I suggest, is to set our sights on a flourishing steel industry for Britain.
8.54 p.m.
Mr. Joseph Ashton: I shall be as brief as I can so as to give others of my hon. Friends a chance to take part in the debate. I do not intervene from a constituency standpoint, but I worked at the River Don Works for 10 years, and my father works there now. He works in the Grimesthorpe foundry, but he senses the cloud hanging over him now, and he wonders whether his job will last until he is 65. If I thought that its plans for the River Don Works in Sheffield were to be the final plans, even though they involved hiving off, I would be prepared to accept them. Unfortunately, the River Don Works has a long history, since the 1914–18 war, of not being a complete works but a sort of ten-legged camel, created for war purposes.
Its history goes back to the days of Cammell Laird, which was taken over by Vickers, and then this was tied in with Firth Vickers, and later became part of Firth Brown. This was part of John Browns in wartime and became a profitable and highly efficient war machine. It has been not a steel producer but on the dividing line between steel production and engineering, with the result that it has always suffered from the kind of proposals that are now made for it.
When the Labour Government went in for nationalisation in 1966 they made a fatal mistake. They thought that they had a large amount on their plate, so they decided that they would nationalise only bulk production of steel. The River Don Works was on the fringe; partly producing steel in bulk—rods, wine and so on—and partly producing heavy forgings, and part was engaged in heavy engineering.
The English Steel Corporation was very profitable, with a monopoly in work such as the making of the propellers for the Queen Mary, drills for oil wells, and so on, work of a specialist, one-off, nature. The Labour Government should have gone further and nationalised the Firth Brown part of the works, where steel production turns into engineering. There would then have been none of the present trouble. We would have had rationalisation, but it would have been rationalisation for the benefit of the industry from a technical and engineering point of view and not from a profit point of view, which

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unfortunately is what has happened today.
I should like to say a little about what is happening in Sheffield and the atmosphere there. There are understandable, emotional headlines in the local newspapers about the workers saying they should take over the factory. People whom I worked with came to see us in the House this morning and asked, "What are you going to do for us?" They think that M.Ps have lost respect for them. They think that we have forgotten the days when we worked side by side with them on the shop floor. We have not, but too often we are faced with economists and other experts in Whitehall who believe that what counts is the profit margin and not what happens to people.
The English Steel Corporation or the River Don Works—whichever of its numerous names of the past 50 years we care to use—will, like Krupps in Germany, continue to produce. It has the engineering skills to pull it through. But we need to settle the uncertainty affecting 4,500 people. How is that number made up—how many people, how many departments, how many shops? What sort of jobs are affected—fitters, turners, engineers, steel melters, rollers? What is to happen to them over the next two years? When will phasing-out occur? What will happen in the interim period?
Someone, somewhere, knows the answer. The people who work there are entitled to know that answer, and they are not getting it. There is no consultation; the only thing we have is communication. Too often the ordinary working man is told, as in the case of Rolls-Royce, Upper Clyde, the coal mines and now the steel industry, that his job is going, that rationalisation is taking place. The working man is treated as a unit, a cipher and no longer as a skilled individual who has something to add to an industry and who should be consulted when its future is decided. It is not good enough for politicians and Governments to act like that. It is essential for the Minister to tell the people concerned within the next few days what their future is, what the picture will be in two or three years' time, and why the redundancies are necessary.
We on this side do not accept it as necessary. We think that a lot of it is
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being done for doctrinaire reasons. We are fed up with the continuing confusion over the industry. We are fed up with the chopping and changing and decisionmaking, often by people who do not know what is involved, who are miles away and who do not visit or consult or talk. The average working man is totally fed up with the way they dominate his affairs. That is why he is afraid to go into the E.E.C. He is afraid of decisions being taken in Brussels. The workers are entitled to some answers, and if those answers are not forthcoming no one can blame them for taking any action which is not democratic.
9.0 p.m.
Mr. W. T. Williams: During my lifetime, I have lived with many changes in the steel industry and I had hoped in 1967 that I had lived through the worst of them. Now we appear once more to be back to square one. No one can have listened to this debate without having sensed the anxiety that is spreading throughout the steel industry about many things. There is anxiety about the position of the steel industry within the E.E.C, about which far too little has been said by those who should know what the long-term consequences to the steel industry will be should we join.
There is anxiety about the consultations within the industry, of which my hon. Friend the Member for Bassetlaw (Mr. Ashton) and others have spoken. There is anxiety above all about the nature of the restructuring within the industry that is being carried out by the Government and by the Corporation. I had hoped that it might have been possible to have developed my thoughts on these matters. I shall restrict myself, however, to this: through all the experience of this industry from poverty and despair to prosperity and hope and now back to times of anxiety the concern that is now felt within the industry can perhaps be best seen when one looks at the isolated spots where one can see in a small compass the way in which the Government's policy for steel is being reflected in its social and human consequences.
My hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) said that those of us concerned about places like Irlam had to consider the total

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picture. Yet these small communities and the way in which they are being treated are perhaps the best illustration of the attitude of the Government generally, and justify the concern which many of us feel about the social and human consequences of their policy. When I speak for Irlam, therefore, I speak also for all the human beings who work within the steel industry who are now being treated like cogs in its machine.
In Irlam, for instance, the Government's decision to close the works will bring increased unemployment to an area where there are far too few places of alternative employment. The price in human terms of the changes which will follow closure is too high to justify even real economic advantage. The increase in the number of unemployed in Irlam alone is from 105 in April to 2,226 after the closure—from 1½ per cent. of the population to 21·2 per cent. And these figures, tragic in themselves, have an effect that is going to be widespread throughout the whole of South Lancashire. In Warrington alone the increase in the number of unemployed will be 354. This makes a mockery of the British Steel Corporation's comment that it was giving serious consideration to the social consequences of these acts. The chances of re-employment for the people who lose their jobs in the Northwest are pathetically slight. Since the beginning of the year the consequences of the Government's policies in the Northwest have led to over 16,000 redundancies in this small area of Britain. In April of this year there were available in the region about 18,500 vacant jobs of all kinds for nearly 110,000 unemployed, most of those wholly unsuitable jobs for the new people whom the Government have made unemployed, for of the 4,500 people who will be thrown out of work in Irlam, over a quarter are skilled steel workers unused to other work, and nearly half are men over 45 years of age.
The picture, therefore, is of a large number of unemployed in South Lancashire left on the scrap heap, without hope of re-employment and with all the consequences of misery and despair that follow from that dreadful situation that we thought had been left behind as before the war. All this for what? The cost
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of making Irlam viable is miniscule in comparison with the overall capital expenditure of the B.S.C. When one considers the cost to the Exchequer of unemployment and social security benefits of about £2 million a year, surely it would make greater economic sense and be more humane to provide capital for maintaining Irlam than to keep the people unemployed. The demands of social justice are clamant here.
Even so, I should have little confidence in presenting this case, because I know the Secretary of State for Trade and Industry has little sympathy with the argument that the Government should provide investment for industry to save the souls of the unemployed, but for one thing. The way in which this industry could be made viable at little cost has been excellently set out in the report of the Joint Action Committee in Irlam. I urge the Government, even now, not to destroy a possibly viable community for so little advantage. Let the Secretary of State belie at least one part of the unenviable reputation he is earning for himself, even among those of us who know him and like him personally, that, although he is personally so pleasant, he is showing himself socially so pitiless.
9.8 p.m.
Mr. Eric G. Varley: I agree with my hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths) that when we debate solid industrial matters such as the coal industry and the steel industry there is never much interest on the benches opposite. They have been empty for most of the day. This is understandable, because coal miners and steel workers are far too sensible to send Conservative representatives to the House of Commons. I make no complaint. I congratulate my hon. Friends on taking advantage of this situation. According to my calculations, we have heard seven speeches from the Government side of the House and 13 from this side.
The Secretary of State in opening the debate began by telling the House that he wished to avoid uncertainty in the steel industry. He also promised to say something about the long-term future, and my hon. Friends were surprised when he came to such an abrupt end. The right hon. Gentleman has done nothing to clear up the uncertainty that exists

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or to allay our fears. There is uncertainty about the long-term review, when it will be completed, how it will be presenetd to the House and what it will say. Following the Secretary of State's statement to the House the other day, there is now uncertainty about the Corporation's pricing policy, and again the Secretary of State did not clear up this matter. I hope that the Minister for Industry will attempt to do so in his reply.
There is uncertainty about the employment prospects. We have heard from my hon. Friends from steel constituencies, particularly those from Sheffield, how uncertain and tense is the atmosphere there where there is the likelihood of 4,500 redundancies. We should like the Minister to say what he knows about this situation and whether this will go through. We hope that he will be able to give us more information than we have had up to now.
Then there is uncertainty about hiving off and what form it will take. One recent informed report in the Daily Telegraph suggested that this process could go on for two years—two years of uncertainty, two years of doubt. We do not know at this stage what section of industry will own what, and at what particular date—and, if Press reports are anything to go by, Lord Melchett and the Secretary of State admit that they have no idea either. There is even speculation in the Daily Telegraph that the name of Krupps may be posted over the entrance of the B.S.C. enterprise. I hope that is not true, but it was in yesterday's papers.
No wonder The Times Business News in a leading article has made what I consider to be an indictment of the Government. It said:
"… a great deal of B.S.C. management energy is going in the coming months to be devoted to sorting out who buys what or who surrenders their assets, and complex constitutional questions."
Another section of the same issue said:
"A number of major question marks still hung over the future of Britain's steel industry."
This is the situation after a year of Tory Government, after a year of power by a party which pledged in its election manifesto "progressively to reduce involvement of the State in nationalised industries, for example the steel industry". This is a party whose spokesman
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attacked the Labour Government only 16 months ago in a censure debate on steel in the devastating terms which I am about to quote. The Minister for Industry knows what I am going to say, since he took part in that debate. The Conservative spokesman then said:
"The Government have denied the Corporation the ordinary commercial freedom to cope with prices. They have delayed and distorted the price movements… the Government's political juggling with prices and delays in dealing with them have led to even higher increases than would have been necessary."—[Official Report,16th February, 1970; Vol. 796, c. 107–8.]
That was the present Secretary of State for Social Services, then the Opposition spokesman on steel. Another passage in that debate in columns 153–4 is even more relevant when one hon. Gentleman said:
"One of the ways in which the Steel Corporation will be able to show a better return on the capital invested in it is by more realistic pricing policies … steel prices have been too low for too long, which is one of the reasons why the Corporation has been in difficulties."
That was said by the present Minister for Industry, who wound up that debate speaking from this Dispatch Box 16 months ago. When we contrast what has happened in the last few months to the B.S.C. with the way the situation has been handled those words to some extent border on hypocrisy.
It should come as no surprise to the Government, to the Secretary of State, that this debate has hinged upon the future of the steel industry. As my hon. Friend the Member for Ebbw Vale (Mr. Michale Foot) said, the statement by the Secretary of State on Monday told us very little about the long-term future of the industry. All it did was to make vague references to hiving off, the details of which are still no clearer. The Secretary of State is frowning, as though in dissent, but so far as we are concerned it was vague. If the Minister for Industry has anything further to tell us tonight we shall be pleased to hear it, but the Secretary of State vaguely told us about setting up new private companies for construction and chemicals and that kind of thing.
I should like to remind the House of what the Secretary of State said when we last debated these matters on 24th May. Referring to his first review he said this:
"We will take all relevant factors into account, including price factors and including

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not only home price factors but competitive prices abroad."—[Official Report,24th May, 1971; Vol. 818, c. 73.]
We thought on Monday that all this would be revealed and that we would know precisely how the pricing arrangements stood, but still this is not clear. It is certainly not clear from the right hon. Gentleman's statement on Monday, because he said:
"As regards prices for the B.S.C.'s products, the Corporation wishes, in future, to be more selective in its price changes, dealing with its products individually rather than upon an across-the-board basis. I am in favour of such a change in practice. …"—[Official Report,28th June, 1971; Vol. 820, c. 34.]
Can the Minister for Industry tell us what that means? Does it mean precisely that the Corporation is now free to charge prices for its individual products? Can it do that? I know that there is the normal consultation and the consultative procedure, but if, for instance, the Corporation comes to the Secretary of State saying, "We want to put up the price of this particular product" can the Secretary of State say to the Corporation in future "Yes, go ahead and do it"? This is absolutely crucial. We all know what happened on that Friday morning when a hurried Cabinet meeting took place and the Prime Minister decided he was going to intervene and the Secretary of State issued a direction to Lord Melchett, a direction which was, I believe, against the better judgment of the Secretary of State. Can we now take it that the Government are giving the Corporation marketing and price freedom? Everybody is concerned about this. It is bound to have been discussed and settled in detail; these discussions have been going on. I think the House is entitled to this information.
The Secretary of State this afternoon had some gloomy things to say about the Corporation's financial position. As many of my hon. Friends have said, this cannot be looked at in isolation. First of all, the Corporation is operating in an atmosphere of chronic economic recession. Nobody denies that. We on this side of the House believe that it is a recession stimulated by the Government, and it is a recession, if Monday's debate is anything to go by, which the Chancellor of the Exchequer and the Secretary of State for Employment gloried in,
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because certainly they announced in that debate nothing which will mean that there will be an improvement in the situation.
Steel users are in difficulty and curtailing their activities. For example, how much damage will be done by what I consider to be the stupid handling of the Upper Clyde Shipbuilders situation? Thirdly, in his statement on Monday the Secretary of State talked optimistically of the Corporation's need to move into profitability, and he referred to the expansion programme at Ravenscraig and Llanwern. How will the Corporation's financial position be damaged? In an intervention earlier, the Secretary of State said that it had not been damaged by holding up these expansion plans. I believe that it has, and again the Minister for Industry should tell us. Certainly those at Ravenscraig and Llanwern have been damaged because of the withdrawal of investment grants. It is probable that this has been estimated. I cannot believe that the joint steering group has not presented to the Secretary of State the precise estimated losses on those two projects as a result of the withdrawal of investment grants.
There are other crucial questions which the Minister for Industry ought to answer tonight. Can he tell us, for instance, what form the possible sale of the Brymbo Steel Works will take? In his statement on Monday, the Secretary of State gave the impression that the only discussion about the sale of the works will be with Guest, Keen and Nettlefolds. Is that really the case? If it is, irrespective of the merits or demerits of hiving-off, it is a poor capitalist concept to tell the British Steel Corporation to get rid of the Brymbo Steel Works and to open discussions with only one firm. If that really is the case, I am amazed, and I bet that G.K.N.s opening bid will be a paltry affair. Unless the Government can say that the sale of the works will be open to all bidders, we cannot help but form the impression that the British Steel Corporation is a forced seller and that a valuable asset will go for a pittance. It is important that we are told about it.
I do not wholly share the views of some of my hon. Friends who say that Sir Raymond Brookes of G.K.N. is getting the works as a pay-off for services

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rendered to the Conservative Party. If that is the case, surely it would have been cheaper to have sent him as Ambassador to Washington or to some similar post.
It is that kind of circumstance that we on this side of the House have in mind when we give the solemn warning to those who are thinking of bidding. If we are right in our suspicions and only one firm is bidding, that firm will get its fingers burnt. That is what we mean by renationalisation without compensation. I have never been in favour of confiscation, but if there is to be only one bidder, my hon. Friends cannot be blamed for the line that they take.
I want to ask the Minister also about the Parliamentary control of the sale of those parts of the industry which are to be hived-off. My hon. Friend the Member for Ebbw Vale mentioned this, as did the hon. Member for Worcestershire, South (Sir G. Nabarro) and the hon. Member for Bedford (Mr. Skeet). Certainly I know the views of the hon. Member for Bedford, since he served on the Committee which considered the Coal Industry Bill and was as anxious as any hon. Member on this side that provision should be made for it. We want an assurance that, if the sale of an asset takes place, there will be legislative and Parliamentary control. We want to ensure that any disposal of a public asset shall be allowed only with the approval of this House in possession of all the facts. We want to know from the Minister for Industry whether, for example, the Brymbo Steel Works and others are likely to be sold off without parliamentary control. If it is, it is nothing short of a scandal.
I hope that the Minister will be in a position to explain in more detail the time scale and manner in which new companies are being formed to deal with the constructional engineering and chemicals divisions.
The headquarters of the chemicals division, and a substantial part of its production, is at Staveley, which is part of the Chesterfield constituency. Never at any time has any question been raised about its efficiency, its profitability or its long-term future, yet now unnecessary confusion has arisen because of the Government's determination to satisfy some of their Selsdon Park prejudices, if I can put it that way. Can the Minister
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give us an assurance that when these new companies are established all those employed at Staveley and elsewhere in the chemical and constructional engineering divisions will be assured of future employment?
Another matter arises out of that. If there is to be rationalisation in these new private companies, if there are to be mergers as suggested by the Secretary of State this afternoon, what part will the Corporation's social policy unit play? Quite properly a great deal of credit has been given to the Corporation, certainly up to a few months ago, for its humane approach to manpower rationalisation problems. Will the social policy unit have a rôle to play in these new companies when they are set up? Whn they are quoted companies, will the Corporation still be involved in that way? If the Government are not able to answer that simple question, it will show how ill thought out these matters are.
But what the House is really interested in is the future, in this second phase, in the Steering Group No. 2 Report. The steel industry over the last 12 months has been subjected to the most intolerable pressure, and the first outcome of that has been the hurried and often heartless way in which redundancies have been announced. The same sort of thing has happened in Sheffield. It is not just a question of relatively junior officials of the Corporation speculating about what will close and what will not and all the difficulty that has been created there. What concerns us is the hurried and heartless way in which these matters have been dealt with, involving, as they do, jobs and lives. What has happened belies the attitude that we expected from the Corporation in dealing with redundancies, an dwhat we thought was its determination to cushion the social impact of redundancies.
Now we have the next stage. There has been this rearguard action against the B.S.C., brought about primarily by the Minister for Industry. I think that he is the nigger in the woodpile, if I may so put it. I do not think that the Secretary of State is happy with the way things have gone. We have seen a display of ideological malice, and Lord Melchett has had to jeopardise about a potential 14 per cent. of his turnover as the price

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for being allowed to continue with his capital expenditure programme or this year, and for this year alone. He has a sword hanging over his head. All that he is being graciously allowed is the extra burden of interest charges in place of the price increase that he has been denied, and yesterday's Daily Telegraph said that in many respects that thas accentuated the Corporation's financial loss.
Added to all that, I think that Lord Melchett has been subjected to terrible pressure and great indignity, but hes has put an extremely brave face on things throughout the situation. The industrial corespondent of the Daily Mirror summed it up very well yesterday when he said:
"In exchange for putting a brave face on this sell-off proposal Lord Melchett, Steel Corporation Chairman, has got Government backing for a £225,000,000 investment programme …"
As my hon. Friend the Member for Rotherham (Mr. O'Malley said, Lord Melchett's arm has twisted so much that his grimace is being misconstrued as a smile. The hon. Member for Bedford quoted something from the Financial Times, saying that they were the actual words. As one of my hon. Friends said, if one is threatened with hanging and it turns out that one will only be tortured, at the end of the process one may say, "Thank you." That is precisely how I view this situation.
The future price which the industry has to pay is the serious unemployment situation. The Steel Corporation has always made regional location one of its chief priorities, yet this vital priority may well be the next sacrifice to dogma.
The question which most exercises my hon. Friends from the hardest-hit regions is where the new green fields site works will be located. Jobs for the jobless and a boost for the regions where hope is scarce is uppermost in our minds. What a terrible let down it would be if it turned out that the Government's favoured location was not a development area but somewhere in the South-East, as close as possible to the markets and combines of the E.E.C. There has already been shock and disappointment at the location of the V.A.T. office. I do not particularly want the office all that much anyway. but if it has to be, it should at least be in a development area.
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We will not be satisfied unless the Minister gives us a categorical assurance that not only will there be a new green fields site but that it will definitely be located in a traditional steel area which is at the moment affected by high unemployment. I know that many of my hon. Friends have an open mind on the Common Market, but they would regard it as extremely serious if it seemed that, in preparation for entry of Europe, the Government were prepared to tilt even further the industrial centre of gravity towards the overcrowded and still relatively prosperous South-East.
So there is anxiety here. The anxiety about the E.E.C. and its impact on this industry has been mentioned time and time again. Can the hon. Gentleman assure us that, in the White Paper, all these aspects will be considered? What will the Community have to say about the future expansion of the steel industry? It is absolutely crucial that we know. This is not an anti-Market point. Many of my hon. Friends who have open minds about this issue want to know, because this will determine their attitude.
Over the last few months the Steel Corporation has been subjected to a ruthless and humiliating intervention, in direct contradiction of the Government's Election manifesto. The postponing of the 1971–72 investment programme has added millions of pounds of extra burdens to the industry.
The proposals for hiving-off do not make economic sense to us. We have not been assured that there will be parliamentary scrutiny. There has been no consultation with the trade unions, which we were told would take place. This is not economic sense; it is just partisan spite.
At the end of the day, every industry in this country depends upon the confidence of those who are employed in it. In view of the way that the situation has been handled over the last few months, I can tell the Government and some of those in the industry that they have lost the confidence of the steel workers and the confidence of the nation as well.
9.35 p.m.
The Minister for Industry (Sir John Eden): The hon. Member for Chesterfield (Mr. Varley) considerably exaggerated things. I hope that in attempting to answer at least some of the questions

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which hon. Members have asked I shall lay some of the quite unnecessary fears which have been aroused.
The one main point raised by many hon. Members on both sides has been the situation in Irlam, and I wish at the outset to inform the House of the situation there now. Perhaps the best way for me to do this is to explain the view of the British Steel Corporation. As the right hon. Member for Newton (Mr. Frederick Lee) was speaking, I felt that he was addressing many of his remarks directly to the Corporation, about which, in this instance, he and a number of hon. Members had some critical things to say.
I am sure that the B.S.C. is willing to consider any alternatives which the trade unions may wish to put forward to its proposed course of action. The Corporation has already made it absolutely clear to the men concerned that it will approach any such alternative strategies with a completely open mind. It will be known to a number of hon. Members that the Corporation agreed to set up a small joint committee, consisting of the unions and management, for the express purpose of considering the unions' counter proposals.
I believe that this joint management committee had a meeting yesterday, though I apologise for not being in a position to give a report on precisely what took place. If the proposals which the B.S.C. has so far put forward in connection with Irlam should later be confirmed, there will still be time for alternative arrangements to be made by and for those affected.
As the House knows, the rod mill on that site will in any case continue. This mill may well be involved in some of the discussions which are taking place about the wire facilities which my right hon. Friend mentioned in his statement on Monday. Apart from that, the Corporation will certainly consider—indeed, it is already considering—approaches made to it to acquire properties at Irlam with or without the associated wire activity.
The Corporation stresses, however, that any such consideration will have to take careful account of the effect there would be on the demand for semis from its own production facilities which are in existence or planned to be under construction
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in the country as a whole, and here it has especially in mind the situation at Scunthorpe.
The observations made towards the end of the speech of the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) on this matter put the situation in its proper context. It is an extremely difficult one, but the fact that the Corporation is approaching the matter with a completely open mind and is ready to receive representations and enter into discussions with the unions should be of some help.
Another matter raised by a number of hon. Members was the possibility of redundancies arising out of the announcement that the B.S.C. and Firth Brown had been discussing the possibility of rationalising their joint and competing interests in the area. This appears to refer to the River Don situation, and in the joint statement which was issued on behalf of the Corporation and Firth Brown there appeared a reference to the fact that the B.S.C.'s other activities at the River Don would be reorganised or terminated.
The situation has got no further than that. The discussions with the trade unions concerned will now begin. All the proposals are subject to final negotiation and agreement between the two parties. The future of the River Don Works will obviously call for very detailed consideration and planning, and the closest consultation with the trade unions. This procedure is normal in the sense that the first thing that has to happen in cases of this kind is that approval in principle has to be given before the actual detailed negotiations and discussions can take place.
Mr. Darling: No.
Sir J. Eden: It is the same sort of thing as took place when the Round Oak and Tube Investments agreement emerged with the creation of a joint venture company under the previous Administration, 50 per cent. owned by B.S.C. and 50 per cent. owned by Tube Investments. The right hon. Gentleman the then Minister of Power had to announce his approval in principle for the transfer of assets to the new company to take place, and once that had happened the detailed negotiations and discussions could proceed.
Mr. John Mendelson: Does not the Minister recall that in the case that he mentions there was also a period after the original intention had been announced before the Minister gave his final approval? Could not the Government say tonight that only a preliminary announcement has been made, that they have not given approval, and that over a period of several weeks or months they will consult the trade unions before giving final approval?
Sir J. Eden: We have given our approval in principle to the proposals as announced in the joint statement, and I think that it is in the general interests of our steel industry that rationalisation at the boundary between the two sectors should take place.
The hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot) took me to task for my failure to consult the unions—[Interruption.]—or I think it was he. At any rate, someone did—perhaps the whole of that side of the Chamber.
I saw the unions concerned on 18th December last, on 28th April, and finally on 28th June of this year—just before the statement was made. I accept fully that that last meeting took place only just before the statement was made, but I was able to assure the unions—and I meant this absolutely—that I had taken their views very much into account in the earlier discussions. I am sure that I was right to have seen them earlier on, and to have given full consideration to what they had to say to me. I am sure, equally, that it would have been wrong for me to have spelt out the details of the statement which my right hon. Friend was about to make, in the first place, to the House. But I went as far as I could in indicating the broad lines of the direction in which we propose to move.
Further than that, I made it quite clear at that meeting, and have since written to confirm the fact, that I am ready to meet them again whenever they feel ready to come forward and to discuss in greater detail whatever they may wish to raise in connection with the statement.
Mr. Michael Foot: I was quoting what was said to me today by representatives of the steel committee of the Trades Union Congress, who regard this as a breach of faith. That is what they authorised me to say, and if the Minister looks at the
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undertaking he will see that that is the case.
But would the Minister now, in an attempt to repair the situation—[HON. MEMBERS: "Oh."]—give an absolute undertaking that there will be a veto on any approval under any of these proposals if the Corporation is not satisfied that the new companies or new firms are able to carry out the obligations which the Corporation itself has under the Act of Parliament, and in accordance with the way in which it has carried out its procedures in the past?
Sir J. Eden: I will come to the new companies in a moment. The other point that was very much in my mind in these matters was the extent to which the Chairman of the Corporation had agreed the broad lines of the approach that we were making. One of the most important parts of my right hon. Friend's statement was that which referred to the fact that:
"… the Corporation fully recognises the need to find a solution to the problems of private sector re-rollers and others who are substantially dependent upon the Corporation for supplies of billets while at the same time competing with it in finished products."
This is a very important affirmation and it will almost certainly lead to the creation of a number of new steel and billet-making companies. I cannot at this stage say what total proportion of assets or capacity is likely to be involved because this depends very much on the nature of the negotiations which will now be able to take place and also upon what proposals the Corporation will put forward to those from the private sector who will enter into discussion with it.
The hon. Member for Chesterfield asked me about Brymbo and was I really right that the discussions would take place only with G.K.N. The answer to that is, "Yes they will take place only with G.K.N.". This is a question of reopening negotiations with Guest, Keen and Nettlefolds about the future of the Brymbo Works. That form of words is no different from that used by the right hon. Gentleman the then Minister of Power in 1967 who stated by means of a Written Answer in this House that discussions were continuing with Guest, Keen and Nettlefold about the future of the Brmybo Works. Those discussions at that time were frustrated. They are now being reopened and it is considered

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by both parties to be in their best interests to do so.
The exact form of the outcome of these negotiations I obviously cannot spell out because they are now only just about to take place. The important thing to remember in all these matters is that the way is now clear for the Corporation to negotiate a series of transactions which will be in its best interests. It agrees very much with the industrial logic of our proposals, mentioned by my right hon. Friend on Monday.
I have been asked about accountability, which is an extremely important matter and I do not pass over it lightly. First we have to bear in mind that these will be transactions with which the Corporation agrees. The emphasis is entirely upon a joint venture, joint public /private ownership and it will now enter into the negotiations to achieve what is believed to be a sensible solution. I and my right hon. Friend are very ready to answer to this House for the general implementation of disposal policy as a whole and the Corporation has agreed to include in its annual reports a full account of progress with as much detail as it is commercially prudent to reveal. We must bear in mind that these are commercial transactions, in some cases, as with Firth Brown, involving Stock Exchange quoted companies and it is absolutely vital that the Corporation should proceed in the way that I have described.
Sir G. Nabarro: The operative words are "answer to this House" firstly and "as a whole" secondly. May we have my hon. Friend's assurance that some instrument such as an affirmative Resolution to implement each of these transactions will be laid before the House so that we may examine each of them individually?
Sir J. Eden: No, Sir, I do not think that that would be a right or a sensible way of proceeding. [HON. MEMBERS: "Why not?"] Because I am sure that the proper way to proceed is to leave the negotiations to the Corporation to ensure that it gets a fair price for the assets concerned and to keep the House, through the Corporation's annual reports, as fully informed as possible of the progress which is being made. This will give the House ample opportunity for
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debate on the accounts and on any subsequent occasions as they occur. I cannot agree to inform the House on individual negotiations, because so much of this must rest within the Corporation's commercial discretion.
The Joint Steering Group is not a constitutional anomaly, as it has been described by some hon. Members. There is no question here of Ministers or of the Steering Group trying to manage the industry. It is simply a fact-sifting operation. There are many precedents for this type of operation of which right hon. and hon. Members opposite do not need to be reminded. There is no question of the Corporation's responsibility or of Ministers' prerogative being in any way interfered with.
The Steering Group study which is about to get under way in the long-term review was the subject of a very detailed reference by my right hon. Friend in the debate on 24th May. A number of hon. Members have asked why my right hon. Friend was not giving greater detail. If they will refer to columns 73–75 of HANSARD for that day they will find in very considerable detail both the objectives and the scope of the discussion which will now get under way with the co-operation of the Corporation in this longer-term review.
This will enable us then to answer the questions about the green field site and about the major investment programmes for the future. It is easy now to ask for a decision across the Dispatch Box about a green field site. This is a vast complex. As my hon. Friend the Member for New Forest (Mr. Patrick McNair-Wilson) said, the one operation involves £1,000 million in investment and this will set the pattern and the course of the industry for a decade and more ahead.
These decisions must not be taken lightly. We must go into them as carefully and as thoroughly as we can taking into account international developments, the technological developments, and the nature of competition with which the Corporation is likely to be faced. [Interruption.] I have already answered that question. It is impossible to give any information about the green field site. This is what the purpose of the review is. This is why these discussions are being embarked upon. I cannot make it

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any clearer than that. The hon. Gentleman should read the debate of 24th May and he will find spelt out in greater detail the details of the investment programme which we have just improved.
This has been described as a very costly delay. I stress that it has meant only a very small amount in addition to the programme.
This is not, as the hon. Member for Ebbw Vale tried to imply, a question of lifting a threat, so that the Corporation ought to be pleased. We have increased approval for investment expenditure by £40 million. This is not only a case of bringing forward and continuing the development of schemes such as Llanwern and Ravenscraig—two heritage schemes—and the Anchor project at Scunthorpe. I was asked to give an assurance that that will proceed. The answer is that it will. Those are three programmes for this industry. We are providing for £225 million worth of investment, which will substantially improve the facilities available to the British industry.
Mr. Michael Foot: Will the hon. Member confirm that what he has done after this two months' delay is to agree in every particular to the investment programmes that the Corporation put forward before?
Sir J. Eden: What the hon. Member fails to recognise is the situation that we found overtaking us towards the end of last year, when there was an inability on the part of the Corporation to fix its forecast with any degree of certainty, and there was clear evidence of steadily increasing demands being placed on borrowing from the National Loans Fund. In those circumstances we were right to get to grips with the situation.
The pricing policy element in my right hon. Friend's statement has been generally welcomed. I am sure that hon. Members are right to recognise the fact that we welcome the pricing policy of the Corporation being placed on a more selective basis in the future. That will provide much greater flexibility, which means that the Corporation is free to put forward proposals for price increases on
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a selective basis whenever it feels that it would be appropriate to do so. My right hon. Friend has said that the Steel Consumers' Council and the normal machinery provided by the Iron and consultative arrangements with the Government will continue.
A number of hon. Members asked me about Europe. I know that many hon. Members who are here now were not here during the debate. This question raised a degree of interest in the debate. Any matters about the conduct of the negotiations are properly questions for my right hon. Friend the Chancellor of the Duchy of Lancaster, but if we become members of the wider European community of nations the existing functions of the Iron and Steel Consumers' Council will cease to exist. As hon. Members know, however, under the Treaty of Paris there is a consultative committee, on which all interests are fully represented, including those of the trade unions. We should be members of that committee.
The pricing system will have to change in those circumstances. Instead of the present system of delivered prices there will be a basing point. The important thing to recognise is that nothing will in any way give power to the Commission to intervene in the normal commercial autonomy of the Corporation. We are well aware that the Commission's chief concern is to guard against any form of subsidy, assistance or discrimination which gives an unfair advantage. Size and structure are in no way called into question.
The whole purpose of the Community is to expand industry—to expand economy and growth. We shall in any case be members of the Community in those circumstances and I can assure the House that there will be no discrimination against us. Rather should we concentrate on the positive benefits of membership. This will help us to get a much stronger steel industry.
Mr. Walter Harrison: rose in his place, and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That this House do now adjourn:—
The House divided: Ayes 270, Noes 304.

Division No. 402.]

AVES

[10.0 p.m.

Abse, Leo

Forrester, John

Mackintosh, John P.

Albu, Austen

Fraser, John (Norwood)

Maclennan, Robert

Allaun, Frank (Salford, E.)

Freeson, Reginald

McMillan, Tom (Glasgow, C.)

Archer, Peter (Rowley Regis)

Galpern, Sir Myer

McNamara, J. Kevin

Armstrong, Ernest

Garrett, W. E.

Marion, Simon (Bootle)

Ashley, Jack

Gilbert, Dr. John

Mallalieu, E. L. (Brigg)

Ashton, Joe

Ginsburg, David

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

Atkinson, Norman

Golding, John

Marks, Kenneth

Bagier, Gordon A. T.

Gordon Walker, Rt. Hn. P. C.

Marquand, David

Barnes, Michael

Gourlay, Harry

Marsden, F.

Barnett, Joel

Grant, George (Morpeth)

Marshall, Dr. Edmund

Beaney, Alan

Grant, John D. (Islington, E.)

Mason, Rt. Hn. Roy

Benn, Rt. Hn. Anthony Wedgwood

Griffiths, Eddie (Brightside)

Meacher, Michael

Bennett, James (Glasgow, Bridgeton)

Griffiths, Will (Exchange)

Mellish, Rt. Hn. Robert

Bidwell, Sydney

Grimond, Rt. Hn. J.

Mendelson, John

Bishop, E. S.

Gunter, Rt. Hn. R. J.

Mikardo, lan

Bradley, Tom

Hamilton, James (Bothwell)

Millan, Bruce

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

Hamilton, William (Fife, W.)

Miller, Dr. M. S.

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

Hannan, William (G'gow, Maryhill)

Milne, Edward (Blyth)

Brown, Ronald (Shoreditch & F'bury)

Hardy, Peter

Mitchell, R. C. (S'hampton, Itchen)

Buchan, Norman

Harper, Joseph

Molloy, William

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

Harrison, Walter (Wakefield)

Morgan, Elystan (Cardiganshire)

Butler, Mrs. Joyce (Wood Green)

Hart, Rt. Hn. Judith

Morris, Alfred (Wyrhenshawe)

Callaghan, Rt. Hn. James

Hattersley, Roy

Morris, Charles R. (Openshaw)

Campbell, I. (Dunbartonshire W.)

Healey, Rt. Hn. Denis

Morris, Rt Hn. John (Aberavon)

Cant, R. B.

Heffer, Eric S.

Moyle, Roland

Carmichael, Neill

Hilton, W. S.

Mulley, Rt. Hn. Frederick

Carter, Ray (Birmingh'm, Northfield)

Hooson, Emlyn

Murray, Ronald King

Carter-Jones, Lewis (Eccles)

Horam, John

Ogden, Eric

Castle, Rt. Hn. Barbara

Houghton, Rt. Hn. Douglas

O' Halloran, Michael

Clark, David (Colne Valley)

Howell, Denis (Small Heath)

O'Malley, Brian

Cocks, Michael (Bristol, S.)

Huckfield, Leslie

Oram, Bert

Cohen, Stanley

Hughes, Rt. Hn. Cledwyn (Anglesey)

Orme, Stanley

Concannon, J. D.

