Sitting of 8 June 1972

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

PRIVATE BUSINESS
THAMES BARRIER AND FLOOD PREVENTION BILL
[Queen's Consent, on behalf of the Crown, signified]
Read the Third time and passed.

ORAL ANSWERS TO QUESTIONS
  NORTHERN IRELAND

    Internees (Personal Records)
    Mr. Leslie Huckfieldasked the Secretary of State for Northern Ireland what access to their own personal records is allowed to internees.
    The Under-Secretary of State for Northern Ireland (Mr. David Howell): An internee is not given access to his records but when appearing before the Advisory Committee is provided with a summary of the grounds for his internment.
    Mr. Huckfield: I am grateful to the Under-Secretary for that information. Will he say who else has access to these files, what provision is made for their updating and erasure and who else can get hold of this information after an internee has been released?
    Mr. Howell: Full particulars of these files are held by the police, and by the police only. The Ministry of Home Affairs also has some identification particulars, as does the governor of the internment centre. But the police, and the police only, have full particulars and they keep them up to date.

    Released Internees
    Mr. Pounderasked the Secretary of State for Northern Ireland what is the latest figure of persons who have been released from internment who have, since their release, engaged in terrorist activity necessitating their their rearrest or redetention.
    The Secretary of State for Northern Ireland (Mr. William Whitelaw): One person released from internment has been arrested in connection with an armed robbery.
    Mr. Pounder: Has my right hon. Friend seen the recent reports in some of the national newspapers suggesting that between one-quarter and one-third of released internees have in one way or another returned to their former haunts and, perhaps, in some cases to their former habits? Is he aware of the acute anxiety and, indeed, anger which the policy of rapid disinternment is causing among the security forces and the majority in Northern Ireland?
    Mr. Whitelaw: I am naturally aware of the anxieties to which my hon. Friend refers. I have no evidence to support these allegations. If there is evidence of this kind and if the national newspapers concerned have evidence of it, I hope that they will give me personally the facts and figures, with the names of the people concerned. It is only fair to me that if these allegations are made they should be substantiated, from wherever they come, with actual facts about the people concerned.
    Mr. McManus: May I ask the Secretary of State, in view of the fact that there is at least some sort of provision in the Special Powers Act—awful legislation that it is—for compensation, what plans he has or what arrangements he has made to compensate the wives—
    Mr. Speaker: Order. That does not arise out of the Question.
    Mr. Kilfedder: My right hon. Friend has said that he would welcome any information and evidence, but is he aware that it has been reported in the Press that many internees, when released, have said that they will return to terrorist activities, and is there not enough evidence in the number of soldiers, police

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    and civilians who have been killed since 24th March?
    Mr. Whitelaw: I do not think that can be right. As much as anyone else, and perhaps more than most, I deeply regret any killings and any violence that continues. But I cannot for a moment accept that these have been due to people who have been released from internment unless I am given the evidence of the facts. I think I am entitled to say that, because I may have rather more information than some of those who make these allegations. I have no evidence of these particular allegations that are being made. If they can be supported with facts, I shall be very ready to receive those facts.
    Mr. Merlyn Rees: Is it not the case that many of the people interned did not engage in terrorist activities in the first instance?
    Mr. Whitelaw: I cannot prove that either. But as I am asking for facts, I must stick to it. All I can say is that I have personally examined the facts of every single case I have released before coming to my decision. I may have been wrong. I may be proved to be wrong. If I am, I shall be properly held to have been wrong, and I understand that. But, at the same time, if I examine the cases and believe that it is right on security grounds to release these people, that is the decision I have taken. At this time I have no reason to doubt that I have been correct.
    Rev. Ian Paisley: Have any of the prominent politicians who have made these accusations in Northern Ireland about detainees and internees returning to subversive activities—including the ex-Prime Minister of Northern Ireland, who made a long statement today about the matter—ever brought concrete evidence or asked the Secretary of State to investigate particular cases?
    Mr. Whitelaw: No, Sir, they have not.

    National Health Service (Parliamentary Commissioner)
    Dr. Millerasked the Secretary of State for Northern Ireland what are his plans for the appointing of a Parliamentary Commissioner for the National Health Service in Northern Ireland; and if he will make a statement.
    The Minister of State for Northern Ireland (Mr. Paul Channon): None, Sir. The Northern Ireland Commissioner for Complaints exercises, in relation to health service bodies, functions similar to those now proposed for a Health Service Commissioner in Great Britain.
    Dr. Miller: This is rather a grave disappointment. Is the hon. Gentleman aware that what could be provided here would be a method of ascertaining the truth of many disturbing accusations that members of the medical profession are engaged in uncivilised methods of obtaining information from people who have not yet stood trial and who are not accused of any crime?
    Mr. Channon: I think the hon. Gentleman may have misunderstood my reply. The Commissioner for Complaints already exercises the functions in Northern Ireland that are now proposed for Great Britain.
    Mr. Molyneaux: Has my hon. Friend read the article in Public Administration indicating that Northern Ireland is very far ahead of Great Britain in this matter of investigating complaints, particularly in the National Health Service—one example is the Northern Ireland Mental Health Tribunal set up in 1948—and suggesting that Great Britain should catch up?
    Mr. Channon: I have not read the article but I am glad to confirm what my hon. Friend has said.
    Dr. Miller: On a point of order, Mr. Speaker. I must apologise but there was a lot of noise going on at the time and I took from what the Minister of State said that there would not be in Northern Ireland the same kind of provisions that we are to apply in Great Britain. Is imply could not hear. I thought that was what he said. May I say in that case—[Interruption.] There was a lot of noise and I must press the point. I just could not hear. [Interruption.] There was a lot of noise—
    Mr. Speaker: Order. Sometimes I wish that I could not hear. But if the hon. Gentleman has a substantive point of order, I would rather he raised it at the end of Questions so that we can get on now.

    Agriculture
    Mr. O'Halloranasked the Secretary of State for Northern Ireland what estimate has been made of the effect on agriculture in the event of entry to the European Economic Community; and what consultations he has had with the Irish Republic regarding a common policy for agriculture.
    Mr. David Howell: An assessment of the effect on agriculture in Northern Ireland of United Kingdom entry into the European Economic Community was made in a White Paper (Cmd. 563) entitled" Northern Ireland and the European Communities" which was presented to Parliament at Stormont in November, 1971.
    My right hon. Friend has had no consultations with the Irish Republic on a common policy for agriculture, but discussions are taking place between officials of the Ministry of Agriculture of Northern Ireland, the Ministry of Agriculture, Fisheries and Food and the Irish Republic on matters of common interest.
    Mr. O'Halloran: I am grateful to the hon. Gentleman for that detailed reply. Will he give an assurance that these relations with Dublin will continue all the time?
    Mr. Howell: I certainly give the assurance that these talks on matters of common interest will continue.

    Employment
    Mr. Duffyasked the Secretary of State for Northern Ireland how many new jobs were provided in Northern Ireland last year; and what proportion were created west of the Bann.
    Mr. Channon: During 1971 agreements were negotiated by the Ministry of Commerce for the creation of a further 7,200 jobs in Government-assisted manufacturing projects. Of these jobs 35 per cent, were in projects west of the Bann.
    Mr. Duffy: Is the hon. Gentleman aware that that information confirms, all too sadly, the imbalance of job opportunities existing on either side of the Bann between Belfast and the Derry hinterland? This has constituted in the past a major source of discontent on the part of the minority. If the hon. Gentleman is to
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    provide a more balanced distribution of jobs in future, he will have to pursue vigorous and dramatic policies of redress.
    Mr. Channon: My right hon. Friend is determined to do all in his power to help the employment situation in all parts of Northern Ireland. I am not sure that the figures quoted by the hon. Gentleman bear out his thesis. Thirty-five per cent, of jobs were in areas west of the Bann and that area represents only 27 per cent, of the population of Northern Ireland.
    Rev. Ian Paisley: How many jobs have been lost west of the Bann as a result of terrorist activity? Does not the hon. Gentleman feel that the continuation of this terrorist activity is jeopardising the economy of Northern Ireland and the provision of many more jobs that could be available for the people of all sections of the community?
    Mr. Channon: The hon. Gentleman is right. If terrorist activity goes on, the future and economic prospects of the whole Province and of all sections of the population will be in grave danger.

    Schools (Military Use)
    Mr. Douglasasked the Secretary of State for Northern Ireland if he will list the number of schools in Northern Ireland which are at present used partially or wholly for military purposes.
    Mr. Channon: No schools in Northern Ireland are used wholly for military purposes. The army at present has part use of the premises of four schools.
    Mr. Douglas: Does the hon. Gentleman accept that this is a quite serious situation, because young people in Northern Ireland are seeing all around them activities of a military or paramilitary nature and this is poisoning their minds for the future? If the Army is in any way inhabiting their schools, can the hon. Gentleman take urgent steps to see, all other things being equal, that it is removed from schools as soon as possible?
    Mr. Channon: I agree with the first part of what the hon. Gentleman has said. Certainly I am sure that the Army does not wish to occupy schools any longer than necessary, but the hon. Gentleman will agree that, in the present security situation, if it is right in the

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    interests of security for the Army to occupy this very small number of schools, it must be left to the judgment of the commanders on the spot.

    Payment for Debt (Emergency Provisions) Act, 1971
    Mr. Meacherasked the Secretary of State for Northern Ireland if he will take steps to repeal the Payment for Debt (Emergency Provisions) Act, 1971.
    Mr. Channon: No, Sir.
    Mr. Meacher: Does not the hon. Gentleman agree that maintaining this provocative and retrospective Stormont-produced Measure is incompatible with the aims of the Secretary of State's initiative and that the value of the sums recovered is easily outweighed by the political damage done? Since the rent strike shows no signs of faltering, would not a display of magnanimity in repealing the Measure prove far more rewarding in the long run?
    Mr. Channon: No, Sir. I think that to do such a thing would be an intolerable affront to vast numbers of people who have continued, some under grave provocation, to pay their rent. Surely everyone here agrees that services in every community have to be paid for and that people in all sections of the community must realise their obligations for the payment of such services.
    Mr. Mather: How much has been collected under this Measure and how much remains to be collected?
    Mr. Channon: Approximately £1 million is now owed in rent and rates. The average weekly recovery is about £35,000.
    Mr. Hayhoe: Would my hon. Friend agree that the main thing is to get the political measures necessary to bring an end to the rent strike? Is it not the case that there are encouraging signs towards that end?
    Mr. Channon: I entirely agree with my hon. Friend. I think it is being increasingly realised that the civil disobedience campaign must end as one of the requisites of getting the whole community back to normal life.

