Sitting of 31 March 1971

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

    Housing Cost Yardsticks
    Mr. Chapmanasked the Secretary of State for the Environment what representations he has received from local authorities and the building industry on the current levels of housing cost yardsticks; and if he will make a statement.
    Mr. Geoffrey Finsbergasked the Secretary of State for the Environment what evidence has been submitted to his Department since the invitation to local authorities last May to comment on any aspect of the cost yardstick system; and whether, in the light of this evidence, he now considers alterations in the system are necessary.
    The Minister for Housing and Construction (Mr. Julian Amery): I have received representations from the local authority associations and the building industry about the level and structure of the housing cost yardstick. These are currently being studied.
    Mr. Chapman: As the housing cost yardstick would have to be increased by about 12 per cent. to maintain its real cost level as compared with July, 1967, does not my right hon. Friend agree that its present inadequacy is affecting the design, layout and standards of housing, and that because of this too many local authorities are negotiating ad hoc arrangements which are bringing the whole, over-complex system into disrepute?
    Mr. Amery: I can assure my hon. Friend that I am very conscious of the point he has just made.
    Mr. Finsberg: Is my right hon. Friend also conscious of the fact that the inordinate delay in bringing the yardstick up to date is not contributing to the success of the housing programme, although we bear in mind that its introduction was a major contributory factor in the slowing down of the housing programme under the last Government?
    Mr. Amery: My hon. Friend will recognise that announcements about the yardstick, like announcements about Bank Rate, must be made at the moment when they are made and cannot be anticipated in discussion.
    Mr. Arthur Jones: Does my right hon. Friend think that fixed-price tendering is significant in the question of the yardstick?
    Mr. Amery: I hope that my hon. Friend will agree that our adherence to the policy of fixed-price tendering was one of the factors which enabled us to give the Budget which we gave yesterday.
    Mr. Wellbeloved: What representations has the right hon. Gentleman received from the Greater London Council about the application of cost yardsticks to its Thamesmead development, where the costs are almost double the cost yardstick arrangements laid down by the Ministry?
    Mr. Amery: If the hon. Gentleman would like to put down a Question on that specific point, I should be glad to answer it.

    Housing Subsidies
    Mr. Skinnerasked the Secretary of State for the Environment whether he has now completed the consultations with the local authority associations regarding the new form of housing subsidies.
    Mr. Amery: Consultations are still in progress.
    Mr. Skinner: Is the right hon. Gentleman aware that the longer the consultations with the local authority associations go on, the more alarming the prospect of massive council rent increases becomes? Will he now tell the House that there will

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    be no council rent increases of £1 a week as a result of the negotiations and the cuts that will follow?
    Mr. Amery: I must ask the hon. Gentleman to await the conclusion of my discussions with the local authority associations. As I have said previously, I shall make as full a statement as possible to the House when they are over.
    Mr. Frank Allaun: How did the councils react to the right hon. Gentleman's recent statement that loans already entered into for 60 years at 4 per cent. will not be honoured? Is not it inevitable that his scheme, whatever it is, will mean the doubling and trebling of many council rents following the reduction of the subsidy by £150 million a year?
    Mr. Amery: The hon. Gentleman is asking two questions which are not on the Order Paper. We have been discussing with the local authority associations the method of progressing to fair rents.
    Mr. Crosland: Has the right hon. Gentleman seen the recent report of the National Economic Development Office suggesting that council house building, if nothing is done, is likely to decline throughout the decade? What element in the proposed new policy is likely to arrest that decline?
    Mr. Amery: The right hon. Gentleman should await my fuller statement when my deliberations with the local authority associations are completed. But I can say here and now that one aim of our proposals is to give the local authorities greater resources and greater incentive to build in the areas of stress.

    Heavy Lorries (Nuisance and Loss of Amenity)
    Mr. Michael McNair-Wilsonasked the Secretary of State for the Environment whether his Department will carry out a survey of London roads used by heavy lorries to assess the amount of nuisance and loss of amenity caused by this type of vehicle.
    The Secretary of State for the Environment (Mr. Peter Walker): No, Sir. This would be a matter for the Greater London Council.
    Mr. McNair-Wilson: Does my right hon. Friend agree that there is a need for
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    plans for all the major cities, especially London, because heavy lorries trundling through residential areas cause damage through vibration and problems and considerable stress to the residents through noise and inconvenience? Will he look at the experiment of having totally lorry-free zones which is to be carried out in the centre of Paris?
    Mr. Walker: Yes, Sir, but traffic control is a matter for the local authorities. We are looking worldwide at experiments in this sphere and advising the traffic authorities about them. There is need for proper traffic control over heavy lorries.
    Mr. George Cunningham: Will the right hon. Gentleman recognise that the efforts of the G.L.C. on this matter are to some extent impeded by the attitude of the Metropolitan Police and the difficulties of administration? Will he have discussions with the Home Secretary on that point?
    Mr. Walker: We are constantly having discussions about enforcement by the police and others through traffic and parking control. I agree that if parking control were properly enforced, it would help the flow of traffic considerably.

    Channel Tunnel
    Mr. Sheldonasked the Secretary of State for the Environment if he will now make a further statement on the Channel Tunnel.
    The Minister for Transport Industries (Mr. John Peyton): The French Minister of Transport visited London on 22nd March for talks on the Channel Tunnel project with representatives of the international private group. I will with permission circulate in the OFFICIAL REPORT the text of the communiqué.
    Mr. Sheldon: Will the reply give any of the figures the right hon. Gentleman promised to give me if I put down a Written Question—but which I have not yet received? Will it include any possibilities of examining alternative methods of a Channel link, including a roadway? Is the right hon. Gentleman aware that new studies are required going even further than that which he is prepared to have because, even if his Department has stood

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    still in this matter over the last nine years, engineering technology has not?
    Mr. Peyton: There is no disagreement between us here. There is no question of my Department having stood still for nine years. We are engaged on the first phase of the final studies which will produce the figures for which the hon. Gentleman has persistently and properly asked. As soon as they are available, I will make them available to the House.
    Mr. Dodds-Parker: Does not my right hon. Friend agree that an early decision to go ahead with the Channel Tunnel would take a considerable load off the number of aircraft landings envisaged for the rest of the decade?
    Mr. Peyton: My hon. Friend is right in pointing out that the tunnel is merely an alternative among the choices of ways of crossing the Channel. In future, there will be a greatly increased demand for facilities and the tunnel is, in my view, one of the tidy and acceptable alternatives—provided, of course, that the final studies turn out as we hope they will.
    The text of the communiqué is as follows:

    Channel Tunnel

      CHANNEL TUNNEL—A NEW PHASE BEGINS
      Monsieur Jean Chament, French Minister of Transport, visited London yesterday for talks on the Channel Tunnel with Mr. John Peyton, Minister for Transport Industries.
      The talks were held at Lancaster House, where M. Chament and the French Ambassador, Baron de Courcel were entertained at lunch and where the two Ministers later held a joint meeting with British and French representatives of the international private group which in 1970 submitted proposals to the two governments for the finance and construction of a rail Channel Tunnel.
      A list of current membership of the private group is beneath.
      The two Ministers have since announced that they have chosen the Group for the further pursuit of the project and that the next phase is to begin at once.
      The two Ministers and the Group have agreed the Heads of Terms on which the completion of final studies and preliminary works will be undertaken, and the basis for negotiating the terms on which the Tunnel could subsequently be built and operated.
      The Tunnel would be financed partly from private risk-capital (10–30 per cent.) and partly by government-guaranteed debt. Private-sector Companies set up by the Group in Britain and France would arrange the finance and construction, hand over the completed Tunnel to the operating authority and be remunerated from its revenues. The Companies would
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      receive a share of profits and a degree of control over the commercial policy of the tunnel related to the degree of risk they assumed, subject always to a sufficient degree of public control to safeguard the public interest.
      For the meantime, the Group have agreed to make an immediate start, at their own expense, on the first phase of these final studies, lasting one year. The two governments would buy these studies from the Group, at cost, if, for any reason, the Governments and the Group should be unable to enter into a formal agreement covering the next stage of the project.
      On present estimates the final decision to build the Tunnel would be taken in 1973, with the Tunnel coming into service in 1978.

      CHANNEL TUNNEL

        MEMBERSHIP OF THE PRIVATE GROUP
        The Channel Tunnel Company Limited.

        The Rio Tinto-Zinc Corporation Limited.

        Morgan Grenfell & Company Limited.

        Robert Fleming & Company Limited.

        Hill Samuel & Company Limited.

        Kleinwort, Benson Limited.

        British Railways Board.

        S. G. Warburg & Company Limited.

        Morgan Stanley & Company.

        The First Boston Corporation.

        White, Weld & Company Limited.

        Campagnie Financière de Suez et de l'Union Parisienne.

        Compagnie du Nord.

        Banque Louis-Dreyfus.

        Banque de Paris et des Pays-Bas.

        Banque Nationale de Paris.

        Crédit Lyonnais.

        Société Générale.

        Banque de l'Union Européenne Industrielle et Financiére.

        Crédit Commercial de France.

        SNCF.

      Thomas Cook & Son Limited
      Mr. Sheldonasked the Secretary of State for the Environment if he will now make a further statement on the proposed sale of Thomas Cook & Son.
      Mr. Peyton: Not yet, Sir.
      Mr. Sheldon: Does the right hon. Gentleman intend to demand a valuation of the assets of Thomas Cook? What will be the basis of that valuation? If he has no valuation, how can he say that bids will be high?
      Mr. Peyton: I hope that the Chairman of the Transport Holding Company will be able in due course to provide me with a reasonably good assessment of the value of the assets of Thomas Cook. I hope that the eventual sale will yield a price substantially above any valuation that is likely to emerge.
      Sir G. Nabarro: Does my right hon. Friend recall that, between 1951 and 1955, the Tory Party dilly-dallied on the denationalisation of heavy road transport, with the result that, in 1956, the rump of such transport was left in public ownership and never denationalised? Will he, therefore, get on with the Thomas Cook operation, selling upon the open market at the highest price and not wasting a moment in the process?
      Mr. Peyton: I assure my hon. Friend that there is no intention in the Government to dilly-dally with the sale of Thomas Cook and Son.

      Empty Houses (Short-Term Accommodation)
      Mr. Geoffrey Finsbergasked the Secretary of State for the Environment if he will issue a circular to local authorities urging greater use to be made, as short-term housing accommodation, of houses standing empty pending redevelopment.
      Mr. Amery: A circular letter to this effect was sent to all housing authorities in London, where the problem is particularly important, on 4th July, 1969.
      I recently reinforced the point in a speech which I made on 12th February, 1971. to the London housing managers. I will send a copy of the circular and of my speech to my hon. Friend.
      Mr. Finsberg: Is my right hon. Friend satisfied with the response he has received so far? Have any boroughs in London, in addition to the progressive borough of Camden, taken any action on this?
      Mr. Amery: I think that some have done better than others.

      Peak District National Park
      Mr. David Clarkasked the Secretary of State for the Environment if he is satisfied that there is sufficient public access to open moorland in the Peak District National Park; and if he will make a statement.
      Mr. Peter Walker: The Peak Park Planning Board propose shortly to submit to me, and to advertise, a map showing the extent of land in the national park open to public access. It would not be appropriate for me to comment at this
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      stage on whether there is sufficient public access since I shall have to consider any representations that are made.
      Mr. Clark: I thank the right hon. Gentleman for that reply. I, too, am pleased that this matter is going well. Is he aware that there is concern in the Peak District over the fact that there are many acres of uncultivated land immediately adjacent to the Pennine Way over which the public rarely go on to the Pennine Way because of huge "Private—keep off" signs?
      Mr. Walker: I am aware of those anxieties. The Commission is doing all it can to gain access for the public to national parks.
      Mr. J. H. Osborn: Will my right hon. Friend ensure that members of the public who want to go through the Peak District can do so easily and quickly? Will he give consideration to the construction of a motorway through the Peak District from east to west?
      Mr. Walker: Motorways through national parks are not the most popular thing but I will consider what my hon. Friend has said.
      Mr. Blenkinsop: Will the right hon. Gentleman take this matter rather more widely? Will he approach every local authority where the same problem exists and emphasise the need to advertise the possibilities of public access?
      Mr. Walker: Yes, Sir.
      Mr. Denis Howell: Will the right hon. Gentleman take up with owners and occupiers of land in national parks the question of the rights of the public? There have been some unfortunate incidents. For example, instructors of the C.C.P.R. have been threatened with shotguns by irate farmers in Snowdonia. Very often, the occupiers of such land are not aware of their responsibilities to members of the public in national parks.
      Mr. Walker: Yes, Sir. We are doing all we can.

      Royal Commission on Environmental Pollution
      Mr. David Clarkasked the Secretary of State for the Environment if he will make a statement on the First Report

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      of the Royal Commission on Environmental Pollution.
      Mr. Peter Walker: I strongly welcome this Report and I look forward to the future contribution the Commission can make to the development of our policy. I particularly welcome their intention to study the pollution of estuaries and inshore seas. I cannot forecast a date for their next report. My right hon. Friends and I are losing no time in studying their recommendations and in preparing to take the action that is needed.
      Mr. Clark: I thank the right hon. Gentleman and I associate myself with his welcome to the Report. Is he aware, however, that there is a feeling in some quarters that the Commissioners have perhaps dealt with what I call certain "trendy" aspects of policy and have not paid enough attention to the historical industrial dereliction problems?
      Mr. Walker: Over all, I thought it was a good Report and fairly objective and that perhaps it did not pursue some of the more fashionable lines which the Royal Commission might have been tempted to do. In my talks with Sir Eric Ashby and others, I found that they are fully aware of the problems of the clearance of derelict land.
      Sir R. Thompson: Is my right hon. Friend aware that more and more people are becoming seriously alarmed at the decay in their environment and that anything he can do to speed up implementation even of parts of this Report will be very welcome to the country at large?
      Mr. Walker: Already in terms of certain planning matters relating to water, air and noise pollution we have taken quite a few measures.
      Sir G. de Freitas: Since the Report is so widely accepted as being enormously important, will the right hon. Gentleman do all he can to get a debate in the House on it?
      Mr. Walker: I should be happy to have a debate, but that is not a question for me.
      Mr. Foxasked the Secretary of State for the Environment whether, in the light of the First Report of the Royal Commission on Environmental Pollution, he will initiate further research
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      into the effects of pollution from road vehicles; and if he will make a statement.
      Mr. Peter Walker: I agree that further research is needed and plan to ensure that it is carried out. I am arranging for up-to-date measurements of lead concentrations to be obtained and will publish the results.
      Mr. Fox: Would my right hon. Friend bear in mind that any increase of costs on the consumer or user would be quite intolerable and so unacceptable?
      Mr. Walker: We have to make a proper estimate of the dangers which may or may not exist and that is why I am seeking the most up-to-date information, and I will make an assessment on that.
      Mr. Atkinson: Is the right hon. Gentleman aware that his predecessor promised the House that he would look into the possibility of appointing engineers to the Royal Commission, other than the Chairman who was already there and who is a chemical engineer? Will he now promise to do that? Secondly, will he ask the Royal Commission to look into the dangers of pollution posed by the introduction into this country of the Wankel rotary engine and ask the Commission to give priority to a study of this engine, because it is believed by many leading engineers in this country and elsewhere that the Wankel rotary engine has a greater effect on pollution than the orthodox, traditional engine now used in this country?
      Mr. Walker: I take note of the hon. Member's suggestion and I will certainly convey it to the Chairman, but this is the sort of work which is in the hands of the Commission and is not directed by me. However, I will bring the hon. Member's remarks to the attention of the Commission.
      Mr. Foxasked the Secretary of State for the Environment what steps he proposes to take, in the light of the First Report of the Royal Commission on Environmental Pollution, further to reduce traffic noise.
      Mr. Peyton: I have already published proposals to reduce as from 1st October, 1973, the maximum permitted noise levels for most types of new vehicles.
      Mr. Fox: In thanking my hon. Friend for that reply, may I ask him whether he

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      will bear in mind that the previous Government announced steps in this direction, and that to get the desirable results we need enforcement?
      Mr. Peyton: Yes, I entirely accept what my hon. Friend said, and we shall look for enforcement by realistic regulations. There has been some disappointment in this field in the past. I certainly do not intend to relax the pressure.
      Mr. Kaufman: On the subject of traffic noise, would the Minister take power to provide financial compensation—for example, to my constituents in New Bank Street, Longsight, whose homes are being made almost uninhabitable by noise from freight liner traffic passing by, and who need to double-glaze their homes to rid themselves of this intolerable noise?
      Mr. Peyton: No, I could not promise compensation of the kind the hon. Member suggests. That is not to say that I am not well aware of this nuisance. I am certain that long-term plans have to be made to disperse heavy traffic out of heavily populated centres.
      Mr. Michael McNair-Wilson: Will my hon. Friend not agree that enforcement is for the police and that they need a hand-held noise meter? Will my hon. Friend tell me what steps are being taken by his Department to produce such a meter?
      Mr. Peyton: There are quite a number of successful prosecutions every year—about 12,000. I should like my hon. Friend to put down a Question on this subject and I will certainly conduct further researches into it, but my present prospects of producing a satisfactory hand-held noise meter are, I am bound to say, slightly remote.

      Fleet Line (South-East London)
      Mr. Moyleasked the Secretary of State for the Environment when he will be in a position to announce his decision on the application by the Greater London Council for a grant for the construction of the Fleet Line in South-East London.
      The Minister for Local Government and Development (Mr. Graham Page): My right hon. Friend is considering the application.
      Mr. Moyle: Is the hon. Gentleman aware that, by this year, London Trans-
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      port Executive will probably have powers to construct a tube to New Cross and that by next year we hope to have powers to construct a line to Lewisham? What is required is a decision by the Government to provide money to allow London Transport to go ahead with construction.
      Mr. Page: I ask the hon. Gentleman to give us a chance on this. It is a complex matter of transport. We are considering it with the utmost urgency. My right hon. Friend will give his decision as soon as possible.
      Mr. Spearing: Will the hon. Gentleman give an assurance that if a grant is given it will be no less than the 75 per cent. grant given on equivalent sums for roads?
      Mr. Page: I could not give such an undertaking. At the moment we are discussing the whole problem of transport and the contribution of the central Government to London Transport with the G.L.C.

      House Building (Costs)
      Mrs. Renée Shortasked the Secretary of State for the Environment what steps he is taking to reduce the cost of housebuilding.
      Mr. Amery: The abolition of the Land Commission and the betterment levy; our policy on firm price tendering; the halving of S.E.T.; the easing of bank credit; and the reduction of corporation tax, as announced by my right hon. Friend yesterday.
      These things and other Government measures to control inflation and stimulate growth should all help to contain building costs.
      Mrs. Short: If the right hon. Gentleman believes that he will believe anything. None of those things will help either the building industry or the building of new homes. Is he aware that there has been a catastrophic fall in the construction industry of about 7 per cent. and that his right hon. Friend's Budget yesterday did nothing to help the building industry? Is he aware that the major requirement is a reduction in Bank Rate? Does he appreciate that that is what will bring down house prices but that nothing was done about it in the Budget? Will he make representations

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      to his right hon. Friend to deal with this now?
      Mr. Amery: In reply to the hon. Lady's speech I can only say that the right hon. Gentleman the Leader of the Opposition said in 1964:
      "We shall cheapen the cost of housing by our interest rates policy."
      The result was that over the period of the last Administration the average cost of a council house rose from £2,186 to £3,110.
      Mr. Costain: Will the Minister completely ignore the remarks of the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short)? Does he realise that the facts he has announced will reduce the cost of house building? Why is he so modest? Why does he not take credit for his own mortgage proposals, which also help in this matter?
      Mr. Amery: I hope that I shall never be guilty of the discourtesy of ignoring the hon. Lady's remarks, but I am bound to say that I pay a good deal more attention to what my hon. Friend has just said.
      Mr. Crosland: We much enjoyed the right hon. Gentleman's humorous answer, as we always enjoy his aptitude for totally irrelevant quotations. Would he be good enough to tell the House by how much the halving of S.E.T. will reduce the cost of a house, and, secondly, will he be so good as to tell the House what measures he proposes to take to persuade house builders to pass on the reduction?
      Mr. Amery: The cost of S.E.T. on a council house has been estimated by the previous Administration and by this Administration at £120. This would be half of that—£60—and that is already very substantial.
      Mr. William Hamilton: Don't forget, Albert; £60 off.

      London Commuter Services (Grant Aid)
      Mr. Huntasked the Secretary of State for the Environment what further requests he has now received from the Southern Region of British Rail for him
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      to reconsider the withdrawal of grant-aid for commuter services.
      Mr. Peyton: None, Sir.
      Mr. Hunt: Is my right hon. Friend aware that the very sharp fare increases which followed the withdrawal of these subsidies caused widespread shock in my constituency? Is he satisfied that Southern Region has fully explored alternative sources of revenue, such as the more effective use of its sites for hotels, office and housing development, before increasing fares to the commuter once again?
      Mr. Peyton: I can only remind my hon. Friend that where costs go up, prices must follow. I appreciate the disturbance that this has caused to many people. As to the last part of my hon. Friend's question, this is a matter for the Railways Board, not for me.
      Mr. Bradley: Can the right hon. Gentleman say how many Conservative candidates in the last election, including those at Bexley and Mitcham, made it clear to commuters that the first result of their Government's railway policy would be a substantial increase in fares?
      Mr. Peyton: I very much doubt whether any of my hon. Friends would have felt called on to do that since the previous Administration had already announced that they would achieve viability for the London commuter network by the end of 1972.
      Mr. Ridsdale: Was not the withdrawal of grant aid a decision taken by the previous Government? Does the Minister realise that what so many people are anxious about is that this is the first burden that commuters will have to face and that the next will follow the wage increases? Will he make a statement as early as possible, since these wage increases are likely to lead to further increases in rail fares?
      Mr. Peyton: Wage increases are a matter for the Railways Board and not for me. What my hon. Friend says is perfectly correct; if railway costs go up, so will the fares. The Governmen's policy is to ensure that the railways achieve viability in the London commuter network by 1973. The previous Administration had committed themselves in the 1968 White Paper to a date of 1972.
      Mr. Atkinson: Is the Minister aware that the Railways Board is under the impression that it is being asked by the Government to make each separate service and route stand on its own feet and that the G.L.C. is now having some idea about a separate fares structure for each route or service in the underground system? Before this idea catches on with either the Railways Board or the G.L.C., will the Minister say that the Government would want to discourage any such idea creeping into a new fares structure for the underground and London commuters?
      Mr. Peyton: Any idea that may be in the mind of the Greater London Council is not my responsibility. What I am concerned with is the amount of aid which the Government are called upon to give to a commercial operation. We have made it clear that we intend that the London commuter network should be viable by 1973.

      Private Tenants (Rent Rebates)
      Mr. George Cunninghamasked the Secretary of State for the Environment (1) if he is now able to estimate the number of tenants in private accommodation in the borough of Islington to whom rebates will be payable under the Government's proposed rebate scheme;
      (2) what indication he has now been able to give to local authorities of the estimated total value of rebates to be paid to tenants in private accommodation under the Government's proposed scheme.
      The Under-Secretary of State for the Environment (Mr. Paul Channon): The value of rent allowances and the number of tenants eligible for them will depend on the details of the national scheme of rent rebates and allowances. My right hon. Friend is still discussing these with the local authority associations.
      Mr. Cunningham: Does the hon. Gentleman realise that that is exactly what he has been saying for months and that it is patently obvious that when he goes to the local authorities to discuss this idea of a scheme, the first question they must put to him is, "How much have you in mind?". Since he must have given some indication to the local authorities, will he tell the House whether he
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      is thinking in terms of £10 million, £50 million or £100 million for the scheme?
      Mr. Channon: I can understand the hon. Member, whose Government signally failed to introduce a system to help tenants, being sore about our success in so doing. These matters are still under discussion with the local authorities and it would be quite improper to give any indication at all at this stage.
      Mr. Marsh: The hon. Gentleman is under an obligation to give the House a little more information than that. Will he tell the House whether the additional funds, whatever they may be, are to be arrived at by a re-allocation of the existing amounts available, which are inadequate, or whether the Government are prepared to make additional funds available?
      Mr. Channon: My right hon. Friend has already answered an earlier Question this afternoon and promised a very full statement as soon as these consultations have taken place. It would be in the interests of the House to await that.

      House Building Programmes (London)
      Mr. Gordon Walkerasked the Secretary of State for the Environment when he expects to complete his consultations with London boroughs and the Greater London Council regarding their future housebuilding programmes.
      Mr. Russell Kerrasked the Secretary of State for the Environment if he will now make a statement on the consultations which he has had with London boroughs concerning their housebuilding programmes.
      Mr. Amery: Consultation with London housing authorities on housing matters in Greater London is a continuing process.
      I propose, however, to convene a conference of these authorities to consider future policy.
      This will be held as soon as practicable after the London borough elections.
      Mr. Gordon Walker: Is the right hon. Gentleman aware that it would have been much wiser to have started these continuing negotiations rather earlier? Is he further aware that it is extremely important that they should result in a

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      speed-up of council building and bring to an end the scandalous waiting lists in such areas as Waltham Forest and many other London boroughs?
      Mr. Amery: As I said, this is a continuing process which has been going on all the time. The conference is a further step. The housing situation is complicated, but the indications are that more tenders will be approved this year than last. The right hon. Gentleman, who served his political apprenticeship under Lord Morrison of Lambeth, will, I am sure, be glad to hear that Lambeth is doing extremely well under a Conservative-controlled council.
      Mr. Geoffrey Finsberg: Would my right hon. Friend not agree that if in the three decades prior to 1964 the G.L.C. and the majority of the Labour-controlled inner London boroughs had done their job there would not have been this inheritance today?
      Mr. Amery: My hon. Friend's comments are very much on the ball.
      Mr. Leonard: Has the London Borough of Havering, which has a waiting list of more than 4,000 families, given any assurance about whether it intends to increase its present derisory programme of housing starts?
      Mr. Amery: Perhaps the hon. Gentleman would table a Question on that point.
      Mr. Spearingasked the Secretary of State for the Environment what is the number of municipally-owned dwellings, for which he has given loan sanction, likely to be completed in the London Borough of Ealing in 1971.
      Mr. Channon: The hon. Member should apply to the Council for this information, since the day-to-day management of the house-building programme, on which the rate of completion of dwellings depends, is in their hands.
      Mr. Spearing: I am mystified by that reply because according to returns by the hon. Gentleman's own Department there were 774 starts in the London Borough of Ealing in 1968 and only 22 last year. Is the hon. Gentleman aware that, because of this, priority medical cases in the London Borough of Ealing cannot be
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      rehoused? Would he not agree that it is a typical example of Conservative Government?
      Mr. Channon: On the contrary. What the hon. Member fails to take into account is that last year nearly 800 dwellings were completed, and I am glad to tell the House that there is a programme for approximately 1,000 dwellings in each year, 1971 and 1972.
      Mr. Weitzmanasked the Secretary of State for the Environment what proposals he has received from the London Borough of Hackney as to the number of houses to be built in the years 1971, 1972 and 1973.
      Mr. Clinton Davisasked the Secretary of State for the Environment what response he has received to requests made by him to the London Borough of Hackney for an accelerated housing programme.
      Mr. Channon: The future level of local building by the borough has already been discussed at two meetings with the council and is still under discussion.
      Mr. Weitzman: Is the Minister aware that there has been a deliberate run-down in the housing programme prepared by the Labour council in 1961 for a period of 10 years and that no provision has been made for the years following 1973, although there is a very large housing list? Would he not regard that as scandalous conduct on the part of the borough council?
      Mr. Channon: On the contrary, I can tell the hon. Member that in the three years of Conservative control on the council there were 3,000 completions compared with 1,400 when the Labour Party was in power.
      Mr. Clinton Davis: Is the hon. Member aware that next year completions will be 800, the following year 600, and that there is no adequate programme for the years to follow, and nothing like a 10-year plan? Is he aware that there has been a deliberate refusal on the part of the local Conservative authority to implement compulsory purchase orders—in fact there is almost a conspiracy by Hackney? Is he also aware of the fact—[HON. MEMBERS: "Too long."]—that the Conservative council is engaged in the disposal of

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      land which has been earmarked for municipal development and that this is adding to the burdens upon a long-suffering public?
      Mr. Channon: I can well understand the hon. Member seeking to clutch at straws in this matter. The facts are these. I have already given the number of completions. I will now give the figures for starts. In 1965 during the Labour administration there were promised to be 1,800 a year. Under the Conservatives, in three years, to 1970, they are over 3,000.
      Mr. Atkinsonasked the Secretary of State for the Environment if he will state those London boroughs with whom he or his officials have had consultations regarding their future house-building programmes, and those with whom consultations have yet to be held.
      Mr. Barnesasked the Secretary of State for the Environment with which London boroughs he has had consultations regarding their house-building programmes.
      Mr. Channon: Consultations about the house-building programme are a regular and continuing feature of the Department's relationship with the London boroughs. In the current round consultations have been held with all boroughs except Wandsworth, with whom a meeting has been arranged to take place shortly, and Richmond.
      Mr. Atkinson: Now that the Minister's right hon. Friend has announced that he is to convene a meeting after 13th May, will he accept that on 13th May the majority of the London boroughs will return a majority of Labour councillors and that then the total commitment of London boroughs will be to build not fewer than 250,000 houses during the next 10 years? Will he now tell the House on behalf of the Conservative Party that it will give a guarantee to Londoners that in the next 10 years it will build not fewer than 250,000 houses for Londoners?
      Mr. Channon: What I can tell the House is that for more than 30 years the Labour Party was in control of London and we can see the ghastly results.
      Mr. Barnes: Is it not very unsatisfactory to have borough elections taking place, especially in London, which is very important, with the uncertainty about what the house-building programme will be, according to how the right hon, Gentleman defines stress areas or how he does not, and with tenants having no idea of how large the housing list may be as a result of Government policy?
      Mr. Channon: I can see that it is very unsatisfactory to the hon. Member's party to note from the tenders that there are likely to be more completions this year than last year.
      Mr. Freeson: The hon. Gentleman must know that that answer is no great encouragement. Will he recall that in London the rate of housing reached a level of about 30,000 about three years ago in one year but has now dropped over these last years—[Interruption.] That is right. Since the Conservatives won control of the town halls in May, 1968, the number has dropped. [Interruption.] The hon. Member should act like a Minister. I assure hon. Members opposite that I know the subject a little better than the Minister does.
      Mr. Speaker: Order. Will the hon. Gentleman put a supplementary question?
      Mr. Freeson: I shall be very glad to do so if the Minister will stop interrupting. Is the Minister aware that since the Conservatives returned to power and took over control at the town halls in May, 1968, in so many London boroughs and at the G.L.C. there has been a drop from 30,000 housing starts in 1967 to 18,000 currently? What does the Minister intend to do to get the housing starts up to at least 30,000 a year as soon as possible?
      Mr. Channon: I can well understand the Labour Party's sense of guilt about the situation which London housing is in. [HON. MEMBERS: "Answer"] I will indeed answer the question. The facts are that in 1970 completions—[HON. MEMBERS: "Starts."] I notice that hon. Members opposite are very sensitive about completions. I can well understand that. In 1970 completions were nearly 4,000 more than they were in 1968 and they very much look like being more this year.

      Trees (Preservation Orders)
      Mr. David Jamesasked the Secretary of State for the Environment whether he will design and make available a metal plaque to be affixed to all trees that are the subjects of a preservation order.
      The Under-Secretary of State for the Environment (Mr. Michael Heseltine): No, Sir.
      Mr. James: As thousands of specimen trees are needlessly cut down every year, why must we have an almost inane "No" to a perfectly reasonable proposition to make people more conscious of the need to preserve trees?
      Mr. Heseltine: I do not think that the fixing of plaques to tree preservation order trees would help to preserve any trees. There are adequate powers to deal with anybody molesting trees on which there are preservation orders.
      Mr. Mackie: If the hon. Gentleman should by any chance take his hon. Friend's advice, will he ensure that the plaques are fixed in such a way that the nail does not affect the ultimate cutting down of the tree when the wood is destroyed?
      Mr. Heseltine: I agree that the fixing of plaques and signs to public property in no way guarantees protection of public property.
      Mr. Robert Cooke: Having rejected the idea of hanging labels on trees, will my hon. Friend encourage the planting of more trees for future generations to enjoy—and I do not mean the proliferation of Christmas trees across the landscape by the Forestry Commission?
      Mr. Heseltine: A very large number of trees are planted every year for amenity reasons as part of the Department's road building programme.

      Transport System (Price Increases)
      Mr. William Hamiltonasked the Secretary of State for the Environment what steps he has taken to prevent or reduce prices increases within the transport system for which he has responsibility.
      Mr. Peyton: I encourage those operators for whom I have responsibilities to
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      improve their efficiency and hold down costs, but prices are bound to follow costs upwards, particularly when wages rise faster than productivity.
      Mr. Hamilton: Which is the more serious problem—increasing commuters' fares, to which the hon. Member for Bromley (Mr. Hunt) referred, increased living standards for railwaymen, or the elimination of subsidies for the commuters? Since the transport system is a public sector element, is not this one of the fields in which the Prime Minister promised to reduce prices at a stroke?
      Mr. Peyton: The Prime Minister's promises are the more difficult of performance because of the obstacles left in the way by the last Administration.
      Sir G. Nabarro: While thoroughly endorsing what my right hon. Friend said in his answer, will he bear in mind that, as the Worcestershire countryside and other rural areas are now nearly denuded of public road transport save only for an occasional heavy, empty, lumbering vehicle polluting the atmosphere, the answer is for him to reform the system of traffic commissioners to enable tidy, compact, speedy, mini-buses with cheap fares to run everywhere?
      Mr. Peyton: I agree with my hon. Friend, but the bus industry is not the only industry which poses very severe problems for me. The legacy left by the last Administration—
      Sir G. Nabarro: Rub it in to them, John!
      Mr. Peyton: —was one of considerable losses and mounting costs due to legislation, the intentions of which were pious but the reality of which was absent.
      Mr. Speaker: I should like mini supplementary questions and mini-answers.

      Sports Facilities
      Mr. Huntasked the Secretary of State for the Environment what steps have been taken to make sports facilities at present in the exclusive use of particular sections of the community more widely available for public recreation.
      The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): It is our policy to ensure that existing and

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      future sports facilities, whether at schools and colleges, at industrial plants or at governmental, including Armed Services, establishments, should be available, wherever possible, to the general public.
      Mr. Hunt: Will my hon. Friend ensure that his very welcome reply is brought to the attention particularly of local authorities? Is he aware that many ratepayers, having paid very large sums of money for the provision of recreational and sports facilities in schools and colleges, resent the fact that those facilities are denied them for long periods during the evenings and school holidays?
      Mr. Griffiths: Yes, Sir. This policy is being brought to the attention of all local authorities, including local education authorities. However, there are more than 100 dual-use projects in co-operation with local education authorities in the pipeline.
      Mr. Edwin Wainwright: Will the hon. Gentleman look at this problem more practically than he has done in the past? Will he take note of the joint schemes between local authorities and education authorities, which abound throughout the country, wanting financial help from his Department? Will he ensure that a greater contribution is made by his Department towards the provision of swimming pools and playing fields?
      Mr. Griffiths: The question of the provision of local facilities is, in the first instance, for the local authorities. Where it is possible to help them, they will be helped. But I am glad that the present Government have been able to make available to the public Armed Services facilities as a result of improving the insurance arrangements, thereby helping many people at local level.
      Mr. Denis Howell: Is the hon. Gentleman aware that both sides of the House agree with his policy and that it is monstrous that schools costing about £750,000 are open for only 35 weeks of the year and about five hours a day? Is he further aware that not a little progress has been made since we issued the circular, which I know the Minister supports? Will the hon. Gentleman ask his Regional Sports Council to carry out a detailed survey of school buildings and similar community buildings not yet fully available to the public for sports use?
      Mr. Griffiths: I will look into that point. But considerable progress is being achieved, particularly when new schools are being constructed.

      Agrément Board
      Mr. Costainasked the Secretary of State for the Environment what proportion of testing work for the Agrément Board on materials or components submitted for appraisal was carried out by the Building Research Station in 1970.
      Mr. Channon: About 85 per cent.
      Mr. Costain: Is my hon. Friend aware that I tabled this Question to draw his attention to the anomaly of having two organisations doing similar work? Will he look into this question and see what savings can be made as a result of coordination or amalgamation?
      Mr. Channon: I will bear in mind and carefully study what my hon. Friend said.

      Building Research Station
      Mr. Costainasked the Secretary of State for the Environment how many inquiries have been dealt with by the Building Research Station since the setting up of its technical inquiry service in 1970; what fee income has been received by the station; and to what purpose that income has been devoted.
      Mr. Peter Walker: The B.R.S. Advisory Service dealt with nearly 17,000 inquiries in its first nine months, to the end of January last. The fee income so far has been £26,000, which has passed to the Exchequer.
      Mr. Costain: I thank my right hon. Friend for that answer. Is he satisfied that this organisation is a commercially viable entity and that the work it is doing is benefiting the building industry?
      Mr. Walker: It is certainly benefiting the building industry. As yet it is not a commercial concern since it has only just started operations and has had all the initial expenditure of being set up. The matter is under review and I have appointed a new director-general of research who will investigate all the research facilities of the Department.

      Joint Tyneside Sewerage Treatment and Disposal Scheme
      Mr. Blenkinsopasked the Secretary of State for the Environment whether he has now authorised the Joint Tyneside Sewerage Treatment and Disposal Scheme.
      Mr. Peter Walker: As the hon. Member will now be aware, on 9th March I agreed to a capital spending programme of some £30 million to clean up the Tyne, and to an immediate start on the scheme for the south western part of the Tyneside Joint Sewerage Board's area. Since then, with a view to approval of other works, my Department has begun discussions with the Board on technical questions arising from the investigation of the Board's scheme—including the question of the method of disposal to be adopted for the rest of the Board's area.
      Mr. Blenkinsop: I welcome the right hon. Gentleman's statement that, after a considerable delay, a start is to be made on this major scheme. Why has the long-term technical investigation been set aside for what we regard as a retrograde proposal that great masses of untreated sewage should be pumped out to sea on the north side of the river?
      Mr. Walker: It will not be completely untreated sewage. I am advised that technically, from the point of view of pollution of the river and the coast, the suggestion which we have made is the best. The sewerage board thinks otherwise. Therefore, I thought that the best thing to do was to enable the experts of both sides to get together quickly and to come to a conclusion. They got together on 25th March, and as soon as they decide the best scheme to deal with pollution I shall approve it.
      Dame Irene Ward: I thank my right hon. Friend for his last statement and for receiving the representations which I made on behalf of my constituents who were frightened about the flow-back on the beaches. Can he say how long he thinks the experts on both sides will take to resolve this question, which is very important for the whole of Tyneside and all our beaches?
      Mr. Walker: I have instructed the officials in my Department to be as
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      speedy as possible. I am grateful for my hon. Friend's remarks. I can assure her that the final decision will be taken on the basis of which system causes the least pollution to her constituency.
      Mr. Bob Brown: I am grateful for the original reply and for the fact that the right hon. Gentleman has committed his Department to look at the secondary problem, but would he now give an undertaking that the best solution is the solution which has been arrived at after many years of filth on Tyneside and that the best solution, not the cheapest, will be the one for which he goes?
      Mr. Walker: Certainly the best, not necessarily the cheapest.
      Dame Irene Ward: Hon. Members should congratulate the Minister.
      Mr. R. W. Elliott: May I also thank the Minister for his initiative in this regard? This is a problem which has been with us for far too long. Is my right hon. Friend aware that there is considerable professional support for the Howden disposal scheme?
      Mr. Walker: I am anxious to make the best technical assessment I can and then to get on with the job.

      Central Housing Authority (London)
      Mr. John Fraserasked the Secretary of State for the Environment if he will introduce legislation to establish a central housing authority for Greater London.
      Mr. Amery: No, Sir.
      Mr. Fraser: Is the Minister aware that cheap cracks from the Government Front Bench do not help the housing programme and that the number of starts bears no relationship to the housing need in London? Will he announce his intention to step in—in place of failing authorities in London, no matter which they may be—to ensure that houses get built, because housing lists are already far too long?
      Mr. Amery: The hon. Gentleman is a good judge of cheap cracks. The record of his own borough, which has built more than 4,000 houses in the last five years and which plans to build nearly 6,000 more by 1974, does not suggest that the boroughs are unable to tackle the problem successfully.
      Mr. Kenneth Baker: Is my right hon. Friend aware that this year the G.L.C. will have over 16,000 new lettings, which is an increase of 36 per cent. over the last year in which Labour controlled the G.L.C.?
      Mr. Amery: My hon. Friend is right. I am satisfied that the G.L.C., the boroughs, private enterprise and the housing associations between them form the best combination for tackling this serious problem.
      Mrs. Renée Short: Is the Minister aware that the fall in the number of housing starts is not confined to Greater London but is being experienced in every large town and city? Will he consider the recommendation contained in the 1968 Report of the Estimates Committee for the setting up of a house building corporation or association to build houses in all parts of the country where the local authorities are either unwilling or unable to do so for whatever reason? Further, may I remind the Minister—[HON. MEMBERS: "Too long."] Hon. Members opposite are very impatient today. I remind the Minister that that was an all-party Committee and not a Committee composed only of Labour Members.
      Mr. Amery: I take the hon. Lady's point. The Question is about London. I will gladly receive any representations from her about any other areas which she thinks should be considered separately.

      Slum Clearance Programme (London)
      Mr. John Fraserasked the Secretary of State for the Environment what steps he is taking to encourage an increase in the slum clearance programme in London.
      Mr. Amery: Our proposals for the reform of housing finance will provide greater incentives for local authorities to tackle slum clearance and increased resources with which to do so. In London the rate of progress in slum clearance is of course very dependent on the overall rate at which new housing can be provided. Here I look to local authorities, overspill arrangements, and the private sector to play their part.
      Mr. Fraser: In the light of his previous reply, can the Minister say why in Lambeth no houses were demolished in slum-
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      clearance areas in the first nine months of 1970, why in five other London boroughs no houses were demolished in slum-clearance areas, and why there are derisory totals in many parts of London?
      Mr. Amery: The housing shortage is so pressing in Lambeth that the Lambeth authority has rightly been concentrating on overspill arrangements. When I visited Lambeth three days ago I was impressed by the arrangements it was making with Peterborough to get people from Lambeth rehoused in Peterborough, often in much better houses and much more cheaply than they were in Lambeth.
      Mr. Gorst: Does my right hon. Friend agree that this urgent and important matter will be much more likely to receive urgent and successful treatment from a Conservative Government because of the economic policies which are being pursued and which have recently been announced? Would my right hon. Friend care to spell them out in detail for the sake of hon. Members opposite?
      Mr. Amery: I agree with my hon. Friend. Indeed, I find it hard to think of any problem which would not be better solved by a Conservative than by a Labour Government.
      Mr. Douglas-Mann: Is not the greatest problem the lack of land in London? Will the Minister take steps to ensure that local authorities acquire such land, particularly public utility land, as does become available and do not refuse land in rich areas as the Kensington Borough Council did in neglecting the Campden Hill Water Works site?
      Mr. Amery: As I have tried to explain in answer to earlier Questions, I have one meeting this week and another after the local elections with the London authorities to discuss all these problems and I hope that these will lead to action to solve a problem which has been left unsolved for far too long.

      North Cross Route Motorway
      Mr. Stallardasked the Secretary of State for the Environment if he will make a statement about the latest proposals concerning the North Cross route motorway, in particular its effect on the London Borough of Camden.
      Mr. Graham Page: No, Sir. Proposals for this route are the responsibility of the Greater London Council as highway authority.
      Mr. Stallard: Will the Minister bear in mind that there is considerable unrest and anxiety among thousands of residents and traders all along this route about the proposals? Is the hon. Gentleman aware that it has been estimated that, if these proposals are accepted, together with council building programmes, at least 30,000 jobs will disappear in the London borough of Camden alone? Will the Minister take this into consideration and advise his friends on the G.L.C. of these facts?
      Mr. Page: It is not for my right hon. Friend to take this matter into consideration at this stage. It is part of the G.L.C.'s proposed primary road network and is therefore being examined at the current inquiry into the Greater London development plan.
      Mr. Geoffrey Finsberg: Will my hon. Friend accept that on this matter at least both political parties in the London Borough of Camden are united in not wanting this montrous route?
      Mr. Page: It has to be considered by the inquiry and it would be wrong for my right hon. Friend to say anything on the merits of the proposal at this stage.

      Rented Accommodation (Camden)
      Mr. Stallardasked the Secretary of State for the Environment what reduction in rented accommodation there was in the London Borough of Camden in the period 1964 to 1970, year by year.
      Mr. Channon: I regret that this information is not available. Table 9, pages 48 and 49 in the 1966 Sample Census, Greater London volume, gives the number of dwellings by tenure for each London borough.
      Mr. Stallard: I thank the Under-Secretary for that scant information. Is the hon. Gentleman aware that rented accommodation in inner London, and certainly in the London Borough of Camden, is seriously declining and that this is causing extreme hardship to many
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      people, especially young married couples, who have to move further and further from London to find somewhere they can afford to live and then pay grossly exaggerated fares to get to work in the London area? Will the hon. Gentleman take account of all these factors and come up with a suggestion for improving the situation?
      Mr. Channon: I agree that the reduction of privately rented accommodation is a serious matter, not only in Camden. I therefore hope to have the hon. Gentleman's support for the announcement that my right hon Friend has made about the implementation of the Report of the Francis Committee.

      Hackney
      Mr. Clinton Davisasked the Secretary of State for the Environment if he will pay an official visit to the London Borough of Hackney.
      Mr. Peter Walker: I have at present no plans to do so.
      Mr. Davis: Is the Secretary of State aware that there is a grotesquely inadequate public transport system in Hackney, that bus routes are being taken off, and that the proposed underground railway system is unlikely to be implemented for about 20 years? Should not the Ministry institute an inquiry having regard to the needs of this very large London borough?
      Mr. Walker: On all these matters my Department is in close liaison with the borough concerned.

PERSONAL STATEMENT
Mr. Lawson: With permission, Mr. Speaker, I wish to make a personal statement.
Yesterday during Questions to the Prime Minister, I asserted that several members of the Scottish Economic Council had left in anger during a meeting with the Prime Minister. I have subsequently learned that I was mistaken. Those members certainly showed their anger, but I understand that nobody left the meeting during the Prime Minister's speech. For that reason, Mr. Speaker,

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I wish to express my regret at having made that statement.
Mr. Speaker: I am sure the House will be obliged to the hon. Gentleman.

SOCIAL SECURITY (BENEFITS AND CONTRIBUTIONS)
The Secretary of State for Social Services (Sir Keith Joseph): With permission Mr. Speaker, I should like to make a statement about the uprating of social security benefits. My right hon. Friend the Chancellor of the Exchequer has already announced the main increases in benefit and contribution rates to take effect in the week beginning 20th September. Associated benefits will go up in proportion to the main increases. Shortly after the Easter Adjournment I shall be presenting a White Paper to the House with a Bill and the Government Actuary's Report and laying Instruments for the war pensions and supplementary benefits improvements.
I am circulating fuller details of the new rates of benefits and contributions in the OFFICIAL REPORT. It may, however, be convenient to state now that for the £18 a week earner there will be no increase in contributions; for the £20 a week earner the increase will be 3p a week; the £30 a week earner will pay an extra 15p a week; and a person earning £42 a week or more will pay an extra 65p a week.
There are certain new selective improvements which I now wish to explain to the House. I am making copies of my Statement available in the Vote Office.

SOCIAL SECURITY (BENEFITS AND CONTRIBUTIONS)
  The Earnings Rule and Increments for Deferred Retirement
  First, the earnings rule. We propose that earnings up to £9·50 instead of £7·50 will have no effect on retirement pensions; on higher earnings the present tapering arrangements will apply. The increments payable for deferred retirement will rise from 5p to 6p for nine contributions paid.

  Measures for the very Elderly
  The old person's pension provided under the National Insurance Act, 1970,
  1500
  for people who could not become insured in 1948 will rise from £3 for a single person and £1·85 for a wife to £3·60 and £2·20 respectively. Similar pensions, at the new rate, will be paid subject to a residence test to all persons over 80, who failed to qualify for a pension or who qualify for one at a lower rate, and to those who subsequently attain that age.
  We are concerned about the very old. We propose to increase the uprated pensions of all persons over 80, including the recipients of old person's pensions, by an addition of 25p. Thus, with full standard pension, a single pensioner will get £6·25 and a married couple will get £9·95 if one of the couple is over 80 and £10·20 if both are over 80. There are some 1·2 million people over 80, of whom about two-thirds will receive the increase. The remainder are supplementary pensioners, and there will be an increase of 25p in the long-term addition where the pensioner or his dependant is over 80.

  Main War Pensions and Industrial Injuries Benefits
  The war and industrial disablement pension for 100 per cent. assessment goes up from £8·40 to £10, and pro rata with lower assessments; the normal maximum of constant attendance allowance goes up from £3·30 to £4. Standard war widow's pension will be increased from £6·50 to £7·80 and industrial injuries widow's pensions from £5·55 to £6·55.
  A pension will be paid regardless of the cause of death to the widows of all war and industrial pensioners who were receiving the normal maximum or higher constant attendance allowance. This will help about 1,500 women who have devotedly nursed their gravely disabled husbands.

  War Pensions Preferential Allowances
  Certain war pensions preferential allowances which have not been increased since 1967 will be raised by a third—namely comforts allowance, clothing allowance, and age allowance. Severe disablement occupational allowance, unchanged since its introduction in 1961, will be doubled to £2 and we shall institute an age allowance at 50p a week for elderly war widows between the age of 65 and 70.
  Supplementary Benefits
  The scale rates for supplementary benefits are to be increased from £8·50 to £9·45 for a married couple and from £5·20 to £5·80 for a person living alone. Children's rates will go up pro rata and, with the agreement of the Supplementary Benefits Commission, there will be selective additional increases for those aged from 13 to 20.

  Restrictions on Unemployment Benefit for Occupational Pensioners and Optional Contributions for Non-Employed Persons over 60
  There has been concern that some retired people with substantial occupational pensions claim unemployment benefit and contribution credits although they really have left the active employment field. But I know that the pensioners themselves have strong feelings about their liability to pay contributions when unemployed and not entitled to credits.
  I propose three measures for occupational pensioners over 60. First those with pensions of £30 a week or more will not get unemployment benefit or credits unless they first satisfy a test of further work. Second, benefit will be reduced on a sliding scale if the pension is more than £18 a week. Third, everyone over 60 will be able to decide voluntarily whether or not to continue to contribute towards obtaining the full standard retirement pension. Some 5,000 to 6,000 people will be affected by the restrictions, but the contribution concession will go wider.

  Measures for the Chronic Sick
  We propose a substantial package of improvements for a neglected group, the chronic sick, to lift them above the basic benefits of the short term sick when their earnings related supplement ceases after six months of incapacity. At this point they will become invalidity pensioners, entitled to an invalidity allowance if incapacity began more than 5 years before pensionable age as well as the full standard rate of benefit. We shall start at a modest level with three rates: £1 if incapacity began before the age of 35; 60p if it began before 45; 30p if it began before 55 for women and 60 for men. We are deliberately favouring those who fall
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  chronically sick young, because they will not have had the same opportunities to build up personal savings or pension rights that an older man had.
  The allowance will be paid to the existing chronic sick who are under pension age at the appropriate rate. Well over three-quarters of the existing 400,000 chronic sick are expected to qualify.
  In these cases of prolonged incapacity the wife may become the main breadwinner. We therefore propose to apply to her earnings the tapered retirement pensions earnings rule, eased as I have already described to £9·50, instead of the all-or-nothing rule which at present extinguishes the increase paid for her if her earnings exceed £3·10.
  The chronic sickness of the father imposes particular difficulties where there are dependent children. We propose to pay the higher rate of children's allowances at present payable only for the children of widows—£2·95 including family allowance after the uprating—for the children of invalidity pensioners, instead of £1·55 as it is now.
  At retirement age, invalidity allowances will be carried over to retirement pensions as lifelong benefits, and they will be payable to unemployable pensioners under the war pensions and industrial injuries scheme. All these categories of pensioners will also qualify for the family benefits which go with invalidity pension.
  The House may be interested in an example of the changes. The national insurance benefit income of a man who fell chronically sick at 30, with 2 children and a wife who is not working, is today £11·20 including family allowances, and would become £13·40 after the uprating. Under the new arrangements it will be £16·60, an increase of nearly 50 per cent.
  Finally, we propose to increase the rate of attendance allowance, due to start on 6th December for the very severely disabled, from £4 to £4·80.
  All these proposals, including the main pension increases, will cost about £560 million in a full year. There are still gaps that need to be filled. We have this time put the chronic sick and the very old as our priorities. I am sure that when the House has had the chance to study our proposals in detail they will be seen as a healthy combination of the universal and the selective.
  Mrs. Shirley Williams: It will indeed be useful to have rather more time to study these very detailed proposals. I have had exactly 10 minutes to look at this very long statement.
  I think that the right hon. Gentleman's hon. Friends and colleagues have been very much taken in by the appearance of a package which is totally inadequate. I should like to tell the House the real value of the increases which the right hon. Gentleman is making. On 20th September, 1971, when pensions are increased and all the benefits which the right hon. Gentleman has announced today are in line with the increase in pensions, the real value of the increase will be exactly 18p for a single pensioner and 30p for a married couple, and it will take approximately three or four months for that total sum to be eradicated by increases in prices.
  I should like to ask the right hon. Gentleman the following questions. First, will he kindly justify the introduction of earnings-related contributions to the very great extent he has made, including one which, at £40, totally eradicates the benefit of the child allowance, when he is not introducing earnings-related benefits at all?
  Secondly, will he tell us what will be the effects on liquid funds for industry of an increase of £250 million on contributions of employers and what effect it will have on the intention of the Budget to increase economic growth?
  Thirdly, has the right hon. Gentleman made an assessment of the increase in unemployment benefits as a result of the increase in unemployment which the Government are doing nothing to reduce?
  Finally, are we correct in believing that those pensioners over 80, for whom another increase has just been announced, which we welcome, will once again find that their supplementary benefit allowances are withdrawn and that consequently many of them will be no better off at the end of the day than at the present time?
  Sir K. Joseph: I am sorry that the hon. Lady has had only 10 minutes to study the statement. Certainly she should have had half an hour. I apologise.
  I cannot see how the hon. Lady can predict the real value of the pension next
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  September. I can assure the House with confidence that the pension will be an improvement in real terms, which is more than the hon. Lady's Government produced in 1969. There will be an earnings-related supplement to short-term benefits payable at 15 per cent. for the tranche of income between £30 and £42, but it will not start until the benefit year beginning 1973.
  As for the liquid funds of industry, it was always anticipated by those who pressed for a pension increase that employers would bear their fair share of the cost. It lies ill for the spokesman for a party which imposed S.E.T. with the forced loan on industry to criticise that.
  It is not possible to predict the cost of unemployment benefit, but the Government Actuary's Report will set the parameters behind these assumptions.
  The hon. Lady obviously did not, in the short time she had to study the statement, take in that the over-80 additional pension will be carried through to supplementary benefit by an increase of 25p in the long-term addition.
  Mr. Boyd-Carpenter: Will my right hon. Friend tell the House—I do not think that he did—what will be the increase in the presumably flat-rate contribution payable by the self-employed? Is he aware that the humane selectivity of a package which gives priority to the very old and the long-term sick will appeal to social thinking people inside and outside the House and in all parties?
  Sir K. Joseph: I am grateful to my right hon. Friend, who pioneered much in this sphere. The answer to his question is 26p.
  Mr. Crossman: First, is the right hon. Gentleman convinced that the general increase will be sufficient to cover over two years the likely increase in the cost of living?
  Secondly, I appreciate what the right hon. Gentleman has done about the disability pensions. It is a beginning, and I welcome it very much indeed.
  Thirdly, the right hon. Gentleman has not mentioned any increase in the graduated benefit; he has mentioned only an increase in the graduated contribution. Does this mean that we have now moved

  1505
  from a contributory system in which benefit is related to contribution to a social security tax system in which we impose graduated contributions and receive only flat-rate benefits? Is that the way we are really moving?
  Sir K. Joseph: I am grateful to the right hon. Gentleman for his welcome to the treatment of the chronic sick. The right hon. Gentleman is wrong about graduated benefit. The graduated pension continues as now; that is, 2½p. for each £7–50, I think, of contribution.
  Mr. Crossman: When we put it up in 1969 we related the increase in contribution to an increase in benefit as well. I think what the right hon. Gentleman now says is that the bricks remain the same value and we pay more and, therefore, the graduated element which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carptener) introduced is being flattened out on the benefits side and swollen on the contribution side.
  Sir K. Joseph: That is a fair statement. We are moving towards the declared purpose of an earnings-related contribution. The real value of the pension will, I am confident, be better after the up-rating than when the pension was last increased in 1969.
  Dame Irene Ward: I should like to express the very grateful thanks of everybody for the speed with which my right hon. Friend has announced this wonderful treatment. I should also like to express my great pleasure at the team which operates from the Department of Health and Social Security. I suggest that my right hon. Friend pays no attention to the monstrous regiment of men and women who cavil and criticise a scheme which they had neither the money nor the courage to bring in.
  Sir K. Joseph: I only hope that my hon. Friends and I will continue to earn my hon. Friend's most welcome commendation.
  Mr. Rhodes: Is the right hon. Gentleman aware that today's insurance claw-back after yesterday's taxation hand-out will make many people feel today very much like the morning after the night before?
  Since the right hon. Gentleman has expressed such close sympathy for the
  1506
  chronic sick and for the elderly, will he now assure the House that, in the course of the massive prescription charges which he is now planning, he will exempt women between the ages of 60 and 65 and those in need of permanent medication?
  Sir K. Joseph: I shall not give such a guarantee. The hon. Gentleman and the House will be aware that every penny which is being raised in contribution from the working generation, and more, because of the Exchequer contribution, will be paid out to the parents of the working generation in increased pensions.
  Mr. Tapsell: Will my right hon. Friend accept that there will be widespread respect for a Government which are not only making our society more efficient, but more compassionate?
  I should like to ask about the position of the self-employed. As we move further towards a wage-related contribution to National Insurance, is there not a danger that the self-employed will become relatively more badly positioned in relation to the employed? Might there not be a case for increasing the Exchequer contribution for the self-employed?
  Sir K. Joseph: I do not think that my hon. Friend has a case there, but I will look at what he has said. I think the whole House wants to see the chronic sick better treated, and this is the first step in a direction which I should have thought both sides would have welcomed.
  Mr. Orme: Is the Minister aware that the people who will have to carry the burden of the contributions will be the highly skilled section of the working population, the artisans and craftsmen, in the wage bracket of between £25 and £40 a week, in addition to the other burdens imposed by the mini-Budget which start tomorrow? Why are the Government not making a larger Exchequer contribution so that the whole community, including those who are being exempted from surtax, can pay towards these contributions?
  Sir K. Joseph: The Exchequer contribution has been restored to the full 18 per cent. which has been habitual. The increases are proportionately much less in the bracket to which the hon. Gentleman refers—for a benefit increase of precisely double—than they were in 1969 under his Government. The low paid

  1507
  are paying no extra, since there is no increase in the flat rate.
  Sir B. Rhys Williams: I congratulate my right hon. Friend on the wisdom with which he proposes to distribute the sum of £560 million a year. Has he prepared an estimate of the number of people who as a result of these measures will be saved from the need for applying for supplementary benefit?
  Sir K. Joseph: It is not nearly as large a figure as I would wish. A number will be shifted, particularly the chronic sick, from partial dependence on means-tested benefit to full dependence on insurance benefit, but the numbers who will be taken off supplementary benefit altogether will, I fear, be only scores of thousands.
  Mr. Alfred Morris: Does the right hon. Gentleman agree that the heaviest onset of chronic sickness is among men between 45 and 60 and that the invalidity allowance of 30p is, therefore, inadequate? Has the right hon. Gentleman seen the publication of the Disablement Income Group comparing the financial

  MAIN INCREASED NATIONAL INSURANCE BENEFIT RATES

  Proposed Weekly Rate

  Existing Rate

  Standard rate of unemployment and sickness benefits, maternity and widowed mother's allowances and invalidity, widows and retirement pensions

  £

  £

  Single person

  6·00

  5·00

  Wife or other adult dependant

  3·70

  3·10

  Unemployment or sickness benefit

  Married woman (normal rate)

  4·20

  3·50

  Persons under 18

  3·30

  2·75

  Widow's allowance (first 26 weeks of widowhood)

  8·40

  7·00

  Widow's basic pension

  1·80

  1·50

  Invalidity allowance payable with invalidity pension, when in-capacity began before age:

  35

  1·00

  New Benefit

  45

  0·60

  60 for men or 55 for women

  0·30

  Attendance allowance

  4·80

  4·00

  Old persons' pensions

  Wife

  2·20

  1·85

  Any other person

  3·60

  3·00

  Age addition to retirement pension

  0·25

  New Benefit

  Guardian's allowance

  2·95

  2·45

  Child's special allowance and increases for children of widows, invalidity and retirement pensioners*

  First child

  2·95

  2·45

  Second child†

  2·05

  1·55

  Any other child†

  1·95

  1·45

  Increases for children of all other beneficiaries

  First child

  1·85

  1·55

  Second child†

  0·95

  0·65

  Any other child†

  0·85

  0·55

  *At present the chronic sick, who will become invalidity pensioners, and retirement pensioners receive the lower rates of increase for their children.