Hughes, Mark (Durham)

Padley, Walter

Conlan, Bernard

Hughes, Robert (Aberdeen, N.)

Paget, R. T.

Corbet, Mrs. Freda

Hughes, Roy (Newport)

Palmar, Arthur

Cox, Thomas (Wandsworth, C.)

Hunter, Adam

Pannell, Rt. Hn. Charles

Crawshaw, Richard

Irvine, Rt. Hn. SirArthur (Edge Hill)

Parker, John (Dagenham)

Cronin, John

Janner, Greville

Parry, Robert (Liverpool, Exchange)

Crosland, Rt. Hn. Anthony

Jay, Rt. Hn. Douglas

Peart, Rt. Hn. Fred

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

Jenkins, Hugh (Putney)

Pendry, Tom

Jenkins, Rt. Hn. Roy (Stechford)

Pentland, Norman

Dalyell, Tam

John, Brynmor

Perry, Ernest G.

Darling, Rt. Hn. George

Johnson, Carol (Lewisham, S.)

Prescott, John

Davidson, Arthur

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

Price, J. T. (Westhoughton)

Davies, Denzil (Llanelly)

Johnson, Walter (Derby, S.)

Price, William (Rugby)

Davies, G. Elfed (Rhondda, E.)

Jones, Barry (Flint, E.)

Probert, Arthur

Davies, Ifor (Gower)

Jones, Dan (Burnley)

Rankin, John

Davies, S. O. (Merthyr Tydvil)

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

Reed, D. (Sedgefield)

Davis, Clinton (Hackney, C.)

Jones, Gwynoro (Carmarthen)

Rees, Merlyn (Leeds, S.)

Davis, Terry (Bromsgrove)

Jones, T. Alec (Rhondda, W.)

Rhodes, Geoffrey

Deakins, Eric

Kaufman, Gerald

Richard, Ivor

de Freitas, Rt. Hn. Sir Geoffrey

Kelley, Richard

Roberts, Albert (Normanton)

Delargy, H. J.

Kerr, Russell

Roberts, Rt. Hn. Goronwy (Caernarvon)

Dell, Rt. Hn. Edmund

Kinnock, Neil

Robertson, John (Paisley)

Dempsey, James

Lambie, David

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

Doig, Peter

Lamond, James

Rodgers, William (Stockton-on-Tees)

Dormand, J. D.

Latham, Arthur

Roper, John

Douglas, Dick (Stirlingshire, E.)

Lawson, George

Rose, Paul B.

Douglas-Mann, Bruce

Leadbitter, Ted

Ross, Rt. Hn. William (Kilmarnock)

Driberg, Tom

Lee, Rt. Hn. Frederick

Sandelson, Neville

Duffy, A. E. P.

Leonard, Dick

Sheldon, Robert (Ashton-under-Lyne)

Dunn, James A.

Lestor, Miss Joan

Shore, Rt. Hn. Peter (Stepney)

Dunnett, Jack

Lever, Rt. Hn. Harold

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

Eadie, Alex

Lewis, Arthur (W. Ham, N.)

Short, Mrs. Renée (W'hampton, N. E.)

Edelman, Maurice

Lewis, Ron (Carlisle)

Silkin, Rt. Hn. John (Deptford)

Edwards, Robert (Bilston)

Lipton, Marcus

Silkin, Hn. S. C. (Dulwich)

Edwards, William (Merioneth)

Lomas, Kenneth

Sillars, James

Ellis, Tom

Loughlin, Charles

Silverman, Julius

English, Michael

Lyon, Alexander W. (York)

Skinner, Dennis

Evans, Fred

Lyons, Edward (Bradford, E.)

Small, William

Faulds, Andrew

Mabon, Dr. J. Dickson

Smith, John (Lanarkshire, N.)

Fernyhough, Rt. Hn. E.

McBride, Neil

Spearing, Nigel

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

McCann, John

Spriggs, Leslie

Fitch, Alan (Wigan)

McCartney, Hugh

Stallard, A. W.

Fletcher, Ted (Darlington)

McElhone, Frank

Steel, David

Foley, Maurice

McGuire, Michael

Stewart, Rt. Hn. Michael (Fulham)

Foot, Michael

Mackenzie, Gregor

Stoddart, David (Swindon)

Ford, Ben

Mackie, John

Stonehouse, Rt. Hon. John

Strang, Gavin

Varley, Eric G.

Williams, Alan (Swansea, W.)

Strauss, Rt. Hn. G. R.

Wainwright, Edwin

Williams, Mrs. Shirley (Hitchin)

Summerskill, Hn. Dr. Shirley

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

Williams, W. T. (Warrington)

Swain, Thomas

Walker, Harold (Doncaster)

Wilson, Alexander (Hamilton)

Taverne, Dick

Wallace, George

Wilson, Rt. Hn. Harold (Huyton)

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

Watkins, David

Wilson, William (Coventry, S.)

Thomas, Jeffrey (Abertillery)

Weitzman, David

Woof, Robert

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

Wellbeloved, James

Tinn, James

Wells, William (Walsall, N.)

TELLERS FOR THE AYES:

Tomney, Frank

White, James (Glasgow, Pollok)

Mr. William Hamling and

Torney, Tom

Whitehead, Phillip

Mr. Donald Coleman.

Tuck, Raphael

Whitlock, William

Urwin, T. W.

Willey, Rt. Hn. Frederick

NOES

Adley, Robert

Dodds-Parker, Douglas

Hunt, John

Alison, Michael (Barkston Ash)

Douglas-Home, Rt. Hn. Sir Alec

Iremonger, T. L.

Allason, James (Hemel Hempstead)

Drayson, G. B.

Irvine, Bryant Godman (Rye)

Amery, Rt. Hn. Julian

du Cann, Rt. Hn. Edward

James, David

Archer, Jeffrey (Louth)

Dykes, Hugh

Jenkin, Patrick (Woodford)

Astor, John

Eden, Sir John

Johnson Smith, G. (E. Grinstead)

Atkins, Humphrey

Edwards, Nicholas (Pembroke)

Jones, Arthur (Northants, S.)

Awdry, Daniel

Elliot, Capt. Walter (Carshalton)

Jopling, Michael

Baker, Kenneth (St. Marylebone)

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

Joseph, Rt. Hn. Sir Keith

Baker, W. H. K. (Banff)

Emery, Peter

Kaberry, Sir Donald

Balniel, Lord

Farr, John

Kellett, Mrs. Elaine

Barber, Rt. Hn. Anthony

Fell, Anthony

Kershaw, Anthony

Batsford, Brian

Fenner, Mrs. Peggy

Kilfedder, James

Beamish, Col. Sir Tufton

Fidler, Michael

Kimball, Marcus

Bell, Ronald

Finsberg, Geoffrey (Hampstead)

King, Evelyn (Dorset, S.)

Bennett, Dr. Reginald (Gosport)

Fisher, Nigel (Surbiton)

King, Tom (Bridgwater)

Benyon, W.

Fletcher-Cooke, Charles

Kinsey, J. R.

Berry, Hn. Anthony

Fookes, Miss Janet

Kirk, Peter

Biffen, John

Fortescue, Tim

Kitson, Timothy

Biggs-Davison, John

Foster, Sir John

Knight, Mrs. Jill

Blaker, Peter

Fowler, Norman

Knox, David

Boardman, Tom (Leicester, S. W.)

Fox, Marcus

Lambton, Antony

Body, Richard

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

Lane, David

Boscawen, Robert

Fry, Peter

Langford-Holt, Sir John

Bossom, Sir Clive

Galbraith, Hn. T. G.

Legge-Bourke, Sir Harry

Bowden, Andrew

Gardner, Edward

Le Marchant, Spencer

Boyd-Carpenter, Rt. Hn. John

Gibson-Watt, David

Lewis, Kenneth (Rutland)

Braine, Bernard

Gilmour, Ian (Norfolk, C.)

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

Bray, Ronald

Gilmour, Sir John (Fife, E.)

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

Brewis, John

Glyn, Dr. Alan

Longden, Gilbert

Brinton, Sir Tatton

Godber, Rt. Hn. J. B.

Loveridge, John

Brocklebank-Fowler, Christopher

Goodhart, Philip

Luce, R. N.

Brown, Sir Edward (Bath)

Goodhew, Victor

McAdden, Sir Stephen

Bruce-Gardyne, J.

Gorst, John

MacArthur, Ian

Bryan, Paul

Gower, Raymond

McCrindle, R. A.

Buck, Antony

Grant, Anthony (Harrow, C.)

McLaren, Martin

Bullus, Sir Eric

Green, Alan

Maclean, Sir Fitzroy

Burden, F. A.

Grieve, Percy

McMaster, Stanley

Butler, Adam (Bosworth)

Griffiths, Eldon (Bury St. Edmunds)

Macmillan, Maurice (Farnham)

Carlisle, Mark

Grylls, Michael

McNair-Wilson, Michael

Carr, Rt. Hn. Robert

Gummer, Selwyn

McNair-Wilson, Patrick (NewForest)

Gurden, Harold

Maddan, Martin

Cary, Sir Robert

Hall, Miss Joan (Keighley)

Madel, David

Channon, Paul

Hall, John (Wycombe)

Maginnis, John E.

Chataway, Rt. Hn. Christopher

Hall-Davis, A. G. F.

Marples, Rt. Hn. Ernest

Chichester-Clark, R.

Hamilton, Michael (Salisbury)

Marten, Neil

Churchill, W. S.

Hannam John (Exeter)

Mather, Carol

Clark, William (Surrey, E.)

Harrison, Brian (Maldon)

Maude, Angus

Clarke, Kenneth (Rushcliffe)

Harrison, Col. Sir Harwood (Eye)

Maudling, Rt. Hn. Reginald

Clegg, Walter

Haselhurst, Alan

Mawby, Ray

Cockeram, Eric

Hastings, Stephen

Maxwell-Hyslop, R. J.

Cooke, Robert

Havers, Michael

Meyer, Sir Anthony

Coombs, Derek

Hawkins, Paul

Mills, Peter (Torrington)

Cooper, A. E.

Hay, John

Mills, Stratton (Belfast, N.)

Cordle, John

Hayhoe, Barney

Miscampbell, Norman

Corfield, Rt. Hn. Frederick

Heath, Rt. Hn. Edward

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

Cormack, Patrick

Heseltine, Michael

Mitchell, David (Basingstoke)

Costain, A. P.

Hicks, Robert

Moate, Roger

Critchley, Julian

Higgins, Terence L.

Molyneaux, James

Crouch, David

Hiley, Joseph

Money, Ernle

Crowder, F. P.

Hill, James (Southampton, Test)

Monks, Mrs. Connie

Curran, Charles

Holland, Philip

Monro, Hector

Davies, Rt. Hn. John (Knutsford)

Holt, Miss Mary

Montgomery, Fergus

d'Avigdor-Goldsmid, Sir Henry

Hordern, Peter

Morgan, Geraint (Denbigh)

d'Avigdor-Coldsmid, Maj.-Gen. James

Hornby, Richard

Morgan-Giles, Rear-Adm.

Dean, Paul

Hornsby-Smith, Rt. Hn. Dame Patricia

Morrison, Charles (Devizes)

Deedes, Rt. Hn. W. F.

Howe, Hn. Sir Geoffrey (Reigate)

Mudd, David

Digby, Simon Wingfield

Howell, David (Guildford)

Murton, Oscar

Dixon, Piers

Howell, Ralph (Norfolk, N.)

Nabarro, Sir Gerald

Neave, Airey

Roberts, Wyn (Conway)

Temple, John M.

Nicholls, Sir Harmar

Rodgers, Sir John (Sevenoaks)

Thatcher, Rt. Hn. Mrs. Margaret

Noble, Rt. Hn. Michael

Rossi, Hugh (Hornsey)

Thomas, John Stradling (Monmouth)

Normanton, Tom

Rost, Peter

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

Nott, John

Russell, Sir Ronald

Thompson, Sir Richard (Croydon, S.)

Onslow, Cranley

St. John-Stevas, Norman

Tilney, John

Oppenheim, Mrs. Sally

Sandys, Rt. Hn. D.

Trafford, Dr Anthony

Orr, Capt. L. P. S.

Scott, Nicholas

Trew, Peter

Osborn, John

Scott-Hopkins, James

Tugendhat, Christopher

Owen, Idris (Stockport, N.)

Sharples, Richard

Vaughan, Dr. Gerard

Page, Graham (Crosby)

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

Waddington, David

Page, John (Harrow, W.)

Shelton, William (Clapham)

Walder, David (Clitheroe)

Parkinson, Cecil (Enfield, W.)

Simeons, Charles

Walker, Rt. Hn. Peter (Worcester)

Peel, John

Sinclair, Sir George

Walker-Smith, Rt. Hn. Sir Derek

Percival, Ian

Skeet, T. H. H.

Wall, Patrick

Peyton, Rt. Hn. John

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

Walters, Dennis

Pink, R. Bonnier

Soref, Harold

Ward, Dame Irene

Pounder, Rafton

Speed, Keith

Warren, Kenneth

Powell, Rt. Hn. J. Enoch

Spence, John

Weatherill, Bernard

Price, David (Eastleigh)

Sproat, lain

Wells, John (Maidstone)

Proudfoot, Wilfred

Stainton, Keith

White, Roger (Gravesend)

Pym, Rt. Hn. Francis

Stanbrook, Ivor

Whitelaw, Rt. Hn. William

Quennell, Miss J. M.

Stewart-Smith, D. G. (Belper)

Wiggin, Jerry

Raison, Timothy

Stodart, Anthony (Edinburgh, W.)

Wilkinson, John

Rawlinson, Rt. Hn. Sir Peter

Stoddart-Scott, Col. Sir M.

Wolrige-Gordon, Patrick

Redmond, Robert

Stokes, John

Wood, Rt. Hn. Richard

Reed, Laurance (Bolton, E.)

Stuttaford, Dr. Tom

Woodnutt, Mark

Rees, Peter (Dover)

Sutcliffe, John

Worsley, Marcus

Rees-Davies, W. R.

Tapsell, Peter

Wylie, Rt. Hn. N. R.

Renton, Rt. Hn. Sir David

Taylor, Sir Charles (Eastbourne)

Younger, Hn. George

Rhys Williams, Sir Brandon

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

Ridsdale, Julian

Taylor, Frank (Moss Side)

TELLERS FOR THE NOES:

Rippon, Rt. Hn. Geoffrey

Taylor, Robert (Croydon, N. W.)

Mr. Reginald Eyre and

Roberts, Michael (Cardiff, N.)

Tebbit, Norman

Mr. Jasper More.

IRON AND STEEL (BORROWING POWERS) ORDER
Motion made, and Question proposed,
That the Iron and Steel (Borrowing Powers) Order, 1971, a draft of which was laid before this House on 23rd June, be approved.—[Sir J. Eden.]
10.13 p.m.
Mr. Michael Foot: One of the reasons why we did not want this Order taken with the previous debate is that I thought it possible that some of my hon. Friends from steel constituencies who were not able to speak in the debate which has just finished might wish to take advantage of this opportunity. I believe that every hon. Member from a steel constituency who wishes to do so should be entitled to speak on these matters if he wishes.
I shall confine myself to only a few sentences. We approve the Order. We think it right that these borrowing powers should be given to the British Steel Corporation. Perhaps we reached that conclusion by a different form of argument from that which the Government would accept. We do not accept the figures which the Government put to us on some of these matters. We think that over the past 12 months many of the actions of the Government have piled up to an extent of tens of millions or hundreds of millions of pounds the extra burdens which are imposed upon the Corporation.
I do not propose to go through them in detail, but I can itemise simply. First, there is the question of the delay in the investment programme, which the Under-Secretary of State has just dismissed as a matter of no consequence. Yet anyone who sits for a steel constituency can see what has occurred by the postponement of the introduction of development plans which could have gone ahead. We think that this is an extremely costly business. Part of the extra £40 million which is being added to the investment programme is due to the hold-up, part to general inflation, part to delay and part to the fact that these projects have now become more expensive for a variety of reasons. But the hon. Gentleman says—and it is in the right hon. Gentleman's
528
statement—that every item in the investment programme put forward by the B.S.C. has now been approved by the Government, after it has been studied, but the programme will cost more money
The Minister for Industry (Sir John Eden): In case there is a wider misunderstanding of the position, perhaps the hon. Gentleman will allow me to say that the programme aproved towards the end of last year was £185 million. The programme now approved is £225 million. That is at 1970–71 prices. At current prices that would be as much as £258 million. It is not right to say, as the hon. Gentleman said, that the reason for the increase is inflation.
Mr. Foot: Whether the investment programme is £225 million or £258 million, there the different reasons why the cost of the Corporation's investment programme has gone up. Inflation is one reason. Another reason is that the physical development may be greater. There has also been delay. It is obvious that if an investment programme is delayed, particularly in a period of extreme inflation, the cost will be affected. The cost of the project in my constituency has been increased because of the long delay. Everyone knows that if a development programme is held up for any length of time it will cost more, and that is an addition to the burden of the Steel Corporation.
Then there is an addition to the burden on the Steel Corporation caused directly by the Government because of their delay in giving the Corporation the freedom of price selection which they now propose to give it. They now think it right that the Corporation should decide whether or not it will put up its prices. A few months ago the Government did not think this was right, but they have now come round to thinking that it is right. The Government have come to the view that it is wrong for them to discriminate against the Steel Corporation by fixing prices in that industry and not in any other industry. That interim has cost the Corporation a figure which can easily be calculated, which I suppose is about £20 million. Taking the whole year the difference of the 7 per cent. is about £70 million. That is another £20 million added to the previous burdens.

529
Then there are investment grants which in a full year would cost the Corporation about £300 million, although that figure is open to argument. We have never been able to extract from the Government how they estimated that figure. To suggest that the abolition of investment grants does not affect the B.S.C. is an absurdity.
Going through the list, there are five extra burdens which have been put on the Steel Corporation by direct action of the Government, leaving aside the injury to morale, all the uncertainties and ambiguities, the hivings off and all the rest. Of course that affects the amount that the Steel Corporation requires to borrow in the period we are envisaging under this Order. All I am saying is that we were not prepared to accept from the Government the conventional excuses which they put forward in steel debates for the necessity of raising the figure which the Steel Corporation is to borrow.
We believe that the figure has to be raised partly because of general inflation, partly because of direct Government policy which has injured the position of the Corporation, and partly because the general operations of the steel industry have been enlarged. Since we want these operations to be enlarged, we wish to see the situation covered by these borrowing powers. Therefore, although we are in favour of the Order, we are not prepared to stand for any attempt by the Government to present false reasons why this is necessary. I say this partly because of the disputes we have had over these matters with the Minister for Industry on other occasions.
As my hon. Friend the Member for Chesterfield (Mr. Varley) said a little earlier, in steel debates there is inevitably an extremely lopsided situation in which there are large numbers of hon. Members on this side of the House who are extremely interested in the subject of the steel industry, whereas very few hon. Members opposite are interested in this matter. One way in which this situation can be adjusted is to ensure that those of my hon. Friends who were unable to catch Mr. Speaker's eye in the earlier debate will have an opportunity to do so now. Although we do not propose to vote against the Order—which would be an absurd situation in view of our attitude on this matter—we wish to protect the rights of back-bench Members from
530
the steel constituencies to put their case to the Government, particularly when we believe that the Government have misrepresented the position of the Corporation and when they are engaged in many actions which we believe must be the subject of the severest scrutiny.
10.23 p.m.
Mr. James Tinn: I shall not detain the House long, but I should like to say a few words about the future investment policy of the industry, which is relevant to this Order. I should like to ask the Minister for an early assurance about the proposed development of the large plant on the Tees, since we had every right to expect an announcement on this matter had it not been for the Government's intervention and their survey of the long-term investment policy of the Corporation.
The Tees, with its deep-water facilities, its readily available labour force, its good internal communications and much flat land available, is an ideal site, and the area should be put out of suspense by being told what is to happen about the new plant.
If I make only one or two observations, I hope that their significance will not be judged in proportion to the time I take to put them forward since they are worthy of attention in considering the long-term investment programme. The trade unions and workers in the industry have accepted the need for modernisation. However, all this is now dogged by uncertainty and possible redundancies.
I would like to put one or two queries about the case for a large plant on the Japanese model. We have heard all the arguments in favour of such a project, but I would draw attention to certain hidden costs. The first and most obvious is the capital cost of such a large-scale development. We hear a great deal in industry of the wage cost per unit of product, but we hear very little about capital costs. Yet it has been the experience in the steel industry that more than one firm has driven itself into bankruptcy by not getting its capital cost situation and the servicing of its debts quite right. I hope that this matter will not be disregarded when looking at the aspect of labour costs.
Then there are disadvantages inherent in very large plants, in their rigidity, for instance, in terms of time, and the

531
fact that in laying down such a plant one is committed for a very long period to the state of technology available at the time when the plant is designed and laid down. In an industry and at a time of rapidly developing techniques this can be a very real danger. I am not at all certain that the flexibility which is inherent in a smaller plant with a shorter working life may not be a considerable countervailing attraction.
Large-scale plants can be inflexible in terms of production. Their profitability is realised only when they are working at or close to their maxima, at their fullest utilisation. Such works are usually at a state of under-capacity or overcapacity. It would be dangerous to base the industry too heavily on plants which are of a scale at which they depend on 90 per cent. of capacity utilisation. We have, for instance, seen the odd spectacle of a so-called modern, efficient plant running at a heavy loss of 60 per cent. or 70 per cent. in my own constituency when an older plant has been able to ride through recession after recession maintaining its production, maintaining its export market, and even taking on labour.
This flexibility of production, and also ability to cater for specialist customer needs, are tremendous advantages which small plants have and which I hope will not be forgotten. To take an analogy, in the clothing industry there is large-scale mass production of clothing, but it has never driven out the bespoke tailor, who meets customers' special needs. On the finishing side, the Skinningrove Works, for instance, fulfil specialist needs for certain sections of shortrun orders, and I hope that this kind of specialist need and flexible response will not be forgotten.
I would draw attention, too, to the absolutely imperative importance of developement in the basic oxygen and steel-making process not being frustrated by the failure to develop these plants in attempting to lay down attractive, new, highly productive steel-making products. If that development is not matched by an equally ambitious programme of development on the finishing sides it will make for production difficulties which will frustrate them.
I promised to be brief and I will conclude on that. I have summarised points
532
which I hope the Minister and the Corporation will bear in mind during the long-term survey.
10.29 p.m.
Mr. George Lawson: There are two points which I should like to put. I did not attempt to catch the eye of the Chair during the previous debate because it seemed to me that there were urgent matters which ought to be aired in this debate, and I am happy to utilise this occasion. Perhaps the Minister may be happy, too, because my first point relates to what he was saying when he was, as it were, closured by the clock. I should like to hear that point more fully developed.
I bring up this matter in no spirit of hostility. I am sure my hon. Friends know my attitude on this matter, which is an important matter, and, in all friendliness, I would say that I should like to have as much reinforcement as I can from my own side of the House.
At a time when we are moving towards joining the E.E.C., it occurs to me to wonder whether this kind of Order will be possible in the future. Will it be possible for public money on this scale to be made available to an industry? Certainly I can see arguments against it. If, for example, a big motor car factory in France was re-equipped out of public money in order that it might be able to sell more motor cars in this country, a great many of my hon. Friends would object strongly. I can see European steel makers objecting if the British steel industry regularly is subsidised out of public money in order to re-equip itself and put itself in a position where it can sell more cheaply than its European competitors. A nationalised industry which is financed in that way can go on for years without paying interest, and, from that point of view alone, there could be legitimate complaints.
I hope that the Minister will tell us that he does not see this being necessary. I support the Order. I have taken the view for a long time that our steel industry cannot put itself into the position that it requires to be in out of its own resources. It has not even maintained itself, quite apart from reinvesting. It has not spent anything like enough money on wear and tear and maintenance. It is in a state where hundreds if not thousands of millions of £s have

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to be spent if it is to compete successfully. I hope that we shall get away with a very heavy expenditure out of public funds to bring the industry to an efficient state so that, when eventually we enter the Community, it will not be necessary for the industry to continue drawing large sums from the public purse in order to maintain itself.
I should like an explanation from the Minister of how he sees the future. His Department must be aware of the situation. It is not new. It has not been sprung upon us recently. The industry was in much the same state when, in 1967, the then Government declared that they were in favour of getting into the European Community. I hope that the Minister will tell us in a little more detail how he sees the steel industry being brought to the state of efficiency that we all want to see. I hope, too, that he will say that it will not be necessary to continue putting in public money in order to keep the industry efficient.
My right hon. and hon. Friends are happy about the pricing arrangement. We objected strongly to the Government's intervention which manifested itself in terms of price control for the industry. We are not objecting to the kind of freedom now proposed. This is very much a matter of harmonisation. I am a good enough Socialist to believe in harmonisation in terms of economic interests and in terms, for example, of bringing about higher standards in our not so well-off regions. This is all part and parcel of things. I am not 100 per cent. confirmed. I am able to listen to arguments, but these are arguments that I want to hear reinforced, and, if I am wrong, fair enough.
In one respect I am a little ashamed to put forward my second point. It is not a big thing. It will not cost more than about £15 million, but it is necessary to the steel industry in Scotland. I am not talking about a green field site, or about spending millions of pounds. What I have in mind is the ore terminal that is necessary for the maintenance of the existing industry. Such a terminal would double the capacity of Ravenscraig, and it would do it cheaply.
I am sure that I have the support of my hon. Friend the Member for Sheffield. Brightside (Mr. Eddie Griffiths) when I
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say that an ore terminal would enable us to double the amount of steel produced. At one time I had some doubt about Ravenscraig being accepted, and I appreciate the help that has been given by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) and others to this project. At one time things got to such a pitch that one of my hon. Friends said, "This damned place Ravenscraig. It is like King Charles's head. We cannot get rid of it".
The provision of the ore terminal is complementary to the development of Ravenscraig. In spite of what has been said, I feel very friendly towards the Minister tonight, and I hope that he will say that this terminal is necessary and that its development should go ahead.
10.37 p.m.
Mr. James Hamilton: I, too, am a Lanarkshire Member, and from a constituency point of view my hon. Friend the Member for Motherwell (Mr. Lawson) is my next-door neighbour.
I start where my hon. Friend ended, by talking about the Hunterston ore terminal. On many occasions my hon. Friend the Member for Motherwell, I, and others of my hon. Friends who represent steel constituencies have met the Secretary of State and the Minister for Trade. We have also met Lord Melchett and representatives of the Corporation. It has been made indelibly clear to us by Lord Melchett and his colleagues that the Hunterston ore terminal is complementary to the Ravenscraig project. It may seem that we are being patronising to the Government, but we are putting forward a serious case, and I hope that we shall receive some assurances about this project.
It may seem that we are being parochial, but it must be realised, as I am sure the Government realise, that we come from an area in which about 8 per cent. of the insurable population are unemployed and that we are, therefore, deeply concerned about our traditional industries.
Only a few months ago the Clydesdale Works, at Moss End, with open hearth furnaces, achieved a record production, so much so that the Corporation took the trouble to send a complimentary letter to the factory. The relationship between management and workers is of the best.

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I often visit the works. In fact, I am going there on Saturday to meet trade union representatives at Scottish level, and also shop stewards.
Last night, I met top-level representatives of the firm in the House. They are also concerned about the Corporation's policy of putting electric furnaces into this works at a capital cost of £15 million. This might sound a small figure beside the £285 million at current prices in the Order, but it is vitally important, because otherwise the works could close, adding to unemployment. With the Hunterston ore terminal, all these things will be complementary. Steel is inseparable from Lanarkshire, particularly Motherwell.
After our meeting with Lord Melchett and his colleagues, we were left in no doubt that a price increase of 14 per cent. was vital for the industry's well-being. After Government intervention, it was reduced to 7 per cent. Our information from the Press is that the Minister was in favour of 12 per cent. but was overruled by the Cabinet. Lord Melchett did not agree to 7 per cent.: he simply received a direct Government instruction which had a serious effect on investment.
I am very much in line with my party's policy on entry of the E.E.C., that we should do and say nothing until we know what the package deal is. I am not like my hon. Friend the Member for Mother well, who is a convinced European. I am prepared to examine the terms when they are presented to us——
Mr. Lawson: I do not have a closed mind; I am prepared to listen to a good argument.
Mr. Hamilton: Yes, I know that my hon. Friend is most receptive to other points of view, particularly mine. When he hears my view on Europe, I am sure that we will both go into the same lobby. My hon. Friend's analogy about the unfairness of competition is worth consideration.
I should like an assurance about the Clydesdale works, since I could then give the workers some hope that the Government and the Corporation will do something for the works.
10.45 p.m.
Mr. Eddie Griffiths: The advantage of discussing matters
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of this kind at this late hour is that one can have a sober exchange of views across the Floor of the House and hope, by asking the Minister some straight questions, to get some straight answers. There are a few straight answers that I should like from him tonight.
According to the Secretary of State, the figure of £225 million capital investment is £40 million more than the Corporation wanted. This, I gather, means that a number of extra schemes will be started during this financial year. We know of some of them, but may we have information about the rest? May we also have a breakdown of the figures by being told where the money will be spent? For example, will the Ebbw Vale scheme be started? Will the capital investment at Shotton continue, and how much will be spent in the Sheffield area?
On the question of hiving-off or exchanging the assets in respect of B.S.C. and Firth Brown, if the amount of money that will be exchanged is considered by the Corporation to be insufficient, will the deal still go through?
I will not, in discussing briefly the question of prices, be as unkind as some of my hon. Friends and suggest that G.K.N, will take Brymbo as a sort of gift for political services rendered. I accept the Minister's defence of G.K.N.—that it was formerly the owner of Brymbo, and that it has taken 80 per cent. of Brymbo's products. That is a valid argument.
However, the same applies to East Moors. Is the Minister aware that it will be more creditable if, for example, the deal that eventually goes through results in G.K.N, taking on its former ownership, that is, taking in Brymbo and East Moors? There would be the possibility of a deal on that basis.
I regard the appointment of two additional part-time directors as completely unnecessary. To cover the whole country, there is only one worker-director. If the Minister insists on increasing the number of non-executive part-time directors, he should increase the number of worker-directors on the main Board.
I am particularly alarmed about the fact that within the Corporation there are two directors, Tom Craig and Tom Cartwright, who have special responsibility for Scottish and Welsh interests

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respectively. Is it really thought that one can stick a sporran over a furnace in Scotland, or stoke the flames with a haggis, to cater for Scottish interests in this matter, or suggest that the special problems of Wales are being catered for by considering what happens at, say, Port Talbot, and appointing a director to do that?
Is it a coincidence that the vast majority of closures within the B.S.C. in the last nine to 12 months have taken place at English steel plants? It could be a coincidence and have nothing to do with the special priority that Scotland and Wales have been given by the Corporation. There have been closures at Irlam, Cargofleet, Rotherham, Sheffield and Manchester, and apart from one small redundancy in South Wales, that area has hardly been touched.
This is annoying to those who represent English steel constituencies. For instance, my only opportunity for asking questions of the hon. Gentleman is at Question Time, but our Scots friends can seek information in their Grand Committee or from the Secretary of State for Scotland or the Secretary of State for Trade and Industry at Question Time. The same sort of thing applies to our Welsh colleagues. This preferential treatment has nothing to do with language or culture but with the steel industry, which is the same throughout the land. I ask the Minister to give very serious consideration to this great bias.
10.50 p.m.
The Minister for Industry (Sir John Eden): I can reassure the hon. Member for Ebbw Vale (Mr. Michael Foot) that the main reason for the increase in the total capital sum approved for investment is the nature of the programme. The £40 million increase reflects higher rates of expenditure on existing projects, especially at the Anchor No. 1 project at Scunthorpe. This has been accelerated quite considerably and is the main element in the extra cost. That project will greatly assist the profitability of the Corporation.
The hon. Gentleman rather implied that there was a substantial additional burden of cost on the Corporation as a result of delays imposed by the Government. I assure him that that is not so. I know that he has never accepted this assurance, but all I can do is to repeat
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it. The only scheme which was delayed was Llanwern C, the start of which was delayed for a very short time only. Approval was announced by my right hon. Friend the Secretary of State for Wales, curiously enough, in the Welsh Grand Committee on 28th April.
But other projects, such as that at Scunthorpe which I have already mentioned, were not in any way held up by the review. Existing projects such as Shotton and Ravenscraig are going ahead, as well as the Ebbw Vale pickle line and the Aldwarke 4,000 lb. coil project, all of which have been approved within the total sum of £225 million.
The hon. Gentleman asked about investment grants. It is of the very nature of the transitional scheme that investment grants are continuing to be paid. The Corporation will continue to receive investment grant in arrears on its existing contracts. The cash benefit will progressively decline in the years ahead—that I accept; it is in the nature of the change over from the investment grant system—but this gradual phasing out will last for a considerable number of years before it completely disappears.
I have every confidence that the Corporation will move towards profitability and in due course, like any other industry, become eligible for the whole range of investment incentives provided by the Government. The hon Member for Motherwell (Mr. Lawson) asked whether Hunterston was affected. He knows that the ore terminal there has been the subject of discussion between the Corporation and Clyde Port Authority. This followed the decision of my right hon. Friend the Secretary of State for Scotland to allow that development. It is early days yet for me to spell this out in any greater detail and give the full extent of the information that has been asked for, because it is a matter of the Corporation persisting in the negotiations and then later the approval of my right hon. Friend the Secretary of State for Environment under Section 9 of the Harbours Act, 1964, would be needed if it is decided to proceed.
Ravenscraig is an extremely important project designed to double the output of hot-rolled coil, enabling the existing plant to operate at full capacity. This is likely to cost £58 million and it is due to start in 1971–72.

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The hon. Member for Cleveland (Mr. Tinn) asked a number of questions about Tees-side which is one of the key steel-making areas. I am sure it will continue to play a prominent part in the industry. The Lackenby development is well under way and involves a £40 million investment in basic oxygen plant and associated continuous casting work. The first stage is nearing completion and the first two B.O.S. vessels were commissioned on 10th March. There is also the work on the ore terminal at Redcar which is a £16 million investment.
The hon. Gentleman asked me about a green field or brown field site. As he fairly recognises, that falls within the general purview of stage two of the review. It would be a major new investment project. I fully accept that it has significant regional implications. These matters will be fully taken into account during the review. Proposals of this kind are in any event for the Corporation to put forward. It is for it to decide in the first instance on location and things like that and we have had no proposals from it as yet. We are well aware of the claims of the region, as is the Corporation.
Mr. Ted Leadbitter: I am grateful to the hon. Gentleman for making special reference to Tees-side which is a major steel-production area. South of the Tees production is at the rate of 5 million tons. The Hartlepools and Consett part of that area's steel production is of the order of 2 million tons. There are great question marks over the future of Consett and the Hartlepools. Has the hon. Gentleman anything to say about the share of capital investment in the whole of Tees-side which is not detrimental either to Consett or the Hartlepools?
Sir J. Eden: I cannot give any figures to the hon. Gentleman, but I recognise the importance of these matters. If I can give him any further information, perhaps I may write to him. If he then wishes to take the matter further with me, I should be very happy for him to do so.
The hon. Member will be aware that the British Steel Corporation is making every effort to mitigate the effects of the tremendous redeployment which has
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taken place in the area generally. Some of it is directly attributable to the new investment, a point which was made by the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths). When it affects a certain locality or plant, it is not only extremely difficult for everyone in the industry to accept, but it is understandable that voices will be raised concerning it. I think, however, that all of us, certainly those in the industry as a whole, fully recognise the process of development and new investment which must take place and the consequential effect which it will have on the closure programme relating to the older plant.
In the area around Lakenby, the Corporation is trying to pursue a number of measures to attract new jobs by the development of industrial estates on surplus land owned by the Corporation. It is doing this in co-operation with a firm of industrial developers. I gather that about £5·5 million will be spent on 2 million sq. ft. of new buildings on the area adjoining the Corporation's 84-in. pipe mill at its Stockton works. If I am able to add anything further to what I have said, I will do so in writing to the hon. Member.
The hon. Member for Motherwell asked about the situation that might arise were we to become members of an enlarged European Community and whether we would still be in a position to bring forward an order of this nature. Perhaps I may try to re-emphasise the position as I see it. The internal measures of reconstruction or expansion do not require approval under the E.C.S.C. Treaty. Indeed, the Community policy expressed in that treaty is to promote the regular expansion and modernisation of production, subject only to avoiding special forms of protection or discrimination.
The major producers should not, of course, use their size to stifle competition or engage in practices which are discriminatory in nature. If they were to do so, the Commission would become involved in their affairs. As I think the hon. Member is very well aware, there are a number of major public sector industries within the Community countries. Some of these are funded from State funds, and I see no reason why this should not continue in the case of the British Steel Corporation.