    Housing
    Mr. Hugh D. Brownasked the Secretary of State for Northern Ireland what is the housing programme of the Northern Ireland Housing Executive; how it compares with house completions in the public sector in the last five years, or any other comparable period; and if he will make a statement.
    Dr. Millerasked the Secretary of State for Northern Ireland what is the target for house building in the public sector in Northern Ireland for the current year.
    Mr. Channon: During 1965–70, 36,000 houses were completed in the public sector. The Northern Ireland Housing Executive's programme for 1970–75 is about 49,000 houses. The Housing Executive hopes to build 10,000 public sector houses in the current financial year.
    Mr. Brown: I welcome the increased housing programme, but is the hon. Gentleman satisfied that the local construction industry can meet the requirements of the programme? Will he see that the influence of the Housing Executive is used on local officials to ensure non-discrimination in the allocation of houses and the abolition of ghettoes based on sectarian beliefs?
    Mr. Channon: I think there is no doubt that the local construction industry can complete the task which the Housing Executive has in mind. As the hon. Gentleman will be aware, the allocation of houses is done by a points system and I do not think there is any evidence of discrimination.
    Mr. Kilfedder: My hon. Friend has mentioned the points system. Will he re-examine this system for the allocation of homes in Northern Ireland, because it is widely believed by a great many people there that it operates against the Protestant population because, generally speaking, Protestant families have a small number of children—an average of three—whereas Roman Catholic families have on average at least six children?
    Mr. Channon: If my hon. Friend has any evidence that the points system is working unfairly, I should be grateful if he would draw it to my attention. I have

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    found no one in Northern Ireland who has made that suggestion to me. Most people think that the system is one of the fairest that could be devised to allocate houses.
    Dr. Miller: Is the hon. Gentleman telling us that there is a new method of allocating houses in Northern Ireland which is non-discriminatory compared with the old method, which was discriminatory? Is he saying that positive steps will be taken to ensure that ghettoes are not developed in the way they were developed in the past?
    Mr. Channon: Regardless of allegations of discrimination in the past, the allocation of housing is nearly completely in the hands of the Northern Ireland Housing Executive. This is an entirely new situation, and I have not had any substantial allegations of discrimination in the allocations.

    Republic of Ireland (Economic Co-operation)
    Mr. McNamaraasked the Secretary of State for Northern Ireland what plans he has for the development of cross-border economic co-operation with the Government of Eire.
    Mr. Simon Mahonasked the Secretary of State for Northern Ireland what plans he has for economic co-operation with the Government of Eire.
    Mr. David Howell: I would refer the hon. Member to the reply I gave the hon. Member for Manchester, Blackley (Mr. Rose) on 4th May.—[Vol. 836, c. 180–1.]
    Mr. McNamara: I thank the hon. Gentleman for his reply and I am aware of the answer which he gave to my hon. Friend. May I draw his attention to the positive need west of the Bann to make up for the backlog of jobs and also for the jobs which are disappearing because of technological changes as well as because of the deplorable terrorist activity? There is here a wonderful opportunity for co-operation between the Republic and the North on the development of jobs west of the Bann and in the Gael Tacht in the common economic interest.
    Mr. Howell: These opportunities are realised by all concerned with regional economic development. As the hon. Gentleman knows, there has long been
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    very active co-operation in such sectors as electricity, tourism, transport and agriculture, and this last category covers important developments like the Foyle Fisheries Company and so on. All these ideas are valid and I take the point which the hon. Gentleman has made.
    Mr. Molyneaux: Would my hon. Friend agree that for a start there could be much closer co-operation in matters of defence and security, which would do much to protect the existing economy of Northern Ireland?
    Mr. Howell: If my hon. Friend is referring to the North-South question, I think there are possibilities. But perhaps that is not what he is referring to. I am not quite sure.
    Mr. McManus: The hon. Gentleman mentioned tourism. May I draw his attention to a case in point? At the moment, people south of the border are making strenuous efforts to link the Erne and Shannon waterways by re-opening a disused waterway. It will cost a considerable sum of money but it would be a tremendous tourist attraction and amenity to County Fermanagh and the surrounding districts. Will the hon. Gentleman give an assurance that he will give all the help he can to the people south of the border who are attempting to do this?
    Mr. Howell: I will bear in mind what the hon. Gentleman has said.
    Mr. Mahon: It should be pointed out more obviously and more generally just how much Ireland as a whole, both Northern Ireland and the Republic, depends on the economy of this country. Is it not important to say that it is only in that way that we shall make progress towards peace and prosperity and not by the pursuit of arms by those who believe in a policy of violence overwhelmingly rejected by the majority of the people of Northern Ireland?
    Mr. Howell: The hon. Gentleman has made a very valid point and it is true that Great Britain, Northern Ireland and the Republic all have a close and intimate economic interest.
    Mr. Biffen: In the context of these two Questions, is it my hon. Friend's view that the Safeguarding of Employment Act should continue well into the future?
    Mr. Howell: This is a matter which is raised in the context of future membership of the EEC and in that context it will have to be looked at.

    Londonderry Commission
    Mr. Thomas Coxasked the Secretary of State for Northern Ireland when he last met the Londonderry Commission.
    Mr. Whitelaw: On 24th April, 1972. When I was in Londonderry last Monday I had discussions with one member of the commission and the general manager, Mr. Bryan.
    Mr. Cox: May I thank the right hon. Gentleman for that reply? In view of the support that many people in Derry are now giving to him and his colleagues, can he give the assurance to the House that to help employment he will see that as much financial aid as possible is forthcoming, because it is on this key issue that much of the future prosperity and stability in Derry and the surrounding area depends?
    Mr. Whitelaw: I am glad to tell the hon. Gentleman and the House that financial aid is no bar. Finance will be made available. What is needed is an end to the terrorism and the violence and, in the interests of everyone in the city, an end to the no-go areas in the Bogside and the Creggan. Although real efforts are being made, much better efforts would then be able to be made to improve the prosperity of the whole City.

    Interrogation Centres (Maltreatment Allegations)
    Mr. Fittasked the Secretary of State for Northern Ireland whether he is aware that torture is being used at interrogation centres in Northern Ireland; and whether he will bring this practice to an end.
    Mr. Whitelaw: I am aware that allegations have been made of maltreatment of persons in custody. All cases where specific representations have been made to me are being investigated.
    Mr. Fitt: While I recognise and accept the Secretary of State's honesty in connection with the charges that have been made, in view of the number of cases that have been brought to his attention,
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    would he not concede that it is quite possible that members of the RUC and the security forces are deliberately engaging in these techniques with the intention of discrediting the Secretary of State? Will he give an assurance that if cases are proved against such individuals in the security forces they will be immediately dismissed?
    Mr. Whitelaw: On the first point, I have no evidence to that effect at all. On the second point, as the hon. Member appreciates, if specific allegations when inquired into have to be further investigated there are the normal processes of law which must be followed. It is not for me to enter into such matters at this stage. I must tell the House in addition that all sorts of allegations are made to me and I investigate them all, though some of them—and I hope the House will appreciate this—as has been said in another instance, turn out to be more of a propaganda nature than fact.
    Rev. Ian Paisley: Would the right hon. Gentleman agree that no good can come of seeking to set the Army and the police against his administration in Northern Ireland? Would he care to comment upon the statement made last night by the ex-Prime Minister of Northern Ireland that the Army and the police are opposed to his policy of internment?
    Mr. Whitelaw: There can be no good purpose, nor is there any risk of the circumstances outlined in the hon. Gentleman's first question happening. As to the question of allegations being made that the Army and the police are against the policy which the British Government are pursuing, that is something which is constitutionally impossible because the British Government, of which I am a member, are responsible for the policies under which the Armed Forces of the Crown and the police operate. We are responsible to this House for that policy, not I alone but the whole of the British Government.

    Short Brothers and Harland Ltd.
    Mr. Ormeasked the Secretary of State for Northern Ireland what are the prospects for increasing employment in Short Brothers Limited.
    Mr. David Howell: My right hon. Friend recognises that large firms like

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    Short Brothers and Harland Limited are of immense importance in combating the serious unemployment situation in Northern Ireland. He is not aware however of any plans of the company which are likely to result in an expansion of employment in the near future.
    Mr. Orme: May I thank the Minister for the first part of his reply? Does he agree that an expansion of employment within this area is absolutely vital? Can he tell us whether there is any possibility of further orders? Can he tell us about the steps being taken to maintain a balanced work force within this plant?
    Mr. Howell: Dealing first with the question of the expansion of the level of activity, the situation is not very hopeful at present but I am hopeful that the company should be able to maintain the existing substantial level of employment, although we shall have to watch that very carefully. On the question of a balanced work force and discrimination, the management here is, as I think the hon. Member knows, very conscious of the need to avoid discrimination and will continue to be so.
    Mr. McMaster: Will my right hon. Friend consider advising his right hon. Friend the Secretary of State for Defence to place an order for the Short Skyvan which would considerably improve the mobility of the Army and be a great deal cheaper than using helicopters for the short transport rôle?
    Mr. Howell: I will certainly take note of that point.

    Government Training Centres
    Mr. Stallardasked the Secretary of State for Northern Ireland how many Government training centres there are in Northern Ireland; and how many training places are provided.
    Mr. Channon: There are currently eight Government training centres in Northern Ireland providing a total of 2,600 training places.
    Mr. Stallard: Would the hon. Gentleman accept that probably one of the main obstacles to implementing his policy of a balanced work force—I recognise the looseness of that phrase—and a policy of non-discrimination in jobs is the lack of the requisite skills among those who ought to be given the chance to apply
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    for the vacancies? Will he therefore consider a crash programme of training to bring some of those skills into high unemployment areas and thus bring the people to the vacancies?
    Mr. Channon: I have great sympathy with what the hon. Member says. He will be pleased to know that there are three other schemes to be completed in the next year or so which will provide a considerable number of further places in Government training centres. The proportion of people being trained in such centres is immeasurably higher in Northern Ireland than in any other part of the United Kingdom. I will certainly bear in mind the hon. Gentleman's point of view and do what I can to encourage further development.