  † Family allowances are payable for second and subsequent children.

  help we give to the chronic sick and severely disabled with what is made available in neighbouring countries, and, against that background, does he think his proposal is adequate? Finally, what does the right hon. Gentleman propose to do about easing the earnings rule to help the wife of the man who has been sick and off work for more than six months?
  Sir K. Joseph: I did say that the rates with which we are starting are modest, but they are a beginning. They are not yet as good as they are in the countries analysed by the D.I.G. pamphlet, which I have read, but it is not for the Labour Party to rebuke us for this, since in six years in office they did precisely nothing about the chronic sick. Secondly, the dependent wife of a chronic sick man will be enabled to earn fully without losing her £3.10 dependency benefit which up to now has been withdrawn if she earned a penny a week over that.
  Mr. Speaker: Order. I am advised that these matters may be further pursued during the debate on the Budget.
  Following is the information:

  MAIN INCREASED INDUSTRIAL INJURIES BENEFIT RATES

  Proposed Weekly Rate

  Existing Present Rate

  £

  £

  Injury benefit

  8·75*

  7·75

  Disablement benefit (100 per cent, assessment)

  10·00*

  8·40

  Unemployability supplement

  6·00†

  5·00

  Special hardship allowance (maximum)

  4·00

  3·35

  Constant attendance allowance (normal maximum)

  4·00

  3·30

  Exceptionally severe disablement allowance

  4·00

  3·00

  Industrial death benefit:

  Widow's pension during first 26 weeks of widowhood

  8·40

  7·00

  Widow's pension now payable at £5·55 rate

  6·55

  5·55

  Widow's pension now payable at £1·50 rate

  1·80

  1·50

  Rates for dependant wives and children are the same as for comparable National Insurance benefit.

  * Increases will also be made in the juvenile rates.

  † Invalidity allowances and the higher rate of children's allowances will be paid as to invalidity pensioners—see National Insurance Table.

  MAIN INCREASED WAR PENSIONS RATES

  All ranks receive the same increases, officer's rates being expressed in pounds per annum.

  PART I—DISABLEMENT BENEFITS

  Proposed Weekly Rate

  Existing Rate

  £

  £

  Disablement pension for private at 100 per cent, rate

  …

  10·00

  8·40

  Unemployability allowances*

  Personal allowance

  …

  6·55

  5·45

  Increase or further increase for wife

  …

  3·20

  2·60

  Increase for adult dependant

  …

  3·70

  3·10

  Comforts allowance

  Higher rate

  …

  1·70

  1·25

  Lower rate

  …

  0·85

  0·63

  Allowance for lowered standard of occupation (maximum)

  …

  4·00

  3·35

  Constant attendance allowance

  Special maximum

  …

  8·00

  6·60

  Special intermediate

  …

  6·00

  4·95

  Normal maximum

  …

  4·00

  3·30

  Three-quarter day

  …

  3·00

  2·50

  Half and quarter day

  …

  2·00

  1·65

  Clothing allowance (annual rate)

  Highest rate

  …

  19·00

  14·00

  Intermediate rate

  …

  12·00

  9·00

  Lowest rate

  …

  7·00

  5·25

  Age allowance with assessments of

  40 and 50 per cent.

  …

  0·50

  0·38

  60 and 70 per cent.

  …

  0·70

  0·50

  80 and 90 per cent.

  …

  1·00

  0·75

  100 per cent.

  …

  1·40

  1·00

  Exceptionally severe disablement allowance

  …

  4·00

  3·00

  Severe disablement occupational allowance

  …

  2·00

  1·00

  * Invalidity allowances and the higher rate of children's allowances will be paid as to invalidity pensioners—see National Insurance Table.

  PART II—DEATH BENEFITS

  …

  Proposed Weekly Rate

  Existing Rate

  Widows pensions

  …

  £

  £

  Standard rate

  …

  7·80

  6·50

  Basic rate

  …

  1·80

  1·50

  Rent allowance

  …

  3·00

  2·50

  Age allowance for elderly widows

  Between age 65 and 70

  …

  0·50

  New benefit

  Over age 70

  …

  1·00

  0·75

  Widowers pensions

  …

  7·80

  6·50

  Widows children

  Eldest child

  …

  3·15

  2·65

  Other children with family allowance

  …

  2·65

  2·15

  Other children without family allowances

  …

  3·00

  2·50

  Motherless and fatherless children aged

  Under 15

  Eldest child or other children with no family

  3·15

  2·65

  Over 15

  4·65

  3·90

  Under 15

  Other children with family allowances

  2·65

  2·15

  Over 15

  4·15

  3·40

  Adult orphans

  …

  6·00

  5·00

  MAIN INCREASED SUPPLEMENTARY BENEFIT RATES

  Proposed Weekly Rate

  Present Rate

  Ordinary scale

  £

  £

  Husband and wife

  …

  …

  …

  …

  9·45

  8·50

  Person living alone

  …

  …

  …

  …

  5·80

  5·20

  Any other person aged

  Not less than 21

  …

  …

  …

  …

  4·60

  4·15

  Less than 21 but not less than 18

  …

  …

  …

  …

  4·05

  3·50

  Less than 18 but not less than 16

  …

  …

  …

  …

  3·60

  3·05

  Less than 16 but not less than 13

  …

  …

  …

  …

  3·00

  2·40

  Less than 13 but not less than 11

  …

  …

  …

  …

  2·45

  2·20

  Less than 11 but not less than 5

  …

  …

  …

  …

  2·00

  1·80

  Less than 5

  …

  …

  …

  …

  1·70

  1·50

  Non-householder rent allowance

  …

  …

  …

  …

  0·65

  0·60

  Attendance requirements

  …

  …

  …

  …

  4·80

  4·00

  PROPOSED MAIN NEW RATES OF CONTRIBUTIONS FOR ADULTS

  (including National Health Service contribution, but excluding Redundancy Fund contribution and Selective Employment Tax)

  CLASS 1—EMPLOYED PERSONS

  Insured Person

  Present Rate

  Increase*

  New Rate

  Total

  Graduated

  Total

  Flat Rate

  Graduated

  Total

  Employed man not contracted out:

  £

  £

  £

  £

  £

  £

  Earnings:

  £10

  0·94

  Nil

  Nil

  0·88

  0·06

  0·94

  £20

  1·39

  0·03

  0·03

  0·88

  0·54

  1·42

  £30

  1·70

  0·15

  0·15

  0·88

  0·97

  1·85

  £42

  1·70

  0·65

  0·65

  0·88

  1·47

  2·35

  Contracted out:

  Earnings:

  £20

  1·13

  0·02

  0·02

  1·00

  0·15

  1·15

  £42

  1·43

  0·65

  0·65

  1·00

  1·08

  2·08

  Employed woman (including married woman not opted out) not contracted out:

  Earnings:

  £10

  0·81

  Nil

  Nil

  0·75

  006

  0·81

  £20

  1·26

  0·03

  0·03

  0·75

  0·54

  1·29

  £30

  1·57

  0·15

  0·15

  0·75

  0·97

  1·72

  £42

  1·57

  0·65

  0·65

  0·75

  1·47

  2·22

  Contracted out:

  Earnings:

  £20

  0·96

  0·02

  0·02

  0·83

  0·15

  0·98

  £42

  1·26

  0·65

  0·65

  0·83

  1·08

  1·91

  * No increase in flat rate contributions.

  Employer

  Present Rate

  Increase*

  New Rate

  Total

  Graduated

  Total

  Flat Rate

  Graduated

  Total

  £

  £

  £

  £

  £

  £

  Employed man not contracted out:

  Earnings:

  £10

  0·947

  Nil

  Nil

  0·887

  0·06

  0·947

  £20

  1·397

  0·03

  0·03

  0·887

  0·54

  1·427

  £30

  1·707

  0·15

  0·15

  0·887

  0·97

  1·857

  £42

  1·707

  0·65

  0·65

  0·887

  1·47

  2·357

  Contracted out earnings:

  £20

  1·137

  0·02

  0·02

  1·007

  0·15

  1·157

  £42

  1·437

  0·65

  0·65

  1·007

  1·08

  2·087

  Employed woman (including married woman not opted out) not contracted out:

  Earnings:

  £10

  0·831

  Nil

  Nil

  0·771

  0·06

  0·831

  £20

  1·281

  0·03

  0·03

  0·771

  0·54

  1·311

  £30

  1·591

  0·15

  0·15

  0·771

  0·97

  1·741

  £42

  1·591

  0·65

  0·65

  0·771

  1·47

  2·241

  Contracted out earnings:

  £20

  0·981

  0·02

  0·02

  0·851

  0·15

  1·001

  £42

  1·281

  0·65

  0·65

  0·851

  1·08

  1·931

  * No increase in flat rate contributions.

  CLASS 2—SELF-EMPLOYED PERSONS*

  Present Rate

  Increase

  New Rate

  £

  £

  £

  Men over 18

  …

  …

  …

  1·24

  0·26

  1·50

  Women over 18

  …

  …

  …

  1·03

  0·22

  1·25

FAMILY LAW REFORM ACT 1969 (AMENDMENT)
3.54 p.m.
Mrs. Sally Oppenheim: I beg to move,
That leave be given to bring in a Bill to amend section 8 of the Family Law Reform Act, 1969 to provide that, in respect of this section only, medical practitioners are not bound by normal medical ethics as to confidentiality with regard to the parents of patients below the age of 18 years, but may use discretion in some cases.
The Bill which I hope to introduce will go some way towards the clarification of a situation which is currently causing bewilderment in the medical profession and concern to parents throughout the country and to those children between the ages of 16 and 18 who are involved.
Section 8 of the Family Law Reform Act, 1969, which gives a right to persons over the age of 16 to give valid consent to medical treatment, is not in essence challenged. It was the result of the Report of the Latey Committee which provided valuable evidence for the reform of family law. But I cannot think that the House could have foreseen some of the difficulties that have arisen as a result of that Section. Had the House done so, it might have sought to amend it then, as I am doing now, to give guidance to the medical profession in a complicated and confusing situation in which medical, legal, psychological, moral and social problems are all intertwined.
Indeed, the Section might already have been amended but for an unfortunate accident. On Report stage of the Bill on 9th July, 1969, in column 1407, my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) sought to amend it and put to the House most cogently the general apprehensions and anxieties which were widespread among school physicians with regard to the problems involved in medical ethical secrecy regarding minors at residential schools. He revealed in his speech that, unfortunately, his letter putting these important points to the Home Office in December, 1968 was lost for four months between Departments and that by the time he received a reply he was abroad and the Latey Committee recommendations had been included in the Bill which by that time had completed its passage in another place.
1516
In replying to him in that debate on the question of the prohibition of a 16 year old patient from discussing her case with her mother the then Attorney-General absolved himself from involvement in a legal answer to the problem by saying:
"Whether a doctor accepted the prohibition would be a matter for his conscience, of what he thought to be right and what he thought to be appropriate."—[OFFICIAL REPORT, 9th July, 1969; Vol. 786, c. 1421.]
That is an interpretation which I accept but which, apparently, is not acceptable to the B.M.A. or the G.M.C.
A doctor was recently brought before the Disciplinary Committee of the G.M.C. accused of breach of professional conduct in respect of breach of confidentiality of a 16-year-old patient. The ruling of the G.M.C. on that occasion, which, in effect, said that the doctor was wrong in what he did but right to do it, was hardly the clear, definitive ruling that most people think was necessary. I believe that doctors, particularly family doctors, should be allowed to use their discretion in some cases where their patients are below the age of 18, and I regret that so much emphasis has been placed on the more sensational and most publicised aspect of it—the pill. Although the pill forms a considerable part of the problem, it is incidental to the much more serious medical considerations which are involved. I have had brought to my attention cases in which youngsters aged 17 or 18 may be suffering from a serious medical or psychological illness, for example, severe depression, thrombosis, peritonitis, septic abortion or V.D., all of which involve risk to life and some of which necessitate medication which may have side effects.
Then there is the other type of case not immediately serious but potentially so, in which a doctor who knows that there is a long family history of thrombosis, when he is approached by his 16-year-old patient, may be reluctant to prescribe a contraceptive pill and feel that it is his duty to warn her parents to watch out for symptoms. Surely the parents of minors, for whom they are still legally responsible, should have the right to know in such serious circumstances as I have mentioned, the medical position of their children. Surely this is just the time when communications

1517
within the family unit are vital, when parental affection, guidance, sympathy and practical help are urgently needed. But, as the situation stands, if in respect of any of those cases a doctor breaches the confidentiality of his young patients, he is in danger of being brought before the Disciplinary Committee of the G.M.C. I cannot believe that one hon. Member would advocate that.
Where it is possible in such cases he should try to obtain the permission of his young patient to discuss his case, but clearly where it is not he must be free, as he is not now, to use his discretion —not in the moral interests but purely in the medical interests of his patient, in the full knowledge that he holds the ultimate responsibility for his decision, and that first and foremost in his medical code of ethics is his consideration of his patient's medical or psychotherapeutic interests, and he must have legal protection for the interpretation of those interests.
I now turn to the social grounds and points of principle upon which I also seek this amendment. It is very fashionable in some circles to advocate a move away from parental influence, to say that teachers, doctors and even broadcasters are better qualified to advise children than their parents. Such people often fail to make the distinction between permitting and encouraging, and such teaching, sometimes deliberately, leads children to believe that they will not receive understanding or sympathy from their parents. Whereas this is true in the minority of cases, in the majority of cases—I believe that good parents are in the majority—it is not.
I particularly deplore any inference that poor or deprived parents are necessarily bad or inadequate ones. I have done social work—[Interruption.] I have done social work for some years in one of the most necessitous parts of the country, in which I met these families, and among them I met more good parents who loved, understood and cared for their children than anyone else. After all, who but the parents—[Interruption.]
Mr. Speaker: Order. The hon. Member for Manchester, Ardwick (Mr. Kaufman) must not shout things across the Chamber.
Mrs. Oppenheim: After all, who but the parents have the best interests and
1518
welfare of their children at heart? It is their advice at a very vulnerable age which is motivated by their love and affection which is usually the best advice that children can get. Therefore, on these grounds too there is some justification for parents of a child below 18 to be told of serious medical circumstances concerning their children—not so that they can forbid, frighten or veto, but so that they can discuss and evaluate the problem with them. Very often the family doctor is the only link between parents and children in such circumstances.
Of course, I accept that no clear boundary can be drawn while a minority of parents are unable to accept this responsibility, and while there are some family relationships which will make it undesirable, even in the case of some children under 16. It is for this reason that I have added the words "in some cases at his discretion". Naturally I accept that confidentiality must be respected in the vast majority of cases.
The opponents of this Amendment will say that it will result in girls being scared to consult their doctors and clinics. [HON. MEMBERS: "Hear, hear."] I can only refer them to The Economist of 13th March, which pointed out that, far from discouraging them, the recent verdict in favour of Dr. Brown had prompted an unprecedented rush of business at a well-known Birmingham clinic. Equally it is easy to reel off a list of examples of parents who are inappropriate to receive confidences, but such selectivity hardly proves the case.
Finally, if it is reactionary to believe that family influence is a great force for good in our society, which should be reinforced and not undermined, and that it will be eroded if parents are not allowed to exercise their responsibility in some cases, I stand condemned as a reactionary, because this is what I believe. It is on these two important grounds, the medical-legal one and the social one, that I beg leave to amend Section 8 of the Family Law Reform Act, 1969.
4.5 p.m.
Miss Joan Lestor rose—
Mr. Speaker: Does the hon. Lady wish to oppose the Bill?
Miss Lestor: Yes, Mr. Speaker, I do.

1519
First, Section 8 of the Family Law Reform Act to which the Bill relates has nothing whatever to do with the confidentiality of a patient. It deals only with the problems of a minor of 16 consenting to medical treatment which might otherwise be an assault, such as a surgical operation. It has no relevance whatever to the confidential information disclosed by the patient to the doctor. The Latey Committee, which proposed this change, which resulted in Section 8, made no reference to the problem of the confidential relationship in that context, except in paragraph 482, which I advise the hon. Member for Gloucester (Mrs. Sally Oppenheim) to read.
As the hon. Member knows, any doctor is under a duty to preserve the confidentiality of any patient by reason of the code of ethics of the profession. Any breach of that duty, as happened, can be charged before the General Medical Council, which is what happened in the case of Dr. Brown and his young patient —the fact that she was taking the pill came to his knowledge through the family advisory clinic—but this duty has to go with the law of the land. The only obligation in law to preserve confidentiality is probably under the right to preserve information by an action in the Chancery Division. This was upheld and explained by the Secretary of State for Social Services in an Answer to my hon. Friend the Member for Pontypool (Mr. Abse).
One of the things which worries me about the Bill is that there is no evidence at all that the medical profession wants it. In fact, the opposite seems to be the case. The Secretary of the British Medical Association has expressed grave concern at the suggestion which has followed from the General Medical Council's recommendation that confidentiality between doctor and patient was being eroded. The B.M.A. has said that it will pronounce on what has happened in due course.
It would therefore ill become the House to allow this Bill to have a Second Reading when we do not yet know what the B.M.A. will tell us. What we do know is that they are not bewildered but are exceedingly worried about the effect of this decision upon people who have always regarded going to a doctor as confidential.
1520
The hon. Member for Gloucester said that this had very little to do with the pill, but it was not until the question of the young girl getting the pill came up that this was ever raised. Her own Greater London Young Conservatives have opposed this suggestion of hers and have tied it very closely to the pill. They and others have made the point that what this would do is stop young people not from indulging in sexual relationships but from seeking effective advice and will encourage them to take ineffective precautions.
This suggestion is also opposed by the Health Education Council, particularly on the grounds of V.D., because the figures of V.D. among the age group 16 to 18 are very high. One of the main reasons that one has been able to encourage people to take treatment for V.D. is that they know when they go for treatment that it will be treated in confidence. The fear of all of us who are concerned with young people is that this, again will not stop them from having sexual relationships but will stop them from seeking advice on how to treat V.D., because they will fear that it will not be in confidence.
This is also true on the whole question if illegitimate births. A total of 15,000 live illegitimate births were recorded in 1969 to girls between the ages of 11 and 18. This is a very drastic increase. The same argument applies exactly. One will not stop the new attitude to sex relationships among young people. One will discourage them from seeking advice. We have a rise in the figures for abortions, which this would also affect.
The hon. Lady spoke about young people between the ages of 16 and 18. But will it affect all of them? It will not affect those who are married, or boys who can obtain supplies of contraceptives without ever going to a clinic or a doctor? Will it affect young people between the ages of 16 and 18 who were in the care of a local authority but who are no longer in care, or young people who are living away from home?
In making the case about preserving the dignity and closeness of family life, the hon. Lady is trying to distinguish between groups of people. This would only apply to young people who are living at home.

1521
All sorts of groups of people are excluded.
I entirely agree with the hon. Lady that family life is very important. It is good, proper, right and desirable that young people talk to their parents, discuss matters with them and receive advice from them. Unhappily, it is not true of all of them. The Bill will damage the fabric of many family relationships, because the confidentiality which the young person wishes to preserve will be destroyed and the knowledge which he does not wish his parents to have will automatically come to them. This could result in breakdowns of family life.
I ask hon. Members to think carefully about how they vote. The Bill will act as a strong deterrent against young people seeking essential medical advice if they are to preserve some sort of responsibility in many of their relationships.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—
The House divided: Ayes 106, Noes 155.

Division No. 337.]

AYES

[4.12 p.m.

Allason, James (Hemel Hempstead)

Hall, Miss Joan (Keighley)

Oppeniheim, Mrs. Sally

Baker, Kenneth (St, Marylebone)

Haselhurst, Alan

Owen, Idris (Stockport, N.)

Baker, W. H. K. (Banff)

Hiley, Joseph

Parkinson, Cecil (Enfield, W.)

Bell, Ronald

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

Peel, John

Bennett, Sir Frederic (Torquay)

Hill, James (Southampton, Test)

Percival, Ian

Benyon, W.

Holland, Philip

Pink, R. Bonner

Berry, Hn. Anthony

Hornby, Richard

Proudfoot, Wilfred

Biffen, John

Howell, Ralph (Norfolk, N.)

Ramsden, Rt. Hn. James

Biggs-Davison, John

Hutchison, Michael Clark

Rees, Peter (Dover)

Body, Richard

Iremonger, T. L.

Rees-Davies, W. R.

Boscawen, Robert

Irvine, Bryant Godman (Rye)

Renton, Rt. Hn. Sir David

Bossom, Sir Clive

James, David

Rhys Williams, Sir Brandon

Boyd-Carpenter, Rt. Hn. John

Jennings, J. c. (Burton)

Roberts, Michael (Cardiff, N.)

Braine, Bernard

Jessel, Toby

Roberts, Wyn (Conway)

Bray, Ronald

Kaberry, Sir Donald

Rodgers, Sir John (Sevenoaks)

Burden, F. A.

Kellett, Mrs. Elaine

Russell, Sir Ronald

Carlisle, Mark

Kilfedder, James

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

Chapman, Sydney

Kinsey, J. R.

Skeet, T. H. H.

Chichester-Clark, R.

Knight, Mrs. Jill

Soref, Harold

Clark, William (Surrey, E.)

Lane, David

Spence, John

Cockeram, Eric

Le Marchant, Spencer

Sproat, Iain

Costain, A. P.

Longden, Gilbert

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

Deedes, Rt. Hn. W. F.

McAdden, Sir Stephen

Taylor, Robert (Croydon, N.W.)

Elliot, Capt. Walter (Carshalton)

Maclean, Sir Fitzroy

Temple, John M.

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

Mather, Carol

Thompson, Sir Richard (Croydon,S.)

Fenner, Mrs. Peggy

Maude, Angus

Trew, Peter

Fidler, Michael

Mawby, Ray

Turton, Rt. Hn. R. H.

Finsberg, Geoffrey (Hampstead)

Meyer, Sir Anthony

Vickers, Dame Joan

Fox, Marcus

Mills, Peter (Torrmgton)

Wall, Patrick

Fry, Peter

Moate, Roger

Warren, Kenneth

Galbraith, Hn. T. G.

Monks, Mrs, Connie

White, Roger (Gravesend)

Gardner, Edward

Morgan-Giles, Rear-Adm.

Woodhouse, Hn. Christopher

Gorst, John

Morrison, Charles (Devizes)

Gower, Raymond

Neave, Airey

TELLERS FOR THE AYES:

Gray, Hamish

Nicholls, Sir Harmar

Sir Gerald Nabarro and

Green, Alan

Normanton, Tom

Mr. Fergus Montgomery.

Grylls, Michael

Onslow, Cranley

NOES

Albu, Austen

Campbell, I. (Dunbartonshire, W.)

Edelman, Maurice

Allaun, Frank (Salford, E.)

Castle, Rt. Hn. Barbara

Edwards, Robert (Bilston)

Archer, Peter (Rowley Regis)

Clark, David (Coins Valley)

Ellis, Tom

Armstrong, Ernest

Cocks, Michael (Bristol, S.)

English, Michael

Ashton, Joe

Coleman, Donald

Evans, Fred

Atkinson, Norman

Concannon, J. D.

Faulds, Andrew

Bagier, Gordon A. T.

Crosland, Rt. Hn. Anthony

Fernyhough, Rt. Hn. E.

Balniel, Lord

Crossman, Rt. Hn. Richard

Fisher, Mrs. Doris(B'ham, Lady wood)

Barnes, Michael

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

Fletcher, Ted (Darlington)

Barnett, Joel

Dalyell, Tam

Foley, Maurice

Benn, Rt. Hn. Anthony Wedgwood

Davis, Clinton (Hackney, C.)

Foot, Michael

Bidwell, Sydney

de Freitas, Rt. Hn. Sir Geoffrey

Ford, Ben

Bishop, E. S.

Dell, Rt. Hn. Edmund

Freeson, Reginald

Blenkinsop, Arthur

Doig, Peter

Galpern, Sir Myer

Booth, Albert

Douglas, Dick (Stirlingshire, E.)

Garrett, W. E.

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

Douglas-Mann, Bruce

Gilbert, Dr. John

Callaghan, Rt, Hn. James

Eadie, Alex

Ginsburg, David

Golding, John

Lipton, Marcus

Rhodes, Geoffrey

Gordon Walker, Rt. Hn. P. C.

Mabon, Dr. J. Dickson

Roberts, Rt.Hn.Goronwy (Caernarvon)

Gourlay, Harry

McBride, Neil

Robertson, John (Paisley)

Grant, George (Morpeth)

McCartney, Hugh

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

Hamilton, James (Bothwell)

McCrindle, R. A.

Rodgers, William (Stockton-on-Tees)

Hamilton, William (Fife, W.)

Mackenzie, Gregor

Roper, John

Hamling, William

Maclennan, Robert

Ross, Rt. Hn. William (Kilmarnock)

Hannan, William (G'gow, Maryhill)

McMillan, Tom (Glasgow, C.)

Sheldon, Robert (Ashton-under-Lyne)

Hardy, Peter

Marks, Kenneth

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

Harper, Joseph

Marquand, David

Short, Mrs. Renée (W'hampton, N.E.)

Healey, Rt. Hn. Denis

Marsh, Rt. Hn. Richard

Silkin, Hn. S. C. (Dulwich)

Heffer, Eric S.

Mayhew, Christopher

Skinner, Dennis

Horam, John

Mellish, Rt. Hn. Robert

Small, William

Houghton, Rt. Hn. Douglas

Mendelson, John

Smith, John (Lanarkshire, N.)

Howell, Denis (Small Heath)

Mikardo, Ian

Spearing, Nigel

Huckfield, Leslie

Miller, Dr. M. S.

Stallard, A. W.

Hughes, Mark (Durham)

Milne, Edward (Blyth)

Steel, David

Hughes, Robert (Aberdeen, N.)

Morris, Alfred (Wythenshawe)

Stewart, Donald (Western Isles)

Hughes, Roy (Newport)

Morris, Charles R. (Openshaw)

Stoddart, David (Swindon)

Hunter, Adam

Mulley, Rt. Hn. Frederick

Strang, Gavin

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

O'Halloran, Michael

Strauss, Rt. Hn. G. R.

Jenkins, Rt. Hn. Roy (Stechford)

Orbach, Maurice

Summerskill, Hn. Dr. Shirley

John, Brynmor

Orme, Stanley

Taverne, Dick

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

Oswald, Thomas

Thorpe, Rt. Hn. Jeremy

Johnson, Walter (Derby, S.)

Paget, R. T.

Urwin, T. W.

Jones, Dan (Burnley)

Pannell, Rt. Hn. Charles

Wainwright, Edwin

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

Pardoe, John

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

Kaufman, Gerald

Parker, John (Dagenham)

Watkins, David

Kelley, Richard

Pavitt, Laurie

White, James (Glasgow, Pollok)

King, Tom (Bridgwater)

Pentland, Norman

Whitehead, Phillip

Lamble, David

Perry, Ernest G.

Wilson, Alexander (Hamilton)

Latham, Arthur

Prescott, John

Wilson, William (Coventry, S.)

Lawson, George

Probert, Arthur

Lee, Rt. Hn. Frederick

Rankin, John

TELLERS FOR THE NOES:

Leonard, Dick

Reed, D. (Sedgefield)

Mr. Alexander W. Lyon and

Lestor, Miss Joan

Rees, Merlyn (Leeds, S.)

Mr. John Fraser.

ORDERS OF THE DAY
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [30th March],

  AMENDMENT OF THE LAW
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but—
  (1) this resolution shall not authorise the making of amendments of the enactments relating to purchase tax, other than amendments about the remission of tax on exported vehicles, and other than amendments making the same provision for chargeable goods of whatever description, or for all goods to which any of the several rates of tax at present applies; and
  (2) neither this resolution nor any resolution relating to selective employment tax shall authorise the making of amendments of the enactments relating to selective employment tax so as to give relief from tax—

  (a) by way of exemption from, or a reduction in the rate of, tax except in respect of all persons of the same descriptions relevant for determining the rate of the employer's flat-rate contribution with which the tax is combined, whether that contribution is under the National Insurance Acts or under the corresponding enactments in Northern Ireland; or

  (b) by way of providing for payments to employers of an amount equal to the whole or a specified part of the tax paid if the proposed provision—

  (i) is in respect of employers in, or at establishments in, part only of Great Britain; or

  (ii) extends to employers in, or at establishments in, Northern Ireland; or

  (iii) is in respect of all persons in any particular description of employment in all parts of Great Britain, and relief in respect of the whole of the tax paid could be given in respect of that description of employment by an order under section 9(1)(a) of the Selective Employment Payments Act 1966 adding that description of employment to the employments to which section 1 or 2 of that Act applies; or

  (c) by adding or removing any employer to or from the employers to whom section 3 of that Act applies, or

  (d) by amending the provisions of Schedule 1 or Schedule 2 to that Act.

  Question again proposed.

BUDGET RESOLUTIONS AND ECONOMIC SITUATION
4.21 p.m.
Mr. Roy Jenkins: I begin by congratulating the Chancellor most warmly upon his presentational performance yesterday afternoon. As I know only too well, a Budget speech in any circumstances is a formidable event for a Chancellor, and that is especially so when it is a first Budget. In addition, the right hon. Gentleman had a formidable amount of material to present to us, and I should like also to congratulate him upon the amount of work done, with the assistance of his advisers, in the past eight months. About the result of that work, I am a little more reserved, but about its quantity there can be no doubt. To have presented all these results in a speech which lasted less than two hours was a great feat of compression, and only very occasionally did the right hon. Gentleman sacrifice lucidity to time. As a result, naturally, there was less economic analysis than is usual, but I suspect that the House can always bear that with a degree of equanimity.
On monetary policy, the right hon. Gentleman was a little thin. New methods of control, he told us, had been studied and would be discussed. But he gave us very little beyond that. In the meantime, existing methods of bank control will continue with an increase of 10 per cent. instead of last year's 5 per cent., unless there is a modification, which he rather hinted at, during the year.
I was not quite clear whether the 2½ per cent. a quarter increase is to be above the present level of bank lendings or above the 105 per cent. ceiling laid down for the year, which it is below at present. I do not know whether the Chancellor or the Financial Secretary can answer that immediately, or the Secretary of State for Trade and Industry, who is to reply later. I should like to know the answer, although it is not of great significance at the moment because, owing to the depressed state of the economy, there is no real pressure to borrow from the banks.
None of us knows whether the Chancellor intends to bring down the Bank Rate tomorrow. Certainly I think he should do so, because our rate is now

1527
well out of line with rates in other centres, which is a position quite different from that of a year ago. If he intends to do so this week, on the whole I think it would have been better to have announced it yesterday so that it could have been taken into account in our discussions then and today. I incurred a little mild criticism for doing this last year. I hope the right hon. Gentleman was not put off by it. It is his decision to make, and there is a certain conflict here between courtesy to the House and the country on the one hand and the Bank on the other hand. But it would, on the whole, have been wiser, if there is to be any action, to give the House and the country the full picture. I am sure the Bank would have understood.
Much of the Chancellor's speech was devoted to longer-term measures. I shall deal only briefly with each of those today, because there is a good deal of vagueness at this stage about the proposals, and I think it right that we should study the two Green Papers and return to them later on the Finance Bill, though perhaps some of my hon. and right hon. Friends will touch on them in this debate.
The House will be glad to hear that my speech today necessarily must be a good deal shorter than the Chancellor's. In it I want to concentrate upon the relevance or irrelevance of the Budget to our present economic problems and upon the taxation measures which come into effect immediately or in the near future. However, before I get on to them perhaps I might say a few words about each of the long-term proposals.
The first is the future of the corporation tax. I do not believe that the direction here proposed is economically right. A system which will encourage distribution of profits and discourage retention and in which there may actually be a lower tax burden on a company if it makes higher dividend payments looks very perverse in relation to our problems of investment and of discouraging inflationary wage claims. My hon. Friend the Member for Heywood and Royton (Mr. Barnett) will have more to say about this tomorrow, and so shall I at a later stage.
The next is the amalgamation of income tax and surtax. In my view, there is no objection in principle to this. But it
1528
will need to be judged very closely on how it is worked out. It could just be a cloak for making the direct taxation system much less fair and progressive. On present form, that seems dangerously likely. But I do not believe in making abstract judgments. We shall see what the Chancellor eventually brings before the House and judge it on its merits. A smoother progression might have advantages, although this may produce unexpected results in the middle income ranges.
I turn to the value-added tax. The Chancellor was fair about this in relation to the European Economic Community. He did not put it forward on that ground at all. He put it forward on its own merits. My position is the reverse of his. Like my right hon. Friend the Leader of the Opposition, who mentioned this yesterday, I should regard it as an acceptable price to pay if we could get reasonable terms for entry into the Common Market. But I should regard it as a price, and I do not see the case for accepting it for its own sake. It will be much more expensive and cumbersome to operate than purchase tax and S.E.T. in companies.
Yesterday right hon. and hon. Gentlemen opposite cheered loudly at the prospect of getting rid of the 2,000 employees from the Surtax Office, although I suspect that under the new arrangements most of them will be absorbed in other Inland Revenue duties. But are right hon. and hon. Gentlemen opposite aware that, according to the best Customs and Excise estimates published in the N.E.D.C. Report in 1969 and in no way contradicted in yesterday's Green Paper, a V.A.T. will involve an extra staff of between 6,000 and 8,000 above that now employed for S.E.T. and purchase tax.
More important, however, will be the effects on the cost of living, especially on that of the lower-paid. The Conservative Party, having talked about it a good deal before, went very quiet on the V.A.T. during the election campaign, and for very good reasons. But we always predicted that it would be an essential part of their taxation changes, and we have been proved right. A whole new range of items will be subject to tax; rail and bus travel, coal, gas and electricity, children's clothing, certainly housing

1529
repairs and maybe house rents—the Green Paper was rather vague about this —canteen meals, and many other goods and services. The rise in the cost of living might well be very sharp, and will certainly be substantial. As compared with a combination of purchase tax and S.E.T., which are more progressive, the worsening in the position of the lower-paid would be several percentage points. Without compensation for that, the results would be quite intolerable. Will the compensation be forthcoming? If the indications of the past six months are any guide, this might be provided for very limited numbers of the worst-off, but not for the bulk of those affected. The outlook for them would be dismal.
I turn to the more immediate effects of the Budget. What are the tests by which it should be judged? It certainly should not be judged simply by the plaudits of the moment. I expect that the Chancellor is as much aware of that as any of us. He must recall vividly the euphoria of that "jolly, jolly sixpence" morning immediately after his October measures, and the disillusionment which set in within 10 days. He will also recall lain Macleod's dictum that all Budgets which looked good in April looked bad in July, and vice versa. I always regarded that, like many illuminating remarks, as something of an exaggeration, but it points to a certain equanimity of response to immediate judgments both good and bad.
It is also the case that a Chancellor should be judged much more by how he manages the whole economy throughout the year than by the tax changes he announces on a particular day in March or April. Of course, these changes may have a big effect on the performance for the year and further ahead. Beyond that, the annual set-piece of the Budget Statement and the Budget debate provides the obvious occasion for reviewing the state of the economy as a whole, for looking at its more important needs and considering the prospects of the Government's policies meeting those needs.
What are the main needs of the economy at present? I shall set them out in a way that will enable us to judge as the coming financial year proceeds how far the Budget is adequately directed to meeting them. The first I would say is a rate of price increases for 1971 significantly lower than that for 1970. It is
1530
not enough for the Government to talk all the time only about wages. It was the promise to stop price increases which, more than anything else, won them the election. We did not hear all that much from them about incomes, apart from those of the doctors, during that period. Any sensible person wants to see a slowing down on a fair basis of wage and salary increases, but this cannot be done independently of prices. For one thing, it is very unlikely to be achieved. There is no reason at all why people should put up with a fall in their standard of living in present circumstances. For another, if it did happen and prices continued for a period to bound ahead much faster, the effects would be highly undesirable. There would be a shrinkage of real demand which would undo what the Budget claims to achieve for the level of production and the pace of business activity. The behaviour of prices during the remainder of the year will, therefore, be a fair guide to whether the Budget has helped to bring inflation under control.
What has the Budget done in that direction? What has it done to deal with what the Government are constantly telling us is the most urgent problem facing this country? Very little indeed. There is the S.E.T. cut. I do not believe that even on the most optimistic assumptions that will make a difference of as much as a half of 1 per cent. on the retail price index. There were one or two very minor optimistic noises last night, but the Daily Telegraph, which would not have wished to present the cut unduly unfavourably, carried a headline over a front-page story by its business correspondent this morning saying
"SET cut unlikely to reduce prices".
Sir Gerald Nabarro: Most of the others said the opposite.
Mr. Jenkins: They were probably briefed by the hon. Gentleman.
Sir G. Nabarro rose—
Mr. Jenkins: If the hon. Gentleman interrupts from a sitting position, he must expect an occasional response without the Member who gives that response having to give way for him to pontificate for a few minutes.
If the Government believe differently about the effect of the S.E.T. cut, let

1531
them monitor the position, if they still have any price-monitoring agencies left, and make a three-monthly report to the House on what the S.E.T. cut is meaning in terms of price reduction. The Budget remits £550 million of taxation, £680 million in a full year, remissions which represent no dividend from the activities of this Government. What they have done is to use our balance of payments surplus and our cautious budgeting of last year and they have contributed nothing of their own, except a record post-war level of unemployment. I find it extraordinary that with taxation concessions of that scale the Government should not have produced a bigger impact—they have produced no significant impact—on the vital prices front. They could have done so. There are two taxes which are to be abolished in 1973 —at a price—purchase tax and S.E.T. If they had chosen to cut purchase tax instead of S.E.T. this year, they could have had an effect at least three times as big upon the retail price index.
Hon. Members: At a stroke.
Mr. Jenkins: It would have been a somewhat delayed stroke. But they have been the prisoners of their own doctrinaire objection to S.E.T. As a result, they have missed a substantial opportunity to make a worth-while impact on the major problem of rising prices. Continuing price increases will rapidly erode such direct taxation concessions as are given to the bulk of taxpayers, not the big concessions, but those given to the bulk of taxpayers.
I am a little sorry and surprised not to see the Prime Minister here today. Last year he centred his criticism on the fact that the Budget was a one-month Budget—
Mr. Kenneth Lewis: My right hon. Friend is not here because he has heard it all before.
Mr. Jenkins: He has heard this before, because it was what he himself said a year ago, but it would not do him any harm to hear it again in present circumstances. He said that it was a one-month Budget because the tax remissions of £220 million were equivalent to one month's increase in prices. He based that
1532
on the price increases of 3½ per cent. in the six months to February, 1970. On the same basis—5 per cent. in the six months to this February, and even reducing it for the likely effect of S.E.T.—this Budget, so far as the ordinary citizen is concerned, to use the Prime Minister's phrase—in other words, taking tax remissions which directly affect the bulk of individuals—is at best a three-week Budget.
The second major need of the economy is a rapid reduction in the present level of unemployment, a reduction leading to a significantly lower run of figures next winter than those which the country has suffered in the last few months. I find no hint in the Chancellor's speech that he expects to achieve this. He suggested, at most—the right hon. Gentleman was fair and straightforward about this —that he would prevent the "degree of slack" which already exists in the economy from increasing further. In other words, there will be a stabilisation of the present level of unemployment.
In his broadcast last night the Chancellor spoke of the pre-Budget forecasts available to him which had shown the prospects of unemployment getting much worse. He should tell us how big a rise was shown and what is now the forecast for unemployment next winter, after the Budget. It was obviously a central consideration in what he did. We should, therefore, know the prospect both before and after the Budget.
I well remember how after previous Budgets, when the levels of unemployment were between 150,000 and 200,000 below that of today, the then Shadow Chancellor of the Exchequer, who felt strongly about these matters, constantly complained that it was intolerable that those levels should be allowed to continue, and he pressed hard for detailed estimates of the unemployment prospects. Those details are of greater relevance today.
Sir Harmar Nicholls: I wonder what unemployment was when the right hon. Gentleman was Chancellor.
Mr. Jenkins: If the hon. Gentleman had been listening he would have heard me speak about the time when the figures were between 150,000 and 200,000 below what they are today.

1533
It was not only the then Shadow Chancellor who was taking that attitude. The present Prime Minister, speaking in Dundee on 9th September, 1969, said:
"We cannot tolerate a waste of human and economic resources brought about by their uneven use in different parts of the country. We refuse to condemn large parts of the Kingdom to slow decline and decay, to dereliction and to persistent unemployment, in pursuit of old-fangled 19th century doctrines of laissez-faire."
It is a pity that the Prime Minister is not in his place to hear me quote those words he used.
Mr. William Ross: Where is he? Scotland wants to know.
Mr. Jenkins: The right hon. Gentleman went on:
"We shall act to bring new life to those areas suffering from high unemployment or depopulation. We shall act to encourage a sensible spread of industry. We shall act to enable the wealth that comes with it to be enjoyed in all parts of Scotland and across all parts of Britain."
When he used those words in Dundee, unemployment in Dundee was 2,579. Unemployment in Dundee today is 5,354. What does the Budget do to give special help to Dundee, to the rest of Scotland and to the weaker regions generally? Precisely nothing.
I estimate that we are now producing nearly 10 per cent. below our capacity. We are losing between £3 billion and £4 billion of potential national wealth. The demand effect of all the Budget measures is put at £250 million direct and £350 million with a multiplier effect. We are not reflating the economy. At best we are preventing it from deteriorating further.
It is clear from the position the Government have now adopted that they should have taken this action much earlier. Their position, as we understood it, was that there could be no attempt at reflation until inflation, particularly in wages, was under control, as they saw it. There is no real indication that that has happened. It is merely a hope expressed by the Chancellor and the Prime Minister. However, they have clearly reversed their policy, but they have reversed it too late, for they have wasted at least six months of strong balance of payments during which time it would have been possible to be push-
1534
ing the economy forward and not allowing it to stagnate as it has been doing.
The third major element or need of the economy is a reversal of the present nearly disastrous trend in the level of industrial investment. The Prime Minister, who deals with trends in a somewhat peculiar manner, tried to take credit at Question Time the other day for marginal improvement in the second half of 1970 over the first. A glance at the quarterly figures should have made it obvious that that was an unwise point to make. But the Chancellor contradicted it yesterday when he said—I thought it was an under-statement—that there was a flattening out in the trend of private industrial investment. He added that there would have been the likelihood of a fall.
None of us can yet know how much of a correction yesterday's measures will provide. Certainly the Chancellor's estimate in the Budget Report gives no ground for confidence, with no increase in the second half of this year over the second half of last year, and with an increase of only one-half of 1 per cent. in the first half of next year over the first half of this year. I do not believe that the corporation tax cut is a powerful incentive here, and it looks from his forecasts as though the Chancellor shares my view. The Government were foolish to abolish investment grants last autumn when an acceleration of payments would have been invaluable. They have thrown away this valuable weapon at exactly the wrong time.
The fourth major element in the economy is the need for, and prospect of, a good balance of payments position. We do not need to look for a further improvement here. It is in no way necessary, so strong has been the recent performance. Of course, had the Prime Minister been remotely right last June, when he talked about a "deteriorating trend", the position would now have been very different. But that was just another example of his somewhat peculiar attitude in these matters to which I referred.
The Prime Minister's idea of an economic trend is a random movement of figures which, if one's conscience is not too acute, can be interpreted in such a way as to benefit the Conservative Party.

1535
But the right hon. Gentleman was not alone. Even the moderate Home Secretary, speaking with all his great knowledge of balance of payments surpluses, said on 15th June:
"It is all very well for Labour to talk about last year's surplus. Last year was last year. The situation will not get better—it will get worse and we are over the hump already."
But that was not true, as the earlier part of the Chancellor's Statement yesterday made abundantly clear. In other words, they were both talking nonsense, though not innocent nonsense.
As a result, a British Chancellor, for the first time for nearly a decade, has not had the balance of payments breathing down his neck. Thus, his room for manoeuvre has greatly increased. For all the talk about the legacy, he is a very lucky man in this respect.
We should not, therefore, expect an improvement in the balance of payments, or even necessarily a maintenance of the present very high figures. I believe that a good surplus should be maintained, but if the three other objectives had been achieved, then some run-down in the size of the surplus could now have been reasonably accepted. However, I am sure that two of these objectives will not be achieved, and it looks highly unlikely that the third will be achieved either. In present circumstances we could and should have set a course for sustained growth of a strength and consistency which has eluded us for 15 years or more past. I am doubtful whether the Budget has done this. Its objective is merely to prevent our spiralling down further into higher unemployment and more unused resources.
I turn now to the redistributive effects of the Budget, to the effects on individuals. I think it would be agreed that it is appropriate here to combine the effects of the mini-Budget with those of the Budget and include also the method of financing the pensions increases. I start with those who will gain substantially. Let us be in no doubt that a limited number gain massive amounts. A married man with two children with an earned income of £10,000 got £195 from the mini-Budget. That amount has now been increased to £410. At £20,000 a gain of £445 has been increased to one of £2,041. At £50,000 the gain is no less than £6,800.
Mr. John Gorst: Are not they worth it?
Mr. Jenkins: If the hon. Gentleman will stand up, we will judge whether they are worth it.
Mr. Gorst: Is the right hon. Gentleman suggesting that the better-paid members of his own side, for example, are not worth the extra amount they are receiving?
Mr. Jenkins: I am suggesting that I do not think it a Budget priority to give £6,800 of tax remission to any one individual.
But this is in no way the end of the story. If persons in these categories are self-employed or employed without a pension scheme, they can save up to an additional £750 a year at a cost to themselves, at £20,000, of only about £160. They can then get the result not in an annuity as hitherto but in a tax-free lump sum. If a man is married to an earning wife with a substantial income of her own there is a further big benefit from the disaggregation of the wife's income. This provision is only of value where the combined income is above £5,200 a year. Where the huband is earning, say, £10,000 and the wife £5,000, the benefit could be as big as £1,434—almost exactly the amount of the gross average wage—above the sums I have already mentioned.
But even that is not the end of the story. There are substantial benefits for those concerned with close companies. There is the disaggregation of children's income. There is the ending of capital gains tax on death and on a 15-year basis of discretionary trusts.
Sir G. Nabarro: Hear, hear.
Mr. Jenkins: I am surprised hon. Members who are so anxious to see corporation tax encourage distribution and, as they see it, greater flexibility should take this view, because the removal of capital gains tax on death will have a locking-in effect on securities, which runs very much against the basic idea of the Government here, and it is by no means only family businesses which are concerned.
There is the effect, in addition to this, of the two cuts in corporation tax upon share values and dividend prospects. I

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am not suggesting that all these measures are bad, although I think that some of them, notably the disaggregation of children's income and the change in capital gains tax, are very bad indeed. But what cannot be denied is that their cumulative effect is massive, not so much upon the revenue as upon individuals, and those affected in all cases belong, broadly speaking, to the same limited group. Some members of it will get four or five substantial and separate benefits out of this Budget. There is a grossly excessive concentration of remission at this end of the scale.
Yesterday, when the Chancellor gave the figure of cost for the only concession which directly affects the ordinary run of taxpayers and announced it as £163 million this year and £207 million in a full year, and then announced the cost of the higher incomes relief at £16 million this year, there was a lot of Tory cheering, presumably in the belief that these figures proved beyond doubt the fairness of the balance—so much cheering, indeed, that the full year figure of £38 million was completely drowned. I do not think any of us heard it and we did not learn about it until we were able to read the speech afterwards. The £207 million is five and a half times £38 million. About six million people share the £207 million. How many people share the £38 million? A few hundred thousand at the most. Will the Financial Secretary give us the figure?
These cumulative arrangements, amounting in many cases to a great number of separate benefits for the same people, must also be seen against the background of Monday's announcement about the three waiting days for sickness benefit. To save £19 million in this form as a prelude to the vast tax hand-outs I have just listed shows an extraordinary degree of insensitivity to the needs of the ordinary people.
It has also to be seen against the background of widespread Press leaks that the cost of some prescriptions will rise to 50p. Will the Government deny the truth of these leaks? They are an important part of the picture.
I now turn to the alleged benefits for the less well off. First, there is the pensions increase. We certainly welcome this. It is overdue. We are told that it is being done at the earliest practicable
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date from now, but that date could, of course, have been brought forward if notice had been given earlier. The pace of price increases and its effect upon the standard of living of pensioners has not just become apparent. It was fully apparent in the autumn and there was, in effect, an autumn budget. In 1964, we announced our pensions increase in the autumn and brought it in in the spring. Had the Government so desired, the same could perfectly well have been done on this occasion.
Mr. William Clark: It is more than the last Government ever gave.
Mr. Jenkins: It is 20 per cent. But we never had such a great inflationary rate. The rate of inflation in the two years following devaluation was just below 5 per cent. in one year and 5.1 per cent. in the other.
Mr. Clark: Would the right hon. Gentleman be frank and agree that the rate of inflation we are suffering now started when he was Chancellor simply because the industrial relations Measure which he dearly wanted to introduce was rejected?
Mr. Jenkins: I do not think it started then but it certainly started in the days of the previous Government. However, the view which hon. Members opposite cultivate so sedulously—that it was peculiarly the fault of that Government —is extraordinarily myopic when the start of the inflation here at a rapid pace coincided with its start in almost every other advanced industrial country in the world. Hon. Members know this perfectly well. Inflation has gained momentum since this Government came in, and this Budget, with all its opportunities, has done nothing to stem it.
This pensions increase needs to be substantial to restore the absolute, let alone the relative, standard of living of the pensioners. For the next six months they will be worse off than at any time since the 1965 increase. They will then be a little better off than they have been recently, but for how long? On the price projections of the National Institute, which are certainly not extravagantly high—it is very cautious here—pensioners will fall back again well below their 1969 standard by early next year with only a

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fraction of the normal two-year period having gone by. The Government will have to move again very quickly if there is not to be not only a delayed relief but also a short-term relief for the pensioner.
I now come to the position of the ordinary family wage earner. After the mini-Budget I presented some figures showing that the married man with two children at £27 a week was significantly worse off as a result of the Government's package and that a person with children needed to be earning approximately £3,000 a year to come out neutral or, still arguably, a little worse than neutral. Those figures were not challenged. Now it may be though that the position has been radically changed by the extra £40 of children's allowance. That is not so. This will be to some extent offset by the extra national insurance contribution and by the large average increase in local rates. At £27 the man may now just about break even as a result of the Budget and the mini-Budget combined.
At £40 a week, because of the steeper rate of national insurance contribution the man will be worse off. All benefit of the increased children's allowances is more than removed, as my hon. Friend the Member for Hitchin (Mrs. Shirley Williams) brought out this afternoon, by the increased contribution at that level. I wonder how many people in this group, when they read the tax tables this morning, realised exactly what was involved in the whole deal. These calculations are without making any allowance for the food, fares and rates increases caused by Government policy, nor for the rumoured further big increase in health charges which I mentioned earlier. There has not been a flicker of denial from the Government Front Bench.
This is all as a result of Government financial policy in a year of massive tax remissions, with hand-outs of several thousands pounds a head to big taxpayers. In addition, there has been nothing in either instalment of the Budget to raise the tax threshold for single persons or married couples without children. How many people in those two categories will be paying tax this year as a result of inflation who were not doing so last year? Many of them will be worse off. The number must be substantial, and I
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hope that the Financial Secretary or the Secretary of State will give us the figure.
The Budget, like the mini-budget, will be socially divisive and not unifying. It will make a further mockery of the Prime Minister's words on the steps of Downing Street on the evening when he took office. I quoted them in November, and I quote them again:
"Our hope is not to divide but to unite, and where there are differences to bring reconciliation."
Reconciliation? This Budget does not reconcile. It accentuates the differences that exist in our society. It does practically nothing to restrain prices. It will make more difficult the achievement of an incomes policy, to which I believe this Government will have to come. It accepts the present level of unemployment, and it may not succeed even in holding that. There is a lot for the few and very little for the many. It is not a Budget for strengthening the economy; it is a Budget for strengthening inequality.
5.5 p.m.
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): The speech of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) has ranged very widely over what my right hon. Friend the Chancellor had to say yesterday. There is one point in what he said that I would like to take up. He promised us that the undoubted enthusiasm with which the Budget Statement of my right hon. Friend was greeted will give way within a short time to disenchantment. I do not believe that for a minute, and I do not believe it because the Budget comprises the essential elements of a wise and sound strategy for this country. It has done this both in terms of the long-term development of our whole fiscal system as well as in terms of individual shorter-term considerations which so glaringly needed attention. The breadth and coverage of my right hon. Friend's Budget Statement constituted an impressive survey of our national economy and our national prospects.
I will not endeavour to attain the same coverage as the right hon. Member for Stechford. This is not because of any sense of a lack of involvement of the many issues concerned, such as social,

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monetary and fiscal policy. I believe it is now established beyond question that the inter-meshing of all these issues with the whole of the welfare of the trade and industry of the country, and their respective effects on one another, is so real as to make such a lack of involvement quite unrealistic.
However, on the Government side there will be several speakers directing their remarks specifically to individual parts of this package. There will be those dealing with the social aspects and those dealing with the macro-economic factors. I shall therefore concentrate on questions concerning trade and industry. I will try to place my remarks in the context of the Chancellor's Budget proposals and the general appraisal of our economic state which his Statement so thoroughly examined. My intention will be first to look at the state of our external trade and its impact upon the balance of payments and then to consider the internal state of our business welfare and its prospects.
In another capacity I had a good deal of opportunity to see much of the activities of the right hon. Gentleman when he was wrestling with the immensely difficult problems of the balance of payments, at the time of devaluation and immediately afterwards. He will not find me grudging in my appreciation of what he did then. I well recall the resolution with which he grappled with what seemed an utterly unresponsive situation and the draconian fiscal and monetary measures to which he was driven in seeking to remedy that situation.
His efforts to achieve a turn-round in the dreary pattern of negative balance on current account and their embarrassing concomitant—steadily mounting foreign indebtedness—are very live in my memory. Indeed they are so deeply burned into it that two short years of positive balances have by no means eradicated the memory of the frustrations and difficulties of those negative years. Those experiences left a quite indelible mark on my mind and made me aware of the need to be watchful ever afterwards to ensure that we should not slip back into the trough of deficit that for so long a period was the principal determining factor in the whole of the conduct of our economic policy.
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I see with satisfaction and relief that 1970 registered the best ever positive balance of £643 million, including a net gain, although a small one, of £3 million on visible account. Some tribute should be paid to that because it is an unusual factor in our external accounts. We habitually live with visible deficits rectified by invisible surpluses. Even when I see this in sequence to a positive current account balance of £437 million in the preceding year, 1969, and even when I recognise the substantial achievement of a turn-round of £940 million between 1968 and 1970, I am not thereby led to any feeling of complacency whatever about the inevitability of such a situation, nor to assume that the turnround is irreversible.
Nor does this scale of credit seem to me an unnecessary one to preserve at its present strength. There are those—and the right hon. Member for Stechford suggested this—who seem to infer that this advantageous position should in some sense be expended for some desirable social purpose, nationally or internationally. But such a proposition leaves out of account several important facets. First, the years of deficit left us with very high international debts. Yesterday the Chancellor of the Exchequer was able to give us up-to-date news about them, I think to the satisfaction and comfort of the whole House. He said that from the terrible peak of over £3,000 million which we owed in 1968 we have brought down our overseas indebtedness to less than £700 million. But £700 million is still a heavy balance to owe, and we must cope with it in the years to come.
A second and no less vital factor is that our application for membership of the European Economic Community, even when a satisfactory negotiation has taken place, is likely to cause a net outflow of exchange in the early years until the very real benefits which we foresee start to flow in. Clearly, we must aim to enter with a strong balance of payments position.
Thirdly, the recent renegotiation of oil agreements, of which major elements remain to be finalised, inescapably implies substantially heavier charges for this purpose which, though they apply equally to all industrial countries, nonetheless have to be borne on the exchange. Our vital

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need, therefore, is to husband our position of strength and, where possible, still further to reinforce it. This must be clear to all. Yet recent indications are not reassuring.
The Chancellor of the Exchequer mentioned yesterday that 1970, measured against 1969, revealed some contrasts in both export and import figures which are, to say the least, disquieting. He mentioned that the total export figures for 1970 showed a growth which, as to two-thirds, was represented by price increases and only one-third by volume. If we look at 1970 more closely we see a yet more disturbing trend between the first and second half years. Although the figures for the second half year are not conclusive, it is to be wondered whether there was any increase in volume at all and whether the improvement in the balance was achieved solely through price increases.
The outlook for 1971 is still for an overall substantial surplus, but the tendencies to which I referred may, and almost certainly will, reverse the rarity of a visible trade surplus into a visible deficit outweighed by a large invisible surplus.
But we cannot afford to be complacent about such a trend. It causes us to look carefully at the preservation of our international competitiveness, and such a scrutiny leaves us with a clear impression that over the last three years we have been gradually but steadily losing way against the competition from other industrialised countries. Statistics are by no means conclusive, but it seems to me from such assessments as I have been able to make that there was the clearest evidence before devaluation in 1967 of the extent to which our own export prices were excessive in relation to those of our competitors. Devaluation changed that situation substantially; there was a marked change round in the position. Figures which competent authorities have put before me show that that clear advantage had been whittled away almost to nothing by the end of last year.
This erosion of our competitive edge is the result of sharply rising costs, particularly in wages, over the recent past unmatched by any real alleviation arising from higher productivity. It constitutes one of the threats to our economic health arising from the inflationary momentum
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which has prevailed over the past 18 months. It is not the least of the reasons for which the Government have seen their most pressing economic need is the containment of the excessive inflation, and particularly the rapid escalation of industrial costs arising from disproportionately high wage settlements. That inflation threatens so much in our national life but not least the assurance of our ability to pay our way in the markets of the world.
Mr. Stanley Orme: Why is it wrong to oppose wage increases for average wage earners but to give disproportionate increases to people at the surtax level?
Mr. Davies: I have been referring exclusively to excessive wage settlements in relation to the productivity obtained. They have been of a variety of kinds and they have been working through the economy to its damage for months.
While on the subject of our visible trade with the rest of the world, it is worth drawing attention to some important underlying tendencies which more and more condition our trading objectives. First of all, we have to be thankful for the continuing buoyancy of world trade over recent years. The year 1970 probably saw some moderation in this upward trend, but it seems probable that the pace will again start to quicken and this will be in part due to the revival of the American economy.
I say that we have to be thankful for this buoyant condition because it has allowed us to maintain high levels of trade with the rest of the world despite a progressive erosion of the proportion of that trade which we secure. In 1955 the United Kingdom accounted for about 20 per cent. of the main manufacturing countries' exports of manufactures. But 15 years later we account for little more than half this figure. Had it not been for the constantly mounting trade internationally, we might well have found ourselves in real difficulties.
The healthy condition of world trade is a consequence of all the effort expended in the postwar years by the main trading nations progressively to remove the obstacles to the exchange of goods and services. Such improvements have come about, not only as a result of wide-ranging agreements covering the whole

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of international trade, such as those in G.A.T.T. and more recently in the Kennedy Round, but also in the more selective improvements resulting from the constitution of such bodies as the European Economic Community and the European Free Trade Area. All these initiatives have combined to ensure a world market of a size and freedom of access that offer great opportunities to Britain for the future providing we keep ourselves competitive in design, quality, delivery and, last but not least, price.
Secondly, we have seen and will continue to see a transformation in the destination of our exports of a kind which few, if any, countries other than our own have had to face. The figures for only three of our major markets are striking and their importance is perhaps insufficiently acknowledged. In 1955, 45 per cent. of our total exports went to the sterling area. In 1965, the percentage was 34. Last year it was 27½ per cent. In 1955 29 per cent. of our exports went to Western Europe, and 10 years later they had risen to 37½ per cent. Today they are over 41 per cent. In 1955 North America took 12 per cent. of our exports; in 1965 the figure had risen to 15 and that is the figure at which it has stayed since.
This major reorientation of our export effort involving the constitution of totally new markets very often does not earn the appreciation it should. Despite the overall decline in the total proportion that we hold of world trade, the redirection of our trade in the light of different relationships and a different trading environment has been a considerable achievement on the part of industry. We were over-reliant on the slower growing markets, and a massive effort has gone into changing the direction of our trade to the faster growing areas.
Thirdly, there has been a substantial shift in the nature of our exports flowing in very large degree from the re-orientation nationally to which I have referred. The position occupied by engineering products has steadily strengthened at the expense of textiles and non-manufacturers. This shift is characteristic of the ever greater movement of goods between sophisticated industrial nations, and this is where the great buoyancy in world trade, to which I earlier referred, arises, and it involves a heightening tension of
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competition between highly expert and evolved manufacturing nations vying strenuously with one another in products of ever greater refinement and sophistication.
It has for some time been recognised that in such a contest for markets the products of developing countries might well be squeezed out with the effect that incipient industries might fail to survive the first early years of gaining experience in world markets. With this in mind the industrialised countries have been seeking to make arrangements whereby tariff protection devised to regulate competition between themselves should not impede the movement of products from developing countries. The result has been the conclusion of agreements within the framework of the United Nations Conference on Trade and Development—U.N.C.T.A.D.—whereby many of the tariff impediments would be removed.
I am glad to be able to tell the House that we propose to include in the Finance Bill this year the enabling powers which will allow us, by subordinate legislation to be submitted to Parliament in due course, to introduce such measures as are necessary to implement these undertakings. As far as the United Kingdom is concerned this involves offering duty-free entry on all industrial goods imported from the developing countries, with the exception of most textiles and goods subject to Revenue charges. Moreover, we will afford duty-free entry—or, in some cases, a reduction of duty—on a range of processed agricultural products.
As I have already said, the characteristic pattern of our external trade is one involving a deficit on visibles and a surplus on invisibles; 1970 was exceptional, as I have said, in that regard, in that there was a small surplus on visible trade. It seems likely, however, that we shall in the foreseeable future return to that there was a small surplus on visible trade modestly in deficit and invisibles well in surplus. However, here, too, we must be on our guard against any sense of complacency. Although generally we look forward with confidence to the continuing satisfactory performance of service industries in foreign markets and to the revenue derived from overseas investments, there are one or two less favourable elements in the invisible account to offset the generally strong picture.