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I hope that I have been able to answer some of the points which have been raised, but before finally resuming my seat perhaps I may deal with the matters raised by the hon. Member for Brightside. I think that his points concerning the directors were outside the scope of the Order. I have noted what he said, however, and I will look at the matter again, but I do not see that it is raised directly by the Order.
The hon. Member asked about the Firth Brown-B.S.C. deal. Perhaps the easiest thing for me to do by way of answer is to refer the hon. Member to the joint statement made by the Corporation and Firth Brown, in which they stated that
"Discussions have now reached the stage at which the general objectives have been defined and agreed and form a basis for further discussion and detailed negotiation ".
In other words, what I was saying earlier is now about to begin, and it could only begin when approval in principle had been given by the Government to permit the Corporation to proceed on these lines. I hope that these detailed discussions and negotiations will be successful and, as a result, come to a satisfactory conclusion. It is not without precedent that, when an announcement to negotiate a merger in principle has been made, subsequent detailed arrangements do not work out to the satisfaction of both parties. I hope that that will not arise in this case.
Mr. James Hamilton: Can the Minister enlighten me on the point I made about the Clydesdale works? I thought that it was in the 1971–72 programme.
Sir J. Eden: All the proposals which were in the Corporation's programme are now subject to the approval of the £225 million. It is now a matter for the Corporation to decide how, and over what period of time, it should proceed with the plans it had in mind when those proposals were drawn up.
Mr. Eddie Griffiths: Is the Minister saying that to the best of his knowledge a price has not been agreed at this stage for the Firth Brown-River Don complex?
Sir J. Eden: That is a matter for the parties to the negotiation. This involves, not only a public sector corporation, but a publicly quoted company. In these
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circumstances, it is right that matters of that kind should be dealt with by them. I have no doubt that when they have taken these detailed negotiations considerably further there will be the opportunity for them to be disclosed and details made publicly available.
Question put and agreed to.
Resolved,
That the Iron and Steel (Borrowing Powers) Order, 1971, a draft of which was laid before this House on 23rd June, be approved.

DONCASTER ROYAL INFIRMARY (PRIVATE PAY BEDS)
Motion made, and Question proposed,
That this House do now adjourn.—[Mr. Hawkins.]
11.7 p.m.
Mr. Harold Walker: I do not know whether or not I am being presumptuous or creating a precedent by utilising the Dispatch Box on an occasion such as this. It is just that I do not like to see unused capital resources. In any case, it puts me nearer to parity with the Minister.
The Minister will know from our correspondence, from the Questions that I have tabled to him, and from the Press cuttings service in his Department, that the subject I am raising tonight is the source of sharp controversy in my constituency. The misuse of publicly-financed facilities for private medical practice has been a running sore in the National Health Service since its inception. At present it is being probed by a Select Committee. More recently it has been scathingly denounced in a withering attack by the Junior Hospital Doctors' Association and the Medical Practitioners' Union.
This alone makes the present a remarkably inopportune time to introduce private pay beds into the Doncaster Royal Infirmary. It is even more surprising as not only is there a very long queue of National Health Service patients waiting for admission into the hospital, on the most recent count 3,442, over one-third of whom have been waiting for more than a year, but also a large number of beds have not been brought into use since the new infirmary came into service.

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The last time I queried this point with the Minister he told me that as many as 44 beds are still not in use. The reason is said to be staffing difficulties. I cannot and do not intend to explore that question now, but I feel bound to point out that to intrude private pay beds into that situation can only exacerbate the staffing problems.
As I understand it, the case for the introduction of the private pay beds rests, in the main, on the interests of consultants. It is argued that not only were the consultants promised the private beds so that they could augment their salaries with private practice fees, but that indeed the Sheffield Regional Board wrote them into their contracts at the time of appointment. Apparently, the board advertised the appointments as part-time, and the appointments were subsequently made on that basis, so that it appeared that, even had the consultants chosen to go full-time within the National Health Service, they were denied the opportunity to do so. They are, therefore, being currently paid as part-timers, without the chance of engaging in private practice.
If that is true, it is clearly wrong. They have been cheated. But I argue that the remedy is not to resort to the evil of introducing private practice. This would merely be piling wrong upon wrong. Surely, those who wish to opt for full-time National Health Service posting should be given the opportunity to do so. If then the consultants still feel that National Health Service salaries provide an inadequate income, they should do as the rest of the community has to do, that is, seek redress through the negotiating machinery. That should be the way to proceed, rather than further to erode the basic principle underlying the National Health Service.
Another argument has been that consultants will tend, naturally and understandably, to gravitate towards the most rewarding posts, with the consequence, it is said, that, if Doncaster cannot offer the inducements which flow from private practice, the best people will seek jobs elsewhere, and the calibre of the specialists at the Royal Infirmary will decline.
I submit that to succumb to that argument is to join in a rat race based on incentives which are wholly alien to the concepts on which the National
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Health Service was founded. It would be to compromise with that which is itself bad. If anything, it is a powerful case in itself for the total abolition of private practice within the Service.
I suspect that the Minister will remind me of the provisions of the Nye Bevan Act of 1948. But I am sure that he will recall as well as I do the blackmailing threats of non-co-operation which the then Minister had to deal with from the British Medical Association, by means of which the concession was secured. I can recall also the more recent Act of 1968. I was the Government Whip on the Standing Committee on the Bill. I recall that the then Minister, Kenneth Robinson, secured the support of Labour back benchers in the Standing Committee for Clauses 1 and 2 only by firmly assuring them that he had no intention whatever of sanctioning any expansion of private pay beds. Moreover, although the original plans for the present Infirmary made provision for 16 private beds, in January, 1968, the same Minister told the Sheffield Regional Hospital Board that their use as such would not be authorised.
I do not want the Minister to be in any doubt about the weight of opposition to the proposal of the hospital management committee and the Sheffield Regional Hospital Board. Just over a week ago, the leaders of the Doncaster Trades Council, representing 30,000 trade unionists in that area, spent two hours with the local hospital management committee ramming home their opposition. This, they said, is bringing health into the market place. My own constituency Labour Party, which has for some time been seeing a meeting with the regional hospital board on the matter, bitterly opposed the move at a lengthy meeting which it had with the hospital management committee. The A.E.F. district committee at Doncaster has made absolutely clear that it is incensed at the proposal. Only last week, the large Bentley Urban District Council put on record its opposition to the move.
Perhaps all these people fear the abuses which have been so bitterly attacked by the Junior Hospital Doctors' Association and by the Medical Practitioners' Union. And who can speak with greater knowledge and authority than such as they? Among other things—I shall summarise

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briefly the main points of their assault—they say that private beds lead to preferential admissions for private patients, to queue-jumping, to neglect of National Health Service patients, to excessive overwork for junior doctors, with serious disruption of their lives, accompanied by a loss of free time, loss of study time, and loss of sleep.
They allege that there are thefts of valuable equipment and costly anaesthetic by consultants. They say that there is resentment among nurses and other staff over the extra, unpaid work involved in looking after private patients, and that the inevitable consequential neglect of National Health Service patients distresses nurses and leads to serious conflict and loss of morale. The majority of nurses questioned by the doctors are reported as expresing strongly the opinion that private practice should be excluded from National Health Service hospitals.
The Association also says that long surgical waiting lists are an inevitable result of having private beds even where there is no abuse. In their ranks there is a strong feeling that a minority of consultants did nothing to reduce their waiting lists, in the certain knowledge that their private practices would benefit.
Those are not my opinions. They are the carefully prepared observations of a professional body representing qualified medical practitioners in the National Health Service, whose president is a consultant himself.
For the obvious reason that they have not got the beds, these charges cannot be levelled at the Doncaster consultants, nor am I suggesting that they are abuses which would inevitably occur if the opportunity arose. I do not question the integrity or the skill of the specialists I have had the chance to meet at Don-caster. The warm praise which I frequently hear from former patients leads me to pay tribute to the splendid work done by all the staff at this very fine hospital. But I want to keep it that way, free from the corrupting intrusion and debasing temptations of private practice. I want the first priority of this and any other National Health Service hospital to be the interests, health and well-being of those for whom they were built—the National Health Service patients.
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The Sheffield Regional Hospital Board will have put its case for the beds to the Minister. Tonight I have taken advantage of the opportunity that the House affords to put part of what seems to me a very powerful case for rejecting the arguments advanced by the Board and turning down the application for private beds, and that is what I ask the Minister to do. If he remains unimpressed by the case I have put, the least I expect of him is that he should defer his decision until the Select Committee has had the opportunity to submit its report and recommendations. For him to do otherwise would be to treat the Committee, and hence the House, with contempt. If, sooner or later, he sanctions the beds, that will be worse, because then he will be endorsing a prostitution of the National Health Service and approving a sell-out of the health of working-class patients for the personal gain of a few.
11.18 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): I am glad that the hon. Member for Doncaster (Mr. Harold Walker) has given us this opportunity to discuss the question of the provision of pay beds at the new Doncaster Royal Infirmary. Pay beds at the hospital have been a concern not only to my right hon. Friend the Secretary of State but to his predecessors.
We have in Doncaster an example of increased facilities increasing the demand, coupled with the almost inevitable difficulties of running-in a new and differently-planned hospital. The pay bed problem is only part of the whole problem of opening and staffing new and redeveloped accommodation such as we now have at Doncaster.
On the general question of pay beds and private practice, I must make it clear that the Government think it right that a proper proportion of beds should be available in National Health Service hospitals for people who wish to pay for their treatment, bearing in mind the needs of people who do not wish to pay, who. I agree, constitute the vast majority.
The hon. Member has referred to the evidence submitted to the Sub-Committee on Expenditure by the Junior Hospital Doctors' Association. He will not expect me to comment on that at this stage. In any case, the report of the evidence has

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not yet been published. However, I saw Press reports earlier this month about their memorandum and I did not understand that the Association was calling for the ending of all private practice in the hospital service.
I do not agree that the private sector "feeds off the N.H.S.", as I saw reported in one article. On the contrary, I agree with the British Medical Association, whose evidence to the Sub-Committee I have seen reported this morning, that a hospital gains from having pay beds. It is likely to attract consultants who would otherwise engage whole-time in private practice or might emigrate, and this is a positive advantage to the National Health Service.
Over the country as a whole there are 5,567 part-time consultants which is no less than 57·4 per cent. of the total number of consultants in post. We cannot afford to do without their services and it is a very real advantage to the National Health Service if they treat their private patients on hospital premises as they are then available for emergencies.
The hon. Member also suggests that we should delay any decisions on application for pay beds for Doncaster until the Sub-Committee has reported. With respect I cannot accept this suggestion. The health service is in continuous operation and is under almost constant review as a result and it is not realistic to suggest that its services should be disrupted or suspended while reports are awaited.
Boards apply from time to time for variation in the number of pay beds in hospitals in their regions and it would be quite wrong to defer consideration of these until the Sub-Committee has reported. Some people speak of private patients as if they came from another planet. The people who wish to use pay beds at the Royal Infirmary are probably all citizens of Doncaster who would naturally look to their local hospital for treatment. For their own good reasons, they wish to be the private patients of a particular consultant and they wish to pay for their treatment in hospital. I entirely repudiate any suggestions that there is anything wrong in this. Aneurin Bevan included in the National Health Service Act, 1946, provision for private
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patients, and every successive Minister of Health has maintained the provision.
Mr. Harold Walker: He was blackmailed into it.
Mr. Alison: The hon. Gentleman, for whom I have a great respect, is a brave man to assert that Aneurin Bevan could be blackmailed into anything.
Private practice in National Health Service hospitals is now governed, as the hon. Member said, by the Health Services and Public Health Act, 1968, but the changes made by that Act do not affect the principle that patients may choose to be treated privately if they wish.
The 1946 Act lays upon the Minister the duty of providing hospital and specialist services for the people of this country and there is no doubt that the majority of these people wish to avail themselves of these services without charge. We must and we do keep their interest to the fore when we consider the total number of private patients we should allow to be treated at any one time at a hospital. Every application from a board is carefully considered in my Department and we know that before it reaches us the medical advisory or the medical executive committee, the hospital management committee and the appropriate committees of the board have looked at it in detail.
I concede that the Doncaster area is unusual in that there have never been pay beds in any of the National Health Service hospitals and, in addition, there is very little private accommodation available outside the health service.
When plans were drawn up to redevelop and enlarge the infirmary, the opportunity was taken to include provision for some pay beds. But in 1967–when the regional hospital board first applied to the Minister for pay beds—the waiting list was close on 4,000 and the then Minister of Health did not feel able to authorise accommodation for private patients immediately. The regional hospital board was confident that the additional accommodation amounting to 238 beds and increased medical staffing would bring about a dramatic improvement in the position.
It was decided, therefore, to delay a decision on the application for pay beds

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until the waiting list had decreased. However, the waiting list did not at that time decline. Indeed, it increased to 4,737 at the end of December, 1969, though part of this increase was due to the transfer to the hospital in March, 1968, of the gynaecological patients from the Western Hospital.
In addition, the new hospital acted like a magnet and drew patients from a larger catchment area than the old hospital. As the hon. Gentleman knows, the management committee in 1970 reopened with the board the question of provision of pay beds, but as it had not proved possible to bring all the new accommodation into use, the board did not feel able to recommend to the Secretary of State an authorisation for accommodation for private patients.
The board is now making an urgent detailed assessment of the nursing and domestic requirements of the hospital to ensure that sufficient staff are provided for all the N.H.S. beds by 1st September. A team of officers from the board, including nursing, establishment and work study officers, made a preliminary visit to the hospital on 28th June, against that background.
On the assumption that all the beds will be staffed and available for use by 1st September, the board has applied to my right hon. Friend for authority to admit up to 12 private patients to Doncaster Infirmary at any one time. It would not propose to use for this purpose the accommodation which had been allocated on the 7th floor in the original plan, as this would make heavy demands on staff. Alternative uses for this accommodation are now under consideration. Private patients would be admitted to the single rooms on each of the six other floors, and as there are eight single rooms on each floor a sufficient number of single rooms will remain available for patients needing them on medical grounds.
My right hon. Friend and my Department are at present considering this request for pay beds from the board. We understand that the board, the hospital management committee and the medical executive committee are agreed that private patients should not for the present be admitted. They propose to wait until the hospital is brought fully into use and until the waiting list position shows signs of improvement. But, as I have
550
said, the board is hopeful that the staffing difficulties will be overcome by 1st September, so there is reasonable hope that the sought for improvement will not be long delayed.
Mr. Harold Walker: Is there any indication that the waiting list will show a dramatic drop from the present 3,442, which I am sure the hon. Gentleman accepts as not very different from the 4,000, on the strength of which the then Minister rejected the earlier application? Can he also tell us the approximate cost to those patients who will be utilising the private beds?
Mr. Alison: An element of the cost will be the private fees to consultants. As there is no precedent at Doncaster, I can only give average figures. The daily charge, according to an answer which I gave the hon. Gentleman on 19th April, varies between different types of hospital. For a single room in an acute non-teaching hospital—the patient making his own arrangements for private medical treatment—the daily charge is £10·10p. But that is an average and it may not reflect precisely what the charge will be in Doncaster if and when pay beds were authorised.
I was saying that everything turned on whether or not the staffing problems will be settled by 1st September. If the improving trend continues I see every reason why we should then authorise the admission of some private patients to this hospital. I have explained my general views on private practice and, as I have said, Doncaster is in an anomalous position in having no pay beds at all. I understand that there are a number of people in the area who are members of one or other of the provident funds. This is a comment on the allegation that £70 is a fabulous sum to pay, but, of course, many people are privately insured against such an event. We think it right that they should be allowed to exercise this choice, which is one that was embodied in the original National Health Service Act of 1946.
As I have said, we have now had an application from the board for authority to admit private patients later in the year. We are considering this and I hope circumstances will enable us to agree to it before long, not only for the sake of the people of Doncaster who wish to be

551
treated privately, but also for the sake of the consultants at this hospital, many of whom, as the hon. Gentleman suggested, accepted part-time contracts on the assumption that pay beds would be available where they could treat their private patients.
They have shown great restraint and a very proper sense of responsibility, but I think that the time has come when their
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interest too should be considered. I look forward to the time when the staffing difficulties at this hospital have been overcome and a continued downward trend in the waiting list is clearly discernible so that a reasonable number of paying patients may be admitted.
Question put and agreed to.
Adjourned accordingly at twenty-eight minutes to Twelve o'clock.

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Preamble
The House met at half past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Blackburn):
The LORD CHANCELLOR on the Woolsack.

HISTORIC BUILDINGS IN SCOTLAND
LORD KILMANY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what plans they have formulated for increased assistance to historic buildings in Scotland.]
THE MINISTER OF STATE, SCOTTISH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, for the remaining two years of the current programme the allocation of funds to the Historic Buildings Council for Scotland has been increased from £110,000 to £150,000 a year.
LORD KILMANY: My Lords, while thanking my noble friend for that reply, which sounds encouraging, may I ask whether she can give an assurance that this represents a substantial increase in grant, as opposed to merely keeping pace with rising costs?
BARONESS TWEEDSMUIR OF BELHELVIE: Yes, my Lords, because for the last three-year period before this one the grant was £220,000 altogether, and for this three-year period it is £410,000.
LORD BALERNO: My Lords, may I ask the Minister whether the Government have yet decided to extend the powers of the Historic Buildings Council in Scotland so as to include churches of architectural and historic interest?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, we have had very extensive consultations with the Church of Scotland trustees and we hope to make an announcement in due course. As no doubt the noble Lord knows, historic
316
churches which are not in use as churches already receive grants.
LORD SLATER: My Lords, could the Minister state how the figure for Scotland compares with the rest of the United Kingdom in regard to grant aid to these historic buildings?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, although, strictly speaking, that is another question, I cannot deny the noble Lord, Lord Slater, and the latest figures were from £700,000 to £1 million in England.
LORD BALERNO: My Lords, may I ask my noble friend whether she is aware that the position of the historic churches in Scotland is substantially different from that of the historic churches in England and that the two are somewhat disparate problems?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I had the advantage of reading the debate, in which the noble Lord made a very interesting contribution, but I understand that it has been the policy of successive Governments not to give grants to historic churches in active use because they are not subject to the same planning controls as are ancient and historic buildings.

THE NATIONAL YOUTH ORCHESTRA
2.33 p.m.
LORD ST. JUST: 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 prepared to help the National Youth Orchestra overcome the serious financial problem with which they are now faced.]
THE PAYMASTER GENERAL (VISCOUNT ECCLES): My Lords, grants to individual organisations in the arts are a matter for the Arts Council, who are well aware of the position of the National Youth Orchestra. I have myself enjoyed their concerts on several occasions.
LORD ST. JUST: My Lords, in thanking the Paymaster General for that reply, may I ask him whether he is aware that this is a very fine orchestra, and whether it is not possible for the Ministry of Education to give a little shove to the Arts

317
Council towards saving and preserving such a fine orchestra?
VISCOUNT ECCLES: My Lords, the grant is £20,000, which is rather more than half the last budget of the National Youth Orchestra, and I must leave it to the Arts Council to decide whether or not to increase any particular grant of this kind.
LORD MAYBRAY-KING: My Lords, is the noble Viscount the Paymaster General, whose work as Minister of Education I well remember with gratitude, aware that this is one of the great young orchestras of the world, and that a word from him might persuade the Arts Council to make a greater grant to a very great young orchestra?
VISCOUNT ECCLES: My Lords, I thank the noble Lord for his intervention. I knew Dame Ruth King from the earliest times of this orchestra, and I agree with what the noble Lord says. Perhaps the words we have heard here this afternoon may reach Piccadilly.
LORD SOMERS: My Lords, would not my noble friend agree that this orchestra is an extremely valuable source of future material for our main orchestras? And would he confirm that its annual expenditure is £35,000 and its income is £13,000, leaving a gap of £22,000, of which £20,000, as he says, is provided by the Arts Council? This year, the orchestra will be able, I understand, to make good from capital the extra £2,000; but can my noble friend say whether it would be possible for the Arts Council to give a little more to help them next year?
VISCOUNT ECCLES: My Lords, my noble friend's arithmetic is quite right; the gap is £2,000. This is not really very considerable, and I feel that those who care for this orchestra might find ways and means of bridging what is really quite a small amount.
LORD ROBBINS: My Lords, is the noble Viscount aware that some of us regard with great approbation his firm resolve to leave the ultimate decisions in these matters to the Arts Council?

CIVIL LIST AND INCOME FROM CROWN LANDS
2.37 p.m.
LORD ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
318
[The Question was as follows:
To ask Her Majesty's Government whether they will state for each of the last 20 years the annual income derived from Crown Lands and made over to the Exchequer and how much the total of these amounts exceeds the total sum voted by Parliament to Her Majesty the Queen over the same period.]
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, the income derived from Crown lands and made over to the Consolidated Fund in the nineteen complete financial years since the Accession of Her Majesty The Queen in 1952 totals £45,390,000. In the same period this amount exceeded the amounts issued to Her Majesty The Queen in respect of the Civil List under the provisions of Section 2 of the Civil List Act 1952 by £38,491,397. In addition, Schedule "A" Tax amounting to £7,332,070 was paid to the Inland Revenue by the Crown Estate Commission during the period.
With permission, I will circulate the annual figures with the OFFICIAL REPORT.
The following are the figures referred to:

Year ending March 31st

Crown Lands revenue paid to Consolidated Fund £

Schedule "A" tax paid to Inland Revenue £

Payments issued in respect of the Civil List £

1953

980,000

610,688

405,565

1954

1,130,000

595,602

387,846

1955

1,170,000

594,564

391,061

1956

1,270,000

577,944

392,596

1957

1,270,000

572,064

388,715

1958

1,440,000

581,454

383,789

1959

1,530,000

594,694

381,086

1960

1,790,000

593,105

379,275

1961

2,020,000

580,954

372,354

1962

2,190,000

609,002

337,659

1963

2,380,000

604,761

365,204

1964

2,470,000

646,214

324,186

1965

3,200,000

171,024

314,640

1966

3,525,000

—

342,950

1967

3,600,000

—

285,154

1968

3,725,000

—

307,750

1969

4,050,000

—

328,218

1970

3,800,000

—

296,555

1971

3,850,000

—

514,000

45,390,000

7,332,070

6,898,603

LORD ORR-EWING: My Lords, from that reply is it not clear that, apart from the great and invaluable service which

319
Her Majesty The Queen and other Members of the Royal Family give to the nation, the taxpayers have since 1953 received some £38 million more in revenue than has been granted back? Secondly, can the noble Lord say what proportion of the income from the Duchy of Cornwall is given back to the taxpayers? And lastly, I wonder if the noble Lord would see whether the Trustees of the Crown Estate have sufficiently wide powers to invest the moneys as they believe will best benefit both the Estate and taxpayers.
LORD ABERDARE: My Lords, I am sure the whole House will echo my noble friend's words in paying tribute to the way in which Her Majesty shoulders her onerous burdens. I have given him the figures which show how much the taxpayer benefits from the payments derived from Crown lands. On the second point about which he asked me, I may say that the Duke of Cornwall, since he became 21 on November 13, 1969, has voluntarily surrendered half of the revenues of the Duchy of Cornwall to the Consolidated Fund. My noble friend's third point was about the powers of the Crown Estate Commissioners. These are contained in the Crown Estate Act 1961, which was a consolidating Act. I understand that the powers are fairly wide and indeed are more or less the powers of the absolute owner, subject only to certain restrictions for the protection of the reversionary interests of the Heir Apparent but I will certainly look into this matter.
LORD PAR GITER: My Lords, would not the noble Lord agree that the title "Crown Lands" is now something of a misnomer, and that these are really the lands of the people, held in trust by the Crown for the benefit of the people from time immemorial? Would he not agree that it is entirely wrong to relate this particular sum of money, whatever it may be at any one time, to the remuneration given to the Queen for carrying out her duties?
LORD ABERDARE: My Lords, I do not think that really accords with the facts. On the Accession of George III in 1760 the land revenues of the Crown in England and Wales were surrendered to
320
Parliament by the King. At the commencement of each reign since then, each succeeding Sovereign has made a similar surrender, effective only for the duration of the particular reign.
LORD GRIMSTON OF WESTBURY: My Lords, from the figures that he has given, would my noble friend tell us what the income from the Crown lands was nineteen years ago and what it is to-day?
LORD ABERDARE: My Lords, in 1953 it was £980,000, and in 1971 it was £3,850,000.
LORD BLYTON: My Lords, is the noble Lord aware that inflation is so rapid now that the Queen is entitled to an increase to meet the increased cost of living since we fixed the figure for her just after she became Queen? Is he further aware that an increase to the Queen is justified when one compares like with like, and what the sum fixed would buy to-day?
LORD ABERDARE: My Lords, I am sure the noble Lord appreciated from the popularity of what he said that he is saying something that many of us would echo. As he knows, there is a Select Committee in the other place which is considering this matter.

SALMON AND FRESHWATER FISHERIES: THE BLEDISLOE REPORT
2.43 p.m.
LORD BALFOUR OF INCHR YE: 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 it is their intention to introduce legislation based on the Report of the Bledisloe Committee issued in 1961, and which has been repeatedly promised by successive Ministers of Agriculture, Fisheries and Food.]
LORD DENHAM: My Lords, Her Majesty's Government hope that it will be possible for legislation on this subject to be introduced in the reasonably near future.
LORD BALFOUR OF INCHRYE: My Lords, arising out of that reply, may I

321
ask the Minister (while I am no advocate of "instant government", of which I think we have had a fairly good dose in the last few years), whether ten years is not rather a long time to go without a measure being brought forward? And might not the indefinite period now given mean a delay of another ten years?
LORD DENHAM: My Lords, I agree that it has taken ten years in the case of the majority of the recommendations. A certain number of the recommendations, of course, are already law. There were two short Acts passed in 1964 and 1965, and a number of recommendations were overtaken by the Rivers (Prevention of Pollution) Act 1961, and the Water Resources Act 1963.
LORD BALFOUR OF INCHRYE: My Lords, the Minister cannot really get away with that. The major part of the recommendations have not been introduced in the form of legislation, as was promised, and the Minister now says that this may come at some indefinite time, he hopes, in the future. Will he take the matter back and try to do a little better than that?
LORD DENHAM: My Lords, with respect, my noble friend knows very well that in each Session of Parliament one has to get the priorities right, and we are hoping that in the very near future the priorities will allow something to be done about this question.
LORD FRASER OF LONSDALE: My Lords, is my noble friend aware that this beautiful creature, the Atlantic salmon, is very rare? Is he also aware that it is a source of great wealth as well as pleasure, to Scotland and England, and will he seriously consider giving it priority?
LORD DENHAM: My Lords, of course what my noble friend has said will be considered by my right honourable friend.
VISCOUNT THURSO: My Lords, when Her Majesty's Government come to introduce legislation on the Bledisloe Report will they see that such legislation matches any legislation which is introduced in Scotland in consequence of the Hunter Report, because I doubt very
322
much whether the Atlantic salmon knows whether it is Scottish or English?
LORD DENHAM: My Lords, I cannot comment on the Hunter Report because it is a little wide of the original Question. As the noble Viscount will be aware, the existing laws on this subject are different as between Scotland and England, so that there must be some difference.
VISCOUNT THURSO: My Lords, if you are revising the laws, would you not think it wise to make the laws suitable for the species being dealt with, rather than defer to the different traditions in two countries within the United Kingdom?
LORD DENHAM: Yes, my Lords, this is very probably so. But, of course, we are discussing amending legislation, and since it will amend two different existing laws, the amendments must be different.

LONDON TRANSPORT (No. 2) BILL
Read 2a, and committed to a Select Committee.
TORBAY CORPORATION (No. 2) BILL
Read 2a, and committed to the Committee on Unopposed Bills.

PROCEDURE OF THE HOUSE
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move that the Seventh Report from the Select Committee on Procedure of the House be now considered.
Moved accordingly, and on Question, Motion agreed to.
The Committee's Report was as follows:
REPRODUCTION OF MINISTERIAL STATEMENTS
The Committee have considered the proceedings of the House on 31st March, 1971, when a Government Statement made in the House of Commons was not repeated in this House because of its length; but, with the leave of the House, its text was circulated in the OFFICIAL REPORT (cols. 1315–28). The procedure adopted that day was without precedent.
The Committee attach importance to the maintenance of the principle that the OFFICIAL REPORT is the verbatim record of what takes place in the House. The House however at present gives leave for the reproduction in the OFFICIAL REPORT of additional matter too lengthy or too complicated to be given orally in Ministerial Statements or answers to Starred Questions. The Committee are of opinion that to adopt the precedent of the proceedings of 31st March 1971 would not represent an undesirable extension of the present practice of the House.
The Committee therefore recommend that, in future, when it is considered to be for the convenience of the House, the text of a Government Statement may be reproduced, by leave, in the OFFICIAL REPORT, notwithstanding the fact that it has not been given orally in the House. On such occasions, the Government Chief Whip or his Deputy should seek the leave of the House to reproduce in the OFFICIAL REPORT a Statement which it is not intended to give orally. Under Standing Order No. 29A such leave would not need to be unanimous.
The Committee further recommend that this new procedure should be adopted on an experimental basis until further notice.
THE EARL OF LISTOWEL: My Lords, I beg to move that this Report be now agreed to.
Moved, That the Report be agreed to.—(The Earl of Listowel.)
On Question, Motion agreed to.

CHARITIES AND CHARITY LAW
2.46 p.m.
LORD BEAUMONT OF WHITLEY LORD BEAUMONT OF WHITLEY rose to call attention to the work and status of charities in the United Kingdom and, in particular, to the operation of the laws affecting charities, and to move for Papers. The noble Lord said: My Lords, the main purpose of my noble friends and myself in putting down this subject for to-day's debate is to give all noble Lords an opportunity of discussing any matter in the field of charity and charity law. In addition, I myself want to raise a specific topic: that of the state of the law on the definition of
"charity" and the effect that this definition, or rather lack of definition, has on work in the charitable field.
More generally, there can be little doubt that the whole field of charities is an important one in the life of the country. Your Lordships, except for the occasional debate on an Unstarred Question, like the one recently initiated by the
324
noble Lord, Lord Brockway, have not discussed this field for about twelve years. Indeed, largely by chance, this debate coincides with more or less the tenth anniversary of the introduction of the provisions of the Charities Act 1960, and even more fortuitously with the very full Annual Report of the Charity Commissioners for 1970, which contains a review of those ten years. I am afraid that it was fortuitous and that I must disclaim any credit for such brilliant timing, but I also disclaim any discredit for giving your Lordships such a very short time to read and digest this Report before to-day's debate.
The mere size of the field is sufficient to show its importance. There are not many reliable statistics about charities and about charities' money, and we must be grateful to the Charity Commissioners in their latest Report for giving the first reasonable attempt to estimate the size of the field in finance. It would appear, for instance, that the income of the charities, excluding educational charities and those which are excluded from the scope of the Charity Commission anyway, such as denominational charities and public schools, is something over £60 million a year. Mr. Nigel Lawson in an article in The Times this morning which some of your Lordships will have read, estimates that income is probably over £100 million a year, and I should think that figure would be about right. The Securities Account of the Official Custodian for Charities amounts to something like £144 million. In 1967 industry alone contributed £32 million to charity. There are 77,000 charities registered with the Charity Commissioners, and 25,000 educational charities. They are growing all the time, and rather rapidly.
In a field of this size there must be a large number of problems of one kind or another which need airing, even if some of them are not properly the business of the Government of the country. May I mention one or two that I hope noble Lords may decide to talk about to-day? There is the whole relationship of charities to the Welfare State. There is the problem which stems from this: that the scale of unpopularity and popularity of charities usually means that those which most badly need the money are the most unpopular and least likely to

325
get it. Anyone who has had any experience of trying to raise money for the curing of drug addicts or for the counselling of homosexuals will know what I mean.
From that very interesting programme which Des Wilson did on television recently, I understand that there is even a very strong differentiation in people's minds between charities for the blind and charities for the deaf; charities for the blind being popular and getting money, charities for the deaf suffering from an image of possibly rather elderly and grumpy people who could hear if they would only try. That appears to be the image which some charities have, and whether or not that is the reason, the fact remains that there is a very real difference in the amount of money that certain charities can raise.
There is the problem of small charities whose objects have been largely fulfilled, and of their reorganisation under the doctrine of cy près, a matter on which I hope the right reverend Prelate the Bishop of Blackburn will touch. While I am on that subject, may I say how sorry I am, as I am sure your Lordships are, to read to-day of his imminent retirement. We shall certainly miss him a great deal. Allied to that there is the possibility of setting up a national disaster fund, as put forward by my right honourable friend Mr. Jeremy Thorpe in a 10-minute Bill in another place two or three years ago; and I believe that my noble friend Lord Amulree may touch on that. Those are just a few of the diverse points which occur to me.
I should like to thank all noble Lords who have put their names down to speak to-day. I know of your Lordships' interest in this matter, as instanced by the presence of so many of your Lordships' names on so many headings of charity paper. I think it is not merely a matter of the pleasure of having a title on the top; it is also because of the enormous fund of experience in your Lordships' House. It gets some charities to the state where one feels that they almost need a statutory commoner to keep the balance. May I say, in particular, how much we look forward to, and welcome, the maiden speech of the noble Baroness, Lady Macleod of Borve. I think we all know of her interest and experience in
326
this field; and indeed I have some small personal knowledge of one minor part of the work that she has been doing, together with my wife and the wives of several of your Lordships and of Members of Parliament, for a cardiac unit for Westminster Hospital which has now been installed.
I should now like to return to the specific point that I want to raise in the charitable field, and that is the whole question of the definition of charities. I want to make it quite clear that although I shall be mentioning several instances of charities and their good luck or bad luck in getting themselves registered as charities, it is not my purpose to-day to raise any particular case as a case. I am merely raising these as instances of the kind of things that happen. I would also ask noble Lords, and particularly noble and learned Lords, to bear with me. As I shall go on to show, I think that the law on this subject is very complicated. I am no lawyer and I hope I have understood the subject aright. I hope I shall be corrected if I am wrong, but possibly with kindness and charity. The Nathan Report on Charitable Trusts of 1952 recommended that there should be a new definition of charities, but in their White Paper the Government of that day rejected this recommendation as being too difficult. Accordingly, no such new definition was put forward in the Charities Act 1960. The idea that it is too difficult to produce a new definition is also agreed with by the Charity Commissioners in their Report for 1970. I have a great deal of sympathy with that point of view, although I do not think it is the final answer.
I should like to say a few words about the present situation. The Charity Commissioners have the power to say that a charity is a charity, and to register it as such. They have a job of definition. They are allowed to say, "This is a charity according to the law"; they are not themselves allowed to make or distort the law. Therefore, a great deal of criticism of the Charity Commissioners is very wide of the mark indeed. They are, if I may be allowed to say so, an admirable body of people doing a very difficult job, I think in intolerable circumstances, and some of those intolerable circumstances are what I am talking