    Housing Finance
    Mr. Skinnerasked the Secretary of State for Northern Ireland whether he has plans to introduce provisions similar to those in the Housing Finance Bill for Northern Ireland.
    Mr. Channon: No, Sir.
    Mr. Skinner: I thought the Government had sent the hon. Gentleman over there to do exactly that. Cannot he remember making all these claims in Committee, that he would help the needy, assist the unemployed, unite the community—[Hon. Members: "Question."] I prefaced my remarks with a question.
    Mr. Speaker: Order. The hon. Gentleman is not entitled to make remarks. He must ask a question.
    Mr. Skinner: Do you want me to start again, Mr. Speaker? If all those claims are right, why has this not been imposed in Northern Ireland? Perhaps the truth—
    Hon. Members: Question.
    Mr. Torney: "Is it not true that".
    Mr. Skinner: I do not need any assistance. Is it not true that the truth of the matter lies in the fact that none of these claims is true, that is why £1 million is not being paid in Northern Ireland and this will possibly result in further non-payment?
    Mr. Channon: The hon. Member almost persuades me with his remarks

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    about the good nature of the Housing Finance Bill in respect of the United Kingdom. The housing situation in Northern Ireland, with its history and its rent strike, is entirely different from that of the United Kingdom. Naturally my right hon. Friend and I will be considering what is an appropriate rent structure in the future.

    Law and Order
    Mr. McMasterasked the Secretary of State for Northern Ireland on what grounds he is satisfied that 17 battalions of British troops are adequate to achieve law and order in Northern Ireland; and if he will make a statement.
    Mr. WhitelawI do not believe law and order in Northern Ireland can be restored by military means alone. A combination of political action to bring about reconciliation within the community and of effective military action against the terrorists is required. The number of troops needed in Northern Ireland is decided upon in the light of the security situation and is kept under constant review.
    Mr. McMaster: Does my right hon. Friend agree that in view of the very large number of bomb and shooting incidents and the heavy casualty roll in Northern Ireland, and also the fact that many police are tied up on guard duties which could be much better performed by the units of the Army which are trained to do this, it would be much better to draft in more soldiers to take over these guard duties and thus release the police to carry out patrols in every part of Northern Ireland?
    Mr. Whitelaw: No one would be more pleased than I if the police patrols were restored in all parts of Northern Ireland, because that would mean a normal law and order situation in any country. That is what I would like to see. If more troops are needed in the short term, and if I believe in consultation with my colleagues that they are necessary, they will be provided.
    Mr. McNamara: The Secretary of State has made the important point that this is a question of reconciliation. With this point in mind, can he assure the House that he will consider the claims of those who allege that they are political pri-
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    soners, from both communities? In the meantime will he assure the House that those who are at present on hunger strike and whose relatives are concerned, very properly, for their health will have adequate access to their relatives and also that their relatives will have the opportunity to state to the responsible authorities the particular points which they think need attention while the men are in this situation, without even considering any particular claim?
    Mr. Whitelaw: This goes rather wide of the Question but it is important and I would wish to answer it. On the first point, above everything else it has to be borne in mind that once any person has been to a court of law and convicted and is in prison he is a prisoner because he has been convicted in a court of law. One has to face that fact in these very difficult cases. As for the question of the hunger strike, I will certainly consider the point the hon. Gentleman makes about families. I can assure the House that the people concerned are being kept under very careful medical supervision and I will see that consultants are enabled to see them as often as possible.
    Rev. Ian Paisley: Can the righthon. Gentleman tell the House whether military personnel allowed the prisoner who was on hunger strike to escape from the Mater Hospital? Can he tell us whether he will open an investigation into this matter? It is causing great concern because this was not a detainee or internee, but was a man who had been convicted of a crime in a court of law and had had a prison sentence imposed on him.
    Mr. Whitelaw: I am investigating this very serious case. I should point out to the House that it was a medical consultant who looked at this man in the prison and it was on medical advice that he was transferred to a hospital. I understand that in cases where this is done the decision is a medical one and naturally it was taken on medical advice. I will certainly investigate the subsequent events and find out exactly what went wrong.

    Political Situation
    Mr. Kilfedderasked the Secretary of State for Northern Ireland if he is now able to say whether he is satisfied with the progress of his political initiative; and if he will make a statement.
    Mr. Biggs-Davidsonasked the Secretary of State for Northern Ireland whether he will make a statement on the situation in Northern Ireland.
    Mr. Whitelaw: Substantial progress has been made in isolating the terrorists. Nevertheless the continued serious level of violence is imposing a considerable strain on the patience of the law-abiding members of the community. This causes me great concern, as continued restraint is vital for the future of everyone in Northern Ireland.
    Mr. Kilfedder: Can my right hon. Friend dispel the widespread rumours that Mr. Howard Smith, the Westminster representative in Northern Ireland, has had some sort of contact with the IRA, either the official or the unofficial wing? Does he not realise that some of the initiatives which he is pursuing represent a real danger in that they may alienate the law-abiding majority who see lawlessness succeeding?
    Mr. Whitelaw: The hon. Gentleman refers to an official responsible to the British Government. It is therefore a British Government responsibility totally. I can assure my hon. Friend there is absolutely no truth whatsoever in the various allegations made in the newspapers last weekend that there is any contact at all with the Official or Provisional wings of the IRA. Dealing with his second point, yes I realise this, perhaps no one better. All I can say is that I believe a policy of military action and political reconciliation is vital. It needs time to be effective. I realise the strain and I am very concerned about it. I will do anything I can to overcome it. At the same time restraint is of the utmost importance, in everyone's interest.
    Mr. McManus: Will the right hon. Gentleman recognise that the hunger strike presently taking place has a tremendous significance and bearing on the political initiatives from the South? Will he take it from me that the demands that these men are making have the backing of a least a considerable proportion of the minority? Will he tell the House whether he is prepared to grant political status to these men and, if they are determined to continue with their hunger strike, will he allow them to die?
    Mr. Whitelaw: I think the hon. Gentleman will appreciate that his last
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    point is highly hypothetical. I am determined to see that I am not blackmailed. No British Minister can be blackmailed and that is something everyone has to understand. At the same time the point I made earlier about prisoners is a valid one, and I hope that all those concerned will consider it. I hope that the hon. Gentleman and many others will use their influence to persuade those on hunger strike that it is an unwise action.
    Mr. Biggs-Davison: Stormont having been prorogued for one year only, is my right hon. Friend the Secretary of State giving long-term consideration to, and is the Commission on the Constitution thinking about, either a resumption of parliamentary self-government or closer union with Great Britain?
    Mr. Whitelaw: I am certainly giving careful consideration to, and in all the talks I have had with many different sections of the community in Northern Ireland I have heard many views about, the future constitutional position. I am very anxious that all the people in Northern Ireland should have an opportunity to consider the political future they want for their country, and I certainly hope to take steps to that end.
    Mr. Merlyn Rees: I am particularly glad that the right hon. Gentleman has denied the newspaper stories of last week end about supposed negotiations, not the least important of the reasons being that my name was associated with them as an intermediary. I am glad the Secretary of State has denied this nonsensical story. We agree that there cannot be swift progress. The initative of two months ago has revealed what many felt before: that the vast majority of people in Northern Ireland want peace and not war.
    Mr. Whitelaw: I accept what the hon. Member says. The strains imposed by the actions taken by the House and the Government on many members of the majority community are very great and I fully understand them. I wish to calm them in any way I possibly can. I realise their feelings and I must say, though it may not be accepted, that I have done everything I can to understand those feelings.
    Mr. Marten: We support the admirable aim of restoring peace and prosperity

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    in Northern Ireland, but can the Government say yet what their political aim for that country is?
    Mr. Whitelaw: Our political aim is to set up for the future a form of political democracy which in the first instance, I hope, will be contributed to by the views of the people of Northern Ireland themselves. In the final event they must put forward their views and I would hope to get as near a consensus as possible. I would like to hear from them and I hope to give them the means of expressing their view so that we can decide how best to set up what I might call a democratic position which is consistent with a sensible future for the whole community in Northern Ireland.
    Mr. Orme: Many of us believe from what we have recently seen that there are great dangers in Northern Ireland, but there are great hopes too. In this regard, does the Secretary of State agree that the ending of the no-go areas, which has become a central issue for many of the Protestants, is essential? This must be done through peaceful negotiations and it cannot be done by military means. The steps taken by the Secretary of State on internment are in the right direction. Will he urge upon both sections of the community that he is not taking a one-sided view but is a mediating force with the first requirement of achieving a cessation of hostilities, the end of violence by the Provisional wing of the IRA and the opening of negotiations with the elected representatives in Northern Ireland?
    Mr. Whitelaw: I agree with the hon. Gentleman that there are great dangers in Northern Ireland and they have existed for a long time. No one is in a better position to recognise this than I am, but I seek all the time to persuade the communities that I wish to see reconciliation and a sensible future for Northern Ireland, and I am doing all I can to that end. I know that many people believe that I am the devil incarnate, and I understand that, but I can assure the House, on behalf of the British Government, that I am determined to do everything I can for the best for everyone in Northern Ireland.
    Rev. Ian Paisley: Is the Secretary of State aware that the statement he has made today that he has not been negotiating in any way with the Irish Republican
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    Army will be received in Northern Ireland with great pleasure? My name as well as that of the hon. Member for Leeds, South (Mr. Merlyn Rees) was linked with the scurrilous report that some of us were negotiating with those who are carrying out a campaign of murder and anarchy. Does the Secretary of State feel that the time has now come when he should make a definite stand and call for an end to the campaign of civil disobedience and let all the elected representatives of all parties sit round a table and talk about the future of Northern Ireland?
    Mr. Whitelaw: I very much endorse the hon. Gentleman's last point and I welcome some of the recent steps that have been taken. I hope they will go further because I am sure that what he has suggested would be in the best interests of everyone in Northern Ireland. The hon. Gentleman, the hon. Member for Leeds, South (Mr. Merlyn Rees) and I have all been linked in accusations which were clearly untrue. The best evidence that they were untrue is that all three of us were linked in them together.
    Mr. Stallard: Many of us would agree with the Secretary of State about the fears of the majority population in Northern Ireland. What are his plans for visiting the Shankill Road and Sandy Row and what steps is he taking to meet the leaders of the majority populations in these areas as soon as possible?
    Mr. Whitelaw: I take note of what the hon. Member says and I will consider the points he has made to me.
    Dr. Miller: On a point of order, Mr. Speaker. I wish to seek your advice—[Hon. Members: "Do it at 3.30."] I hope that hon. Members will not mind my putting my point of order to Mr. Speaker. [Interruption.] Let Mr. Speaker speak.
    Mr. Speaker: That might be a great mistake. If the hon. Member has a point of order I would prefer to hear it at 3.30.
    Dr. Miller: May I ask my point of order now, lest the Secretary of State and his retinue rush off to catch the ferry to Lame, or should I wait until after questions? I am in your hands, Mr. Speaker.
    Mr. Speaker: I prefer the hon. Member to put his point of order at 3.30. I am

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    sure the Secretary of State will wait to listen to it. Questions to the Prime Minister. Mr. Leslie Huckfield.