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In particular, I have referred earlier to the impact of recent, and perhaps imminent, agreements upon the cost of our oil for our own needs. Additionally, however, there is the impact of those agreements upon the invisible elements of our income arising as a result of the prominent position of British oil interests in world markets. The secondary effect of these agreements may have implications of a substantial kind on these indirect oil revenues.
Moreover, we expect to see the balance on travel account move adversely in the immediate future, though it is not anticipated that the account itself will move out of surplus.
The net result of these tendencies is the expectation that invisibles may not show any further improvement in the immediate future, although there is prospect of continued progress thereafter.
All in all, then, our trade with the world at large is giving us the results we seek, but with no margin to induce complacency and with some facets which demand concern and urgent attention—
Mr. John Biffen: Before my right hon. Friend moves from invisibles, would he share with the House his thinking on what he would like to see emerge with the new style corporation tax and the Green Paper? The corporation tax which we now have has a very considerable adverse effect on companies which have considerable overseas interests. Would he hope now to restore the position which existed before the 1965 Budget?
Mr. Davies: This is substantially a matter which will be dealt with by the Financial Secretary in his speech tomorrow, but undoubtedly one of the useful purposes of the Green Paper which has been issued is to allow discussion precisely of this issue.
So our position really is that we are facing a relatively secure overseas trading pattern but with some elements which may give concern, and there is this dangerous tendency to slip into non-competitiveness arising from escalating costs and inadequate productivity.
The sense of watchful non-complacency by which I have characterised my
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attitude to our external trading prospects gives way to one of some very real concern in assessing our present industrial performance and outlook internally. There is a tendency to attribute this concern to some kind of pervasive lack of confidence in industry arising from measures said to have been put into effect by the present Government. The right hon. Gentleman the Leader of the Opposition in the course of his rather sour and specious remarks yesterday alluded no fewer than three times to the economy
"spiralling down into the deepest recession since the War."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1401.]
and sought to infer, in this rather extravagant language—
Mr. Sydney Bidwell: I am grateful to the right hon. Gentleman for giving way, but when he talks about invisibles to better our overall economic situation and looking for a growth of productivity, would he not require agreements between workers and management in industry, and how does he see excessive tax relief for surtax payers getting that greater productivity in industry?
Mr. Davies: I am bound to say that I do not see this figuring prominently in discussions about attaining greater productivity.
I return to this question of business confidence, and I wish to pin what the right hon. Gentleman the Leader of the Opposition had to say yesterday evening, and the consequences, as he put it, of the present Government's policies upon business confidence. I do not deny for an instant that I am concerned about the inadequacy of industrial investment. I do not deny that I find the rise in the level of unemployment worrying. I do not deny that the disproportionate impact of these redundancies in regions of the country where industrial prosperity is habitually more precarious than elsewhere causes me a lot of concern. Where I differ absolutely from the right hon. Gentleman is in ascribing these disturbing developments to the policies of the present Government. On the contrary, I believe that the policies we are pursuing, reinforced as they are by a Budget fulfilling our promises and powerfully motivating industry to invest and prosper, are

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just those needed to reverse the unsatisfactory performance of recent years and to move into a dynamic future. The deficiencies which presently exist are the product of damaging tendencies which are the relic of the former Government's management—or mismanagement—of our affairs, and I shall illustrate how and why. First, industry does not expand and invest without the prospect of profit. I have no sense of apology whatever for maintaining that the pursuit of profit is the primary stimulus of industry and the absence of an expectation of it is the primary cause of stagnation and decline.
There has been for far too long a campaign aimed at denigrating the pursuit of profit and of characterising it as an unworthy objective closely allied to those which the right hon. Gentleman the Leader of the Opposition is fond of describing as the hard liners of industry. Yet traditionally it is the added value related to profit that constitutes the seed corn of industrial prosperity. The generation of added value within the concern is the very basis upon which its continuing expansion and development depend.
Recent years have seen an unparalleled squeeze upon this added value and thereby upon the very resources upon which industry primarily depends to build its future. The trend in the proportion of company profits to total domestic incomes tells its own tale. The proportion was 15·6 in 1964 and was in successive years thereafter 15.1 per cent., 13·4 per cent., 13·4 per cent., 13·5 per cent., 12·6 per cent., and 11·6 per cent. last year.
Mr. William Hamilton: We get a C.B.I. lecture every time. Save us from this man.
Mr. Speaker: Order. Hon. Members must listen to what the right hon. Gentleman is saying. They will get a chance a little later to catch my eye.
Mr. George Lawson: On a point of order, Mr. Speaker. We have listened with great care to what the right hon. Gentleman is saying. Now that he is coming to his partisan peroration he will not even listen to anybody on the other side.
Mr. Speaker: That is not a point of order.
Mr. Davies: I return to the question of the inadequacy of profits which has
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characterised the pattern of the last few years. The absolute level of gross trading profits shorn of stock appreciation within this self-same period shows that there was a virtual immobility in the money figures whilst money values were depreciating by about a quarter.
Still more significant are the rates of return on capital employed. The Monopolies Commission makes estimates of such rates of return related to the value of assets at estimated replacement values. Those estimates show a deterioration from the 1964 level to today and competent opinion assesses that rate of return now at much nearer to 9 per cent. than to 10 per cent.—that is, a rate of return which by no means is equivalent to the rate at which funds can be borrowed for investment at present.
This squeeze on profit, coinciding with the dangerous rate of cost inflation that we have experienced over the last 18 months, lies at the very root of industry's disinclination to expand and thereby to provide both the means of national growth and the assurance of both stable and remunerative employment.
Over and above the profit squeeze, the liquidity of companies—the funds remaining in their hands to undertake the investments we so much need—has been hard hit by a wide variety of factors.
Several Hon. Members rose—
Mr. William Hamilton: Let him read his brief.
Mr. Davies: First and foremost, this self-same inflation has not only aggravated the terms of raising money but has heavily increased the cost of new plant, the requirements of working capital and particularly the replacement values of stock in trade.
Sir Harmar Nicholls: In asking my question I should like my right hon. Friend to know that people who understand the problems and who want to get out of them recognise the sound good sense of what he is saying. It is essential that firms, particularly medium and small firms, should have the liquidity which will enable them to reinvest and re-equip. I believe that the Budget as it stands will help greatly in that direction. However, are my right hon. Friends the Secretary of State and the Chancellor satisfied that

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the extra freedom being given to the joint stock banks and greater facility these days—
Mr. Orme: Give way!
Mr. Speaker: Order. There are a great many right hon. and hon. Members who want to take part in this debate, and lengthy interventions are not fair.
Sir Harmar Nicholls: Will my right hon. Friend use any influence he has to ensure that the banks do not increase their surcharge on interest rates, which will more than take away the advantages that are given to industry in the Budget?
Mr. Davies: I will take up that interesting question with my right hon. Friend the Chancellor later. As my right hon. Friend knows, this is a matter which my right hon. Friend made very clear in his Budget Statement he will pay particular attention to in the near future.
The combination of all these events has meant that with steadily less resources generated within industry, a steadily greater proportion has had to be invested in non-productive assets. The implications for productive investment are obvious.
Despite these adverse conditions, the tax burden on industry in recent years has been made ever and ever heavier, once more seriously reducing the cash flow so greatly needed to build the future. Yesterday's Budget came, I know, as a great breath of relief to industry which for the first time in six years started to see the penal burdens under which it had been obliged to labour being relieved. It will have appreciated the further welcome reduction in corporation tax, the halving of S.E.T., but perhaps most of all the firm plans for the restructuring of taxation generally, and especially that affecting companies, upon a simplified, rational and non-discriminatory basis.
Undoubtedly the smaller concerns will also have seen the Budget with a great sense of relief. They had come to regard themselves as forgotten men. They will have seen in a great series of the proposals that my right hon. Friend the Chancellor made the dawn of a new era which I am sure will encourage them to continue to play the part in our industrial life which is so essential to the pursuit of our prosperity.
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Turning again to the whole question of company resources, the pattern of corporate saving measured against cash needs for investment, working capital and stocks reveals a situation in 1969 and 1970 of a quite unpredecented kind. The aggregation of all the constraints to which I have referred forced companies into borrowing to the tune of some £600 million in 1969 and double that in 1970, just at a time when borrowing costs were at their peak.
It is these factors that have caused industry to draw in its horns, and it is these factors that it is the express policy of this Government to alleviate, a process to which they have given a notable and confidence-giving impulse yesterday.
I am in no doubt whatever that our present policy directed towards encouraging industry to concentrate upon profitable operations and to abandon the dangerous delusions of investment for investment's sake and turnover for turnover's sake is the right one. I confidently believe that industrial management shares this view and will respond to the conditions that we are now creating. Nowhere is this more true than in the matter of regional development.
What the regions are now suffering is not the inadequacy of differential incentives but the ultimate impact of the profit and liquidity squeeze. Too many of the investments in the regions, both completed and in prospect, were undertaken or projected on too precarious a profit base. When companies are under pressure, as they have been caused to be in the last year by past policies, then it is from the precarious ventures that they withdraw.
The new mood of confidence which I believe our policies, strongly supported by the fiscal and other changes my right hon. Friend the Chancellor has proposed—
Mr. Joel Barnett: What evidence does the Secretary of State have for what he has said? Could he give the number of companies which have withdrawn from precarious ventures in the regions?
Mr. Davies: I have a considerable number of companies in mind. I have no need to name them and do not propose to do so; I do not propose to reveal

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what are clearly confidential matters to individual companies. Certainly the new mood of confidence which I believe will come about as a result of the Budget will have its impact on the regions, and it will be a welcome impact.
The Opposition constantly like to make out that they only are responsive to the social and human problems of the regions. This is utterly false. We on this side of the House are deeply concerned about the matters which we would so much like to see remedied, and we believe that they will be remedied. But we know that the ultimate benefit is to be secured only by soundly-based industrial prosperity on a national foundation, giving rise to self-sustaining and expanding investment in the less naturally buoyant parts of the country. This is what our policies set out to achieve. The same goes for unemployment. How wrong it is to infer—
Mr. Dick Douglas rose—
Mr. Davies: No, I will not give way.
How wrong it is to infer that we accept the growing number of unemployed with indifference and even, as some malicious critics would have it, with satisfaction. But we realise that industrial companies, hard-pressed by profit deterioration and cash shortage, will respond to steadily increasing wage costs by closures and redundancies. We know that the only long-term solution to those problems is by relieving the pressures and modifying the pace of inflation. This is what we have set about doing and what we mean to see through. What my right hon. Friend the Chancellor had to say yesterday was a powerful step towards success.
5.55 p.m.
Mr. Jeremy Thorpe: I am sure the whole House is grateful to the right hon. Gentleman the Secretary of State for Trade and Industry for what can be described as a somewhat unusual speech on the first day of debate on the Budget. I am sure that he will agree that it had as much coverage of Conservative philosophy as it had details of the Budget itself. Speaking from my experience of the very few companies with which I have the privilege to be
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associated, I feel that it is preferable that the chairman's remarks are printed, circulated in advance and kept reasonably brief. We accept that the right hon. Gentleman's attitude will be one of watchful non-complacency, to use his own words.
I start with what I hope will be regarded as a non-controversial remark. Whatever may be the arguments about whether the Budget has sufficiently reflated the economy, the Chancellor is sincerely to be congratulated in regard to his personal reputation on a considerable act of reflation. We enjoyed his speech and were grateful to him for the way in which he lucidly presented the facts.
The Budget can be judged in two contexts. First, in its intention to reform and simplify the whole tax system. Secondly, in its ability to tackle the real and urgent problems that face us as a nation. For the first, I can register a good deal of enthusiasm. For the second, I wish I had a greater degree of confidence.
Dealing with the first context, I remember that in many previous Budget debates when my colleagues and I suggested to various Chancellors that we should start the whole process of reform and simplification of the tax structure, successive Chancellors, in a long-term echo of Leaders of the House, said "Not this year." But the right hon. Gentleman the Chancellor of the Exchequer with courage and, I suspect, persistence has overcome much of the inbuilt resistance to change found both in the Treasury and the Inland Revenue and the process of root and branch reform has begun. It must be said in fairness to the Inland Revenue, which has been much criticised, that in 1965, which saw the imposition of capital gains and corporation tax, that department had a formidable task and probably is only just overcoming the indigestion pains. If we can reach a simple and intelligible tax system, that will indeed be a revolution. It will take some years to achieve, but I welcome the fact that the process has begun.
I hope that it will cause the annual Budget to be less than a tribal rite, a sort of pagan festival involving members of parliament arriving at the House before the sun has even risen.
Sir G. Nabarro: Certainly not.
Mr. Thorpe: One hon. Member—and I do not include the hon. Member for Worcestershire, South (Sir G. Nabarro)—arrived so early to claim a seat that that hon. Member's reception of the Budget speech—and I must be very careful following the events of last week in what I say about the demeanour of any hon. Member—was the nearest simulation to receiving its contents in a dormant position that I have seen in this House for many years. As I have said, I expressly exclude the hon. Member for Worcestershire, South, whose resonant sounds from a deep bellied position is appreciated and heard in all quarters of the House.
Dealing with the major reforms—and I say this subject to seeing what the exemptions will be—I personally welcome the introduction of value-added tax and, indeed, was actively canvassing it at a time when, along with their other anti-European sentiments, the Conservative Party gave the system very short shrift. I wonder whether the Chancellor of the Exchequer shares the view of the National Economic Development Council that V.A.T. could be varied regionally since this would be a matter of great importance and interest to development areas. I ask rhetorically whether there is a possibility of exemption beyond those he mentioned yesterday for freight charges by road and rail. This also would be of great significance for the development areas. Further, although selective employment tax is to go—not at a stroke but at a half stroke—will regional employment premium, which obviously was intimately connected with it, continue until 1975 as promised for the seven-year period? Although in that context it is possible to have any regional premium for any tax that is introduced, if the Government had a regional employment premium on value-added tax they would be let off the hook.
I personally believe that the abolition of purchase tax is long overdue. It is an extremely artificial tax which has put up the cost of living. It has involved learned counsel in endless discussion in the High Court as to whether frozen yoghourt is the same as ice-cream and whether Ribena is or is not a medicine. All that rubbish will go.
Likewise, I believe that S.E.T. was one of the most ill thought-out taxes. I
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remember the horror with which Labour Front Benchers received the news that agriculture was technically classified as a service industry and, therefore, a special price review was to be expected. The situation was rapidly changed by a new Clause, and agriculture was put on all fours with manufacturing industry. If ever there was a need for taxation to be thought out at more than a year at a time, I should think selective employment tax was the case in point.
It would be interesting to know the extent to which the Chancellor believes that the reduction is S.E.T. will be passed on to the consumer. I know, because reports of private party meetings are usually correct—these are about the only things on which one can get full reports nowadays—that the Chancellor wishes to see it passed on to the consumer. I do not for a moment suggest that that is other than his hope. But when we realise that many of the retail industries will have to absorb the increased costs of coal, electricity, transport and oil, it may be that they will be able to do no more than contain prices as a result of the reduction in S.E.T. Therefore, if the Government are basing their hopes of bringing down the cost of living on the result of halving S.E.T., I believe that they will be wrong, but I hope that I am wrong in thinking that.
I believe that one of the most dramatic changes which is still required in tax, which I hope the Chancellor will look at, though perhaps not this year, is the whole concept of a negative income tax. On the one hand, if we can have those who pay out benefits and, on the other hand, those who claw back benefits, or indeed receive fresh tax, under the same roof, this will be administratively an immense improvement. But in so far as it will help those who pay no tax and, therefore, can derive no benefit from tax allowances, this is the quickest and best way of helping the poorest in the country. It is by these measures that any Government will be seen to have the kind of fairness which they have to prove before they have any hope of getting an incomes policy.
Mr. Idris Owen: Does the right hon. Gentleman agree that the family income supplement goes some way towards what he is suggesting?
Mr. Thorpe: I think I had the privilege of catching Mr. Speaker's eye on that very subject. I shall not repeat the arguments which I put forward then. But the short anwer is "No". If the hon. Gentleman will forgive me, I shall leave it at that and try to find my speech and send it to him.
I obviously welcome the increase in old-age pensions. I confess that it is strange that in a country which claims to have very scientific means of ascertaining information—we have computerisation, and all the rest—these changes should take five months to bring about. I know what I call the "yahboo" argument in which one side says, "Oh, but you took six months and we are only taking five months, so, yah-boo, we are better than you." That is quite a good debating point—at least by current standards. But it seems extraordinary that a reform of this kind, which is highly desirable and about which everyone is in agreement, should take such an interminable time to work through the system. I hope that we can look at it and see how we can step up the computer system or mechanisation or paying-out arrangements.
I welcome the long-term addition changes which the Secretary of State for Social Services announced, which I believe will be for the benefit only of the over-80s. I am informed that for those who regularly receive supplementary benefit in addition to their old-age pension, the long term addition of 10s. will make them very little better off. They are the people we must consider in this Budget.
I regard the reintroduction of the grandfather clause as somewhat unnecessary and regressive, but I must warn the Government that the logic of their argument in this regard is that student grants can no longer be tied to the size of the parents' income.
Concerning death duties, I have no great objection to the raising of the threshold and the ending of the capital income gain which hits an estate twice over. But I should prefer to see a gift tax, which is a much better way of encouraging the distribution of wealth, if that is the Government's aim and intention, although I am not convinced that it is from this Budget. However, I do
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them the credit of believing that this is their ultimate objective.
I come now to what I believe is the really crucial point of the Budget, namely, the lack of strategy to deal with the immediate problems facing us. If someone from another country were to find himself addressing the 1922 Committee or any particular committee of the party opposite and were to say, "What are your problems?", I think it would be generally agreed that they are high unemployment, stagnation, low investment and sluggish growth. We have what the late Iain Macleod would refer to as "stagflation". I think the Government would, very honestly, say: "We are in this position. We can go on blaming all these things on our predecessors for the next year or perhaps even for the next 18 months. There may be one or two international events beyond our control, but at the end of that period there will be no more passing the buck. We shall be judged on our record whether we have cured unemployment, whether we have got economic growth, whether we have investment and whether stagnation has ended." I am sure that the Chancellor would agree that that would be a fair test by which the Government are prepared to be judged.
We have at the moment 800,000 unemployed. If Mr. Peter Jay is right, that represents about £5,000 million of potential output which is wasted. The Chancellor has said that existing output would increase by 2 per cent., but he believes that with his measures it could be 3 per cent. That is presumably on the basis of existing employment figures, not brought about by unemployed people returning to work, but on the existing out-turn of the employed population. Therefore, I do not believe that, coupled with the Government's very modest projection of investment in both the public and the private sectors, that will give very much hope, at any rate for the next 12 months, to those who are currently unemployed and, therefore, not able to contribute to the output which this country needs.
The Government constantly and rightly refer to both rising prices and wage inflation, but they have not told us very much about their policy in that regard. I believe—and the country will think this as well—that incantations on the

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question of wage inflation are no substitute for an actual policy.
As far as I can see, the only incomes policy which the Government have is sporadic confrontations with individual groups of claimants in the public sector and virtually no policy at all for the private sector.
It is no answer to rising prices for the Government to say, like the preacher with regard to sin, that they are against them. That does no constitute a policy. The Government's Clause 4 dogma is that they are not going to have a policy for prices and incomes, save for the incantations to which I have referred. The test will be whether the Budget is man enough to do the job which is required.
I believe that the Government had a great opportunity of a package deal with the trade union movement. If they had been able to say that here will be no wage freeze—no attempted wage freeze—as under the previous Government, that they want to look after the lowest paid workers by guaranteed minimum earnings, that they want settlements to be increasingly localised at plant level, that they want them, whenever possible, to be tied to productivity, that awards are to be divided between costs which are claimed in respect of actual price increases in the cost of living as opposed to apprehended, with a review clause built in, they could have gone a very long way to getting union support to tying wages more closely to productivity than at present.
The great difficulty that the Government are in is that this Budget does very little for the lowest-paid and the middle-paid workers, and, therefore, it does not increase the Government's chances of getting co-operation but rather makes it more difficult. Likewise in regard to prices. It is no good the Government speaking out like an Old Testament prophet about the evils of inflation. The Government must be seen to be doing much more about it. The abolition of the Consumer Council was not a good earnest of intentions. It will be seen to be one of the most unnecessary and unrewarding economies of any Government for a long time.
When one considers the external operations of this country compared, for example, with those of our European neighbours, one finds that this is still one
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of the most highly-protected industrial nations in the world. If we really want to bring down prices and get competition, a little tariff slashing and a few initiatives taken at the next Kennedy Round would do a tremendous amount to assist the consumer.
We shall look with great interest to see in what way the Monopolies Commission is strengthened—whether certain price fixing arrangements, as in Liberal Canada, are to be a criminal offence, or whether the Monopolies Commission will be a lethargic beast which is seldom awakened.
We shall be interested to see how the Government tackle the nationalised industries to ensure that they are more economically efficient. Where practicable, I should like to see nationalised industries subject to independent efficiency audits, with reports subject to parliamentary debate—
Sir G. Nabarro: Rather than going in for independent efficiency audits as the right hon. Gentleman suggests, surely it would be far more effective if Her Majesty's Treasury imposed and impressed on nationalised industries the need for a higher net return on capital employed, as my right hon. Friend suggested should be done in private industry. That means a larger gross profit and a larger surplus before tax. For that to be impressed on nationalised industries would be much more effective than any audit.
Mr. Thorpe: I do not want to digress, but profitability and return on capital are not the only criteria in the nationalised industries. The case for nationalisation is that in many cases the industry is a public service and there is inadequate private capital for the enterprise to be carried on. That, I believe, is the Government's argument for nationalising Rolls-Royce. It is not only the return on capital which is important; it is the commercial judgments that are taken and the commercial efficiency with which the organisation is run. The Select Committee on Nationalised Industries, expanded, could play a great part in that, but independent efficiency audits also have a part to play.
There was no reference by the Chancellor of the Exchequer—and I do not complain—to the position of sterling. This has

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once again reared its head in the negotiations in Europe. It may rear its head again when the Basle Agreements are re-negotiated. The Chancellor may find that some of our Commonwealth partners are perhaps not so co-operative as they were before—with good reason. I hope that one of the old-fashioned trappings we shall throw off—and I know this will horrify those who are of a very conservative point of view—is the incubus of sterling as a reserve currency. If we cannot have a floating pound, I hope we shall consider the concept of the crawling peg, and move towards a European reserve currency. This problem has bedevilled the economy of this country ever since the Second World War.
I welcome the long-term tax reforms. I congratulate the Chancellor and wish him luck in those reforms, but I am pessimistic about the lack of initiative in the Budget to tackle the problem of prices, incomes and investment. The Chancellor has convinced his colleagues that the horizon is bright, but I hope he has not deflected their gaze from the many rocks which are still around us. Some of them are clearly visible—the unemployed and the cost to the housewife in the shops. Some of them are submerged but no less dangerous. Mr. Sam Brittan was right to say in the Financial Times this morning that there is a fear that the present payments surplus will run off, repeating the train of events which led to the last devaluation. If that happens, it will indeed be dust in our mouths, and it will be a taste that this country has savoured all too often.
Several Hon. Members rose—
Mr. Speaker: Order. I wish to inform the House that nearly 50 hon. Members want to speak. That means that, even with the two extra days available, we move along with four or five speeches to the hour all the hon. Members who wish to speak will not be called.
6.6 p.m.
Mr. Boyd-Carpenter: Both the right hon Member for Devon, North (Mr. Thorpe) and the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) by implication referred to the Budget having had an extremely good and enthusiastic reception in the country. Indeed, the right hon. Member for Stechford when he quoted the late
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Ian Macleod's admirable observation about all Budgets that seem good in April seeming bad in July, raised in the minds of many of us the riposte that the right hon. Gentleman's Budgets looked awful all the time. Public opinion has been enthused and excited by the reversal of the tendency of many years for Budget day to see increased impositions of taxation upon an already overtaxed community. There has also been an almost incredulous surprise to see a Government actually doing the things they said they would do and which they were elected to do.
The quality of the Budget was perhaps best demonstrated by the pathos of the efforts of the right hon. Gentleman the Leader of the Opposition yesterday evening to find any holes to pick in it. All he could say, in an attempt to coin a phrase, was that it was a Budget for a Bourbon. Although nowadays he is a distinguished writer, he is not an historian or he would have recalled that apart from giving their name to an agreeable biscuit the Bourbons' main claim to memory is that they had the gift of remaining in power for a very long time. It may be that subconsciously it was that aspect of this distinguished dynasty which was in the right hon. Gentleman's mind in a speech which it would be kind for us to forget but which he may find difficult to do so for a little time.
The right hon. Member for Stechford thought that the Budget was socially divisive, and he spent a good deal of time referring to the effects of the remission of taxation on various people with fairly high incomes. It is an inevitable consequence of a highly progressive system of taxation that when the time comes to give relief the quantum of relief shall be the higher in respect of higher earnings. That is the inescapable consequence of imposing disproportionately large increases upon the higher earners. The right hon. Gentleman referred to people with incomes of £50,000 a year. There is progress in this House. You, Sir, will remember that the late Mr. Gaitskell took exception, on a previous Conservative Budget, to the effect that it might have on a bachelor with an unearned income of £100,000 a year. [Interruption.] Obviously, women with marriageable daughters would certainly ensure that that state of affairs did not endure for long.

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It is not a fair debating point in considering amendments in one of the most—perhaps the most—progressive system of taxation in the world to make the criticisms which the right hon. Gentleman made. It also revealed a considerable change in his own attitude.
The House may remember his Budget speech two years ago, when he went out of his way, when introducing an admittedly difficult Budget, to refer to the possibility at least that high levels of taxation on high earnings had a disincentive effect. He went on:
"I have come to the conclusion that, desirable though such a reduction would in many ways be, I must concentrate this year on more vulnerable sections of the community. I would emphasise, however, that I regard an increase in one of the earned income allowances as a high priority for a later Budget."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1031–2.]
This is indeed one of the things which my right hon. Friend has done and therefore has taken somewhat less in taxation from the high earners. It is a major factor in that change.
It is a little curious that the right hon. Member for Stechford, when Chancellor, understood the ill-effects of very high—uniquely high—levels of taxation on the higher earnings, but forgets all this when he comes into Opposition, and seeks to make points which I think unworthy of a right hon. Gentleman of such intellectual distinction when he happens to be in opposition and finds it difficult to find a criticism to make of the Budget—
Dr. John Gilbert rose—
Mr. Boyd-Carpenter: The hon. Member is not the right hon. Gentleman to whom I was referring, but perhaps he anticipates for a moment. In the light of Mr. Speaker's warning, I must get on.
The main purpose of this Budget is to improve Britain's economic performance, to achieve a better rate of growth and a higher level of industrial investment. The House will remember that the rising levels both of individual standards of life and of social provision which we saw under the previous Conservative Governments were founded on just that, on high—it was not high enough, but it was higher than it has been since—industrial investment and steady economic growth, and this Budget will be judged in due
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course by the contribution it makes to that better economic performance, as so defined.
In that context, I very much welcome the improvement involved in the reduction of corporation tax. It will help the cash problem of many companies and it will leave them greater freedom either to finance investment out of revenue or to use their funds in the most economic way possible.
I was delighted at my right hon. Friend's proposal for the future to eliminate the discrimination which the tax at present imposes against distributed profits. It seems quite wrong that the difficult decision which every company has to make from time to time as to whether to make an additional distribution or to use additional profit in other ways, should be determined by tax considerations. It should surely, in the interests of the economy, be determined by the judgment of the company as to the most efficient and effective method of using those funds.
Indeed, I believe that the attention of those controlling industry and commerce and of many people outside as well has been excessively, though inevitably at recent rates, concentrated in recent years on the tax consequences of what they do, rather than on the economic viability of their decisions. If my right hon. Friend carries this through, as I am sure he will, he will make a great contribution to greater economic efficiency.
I was delighted to hear my right hon. Friend's announcement about selective employment tax. I must, I suppose, declare an interest. As the House knows, I am chairman of an insurance company which earns a good deal of foreign exchange, particularly in the marine and aviation markets. Every one of our company's employees makes on the average a probably higher contribution to the British balance of payments than workers in almost any other industry. Yet, under this impost devised by right hon. Gentlemen opposite, under the guidance of impractical academic economists, the tax fell in full on them while it was refunded to any manufacturer, even if he were a manufacturer of gaming machinery, for the home market. [Interruption.] That was a distortion of the whole economic process. I am delighted that my right hon. Friend will be able to get rid of half

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of it this year, and that the other half will follow it shortly. One of my hon. Friends just observed that it is what one might call the operation of a two-stroke engine.
These are the important matters bearing on the working of the economy. I should now like to say a word about the announcement about pensions and social benefits. If my right hon. Friend will allow me to say so, it was a pity that this was included in his Budget speech. I know that there are precedents for it, and it may also be known to some people that there would have been more precedents for it had objection not on certain occasions been taken.
National insurance is a separate, largely self-financing operation, and although it has some budgetary consequences—its effect on consumption, the Exchequer contribution and so on—it is a pity to blur it by introducing it in a Budget. Indeed, inevitably, my right hon. Friend yesterday could not give the vivid picture of what was being done which my right hon. Friend the Secretary of State for Social Services gave this afternoon. I hope that when future improvements are made they will be made and announced separately by the responsible Minister and not confused in the general Budget discussion. Having said that—
Mr. Tam Dalyell: Is not the contributory element being used as a straight tax, and is it not therefore particularly appropriate to include it in the Budget?
Mr. Boyd-Carpenter: I must not anticipate my speech or that of the hon. Member on the National Insurance Bill which is to come forward. What I am saying here is that I think we would get a better presentation if it were separately presented as a separate social operation.
I am delighted at the substance of it, particularly—I tried to say this in a brief intervention when my right hon. Friend made his statement—at the forward move in respect of the treatment both of invalidity and of extreme old age. This is a very good package which will, I think, be enthusiastically accepted throughout the country.
As to the date of operation, to which the right hon. Member for Devon, North referred, there are real social advantages
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in making improvements in social benefits just before the onset of winter. Those who have studied this problem know that the impact of colder weather on the poor and the old is severe, and that, therefore, if social improvements are timed just as the colder weather is coming, more help is perhaps given at the moment when it is needed.
Quite apart from the magnitude of the operation—as one who had to undertake it three times, I have no illusions about it—the timing of this, I think, is right. Of course it is better than the pledge given by my right hon. Friends, which I think would not have involved the improvements taking place until November. At any rate, we shall have a chance to discuss this on another occasion.
I want now to deal with two tax points on which I want to urge certain things on my right hon. Friend. Even with the Budget, from the tax point of view we in this country treat widows very badly indeed. In life—and even my right hon. Friend's announcement yesterday only partially modifies this—the Revenue treats them as one with their husbands, but as soon as the husband is dead the Revenue treats his property in the same way as if it were passing to anybody else for the purpose of estate duty.
In human terms, when a woman has just been widowed, apart from the emotional aspect with which most of us are, unhappily, familiar, she loses her husband's earnings; and such pension as she may get is undoubtedly a great deal less than the amount to which she has been used. At that precise moment the State steps in to levy a tax on what he may have left her, including the family home. This is socially the cause of much understandable bitterness.
If my right hon. Friend were to accept a suggestion which has been made before —I do not claim that it is original, though I strongly support it—which is that the incidence of estate duty should be postponed, when a husband leaves property to his wife, until she dies, much social trouble and harm would be obviated. Although the Revenue would be kept from its money for a little while, it would get it in the end.
I hope that my right hon. Friend, who has shown much sensitivity in many of the changes he has announced, will pay

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attention to this point. I do not think the cost, even in the short-term, would be prohibitive. In the long-term it would be very little and it would give relief to people who, at the very moment when they are down, feel that the whole force of the State and Inland Revenue is concentrated on attacking them.
My second point relates to capital gains tax. My right hon. Friend has given some relief in respect of the short-term tax. I am bound to say that the short-term tax, which was introduced by a distinguished Conservative Chancellor, is socially a great deal better and more justifiable than the long-term one, which was introduced by a Chancellor from the benches opposite.
I have always considered reasonable the provision that a gain resulting from speculation should be as taxable as a gain derived from work. However, in an era of long-term inflation, the long-term tax operates quite differently. It operates on money values and, therefore, in respect of both Stock Exchange securities and chattels, one can have the unfair situation that something which has not risen in value in real terms but which has only maintained, or even lost, a certain amount of its value in real terms, because of the passage of years and inflation, goes up in money value and is therefore subject to tax when it changes hands.
This is a kind of modified capital levy. It must be, particularly in relation to chattels, extremely difficult to operate administratively. How my right hon. Friend's officers can decide what a picture sold today was worth in April, 1965, with all the changes that have occurred in the value of pictures on the international market, I do not know. This must involve an enormous amount of work, including a considerable amount of guesswork.
I wonder whether some alleviation of the long-term tax is not more urgently required than the modest alleviation of the short-term tax which my right hon. Friend has provided? I trust that he will consider this point. One hopes that the present inflation will be arrested, but we are living in an era when, as part of the broad sweep of the century, there must be a measure of inflation. That being so, a tax based simply on an
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increase in money values must necessarily be unfair, and, I suggest, could have a marginally damaging affect on savings.
Having made those points, I again congratulate my right hon. Friend on presenting a Budget which has given a lift to the British people and has provided the kind of stimulus which was needed. This people has suffered a good deal in recent years. It has been a long haul since the war. Hopes have been aroused but disappointments have followed. No doubt the economy still has a long way to go before it is secure, firm and prosperous. However, in what will still be a long and hard struggle, yesterday afternoon we saw for a moment the first gleam of victory.
6.25 p.m.
Mr. Ernest Armstrong: My brief intervention will be concerned solely with what I regard as the most serious omission from the Budget Statement. I refer to the lack of any reference to the necessary aid that is required for the development areas.
The Chancellor stressed that the reflation which he was modestly permitting was designed to deal with the disastrous trend in unemployment, and hon. Member on both sides are agreed that Budget strategy must be related to the general economy and the need to reduce unemployment.
I was, therefore, shocked at the lack of any mention of the development areas, for it has also been accepted by both sides that when we refer to the problem of unemployment we are really referring to the problem of the development areas, in which the rate of unemployment is always much higher than the national average.
It was with some interest, therefore, that I heard the Secretary of State today refer to regional policy and the development areas, though, frankly, he rather frightened me. He asserted a philosophy which was one of the major causes of the depressed area status that was achieved before the last war.
He said that he did not have much faith in differential incentives, and that a strong economy, allied to good profitability, was the real answer to our regional problems. I do not deny that one cannot solve the problems of, for

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example, the Northern Region, in which my interest is centred, without a strong national economy. However, I warn the right hon. Gentleman that our experience is that, apart from market forces, there must be a committment by the Government to the regions, and particularly to the development areas, before industrialists will be prepared to invest in those areas.
On 8th March last the rate of male unemployment in West Durham was 9·1 per cent., despite the fact that the whole of my constituency enjoys, if that is the word to use, special development area status. The special development areas were established towards the end of 1967 so that areas which had suffered severe pit closures might compete on favourable terms with other parts of the development areas. Nevertheless, we have new empty advance factories because we cannot find tenants.
Redundancies are taking place in the established industries, mostly in the older basic industries that are running down, and in the County of Durham over 5,000 redundancies were declared in the last six months of 1970. There is a complete lack of confidence throughout the region.
This has nothing to do with political parties or anything else. It concerns industrialists, local authorities, trade unions and so on. It is interesting that we have heard various figures today and talk about equality and so on. In a reply from the Secretary of State for Employment, which I received only a fortnight ago, he indicated that in the Northern Region there are 21,200 men over 21 who work a full week and whose gross pay is less than £15. Those 21,200 men are the breadwinners of the family, in the main. In the light of some of the figures given about tax remissions, we have heard talk about restraining wage claims and dealing with cost inflation when that £15 a week is just over half of the average national industrial wage. To talk of a booming economy and letting the market forces work as a solution to the problems of the Northern Region shows abysmal ignorance of what has happened there and the present needs of the region.
Yesterday the Chancellor was the prisoner of some very irresponsible state-
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ments that the Prime Minister made during the election campaign. When the Prime Minister came to the Northern Region he spoke about the waste of the central Government's resources for the region. In the six years of the Labour Administration about £1,000 million was injected into the Northern Region. The Government have persisted in declaring that this money was largely wasted.
I should like to mention two statements which do not come from political friends of mine. Sir James Steel, who is the chairman of the Washington Development Corporation and a very able industrialist, which no one can deny, made a very interesting speech to the northern Stock Exchange just before the last General Election. He said that in the Northern Region, because of the efforts of central Government, we will soon have the best road system in the whole of the country. So many people—and this is true of statements from the benches opposite—underestimate what has been done by the efforts of central Government in the Northern Region. In 1963, 60 per cent. of the men at work in the Northern Region were employed in the heavy basic industries that, in the main, are declining. In 1970 66⅔ per cent. of the hourly-paid workers in the Northern Region were employed in the new modern industries, the industries that have growth potential. This is a basic restructuring of industry in the Northern Region which was paid for by the resources that were being pumped into the region because the previous Government believed in regional policy.
In an article in The Times, Peter Jay, who visited the North to study the consequences of the changes in incentives that were brought in by the present Government since the election last June, said:
"… a new crop of doubts and anxieties have beset the region. This is particularly hard on the North when it seemed to be surmounting the problems of poor communications, radical industrial transformation and pit closures in recent years."
I draw the attention of the Secretary of State to his following remark:
"A positive advance has begun. It is the preservation and continuity of that advance from the North's new sounder industrial base that is now in jeopardy."
Those doubts are shared by industrialists in every section of the

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community in the Northern Region. Yesterday's Budget does nothing to remove those doubts. There was not one contribution which would help people in the north to regain confidence.
My second point about regional policy is that if we are to have industry on the move and the kinds of investment which we need in the North, we must have clear, credible policies which are easily understood, with continuity assured. After the Secretary of State's speech, we need reaffirmation of a commitment from the central Government on regional policy. I wonder whether it is true, as the Sunday Times reported, that it was a confidential report which the Government asked for when they came into office that deterred them going any further in their regional policy. I am sure that the Secretary of State knows what I mean.
The extension of special development area status from those areas hardest hit by pit closures, including West Durham, to the whole of Tyneside and Wearside will do little to help those areas. They need different incentives and commitments. It will certainly harm West Durham and similar areas. Now that the margarine, which was never more than poor class margarine, has been spread so much more widely, it acts to the disadvantage of areas such as mine, where at least the special development area incentives were an asset and advantage. Therefore, it seems that this extension, which was done piecemeal and as a panic measure, will help very little any part of the Northern Region and will seriously put at a disadvantage the area which I represent.
Finally, to inject resources into the region is not charity. It is not dole. It is good economic sense. We heard earlier today pleas from Members representing the City of London and Greater London areas for Government expenditure to relieve congestion, for motorways, for investment in the tube and so on. There is a terrific strain on all the social capital in the south of England. In the North, we have social capital unused and a labour force that is adaptable and has proved to be so in recent years. Therefore, this significant omission is not only a slur on our region but economic nonsense. It would be much wiser for the Government to give another commitment
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to the regions about development in such areas as I represent, because in the long run it is in those areas that we can secure the economic growth which the country desperately needs.
6.38 p.m.
Mr. Christopher Tugendhat: It is a happy chance that I should be called after the hon. Member for Durham, North-West (Mr. Armstrong), who referred to London and the City of London. I am delighted to say that I agree with the need for pouring more money into the regions as and when the economy is able to permit it.
This is my first Budget as a Member of the House. Before coming here I was a financial journalist and covered a great many others. My experience has always been that Budgets tend to be forgotten quickly, after the euphoria and excitement of their presentation. However, on this occasion I have a suspicion that the Budget will remain in the memory a great deal longer.
This Budget, like Lord Butler's Budget after the 1951 General Election, marks a turning point in the country's post-war economic history. It represents a fulfilment of a great number of pledges which we gave to the country. For a variety of reasons, I appreciate that a fulfilment of our pledges must come as an unpleasant surprise and experience to hon. Members opposite. The Budget is the result of a General Election in which we put our ideas to the people, they approved them, and we have acted. It has the three main characteristics of a Tory Budget. It is a Tory Budget and one to be proud of. It has the three characteristics of a Tory Budget. It reduces taxation. Taking the mini-budget with this one, taxation in the corning year will be reduced by £951 million. As a journalist writing about past Budgets, I remember how one wrote in each of the Labour years about the massive increases in taxation which had just been put on, and I envy my successors who have an opportunity to write about reductions.
The second characteristic of a Tory Budget is that it reforms. This Budget is launching what is probably the most enormous reform programme in our taxation system since Mr. Gladstone himself.

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The third characteristic of a Tory Budget is that it helps all sections of the community—[Interruption.] Right hon. and hon. Gentlemen opposite do not like to hear it, I know. It helps pensioners, families, savers, wage and salary earners, and industry and commerce. The whole country will be better off and better run as a result of this Budget.
My right hon. Friend the Chancellor of the Exchequer covered such a wide area that it is impossible for an hon. Member on the back benches to do more than dwell on one or two of the points that he mentioned. I shall pick out two, and then I shall take up two of the points made by the right hon. Member for Birmingham, Stechford(Mr. Roy Jenkins).
The first point that I take from my right hon. Friend's speech will be received by right hon. and hon. Gentlemen opposite, unlike most of my speech so far, with assent and agreement. One of the most interesting features of this Budget is that it represents a major move towards open government. Right hon. and hon. Gentlemen opposite, especially those with experience of government, will agree that the Budget mechanism is a very unsatisfactory way of introducing major changes in our taxation system. Because of the tradition and the panoply of secrecy surrounding it, great reforms tend to be thought up in the Civil Service and introduced without adequate consulation with expert opinion among the professions and others involved outside this House. Over the last few years, one has seen a divergence of British practice from that in overseas countries, where major reforms are discussed before they are introduced, whereas here they are introduced with inadequate discussion. One saw this with the S.E.T. and the corporation tax. Regardless of one's view of these taxes, they were introduced in what might be called an unfinished state, and much time and trouble had to be devoted to improving them after their introduction.
I am sure that the House will welcome the two Green Papers on the value-added tax and the corporation tax. I am sure, too, that everyone will welcome the decision to consult all the relevant authorities, both inside and outside Government, on the possibility of changing the instruments of monetary policy. Also to be welcomed is the fact that a long time
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will be left for the reform of direct taxation, since this, too, involves many highly complicated and difficult considerations.
This is a desirable reform to which all Governments would be wise to adhere. By taking the public more into their confidence at an early stage in the preparation of legislation, Governments will be able to make good measures better and, to some degree, mitigate the effects of bad ones.
My second point concerns savings and investment. We are a capitalist and free enterprise society. The trouble in the past has been that too few people have had a share of the capitalism and an opportunity to embark on the free enterprise. I very much welcome the immense incentives that my right hon. Friend has given to people to save more and to be more independent in the management of their lives as a result of being able to save more. I welcome particularly my right hon. Friend's decision to exclude small capital gains up to £500 from capital gains tax. It has always struck me as absurd to suggest that people should endeavour to save money out of their wages and salaries and then to take away most of the gains that they made. The decision to exclude small capital gains up to £500 is a thoroughly desirable proposal which will benefit a great many people in the community.
Sir G. Nabarro: I endorse completely all that my hon. Friend says. Will he now agree that the Conservative Party should take the logical next step, which is to honour the undertaking given by my right hon. Friend the Prime Minister in 1965 that capital gains duty would be removed from any increased value of unit trust units?
Mr. Tugendhat: Yes, and I very much hope that that will be done. Any measure which benefits the unit trust movement also benefits small savers to a great degree.
The other proposal in the Budget which will benefit small savers is the abolition of the short-term capital gains tax. It has always seemed to me to be right that capital gains should be subject to taxation, but it has seemed quite wrong to distingish between short-term

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and long-term gains. It is usually the small person without the opportunities of large institutions and the richer members of the community who find it difficult to wait before realising his capital gains, and the tax on short-term gains has borne especially hard on the small man. He also finds it harder to look twelve months ahead than the large institution and the rich man, and again the short-term gains tax has borne especially hard on the great mass of the population.
In terms of direct taxation, my right hon. Friend has taken a great step forward in removing some of the discrimination against investment income. For all those reasons, the great mass of the population stands to benefit enormously from what has been done.
I turn, then, to the speech of the right hon. Member for Stechford. I said that I proposed to take up two of his points, and they are corporation tax and surtax. He said that he did not think that, after time for reflection, the Labour Party would approve of the direction in which the Government proposed to go in the changes in corporation tax. I was a little surprised to hear that, even though in its present form the corporation tax was introduced by the Labour Government. It must be common knowledge that the tax flew in the face of all contemporary European practice and of all expert opinion in this country. People overseas and experts in this country are by no means always right. Equally, the Labour Party is not always wrong. But it is significant that the tax flew in the face of expert opinion at home and overseas, and I am sure that it is right that the balance as between retained and distributed profits should be altered. By discriminating against distributed profits in the way that the tax does at the moment, it leads to the survival not of the fittest but of the fattest.
Mr. Robert Sheldon: The hon. Gentleman really cannot get away with that. He must be aware of the van den Tempel solution, which is a copy of our corporation tax and is very much admired on the Continent.
Mr. Tugendhat: I confess that I have not read the whole of Professor van den
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Tempel's report. Indeed, I recall the Shadow Chancellor saying somewhere that he had not, either, though I may be wrong about that. However, I cannot agree with the hon. Gentleman's interpretation of it. Throughout the Community there are different systems, but all of them follow precisely the opposite principle to the one introduced by the Labour Party. The changes that my right hon. Friend is proposing will bring us more into line with Professor van den Tempel than our present practice.
Mr. Barnett: Let us get this clear. Professor van den Tempel sets out and the Common Market Commission recognises what he calls the "classical" system, which is the system that we have at the moment.
Mr. Tugendhat: My impression was that he set out a great many different things, but certainly he favoured the principle which exists in the Community and which we intend to introduce here.
Regardless of Professor van den Tempel, it seems to me—
Several Hon. Members rose—
Mr. Tugendhat: I will not give way; I think that Professor van den Tempel has intruded far too much into the debate. The Labour Party ought to invite him to address its finance committee and we could then get it absolutely straight before the next Budget. I wonder how many Labour Members would actually go to listen to him!
I was saying that the present corporation tax system leads to the survival of the fattest and not the fittest. It deters companies from spending money and then going to the market to raise more, and it makes it much harder for the young and dynamic company which is expanding rapidly to obtain money from the market.
The second point made by the right hon. Member for Stechford worth taking up is the whole business of surtax and people at the upper end of the income scale, a subject which seems to have brought much mirth and hilarity to Labour Members. Again I was surprised by what the right hon. Gentleman said. I remember very clearly from having had to write about it in the past, that in his previous Budget speeches he was always saying how much he hoped to be able

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to do something for surtaxpayers, that the level of tax on high incomes was too high, and how he hoped to be able to do something about it. It was a matter of great regret to me that in his Budgets he was not able to do something about it, and no doubt if he had been the Chancellor of the Exchequer still he would have remedied that in this Budget, but he is not and it has been left to us, as in so many other matters, to do it.
It is unjust for the State to take so much of a man's income as we have been taking in this country, and that is one of my reasons. The other is that although, as hon. Members opposite have rightly said, this will benefit only a relatively small number of people, they forget that that is because our level of direct taxation on high incomes has been so high that it has resulted in incomes at high levels in this country being greatly depressed as compared with corresponding incomes in other countries.
A most interesting report was done by, I think, Associated Industrial Consultants last year showing that over a wide range of jobs in this country in the upper levels of management British salaries were only about 60 per cent. of those for comparable jobs on the Continent. This is not surprising, because when people are taxed at the very high rates which we have been applying, it is absurd for companies to pay as much to them as would be paid on the Continent, because they might as well make a gift of the money to the Exchequer, as it clearly does not go to the executives.
Altering the system in the way proposed will result in a considerable increase over the years in the salaries of all executives. By raising the ceilings, we shall create the opportunity for people at all levels throughout industry to get more money, because the levels throughout industry are set by salaries at the top. This is a reform which the right hon. Gentleman himself intended to introduce and, although it will benefit only a small number of people, it will have beneficial long-term effects for very many.
That is all I wish to say beyond observing that the Budget has done much to lift the spirits of the country and to impress everybody with the Government's sense of purpose.
6.54 p.m.
Mr. Neil McBride: The hon. Member for the Cities of London and Westminster (Mr. Tugendhat) brings the view of the City to the House when he says that the benefits of the Budget are widely appreciated throughout the country. I bring a totally dissimilar view, in that I believe that most people do not agree with him. A sense of social purpose has to be seen in a Budget, and in two respects this Budget has no sense of social purpose.
It is appropriate for the Secretary of State for Trade and Industry to be here, because I wish to refer to his Department, but before doing so I want to deal with the increase in old-age pensions. Pensioners are not part of the capital-owning democracy and the increase in pensions will be eroded by rising prices almost before it is granted. The leader writer in the Evening Standard today castigates the Prime Minister for his inability to devote attention to rising prices. As my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) said, the increase in the pensions will only restore their purchasing power to the level of 1969, a poor return for seven million old-age pensioners, who will remember the Tory Government.
The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said that the coming of the colder weather was a good time to increase pensions. I ask him to ponder that the increase to a single person will be offset by the cost of one bag of coal this winter. The increases will prove two things: first, that the Government have no concept of how pensioners live—how they exist would be a better way of putting it—and, secondly, that this large section of the population will slip back still further in its attempts to secure a decent standard of living. Pensioners ask only for decency; the Government had a chance to give it to them, and it failed to do so.
There is no sense of social justice when the increase in the pension ignores the fact that pensioners are the "have-nots" in Britain. A national official of the National Association of Old Age Pensions Associations recently said that one pensioner living alone had the same costs as a married couple. The increase for

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a single pensioner should have been more than £1 and married couples should have had more. This large section of the population has invested all its working life in the United Kingdom and it has received a poor return from the worshippers of good investment, the Government.
The increase from 20th September ignores the plight of a great body of consumers. Prices are undeniably rising steeply and by 20th September the value of the increase will have been whittled away. Pensioners will contrast their treatment and their needs with the rest of the Budget's proposals. How can the Government reconcile the give-aways at the top end of the scale with the increases accorded to the pensioners? A pensioner has to purchase his loaf of bread in the shop where I buy mine. Can we not do better for him? The dividend which old-age pensioners receive for their life investment in the business which is Britain is very poor, and I ask the right hon. Gentleman to think again.
The imminent value-added tax will add to the plight of pensioners. It means the addition of a percentage at every stage of manufacture or processing. It will affect travel, clothing and a multifarious range of other things which everyone needs, including pensioners, in a society such as ours. The whole range of services will be increased in price. The cost of living will rise, and inevitably the standard of living of those with the lowest incomes will be depressed. The old-age pensioners' concept of tomorrow's horizon is not of something several months away. Because of their age and needs we should give them the best we can. The need is urgent, and they should have the increase now, not on 20th September.
The Chancellor referred to expenditures in his speech. We must consider all the range of prices that the consumer has to pay in making those expenditures. We must take the Budget of 27th October with yesterday's Budget. All the euphoria has gone now; the scenes of wild acclamation are a thing of the past. The Secretary of State for Social Services was most efficient in applying the cold douche this afternoon.
In talking of consumers' expenditure in his Budget speech, the Chancellor
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failed to say anything about protection for the consumer. He referred to the Crowther Committee's Report on consumer credit. Consumer credit is a vast industry, as people live very differently from the way in which they lived a couple of generations ago. As the Report states, the law on it is chaotic and must be brought up to date. The consumer has the right to know the rate of interest on his loan or hire purchase agreement. The terms fluctuate. In conclusion No. v in the summary of conclusions in Chapter 7 of its excellent Report, the Committee favours the appointment of an independent official answerable to the Secretary of State for Trade and Industry
"To act as an Ombudsman in the area of consumer credit;"
Such an appointment is long overdue.
As the Leader of the Liberal Party, the right hon. Member for Devon, North (Mr. Thorpe) said, it was an act of crass stupidity, of cheeseparing economy, to axe the grant to the Consumer Council. The housewives in the main form the largest section of consumers. I believe that they would be willing to pay a small price for the independent protection of their interests, which they no longer have. It is regrettable that there is nothing in the Budget to provide for this. Perhaps the Chancellor is oblivious to the importance of consumer protection. He cannot ignore the extent to which efficiency depends on consumer strength and pressure. He forgot that in the United States, Canada and Scandinavia, Government funds are becoming increasingly available to organisations working to protect and advise the public.
The Conservatives always say that competition will stabilise prices, but that is a canard in these modern times. Dame Elizabeth Ackroyd, who was Director of the Consumer Council, has said:
"Competition will not work in the interests of us consumers unless we are equipped to get the most out of it: equipped with information about the goods we buy, equipped to weigh up advertising claims and promotion offers, to stand up against high pressure salesmen and to assert our rights when we get bad goods or bad services."
That shows the need for an independent agency. The Consumer Council did a magnificent job with the money with which it was provided. An independent agency could also look after the surveillance of prices of credit, goods and

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services, and the maintenance of quality standards. Sixty hon. Members have joined me in signing a Motion to that effect.
The Minister of State should tell his right hon. Friend to think again about the absence of any reference to the restoration of the grant to the Consumer Council. One thing that no Government can ignore is public opinion. Here the Government are acting, and have acted, contrary to public opinion. In Sweden the office of consumers' Ombudsman came into operation in January. Surely Britain can imitate Sweden?
The other night, broadcasting on radio from London, I said that it was the interests of the little people, figuratively speaking, that I wanted to protect. They want someone to turn to who will protect their interests. The removal of the grant from the Consumer Council, thus ending its activities, pinpoints the need. The balance of power is now weighted in favour of traders. Therefore there is a need for legislation to create a Parliamentary Commissioner for the Consumer. Traders and manufacturers have their trade and professional associations, expert advisers, public relations officers and a whole range of assistance denied to the ordinary consumer. There should have been provision in the Budget for such a Parliamentary Commissioner. If the Chancellor talked about expenditures he should talk about the consumer who makes them. Overall supervision is necessary here. The big battalions of the law, through the trade associations and so on, will work hard to protect the traders and manufacturers. An independent agency to protect the interests of the consumer should therefore be created. How can consumers be expected to know about new methods of presentation, marketing and selling techniques?
The omission of any intention to restore the grant could be rectified. Expenditure on it had cost the taxpayer a penny per head per year. It was £240,000 annually, a drop in the bucket. There are some rapacious traders—I am not attacking a huge body—and the consumer must be protected against them. The consumer needs an independent agency, a consumer's Ombudsman, to investigate his complaints. The last annual report of the Consumer Council said that 400 individual complaints were made to it,
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although it had no power to deal with them. That gives an idea of the volume of work in this connection. The Council covered many aspects.
The Government are bent on entering the Common Market. There is no real provision in Europe for consumer protection. The Economic and Social Committee there consists of representatives of producers and farmers, many community groups and consumers, and the French representative on the Comité Comtat has already expressed concern at the lack of consumer representation from Britain. We must closely consider, with the prospect of our entry into the Common Market, the lack of Government-sponsored consumer protection organisations in Britain. The Government should repair this omission and afford our consumers the protection that they demand by appointing a Parliamentary Commissioner to watch consumer interests.
Social justice, like justice in the courts, must be seen to be done and in the case of the pensioners and in the case of the consumers it is not being seen to be done. It is the bounden duty of the Government to bow to public opinion and do something about both.
7.11 p.m.
Mr. R. H. Turton: The hon. Member for Swansea, East (Mr. McBride) was quite right to draw attention to the fact that the spiralling inflation over the last two and a half years has hit old people extremely hard. One of the most welcome aspects of the Budget is the Chancellor's measures to increase tax relief for old people with moderate incomes and to increase the retirement pension. This Budget is a landmark. For the first time we are making pensions higher for the very old. It is a policy which I and others have advocated for many years; my right hon. Friend has taken only a small step this time. In general the Budget must be judged by how far it will tackle the problem of breaking this country out of the stagnant lack of growth which it got into over the last few years of the Socialist Government and by his measures to tackle the problem of inflation.
Yesterday, an hon. Member asked me how many Budgets I have listened to. Allowing for absence during the war and

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taking into account the fact that some Chancellors have had more than one Budget in a year, this must have been about the fortieth Budget I have heard. I can think of no Budget so distinguished by its clarity, its economy of language and its modesty. I thought that it was magnanimous of the right hon. Gentleman the Leader of the Opposition to describe the Chancellor's speech as a superb form of presentation. All of us agree that he acquitted himself in a way to make us proud of him. I am particularly glad of that as a Yorkshireman, because I like to see a fellow Yorkshire-man do well in the House. The whole House and the country will congratulate my right hon. Friend.
The very dynamism of my right hon. Friend's proposals exposes the out-of-date and restricted scope of the House of Commons procedure for dealing with taxation. The Leader of the Liberal Party correctly talked about it as a ritual process. After the ritual orgy in the spring and the hundreds of thousands of words pouring out of hon. Members in the following three months about finance, the House goes completely mute on the subject while the Chancellor again withdraws into purdah until the daffodils grow in the spring and we get again the seasonal urge to talk about taxation. Surely this is a complete nonsense and it is now time, just as my right hon. Friend is reforming the system of taxation, for us to reform our procedure.
My right hon. Friend announced proposals stretching over three years. When the Select Committee on Procedure was taking evidence on the scrutiny of taxation in the last Parliament, the Treasury memorandum, for which, I suppose, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) was responsible, said in paragraph 9:
"Because, therefore, no Government can present its proposals on taxation as much as three years' ahead, it would be unprofitable for any Government to open itself to examination about its long-term thinking …"
on taxation. But this is the very thing which my right hon. Friend has now done. This leads to certain considerations which I want to put before the House.
I am Chairman of a Select Committee which has put a number of suggestions
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about which we are still awaiting the reaction of the Government. If the Chancellor is able to deal with the problems of taxation three years ahead, why cannot Parliament do the same? Why cannot committees of the House look forward into these projections? Yesterday, my right hon. Friend produced two Green Papers. I noted with interest that he said their purpose was to provide a basis for consultations with trade and professional bodies. Surely the object of Green Papers should be consultations with Parliament.
What are the Government's proposals regarding the recommendation of the Select Committee on Procedure that there should be either a taxation committee or at least taxation sub-committees of the Committee on Expenditure to look at matters such as these two Green Papers? My hon. Friend the Financial Secretary, when giving evidence before us this Sesson, said:
"I see no difficulty, for example, in putting before the House or a Select Committee a Green Paper on the pros and cons and the difficulties and methods by which a value-added tax might be introduced."
I gather from that that he was thinking not of a sub-committee of the Expenditure Committee or of a taxation committee but of an ad hoc Select Committee to deal with this problem. All I ask is that we shall get an answer and some form of examination by Parliament. These two Green Papers will require very close consideration.
In dealing with the value-added tax, my right hon. Friend said yesterday that there would be no taxation on food.
Mr. Douglas: If the right hon. Gentleman reads the Chancellor's word correctly, he will see that that was not his undertaking. There will be some exemption for food. Will he, therefore, join with me in pressing for a distinct assurance from the Government that food will be exempt from such a tax?
Mr. Turton: I am grateful for that interruption because it has enabled me to find the quotation I was looking for. My right hon. Friend said:
"We have made it clear that food will be relieved of the tax."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1394.]
He added that newspapers, periodicals and books would also be exempt. It

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seems to me that there is a little difficulty over the Green Paper on the value-added tax. The other Green Paper on company taxation presents the same difficulty
I spent part of last Thursday in Brussels discussing the problems of the harmonisation of taxation within the European Community. The Commission told me that after the decision of 9th February there has to be a complete harmonisation in the structure of value-added tax and taxation of dividends. What is the purpose of this Green Paper if we are out of harmony at the end of it all with the European Economic Community? If the negotiations fail I can see that it will be all right and we can have our own value-added tax which I hope will not include food.
If the negotiations are successful we would be in a difficulty. I hope that we will be told what is the time-table for harmonisation. I will be corrected if I am wrong, but I gather that the idea is that harmonisation is to be begun in 1973, which is an interesting date, and is to be completed by 1978. I hope that we will be told what are the confines within which we are to have this examination of these Green Papers.
I welcome the Chancellor's announcement that he will publish a White Paper at the same time as the Finance Bill so that on Second Reading we can have that White Paper in addition to the Chancellor's exposition. This was a recommendation of the Select Committee, and we are very glad that it has been adopted. We made certain other recommendations and I would like to know, what Government thinking is on them. We asked that the time-tabling of the procedures on the Finance Bill should be such as to enable hon. Members to have adequate time between publication of the Bill and Second Reading to consult their constituents and professional bodies. In previous years the time has been inadequate. I would be grateful if the Financial Secretary could give us the Government's views.
We also recommended that it might be helpful if the Bill was published in parts, as was done in 1965, so that if a part was not ready hon. Members may still receive those parts which were complete. We also recommended that Standing Orders should be altered and there
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should be an extension of the Resolution concerning incidental or consequential charges to enable hon. Members to put down Amendments in Committee on the Finance Bill which did not add to the charges on the revenue but made some pay less and some pay more. This would widen the scope of Amendments and it was recommended to us by the Clerk of the House. I would like very much to hear whether the Government will make that revision of the Resolution.
It is important that we bring our procedures up to date, because the time is long overdue. I cannot see why we should have all these taxing Bills at this time of the year. The Select Committee recommended that in future Revenue Bills should be brought in in the autumn. After all, if this big Bill dealing with the reconstruction of company taxation is to be brought in, why should it come in at daffodil time? There is no reason at all. It could not be classed as a money Bill under the Parliament Act. It would be much better to bring it in at our leisure in November and give it proper examination without the hurried restrictions of the Finance Bill time-table.
One real problem about our stagnant growth as a country, of which I am sure every hon. Member is ashamed, has to do with the fact that the money supply had that burst just about the time of the last election when it went up by 16 per cent. That really set the whole inflation going. In column 1374 of the Chancellor's Budget Statement yesterday—and I notice that the Yorkshire Post took up this point in an editorial—the Chancellor says:
"Given the current growth of incomes, there would be dangers for liquidity and employment if we sought immediately to reduce the growth of money supply to much below 3 per cent. per quarter."
This seems to be a very dangerous philosophy because it means that if we have stagnant economy we can still have a 12 per cent. increase in money supply. My right hon. Friend went on to say:
"But this does not mean that I intend the growth of money supply simply to accommodate the going rate of inflation."
Surely the real factor that we have to get at is that the growth of money supply ought to have some relationship not to the going rate of inflation but to the growth of the economy. Until we get that right we will not get the economy right.