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about now. They can refuse to register a charity. That does not necessarily mean that it is not a charity; it means that the charity can then apply to the High Court. But there has been only one appeal from the Charity Commissioners' decisions in the last ten years, and I think that is at present waiting to come before your Lordships' House.
I want to make it quite clear, in case there is any doubt, that there is no accusation of bias against the Charity Commissioners. It is true that they have some slight leeway in the decisions that they make, as has anyone interpreting a very difficult field of law, but I think it is possible to say that their over-helpfulness in a large number of cases has often put them in a slightly difficult position. Since 1969, therefore, they have felt that they must stick more strictly to the law than they did before, going straight down the middle of this field. As the noble Lord, Lord Belstead, said in reply to the Unstarred Question of the noble Lord, Lord Brockway, neither the Charity Commissioners nor the Department of Education and Science can change the law; but the Government can, and that is what I am talking about to-day.
What then, my Lords, is the law? The law is based on a charities doctrine stemming from the Middle Ages and dealing with the relief of poverty and the advancement of education. More recently it is contained in the Preamble to the Statute of Charitable Uses of 1601, which gives a long list of charitable objects, including the provision of marriages for poor maids. It was further refined by Lord Macnaghten in 1891, under the four general heads of trusts for the relief of poverty, for the advancement of education, for the advancement of religion and for other purposes beneficial to the community. To be registered as a charity, a body must have objects which are exclusively charitable in those terms. But the law is case law, and some judgments have fallen within the spirit rather than the letter of the Preamble to the Statute, which indeed was not expressly preserved by the Charities Act 1960. The Charity Commissioners themselves are on record—and I think this is important—as having said, in their 1966 Report:
"…as the judges themselves have admitted, charity law is not always governed by logic nor are the decisions entirely consistent."
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Indeed, my Lords, the law on the definition of charities is what we are used to refer to, in spite of the denials of the noble and learned Lord who usually sits on the Woolsack, as "a lawyer's paradise".
The whole situation reminds me of the case of Dahlia Limited v. Yvonne, reported, as your Lordships will remember, by Sir Alan Herbert in Uncommon Law, Section 49. Your Lordships will remember that in that case the respondent, having lost an appeal in your Lordships' House, asked that costs should be borne by the Crown on the grounds that a judgment in the House of Lords is in the nature of an act of God. The contention was that a decision in your Lordships' House is something which no reasonable man could have expected. It was argued that it must be evident a priori that no reasonable man could foresee a decision of the House of Lords, for otherwise no reasonable man would appeal to it only to lose his case; and that, in any case which had been argued in different courts before a number of different judges who came to differing conclusions, and when the final decision was only given by a majority of your Lordships' House, it was doubly evident that such a verdict could not be foreseen. It was one of Sir Alan's most fascinating pieces of argument and I think it could more apply to a case brought on charity law than to almost anything else. As can be seen from the files of a large number of people who have gone to the Charity Commissioners for registration as charities, it is very difficult indeed to tell what their verdict is likely to be in the context of the present law.
This doubt as to the definition of charitable status comes in many different ways. For example, I should like to read briefly to your Lordships a series of aims put forward by a body called Release, when it applied for charitable status. The objects of the trust were:
" To further educational activity particularly by and for young people in relating to the problems arising from drug taking and drug dependence in the United Kingdom, by facilitating and promoting research into and dissemination of information about all aspects of such problems and of social problems associated therewith…
" With a view to improving the standards of treatment to further and promote the study of and research into all aspects and methods of the treatment and prevention of crime,

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delinquency, poverty and ill-health and to publish the results of such study and research…
" To establish research and community centres which…will provide facilities to all interested in the objectives of the Trust…will promote studies into different aspects of drug-taking and drug addiction…will promote educational conferences, meetings, lectures and film shows…will maintain an advice and information service on such matters…will help to develop or organise or will co-operate with other centres or institutions having similar charitable objects ".
I venture to suggest that all your Lordships would regard those as being charitable aims; but it was decided, in fact, that they were not charitable aims. I was delighted to hear just recently that the Charity Commissioners have approved a different set of aims for that admirable body Release, which deals with the problems of the young drug addict in a field which is very little touched on by other people; that the Charity Commissioners have shown the good sense and judgment which they have in finding a way to approve of this charity. But I mention that instance to show that something which your Lordships would no doubt regard as totally charitable is not necessarily so regarded by the law. Indeed, Lord Wright, in a judgment in 1948, said:
" The legal meaning of 'charity' differs so widely from the popular meaning of the word as to have very little relationship to it ".
Then there is the problem of Quest, about which your Lordships may have read a short account in The Times yesterday or the day before. I have something to do with that body and therefore must declare an interest. It has been refused charitable status on, I am sure, perfectly proper grounds, one of which is that the law holds that a charity to service charities cannot really be a charity itself. But the work which Quest does—and I do not think there is any debate about this—in producing information for the whole charitable field is for the common good. It is a non-profit-making body; and it is a bad thing that a body like this cannot achieve charitable status. There is the problem of the Humanist Trust, which has already been raised in your Lordships' House and which will doubtless be raised again to-day. But, above all, there is the question of political action, and I shall come to that in a moment.
May I say that none of this would particularly matter if it were not for the benefits
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which registered charities enjoy. In principle, and according to law, these are three: first, exemption from the rule against perpetuities; second, that imprecise bequests to them can be validated; third, the privilege and the ability to obtain fresh objects for the charity. But the real advantages, as your Lordships all know, are certain tax advantages which may be given by the Government of the time, and also the ability to receive grants from charitable grant-making bodies. It is this last advantage which may make all the difference between life and death to a small, valuable body like Quest, which can get a grant from a charity only if it has charity status itself.
The problem of political activity has been well stated and well analysed by the Charity Commissioners in their Report for the year 1969, and I hope your Lordships will forgive me if I quote from paragraphs 7, 8 and 10 of that Report:
" In a world in which the pace of social change seems ever to be increasing we shall inevitably continue to be faced with new or extended activities, the charitable nature of which has never been the subject of consideration by the courts.
" One contemporary development which has given us some concern has been the increasing desire of voluntary organisations for 'involvement' in the causes with which their work is connected. Many organisations now feel that it is not sufficient simply to alleviate distress arising from particular social conditions or even to go further and collect and disseminate information about the problems they encounter. They feel compelled also to draw attention as forcibly as possible to the needs which they think are not being met, to rouse the conscience of the nubile to demand action and to press for effective official provision to be made to meet those needs. As a result `pressure groups ', 'action groups' and 'lobbies' can come into being.
" It is a well-established principle of charity law that a trust for the attainment of a political object is not a valid charitable trust and that any purpose with the object of influencing the Legislature is a political purpose. Thus no organisation can he a charity and at the same time include among its purposes the object of bringing influence to hear directly or indirectly on Parliament to change the general law of the land ".
That, my Lords, is the position. Apart from the slightly unfortunate sentence stating that a development which is giving them some concern has been the increasing desire of voluntary organisations for involvement in the causes with which they work, it is admirably put.
But what may have been admirable 60 or 70 years ago, and possibly not even

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then, does not now seem to be entirely suited to the world in which we live. Charity after charity, from the possibly slightly suspect charities, some of whose views coincide with one political Party rather than another, to bodies such as the Disablement Income Group, for which the whole of your Lordships must have the utmost admiration and whose experience and work we have recently considered in legislation going through this House—from one extreme to the other—all see one of their objects, and sometimes the most important of their objects, as the influencing of the Legislature. And the reason for this, my Lords, is not rooted in Party politics as such. There is nothing wrong about it. It is rooted in the realisation that within a Welfare State such as we have, the great burden of relief of poverty and the provision of education is the responsibility of society as a whole, often working through the State, and that where there is a large organised charity it is in fact finding areas which the State does not at present deal with and which they believe should be dealt with. So for many charities it is axiomatic that their objects are twofold: first of all, to relieve the suffering which is there, and at the same time to urge the Government to take over that relief themselves, or indeed in many cases to obviate the need for relief by tackling the basic causes rather than the symptoms. And even a Government whose philosophy is very much to make people stand on their own feet will. I think, agree that this is worth while. Indeed, the Conservative Party have by their actions shown that they believe in it.
One way of getting round this problem has been for charities to split into two, so that one branch has charitable status and can relieve suffering and do research work, whereas another branch does the political work. It is, I think, no secret that the National Council for Civil Liberties with the Cobden Trust, and the Homosexual Law Reform Society with the Albany Trust, of which I have the honour to be chairman, and many other bodies, have availed themselves of this possibility, and that the Charity Commissioners have been helpful in this connection. But I do not need to go into details to point out to your Lordships that this must be an unsatisfactory way
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of dealing with the problem and one which, to put it mildly, is open to abuse. So what I should like to see is the whole concept of what is a charity being widened; and I should like to see it widened to include any non-profit-making body working for the common weal. I know that this has difficulties. There is the difficulty of definition. The Charity Commissioners, in their Report, recall that the possibility of a new statutory definition was discussed when the Charity Bill was before Parliament and it was then generally agreed that it would be impossible to draft a satisfactory definition. They also point out that a new definition would give rise to other difficulties, and indeed it would. It is often argued that if you gave a charitable status to pressure groups undertaking political work you would find it hard not to give it to political Parties. I accept this; but I do not in truth see anything very wrong in giving political Parties some financial advantages. I do not think that I could be accused of having a vested interest, because I do not believe that my Party would be the one most to gain if there were such changes. The whole question of how we pay for our politics in a democratic society—indeed, how we pay for a democratic society—is a very important one to which a fresh approach needs to be made.
My Lords, I accept that any step which is taken will be difficult and will entail difficulties; but where I do not follow the implications—not the statement, the implications—of the Charity Commissioners' comments on this point in this year's Report is that it does not necessarily follow that if you have one difficult, complicated, obscure and unsatisfactory state of affairs you should not make a change which would be manifestly for the better, even if the result also is to some extent obscure and unsatisfactory. Of course it would be better if we could provide a clear-cut, lucid, straightforward definition; but even if we cannot do this, I think that we must make some move to bring the law of charities more into line with the realities of the situation of a Welfare State.
I have spent some time arguing a specific point which I wish to bring before the House and, indeed, to the notice of the Government. Before I

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close, I should like to reiterate that I have put down this Motion in the hope that noble Lords will not concentrate on this point but will range widely over the whole field of charities. Only if they do this will I and my noble friends consider that this debate has really served a useful purpose. Finally, lest I should be accused of tinkering with the problem and not going deeply enough into the whole concept of charity, I would say that I view this debate which I have had the honour of introducing to-day as being part of and dependent upon the larger and wider subject which I raised on the last occasion that I initiated a debate in your Lordships' House—that of poverty. In almost all its objects charity comes down sooner or later to the relief of poverty. This is a matter for society as a whole; and to say that we can make things easier for the charitable bodies themselves and that we should do so—and I do say that—is not to take away for one second the responsibility that our whole society has for looking after its more unfortunate members. My Lords, I beg to move for Papers.
3.11 p.m.
BARONESS WHITE: My Lords, it is not merely to use a conventional phrase to say that we are all deeply indebted to the noble Lord, Lord Beaumont of Whitley, both for having chosen this subject for debate to-day and for the admirable way in which he has spoken to his Motion. I should also like to say from these Benches how very much we look forward to the contribution of the noble Baroness, Lady Macleod of Borve, and how much we welcome her presence here. I wish to speak briefly because I am far less experienced in these matters than my noble friend Lady Phillips who will be speaking at a later stage. She has had very great experience and can, I am sure, contribute to the debate with far greater authority than I—as indeed can many of your Lordships whose names appear on the list of speakers.
I should like to put a few points for consideration. This is in no sense a Party matter; but it is one of great concern to all parts of the House. I should like to say first, because I tend to agree in certain respects with some of the remarks made by Lord Beaumont—with the more controversial aspect of his
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speech—how much we must all be impressed with the work done by the Charity Commissioners themselves and their staff. Anyone who has read their Reports, including the one which has fallen into our hands in time for this debate, must be impressed by the very positive role that they now play, much more so than used to be the case. This, I think, is one of the most helpful consequences of the legislation of 10 years ago with which the name of Lord Nathan is associated—and I am glad to see that his son will be taking part in our deliberations—because it was based largely, though not entirely, on the Nathan Report. As the noble Lord, Lord Beaumont, indicated, the Government of the day did not accept all the recommendations of that Report. But I think that one of the results of that 1960 Act has been that the Charity Commissioners have felt able to take very much more positive action and to be, in the most helpful way, more interventionalist and not merely to be the guardians of charitable funds in the negative sense of seeing that they are not being misappropriated.
I was impressed with the references in the latest Report, the 1970 Report, which we have only just received. I have not read it all but I have been through it rapidly. It seems to me that in addition to the establishment of the central register, which we all knew about, they seem to be doing most admirable work in instigating local consultations, in trying to bring together in cities or neighbourhoods the various charities and in trying to see that the work of different charities with common interests should not be wasteful or overlapping and that, as far as possible, schemes of co-ordination should be worked out between those charities that are working towards the same or comparable ends. Similarly, they have very properly emphasised the need to bring together the charitable organisations and statutory bodies charged with the duty of the good of the community. Again I think we are much in the debt of the Charity Commission for the very useful work that they carry out in this field.
Furthermore, I was glad that Lord Beaumont mentioned the work they do in the field of reorganisation of charities under cy-près doctrine; because I think

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that many of us in past days have been much disturbed to find charities which had been, as it were, jogging on for generations and which, if not entirely useless, were far from being as useful as they might have been. One of the advantages of the 1960 legislation was to make easier the reconstruction of such charities. Plainly, the Charity Commission are active in this way. In all these administrative fields I think it only right that we should offer our grateful congratulations to the Commission for the way in which they are setting about their work.
The main purpose of the debate this afternoon, however, is to give an airing to the problems which the noble Lord, Lord Beaumont, has so vividly placed before us. These stem from the fact that a law enacted in Tudor times is not really the best and most suitable basis for action to-day. The concept of charity goes back to the law of 1601, when not only was society differently organised but the whole concept of social services and so on was different from the one which engages us to-day. I do not think that any of us who have been active in those fields of charity where opinion is in any way concerned can be entirely happy at the situation in which we find ourselves. It is true that the purpose of the Charity Commission is to administer the law and therefore one can lay no complaint at their door; but it is surely an unsatistory state of affairs that, as Lord Beaumont has said, so many organisations with which one is acquainted have to set up two organisations in order to carry out their purpose. He mentioned some. I think that we can all think of certain others. For example, when the group of charities concerned with overseas aid, Oxfam, War on Want and others, wish to influence opinion in the direction of greater contributions, by Government as well as by individuals, and set up a campaign of action for world development, they have to set up a different organisation in order to further this purpose. I understand that the Rowntree Trust for example, one of the best known charities in the educational and social field, has also set up a separate organisation to be able to help other organisations which are not charities in the strict sense of the word but
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which are carrying out aims which, in normal, popular parlance, we would consider to be educational and charitable; but they do not come within the four walls of our law.
The noble Lord, Lord Beaumont of Whitley, naturally mentioned the Albany Trust with which he is concerned, and there is the Disablement Income Group, the Child Poverty Action Group and others which have got into difficulty—or apprehend that they might do so in this way—because they seek to change the minds of men, and not merely to collect money to relieve their distress. Is this an unworthy object? I should have thought that most noble Lords would agree that it is a worthy object. But it is not a legal object in the charitable sense because, I understand, it is not legally charitable to undertake any activity which would be likely to affect the law of the land. Any effort to influence the Legislature is a political purpose and therefore not charitable. This seems to me, my Lords, to be quite out of keeping with modern society and modern thought, and particularly, if I may say so, with the attitude of the younger generation. This definition, this attitude towards charity will, I think, prove to be one of the ingredients which has alienated a number of young people from political activity in this country. They feel that it is not realistic in the terms in which they look on life.
I read the passages in the 1969 Report of the Charity Commissioners for England and Wales to which the noble Lord, Lord Beaumont of Whitley, referred, and parts of which he quoted. The Commissioners devoted quite a considerable section of the 1969 Report to this very problem because, as they say, it had been causing them concern. They tried to indicate areas in which it would not be improper for there to be some communication, at any rate, between these organisations and those responsible for Government. For example, they suggest that if the Government are investigating, or have propounded proposals for, changes in the law, it would be proper for there to be some communication. If it is proper for the Government surely it ought also to be proper for Her Majesty's Opposition, who may be considering the possibility

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of investigating changes in the law. In their Report the Commissioners say:
"…when a parliamentary Bill has been published a charity will be justified in supplying relevant information to a Member of either House and such arguments to be used in debate as it believes will assist the furtherance of its purposes. So also there can be other cases, not involving legislation, in which a charity is entitled to persuade a Member to support its cause in Parliament, for instance, where the question arises whether a Government grant is to be made or continued to a particular charity."
But, my Lords, I find that when legislation to deal with gambling was before Parliament the Churches' Committee on Gambling, which is a charity—an educational charity, presumably—found apparently that it was not within its scope to undertake work of this kind because it set up a separate and non-charitable body namely, the Churches' Committee on Gambling Legislation, to deal with the problem of legislation.
I had an experience with an organisation which has very recently been established; namely, ASH—Action on Smoking and Health. The sole object of this organisation is to try to influence opinion—including, one would hope, indirectly if not directly, that of the Legislature—about the dangers of smoking. Your Lordships may recall that we were to have a debate on this subject in this House. When I asked the officers of this organisation whether we could have some information, they said that, as advised by their solicitors, they felt they should not supply anything other than the Report published by the Royal College of Physicians (a public document and, apparently, permissible) because it might endanger their charitable status. So plainly, my Lords, there is dubiety in people's minds about just how far they can or should go. The example I have given about the Churches' Committee on Gambling Legislation shows that the kind of reassurance which appears to be contained in the Charity Commissioners' Report of 1969 does not seem to have been disseminated sufficiently convincingly for legal advisers of charities to feel that they are entirely safe; and there is a great deal of difficulty over this business. A large organisation could perhaps set up a parallel organisation without too much difficulty or expense; but it is very difficult for a new or small organisation to have to go through all the
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trouble and cost of doing this to make quite sure that it will be on the right side of the law.
I can quite understand that a major change in the law would need great consideration. I have had talks with people responsible for some of the largest and best known charities in the country, and on the whole I think that many of them—certainly the long-established ones—feel that they have found ways round the law and that they can manage not too badly. They feel that if the law were widened they might find themselves drawn into situations which might possibly be difficult for them, and might conceivably cause a fall in their income; because it might lead to controversy within the organisation. They also suggest that if there were a completely free-and-easy situation, in which there was no way of controlling or checking the way in which the money was dispersed, it would be very difficult to keep a proper balance, or to say what was a proper balance, between expenditure on the main object of the charity and expenditure on propaganda by advertising and so forth. So, my Lords, this is not a simple problem, and I do not think that it would be doing a service to anyone to suggest that it is. It seems to me, nevertheless, that one should ask the Government whether the time has not come to give further very serious thought to this matter because I think the growth of organisations in the last few years of a kind in which the members are "involved", to use the word of the Charity Commissioners, surely indicates that the balance of opinion in society—particularly, I repeat, among younger people—is changing somewhat, and therefore it is our duty to have a look at it.
I should have thought that we, as Parliamentarians, should suggest that ally communication from a charitable organisation to a Member of either House of Parliament should be regarded as privileged. There should be no dubiety in the mind of anyone in charge of a charity about whether he or she should be allowed to say anything he or she chose in relation to the charity, or to write it, to a Member of either House. I should have thought that a relatively simple matter, and something we ought to put beyond any doubt at all. Having said that, my Lords, I should like to quote a few sentences from an interesting lecture by Mr. Des Wilson given in

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the Diamond Jubilee Address in December of last year to the London Council of Social Service on The Volunteer in Society.
I do not necessarily always agree with Mr. Wilson—some of us have reason to feel that some of his comments during the time of the past Administration were not entirely fair. But I must say that I think he is right here to pose the problem as sharply as he does. He says:
" We have got to get the only people who hold the answer, the ratepayer and the taxpayer, more knowledgeable about the need. This. I believe, has become the major role of the modern volunteer; acting as a bridge of communication between the island of the minority "—
people who are in some form of distress or ignorance—
" and the mainland of the majority in our society."
He then says:
" This is the challenge that faces Shelter."—
which is the organisation of which he was until recently the Director—
" Should it go on raising money, claiming its very real achievements, but implying all the time that this is the best way for people to help? Or should it say plainly that this is the problem of the authorities, and that the authorities, denied the essential resources, cannot cope?…
" We believe where people are prepared to give time and toil to tackle the need, they have shown sufficient commitment to be also entitled to speak out about it."
That I think is putting in a more precise way the problem which the noble Lord. Lord Beaumont of Whitley, had in mind when he put his Motion on the Order Paper. I repeat that I do not think that there is any easy solution, but I think that the time has come when we should think clearly and carefully about this problem.
3.31 p.m.
THE MINISTER OF STATE, HOME OFFICE (LORD WINDLESHAM): My Lords, it is customary to thank the mover of a Motion of this kind, and I do so to-day for three reasons in particular. The subject of charities, their work and status, is one of continuing public interest and importance, although it lies in the main outside the field of day-to-day Parliamentary or Governmental control. Secondly, since there is no statutory
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definition of "charity", the way in which the courts and the Charity Commissioners, in the exercise of their quasi-judicial functions, interpret the meaning of the words "charitable purposes" will change as society changes. It is easy to overlook or underestimate the closeness of the relationship between law and opinion in any political system. It was Abraham Lincoln who remarked, in the course of his debates with Judge Douglas a hundred years ago:
" He who moulds public sentiment goes deeper than he who enacts statutes or pronounces decisions. He makes statutes and decisions possible or impossible to be executed."
Therefore a debate of this kind, accompanied as it has been by a certain amount of comment outside Parliament, in the Press and elsewhere, is important in that it influences attitudes which ultimately determine the findings in the courts.
My third reason for welcoming the noble Lord's initiative is that it gives an opportunity for a number of noble Lords with very considerable first-hand experience of charitable work to take part in the debate, so that we can benefit from their advice and knowledge. We are particularly fortunate that this debate to-day is to be the occasion of the maiden speech of the noble Baroness, Lady Macleod of Borve.
My Lords, in his speech, the noble Lord, Lord Beaumont of Whitley, talked about the restrictions placed on charities as regards political activities, and proposed that the definition of "charitable purposes" should be widened. The noble Baroness, Lady White, followed very much the same lines in her speech. I listened with great attention, and some sympathy, to the way in which the noble Lord developed his argument. This approach represents a line of reasoning which combines idealism with impatience and with an element of protest. This is a feature of much political debate to-day and we should be very foolish to overlook it; but he will not expect me to reply in quite the same terms.
In order to give noble Lords who are going to take part in the debate a fairly full picture, I should like to describe the current situation, based as it is on the 1960 Charities Act, on a number of decisions of the courts and on the powers of the Charity Commissioners, and to

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explain some of the reasons that lie behind the practices to which the noble Lord has referred. Although the Charity Commissioners, as your Lordships will know, are an independent statutory body, I think that I may be the appropriate person to acknowledge from this Box the tributes which have been paid to them by the noble Lord and the noble Baroness for the obviously difficult work they have to do and for the sensible and common-sense way in which they have interpreted that work. I should also say that I do not intend to refer to educational charities registered with the Department of Education and Science, since my noble friend Lord Belstead is to reply at the end of the debate.
Both noble Lords who have spoken so far have referred to the fact that in their Annual Report for 1969 the Charity Commissioners set out in some detail their views on the question of charities' taking part in political activities. The Commissioners thought that it was desirable to try to establish some guide-lines for charities on this question, because queries had arisen concerning some of the activities of a number of different charities. The Commissioners made it clear that the law is based at present on a limited number of decided cases and that it is consequently difficult to formulate precise general rules. They offered to give guidance in any particular case which arose, where it would be possible to look at the actual question in the light of all the attendant circumstances. I am sure that this has been valuable and useful for a number of charities.
The reason why charities are excluded from political activities has perhaps not so far been made clear in the debate. Charities in this country enjoy certain benefits, one of them, a traditional privilege, being that they are entitled to the special protection of the Crown. If it is necessary for action to be taken in the courts in the interests of a charity, the Attorney General will accordingly act in the charity's interests. But probably more important in these days of high taxation is the very considerable financial privileges which are enjoyed by charities. It is reasonable that in return for enjoying these privileges, which are not shared by others, charities should confine themselves to activities which are
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recognised by the common law as being properly charitable.
One of the conditions that has to be met to establish that an organisation can be regarded as charitable is that it should operate for the public benefit. Here we come into an area of great difficulty. The courts have taken the view that they are unable to decide whether activities of a political kind are likely to benefit the public or not. The 1947 case of The National Anti-Vivisection Society v. The Commissioners of Inland Revenue, one of the leading cases in this connection, showed the great difficulties which arise in trying to decide whether or not a proposed change in the law—that is, a political aim—would or would not be for the public benefit. While noble Lords, particularly during our discussions of the Industrial Relations Bill, have been talking about a "lawyers' paradise" and about the aridity of the law, I think that the judgments in that case by the noble and learned Lord, Lord Wright, referred to by the noble Lord, Lord Beaumont, and particularly by the noble and learned Viscount, Lord Simonds, show the immense breadth and width of understanding that the appellate courts can bring to bear when considering a question of this sort.
What happened in this case? I should like to give a brief description. In this case your Lordships' House, sitting in its Judicial capacity, held that the National Anti-Vivisection Society, an organisation which has as its object the total suppression of vivisection, was not a body of persons established for charitable purposes only and so was ineligible for tax relief. No one questioned the sincerity with which the members of the society believed that vivisection was cruel to animals and that its abolition would benefit the public. On their behalf it was argued that trusts for the protection and welfare of animals were beneficial to the community as a whole, and therefore in the public good, because kindness towards animals produces moral benefits as tending to promote feelings of humanity and thus to elevate the human race. Against these generous and humane sentiments, however, had to be weighed the importance of experiments on animals for the purposes of medical and scientific research. Consequently, the contrary

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argument was advanced that, so far from the public benefiting if the Society succeeded in its object of banning vivisection, public health would suffer as a result.
Where in cases of this sort does the public interest lie? The noble Baroness used the word "worthy". I think that most people would feel that the aims of the Anti-Vivisection Society are worthy. But the courts had to decide whether they were or were not for the public good. There was a legitimate dispute in which honest and dedicated men found themselves on opposite sides. In such circumstances, it must be for the courts to decide. As it happened, in that case the House of Lords found against the Society. But these will never be easy cases to resolve. It is as a result of considerations of this kind that the courts have taken the view that if an organisation has as one of its main objects activities of a political kind, it cannot then be considered to be charitable. Political activity which is subsidiary to a main charitable object is not necessarily objectionable, but there is inevitably some difficulty in saying exactly where the line should be drawn between one case and another.
The Charity Commissioners have been in touch with a number of charities about activities which appear to be of a possible political nature, and have discussed with them the difficulties which arose, or are likely to arise, in the particular cases. The Commissioners have said that they believe that charities in general now understand fairly clearly what limitations the law, as it exists at present, has thought to impose on political activities. Moreover, they have added the comment that, in general, charities are not unhappy with the present position. It has happened from time to time in the past that an organisation wishing to be recognised as a charity has been unable to obtain that recognition because one or more of its objects was not recognised as being charitable in law. To be a charity, an organisation must have objects which are exclusively charitable. Where this difficulty has arisen, it has quite often been overcome by removing the objectionable object from the charity's purposes, and if it is still desired
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to pursue that object, a separate non-charitable organisation has been set up for that purpose, relying on funds not raised for charitable purposes. The Charity Commissioners have suggested that a similar solution could be adopted where a charity wishes to exert political pressure: that a separate non-charitable organisation might be set up for that purpose. This, as we have heard already in the debate, has been done in some cases.
Apart from these considerations of public policy, however, there are a number of charities which are themselves doubtful about the wisdom of engaging in political activities, and I think it is worth placing this consideration before your Lordships. Donors to a particular charity will be unanimous in supporting the main purpose of the charity; but if the charity seeks to engage in political activity dissensions can easily arise as to whether such activity is desirable or, if so, as to what form it should take. Moreover, a charity may arouse opposition from taxpayers and ratepayers who do not agree with what the charity is seeking to do, or with the means being used, and who are aware that charities are, in a sense, because of the tax advantages that they enjoy, subsidised by the taxpayer and the ratepayer. There are therefore, I am informed, many charities which would be reluctant to extend their activities into the political arena for fear of creating dissension among their supporters and antagonising other members of the public. The Charity Commissioners refer in their Annual Report for 1969 to the controversies which have arisen in the United States because of objections on the part of members of the public there to the use of grants made by charitable foundations for what have been regarded as political purposes.
The noble Lord, Lord Beaumont, talked about an alternative definition of "charity". This, as he indicated, is not a new suggestion. The possibility of devising a statutory definition of "charity" was fully discussed when the Charities Bill was before Parliament in 1960. I see the noble Lord, Lord Silkin, in his place; he tabled an Amendment in the later stages of the Charities Bill which attempted to widen and put on the Statute Book

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a definition of "charity". The late Lord Simonds, to whom tributes were paid yesterday, made a notable speech in the course of the same debate. But, in the end, Parliament came to the conclusion that, desirable as it might be in principle to have a statutory definition, the practical difficulties in the way of producing a satisfactory formula seemed to be almost insuperable. It was eventually accepted, although not without some reluctance, that the disadvantages of any statutory definition that could be devised would be likely to outweigh the advantages.
The origins of the present law can be found as far back as the Statute of Charitable Uses of 1601. There has been a long line of decided cases since then, and the law has proved itself to be flexible over the years. It falls to the Chancery Division of the High Court of Justice to determine what objects are charitable and from time to time attempts have been made to classify the results of these decisions. The classification usually referred to at the present time is that made by Lord Macnaghten in the case of Income Tax Commissioners v. Pemsel. Lord Macnaghten classified charitable purposes under four heads: the relief of poverty; the advancement of education; the advancement of religion; and other purposes beneficial to the community not falling under any of the preceding heads. It is this fourth category, of course, that has caused so many problems of interpretation.
But it is possible—and we must not make any mistake about this—by proceeding from one analogy to another to regard as charitable organisations which could not conceivably have been envisaged in the Elizabethan Statute, or at the time of later decisions based on that Statute. At the present time, we find on the register of charities organisations such as the Albany Trust, referred to by the noble Lord, Lord Beaumont, which it does not seem likely would have been regarded as charitable even a comparatively short time ago. If we were to have a statutory definition, it would be difficult to devise one, first of all, which would embrace all the existing case law; secondly, which would be flexible enough to enable development to continue in the future; and thirdly, which would not be so wide as to admit to charitable
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status all kinds of organisations which have only the most tenuous relationship with the public good. Having regard to the pace at which social change continues, and the differing needs which emerge as a consequence of these changes, there would be dangers in replacing the present definition of "charity" with a broad formula on the lines envisaged by the noble Lord, Lord Beaumont.
My Lords, I am very anxious that in what I have had to say I should not appear too negative. This debate is exploratory: it is an airing of the subject. It has been very useful to hear the speeches of the noble Lord, Lord Beaumont of Whitley, and the noble Baroness, Lady White, and the Government look forward to hearing, and subsequently to studying with careful consideration, what other Members of your Lordships' House have to say. At the same time, we must remember the practical difficulties, and noble Lords may find it helpful to have in mind some of the considerations that I mentioned. But I do not want to close on that note. Of course we must be concerned with the law, the practice and the status of charities. We tend to think of charities—and there are 100,000 charities, large and small, registered at the present time—as organisations which raise money and spend it for purposes that we can applaud. We ought not, however, to forget the inherent value of what moves people to perform charitable work. Charity is one of the three great Christian virtues, together with Faith and Hope, and it is a virtue which enables a man to fulfil himself by serving others.
One voice is missing in our debate this afternoon, that of the late Lady Reading, who would certainly have spoken in a debate of this kind and whose contribution in this field is one that we all remember and which very few indeed can equal. I should like to end by quoting two sentences from the booklet on voluntary service which she wrote and which was circulated shortly after her death:
" To be a real human being is a challenge in itself, and so in this context the Chinese proverb, ' What you hear you forget, what you see you remember, what you do is part of you', is a tenet worth remembering."
3.52 p.m.
THE LORD BISHOP OF BLACKBURN: My Lords, I should like to associate myself with what has been

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said by the noble Lord, Lord Windlesham, and the noble Baroness, Lady White, in their appreciation of the noble Lord, Lord Beaumont of Whitley, for initiating this debate upon charities and in particular concerning the operation of the law affecting them. We are all aware that there are many anomalies in the law and not a little confusion. I am told that a gift to a vicar for parish work is probably not charitable, while a gift to a vicar for church purposes almost certainly is charitable. I do not intend to pursue this matter of law but to leave it to others more knowledgeable than I.
It has already been pointed out that the field of charities is a very large one indeed, with some 110,000 registered charities and some 30,000 unregistered charities and educational trusts with an income, so the noble Lord, Lord Beaumont, tells us, of £60 million per annum. It needs to be remembered that charities have been from time immemorial the source of social intitiatives, social experiment and cultural development. Universities, hospitals, schools, friendly societies, social work amongst the poor and needly and the patronage of the Arts have sprung from charitable bequests and charitable works, and have in the course of time inspired the extension of these activities to make sure that that which was available for the few should now be made available to all.
Thus we have seen how, inspired by charities, the Welfare State has grown and developed and statutory authority has taken over, by and large, the work started, often in a small but inspired way, by some individual or charitable society. The example that immediately springs to mind is that of Dr. Barnado with his great work for homeless boys and neglected children, for whom, so rightly, provision is now made by statutory authorities; but the homes bearing his name, thank God! still remain and perform a most valuable function in partnership with the State. I believe I am right in thinking that one of the objects of the 1960 Act regarding charities was to promote co-operation between the statutory and local authorities and voluntary agencies; and we still need these voluntary agencies. I hope that this is a matter that will be brought out very strongly in this debate.
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The noble Earl, Long Longford, said in this House in 1949—he was then Lord Pakenham—during a reply to a debate:
" It is the view of the Government that democracy, without voluntary exertion and voluntary idealism, will lose its soul."
I am sure those words are true. Particularly in this technological age, with all the present emphasis on professionalism, we still desperately need idealism, and I hope that we shall always recognise our need for voluntary agencies because there is a greater flexibility about voluntary societies. There is a freedom to pioneer and undertake new work without being tied hand and foot by irritating regulations. Often, perhaps one goes to some statutory authority and finds that a particular department cannot deal with the matter of some regulation and so one is passed to some other department. But there is a freedom and flexibility about our voluntary agencies and we should pay tribute, as I am sure this debate will, to the great army of men and women throughout this land who are giving their time and service in a voluntary capacity on behalf of thousands of charitable causes, without whose aid the many agencies that exist could not be effective. The whole nation owes them a debt of gratitude, and we hope that with the increase of leisure there will be more and more people who are prepared to serve in voluntary and charitable agencies, which certainly cannot be effective without them.
The other great cause for gratitude is the wonderful generosity with which frequent appeals for charitable assistance are met. One thinks of the appeals for East Pakistan or, going further back, Aberfan, the appeals of Oxfam, Christian Aid, or appeals with which I have had something to do for a number of years such as the St. Martin-in-the-Fields Christmas Appeal. It is not only the large donations that are indeed necessary, but the "widow's mite" and contributions from old-age pensioners which reveal the inherent goodness in the hearts of the British people. It is true, as the noble Lord, Lord Windlesham, said, that charities depend upon charity, which is the spirit of love and the spirit of God, the caring about the needs of others. It is this which inspires the actions of so many.
Personally, I do not think that the charity walks are to be despised or written

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off. Provided that they are properly conducted, they give an outlet for a number of people who wish to do something to help a worthy cause. We may sometimes find flag days personally a nuisance, but in those a small army of volunteers help. There are also charity concerts in which great celebrities give their services. We welcome all these and believe that there are few, if any, genuine charities which fail to draw forth a response. As the noble Lord, Lord Beaumont of Whitley, said, some seem to be more successful than others.
But, having said all that, there is the real problem to which the noble Lord referred of the relevance of some charities to existing needs—the cy-près doctrine. Many charities are totally irrelevant in the traditional provision of shawls and red flannel petticoats. I was talking to someone this morning who told me that he had the greatest difficulty in disposing of £10 to needy poor on Whit Monday because none of such recipients must own his home. There are the loaves of bread which have to be distributed on Shrove Tuesday to poor people. A visit to almost any country parish church will reveal a list of these ancient charities. They are almost entirely out of date. We are grateful for the variations of these charities which can now be made. In this I have always found the Charity Commissioners to be very co-operative.
But there is an area which needs closer examination. That is the field of education trusts, especially those relating to church schools. In the days when the Church was almost entirely responsible for education, a large number of bequests, some big and some small, were made. Now many of those bequests are outdated and out-moded. There is a need for a very careful survey of those bequests and charitable trusts and for an examination of them so that they can be adjusted and better used in the service of education, and indeed of the Church.
As I see it, this is a joint responsibility of the Church authorities and the Department of Education and Science, which handles all educational trusts. The Department, with the Church Commissioners, are usually sympathetic to reasonable requests, but very often they are so overwhelmed with work that delays are long and tiresome. That is one of the things which Her Majesty's Government may think about in considering how to
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increase the manpower in some of these departments which deal with these very pressing needs. It is very exasperating to have to wait for 18 months or two years for action to be taken. It might be possible to employ some voluntary agencies to help in this matter. I sincerely hope, with your Lordships, that this debate will initiate those procedures which are necessary to simplify the existing laws and also to speed their working.
4.5 p.m.
BARONESS MACLEOD OF BORVE: My Lords, I crave your Lordships' indulgence this afternoon and hope that nothing I say will prove contentious. As some of your Lordships may be aware, I was in the wings of another place—or perhaps, more correctly, more often in the Gallery of another place—for nearly 21 years, but I am very proud of being a Member of your Lordships' House.
I am enormously grateful for the many kindnesses I have received since I became a Member of this House. Specifically this afternoon I thank the noble Lord, Lord Beaumont of Whitley, the noble Baroness, Lady White, and the noble Lord, Lord Windlesham, for their kind welcome. I also thank Lord Beaumont of Whitley for initiating this debate. This is one of the subjects I know a little about. One might perhaps have thought that I should have to wait two or three years before a subject arose on which I felt I knew a little.
My Lords, I wish to make one or two quite brief suggestions and comments. I am sure that everybody present read an article in one of the evening papers last night by a man who has been mentioned in this House this afternoon, Mr. Des Wilson. In that article he mentioned that charities are able to be exempted from certain taxes. The noble Lord, Lord Windlesham, has told us about that this afternoon. I wish to draw the attention of the Government to one tax which, if it were altered, could be of enormous benefit to charities, perhaps in the not too far distant future: I refer to the tax on Christmas cards. As all noble Lords will be aware, many charities, particularly the large ones, derive considerable profit from the sale of Christmas cards but perhaps not everyone is aware that Christmas cards attract purchase tax at 96⅔ per cent. This seems an extraordinarily high rate of purchase tax which, perhaps in the fullness of time, could be reduced. I wonder whether my right honourable