  PRIME MINISTER (SPEECH)
  Mr. Lipton: On a point of order, Mr. Speaker.
  Mr. Speaker: This is supposed to be the time for the Prime Minister's Question time.
  Mr. Lipton: This point of order must be raised now, Mr. Speaker, as you will see in a moment. There are eight Questions on the Order Paper addressed to the Prime Minister about a speech he made on 16th May. The slightest effort on the part of any of the eight hon. Members would reveal that the speech has been gathering dust on the shelves of the Library since 17th May. Therefore, is it not an abuse of the time of the House to put these Questions?
  Mr. Speaker: That is not a matter for me, Mr. Huckfield.
  Mr. Leslie Huckfieldasked the Prime Minister whether he will now place in the Library a copy of his speech to the Confederation of British Industry on 16th May on the interests of the community.
  Mr. Wiliam Hamiltonasked the Prime Minister if he will place in the Library a copy of the public speech he made on Tuesday, 16th May, to the Confederation of British Industry in London on the economy.
  Mr. Duffyasked the Prime Minister if he will place in the Library a copy of his public speech at the annual dinner of the Confederation of British Industry in London on 16th May on conciliation in industrial disputes.
  Mr. Skinnerasked the Prime Minister if he will place in the Library a copy of his public speech on 16th May to the Confederation of British Industry on industrial relations.
  Mr. Redmondasked the Prime Minister if he will place in the Library a copy of his public speech to the annual dinner of the Confederation of British Industry on 16th May on the subject of inflation.
  Mr. Wyn Robertsasked the Prime Minister if he will place in the Library a copy of his public speech on the economy at the annual dinner of the Confederation of British Industry on 16th May.
  Mr. St. John-Stevasasked the Prime Minister whether he will place in the Library a copy of his public speech to British industrialists, on the subject of the economy in London on 16th May. 1972.
  The Secretary of State for the Home Department (Mr. Reginald Maudling): I have been asked to reply.
  My right hon. Friend did so on 17th May.
  Mr. Huckfield: I thank both the right hon. Gentleman and my hon. Friend the Member for Brixton (Mr. Lipton) for that information. Does the right hon. Gentleman honestly believe that the Government are acting in the interests of the community by going through a deliberate exercise in brinkmanship with the railway unions? Does he believe that the Government are acting in the interests of the community by doing nothing about rising food prices? Does he think that the Government are acting in the interests of anyone but themselves?
  Mr. Maudling: I do not accept the hon. Gentleman's description of our policies which are designed to serve the interests of the public generally.
  Mr. Hamilton: What did the Prime Minister mean when he said he was taking a lively interest in an independent form of conciliation, and what progress has been made in that direction? Does he regard the Chancellor of the Exchequer's forecast of growth this year as being currently on target, in view of the recent pessimistic forecasts?
  Mr. Maudling: My right hon. Friend meant what he said. He has taken a close interest in suggestions from the CBI and the TUC about conciliation. The point he was making was that an effective system of conciliation must also have regard for consumers' interests. On the second point, the National Institute's forecast is a little on the gloomy side, but in the past I have sometimes known it to be a little wrong on that matter.
  Mr. Redmond: Will my right hon. Friend place in the Library a copy of the speech made at the same function by Sir John Partridge, in which Sir John asked for some tangible sign from the trade unions that they were willing to help in the fight against inflation? Does he also realise that I have received a letter today from a firm in my constituency which says that wage/cost rises are taking them to the Rubicon and that they do not want to cross it?
  Mr. Maudling: It is clear that every section of the community has a part to play in dealing with the problem of cost inflation.
  Mr. Duffy: Is the right hon. Gentleman aware that the Prime Minister also said on that occasion that he welcomed the development of new voluntary conciliation machinery on a proper basis? Does he not think that the early willingness of the trade unions to become involved is crucial? Will he explain how the present grasping obstinacy of the Government in denying the railwaymen every last penny of their claim will help the trade unions to co-operate?
  Mr. Maudling: I thought the last penny was being demanded rather than refused. On the broader question of conciliation generally, it is clear that the whole House and the country would welcome a system in which conciliation was more effective, in which the TUC and CBI take part and in which the consumers' interests are also clearly represented.
  Mr. Roberts: In view of the present uncompromising attitude of the unions, will my right hon. Friend assess the likelihood of the CBI extending its period of price restraint beyond July?
  Mr. Maudling: I do not think it would be wise to try to reach an assessment. We all hope that a proper solution can be found. Clearly the ability of employers to maintain stable prices depends on what happens to their costs.
  Mr. Skinner: Would the right hon. Gentleman clear up one small point? The Prime Minister in that speech referred to pay awards, conciliation protecting the consumer and so on. If the Prime Minister can get a pension of £7,500 per year, which is non-contribu-
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  tory and is backdated to 1st April, 1972—an increase of £3,500—why cannot the railwaymen have their pay increase of just over £2 per week backdated to 1st May?
  Mr. Maudling: I thought that in the case of ministerial and parliamentary salaries there was an acceptance of an impartial decision. In the case of the railwaymen there has not been an acceptance of an impartial decision.
  Mr. St. John-Stevas: Is not the immediately important point about conciliation that it should be used to the full, in the intervening five days before the threatened go-slow on the railways, to promote a compromise settlement?
  Mr. Maudling: Yes, I gather that discussions are taking place and in the circumstances I would not like to say anything at present.
  Mr. Prentice: May we have an assurance that Ministers are now urgently considering what initiative they can take to promote a compromise settlement in the railway dispute, a compromise which they should have promoted some weeks ago? Will they recognise that the results of the ballot, which they themselves initiated, have created a situation which can only be solved by some compromise formula of this kind?
  Mr. Maudling: I do not want to enter into argument with the right hon. Gentleman about the merits or demerits of what has happened in this dispute. All I can say is that everybody recognises that it is extremely important to get this solved, and it should be possible to solve it. If I were to answer a question on this matter today, I feel that it would not be likely to contribute to the possibility of a helpful solution.
  Mr. Ridsdale: What discussions have taken place with the CBI and the TUC on the effect of the demand in the Community to raise steel prices and also the effect of the demand to establish a minimum wage? Are not these questions far more important than the demand to raise rail wages since they will have far more effect on the country at large than will the other matter?
  Mr. Maudling: These are extremely important questions which often come up

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  in the course of regular contacts between the Government and the TUC and CBI.
  Mr. Pardoe: I welcome the Government's conversion to the consumer's interest, but will the right hon. Gentleman tell the House at what stage the Conservative Party, when in Opposition, supported the then Labour Government's attempts to bring consumer interest to bear on wage restraint? Will he not agree that the Conservative Party supported the more disreputable elements in the Labour Party in sabotaging any attempt to bring about a prices and incomes policy?
  Mr. Maudling: I thought that a somewhat impolite supplementary question. We supported the Labour Government when we thought they were talking sense.
  Mr. Harold Wilson: A polite supplementary. Since the right hon. Gentleman did not answer the question put by his hon. Friend the Member for Harwich (Mr. Ridsdale), will he undertake that a Minister who knows, or who can find out the answer, will make a statement to the House on this important question next week? Secondly, since the right hon. Gentleman, most unfortunately and uncharacteristically, is following the Prime Minister in giving the same answer that inflation is due to wages, will he explain how far wage demands are responsible for recent increases in the price of meat, houses and land?
  Mr. Maudling: On the first point, I would answer certainly, yes. On the second point, obviously the volume of money involved in increases in incomes is by far the most important element in the inflationary situation generally. [Hon. Members: "Oh!"] It is sheer mathematics. As for the price of beef, one knows that this arises partly from international conditions and partly from the lamentable record of the Labour Government in encouraging beef production. Since we are being blamed for the high price of beef, I think we should be praised for the low price of butter.
  Mr. Wilson: Since the right hon. Gentleman cannot do better than repeat what was said on Monday by, of all people, his right hon. Friend the Minister of Agriculture, Fisheries and Food, will he come back to the question of the high price of housing and land, which he
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  blames on the amount of money in circulation, namely wages of £20 per week? As a former Chancellor of the Exchequer of great distinction, as we recognise since we had his inheritance as well as the previous one, would not the right hon. Gentleman agree that an increase in money supply at the rate of 20 per cent, might have some effect on the amount of money in the country—[Hon. Members: "Ask a question."] It is a question, though I do not expect an answer. Secondly, does not the right hon. Gentleman feel that recent budgetary changes have led to a great deal of speculation in housing and land?
  Mr. Maudling: The right hon. Gentleman, as a distinguished statistician, will recognise that the cost of labour is an important element in the cost of building houses, as indeed was SET.
  Mr. Wilson: Will the right hon. Gentleman, as a distinguished statistician, retired or reformed, tell the House how an increase of 21 per cent, in new house prices can be explained by wage increases amounting to much less? Secondly, will he say how far an increase of 20 to 30 per cent. in the price of second-hand houses, which is in no way based on present wages, is explained by wages?
  Mr. Maudling: I do not claim to be a statistician. If I may say so, it is a great mistake to do so—it is better to be correct. I know that if there is a much greater volume of purchasing power, prices go up.

  LUXEMBOURG
  Mr. Spearingasked the Prime Minister when he next intends to make an official visit to Luxembourg.
  Mr. Maudling: I have been asked to reply.
  My right hon. Friend has at present no plans to do so.
  Mr. Spearing: Does the right hon. Gentleman recall that on 21st March his right hon. and learned Friend the Chancellor of the Duchy of Lancaster told me in a Written Answer that it was in Luxembourg that the Council of Ministers said that where vital national interests were at stake and decisions of the Council of Ministers could be taken by a

  703
  majority, the Ministers would endeavour to reach unanimity within a reasonable time? Why was this statement upgraded in the White Paper of last summer to say that where vital matters of national interest were at stake it was established that there should be unanimity? Was that a mistake or a deliberate attempt to deceive?
  Mr. Maudling: I had always thought that the Luxembourg Declaration was clearly known and understood.
  Mr. Tapsell: Following the question by the Leader of the Opposition about rises in house prices, is it not a fact that one important factor is that whereas under the Labour Government mortgages became unobtainable, they are now freely available?
  Mr. Speaker: I do not connect that question with a visit to Luxembourg.