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The Chancellor went on to say, and this has worried me even more:
"As the rise in costs and prices is moderated, so the aim will be to slow down the growth of the money supply."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1374.]
But if we can get over the hump of this inflation, and can get the economy growing, then I would want to see money supply expanded. That is the only way in which we could increase growth. This passage was, I thought, a fault in what was otherwise an extremely clear and excellent speech. It is important for the future of Parliament and the country that we have the growth I believe we can get under these far-sighted reforms of the Chancellor. But it does mean that we have to get the money supply under control. A great deal has been done to this end since we had that 16 per cent. rise in the quarter before the June Election—a rise of which I am sure all right hon. and hon. Members on the Opposition benches are thoroughly ashamed.
7.28 p.m.
Mr. William Hamilton: The right hon. Member for Thirsk and Malton (Mr. Turton) has made probably the most cogent and pungent criticism of the Budget to be heard from that side of the House, at any rate up till now. The part of the Chancellor's speech to which he refers, when he speaks of the money supply and the rate of inflation—in which he seemed to put the cart before the horse—seems to be a formula for continuing disaster. I agree with the right hon. Gentleman when he talks about the desirability of a Select Committee on Taxation or at any rate some subcommittee of the Public Expenditure Committee to deal with this point.
I wish that the right hon. Gentleman would come to listen to the evidence that we have been taking from the Treasury officials on the need to publish receipts. In addition to the expenditure side, we were told in evidence last week that the savings on expenditure were founded on very weak figures. Those were the exact words of the Treasury officials. But they presented figures on expenditure, although when we discussed the White Paper in the House a week or so ago the Financial Secretary advanced the same argument for not producing figures on the receipts side.
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I wish to refer to one or two points made by the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) and the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). The more I hear right hon. and hon. Members opposite speaking, the more it impresses on me that we talk different languages. The hon. Member for the Cities of London and Westminster talked about the great desirability of making concessions on capital gains, particularly on small capital gains of up to £500. I have not been swamped with letters of gratitude from my constituency on that matter. I am waiting for them, but I suspect that my postbag will not be all that full with letters on that subject.
The right hon. Member for Kingston-upon-Thames talked about giving a lift to the people. I wonder which people he was talking about? Who have been given a lift, and who have been given a kick in the teeth by the Budget? He went on to say that the Government were doing the things which they promised at the General Election they would do. They are doing nothing of the kind. They said that they would reduce taxation, but they did not say whose taxation it would be. That is my main criticism of the taxation proposals in the Budget.
The Budget does not deal with prices, except to give them a lift. Nothing in the Budget will curb inflation. There is a lot in it which will increase the inflationary spiral, both short term and long term. There is nothing in it for the regions.
The Secretary of State for Trade and Industry gets worse with each speech. He delivers a C.B.I. lecture. We are not members of the C.B.I. We represent ordinary working-class people who often are struggling to make a living. When he and Ministers talk about excessive wage demands and the cost inflation spiral, about whom are they talking—the railwaymen, the postmen, the nurses? Are these the people who are jeopardising the economy? I am not aware of any condemnation by the Tory Party when the doctors asked for a 30 per cent. increase and have now got it or are about to get it. Right hon. and hon. Members opposite and we on this side of the House talk different languages because we represent different people.

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I read The Times today. "Top people" read The Times. On the front page it says, "Budget news on other pages" and refers to
"Family finances: Relief for salaried wives"—
there are not many of them in my constituency.
"Big taxpayers are main beneficiaries … Top people's extra: What the £20,000 a year men will gain."
I looked at the inside pages and saw what they would gain.
The Secretary of State for Trade and Industry said that top people needed incentives and that high taxation was a disincentive. There is not a shred of firm evidence anywhere to prove that. Different authorities have investigated this problem and have signally failed to come up with any firm evidence—they may have had hunches—that that is so. But even if it were so, why should it be assumed that people at the lower end of the scale need incentives any less than people at the top?
I looked at the inside pages of The Times to see what it said about the relief for salaried wives. It said this:
"The Chancellor's decision to treat husband and wife as separate individuals when it comes to paying tax will meet with great approval from a small but certainly vociferous group of well-paid working wives and even more so from those households where the wife enjoys a reasonable level of unearned income."
A minority of wealthy salaried wives will welcome that proposal. It is none the worse for that, except that there are millions of working wives in my constituency and in other constituencies who will wonder why this small vociferous section is singled out in this Budget, particularly by a Government which proclaimed that they would establish one nation.
The Times went on to say:
"The penalty for getting married begins at £5,265"
a year. So rich married wives—rich by working class standards, that is—who with their husbands earn over £5,000 a year will benefit by rather more than £2 a week—£115 a year.
Rich children will also benefit. The Times pointed out that the old attraction by which wealthy grandparents divested themselves of income by deed of covenant to grandchildren, would return.
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So that there will be a bonanza for wealthy wives, wealthy grandparents and wealthy people generally.
The Times quoted individual figures. Lord Stokes, of British Leyland, will benefit from the Budget's proposals by £3,500 a year, or £70 a week. That is the tax concession he will get, not his salary. Mr. John Clark, head of Plessey—a generous contributor to Tory Party funds at the last election—will get a tax concession of £6,450, more than £100 a week. That is on top of his basic salary. Mr. John Davis, of the Rank Organisation, will get an additional concession of £3,850 a year. Sir Peter Allen, of I.C.I., will get an extra £5,200 a year—just £100 a week extra. Mr. Eric Drake, of British Petroleum, will get a measly £3,700 a year extra tax concession. Our people do not understand this—or they do! That is what this Budget is all about. It is a redistributive Budget. It is an obscene Budget. There is no doubt that at the other end of the scale the vast majority of working people will be worse off.
The Chancellor of the Exchequer referred to married couples with two children under the age of 11. He said that they would get a tax concession of £31 a year. That is assuming that the man is earning on average £28 a week. The vast majority of working people in Scotland are not earning anything like that.
Let me take a man in similar circumstances with two children under the age of 11 earning £25 a week—£1,300 a year. He will pay £40 less in tax—16s. a week. If his two youngsters are taking school meals, from tomorrow they will pay 3p per meal per child, which works out at 30p per week. So almost half his tax concession is going on increased meal charges alone.
There is no school milk, and no account is taken of that, or of increases in dental and ophthalmic charges, and in council house rents, or of the consequences of the Farm Price Review, which the Minister has admitted will take £98 million additionally off the housewives.
It is interesting to compare two papers which the Government have introduced, the one produced last October, "New Policies on Public Spending", Cmnd.

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4515, and the Financial Statement which we got yesterday. In Table 16 of the Red Book we see that the surtax concessions in a full year are £38 million. In the former White Paper we see that the abolition of welfare milk costs £35 million. So the Government are taking from the kids milk to the value of exactly the amount of money which they are giving to the surtax payers. The rich kids whose income is to be assured by trusts are given £15 million concession according to this Red Book. The dental charges will cost £14 million. So the Government are making ordinary working folk pay for their dental treatment and giving that money to the rich kids.
The rich wives I have talked about have a concession worth £12 million, and there is a plus in the estate duty concession of £20 million, making a total of £32 million, which is exactly the sum which is to be got from increased prescription charges, which also start tomorrow. So the Government are making working folk pay for their medicine to give a tax concession to rich wives. On capital gains tax there is a concession of £18 million. I think it is £7 million which the ophthalmic charges will save, and on school milk £9 million is to be saved.
This is where the redistribution is taking place. The Government are taking milk from the kids and are putting up school meal charges and compelling people to pay more for their prescriptions—a hell of a lot more—and to pay ophthalmic charges and prescription charges, in order to give money to the wealthy. That is why I call it an obscene Budget, an unfair Budget. That is why the hon. Member for the Cities of London and Westminster was right when he said it was a Tory Budget.
7.43 p.m.
Mr. David Mudd: I am both delighted and relieved to have this opportunity to catch your eye, Mr. Deputy Speaker, after some nine months of oral gestation, belatedly to deliver my maiden speech. I hasten to tell the House that this reluctance to speak is in no way based on any reservations about the traditional tolerance of the House to maiden speakers or on any false modesty on my part. It is simply that
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I promised myself that I would take my first opportunity to talk on this occasion and on this particular subject.
The constituency I have the honour to represent, Falmouth and Camborne, is unusual by West Country standards. First, although it has the traditional industries of agriculture and tourism, it embraces heavy engineering. In the southern half of the constituency we have Falmouth Docks and a world-famous tanker repair facility, well renowned for its standard of craftsmanship, and, above all, for a really significant record of industrial relations which it has had over the last few years. At the northern end of the constituency engineering is fully represented by the Holman Group of companies which overshadow and intermingle with one of Britain's oldest industries, tin mining.
The constituency itself was created in 1950, and since then it has had only three Members of Parliament. My predecessor, Dr. John Dunwoody, represented the constituency from 1966 until 1970, and certainly served his constituents well, as well as deservedly earning his spurs as a junior Minister in the previous Administration.
However, to many of us in Cornwall the greatest Parliamentarian the Duchy of Cornwall has ever produced was Dr. Dunwoody's predecessor, from 1950 to 1965, Harold Hayman. I say in all sincerity and humility that if ever there was a man who through his example of personal integrity brought home the real value of a back-bench Member of this House, then that man was Harold Hayman. I was delighted and proud to know him well, and I well recall meeting him in the last few months of his life, when he was a very sick man, but though he was a sick man he made a point of coming to London whenever necessary to defend the very small majority which the Labour Government enjoyed in 1964. Although he was sick, although he was weak, although he had given his health and given his soul and was giving his life for the good of Cornish people, not for one moment did he think of giving up or admitting defeat.
Harold Hayman told me something which I shall always remember, and I believe that if all hon. Members of this House would remember it as well we

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would have better Members of Parliament. This is what he said:
"Half a Member's work is looking after his constituents' interests and complaints. I can do this work from my home. While I am still Member, and while God gives me strength, so shall I continue to do whatever I can for the people who elected me and the thousands of other people whom I represent."
He then added:
"I have seen the dire poverty of the depression pass, at least in Cornwall. It was easier to wipe it out than it will ever be to expunge its memory from the minds of those who were its witnesses."
The dire poverty of the depression may indeed have gone, but the grim totals of unemployment in West Cornwall show that there is still no real security for many of our would-be working families.
Yet, due to the callous disregard of successive Chancellors of the Exchequer of both parties, Cornwall's greatest natural industry has been given no encouragement to move into full production, full employment and full prosperity. I refer to the constant refusal of successsive Chancellors of the Exchequer to emulate the Governments of Australia, Canada, South Africa, Eire and the United States in the provision of a tax-free moratorium for the initial years of production of non-ferrous metalliferous mining. Ironically, the idea of a tax-free moratorium is one which would not cost the Treasury even one penny, either new or old, and yet the Treasury makes no move to give it, but without this very real incentive there will be little development, and there will be no mining in Cornwall, and without development there will be no profits, and without profits there will be no tax for the Treasury to scoop in. So what we in Cornwall say to the Treasury on this occasion is "Join us in nurturing this great natural wealth, help us to coax it to maturity, and then there will be rewards for all; but if you stifle us there will be a drain on the revenue"—and nothing for the vultures of the Treasury.
The case I make is no new one. On 21st June, 1961, in Committee on yet another annual Finance Bill, the right hon. Gentleman the Leader of the Opposition said that the need for a tax concession had been made all the more urgent because
"We are facing a world shortage of tin".
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He said it would not be a temporary shortage because
"Consumption is rising very, very sharply all over the world while production, on the whole, is declining."
Later he said:
"… there is a danger of an absolute shortage, of a real absence of the tin that we may need to ensure full employment and the maintenance of our export trade."
Replying, the then Chancellor of the Exchequer said this:
"It is common sense that we should attempt to get all the mineral wealth we can from beneath the surface of our own country."—[OFFICIAL REPORT, 21st June, 1961; Vol. 642, c. 1515–7.]
What is even more serious than that the then Chancellor was unable to apply that common sense to create this incentive and that the Leader of the Opposition did not take the opportunity of one of his 13 Budgets to bring to fulfilment the very policy that in Opposition he had supported is the fact that the situation which was described so eloquently 10 years ago is, if anything, even more serious today.
The demand for world tin is increasing, yet bulk supplies are mined in those countries which have become masterpieces of economic and political instability. Although the output of tin from Cornwall is currently running at £2½ million worth every year, this is but 10 per cent. of Britain's national domestic need. This means that every year £20 million worth of sterling is being used against our own balance of trade interests to buy the very commodity that we could substantially produce—certainly to the extent of up to 30 per cent. of our own needs—by utilising our own resources.
If the potential is there, as I assure the House it is, why is it necessary to have a tax-free moratorium? The answer is simple. The risk element in nonferrous metalliferous mining is higher than in any other form of investment. It is not enough to tell an investor that he will recover the amount of his investment when the mine starts making a profit. To justify his gamble he must know in the early days that there will be no tax-taking when the mine reaches production and is finding its own peak. The economies of the United States, Canada, South Africa, Australia and the Irish Republic are certainly not being wrecked by the granting in those countries of a very wise and

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intelligent tax-free moratorium. Indeed, the revenue in those countries is increasingly swelled year by year from the profits of mining ventures that would not otherwise have come to fruition in the first place.
It is estimated that £2,000 million worth of tin has been raised in Cornwall from the beginning of its history. Surveys show that it is still there in substantial quantities. Every ton of tin mined in Cornwall is not only a ton less to be bought from overseas but a ton more in terms of the men who work in the smelters at Kirby and at Capper Pass. It is, therefore, a vital contribution to Britain's future.
I therefore ask my right hon. Friend the Chancellor seriously to consider the question of a tax-free moratorium. I will try to make his task just a little easier by doing some of his basic homework for him. He need not worry about the fears of the Treasury about establishing a precedent in connection with mining. The Treasury has already short-sightedly done this by sweeping away investment grants and replacing them by investment allowances in a deluge of destructive policy which overlooks the fact that a mine cannot make profits from which to deduct its development costs without first raising the money and retrieving the money for that development. The Treasury may indeed have put a crock of gold on the larder shelf of mining but it has painted the ladder with slippery paint.
Second, my right hon. Friend need not argue that such legislation would be rendered impossible on grounds of definition, because, if his experts do not know the difference between deep-vein deposits of ore and metalliferous minerals and sand, gravel and clay, the Institute of Mining and Metallurgy, which is composed of experts and technicians and not of mineowners, would be happy to supply the details. My right hon. Friend need not query the availability of workers. We have the proof that we have the labour force. He need not query the shortage of tin and the world demand. The facts speak for themselves. All my right hon. Friend has to do—this I urge him to do—is to use one of those much-maligned but oft-quoted mere strokes of the pen to give our mineral producers exactly the same terms in this country as those which
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are enjoyed by all the other metalliferous countries of the civilised and intelligent world.
If it is not the rôle of the Treasury to use its powers to encourage the development of important industries, if it is not the rôle of the Treasury to expand industry to help lower unemployment, if it is not the rôle of the Treasury to stimulate our balance of trade through home production of what would otherwise be costly imports, and if it is not the rôle of the Treasury to bolster the prosperity of the poorer corners of Britain, I apologise for the naïveté of my case. But if the Treasury accepts and answers even one of these responsibilities and challenges, Cornwall looks to its future with hope and to this Chancellor with undying gratitude.
7.56 p.m.
Mr. James Hamilton: It is my very great pleasure to follow the hon. Member for Falmouth and Cornwall (Mr. Mudd). If the hon. Gentleman was in any way nervous in making his maiden speech, he did not show it. I am sure that my colleagues will join me in saying that if the hon. Gentleman is as good as the previous incumbent of that seat his progress will be very great.
I liken the hon. Gentleman's performance to that of the Chancellor's yesterday; because we cannot deny that the Chancellor certainly gave a wonderful performance. It is there that I part company with him, because when he introduced his mini-budget in October we were all sadly disillusioned not only by his performance but also by the ingredients he gave us.
We are now beginning to bear the brunt of the decisions taken last October. Prescription charges have increased. The price of school meals has also increased. Shortly there will be the cessation of school milk to the over-7s in primary schools. Consequently, many of the workers, particularly in my country and in my constituency, will begin to realise that those of them who were silly enough to vote for this Government will have done themselves and the country a great disservice.
Those of us who come from development areas readily recognise that there is nothing for the development areas in

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the Budget. The hon. Member for Falmouth and Camborne said that industrialists in his constituency have recognised that the change from investment grants to free depreciation is a retrograde step. Prominent members of the Scottish C.B.I. have told me that they made a determined effort to persuade the Chancellor, and particularly the Secretary of State for Trade and Industry, to depart from this exercise. It is now becoming well known that unless industrial areas receive investment grants many workers in those areas will be declared redundant. It must be remembered that there are in Scotland at present some 122,000 unemployed. I would hazard a guess that there is a distinct possibility that the record post-war unemployment situation in Scotland in 1963, which was inflicted on Scotland by a Conservative Government, could now easily be surpassed. Unless the Government are prepared to do something about the situation Scotland is doomed to failure.
The House will know that my hon. Friend the Member for Motherwell (Mr. Lawson) yesterday made a certain statement and today thought fit to retract it. The simple explanation is that although the members of the Scottish Economic Development Council listened to the Prime Minister at the meeting described by my hon. Friend they were certainly disgruntled when they left the meeting. They realised that because the people of Scotland were not prepared to align themselves with the Conservative party they would suffer. Certainly nothing in this Budget will do anything to relieve the situation in Scotland.
In my own county of Lanarkshire, in addition to the increases I have already mentioned, we are faced with the quinquennial review arising from the 1956 Valuation and Rating (Scotland) Act. That review shows that the valuation has increased by 110 per cent., which will mean a terrific upsurge in rates. This will also bear heavily on the lower paid workers. When one considers the large amount of money that is being given to people in the higher income group, it is understandable that 25 per cent. of the population in Scotland, earning £19.50 and less in their gross wage packet, will receive nothing from the Budget. Indeed those with children of eleven years old or under attending primary school will be
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required to pay for school milk, and so on, and there will also be additional bus fares to cope with. Since many of these people are already working a 40 hour week they have no possible chance to enhance their earninges in any way.
I am glad to see that the selective employment tax is to be cut by 50 per cent., but it is a matter of conjecture whether this will benefit my area. Last night, following the Budget Statement, we were told on the television news that some of the supermarkets had already reduced prices. How could they possibly do that when S.E.T. is not to be reduced until July? This gives the impression that because they now have in power the Government of their choice, they are prepared to do something tangible to show appreciation for what the Government are doing for them.
Mr. Peter Hordern: Does the hon. Gentleman realise that the first group to make that declaration was Sainsbury's, and does he appreciate the political character of Lord Sainsbury?
Mr. Hamilton: I appreciate the position of Lord Sainsbury, but I do not retract what I have said. If Lord Sainsbury is able to reduce his prices after the Budget, surely he could have reduced prices on Monday. This is the point I am making. If prices are able to be reduced before the S.E.T. is cut by 50 per cent., then surely the whole situation should be examined. Personally, I am not sure that S.E.T. reduction will lead to any reduction in prices. The Reddaway Report, which was a very good report, proved conclusively that the distributive trades which have been paying S.E.T. have been able to bring about greater efficiency and that the tax has proved to be workable and in the country's best interests.
I should like to mention the situation of the old-age pensioner as a result of this Budget. Certainly the increase granted by the Chancellor is the highest in the history of the country, but I cannot accept the fact that the increases will not come into operation until September. And I would level the same criticism at a Labour Chancellor were the Labour Party now in office. It is morally wrong for politicians to use the old-age pensioners as a pawn in a great political game. Our old people have been the

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producers of our wealth and have given us their sons and daughters to fight in a world war. The first Government to take old-age pensions out of the political arena will be doing a great service to our retired citizens. The old-age pensioners will find it difficult to accept that the single pensioner is not to receive the full supplement, which will amount to £1·60 for a married couple. Since coming to this House I have persistently advanced the argument that the supplementary pension benefit and retirement pension should be increased together. Each time the old-age pension is increased and at a later stage there is an increase in the supplementary benefits old people misunderstand what is happening and find the situation difficult to accept.
A great deal has been said already in this debate about the situation of workers, and one hon. Member yesterday brought into this debate the Industrial Relations Bill. Although he should not have brought in that legislation on this subject, I wish to take up his challenge. I would point out that in my constituency there was a record production in the British Steel Corporation Clydeside works even though they were operating with obsolete equipment. For the good of Scotland it is essential that the Government should have talks with the British Steel Corporation to ensure that the steel complex comes to Scotland. If it does not the heavy unemployment that is being experienced in Scotland at present will increase still further. It will mean the demise of the steel industry in Scotland and will put the ancillary industries which have come to Scotland in a worse situation.
I conclude by saying that in the main this Budget will not give joy to the people I represent. It is certainly a Budget which will give immeasurable joy to the City of London, and will also please Conservative Members of Parliament. However, on behalf of my constituents I want in the strongest possible terms to condemn the Budget since it falls so short of what is needed.
8.9 p.m.
Mr. William Clark: I wish to join the hon. Member for Bothwell (Mr. James Hamilton) in offering congratulations to my hon. Friend the
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Member for Falmouth and Camborne (Mr. Mudd), whose constituents need have no doubt that they have a worthy representative to put forward their constituency claims.
In the past few years politicians have fallen into a certain amount of disrepute, mainly due to broken promises. Consequently, I welcome the Budget. In our manifesto we said that we would start on S.E.T. and give reductions in taxation. There is nothing wrong in promising the electorate something and then, on getting into power, actually carrying out that promise.
The underlying philosophy of this Budget is the incentive to earn money. Nobody will deny that we took over—and are still in—a difficult economic period. We have rather overlooked and played down the fact that since last June we have reduced our overseas debt. Hon. Gentlemen opposite may claim some credit for this in that there is a balance of payments surplus. But we must not forget that that surplus was from invisibles. So there is no point in hon. Gentlemen opposite criticising in a derogatory, derisive and sneering way the work of the City of London. That is where our invisibles come from. If it were not for those invisibles—the hon. and learned Member for Lincoln (Mr. Taverne) knows this better than most in this House—the balance of payments surplus last year would have been precisely £3 million.
We must remember that our economic position today is not all that strong, and we should not underplay or exaggerate our difficulties. However, we suffer from inflation, from the wage cost explosion, from unemployment, from low profitability and from low investment. This is the position which faced the Chancellor. The Budget has gone some way to remedy that position. Let no hon. Member delude himself into thinking that one Budget or one Act of Parliament will immedately bring prosperity to everybody. However, I suggest that this is a step in the right direction.
It does no good to the country to speak about two nations. This Budget has a wide spread. It gives a 20 per cent. increase in the old-age pension—one of the largest increases we have had—and there is the small incomes exemption, the

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dependent relatives' allowance, the child allowance, and so on. Any married man with children will now benefit under this Government.
Mr. William Hamilton: He will not.
Mr. Clark: It is no use the hon. Member for Fife, West (Mr. William Hamilton) saying, "He will not". There is a reduction in taxation in a full year for child allowance of £207 million. Any reduction in taxation, although we may say that it is not enough, is a step in the right direction. We must take that into account for those on low incomes. We must not look at the Budget in isolation. There is the family income supplement, and this again helps low incomes.
Much play has been made about the surtax payer. The top rate now will be 75 per cent. on earned income—15s. in every pound. Hon. Gentlemen opposite talk about the advantages and benefits which the surtax payer is getting. It would be better if they asked about the take-home pay of all these chairmen referred to by the hon. Member for Fife, West. The take-home pay of a man earning £20,000 a year before the Budget was £7,600. He pays £12,400 in tax. We should not over-exaggerate that those in the higher income brackets are getting the most benefit. As my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd Carpenter) said, when we reduce taxation we can give the most benefit only to those who pay most tax. We cannot give benefit to people who do not pay or pay very little tax.
Another feature which will have a great advantage for the country is the increase in pensions for the self-employed. In this way we are increasing the savings of the country. This is something which we sadly lack.
In view of the time wasted on capital gains tax, particularly of the financial brains of the country, I welcome the modest step which the Chancellor has taken in proposing that a profit should be ignored if on disposals it does not exceed £500. But what if, after computation, the profit of a capital gain, with a disposal of say £700 or £800, is under £50? I do not think there will be many examples of this kind, but it would be illogical to take away the £50 exemption for administrative reasons and not allow it to the person who sells over £500 of shares.
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We are on very solid ground towards growth with savings. The doubling of the upper limit of Save As You Earn will be or great benefit. I regret that our savings and the various bonuses which we get are all related to National Savings—that is, gilt-edged. I do not denigrate the work gilt-edged has done or what the National Savings Movement has done, but I think that we have got to the point where if we give a tax incentive to a man to save, it should also be allowed on equity savings. I think that both sides will realise the importance of this. I do not now seek to make a party point. In 1946 Treasury 2½ per cents.—known as Daltons—were issued for £100. Today are worth £27, so in real terms they are now worth £10. This activates against savers going into National Savings and into the gilt-edged market. If one saves £1 in National Savings one gets bonuses and interest, but at the end of the day there will be no capital growth on that £1. I make a plea that contractual savings should be linked with equity holdings whether they be unit trust, investment trust, or whatever.
I make no bones about saying how gladly I welcome the abolition of S.E.T. We said at the General Election that we would abolish it, and it has been halved to £250 million. It is the partial half-promise redeemed. One advantage is that prices will come down. Evidence came out even last night. When it becomes effective in July we shall get far more reductions in prices. The S.E.T. procedure means that there are forced loans from industry to the Government. Sometimes one pays out S.E.T. and eventually gets it back. At any one moment the Government of the day are holding £200 million of companies' money. Halving the rate means that £100 million extra will go back into the liquidity of companies. This must help investment. The reduction in corporation tax by another 2½ per cent. will also improve the liquidity of companies.
The Green Paper on V.A.T. is very interesting. I should like to reiterate what was said by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton). We must discuss this with the professional bodies, trade and industry, and the rest. But I think that a Committee of this House sitting upstairs would be an admirable way of dealing with the Green Paper.

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I should like to answer the charges made yesterday by the Leader of the Opposition and repeated this afternoon by hon. Gentlemen opposite that, with the introduction of a value-added tax, the cost of living will go up. This is completely untrue. Purchase tax produces £1,500 million and S.E.T. about £500 million, making a total of £2,000 million a year. In his Budget the Chancellor has reduced that £2,000 million by £250 million by halving S.E.T. Not until we come to discuss V.A.T. and fix the rates will it be seen whether or not it increases the cost of living.
The Chancellor said that he had considered an employment tax, commonly known as a payroll tax. I accept his reasons for rejecting that. I would leave in his mind this thought about the payment of national insurance contributions. In this age of computerisation it should not be necessary to waste time licking stamps. It should be possible to collect National Insurance contributions in a much more effective and efficient way. We all welcome the promise of a White Paper to deal with the streamlining of personal tax so as to do away with fluctuations in allowances and to provide for a graduated rate of tax depending on a person's income.
I cannot understand the carping criticism of some hon. Gentlemen opposite. I am not making a party point, but the Labour Government in their six years of office increased taxation by £3,100 million a year. We have reduced taxation. My right hon. Friend is reducing taxation by £680 million in a full year. This is nothing to carp at. Hon. Gentlemen should welcome this.
We should not look at the Budget in isolation. The idea underlying it is to give an incentive for increased growth by a reduction in and an adjustment of taxation. By itself the Budget will not do this, but taken with the Industrial Relations Bill and the family incomes supplement it will give an incentive and increase our growth.
This is an historic Budget. We have been told time and again that the reform of taxation is wonderful in itself but administratively far too difficult. Here, at last, we have a Chancellor who has said that he will not be governed by administrative difficulties but will reform and
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simplify taxation. For all these reasons I welcome the Budget. It redeems some of our pledges, it reduces taxation and it will lead to further growth. I admire the courage of my right hon. Friend and his team for getting the administrative difficulties out of the way so that we can simplify and reform taxation.
8.24 p.m.
Mr. Charles Morrison: This is a depressing day for hon. Gentlemen opposite. For six years, in Budget after Budget they have been able to revel in the Socialist joys of increasing taxation. They cheered on their Chancellors as they heaped new burdens on the shoulders of the taxpayer, taking an ever-increasing proportion of the national product in taxation. This Budget is different, and it has been enormously well received by the whole country.
During six years of Labour Government we learned once more that Socialism goes hand in hand with high taxation. After this first Conservative Budget for six years, we are reminded that Conservative Government goes hand in hand with cuts in taxation. I remind the House that between 1951 and 1964 Conservative Governments cut taxation by £2,000 million. Between 1964 and 1970 the Labour Government increased taxation by £3,100 million, and already under Conservative Government it has been cut by £951 million.
In the Conservative election manifesto proposals to cut taxation it was said:
"We have done it before. We can do it again."
Now we are doing it, and I congratulate my right hon. Friend on his Budget. He has struck a nice balance between social and economic measures and between his concern for the short term and his strategy for the years ahead.
Economically, the Chancellor's judgment will prove to be correct. It is understandable that we are all worried about the current high rate of unemployment. If the measures in the Budget do not bring about the improvement for which my right hon. Friend hopes, I am sure he will take further action. My right hon. Friend's judgment is correct, not just in the light of the theoretical economic effects of the Budget but because the whole Budget package will

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give people a new confidence in the future, that is the most important thing of all.
I suspect that the two announcements in the Budget which will have given greatest pleasure are that old-age pensions will be increased and that S.E.T. will first be cut and then abolished. It will have given great pleasure to old-age pensioners that the increase is to be effective from 20th September, which is a month sooner than previous increases have become effective.
Few people outside the House, and fewer inside it, have said anything in favour of S.E.T. I have no doubt that the cut will at worst contain price increases and in many instances cut prices.
No one has escaped the nonsense of selective employment tax. It was meant to impinge only on the service industries, but many of them service manufacturing industries, so S.E.T. indirectly added to manufacturing costs. For example, agriculture was a manufacturing industry, but services like machinery repairs were subject to S.E.T. Furthermore, the forced temporary loan by agriculture was an added burden, harming the industry's liquidity and adding to its borrowings. The abolition of this tax will be a boon to farming and an extra boost following the excellent Price Review introduced by the Minister of Agriculture.
Few industries were in greater need of encouragement. It is remarkable that, in 1969–70, the purchasing power of aggregate net farming income was only 91 per cent., in constant money terms, of that in 1964–65, and there was only a marginal improvement, to 92 per cent., in 1970–71. Therefore, better financial prospects for agriculture were and are essential if it is to expand as required. The Price Review, coupled with the S.E.T. and capital gains tax proposals in the Budget, will help to introduce and retain confidence and capital in the industry.
The proposal to abolish the charge to capital gains tax on death is very welcome to many farmers. It has been the objective of successive Governments to encourage the creation of more economic farm units, but capital gains tax on top of estate duty ran completely counter to this intention. Even with the estate duty abatement on land, it is difficult enough
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for a successor to continue working an owner-occupied farm intact. And with capital gains tax as well, it is virtually impossible.
For example, for a farm of 350 acres, bought in 1951, estate duty would have been about 24 per cent. by 1965, before capital gains tax was introduced. But by 1968, with increased market values and with capital gains tax, the total tax would have added up to 27 per cent. The incidence of estate duty and capital gains tax would have steadily grown. By 1978, even assuming a rate of inflation of only 3 per cent., estate duty on that farm would have been at 34 per cent., and by 1988, it would have been 40 per cent.
The result of the incidence of both capital gains tax and estate duty would have been an increase in the number of sales of farms, a lack of continuity in farming and a fragmentation of the structure of agriculture which is the complete opposite of what is desired. Therefore, the abolition of capital gains tax on death will be a much-needed relief.
I hope that, in a future Budget, the Chancellor will be able to help smaller owner-occupiers in particular over estate duty. Because of inflation and increased land values, the burden of estate duty is hitting small farms with great harshness. In real terms, this burden on a farm of 100 acres—in modern terms, quite a small one—increased seven-fold between 1949 and 1970. It is worth comparing that increase with the increase on a farm of about 1,000 acres, where the incidence of estate duty would be only about two-and-a-half-fold So it is the small man who suffers.
Faced with such an excellent Budget, it may seem a little ungracious to point out any omission, but I was a little sorry to note that there was no reference to betting tax. I believe that there is a strong case for widening the differential between the rate of general betting duty for off- course and on-course betting. This would provide two advantages. First, for the Chancellor there would be an opportunity to increase total revenue and, secondly, encouragement would be given to horse and dog racing.
Just before Christmas the Financial Times estimated the off-course betting turnover for 1970–71 at £826 million. It also estimated that 93 per cent. of all

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betting on horse racing was now off-course. That is not wholly surprising because off-course betting is cheaper for the punter, who does not have to pay admission charges to race courses or bear travelling expenses to meetings. The money he saves can provide him with more to indulge his love of gambling.
This incentive to off-course betting is partially responsible for the fall in attendances at both greyhound and horse-race meetings. Greyhound racing attendances have decreased by 40 per cent. since 1961. Horse-racing attendances have gone down by about 17 per cent. in the last four years.
A rough calculation shows that a 2½ per cent. reduction in the on-course betting duty could be balanced by a 1 per cent. increase in the off-course duty. There is no reason why the on-course betting duty should not be reduced by 2$ per cent. while the off-course duty is increased by more than 1 per cent. If this were done the Chancellor would obtain an increase in revenue and racing would benefit considerably.
For the professional punter the relative attractions of off-course compared with on-course betting would be reduced and there would, therefore, be a tendency for more people to go racing actually on the racecourse. This would strengthen the on-course market, increase revenue for race courses and, incidentally, provide much appreciated help for the Tote.
Horse racing is an industry as well as a sport. It employs a large number of people and provides entertainment both on course and by radio and television to millions of people throughout the country. Sales of bloodstock abroad help our export figures. But the shortage of money in racing, and in particular the relatively low prize money offered in the United Kingdom, have put this sport and industry in a parlous state.
For example, prize money in only two States in Australia, New South Wales and Victoria, exceeds the total for the whole of the United Kingdom. Unless this situation is changed at home more and more of our best horses will go abroad and, in due course, potential export sales will be seriously affected and racing will
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become less interesting to the British people.
The only sector of the racing world which is doing really well is that comprised of bookmakers. Their pre-tax profits have steadily grown and between 1968 and 1970 four of the major bookmaking concerns increased their profits by 41·8 per cent. in one case, 185 per cent. in another, 157·9 per cent. in another and by no less than 394 per cent. in yet another. It is hard to believe that, given these profit margins, bookmakers could not stand a considerable increase in the off-course betting duty, to the advantage of both the Chancellor and racing. Therefore, I hope that it might be possible for my right hon. Friend to give further consideration to the betting tax, with a possible view to making some recommendations and proposals within the Finance Bill.
We had yesterday a historic Budget, and I have no doubt that its appreciation today will continue amongst a very large majority of the population until the next year's Budget, when I hope that we shall be able to look forward to still more improvements. Meanwhile, I congratulate my right hon. Friend once more on an excellent Budget.
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Mr. Dick Douglas.
Mr. William Hamilton: On a point of order, Mr. Deputy Speaker. I have no wish to criticise your selection of speakers, but it has not escaped the notice of Members on this side that you have called two successive Members from the Government side, although during the course of the debate back bench Members opposite have taken 79 minutes, apart from the speech that we have just heard, as compared with 58 minutes from the Labour back benches.
Mr. Deputy Speaker: I am grateful to the hon. Gentleman for letting me know that he would seek to raise a point of order, which has given me time to look up the relevant part of Erskine May upon the matter. It is quite clear that it is the undoubted right of the Chair to call whoever the Chair thinks right to be called, bearing in mind what the Chair thinks to be best in the general

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interests of the House in the debate at any one time. The actual sentence in Erskine May bearing upon the matter is:
"It is the Speaker's duty to watch Members as they rise to speak; and the decision should be left with him."
It must be like that, and it so happens occasionally, and in my experience, too, that the Chair has decided that it is better in the interests of the debate to call two Members in succession from the same side. But it should not be taken in any way—and I am sure that the hon. Gentleman does not take it so—to affect the impartiality.
Mr. Hamilton: I take it, Mr. Deputy Speaker, that we can now expect two successive speakers from this side of the House.
Mr. Deputy Speaker: Not necessarily. But it could well happen. Mr. Douglas.
8.42 p.m.
Mr. Dick Douglas: I would hasten to follow the hon. Member for Devizes (Mr. Charles Morrison) in his excursion into the field of horse racing, but my haste is halted in that I am not a betting man. Nevertheless, I shall comment along those lines by saying that the Budget is a gambler's Budget. The Budget is really gambling with the future of the British nation, and gambling in a way that merits a great deal of attention by the people of this country as a whole. The euphoria with which the Press welcomed it this morning will disappear in a few months' time. I hope to enlarge upon my reasons for that view in the brief time that is available to me.
I shall touch on one or two points made in the hon. Gentleman's speech. I recognise that he spoke especially from his background of farming interests. I recognise also that the British consumer will have to pay to subvent the British farmer. There are good reasons for supporting British agriculture. But there are a number of reasons why we should not go along the lines upon which the Government have embarked very hastily since they took office. There is a direct transfer away from tax-supported subvention to market supported subvention, and this, on general lines, is the Government's philosophy.
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We see that the two arms of this policy relate to moving away from the tax-supported subventions in agriculture and moving towards a form of indirect taxation, albeit the value-added tax, which will bear very heavily on consumers, and although many of us may be very favourably disposed towards looking at the long-term values of entering the European Economic Community, we should not pre-empt our position there by accepting the European value-added tax before we see the terms and conditions of entering the E.E.C.
I want to draw the House's attention to the duplicity of the Government on this particular issue. The nation deserves an answer, because it must be clarified very quickly.
Yesterday, the hon. Member for Banbury (Mr. Marten) asked:
"In the meantime, if we are to have a value-added tax, would the Government assure us that it will not be placed on food?"
Replying, the Chief Secretary said:
"This assurance has already been given both by myself and by others in the House."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1338.]
and he referred to a Written Answer on 15th December. However, looking at that Answer, it is not really an assurance.
I go on to examine the words of the Chancellor of the Exchequer. In his speech yesterday, he said:
"We have made it clear that food will be relieved of the tax, except perhaps those few items already subject to purchase tax".—[OFFICIAL REPORT, 30th March, 1971; Vol. 814. c. 1394.]
Then I go a stage further and look at the Green Paper. This is the crux of the Government's duplicity. Paragraph 4.3, headed "Food, farmers and fishermen", says:
"In E.E.C. countries with a V.A.T. in operation, food is taxed, though at a reduced rate for at least basic agricultural products. If our application to join the Community is successful, we shall, of course, within such period of transition as may be negotiated, have to come into line with other Members in so far as taxation is harmonised."
Mr. Charles Morrison: It is only fair to read the next sentence:
"In the meantime we are free to consider also other ways of giving relief to food and food products."
That obviously refers to what may happen when we are in the Common Market and not to present circumstances.
Mr. Douglas: With respect, it refers to the transitional period and not to the period when we accept the full implications of the Treaty of Rome.
I now turn to the general Budget strategy. I have said already that this is a gambler's Budget. The Government are gambling with the surplus which has been hard-won by the people over the past few years. They have had a golden opportunity to give us export-led growth. Do they consider that the taxation alterations in the Budget will give us export-led growth? There is no indication in the Budget analysis or the right hon. Gentleman's speech that a resurgence in exports is expected. The Government do not expect Britain to gain a larger share of an expanding world market in terms of its international trade. There is no expectation of that in the Budget speech or the economic forecast.
Today, the Secretary of State for Trade and Industry gave workers faint praise for producing record exports. On one of the few occasions in our history we have had a positive balance of visible trade. In the past, we have had to pay our way on the surplus of "invisibles". If workers and managements need any incentive to produce more, one has to question whether the Budget supplies it. This massive export total was acheved at a time of Government intervention. Do the Government expect this rising trend in exports to continue when they are manifestly withdrawing from the economy and manifestly dismantling all the instruments of Government persuasion and Government assistance to the economy? These questions must be answered, because the Government are gambling with the future of the people.
It is all very well to please one's friends when one gets into office and to give handouts, but we are thinking of the 55 million people of the country and not just of the surtax payers, not just those with incomes of £20,000 or £30,000 a year. A Written Answer to my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) yesterday showed that perhaps 200,000 houses in Scotland failed to reach the statutory tolerable standard, and there was more of the same in a series of Written Answers. Are the people in those houses being given an incentive by this Budget?
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Quite rightly, the Secretary of State for Trade and Industry spoke of the falling off of investment in the economy. Let us examine the forecasts even after the Budget changes. The increase in private fixed investment from the first half of 1971 to the first half of 1972 is ½per cent. The Government's strategy in the regions—and I hope that I am not misinterpreting—is that if they can get a rising rate of economic growth in the nation as a whole, the fingers of growth will be pushed into the regions. Will that be done with an increase in investment of ·5 per cent.? A massive increase in investment is needed for that.
The regions need to be given confidence, but the entrepreneurs of Scotland and the North of England will not be given confidence by the miserable increase in investment forecast in the Budget. Yet the Government rely on the market mechanism to increase investment opportunities. That is another reason for saying that this is a gamblers' Budget. The increases in stock market quotations today were a clear indication that that is how the stock market regards the Budget, but stock market prices are not necessarily expressed in purposeful investment.
When the Government make concessions to the higher income groups, they assume that those concessions will not result in increased consumers' expenditure, but will be expressed in savings and eventually in investment through the market mechanism. I greatly doubt it. Their own figures clearly show that they are looking for an increase in consumer expenditure of about 5 per cent. An increase of that magnitude and with our consumption pattern inevitably having a propensity to imports, this will inevitably thrown out the trade balance, so that we shall be back again on the slippery slope of an adverse trade balance and an adverse balance of payments. The surplus was hard earned by the people of this country. It was earned not by my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) or any of us on this side of the House but the millions of workers whom Conservative Members malign for asking for what they call inflationary wage increases.
I accept that there must be a partnership between management and labour to

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ensure that we pay our way in the world, but that partnership is severely undermined if the Government think that after the tax concessions given to those in the higher income groups there will not be a feeling among people on the shop floor that if there are any hand-outs they should have a portion of them, not as hand-outs but as a right. We are in danger of undermining the whole psychological approach that we should be adopting. We should be having not a higher disposable income but a higher degree of interest.
Mr. Hugh Dykes: Since all these questions are a matter of relative degree, does the hon. Gentleman agree that there is a reasonable case for saying that there is sufficient by way of a redistributive element in that the tax band will cover the range from 30 to 75 per cent., and that there is sufficient redistribution in the top rate for higher-earners, with all the other arguments that flow from that?
Mr. Douglas: If we were looking only at the revenue side, that might be so, but we are looking not only at the way in which the Government produce their revenue but at the total budgetary picture, the nature of public expenditure as a whole. That point has been completely missed by Conservative Members. They adopt the mental attitude that the social wage does not matter. But it does matter to people. Good housing is more of an incentive to work hard and purposefully than a tax incentive. There was a television programme the other night on the new town of Livingston. It has had its possibilities undermined by the action of the Government and other actions. The people who went there did so in the main because of the new housing opportunities. That new housing was provided 100 per cent. by public expenditure. That is the sort of thing that the right hon. and hon. Members dismiss.
What happens if the Government's forecasts are out? They are looking for an expansion in consumer expenditure of about 5 per cent. To be 1 per cent. out with that means about £200 million, a very large figure, and if they are wrong in that they have taken down all the bulwarks for ensuring a redistribution of industry in terms of population and employment opportunities.
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We have in Scotland 122,500 unemployed. The Budget does not indicate any falling off in that figure come next winter. It is a stable figure, acceptable in the Government's view of the economy over the next year to 18 months. But it is unacceptable to us on this side of the House. The Government have removed the opportunities given by investment grants, intervention by the I.R.C. and the Industrial Expansion Act, all of which are being reduced or eliminated by the Government. They do not like intervention by the Government in terms of regional policy. What prospects do they offer to the people of Scotland and the other regions for a reduction in unemployment?
The Chancellor has indicated a stabilisation of the position. There is to be no taking up of the slack. The slack is still going to be there in the economy and the miserable rate of 3 per cent. in economic growth is all the Government aim at at present. That is not big enough for the Scottish economy or the people of this country. I suspect that, when the local authority elections come in Scotland in May, the Conservative Party will get a drubbing. I suspect also that, when hon. Members opposite come to explain the working out of the Government's Budget strategy a year or so hence, they will be in severe difficulties. I excuse them for gambling with their own future. What is inexcusable is their gambling with and wasting the resources of the people.
9.1 p.m.
Mr. John Biffen: There is something of a surrealistic nightmare at this stage of the debate in realising that 80 per cent. of back benchers present opposite have been transplanted from the Scottish Grand Committee.
It is rather sad that the hon. Member for Fife, West (Mr. William Hamilton) is absent, because it is to his speech that I would like to address a few introductory comments. He has swallowed the slogan, so temptingly put about by my hon. Friend the Member for the Cities of London and Westminster (Mr. Tugendhat), that this is a Tory Budget. I wonder. It could just be that this is the Jenkins Budget that never was. We have on record very good evidence to suggest that the right hon. Member for Birmingham, Stechford (Mr. Roy

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Jenkins) was fully aware of the compelling arguments for some alteration in the incidence of direct taxation upon high income earners. Granted that point, and granted the disposition of the right hon. Gentleman, egged on by the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) and the hon. and learned Member for Lincoln (Mr. Taverne)—"Euro-Brits" to a man—who doubts that they would have been attracted by the prospect of a value-added tax?
Indeed, the proposition of a merging of the direct tax rates—of surtax and income tax—would, I am certain, have appealed particularly to the right hon. Member for Cheetham. I am sorry that the right hon. Gentleman is not here and, therefore, is unable to attend to all my inferences. But my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who had the business of conducting a debate on television with the right hon. Gentleman yesterday afternoon, will agree, I am sure, that I am not misrepresenting the attitude of the right hon. Gentleman.
Later in my speech, I shall return to the possibility that this Budget does not quite bear the true, authentic, unchallengeable stamp of Toryism. I am not saying that it is not a good Budget. I am happy, and I will say many kind things about it. I will reserve the more detached parts of my speech for the peroration.
Just before I finish with the relics of the Scottish Grand Committee, I want to touch on the most charming characteristic of the hon. Member for Fife, West, who has to overcome the major disadvantage that he is not a Scotsman. He has to appear that much more aggressive when he comes to debate these things. He was talking about the Budget obscenity and "giving away There is something wonderfully Orwellian about the concept that when we take from a citizen slightly less than we were taking hitherto, somehow or other it involves giving away. I hope that, for the productive conduct of our discussions on this Budget and everything that will flow from it, we shall avoid these Orwellian slopes which I realise are obliged upon the hon. Member for Fife, West.
I so much enjoyed the Budget of my right hon. Friend because it falsified a
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fear I had that this year, because of the discussions at Brussels, there would be whole areas which would be "no go" areas in economic policy—whole areas of taxation from which my right hon. Friend would feel obliged to desist because he would be open to the accusation that he was already indicating to our prospective European partners that we were prepared to accept terms and, by virtue of the Budget generally, that we had already taken on the mental attitude of having become members of the Community. He resisted that temptation, and it is valuable that he should have done so.
I will deal first with the direct tax, then the indirect taxation changes, proposed or in prospect and then the relevance of the Budget to current economic circumstances and the problem of inflation. On the direct tax changes I would like to give a vigorous nod of welcome to the proposed merging of income tax and surtax into a common form of direct taxation. This is a reformer's achievement, the achievement of a radical reformer in the best traditions of Toryism.
From now on I will proceed, I imagine, under the slightly disapproving eye of my right hon. Friend the Member for Kingston-upon-Thames. This afternoon we have had substantial increases in the National Insurance contributions on the graduated principle. Are we not, as was suggested by the right hon. Member for Coventry, East (Mr. Crossman), moving towards a social security tax financed out of a pattern of taxation, a pattern of impost, not all that different from income tax? If that is so, let us not exclude from our considerations one final merger, namely, income tax with National Insurance contributions.
Sir Brandon Rhys Williams: Hear hear.
Mr. Dalyell: Hear hear.
Mr. Biffen: I know that the voices will gather as I proceed. I echo the comments of my hon. Friend the Member for Cities of London and Westminster and hope that in the final pattern of direct taxation the surcharge to be levied on investment income will not be of such modest dimensions and operated in such a fashion that it will bring gimmickry rather than equity to the rewards of savers.