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friend the Chancellor of the Exchequer could be persuaded at some foreseeable time to look into this matter and alleviate what I regard as the excess tax which charities have to pay on Christmas cards.
My Lords, to me charity does not necessarily mean money. I know that it does in the minds of a great number of people in the country to-day. To me, charity first of all means aid, then it means help, and then it means involvement. Also, as the right reverend Prelate the Lord Bishop of Blackburn said, it means caring. I have had 25 years of organising people who want to be involved and who do care, who are willing but are not necessarily able to give of their money because very often they have none or very little, although as the right reverend Prelate also said, the widow's mite is as much forthcoming as the pound notes from the general public. There is an enormous wealth of people in this country who want to give of their help—what we in the hospital services call personal service. In the 20 years I have been involved in trying to organise hospital services throughout the country I do not think I have ever had a refusal from anyone to give personal service. This, my Lords, is because people care and want to help.
I want to make a plea this afternoon that we should all nationally (and specifically from this House) try to involve more young people in the giving of personal service to others. In my experience young people will, if they are asked, always come forward to give personal service. They often do not volunteer although they will, in the end, be volunteers. When I have asked the young people of this country to help out I have never had a refusal. I hope that anybody in this House who is able to contact young people will ask them to make a special contribution in this field. I should declare an interest here in that I am chairman of a juvenile court. Having been in court the whole of this morning, I am quite certain that if some of the young people who came before me had been more involved in helping other people, then perhaps they would not have made my list rather longer than it usually is.
My Lords, you have listened to me very courteously and I am most grateful. I
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have considerable knowledge, mostly in the hospital field. All charity, it is said, begins at home; but the British people have never been lacking in charity of any sort, and we should all be proud of our countrymen and give thanks where credit is due.
4.12 p.m.
LORD GORE-BOOTH: My Lords, I have suggested before now to your Lordships that fate gives one extraordinary gifts and occasionally inflicts on one extraordinary reverses. One of the happiest gifts that it has bestowed upon me is the privilege of being the Member of your Lordships' House to speak immediately after the maiden speech of the noble Baroness, Lady Macleod of Borve. She has come through so many things in life with such courage, capability, vitality and charm that it is beyond the capability of my mind or tongue to do all that she has done adequate justice. So I give her a very simple welcome with all my heart, and, I am sure, the hearts of all your Lordships. We look forward to seeing her many times. Fate did something else to me: I went out of your Lordships' Chamber to see whether there was any difficulty about pronouncing the word "Borve" (my Celtic fringe comes from Ireland and not from Scotland). I had the pleasure of meeting the noble Baroness, who put me right and told me that Borve was in the Hebrides. I am sure that the noble Baroness will bring the fresh and fair wind of the Hebrides into this House often, where it will be very welcome indeed. May I also join with the noble Lord, Lord Windlesham, in a tribute, particularly from these Benches, to the late Lady Reading. She was a regular occupant of these Benches, and we, like the rest of your Lordships miss her very much indeed.
In offering thanks to the noble Lord, Lord Beaumont of Whitley, for introducing this Motion, I do not propose to detain your Lordships long, but to concentrate on two aspects of this question, one of which has been dealt with fairly comprehensively already. I should like to say a word about the function of voluntary societies and charities, and then a word about the complications of the principal point raised by the noble Lord, Lord Beaumont of Whitley. I refer to political activity concerning charity work

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abroad, or in connection with work abroad.
On the subject of charity as such, and its place in our society, I am very much with the noble Lord, Lord Windlesham, the right reverend Prelate and the noble Baroness, Lady Macleod of Borve, in paying a tribute to the people of this country for their instinct for charity. I feel a little more polemical about it than anyone who has yet spoken, because I have sat through some television programmes which seem to treat the subject with a kind of intellectual aridity or austerity which I find extremely inappropriate. I remember one programme which concluded with the last question being referred to one speaker, who was asked: "Do you think, therefore, that voluntary charity work should cease?" The gentleman replied, "Yes". Intellectually that is true: in the Kingdom of Heaven either there is no charity or it is all charity. No doubt in the perfect Welfare State there would never be anything left over. I am quite sure that, I think it is safe to say for centuries to come, there will be found pockets of suffering in the lives of our own people and other people where the instinct of our own people to help can still be applied voluntarily, with the thanks and not the rather condescending criticism of the State, or members of it. I feel very passionately that it is to those people who do this work—and I want to include one other community which has not been mentioned; namely, British communities abroad—that the human race owes, and will go on owing, very profound thanks.
Now I should like to turn to the problem of the action which can be taken by charities here in regard to situations abroad, because it is relevant to this question of whether more political activity should achieve charity status. I shall have to analyse this a little closely in order to reach a conclusion. We are familiar, and have been lamentably familiar in recent months, with disasters in different parts of the world. The world being the way it is, disasters are apt to happen in places where the political situation is complicated and, indeed, even tense. Often the repercussion of that is that charity work finds itself in great difficulties. Medical teams cannot get in or cannot function, or there
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are other complications which prevent the authorities in the country concerned, understandably, from affording the facilities to charity work which charity workers quite naturally expect. This kind of situation immediately arouses the indignation (and so it should) of the people and organisations engaged in charity work in this country. If I may mention my interest, this is something I have found myself involved in for the past year. There is a temptation, when this happens, to rush into activity which must be classified by the Charity Commissioners as "political", a pressure on the Government which goes beyond what the noble Baroness, Lady White, spoke about and which, in modern terms, would be called "political".
When this happens, the following point arises. The best judge of a situation, and how much pressure you can put on it—as, for instance, in Nigeria and Biafra—is that body which has permanent information and judgment; and that body must be the Government of the day, of whatever Party. The Government of the day may well feel that political activity of this kind may be an impediment to charity work reaching the people whom it wants to reach. We all want to reach the people we want to help, and quickly. But it may well be that an indignant or pressure approach to this objective may have precisely the reverse effect of what the people who put it in hand expect.
I am not arguing, and could not possibly argue, that there must be any limit on people urging that right effects be produced by the wrong method. We all have the right to do that and must exercise it. Where the constitutional point arises, and the administration point, is whether that kind of activity is something which those who have studied charity legislation throughout the centuries would deem to be something which should be free of any tax obligation. I do not think it is, and I think that the noble Lord, Lord Beaumont of Whitley, was extremely honest about this when he said that the total logic of his remarks might well mean that in the end the Conservative and Labour Parties should also be afforded tax privileges under this heading; and if that were the case, perhaps I might put in a word of co-operation from these Benches.

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No, my Lords. There is a point very difficult to find here where the genuine, exempt charity work stops and legitimate political activity, but political activity that is essentially political, begins, and where therefore the financial and other privilege must cease. I have tried to bring out one of the most difficult cases because I think it gives the measure of the problem which the noble Lord, Lord Beaumont, has raised. If I may refer again to the speech of the noble Baroness, Lady White, I was very much attracted by some of the suggestions she made on where the borderline could in subsequent administration, or even again ultimately in legislation, be defined. There is certainly a very difficult moment where giving the public information goes over into advocating priorities on the Government, and that again is politics. So what I am really saying is that the Charity Commissioners have, to my mind, with great wisdom and great insight, tried to determine this borderline between the two; and even for purposes of the changed views of society that we have at this time they have got it about right. This is not to say that it will always be right, but I think it is still right at the moment.
I come to my final point here, and the only point on which I think I disagree flatly with the noble Lord, Lord Beaumont. That is that I do not believe this is a matter of definition. If we were all Latins probably it would be, but I think that even if we become members of the Common Market we shall retain that Anglo-Saxon part of our psychology which really makes us regard what we are discussing as a matter of degree rather than as a matter of definition. But I believe that in this matter of discussing charity, if I may steal from what may have been an unused part of the brief of the right reverend Prelate, we should think of charity rather as we did perhaps at the beginning of my remarks, in the way the noble Baroness, Lady Macleod of Borve, used the word. I think that we should think of charity both from the point of view of people doing it and from the point of view of people watching charity being done in some extremely famous words:
" Charity suffereth long, and is kind"—
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kind and not disputatious for the sake of being disputatious—
" charity envieth not; charity vaunteth not itself, is not puffed up,
" Doth not behave itself unseemly, seeketh not her own, is not easily provoked, thinketh no evil."
My Lords, if that could be the background of all charity work and of all people who talk about charity work, I am sure that the dedication of the many thousands of people who do it and contribute to it will be even more amply rewarded than it is already.
4.24 p.m.
VISCOUNT BOYD OF MERTON: My Lords, I should like to join in the chorus of congratulations that has greeted the noble Lord, Lord Beaumont of Whitley, on initiating this debate and on the manner in which his own intervention was framed. I should also like to join in the praise given to the noble Baroness, Lady Macleod of Borve, on her maiden speech and to say how much those of us who have known and admired her for many years rejoice in her arrival in your Lordships' House and look forward to frequent interventions from her.
As the noble Lord, Lord Windlesham, reminded us, the legal definition of "charity" is a very old one—370 years old in fact—and charitable objects which were set out in that definition were summarised at the end of the last century by Lord Macnaghten. Considering the antiquity of the definitions, it is not surprising that from time to time there is pressure to take a new look at them to see how relevant they are under modern conditions. I remember reading the debates in this House ten years ago when the Charities Bill 1960 was being considered. The first Lord Nathan, to whom all concerned with charities owe a very great deal, when dealing with the limited issue of the doctrine of cy-près, said in that connection:
" It should be possible to keep charitable trust purposes in tune with public needs in changing times."
But he also made his own position clear and, so far as I know, no noble Lord at that time challenged it, on any widening of the definition of "charity" so that charities could find themselves in what the Commissioners would rightly call the

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political field without losing their charitable status and all the much valued advantages that flow from it.
In the report of Lord Nathan which preceded legislation it was stated:
" Charity has always in this country been regarded as standing quite outside the realm of Party politics and it is in our view of the first importance it should continue to be so regarded."
Noble Lords have been reminded already this afternoon of an article on charities which appeared in an evening paper yesterday with the arresting headline:
" Charities—A battle to free the money box. They should enter political arena and fight all the way ".
The article then quoted from last year's Charity Commissioners' Report an extract which it said caused hilarity in the field. The extract read:
" One contemporary development "—
it was in the Commissioners' Report of 1969—
" which has given us some concern has been the increasing desire of voluntary organisations for involvement '"—
they put the word "involvement" in inverted commas—
" in the causes with which their work is associated ".
If that was all that the Charity Commissioners said on that subject it could have been no doubt more happily worded. But, as the noble Lord, Lord Beaumont, himself pointed out, and the noble Baroness as well, this was part of a very long, sustained argument occupying three pages of closely argued reasoning in that Report, and all who are tempted to economise on their reading' by concentrating solely on what appeared in last night's Evening Standard will, I hope, take the trouble of reading what the Commissioners wrote in full.
I speak with a little knowledge of the work in this field, for I was for nearly ten years President of the Save The Children Fund, of which the noble Lord, Lord Gore-Booth, is now Chairman; and I am still President of LEPRA, the British Leprosy Relief Association; and as the Commissioners know very well, and have never hesitated to say, in both these splendid bodies, and in all similar bodies, the staff are deeply and passionately involved and to many it is their life's work. But being involved does not mean necessarily that they
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would want their organisations to become political pressure groups. I suspect that most of these people working in these great organisations would hold firmly to the view that on balance charity in the future, as in the past, should remain free from political pressure. I frankly do not think they would follow the noble Lord in his desire to equip their organisations with the right to undertake some kind of pressure group or political activity.
If this change were made and charities working in the international field yielded to the new possibilities that would be open to them, relations with our own Government here, or overseas Governments, would become continuously embarrassing. No one knows better than the noble Lord, Lord Gore-Booth, that it was in large part by keeping out of politics, despite constant pressure to get involved, at the time of the tragic war in Nigeria, and retaining freedom to work for children wherever they were in need, that the Save The Children Fund was able to operate field teams simultaneously on both sides of the firing line in the Nigerian civil war, and to continue to be acceptable to the Nigerian authorities after the war. I do not believe that it would be in the interests of existing charities for their power to be widened to enable them to engage in these new activities.
The noble Lord, apart from wishing existing charities to have new powers for which, so far as I know, most of them are not asking, has also a second purpose which he mapped out this afternoon. He argued that any non-profit-making organisation which attempts to promote the welfare of the community ought to be considered as a charity and entitled to the benefits which accrue to the existing registered charity. If this sweeping change were to be introduced, I very much doubt whether the privileges which existing charities enjoy when they are precluded from political activities not only by their charters, in most cases, but also by law, will long survive. It seems to me inconceivable, if the definition of a charity were changed, as the noble Lord, Lord Beaumont, suggests, that public opinion would tolerate the continuance of the financial privileges which charities at present enjoy and without which their work would be impossible. So, my Lords, on this count too, while thanking him

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for his speech, for the form it took and for the debate it has made possible, I see the most formidable difficulties ahead if either of the noble Lord's objectives were achieved.
4.30 p.m.
LORD MACLEOD OF FUINARY: My Lords, may I first join others in thanking the noble Lord, Lord Beaumont of Whitley, for his introduction, and also the noble Lord, Lord Windlesham, for his explanation of what is almost the inexplicable: where charity begins and where politics ends. Though I may not agree with him entirely, I am grateful to him for the painstaking way in which we were brought nearer to some conclusion. Perhaps I may also add my happiness that my clanswoman, if I may say so, should have addressed us so well and amicably to-clay. Were I to declare my interest, it is that inevitably a minister of religion is concerned with the sponsoring or co-sponsoring of charitable funds; and, quite frankly, I, like others, have been mystified by what does and what does not qualify as a charitable status, which actually is the main issue that we have been discussing.
Before I say anything else may I declare with equal sincerity my gratitude to the Charity Commissioners for the positive way in which, time and time again, they approach borderline cases; for their obvious sincerity in endeavouring to show us ways in which to word it in order that—always in terms of integrity—an allowance may be made for charitable status. Time and time again they are on the side of the angels. The point of our mystification is that sometimes something seems to happen just at the point where the Charity Commissioners are almost agreeing with one. Am I out of order in suggesting that the office of Inland Revenue, in its largest sense, comes in at some point on the question of what is and what is not political?
It is at this point in the debate that we can all afford to be short, so many things having been said which need not be repeated. But perhaps I may make my short contribution by mentioning just two charities, to bring the matter down to actualities, and also make a comment arising from those two charities. These are two charities with which I am connected in sponsoring and which have
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failed to qualify. And I do not think that specific comment is without importance. Most of your Lordships will be familiar with the Defence and Aid Fund inaugurated by Christian Action to assist the Bantu in South Africa, to ensure that he gets defence if he is accused. I think I am right in saying that the average salary of the white man in Johannesburg is £2,400 a year and that of the Bantu and the coloured £240 a year. There is no one in this House who would disagree with the view that anyone, especially those in conditions of poverty, should have the fullest representation when he comes up and is accused in the courts. This is precisely what the defence side of the Defence and Aid Fund is for; and the aid side is obviously for the children of people who have been put in this position. Bantus who are "had up" on the most difficult kinds of cases are unable, because of the lack of social security there, to have free advice, and therefore they must have defence. Here is something with which we all agree; that every man is entitled to justified and instructed defence; and, by the same token, that his children should not die of starvation, by reason again of lack of social security, while he is being tried, and sometimes while he is in prison.
Here is something which is charity, and here is something which on political grounds has been denied a position for charitable status. Parallel to that, because it comes also under the ægis and fathering of Christian Action, there is the more recent Martin Luther King Foundation, when there was an effort, starting in 1968 and still in process. We have been for three and a half years in most amicable, helpful and courteous discussion with the Charity Commissioners, but not yet does the Martin Luther King Foundation find that it has the kind of objects which allow it a charitable status. Its object is, of course, to spread the news of non-violent action, and although it seemed at one point in the discussions with the Charity Commissioners that it would pass for charitable status if they were to discuss non-violence, if it had anything to do with the practice of non-violence then that would be a political issue and the Foundation would not stand up as a charitable organisation. If this were the kind of way in which it was going to be argued on its face value, then the practice of non-violence by the

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Founder of Christianity at Calvary would not qualify as a charitable status because of its political significance. Would this satisfy us? That might be the text—if I may use the word "text"—for the one comment that I want to make arising from these two cases at this junction between the political and the charitable.
With regard to the great responsibility that lies on the Charity Commissioners (or is it on those who advise the Charity Commissioners, the legal advisers, in the interpretation of the Act?), I would emphasise that it has become greater when Christianity is no longer the formative power of our national principles.
May I, again for the sake of brevity, put this point in this way? It so happens that I have strong views about the Common Market, and I have been expressing these views. What my views are has nothing at all to do with this debate, and I am not declaring them. I am merely referring to the point because, in becoming public in that matter, I have been amazed at the number of people, both inside the Church, and still more outside the Church, who in correspondence and over the telephone, and on meeting me in the street, have asked what on earth the Church has to do with the Common Market. They seem to feel that there is no place for a relationship between the Common Market and the teachings of the Church—or, if you like, between the area of charity and the area of politics. I must be entirely telegraphic here and not preach a sermon, but they seem to forget that the late Archbishop Temple said that Christianity is the most materialistic religion in the world. They seem to forget that "Bethlehem" means the House of Bread; they seem to forget that "Lord" means the warden of the loaf:
" Why call ye me Warden of the Loaf and do not the things which I say? "
They seem to me (and I was assisted by the noble Lord. Lord Gore-Booth, in quoting from Scripture) to say that Pentecost is of no significance at the present time. Yet at Pentecost
" all the nations were gathered together and they had all things in common."
Too many people seem to forget that the parable by which it is decided, in biblical language, who is to go to Heaven and who is going to Hell—or, if you
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like, who is going to have life now and who is going to have death now—is the parable of judgment. And the parable of judgment as to who is going to have eternal life and who is not going to have eternal life is precisely on political grounds:
" I was hungered and you gave me no meat; I was naked and you did not clothe me—either with clothes or with houses. I was in prison—either in the prison of illiteracy or the prison of dictatorship and you did not come to release me ".
Political, political, political! The ultimate decision as to where spiritual life lies is in the political area. It is in this sense that there is an enormous responsibility lying on those, whoever they may be, who find it easier than I should find it to decide between charity and politics in the light of these things.
Perhaps, of course, it is not the fault of those who so decide. It may be because of the rarefied nature of the Church's witness for the last two centuries, getting more and more spiritual and less and less biblical, that we leave it to them to decide. Perhaps I may make this point by the shortest possible story, a true story, of the missionary in Africa who was in an area where there was a very primitive tribe who on March 1 used to celebrate their god's anniversary. They would go through the woods, to the cacophony of drums, until they came to a point shortly before midnight where they would pause and then go down into the groves for their bestialities and obscenities.
One of the missionaries, with some courage, decided on one occasion, to accompany them. He walked with them, and when they got to the pause just before midnight he got on to the stump of a broken down tree and preached the love of God. For a moment there was a terrifying silence, while the young men of the tribe were considering whether to knife him on the spot for getting in the way of their celebrations when they allowed him to have his Easter. But grace intervened, no one attacked him; he was not molested, and, somewhat to his own surprise, he was able to go back to the mission station. The next year he did it again; and there was less intensity, lessened tension. Indeed, he did it increasingly for ten years, and then he died a natural death. The year after he died, as March 1 approached, the head of the

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tribe came to the mission station and asked that another missionary be appointed to do it, as it had now "become part of the show". Unfortunately, it may be that secular people are left with these terrible decisions because the Church has become "part of the show".
Up in the part of Scotland that I come from, not many days ago I found myself near Holy Loch—still so strangely called Holy Loch, where we are somewhat furtively unloading Poseidon missiles, not Polaris missiles but Poseidon missiles. Polaris missiles might be interpreted as being a response to such a terrible thing as nuclear attack. We all know that Poseidon missiles are not for that purpose; they are first strike missiles; they are not to reply to some attack by some atheist opposition. They are there to make the first strike in order to break down the missile centres and missile buildings on the other side. This is what we are committed to politically at the moment, and the Church is part of the show; and if it is part of that show it is no wonder that people look less and less to the Church to decide where politics begins and where charity ends.
My Lords, I would plead with those who are responsible for these final decisions, which are so difficult to define, that they should take on an immense responsibility, else charity will very soon be reduced to mere soppiness, and politics, in the last resort, will become the instrument of the devil.
4.45 p.m.
LORD SAINSBURY: My Lords, from these Opposition Back Benches I should like to extend our warm congratulations to Baroness Macleod of Borve. Her speech, I am sure your Lordships would all agree, showed deep humanity, sincerity and understanding. Secondly, I should like to join with noble Lords who have spoken earlier in this debate in thanking the noble Lord, Lord Beaumont of Whitley, for initiating this much-needed and extremely interesting debate. Thirdly, I should like to apologise to your Lordships' House if during the course of my brief remarks I traverse ground that has already been traversed. I find it very difficult in a debate of this sort to decide whether to erase my name from the list of speakers or, out of sheer
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vanity, to proceed with the speech I intended to make. I have, perhaps to your regret, chosen the latter course.
To my mind, one of the most pleasing features of our society, which reveals the compassionate nature and the generous character of the British people, is the support given to our many and various charitable organisations. I think it will be agreed on all sides of the House that most of our charities do excellent work, and that no matter how well the Welfare State functions charities at home will always have an essential role in supplementing the efforts of and filling the gaps left by the State.
My main reason for intervening in this debate is to underline, as other noble Lords have done, the growing anxiety felt by many charitable organisations, especially those in the field of research and education, about some recent developments concerning the definition of what is a charitable activity. As has already been said, the difficulty stems from the legal requirements that charities may not pursue activities with the object of changing the law of the land. I have no doubt that some safeguards are necessary in order to prevent the abuse of charitable status for political purposes. But the current interpretation of this rule seems to me to be too wide and all-embracing.
Thus, according to the 1969 Report of the Charity Commissioners, which concedes that the law is imprecise and difficult to interpret, any action to influence the Government to adopt a particular line of action may be against the law. Not infrequently, such a strict interpretation would, and does in fact, lead to some rather absurd results. For example, educational and research charities which study and report on a large number of subjects of general interest cannot lawfully make public recommendations as to what should be done if those recommendations involve action by the Government. In a similarly absurd way, if a charity engaged in the alleviation of poverty produces a reasoned case for greater Government expenditure on a particular branch of the social services it may be breaking the law.
Although the Charity Commissioners' Report of 1969 shows that there are certain exemptions, these merely make the

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recent rather restrictive interpretation of the law even more absurd. Thus, apparently the rules regarding public recommendations do not apply in respect of a Government Bill that has been published or when the Government themselves ask for comment and advice. In other words, it is quite in order for charities to propose changes in the law or recommend new Government action when the Government have already decided that changes are necessary. This not only enhances the power of the Executive but also provides a strong built-in bias in favour of the status quo. History proves that many desirable reforms have originated from the efforts of dedicated pioneers outside the Government, and I am sure that many of your Lordships will agree that it would be most undesirable to restrict the activities of our charities in this way.
a few minutes ago I gave your Lordships a few examples of the absurd results brought about by the current interpretation of the law. I hasten to add that my examples are not entirely hypothetical. I am aware that the Charity Commissioners, and the Department of Education and Science, have indicated to certain charities that they are in danger of losing their charitable status by making recommendations and proposals which involve action by Government. Whether this is simply the result of the efforts of some over-zealous civil servants, or is due to a conscious change in Government policy, I have no means of knowing. In either case, however, it is, in my opinion, a regrettable development which is not in the public interest. It is highly desirable (and I would say even essential) that our charities should be deeply involved, and passionately concerned, with the causes that they are working for, and the fact of maintaining a highly legalistic and restrictive attitude regarding the range of their activities would merely shackle them and reduce their effectiveness. I am convinced that some safeguards are necessary, but it is essential, in my opinion, that the law is interpreted wisely and tolerantly, and that charities have the maximum possible freedom of action in this respect.
4.53 p.m.
LORD GRENFELL: My Lords, like all other speakers I should like to congratulate my noble friend Lady Macleod of Borve on her maiden speech. The
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fact that she has made most of my speech for me does not deter me in the least, and I hope that my few words to-day will reinforce what she has so ably said.
It is important to define, in the context of this debate, what we mean by "charity". There are many in this country who devote their spare time to charitable acts. Many are young people who have just left school and of whose kind acts we hear little. We live in an age when violence and crime make the headlines, and I feel sure that the whole House will join me in paying tribute to the young and old who do so much in their quiet way to alleviate pain and loneliness among the less fortunate members of our community. I believe that the noble Lord, Lord Beaumont of Whitley, to whom we are all deeply grateful, framed his Motion in order to bring to our notice the charitable organisations whose main duties are to fill in the gaps which cannot be covered by the State in bringing help to humans and animals, and indeed assistance to the Arts and the environment of our country. All who work in this field are finding it more and more difficult to raise the money required to finance projects which, in spite of the Welfare State, are of the utmost importance to the old and young who are in any way afflicted. Charity organisations do all they can to keep down to the minimum the cost of administration so that every possible penny goes to the object of that charity. It is essential that the State should assist them in every way.
In a very short speech I propose to put before Her Majesty's Government a few matters which, to my mind, need careful consideration. Some of these are requests for retention of privileges given in the past, and some are for privileges so urgently required in order that the organisations can continue to give their invaluable service. A great number of charities depend for their income on Christmas cards, as indeed my noble friend Lady Macleod of Borve stated a short while ago. There can be no doubt that the increased cost of postage will make it impossible for so many who sent them in the past to continue to do so. I know that this is a matter for the Post Office, but could not the Government, through the Minister, give their blessing during a limited period to a reduced stamp fee for Christmas cards? I fully

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realise that it would be administratively impossible to differentiate—and I would not wish to do so—between charity and other Christmas cards; but at Christmas time we all want to remember those whom we do not often meet, and to revive memories of past friendships. I believe that the Post Office would be fully compensated by the volume of traffic at the reduced rate; I firmly believe that the public would play fair over this concession, and that it would be of infinite assistance to the charities and to all those who look forward to receiving the cards.
My second plea is for the abolition of S.E.T. contributions by registered charities. The payments are returnable, but it is ridiculous that charities should have the added administrative costs of the payment and reclamation of this tax. We are delighted that S.E.T. will, in the near future, be halved, and we look forward to total abolition; but we must consider the implications of any future tax, such as added value tax, on their work, and what concessions should be given. May I turn for a moment to football pools. I know that conversations are taking place regarding this subject, and I hope that ways and means will be found to ensure that charities can continue to receive income from this source. For many charities it would be catastrophic if the law decided against this method of raising money which really, in this day and age, is a quite harmless pursuit.
My last plea is in the educational sphere. I hope and trust that no Government in the future will remove the charitable status from independent schools (especially those not privately owned) which gives them a financial advantage. I know that there are differences of opinion on this subject; but there can be no doubt of the value of these schools, and if they cease to exist the added cost to the taxpayer would be very high.
May I finally say that our charity organisations, through devoted workers and voluntary contributions, are saving our country thousands of millions of pounds, and are extending to so many of our people from early youth up to old age that care which some, through pride, and some through ignorance, do not obtain. They care not for colour nor creed, but request, and indeed demand,
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every facility from the State to carry on the great work for which, in this madcap world, there is ever more demand.
5.0 p.m.
BARONESS HYLTON-FOSTER: My Lords, may I first of all add my congratulations to the noble Baroness, Lady Macleod of Borve, for her valuable contribution to to-day's debate. Secondly, I should like to express my thanks to the noble Lord, Lord Beaumont of Whitley, for initiating this debate, as it gives us an opportunity to discuss some of the problems facing charities to-day. I am joining in the debate only because, like so many other noble Lords and Baronesses, I have an interest to declare, in that all my life I have either worked with, or been connected with, charities which have all been, or are, filling the gaps that the State is unable to deal with, raising money by voluntary efforts, contributions and donations from trusts and foundations, or receiving grants from local authorities and undertaking certain tasks on an agency basis. But they have all been, and are, utterly independent of pressures and of Government.
Once a charity becomes a pressure group, it is liable to get a political tang. If it lobbies the Government of the day, the Opposition Parties may quite likely take a different view and, inevitably, in the eyes of the public the charity will be linked up with a political Party. It may no longer indeed be truly independent. Surely one is then entitled to ask, "Is all this in line with the wishes of the founders of the trust or charity?" To follow up what was said by the noble Lord, Lord Gore-Booth, and the noble Viscount, Lord Boyd of Merton, those of us connected with international charities know that it is vital that there should be no hint of political or other type of pressure groups having any influence at all, as the charity could then easily lose the respect and confidence which only time and experience can build up.
I must confess that I am thinking in particular of the Red Cross, because it has national societies all over the world who are respected by their Governments as they are bound by charter and by the Geneva Conventions, and because they uphold the principles of independence, neutrality, universality and no politics. Unlike some other charities, the Red Cross is an organisation which raises

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money for its own day-to-day services in this country as well as overseas, in addition to supporting the League of Red Cross Societies in Geneva when asked for overseas help. In recent disasters and troubles the national societies have been used by their Governments often when other people and other organisations have not been acceptable. Your Lordships will remember that after the hijacking in Jordan only the Red Cross was trusted by both sides. If there is a relaxation of the accepted charity rules, this could reflect on those who keep strictly within hounds, as they might become suspect in the eyes of the public in this country and abroad, which would prejudice both fund-raising and confidence.
Of course, conditions have changed by leaps and bounds since the introduction of the Welfare State. Organisations are springing up to-day and doing splendid work and they expect to have the same tax concessions as the existing registered charities, which they regard as too established and old-fashioned because they abide by certain standards. Even the word "charity" is not acceptable to everyone to-day, and it would be of help to all of us—including the Charity Commissioners, I suspect—to have a modern definition of "charity", even if little change is needed. Finally, I beg the Government to resist all forms of charity pressure groups and to ensure that charities are run for genuine charitable purposes only.
5.5 p.m.
VISCOUNT GAGE: My Lords, I have had to deal with charities and trusts for many years and I think I know enough of the tremendous complications of the whole subject. The field which has been covered to-day has shown what those complications are, but I want to deal with only one point. What I wish to say is very simple and very short. I am a member of a committee which issues grants and loans to charitable housing associations. We sit quite often, and, apart from myself, everybody on that committee is what I might call a housing expert, having spent many distinguished years in the voluntary housing movement. We are all nervous that perhaps as a result of debates of this sort, some Government will attempt to redefine what a charity is. We are not afraid that the associations which come
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under us would fail to qualify under any conceivable definition of "charity". What we are afraid of is the red tape, the questionings, the legal conditions, the administrative regulations, the inspections and inquiries as to whether the scheme, or any part of the scheme, entirely conforms with the definition of "charity ". That may sound a small matter, but we go through these cases every six weeks or so, and in view of the tremendous complications about doing anything at all I always come away amazed that as much charitable building work goes on as it does.
As the noble Baroness, Lady Macleod of Borve, said, these are thoroughly involved people. I do not suppose they want publicity, but I sometimes wish they had a bit more, so that their task would be made a bit easier. I am always hoping that one day my noble friend Lord Sandford will give us some good news to make that task easier. I can see the attractions of widening the definition from the point of view of those who raise money. I would say, in passing, that I am somewhat amazed to hear that Mr. Des Wilson found himself inhibited by the law. He has said some pretty strong things and I do not know what he would have said if he had felt completely uninhibited. We feel that the Charity Commissioners and the Board of Inland Revenue are acting rather like your Lordships' House is supposed to do in the minds of many people—quite illogically but it works quite well. And we hope that until the housing society movement has been put on a completely different basis, as I suppose it might be, we shall be allowed to go on as hitherto.
5.9 p.m.
LORD AMULREE: My Lords, I want to turn your Lordships' attention to a rather different aspect of this question of charities, and to refer to something which is a good deal in the national Press at the present time; that is, the question of a national disaster fund. I shall be very interested to know the Government's views about such a fund, if they feel that they are able to express them to me at such short notice. The matter was raised in a Bill in another place in 1967, but nothing much happened to it, so far as I can make out. The idea is that there should be a central

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fund which would be subscribed to by charitable people and which could be called upon at once for money when a disaster occurred. It would also be a fund in which surplus monies from other charitable funds could be put, so that they could be called upon at the same time. The idea, I admit, sounds a rather attractive one, but I think there are certain drawbacks to it. The first is that if you are going to have a relief fund for a disaster it must depend upon a degree of spontaneity among those who are going to be called upon to contribute to it. Secondly, if it is a local thing, it must depend a large amount upon local interest, local initiative and local feeling.
Another thing which we find about these funds is that when the time comes for them to be wound up, or when they cease to function, there is very little money left in them. In fact, I believe that on quite a number of occasions they have been left with a minus balance rather than with a surplus. I am quite sure that one could quote one or two cases where that was not so. I rather think that there was a large sum of money collected when there were floods in East Anglia in 1953, when about £5 million was collected. Whether or not that was all spent, I am not sure. It was the same in the case of the Aberfan disaster not so long ago, when about £1,500,000 was collected. I believe that some of the colliery disaster funds, too, have left a certain amount of money behind them in the past; but in the vast majority of cases the money has been spent upon the purpose of the fund and there has been nothing left when they have been served.
There are two certain difficulties at the present time in winding up these funds, but whether that should be a permanent affair I do not quite know. I am told that the fund for the "Titanic" (which, after all, sank in 1912) was not finally wound up until 1965, which sounds quite a long time; and there were long legal processes (running into thirteen years, I think) in disposing of the surplus of a fund which was raised when a number of cadets of the Royal Marines were knocked down by a bus in the middle of the night. That again was a long time ago but there are certain processes which could be speeded
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up. There was some good which came, I think, from the Charity Act 1960, under which the Charity Commissioners were given a little greater discretion in putting money to other charities when the one in which they were involved was no longer required. But the cy-près doctrine is still a very powerful one, and is one which is adhered to pretty firmly.
As I said when I began, I can see the attraction in the idea that after two years have gone by the monies might go into a central fund, but I wonder whether, if that were to be the case, you would get as many people subscribing to the fund as you would if they thought it was going to go to the one object which they had in view. For various reasons, quite a number of claims come in late. That again might be a drawback to this project for a national disaster fund. But, if the Government can possibly give it to me, I should like an idea as to what their views are about this.
Before I sit down, I should like to add my congratulations and those of noble Lords on these Benches to the noble Baroness, Lady Macleod of Borve. I am sorry that I did not say so when I first got up, but I began to speak and it slipped my mind. However, I should like to congratulate her on her maiden speech, and say that we look forward to hearing her many times on this subject in the future.
5.15 p.m.
LORD NATHAN: My Lords, may I first congratulate the noble Baroness, Lady Macleod of Borve, on her speech and on the warmth of her address, which I think we all appreciate; and if my remarks are somewhat cold, let that be the reason. I am also grateful to the noble Lord, Lord Beaumont of Whitley, for having raised this Motion, and particularly for referring in his opening remarks to a more general discussion concerning social welfare and so forth. I am particularly glad that this matter should have been raised, and I shall refer to it in a few moments. I must say that the discussion, so far as the political activity of charities is concerned, is one on which I feel that a firm decision against should be taken. I think that the margin between what is acceptable and what is not would be too difficult to define. The noble Lord, Lord Sainsbury, has referred to certain cases