  REGIONAL POLICY
  Mr. Douglasasked the Prime Minister what arrangements have been made for co-ordination between the Scottish Office and the Department of Trade and Industry on matters of regional policy as a consequence of the recent appointment of new Ministers in both Departments.
  Mr. Maudling: I have been asked to reply.
  There have always been close links between the Scottish Office and the Department of Trade and Industry on regional policy matters. The new arrangements will ensure that these continue.
  Mr. Douglas: Will the righthon. Gentleman accept that in present circumstances there is a great deal of confusion about which is the appropriate Ministry to approach for regional assistance in Scotland? Will he take urgent steps to explain the position to industrialists in Scotland to ensure that they obtain the requisite knowledge in advance of enactment of the Industry Bill which is now going through the House?
  Mr. Maudling: If there is any confusion we shall clear it up.
  Mr. Bruce-Gardyne: Is it true, as reported this morning, that the NEDC yesterday suggested to my right hon. Friend
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  the Chancellor of the Exchequer that the Industry Bill was not, as some of us feel, totally without spot or blemish? If this is so, will my right hon. Friend place before the Committee which is to consider this Bill a transcript of the discussions at yesterday's meeting of the NEDC?
  Mr. Maudling: I have seen the Press report in question. If my hon. Friend tables a Question to the Chancellor of the Exchequer, no doubt it will be answered.
  Mr. Millan: Will the functions of the new Scottish Development Board be advisory, or will it have executive functions with its own finance?
  Mr. Maudling: It is intended that its functions should be advisory. Where finance is provided, it must be subject to the control of the House.

  NORTHERN IRELAND (NATIONAL HEALTH SERVICE PARLIAMENTARY COMMISSIONER)
  Dr. Miller: I rise on a point of order, Mr. Speaker. I seek your guidance since, Sir, you are our protector, though a less Cromwellian figure I could hardly imagine—[Interruption.]
  Mr. Speaker: We have very important business to transact today and I hope the House will allow the hon. Member to make his point.
  Dr. Miller: I rise to put what I consider to be an important point of order. I asked the right hon. Gentleman the Secretary of State for Northern Ireland a Question about his plans for a Parliamentary Commissioner for the National Health Service for Northern Ireland. In the hubbub of noise pollution which occurred at the time there were one or two words I did not hear. [Hon. Members: "Read Hansard."] Had I heard what the Secretary of State actually said, my supplementary question would have been worded entirely differently. [Interruption.] It is not a laughing matter. Allegations have been made against the medical profession in Northern Ireland, and I should have like the right hon. Gentleman to tell me, in order to satisfy and help the medical profession itself as well as those against whom—
  Mr. Speaker: Order. I am sorry to have to interrupt the hon. Gentleman.

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  I agree with quite a lot that he has said about noise pollution. I also agree that this is not a laughing matter. Nor is it a point of order. It relates to the content of a ministerial answer. That is not a matter for the Chair.
  Dr. Miller: But I did not hear the ministerial answer—[Interruption.] On a point of order, Mr. Speaker. Surely it is your duty to protect hon. Members so that they may hear what Ministers say. That is my reason for asking for your protection.
  Mr. Speaker: That is a very sound principle. I hope that example will be better than precept from all right hon. and hon. Members.

  QUESTIONS TO MINISTERS
  Mr. Crouch: On a point of order, Mr. Speaker. This really is a point of order. May I draw your attention to the fact that Question No. Q1. to the Prime Minister today produced now fewer than nine supplementary questions from hon. Members and a further three supplementary questions from the Leader or the Opposition? While we are always glad to have supplementary questions from the Leader of the Opposition and other hon. Members, it seems that we went almost too far in penetrating one Question. Do you think that this is a matter that you could stop?
  Mr. Speaker: It is not a matter of order. Mr. Harold Wilson. Business Question.

BUSINESS OF THE HOUSE
Mr. Harold Wilson: May I ask the Leader of the House whether he will kindly state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Robert Carr): The business for next week will be as follows:
MONDAY, 12TH JUNE—Private Members' Motions until seven o'clock.
Afterwards, there will be a debate on Northern Ireland Affairs, when the House will be invited to approve Motions on Northern Ireland Orders relating to Appropriation, Employers' Liability and Exported Animals.
TUESDAY, 13TH JUNE and WEDNESDAY, 14TH JUNE—Further progress in Committee on the European Communities Bill.
THURSDAY, 15TH JUNE—Supply (21st allotted day): Debate on the Report of the Pearce Commission on Rhodesian Opinion (Command No. 4964).
Completion of the remaining stages of the Criminal Justice Bill.
FRIDAY, 16TH JUNE—Private Members' Bills.
MONDAY, 19TH JUNE—Supply (22nd allotted day): There will be a debate on Yorkshire and Humberside, on an Opposition Motion.
Mr. Wilson: With regard to Thursday's business on Rhodesia, will the right hon. Gentleman confirm that, while this is nominally being taken on a Supply day, this is because for the second time in recent weeks we have lent the Government a Supply Day? It must obviously come out of Government time. Will the right hon. Gentleman undertake that it will be returned to us in the present Session?
Secondly, is the right hon. Gentleman aware that we on our side of the House decided this morning not to attempt to seek your authority, Mr. Speaker, to table a Private Notice Question on the rail dispute on the ground that it might be more helpful not to do so today? However, the right hon. Gentleman should know that the House wishes to have a statement from the Minister responsible at the earliest appropriate moment, either tomorrow or Monday—[Hon. Members: "Tomorrow."] There may be good reasons why it should not be tomorrow. That must be within the discretion of the Government.
Thirdly, will the right hon. Gentleman undertake to let us have a statement by the appropriate Minister about the threats issued under the Industrial Relations Act to a constituency Labour Party in respect of a resolution passed by it and, I think, published in the local paper on a matter of public policy? Is the right hon. Gentleman aware that those threats involve the possibility of imprisonment and distraint? Will the right hon. Gentleman ask whoever is the appropriate Minister to reply for the Government to make the position on this matter clear? We

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are sufficiently concerned about Parliament, the Press and television being gagged. Can the right hon. Gentleman assure us that some degree of public discussion on matters of public importance can continue without threats of action for contempt?
Mr. Carr: Dealing with the right hon. Gentleman's first point, I acknowledge gratefully that the Supply Day for Rhodesia is on loan from the Opposition. It is a loan that I shall feel bound to repay this Session—[Hon. Members: "Two days."] I thought that I had accepted that.
As for the railways, certainly I will talk to my right hon. Friend the Secretary of State for Employment. I know that he will be anxious to make a statement to the House at the earliest opportunity that he feels appropriate. I will make clear to my right hon. Friend the desire of the House to have it as early as possible.
On the right hon. Gentleman's third point, I should like a chance to study this matter. But, there again, I will talk to my right hon. Friend about it. However, I am sure that the right hon. Gentleman will have noticed in the Votes today that the Procedure Committee will be producing its report shortly on its study of the sub judice rule.
Mr. Maude: Can my right hon. Friend clarify a little the Northern Ireland business on Monday after seven o'clock? I understood my right hon. Friend to say that the House would be invited to approve a number of specific orders, but I thought that my right hon. Friend began by saying that there would be a debate on Northern Ireland affairs. Is there to be a general debate followed by a number of orders? If so, how long will these pieces of business last?
Mr. Carr: I understand from conversations that I have had that it may be convenient if from seven to ten o'clock there is a general debate on Northern Ireland affairs arising on the Adjournment and that at ten o'clock we should move on to debate the three orders. Subject to Mr. Speaker's views, and assuming that it is generally acceptable, they will be taken in a way which allows the greatest width of discussion for the maximum time. Theoretically, the three orders could each take 1½ hours. That
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is a total of 4½ hours. If they were discussed together and taken in a certain order, this could achieve a wide-ranging debate until the end of that time.
Sir Harmar Nicholls: On a point of order, Mr. Speaker. I am not certain about the result of the interchange between my right hon. Friend and the Leader of the Opposition on contempt. Whether it involves a constituency Labour Party, Conservative Party or Liberal Party, surely if it is in contempt no exchange across the Floor of the House should save it from the disciplines which should flow from that.
Mr. Speaker: The hon. Member for Peterborough (Sir Harmar Nicholls) raises a point of order. But it is not a matter on which I have to rule today.
Mr. Harold Wilson: Further to that point of order, Mr. Speaker. This is very important. What has happened is that publicly paid functionaries—not the courts—have warned this party about contempt in relation to its resolution. The Leader of the House has undertaken to look into the matter. What this House must be careful about is public functionaries paid out of monies voted by this House interfering with the freedom of public discussion. While we welcome the report of the Select Committee, which will have to be debated in Government time very soon, we must not forget that this House cannot function without free comment in the country.
Mr. Speaker: Order. On these matters of contempt and the sub judice rule, I am continually being asked to rule in advance of a situation having arisen. I have ruled only one Question out of order—that was some days ago—on the ground that it related to a matter which was sub judice. I will deal with these matters as they arise, and I will administer the sub judice rule according to the instructions of the House based upon the report of the Procedure Committee.
Mr. Loughlin: May I draw attention to the scandal of ever-increasing house prices, a number of glaring examples of which have been given again today in the London Evening News? Will the Leader of the House ask his right hon. Friend the Minister of Housing and Construction to make a statement next week telling us what the Government intend