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Turning to the indirect tax proposals, I am delighted that 50 per cent. of S.E.T. disappears. I can think of no single tax proposal announced yesterday which has commanded greater enthusiasm from these benches. What encouraged me is that it has gone without having to bring in another form of indirect taxation. Therefore, I ask myself. "If only 50 per cent. of S.E.T. remains, do we need a value-added tax in order to demolish this relic?"
Mr. J. Bruce-Gardyne: Naughty.
Mr. Biffen: No—an innocent observation. I begin to think about the pledges on reducing public expenditure and, indeed, the opportunities which reductions in public expenditure would provide for the removal of the remaining 50 per cent. I shall not deploy, only out of interest of time and not out of lack of conviction, the argument about the areas in which I should like to see further reductions in public expenditure. It would touch on higher education, overseas aid and financing of the investment programme in the public sector. I shall be happy to do that whenever the occasion is provided; I will not run away from it. However, any thoughts which I have about the Government perhaps shrinking from the challenges of cuts in public expenditure were wholly unfair because the Government have already given an earnest of their determination to make cuts in public expenditure, and I believe not necessarily that well begun is half done but in the integrity and determination of the Government in this area.
But in the one significant decision which has resulted in cuts in public expenditure—namely, the decision to move away from investment grants, not to investment allowances, but to tax allowances—the savings to the Exchequer accelerate through time so that the most dramatic of the savings become apparent not next year or the year after but in the period beyond that. Therefore, I can see emerging scope for embracing the disappearance of the other 50 per cent. of selective employment tax without any thought of compensating taxes.
I must put on record that I have the gravest doubts about a value-added tax. I do not wish to dwell too much on the interchange which I sought to have with
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the hon. Member for Clackmannan and East Stirlingshire (Mr. Douglas). When he has been a Member longer he will realise that I am quite an ally. I was seeking to support him. This is not an unknown situation from time to time.
But my hon. Friend the Member for Devizes (Mr. Charles Morrison) is innocent if he imagines that a value-added tax, in the Common Market context, which is specifically assigned in part to finance the common agricultural policy, can in one country be subject to unilateral considerations to offset the impact it would have in that country on foodstuffs. Once the value-added tax is assigned specifically to help finance the common agricultural policy, the consequences for the taxation of foods at the breakfast table in all member countries of the Common Market will be uniform and cannot reasonably be thought to be subject to exceptions. But time may tell. I travel with scepticism; my hon. Friend, as ever, with hope.
Mr. Bruce-Gardyne: My hon. Friend is being a little unreasonable about the value-added tax, because the proposition in the European Economic Community is that not more than 1 per cent. of the tax should pass to the Community budget. My hon. Friend cannot refer to all proceeds passing to the Community budget.
Mr. Biffen: Certainly. I am sorry if I gave my hon. Friend the impression that the entire proceeds of the value-added tax should be assigned to the Community's budget. No. What I am saying is that, because it is the product of I per cent., the product of that I per cent, must be, broadly speaking, uniform throughout the Community countries, and the scope of the tax must be broadly uniform throughout the Community. I hope my hon. Friend will not pursue me further on this, but I take the point he makes, and I am fully aware of it, and it really does not get away from the fact that foodstuffs are bound to be in any value-added tax to which this country is wedded within the context of the Community.
If I had other reason for doubts about the value-added tax it would be that I remember sitting on the benches opposite when, from the benches on this side, Mr. Robert Maxwell was a great advocate of value-added tax, and I remember his

1619
specific contribution to fiscal thinking in the debates we had under the Labour Government. But, of course, there are weightier reasons to be sceptical about the value-added tax. Are we so sure that the Richardson Report has been set aside by experience? I would be interested to know whether that is the view of my right hon. Friend the Member for Kingston-upon-Thames. One thing I do know: someone who will be well known to hon. Members on this side of the House and probably to hon. Members on the other side, Mr. John Chown, taxation correspondent of the Financial Times, in a very recent article, said—I make only two quotations—
"There is no dramatic advantage on exports—"
that is, with respect to a value-added tax—
"—overseas customers do not pay purchase tax at present."
That fairly reflects the findings of the Richardson Report. Mr. Chown also said:
"In practice it is unlikely that a V.A.T. could fully replace both purchase tax and S.E.T. and there seems little real hope of any further transfer from direct taxes at present."
I only conclude that the very complexities of selective employment tax, the absurdities of a purchase tax, would be united and compounded, I suspect, in a value-added tax. There would be disallowances for certain commodities. That we already know. There would then grow up pressure for differential rates. That, I am certain, we shall experience—and already the Liberal Party, with that enthusiasm of those who espouse causes which, if not lost, are almost bound to be, has come in this afternoon advocating regional variations in the value-added tax. We shall end up with a tax which, far from bringing simplicity to our fiscal system, will have complexities the like of which will mean that certain distinguished public statesmen will be called perhaps from their present offices, having once successfully chaired a campaign for the abolition of S.E.T., to campaign for the abolition of the value-added tax.
I realise that I have traded more on the time of the House than I am entitled to but I must make my final point which I believe to be one of the greatest substance. I believe that there is a very real
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and genuine area for debate about this Budget, a debate which has not yet really begun, though my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) sought to start it. The challenge of this Budget to the economics and fiscal strategy of this Government must be contained in the answer to the question whether or not the problems of inflation will be eased or compounded by the measures we are now undertaking and though this Budget has flair and imagination and the Chancellor deserves full praise on that account I believe there is a central area of grave ambiguity, and this is in the area of the Government's attitude to money supply. I say this in the knowledge that the final speaker tonight will be my hon. Friend the Member for Horsham (Mr. Hordern), and, therefore, any heresies to which I might possibly give tongue would be but the most mild of doubts compared with what I know to be his feelings on this subject.
My right hon. Friend the Member for Thirsk and Malton quoted the Chancellor. I shall do the Chancellor the courtesy of making the same quotation again. I hope that everybody else will repeat it and think about it. These were the Chancellor's words:
"As the rise in costs and prices is moderated, so the aim will be to slow down the growth of the money supply. This will depend on the progress we make in de-escalation."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1374.]
This goes to the whole heart of economic management and the relationship between the administration and money supply. Are the Government to be a passive supplier of money to finance income settlements that have been contrived or bluffed or cajoled in the public sector? It begins to come down to this. Do we believe that the Government are there in some residual rôle financing the outcome of industrial conflict and activity within society rather than seeking to control those events by their indisputed function as the sole creator of money? I believe that the choice which has to be made the one side or the other is the real political, economic and social divide today.
I thought that much credit was due—I hope that I do not sound patronising—to the hon. Member for Stoke-on-Trent, Central (Mr. Cant) who made this point last night without the advantage of the

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Yorkshire Post editorial so to instruct him. He also said this:
"… I am surprised that, in the last analysis, he"—
that is the Chancellor—
"should emerge as a good National Institute of Economic and Social Research man."—[OFFICIAL REPORT, 30th March, 1971; Vol. 814, c. 1411.]
I think we should be a little careful about those from whom we are getting praise. The National Institute of Economic and Social Research has great academic dignity, but more to the point it has a well-documented relationship between its senior executives and the Opposition Front Bench.
There is plenty of ground for saying that, although my right hon. Friend has produced a splendid Budget in many respects, on this one vital issue—in the area of deficit financing and money supply—I have some residual doubts. Therefore, I welcome the Budget, and welcome it sincerely and unstintingly for its imagination and for the welcome forward glimpse it gives of a more equitable tax system. But on the worrying and socially corrosive issues of inflation and its attendant evils I believe that we are obliged to exercise the charity of suspended judgment.
Mr. Speaker: I call the hon. Member for West Lothian. I think it is reasonable for me in these circumstances to express the hope that the hon. Gentleman will sit down at twenty-five minutes to ten o'clock rather than at 9.30.
9.25 p.m.
Mr. Tam Dalyell: When an hon. Member is given a timetable at the end of a debate he often excuses himself from following the previous speaker. I, on the contrary, must succumb to the temptation and follow the previous speaker—the hon. Member for Oswestry (Mr. Biffen)—in some detail.
I was fascinated by the proposition that what we are having is the Jenkins Budget that never was. Perhaps because at this time of night one becomes irreverent that thought in certain respects had crossed my mind. But in other respects, such as the bias actually towards inequality, it could not conceivably be the Jenkins Budget that never was. In one respect I suspect it might have been
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a fourth Mr. Jenkins Budget, namely, in the merger of surtax and income tax. I very much welcome this merger, and many of us begged our own Government to do precisely this. The interesting issue is how a Conservative Government have succeeded in doing this when a Labour Government, or many members of the Labour Government, wanted to do it and failed. One easy answer is that Sir Arnold Francis and his colleagues are wicked Tories and will do it for a Tory Government but not for a Labour Government. I would not accept such a proposition. The truth is that a virgin Government coming in in its first year of office can impose its will on Whitehall in a way that a Government which may be 20 or 25 per cent. down in the opinion polls in its third or fourth year of office cannot do. I do not blame the Civil Service. I accept this as a fact of life. Once again it demonstrates the importance that when a party comes into power it should be clear what it wants to do.
The hon. Member for Oswestry raised the matter of social security. There is present in the House this evening a right hon. Gentleman who probably knows more about the mechanics of social security than any of us, the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). My impression when I interrupted him earlier was that he accepted that the new contribution system was indeed a straight tax. If my figures are right, I estimate that a man earning £18 to £30 a week previously would have made a contribution of 3·3 per cent., and we are now faced with the situation that the man earning from £18 to £42 a week will be paying not 3·3 per cent. but 4·3 per cent., and the introduction of the 4·3 per cent. on the extra £12—£30–£42—is totally new. This will amount to an extra contribution of 60p a week towards the limit.
Can it be said that this is not a tax? At least under the Labour scheme the man would have got some benefit out of it since there was an earnings-related benefit. The present system will mean a straight contribution. Can anybody deny that this is a straight swingeing increase on taxation in the critical area between £18 and £42 per week? My suspicion is that the Government will very soon realise that this is seen as a direct form of taxation, neither more nor less.

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My time is limited so I will take up one other matter mentioned by the hon. Member for Oswestry, selective employment tax. I have been a great defender of S.E.T. since it is easily the cheapest tax to collect. How often have we heard hon. Gentlemen opposite complain about increases in the number of civil servants. Is it untrue that the new proposals will mean an extra 6,000 to 8,000 civil servants?
Sir G. Nabarro: Totally untrue.
Mr. Dalyell: It will be extremely difficult to operate for the reason that it is a tax that often lends itself to corruption, to evasion and therefore a large number of expensively paid civil servants is required to counter evasion. Therefore, one probably has to face expenditure of £10 million before starting to get the advantages. As my right hon. Friend the Member for Birmingham, Stetchford (Mr. Roy Jenkins) made clear, it is not a good tax.
I should like to address myself now to the speech of the right hon. Gentleman the Secretary of State for Trade and Industry, and I gave him warning that I should be making these remarks. In his opening speech this afternoon he said that nothing the Conservative Government had done had made the unemployment situation worse. My hon. Friend the Member for East Stirlingshire (Mr. Douglas) mentioned the occasion when Nicholas Harman came to my constituency, and spent a day with me, to do a pre-Budget "Panorama" programme. All who saw the programme will agree that the accounts given by my constituents in Livingston and Fauldhouse were moving, human, non-political accounts of tragic happenings, to blameless families.
What is true is that the Government have made an alteration. The change from investment grants to investment allowances has hit those potential industries which might have gone there. I prefer not to argue in terms of my constituency, because that, in a sense, weakens the general argument.
I refer then to the maiden speech of the hon. Member for Falmouth and Camborne (Mr. Mudd), who, quite rightly, said: "Look at the tin industry. How on earth can the tin industry hope to make any kind of profit in the first
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three or four years." This was an absolutely valid point.
I take another example. At enormous expense to the central Exchequer a great new aluminium smelter has been put up in Ross and Cromarty. I have given notice to the hon. Member for Ross and Cromarty (Mr. Gray) that I should raise this point. I was at a political meeting there last weekend and I am fully informed on the position. To attract aluminium-using industries, given the geographical situation of Ross and Cromarty, there must be considerable central Government incentives. No aluminium-using industry, by the nature of the technology, can possibly make a profit in year one, year two, or probably in year three. Profit may come in year four or year five. Therefore, what advantage to such an industry is any favourable response to tax allowances on profits? [Interruption.] I am talking of aluminium-using industries, not the smelter itself. To provide good jobs in the Ross and Cromarty areas subsidiary industries have to be brought in. This is where the worth while jobs for young people are.
I know something about the nature of big projects, because I represent Bath-gate. By bringing in the big project motor industry one does not solve the unemployment problem unless there are the subsidiary ancillary industries. We have not got them. This is partly because there was not sufficient incentive for them to move from the Midlands, for reasons, in the context of the motor industry, which we can understand.
In the context of the Ross and Cromarty and the aluminium smelter project, there is a real difficulty about the change in the system. I do not want to make a great party issue out of this, but I suggest that for the good of Scotland, because we want the smelter project to succeed, we should go back to the old system for certain parts of the country. I do not make this plea on behalf of my constituency, because Ross and Cromarty is far from it, but there is a real Scottish problem here.
I shall now sit down to give maximum time to hon. Gentlemen opposite hoping that the Secretary of State may either care to comment or at least to reflect on what I have said and go back to the grants system for certain areas.
9.33 p.m.
Mr. Peter Hordern: It is my privilege to congratulate my hon. Friend the Member for Falmouth and Cambome (Mr. Mudd) on an excellent maiden speech. I do not think his constituents can be left in any doubt that they have a most redoubtable defender of their interests in this House. We shall look forward with interest to hearing what he has to say on many occasions. Indeed, so much so that I dare say that if by any chance he should happen to catch your eye, Mr. Speaker, before some of us do on future occasions we may bear that state of affairs with rather more than our customary equanimity.
I think that almost all my right hon. and hon. Friends have given this Budget the very warm welcome which it deserves. I say "almost all", but even my hon. Friend the Member for Oswestry (Mr. Biffen) gave it a partial welcome—and that is quite something for him.
The Leader of the Opposition yesterday seemed to me to have a difficult task, and he made it obvious that he was having a difficult task. The best part of his speech seemed to be where he quoted some remarks which he made 15 years ago. The right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) made a good deal better speech, but that was only because he modelled himself very much on the remarks made by my right hon. Friend the Prime Minister on a similar occasion a year ago.
I have always thought that the Budget should be the visible evidence of a party's policy as well as a Government's economic judgment for the coming year. There is no doubt that this is an historic reforming Budget by a reforming Tory Chancellor. To propose, as he has done, the complete reform of income tax, the introduction of V.A.T., the abolition of S.E.T. and the reform of the corporation and capital gains taxes is and will be a landmark in our fiscal history. There is also to be a major reform of the whole of the monetary and credit system. All this will keep economic commentators in business for months to come.
It is the sort of Budget for which all Conservatives have been hoping, and for which many of us have been working, for many years. There must have been times during the past few months when one could have heard sounds of furious
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combat within the Treasury and the Inland Revenue, but the Chancellor has won, and we now have the best Budget we have seen since the war and probably since long before.
Despite what hon. Gentlemen opposite say, it is a national Budget. It has had proper regard for those who are most in need. There is a substantial increase, in fact the largest ever, in the old-age pension—
Mr. William Hamilton: No.
Mr. Hordern: My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) said how much he welcomed the extra provision for the very old, and I share that view. There has been a large increase in the child allowance and an increase in the dependent relative allowance and, of course, the halving of S.E.T. The new pensions will cost £560 million and the S.E.T. £245 million in a full year. Nobody can say that this is not giving a lot of relief to those who need it most.
For hon. and right hon. Gentlemen opposite to carp about the reliefs which have been given to those who have been so hard pressed for years is a remarkable argument. Let us look at these reliefs. On capital gains £1·5 million, on estate duty £10 million, close companies £2 million, surtax £16 million—this year a total of less than £30 million in all. That is the money about which hon. and right hon. Gentlemen are complaining. If anyone has given more help to the surtax payer, it was the right hon. Member for Stechford when he allowed gilt-edged transactions to be exempt altogether from the long-term capital gains provision.
I am glad that there is now to be a sensible distinction between the earnings of husband and wife. This is a long overdue reform of a situation which has caused a good deal of frustration.
What is so refreshing about the Budget—rather like "The Hound of the Baskervilles"—is what is not there. For once, there are no higher taxes in the Budget. That makes a change from the £3,000 million extra taxation in the last six years. There is also a marked absence of the petty jealousy and vindictiveness which has characterised every Socialist Budget. The artificial valuation of trusts for capital gains, even though no disposal has

1627
taken place, has gone. The attachment of minors' income has gone. The whole field of close company legislation is to be reformed. I am glad that my right hon. Friend has put these things right. I hope that the Finance Bill, when it is published, will also include one or two other matters to which my hon. Friends referred particularly when we were in Opposition. I refer especially to the exclusion of unit trusts and investment trusts from the purview of the capital gains tax.
The most significant change lies in the wholly different approach of this Budget from those of the last six years. The difference between this Budget and all previous Socialist Budgets is the difference between a fundamental and far-sighted reform of the tax system and a series of desperate improvisations. The proposals to abolish surtax and to unify incomes under one graduated rate and to abolish the artificial distinction between earned and savings income as well as to increase the level at which estate duty starts are all of immense importance. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) was right in referring to the plight of the widow who has to face the sudden burden of estate duty.
This Budget should give the young technically qualified people just the incentive they need, the very people to whom the Jones Report on the brain drain referred, and—
Mr. Barnett: The Jones Report never said anything about taxation being a disincentive.
Mr. Hordern: I am grateful to the hon. Gentleman. I have a copy of the Jones Report here. What it says is:
"The attraction of financial prosperity at an early age, carrying with it the ability to set up home in reasonable comfort without stretching resources to the limit is obvious when compared with the likely situation of the young married man here today."—
Mr. Barnett: The hon. Gentleman has misquoted.
Mr. Hordern: I could scarcely misquote what I have just read.
For many years, it has been virtually impossible to make significant savings from income. Now at last—indeed, for
1628
the first time since the war—it should be possible to do so. These proposals for savings should be considered in the context of the prospects for savings as a whole. I welcome the provisions for the new Premium Bonds and the other savings media, but the most important form of national savings—important in its effect both on interest rates and on money supply—remains gilt-edged securities.
I recognise the benefit which gilt-edged will receive from the application of the 30 per cent. short-term capital gains tax. It will certainly help, but is there not a strong case for removing gilt-edged from the ambit of capital gains tax altogether? Of course that will mean that gilt-edged will be more favourably treated than other securities, but there is nothing new in that. The effect would be to help considerably the redemption programme, which is particularly heavy this year, as well as the Government's borrowing requirement.
It should mean that sort term interest rates would fall, and this in turn would have its effect on long-term rates as well. I do not think that the authorities have at all an easy task, and they need every help that they can get.
I and many of my hon. Friends were fascinated by the Chancellor's proposals for monetary reform. I hope that they will lead to the abolition of the ceilings on bank lending and that control will be enforced on all forms of credit, both through control of the money supply and through special deposits.
I should not be surprised if such reforms do not lead to a further change, and that is in the rôle of Bank Rate itself. It seems to me that its rôle is of diminishing importance. I hope that the time will come when the Government will directly control the money supply and liquidity ratios and leave the bank and other institutions to compete for deposits. It has always seemed wrong to me that the Government should dictate to these institutions how they should carry out their business and lend the money. I hope that this will eventually cease. The banks have plenty of money to lend at present, and I should be surprised if Bank Rate is not reduced very soon.

1629
Of course, if these things are to happen, it is important that monetary policy should be effective. I understand that the Chancellor intends to allow money supply to increase by 3 per cent. a quarter, until growth matches productive capacity. This is a fairly precise target. Some of my right hon. and hon. Friends think that it is an unwise target, but is monetary control such a precise instrument? The trouble is that if changes in the exchange rate are ruled out—some of us think it a pity to rule out anything —it is very difficult to pursue an entirely effective monetary policy. Overseas funds can come here or domestic companies can borrow on the Euro-dollar market, and in both cases the money supply is increased, as it was considerably in the December quarter.
Of course, the rules for borrowing on the Euro-dollar market have been changed, but not before there has been a considerable inflow. The Chancellor said that he is operating neither a neutral nor a passive monetary policy. That is fine, so long as the amount by which the money supply is increased is the amount that he had in mind. I do not think that the monetary weapon can be retained with any precision as it is at present used.
In the first place, there is no way of guessing what the foreign inflow will be, but in the second place it appears, if one is to be guided by his public utterances, that the Governor of the Bank of England decides how far the monetary weapon should be used at all. If he is going to dictate his tactics in the gilt-edged market by what he thinks is politically tenable, we will not have a very effective monetary policy. It is almost as if the Chancellor, in relying on monetary policy, were to play golf with Mr. Goldfinger and find that his putter had been pinched on the last green. I hope, therefore, that the Governor will allow the Chancellor to look after the political considerations while he attends to his business of keeping a grip on the money supply.
There is little doubt that the increase of 3 per cent. a quarter in the money supply is reflationary, and is meant to be. Employers are now much more reluctant to meet extravagant wage claims but disturbing features include the rapidly increasing rate of unemployment and the reluctance of companies to invest.
1630
The right hon. Member for Stechford spent a good deal of time on the question of investment. He was critical of the level of manufacturing investment at present and in prospect. It is certainly a serious situation, but nobody could call it new. In real terms, at 1963 prices, investment in new plant and machinery was lower in 1969 than in either 1967 or 1968.
A year ago both the C.B.I. forecast and the Financial Times survey were almost as pessimistic as they are now, but industrialists actually spent a good deal more than they said they would. Indeed, it is particularly interesting to note that expenditure on plant and machinery in the last half of 1970 was higher than in any six-month period for at least three years.
I do not claim that the present position is not dangerously low. Indeed, the machine tool statistics are anything but encouraging. However, I claim that it is too early to despair, judging from the figures that we now have. Furthermore, this Budget, with its emphasis on improving company liquidity, will change the outlook substantially. I do not believe that the decision whether or not to invest is determined solely by the prospect of future profit, though it is certainly an important consideration. Almost equally important, however, is the existing level of company profits and company liquidity.
This brings me back to the essential difference between this Budget and Budgets introduced in the last five years. In this one we see a further reduction of 2½ per cent. in corporation tax and an end to the forced loan of S.E.T., to which my hon. Friend the Member for Surrey, East (Mr. William Clark) rightly referred. This will help company liquidity. We have already had the first reduction in corporation tax of 2½ per cent., and we have also had a change from investment cash grants to investment allowances—that is, allowances against taxation on profits—and this will act as a deliberate incentive towards profits.
We now have a major change in corporation tax. The intention, as my right hon. Friend the Member for Kingston-upon-Thames said, is to encourage distribution rather than retention, and the most favoured system seems to

1631
be a two-tier one somewhat similar to that employed in West Germany.
Mr. Boyd-Carpenter: I did not go quite as far as that. I suggested that the intention, as the Chancellor said, was to be neutral between the two and leave the decision to companies.
Mr. Hordern: I hope that this will be carried out within the corporation tax system itself. Indeed, if the suggestion of the Green Paper is implemented arid the tax on retained profits is to be 50 per cent., there would seem to be advantage in having a common rate of tax; of say, 15 per cent. on distributed profits or by allowing investment against tax on retained profits, as far as the last 15 per cent., so enabling both to be treated equally.
That would encourage firms either to invest in new plant and machinery or to pay it out in precisely equal fashion. This hope certainly contrasts with the double taxation of shareholders under the present system, let alone contrasting it with the increased rate of 45 per cent. from 35 per cent. under the Labour Government.
The results of the previous Government's policy are now all too plain. In five years the gross trading profits of all companies increased by only 7 per cent. The national income, meanwhile, rose by 30 per cent. Import prices have risen by 20 per cent. and basic materials have gone up by about 25 per cent. Trading profits in industry are less than £3,000 million before tax, which represents a return of about 10 per cent. on assets.
As it costs about 11 per cent. to borrow money, and as company liquidity is at its lowest level, there has been precious little incentive in the past to do anything except blame the Government. The trouble is that industry has been blaming the wrong Government. It is the responsibility of the previous Government that profits now form so small a part of the national income, down now to 10 per cent. Companies were made by the Labour Party to feel somewhat indecent in their search for higher earnings. They were examined by the Prices and Incomes Board, told to merge by the I.R.C., told not to merge by the
1632
Monopolies Commission, and generally made to feel inferior by the big and little Neddies. All these influences have had their effect, and the effect is that company liquidity is at a dangerously low level and there is not much disposition to invest.
This is not an easy process to reverse, but we have now made a good start. The I.R.C. and the Prices and Incomes Board have gone, and I hope that we shall hear less of those extraordinary statements from the Monopolies Commission. Above all, company liquidity will be greatly eased by these reductions in corporation tax, and it will come as a welcome change to companies that the Government expect nothing more of them than that they go about their business and increase their earnings. That is what they thought they were there to do. But it would certainly help—as I expect will happen—if Bank Rate were reduced as well.
One thing that we have mercifully been spared in the Budget is any reliance on a statutory prices and incomes policy. It is quite extraordinary that people still talk favourably of such a policy, despite all the evidence of its total failure here and in every country where it has been tried. There are always those who are anxious not so much to cure a problem as to be seen to be doing something about it. On this matter The Times has been more than usually other-worldly. So far as the Conservative Party is concerned, it would not be a pretty spectacle to see taxes being reduced on higher incomes without allowing people to earn those higher incomes because they were faced with a freeze. There is also the fact that the trade unions would never agree to operate such a policy, and, if they did, their members would refuse to abide by it.
The right hon. Member for Stechford accused us of being responsible for unemployment, for inflation and for nil growth. He then took credit for the balance of payments improvement. He might have been a little more generous, as might other hon. Gentlemen opposite, about giving credit where it was due, to the invisable earnings of the City, as my hon. Friend the Member for Surrey, East said. But to do that would be to destroy one of the Labour Party's most cherished myths. I wonder how much longer the right hon. Gentleman will claim the credit for the improvement of the balance of payments

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position. I do not remember we in Opposition being given any credit for the improvement that they secured in the balance of payments position in the Budget of 1965. But credit is due to the right hon. Gentleman and to the International Monetary Fund, which was effectively running our economy while the right hon. Gentleman was Chancellor of this country.
As for unemployment, the reason for the present painfully high level is quite plain. It is that while employers may be bullied into paying extortionate wage increases, nobody can bully them into taking on more people or even keeping all the workers that they already have. What would the Opposition have done? Would they have had another prices and incomes freeze? I can imagine the welcome that that would have had from some hon. Gentlemen opposite. As it is, they have connived at every inflationary wage claim that has been submitted. Do the Labour Party think that it was wrong to channel tax reductions towards companies, or to increase the old-age pension, or the dependent relative allowance, or to halve selective employment tax?
The best way to reduce unemployment is to encourage companies to grow. This is what the Budget sets out to do and will achieve.
As for inflation, what kind of prices and incomes policy were the Labour Party running in the last six months before the General Election? We had all the guidelines set out in the White Paper called "Productivity, Prices and Incomes Policy after 1969". We were told that
"most wage and salary statements need to fall in the range of 2½ to 4 per cent. increase in a year if the aim of greater price stability is to be achieved."
This came at the end of 1969, before the start of the most inflationary period that we have seen for many years.
We had the right hon. Member for Stechford saying in his Budget speech last year:
"Everyone concerned with wage settlements should understand that if we are to achieve the reasonable stability of prices which is necessary for a sound economy and a healthy social framework, incomes cannot for long continue to rise at their present rate."—[OFFICIAL REPORT. 14th April, 1970; Vol. 799, c. 1225.]
What did the right hon. Gentleman do about it? He let loose the largest
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increase in the money supply in the whole of our history in the quarter before the General Election. That was the right hon. Gentleman's contribution to holding up inflation.
The contribution of the Industrial Relations Bill will be very significant in terms of higher earnings for companies and in less disruption to their operations. As a result of its passage and this Budget, confidence in business and industry will very soon return. This is a good Budget for the nation. It is an historic Budget for the Conservative Party. This is what we were all sent here to do. My congratulations go to my right hon. Friend for a very successful Budget.
Debate adjourned.—[Mr. Fortescue.]
Debate to be resumed Tomorrow.

CEREALS (GUARANTEE PAYMENTS)
Resolved,
That the Cereals (Guarantee Payments) Order 1971 (S.I. 1971, No. 289), dated 23rd February, 1971, a copy of which was laid before this House on 2nd March, be approved.—[Mr. Anthony Stodart.]
Resolved,
That the Cereals (Protection of Guarantees) Order 1971 (S.I., 1971, No. 290), dated 23rd February, 1971, a copy of which was laid before this House on 2nd March, be approved.—[Mr. Anthony Stodart.]

EXPERIMENTS ON LIVING ANIMALS
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]
9.57 p.m.
Mr. Kenneth Lomas: I am grateful for the opportunity to raise this matter at such an early hour. I am sorry that there is no one on the Treasury Bench at the moment to answer the debate, but no doubt that will be put right in due course.
I begin by pointing out to hon. Members that before this 30-minute debate is over there will have been 300 experiments on live animals in this country. In 1960 the number of animals used in research was about 3½ million, and the number of vivisectors who could legally perform

1635
experiments was about 7,000. In 1969, the number who could legally perform experiments on live animals had increased to 13,791. This was matched by the all-time record number of animals used, a total of 5,418,929. If my arithmetic is correct, that works out roughly at 100,000 a week, 14,300 a day, 600 an hour, or 10 for every minute of the day and night, seven days a week, all the year round. I cannot believe that this is necessary.
I am not a total anti-vivisectionist. I accept that it may well be necessary to carry out certain experiments in the interests of research and science. But I question whether it is necessary to use so many animals.
In 1969 the total number of Home Office inspectors appointed to supervise this method of research was only 13. In 1969 there were 13 Home Office supervisors to look after 14,000 vivisectors performing 5½ million experiments.
It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jasper More.]
Mr. Lomas: It is for these reasons that I suggest that there is a need to establish a research institute to study and develop methods not including the use of animals. I believe that the establishment of such an institute would be welcomed by scientists and the general public.
Hon. Members and especially the right hon. Lady know as well as anyone that there is tremendous concern about animals, and that if our postbags are full of nothing else they are full of letters about animals. But I am sure that the vast majority of constituents of hon. Members on both sides of the House would be horrified if they knew of the total number of live experments in this country.
I like to think that such a research institute would be vested in the Medical Research Council, the Government's principal agency for the development of medical research, but if that is not acceptable, some alternative method has to be found.
1636
It has been calculated by the National Anti-Vivisection Society that the cost of such a research institute, including running costs for the first five years, would be about £1 million. That is not an excessive sum of money to stop the needless cruelty and pain inflicted on animals and by the establishment of such an institute it might well be possible to increase our knowledge for the benefit of science and the future well being of the people of this country.
The functions of the institute, as I see it, would be to collate information from all over the world concerning techniques which negate the need for the use of animals, and to study, develop and expand their use generally in medical research. There is no doubt that there is concern in areas of medical research which are currently involved in the extensive use of animals, with the standardisation and testing of drugs and the manufacture and testing of vaccines and sera, and there is substantial evidence to suggest that such tests can be made effectively in vitro using cell and tissue cultural methods without recourse to live animals, and such techniques have been shown to be more reliable, quicker and cheaper. If the Minister would like me to send her a list of references appertaining to this aspect of the use of cell and tissue culture, I should be glad to do so.
I do not pretend to be either a scientist or a doctor, but from what information I have been given it would appear that we in this country are lagging behind many other countries in seeking an alternative method of research. We are certainly behind the United States of America, the Soviet Union, Yugoslavia, Finland and Germany. We pride ourselves on being a nation of animal lovers, and yet there are 5½ million animals used for live experiments in the course of any one year.
If such an institute as I suggest were established, it would give tremendous impetus to the search for alternatives, which must be welcomed by all concerned on humanitarian and practical grounds. It could lead to the discovery of new methods of research far superior to those involving the use of animals both in terms of economy and reliability. It is sometimes said by Governments and organisations interested in such matters that the

1637
use of animals in experiments is a regrettable necessity. If that is so, and if the present Government are truly concerned at the increasing volume of animal experimentation, the establishment of a research institute along the lines I have suggested would be a practical demonstration of their sincerity and an enlightened step forward to deal with a situation which reflects credit on no one.
Since the Cruelty to Animals Act was passed in 1876, 95 years ago, not a single Amendment has been moved from either side of the House that would lessen the pain inflicted on the animals involved in experiments. The experimenter has been protected, but the animal has not. In the 50 years from 1919 to 1969 over 90 million animals died as a result of experiments, and almost every one of those experiments inflicted some pain or suffering on the animal concerned. It is time we found an alternative method. I understand from the National Anti-Vivisection Society that it has written to the 14,000 licensed vivisectors in the country asking for their views on the creation of such an institute, and the replies so far have been most encouraging.
The question goes beyond the boundaries of Britain. Earlier this year the Consultative Assembly of the Council of Europe, following a recommendation from its Science and Technology Committee, argued the case for a thorough study of the whole question of experiments on live animals. It suggested that a Commission should be appointed to draft international legislation setting out the conditions and the scientific grounds on which experiments on live animals could be authorised. It also argued that there should be a documentation and information centre open to all interested parties to collect information on the types of experiments carried out, the kind and number of animals used, and the alternatives to the use of live animals, and that experiments on live animals in schools for teaching purposes should be forbidden, and that such experiments in universities should be limited by replacing them with new visual methods.
I am deeply honoured that the Secretary of State for Education and Science is to reply to the debate. It is a great privilege that we should have someone from the Cabinet who is interested in the subject here tonight. In far too many
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schools—I speak as a father of three children—children are being taught to love, care for and look after animals which at a later stage are being used as subjects not necessarily for vivisection but certainly for dissection and experiments of one kind and another. I deplore that.
I return to my main point, the need for the establishment of a research institute to study and develop methods not including the use of animals. Will the Secretary of State give a firm assurance that such a proposition will receive sympathetic consideration, and assure the House that she is in favour of reducing, if not totally abolishing—which I accept we cannot do, the number of vivisections in this country, in the interests of humanity, the animal kingdom and the people who love animals?
10.5 p.m.
Mr. Douglas Houghton: I apologise to my hon. Friend the Member for Huddersfield, West (Mr. Lomas) for not having been here when he began his speech. The debate came on a little sooner than I expected. May I also explain that although I am speaking from the Dispatch Box I am not speaking on behalf of my right hon. and hon. Friends; I simply did not know where else to speak from. I want to add a personal word of support to my hon. Friend and to join him in congratulating the Secretary of State on giving the debate her personal attention.
I regard the treatment of animals by human beings as one of the great moral issues of the day. I am sorry that this House does not take a great deal more interest in this side of research and experimentation and the treatment of animals. Members of the public are rightly shocked when they read of cases of extreme cruelty and neglect of animals and see television programmes on the subject. What they do not know is what is going on behind the scenes. They would be appalled if they could see the fate of many laboratory animals.
When we read the report of the Royal College of Physicians on the health hazards of smoking, many of us, I am sure, were horrified to learn that animals were compelled to smoke cigarettes for hours a day, for weeks, for months and possibly years on end, in order to show

1639
what the effects of the smoking of cigarettes would be on live tissues. The spectacle of animals with cigarettes tied to their snouts and compelled to breathe in tobacco smoke in this way in order that human beings might know whether addiction to tobacco is harmful to their health is really a monstrous form of experiment.
If human beings want to know whether things are bad for them they should try them on themselves and learn from their own experience. The enormous growth in the number of experiments is something to which Parliament should give attention. The real difficulty is to find out what is really going on. This is a closed shop. The cameras do not get there. Personal inspection is frequently refused not only in medical research establishments but in defence research establishments also, dealing with poison gases and noxious liquids of one kind or another. We are really using animals to find out what damage things do to them in order that human beings may be saved and in order that we may know what damage certain things will do to our enemies in the event of war. This matter deserves a longer debate on some future occasion, and I hope that we shall have one.
I am deeply moved by this kind of thing. It is quite untrue for many people to suggest that those who take an interest in this matter are either cranks or sentimentalists, or for some reason or other love animals more than children. That is the kind of snide suggestion sometimes made against those working for animal protection.
Experimenters should not be hidden away or their work shut off from public gaze or independent inspection by those who can convey their findings to the public. Numbers are not enough. The long standing Act of Parliament on this matter needs to be rewritten and brought up to date in order to conform to modern standards on this great moral issue.
When I read of animals being used in order to see whether certain cosmetic treatment for women will be harmful to the eyesight of animals, I find it quite horrifying. One may justify using animals—but it is difficult to do so—in order to discover some of the secrets about dread
1640
diseases which are afflicting the human race, and especially perhaps diseases which afflict animals themselves. But to use them as a basis for testing out cosmetics is an abomination.
I fully support my hon. Friend's plea to the House and to the right hon. Lady to consider every conceivable means of finding alternatives to the use of animals for experimentation. That is all I have to say. I am obliged to my hon. Friend for raising this subject and I hope that, in all the great issues confronting Parliament, this one will not be lost sight of. It is one of the great moral issues of civilised society.
10.15 p.m.
Sir Ronald Russell: I should like to support the plea made by the hon. Member for Huddersfield, West (Mr. Lomas), as the honorary secretary of the Animal Welfare Group in this House. One point he did not touch upon is that the reaction of animals to experiments is not always the same as that of human beings.
Therefore experiments on animals are not always reliable in giving guidance as to whether a drug will be safe.
I know that this is a Home Office matter and not my right hon. Friend's responsibility, but it is now six years since the Littlewood Committee reported to this House. Not only have we not had a debate on it but no steps have been taken to implement its recommendations. Some of them are probably out of date now. I wonder whether my right hon. Friend could make representations to the Home Secretary about this and see whether something can be done.
I have a feeling that there is a resistance to something being done about this. Some of those engaged in research using animals become hard-boiled in their attitude towards those animals. This is inevitable, and it is no criticism of these people, just an unfortunate fact of life. That seems to create resistance towards reducing experiments. The scope of these is appalling and it is increasing every year. There must be an enormous amount of duplication. I support the hon. Gentleman's plea for this research institute to be established to consider alternative methods and I hope that my right hon. Friend will be able to give some encouraging information.
10.17 p.m.
Mr. Harold Walker: In 1966 I had the pleasure of raising a related matter on the Adjournment, and I have it in mind now because when we consider this matter we must realise it is not only a question of the distress caused to the animals involved.
There is also the wider distress which often arises from the number of animals used. So long as this experimentation takes place and so long as the practice grows there will be a need for animals, and, as was indicated in the Littlewood Committee Report, so long as there is a shortfall in the number of animals coming from breeders for this purpose there will be an inducement and incentive for criminal elements to obtain animals improperly, animals which are often children's pets.
There is unquestionably a traffic in illegally obtained animals, often stolen. This also is a matter which causes distress to the owners of the stolen animals. While I accept that this is not the right hon. Lady's responsibility, I want to put this in support of the case made by my hon. Friend the Member for Huddersfield, West (Mr. Lomas).
10.19 p.m.
The Secretary of State for Education and Science (Mrs. Margaret Thatcher): I am grateful to the hon. Member for Huddersfield, West (Mr. Lomas), my hon. Friend the Member for Wembley, South (Sir R. Russell) and other hon. Members for raising this matter. My time is brief and I will try to get as much information as possible into the reply.
The statistics given by the hon. Member are very striking and arouse strong feelings. But there may be good reasons for them, and I should like first to examine them.
At present the use of animals is essential not only for the advancement of biomedical research but also in routine safeguards for the health of the community. An increasing number of drugs and food additives have to be initially screened and tested on living animals, often as a legal requirement, before they may be administered for clinical purposes. It would, clearly, not be possible to use human subjects for such purposes, in view of the toxic hazards involved.
1642
Again, some diagnostic tests carried out in hospitals and public health laboratories are dependent on the use of animals.
The development of vaccines and drugs for use in veterinary medicine is similarly dependent upon screening and testing in other animals. Indeed, advances in veterinary medicine and surgery and particularly in the prevention of communicable disease, are no less dependent on animal experiments than their counterparts in human disease.
Again, fundamental knowledge of the nutritional requirements of domestic animals derived from animal experiment has made it possible to prevent much sickness and misery. Any unnecessary restrictions on animal experimentation would thus be deterimental to progress in veterinary science—the progress of agriculture and the welfare of domestic animals and pets—in just the same way as it would hold back research into the problems of human disease.
Furthermore, to maintain the present rate of progress in the bio-medical field as a whole, but particularly in such subjects as cancer research, toxicology, ophthalmology, pulmonary diseases and mental illness, the use of experimental animals will continue to be essential in the foreseeable future.
Although advances continue to be made in the search for effective alternatives to animal experimentation, it is the view of the Medical Research Council that the use of animals remains essential for the advancement of medical and biological research. The progress of medical science—and conseqeuently of medical practice—on the scale and rate that has occurred in recent years would have been impossible but for such experiments.
The hon. Member has laid particular stress on the present scale of animal experimentation. It is true that in recent years there has been a steady increase in the number of experiments on living animals. The background to this trend was reviewed by the independent Departmental Committee of Inquiry the Little-wood Committee, which, in 1963 to 1965, examined very thoroughly and in detail the working of the present controls over animal experimentation. After reviewing the enormous expansion of biological science since 1876, and all the operational factors involved in the use of animals for

1643
experimental purposes, the Committee pointed out that
"the increase in the numbers of animals used in reaserch is largely to be explained by the expansion of biological science and the mandatory testing of biological substances."
In paragraph 73 the Committee further said:
"Our general conclusions are that, in spite of strong incentives to the avoidance where possible of animal experimentation, the discovery of substitutes for animal tests is not likely materially to affect the demand for animal experimentation."
The hon. Member referred to the controls and safeguards in this country over the use of animals for experimental purposes. Although our legislation dates back to 1876, its basic principles are not out dated. The essential feature is that the person who conducts the experiments must hold a licence, which is only issued on certain stringent conditions. If he does not continue to satisfy these conditions he may lose it. Restrictions are imposed by the Act on the purposes for which animal experiments may be carried out. It prohibits absolutely the performance of any experiment liable to cause pain unless it is undertaken with a view to the advancement by new discovery of physiological knowledge or of knowledge which will be useful in saving or prolonging life or alleviating suffering, or the acquisition of such knowledge by persons attending lectures at medical schools, hospitals or elsewhere. Experiments of this kind are not, and would not, be permitted in schools in this country.
Restrictions on the infliction of pain are imposed by and under the Act with the object of ensuring that no animal under experiment suffers severe pain that is likely to endure, or avoidable pain of any kind. Within the Medical Research Council's organisation the majority of animals are specially bred in the Council's own laboratories. When requirements cannot be met from internal sources, all M.R.C. establishments are under instruction to purchase animals only from sources accredited or recognised by the Laboratory Animals Centre.
In spite of everything I have said, research workers generally will always prefer experimental methods which do not involve animals where such methods are effective. The reasons are first
1644
humanitarian, secondly economic, and thirdly convenience. We do not have to persuade scientists not to use animals if other methods are effective. They would be anxious to do so for those three reasons. Any new procedures which give equally successful results are taken up rapidly. British scientists—not least those working under the auspices of the Medical Research Council—have made steady progress in introducing alternative methods. In recent years, many techniques have been developed for tracing and measuring biological substances which have helped to reduce the need for animal experiments.
I quote as one example among many the development of immunofluorescent assay. This is the method of measuring the concentration of a substance by combining it with a suitable antibody, the concentration of which can be measured through its property of fluorescence under ultra-violet light.
Originally this method arose out of studies of immunology but research workers at many centres have developed the technique for different biological substances, and it is now in widespread use.
Again, much effort has been concentrated on the rôle of human diploid cell substrates in the production of virus vaccines. Diploid cells are those with a full complement of chromosomes. As a result, both rubella and measles vaccines based on human cell cultures have been licensed for sale in the United Kingdom.
Methods involving human material have their own problems. Clearly, it is possible unknowingly to transmit disease by this method while trying to cure another disease.
Quite recently scientists at the M.R.C. Clinical Research Centre have developed a method for detecting the toxin produced by cholera bacteria which is responsible for the disease. The method is based on the effects of the toxin on cultures of living cells and is simpler and more sensitive than previous methods in which animals were used. Progress has thus been made towards identification of the active principle of the toxin and its molecular structure.
Apart from work on living cell systems, the introduction of computers has paved the way towards introduction of mathematical models. A measure of success

1645
has been achieved, but the great complexity of biological systems inevitably means that difficult problems remain to be surmounted in devising valid analogues.
These are but a few examples of alternatives to animal experimentation. I would however strongly emphasise that all such developments arise from a particular research problem. Indeed, work of this kind is more likely to be fruitful if pursued in close conjunction with the scientific research activity to which it may be applied.
Results become widely known through scientific literature and are, therefore, adopted by other workers in relation to their own particular research problems. This is well illustrated by the technique of immunaluorescent assay mentioned earlier. Its wide area of application was achieved despite the fact that each new extension of its use has required further research effort, even though the basic technique was well established.
I have stressed this aspect since it has a crucial bearing on the subject under debate. The fact is that progress is likely to be quicker through existing scientific channels than by pursuing the search for alternatives outside the main stream of research.
On all the evidence from work in the field, and progress with alternatives so far, an institute created with the primary object of reducing animal experiments would be unlikely to be as effective as existing approaches mainly because of the difficulties of ensuring that the staff of the institute kept in day to day contact with the specific problems for which animal experiments are needed. Indeed the Medical Research Council is not in favour of establishing an institute for the development of alternative techniques in isolation from other research; rather, it has chosen to encourage new methods by the development of specialist sections and divisions within its establishments where staff with special technical skills can work with other scientists to the best mutual advantage. The Council gives active support to the development of new techniques when they show promise of improvement on existing methods, and I should be glad if the hon. Member would let me have details of the instances where he thinks we are behind other countries.
1646
The need for collaboration between disciplines is one of the principal facets of the Medical Research Council's research policies; this policy, which has been justified by the many scientific advances which have been achieved over the years under the Council's auspices, contributes to the development of alternatives to animal experiments. Moreover the Council's policy of placing its own establishments within universities whenever possible ensures both that the Council's staff have access to the widest possible range of scientific disciplines and also that any developments achieved by the Council's staff are rapidly communicated to a larger scientific community. I do not, therefore, feel able to accept the hon. Member's proposition that the addition of a new institute, which might well find itself out on a limb, would be of any significant help.
I repeat that scientists are anxious not to have to use these methods when proper alternative methods are available, and the search for those methods continues, and will go on as it has in the past.
One final point. The hon. Member mentioned that other countries are ahead of us in this. This general assertion is often made, but it has never been backed up by detailed examples and facts. If the hon. Member has any we should be very grateful if he would forward them to us.
Mr. Lomas: The right hon. Lady tonight has read from a brief and not spoken from her heart. I think she will agree with me that we have to do something about the position which we have in this country and experimentation with animals. The Council of Europe is on record as proving that the Soviet Union, Germany, Finland, the United States are ahead of us on this, and I am very upset that the right hon. Lady has decided tonight that she is not in favour of a research institute to find alternative methods.
Mrs. Thatcher: I may have read from a brief, but I myself carefully studied it, and I did it myself, because I have a scientific background and felt that I might even understand the brief.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten 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 Rochester):
The LORD CHANCELLOR on the Woolsack.

LORD MAYBRAY-KING
The Right Honourable Horace Maybray Maybray-King, lately Speaker of the House of Commons, having been created Baron Maybray-King, of the City of Southampton, for life—Was, in his robes, introduced between the Lord Henderson and the Lord Kilmany.

SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS
2.41 p.m.
VISCOUNT GOSCHEN: My Lords, my right honourable friend the Secretary of State for Social Services is making a Statement to-day in another place on the uprating of social security benefits. This is a long and very detailed Statement, and after discussions through the usual channels my noble friend the Leader of the House has decided that it would be for the convenience of the House if the Statement were not repeated here but were circulated in the OFFICIAL REPORT which, with the leave of the House, I shall arrange to do. Copies of the Statement will also be available in the Printed Paper Office.
LORD SHEPHERD: My Lords, I am most grateful for what the noble Viscount has said, and I fully endorse the view that has been expressed: that because the Statement is very detailed and of length it would perhaps be best to deal with it in that way. I do not want to be too difficult, but I am not quite certain that the words in the noble Viscount's Statement were wisely chosen. I think he said that the Leader of the House had decided that the Statement
1316
should be treated in this way. Clearly, it is for the House to decide how a Statement is to be dealt with. I raise that point only so that there shall be no question of a precedent.
LORD BYERS: My Lords, may I ask the Government not to allow this very useful precedent in any way to be weakened by the splitting of hairs?
LORD BLYTON: My Lords, can the noble Viscount say whether this is a new procedure which is before the House, and whether we shall have a debate on the contents of the Statement?
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, it is always open to your Lordships to put a Question or arrange a debate through the normal channels. Of course this Statement will involve legislation, and there will be an opportunity for debate when the Bill is presented for Second Reading.
Following is the Statement:
With permission, Mr. Speaker, I would like to make a statement about the up-rating of social security benefits. My right honourable friend the Chancellor of the Exchequer has already announced the main increases in benefit and contribution rates to take effect in the week beginning September 20. Associated benefits will go up in proportion to the main increases. I shall be presenting a White Paper to the House with a Bill and the Government Actuary's Report shortly after the Easter Adjournment, and laying instruments for the war pensions and supplementary benefits improvements.
I am circulating fuller details of the new rates of benefit and contributions in the OFFICIAL REPORT. It may, however, be convenient to state now that for the £18 a week earner there will be no increase in contributions; for the £20 a week earner the increase will be 3 new pence a week; the £30 a week earner will pay an extra 15 new pence a week; and a person earning £42 a week or more will pay an extra 65 new pence a week.
There are certain new selective improvements which I now wish to explain to the House. I am making copies of my Statement available in the Vote Office.
THE EARNINGS RULE AND INCREMENTS FOR DEFERRED RETIREMENT:
First, the earnings rule. We propose that earnings up to £9.50 instead of £7.50 will have no effect on retirement pensions; on higher earnings the present tapering arrangements will apply. The increments payable for deferred retirement will rise from 5p to 6p for 9 contributions paid.
MEASURES FOR THE ELDERLY:
The old person's pension provided under the National Insurance Act 1970 for people who could not become insured in 1948 will rise from £3 for a single person and £1.85 for a wife to £3.60 and £2.20, respectively. Similar pensions, at the new rate, will be paid subject to a residence test to all persons over SO, who failed to qualify for a pension or who qualify for one at a lower rate, and to those who subsequently attain that age.
We are much concerned about the very old. We propose to increase the uprated pensions of all persons over 80, including the recipients of old person's pensions, by an addition of 25p. Thus with full standard pension a single pensioner will get £6.25, and a married couple will get £9.95 if one is over 80 and £10.20 if both are over 80. There are some 1·2 million people over 80, of whom about two-thirds will receive the increase. The remainder are supplementary pensioners, and there will be an increase of 25p in the long term addition where the pensioner or his dependant is over 80.
MAIN WAR PENSIONS AND INDUSTRIAL INJURIES BENEFITS:
The war and industrial disablement pension for 100 per cent. assessment goes up from £8.40 to £10.00, and pro rata with lower assessments; the normal maximum of constant attendance allowance goes up from £3.30 to £4. Standard war widow's pension will be increased from £6.50 to £7.80 and industrial injuries widow's pensions from £5.55 to £6.55.
A pension will be paid regardless of the cause of death to the widows of all war and industrial pensioners who were receiving the normal maximum or higher
1318
constant attendance allowance. This will help about 1,500 women who have devotedly nursed their gravely disabled husbands.
WAR PENSIONS PREFERENTIAL ALLOWANCES:
Certain war pensions preferential allowances which have not been increased since 1967 will be raised by a third—namely comforts allowance, clothing allowance, and age allowance. Severe disablement occupational allowance, unchanged since its introduction in 1961 will be doubled to £2 and we shall institute an age allowance at 50p a week for elderly war widows between the age of 65 and 70.
SUPPLEMENTARY BENEFITS:
The scale rates for supplementary benefits are to be increased from £8.50 to £9.45 for a married couple and from £5.20 to £5.80 for a person living alone. Children's rates will go up pro rata and, with the agreement of the Supplementary Benefits Commission, there wilt be selective additional increases for those aged from 13 to 20.
RESTRICTIONS ON UNEMPLOYMENT BENEFIT FOR OCCUPATIONAL PENSIONERS AND OPTIONAL CONTRIBUTIONS FOR NON-EMPLOYED PERSONS OVER 60:
There has been concern that some retired people with substantial occupational pensions claim unemployment benefit and contribution credits although they really have left the active employment field. But I know that the pensioners themselves have strong feelings about their liability to pay contributions when unemployed and not entitled to credits.
I propose three measures for occupational pensioners over 60. First those with pensions of £30 a week or more will not get unemployment benefit or credits unless they first satisfy a test of further work. Second, benefit will be reduced on a sliding scale if the pension is more than £18 a week. Third, everyone over 60 will be able to decide voluntarily whether or not to continue to contribute towards obtaining the full standard retirement pension. Some 5–6,000 people will be affected by the restrictions, but the contribution concession will go wider.
MEASURES FOR THE CHRONIC SICK:
We propose a substantial package of improvements for a neglected group, the chronic sick, to lift them above the basic benefits of the short-term sick when their earnings related supplement ceases after six months of incapacity. At this point they will become invalidity pensioners, entitled to an invaldity allowance if incapacity began more than 5 years before pensionable age as well as the full standard rate of benefit. We shall start at a modest level with three rates: £1 if incapacity began before the age of 35; 60p if it began before 45; 30p if it began before 55 for women and 60 for men. We are deliberately favouring those who fall chronically sick young, because they will not have had the same opportunities to build up personal savings or pension rights that an older man had.
The allowance will be paid to the existing chronic sick who are under pension age at the appropriate rate. Well over three-quarters of the existing 400,000 chronic sick are expected to qualify.
In these cases of prolonged incapacity the wife may become the main breadwinner. We therefore propose to apply to her earnings the tapered retirement pensions earnings rule, eased as I have already described to £9·50, instead of the all or nothing rule which at present extinguishes the increase paid for her if her earnings exceed £3·10.
The chronic sickness of the father imposes particular difficulties where there
1320
are dependant children. We propose to pay the higher rate of children's allowances at present payable only for the children of widows, £2·95 including family allowance after the uprating, for the children of invalidity pensioners instead of £1·55 now.
At retirement age, invalidity allowances will be carried over to retirement pensions as lifelong benefits, and they will be payable to unemployable pensioners under the war pensions and industrial injuries scheme. All these categories of pensioners will also qualify for the family benefits which go with invalidity pension.
The House may be interested in an example of the changes. The national insurance benefit income of a man who fell chronically sick at 30 with 2 children and a wife who is not working is to-day £11·20 including family allowances and would become £13·40 after the uprating. Under the new arrangements it will be £16·60, an increase of nearly 50 per cent.
Finally, we propose to increase the rate of attendance allowance due to start on December 6 for the very severely disabled from £4 to £4·80.
All these proposals, including the main pension increases, will cost about £560 million in a full year. There are gaps that need to be filled. We have nut the chronic sick and the very old as our priorities this time. I am sure that when the House has had the chance to study our proposals in detail they will be seen as a healthy combination of the universal and the selective.
Following are the tables giving details of charges:

MAIN INCREASED NATIONAL INSURANCE BENEFIT RATES

Proposed Weekly Rate £

Existing Rate £

Standard rate of unemployment and sickness benefits, maternity and widowed mother's allowances and invalidity, widows and retirement pensions

Single person

6·00

5·00

Wife or other adult dependant

3·70

3·10

Unemployment or sickness benefit

Married woman (normal rate)

4·20

3·50

Persons under 18

3·30

2·75

Widow's allowance (first 26 weeks of widowhood)

8·40

7·00

Widow's basic pension

1·80

1·50

Invalidity allowance payable with invalidity pension, when incapacity began before age:

35

1·00

45

0·60

New Benefit

60 for men or 55 for women

0·30

Attendance allowance

4·80

4·00

Old persons' pensions

Wife

2·20

1·85

Any other person

3·60

3·00

Age addition to retirement pension

0·25

New Benefit

Guardian's allowance

2·95

2·45

Child's special allowance and increases for children of widows, invalidity and retirement pensioners*

First child

2·95

2·45

Second child†

2·05

1·55

Any other child†

1·95

1·45

Increases for children of all other beneficiaries

First child

1·85

1·55

Second child†

0·95

0·65

Any other child†

0·85

0·55

*At present the chronic sick, who will become invalidity pensioners, and retirement pensioners receive the lower rates of increase for their children.

† Family allowances are payable for second and subsequent children.

MAIN INCREASED INDUSTRIAL INJURIES BENEFIT RATES

Proposed Weekly Rate £

Existing Present Rate £

Injury benefit

8·75*

7·75

Disablement benefit (100 per cent, assessment)

10·00*

8·40

Unemployability supplement

6·00†

5·00

Special hardship allowance (maximum)

4·00

3·35

Constant attendance allowance (normal maximum)

4·00

3·30

Exceptionally severe disablement allowance

4·00

3·00

Industrial death benefit:

Widow's pension during first 26 weeks of widowhood

8·40

7·00

Widow's pension now payable at £5·55 rate

6·55

5·55

Widow's pension now payable at £1·50 rate

1·80

1·50

Rates for dependant wives and children are the same as for comparable National Insurance benefit.

* Increases will also be made in the juvenile rates.

† Invalidity allowances and the higher rate of children's allowances will be paid as to invalidity pensioners—see National Insurance Table.

MAIN INCREASED WAR PENSIONS RATES

All ranks receive the same increases, officers rates being expressed in pounds per annum.

PART I—DISABLEMENT BENEFITS

Proposed Weekly Rate £

Existing Rate £

Disablement pension for private at 100 per cent. rate

10·00

8·40

Unemployability allowances*

Personal allowance

6·55

5·45

Increase or further increase for wife

3·20

2·60

Increase for adult dependant

3·70

3·10

Comforts allowance

Higher rate

1·70

1·25

Lower rate

0·85

0·63

Allowance for lowered standard of occupation (maximum)

4·00

3·35

Constant attendance allowance

Special maximum

8·00

6·60

Special intermediate

6·00

4·95

Normal maximum

4·00

3·30

Three·quarter day

3·00

2·50

Half and quarter day

2·00

1·65

Clothing allowance (annual rate)

Highest rate

19·00

14·00

Intermediate rate

12·00

9·00

Lowest rate

7·00

5·25

Age allowance with assessments of

40 and 50 per cent.

0·50

0·38

60 and 70 per cent.

0·70

0·50

80 and 90 per cent.

1·00

0·75

100 per cent.

1·40

1·00

Exceptionally severe disablement allowance

4·00

3·00

Severe disablement occupational allowance

2·00

1·00

* Invalidity allowances and the higher rate of children's allowances will be paid as to invalidity pensioners—see National Insurance Table.

MAIN INCREASED SUPPLEMENTARY BENEFIT RATES

Proposed Weekly Rate £

Present Rate £

Ordinary scale

Husband and wife

9·45

8·50

Person living alone

5·80

5·20

Any other person aged Not less than 21

4·60

4·15

Less than 21 but not less than 18

4·05

3·50

Less than 18 but not less than 16

3·60

3·05

Less than 16 but not less than 13

3·00

2·40

Less than 13 but not less than 11

2·45

2·20

Less than 11 but not less than 5

2·00

1·80

Less than 5

1·70

1·50

Non-householder rent allowance

0·65

0·60

Attendance requirements

4·80

4·00

Employer

Present Rate

Increase*

New Rate

Total

Graduated

Total

Flat Rate

Graduated

Total

£

£

£

£

£

£

Employed man not contracted out:

Earnings:

£10

0·947

Nil

Nil

0·887

0·06

0·947

£20

1·397

0·03

0·03

0·887

0·54

1·427

£30

1·707

0·15

0·15

0·887

0·97

1·857

£42

1·707

0·65

0·65

0·887

1·47

2·357

Contracted out:

Earnings:

£20

1·137

0·02

0·02

1·007

0·15

1·157

£42

1·437

0·65

0·65

1·007

1·08

2·087

Employed woman (including married woman not opted out) not contracted out:

Earnings:

£10

0·831

Nil

Nil

0·771

0·06

0·831

£20

1·281

0·03

0·03

0·771

0·54

1·311

£30

1·591

0·15

0·15

0·771

0·97

1·741

£42

1·591

0·65

0·65

0·771

1·47

2·241

Contracted out:

Earnings:

£20

0·981

0·02

0·02

0·851

0·15

1·001

£42

1·281

0·65

0·65

0·851

1·08

1·931

* No increase in flat rate contributions.

CLASS 2—SELF-EMPLOYED PERSONS*

Present Rate

Increase

New Rate

£

£

£

Men over 18

1·24

0·26

1·50

Women over 18

1·03

0·22

1·25

CLASS 3—NON-EMPLOYED PERSONS*

Present Rate

Increase

New Rate

£

£

£

Men over 18

0·99

0·21

1·20

Women over 18

0·78

0·16

0·94

* The limit for exemption from liability to contribute on grounds of small income goes up from £6 to £9.