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in which obviously there is much merit, but to define the division between what your Lordships would think acceptable in this debate and what would not be acceptable seems to me to be quite impossible.
There are the additional points already raised with which I personally am concerned in relation to charities operating overseas. An absence of political bias or motive is of first importance. But I would mention also what I think has not been mentioned so far, and that is that the difficulties within organisations operating in this country if a political motive were to be introduced would be very great. One need think only of poverty. A charitable body properly constituted for the relief of poverty might decide to take upon itself a campaign of a particular type to persuade the Government to provide more benefits, more grants, or whatever it may be, which could lead to the most difficult political problems within the charity itself. This, in turn, would, in my view, create great difficulty in retaining the support of those thousands who, in their small and large ways, support it, and who are not of any particular Party; and I can frankly see only chaos resulting from it.
There is another interpretation which might be put on the remarks of the noble Lord, Lord Beaumont of Whitley, and that is that, as he made fairly clear, he was really talking about money. The question that could be raised by his remarks is: should political pressure groups, or pressure groups without the adjective "political", or political Parties be entitled to some form of tax relief? That, surely, is an entirely different matter, and should be wholly distinct from the question of charities with which we are concerned here. It seems to me that the confusion between the two can only do very great harm. So one comes to the question of financial advantages which has underlain so much of what has been discussed to-day but has not been specified. I certainly do not intend to detain your Lordships upon it for any length of time. I should like to point out, however—and this is a rare occasion to do so—that in the case of legacies there is no advantage to a charity whatever. It was not always so. Twenty-five years ago there was relief for charitable legacies, but that is no longer so; and
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I think it is a matter which the Government might care to consider.
There are two primary sources of funds, I suppose: one is direct donations and the other is donations under seven-year covenants. Seven-year covenants have grown up in a most extraordinary way and were certainly never created for the benefit of charities. It chanced that they developed in that direction. The fiscal convolutions involved and the administrative expense for the donor, the charity and the Revenue alike make this, so far as I know, a uniquely complex way of achieving what is comparatively simple. There is no tax advantage to the donor as some people seem to think. Indeed, as in most cases people have only earned income, entering into a covenant is an actual tax disadvantage. The advantage is simply that the charity recovers the income tax but not the surtax suffered by the donor. I feel that it is time for a radical review of the tax system now that the Green Papers have been issued, for some further consideration to be given to this matter and in particular to see whether it would be acceptable that a system similar to that in force in the United States should be adopted under which a portion of a person's income could be given to a charity and that portion would be tax deductable. There is a point on the Green Paper on value added tax to which reference was earlier made and where I would hope that the Government would relieve charities from all value added tax except of course in their trading activities, if they have some. This could be very easily done, by treating them in the same way as an exporter, by zero rating.
May I draw a distinction that I want to make between what I call social service charities and other charities. I do not want to define my terms too closely. There are charities which are in no sense (and are understood not to be) within the Welfare State in anything they do. I have the honour to be the chairman of the executive of the Cancer Research Campaign. It is quite clear that this is not within the Welfare State and that the vast majority, or perhaps I should say the majority, of the funds provided for cancer research are provided by voluntary effort. There is no resistance to appeals for money in that connection on the ground that this is a function of

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Government. The position with regard to what I call the social service charities is somewhat different. Those charities which provide homes for the aged, mental after care and so forth are working in a field now similar in many respects to the local authority activities, and their finances are substantially assisted by money which comes to the charities concerned from those local authorities.
It has been said many times by Ministers of both present and past Governments, and it is transparently true, that the totality of the social service provided in this country just could not be provided with State funds and with State support alone, and that the voluntary services, the charities, provide an essential element. That element may take many forms. It may be in providing homes or assistance for particular groups of people, perhaps bound together by some religious or other association. They may be working to pioneer new efforts which it is the task of voluntary bodies to do. But the totality is a combination of the two. I, unfortunately, have had no opportunity, as many of your Lordships have had—and it is entirely my fault—of studying the recently published Report of the Charity Commissioners; but I feel that it is important that there should be public knowledge of the extent of voluntary service in the social welfare field and, secondly, the amount of money from private sources involved; because that will bring home to the public at large how important voluntary social service is. That is the point to which I referred in my opening remarks when I said that I was glad that Lord Beaumont had introduced this Motion.
But the knowledge, the availability of information in that field, is not relevant to the collection of money alone. The two principal problems facing those charities with which I am concerned are people and money; and as regards people, staff, the highly qualified young staff whom the social services require, whether that social service is being conducted by the Government, by the local authorities or by private effort. It would help that knowledge that private effort contributes substantially to the total social service was available, because it would encourage staff to make their careers with charities or by changing their work between working for local authorities and working
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for charities. This has happened to my knowledge to a limited degree, and the benefit has been great to both. That I refer to staff for charitable private activities states that I have experienced that it is essential in charities of a certain size to have the most expert and skilled staff. Let it not be thought that compassion is confined to the volunteer or to voluntary service. It is to be seen very much in the work of the local authorities as it is with charities, although I yield to none in my admiration for those who work for the charities voluntarily—and fantastic work they do.
It is up to the charities themselves so to organise themselves as to attract the staff required not only by adequate remuneration but also by giving opportunities in the jobs provided. To achieve this I feel that there will have to be far greater co-ordination between them than hitherto while at the same time each must retain its character, associations and identity. This is not easy and may involve creating some novel ideas to provide a suitable framework. This may involve the Charity Commissioners in the exercise of their scheme-making powers. My own experience and that of those with whom I have worked and of those who have spoken is that the Charity Commissioners are most helpful. But I hope that they will give every assistance within their power in the situations which over the next few years will, I believe, confront them in relation to the co-ordination to which I have referred.
Charities concerned with overseas relief have come to the fore in the support they have received, particularly from the young to whom they are an outlet for idealism unimpeded by confusion with the functions of the Welfare State. Not only in terms of money but most of all in offers of service will the young come forward to offer themselves for service, for instance, overseas. The response to an appeal for such help that a charity with which I am concerned made was overwhelming in number, from whom it was difficult to choose, so high was the quality of those who applied. Therein lies the firm future of voluntary effort.
5.29 p.m.
LORD FRASER OF LONSDALE: My Lords, I venture to say that the speech of the noble Baroness, Lady Macleod of Borve, moved me, and it is a great

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pleasure to congratulate her and to welcome her to your Lordships' House. I should also like to thank the noble Lord, Lord Beaumont of Whitley, for having introduced this debate. I myself have been connected mainly with three charities for most of an adult lifetime. They are St. Dunstan's, of which I have been Chairman for 50 years; the Royal British Legion, of which I was President for 11 years, and the Royal National Institute for the Blind, with which I have been connected for over 50 years. I mention these facts because there is a considerable experience that has been accumulated in this voluntary service over all these years, and also because it entitles me perhaps to claim just a little knowledge.
Charities should all be registered with the Charity Commissioners, save for one or two exceptions which I need not mention. They are not all registered, either because there has not been time or because people have been careless; but they should all he registered. In addition, war charities and charities for the blind, going back to the early years of the First World War have to be registered with the local authorities. The big charities to which I have referred, the Royal British Legion, St. Dunstan's and the Royal National Institute for the Blind, are all registered with the Greater London Council.
My Lords, long ago I served on the old London County Council for a period of three years, and therefore I was able to experience how this registration worked from both sides—as a member of St. Dunstan's Council and also as a member of the London County Council. It is my understanding (and I have checked within the last day with these three societies) that the local authorities, certainly those in the big cities, do this registration work satisfactorily and well, and no change in the law is required. The authorities request and receive annual reports, audited accounts, chairmen's statements and so on; and if they do not find these satisfactory the authorities ask questions. Their object, of course, is to see that the charities are well conducted and adhere to the purposes for which they were set up under their constitutions. As I have said, this is well done.
Suppose, my Lords, that, instead of my having been an unpaid Chairman or President of St. Dunstan's or the Royal
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British Legion, I had been an official of those bodies and had been paid a salary. I expect that I would still have gone to the House of Commons and would have bothered every Government for the last 50 years to do more for the ex-Servicemen. Should I not then have been indulging in political activity?—not Party political activity, because I have "chased" every Government with equal friendliness and advocacy. To-day we have had at least five speeches in which requests have been made to Government to reduce this tax or to improve that tax—on Christmas cards, or whatever it might be. These are all political activities, and it is a great nonsense to suppose that those concerned with charities, especially the great national charities, should keep away from politics Their first aim should not be political, but one of their aims should be to improve the position of their members in the sight of Government and Parliament; and that, surely, must be a good aim. Even if I go to prison for it, my Lords, I shall keep on making these speeches—indeed, I have something to ask now.
The National Institute for the Blind supplies blind persons with machines for writing Braille, and all kinds of valuable gadgets to help them overcome the handicap of blindness. These things are supplied at much less than cost price. Many of these machines attract purchase tax, but by a kind and somewhat obscure arrangement between the Royal National Institute for the Blind and the Treasury, a rebate is given which almost covers the purchase tax. If value added tax comes along and is applied to every commodity, it will raise the price of these things to the charities; and, worse still, to the blind people. So here we are indulging in a political observation of which I hope good notice will be taken.
I do not think it necessary to redefine the meaning of the word "charity", nor do I think it necessary to introduce new legislation to make the supervision of the Charity Commissioners stricter or to give them more widespread powers than they have already. It is my experience—not only as a Member of Parliament, when I used to bring local cases to the Charity Commissioners for the application of the cy-près doctrine but also in national charities—that the work is very

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well done by the Charity Commissioners or the big local authorities; and there has been a very good relationship which is much to the credit of both.
My Lords, this word "charity" was made famous by the Bible and the words, "Faith, hope and charity". There the word was a translation of a Greek word which meant Christian love: not sexual love, or any unpleasant kind of love, but Christian love of one fellow for another; the love of a man for his neighbours and his friends. It is a beautiful word. Nevertheless, it has come into discredit, and there is a stigma attached to it to which I wish to refer. So much so, that for the last six editions of the Bible the word "charity" has been dropped and replaced by the word "love". So now we have, "Faith, hope and love". They are to be found in nearly all the new Bibles.
Why has this stigma been attached to the word "charity"? It is due to the fact that a relatively small number of people put on airs because they had money to give away and because they were members of committees. They were patronising, and the poor people who had to go to them did not like this and felt that they were being patronised. A poor person would say, "I am not going to have charity"—very much like the Irish who would rather starve than have anything to do with England. Along with this there is a demand, which is a political demand, though not necessarily made by charities, by people who say, "We want the State to do, through the welfare services, through the local authorities, everything which is required to be done. We do not mind receiving help from our neighbours, the taxpayers and ratepayers and those who live next door to us—we do not mind that. What we object to is receiving charity". You see the confusion of thought, my Lords, because both are a form of uncovenanted aid. They say, "We want it as of right". Unfortunately, this ideal, if it is an ideal, or this idea—it is certainly an idea—is quite incapable of being fully realised.
Even now, when the State has developed the welfare services to a high degree, and so many of the accidents and misfortunes of life are covered, there are still a great many gaps which are filled
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by various voluntary organisations including the Red Cross, the women's societies, the Royal British Legion, St. Dunstan's, the Royal National Institute for the Blind and many local societies for the blind. They not only bring money and help where needed, but they bring it quickly, kindly and sympathetically in cases where the State could not possibly be expected to intervene. When I was a young soldier I went to the Salvation Army in France for a rest and a cup of tea; when I was wounded the Red Cross took care of me. Then I went to St. Dunstan's as a beneficiary. That did not hurt me. One can receive help with grace just as well as one can give it. It is a great mistake to decry the work of charity, because if we are to discourage it, if Governments were to try to put it down or supersede it, it would mean depriving not only a great many people of the help they need but also a great many other people of the opportunity of giving that help.
5.40 p.m.
LORD BALERNO: My Lords, it gives me peculiar pleasure to be following my noble friend Lord Fraser of Lonsdale, especially because of what he has done for the war blinded. I am vice-chairman of the Scottish War Blind Association, and we find it a distinction to try to emulate the magnificent work that is being done by St. Dunstan's. I am also glad to join with other noble Lords in thanking the noble Lord, Lord Beaumont of Whitley, for initiating this debate and for his speech. I should like to join in the congratulations to the noble Baroness, Lady Macleod of Borve, on her maiden speech and to thank her, for it is seldom that experience, charm and clarity of thought are combined in one and the selfsame speech, and we must all hope to hear her again frequently in your Lordships' House.
There are two points that I wish to make relating to tax on charities. Both have been covered by the noble Lord, Lord Nathan, and therefore I will not unduly detain your Lordships with a further elaborate exposition. The noble Lord spoke about the incidence of death duties on legacies and asked whether any alleviation could be made there. Many legacies are made by the testator free of duty but by no means all. There is, however, a peculiar facet of this situation to

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which I should like to draw the attention of the Government. Where the donor dies within a year of making a substantial gift, the Treasury applies the full incidence of death duties. A prudent charity, getting a substantial gift, ought to take an insurance policy on the life of the donor. But where the donor insists on being anonymous this is somewhat difficult, and where the donor insists that the money be used with speed for a specified purpose, then the charity might find itself in a very serious situation. I have recently had experience of such a thing in the case of a donation of £50,000, given to Heriot-Watt University by an anonymous donor, who died within the year, and £40,000 has to be given over to the Treasury. I think that it ought not to be beyond the wit of the Government to devise some means of putting this situation right.
The second point that the noble Lord. Lord Nathan, made, which I most strongly support, is that we should adopt a better system than that of the 7-year covenant for making donations to charity. We should adopt a system of tax relief on production of receipts from charities, which are deducted from the total income liable to be taxed. Of course, there must be a ceiling on the amount for which this can be done. I think the noble Lord mentioned that in the United States and Canada, where this system works, the ceiling is of the order of 10 per cent. of total income. Such an alteration, I submit, would be very much more productive than the 7-year covenant; would be a greater incentive to donors and would give greater net return to charity. It has the virtue, which again the noble Lord mentioned, that it could greatly simplify the matter of tax collection. Those are the two points I wish to make.
5.47 p.m.
LORD SANDYS: My Lords, I should like to thank the noble Lord, Lord Beaumont of Whitley, for giving us an opportunity to discuss this subject, and I should also add my voice to the chorus of congratulation to the noble Baroness, Lady Macleod of Borve, on her delightful speech, delightful because it was so practical.
The right reverend Prelate the Bishop of Blackburn reminded the House of the excellent nature of the voluntary societies conducting their charitable affairs,
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especially in relation to the fact that they are not tied hand and foot by statutory regulations. I will address myself later to this point, particularly in regard to the Trustee Investments Act, 1961.
I should like to speak for a moment on the annual reports of the Charity Commissioners for the last few years. I was especially glad to see that the principles and purposes of a charity were underlined in their 1970 Report, in paragraph 28 on page 11, and also emphasised in their Report for 1969. Perhaps I may be allowed to quote from paragraph 12 on page 6:
" We are concerned simply with the law of charity and with seeking to ensure that funds which are impressed with charitable trusts are used for the purposes of those trusts and not for other purposes which could not be recognised as charitable."
This is the very touchstone of what the Charity Commissioners attempt to do—the interpretation of the law.
I would especially commend the Commissioners' work in relation to the charities review, to which the noble Baroness, Lady White, referred. This review is taking place in no fewer than 36 counties, 25 county boroughs and 52 local authorities. I have a slight knowledge of this review in my own county. It is particularly relevant to-day that a large number of charities, whose aims are becoming somewhat obsolescent, should be drawn together and their funds used towards making possible tasks which are more useful and more relevant to the year 1971. But I would stress this. I happen to be a trustee of a charity of a type which might be termed anachronistic. I do not feel in this particular case that the cap fits. I am a trustee of a small trust for bellringers, and on Christmas Day every year £6·50 is distributed among 12 bellringers who perform an admirable public service, Sunday by Sunday. It cannot be claimed that this is in the same nature at all as overseas relief. Yet this is a charitable trust, and I think a public service is performed, and it is acknowledged in this bequest. Surely there is a place for small, charming and somewhat anachronistic charities to continue.
Trustees of charity funds work within the terms of the Trustee Investments Act 1961, and this Act followed almost exactly a year after the Charities Act

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1960. I should like to point out the difficulties that trustees have experienced. I happen to be involved with the council of management of Oxfam and also in Red Cross, and the management of funds is governed inevitably by the Trustee Investments Act. The particular section of the Act to which I wish to draw the attention of the Government is Section 2, in which are implanted restrictions on the wider range of investment. Your Lordships may be only too well aware that in Schedule 1 to the Act strict rules are laid down whereby the narrow range of investments in Part I do not require professional advice. In Part II there are the narrow range of investments requiring advice; and further, in Part III there are the wider range of investments, including unit trusts and certain other investments. Because the Trustee Investments Act is so particular in the regulation which it lays down, and the interpretation of it requires particular skill, charities are careful to appoint those who are able to interpet it. But where the thing falls down is on inflation.
In 1961 the going rate of inflation, as everyone will be aware, was much less than it is to-day. I do not wish to enter into the political side of this inflation factor, because a number of Governments have been in power in the last ten years, but the point is that the first duty of any trustee is to maintain the value of the trust fund. All trustees are well aware, despite the fact that they enjoy a full measure of benefit of tax relief and other reliefs such as rates et cetera, that even when an investment in the narrow range, which hears high coupon interest of the order of 7 per cent. 8 per cent. and 9 per cent. is accumulated, it is insufficient to make good the depreciation of the total fund by the erosive effects of devaluation in the course of a year. I feel that this is a very relevant point. It should be stressed that the Trustee Investments Act could be revised: indeed, there are provisions for it being altered in Section 12, whereby Her Majesty may by an Order in Council vary the terms of the Act in any manner of investment specified in the particular Order.
This is a complicated area, and one on which I should not wish to detain your Lordships overlong. However, I should like to point out a further aspect of this which can be portrayed quite well
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in Table 2 of the Appendix of the Charity Commissioners' Report. Values of stocks and securities worth over £141 million are set down, but the details of the actual portfolio are very sparingly set out. But we can gather from that that the "battle of the money box", referred to by the noble Viscount, Lord Boyd of Merton, is all too apparent, because earlier in their Report they state clearly that the two classes of share—the share which bears income and the share which builds up—have not appreciated to anything like the same extent as, for instance, a similar investment in a unit trust. It is my contention that there is an opportunity here for the Trustee Investments Act to be varied.
I hope that the noble Lord, Lord Beaumont of Whitley, will feel that my remarks have been relevant, in that he suggested in the terms of his Motion that we should review the laws affecting charities. That is the centre of my contention.
5.57 p.m.
BARONESS PHILLIPS: My Lords, we are of course grateful to the noble Lord, Lord Beaumont of Whitley, for introducing this debate to-day in his usual statesmanlike fashion. I think it is significant that the contributions from your Lordships have all been brief, practical and typical of the people who work in the field of social service. I should like to add my congratulations to the noble Baroness, Lady Macleod of Borve. She is going to be a great addition to this House. Perhaps I can say to her, with all due humility, that she will carry on a tradition which we, as females, have set; namely, that we are always much briefer than the males, and therefore we commend ourselves very much to them. Within this House I can say that without fear of contradiction.
This debate has given us the opportunity to pay tribute to the work of charities, and it is very singular that we have heard to-day of some of the many charities with which your Lordships are concerned. I was particularly glad that the noble Lord, Lord Fraser of Lonsdale, made some reference to the misuse of the word "charity". It is sad to think that it has now become almost a term of abuse. If anyone says, "I do not want charity", it is not intended to be any other than a reproof.

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My Lords, I have a vested interest in this subject. I have been employed for over twenty years, excluding the period when they lent me to the Government, by the greatest voluntary social service agency in Great Britain, the National Council for Social Service. I notice that the gentleman to whom some of your Lordships have referred, Mr. Des Wilson, in an article yesterday, said that it is time charities were taken away from retired colonels and Lady Peers. I should like to challenge Mr. Des Wilson from this Box as a Lady Peer. If his organisations are run as cheaply as efficiently as mine, I shall be interested to match him pound for pound, and to introduce him to every one of my 50,000 satisfied members.
For the purpose of this debate I have re-read the history of the National Council for Social Service, which they call Voluntary Social Service. I think it is important to remind ourselves of the background in which we discuss the law of charities and the status of charities. We see here a description of the conditions, which I think we sometimes forget, that prevailed in London in the mid-19th century, of 100,000 abandoned children; a ragged army who marched forth every morning, not to work, but to beg; and the silent legions of the poor bowing their heads for bread. But there was at that time very little method for a consistent purpose of alms-giving. Several attempts were made to draw the threads together and avoid misdirected charity, which I am sure we all agree degrades both the giver and the one who receives. Therefore over the years we see attempts to draw together the charities and to avoid overlapping. We also see that the growth of the voluntary societies affecting social and economic welfare has been continuous in the last hundred years, until we now have a vast variety of charities of all kinds. This growth has run parallel with an expansion in the local government field of statutory social service.
There is another factor to consider. The redistribution of income through taxation has resulted in the disappearance of what might be called the "great patrons". Their place has been taken in modern society by charitable trusts, big business and industry. That is why we are all so concerned when engaged
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in charity work for the status which is bestowed upon us by being a registered charity. At present the National Council of Social Service have set up two committees to look into two specific areas we have been discussing this afternoon, one of them on charities and taxation. The Director when introducing this quite rightly said:
" Many charities in Britain think the lack of incentives in tax law is a serious obstacle to improving their income."
We have had several instances of this to-day. I will not refer to the question of covenant, but I will merely say that the single graduated pension tax from April 1973 will mean that charities which are at present reclaiming a standard rate of tax at 38·75 per cent. under deeds of covenant will only be able to reclaim at the new basic rate of 30 per cent. I am not quite sure whether the Minister who is to reply will be able to deal with those two points; it is a little hard on him since this is obviously not his department. However, it is useful to air these matters. I believe one noble Lord referred to this debate as "exploratory". That is true.
Perhaps I may raise the question of the value added tax which is to replace purchase tax and S.E.T. The charities are wondering whether this, too, will have an effect, as at present they receive a refund of S.E.T. Then there is the question of national insurance. In the example of a charity which may run an old peoples' home, it is very hard if the warden working in the home has an insurance card on which the charity has to pay the full rate of insurance. This may make quite a considerable difference to the number of people they employ, though it is a small sum compared with the total amount of insurance collected. There is also the point that if a person makes a gift of land as a site for a village hall or community centre, this becomes liable for capital gains tax, because the owner is deemed to have made a "disposal". This means that he may have to pay tax, when in fact he has given the land and therefore has not only lost the value of it but also any profits that he might have made from it had he sold it and not given it away.
Another point with which the Committee is concerned is to look at the overlapping of appeals; and they are also

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preparing a guide for the public about fund-raising. I should like to quote from this guide because it is very relevant to our discussion in relation to the definition of "charity". They say in their foreword that they are outlining the enactments and common law relating to charities and that there is one cardinal difficulty: In everyday usage the words "charity", "charitable" and "charitable purposes" are commonly applied to any enterprise or object associated with welfare, as distinct from commercial benefit. A second and more restricted meaning of "charity", "charitable" and "charitable purposes" arises when these terms are used to denote enterprises or objects which are exclusively charitable and not commercial, although trading may be part of their activities, and the proceeds are wholly devoted to charitable objects. Such charities are protected and regulated by law. The Charities Act 1960 provides for the registration of a large number of these charities, so it is convenient to distinguish them from those in the first group by using the term "registered charity". But even in the case of registered charities there is no universal, statutory or other definition of the word "charity", and the connotation it bears in particular circumstances has therefore to be decided on a legal basis by analogy with past decisions of the courts going back as far as the Elizabethan Preamble. That Act is the Act of 1601, which is sixty years before the Great Fire, and I would suggest that things have changed a little since then and indeed are changing rapidly now.
If we look at the Report of the Charity Commissioners we see at page 5 that the new constitution of the Commissioners was laid down in the first Schedule to the Act of 1960 and that it provided that the Commissioners should be appointed by the Home Secretary and should be civil servants. It was explained—and this is the relevant point—that when the Charities Bill was before Parliament the Commissioners would not be subject to ministerial control or direction in the discharge of their duties. This is excellent in one way, because it leaves them great flexibility of movement, but it makes it difficult for anybody to make an appeal; and what I have learned in my short exercises in local and central government
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is that there is an appeal for almost any activity which is undertaken. So I feel that the Charity Commissioners are in a singularly unusual situation.
LORD WINDLESHAM: My Lords, before the noble Baroness leaves that point, there is an appeal to the courts through the Charity Commissioners.
BARONESS PHILLIPS: My Lords, that is so; but of course an appeal to the courts can be an expensive business, and a charity without any money is not often in a position to undertake such a course. The Minister gave us some very useful guidelines for charities which I think he said the Charity Commissioners used. The first is the limited number of decided cases where the activities were of a political and not charitable nature, but having objects which are exclusively charitable. We have had several examples cited this afternoon which are very difficult to explain under the fourth clause; namely, that they are charitable within the meaning of the Act.
I have founded a little trust to educate people in consumer affairs and, as I have said before, if the Consumer Council has gone out of existence—and perhaps it is reasonable that the Government should not spend money in this field—it therefore seems the more reasonable that a charity which is prepared to do this work should be encouraged. We have tried twice, and shall continue to try, to be registered as a charity although we are not bothered about profits because we have not go any—in fact, we have not got any money at all, which is quite usual for a charity—but we received a reply to the effect that because we were dealing with consumer education this was something outside the field of "charity", and it would not be sufficient to suggest that this was a purpose beneficial to the community, and one which would come within the fourth division of charity in Lord Macnaghten's classification in Pemsel's case. To come within that division, a purpose must be beneficial in a way which the law regards as charitable, and to do this it must be within the spirit and intendment of the Preamble to the Statute 43 Elizabeth I (The Charitable Uses Act, 1601). So we come back to the four dimensions which have been mentioned. I am sure there is a way out of this—it is not like the life cycle; you

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must be able to break through it—but I have not yet been able to discover it.
Several noble Lords have referred to the fact that if money is subscribed for a particular object, it may lie fallow for many years unless it is whittled away by legal action. I am reminded of an occasion when a charity with which I was concerned had a report submitted by the treasurer in which he said that quite a large sum of money had been lying dormant for about thirty years. He said that it had been in the hands of the bankers and not of the lawyers, and that was why we had so much money left.
There is little doubt that there is a vast amount of money lying about which could be usefully employed if we could find a way of breaking through this curious law that it must be devoted to an identical object. If there is another disaster such as that at Lynmouth, which we pray will never happen, it could hardly be an identical disaster. I wonder whether "the common good funds" referred to in this Charity Commissioners' Report might be a way of breaking through this problem.
The right reverend Prelate the Lord Bishop of Blackburn drew attention to something which we must never underestimate. Whatever the power of the State, and however good the statutory provision, there will always be a place for charity and for voluntary social services in this country. There will always be the group that needs to have the manoeuvrability and opportunity to pioneer, and always the need for the volunteer. I get a little tired of some of the snide comments about the "inspired amateur". I suppose that we in this House are all "inspired amateurs", and I hope that no one will say that this does not work. This is the British way of life; it is something very special to us, and we must not see it whittled away.
May I close on the note struck by the noble Baroness, Lady Macleod, with whom I so much agreed. Charity means caring; personal charity means real personal service. But charities cannot survive unless they are given responsibility and money with which to do their very valuable work.
6.12 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF EDUCATION AND SCIENCE (LORD BELSTEAD): My Lords, the noble Lord, Lord Gore-Booth, when he started his speech, referred to his good fortune in speaking immediately after the noble Baroness, Lady Macleod. I have no doubt that those who know the noble Baroness could have told us in this House that we would have a maiden speech of such exceptional knowledge and exceptional charm. The noble Baroness catalogued aid, help, involvement and caring as integral parts of charity as well as that of fund-raising. Those of us who have only recently come to know the noble Baroness must have realised as she spoke this afternoon that she herself is no bad advertisement for those characteristics and that we were listening to a speaker whom we hope will very soon take part in our proceedings again.
It is interesting to recall that back in 1949 the noble Viscount, Lord Samuel introduced a debate in this House calling attention to the need for encouragement of voluntary action, to promote social progress. Before that debate, the noble Lord, Lord Beveridge, had published a book drawing attention to the fundamental question of the position of charities when their objectives had been overtaken by the statutory services of the Welfare State, a matter which has been referred to again and again this afternoon. So it is immensely heartening that over twenty years later, and with hundreds of millions of pounds added to the national statutory social welfare budget, the pressure in the terms of this debate (which we thank the noble Lord, Lord Beaumont of Whitley, for initiating to-day) is for a widening of charitable activities. It is true that this stems partly from dissatisfaction which some of your Lordships have expressed with the legal view of what is charitable, but there is no question that behind this debate today there also stands an acknowledgment of the record of charitable work giving service to the public on a voluntary basis.
My Lords, lest you may think that this is just a glib phrase rolling off the tongue, may I refer you to statistics in the Charity Commissioners' latest Report for 1970, that at the end of 1970 there were some

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77,000 charities registered, of which 10,444 were registered in the last ten years. In my Department of Education and Science this record is clearly seen in the general youth service field where service is given by a multitude of diverse organisations, some long established and building on their well-tried traditions to meet new problems in modern society. One remembers that it was the Report of the noble Lord, Lord Hunt, a few years ago which made the point, which came startlingly to some people, that it was the older established charities which were doing a better job than anyone in dealing with immigrant problems. One sees that sort of organisation in youth services, and on the other hand fresh organisations often specialising entirely in voluntary service in urban areas. As my noble friend Lord Windlesham said earlier in the debate, the spirit of charity and service is nowhere stronger in the community than in the younger generation. I have had the good fortune in my Department to see the truth of this in general youth service organisations.
As paragraph 28 of the Commissioners' Report reminds us, over the last ten years "joint provision" is a term heard increasingly where statutory and voluntary bodies combine to provide facilities for the public. As that Report says, it was Section 12 of the 1960 Act which gave statutory authority for consultation and co-operation between the charity trustees, their fellows, and between charities and local authority services at all levels, and which authorised exchange of information for the purpose of co-operation, while at the same time Sections 10 to 12 of the Act ensured that local authorities had no power to review or to intervene in charities' affairs without the consent of the trustees.
None the less, the Commissioners have, since 1964, taken the initiative in launching local reviews to avoid duplication and have tried to identify need, and they tell the reader about this in paragraph 31. There must he many noble Lords in this House who have cause to bless the added effect when statutory and voluntary effort combine to act together, not only in simply providing more cash for a particular objective, but in dovetailing the services which are the special responsibility of each. For instance, to take
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a simple example, many of your Lordships probably know a great deal better than I do that it is not much good having an organisation which exists, say, to offer temporary housing to those who have come out of prison and their families if the local authority housing list does not provide hope of ultimate permanent accommodation. This is the sort of thing I was trying to refer to when I spoke of dovetailing services. I for one listened with greatest respect to Lord Nathan's reference to the part of voluntary service in the social service field, which I am sure will be read with great interest by senior Ministers.
The speech of the noble Lord, Lord Beaumont of Whitley, to-day called for a widening of the intake for charitable organisations, and my noble friend Lord Windlesham undertook that at the end of the debate replies would be given about educational charities. I seek to reply to the noble Lord, Lord Beaumont of Whitley, in this way. He mentioned the case of the Humanist Trust, which was placed on the register because its objectives were assumed to exist for the promotion of education in the sense in which "education" is used in charitable law, but subsequently the view was taken that this body has as its real purpose the promulgation of its particular beliefs and not of "education" in that legally charitable sense. There is nothing derogatory in what I am saying; I am simply relating facts. In these circumstances, Section 4(3) of the Act provides that the Secretary of State shall remove from the register
" any institution which no longer appears to the Secretary of State to be a charity ".
From Section 4(3) there is the right of appeal to the High Court provided by Section 5(3) of the same Act.
When the case of the Humanist Trust was debated in an Unstarred Question in February, the noble Lord, Lord Brockway, quite reasonably, pointed out that such an appeal would be far too costly for many charities. But what is the alternative? I suggest it can only be by a widening of the intake for charities, without any definition. Although the noble Lord, Lord Beaumont of Whitley, very properly gave his definition as "any non-profit making body working for the common good", speeches by other noble Lords, the noble Lord, Lord Gore-Booth, the noble Viscount, Lord Boyd

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of Merton, the noble Baroness, Lady Hylton-Foster, and my noble friend Lord Gage, showed that this would not be what one could call an agreed policy.
Although in many respects I sympathise with the views which the noble Baroness, Lady Phillips, has put to the House, it is right for us to bear in mind that when the 1960 Act was passing through Parliament the attempt was made, as my noble friend reminded us, to define a "charity" or "charitable purposes". This proved impracticable, and after an Amendment had been unsuccessfully moved in your Lordships' House the matter was dropped, because the Statute of Elizabeth in 1601 did not give any definition; and in any case it could obviously be held to be out of date to-day. That Statute gave examples of matters then held to be charitable. For the past 370 years a body of law has been built up which has endeavoured to extend and adapt. I would draw your Lordships' attention to the second table on page 9 of the Charity Commissioners' 1970 Report, where it is shown that (taking Lord Macnaghten's first three classifications), 10 per cent. of the new charities which have been founded since 1960 have been religious; 2 per cent. have been educational; 18 per cent. have been for the relief of poverty and the rest have been for other charitable purposes. The noble Lord, Lord Beaumont, will be quite within his rights if he points out that the relief of poverty comes into a great many of these other charities. None the less, I think I am in my rights to point to this table, which surprised me and might surprise some other noble Lords.
I accept that there are disagreements about what institutions should be admitted to the register. Broadly speaking, I believe that a real attempt has been made to extend the register so far as the four classifications, and in particular the fourth, of Lord Macnaghten in the Pemsel case, will allow; and as both Lord Beaumont and Lady White said, the Charity Commissioners' Report clearly shows that their work through the cy-près doctrine is ensuring that charitable funds are not lacking in up-to-date objectives—at any rate, not if the Charity Commissioners can help it. Paragraph 45, about how the Charity Commissioners would like to chase some trustees if they
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had the chance, makes not unamusing reading.
If the work of the past 370 years were to be consolidated into a Statute I have no doubt that it could be done, but it would be unrealistic not to recognise that the Nathan Committee, though wanting a definition of "charity", recognised that it must be based on Lord Macnaghten's classification, with the case law preserved as it stood. That is reported speech of what the Nathan Committee said. The attempt to introduce a definition into the 1960 Act defeated the ingenuity of your Lordships' House.
Notwithstanding all this, the noble Lord, Lord Beaumont of Whitley, and the noble Baroness, Lady Phillips, put forward the case that the law of charity excludes sections of the community who are in need of help. On the Second Reading of the 1960 Charities Act the late Lord Nathan commended the central register which the Act provided as an
" immense step forward in the direction of enabling the public to derive the maximum benefit from charitable trusts, which, it must not be forgotton, by their very nature have been created for the benefit of the public."
It is because the view has been taken over the centuries that "charitable purposes" exist for the public that no tightly defined definition has been achieved. But, at the same time, if the law were to follow the bidding of the noble Lord, Lord Beaumont of Whitley, and the noble Baroness, Lady Phillips, and were to extend Lord Macnaghten's classifications, although at first sight such a move would satisfy their wishes, it would lead us down a path which many people might bitterly regret. The noble Lord, Lord Beaumont, has referred to political organisations and their suitability for charitable status. We live in a democracy in this country where the give-and-take of Parliamentary life is sincere but invariably good-humoured. Doubtless the existing political Parties, and others in politics, whose objectives are persuasion by constitutional means might be deserving cases if there were a change in the law. But if there were any change in the law there would be no knowing where this move might lead.
The noble Lord, Lord Amulree, has discussed a national disaster fund, with money after two years going into the fund from localities. Like the noble Lord, I