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to do about the present scandalous position?
Mr Carr: I take note of the hon. Gentleman's remarks and I will draw them to my right hon. Friend's attention. However, I remind the House that it is only a matter of a few weeks ago that my right hon. Friend took part in a debate on this subject.
Mr. Biffen: In order that we might have reasonable time in which to adjust our political safety belts, can my right hon. Friend say whether, either next week or sometime before the rising of the House for the Summer Recess, the Government intend to announce either a statutory wages freeze or a statutory incomes policy?
Mr. Carr: I advise my hon. Friend always to drive with his safety belt fastened.
Mr. Elystan Morgan: Will the right hon. Gentleman tell us when we are likely to have a debate on agriculture? Does the right hon. Gentleman recollect that there is a very well-established precedent for this debate to take place very shortly after the Annual Price Review? Will he confirm that the over lading of the legislative timetable by the Government will not deprive us of this opportunity?
Mr. Carr: I am afraid that I cannot promise a debate on agriculture in the near future, but I take note of the hon. Gentleman's feelings.
Dame Irene Ward: When are we likely to have a discussion on the joint proposals put forward by the shipbuilders and the shipping industry, which are very important, especially in view of the fact that the Industry Bill, which is also very important, does not concern itself with shipbuilding and ship repairing? Since we are still, and hope to remain for a long time, a maritime power, it is tremendously important that these joint proposals should be put before the House and we hope that they will receive ministerial approval. This is a matter of great urgency. I should welcome a debate on it.
Mr. Carr: I note my hon. Friend's desire for a debate on this undoubtedly important matter. I shall discuss it with my right hon. Friend concerned. But I should be raising hopes falsely if I said
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that there could be a debate in the near future.
Mr. Dell: Is the right hon. Gentleman aware that this morning, in Committee, we began to discuss the Industry BUI which repeals large sections of the Local Employment Act, 1972, sponsored by this Government and passed in this Session? Is the right hon. Gentleman aware, further, that the Government cannot complain about the congestion in their time table when they have wasted parliamentary time in this way, and that they cannot use this as an excuse for putting on an important Measure like the Criminal Justice Bill late at night again when it cannot be debated adequately? Will the right hon. Gentleman, therefore, rearrange the time table so that the Report stage of the Bill may be debated at a reasonable hour and considered properly?
Mr. Carr: I note what the right hon. Gentleman says. However, I had thought that the arrangements finally come to about the Criminal Justice Bill, although not ideal, were acceptable to the principal parties involved.
Sir Robin Turton: May I remind my right hon. Friend that when he last answered Business Questions, he said that he would like to arrange a debate on the outstanding reports of the Select Committee on Procedure. I notice that he has not included them for next week. Will he consider whether he can make a statement during the course of next week about the Government's attitude to some of the recommendations of the Select Committee which are becoming very much out of date? He will recollect, for example, that his predecessor said seven months ago that he accepted the recommendation about a Joint Committee to revise the form, drafting and amendment of legislation, which was a very important matter. But nothing has been done for seven months.
Mr. Carr: I am afraid that I cannot promise a debate in the immediate future. I will do my best to see that the Government's intentions on these matters, including that mentioned by my right hon. Friend, are made known as soon as possible, and I mean what I say when I use those words.
Mr. Thorpe: Reverting to the point about agriculture, since there was some

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doubt in the right hon. Gentleman's reply, will he at least concede that he accepts in principle that there must be a debate on the Annual Price Review in Government time fairly soon?
Mr. Carr: I take serious note of that. Undoubtedly it is a very important matter. In the past, probably it has been dealt with on Supply Days. But I do not want to make that a matter of principle. I realise its importance. However, I have no days to offer at the moment.
Mr. Maxwell-Hyslop: Is my right hon. Friend aware that it is more than a month since he said," Not this week" in answer to a request for a debate on the Report of the Select Committee on Procedure concerning the election of the Speaker and asking when the Government would move the necessary Motions, bearing in mind that the Government never know when it may be necessary to activate the new procedures. Obviously, it would be intolerable to use again the old procedure which has been condemned by the Select Committee. This cannot be postponed indefinitely, as the Government cannot control the date when it may be necessary to use the new procedure.
Mr. Carr: I accept, as did my predecessor, that these are important matters. As a new Leader of the House I felt that I must have a little time to study and take them on board, so I take the blame for the delay on my shoulders. I will try to make those announcements as early as possible.
Mr. C. Pannell: Mr. Speaker, may I ask whether you are feeling well after that question?
Mr. Torney: Is the right hon. Gentleman aware that a Motion has appeared on the Order Paper in the names of nearly 200 of my right hon. and hon. Friends on the subject of agricultural workers' wages?
[That this House notes the mounting anger among farm workers due to their continuing poor wage structure and conditions and, in particular, the flat rejection by the Agricultural Wages Board of their re-submitted claim for an £18, 40 hour, five-day week; notes further that output per farm worker in recent years has risen by 6 per cent, annually; and calls upon
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the Minister to investigate urgently both the working and constitution of the Board as a step towards securing a just and realistic award and conditions comparable to those of the average skilled industrial worker.]
In view of the importance of agriculture to the production of the nation's food and the economy as a whole, and in view also of the scandalously low wages being paid to agricultural workers, may we have an assurance that this important matter will be debated in the near future?
Mr. Carr: This is an important matter, and there are well-defined statutory procedures for dealing with it, but I cannot promise a debate in the immediate future.
Mr. Kilfedder: May I ask my right hon. Friend to explain why the debates on the Northern Ireland orders, some of which are complicated and all of which are important, are restricted by the Government to 1½ hours each and, worse still, why they are to be debated late at night, like some third-rate movie at its umpteenth showing? This is a disgrace.
Will my right hon. Friend give us an assurance that we may have a full day's debate on Northern Ireland before the end of this month, because I take the view, and I think the people of Northern Ireland do, that a 3-hour debate on Monday night is derisory? Stormont has been suspended, the democratic processes have been suspended and this is the only Parliament that we have, and we are treated in this bad way.
Mr. Carr: I understand and respect the strong feelings of my hon. Friend and, indeed, those of his colleagues from Northern Ireland. The debate on Monday will run, in total, to about 7½ hours. There will be a continuous debate on Northern Irish affairs. I know that it would be more convenient if the debate could be held at an earlier hour, but in the years that I have been in the House I have seen some most important matters concerning England, Scotland and Wales perforce debated on many occasions late at night. We are doing what we can in this matter.
Dr. Miller: May I ask the right hon. Gentleman whether, as there are murmurs of discontent particularly among the lower echelons of the BBC, and also as,

713
in the near future, the BBC's charter will be coming up for renewal, he will at an early date institute a debate on broadcasting? Will he also take into account the fact that there has to be a devolution of broadcasting services throughout the country?
Mr. Carr: The matter is important, but the hon. Gentleman rather exaggerates when he talks about the charter coming up for renewal at a very early date. The charter expires in 1976. We must make plans in good time, but it is hardly the most urgent matter for debate in the House at the moment.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I must preserve the business of the House. Mr. Pavitt.
Mr. Pavitt: Is the right hon. Gentle man aware that there has been an inordinate delay between the publication of the consultative document on the National Health Service—
Mr. Speaker: Order. Mr. Pavitt, to give notice of the presentation of a Bill.

BILL PRESENTED
PROFESSIONS SUPPLEMENTARY TO MEDICINE ACT 1960 (AMENDMENT)
Mr. Pavitt, supported by Dr. Tom Stuttaford, Mr. David Steel, Dr. Miller, Colonel Sir Malcolm Stoddart Scott, Dr. J. Dickson Mabon, Mr. Thomas Cox and Mr. Alex Eadie, presented a Bill to amend the Professions Supplementary Medicine Act 1960 so as to provide for the establishment under that Act of a board for laboratory technicians in university medical schools.
And the same was read the first time; and ordered to be read a Second time upon Friday, 16th June; and to be printed. [Bill 154.]

ORDERS OF THE DAY

  EUROPEAN COMMUNITIES BILL
  [3RD ALLOTTED DAY]
  Considered in Committee [Progress, 24th May].
  [Sir Robert Grant-Ferris in the Chair]

  EUROPEAN COMMUNITIES BILL

    Clause 2
    GENERAL IMPLEMENTATION OF TREATIES
    3.55 p.m.
    Mr. Peter Shore: I beg to move Amendment No. 229, in page 3, line 16, leave out subsection (3).
    Today we are discussing in this and other Amendments which have provisionally been selected what is for many of us the most damaging and unacceptable part of what is a thoroughly odious Bill. Formally, subsection (3) which we seek to delete authorises the Government to hand over to the European Communities the amounts required, in the words of the subsection
    "to meet any Community obligation to make payments to any of the Communities or member States".
    In reality, the subsection embodies one of the principal failures of the entry negotiations. It sanctions both the payment by this country of ruinous sums to Europe and the abandonment of part of the essential democratic power of this House.
    The payments covered by the subsection fall into two separate and, indeed, contrasting groups. There are those contributions to the European Investment Bank and the mutual support scheme which are limited and definite in amount, reasonably fair in relation to our national income and broadly uncontroversial as to their purpose. I shall say nothing more about them except to point out that, unhappily, they comprise only a tiny part of the total contribution that we have to make and, indeed, of the total Community budget.
    It is the second group of payments, the annual contributions that we are to make to the Communities' expenditures, about which the country and this Committee are rightly concerned. These sums,

    715
    in contrast to the first group, are large and open-ended, unrelated to our capacity to pay, unfair in their incidence and earmarked for purposes—mainly agricultural protection—which no serious person in Britain, or, indeed, in Europe, wishes to justify. It is these payments and the taxes on which they are based that will imperil our national prosperity, increase the food bills of every family in the land, make a mockery of parliamentary control and force upon us the profoundly unacceptable principle of taxation without representation.
    The subsection itself tells us nothing about amounts, and the Explanatory Memorandum, like the White Paper of last July, discreetly lowers the curtain at the end of year five, 1977. Even so, up to that date, as we know, we are to pay no less than £725 million across the balance of payments to the European Communities, and I emphasise that that is a net figure. The gross figure will be just over £1,000 million, and one of these days somebody on the Government Front Bench will, I hope, try to tell us in some detail all elements of payments which this country is expecting from the Community which will bring down the gross figure even to this pretty appalling net figure of £725 million.' We simply have not had any serious explanation of all the kinds of payment and what the relationship of the receipts will be to the contributions over the period of time that is involved.
    4.0 p.m.
    At the end of the five years, the amount will of course dramatically increase. The £725 million is only the beginning. Instead of paying the reduced entry fee, which is all that we are obliged to do up to 1977, we shall have to pay by 1980 the full amount—an amount based not on our capacity to pay but upon the new rules laid down in Luxembourg in April, 1970, the so-called "own resources" rules of the Community.
    So there will be a yield from three taxes. The first is the levies on food imported into Britain from outside Europe, principally on our food imports from Australia, New Zealand, Latin America, Canada, the United States and elsewhere. This will be a tax on food that has given to British families for so long a low-cost, high-quality diet.
    The second tax is the yield on our customs duties imposed on goods coming from the rest of the world, apart from Europe. The third—because the first two taxes and their yields will not be enough in the Community's budget—is an up to 1 per cent, value added tax, which the Government have been obliged to introduce in the Budget this year.
    What will this mean to us? The Government say that they cannot even assess the cost. That is very convenient for them. What we do know, however, is that, first, our contribution will increase well beyond the 1977 level. That will not be denied. So much so that two further years are allowed for adjustment upwards to whatever new level under the own resources system our payments will then have to reach. The Committee should be reminded that the low 1977 level of net contribution from which we shall go up is not less than £200 million. That is the starting point.
    Second, the Government's own estimate, presented to the Six in Brussels at the start of their negotiations in July, 1970, was for a gross contribution of £570 million a year or a net contribution of £470 million. That was their own estimate, and we have heard nothing since in correction of it.
    The third thing we know is that we shall pay more than any other member country, not only absolutely but per capita as well. One of the things that have amazed me is the Government's failure to produce any estimate of the relevant contributions which will be made under not only the first five years' contribution but the permanent own resources contribution system, not only by ourselves but in relation to all the other member countries. This is a deficiency which I hope they will take an early occasion to remedy.
    The last thing that we know is that we shall receive in return a smaller amount than anyone else in relation to our own contribution. Whatever the precise figures may be—I have always understood the difficulty of giving more than arranged—they will clearly amount to a vast and damaging payment imposed upon this country.
    Of course, the reason for all this, the reason why we have this great difficulty with this Clause and with the payments to the Community that it sanctions, is