LOCAL GOVERNMENT REORGANISATION IN WALES
2.43 p.m.
LORD OGMORE LORD OGMORE rose to call attention to the Government's proposals for the reorganisation of Local Government in Wales; and to move for Papers. The noble Lord said: My Lords, on Monday last the Leader of the House, the noble Earl, Lord Jellicoe, in opening a similar debate with reference to local government reorganisation in England, implied that it was an historic occasion. This is an equally historic occasion for Wales because, as the noble Earl said, it is only once in a hundred years or so that we have an opportunity to discuss an enormous reorganisation such as is contained in the Government's Consultative Document. The present position so far as Wales is concerned is that there are 13 counties, four county boroughs, and numerous urban districts, rural district councils and parish councils, and I think we are all agreed that it is high time something was done. The only doubt up to now has been about what should be done.
Following the Report of the Local Government Commission for Wales, the late Government, in 1967 and 1968, proposed seven large county councils in a two-tier structure—that is, a county council and a district council structure. In 1970, however, I think impressed—perhaps over-impressed—by the Redcliffe-Maud proposals for England, the same Government, while keeping the original two-tier proposals for most of the counties of Wales, proposed a single-tier system for the industrial counties of Mon-mouth and Glamorgan. As can be imagined (and no doubt we shall hear more about this to-day, because there are several noble Lords and one noble Baroness who were concerned in this matter), the Government had taken a very great deal of trouble to get the original plan through, and to try to get a revised plan was a matter of considerable difficulty. In fact, they succeeded in importing consternation to their friends and confusion to their foes—and it is not often that one can do that, either in politics or in military matters. However, before anything really drastic could happen, the General Election took place. The present Government took over, and
1330
they have very largely gone back to the 1968 plan of the Labour Government. There are certain alterations; but basically the plan is much the same.
I am not going into the history of the matter, because I expect the Minister will do so; and if he does not there are other noble Lords and a noble Baroness who have more intimate knowledge than I have about the history of these proposals. But the present plan is for a two-tier system right the way across and down Wales. There are to be seven large county councils and 36 district councils, with an unspecified number of rather vague community councils of which we shall perhaps hear more to-day. The seven county councils which are to be created from the present 13 are to be named Gwynedd, Clwyd, Powys, Dyfed and Gwent—those are certainties, I am glad to say—and two others which are not so certain, East Glamorgan and West Glamorgan.
The problem of Wales, which is different from that of England, is that on the North Coast we have a residential, urban, watering-place population which is getting steadily older because it is a favourite retiring place for people from the Midlands and the North-West of England. In Glamorgan and Monmouthshire in the South, we have a heavily industrialised and urbanised population. Bet in between we have a very large and very sparse area. If I may apply the position to Scotland, it is as if in the North of Scotland there was a comparatively large population; then there would be the industrial belt in the South; and in between there would be the Highlands with very little population at all. The situation is further complicated by the three great mountain ranges of Snowdon, Plynlimon and the Brecon Beacons, although every Welshman is very glad of those mountain ranges, since we are here because of them. If they had not been there to retreat to at strategic intervals, we should probably have been wiped out by successive invaders—the Romans, the Anglo-Saxons, the Normans and the English—and now we have the mid-Atlantic situation on the television with which, unhappily, the mountains do not deal.
What is necessary is that the local authorities must not be too large so that

1331
they are out of touch with the people. On the other hand, they must not be too small so that they are non-viable. The test of the Government's proposals is this: does it mean that the authorities they propose will not be too large to be out of touch, and will not be too small to be viable? That is what this debate is about. In my view, the Government's proposals meet this requirement, by and large. I do not mean that they meet this requirement in every particular, and of course there are certain qualifications and conditions; but, by and large, I think they are about as good as we can get. We can all think up ideal schemes and twist the subject around this way and that. But, in the end, we must come down to something which is fairly realistic.
I have one or two qualifications, as I have said. First of all, what is the Government's attitude to a domestic Parliament for Wales? Obviously, this will affect the local government situation enormously. I would ask the Government, through Lord Aberdare, for an assurance that the present proposals will not prevent the creation of a domestic Parliament for Wales if the Welsh people want it. I do not say that necessarily it need be on the lines set out in the Bill the Second Reading of which I moved in your Lordships' House on January 30, 1968, but some sort of legislative body. We are awaiting the Crowther Report, and I noted on Monday, when listening to the noble Earl, Lord Jellicoe, that he said he had had an assurance from Lord Crowther that the proposals in his Report were not likely to affect the Government's proposals for local government in England. I do not know whether Lord Aberdare could give us that assurance to-day for Wales.
There are, too, certain alterations to boundaries. Your Lordships will no doubt hear about these to-day. I know that a number of noble Lords will be discussing this question and will be asking whether this is a good time to correct boundary anomalies between Pembrokeshire and Cardiganshire or Carmarthen-shire, Glamorgan and Brecon, Monmouth-shire and Brecon and so on. We shall hear of those later. So far as my own particular area is concerned, I think I am almost unique in the annals of your
1332
Lordships' House because I am a satisfied client. I have no suggestions to make by way of correction. I think they have done us very well. I may say I refer to No. 3 districts in Glamorgan—Bridgend, on the River Ogmore, is my home town: and I have no doubt that Bridgend will be the administrative centre of No. 3 district. I think it has all the qualities for that important position. Anyway, I have no complaints at all so far as my own area is concerned.
I come now to the names. These, of course, are important. As your Lordships will remember, in Bernard Shaw's play, when discussing all sorts of proposals on the question of a family arrangement, one of the characters said, "The important things are the names". "That does not matter", said the solicitor. "Yes", said the first person, "that is the important thing". I believe that it is very important that we should get the names right in this case. I have looked through a large number of maps of ancient Wales, going back right through mediæval times to ancient times, and from ancient times actually to the first century A.D. I do not mean to say that I consulted a map of the first century A.D.—I do not suppose there is one—but maps showing the tribal areas in England and Wales (or Britain, as they then were) at that time; and I must say that I think the first names I read out—Gwynedd, Powys, Clwyd, Dyfed and Gwent—are excellent. They all have an historical connotation. They refer, by and large, to the areas which they will now take in; and they are fine.
I cannot say the same, as your Lordships will no doubt have gathered, about East Glamorgan and West Glamorgan. Just imagine one man being asked, "Where do you come from?" He says, with pride, "I come from Dyfed", or, "I come from Gwynedd", or "Powys". Then another man is asked, "Where do you come from?", and he says, "I come from East Glamorgan". It sounds like some rather dull laundry company, the East Glamorgan Laundry Company; or a cement company, the West Glamorgan Cement Company Limited. I think it is dreadful. However, to be fair, the Consultative Document says that these names are adopted provisionally, and that the Government are prepared to consider others. I will give them some others to

1333
consider. First, so far as East Glamorgan is concerned, there seems to me to be no doubt at all. There is only one name, following the precedent of the others that I have read out, and that is Morganwg. Morganwg is the old name of that area, going back for many hundreds of years, probably a thousand years at least. The present East Glamorgan (I use that term for the moment) takes in basically most of the old Morganwg, other than a portion of it which is now in West Glamorgan; but by and large it follows pretty closely the original boundaries, and I urge the Government to adopt Morganwg for East Glamorgan.
As for West Glamorgan, the position is very different because there is no one division, either a tribal division or a princely division, which takes in West Glamorgan. On the precedent of the others I have mentioned, I think it should be Dinefawr, because the most Westerly part of the area was in the princedom of Dinefawr. The noble Lord, Lord Dinevor, and also the noble Earl, Lord Longford, neither of whom is here to-day, I regret to say, are both descended from this princely house—a very ancient house; way back, I suppose, almost to Roman times. They had a vast princedom running from the portion I have described in Glamorgan right through down to Carmarthen and Pembrokeshire. I think that that is probably logically the best name—Dinefawr. But perhaps it would not be acceptable, and so I suggest two others. I suggest Glynnedd or Gwyr. Of the three, I would think that Gwyr would probably be the most acceptable locally, but I still think Dinefawr is a very pretty name. It has this connotation; there still is a representative of the princely family in your Lordships' House; and I think it would be nice. I should like it, anyway. I think that aesthetically it would be best, but in these egalitarian times possibly Gwyr would be the most acceptable.
Now I come to certain specific questions—first of all, as to Cardiff. As in the case of Scotland and Edinburgh, Cardiff is now a city, a county borough, with a population of 284,000; it has a Lord Mayor, who is also a right honourable for his term of office; and it is the capital of Wales. Under the proposals, this city is going to be in No. 1 district of East Glamorgan. Certain special
1334
arrangements are proposed for it, but according to Cardiff the special arrangements are practically meaningless. All they mean is that they will have some rather vague powers to do local planning without the ability to carry out the plans. The effect is—there is no question about this and I think this is probably the most important question of all with regard to the Government's proposals; the most important criticism, anyway, or defect, if you like to call it that—that it will be a great blow to the prestige of the city. Cardiff has had a splendid east. Just lately, perhaps, it has been a bit in the doldrums, but I am sure it could have a great future. But it needs Government help, support and encouragement. In the central area of the city the Corporation is committed to spending £23 million over the next 10 years, and their commercial partners some £25 million. They have some important highway schemes: one road scheme alone will cost over £28 million.
Cardiff is very worried about this whole situation; and the same thing applies to Edinburgh, so far as I can see from the White Paper, unless the Government have altered their mind. How does a capital city, the focus of the pride of a nation, having to entertain, and all the rest of it, on behalf of a nation, carry on when it is in a district—in a district with others of course; No. 1 district—of a county area, East Glamorgan? I think the Government ought to apply their mind to this, because Cardiff is very worried, and should give great thought to this problem. I have no solution to offer to-day and it is not my place to have one. Basically, of course, it is between Cardiff and the Government.
The next point concerns aldermen. Is this not a very good opportunity, my Lords, to get rid of them? In the old days, of course, they were supposed to be senior citizens who had had a great deal of experience on the council, and when they got too aged or too deaf to attend acutely to the business they made them aldermen. That has changed. Now they are virtually pawns in the Party struggle. They are generally people who failed to get back in the local elections, and in order to make up the numbers so

1335
far as electoral representatives are concerned they are made aldermen. I suggest that this might be the time, in Wales at least, to get rid of them.
Now I turn to the payment of members. I believe that some remuneration to members is essential in the county areas. We are to have these very large areas now, especially in North and mid-Wales, and I believe that members should be reimbursed, first by means of travelling expenses such as we get—those of us who travel to this House—and, secondly, by attendance allowances on the same basis as we have here. Whether it is to be the same amount is a matter of discussion. If the basis that the Government follow with us—or we follow for ourselves, as the case may be, helped by the Chancellor—were followed for these councils, that would be as good an arrangement as possible.
I turn next to the police. We shall hear more about this subject from the noble Lord, Lord Merthyr, who is closely concerned with the administration of police in this area. At the moment, I do not think that all the police force areas will coincide with the new county boroughs. Finally, on the question of community councils, I would point out that they are very vaguely specified in the Consultative Document. Have they any functions, except in some rural areas? And what are they?
There is not a great deal more that I want to say; but I ought to stress that in spite of these, in my opinion, satisfactory proposals the larger problems of Wales will remain. The local authorities cannot solve them by themselves. So far as the Welsh Office are concerned, I may say that I have found them to be very helpful. The Ministers, later Secretaries of State, have all been most helpful to me within the ambit of their authority. We have only a non-elected Consultative Council which is feeble and toothless. It has no independent secretariat and no budget of its own. It is a stop-gap institution.
In this situation the main problems of Wales—lack of communications and protection of the environment—cannot be dealt with. Then there is the terrible problem of mid-Wales. No one has yet made up his mind what is to happen to
1336
that area. It is something like the Highlands of Scotland. In summer it is full of tourists and holidaymakers, mostly from the Midlands and the North-East; in winter it is a solitary area of wild natural beauty. What are we to do with it? As matters are going now, it is becoming more and more depopulated. Soon there will be very few people there, especially if we join the Common Market and the small farmers are rubbed out. No one will be there but the odd garage attendant and people looking after youth hostels.
I would ask the noble Lord, Lord Aberdare, whether he would consider for local government in Wales a system of proportional representation. I know that it does not suit the two main Parties nationally. The result of the "first-past-the-post" system that we have in this country is a gross misrepresentation of the electorate in Wales. It is also a misrepresentation in England; for invariably it means that a minority Party becomes the Government. That happened in the last Election and the one before it: almost invariably more people vote against the Government than for them. That seems to me to be most undemocratic; and in Wales it is even more so. I suggest that for local government in Wales we should try out a system of proportional representation. I do not know whether they would like it in the local authorities—I am putting this forward as a Liberal. It has long been a most important plank in our platform. I think it would be a good idea to have it. They have it in many other countries. We usually suggest proportional representation when we give people new Constitutions. Often in the past we have insisted that they have proportional representation. It is only here that we do not seem to like it.
In my view, the present Government, and so did their predecessors in some respects, have by their actions taken as a first step the expansion of the scope of the Welsh Office. They have already done that with regard to education, and that is good. The second step, by the present Government, was to reorganise the courts; and that was good. The third step is to reorganise local government, and I think that that is good also. The fourth step should be to provide a legislative body to deal with Welsh needs and Welsh problems in the way Wales wishes.
My Lords, as this is, in a way, a Welsh day and we are a sort of substitute Parliament for Wales, I should like to refer to a matter in the minds of most Welsh people here to-day. It is to congratulate the Welsh Rugby Union on winning the Triple Crown and the Championship, and particularly on that wonderful game in Paris last week. I should like also to congratulate Mr. John Dawes, captain of the Lions—the first Welshman to be captain—and the other twelve Welsh members of the party. I wish them all well. We hear much in this House and elsewhere about the decadence of modern youth. We hear about drug taking, and all that. It is just as well to look at some of the things that are happening in Britain to-day, some of the results to which I have been referring. Those who saw that match on Saturday, even on television, when Wales played France—and what a wonderful team the French were!—will know that there was no decadence about that. They are fine young men; and so long as we have men who can put up a display like that we have nothing to fear—not the English, nor the Scots, nor the Welsh. I beg to move for Papers.
3.8 p.m.
BARONESS WHITE: My Lords I am sure that we can all join in the closing sentiments, at least, of the noble Lord's speech in offering our congratulations to the Welsh rugby team. If the noble Lord, Lord Aberdare, and I agree on nothing else, we shall be in accord on that. If we could be only just as successful on the reform of local government in Wales as on rugby we should be happier than we are now; because we started post-war with Sir Malcolm Trustrarn Eve; then we had two Reports, Interim and Final, from the Local Government Commission for Wales; and if in 1965, when Mr. James Griffiths, the first Secretary for Wales, set up a Working Party on Local Government in the Principality, anyone had told us that to-day we should still be discussing no more than a Consultative Document, I think we should have expressed disbelief.
All of us who are concerned with administration in the Principality realise that the need for reform was and is acute. We still have in Wales, I think I am right in saying, 181 local authorities (apart from the parish councils) for a population of some two and three-quarter million
1338
people. Of these authorities, about 50 have a population of fewer than 5,000 each, and the product of a penny rate is a very small sum indeed—a few hundred pounds. Wales suffered, I believe, by being caught up in the wash of the bigger ship, the Redcliffe-Maud Commission. Had that Commission not been sitting I believe that we might have gone ahead with a pattern of reform as proposed in the 1967 White Paper which, while not perfect, on the whole would have done us pretty well.
That Paper, my Lords, was discussed with a thoroughness which can rarely have been equalled. Those of us who were Ministers at the Welsh Office at the time met and discussed it with every local authority in Wales. We did not discuss it individually with every parish council but with every other council, and parish councils were represented at meetings of the other authorities. We discussed it in principle, we discussed it in detail. One matter which we said had to be left over was finance; and the present Government, though critical of us at the time, find themselves in exactly the same position and we are to await a Green Paper on the financial proposals. The other subject which we said would have to be tackled after the major legislation had been passed was the detailed study of boundary anomalies; the present Government say the same, and we have no quarrel with them on that account.
The 1967 White Paper was based on the two-tier system, which we then thought and still think is the most appropriate, for most parts at least, of Wales. There were two major differences between that White Paper and the proposals which succeeded it. In 1967 it was proposed that there should be only one North Wales county, comprising the five existing counties of Anglesey, Caernarvon, Merioneth, Denbigh and Flint. I was rather surprised that the noble Lord, Lord Ogmore, did not pay very much attention to this.
This proposal, after discussion, was later amended to provide for two North Wales counties: Gwynedd to take in the North-Western area of Anglesey, Caernarvon, Merioneth; and Clwyd, to comprise the present Denbighshisre and Flintshire. The Consultative Document we have before us this afternoon retains this division into two counties for the

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North, and I fully support this. I am very well aware that, even to-day, there are other views; and there are those, whose opinions I respect, who would prefer one North Wales county authority, but I have never had any doubt in my own mind that two counties were to be preferred.
There is, too, a great discrepancy of outlook between the largely industrialised area of North-East Wales, part of which I had the honour to represent in another place for over 20 years, and the North-Western counties, for real community of interest to be attained. To place the centre of administration in Colwyn Bay or some such place would have involved very long journeys for elected members, and I do not believe that at the present time cohesion could have been achieved, so I have no quarrel with the Government on their proposals for the North. I observed that in the debate on Scottish local government the noble Viscount, Lord Thurso, was complaining that the proposed Highlands Region was too large and ought to be split in two. The conditions in Wales are not fully comparable, but the same sort of considerations seem to me to apply.
The second main difference between the 1967 plan and subsequent proposals lies in South Wales, in Glamorgan and Monmouthshire. Here we have had two revisions, based on radically different principles, but each involving the division of the present county of Glamorgan into two parts, one including Cardiff and the other Swansea. I must admit that the 1967 proposals dodged the issue of amalgamating town and country, which is one of the main principles laid down for this current reform of local government.
If one accepts the principle of this amalgamation between town and country, then, my Lords, it can be implemented in one of three ways. First, one can do it by establishing unitary authorities—all-purpose or nearly ail-purpose authorities—as the former Secretary of State, Mr. George Thomas, proposed last year. Secondly, one can do it by setting up a two-tier system with a somewhat enlarged Cardiff and an enlarged Swansea as second tier districts; and that is the proposal in this Consultative Document. Thirdly, one could, of course, in industrial South Wales set up a metropolitan authority
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under which Cardiff, and maybe Swansea, would have the wider powers accorded to districts in such areas.
Quite frankly, I find the Consultative Document very unsatisfactory in its comlete lack of argument about these alternatives. In the two White Papers, produced by the last Government we set out pros and cons. This document quite baldly states the main principle and makes no effort at any reasoned argument as to the method of implementation which Her Majesty's Government propose to follow. In our 1970 White Paper, the one for which Mr. George Thomas, Secretary of State, was responsible, we explicitly rejected the proposals which are contained in the present Consultative Document—and I quote from paragraph 21, in which we said:
"If there were to be a tier system in South Wales it would have to be a metropolitan authority with a number of metropolitan districts under it.'
The only argument put forward in the present document is that of uniformity throughout Wales, a uniform type of two-tier system for the Principality. But in England the metropolitan authorities break into the otherwise uniform system for the very good reason that they are different in character, so I think that that particular argument does not hold water. Similarly, in the Welsh context it could be argued, as the noble Lord, Lord Ogmore, has argued, that Cardiff and its surrounding areas are different. I do not pretend that there is an easy solution. The fact that we have had three radically different proposals in the course of four years proves that it is a very difficult situation. That I grant quite freely. Nevertheless, I believe that the Government owe it to Parliament and to the people of South Wales, and not least to the citizens of our capital city, to explain just how they have reached their present conclusions.
We can all see the attractions of the proposed arrangements in terms of Parliamentary seats (I shall refer to that later), but in terms of local government I think that a much fuller explanation is due. Edinburgh, I grant, seems to be in a similar sort of position and, judging by the recent debate in this House on local government in Scotland, seems to have taken its demotion lying down. But the vigorous representations that many of us have received from the city of Cardiff

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show that they are not likely to be satisfied with the few crumbs of special planning powers which have been thrown to them.
My Lords, in the presence of my noble friend Lord Heycock, who has been such a tower of strength to the Glamorgan County Council over the years, I will refrain from saying very much about that great authority of South Wales. But it was an open secret that the 1967 proposals owed their weakness, if it was a weakness where South Wales is concerned, to a very understandable reluctance to break up this great local authority which has done so much for Wales, not least in the field of education, in which the noble Lord has Played such an active part.
Where Monmouthshire is concerned, I find less difficulty in accepting the proposals in the Consultative Document, and for the reason that Newport is far more closely interconnected with its surrounding county areas I think that here the marriage could go forward without impediment, although if one were adopting a metropolitan pattern one would have to look again at its position in relation to Cardiff and the area between Cardiff and Newport.
I shall have a word to say later on about a particular matter in Monmouthshire, but to keep first to the main outline of the proposals, having touched on North and South Wales, I must referro the other areas, to Powys and Dyfed. Before I do so perhaps I should say a word about Lord Ogmore's suggestion as to names. I quite agree with him—and obviously the Government have had some hesitation about the matter—that East Glamorgan and West Glamorgan do not have the romantic ring which appeals to our Celtic hearts. Morganwg—certainly that has the right ring. Dynevor is indeed a famous name in Welsh history, but unfortunately the seat of the Earl is in Carmarthenshire and not in Glamorgan-shire, and I should have thought this would be a little awkward. I hesitate about the name for the other half of Glamorgan, and I do not enter into the competition. But the names do matter. We in Wales have a long history, and I hope that we shall find a happy solution. I think that we are happy with the names of Powys and Dyfed.
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Again, if it were only the names that presented difficulty there would be few problems, but none of us, my Lords, can overcome, by organisation or reorganisation—
VISCOUNT AMORY: My Lords, the question of names is extremely interesting to us and it would help us very much, those of us who are not Welsh, if the noble Baroness would sing the names
BARONESS WHITE: My Lords, I will give the noble Viscount, a private audition. Modesty prevents my doing so in your Lordships' House. If I may return for a moment to Powys, which of course was one of our ancient Kingdoms, I am sorry that none of us can, by any organisation or reorganisation of local government, avoid the fact that Powys is such a sparsely populated area of the Principality that it is very difficult indeed to find a truly satisfactory unit of local government.
The ingenious suggestion was made in 1961 by the Local Government Commission for Wales that these counties of mid-Wales—Montgomery, Brecon and Radnor—should be split, and attached to the more industrially developed areas, in the North, on the one hand, and in the South, on the other, thereby possibly meeting some of their financial difficulties. Not surprisingly, this proposal was not very warmly welcomed, and I am glad to see that it has not been resuscitated here. I think the proposals for Powys, which are the same as those of the previous Government, are the only practical ones, and I would say that the solution for the problem of Powys really lies in other fields, in particular, development aid on a really significant scale. Also, I would suggest special help by other means. In this connection, of course, the financial proposals, when we receive them, will be very important indeed. At this stage I think all I should say is I am sure we would all agree that individual citizens in these areas must not be penalised, or have the standard of services lowered, because of the nature of the county. Having said that, I can assure the Minister that, as I now live in what will be part of Powys, he will have at least one pair of very watchful eyes on his future actions.

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As regards Dyfed—that is, Cardiganshire, Pembrokeshire and Carmarthenshire—this area, too, has its problems of communication and economic development; not quite as acute as Powys, but still very important. At one point we discussed putting North Cardiganshire into Powys to help redress the balance, but that was not very popular, and I do not quarrel at all with the fact that the present Government have not resuscitated that. I must however query the decision that Pembrokeshire should be one district instead of two, or even three as was at one time suggested. I know very well that the county authority urged that Pembrokeshire should become one all-purpose unit; so, for that matter, did Anglesey. But for very good reasons this plea was rejected. But it does not follow that one district in a two-tier system is necessarily right. I hope that we may have some assurance that this matter will be discussed further. After all, the whole object of adopting a two-tier system is that the lower tier shall be truly local. Pembrokeshire is a large county, with more than 100,000 inhabitants, and in my view it could support two district councils, unlike Cardigan which has only half that population.
My Lords, it would be inappropriate, I think, in a general debate to go much further into detail on the district proposals which are of course subject to discussion. Local authorities have been asked to send in their views before the end of May, as I understand it. But there are two instances where the present Government are going against the proposals of their predecessors and I think we are entitled to know why. Each involves the same principle with which we do not quarrel; namely, that a river should not be the boundary of the administrative unit, but that both sides of the valley should be contained in one area of administration. This I regard as sound sense, and I entirely support it. It is the further step in each case that worries me. And the first instance is in Rhymney, in Monmouthshire, a place with which I have the closest possible connections.
Why on earth should Rhymney, the Rhymney Valley, be taken out of Gwent, as the new county will be called—the
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present county of Monmouthshire—and handed over to East Glamorgan—whatever it is to be called—which is more than twice the size of Gwent and nearly three times as large as any other Welsh county, and therefore cannot possibly need extra sustenance in population or rateable value? This seems to me a really monstrous proposal. The local council do not want it, they have assured me of that; and so far as I know the local people do not want it. The statisticians may have worked out some line of communication in their various investigations, and on the little maps which I have seen prepared from time to time, but I can assure the Minister, from the closest possible personal knowledge, that there are very strong links between Rhymney and the other valleys of Monmouthshire, particularly Tredegar. I see no reason at all why Rhymney should lose its historical connection in favour of a new county which is quite large enough without it. I hope very much that this point will be reconsidered.
The other instance is the Conway Valley and Llanrwst. Here, frankly, I must say that I feel that there may be some slight whiff of politics. It is, after all, not for nothing that the present Secretary of State is also Chairman of the Conservative Party and that he once lost his seat in Conway. By taking this area out of West Denbigh, which is a safe Tory seat, and adding it to Conway, which is a marginal seat, it may be that Mr. Peter Thomas has in mind to try his luck again in Wales. It will be very interesting to see.
LORD GREENWOOD OF ROSSENDALE: It is very unlikely.
BARONESS WHITE: It was the noble Baroness, Lady Sharp, an impartial witness after all, who said in the debate on England on Monday:
"Some of the areas suggested … owe a great deal more to political pressures I think than any idea of constructing a rational local government area."—[OFFICIAL, REPORT, 29/3/71, col. 121.]
I do not propose to pursue further the accusations of gerrymandering, but I think your Lordships ought to know that they are rife in the Principality, especially in regard to Cardiff and Swansea. It is difficult to explain the Swansea-Gower

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proposals on any other basis. I would only suggest that when the Secretary of State for Wales is also the Chairman of the Conservative Party he is in a peculiarly delicate position in that dual role, and I am sure that on reflection he must in honour feel that he should put his public responsibilities before any question of loyalty to his Party. I am sorry to have to say this, but there are such strong feelings in parts of Wales that I think it would be unrealistic not to let your Lordships' House know of them.
As perhaps there are not many noble Lords with close personal knowledge of administration in the Principality, may I be forgiven if I make one or two points before I come to one major concluding point on the Crowther Commission? The new counties will be in general very much larger in area than those we have at present and, as the noble Lord, Lord Ogmore, rightly said, unless we recognise this by making much more generous allowances to elected members, then we simply shall not have the choice of candidates to which electors are entitled. They just will not be able to serve.
My noble friend Lord Champion touched on this point in speaking on local government reform in England earlier this week, and I hope that he will develop it to-day. Because for us in Wales this is vital. I would add that any method of payment must in equity take account of the position of women, who often cannot claim for loss of earnings but, as all of us in public life know, are involved in higher personal and also housekeeping expenses, if they are away from home for long periods at a time.
There are many other important points: provision for staff—I am glad that the present Government are proposing to have a Staff Commission, as we did: new arrangements for health services, on which further consultations will be required, as I know that these are causing a certain concern; and the distribution of functions. Here, rather interestingly, Wales is to have a more flexible system than England, with discretionary powers vested in the Minister to allot certain functions to the districts according to circumstances. I can see all kinds of trouble arising from this, and I am not sure that I should wish to be in the Ministerial shoes and have to decide on
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these matters. But I would not be implacably opposed to this suggestion, because I recognise the real discrepancies between the different authorities which will nominally have the same constitutional status. I am fortified in this view by the opinion again of the noble Baroness, Lady Sharp, in her speech on Monday, in which she referred to the lack of such flexibility in the proposals for England.
Finally, I turn to something which is exercising us very much in Wales, and that, as the noble Lord, Lord Ogmore, rightly said, is the position of Crowther Commission. I am sure that had it not been for our problems in Wales and Scotland we should never have had a Crowther Commission, for England would have got along reasonably well without it. Scotland has its pattern of regional government, but to me Crowther is significantly important for Wales in a way which is not so important for England and somewhat less important also for Scotland. I must say that I was much disturbed when I found out recently that the Commission had not met to consider their Welsh Report, at least since last June. We know of course that the noble Lord, Lord Crowther, has been turning his powerful mind to other matters, such as consumer credit, but meanwhile we are kept in suspense.
Had we been able to legislate on the 1967 proposals, there was a strong case for going ahead and not waiting for Crowther, but, with the long delays, if Crowther had been speeded up it would have been far more satisfactory for us to-day to look at the picture as a whole. There are bound to be questions as to the division of functions between the new counties and any new all-Wales body which Crowther may propose, and which some of us hope he will propose. I grant that they are not likely to be functions which are of the essence of local government; they are more likely to affect relations with the central Government. But we do need to know where we stand, and the sooner we can have the Crowther Report, the better. Meanwhile, we must await the views of the local authorities themselves upon the Consultative Document. I hope our deliberations here today may help to clarify some of the issues which, after ten years of talk, still have to be resolved.
3.35 p.m.
LORD ABERDARE: My Lords, I am grateful to the noble Lord, Lord Ogmore, and I am sure that the rest of your Lordships are equally grateful to him, for having given us this opportunity to discuss the third part of the local government reorganisation in England, Scotland and Wales. I was glad to hear him say that in broad general principle the proposals in the Consultative Document have his approval. May I also say with respect that I was pleased that the noble Baroness, Lady White, made such a moderate and well-balanced speech? I think that perhaps the officials of the House were expecting something more in the way of pyrotechnics, as I see that both Front Benchs have been provided with asbestos fire blankets.
Wales has waited a long time for the reorganisation of its pattern of local government. It is 25 years since proposals were first made for reform, and in the meantime thinking has been influenced by the Redcliffe-Maud Report on English Local Government Reform and the Wheatley Report on Scottish Local Government Reform. It will surely come as a relief to all of us, whether or not we agree with all the proposals in the Consultative Document, that we intend to introduce a Bill in the 1971–72 Session so that the new authorities can take up their duties on April 1, 1974. There has already been a fair measure of agreement on at least one point of substance—that we cannot continue with a pattern of no less than 181 county, borough and district councils, all with major local government functions, to serve a population of 2,700,000.
If I may briefly put into perspective the history of these proposals over the last 10 years, your Lordships will recall that the Local Government Commission for Wales put forward two sets of proposals in 1961 and 1962, the first for 5 administrative counties in place of the present 13, the second for 7 counties. In both cases they proposed to retain the existing county boroughs, with the exception of Merthyr Tydfil, which was to become a non-county borough. However, these proposals were not accepted by the Conservative Government of the day or by the Labour Government which succeeded them, and Mr. James Griffiths,
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the Secretary of State for Wales, initiated a Study which resulted in the White Paper of July, 1967. This proposed that existing counties should be amalgamated with certain modifications to produce five new administrative counties and followed the proposals of the Local Government Commission for Wales in retaining the county boroughs except for Merthyr Tydfil. It also proposed considerable amalgamations of the existing 164 county districts and the county borough of Merthyr Tydfil into 36 new districts.
After consultations, these proposals were modified to provide two counties in North Wales instead of one and to make the whole of Cardiganshire a single district, resulting in 6 counties and 35 districts. However, after the Report of the Royal Commission on Local Government in England, published in June, 1969, the previous Government reviewed their proposals and produced a new White Paper in March, 1970, in which they proposed to abolish all the county boroughs and to divide Glamorgan and Monmouthshire into three unitary authorities centred on Cardiff, Swansea and Newport.
The present Consultative Document accepts in general the grouping of counties other than Glamorgan and Monmouthshire to form four new counties—Gwynedd, Clwyd, Powys and Dyfed. But we see no sense in having a two-tier system in one part of Wales and a unitary system in another—particularly as we have preferred a two-tier system for England and Scotland. For this reason, we propose to establish three new counties in South-East Wales, Gwent, East Glamorgan and West Glamorgan, and within these three counties, 17 districts.
I noted with great interest the suggestion made by the noble Lord, Lord Ogmore, for the renaming of East and West Glamorganshire. As he knows, we are still anxious to receive any suggestions for the names of these two counties. I cannot say that I was particularly attracted by "Dinefawr", except as a pleasant sounding name, especially when I realised that the two claimants to the Throne of Wales in your Lordships' House both sat on the Opposition Benches. But certainly Lord Ogmore's

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proposals for names will be seriously considered.
We further propose that the present geographical county of Glamorgan should be divided into two, roughly East and West of a line Hirwaun to Porthcawl. The detailed boundary would, in the first place, follow the existing boundaries of districts and parishes. The proposed East Glamorgan county is by far the largest in population of the new Welsh counties. It will have a population of 928,000, neary 200,000 more than the present administrative county of Glamorgan. The proposed West Glamorgan county will also be very substantial compared with the other Welsh counties. It will have a population of 371,000—the third largest of the seven proposed.
The Consultative Document explains that the Government have considered very carefully the alternatives to this two-way division of Glamorgan. The first would have made the present geographical county, including the three county boroughs, into a single new county. But this would have had nearly twice the population of the present county, and nearly half the population of Wales. It would therefore have thrown the whole scheme of reorganisation out of balance, and there would, I suggest, have been a dangerous tendency for it to have been pulled in two directions, between Cardiff at one end and Swansea at the other. The other alternative would have been to divide the county into three or more new counties. We took the view, however, that to divide Glamorgan into three would inevitably have split off areas which ought to be planned together, and that at least one of the new counties would have been seriously hampered by lack of resources and lack of suitable development land.
Cardiff, which has been mentioned both by the noble Lord, Lord Ogmore, and the noble Baroness, Lady White, will continue to be recognised as the capital of Wales. It is proposed that the present City, along with Penarth and suburban parishes at present in Cardiff rural district and Magor and St. Mellons rural district, should form a new district in the county of East Glamorgan. In order to emphasise its special status as the capital of Wales, we intend to give the new City Council substantially wider powers and responsibilities than other district councils in Wales or, for that matter, in
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England; in particular, they will have power to make their own local development plans.
I was a little surprised at the concern of the noble Baroness, Lady White, for Cardiff, when her Government's proposals envisaged Cardiff as being reduced to no more than a parish council. Under our proposals, Cardiff will maintain its identity as a strong district council, with special planning powers, with enlarged boundaries and with the status befitting the capital city of Wales and the seat of the Welsh Office.
BARONESS WHITE: My Lords, if the noble Lord will permit me to interrupt, I recognise the importance of this being the seat of the Welsh Office. But, after all, in our proposals Cardiff was at least in a unitary authority, with all the powers, whereas by the present Government's proposals these powers will be divided. The noble Lord said that Cardiff would have substantially greater powers than a rural district. Can he perhaps enlighten us as to what powers, other than the planning powers, he has in mind? Are there to be other powers?
LORD ABERDARE: My Lords, certainly the planning powers, as the noble Baroness knows; and as a result of the discussions that are going on, it may be possible to find other powers which would help to distinguish Cardiff. But this at the moment is still under discussion.
LORD OGMORE: My Lords, perhaps the noble Lord would apply his mind to the question of expense. At the present moment, Cardiff has all the powers and large resources. If it is a district council, how will it be able to afford to carry out the expensive duties of a capital city, with a Lord Mayor, a Rolls-Royce and all the rest?
LORD ABERDARE: My Lords, it will still have its rateable value. I cannot of course anticipate what will be in the Green Paper in regard to financial provisions; but Cardiff, I should have thought, would in any circumstances be a fairly rich and well-to-do authority, whether it be as a district authority, as we envisage, or in some other form.
LORD HEYCOCK: My Lords, perhaps I may intervene to clarify something in my mind. A question was put as to the

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future planning functions of Cardiff. The noble Lord, Lord Aberdare, went on to say, if I understood him correctly, that there were other functions. Are we to assume that there will be a departure from the functions specifically laid down in the Consultative Document for a county council?
LORD ABERDARE: No, my Lords. I merely said that there were discussions in progress with local authorities, and that in the course of these discussions we should naturally take into account representations that might be made to us by the county councils or by the City of Cardiff.
So far as the districts are concerned, we propose only one major alteration, and that is to retain Pembrokeshire as one complete district within the County of Dyfed. I know that there are those who object to Pembrokeshire being joined with Carmarthenshire and Cardiganshire to form this new county. They argue that the distances involved are great, and that the differences of outlook are significant. But we cannot accept that the population of Pembrokeshire is sufficient for it to form a new county on its own. However, in view of the concern expressed that Pembrokeshire should continue as a single unit, we have proposed in the Consultative Document that it should form a single district. I can only say to the noble Baroness, who asked me about this, that again we are still subject to consultation on this matter, and it can be discussed further if the local authorities wish it.
I was somewhat surprised that the noble Baroness, Lady White, should have urged that the Rhymney Valley should be included in Gwent rather than in East Glamorgan. She was, after all, Minister of State in the Welsh Office at the time the previous Administration proposed in their White Paper of March, 1970, that the valley should be included in East Glamorgan. That White Paper said:
"In so far as the communities in the valley have linkages with either Cardiff or Newport, those with Cardiff predominate."
The difference between the proposals in the Consultative Document and those made by the previous Administration is that we are proposing that the Rhymney Valley should have a district council, with substantial executive functions, to
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represent it. Nevertheless, I accept that there are substantial arguments on both sides on this particular question.
There is little disagreement that the administration of the valley should be unified within one county. The Local Government Commission for Wales, as the noble Baroness pointed out, suggested that the county should be Monmouthshire. This was also the first thought of the previous Administration in their White Paper of 1967; but they subsequently changed their minds. My right honourable friend the Secretary of State will, I know, be prepared to give full consideration to the views of the local authority of the valley and the two county councils on what should be done.
The effect of our proposals is a total of 7 county councils and 36 district councils, in place of the present 13 counties, 4 county boroughs and 164 non-county boroughs, urban and district councils. We intend that existing parish councils in rural areas should continue with their present functions, although renamed community councils, and we propose that similar community councils should be established in the towns if there is a local demand for them.
My Lords, I have spoken so far of a two-tier system, since this is the generally used and understood term. But I would emphasise, as does the Consultative Document, that the new district councils will be autonomous within their own areas of responsibility and will not be subordinate to the county councils. Although we have taken the view that the basic organisation of local government in Wales on a two-tier system should be the same as in England, there are some significant differences in the proposals for the two countries to which I should like to draw your Lordships' attention. In the first place, the new Welsh districts will be prescribed in the Bill itself, whereas the new English districts will be set up by orders made between the passage of the Bill and the appointed day. The difference is mainly due to the fact that Wales is a much smaller country and that a great deal of thought has already been given to the future district pattern in Wales.
Secondly, it is proposed that there should be six metropolitan areas in England, where the allocation of functions

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between counties and districts will be substantially different from that in the remainder of England. But the conditions that apply in the proposed English metropolitan areas do not apply in Wales—I think this is the answer to the noble Baroness, Lady White. There are no similar large, heavily populated areas which need to be planned as a whole but which can be conveniently divided up into districts with a population of 250,000 or more. For this reason we propose no metropolitan districts for Wales and the whole Principality will have the same basic system of local government.
Thirdly, there are differences in the range of size of the new counties in England and in Wales. In acreage the differences are not substantial. The largest of the proposed English counties will be larger in area than the largest of the proposed Welsh counties, but there is not a great deal in it. However, in terms of population most of the proposed new Welsh counties will be small compared with the proposed new English counties. Powys and Gwynedd, for example, will be smaller in population than the smallest of the proposed English counties. This is of course due to geographical differences between the two countries.
So far as the distribution of functions between the county authorities and the district authorities is concerned, this in general follows the pattern in England. Major functions requiring to be exercised over a large population will be the prerogative of the county councils. These include education, the personal social services, development plans and highways and traffic management. District councils will exercise those functions most intimately of concern to their local community such as housing, including slum clearance and housing improvement, building regulations, development control, clean air, food hygiene, refuse collection and the provision of parks, playing fields, museums, art galleries and so on. As was noted in the debate on English local government reorganisation on Monday, it is proposed to allocate to the new Welsh district councils a slightly wider range of responsibility than those allocated to the new English district councils outside the metropolitan areas. For example, responsibilities in connection with clean air, refuse disposal and
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building regulations will be given to district councils in Wales, whereas in England they will be reserved to the county council. And, of course, as I have already mentioned Cardiff City Council will have special powers of making local plans enjoyed by no other district council in England or Wales.
My Lords, our proposals have not been greeted with unanimous approval. Several of the existing counties consider that they are perfectly competent to continue to exercise full county responsibilities; there are bound to be objections from district councils to the amalgamations proposed for them. Many of those who disapprove of the present proposals are maintaining that it is wrong to take any action before the Report of the Royal Commission on the Constitution under the chairmanship of the noble Lord, Lord Crowther. My Lords, with due respect to those who advocate this view, it is really a red herring. It is not part of the Royal Commission's task to review the organisation of local government, although naturally they have been invited to have regard to developments in the field of local government.
Whatever their recommendations may be, it remains our view that major local government functions, such as education, planning and social services, should be carried out wherever possible by authorities with a population of over 250,000. Equally, we are of the opinion that the more local functions of district councils should be exercised in a minimum desirable population of 40,000. Whatever Crowther may recommend, this basis for the exercise of local government need not be affected. The Commission's Report will inevitably bear more closely on the future exercise of central Government powers and the position of the Welsh Office and of course I can give the noble Lord, Lord Ogmore, the assurance that the Government will consider the recommendations of the Commission very carefully. But I believe it to be far more in the interests of Wales to proceed swiftly to the reorganisation of local government without finding further excuses for delay and indecision.
My Lords, the present Consultative Document was published on February 16 and Welsh local authorities have been invited to comment on it by the end of May. I would emphasise that it is a

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consultative document and that we shall consider very carefully any comments made by the local authorities. It would, however, be misleading to suggest that our proposals are subject to modification in their basic essentials, notably the need for legislation, the broad division of functions in a two-tier county district system, and the range of size of the proposed counties and districts. On all other matters we are open to persuasion. I know that my right honourable friend, the Secretary of State for Wales, very much welcomes this debate on the Motion by the noble Lord, Lord Ogmore, and I can assure the noble Lord that all points that he and your Lordships will make in this debate will be most fully considered.
I have not covered all the points that have been made by noble Lords and the noble Baroness, but if I may, with leave, speak again for a short time at the end of the debate perhaps I may pick up one or two of the points that have been made on matters such as aldermen, remuneration and other points which may well arise in the course of the debate.
3.58 p.m.
LORD HEYCOCK: My Lords, may I first of all say that I welcome the opportunity of this debate, and I appreciate the fact that my noble friend Lord Ogmore has raised this matter. I should also like to say to the Government how delighted I am that they have afforded us the opportunity of debating the Consultative Document on the reorganisation of local government in the Principality. May I say to my noble friend Lord Ogmore that for at least 35 years I have been a member of the Glamorgan County Council, and have been perfectly happy with the term, "Glamorgan". I am convinced that if I go into West Glamorgan I shall want to carry the very fine tradition of local government which Glamorgan has established over many years.
Secondly, I should like to draw attention to the fact that there was one omission from the noble Lord's speech, although I do not want to dwell too much upon it. He illustrated clearly to the Members present the victory of the Welsh team in Paris. I was in Paris, and a great tribute should be given to Clive Rowlands (although this is getting away a little from the aspect of local
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government), for he was the instigator of the victory. I hope that the Government will also be a very good coach in relation to channelling the very nature and character of local government of the future.
I welcome the philosophy that underlies the Consultative Document; namely, the two-tier system of government. In 1970, in the Llanelli area you would have had eight chances more of serving on a local authority than in Glamorgan under a unitary system. Therefore I welcome the two-tier system, because it gives the larger authorities the facility of administrative experience and financial control to administer the services with which, under the present Consultative Document, they have to deal. Secondly, it presents the opportunity very clearly for local authorities, who are much nearer to the core of the people, to administer the functions contained in the document.
I want to say here this afternoon very clearly that there is a strong body of opinion on this question. I am not in agreement with the noble Lord, Lord Ogmore, when he says that red herrings are drawn across the path in relation to the Crowther Report. Having spent nearly 35 years in local government administration in the Principality, I make the prophecy that if we get the recommendations of Crowther they will have an effect on local government in Wales in the future. Obviously if you are going to set up a committee or elected body, which may be the recommendation of the Crowther Commission, logically they must have some power. I am certain in my own mind that when the Crowther Commission recommendations are made, if such a body is set up it will take away from the local authorities the co-ordination of education in Wales, the co-ordination of economic planning, and the co-ordination of physical planning. I am convinced in my own mind that in those three fields, at which at the moment we labour as local authorities, the Crowther recommendations will have that effect; and therefore, from that standpoint, I feel fairly certain that there is a sense of apprehension in the Principality.
I do not want at any stage to delay the implementation of the Consultative Document. We have waited far too long for the reorganisation of local government up to the present moment. In that

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particular sense I should like to deal with a question of procedure. I speak as one who for 35 years has been engaged in local authority work, as I said previously, and one who has taken part in many negotiations upon various Reports, right from the first Report of Trustram Eve in 1947 up to the Report of 1958, finished in 1961, plus the two subsequent Reports. I am conscious of the fact that the time factor which the Government have allowed is not sufficiently long for the local authorities to give necessary attention to the effect which reorganisation is going to have upon them, to the physical aspect and to the question of functions.
We have been given the assurance of the Secretary of State for Wales about representations. I know that there will be no alteration of the fundamental basis of the reorganisation of local government—there can be no alteration to the two-tier system of government. But there should be careful consideration of the arrangement of boundaries. I want an assurance this afternoon from the Minister that, wherever representations are made by the Welsh Counties Association, or through the individual county associations, they will be given consideration; and that the Consultative Document as it is set out at the moment, and its boundary arrangements and functions, is not a fait accompli. At the end of this debate I should like it to be placed on record that we have the assurance—and I speak for the Welsh Counties Association and for the Glamorgan County Council—that at least proper consultation will take place; that such consultation and representations will be given proper consideration; and that this Report is not a fait accompli.
I come to the question of functions. Both the noble Baroness, Lady White, and the noble Lord, Lord Aberdare, seemed perfectly happy that the functions that are given to the Principality are in essence a little different from the functions that are given to the English counties. I have not considered in detail the functions given to the English county, but I believe, as a member of a county authority, and one of long experience, that the functions should be similar. I cannot make out why in the English document the provision for libraries shall be a responsibility of the county council. The reason given for that is the fact that it is a part of the educational apparatus
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of the administration of English counties. I cannot understand logically why it is necessary to say that in certain district councils in Wales the functions of the administration of libraries shall be the responsibility of the district council. I have had a long experience in the field of education and its administration, and we have in that particular field adequately met the requirements of the people of our administrative county.
Let me again go over one or two points in relation to the question of planning. I was not very happy earlier at the statement made by the Minister when the noble Baroness, Lady White, questioned him on Cardiff. This statement created a sense of apprehension in my mind. The noble Baroness spoke about planning and said that the planning did not have any teeth. I say frankly that from our own county standpoint in the foreseeable future I feel that a duplication of planning is not right. I think it was the noble Lord, Lord Fiske, who on Monday indicated some of the problems of dual interference in planning that occurred in the Greater London Authority.
The Minister said that when we come to consider other matters we shall consider whether certain other functions should be given to the city of Cardiff. I want to say here, from my own county's standpoint, regarding the concepts of structure planning, that I am fairly certain it is a mistake at this particular stage to separate planning from county administration and to give Cardiff something that is not given to any authority in England. Therefore, I believe that what is proposed is merely a sop to the city of Cardiff in order to get some sense of support for the Consultative Document.
I have spoken generally on the question of local government administration; I have touched upon the Crowther Report and also upon functions—there are clean air functions and others which are going to be the responsibility of the district council, whereas in England many such functions are to be the responsibility of the county council. We in Wales say—at least, I say and I know that the Welsh counties say—that we shall require from this Consultative Document the same measure of responsibility and the same measure of functions that the English counties get.

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Having spoken in the general sense, I come to the particular sense—my own county authority. By tradition, by character, by progression, we have played our part in the local government development in the Principality. I am certain that in cultural matters the Glamorgan County Council has taken a lead. In the field of education, on the Welsh Joint Education Committee we have coordinated education in every particular sense of the word and have played a leading part. Furthermore, in the fields of the social services, welfare and health, the tradition of the county council has been such that it can compare favourably with all that has been done by any of the county council organisations in England.
The point I am making is that we are clearly opposed to the division of the county. I do not want to say, in the same sense as my noble friend Lady White said it, that there is a political motive behind this. I could go into detail as to the composition of the South-East Glamorgan authority in the future, as against the political composition of the present County Council in Glamorgan. What we do say, first of all, is that the Report of 1967 was the one that commended itself most to the local authorities in Wales and the one that would have been accepted by the great majority, for one reason only. All the other previous Reports had fragmented the county councils. For the first time the county councils were amalgamated as single units, and for that reason I am fairly certain that the Report commended itself to the majority of people in the Principality.
The only divided authority under the Consultative Committee is the Glamorgan County Council, and on this I should like to make one or two suggestions for the consideration of the Government. The ideal thing would be for the county council to remain as it is at the moment. We should be perfectly content, and we should have sufficient resources and contact with the people to meet all the necessary needs of the period from 1970 to 1980.
If that suggestion does not commend itself to the Government I would make another. I do not know what the noble
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Lord, Lord Merthyr, is going to say, but although we in Glamorgan have had our teething troubles in the police administration this is now working well. The police administration covers the geographical county of Glamorgan. I am fairly certain that we shall go into West Glamorgan. This means that we shall build a new staff. The position will be no different from that which has obtained in England. We shall have new county offices in Swansea; and if the Government will have another look at the administrative recommendation and they decide that so far as Glamorgan is concerned it should be based on the geographical county, that would obviate a tremendous amount of difficulty and also a great deal of opposition to the recommendation in the Consultative Document.
On the question of finance, I think that, coincidental with local government reorganisation, we should have had a Green Paper on finance. If there is to be any change from the present system of rateable value to an added value tax (or whatever it is called) then the local authority should be informed of it. We are concerned with what should be contained in the Green Paper and with the financial resources of each authority. I know that the present document contains the figures, £22 million, £70 million and £29 million but, if I may say so, that is hypothetical reasoning in relation to the viability of a local authority of the future. I hope that the Government will, as soon as possible, bring out a Green Paper on local government reorganisation.
The document states that health reorganisation will take place simultaneously with the reorganisation of local government. I make the plea that when that reorganisation takes place we should have regard to an efficient school health service. If we take away all the medical personnel and the diagnostic analyses of the pupils I am certain that the school health service will suffer unless it is established on a sound basis.
I hold the view that reasonable expenses should be paid to members of local authorities. For many years I have served on a local authority, and I am certain that the time has now come when local authority representatives should have reasonable compensation. There is also the suggestion made that we should have a boundary commission

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for England and Wales. In Wales the district councils are arranged in a different way from that obtaining in England. A boundary commission is necessary to examine the arrangements of districts in England. In Wales we have already come to the conclusion that the anomalies that will occur as a result of the established districts could be easily tackled by a boundary commission which could be set up by the county councils themselves.
Perhaps I may say, in conclusion, that I welcome the Consultative Document as a basis for discussion on the reorganisation of local government, and I hope we shall see the fulfilment of that reorganisation within the next few years.
4.15 p.m.
LORD BRECON: My Lords, I should like to thank the noble Lord, Lord Ogmore, for having introduced this debate on the reform of local government in Wales, and say that I, too, welcome the Consultative Document that we have before us to-day. It was my noble friend Lord Brooke of Cumnor who set up the first Local Government Commission in about 1960, which reported in 1962 and produced two Reports. The first was to the effect that the counties should not be divided, to which everybody objected and then they produced a second Report with the recommendation to divide the counties, and everybody objected to that, too. Subsequently, there have been other Reports: the last Administration had a White Paper and a Report, and we find that even now there are great objections to the Report which has just been published.
It is a pity that after ten years of Commissions and Reports we have made no progress in the reform of local government in Wales, which is so urgently needed. I should like to congratulate my right honourable friend the Secretary of State for Wales on having produced a document which contains some firm decisions and which will allow us to have consultations with him to produce a situation whereby local government can be reorganised as soon as possible. If we have further Reports, I do not think that we shall get any closer agreement with the local authorities than we have had in the past.
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The need is urgent. There are something like 165 local authorities in Wales concerned with building houses, and they cannot really be efficient. Some are efficient, but others are not. There are many other directions where our services are split up in this manner, and we should try to do something about it. The fewer they are, the stronger they are. When they are given their own finance and allowed to control it and spend it without too much interference from either Whitehall or the Welsh Office, then I think the councils themselves will carry greater responsibility to the electors, and the electors will take more interest in the elections because the councillors will be responsible for spending the funds. That is what local government is about, and I think we should try to keep it as local as possible.
With regard to the Consultative Document, I rather felt that the functions were not sufficiently clearly defined between the county councils and the district councils. In fact there are nine functions on the county council list and also, obviously, on the district council list, which will run concurrently with each other. I am not sure that it will be easy to make decisions on who should run what, and perhaps in the thought that is to be given to this by the Government they will clarify the position a little so that we do not have this division of responsibility.
A number of services have been taken away from local government. The personal health services are to be taken away and the police authorities have been moved from the local level into slightly different areas. Water is also moving away, as is sewerage. This process of taking off certain functions from local government and putting them into area boards and other organisations makes one wonder what local government will have left in the course of time. Will education go? Will roads go? I think there will be little left for local government to look after, because the principles of reform which are stated in the Report are as follows:
"Many important services are most effectively organised on a large scale. This permits the recruitment of specialised staff and makes for economy in operation."
Those of us who have seen police authorities taken away from the old

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counties and county boroughs, then water and sewerage, and now the personal health services, know exactly how much extra these services cost to run since these organisations have been set up, and yet we were promised that if the organisations were larger they would run more economically in every way. I am told that in most cases the cost of these services to the county is now three times what it was when the counties were running them themselves. I hope that if we are to have reorganisation of local government in Wales, we are not going to build up great bureaucracies which will cost the ratepayers much more than they are costing at the present time. One only has to think back a few years when our rates were 20s., 25s. and sometimes 30s. in the pound. Then the assessments were doubled and the rates came down to 10s. or 12s. Now they are creeping up again and they will soon be back to 25s. again. This means that ratepayers will be paying twice as much as a few years ago. I am particularly anxious that whatever we do will be done efficiently and well and will not become a great burden on ratepayers.
So far as the administrative map is concerned, Cardiff has been mentioned by noble Lords and by the noble Baroness, and I think they are making strong representations at the present time. I would raise one matter. I am not happy about calling the three counties certainly of Powys, county councils and then calling Breconshire Montgomeryshire and Radnorshire district councils. I wonder whether we could retain the title of county council instead of district council, and call the other three together a regional council? I believe that this would save a great deal in many ways and would retain for the counties their own particular position and title.
Viewing all the difficulties of local government in Wales—and they are very difficult—I think the plan that has been put forward is the best division of Wales that can be achieved. Certainly in North Wales it is right to have the two counties. It is right to put the Conway Valley into one of them, whatever the noble Baroness says is the reason for it, but it is right to remove the boundary from the river and put it on top of the mountain. The Report says that
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the Southern edge of Breconshire, the small towns and villages there, South of the watershed of the Brecon Beacons, are closely united economically and socially with the neighbouring areas in Monmouthshire and Glamorgan. The Consultative Document then proceeds not to carry out the view expressed there; they have taken Vaynor and Penderyn into Glamorgan East, which is right, and Brynmawr into Monmouthshire, but then the parish of Llanelli, which runs into the Usk Valley and right down to the river, is taken into Monmouthshire. At the top end of the Swansea Valley we have Ystradgynlais, which has nothing to do with Breconshire, Radnorshire and Montgomeryshire, and it seems odd that this small entity which has all of its interests—social interests, work interests and further education—in Glamorgan is to remain with this area of Powys.
I hope that the Government will look at this again. If the noble Baroness, Lady Brooke of Ystradfellte, were here I might not have suggested that her parish of Ystradfellte ought to go where it really belongs, into the Valley of Neath. As she is not here, I hope that the noble Lord, Lord Brooke of Cumnor, will tell her that I did it with my tongue in my cheek, anyway. Of course, we have always been cursed with these boundaries in the rivers and valleys of Wales and in other parts of the country, and this is because populations have been built up around them and the boundaries have become blurred. I am very glad to see that it is now going to be changed.
With regard to the finance question we shall look forward with interest to the Green Paper. It is important that we should have this as soon as possible, to see how we are to finance the operation. It was said by the noble Lord, Lord Ogmore, that mid-Wales is a terrible place. I can assure him that it is not.
LORD OGMORE: My Lords, I cannot let that pass; I never said anything of the kind. I was criticised before when I said something about mid-Wales. I said it was a problem; I did not say it was terrible; I think it is a lovely place, but it is getting depopulated fast.
LORD BRECON: My Lords, I am sorry if I misunderstood the noble Lord.