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respect the concept of a national disaster fund, but such a proposal involves certain misunderstandings of which most certainly the noble Lord was fully seized. The view of the Commissioners is that there are not large quantities of dormant charitable funds—though I know that there are certain exceptions to that statement. Any trustees in difficulties over applying their income in accordance with their trusts have a duty under the Charities Act 1960 to apply to the Commissioners for a scheme to vary the objects of their charity. If, on the other hand, the concept of the national disaster fund is to facilitate the raising of funds, I take the point of the noble Lord, Lord Amulree, about local spontaneity, and I believe that emotive appeal is a most important factor in attracting financial support. It is not defeatist in any way to query this generous concept. Certainly a national fund would provide a ready answer to disaster, whether local or national in scale. But, as I have said, charitable funds across the board do not lie idle. We in this country have a wonderful gift for doing our best to meet disasters when they strike. Our money-raising record, as a nation, is such as to lead us to believe that the existing methods usually provide the heartfelt response which is the necessary ingredient in so many of these cases.
In this connection may I pay tribute to the chairmanship of the Disasters Emergency Committee by the representative of the British Red Cross Society, and refer to the case which was strongly put by the noble Viscount, Lord Boyd of Merton, and the noble Baroness, Lady Hylton-Foster, about charities and political activities. Let me repeat, briefly, what my noble friend Lord Windlesham has said. One of the conditions of charitable status is operation for the public benefit. The courts have taken the view that they are unable to decide whether activities of a political kind are likely to benefit the public. It is possible that political activity, subsidiary to a main charitable object, may not necessarily be objectionable, but there is difficulty in saying where the lines should be drawn. So the Charity Commissioners have been in touch with a number of charities on this subject and it is now their belief (and this is subsequent to the 1969 report) that their stand on this subject is generally understood and is accepted.
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I would say to the noble Lord, Lord Sainsbury, that the law to-day is interpreted in this respect more liberally and not less so. There are certain charities on the register in 1971 which it might reasonably be expected would not have been found on the register in the 'fifties. My interpretation of this is that the Commissioners are doing their best, within their terms of reference under the law, to be as flexible as they can. This can be nothing to do with Government policy, or civil servants because the Charity Commissioners, once appointed, are an independent body.
Other points have been raised in the debate, and in list form may I very briefly do my best to reply to them. The noble Baroness, Lady White, brought home the telling point about information to Members of Parliament: should it not be privileged when it comes from charities? The Charity Commissioners have made it clear to charities that the presenting of facts or analysing of situations to those in politics is something which is perfectly all right, but that as soon as political propaganda comes into the brief which charities may send to politicians we are once again led back to the field of controversy and this is something on which the Charity Commissioners would have to take a different view.
The right reverend Prelate the Bishop of Blackburn brought to the notice of the House the delay in the altering of charitable objectives in Church schools. I am sorry to hear this. I should be grateful if the right reverend Prelate would give me afterwards relevant information. I am worried that perhaps the right reverend Prelate is referring to omnibus schemes which the Department of Education and Science has been making in agreement with the dioceses under Section 86 of the 1944 Act, whereby the Department and various dioceses deal with old, worn-out schemes just as the right reverend Prelate described. Naturally, these are sometimes held up by perfectly understandable opposition from people living in the locality and also by the weight of work to which the right reverend Prelate referred. If he cares to give me chapter and verse, I will do my best to be helpful at a later stage.
The noble Lord, Lord Grenfell, and the noble Baroness, Lady Macleod of

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Borve, referred to Christmas cards, purchase tax and football pools. I think I must ask whether I may refer to my right honourable friend the Chancellor of the Exchequer all three of these subjects and see what reply I can get from the Treasury. But on the football pools competition, I may say that the Bill for this has passed through all its stages in the other place and is down for Second Reading in this House next week. The object of the Bill is to give a limited continuing legality to certain charitable pools, provided the financial benefit they provide for charity or sport is kept as high as possible. The noble Lords, Lord Fraser of Lonsdale, Lord Nathan, Lord Balerno and Lord Sandys, all made points on which I must ask whether I may consult the Treasury.
The noble Baroness, Lady Phillips, made a point on the rate of income tax. In the discussions on the Finance Bill in the Standing Committee of the House of Commons the Financial Secretary to the Treasury said:
" My right honourable friend has this matter under consideration. He is prepared to discuss it with the representatives of charitable organisations to see whether there is something else that the Government may reasonably do to help charities retain their equilibrium. We place the utmost value on the voluntary work which many of these large and small charities do, and we would not willingly see them suffer inadvertently as a by product on the reform of the system of taxation."
The noble Baroness made other points as well, on which I would ask whether I might write to her.
Finally, the noble Lord, Lord Grenfell, made a specific point on independent schools. My right honourable friend the Secretary of State has affirmed in another place, on April 21, the belief of the Government in a thriving independent sector of education. We believe this because although no Minister at the Department of Education would be a Minister there unless he believed that the maintained system of schools in this country was the best in the world, we also as a Government do not like monopoly, and we view monopoly in the future of our children as suspiciously as we view monopoly in anything else. We also view with interest the contribution which the independent sector of schools makes to the boarding provision in this country. Out of a total of boarding places of 162,316,
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only 24,818 are at the maintained schools to-day, and 119,658 of that total of over 160,000 are in independent schools. It is for reasons of this kind that I can give the answer to my noble friend that it is the Government's intention that the independent schools should continue to make their valuable contribution to the pattern of education.
My Lords, to end my remarks, may I return to the question of admissions to the register. Certainly the existing law applies restrictions, though the whole tenor of the 1970 Commissioners' Report demonstrates, I think, their desire to be as flexible and helpful as possible within the law which they are bound to administer; indeed, many noble Lords have said this during the debate. But there is another side to the coin. One of the difficulties voluntary bodies inevitably face is duplication of effort. This is the fault not of people but of circumstances, for it is only right that voluntary effort should be alive to meet the needs of the moment. Very often, inevitably, this will mean that diverse organisations find themselves all coming in together to try to sort out particular needs and particular demands. An unlimited widening of entry to the register might exacerbate this situation and might increase the apprehensions of many people who have the future of charities at heart and it would increase the difficulties which Departments have to face where the question of Government support arises.
It may be of interest to your Lordships to know that the Commissioners' Report shows that by the end of 1970 113 local authorities had started local reviews of charities within their areas. Arising out of these reviews the Commissioners have so far made 279 schemes, usually to modernise the objects of the charity, but sometimes to combine charities with similar objects, or both. Schemes are not required in all cases, however, for often such reviews will encourage trustees to think afresh about their objectives, the effective application of their income, and the need to co-operate with other bodies, be they voluntary or statutory. My Lords, I believe that this is the way forward—a sensible use of private money, and also of money given by public bodies, by co-operation and by constant review, bearing in mind that the

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law and organisation of charities owes this to those who give and to those to whom charitable work, which to my mind is a vital element in the life of our nation, means so much. In thanking the noble Lord, Lord Beaumont, for initiating this debate, I would add that we owe a debt of gratitude also to the Charity Commissioners whose latest report clearly shows their desire to promote the vital work of charities in as constructive and liberal manner as is open to them.
6.38 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, it only remains for me to thank your Lordships' House, and particularly all noble Lords who have spoken, for what I think has been a useful debate. Noble Lords will forgive me if I do not take up their time by mentioning all the speakers, but it would be right to say that the highlights probably of to-day's debate have been the contributions from the Clan Macleod. It has been a great privilege for me to initiate a debate which has provided the opportunity for the noble Baroness to speak to us so early in her Parliamentary career. We are delighted that she has done so and very much look forward to hearing her on many other occasions.
I was also very pleased that this debate was the occasion for one of the rare but always trenchant speeches from the noble Lord, Lord MacLeod of Fuinary, who put in an exemplary way exactly what I feel about the interaction of politics and religion. I thought that possibly we strayed a little off the path occasionally when we got too theological about charity, because a term with two meanings but a common root can give way to a certain amount of misunderstanding, and it is not always right to follow that to its logical conclusion. Another highlight of this debate has been the special expertise of certain noble Lords, reflected particularly in the speeches of the noble Lord, Lord Sandys, and the noble Lord, Lord Nathan. Indeed it is fitting that the noble Lord. Lord Nathan, should have made such a heavyweight contribution to this debate, seeing how well his name is tied up with this whole field of charity.
I think it has transpired in the field in which I particularly made my points
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in my opening speech that there is a division in your Lordships' House, just as there is a division in the work of charities. I am not going to answer this debate in detail, but I should like to say one or two things on this matter before we close. First, I get the impression that it is a division between the older and the newer charities and, to a lesser extent, a division between the older and the younger generation. It may be unfair—I hope not—but my general impression is that when the Charity Commissioners say that they are in touch with charities and on the whole everyone is happy, what they really mean is that they are very much in touch with the bigger, most established and older charities.
To those who have been riled—and obviously some noble Lords have been—at the slightly astringent attitude taken by Mr. Des Wilson on this subject, I would say that he has earned the right to speak in this way by his brilliance in combining these two approaches of politics and charity. Therefore I hope I detected an element of open-mindedness in the Government, particularly in the speech of the noble Lord, Lord Windlesham, on the matter of definition. I think we would do well to bear in mind that if this diagnosis is right there may be more charities and more people, rather than less, who as time goes on, feel unhappy about the situation.
I do not think the question of international charities and the danger they may get into is a very real objection. No one is going to force charities to become political if they do not want to, and foreign Governments are perfectly able to distinguish between those charities which have any political taint and those which have not, as indeed was obvious in the case of the Nigerian Government, the Pakistan Government and other Governments.
I wish to make one personal comment about my reaction to the debate before I ask your Lordships' leave to withdraw the Motion. There is also, I believe, a psychological split in your Lordships' House. In terms of the argument adduced by the noble Lord, Lord Gore-Booth (if I followed it correctly) I am a Continental rather than an Anglo-Saxon. I do not think that to muddle through is a good thing; I do not think that the argument

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that it works and therefore it is all right is a good one. The question is: How will this work and in comparison to what, and could something else work better? The argument that it works and that therefore we had better leave it alone is a singularly Anglo-Saxon device. I do not regard myself as an amateur—not even a gifted amateur; I regard myself as a professional politician, and I am proud of it. I think a large number of your Lordships would so regard yourselves. The noble Baroness, Lady Phillips, is one, and it is a very good thing to be.
Therefore I think we ought to move towards a clearer and more satisfactory position on this question of the definition of charities. The way forward may come from the suggestion of the noble Lord, Lord Nathan, when he made the wholly pertinent comment on my speech that I was muddling up two things—charities and financial relief for pressure groups and political Parties. I do not entirely accept that criticism, but I think it may open a way forward that could be explored in the future.
I am grateful to your Lordships' House for giving me this opportunity of moving this Motion, of initiating this debate and so following my distinguished Liberal predecessors, Lord Samuel and Lord Beveridge, as the noble Lord, Lord Belstead, reminded up. All that remains for me to do now is to ask leave to withdraw the Motion for Papers standing in my name.
Motion for Papers, by leave, withdrawn.

CIVIL AVIATION BILL
Brought from the Commons; read 1a, and to be printed.

SALMON STOCKS AND CONSERVATION
6.45 p.m.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE rose to ask Her Majesty's Government: Whether they are aware of the serious risk that the Atlantic salmon could become an extinct species of fish unless urgent measures are taken in both home and international waters for conservation of stocks; and what steps they propose
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to take to this end. The noble Lord said: My Lords, I rise to ask the Question standing in my name on the Order Paper, and I trust your Lordships will allow me some minutes—not too many—to deploy some of the important issues that are raised in this Question.
I think the asking of this Question is amply justified when one reads the Report of the proceedings in another place on June 23, when the Minister was asked a Question as to the dangers of Scottish salmon becoming extinct in the comparatively near future. The replies of the Minister, I regret to say, showed no sense of urgency, and, I also regret to say, seemed to me to savour of complacency. I do not expect my noble friend Lady Tweedsmuir of Belhelvie, to agree with me, but let me repeat to your Lordships what the Minister said. When asked as to the dangers for the future he replied:
" I do not share my honourable and gallant friend's fears for the future."
And on the question of international negotiation for limitation of fishing he said:
" I am hopeful that over the years we shall get even more co-operation than we have had in the past."—[OFFICIAL REPORT, Commons. 23/6/71; col. 1411.]
My Lords, while the years of hope, resting in the breast of the Minister, pass by, the Atlantic salmon are getting fewer and fewer.
To-day at Question Time in your Lordships' House I asked the Government whether they intend to introduce legislation based on the Report of the Bledisloe Committee issued in 1961—and of course we still await legislation on the Hunter Report. I hope that in regard to this question of fishing Her Majesty's Government are not working under what we used to know as the "ten-year rule"; that is to say, no decisions to be made within ten years, because those decisions are surely thoroughly overdue. Let me say at once that the question of salmon conservation does not mean preservation for a privileged few, but preservation in the interests of an industry which employs something like 10,000 people directly in Scotland, some 3,000 directly in England, in addition to indirect benefits with transport, catering, retail trades and tourism generally which are immense, both in terms of money and in terms of employment. There is also the very germane

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question of the rateable values in Scotland which salmon yield to the Exchequer.
The future extinction of salmon presents a very real danger. I hope some noble Lords, including, I trust, the Minister, may have read in the Field—a very authoritative paper—a few weeks ago an article headed, "Will salmon become extinct in 20 years?" All those interested in the Atlantic salmon can confirm the deplorably low catches in the spring of 1970 and 1971. One cannot net heavily in home waters and on the high seas take something like 2,000 metric tons of salmon every year off Greenland and the Davis Strait, and at the same time have them in the Northern European rivers. It is as simple as that.
There is, I believe, much to be done by Government action, both at home and internationally. In my remarks I am going to put forward to the Minister one or two suggestions with great humility—one always puts suggestions to any Government with great humility. At home I think the first thing we must do is put our own house in order if we are going to exert the greatest possible influence internationally. And certainly there is much to be done to put our own house in order.
As to the practical steps, drift-netting off Scotland is prohibited by a biennial order passed in 1970, in force for two years and still running. But drift-netting is allowed off the English coast, subject to licences from the river authorities. As your Lordships know, Scotland has no river authorities but England has. Drift-netting of the North-East coast has increased dangerously and is taking a terrible toll of salmon. Let me give your Lordships the figures: off the North-East Northumberland coast in 1966, 16,000 salmon were taken by drift-nets; in 1969, 53,000 salmon were taken by drift-nets off the North-East coast; in 1970, the provisional figure is 99,000 fish taken by drift-nets off the North-East coast. I stress the rise from 16,000 in 1966 to 99,000 in 1970.
Therefore, my first request to the Government is to represent most strongly to the river authorities the serious effects of their use of the licensing system and a plea to the river authorities that they should revert to strict control. There are
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in Northumberland two river authorities. The North Northumberland authority have always used a good deal of restriction and 75 licences are issued. The South Northumberland area river authority issued about 30 licences, but it shot up to 350 licences last year. Men from Scotland are coming down to South Northumberland and taking out licences to drift-net. If the salmon could speak they would say, "It's a scandal"; and I sincerely hope that we are going to hear something encouraging from the noble Baroness to-day.
My second request concerns a most recent modern development called a monofilament net. It is a net, light, cheap and invisible to the fish; it takes immature fish as well as adult fish; it is made from man-made fibres. Undoubtedly, the use of monofilament nets is one of the causes of that great increase of salmon taken on the North-East coast that I have just cited to your Lordships, as well as the increase of salmon taken in other forms of netting. It is interesting to know that by international action, which I hope to say a word about in a moment, a recommendation has been made to prohibit the use of monofilament nets on the high seas. But there is no such prohibition in Scotland, and in England the river authorities could attach to their licences a condition of no use of monofilament nets, but they have not done so, and I do not blame them for not doing so when there is no prohibition in Scotland.
In Scotland there is use of fixed nets to a distressingly increasing degree. I would ask the Government whether they would introduce a Bill in the immediate future, as an emergency measure, quite apart from any major legislation for which we are waiting so patiently, to prohibit in the interests of conservation the use of man-made fibre nets, or, if the Government feel unable to do it, to say they would facilitate a Private Member's Bill to this end. If the noble Baroness argues to-night, as she may, that prohibition is out of the question, it is impracticable and that all we can do is to use control, let me remind her of what I just said: that internationally there has been a recommendation for prohibition. I am glad to say that Her Majesty's Government were one of those who supported the proposal; so it would be a little illogical if she came here

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to-day and tried to make out the case that control was the correct method, and not prohibition.
My third request is in much more general terms; it is really almost a form of question. Can we afford, while we are waiting for comprehensive legislation based on Bledisloe and on Hunter, to allow the present heavy depredation of salmon? Should we consider, a what I would call a crash programme, for two or three years altering the timing of nets? At the present time, the nets are lifted at the weekends for 42 hours a week. Ought we to extend that period? Ought we to shorten the netting period of the year? Ought we as regards rods to have river by river, according to the particular characteristics of the river, later opening or earlier closing? These are questions I cannot pontificate about to-day, but I believe they are questions that we ought to consider as a crash programme to meet the needs and the dangers of the present situation.
For a very few moments I turn to the question of the high seas, where fishing has been indiscriminate as to size, condition, time of year, and certainly country of origin of the fish. Countries that originate no salmon, that have practically no rivers of their own, in many cases absolutely no rivers of their own, fish on the high seas, taking the view that it is fair game for all. Countries that originate salmon, like the United Kingdom and many other European countries, contest this view, quite rightly, and ask for consideration of their problem of the preservation of the fish that have been breeding in their rivers, and feel that they have some priority right to fish coming from and returning to their rivers. But, alas!, in the International Commission on North Atlantic Fisheries it is a case of all countries having one vote. Whether they have any salmon rivers or not they can fish the high seas and they have a vote equal to countries that have many rivers and originate much of the salmon catch: it is a case of "no salmon, one vote". This is not a very healthy position. Again, if the poor salmon could speak, he would say it was not really very fair.
I agree, of course, that only by international agreement can we go forward on the high seas. But the Danes, with Greenland in the van of this open-to-all
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school, have been very stiff. They have now made some slight concession from their original position, a matter in which we rejoice, and the reason we rejoice is that we hope they will concede some more. The International Commission on North Atlantic Fisheries require a two-thirds majority for any resolutions to be effective, and after that each resolution has to be ratified by the respective Governments. The Danes have agreed in the International Commission that the catches should be restricted to the 1969 level, which was a very high one. They have also agreed, as I said earlier, to prohibit nylon nets, and they have agreed to a close season. But these matters have to be ratified by the various countries—and the various dissenting countries—and we do not know what the position is here. I hope the Minister will be able to tell us to-night.
In June this year the I.C.N.A.F.—the International Commission for North Atlantic Fisheries—met at Halifax. In the cause of conservation of salmon. Canada proposed that high sea tonnages should be reduced to 80 per cent. of the 1969 levels. The United States of America supported that proposal. That proposal needed a two-thirds majority. It did not get that two-thirds majority because it was defeated mainly by countries having no originating rivers of their own. But my regret is that Her Majesty's Government abstained from voting on that resolution. Now the Danes propose to continue this high 1969 level for 1971, 1972 and 1973. I must tell the noble Baroness that I know that the abstention by Great Britain has caused a good deal of ill feeling in Canada and the United States.
What I seek is for Her Majesty's Government to be the leader in the field of international co-operation. I would ask for an assurance from the Minister tonight of support for the conservation of Atlantic salmon, and for these international negotiations not to be a pawn on the board of international diplomacy, international trade patterns, and bargains and concessions for reciprocal advantages here and reciprocal advantages there. Salmon conservation should be treated as a matter on its own, and of vital importance. I have suggested certain ways of putting our house in order. I hope I have suggested certain ways of leading in international measures. In

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an Unstarred Question I have no right of reply, but I can, before I sit down, thank noble Lords in advance who have kindly consented to take part in this debate. I look forward to a reply on the general position and on the proposals I make—particularly for our own waters—from the Minister, who I know has salmon fishing very much at heart.
7.4 p.m.
LORD HOY: My Lords, we are very grateful to the noble Lord, Lord Balfour of Inchrye, for putting down this Question. I certainly would not dissent from most of what he has said, although I am bound to say it came as a little surprising to me to hear that licensed netting had increased to such an extent on the North East coast. I had some experience in this particular side of the industry, and many a time I was assailed in another place for not increasing the number of licences. We operated through the river board authority a very tight system of licensing, and indeed the argument at that time, when we were imposing the ban on drift-netting in Scotland, was that drift-netting off the North East coast of England was so infinitesimal and so well controlled that it provided no hazard. If, in fact, the noble Lord—and I do not doubt his word—is right in saying that licences have multiplied ten times over the last year or two, then perhaps the noble Baroness will have something to say to us about it, about the reason for it and indeed what the catch represents. It seems to me that if all this is going on on the North East coast of England, we are going to have a demand a little further North. Only earlier in this year we in Scotland renewed our ban on drift-netting and I think it lasts for another two years yet—certainly two year from February or 'March of this year.
I should like to say a word or two about the work of the Fisheries Commissions, both the International Commission for the North West Atlantic and the Commission for the North East, because they have a particularly important part to play. Indeed, I think this is where the key lies. It may be interesting to recall that in 1969 both these Commissions decided, on a motion submitted by this country—and whatever we do, do not let us deprecate the part that Britain has played in giving a lead to the rest
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of the world in this particular matter—and by very substantial majorities, to call for a ban on the fishing of Atlantic salmon outside national fisheries limits. Indeed, it was this, your Lordships will recall, that caused some perturbation in Denmark. They then submitted, with one other country, their objections to carrying out the decisions of both of those Commissions. I know that no matter which Government are in office in this country, we have not the power—let us face it—to dictate to the others what they should do. We can seek to advise; we can put pressure on them; and I should be sorry if the noble Baroness confirmed the information from the noble Lord, Lord Balfour, that an abstention on a vote in Halifax has caused this trouble. It is no secret that Canada was very helpful to us, as was the United States, when we were getting those motions through both those Commissions. If in fact that is what has happened, I regret it.
I understand that there has been a more recent agreement with Denmark, and I should be grateful if the noble Baroness would spell it out. I understand that they have agreed to a quota, but what the quota is based on I am not quite certain. The noble Lord takes the figure for 1969, and I should like to know whether that is the basis on which it is done. It is all right to talk about a quota, but we have to understand what the quota means. What does it mean in metric tons of salmon, and how does it compare with the total catch in that area? Simply to say that they have taken a quota is not giving us the information that we really require. What we want to know is the quantity. Secondly, is it an agreement that has been reached inside the North East Atlantic Convention, or is it some bilateral agreement? I know that there was considerable trouble at that time. Indeed, we had an amusing episode, because Greenland was perfectly willing to support us and not Denmark on a settlement of this issue, and we were then pressing for control of the fishing of salmon not only outside but even inside Greenland's waters. That is where a tremendous amount of fishing takes place.
I should be grateful if the noble Baroness could tell us what decision has

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been arrived at regarding inside the limit, because this was causing some considerable concern. We also want to know whether it is an agreement taken under the Commission, or whether it is some bilateral agreement that has been reached. Obviously, with all these changes going on, we are also faced with what might happen in the near future if we enter the E.E.C. What in fact will the influence be on the fishing grounds? I am even talking about salmon in this respect. It is true that if one is a member of the E.E.C. and also a member of either the North-East or the North-West Atlantic Fisheries Commission, then one is bound by the rules. But as rules are being changed in these areas, it is essential that your Lordships should know what the new position will be.
I want to take up the last point made by the noble Lord, Lord Balfour of Inchrye. There is always a little anger, not only in this country but in every other country that has rivers with salmon in them and makes a contribution to the salmon stocks of the world, when other people come and take them—and the Lord knows, it was a bad day when somebody discovered the salmon feeding grounds off Greenland. There is resentment if countries which have made no contribution go to Greenland and begin hauling the salmon out of the waters. A year or two ago, it was my job to visit certain countries which are making their contribution in production, in hatcheries and in everything else which means giving attention to salmon. In a visit to Iceland, I was very much impressed with the Icelandic contribution to the salmon fishing stocks. I was more than impressed with what was happening in Eire. At that time we were all blaming Eire for having produced U.D.N.—ulcerative dermal necrosis—and we were putting the blame on to some poor little rainbow trout farm in Waterford. This proved to be complete nonsense. But, while there, I had the opportunity of visiting that very handsome and distinguished place that has been provided by the Guinness family. That is one Guiness that is "good for you". I thought they were making a remarkable contribution. I also had the privilege of visiting Russia, from Murmansk to Yalta, and they, too,
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were making their contribution to the fishing stocks of the world.
So that when we make this complaint to-night, we complain not only for ourselves but for many other nations in the world. It was said to me by a colleague that even off the coast of the Falklands efforts have been made to cultivate salmon. Apparently, they were a failure at first, but then a scheme of brown trout was embarked upon which I am told has proved tremendously successful. I do not know what locus standi the Government have in this matter, but it may well be that there is another ground which could produce fish. But, having said that, there is one other form of action that we might well take. First of all, we have to know where we stand internationally, and we shall expect the noble Baroness to tell us this. We also want to know what the Government are doing about the further development of salmon fisheries. I am certain that before this question has been asked and answered the noble Viscount, Lord Thurso, will again be offering that river that he offered to the Government two or three years ago for the development of salmon.
I should also like to deal with one other side of this business. We want the Government to tell us what is happening, and about the quotas. But there is something else which is within our own grasp in this country. It is not much use getting international agreements and producing even more salmon if, at the end of the day, they finish up in rivers and die from pollution. This is something to which we could give personal attention. I should not care to single out any river, although I have no doubt that that may well be done and it may be a little embarrassing for my native city. But this is something within our control, something that we could attend to; and we should not overlook the fact that in the northern parts of our country there are local authorities who are very grateful for the rateable values that are involved in this business. I am grateful to the noble Lord, Lord Balfour of Inchyre, for once more giving me an opportunity of saying a few words on this highly important subject, and I sit down knowing that this will not he the last occasion on which we shall discuss salmon.
7.15 p.m.
VISCOUNT THURSO: My Lords, I have indeed a well-known interest in salmon, to which I have referred in your Lordships' House on a previous occasion; but the real interest which I have in the species is the interest which anybody who has the fascinating job of managing a salmon river can feel. I am therefore extremely grateful to the noble Lord, Lord Balfour of Inchrye, for putting this most important Question, and for giving an opportunity for the discussion of what can be done for this species by people who are interested in its preservation, and, indeed, as the noble Lord, Lord Hoy said, in the improvement and increase of the species.
I share the concern of the noble Lord, Lord Balfour, about the attacks and threats to the Atlantic salmon, but I do not entirely share the gloomy prognosis for the species. He is quite right to stress the financial value of the fish. He is quite right in saying that we must put our own house in order before we go abroad and join with other countries in the Commissions in trying to put the international house in order. He is quite right, too, to stress the danger of the drift-nets off the North-East coast of England, because that danger is already felt by the responsible fishery officers in the area. The noble Lord is also quite right to stress the danger of the monofilament net, because it is a dangerous engine and one which I think we could well do without. But the fact is that all of us who are interested in salmon are predators upon the species. Whether we be rod fishermen, whether we be catching the salmon for smoking, whether we be catching it by drift-net, whether we be catching it by stake-net, fly-net, sweep-net or any other means, we are preying on the species. We must therefore know more about the species, so that we may know the limits to which we can safely prey and recognise the danger signs, when we see them.
We know that the species can be destroyed. It is a very simple thing to destroy salmon, and the noble Lord, Lord Hoy, put his linger on the point at which they can all too easily be destroyed; that is, by pollution in the river of origin. If we turned our backs upon the problem of keeping our rivers clean, we could indeed destroy the salmon species. We
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are not likely to destroy the salmon species by fishing with rod and line, because that is an inefficient means of catching fish. We are not likely to destroy the species by the use of the traditional forms of fixed engines, which have been used around the coast of Scotland for over a hundred years because they have not affected the runs of salmon over that period to any measurable extent.
We could conceivably destroy the species by allowing indiscriminate drift-netting, especially by mono-filament net. My Cords, I am possibly the only noble Lord in this Chamber who has personally apprehended a drift-netter, and when did so he had a quarter of a mile of mono-filament net right across the mouth of the Thurso River. In the time that it took us to get aboard—which was roughly an hour, by the time we had gone round and got in a boat, come alongside and boarded him—he had caught no fewer than 36 salmon. So your Lordships can see that there is indeed a grave danger in this particular method of fishing.
We could also destroy the species, not utterly but to the point at which it was more or less unusable in the rivers of origin, by over-predation on the feeding grounds. This danger we have tried to deal with, and I think that the Commissions to which the noble Lord, Lord Hoy, referred, have done a good job in starting international agreement. Action such as this, I agree with him, we must build upon in the future. We must see that this international agreement is continued along sound lines and is well advised by a good corps of scientists, and that the countries who prey upon the salmon species in their feeding grounds contribute to the cost of doing the scientific research that will be necessary in order to see that this activity is properly controlled. But, my Lords, I have hope for the salmon species, and I think it would be wrong to stress too much the danger, because (and I think that, again, it was the noble Lord, Lord Hoy, who stressed this point) I feel there is so much to be done in understanding the species and in improving the runs of salmon into our rivers and to our coasts.
We are sensitive at the moment because there are many new methods, new fishing grounds have been found and we have

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disease. But the strength of the species lies in its reproductive capacity. As many noble Lords here will know, a salmon lays about 500 eggs per lb., and therefore a 10 lb. hen fish will lay about 5,000 eggs. So she is reproducing at 5,000 times her own number, or 2,500 per pair, and it is in the natural loss of fish that we can do much to make up and improve our salmon stocks. Experiments were done on the Cottage River in Ireland which showed conclusively that if trout are fished out of the rearing areas of a salmon river the run of smolts out of those rearing areas can be increased by two and a half times.
Here we come to a point at which certain Government Departments can help, because there is a lack of information on this sort of thing. This kind of information is passed around from river to river by word of mouth from friend to friend, and there is not enough correlation of information among the different interested parties—or, indeed, between England and Scotland—about the conservation of salmon. This was a matter which was referred to at a recent joint meeting between the Association of Scottish District Fishery Boards and the River Boards of England, and plans were laid to exchange information at that level so that more information is available to the people who are doing the job of trying to conserve the stocks of fish.
In my view, my Lords, the strongest forces which we contend with are the forces of Nature, and the problem is to get to know what we are dealing with in order to be able to deal with these properly. I have some very interesting statistics with me, but I am not going to read them all because I know only too well how extremely boring too many statistics can be. But I should like to refer to one or two to illustrate my contention that there is great hope for the species, and that it is our job to take this opportunity to try to make improvements. On the River Coquet, in Northumberland, all the fish that go into the river are actually counted, by eye, by the river bailiffs. They cannot get into the river unless they are allowed in through a lift which is operated by men who count the fish. The rod catches are then returned. It is interesting to note that in the years from 1959 to 1964 the average stock in the River Coquet was 2,069 fish,
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and the average annual catch was 455 fish, or 22 per cent. of the stock. In the following period of six years, from 1965 to 1970, the stock in the Coquet went up nearly 1,200 to 1,300 fish to an average stock of 3,297. The average catch fell to 353, or a percentage catch of only 10 per cent.
Now to people who say that the salmon species is being killed out I would draw attention to our figures on the River Thurso. During the decade from 1961 to 1970 inclusive, there was one glorious lustrum of successive years in which the catch on the river was on average 75 per cent. higher than the average going back to the last century. Included in it were the three highest grilse catches at the estuary of the river. This period included our record ever rod catch, which was indeed in the same year as our record ever grilse catch on the estuary net. So I think I would prefer to have a feeling of optimism about this problem. I am glad to see the Commissions in action; I am glad to see international agreement taking place. I do not feel the species is going to be destroyed, because I think the will is there not only to look after the species but to improve its situation.
So I would say to Her Majesty's Government that they should take advantage of this will being there to help all those who are working with the salmon species to improve the stocks of fish, and that to do this we need this revision of the law both in Scotland and in England. As was said in the debate on an earlier Starred Question put down by the noble Lord, Lord Balfour of Inchrye, the Law of England and that of Scotland should be the same in its aim. It may have to be altered in different ways because the law of the two countries is different, but it should be the same in its aim, which aim should be the conservation and improvement of the stocks of the salmon species.
7.30 p.m.
LORD LOVAT: My Lords, I think it is generally agreed that global population growth and industrialisation are very rapidly approaching the limits of the earth's capacity to support them. This is really what we are talking about to-night, because it is quite apparent that the Atlantic salmon has been overtaken by events. It cannot adapt its

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habits to changing times and increasing pressures, and I feel that it is our duty to persuade Her Majesty's Government to do something more about this. We have heard three excellent speeches already to-night and I hope that I am not going to spoil the batting average. I think that I made my maiden speech in your Lordships' House 40 years ago on this very question, but the situation has not altered except for the worse since then. The noble Viscount, Lord Thurso, who lives not so far from me in the North of Scotland may be optimistic, I feel, in some of his remarks. I hope that I am wrong; I hope that I may stand corrected by the end of the debate.
I feel that the noble Lord, Lord Balfour of Inchrye, has done an excellent job in asking this Question, and although I am not going to talk about international laws or international negotiations (which he has covered so adequately) I think that perhaps I could help the noble Baroness when she sums up to-night by making certain very local suggestions as they affect the salmon rivers of the North-East of Scotland, and particularly in the Moray Firth area where I confess to have interests and, with all respect to your Lordships, the advantage of owning a river which has been in the family for a long time and which fortunately has kept game books and very long records of every salmon and sea trout which has been caught as far back as the year 1809. I do not think that that performance can be easily matched. Without boasting in any way and with great humility I can say that if a salmon river is well preserved you can work it up, just as the noble Viscount said. At the turn of the century the Beauly was supplying netted salmon in numbers between 15,000 and 16,000 a year; and yet when my father came back from the South African War, stocks had been virtually wiped out by over-netting. He was one of the first men to put hatcheries into the River Beauly in spite of public criticism and the suggestion that fish could spawn quite well under natural conditions. Of course they can. But there are such things as floods, frosts and too many fish competing for the same spawning bed. The proof of the pudding was in the eating: the fish came back and multiplied, until they had a very severe
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setback through the electrification of the river by the North of Scotland Hydro-Electric Board about which I propose to talk shortly a little later.
At this point I should like to say that the situation is very serious. I think that whoever answered in the other place to the effect that he was not unduly perturbed by the situation either off Denmark or in the North Sea or in our rivers and coastal nets, can only be accused of making an irresponsible statement. If Lord Balfour's horrifying story is correct, that in Nova Scotia at a recent high-level conference Britain abstained from voting on the very subject of preserving our salmon stocks, that is quite unforgivable. I hope that the national Press will fully ventilate this fact. Except for the Field newspaper (to which I should like to pay the highest tribute) we have simply forgotten over the years just how serious the situation is. Were it not for the Hunter Report or the Bledisloe Committee, or something else which was put into operation about a year ago called the Atlantic Salmon Reserve Trust, we simply would not know what is going on and how many fish are being destroyed.
I realise that I am going over the ground covered by some previous speakers but I am paving the way to say what can be done at home. The noble Lord, Lord Balfour of Inchrye, dealt with the international situation. May I concentrade on the home front? As a desperate situation requires drastic remedies, I put forward the following proposals in order to maintain and thereafter increase salmon stocks as opposed to grilse. May I ask your Lordships to bear with me for a moment to differentiate between salmon and grilse? They are the same fish; one is the maiden fish entering the river for the first time to spawn and reproduce herself. But the grilse have different habits from the salmon. The grilse are not at risk. One gets large grilse runs in all the North-East rivers. They may well continue, as the Under-Secretary may have said in another place, referring to salmon as a species; but the spring salmon are rapidly reaching the point of no return. One has only to check on the records among any of the rivers on the North-East coast of Scotland to discover that fact.
I am going to try to keep off facts and figures—they become extraordinarily