    717
    that here there has been, and was throughout the negotiations, a real failure by the Government.
    They failed in the first place to get a permanent exemption from the Community's own resources system. The Chancellor of the Duchy and the Chancellor of the Exchequer who preceded him have both rigidly sought this. His predecessor, in his negotiating rôle, went so far as to say that no British Government could contemplate joining unless we got a satisfactory waiver from it.
    Second, they failed to get a review clause, which was their fall back position, and which would, if the sums involved were too much, have given us an automatic right to take the matter up. They were refused a review clause, so all that they were left with was a mere mention in the White Paper of last July, quoting from some communiquéissued in the course of the negotiations by the Council of Ministers, to the effect that it would be awful for the Community if Britain could not pay. That is what it amounts to. That was the second substitute for a safeguard.
    The Government failed in the third instance because they could not get accepted what I think was a reasonable alternative strategy—to get the Community to agree, in exchange for our acceptance of the common agricultural policy, to a common industrial or regional policy, of which it was hoped that Britain might be the main beneficiary.
    Mr. Anthony Fell: The right hon. Gentleman has asked a number of specific questions about finance, affecting the people of this country in a very big way indeed. As these questions may be lost during this debate by the time the Minister answers, I wonder whether he would be willing to give way to someone on the Treasury Bench if they were willing to try to answer one or two of these very special questions.
    Mr. Shore: I would be very willing. This is a difficulty that we all have in this closured and guillotined debate. It would be very helpful if we could have the ordinary exchanges, but I shall always be very willing to give way for serious contributions and information. But I hope that the Minister will be able to answer us later on.
    718
    My last point was on the failure to get a regional and technological counter-contribution in the form of a common policy. It was a reasonable thing to go for, but what does the July White Paper tell us about it? At the end of it all, all that it can say—and it sounded very helpful—is on page 42:
    "As the Community develops, there will be other purposes for which Community funds will be spent, such as technological, industrial and regional policies, from which, unlike agriculture, Britain could expect to receive back money commensurate with her contribution to the Community's budget."
    So I believe that I made my point fairly enough—this was part of the Government's strategy. The only trouble is that it appears in a White Paper and not as anything to do with an obligation entered into by the Community or in any way as part of the treaties of accession. This is a very serious problem.
    In other words, these words express not agreements reached but hopes entertained. So, while we have the reality of substantial and continuing British payments for the farmer of Europe, we have nothing except the weak words of the White Paper about community policies for industry in the regions which might benefit Britain. So now our Prime Minister has to importune President Pompidou to put these matters on the agenda of the October summit meeting. If he is not careful, President Pompidou may not have a summit meeting at all. I should have thought that everyone here would agree that the right course was to have insisted that these policies should be agreed before the treaties were ever signed.
    The payments here are large and open-ended, in more senses than one. Under Clause 2(3) we shall assume obligations to contribute to the costs of the Community. That is clear; but these costs are changing year by year. Only a few months ago, as the Committee will recall, Community food prices were increased by just under 7 per cent., and they will increase again by roughly the same amount in 1973.
    Surely the Government can give some revised figures of the total Community budget and of our share in it in the years immediately ahead. After all, we are sanctioning in the Clause our payments to the Community, though we do not have the faintest idea what they will be.

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    I questioned the Minister of Agriculture, Fisheries and Food on 17th May about the current and forward estimates, of the Community's common agricultural budget. Remember, this is 90 per cent. of the total budget. To my surprise, I received the information that these estimates did not extend beyond 1972. I was genuinely surprised—[Interruption.] One can be more or less surprised, but in this case I assure the Committee that I was very surprised indeed. After all, in the Council decision of 21st April, 1970, Article 1 provides:
    "that the Commission draw up the financial forecast for the three subsequent financial years."
    What has happened? This is a proper question to ask, and I am glad to see the Chief Secretary in his place, because he has access to the Treasury and will no doubt be able to supply the answer. The figures should be available to the Committee, at least of the size of the Community budget in estimate, for 1973, 1974 and 1975. Indeed, the Government have a duty to supply this information.
    I have every reason to believe that these figures will show a marked increase yet again in the size of the Community's total budget. In the White Paper of July, 1971, the Government's estimates were based on an assumed Community budget of £1,400 million in 1973 and £1,600 million in 1977. I have done the translation into pounds sterling and allowed to the best of my ability for the changes since that date, and I now quote the figure which I believe is comparable. If I am wrong, I trust that a Government spokesman will correct me.
    According to the latest report of the European Communities, the figure for 1972—that is, the budget figure for this year—is over 4,000 million dollars or units of account. When translated back to what I believe to be the equivalent in £s, this in terms of the Government's White Paper is £1,600 million, which is the figure the Government estimated for 1977.
    Sir Robin Turton: Is the right hon. Gentleman aware that the figure given in the Community budget is not 4,000 million dollars but 4,100 million, which is equivalent to £1,708 million, converted into units of account?
    Mr. Shore: The right hon. Gentleman is more accurate than I am in these matters. Frankly, on these occasions I am happy with orders of magnitude, though I agree that it would be useful if we could establish precise figures. In any event, the point is well made and I trust that it will be well taken by the Government.
    Mr. Arthur Lewis: I was staggered to hear the figure given by my right hon. Friend. I am still wondering whether I heard him correctly. Would he mind repeating it?
    Mr. Shore: I have a further point to make which will help to reinforce it. Perhaps no one should be surprised to find the White Paper figures out of date. When we look back over the past decade we see that the growth in the Community's budget has been staggering. It was negligible at the time of Mr. Macmillan's application. It had reached £600 million a year when the 1967 non-negotiation, as it were, did not start. It had climbed to over £1,000 million by 1970, and now—this will interest my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis)—it is £1,600 million, the figure which Her Majesty's Government thought the budget would reach by 1977. In other words, the 1977 figure has been exceeded in 1972.
    Mr. Raymond Gower: The right hon. Gentleman is making a lot of play with figures. Has he borne in mind that even in our domestic Parliament since the war British Chancellors of the Exchequer have been grotesquely wide in their budgetary estimating? Why should the right hon. Gentleman assume that it is so easy for estimates of this kind affecting a great deal of Europe to be made?
    4.15 p.m.
    Mr. Shore: I appreciate the difficulties involved in making estimates of this kind. I am simply trying to establish what the position is at present. After all, we are discussing this matter as responsible people. We must consider whether or not we should abandon control over the payment of moneys from this country to Europe. I cannot understand why anyone should not wish to probe to the utmost to find out precisely what is involved and to satisfy himself, whatever

    721
    view he holds about membership of the EEC, that we are doing the right thing.
    Captain Walter Elliot Captain Walter Elliot (Carshalton) rose—
    Mr. Shore: I would dearly love to give way to the hon. and gallant Gentleman, but as we are working under the shadow of the guillotine I fear that I must disappoint him.
    Having explained that the budget has already reached the 1977 estimate, I am anxious to explain what in my view has been the main reason for this. It is not just the difficulty of making estimates. There is an underlying problem. It is the inefficient method of support for European agriculture and the spread of the common agricultural policy to embrace increasingly all the major foodstuffs. I see no reason why these costs should not continue to escalate.
    We have talked before about the so-called or alleged national veto. It certainly exists on farm prices. They can be lowered only if there is a unanimous decision to do so, and one will not get such a decision from many of the Governments of Continental Europe in view of the importance of the farm vote to them.
    Not only will prices not be reduced, but I am afraid that the myth which Ministers opposite tried so hard to spread last summer—"Do not worry because world prices will rise"—has proved groundless. After all, that was the only possible alternative; if world prices rose it would not matter if Community prices remained at an intolerably high level.
    However, I must inform the Government that the evidence is against them. Despite the exceptional events that affected the supply of butter in New Zealand and what happened to other commodities, there is no evidence to show that the gap is closing. Indeed, the evidence is to the contrary, so that the full burden and cost of the common agricultural policy will have to be borne. It is also possible that the CAP will be extended to some other commodities and that the whole costly protectionist machinery will be extended into new areas.
    We know that just before the negotiations with Britain began the Commission was working on proposals to bring mut-
    722
    ton and lamb within the CAP. I believe that there was a draft regulation to that effect. There is hardly any mutton and lamb in Western Europe, but, provided that the levies and support prices are high enough, I have no doubt that the supply of these foodstuffs could be increased and sheep breeding made sufficiently profitable; and everyone will be happy except our housewives and the exporters of New Zealand.
    Mr. Arthur Lewis: While we know that the Minister of Agriculture, Fisheries and Food knows nothing about beef, perhaps he knows something about mutton and lamb. Does my right hon. Friend agree that the Minister might have shown the Committee the courtesy of being present when an important subject like this is being debated? He might have been able to answer my right hon. Friend's questions. Certainly the Solicitor-General will not be able to answer them.
    Mr. Shore: My hon. Friend has a point, but on the occasions when the right hon. Gentleman has been present we have not found him the most helpful of those who have been dealing with these matters. Such an extension of the CAP—it is perfectly possible that it will be extended to mutton and lamb—would increase the size of the budget and the contribution that we have to make.
    Perhaps I may put another specific question to the right hon. and learned Gentleman. In view of the possible proposal for a regulation to bring mutton and lamb within the ambit of the common agricultural policy and its protectionist levies, is it Government policy to consider any such regulation as raising a matter of major national interest on which we would exercise the alleged veto and refuse to agree to such an extention of the CAP and such levies being imposed? We and every housewife in Britain would be grateful to have an answer to that question before the end of the day.
    There is another reason why we have to worry about the Clause. It gives no adequate parliamentary restraint or control upon the growth of the Community's budget or upon our contribution to it. I will give an example from the way the food levies operate. Once the system is adopted, these have to be adjusted frequently to reflect variations in world