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I know that the noble Baroness spends a lot of time there enjoying that countryside. We cannot really make mid-Wales an industrial area; and God forbid that we ever should! Therefore, on the financial side, if these rural areas of mid-Wales have to be retained in order that those who work in the industrial areas of South Wales, the Midlands and Manchester, can come and enjoy their beauty, they must be prepared to come and pay to support the local government in the rural areas so that it can provide the necessary services. But we must in all circumstances retain the beauty of the countryside there for these people.
With regard to the electoral side of the Report, generally speaking I would say that there are far too many councillors to every council, and I see that it is now even proposed that the figure for county councils should be 75. In the past, when other members besides council representatives were appointed to education committees it was quite possible that for quite a small area there would be an education committee of well over a hundred members. I hope that, when the Government are looking at this question, the number of county councillors will be reduced. We can certainly run in Powys to three Members of Parliament, but we shall need 75 people to run the county council if these proposals are carried out.
May I ask the noble Lord, Lord Aberdare, whether he can tell us how many members there will be on the district councils, because I shall be very worried if we have on the present county council 75 members, and another 75 on the district council, which covers exactly the same area as the county council at the present time. As I say, I hope that we shall be able to reduce the number of councillors. In any case mobility is so much better to-day than it was when all these councils were set up, I believe in 1888.
There is one other point concerning community councils. I think one ought to try to satisfy the local communities about what will happen when their small councils—borough councils—go and become in effect, in their minds, almost county councils. In the rural areas we have the parish councils to look after our
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affairs. But the small boroughs have never had parish councils, and I look for something to be done fairly soon to try to explain to these people how these community councils will look after their local needs. I am really asking why we should wait until the appointed day before these small community councils are set up.
The question of aldermen has been referred to. I always say that there are far too many—one quarter of the membership of county councils and county boroughs, and also of borough councils. I think the day has come when the office of alderman should be changed completely, and certainly it should not be used for political manoeuvring, as has been done in the past by so many of all Parties. I suggest that the numbers of co-opted people—call them aldermen if you wish—on councils should be greatly reduced; and men and women should be co-opted because they have a particular contribution to make to that particular council, and not for any other reason.
If all these changes take place, there is hound to be a big change for all the staffs of our county councils, and I welcome the fact that there is to be a Welsh Staff Commission. I am glad to see that it is to function, and I hope it will not be too long delayed, because I know that there is much uncertainty among stall on these local authorities at the present moment, and there has been for quite a number of years. If these new arrangements are to operate efficiently—and this is the purpose; to get greater economy of operation—then there must be a fairly large reduction in staff. I think that as a result of that there should be a great saving as well, but I hope that the Commission will deal with the placement of staff into other positions in order to help them through this very difficult time.
This is a very good Consultative Document. Perhaps it has been some time in coming, but it is a document that we badly need. I am very glad that my right honourable friend the Secretary of State is now pressing ahead with this reorganisation, and we are going to make whatever contribution we can to try to make it rather better, if that is possible, and to produce for Wales the sort of local government service that is vital for us. We should not shrink from doing what we believe is absolutely right to give

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us the type of local government that we need.
4.32 p.m.
LORD MERTHYR: My Lords, first I declare an interest because I am the President of the National Association of Parish Councils. Second (though it ought not to be necessary for me to say this), what I have to say to-day is only on my own behalf, and not on behalf of anybody else. My first question to Her Majesty's Government is: why is it necessary to have a different scheme for Wales and for England? Why cannot the Government determine what is the best system, and apply that to the whole of the country, England and Wales? I concede that the fault for this state of affairs lies with the Labour Government, because they started it; but the Conservative Government have continued it. Why is it necessary to have a library system for Wales that is different from a library system for England? I cannot imagine what the answer is. It makes for more work, and more delay. Perhaps the noble Lord who is to reply will touch on that point. Both Governments are to blame: one for starting it, and one for continuing it.
The best system that has been invented so far is that of the noble Lord, Lord Redcliffe-Maud and his Royal Commission, but that is thrown to the winds. I regret that very much. Why appoint a Royal Commission to sit for years, and spend thousands of pounds on it, and then, when their Report is published, disregard it entirely and throw it over, despite the fact that it was supported by every member of the Commission except one? I think the noble Lord's solution was the best, and I am very sorry to see it go. The Labour Government deserve credit for starting to put the Report into force, as I understood it, but this Government have, as I said, thrown it to the winds. I regard that as a big step backwards.
Let us start afresh by all means; and when you start afresh in this matter you must ignore present boundaries, as was found by the Royal Commission on Assizes and Quarter Sessions, who in the course of their Report said they had examined the boundaries of local authorities and found that they were irrelevant to their needs. The Commission meant
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that the local government boundaries in this country are simply hopeless and cannot be used for any other purpose. That is what that Royal Commission found, and I think rightly. The boundaries very badly need reforming. In this respect, I think that the English scheme, although not nearly so good as Maud, is slightly the better of the two, because England does alter the boundaries much more than Wales, which leaves them severely alone and has some pretty bad results. Boundaries should be our slaves; we are far too much inclined to make them our master.
If we must have two tiers, as is apparently the case, it immediately creates difficulties—and the noble Lord, Lord Ogmore, mentioned one big one, that of Cardiff. If we had Maud, there would be no objections from Cardiff. It is because the present scheme takes away major powers from Cardiff and Swansea and others, and places them under some other distant authority, that the objections arise; and I know that we shall hear a lot more of these objections. Under the scheme, Cardiff loses its major powers, top layer powers, for the first time for a very long period. It does not like it, and I am not surprised. That difficulty is immediately solved by having all-purpose authorities, of which Cardiff would be the centre and the head. Incidentally, the same applies to Bristol.
LORD ABERDARE: My Lords, I wonder whether the noble Lord recalls that the last Government proposed a unitary authority round Cardiff, and Cardiff was very loud in its protests?
LORD MERTHYR: My Lords, I did not know that Cardiff was protesting against that. But surely under that scheme Cardiff would have been in a much better position than it is now. Anyway, we shall have to leave that as a matter of opinion.
If we must have two tiers I concede, and I am very glad to do so, that the present scheme is not far off being right so far as the boundaries of counties, the number of counties, and the shape of counties is concerned. They could be improved, in my view, by greater attention to detail, and I hope that they will be; but they are not far off right. I must say that I have serious misgivings about Powys because it is so very small. I would have had one central county going right

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across the centre of Wales and bring Glamorgan right up to the top of the Beacons. That is surely the best place for the northern boundary of Glamorgan. I agree with those noble Lords and the noble Baroness who said that mountains are the best boundaries, and rivers the worst. Unfortunately, at present we have far too many rivers as boundaries.
I agree that Glamorgan should be divided into two. Perhaps it is somewhat presumptuous of me to say that, because I do not live there, and I know that it offends some people who do, as we have heard this afternoon. But, after all, the present county has a city at each end of it, East and West, and I think we could well have two counties, with ample numbers of people and a city in each county to be the capitals. I do not think the names are right. I do not like East and West Glamorgan. What is wrong with Gwyr? It has been mentioned, and I think it is by far the best name for West Glamorgan. And why not "Glamorgan" for East Glamorgan? If you want to call it "Morganwg" well and good, but I see nothing wrong with plain "Glamorgan". It must not be called Dynevor, because Dynevor is in Carmarthenshire and will be in Dyfed, and it will create one more tremendous muddle if you have the name of a county the same as the name of a place in the next county. That is suggested by the noble Lord, Lord Ogmore, I am sure with the best intentions.
LORD OGMORE: My Lords, I want to be quite clear about this matter. I said that it was logical, but it would not be popular. I said that the name I thought would be acceptable was "Gower", which the noble Lord has just mentioned. I simply said it was logical, because it followed the logic of the others. They have practically all taken the names of the ancient principalities or divisions into which Wales was split. But I do not propose Dynevor. Personally, I think "Gwyr" is the one which will be acceptable.
LORD MERTHYR: My Lords, I am glad to hear that, and I hope we can agree that Gower is a very good name. It is historical and goes back a very long way. What we now call Gower does not cover the whole area, but it covers the major part of it, and it would be a very good name for the new county.
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I turn to the districts. I think that there should be none, because I want the Maud Report implemented; but I know that I am not going to get it. But if we are to have districts—and we are—then I agree that these are not too bad. I congratulate the Government on this, at least: that they have made a very satisfactory reduction in the number of districts and therefore have increased the size of the districts. It is a big step in the right direction, if we must have districts. But the boundaries, which we are told are already fixed, are not at all the best that could be invented. For my liking, we have followed too much the existing boundaries.
May I say this without being too parochial? The boundary between Pembrokeshire and Carmarthenshire, which is to form the boundary of the new district of Pembrokeshire, is about as had as it could be. It has never been altered, simply because neither of those two counties has ever been willing to give one inch to the other. The counties concerned could have altered the boundary at any time since 1933, whenever they liked. But they have done nothing at all, because neither side will give an inch; and the boundary is very bad. I will not go into details, but it is very regrettable that that bad boundary should be continued as the eastern boundary of the district which is to form what used to be Pembrokeshire.
It has been mentioned that there has been a doubt and a dispute as to whether the present county of Pembrokeshire should be two districts or one. I much prefer one. There was a feeling that it should be two, but I understand that locally that feeling has largely disappeared and that, for the sake of unity, although they do not like Dyfed one little bit they are happy that Pembrokeshire should be one district under Dyfed, if they must have Dyfed. I shall not find a red carpet stretched out for me when I go home to-morrow, because I am about the only person in Pembrokeshire who likes Dyfed. I think it is perfectly all right. It is sensible and is not too big an area, although it is big. It also has a perfect place to be its centre and to have its meetings, and I think it is right that we should have a Dyfed County Council with districts underneath it—five districts in one county. I hope that the

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boundaries will be attended to by a Commission, appointed soon and urgently, for the reasons I have already given.
Talking about boundaries, I would point out that no one has yet mentioned the boundary between England and Wales. I know that that is a very dangerous subject. I knew someone who used to be a Member of another place who once boasted to me that he had got an Act through Parliament—I do not know which it was—that made it impossible for that boundary ever to be altered again. Of course he ignored the fact that Parliament can do anything, even alter its own Acts. But why do we always conveniently forget the boundary of England and Wales, apparently assuming that it is perfect? I do not live anywhere near it, but I would hazard a guess that it is anything but perfect. Perhaps the noble Lord, Lord Raglan, will touch upon that subject this afternoon, because he lives very near it, and I strongly suspect that the boundary between Monmouth and Gloucester, to say nothing of the rest of it, could do with an improvement and an alteration. I see no objection to the name Gwent, though the noble Lord, Lord Raglan, apparently does and will probably say so.
LORD RAGLAN: No.
LORD MERTHYR: The noble Lord does not, and I beg his pardon. I did not know that he was here. I want to mention rural boroughs, which I do not think anybody has referred to this afternoon. Inevitably, under this scheme, all the ancient municipal boroughs of Wales will disappear as borough councils. They will not disappear, I hope, as boroughs. I very much hope that they will retain their antiquity, their ceremonial, their mayors and their town clerks, but when the mayor goes to preside over a meeting he will preside over a parish council meeting, instead of over a borough council meeting. I hope that Her Majesty's Government will apply the Local Government Act 1958 to all the ancient boroughs in Wales which are losing their old status. I have some sense of history and I do not want to destroy it. We can make the necessary alteration. Surprisingly, that provision has hardly been used yet in the 12 or 13 years since the Act was passed, except, I believe, in Shropshire
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and to some extent in Cornwall, but not at all in Wales, so far as I have ever heard. I think it is an excellent provision and I hope it will be used.
I turn now to the communities as, according to paragraph 21 of the Consultative Document, I suppose I must, for the time being at least, call them. But why in the world must we change the name of the good old parish councils? What is wrong with the parish councils that we have had for over seventy years? Why must the parish council now be called a community council, apparently only in Wales and not in England? It is another muddle and another reason why we should have not two different schemes, but one. We shall muddle the new community councils with the existing community councils, of which there is one in every county. Who is going to explain to us, day by day, the difference between the existing community councils and the new community councils? I concede that the word "parish" has only two syllables, whereas the word "community" has double the number, but I really see no argument at all for changing the name. I have never heard, in Wales or anywhere else, a complaint about the name parish council". If there must be a change, I suggest that the name common council "would be far better than community council". At least there is no other common council nearer than London. But why change the name at all?
I agree entirely with the Government that the number of these councils, call them what you will, must be far fewer and that, consequentially, they must be far larger in area. That is right. The number of parish councils that we have now is nothing short of scandalous, and there has been a complete lack of effort over these years to nut the position right. In that respect, though not in others, my county is the worst in Wales—by which I mean that it is the county which has the most parishes without a parish council. I say that every parish ought to have a parish council. In the next county, over the border in Carmarthen, there are no parishes without a council. If they can do it we can: but we have never done it. We ought to be compelled by some new Commission to do it, for it will never be done voluntarily.

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So I plead with the Government to appoint urgently a new Commission that will alter these boundaries and will not be too particular about the complaints they receive in opposition to changes—because inevitably they will receive a great many complaints. But the number of parishes that have no council at all—the paucity of their population and the badness of their boundaries—is almost scandalous. Those difficulties can be put right, and ought to be put right most urgently. I was glad to hear several people mention this afternoon—I think the noble Lord, Lord Brecon, was the last one who mentioned it—that a speedy review of these boundaries was necessary, and I strongly support him in making that plea.
My Lords, I have said that I disagree with my friends at home about Dyfed. In my view, the new county of Dyfed, though big is not too big. It will be the biggest in Wales, but not the biggest in Britain. It is not as big as Devon, with Torbay, has been since 1889; it is not as big as the West Riding of Yorkshire has been since 1889. And during all the early years of that period there were no motor cars and no telephones. I have never heard anyone say that those counties are too big; yet when it is proposed to make a county which is not as big as they are, there is violent opposition. I hope that Her Majesty's Government will strongly resist the opposition to the formation of the county of Dyfed.
That leads me just to mention the police, only because some other speakers have done so. I happen to be the chairman of the police authority which has the smallest force and the largest area in Britain. I plead with Her Majesty's Government now not to alter the police area except as regards trivial alterations to boundaries as required. Please do not upset us again. We were very much upset three years ago by very great changes—six counties rolled into one force. We have hardly recovered from that yet: please leave us alone for a bit.
My Lords, we differ about these boundaries, but I suggest that when thinking of these boundaries we must look at the problem from the point of view of the whole country, and not from a merely local or parochial point of view. We must not think only of our
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own interests. The first interest to be thought of is the interest of Britain, because we are in the British Parliament. It is because so many people look at this from a short-sighted parochial point of view that we get nothing done.
Surely, the counties, as counties, are not being altered at all. That fact is often overlooked. If I am right, it is not the counties that are being touched, but the county councils; and it is not true to say, as so many people do say, that 400 years of history are being overturned. What is being overturned has been in existence for exactly 82 years, and is quite a different thing. As I understand it—and I hope the noble Lord will correct me if I am wrong—the counties as such will continue to exist, as we now have legal counties such as Haverfordwest, which has never had a county council and will continue without one, I think, into the foreseeable future.
There are other little details upon which I think further information would be most valuable. First, what will happen to the sheriffs of counties? I take it that they will not be affected at all because their counties will be still in existence. But if I am wrong, I should be most interested to know. What will happen to Lords Lieutenants of counties? I do not think we have been told that (unless I have missed it), yet many people besides the Lords Lieutenants themselves must be very interested in the answer.
Finally, I come to one more point about Dyfed. One of the strongest objections to it comes from people in Pembrokeshire who say, "If we are compelled to go in with Carmarthen; if we are forced to do that, as we hope we shall not be, the language question will create difficulties." They say, "The English, who live in the South of Pembrokeshire—most of the county—will be swamped by the Welsh, who live in the other parts." I do not think that that view ought to prevail, and my major reason for saying that is this. What these people overlook is the fact that the present boundary between Pembrokeshire and their two neighbours is about as bad as it could be. It is not a boundary between ethnic peoples—English on the one side and Welsh on the other. There are many Welshmen in Pembrokeshire and a good many English in Carmarthenshire.

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My Lords, if anyone wanted to devise a boundary in order to separate the two and form an English county (and I hope we shall never be compelled by the more ardent Welsh Nationalists to do that) it would not be that boundary. It could not be. It would be the ancient, historical boundary of the landsker, which went in quite a different direction. Since the year 1106, when Henry I invaded Pembrokeshire with his Englishmen and Flemish, and drove out the Welsh over the boundary of the landsker, that is where the boundary must be, if it ever has to be changed, though I very much hope it will not. My point is that objections on racial grounds, on linguistic grounds, are really hopeless because they are based on a boundary which is in itself thoroughly bad.
My Lords, subject to the criticisms that I have ventured to make, I think that on the whole the proposal in the document is a very good one, and one to be welcomed, and I hope that it will be put into force without undue delay.
4.59 p.m.
LORD SWANSEA: My Lords, I must apologise in advance to the noble Lord, Lord Ogmore, and to my noble friend Lord Aberdare, that I shall not be able to stay to the end of this debate because I have to catch a train to Wales as soon as I have finished speaking. For that reason, too, I shall not detain your Lordships very long, but I shall look forward with interest to reading Hansard as soon as the postal services can get it down to me in Wales.
My Lords, I have more than a passing interest in local government in Wales. My grandfather was the first chairman of the Glamorgan County Council; my father was a member for some years of the Swansea Borough Council; and I myself was a member for 15 years of a rural district council in mid-Wales, until I became ineligible to sit on that council any longer, having lost my residential qualification. The problems of mid-Wales are what I propose to talk about this afternoon, because that is the part of Wales that I know best. The proposed county of Powys comprises three present administrative counties. It will be the second largest in area and the smallest in population and rateable value in the whole of Wales. It will measure,
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as the crow flies, some 80 miles from North to South, and many more miles by road. It will present considerable difficulties of travel and time to the councillors who will be elected to the new council. Even if the seat of that new county council is near the geographical centre, for the sake of argument in Llandrindod Wells, there will still be considerable distances to be covered by the councillors to get to the meetings.
I feel that we are in danger of losing the voluntary character which has always been a great characteristic of local government service in this country. Councillors cannot be expected, however dedicated they may be and however public-spirited, to carry out their duties properly under the heavy burdens of travel and loss of time without proper compensation. I am very glad to see that the Government intend to consult local authority associations about improving the allowances paid to councillors. The noble Lord, Lord Ogmore, touched on that subject, which I think is an important one. At the same time, I think that we should be very wary of establishing the principle of salaries to councillors. That is another matter altogether. One advantage of our present system is that it attracts the sort of persons to local government whom we want to have in it: public-spirited people who are prepared to give up their time for the good of the community. But if we once establish the principle of paid councillors, then I very much fear that the wrong sort of people will come into local government. There is mention in the Consultative Document of a suggested maximum membership of any of the proposed new councils of 75. I think that we should not be too rigid over this; that we should bear local considerations in mind and keep the size of a council elastic, depending upon the distances to travel, areas and population.
It is a matter for very deep concern, particularly in the present Breconshire Council, that it is proposed to transfer certain fringe areas in South Breconshire to other areas. The urban district of Brynmawr and the parish of Llanelly, from the Crickhowell Rural District, are proposed to be transferred to Gwent: the parishes of Vaynor and Penderyn it is proposed to transfer to East Glamorgan. I cannot believe that this is absolutely

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essential and that Gwent and East Glamorgan cannot possibly do without those areas. In those circumstances, in both population and rateable value, Powys will have by far the lowest resources of any of the proposed new counties. For example, whereas East Glamorgan will have a population of about 927,000 and a rateable value in excess of £32 million, Powys will have just over 100,000 in population and a rateable value of over £2½ million.
It is rather surprising that the Government in these proposals have thought fit to cut away from the existing county of Breconshire a good part of the southern fringe of that county. The population and rateable value are not particularly large in themselves by comparison of those of Gwent and East Glamorgan but they would make a considerable difference to the size of Powys and Breconshire district councils because the transfer would represent a loss in both population and rateable value of about 16 per cent. of their resources.
On the other hand, their addition to Gwent and East Glamorgan would have a negligible effect on those areas. Indeed, if I may quote from the Consultative Document, in paragraph 29 it says:
"The population and resources of Powys would be small even if its constituent counties remained intact, and a decision to reduce them further needs particularly careful consideration."
It is hard to appreciate the viewpoint that the likely advantages to Gwent and East Glamorgan would justify the transfer of those areas from Powys. I think that the loss to Powys would far outweigh the advantages gained in other directions. The view has been expressed also that Powys, as it is at present proposed, would need a great deal of assistance by way of Government grant to make it viable. Would it not be of advantage from the Government's point of view, and from the point of view of the taxpayers, to restore the fringe areas to Breconshire and thus make the Breconshire district and Powys less dependent on central funds?
My Lords, the noble Lord, Lord Ogmore, touched on the question of county names. I think that the choice of names for most of these counties is very good. They bring back to one a bit of history. Like the noble Lord, I
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am not happy about East Glamorgan and West Glamorgan, and I think his suggestion of Morganwg for East Glamorgan is very good. For West Glamorgan—well, on might suggest to the Western Mail that it runs a competition among its readers to suggest the most suitable name for the new county. But I am inclined to agree with the noble Lords, Lord Ogmore and Lord Merthyr, that Gower would not be a bad choice. In any case, the names of the existing counties would still be perpetuated in the new districts, and I think that a resident of mid-Wales would rather be able still to say, "I belong to Radnor "—or Brecon, or Montgomeryshire—than, "I belong to Powys".
Much has already been made of the status of Cardiff. I should like also to raise a point about the status of Swansea which only very recently was raised to the status of a city. Only last night I was in Swansea and sitting next to the Mayor. He asked me. "What is going to happen to Swansea under these proposals? Is it still going to retain its city status?" I was unable to reassure him; but I hope that the noble Lord, Lord Aberdare, will be able to do so.
Local government areas in Wales are a bit of a "dog's breakfast", and it is high time that they were sorted out. I think the noble Lord, Lord Merthyr, is quite right when he says that we need not feel bound to stick to the existing boundaries and that we should perhaps have a certain elasticity; but broadly speaking I think that these proposals are about the best that can be worked out. The problem of mid-Wales is one that will always be with us. These proposals will not solve it entirely but it is very hard to see how they can be improved upon. I hope that the Government will be open to persuasion in matters of detail so far as boundaries are concerned, but apart from that I think that these proposals should be commended.
5.10 p.m.
LORD BROOKE OF CUMNOR: My Lords, I, too, am grateful to the noble Lord, Lord Ogmore, for bringing the Consultative Document before us this afternoon. I hope that he, for his part, will pardon the first Englishman who ventures to take part in his debate. My excuse is that for four and a half years I was Minister for Welsh Affairs, and in

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that position I gained an experience enjoyed, I found, by relatively few Welshmen—I gained a working knowledge of all parts of Wales. Perhaps I have another excuse which might commend itself to your Lordships to-day, so soon after Wales has won the championship as well as the triple crown, and that is that I am the son-in-law of a Welsh international.
While I was the responsible Minister I made it my business, as I gather the noble Baroness also did when she was Minister of State, to visit on their own ground pretty well all the local authorities throughout Wales. I found it a fascinating experience. It removed a number of my preconceived notions. It was clear, of course, that some authorities were far too small. But sometimes when I was visiting an authority of some importance I was depressed by what seemed to me the lifelessness of the council; at other times I met representatives of a council which seemed to me to have rather depressing tasks in front of it and not very much in the way of resources, yet I was revitalised by the vigour of the approach of the councillors towards those tasks.
It did come home to me in those days that there was one Welsh borough with a population of under 1,000 souls, where a penny rate—this of course was the old penny—produced only £22. Resources like that are not adequate for any purpose—hardly for buying a new typewriter. In another district I visited I found to my surprise that apparently it was regarded as the duty of the clerk to the council to find people in the town willing to serve on the council. He explained to me that he had never failed to get sufficient people nominated to fill the council at the triennial elections, but never during his tenure of office had he persuaded anybody to stand for a casual vacancy. There again one realised the weakness of the small district.
But, my Lords, I am quite sure that in local government matters, not only in Wales but throughout Britain, the most important criterion of viability is not the rateable value of the area, nor the administrative convenience of the area, but the willingness of public-spirited citizens to serve on the council. You can have
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a good local authority with not very good officers, if there is really leadership among the elected members; but, however good the officers, I do not believe you can have a good local authority—certainly I have never seen one—if there is no vigour and sense of local pride and energy among the elected members. I noted just now what my noble friend Lord Swansea said about the problems that great distances were going to create. We must not minimise that in our thinking about the reorganisation of local government. Already in many places county councils are thought of as remote bodies; believe me, some are going to be a great deal more remote if the reorganisation on these lines goes through. And yet I think it should. I believe in principle that it is right.
If I may look first at the smallest authorities, about which the noble Lord, Lord Merthyr, spoke with such knowledge and sympathy, I am a bit worried by a sentence in paragraph 50 of the Consultative Document which says:
"The present rural parishes would not be a satisfactory basis for a system of community councils, partly because many of the parishes are too small to support effective councils …".
I am not quite sure what is meant by that. In my view, no village worthy of the name is too small to support an effective council. One will not get a more effective council by joining together in a single community council two villages four miles apart which hate one another. I happen to be a member of a parish council at the present time, as I had been long before I became the Minister, and all my parish council experience teaches me that the virtue of a parish council lies not in its population nor its financial resources but in the fact that you have a group of people who know the village and the parish through and through and are prepared to give some of their spare time to improving it. But it must be a unity. If what the Document and what the noble Lord, Lord Merthyr, meant is that some parishes are so tiny that they comprise fewer than 50 people, I grant that those cannot support a parish council or community council. But I sincerely trust that one of the features of reorganisation in Wales is going to be a revitalisation of parish council work in the best sense.
I am not sure why we should wait at all about getting new parishes suitably

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organised to form parish councils. The Consultative Document suggests that the new county councils will be too busy to take that on in the early stages, and therefore it should be done by an ad hoc commission nationally appointed. Let me hasten to say that when I use the word "nation" in this debate I mean the Welsh nation, not the British nation. I should have thought that this work could go ahead straight away, and under the auspices of the present county councils. There need be no conflict of interest here, and I should have imagined that by 1974 the work could have been completed; and if it emerged that there was either inertia or sharp controversy among parishes it should be the duty of the present county council to bring pressure.
My Lords, as to the district councils, with great respect to my noble friend Lord Brecon, whose services to Wales are unparalleled, I do not believe that one could call the new Brecon District Council or the Radnorshire District Council or the Pembrokeshire District Council a county council. It would be too confusing to do that. But I do not see why they need be called district councils. That might seem to be an unnecessarily pejorative word to apply to what has hitherto been a whole administrative county. I should have thought the solution of this problem would be for us to think up a new word to use instead of "district". The word "district" is one to which, as far as I am aware, neither the present Government nor their predecessors have been in any way committed.
I am glad to see that in Wales the Government have been bolder in their allocation of functions to the district councils than they have been in the case of England. This seems to me on the right lines. I firmly believe that if we are to have a two-tier system of government, the lower-tier authorities must be given well worthwhile jobs to do. The Consultative Document also recognises that some strong district councils could administer more functions than some of the weaker and very scattered ones. I see no reason why we need to have precisely uniform patterns throughout Wales, or throughout England for that matter. Places differ. Local authorities of the same category differ greatly in strength and size, and I consider that the
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plans should be flexible enough for the functions in some degree to be tailored to suit the council concerned. In the last resort, if there is difference of opinion between a county council and a district council about whether the district council is capable of conducting some service, it must be for the Minister to decide.
Arising out of this question of the powers of the district councils, I hope that the Government will be able at some stage, not necessarily to-day, to explain exactly what is meant by the statement in paragraph 15 of the document that:
"Ways will have to be found by which the interests of district councils "—
in roads and traffic management—
"can be adequately expressed."
My Lords, that sounds to me very like a form of words designed to cover a gap in thinking. That gap must be filled before the scheme comes into operation. I have little doubt that the local authority associations will make certain that it is filled, but at the moment it seems to me one of the less satisfying phrases in the document.
It is of course a virtue that, as has been pointed out, a number of what might seem arithmetically to be the weaker district councils will in fact be coterminous with existing counties, so the new bodies will have additional strength gained by the previous experience of administering front the same town all of the major county services. The new district councils will have passed over some of those services to the new and enlarged county councils, but nevertheless there should be a fund of valuable local government experience.
Like the noble Lord, Lord Merthyr, I believe that Dyfed is the right shape for the new county. I cannot agree with some of my friends who argue that Pembrokeshire should be a county on its own, because, among other things, it has as large a population as the new Powys will have. I do not think it would make sense in South-West Wales to have Pembrokeshire as a separate county; though I am devoted to Pembrokeshire and greatly look forward to spending a Whitsun holiday there. As to whether the existing Pembrokeshire should in future be administered by one district council or two, I should have thought that the important developments on both

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sides of Milford Haven made it wiser to form the county into a single district than into two separate ones.
My Lords, with one exception the shape and the boundaries of the new counties seem to me to be right. The noble Baroness, Lady White, attacked the Government's decision in the case of the Conway Valley. I hope that everybody will be in agreement that the River Conway is not the ideal boundary between two counties. I should have thought it extraordinarily difficult, if one accepts that, not to put Llandudno and the whole Conway Valley into the same county. The noble Baroness suspects political motives, but I would ask her to examine, as objectively as she can, the alternative which in her speech she seemed to favour. I do not think she will find it makes sense to have Llandudno in Gwynedd and the Conway Valley in Clwyd.
The other boundary on which there has been much discussion is the southern boundary of Brecon, in future of Powys. I cannot agree with my noble friend Lord Swansea that the Government are wrong to propose transferring Brynmawr from Brecon to the new county of Gwent. If one drives along the road through Beaufort and Brynmawr to Abergavenny it is impossible to see any clear division of community as between Beaufort and Brynmawr. Both of those unquestionably, I should have said, ought to be in the same county. As to Ystradgynlais, which was mentioned by my noble friend Lord Brecon, on paper and in economic geography there seems to be a great deal to be said for joining Ystradgynlais to Glamorgan. But I gather from the document that the local authority of Ystradgynlais has not yet been sufficiently attracted by the noble Lord, Lord Heycock, and his county, to wish to transfer from North to South of the county boundary, and I am sure that one must pay careful attention to the views of the local authorities concerned.
Mention was made by the noble Lord, Lord Brecon, of the parish of Ystradfellte in Vaynor and Penderyn rural district. If my noble relative had strong feelings that the Consultative Document was not doing right in keeping Ystradfellte in Brecon I feel sure that she would have
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taken part in the debate; just as I feel sure that Lord Maelor would be here to take part, had he not been satisfied about the detached part of Flint, from which he takes his title, being merged in the new county of Clwyd.
My Lords, I said there was one exception. The one area where I cannot agree—and indeed fundamentally disagree—with the Consultative Document concerns Cardiff. Cardiff was constituted by my predecessor the capital city of Wales nearly twenty years ago. It must be treated as a capital. I do not believe that one can maintain the dignity of Cardiff as the capital city of Wales if Cardiff is to be a district comprising only a small part of the county in which it is situated. Reference was made to the position of Edinburgh, but if noble Lords look at the Scottish White Paper, they will find that Edinburgh will comprise a much larger part of the whole region in which it is situated, than Cardiff will under this plan for a new county of East Glamorgan. Cardiff will have only one-third of the population of the county; it will have one-tenth of the acreage, and it will have under one-half of the rateable value. My Lords, it cannot be right to put a capital city, or the lord mayor of that city, into so subordinate a position.
The noble Baroness, Lady Sharp, spoke wise words in our debate two days ago on very similar points arising in England. She specially instanced the case of Plymouth which, like Cardiff, is under the Government's plan to be situated in a corner of a large county. The noble Baroness said that there must be internal cohesion between the parts of a new county, and she pleaded with the Government to think again and not to be afraid of creating two or more additional major authorities, if in fact a strong case were made out for that. I believe that there is a still stronger case with regard to Cardiff than with regard to Plymouth.
As to internal cohesion, I cannot really believe that there is any perceptible internal cohesion, except perhaps on a Saturday when Wales is playing at Cardiff Arms Park, between Cardiff, on the one hand, and (let us say) Maesteg or Aberdare, on the other. Let me hasten to say that I mean the town and not my noble friend. Nor can I see how the

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"special arrangements" referred to somewhat vaguely in the Consultative Document can be made to work. They will work only if there is complete mutual understanding and good will between the new Cardiff and the new East Glamorgan. The tone of the vigorous speech by the noble Lord, Lord Heycock, did not seem to me to bode well for there being that close co-operation which I should have thought all persons would regard as absolutely essential, if this new scheme is to operate successfully.
In the last Government's 1970 White Paper, it was said that
"there is a viable planning region focused on Cardiff".
I agree, but it does not extend to the whole of East Glamorgan. It was said in that same document that it is neither necessary nor desirable that East Glamorgan should be responsible for the planning of Cardiff. That is exactly it. The capital city must be given the opportunity to plan for itself—not only to do some of the initial planning, as the Consultative Document suggests, but also to carry out the plan and implement it. I have studied this matter so far as I am able—and I have had some experience of planning—and I am bound to say to your Lordships that this proposal about giving Cardiff some special place in the making of plans seems to me to be a sop offered to the city, not a scheme that will work out successfully in practice if we are to have a new Cardiff that is to be worthy as the capital of Wales.
The redevelopment of Cardiff must be carried out, I feel certain, by an authority in which Cardiff people predominate and are not a minority interest. Nor is there any insuperable difficulty in doing this, and in creating an extra county. I would not go so far as some people would suggest beyond the borders of Cardiff. I would include Cardiff and Penarth and the strip to the East, which I think everybody agrees should be moved over from Gwent. Then on the West I would include Barry and, broadly speaking, the Eastern part of Cardiff rural district; but I would not go farther West than that into the Vale of Glamorgan, nor further North to include Caerphilly or Pontypridd. It seems to me that in this way we could make a strong new county of
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something like 400,000 in population, and we should still have a large East Glamorgan with a population and rateable value not so far different from that of Gwent.
The objections to this are stated in paragraph 43 of the Consultative Document. It says:
"First, it would further divide the existing county administration."
If the new East Glamorgan is to be so enormously larger than any other county in Wales, I do not think it is a fatal objection if that county were reduced roughly to the size of West Glamorgan and Gwent. The Document then says:
"Secondly, to divide the proposed county of East Glamorgan would inevitably mean the separation of areas which ought to be administered together for the purposes of town and country planning and transportation."
That statement certainly needs careful study and analysis, but I incline to put more faith in the statement, which I quoted from the Labour Government's White Paper, that "there is a viable planning region focused on Cardiff."
The third argument in paragraph 43 against the proposal is that:
"… to separate Cardiff and its neighbouring areas … would mean the creation of at least one authority which was comparatively weak in terms of rateable resources, and was handicapped by lack of resources and lack of suitable land in seeking solutions to its problems."
As I indicated, the new but restricted East Glamorgan would have a population and rateable value comparable to that of Gwent; so that argument seems to me to be not so strong as it appeared to be to the Government. As for the new East Glamorgan being handicapped by lack of resources and lack of suitable land, I certainly would not detach from it any but a small part of the Vale of Glamorgan and certainly would not extend the boundary to include Cowbridge or Bridgend or Caerphilly or Pontypridd. I believe the map will show the new East Glamorgan to have ample resources of land for development. It would then be natural for the new East Glamorgan to have its administrative centre at, say, Llantrisant, which is acknowledged by the Consultative Document to be destined as a major growth centre.
If South Wales were divided in the way I am suggesting, I can envisage, as I believe many other people can envisage, local government peace and co-operation

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between the different parts of the present county of Glamorgan and the former county boroughs, which I cannot believe will ever be achieved if Cardiff, the capital city, is merged as a district into East Glamorgan. In saying this, I am not seeking to delay the implementation of local government reorganisation. It is even more urgent in Wales than it is in England. As the Minister who set up the original Reorganisation Commission for Wales, nobody is more concerned than I that the job should be settled. My main plea to the Government is that they will re-examine the situation in Glamorgan before introducing their Bill. I was relieved to gather from my noble friend Lord Aberdare that, though there were certain matters on which the Government would not be prepared to move, there were others, including this field which I have mentioned—the of new major authorities—which he did not include among those on which the Government were inflexible.
5.39 p.m.
VISCOUNT AMORY: My Lords, I believe this to be the first Welsh debate in which I have ever participated. As a mere Englishman, I have been dubious about whether I could be equal to the intellectual pressure. I am conscious, too, that my halting, stumbling phrases will accord ill with the mellifluous flow of Celtic eloquence.
BARONESS WHITE: My Lords, as the noble Viscount interrupted me, may I interrupt him to say a very warm croeso—that means "welcome"?
VISCOUNT AMORY: My Lords, may I respond to the noble Baroness with, Bore da? Yet I do so now, after declaring once again my interest as having the honour to hold the appointment as President of the County Councils Association, only because it gives me an opportunity of subscribing wholeheartedly, I think, to the principles on which the Consultative Document is based. This subscription applies both to the two-tier principle and in general to the proposed pattern of areas of 7 new counties and 36 districts.
I am going to speak only briefly, but I speak with the greatest diffidence in the presence of the noble Lord, Lord Heycock, whose services in local govern
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ment in Wales have been almost unique in their length and depth, and who has rendered most distinguished service, in particular, to his county of Glamorgan.
The current proposals for South Wales seem to be better than those that were embodied in the 1970 proposals. Individual county councils no doubt will be submitting their comments in accordance with the request that has been made by the Welsh Office to them to do so before the end of May on boundaries and other matters. I thought that my noble friend Lord Brooke, whose knowledge again is unparalleled, made a strong plea for reconsideration of one important area; and other noble Lords, too, have mentioned the question of the responsibilities that are going to devolve on the second-tier authorities of very different sizes and populations. No doubt those matters will receive the further study and consideration that they clearly require. As the noble Lord, Lord Heycock, mentioned, there are some differences in the allocation of responsibilities between the authorities in Wales as against those in England. That again is something that I should have thought required further study.
The noble Baroness, Lady White, mentioned political pressures, as did the noble Baroness, Lady Sharp, in our debate last Monday. Those of your Lordships who have belonged to Governments, including the noble Baroness, will know that so often when one tries to do what most local electors seem to want, one is accused of pandering to political pressure; and if one does not, one is accused of arrogantly flouting the declared wishes of local democracy. So one can never wholly win.
I was interested in Lord Ogmore's little dissertation to us on names, which I am sure is important. I have been astounded at the brevity of the names brought forward for these new bodies, because as an Englishman I was always under the impression that Welsh names were very long and complicated. After about six or eight syllables, most Englishmen forget where they started and have to begin again. I was thinking, as the noble Lord, Lord Ogmore, was speaking, that "Ogmore" would possibly be a little long. But would "Og" suit some area somewhere? That is just a thought. It is tantalising for those of

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us who live in England and know the beautiful areas of Wales to hear noble Lords from Wales talking about "the magnificent road along the ridge" between somewhere and somewhere else, or "going down the beautiful valley" from somewhere. I thought how nice it would be for a Committee of the Whole House to spend two or three days going to look at these boundaries for ourselves, on the spot.
Perhaps I may say a word about the section of Lord Ogmore's speech which dealt with rugger. I agree with him that it is splendid that so many young men still pursue the activities of that noble game; and the enthusiasm of the Welsh for it is unrivalled. I remember the story of a Welshman who was watching an international rugger match in Wales, and had an empty seat next to him. Somebody said to him: "Mr. Jones, how come that you have got an empty seat next to you?" Mr. Jones said, "It was for Mrs. Jones, but she was unable to be here to-day." "Ah!" said the other, 'but surely you have many other friends who would have been delighted to occupy that seat?" Mr. Jones's reply was: "Yes, I have; but they all insisted on going to Mrs. Jones's funeral."
I suppose that I must not talk any more about rugger, and therefore I should like to end by saying that, in general, these proposals seem to me to merit positive approval, and our thanks are due to the noble Lord, Lord Ogmore, for initiating this debate this afternoon.
5.46 p.m.
LORD RAGLAN: My Lords, I do not wish to join in the discussion on the boundaries of the new districts, because I am employed in a strictly non-political capacity in the only district which I know intimately. If I gave some opinions on that subject I might get into trouble with one or other of my friends back there, and that I do not wish to do. What I wish to do is to draw attention to the unique condition of Monmouthshire, which some say is neither in England nor in Wales. I am wondering what will happen to it under this reorganisation.
Under Thomas Cromwell's Act of 1536 the county is mentioned as being part of Wales; but it is not so mentioned in the Act of 1542, which was a kind of consolidating
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Act designed to clear up some things left out of the previous one. Until about the beginning of the present century the county was treated as being more in England than in Wales, but more recently it has been lumped in with those counties which are in the administrative area of the Welsh Office. Some people say that the change has been helpful; others that it has not. To me, life seems to go on much the same in either condition, and so long as one can travel without hindrance between what is called Wales and what is called England, without being subject to a different law, and without having to speak a different language, I dare say that most people will not notice much difference either.
But the motto of the county reflects its ambivalence. It is, "Faithful to both." Why it remains faithful to either, except that being so tiny, it has no option, I cannot think, because in the 1,500 years or so of the existence of Gwent (which under the reorganisation is the proposed new name for Monmouthshire) it has been continually rampaged over and quarrelled about by the big bullies from either side. It used to be a proudly separate Kingdom, taking in, in addition to its present area, much of South Herefordshire and the Forest of Dean. But the Saxons took to stealing bits from the East and the North, and when they were not doing that we were being laid waste by swaggering Princes from the North-West. Neither side, I may say, was concerned with the welfare of the inhabitants, but only with territorial aggrandisement.
This condition of being a kind of buffer state or no man's land, belonging neither to one nor the other, was reflected in the Acts of Henry VIII. Henry and his advisers were understanding. They knew the land and its people, and I am quite certain that their ambivalence was deliberate; and they knew, too, that the boundaries they were creating were for administrative convenience. They did an excellent job right the way down the Border—although I know that my noble friend Lord Merthyr will not agree with me.
If speaking Welsh is a measure of Welshness, then Shropshire is actually more Welsh than Monmouthshire, because I think that there are more Welsh

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speakers in Shropshire than in Monmouthshire. This is a curiosity of the English-Welsh Border which was not meant to be in the modern sense a national boundary. I replied rather indignantly with a "No" to the noble Lord, Lord Merthyr, when he said I was not satisfied with the name "Gwent", because I have from my youth been very familiar with it. My ancestral home, Raglan Castle, used to be called the Yellow Tower of Gwent. Newspapers have been using "Gwent" rather than "Monmouthshire" in headlines for many years because, being a shorter word, it fits more easily into a headline.
My objection is that these new proposed county names have an air of false antiquity, in the same fashion as those public houses that one sees with appliqué beams and bulls eye panes of glass. These names are "stockbrokers' Tudor" gone political. It is unfortunate for Wales that modern Welsh politics should have taken this neo-Celtic path, though perhaps it helps the tourist trade. I hope that the English never fall for the same kind of thing and start renaming their towns and districts with Anglo-Saxon names. It makes life very complicated and it is expensive. If we in Monmouthshire are to readopt the ancient name of Gwent as an acknowledgement of our position under the Welsh Office I, and many others in the county, would still much prefer to retain our status and not be absorbed by either side.
I know that those with tidy, administrative minds will object to this, for they say that there is no point to it. But there is a point: for one thing, nobody in the county has ever been asked whether they wished to be English or Welsh; we have just had one thing or another "plonked" on us without so much as a "by-your-leave". It is suggested that there should be a parish by parish plebiscite in order to determine where the border between England and Wales should run. Leaving the county neutral would solve that problem very delicately. If, as a man of Gwent, you like to think yourself Welsh, you can. If you like to think yourself English, you can. If, like me, you like to think yourself both English and Welsh you can do that, too, as a pleasant example to the nationalists of either country, showing them that national borders are arbitrary, unnecessary and archaic,
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and that it is quite time that we abolished them and thought of something else.
My Lords, the people of Gwent have existed for over 400 years without belonging to any particular nation, and it is a matter of some significance that we should be able to go on doing so. I cannot say that otherwise your Lordships will see demonstrations by Gwent nationalists in the now time-honoured fashion: lying in the middle of the road, blowing up power lines and such, or replacing road signs with whatever language was spoken in Gwent before either the Celts or the Saxons came there—I expect we could find one. If Monmouthshire's present motto disappears, it will be a sad thing for Gwent, Wales and England. I hope that the governments of both neighbouring countries will have the sensitivity to allow us to keep it, in fact as well as in words and in spirit.
5.57 p.m.
LORD CHAMPION: My Lords, in his excellent speech in opening the debate, the noble Lord, Lord Ogmore, spoke of the waves of successive invaders into Wales, most of whom were repelled in part by the strategic advantage of the mountains. I suppose that I must count as one of the later invaders, a very minor one it is true, but I have been far from repelled, either by the mountains or by the local tribesmen. I am proud to have been, I think, after 58 years adopted. That is my only justification for speaking to-day in this debate. The Government must be very grateful to the Liberal Party for giving up one of its precious days to enable us to debate this Motion and, as I have said, the debate has been well opened by the noble Lord, Lord Ogmore. This is my second winding-up speech on local government in three days. On Monday I was, in rugby terms, playing in the white strip of England; to-day it is in the red jersey of Wales, striving on this occasion not to beat England, as Wales seems habitually to do, but to ensure that both England and Wales should be working towards a better form of local government on parallel, but not exactly similar lines. That point should be stressed.
A certain Welshman, whom I regard as one of the brilliant ornaments of Wales in the first half of this century, said of democracy:
"We have experimented with increasing doses of democratic government for less than

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a century, but long enough to realise its dangers and disappointments. But in the matter of government we are among the most inventive nations and our genius for compromise, for steering mid-way between enlightenment and prejudice will, I believe, surmount our difficulties."
A few sentences later, after mentioning some of the aspects of the indifference of the public to local elections and local government matters, he said:
"Despite this indifference of the ordinary voter, there is some improvement continually proceeding, prompted by Royal Commissions, departmental, consultative and advisory committees. But the demand for reform does not come from the electorate. It originates from above, not from below."
I do not know whether the noble Baroness, Lady White, recognises that quotation, but if she does not she ought to do so, for it was said by her father in a speech to a gathering of civil and municipal servants in 1942. I feel fairly sure that if Dr. Thomas Jones were here to-day he would be proud of his daughter and the way in which she spoke at the outset of this debate.
The proposals we are now discussing stem from the Local Government Commission for Wales which reported in 1962 and the Redcliffe-Maud Royal Commission which reported in 1969. I believe that those two Commissions have prompted a proposal for improvement which is the document we are considering to-day. It certainly fits Dr. Jones's remark that we have a
"genius for compromise, for steering mid-way between enlightenment and prejudice".
It is true also that the demand for it originated from above and not from below, but it is none the worse for that. I do not agree with the noble Lord, Lord Merthyr, that we should have accepted in toto the Redcliffe-Maud proposals, or any Commission's proposals. You set up a Commission to examine something; they examine it and report, and it is then for you, as a Government, to decide what parts of the proposals or recommendations of the Commission should be adopted in the interests of the country. It is for the Government of the day to decide, and perhaps for the Opposition to criticise their decision. Frankly, I do not criticise the decision of the Government in connection with the Consultative Document and their rejection of proposals
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of Royal Commissions. Of course, they have adopted some proposals.
There are some differences in the proposals in this Consultative Document from the English White Paper, but they are nothing like as great as in the Labour Party's original proposals for Wales and for England. For some reason or other the Labour Government's first, 1967, set of proposals for Wales was a much more down to earth and more acceptable White Paper than the 1970 White Paper for England, or the amendment subsequently made by the Labour Government for Glamorgan and Monmouthshire. That amendment was, in my opinion, a mistake, and I am glad to see that it is not repeated in this Consultative Document.
Basically there is now a close similarity between the proposals for Wales and for England, but it is not so close, I am glad to say, as not to allow for some difference in the allocation of functions. I cannot see why they should be exactly similar; I cannot think why there should not be differences, and differences which can pay some regard to variations in population sizes, areas and all these matters. On areas and boundaries, with some slight exceptions I tend to feel that the Consultative Document has them nearly right; but in the case of Glamorgan I am bound to recognise the strength of the arguments advanced by my noble friend Lord Heycock, whose experience of local government in, and knowledge of, the county is quite unrivalled. When I was listening to my noble friend I could not help feeling that if every Welsh wing three-quarter from now on had the speed that the noble Lord had in speaking we should never lose another match; we should always win because certainly his speed was quite terrific. But the sense that he poured out was very well worth listening to.
If I had to take the final decision in the matter of "to divide or not to divide" Glamorgan into East and West, I should hesitate a long time before ignoring the noble Lord's advice, but there is—and we cannot shut our eyes to the fact—a strong case to be made out for a county area centred on Cardiff, and one centred on Swansea. I believe that in both instances it is possible to say that, broadly speaking, one can identify the areas in which people live who look to one or

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other of those cities as their centre. Had it not been for the advice so cogently advanced by my noble friend, I would have plumped for the Document. I must admit that he has sown a great seed of doubt in my mind. And generally on this whole point of the possibility of a third county, I must say that I have some sympathy for the point of view advanced by the noble Lord, Lord Brooke of Cumnor; but I shall come to that a little later.
The noble Lord, Lord Ogmore, spoke, as almost everyone has done, about this point of the capital of Wales. It is only 16 years, as has been said, since Cardiff, after decades of argument, was named the capital city of Wales. Its status as a county borough and as a capital city, in which is located about the finest complex of governmental buildings in Great Britain, if not in Europe, has by now been accepted by most of those who opposed having the accolade of "capital" bestowed upon it at the outset. It is now accepted, and generally accepted. In these circumstances, I can well understand the feelings of the City Council, who feel that on becoming a district council the standing, the prestige and the dignity of the capital is being lowered. I am not unaware of the difficulties, but I feel that the Government must pay very great regard to the representations which the City Council will undoubtedly be making in the future. As I said just now, I rather like the idea of the noble Lord, Lord Brooke of Cumnor. I certainly think that Cardiff could be extended East and West along the coast; but I would agree with him not to extend it to Pontypridd and the area there. I do not say that merely because I live in Pontypridd. I like Cardiff, I like to visit it, and I certainly do not like the idea of its being virtually demoted.
So far as Pembrokeshire is concerned, until I heard the noble Lord, Lord Merthyr, speak I was strongly inclined to the view that there ought to be two districts there. I thought that the county divides geographically, and certainly to some extent culturally, into two areas. My experience of Pembrokeshire—that beautiful county with the coastline which I think is about the finest in Great
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Britain—taught me that North of the Haven the county is largely Welsh in character—culturally and in character. South of the Haven, for some historical reason, some historical set of circumstances, it is an area which has been described with some truth as the "little England beyond Wales". I should have thought there was a justification here for it, but I should have said that this was a matter in which we ought to take the views of the inhabitants; and the noble Lord, Lord Merthyr, has told us to-day that Pembrokeshire does not wish to be divided into two. So it is not for me to press this upon the noble Lord, Lord Aberdare, and the Government. I would accept his word for it, of course.
The only other point I would make on boundaries is of a small alteration which I think should be made, and that is that the towns and villages in the Ynysybwl Valley look to Pontypridd as their centre. They have a direct and a very heavily used bus service running to and from that town, and I think that that Valley should be attached to the East Glamorgan No. 8 District. I know the interest of the noble Lord, Lord Aberdare. He lives in Mountain Ash, and at present the Ynysybwl Valley is part of the Mountain Ash Urban District Council—but it ought never to have been. It is time that it was changed and that it now became part of the No. 8 District.
I must say that, on balance, I tend to support the noble Lord, Lord Swansea, in his plea for Brynmawr, Penderyn, Vaynor, being perhaps retained in the area which he comes from and which he supports; namely, Powys. But these are matters which will be argued out elsewhere on the representations of the various bodies concerned. There will inevitably be some opposition to the various proposals on areas and boundaries up to the very time of the Parliamentary debate upon the Bill. Here we are fortunate, in a way, that the boundaries are going to be settled and will appear in the Bill, and will be known to us very early.
This applies, too, to the allocation of functions. As I said on Monday, councillors and officers tend to cling to their

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little bits of territory and their powers with very great tenacity. I was the chairman of what was known as a Part III education authority in Pontypridd before the Act of 1944, the Butler Act. A Part III authority had powers up to grammar school level. I have a memory of the opposition I encountered when I said that I thought that the Butler proposals for doing away with the Part III authorities made good sense for it would mean that the whole of primary and secondary education would be in the hands of the county education authority. I found that in this, in local government, as in so many other fields of human activity, councillors and officials pay lip-service to the urgent need for reform but tend to add under their breath, "Not in our neck of the woods at all." In this connection, I must say that I welcome the proposed disappearance of the education divisional executives as the accepted district of the Rhondda. I shall not fear going home this weekend, despite the fact that I live at the foot of the Rhondda, because this was, in my opinion, a device to please the areas which had become deprived of their Part III powers. I welcome it because I think it must be very frustrating to be carrying out policies not of their own making, nor directly derived from Parliament.
On functions, I am pleased to see that, unlike those in England, the district councils are to be allocated building regulations. I would say that what is good for Wales would be equally good for England in this respect. With the noble Lord, Lord Brooke of Cumnor, I like the idea that under paragraph 16 room is left for manœuvre. There is a distinct possibility that there may be some adjustment in functions to meet the wide variations that exist in the sizes and populations of the proposed areas in Wales.
On Crowther I do not think that very much needs to be said to-day. We have had the assurance that was given in the English White Paper that the Crowther Report and recommendations are not likely to touch very much upon local government, certainly in England, and I imagine that exactly the same assurance and undertaking has been given by Lord Crowther to the Government in relation to Wales. But in this connection I should like to hear from the noble Lord, Lord Aberdare, whether it is in fact the case
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that Lord Crowther has given this undertaking.
On pay, there is inevitably a difficulty in speaking within three days on matters so closely related, and in which the very paragraphs are repeated in the two documents that have been under discussion in the two debates. One is in danger of repeating oneself on many of the issues involved. I said on Monday in connection with pay that if the Government decide that a salary ought not to be paid, there should be the payment of daily expenses which would not only cover travelling expenses, a subsistence allowance and a loss of earnings allowance, but also be sufficiently generous to compensate for loss of promotion opportunities. Young men suffer this loss, as I know. Something ought to be done about it, and I think it will not be done unless we accept a proposal that was made to-day, by the noble Lord, Lord Ogmore, by my noble friend Lady White and by the noble Lord, Lord Heycock, that we should have some form of daily allowance which would truly compensate councillors for the things that I have mentioned. Here, although I had not given it any thought previously, I very much support my noble friend when she says that the position of women in this relationship must also be considered.
On the timetable, as I said on Monday I think that, despite pressures which will be brought to bear upon the Government, the decision to get on with it has been about right. If you do not set a target date and make it clear that you intend to stick to it, we who are interested in local government here or elsewhere, would be tempted to go on arguing about this or that aspect of the proposed reforms "until the cows come home". We should be at it, at it, at it, and there would not be reform of local government for perhaps even another twenty years.
Finally, I must say a word about the councillors and officials who have served so excellently in local government in Wales. The noble Lord, Lord Brooke of Cumnor, paid a tribute to some of them. It is true that he was not wholly impressed by all of them that he met, but in the main councillors have done a first-class job of work. Many of the councillors I knew in my period as a councillor were unreservedly devoted to the task they

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had then undertaken. Many, like myself, were uneducated in the formal sense, but were shrewd, sagacious and very knowledgeable about their authority's powers. It was a joy to work with them; it was a joy to feel that these men really were thinking in terms of the people they represented and the area they were serving; and the people about whom I am speaking did a really first-class job.
My Lords, watching and listening to a television programme on Sunday last I heard the noble Lord, Lord George-Brown, being asked if he would tell his audience what was the most personally satisfying period of his public life. It seemed to me that his answer virtually said that he could pick out no single period, for many periods had their own satisfactions. Were I to be asked the same question, my answer would be that my period in local government was by far the most personally satisfying part of the whole of my life. It was an honour and nice to be a Member of the House of Commons. It is also very nice to be here, my Lords: it tickles the ego. But the result of what one has done, or is trying to do, in these places is so far removed that one can never feel the sort of satisfactions that can be felt when a particular school was going up during the period when I was the chairman of the education committee, or when certain houses were being built when I was the chairman of the housing committee. My Lords, when I go home at weekends I still look with pride at that school and those houses, and feel some satisfaction that I played some small part in bringing them about.
VISCOUNT AMORY: My Lords, I wonder whether I may ask the noble Lord whether he has yet had the experience that I have had: that a building which I, as a very young man, opened, has now been declared an ancient monument.
LORD CHAMPION: My Lords, that is the worst of the noble Viscount: he is so good a speaker and he has such wit that he destroys every other speaker in the House. That lovely story of his about Mr. Jones—what a delight that was! I hope it will not be reported too widely because I hope to use it at every possible rugby function in the future.
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To get back to the main lines of my speech, in Clarke's Local Government of the United Kingdom there is a sentence which reads:
"It is probably true to say that many men have found greater satisfaction in local government administration than at Westminster."
I agree with that. Councillors have their satisfactions, but they also bear the slings and arrows of those who mistakenly think that they are in it for what they can get out of it in monetary terms. Be that as it may, I believe that councillors have done an excellent job in a local government machine which, though it certainly creaked a little, has nevertheless served the people pretty well in Wales, as it has done in England.
6.18 p.m.
LORD ABERDARE: My Lords, perhaps I may be allowed to intervene fairly shortly at the end of this debate to pick up one or two of the points that have been made. I have listened with the greatest interest to all the speeches that have been made. I was only sorry that the noble Lord, Lord Davies of Leek, had to leave apparently he was not feeling well, and it was a great loss to us not to have his Welsh eloquence in this debate.
It is a pleasure to follow the noble Lord, Lord Champion, once again. We seem to have been following one another fairly frequently on recent Wednesdays, and it is a great tribute to him that he has spoken both on English local government and on Welsh local government. It is a pity he did not carry the ball into the Scottish half and "have a go" at Scottish local government too. He spoke some wise words, if I may say so with respect, on the differences in the proposals that we are making for Wales as opposed to those for England. After all, our history, geography and tradition are different, and it it is quite right that we should not ignore them simply for the sake of uniformity.
The noble Lord cannot expect much personal sympathy from me in his attempt to grab Ynysybwl from Mountain Ash Urban District Council. He did not reveal that what he so coyly called "District No. 8" is Pontypridd, where he lives. But my personal feelings do not come into this, and naturally all the

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points which he made will be most carefully considered by my right honourable friend.
The noble Lord spoke about the compulsory delegation of functions from county councils to county district councils. We are clear that it tends to obscure responsibility and to increase the risk of friction between county council and district council. It may work satisfactorily in sonic areas for some of the time, but generally we do not want to see a continuance in the new system of local government where responsibility is shared, as for example under our proposals it will be in town and country planning. The district council's responsibilities should be conferred upon them clearly and directly, without delegation.
My Lords, so far as the assurance he asks me for with regard to the noble Lord, Lord Crowther, is concerned, the Secretary of State has discussed these proposals with Lord Crowther, and Lord Crowther indicated that he had no objections to the proposals we were putting forward at this present moment. May I also follow him in paying tribute to the councillors and staffs of the local authorities in Wales. I think it was the noble Baroness, Lady White, who commended the fact that we were following the last Government in setting up a staff commission. Quite clearly, whatever we do in the way of reorganisation we must do our utmost to protect the staffs of the local authorities.
A number of your Lordships have spoken about pay and allowances for members of local authorities. I can only say that we intend to consult further with the local authority associations about the whole question of financial allowances for members. Going back for a moment to what the noble Lord, Lord Ogmore, said in his opening speech, he asked me about aldermen and was personally, I think, in favour of abolishing them. We want to consider very carefully in co-operation with the representatives of the present local authorities, whether it is right to maintain the institution of aldermen in the new structure of local government; but we think it would be a great mistake to abolish this long-established institution without giving it very careful thought.
If I may refer again to the noble Baroness, Lady White, I should like to rebut her allegations about what we were
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doing at Conway, which she seemed to think was for political reasons. I can only refer her to the Consultative Document, paragraph 26, where she will see that the proposal stems originally from an independent body, the Local Government Commission for Wales, and from the views expressed by local authorities in the area.
The noble Lord, Lord Heycock, as he always does, made a very distinguished contribution to the debate this afternoon based on his very long and intimate experience in Glamorgan County Council. I was glad that he welcomed the two-tier system. He spoke of the tight deadline asking for rte local authority's views by the end of May. I recognise that it is a very tight deadline, but unfortunately it is necessary to impose it if we are going to get through the timetable we have set for legislation. I give him this categoric assurance for which he asked: that this is a consultative document, and although there are broad principles which I spoke about in opening which we shall abide by, it is certainly a consultative document in other ways and all the representations made will be most carefully considered. He did not want Glamorgan divided. Of course I quite sympathise with that viewpoint, coming from him. The difficulty is that if it is not divided and one keeps to the administrative county of Glamorgan, and it swallows Cardiff and Swansea, it would be twice as big as at present and comprise nearly half the population of Wales. From the point of view of reorganisation of the whole of Wales this would be rather difficult. May I say how much importance I attach to the school health service. It is too early to comment because our proposals for the reorganisation of the National Health Service have not yet seen the light of day, but I take note of the noble Lord's concern.
On the question of libraries, our proposals are similar to those of the previous Administration. We propose that the main library authority should be the new county councils. This is an important and developing service and needs to be administered by strong local authorities. There are advantages in making the education authorities the library authorities, but we leave open the possibility that a limited number of stronger district councils may be made

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library authorities, because there are in our proposals certain present county councils which will in future be district councils. I think one has to leave this matter open for further consultation.
My noble friend Lord Brecon, spoke with great authority as a previous Minister of State and one who did a great deal for Wales. He spoke about concurrent powers. They exist under the present law for nearly all the functions mentioned in the Consultative Document as being subject to these arrangements; for example, both county and district councils have powers to involve themselves in the clearance of derelict land, and in Wales at least good working relationships between them have been established for this purpose. We see no reason why the principle of these arrangements should not continue in relation to some functions. Again, the details are open for discussion with local authority associations.
My noble friends Lord Brecon, Lord Swansea and Lord Brooke spoke about the Southern boundary of Breconshire, and essentially they made three points: why pay so much attention to the views of local councils in one instance and not others? Why not include Ystradgynlais rural district and the parish of Ystradfellte in West Glamorgan, and why include the whole of Llanelli parish in Gwent? My answer to the first point is that plainly the wishes and views of the local councils concerned must be considered and given due weight, but they cannot be the overriding factor if only because they are often in conflict with one another. In the present instance, most of the local authorities concerned, Brynmawr urban district council, Vaynor and Penderyn rural district, Monmouthshire and Glamorgan County Councils, the Merthyr Tydfil county borough council and the district councils in Monmouthshire and Glamorgan are in favour of the boundary being moved Northwards; but the idea is not accepted by the Breconshire County Council or the Ystradgynlais Rural District Council. I am speaking of the views they expressed on the previous Government's proposals, and for all I know they may wish to put forward different ones now.
LORD BROOKE OF CUMNOR: My Lords, if I may intervene, I do not think it would be right to say that anybody had seriously suggested that Ystradfellte should be moved from Brecon into Glamorgan. I should certainly have got into serious trouble at home if I had suggested that.
LORD ABERDARE: My Lords, I am very grateful to the noble Lord; I take his point. My noble friend also asked about size of councils. Proposals about size are about to be put to local authority associations. There will be discussions about the appropriate sizes for the new county and district councils. There is certainly no intention of having an inflexible figure to fit all circumstances.
The noble Lord, Lord Merthyr, who was generally in favour of the Redcliffe-Maud Report and would have preferred to see that applied to Wales, seemed, I think, to be rather more enthusiastic about the Redcliffe-Maud Report than Lord Redcliffe-Maud who, at least on Monday, seemed to commend the Government proposals. But I was grateful to him, at any rate, for giving full support to the fact that Pembrokeshire would form one district, and for saying that he likes the concept of the county of Dyfed. I can assure him that we have no present intention of altering police authority boundaries.
The noble Lord spoke about the alteration of other boundaries. The proposed boundaries of the new authorities are almost all existing county borough, district or parish boundaries, with a few ward boundaries in urban districts. We have adopted this procedure for practical reasons. We think that we should be creating impossible difficulties for ourselves if at this juncture we tried to draw fresh boundaries all over Wales. But the existing boundaries contain many anomalies, and there will have to be an effective procedure for putting them right and keeping revised boundaries up to date as new building and similar developments tend to make them obsolete. Any procedure for this purpose must allow full opportunity for local views to be expressed, and we think that there is much to be said for setting up a permanent Commission to keep boundaries and local authority electoral areas up to date.