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dull—but I can assure your Lordships that there are beats now on some of the most famous rivers that cannot be let for lack of fish, and this has been getting worse for the last four or five years. Whether you put it down to the Denmark Straits and the netting off the coast of Iceland is a question. I think it must stem from there; but spring salmon are simply not running our rivers any more. It is as simple as that. Grilse can come in later, but they have not the significance. If the Under-Secretary was an authority on fish he would know that unless grilse themselves produce grilse there are not any salmon left to breed spring salmon. It is an accepted fact that spring salmon breed spring salmon. In the noble Viscount's river on the Thurso the fishing has been immensely improved by getting them over from the Naver, one of the earliest salmon rivers in the Highlands or the Tay and the Garry. In the old days my father did not get away from Fort Augustus for Christmas; and they had a Christmas Day salmon—fresh salmon. These are things that everybody knows about who knows anything about salmon fishing and the history of this species. I suggest that one should bear in mind that grilse are not what we are talking about; that we are talking about salmon.
All the East Coast netting stations are back dated for seasonal opening from February 12 (the present date) until April 1. This is quite a useful proposal if we are serious about preserving the salmon stock as opposed to grilse. Before this debate I was in touch with the principal salmon factors in Aberdeen (Messrs. Scotsell who provide most of the fish for the London market) who confirmed what I have already been told: that for the last two seasons from the Aberdeen harbour authorities right round to Burg-head and as far up as Inverness the netting stations in that 140 miles of coastline caught less fish between February 12 and April 1 than did the rods in the rivers in the same area. This will be an astonishing fact to any of your Lordships who know that coast and know of the stake nets, jump nets, and others stretched along it, that the stations did not catch as many fish between February 12 and April 1 as did the rods fishing the few rivers in the same area. So there would not be an outcry by the fishermen: I
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think that most of them would welcome it. It is a particularly bad time of year to work sea nets on that exposed coast; there is floating weed and adverse weather conditions which break tackle and pull up the stakes and gear. I should like the noble Baroness to consider that suggestion very seriously.
My next point, which has already been made by the noble Lord, Lord Balfour of Inchrye, concerns the flapping period at the week-end—the open week-end which, until 1952 was 36 hours and which has now become 42 hours. That could be extended to 48 hours. It would give all forms of fish a better chance of passing through the various machines devised for their destruction to go on up to the rivers for spawning purposes. At the other end of the scale (and we turn now not to the beginning but to the end of the season, when rod fishing is the order of the day: I think this a worthwhile contribution to the debate) I suggest that from 1972 the rod fishing season in all Scottish rivers should end on October 1. As a corollary to that I suggest that after, say, September 20, all gravid hen fish, which, as your Lordships know, are much the most voracious fish at that time of the year, should be returned to the river as soon as they are caught. I do not think there is any real pleasure in putting a gaff into a hen fish which is almost on the point of spawning. As one noble Lord has already pointed out, we could have expected 500 to 800 ova from every pound of fish so destroyed.
I suggest that river boards, tenants and proprietors should combine to put an end to the malpractice of bait slinging and body fishing which has become acceptable in so many Scottish salmon rivers since the war. Here I am treading on rather dangerous ground, because, although no minnow, prawn or plug bait is allowed on the Beauly, I have often heard tenants say, "We have got to do something to pay the rent to these voracious Highland landlords, and the only way we can catch salmon is by using a sand eel's tail"—or some other rather unworthy device which Is quite contrary to the best traditions of the river. I do not think that anyone, if directed to do so, would feel he had been greatly inconvenienced if he had to give up these practices and go back to the old ways. It is easier to catch salmon on a bait than with a fly, but there is nothing

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worse, I think, than seeing a fellow chucking a spoon across a fast pool which has been fished for centuries by a Spey cast, and the skill required to go with it to catch fish in cold water.
I suggest, further, that the Secretary of State should re-examine the whole question of pollution and purification boards. In Invernessshire, the county to which I belong—and the same applies to Ross and Cromarty—purification boards have never been set up because they never got further round the coast than Aberdeenshire or, maybe, Nairn and Moray; and as a result the pollution is gradually seeping along the Moray Firth. It is very difficult to persuade the burghs in that area to put up the rates to install purification systems in keeping with the needs of the day. I am afraid that provosts are very touchy people who resent their civil dignity being in any way questioned, either by landowners or by someone from the landward areas of the county. But it is an inescapable fact that pollution in a mild form exists all over the Moray Firth. It is unsafe to eat mussels caught between Burghead and Beauly because they are contamniated. Yet in the old days the strongest men in the parish grew up on a diet of mussels. This has come to an end, and sooner or later we shall have the same state of affairs as has prevailed on the Firth of Forth, referred to by the noble Lord, Lord Hoy, when touching delicately on his Edinburgh background. The salmon can no longer run in the Forth into what was the river Tay, from the top of the Forth to the Trossachs, where I have caught many fish. A sailing man was heard to remark, when going on a jaunt up the Firth one day and past the Bridge, "I have sailed on the Black Sea, the Red Sea and the White Sea, but never on the W.C." And that is just about the form.
One cannot laugh at the risk to our fish population when one pauses to think of what has happened in the Great Lakes in Canada which are often referred to. These are vast inland waters where one cannot see land from one side to the other. Lake Eyrie is 75 miles to 80 miles wide, and no fish there are edible any more. They are all suffering from some sort of poisoning, which is picked up by a not very large population along the banks of that inland water. Even in the
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Baltic, in the Skagerrak, you are told not to eat fish in the restaurants; and the salmon and sea trout which literally paved some of the rivers cannot be fished for because they are not edible. They are contaminated by, I think it is, some form of mercuric poisoning. It is proposed to establish a petro-chemical consortium at Invergordon, but no safety provision has been made by the Ross and Cromarty County Council (I am sure that the noble Viscount, Lord Cromartie, will confirm this fact) because they want to get "money spinners" there. They are not interested in fishing or the future of the salmon. It is understandable, because the rates there are prohibitive, and I am sure the noble Baroness will take note—
THE EARL OF CROMARTIE: My Lords, I must correct my noble kinsman. There is at the moment no sign of any petro-chemical complex arriving there. As we know, it has been talked about for many years. I can assure my noble friend Lord Lovat that we have this very much in mind. I can assure him of that as a member of the county council.
LORD LOVAT: My Lords, I am very grateful to the noble Viscount for his remarks, but let me tell your Lordships a little story, which is against myself, referring to Inverness County Council of which I am a member. A firm applied to build a certain sort of factory in Perthshire on the banks of the Tay. Permission was refused because of the pollution risk to the river, and immediately they came North and set up in Inverness. I am quite sure that when the time comes for a petro-chemical complex at Invergordon the noble Viscount will be the first to support it.
THE EARL OF CROMARTIE: My Lords, may I ask the noble Lord to address me properly? I am not a noble Viscount.
LORD LOVAT: My Lords, I apologise. I make one last reservation: a criticism of the Hydro-Electric Board. Let me say straightaway that in the days of our greatest Secretary of State, Mr. Tom Johnston, and of my noble friend Lord Strathclyde who was Chairman of the Board, and who is present in the Chamber, no effort was spared to look after

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the salmon interests wherever possible. But one has to face the fact that these things are expensive and a hatchery at Invergarry which turned out 6 million ova, or had a potential for turning out 6 million ova, has reduced its throughput and has more or less handed over to the Ness Fishery Board. This seems a pity, but maybe it is not possible to catch fish to stock a hatchery.
But there are so many problems and so many kinds of rivers that one has to accept the fact that salmon are at a disadvantage in certain rivers where they cannot get up, and in others where they cannot get down. Certainly on the Beauly the smolt screen has been most unsatisfactory, and there is a marked reluctance to put these things right. Again I hope that the Secretary of State, even if he has to supply the finance to help the Hydro-Electric Board on this matter, will at least try—with the salmon being at such risk at the present time—to obviate some of the mistakes that have occurred. I am thinking of such things as letting oil down the river, where it destroys fry, or turning off the water so that the fry are sun-dried in the shallows or get caught out of their depth and then are dried out altogether. These are things that happen all the time, and they create enormous damage, often inadvertently. What is needed is very strict supervision.
Lastly, there is the question of damage by seals, which is much worse than people might realise. In the Moray Firth, we reckon that one seal eats two fish a day and there are never fewer than several hundreds of seals in the area. I am aware that some noble Lords have approved the idea of preserving this very remarkable animal, but there are limits, even in Conservation years.
VISCOUNT THURSO: My Lords, may I intervene for a second to correct an impression given by the noble Lord, Lord Lovat, that the River Thurso takes stock from other rivers. To my knowledge, it has never taken stock from other rivers—certainly not in my lifetime, nor, I think in the lifetime of my father. The noble Lord said that it took stock from various other rivers, but of that I am not positively aware.
LORD LOVAT: My Lords, I think it did from the Naver, about 45 years ago.
7.52 p.m.
LORD BOOTHBY: My Lords, I shall detain your Lordships for only a few minutes, because we have had some expert speeches from noble Lords with knowledge of this industry. I used to live, as Member of another place for East Aberdeenshire, within hail of five of the greatest salmon fishing rivers in the world and I had a free run of them all. I also had a certain amount of personal experience of the river with which the noble Viscount, Lord Thurso, is associated, because I used to go to Dalnawillan every year before the war. I must tell your Lordships that in all those years I caught only one salmon. That was because I had not the necessary patience, and the rod was so heavy; but I am interested in salmon on that account.
We all ought to be very grateful to the noble Lord, Lord Balfour of Inchrye, for raising this question. I think that it is not as the noble Lord, Lord Lovat tried to point out, a local problem. It is not a problem of the Hydro-Electric Board or what we should do about hatcheries or this or that. It is an international problem. I want to dwell on this point for a few moments, because I think it is important. We have already had it in our herring fishing industry. The Danes are to blame for this difficulty and I think we must face that fact. They have cleared the North Sea of herring by their absolutely ruthless fishing of immature herring for industrial processes. There is some herring off Shetland but none left on the Buchan Coast now and off Yarmouth and Lowestoft. The herring which we do get are grabbed by the Continent at very good prices. The herring are all now in the Minches, and they 'have been driven there by this ruthless industrial fishing on the part of the Danes. They are responsible for this situation and I think that we ought to blame them. Now they are doing the same thing to the salmon.
The salmon is a curious fish. I am not talking about grilse but about sea salmon, the Atlantic salmon. They swim across the Atlantic Ocean every year—I suppose just for the hell of it; I do not know why they want to do this but they do—and reach the coast of Greenland. There the Danes have been fishing them

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ruthlessly for the last three years with deep trawl nets. The salmon, if they were still alive (but they are not any more and therefore have no complaint to make), would swim across the Atlantic and go back to the rivers which they know and remember, to spawn. Our Scottish salmon fishing rivers are in very bad shape at the present time. It has been a terrible season up to date. The main reason for this, I am convinced, is that the Danes, who have no salmon rivers, have scooped up these salmon with these deep trawlers off Greenland, fished them so relentlessly that they simply do not get back to Scotland. It is important that we should bear this in mind. And if it goes on, within another 10 years what the noble Lord, Lord Balfour of Inchrye, has said will be probably true: the Atlantic salmon will become extinct as a species.
I think we have to talk strongly to the Danes and to everybody else on the subject of fisheries. The forthcoming negotiations in Luxembourg will be of great importance. If we allow these foreign trawlers, with their destructive methods of fishing, to come in and base themselves in our ports and to fish, all protection is gone. We have to be as tough as hell about fishery policies. We have great advantages as against the Danes, because they are very dependent on us. We can hardly say to the Danes that we are sick of Danish bacon, because it is the best bacon—we all know it and buy it; but if we were to say that we were getting fed up with Danish butter and Danish bacon, that would make them sit up on this fishery business. They have already ruined the herring fishery industry in the North Sea and they are in process of steadily, remorselessly, relentlessly ruining the salmon fishing industry of this country. This is the real basis of the trouble. I have had some communication with the Danish Ambassador on this question. I do not say that we should impose sanctions. I do say that we should be tough.
The word on which I would like to conclude my remarks is the one used several times by the noble Lord, Lord Balfour of Inchrye; namely, conservation. That is the most important word so far as fisheries in this country are concerned. We have got it at the moment
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We must not give it up. We have got it in our inshore waters, and to a large extent but not completely to the right extent so far as our salmon fisheries are concerned. I go some of the way with the noble Lord, Lord Lovat, about the netting of fish, especially in North-East England, and I think that we should check that. But the main thing to bear in mind is conservation. If we do not conserve our fish supplies and breeding grounds, which in the case of salmon are far away beyond our control, though we can exercise some influence on the Danes, then we shall be in for a lot of trouble in the next 10 or 15 years.
We depend very much on the fishing supplies of this country, because we export a tremendous amount of fish to the Continent of Europe. The Community of the six is completely different from the Community of Ten, of which we may be one if we get in. The Ten will become exporters instead of importers of fish. The present Six are importers. There is no inland fishing in Denmark, Belgium. Holland or France that is worth speaking about. They are being rough about it because they have no great interest in it. The great coastline of this country is prolific in fish. Since we have established the present fishery limit, the inshore fishing industry has become extremely prosperous, and we must not give that up. This is all part and parcel of the same problem. I would say to the noble Baroness. Lady Tweedsmuir of Belhelvie, (and I am sure that she will sympathise with me) that on this fishery policy she has to be tough with the Danes, the Europeans and everyone, and say that we are going to preserve our breeding grounds, our fish and everything: we are not going to give them up.
LORD LOVAT: My Lords, before the noble Lord sits down, I should like him perhaps to agree with me, so that the noble Baroness can hear, about the destruction of immature fish in our estuaries, because the Kessock herring, immature fish, are being killed out in the Inverness area, and, I am sure that this is wrong. I only make this point and ask the noble Lord to give his support, because I am 100 per cent. behind the inshore fishing. There is no question, of salmonidai also being destroyed when the bottoms of our river entries are rigged up.
LORD BOOTHBY: The noble Lord has my full support.
8.0 p.m.
THE EARL OF CRANBROOK: My Lords, it is with some diffidence, as the only Englishman to venture to raise his voice here to-day, but with a certain amount of feeling of responsibility for what the Englishman in the South may be doing to the Englishman and the Scotsman in the North, that I speak in this debate. I come from a county where there are no rivers fit for salmon—not that they are polluted, but they are otherwise unfit—and my major connection with salmon is that in that county there is one of the largest smoking establishments, which I find conveniently adjacent and cheaper than getting it by post. But we always have caught a certain amount of salmon, formerly in trammels and not yet, I think, in drift-nets, and such of those as have been marked and recovered have been recovered from North-East England and East of Scotland rivers. It is quite clear that those who occasionally come up our rivers in Suffolk and that we catch off our coasts are that cohort of the salmon population which are travelling northward to their breeding grounds: and it is as important that they should be protected there as it is that they should be protected on their breeding grounds, because it is when that group in the life cycle of any species is at risk that the species is most at risk. I think those noble Lords who have spoken this afternoon so much about the fisheries in Greenland and the Danish Strait may well be harking up the wrong tree, and that the most important thing is to control the fisheries in our own country.
May I give an example? If your Lordships go into your gardens at the moment you will see a large number of small birds which, with perhaps 10 per cent. left, will have died before next year. If you go out and shoot half of those little birds to-day, it will not make one ha'p'orth of difference next year, because the sort of damage which you do to a population at that stage is not cumulative. You do not add to the total number killed already by cats, foxes or disease by those that you shoot. By and large, in any species the number taken between the time when it comes out of the egg or its mother's womb and the time it breeds is more or less the same. The noble Viscount, Lord
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Thurso, reminded us that the salmon lays between 5,000 and 20,000 eggs. If that salmon breeds only once, only two of those eggs have to be successful and come back to the river where they were laid; and if it breeds twice, only one. That is an enormous mortality rate. I do not believe that the addition of reasonably intensive fishing on the feeding grounds is going to make an enormous difference: it is not going to add to that mortality which they will already suffer between the time that the egg is laid and the time that the hen fish comes back to spawn with the cock. I do not believe that the mortality caused by reasonably intensive fishing adds to that which takes place to the egg which is washed away, the par which is eaten by a gooseander, the feeding fish which is eaten by a seal, a shark or a larger fish, or netted by a Dane.
LORD BOOTHBY: My Lords, may I interrupt the noble Earl for a moment? If he does not believe that too intensive fishing of immature fish has any effect, how does he account for the fact that during the last four or five years the North Sea has been denuded of herring altogether?
THE EARL OF CRANBROOK: My Lords, I have no doubt that the noble Lord is as fond of herring as I am. I like those with roe in them. The great trouble is that the difference between your herring fishery in the North Sea and the salmon fishery off the Greenland coast is that at one stage you are killing the breeding stock, the herrings with roe in them, and at the other stage you are killing the immature salmon down to 11b., 21b. and 31b. in weight on their way to growing up to becoming adult. I do not want to stress this point too much, but I think it is important in our negotiations over fisheries that we do not make statements which can fairly easily be refuted by reference to what the ordinary ecologist knows about almost every species.
Fundamentally, if you are going to preserve an animal you have to preserve it at its breeding station and not at its feeding station. I know nothing about the laws which control salmon fishing in Scotland, and I know very little about what happens with river boards in England, but I do know that the river boards here have much more control

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over what goes on in the English rivers than there is over the Scottish rivers. I believe the important thing is to keep the salmon at the sort of level which it has been for many years past. The noble Lord, Lord Hoy, referred to pollution. We are already beginning to see some of our rivers become fit for fish which have not lived there for perhaps fifty years. One hopes that more will become fit for salmon to run up again—rivers which have not been run up for the better part of a hundred years. We can do that only by controlling the salmon at the stage when they are coming up to spawn. That means not only in the rivers themselves, but round my part of the coast, 200 or 300 miles away from where they are ultimately going to spawn, certainly off the North-East coast of England and in the seas off the coast of Scotland. That is the stage where I think we should be controlling them, and that is the stage which I hope the noble Baroness who is going to reply will say that the Government are going to start controlling now. If we control that, I believe that the Atlantic fishing is something that we have to investigate and perhaps control, too, by international agreement. However, one despairs of international agreement when you see what has been done to the whales. But I think we could do most of it ourselves, and I hope that we shall not go attacking the Atlantic fishing when I believe that the remedy lies in our own hands.
8.9 p.m.
LORD STRATHCLYDE: My Lords, having heard this evening of the seriousness of the situation, and indeed of the very real threat to the continued existence of Atlantic salmon, of which noble Lords have spoken, surely no Member of your Lordships' House can doubt the urgent need for Her Majesty's Government to take all possible steps, by international negotiations or otherwise, to remedy the existing situation. The Atlantic salmon is a great Scottish asset, and particularly so in that part of Scotland for which the North of Scotland Hydro-Electric Board is responsible, not only for providing light and power but for doing everything possible to improve the social and economic conditions within its area of operations which, may I remind your Lordships, stretches North and West of
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a line roughly drawn between Dundee and Dumbarton. That is in fact about two-thirds of the land area of Scotland. The Board's first chairman was the right honourable Tom Johnston, the man to whom the people of Northern Scotland owe so much, for due to his vision, foresight and drive to-day they enjoy the amenities provided by having at their disposal practically unlimited supplies of electricity.
Mr. Johnston saw his task as more than providing electricity. He wanted the people of the North to enjoy the fullest possible life, and to that end saw that every asset the North possesses must be fully developed. One of these assets which could draw tourists to the North, provide employment and a greater flow of money, was fishing by rod in its many rivers; and so Mr. Johnston took steps to maintain and increase the salmon population. Among these steps was the setting up of hatcheries in suitable places, the largest of which, as mentioned by the noble Lord. Lord Lovat, was at Invergarry. From these hatcheries fry were planted in the head waters of all the rivers in the area. In the year 1968–69 the number of fry planted amounted to 9,915,000; in the following year. 1969–70, the number fell to 3,143,000, and in 1970–71 it was 3,434,000.
In the Board's Annual Report for 1968–69 it is stated that there was a general decrease of about one-third from the number of fry planted in 1967, that being due to fewer fish entering the rivers from the sea and to the appearance of disease. But in 1969–70 and 1970–71 the number of fry planted fell by one-third of the number planted in 1968 which, as I have already said, was one-third less than in 1967. Here again, the Annual Report speaks of fewer fish entering the rivers and of the effect of disease. But in none of the reports is there any mention whatsoever of the closing down of any of the Board's hatcheries or of their being used below capacity. I have therefore assumed that the decline in the number of fry planted is due solely to fewer fish being available for stripping. If, on the other hand, it is not due to the fewer number of fish available but to the closing down of any hatchery, as stated by my noble friend Lord Lovat, at a time when every resource should be used to offset the effects

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of disease and excessive netting of salmon in West Greenland waters or elsewhere, that is deeply to be regretted.
One can only hope that in the existing circumstances the Board may see their way to ensuring that every obtainable ova is collected and that their hatcheries are used to capacity, thus offsetting to the greatest possible extent the threat to Atlantic salmon arising from over-fishing wherever that may be taking place, and so leading to the greater prosperity of the North of Scotland.
8.14 p.m.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am sure we are all grateful to the noble Lord, Lord Balfour of Inchrye, for giving us a chance to discuss what is a very important subject indeed. He has given us powerful views from his great knowledge, which I know well because we have spent happy days fishing together. I am afraid, however, that I must at the start of my remarks take issue with him when he suggests that my honourable friend, the Under-Secretary of State in another place, did not appear to realise the seriousness of the position so far as the Atlantic salmon is concerned. The noble Lord quoted from a recent Question and Answer, and I should like to quote exactly what the Question was. The Under-Secretary was asked whether he would not agree that by 1973 the Scottish salmon is very likely to be extinct. Therefore it is not surprising that my honourable friend replied:
" I do not share my honourable and gallant Friend's fears for the future."—[OFFICIAL REPORT, Commons, 23/6/71: col. 6410–11]
But he did say afterwards, when he was asked about Greenland:
" This gives us great cause for concern."
I should like to say at the very start that when we look at the Question on the Order Paper it asks us in the first part whether Her Majesty's Government are aware of the serious risk that the Atlantic salmon could become an extinct species of fish unless urgent measures are taken in both home and international waters for conservation of stocks, and what action we propose to take. I would reply that certainly we are aware of serious risks to the Atlantic salmon, but we cannot say from the figures, which I shall quote to this House, that we believe that at this moment in time there is a likelihood
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of its becoming extinct. This is the point. But we certainly agree that we should take measures, both at home and overseas, to do the best we can for the conservation of stocks.
The salmon, as my noble friend Lord Strathclyde has just told us, is a very great Scottish asset, not only for sporting purposes but also from an economic point of view. We are trying both within this country and overseas to secure measures which are effective to prevent the salmon from becoming too few in number for the safety of the species, which I think is the way I would put it to the House. As your Lordships will know, over the country as a whole there is no means of accurately measuring salmon stocks, because we do not know how many salmon return each year to their native rivers to spawn. The statistics of catches give us sonic idea of the position, and of course the Scottish statistics are collected annually by my Department from proprietors of salmon fishings and are published each year. Perhaps the noble Lords who have been good enough to take part in this debate will find the statistics interesting, because they are as up to date as I can get them. These figures show that, in spite of the effects of high seas fishing and salmon disease, the Scottish catches of salmon alone, excluding grilse, in the period from 1966 up to and including 1969 were well within the range recorded since 1952, and that exceptionally high grilse catches were recorded during the same period. I would say to my noble friend Lord Lovat that the grilse becomes the salmon: it is the same species.
The 1970 catch of salmon was without doubt very poor; but noble Lords with long experience in these matters will know very well that fluctuations can occur for many reasons, some of which are unknown to us, and it is perhaps safer to judge by periodical average figures. The average annual catch of salmon alone in the period 1966 to 1970 was 8,704 fewer than in the period from 1956 to 1960, when there was no high seas fishing and no salmon disease. The average annual catch of grilse from 1966 to 1970 was about 105,000 higher than the average for 1956 to 1960. If the catch of grilse and salmon is combined, the average annual catch of the species in Scottish rivers and coastal waters in the period from 1966 to 1970 was about 100,000 higher than between 1956 or

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1960. I do not think the Scottish figures suggest that the salmon is near extinction, but that does not mean that I do not share the view, expressed by all who have spoken, that we have to do our very best for conservation both at home and overseas.
My noble friend Lord Balfour of Inchrye said that he thought that we should first set our own house in order. Indeed, the points made by my noble friend, who as an Englishman, was brave enough to speak in this debate, were, I thought, very interesting. He took the view that what we have to protect (if I quote him correctly) is the breeding station and not the feeding station. He spoke with enormous knowledge of the great mortality and hazards there are for salmon eggs. I will take in order first what we can do at home and then what we can do overseas. I take the point made by my noble friends Lord Balfour of Inchrye and Lord Lovat, that some consideration should be given to limiting netting and shortening the period of fishing. We have been going quite closely into this question of period of fishing. The periods date from old Acts, and in many cases to alter them legislation would be required. This is the kind of thing we are considering in connection with the Hunter Report. Therefore perhaps this is the moment to say to this House, as I said when we debated the Order, that we will make an announcement without doubt within the period of the Order, and very much sooner than later. Noble Lords opposite, after all, had five years in which to consider this matter, but we know that we shall be very much quicker than that.
The noble Lord, Lord Hoy, and my noble friend Lord Lovat raised the question of pollution of rivers. I agree that this is an extremely important matter because I learned some rather dreadful facts when for five years I was Chairman of the Water Pollution Control Committee, under the British National Export Council. I think it true to say that the Prevention of Pollution Acts of 1951 and 1965 have done a great deal. They gave certain powers to river purification boards to control discharges into rivers and certain tidal waters. I think that some progress has been made, but it is
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perfectly true that the longer the pollution problem is left the greater is the cost involved. I think it also true that probably only over the last five years have people become personally concerned about pollution and contamination in all its forms. I think there is now a very much greater demand from the general public that industry, wherever it is established, should have to observe certain standards of discharge of effluents, as is necessary under legislation.
So we have, first, the kind of legislation necessary under the Hunter Report proposals. Then we must consider the question of drift-net fishing. The Order to which several noble Lords have referred, approved by this House in February of this year, extended the ban for two years for Scottish waters, but of course there is no similar ban off the coast of Northumberland and North-East England. It is true that drift-net fishing for salmon off Northumberland is a traditional fishery. It has been carried on for many years within three miles of the shore under licence from the Northumbrian River Authority and from three to twelve miles under licence from the Minister of Agriculture, Fisheries and Food, but almost all the catch comes from within the three miles.
In the northern part of the area a net limitation order restricts the number of nets of all kinds to 70. Without an order in the southern part, licences are granted on request. I understand that last year 148 such licences were issued, and the total this year exceeds 240. The catches taken in this fishery within the three-mile area have greatly increased in recent years, from over 14,000 salmon and grilse in 1966 to 47,000 in 1969 and 86,000 in 1970. Last year, an additional 5,000 were taken beyond the three miles. It is therefore only too clear that these catches are not being taken from stocks belonging to rivers in the area, for there are no local rivers capable of supporting runs of this magnitude. That is why this increase is causing a very great deal of concern, not only among all those noble Lords who have spoken to-day, but particularly throughout Scotland, because it appears probable that the salmon are homing to Scottish rivers. I must say that I share very much the anxieties on this count which noble Lords have expressed to-day because this situation bears a

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strong resemblance to the one which developed off the Scottish coast until drift-netting was banned in 1962. But there are differences, and I think it only fair that I should make them clear. Fishing for salmon off England is a public right, and, as I said earlier, it is traditional. In a way it is the counterpart of the traditional fishing which we have, such as stake-net fishing, or what is called fish engine fisheries, in Scotland.
Up to last year there was no sign that this development was at the expense of the Scottish commercial catch because although the Northumbrian catches in 1968–69 were the highest recorded, the total Scottish and Tweed catches were also very good. The percentage relation which the average annual catch in England and Wales bore to that in Scotland did not differ very much over the years. However, in 1970 there was a very different position because, as I have said, there was a very large increase in the Northumbrian catches of salmon and grilse, and these were correspondingly accompanied by drastic reductions in Scottish catches. Whether or not any conclusions can be drawn from the performance of one year is, of course, debatable.
What is going to happen about it? I understand that the river authority has decided to make an order for the southern part of this area providing that not more than 40 licences shall be issued for all kinds of net fishing for salmon and migratory trout. This, of course, requires to be advertised and submitted for ministerial approval, and if there are objections a public inquiry has to be held. I cannot therefore say any more at this stage except that by-laws which are awaiting consideration following a public inquiry will also restrict the length of net to 600 yards. I particularly wanted to make this clear because several noble Lords have said how important it is that the aims of conservation should be the same both North and South of the Border, even if they are not exactly in the same terms.
The noble Lord, Lord Balfour of Inchrye, asked me about monofilament, and so did my noble friend Lord Lovat. The problem, when we are seeking to reduce costs and increase efficiency, is whether it would be right to ban monofilament.
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It is true that its use on the high seas has been banned or severely restricted internationally by agreement. This was part of a package deal in the particular circumstances of the high seas fisheries, and it may be that if we want additional controls in home waters the right way to deal with the problem will be to limit the catch. It is certainly true that there is a danger in the great growth of the use of monofilament, whether in drift-nets off England and Wales or in hang-nets in Scotland. It might lead to an expansion in the scale of netting or the catch taken by this method. Although there are powers in England and Wales to deal with the use of monofilament, no such powers are available to my right honourable friend the Secretary of State. But we are considering, with very great care, how and whether we should take them.
My Lords, I should now like to turn to the international scene, on which the noble Lord, Lord Hoy, in particular, asked me several questions, and to which the noble Lord, Lord Boothby, also referred. There is a very real fear that the development of sea fisheries for salmon off Greenland and elsewhere will increase the exploitation of salmon to a dangerous level. That is why we are all here tonight. We have tried to secure effective restrictions, particularly off Greenland. The essence of the problem is that fishing takes place not only on the high seas and off Greenland but also inside their national fishery limits. Therefore we can only work within the international fisheries Commissions.
At the 1970 meeting of the North East Atlantic Fisheries Commission and the International Commission for the North West Atlantic Fisheries, measures were agreed to restrict the sea fisheries off Norway and Greenland. The agreement reached for the North East Atlantic area lasts for 1971 and 1972. However, I am also glad to say that at this year's meeting we have been successful in securing the addition of a large closed area surrounding the United Kingdom and the Republic of Eire. This is roughly 160 miles East of Berwick, 200 miles West of Scotland and 100 miles North of Shetland. Within it fishing for salmon outside national fishery limits will be completely banned. I suggest that this should prevent the establishment of a fishery to

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exploit United Kingdom salmon—especially grilse—on their return routes to this country. This ban will be reviewed at the same time as the agreement reached in 1970.
As for the Greenland fishery, it became clear in 1969 that because of the growth in the catch taken within the 12-mile national fishery limit, a complete ban on high seas fishing applying outside that limit would be ineffective in curbing the growth of the fishery. Denmark, of course, continues to resist such a ban, but she agreed in 1970 to restrictions applying both outside and inside the 12-mile line, including a limit at the 1969 level on the tonnage of ships engaged in the fishery or in the amount of catch. This agreement was to operate this year and it has not yet, therefore, been tried out in practice, as the fishing there would start about August. This year's meeting of the North West Atlantic Commission took place early in June. The United Kingdom delegation went with an open brief to support the most effective arrangements for restriction on which agreement could be reached. We should have liked a tightening of the restrictions agreed in 1970, but it became plain that if we were to insist on this it would result either in no agreement at all or one which would be frustrated and ineffective from the start, because it was unacceptable to Denmark, as the noble Lord, Lord Boothby, seemed to know. The result of the meeting, therefore, was a proposal by the Commission that the measures agreed upon for 1971 should continue in operation for two more years, subject to review in the event of substantial changes in various factors.
The noble Lord who started this debate asked me whether it was a fact that the United Kingdom had abstained on any vote. It is a fact, but I should like to explain the circumstances, and perhaps the noble Lord and the House will support us in what we did. At the 1971 meeting of the North West Atlantic Commission Canada proposed that the arrangements approved in 1970 for operation in 1971, which included limitations on tonnages of vessels or catch, a close season and a ban on the use of monofilaments, should be continued, but with two changes: first, a cut back in the number of vessels employed, or in the
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catch, to 80 per cent. of the level of 1969; secondly, a limit of eight nautical miles on length of nets fished at any one time from any one vessel. The Danish delegation could not accept this proposal. It felt unable to consider new restrictions until the effect of those agreed last year for this year had been studied. The United Kingdom delegation made it clear that it was in favour of greater restrictions on the Greenland fisheries, but saw no point in supporting the proposals which were unacceptable to Denmark and the other countries engaging in the fisheries, because this would result in no obligation to apply any restrictions at all. It was in these circumstances that the United Kingdom delegation abstained from voting on the Canadian proposal.
LORD BOOTHBY: My Lords, may I ask the noble Baroness one question? Why did not we turn the heat on the Danes?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I am sure the noble Lord will agree, the whole point of these international commissions is to try to get these restrictions, or these conservation measures, by agreement, as the noble Lord, Lord Hoy, said in his opening speech. He said that we can influence but we cannot impose. Therefore, there was a certain degree of justice in the Danish remark that the agreements to which they had promised to adhere for 1971 had not yet been put into practice because of the fishing season, and they would rather see how this had worked out in practice. Therefore the answer to the second question which the noble Lord, Lord Hoy, asked me is that these arrangements were ratified.
Nevertheless, in spite of the fact that we did not get everything we wanted, the arrangements for the North West Atlantic seem to me to be important on two counts: first, the Danish Government accepted the principle of restrictions applied inside as well as outside national fishery limits, and to confine any measures to the sea outside these limits would not necessarily limit the growth of the fisheries. Secondly, there are signs that the growth may have been checked even before the arrangements take effect. I say, "may have been checked" because I was asked the total

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of the catch. In 1969, the total catch at West Greenland by all methods and nationalities amounted to 2,210 metric tons. In 1970, the figure is thought to have declined slightly to 2,146 metric tons. This is before these new restrictions, or conservation measures, had been brought into effect.
As part of the international scientific investigations into the fisheries the Joint Working Party of Scientists, the chairman of which is my Department's Director of Fisheries Research, concluded in 1970 that a catch of about 2,200 metric tons at West Greenland would result in losses ranging somewhere between 1,100 and 2,700 metric tons in all home water stocks, and between 650 and 1,600 metric tons in all home water catches, the largest proportion of losses being experienced in Canada and the United Kingdom. Without doubt these figures are formidable. But I think that from the latest figures we have we can perhaps consider them as upper limits. What we have to do now, through the measures I have put before your Lordships, is to increase our efforts to reduce them. But I would also suggest that these figures, when taken together with the levels of the catch in home waters, do not show that the species is heading for extinction. This is very important, because this of course was the burden of the Question as framed by the noble Lord, Lord Balfour of Inchrye.
On research, I should like to say, briefly, how much I think this House and everyone appreciates what is being done upon the River Thurso. I myself found it quite fascinating and should like to know the reason why, when the total number of fish was 2,069 the catch was 22 per cent., and when it was 3,297 the catch was 10 per cent. It is only an indication how little we know about this most remarkable and fascinating species. I thought that the noble Earl, Lord Cranbrook, gave us some very interesting comments on the research side. And I should like to say to my noble friend Lord Strathclyde that I am glad that he was able to tell this House how much the Hydro-Electric Boards have done to try to improve the stocks in the rivers on which they have a claim.
My Lords, I think I should end this debate by referring to the question raised
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by the noble Lord, Lord Boothby, concerning the negotiations that are to take place on July 12 concerning fisheries policy. I think I have never heard the noble Lord make a speech without referring to herring, so I would bring him back to the fact that this is a debate on the salmon. Nevertheless, it is important to remember that in Scotland the right of salmon fishing is a private right, and that it extends three miles out from the shore. This in itself is a safeguard—I am speaking only of salmon. Beyond this, of course, the United Kingdom proposal to the Commission would reserve to British boats our exclusive fishery limits, extending out to six miles from the base line. I think there has been a little confusion between the exclusive rights up to six miles and the fishery rights of the possible Ten members between six and twelve miles. Off Scotland, the prohibition we have imposed on fishing for salmon within our present national fishery limits extending out to twelve miles from base lines applies to all British boats, and as a non-discriminatory measure could be continued and would apply to all Community vessels fishing in that area if it were done under regulations for conservation purposes. This is very important.
I would end this debate, my Lords, by thanking all those who have taken part, and in particular the noble Lord who has given us the opportunity to debate this subject, and to assure him that, as a member of the Government, I can say that we in the Scottish Office are determined to do everything we can, both at home and overseas, to conserve this very great national asset.
LORD LOVAT: My Lords, before the noble Baroness sits down, may I ask her to answer three rather important questions she has left out? One is the slapping period at the weekend. The second is the suggestion about cutting the netting season to April 1, and the third is about ending the rod fishing season on October 1.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I did in a general way, reply to all those points. In fact, I referred particularly to altering the netting times, and perhaps limiting

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the netting off the coast, in the very first of my remarks. I said that it would need legislalion because I found that the dates for each district in Scotland were originally fixed by Commissioners acting under the Salmon Fisheries (Scotland) Acts 1862 and 1868. The Acts empower district boards to petition the Secretary of State for changes in the dates of the annual close season; but no change is possible, of course, in districts where boards do not exist. But I should also say that where they do exist no petition has been received and therefore legislation is needed. I also referred to the fact that we were considering this matter in relation to the Hunter Report.

BRITISH TRANSPORT DOCKS BILL
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Order made on April 26 last discharged, and Bill committed to the Committee on Unopposed Bills.

D. & J. FOWLER LIMITED AND ASSOCIATED COMPANY BILL
Brought from the Commons; read 1a, and referred to the Examiners.
House adjourned at fourteen minutes before nine o'clock.