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I can also assure him that paragraph 53 of the Consultative Document makes it clear that:
"The titles of borough and city, and their honorific attributes … will be continued in the forms best suited to local circumstances."
With such a wide variety of boroughs in Wales, we must have discussions with the associations concerned before we come to conclusions, but we want to do everything practicable to safeguard the traditions of the Welsh boroughs. I took the point that he made about keeping the title of "parish" rather than "community councils", and I will certainly see that that is considered.
He also asked me about Lords Lieutenant and sheriffs. We are very much aware of the concern about the future of these traditional offices, and we shall be discussing these matters with representatives of the officers concerned with a view to finding ways of smoothing the transition from the existing pattern of local government to the new one. I should prefer not to go into any further detail at the moment because Her Majesty's prerogative will be involved, but I can assure noble Lords that their views will be carefully considered.
I can also assure my noble friend Lord Swansea that the city status of Swansea, just as of Cardiff, will be maintained, and indeed enhanced by the extension of its boundaries. My noble friend Lord Brooke of Cumnor spoke from his wealth of experience as a previous Minister for Welsh Affairs. He told us of his claims as a son-in-law of a former Welsh international, and he has also since drawn our attention to his close relationship with the noble Baroness from Ystradfellte. I took much to heart the points that he made, and I will certainly see that they are brought to the attention of my right honourable friend. He made an interesting point about the setting up of parish councils, and the reason why we should not proceed with that immediately. I think we have always taken the view that it was better to wait until the new county councils were in being before tackling the new parish councils, but I accept the force of his argument and I will see that it is considered.
He spoke of the thinking—which I felt he thought we had not done—about highways and traffic management. We
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are clear that the main highway and traffic management functions must rest with the seven new county councils. The present arrangements for the allocation of these functions are confusing and illogical. No fewer than 122 Welsh authorities have some highway responsibility, and the range varies according to the type of authority. We have given careful consideration as to whether some substantial highway responsibility should be conferred on some, or all, of the new district councils, but we are satisfied that the county councils ought, in the interests of efficiency and economy, to employ all the professional highways and traffic management staff and have overriding control over policy within their areas. At the same time, we shall be pleased to consider any ideas which local authorities may have for associating members of district councils with decisions on highway and traffic management matters of local concern.
My noble friend spoke about the problem of Cardiff, and he spoke with very great force. The difficulty is that we are trying to get away from the old county borough concept. We feel that it is undesirable that areas which ought to be looked at as a whole for such matters as town and country planning, roads, education, and the personal social services, should be split by boundaries which are based on the out-dated idea that the county borough should begin where the continuously built-up area ends. I recognise that his proposal went rather further than that, and he included in his projected new county of Cardiff a good deal of not built-up area. I certainly undertake to draw my right honourable friend's attention to his very strong views on this.
It is perhaps worth making the point that the East Glamorgan County, as suggested in the Consultative Document, will be very small in area compared with most of the smaller proposed English counties. It will be only a fifth of the size of the proposed Plymouth/Devon County, for example. Cardiff City Council, I repeat, under our proposals, will have power to redevelop the city in accordance with their own local plans, and they will have power to buy land, redevelop it themselves, and control development within the city.
My noble friend Lord Amory delighted us all with his speech. He broke into

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Welsh, which I thought was very impressive, coming from him. I am not sure that he was not a little late in saying "Bore da", but no doubt if he takes a few more lessons he will become very fluent at it. I was very grateful for his positive approval of our plans. The noble Lord, Lord Raglan, decided to take part in the debate, and I was very pleased that he did. He has an unrivalled knowledge of the history of Monmouthshire, about which he told us. I would only say that for nearly all administrative purposes Monmouthshire is treated as part of Wales.
It is within the jurisdiction of the Secretary of State for Wales; it is covered by such bodies as the Welsh Hospital Board and the Welsh Joint Education Committee. It has been treated as part of Wales for the purposes of the Welsh Church Act and for licensing law, and for recent local government legislation, such as the Local Government Act 1958, which included Monmouthshire within the terms of reference of the Local Government Commission for Wales. Just before the noble Lord interrupts, may I add that it is also included for the purposes of rugby football, which I should have thought would have pleased him.
LORD RAGLAN: My Lords, on that last point, if you play for Glamorgan you can also play for England. The administrative entity at the moment is called "Wales and Monmouthshire"; I should like the new one to be called "Wales and Gwent".
LORD ABERDARE: My Lords, I take the noble Lord's point. Whatever happens, I do not think that legislation and administrative practice need affect how people feel, and I am sure that some natives of Monmouthshire will no doubt continue to feel that they are English, and others will feel just as strongly that they are Welsh. They can continue with their motto "Faithful to both" or, as the noble Lord seemed to prefer, "Faithful to neither". I am sure that the noble Lord's own eloquence is proof of the fact that he has Welsh blood in his veins.
I should like to conclude by again thanking the noble Lord, Lord Ogmore,
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for initiating what I feel has been a very good consultative debate on a Consultative Document.
6.38 p.m.
LORD OGMORE: My Lords, I should like to thank the Minister, the noble Lord, Lord Aberdare, for both of his speeches, and for taking trouble to try to answer some of our points. I should like to thank all the speakers, including the noble Baroness, for their contributions, which were weighty and, I am sure, will be regarded with considerable attention both by the Welsh Office and by the people of Wales. I want to make it quite clear to both the noble Lord, Lord Brooke of Cumnor, and the noble Viscount, Lord Amory, that, so far from there being any hesitation on our part in welcoming them, we were delighted that they took part in the debate. They made important contributions.
On the one question that the noble Viscount asked—perhaps not very seriously—about why Welsh names are usually very long and these new ones are not, the fact is that most of the old Welsh names were descriptive: they were either geographical descriptions, such as, "The little mill by a waterfall near to the church", and so on, or they were biographical: "The house were Red Evan lives". That is the reason. The new county names are not descriptions; they are, in fact, the old divisions of the country. They are not geographical descriptions; they were divisions on tribal lines.
I am very glad the Minister has agreed to put to his right honourable friend some of the suggestions that have been made this afternoon, because I think they were valuable and very important. I hope they will receive the consideration which they demand. A great deal of anxiety has been expressed about the position of Cardiff, and the Government should consider very carefully the views of the noble Lord, Lord Brooke of Cumnor. I cannot see how Cardiff is going to operate as a district council. It is in a better position than it was before, when it was going to operate as a community council. I objected strongly to that, but I really feel it is not "on" that a national capital should be a district council. If some suggestion, such as has been made by the noble Lord, Lord Brooke, were put

1409
into effect, it would be valuable. Of course whether you carried out his suggestion or made District 1 a new Cardiff, the population of East Glamorgan that would remain would still be far more than that of most of the new counties. So that it would be quite viable.
The question of names was raised, and I think I was quite right in saying that, however logical Dinefawr is—there is a certain logic, though perhaps not much—it would not be popular. I think that those who have expressed a view, particularly the noble Lord, Lord Swansea, and the noble Lord, Lord Merthyr, have agreed with me that probably the favourite will be Gwyr for what is now West Glamorgan. I am very glad that both of those noble Lords agree on Morganwg for East Glamorgan.
Finally, I cannot let pass what the noble Lord, Lord Heycock, said on my having been remiss about referring to the Welsh Rugby Union. As patron of the Bridgend Rugby Football Club, one of the constituent clubs of the Union with a very important and first-class team, I must point out that I fully accept that Major Cliff Jones and Mr. Clive Row-lands and the others, who have been concerned with selecting and training the Welsh team, are much to be congratulated and commended. I did not enlarge upon the subject before, because I did not think it was particularly relevant to this debate. But as everybody else has been talking about rugby football right through the debate, perhaps I may be excused if I am slightly out of order. With those few words, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

RELIGIOUS EDUCATION IN PRIMARY SCHOOLS
6.43 p.m.
VISCOUNT MONCKTON OF BRENCHLEY VISCOUNT MONCKTON OF BRENCHLEY rose to ask Her Majesty's Government whether they think it feasible to provide any form of religious education asked for by the parents of children in primary schools. The noble Viscount said: My Lords, before starting a short speech on the Question which I have put down, I should declare an interest. I am a Roman Catholic, but I
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am not speaking on behalf of the Catholic Church in this country. Indeed, I think that much of what I am going to say will be, and would have been, disagreed with by the hierarchy of the Catholic Church in England.
I imagine that the 1944 Act is coming up for review and change, and it is therefore right that we should question some of its provisions and see how it has worked in general in the religious education of our State schools. At the moment, the State schools work side by side with the grant-aided denominational schools, and in my opinion there is no question that there should be any change in the denominational schools. They must go on. They are happy, the religions that back them are happy and the system works well. What I am proposing we should look at to-night is religious education in the State primary schools in particular.
Under the 1944 Act, a right of access is given to teach denominational religions inside secondary schools, if the parents of the children so desire. It also allows children to opt out for any reason from a religious class, which I think is statutorily one class a week. It is in that context that we ought to consider this subject. The system works well for the majority, but does it work so very well? We now have a pluralist society. We have had for a long time a large Jewish population, a large Catholic population, a large immigrant population from Ireland, and now we have Moslems, Hindus, Sikhs and Buddhists. If we are a Christian and a tolerant nation, do they not have a right to have their own religion taught to their own people in State schools, and a right of access to them if the parents so desire? Of course one accepts that when they opt to come to Britain they are opting to come to a country which is basically, historically and still nominally Christian, and that therefore they must learn something about the basic history of this country which is founded on Christianity. But, in addition to that, I should have thought they had a right to have their own religion taught.
If we look around at the products of the existing scheme, at those who have just come out of school, can we say that the scheme has worked? Have they a firm belief in a religion of any sort? Does sex before marriage indicate a

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strong religious belief? Does the increase in witchcraft, the digging up of graves, the wrong sort of spiritualism, indicate that religion has got through to the people being taught? It indicates to me that there is an overwhelming desire for some form of religion. The very fact of going in for witchcraft or strange by-paths of spiritualism shows that this desire for religion exists. It is how it is taught and how it is getting through that are going wrong.
We have at present cases of masters, and mistresses I suppose, teaching religion in secondary schools who do not believe a word they are saying. But religion has to be taught by Statute. This seems an appalling situation for the teachers and even fatal for the children who are taught by those teachers. One cannot help looking back at St. James's letter in the Gospels, which starts off:
"Let not many of you become teachers, my brethren, for ye know that we who teach shall be judged with greater severity."
So is it not better that those who are convinced of the religion which they want to teach should go in to visit those schools as of right, and with the agreement of the headmaster, to teach a recognised Christian denominational religion or a recognised major religion to the children of parents who want it?
It should be yet another clear choice of the parents. When a child becomes 16, or whatever the school leaving age may be, it is then the child's choice and is no longer the choice of the parents. But up until then I should have thought it was the parents' choice and even their right. One could even go so far as to ask: if the parents want their child to be taught to be a Humanist, should he not be so taught? It is the parents' right to decide the education of their children. Some of the secondary schools allow access for teaching—and I have had letters from headmasters and directors of education saying that the system works very well—during the normal school period, but in an empty form room. They take 8, 10 or 12 of a certain denomination out of the class and teach them. But some secondary schools allow this education only at 4 o'clock, and I do not need to remind your Lordships that everybody else is by then on his way home. It takes a brave child, almost
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a strange child, to stay behind for that religious education when everybody else is on the way home.
What are we really wanting to get across? Whatever religion we hold, some form of ethical teaching is obviously necessary for children. All of us—Humanists, Christians and other major religions—will probably agree about that. If one is a Christian, one wants to get across the key to our religion, which is love. This is now so difficult because, strangely enough, sexual love is compulsory education. They have to listen to that, and they have to see the films on that one small part of love—the sexual act. Unfortunately, in English we have only this one word "love" to cover what in Greek has four words. As Christians, I should have thought that, above all, we love our neighbour, because by doing that we obey the Commandment to love God. That is the major object in the teaching of our religion—the fairly simple one of loving one's nighbour. But it also means to be tolerant of those who have other religions, and also to be tolerant of those who have none. That is what I hope will now be looked at.
Too many of the young who have apparently been taught religion and have not accepted it never smile. I wonder whether your Lordships have noticed this, going around—how few of those who have come out of school smile. They do not appear to be happy. Compare that with the story, which is true, of a 15-year old Spanish boy, about ten years ago, dying in the presence of his parents and brothers. Everybody was very sad—it was a most ghastly thing—but he turned round just before he died and said, "See you later, father". His was quite a different attitude: the certainty that he had, and the happiness that he therefore had, of the transient nature of our life and the certainty of the future somewhere else.
I have said, my Lords, that we want some ethical teaching. Then we want some teaching on Christianity, which can be opted out of to go for a doctrinal teaching of another denomination or another major religion—at the choice of the parents, I would suggest. We want to teach to all compassion; not giving sympathy to, but suffering with. I do not want to quote, but I will quote, Miss

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Cilia Black. She says she is convinced in her own faith and religion but that she wants her child, aged nought, to choose for itself when it grows up. He will line up the major faiths and choose. You cannot do that. If you remember the cloud of unknowing, one can only desire what is known. If you place a child to grow up on a desert island, he will probably start worshipping the sun, the wind, the water or the fire. You can only desire what is known. Therefore your religion must be taught; and whether you get faith in addition depends, I suppose, on God. But the doctrinal faith must be taught.
We need committed teachers to do this. We need, probably, teachers, catechists, from all these faiths who are prepared to go in, and it is for consideration whether they should not be paid to go in, because they ought to be inspected—I do not quite know how, but examined, perhaps, by Her Majesty's Inspectors—to see that they are capable of teaching. Not all priests and religious are capable of teaching a religion properly. Often lay people, and ladies who have had their families and will go back to teaching, are better qualified to do it and better suited to do it; but it is for consideration whether they should not be paid on a per capita basis, on the basis of the numbers of that religion in that particular school.
So, my Lords, really, a new look at the Act is wanted; a new look in relation to the immigrants which have come to this country and have a right to their own religious teaching, though they should learn about the basic religion of this country. Above all, we should have a look at what is going on and what should go on in the primary schools. I hope that the Government will therefore be able at least to say that another look will be taken. I hope that we shall hear some interesting views from other noble Lords. We are all fallible, but I think most of us who are speaking, or are going to speak, realise that man is not supreme.
6.55 p.m.
LORD GARNSWORTHY: My Lords, we shall all be grateful to the noble Viscount, Lord Monckton of Brenchley, for having tabled this Question. It is very timely, and it gives us an oppor
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tunity to discuss a number of issues. The Question itself, not being a simple one, prompts a good many more questions which, because of the explosive nature of the subject—and I think we ought to recognise that it is a highly explosive subject—ought to be approached with as much care as we can muster, if not, indeed, caution. I would just say this with regard to what the noble Viscount has said about making available in primary schools the opportunity for doctrinal teaching of all kinds: that I should not like to be responsible for organising the primary school. I should think that, as a matter of practical administration, having in mind the size of our primary schools generally, this idea is not a starter.
Certainly, my Lords, if the discussion is to be fruitful we shall need a minimum of prejudice and a maximum of tolerance, and I think our aim must be to establish whatever common ground we can discover—and it is perhaps in the atmosphere which so often prevails in this House that this can best be attempted. At the outset, I should like to remind your Lordships of what the White Paper of 1943 said about religious education in schools. I quote:
"There has been a very general wish, not confined to representatives of the Churches, that religious education should be given a more defined place in the life and work of the schools, springing from a desire to revive the spiritual and personal values in our society and in our national traditions."
We know that because of the 1944 Education Act, which provided that each school day would begin with a corporate act of worship and that there would be regular religious instruction on a locally agreed syllabus, the Church of England surrendered control of many parochial schools. We also know that, as a result of that Act, religious education is the only subject which the law requires to be taught, and is the only subject from which both child and teacher may be excused.
It seems particularly fitting that we are discussing this Question to-night, because a quarter of a century later it is reasonable, I think, that we should be attempting some assessment of the success which has been achieved in realising the desire to which I have referred as set out in the 1943 White Paper. So one asks—and here I shall use more general terms than did the noble Viscount—are the moral

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values, the personal values or the spiritual values of our society such as to warrant complacency? Although many of us would testify to the excellent quality of many of our young people, we see little reason for complacency, and much to cause us concern; and if we have cause for concern at all, surely there is a case for consideration to see what, if any, changes are desirable in this particular field of education. If, on the other hand, we have achieved all that can be hoped for, then there is good reason to say, "Leave well alone"—but only then.
My Lords, we all know that young people of to-day face tremendous challenges and are subjected to very great pressures. They question the standards and the values of older generations, and I think it is right that they should do so. They reject much of the moral code that those of us who are older absorbed in our more formative years. They are more open in their ways of living, but they are not always as wise as they seem to think they are. But yet, if they appear to be stumbling and sometimes misguided, I think a great deal of the fault lies with us who are older, in that we have not succeeded in helping them to appreciate that man has within him the power to overcome his inherent weaknesses.
As I see it, our challenge lies in providing for them the experience of making decisions, for every decision made is a choice between what seems right and what seems wrong. School is a good place to learn this, for school is the place where the making of decisions can be practised: where the individual learns that he has a choice, a choice between what is good and what is bad, or perhaps not quite as good. There are changes in our schools that could not possibly have been foreseen in 1944. The noble Viscount has already referred to the fact that we have sizeable groups of Hindus, Sikhs and Moslems. There is another fact of which we ought to take notice; and that is that we also have in some of our local authority schools sizeable groups of Roman Catholic and Jewish children.
The noble Viscount touched on opting out. I have myself referred to the fact that the 1944 Act provides this possibility. I think that few of us to-day would regard opting out as being in the best
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interests of a young child, since it tends to make the child feel different. One cannot expect a child of primary school age to begin to understand what it is all about. In this connection, may I say that I speak as one who when young was a martyr to my father's heroism in the matter of being called to put into operation at school what he thought was right. I do not regret that he did it; I learned a great deal as a result. I was of primary school age. I would not commend it as an operation that ought to be inflicted on any child having been through it myself.
Rather than speak at length of what I myself feel about the matter, I want to touch on what some others have placed on record. First, the National Union of Teachers. In their pamphlet, Into the Seventies, issued in September, 1969 (and I think that they submitted the document as evidence to the British Council of Churches), they suggested two changes in the 1944 settlement. They asked that the act of corporate worship should no longer necessarily have to take place at the beginning of the day: they wanted flexibility, and sought changes in the agreed syllabus. As they put it:
"This syllabus which is compulsory by law has always presented difficulties. In some areas it is regularly revised but in others it has become ossified with time and is a severe handicap to vital teaching. In any case a syllabus imposed upon a school from outside is contrary to the whole tradition of British education."
The requests of the National Union of Teachers strike me as being modest, but they ought not, just because they are modest, to be discounted. What bothers me is that, unless notice is taken of this sort of criticism, somebody somewhere, some school in some place, feels driven to take an initiative. This is what may have happened, as I understand it, at Countesthorpe in the county of Leicestershire; and I am not sure that that is the way progress ought to be made in this field.
Then I would mention the Plowden Report. In paragraph 562, it asks:
"Is the very notion of an agreed syllabus compatible with the flexibility of the modern primary school?"
In paragraph 573, it comments:
"There is urgent need for reconsideration and re-appraisal of what aspects of religious faith can be appropriately presented to children, at what time and in what way."

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The Plowden Report mentioned the dangers of introducing the more difficult stories to children at too early an age and warned that
"they may reject religious ideas as their critical faculties develop, and, at the same time, the morality which they associate with them."
In preparation for this debate I have re-read with great interest what six members of the Plowden Committee set out in their Note of Reservation in regard to the inculcation of moral, social and æsthetic values in school: and I think the time has come when we need to face squarely the risk we run if moral education is based an any particular faith; for if the faith be rejected the moral values associated with it may be discarded also. To put it somewhat crudely: the baby thrown out with the bath water.
Next, I should like to refer to a recent report, Moral and Religious Education in County Schools, submitted by a Working Party to the Social Morality Council. I myself have benefited tremendously from reading this report. The Social Morality Council includes three Members of your Lordships' House: Lord Ritchie-Calder, Lord Soper and the right reverend prelate, the Bishop of Durham. It has Anglicans, Roman Catholics, Free Churchmen, Jews and Humanists working together
"to promote morality in all aspects of the life of the community."
The report states:
"Some of the provisions of the 1944 Act have become irrelevant to the present position in our county schools."
It asks for a more open approach in religious education, and it goes on to say that it
"welcomes the systematic attention based on research and experiment which is now being given to moral education; and hopes that this initiative will lead to far-reaching changes."
My Lords, it seems to me—and certainly the noble Viscount, Lord Monckton of Brenchley, made clear that it is his view—that the time is right for consideration of what changes are desirable. For some change would appear to be supported by a fairly substantial body of thoughtful opinion. I do not think it is the duty of a local
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authority school to indoctrinate, but rather is it a duty to help the growing child to learn to distinguish between right and wrong; to acquire a sense of judgment; to discover where to find and how to use knowledge; to help in building a world community of peoples and to develop a sense of responsibility as a citizen of that community.
I rather think that those who wish their children to follow any particular faith would do well to seek to persuade by example, and beyond this there remains, and I think will remain, a continuing opportunity to the Churches to meet the challenge that inevitably faces them. I like some words written by the right reverend Bishop Butler, Roman Catholic Auxiliary Bishop of Westminster—indeed, they are included in this document. He wrote:
"No one can doubt the urgent need for men and women, of all faiths and none, to find common ground from which to face the vast moral issues of our time: world poverty, international peace, race relations, control of the environment."
I think it right and proper that in our schools we should teach children something of all the great religions of the world. If in our schools we can help young people towards the solution of the problems to which reference has already been made, we shall, I think, have served them well. And what they have to do, as we have, is to seek to find common ground with other peoples. In our primary schools we need to offer as fully as we can opportunity to acquire a set of moral values that will help them in that search.
My Lords, in the context of the world as it is to-day, and the context of the world as we can see it shaping, the children of to-day face tremendous challenges. I believe that by a right approach, beginning in our primary schools and carrying on through our secondary schools this notion of training them to discover the difference, or to determine the difference, between what is right and what is wrong; by doing what we can to give them a high set of moral values, giving them an understanding of the needs of their fellows and encouraging them to work as members of a world community, we shall be making a constructive and useful approach.
7.10 p.m.
THE LORD BISHOP OF ROCHESTER: My Lords, the Question which the noble Viscount is asking Her Majesty's Government has to do with feasibility, and we all know that what are called "feasibility studies" are one of the exercises most in vogue amongst administrators at the present time. While I am confident that no one in the Church of England who has any concern for its continuing share in the work of national education would wish to impede any feasibility study such as that which the noble Viscount is asking for, I am equally sure that they would wish to see maintained the consensus of opinion achieved in 1944 for the religious clauses of the Butler Act.
They would, of course, be among the first to recognise that after a quarter of a century some modification of those clauses will be called for in any new Act, and indeed a very substantial Report on religious education, entitled The Fourth R produced over the name of my right reverend friend the Bishop of Durham, is a contribution to the fresh thinking that the situation in 1971 undoubtedly demands. But I would hope that any changes would, like those made in 1944, be changes that are agreed after consultation with the teaching profession, with the local authorities and with all the Churches. The very much closer bonds which to-day unite the Churches in what the B.B.C. calls "the mainstream of Christian tradition" in this country encourages one to believe that there would be found to be a very wide measure of agreement among them, both on what should be the content of religious education and also on the provision that ought to be made for those of other faiths.
My Lords, the only provision in the law at the moment for religious education to be provided in accordance with the wishes of parents is that which is made for voluntary controlled schools—a status established in 1944 to meet the difficulties of church schools which needed building improvements for which the managers were unable to pay. The control of such schools passes largely to the local education authority, but the purposes of the original founders of the schools are acknowledged in the arrangements that are made for religious education. Thus, an act of worship can be in accordance
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with the trust deed of the school and parents have the right to request that their children may receive religious instruction in accordance with the foundation of the school, be it Anglican, Roman or Free Church. The managers of a controlled school in any normal situation are under obligation to provide such instruction, and for this they may appoint what are called "reserved teachers" qualified to give the kind of religious instruction needed.
It is not without significance for our present discussion to note that the Roman Catholic Church has never taken advantage of the voluntary controlled status for schools, preferring to put all its resources into schools where denominational teaching is integrated into the total educational life of the school. There are many members of the Church of England who hold the same view. So what the noble Viscount is in fact asking for is an extension to county schools of the right to appoint reserved teachers for religious instruction.
I feel bound to say that I think this raises a number of very real difficulties. For example, where numbers are small there is a danger of lapsing back to the all-age teaching which it was one of the objects of the 1944 Act to abolish. One's mind boggles at the problems of accommodation and of the recruitment of part-time teachers of the quality of which the noble Lord spoke that would be involved in providing for all the numerous groups that might be called for in, say, a large comprehensive school.
My Lords, such practical difficulties, serious though they would be, could no doubt be overcome by good will where there was a conviction amongst parents and teachers that such arrangements would provide better education. But would that be the case? I doubt whether the authors of the Durham Report on religious education would think so. They say in paragraph 20 of their Report:
"All major educational reports in recent years have made it plain that the principal argument for religious education in county schools is that it is a subject with its own inherent educational value and must have its place in the curriculum for educational reasons."
I take that to mean that the teaching of this subject must contribute to, and in no way disrupt, such promising educational developments as the thematic teaching

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method or the development known in primary schools as the integrated day".
In the first of these children are given an introduction to those basic experiences of life which are used as the symbolic language of religion; and in the second, the integrated day, there are no subject divisions as such at all, and the experiences which the children have are examined in different contexts or perspectives, including the religious. I question whether a peripatetic teacher of religion could easily share in such an experiment, and I should be fearful lest such teachers would fail to be identified with the corporate life of a school, and that they might even become a cause of dissension among the full-time teaching staff.
My Lords, ever since schools were built out of public money, a century ago, it has been a cardinal principle that in such schools, now known as county schools, no religious catechism or religious formula which is distinctive of any particular denomination shall be taught. This principle, established by the Couper-Temple clause in the 1870 Act, survived all the sectarian controversies of the 19th century and formed part of the 1944 Act—that Act which made such an immense contribution to the unity of purpose among men of good will concerned with the religious education of the young. In all the evidence collected by the Durham Commission, much of which is published in an Appendix to the Report, no Church and no body of teachers suggested that it would be a good thing to depart from the terms of the Couper-Temple clause. I believe that behind this there lies a deep concern for a school to live as a single united community; and an equal concern that the home should take its rightful place in the upbringing of children.
My Lords, I speak from these Benches for those who share the noble Viscount's deep concern for religious education; and I speak also as a near neighbour of his in Kent who knows and admires his passionate concern for Christian unity. He will, I am sure, understand if I say that I hope that whatever Her Majesty's Government may consider feasible for the provision of religious education in the years ahead, it will be such as will have the widest possible support from parents, teachers and education authorities, and from all the Curches; and that such
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support will be given for sound and respected educational reasons.
7.22 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, I too, am very grateful to the noble Viscount, Lord Monckton of Brenchley, for having asked this Question and for turning our minds to-night to a problem which, in its particular bearing on the primary schools, has possibly not been thought about quite enough. Before I turn to that subject perhaps I may take up one point which the noble Viscount made. This would be an opportunity for the noble Lord who is to reply for the Government to tell us whether the noble Viscount is right in his assumption that the 1944 Act is due for overhaul; or whether we are rather to believe The Times Educational Supplement and that his right honourable friend regards herself more than anything else as the guardian of the 1944 Act. I had rather hoped that we education specialists were going to have an easier time under this Government than we had under the last one.
The whole problem of teaching religion is a very difficult one about which people have very definite, distinctive and differing ideas. I think it is even more difficult in the primary school than in the secondary school. I would agree with the noble Viscount that what we want to see is some form of ethical teaching at primary school level. I think this could be of a fairly simple nature. I agree with him also that we want to see that the teaching of religion is about religion. I think he would agree that we do not necessarily want to see indoctrination, but we want people to know about the religion or religions that their particular culture stems from and which their families may, or may not, have had; particularly the Christian culture in which this country is still steeped. We want them to know more about it and more about the experiences. I think this can be done within the context of the teaching experiment that the right reverend Prelate the Bishop of Rochester spoke about. It is done at the moment in a great many schools, I believe, without its being necessary to take the steps which are being more or less advocated by the noble Viscount.
I would agree with the right reverend Prelate that it is extremely important that

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we keep a unity of spirit in the schools, more particularly in the sphere of religion. At the primary level, rather than separating out people of different sects and different religions, they should be brought together and taught more about each other's faiths. Simple stories about religion are very suitable for primary education. There should be simple stories about other religions, particularly where there are a large number of children of religions other than the Christian religion.
I was sorry that the Durham Report came out against the idea of assemblies built on a multiplicity of faiths. I do not wish to be misunderstood. I am not in any way advocating a kind of colour-less philosophical mish-mash—putting everything together—which results in having absolutely nothing at the end. But I suggest that in the teaching of religion in schools, especially perhaps in primary schools, there should be a foundation of tolerance, and an appreciation of the richness of the various faiths and cultures represented in this country which this proposal might not help.
In the various discussions that we have had from time to time about racial problems in this country, and about immigration, one thing has been almost entirely ignored; that is, the great cultural richness imported by our immigrant population, from which I believe this country will benefit in future years. We have not yet even begun to appreciate the value that we shall get from this. I think it can also be rewarding in the religious sphere. It may be very good for us that, among other things, we should note that the immigrant population in this country is a great deal more religious-minded than most of the native-born inhabitants. In conclusion, I would say that I do not see the way ahead along the lines the noble Viscount has suggested. But I think we ought to thank him most sincerely for having raised this Question and having, perhaps, started chains of thought about how we can best deal with the problem of religious education in a pluralist and multiracial society.
7.29 p.m.
THE EARL OF LYTTON: My Lords, I much appreciate being able to join in the debate led by the noble Viscount, Lord
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Monckton of Brenchley, but I do so with some reluctance, because I am out of date. For ten years or more I was the nominee of the Roman Catholic hierarchy on the National Council Advisory Committee on Education in England. It was not until I had been there for several years that I discovered that the hierarchy of the Church which had nominated me lived in the most harmonious day-to-day relations with the Ministry, had no need of my help, never sent me a brief, and presently forgot my existence; and when I retired, did not notice it. I think it most likely that the hierarchy is still on the excellent terms with the Ministry that it was when I unobtrusively left my post. And I do not think that I can add very much in a conference like this, except to comment a little on the noble Viscount's lead.
I thought that he was telling us that there are three kinds of religious education involved. Those Churches which have denominational schools, like the Church to which we both belong, give religious education in the manner they wish; but they have a great many of their children in schools which are State schools, and I thought the noble Viscount said, and I believe it to be correct, that in secondary schools there is a right of entry of the representatives of denominations (the Roman Catholic, in my own case) by arrangement with the authorities of the school to impart specific instruction, which I understand in our case is something quite different from the broad aspirations of tolerance and understanding of other faiths. Our instruction is particular, and I hold that it must be so.
I have noticed that there are two principles for dealing with mixed gatherings of people with different religions. There is the Boy Scout principle, where every denomination is invited to worship in its own way, without any impairment of the unity in the Boy Scout movement. Then there is something more like the Y.M.C.A., which holds ceremonies of an inter-denominational or non-denominational character. I have always held that for everybody the soundest thing, pending universal unity, is to let people worship and teach their people as they wish, under denominational control. That does not mean, to my mind, impairing unity.

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I do not wish to be anything but a Briton, and Britain is for the most part a Protestant country; it certainly is not a Catholic country. I like unity. I have enjoyed a splendid unity m my regiment, where there are few Catholics. Nevertheless, I still feel that denominational education is right. Some people have said: let children be taught other faiths. I have examined other faiths. I have been round the Holy City of Benares and talked to people there. I have talked to a man who had been twenty years a priest of my own faith and asked him if he understood what this religion was. He said that he had studied it for twenty years and he was only at the beginning. I do not think that we can inflict this on our children.
I have many Moslem friends—in a sense I can say that I have two or three million of them, but I correspond with one or two, with whom I am on excellent terms. I have one Moslem friend in Delhi who stays up on Christmas night to be in a sense in harmony with me, because it is the night on which Christ was born. I do not think that compassion, friendliness, good comradeship and unity require one to abandon denominational teaching.
When Roman Catholics go into a school, we go in for specific reasons. We teach about the Seven Deadly Sins. We tell the children of the seven Sacraments and we prepare them for the Sacrament of Confession and of Holy Communion. And we do it in a way which none but the Roman Catholic Church can do. It is not done in a spirit of animosity or of censorship of the Jew or Moslem or Hindu or the Protestant next door. It is the way we teach the difference between right and wrong, to which the noble Lord, Lord Garnsworthy, referred several times. I think that what the noble Viscount was suggesting was that whereas there is the right to go into secondary schools and impart specific instruction, there is no such right to go into elementary schools. If this is not so, no doubt the Minister who replies will indicate where I have misunderstood. The noble Viscount asked that what happens in the secondary schools should be extended in regard to primary schools.
He also asked that this right should be extended to every other religion and, I understood him to say, to non-religions, which I understand is ethics. There we
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get into tremendous difficulties. I do not see how this could be undertaken. Either we have a religion which exists or we impart a religion which we have invented, or we expose ourselves to a variety of other people claiming the right to impart instruction. While I could not agree more with the noble Viscount that parents should have the right to say what religion is imparted to their children and that in their older years that right should pass to the child, I do not see how this business of imparting ethics can be done. I think that instead of Aristotle we might find Scientology, or something of that kind, introduced, and we should have difficulty in excluding things about whose value in unifying the community we have great doubts.
However, perhaps the Minister will say whether he is in sympathy with the noble Viscount's proposal that religious denominations which at present have no right to enter primary schools and impart their specific instruction should be accorded either that right or an enablement which entitles them to negotiate with the schools in question. I do not think that in our case the duty to give instruction would be given to anybody but a nun or parish priest and they would give instruction in the seven Sacraments, and that is all. I apologise for intervening in this debate in a rather incompetent and out-of-date manner.
7.38 p.m.
LORD SOMERS: My Lords, I, too, should like to thank my noble friend Lord Monckton of Brenchley for having raised this Question to-night, because it is one which urgently needs answering. It deals mainly with primary schools and that, to me, is of great importance, because I believe that if religious education is to be given at all, it must start when a child is very young. It need not be over-sectarian. It need be only of the most elementary, non-sectarian nature, but it should begin most definitely at an early age. Later on, when a child reaches the age of 16 or so he is able to choose for himself which sect he wishes to belong to. This is generally the same as that of his parents, although not always.
My noble friend raised the problem which exists to-day of the great number

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of children in our primary schools who are not even of a Christian faith. The problem of those who are practising Jews has, of course, always existed. It existed in the school where I taught for a time—Epsom College. We had two boys there who were allowed not to attend Chapel or receive normal religious education and who went to their own instructor outside. That seems to me to be the obvious way. They did not feel like the odd men out, but felt perfectly content with their own religion. One of them rose to be head of the school one year; and a very fine chap he was. One must remember that the Christian faith and the Jewish faith have a very close connection, one having, so to speak, emerged from the other, and there is not such a wide gap between us. But with faiths like the Moslem, the Buddhist, the Sikh, and others that have been mentioned this evening, the problem is rather different.
When a child is young, there is no doubt about who should say what form of religious instruction the child should have: it should be the parents. The child when very young is incapable of deciding for himself or herself. The child must receive guidance, and that should be guidance given by the parents. I see no reason why there should not be some arrangement for the teachers of these various faiths who are not admitted to school during periods of religious instruction to give their own particular group separate instruction. But I do not think the school should have to be responsible for it or have to organise it. Above all, the State should not have to pay for it. One must remember that these religious instructors have to be paid, and I do not think that that burden should fall on the local education authority. If the parents are anxious that their children should continue in the faith, then I think it is they who should pay for this outside instruction.
My noble friend Lord Monckton said that not all teachers are capable of giving good instruction in religion. I regret to say that that is only too true in every subject. There are bad teachers to be found everywhere, and in every subject. The problem, of course, with our ever-increasing numbers of schools, has
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always been to find really qualified staff. My noble friend mentioned also teaching in humanism. I am a little doubtful about this. I confess that I know absolutely nothing about humanism, but it has always struck me as being rather a euphemism for atheism: in other words, a belief in nothing. I do not think that a child either needs to be, or should be, taught to believe in nothing.
LORD GARNSWORTHY: My Lords, perhaps the noble Lord would allow me to ask him a question. Since he made the point that parents should be able to choose, what does he think ought to happen to the child of a humanist when the humanist endeavours to exercise precisely the same right that the noble Lord is indicating other parents should enjoy?
LORD SOMERS: In that case, if the parents are anxious that the child should receive no religious instruction at all, then I think their wishes should be observed. But the parents are quite capable of teaching the child humanism, and I do not think that the school should necessarily provide that instruction.
LORD GARNSWORTHY: I do not want to labour the point, but are not the parents of the other children equally capable of teaching them?
LORD SOMERS: No. The position is rather different, because the parents may not be fully qualified to teach in that way. The noble Lord, Lord Garns-worthy, mentioned the fact that the National Union of Teachers oppose corporate worship of any kind.
LORD GARNSWORTHY: I must interrupt on a point of correction. I did not say that. If the noble Lord will read Hansard, he will see clearly that I did not.
LORD SOMERS: I am sorry if I made a mistake; I must have misheard the noble Lord. This is something that I feel is necessary. Corporate worship need not be sectarian, and if any parents object to their child attending corporate worship, of course their wishes should be observed.
I was interested to hear the speech of the right reverend Prelate the Bishop of Rochester, particularly as an uncle of mine was one of his predecessors at

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Rochester. I agree entirely with everything that he said.
The noble Lord, Lord Beaumont of Whitley, thought that instruction is more difficult in primary schools than in secondary schools. I do not think I agree with that, because instruction in primary schools is only on the very basic elements of Christianity: it does not go into the rather more complicated forms of sectarian instruction, or anything like that. I think that, on the whole, it is much easier to be inter-sectarian in a primary school than in a secondary school.
My noble friend Lord Lytton pointed out the difference between acceptance of another person's faith and friendship with the person who has that faith. I have had the same experience. One of the members of the Iran Parliament who came over here on a visit has been a firm friend of mine ever since, and one of the most touching experiences I have had was to receive a Christmas card from him two years ago. This shows that there need not be any barrier but that, on the other hand, there need be no acceptance of everything. You cannot accept the truth of every faith under the sun; you must have your own convictions. Nevertheless, tolerance of others and respect for their views is essential. I feel that the question of religious education of the very young is of vital importance, and therefore I sincerely hope that what my noble friend and others have said tonight will be taken note of.
7.49 p.m.
LORD JANNER: My Lords, I, too, am indebted, as I am sure everybody in the House is, to the noble Viscount, Lord Monckton of Brenchley, for having introduced this subject. It is an extremely important subject, and I am only sorry that I am intervening at such a late hour and consequently feel that I must confine my remarks within as short a space as I can. I appreciate, as does every sane human being, that it is highly essential that there should be an understanding between the various religious denominations and of the various religious ideals, and that there should be respect for the susceptibilities of people who belong to different denominations and different religions.
I speak of course as a Jew. My coreligionists have for centuries regarded
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religious education as being something of vital importance to the up-building of the morals and the understanding of the members of our particular religion. The name which was used for a synagogue was often shool which really meant a school. The synagogue itself was considered to be a place in which education would be encouraged and developed. I am strongly of the opinion that what has kept the Jewish community together throughout the ages is the religious education which people from the youngest age upwards received, and the parental control and guidance that they received. Consequently I feel—and I cannot speak, obviously, on behalf of all my coreligionists but of the vast majority—that what was provided in the 1944 Act granting possibilities to pupils of various religious sections to have their own particular religious training was an extremely important provision. I also feel that we are indebted to most of the heads of the secondary schools for the manner in which they have regarded the importance of that provision and have acted during the years that have intervened.
So I come again to the same conclusion as the noble Lord, Lord Somers, and others, who have expressed themselves in respect of this opportunity for religious training to be given starting right from the primary school. I would go further. I would say that in places where a community are prepared to provide denominational nursery schools some kind of assistance should be given by the State to the denomination concerned. It seems to me that by understanding one's own religion, provided that it is a civilised religion (and most of them are), one develops an understanding for religions of another denomination or kind. A child is brought up with certain religious ideas at home. The noble Lord, Lord Somers, has said that perhaps the parents are not sufficiently able to inculcate into the child the ideas and ideals which lie behind their religious point of view. But there is no doubt at all that the home is the basis of the education of the child and its future. Consequently, when the child goes to a school it should have the opportunity of being taught to understand what the religion of its home really means.
I do not want to delay the House longer than I can help, but there are one

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or two things I should like to comment upon that might be considered by the Government when they prepare a new Education Act. I have said already that county primary schools should offer the same right of entry as is currently provided under the 1944 Act for county secondary schools, to enable denominational teachers or ministers of religion to give denominational instruction on school premises. I would say, too, as was indicated in a memorandum of the Board of Deputies of British Jews, which is the representative body of British Jewry, that where colleges of further education or sixth form colleges are providing all-day courses for senior pupils from county secondary schools, the same provision for denominational religious education should be applicable and available as in the secondary schools themselves.
There are some suggestions (though it is too late this evening to deal with them in detail) that fresh arrangements might be made in so far as denominational schools are concerned whereby, instead of regarding the approach in the way that it is at present in areas where there is a large section of people of a particular religious denomination, several councils, rather than one particular council, should have the right, or should be authorised, to deal from a financial point of view with the provision of facilities for a denominational school. These are matters of administration, which one hopes to have an opportunity of discussing when proposals are made for amending the present Act.
My Lords, I conclude with this thought. The proper upbringing of a child in its own religious beliefs is something which places that child on the proper path of conduct for its life. I say with a considerable amount of pride that it has proved in my own community that it has succeeded in preventing a considerable amount of juvenile delinquency. It is the religious basis and the Jewish home that has produced this result. Whatever provision we can make to enable the child—of whatever denomination he may be—to be brought up and to understand his own religion is all for the good. The matter is of particular importance now that we have the new immigration population in the country; and they too, I am quite sure, would want similar opportunities.
7.59 p.m.
LORD TAYLOR OF GRYFE: My Lords, like other noble Lords who have spoken, I should like to apologise for detaining your Lordships so late to-night. I should like to express my appreciation to the noble Viscount who has introduced this subject. I am sure that, while only a small number of your Lordships have been present, he must have been encouraged by the fact that this subject has stimulated a good deal of interesting comment and wise words. I hope it will not be considered irrelevant if what I have to say refers specifically to my experience in local authority North of the Border. I can assure your Lordships that, while the question of religious instruction does not cause a great deal of excitement in your Lordships' House, it is in the City of Glasgow, and in the forthcoming municipal elections, probably the most vital issue which will be debated, for reasons which I will explain. But I am appreciative of the fact that this subject has been introduced to the House at this stage because it enables me to dwell on some of these points.
I hope that the noble Lord who is to reply will not feel inhibited by the fact that this matter is dealt with in a separate Act for Scotland from that which has been mentioned in the debate to-day. I would hope that the wise and tolerant words that have been spoken in this debate were said more loudly in the rather turbulent and violent city where I live, because the question of religious instruction in school is a major divisive element in our community. The fact is that in the City of Glasgow we have a very large immigrant population of Pakistani children, and we have a substantial Jewish community. It is predominantly a Protestant city; but there is provision for separate education for Roman Catholic children. This provision is jealously guarded by the hierarchy of the Roman Catholic Church. I would hope that the spirit of unity which has been preached here to-day, and the great and increasing interest in ecumenical relations between the Churches, were accepted to a greater extent in Glasgow. The insistence on separate schools for Roman Catholic children, as against all the other children who are able to be educated in the other council schools, is, as I say, an important divisive element in our community. Children at a very early

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age develop allegiances to groups which run right through the whole of the community. A good deal of the violence in our city can be attributed to the fact that the community in itself is a divided community from the beginning.
In addition, the fact that there are separate schools, and the number of teachers available for Roman Catholic schools is limited, means that the opportunities for reasonable education for Roman Catholic children are much diminished. I think in my own county it is estimated that the ratio of Roman Catholic teachers to Protestant teachers is something like one to nine; and most Roman Catholic children who are seeking secondary education are not given the same educational opportunities as Protestant children because the facilities are not there; the teachers are not there. It has been said in fact by some representatives of the Church that this is of lesser importance than the separateness of the schools.
I have been much encouraged by what I have heard in this House to-night from the noble Viscount and the noble Earl who spoke from the Cross-Benches, of their desire to see a unity in the approach to this problem. I would hope that this sense of tolerance and unity and understanding of each other's faiths, and respect for each other's faiths, would be accepted on a wider scale. I say this because I appreciate to the full, and subscribe to the full to, the concern of the noble Viscount who introduced this discussion—his concern that our children should be made increasingly aware of the great moral teachings which belong to the Christian faith. I subscribe to that completely. But I do not think it best serves either the education of children, or the unity which in fact embraces the Christian faith, if this continued insistence on separateness is demanded.
THE EARL OF LYTTON: My Lords, I am grateful to the noble Lord for giving way, but I have a little experience at the back of my mind of many years ago of running a working boys' club in South-East London in a Catholic community. I was unaware of the divisiveness of which the noble Lord speaks as an integral part of denominational education which exists there. I thought everybody was on very good terms. I am asking
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whether there is something peculiar about Glasgow, as we all know there is about Belfast.
LORD TAYLOR OF GRYFE: My Lords, I think there is something peculiar about Glasgow. I am sorry that the noble Lord, Lord O'Neill of the Maine, is not present in our House to-night for he would probably tell you that the same disease exists in Belfast with disastrous results. I think the separateness of schoolchildren at an early stage, separated into the respective religious communities, is a bad thing and a divisive thing. I say that, not because I am against religious instructions in schools at all. I am a Christian, I hope a practising Christian, with all my limitations. But I do feel that it does not serve the purpose of the advancement of religious thought and tolerance to continue to insist on the kind of conditions which I have described.
8.7 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF EDUCATION AND SCIENCE (LORD BELSTEAD): My Lords, the noble Lord, Lord Beaumont of Whitley, said that it had been his impression that there might be a rather more lazy time in educational circumstances to-day. I assure the noble Lord that the resources which have so far been gained by my right honourable friend for the school building programme are nit going to give some people whose work lies with the Department of Education and Science a particularly lazy time, and I shall be delighted if that attitude to education rubs off on your Lordships in your Lordships' House. The noble Lord also asked if I would give him a reply about the 1944 Act. Of course we are this evening dealing with a part, a most important part, of the 1944 Act, and I hope that in the very brief time available to me I shall be able to indicate to your Lordships how Her Majesty's Government feel about this part of the Act. But as regards the rest of that great measure, it is not possible for me to give a reply to the noble Lord this evening, although of course I am at the noble Lord's disposal if he cares to put down a Question at any other time.
My Lords, I am grateful to the noble Viscount, Lord Monckton of Brenchley, for drawing attention to the importance of

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religious and moral education this evening, and also for the preparation of a Paper which the noble Viscount kindly allowed me to have, which contains at any rate some of the opinions which he put to your Lordships this evening. I am sure the House would agree with the objectives for religious education in the final paragraph of that Paper. I quote:
"It must comprehend and respect all classes and races, all types of religious belief and non-belief whilst assisting students to view others with tolerance and understanding. It must be a system dedicated to respecting individual integrity whilst assisting all to live in a single community."
Certainly on behalf of Her Majesty's Government I would say we are agreed about basic needs and objectives. But I am very doubtful whether the detailed proposals put forward by the noble Viscount are administratively practicable or perhaps in line with current developments in religious education, and indeed in primary education in general.
In 1944 the teacher was seen largely as an instructor or as a giver of information, and this information was often divided into separate entries on the timetable. It was the Plowden Report which showed us that increasingly the teacher seeks to stimulate learning, while separate subjects have been merged into the "integrated day". I think I can rest on the authority of the right reverend Prelate the Bishop of Rochester when I hold that teachers have felt more and more that religious education, which has natural links with every subject in the curriculum, should not remain isolated from this process. The House may be interested to hear that a recent survey carried out by Her Majesty's Inspectors, but not yet published, shows that in infants and first schools where religious education was regarded by the H.M.I.s as being well taught, it was rare to find it separately timetabled, and that there was a similar pattern in about half the junior schools which were in the survey sample.
My doubts are reinforced by the development of religious education within the framework of the 1944 Act and within the curriculum framework which I have sought to outline in these few words. The noble Lord, Lord Garnsworthy, may be interested when I say that the past five years have seen the increasingly rapid
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adoption by local education authorities, through normal legal procedure and led by the largest—the West Riding, London and Lancashire—of syllabuses of a rather new type which take into account the findings of research and the new situation in schools. The evidence is that they are already having many of the beneficial effects to which the noble Viscount referred in his speech, and these new syllabuses are making greater demands on the professional skill and freedom of the teacher.
Research in moral or, to use the words of the Paper which the noble Viscount kindly let me have, "ethical" education—an expression which has been used by other noble Lords—is currently being carried out at Oxford, where the Farmington Trust is carrying out a long-term project into the philosophical basis of moral action and education, and the Schools Council has a project on school methods. Important work has also been done at colleges of education at Exeter and Nottingham. This work leads to conclusions similar to those which I have put to your Lordships in connection with religious education: that moral education is something which cannot be isolated; it is a matter of obtaining acceptance of standards by pupils. It is inescapably the concern of teachers, and on this last ground alone I feel that a separate programme of ethical education could be looked upon as a retrograde step.
I would go further, and say that the adoption of a system of separate programmes of religious and ethical instruction would really involve much closer central control of the curriculum than has been acceptable in this country in the past. I bear in mind the remarks which the noble Lord, Lord Garnsworthy, put to me from the other side of the House. Even the agreed syllabus system which represents the closest control ever exercised is based on local control and is, after all, subject to local modification—at least, when it is run at its best.
May I now put the administrative side of this case to your Lordships? I was most grateful to the right reverend Prelate the Bishop of Rochester for his clarification to the House on the subject of controlled schools, and I ask your Lordships to forgive me if, just for a

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moment, I stretch your Lordships' patience by following the right reverend Prelate on the present structure, so that we shall have no misunderstanding.
As your Lordships know, there are two main categories of school in the maintained system: "county" schools, established by the local education authority, and "voluntary" schools, established by voluntary bodies. But the voluntary schools are sub-divided into aided, controlled and special agreement schools, with different provisions about administration and religious instruction. In county and voluntary controlled schools the staple religious instruction continues to be nondenominational and is given in accordance with the agreed syllabus drawn up by representatives of the Churches, the teachers and the local education authorities, although in certain circumstances voluntary-controlled schools have power to provide denominational instruction on request. In the voluntary-aided and special agreement schools, religious instruction is under the control of the managers or governors and is normally given, as we know, on denominational lines.
The noble Viscount referred to the fact that the denominations were happy with the position in aided schools. But may I just say that it is within the knowledge of Her Majesty's Government that great efforts have to be made to-day by managers and governors of aided schools of all sorts, and Her Majesty's Government are appreciative of the responsibility and the care for those schools which these bodies continue to give.
In maintained schools, of course, safeguards are provided for parents who, for reasons of conscience, do not want their children to take part in the religious activities of the school. They may, if they wish, have their children excused from instruction and acts of worship. The protection of conscience extends also to parents who are not content merely to have their children excused from taking part in the religious instruction given by the school, but wish them to receive some other form of religious instruction. That is of course what so many noble Lords have referred to this evening. Under the proviso to Section 26 of the 1944 Act parents may arrange to have their children withdrawn, with the concurrence of the local education authority, to receive
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alternative religious instruction elsewhere, but of course it must be given outside the school. The reason for insisting that alternative religious education should be given outside the school is connected with the potential objections, on the one hand, to the using of county school premises for denominational purposes, and on the other hand to using premises provided by one Church for giving instruction in the beliefs of another. Such objections may arise, even in these days when people are striving toward ecumenical co-operation.
This rule admits of only one exception. That is in the case of a county secondary school which is so situated that arrangements cannot conveniently be made for the alternative religious instruction off the school premises. In these circumstances the alternative religious instruction may be made available on the school premises, again with the concurrence of the local education authority, but the cost of making the arrangements must, under the Act, be wholly met by the parents themselves.
I do not know whether it is generally known that this "right of entry" does not extend to primary schools. This is because the 1944 Act assumed that a child will attend a primary school near enough to home and church for it to be possible to receive denominational teaching, if required, at the local church. Secondary schools, on the other hand, may be located in compromise positions between two or more villages, and not really convenient for either. I would suggest to your Lordships that it is part of the basis of the noble Viscount's Question that the "right of entry" should extend to primary schools. I have tried to describe reasons why the Government believe that this would not necessarily forward the progress of religious education at the present time—bearing in mind, of course, that there is the right of withdrawal from—
LORD JANNER: My Lords, I am much obliged to the noble Lord for giving way. I should like to ask him whether he does not realise that if a child has to get a religious education other than at school, it means that that child has to spend more time after school hours in order to be given that religious education. That situation certainly prevails in regard to Jewish children and I am sure it does in regard to other children. Therefore it

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is really more practical, from the point of view of not straining a child's energy, to allow the child to be given some kind of religious education in the primary school itself.
LORD BELSTEAD: My Lords, I thank the noble Lord for putting that point. He is, of course, referring to the school which is not near enough to the place where the child would be receiving the alternative religious education, so that the time when the child is withdrawn is not in fact a suitable or convenient moment for the alternative religious education to be given. I assume that the noble Lord was referring to that, and I agree that there is a point here which the noble Lord and the whole House, I believe, most certainly appreciate.
LORD GARNSWORTHY: My Lords, I would not interrupt the noble Lord but for the fact that he has already been interrupted. He has drawn attention to the special provision that obtains in regard to primary schools. He has indicated that it is because the primary school is located near the home, but I would point out that throughout the country a different situation is now developing, the organisation of the first and middle schools. The middle schools are much larger entities than the old junior schools used to be, or indeed are at the present time. Children will be drawn from a very wide catchment area. I do not know whether the noble Lord can indicate whether any thought has been given to this because, regardless of any other consideration, it seems to me to introduce an element that has not existed at this age level heretofore.
LORD BELSTEAD: My Lords, this is what I meant when I said that the noble Lord, Lord Janner, and the House are on to a point. Some middle schools of course can be designated primary, but I know that I am quibbling in saying that. Most can be designated secondary. I quite acknowledge that there is a point here.
The noble Lord, Lord Janner, intervened when I was just about to put to your Lordships this point, which many other noble Lords have put. In schools opportunities are increasingly being provided for all pupils to learn more about the various faiths represented in the
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school, both through teaching and through joint or observed acts of worship, all of which will help to promote the tolerance and understanding necessary among children of different faiths and cultural backgrounds. I am aware that in his speech the noble Viscount, Lord Monckton, made the point that what he wanted to see was, at its best, children having first of all a knowledge of their own religion, but also a knowledge of other religions. In a nutshell, I am saying that I agree with this objective; and that the religious education developments are aimed precisely at this objective. And I would ask the noble Viscount not to overestimate the percentage who wish to withdraw their children. I had an opportunity to visit schools in the middle of England with a high immigrant population, and was extremely interested, in talking to the teachers, to learn what percentage of children were in fact withdrawn. It was a great tribute to many of the teachers to find that so few were. I am speaking, of course, of schools with a high immigrant population.
VISCOUNT MONCKTON OF BRENCHLEY: My Lords, I must come back on that particular point. The reason why most of them do not withdraw from religious education which is not their own is because of the examinations they know that they will have to take.
LORD BELSTEAD: My Lords, I do not know that I follow the noble Viscount on that point, so I will pass on, unless he wishes to take it up again.
In addition to what I have said, there are practical difficulties (to which the right reverend Prelate the Bishop of Rochester drew attention) in the matter of reserve teachers; and the noble Lord, Lord Somers, drew attention in his general reservations to the financial burden that he would not wish to see fall upon local education authorities. Those voluntary schools which are required by their trust deed to provide a certain kind of denominational instruction would no doubt have some reservations about making their premises available for the propagation of other religious beliefs.
A similar difficulty should not of course arise in the case of county schools, but there would still be practical difficulties about making different forms of

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religious education available on request. In schools where several different faiths and sects were represented it would be administratively inconvenient, if not impossible, to arrange separate religious education for all the different faiths in a sector of education (we are talking this evening about primary schools) where often the size of schools alone requires that all teachers are asked to become involved in religious education. A limited provision for the larger schools might well lead to charges of discrimination which it might be difficult to refute.
Perhaps I might ask the noble Lord, Lord Janner, whether he understands that it is particularly in the light of those practical reservations that the suggestions which he made at the end of his speech must be considered, and I assure him they will be considered by my right honourable friend. The noble Viscount, Lord Monckton of Brenchley, asked Her Majesty's Government to take another look at that whole area of the 1944 Act.
May I rejoin that the two important reports which have been referred to this evening do just this. The first was published by the Social Morality Council, a body of influential men of all creeds who are united in concern for the moral and spiritual wellbeing of this country. Its president is Bishop B. C. Butler, the Roman Catholic Auxiliary Bishop of Westminster. Its vice-president is Lord Ritchie-Calder, and its executive committee includes two other Members of this House, the Lord Bishop of Durham and the reverend Lord Soper. They set up a working party which was equally broadly based, and it produced just a year ago a most valuable report on Religious and Moral Education in County Schools.
This report defined the aim of religious education as
"… to enable a boy or girl to have a proper understanding of what is meant by a religious approach to life",
and it added:
"one of the results of religious education should be to create in boys and girls a more sensitive understanding of their own beliefs and of the beliefs by which others govern their lives".
These words, I think the House would agree, are closely parallel to those that I quoted from the document which the
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noble Viscount kindly let me have before this debate, and indicate the same ultimate aim as that of the noble Viscount. The means recommended, however, are not separate instruction for those from different backgrounds, but "open" religious education in which all can take part together, as the report is careful to point out, in a spirit of respect for "the integrity and distinctiveness of each tradition".
Abount a month after that report from the Social Morality Council there appeared the equally important document known as The Fourth R; The Durham Report on Religious Education", prepared by an Anglican Commission, under the chairmanship of the right reverend Prelate the Lord Bishop of Durham. Perhaps the most significant point about this report is that, although it was produced by a purely Anglican body, it came to almost exactly the same basic conclusions as the more widely based S.M.C. working party: and that, I understand, without any collusion. The report defines the aim of religious education as being:
"to explore the place and significance of religion in human life and so to make a distinctive contribution to each pupil's search for a faith by which to live."
Again, it recommends the "open" approach in which all can join, emphasising this by saying:
"The teacher is thus seeking rather to initiate his pupils into knowledge which he encourages them to explore and appreciate, than into a system of belief which he requires them to accept."
In addition, a number of research projects are hard at work trying to produce practical help for the school and the individual teacher, and my own Department has just published a small pamphlet called, Prospects and Problems for Religious Education.
The noble Lord, Lord Garnsworthy, referred in his speech to the need for us not to be complacent, and only to accept a policy of no change if we are confident: that society to-day warrants that confidence. I hope that I may have said enough to indicate that, while Her Majesty's Government are deeply concerned about the issues which have been raised, and shire many of the ultimate objectives of the noble Viscount, Lord Monckton, it is none the less felt that the way forward does not lie so much with separate instruction for all those of

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different backgrounds but that the widest possible support (to which the right reverend Prelate the Bishop of Rochester referred) may lie in the development of religious education along the lines envisaged by the two major reports to which I have just referred.
LORD GARNSWORTHY: My Lords, I have no interest in the Social Morality Council, other than an educational interest. I wonder whether the noble Lord could confirm that they are shortly to issue another report covering religious education in primary schools particularly. It might be helpful to those of your Lordships' House who are interested in this subject if the noble Lord could confirm that. I am not in the habit of doing "commercials", and as I say I have no interest. But it strikes me that it may be helpful.
LORD BELSTEAD: My Lords, I am sorry, the noble Lord has caught me out. I think he is right, but I cannot confirm it "off the cuff". I will certainly write to him.

NEW BROKEN HILL CONSOLIDATED LIMITED BILL [H.L.]
Reported, with Amendments.
GREATER LONDON COUNCIL (GENERAL POWERS) (No. 2) BILL
Brought from the Commons; read 1a, and referred to the Examiners.
  MANPOWER NEEDS AND IMMIGRANT WORKERS
  MANPOWER NEEDS AND IMMIGRANT WORKERS
  FOOD RESEARCH ASSOCIATIONS
  FOOD RESEARCH ASSOCIATIONS