    723
    prices. If a downward trend in world prices should emerge, automatically the size of the levies has to increase. That emerged clearly from the reply that the Chief Secretary to the Treasury gave in column 1140 on 22nd February when he confirmed to my right hon. Friend the Member for Battersea, North (Mr. Jay) that if an existing levy was raised to take account of changes in Community and world prices, no further Order in Council, if there was an Order in Council already, would be required to authorise it. That point was well established.
    Further, the Chief Secretary on the same occasion explicitly envisaged the widening of the CAP to embrace new commodities. He said:
    "it is necessary to make provision for such new levies and for such changes to be directly applicable in this country."—[Official Report, 22nd February, 1972; Vol. 831, c. 1139.]
    The only comfort we got from this—
    The Chief Secretary to the Treasury (Mr. Patrick Jenkin)The Chief Secretary to the Treasury (Mr. Patrick Jenkin) rose—
    Mr. Shore: —I think I can anticipate the hon. Gentleman's answer—was his assurance that the Government would require first that any Community agreement that was reached, to which we were a party, to broaden the scope of the CAP would have to come before the House under the affirmative procedure of Clause 1(3).
    Mr. Jenkin: I am looking through the passage the right hon. Gentleman has quoted. My recollection is quite clear that I also said that there was at present nothing in the wind about extending the policy. I recall that I said there were no proposals to extend the common agricultural policy to new products.
    Mr. Shore: I am grateful to the hon. Gentleman. I hope that the Minister of Agriculture and his colleagues on the Council of Ministers in Europe will be able to confirm his statement.
    But even that does not finish the matter. Both the Chief Secretary on 22nd February and the Financial Secretary on 15th February made it all too clear that it was their understanding that under the "own resources" formula the Communities had an absolute right to the yield of both customs duties and food levies in Britain.
    Mr. Nicholas Ridley: Surely the amount the present agricultural system in this country costs us is determined by market forces, and the levels of the deficiency payments are never brought before Parliament. Will the right hon. Gentleman explain the difference between the Community system in relation to the powers of this House and the present system?
    Mr. Shore: The hon. Gentleman is being a little naïve. I am sure he understands the matter perfectly well. One of the major differences is between an internal transfer cost and a balance of payments cost. That is an important distinction, and by no means the only one, between the two.
    Mr. J. Enoch Powell: Surely the right hon. Gentleman would agree that these sums under our domestic policy have to be voted, appear in Estimates, and go through the whole parliamentary procedure on the control of money.
    Mr. Shore: The right hon. Gentleman has made the second—indeed, he may think the first—important distinction between the two forms of payment, but I think we have established that. This is particularly worrying when we view all this and our inability to take control over the open-ended nature of these payments and look not only at the reality of the situation but at the whole philosophy of the Community and the Government's acceptance of it as expressed by the Chief Secretary on 22nd February. His words will be familiar to us all. Referring to the levies which will be imposed and our own customs duties, the hon. Gentleman said:
    "these do not in reality belong to member countries but flow through, in our case, the Consolidated Fund to the Communities."—[Official Report, 22nd February, 1972; Vol. 831, c. 1148–9.]
    They just flow through. At the time we were all arrested by the image of money flowing through the British people directly to their new tax masters in Europe. [Hon. Members: "Oh!"] I am afraid this is so. It flows through under self-enacting regulations and tax powers which hon. Members, if they do not wake up in time to resist, will see.
    Mr. Douglas Jay: They will never wake up.
    Mr. Shore: I turn to the second point made by the hon. Gentleman. Because it flowed and was no longer the property or under the control of the British Parliament and people, he said:
    "I suggest that an annual Vote in these circumstances would be wholly inappropriate. It would not recognise the reality of our obligation."—Official Report, 22nd February, 1972; Vol. 831, c. 1148–9.]
    That is the whole point. The hon. Gentleman expressed the matter fairly, and I congratulated him at the time on doing so. But let us have no doubt that the control over these sums is virtually negligible and that the amounts involved are completely open-ended.
    The situation is that we are dealing with expenditures whose size we do not and, according to the Government, cannot know or control with the necessity to make a contribution to it which can be altered in both amount and composition by agencies over which we have little and, in some instances, no control. All we can do in the end is to mount a toothless post-mortem on decisions of which we shall have become little more than a spectator.
    All this is intolerable, first because we are assuming a burden which this nation cannot carry. I spoke earlier of the £725 million which the Government admit to be the size of our reduced contribution in the first five years. They know, although they will not admit it, that in the following five years the figure will be much bigger, at least double, and far more likely to be of the order of £2,000 million—a rate of £400 million a year for the next five years. In other words, by our own decision we shall have inflicted upon ourselves the obligation to pay to the continent of Europe over the next decade a sum equal to the whole of our outstanding official sterling balances which the Committee will realise is the accumulation of debts which we sustained in our effort to fight the Second World War. When one considers the magnitude of this burden, it is such an act of folly that I cannot find words adequate to describe it.
    The second reason why it is intolerable is that, if it was possible for us to contribute across the balance of payments something like £2,500 million, adding the
    726
    two together, in the next 10 years, there are many other purposes upon which sums should be spent than to increase the prosperity of already prosperous nations of the Continent of Europe. When I note that about 90 per cent. of all Community expenditure is on the support of agriculture and when I further note that more than half of all the money involved has been given to European farming as compensation for sales in third markets at dumped prices—when I reflect upon that, the whole system appears to be, as it is, not only grotesque but immoral. It is utterly wrong that this country should join with Europe in paying farmers, under the CAP, to over-produce rice in Europe which is then dumped, to the tune of 60 million dollars a year, on third markets, in competition with the poor rice-exporting countries of Asia and elsewhere. It is immoral; that was the word I used.
    4.30 p.m.
    In conclusion, we are seriously contemplating paying, as I said, across the balance of payments, what will be by the end of this decade a sum greater than our contribution to the developing world, the public expenditure component of the 1 per cent. of GNP. We shall be paying a bigger sum to Western Europe than to all the developing nations of the world. I find it absolutely intolerable as a proposition that we should do this, on the broadest ground of our own interests as well as the interests of the peoples for whom we still have some responsibility.
    I turn now to my third reason why these arrangements are intolerable. They are intolerable—I have no doubt that others will speak more to this than I—because no British Parliament has the right to transfer to others the power to tax the British people. Only a Parliament that had lost its self-respect could, in the light of British history, consent to a tame transfer, not just to an executive but to non-elected institutions in Europe, if the power which is fundamental to the freedom of this country and to its practice of democracy.
    If I appear to labour these points, it is because on this matter, at any rate, we have to address not only the Chancellor of the Duchy, the Solicitor-General and the Chief Secretary but the President

    727
    of France and the governments of the other countries involved. Let them have no doubt about this matter. We have never consented to these arrangements. We do not accept these arrangements. We shall not abide by these arrangements. We have no illusions about the difficulties that we shall face.
    Sir Anthony Meyer: Will the right hon. Gentleman give way?
    Mr. Shore: We know very well that the reason why these disadvantageous terms—
    Sir A. Meyer Sir A. Meyer rose—
    Hon. Members: Sit down.
    Sir A. Meyer: On a point of order, Sir Robert. Is it not a gross discourtesy to the Committee, when my right hon. and learned Friend invariably gives way—
    The Chairman: Order. The hon. Gentleman is seeking a wrong way in which to raise a point of order. He must not do it like that, and he knows that.
    Mr. Shore: I think that it is well understood in the Committee by those who have regularly attended it that since the guillotine was imposed we have had to discipline the number of occasions on which we give way, particularly to those who voted for the guillotine.
    I have said that we know very well that the reason why these disadvantageous terms have been imposed is not simply the weakness of the present Government's negotiations but the fact that they took place under the threat of a third French veto. That is the truth of the matter.
    French Ministers have recently confirmed, in their referendum campaign on the issue whether Britain should be allowed to join, which they took to the people of France, that the main reason, as they put it, why they lifted their objection to our entry was precisely the willingness of the present British Government to accept total French demands. If we had any doubt about the matter, we learned only yesterday from M. de Lipkowski at the Western European Assembly of their toughness about this and how much they attach to the agricultural policy. He said:
    728
    "We must not relax our vigilance on the common agricultural policy. If we let it collpase, we should have lost the backbone of Europe."
    That is a classic example of the French identifying their own national interests with what they conceive to be the interests of Europe and of the world.
    We know and recognise how toughly and strongly they are committed; but, equally, they should have no illusions about our resolve. In voting against the subsection today and for the Amendment to delete it we are issuing once again a serious and measured warning to the governments of Europe that Her Majesty's Opposition, on behalf of the British people, whose will and wish have yet to be tested, reject these burdens and will seek to remove them at the earliest moment.
    Mr. Powell: When the Committee, during the limited time permitted to us, disposed of the previous two subsections of the Clause, we abrogated the legislative independence and supremacy of the House of Commons. By adding those two subsections to the Bill, at any rate provisionally, we gave up, over a wide area, the right to legislate in due form or, indeed, to legislate at all.
    What we come to in this subsection is a matter of no inferior importance. Indeed, the control of the House of Commons over expenditure, over the expenditure and the borrowing of the Government of this country, is not subordinate to its legislative power; it is the historical matrix from which that legislative power grew. It was the power of the House of Commons to control expenditure, the necessity on the part of successive Governments to come to Parliament if they wanted to borrow and to spend, which enabled the House of Commons to build up over the centuries its legislative supremacy and its responsibility and right to speak for the people of this country.
    In this subsection, therefore, we come to an issue which perhaps exceeds in its constitutional importance even those of legislation, which we have considered in connection with the previous two subsections. As we examine, as the Committee ought to do in detail, the provisions of this subsection, we shall find that with each successive phrase a constitutional principle is destroyed and

    729
    sacrificed; a whole chapter of our constitutional rights and law is lost with each passage between commas in this subsection as it is printed in the Bill.
    I ask the Committee to be patient enough to study these phrases separately and in succession. The first phrase refers to the making of
    "payments to any of the Communities or member States"
    and it enacts that "the amounts required" to do that shall be charged upon the Consolidated Fund. The plain meaning of that is that the expenditure which is necessary to make payments to the Communities or to member States is no longer to be dealt with as Government expenditure has been dealt with heretofore. It is not to be presented to the House of Commons in the form of Estimates. It is not to be debated by the House of Commons under the forms of Supply. It is not to be appropriated by the House of Commons. We are to be neither informed in the manner to which we have been accustomed; nor are we to be allowed to debate these sums; nor are we to be allowed to vote them.
    The right hon. Member for Stepney (Mr. Shore) was complaining of the paucity and the doubtfulness of the estimates, which the Government had made, of the sums that would be paid in this way in the first financial year concerned and in subsequent years. It is all very well for the right hon. Gentleman to ask for estimates. But the purpose of this subsection is to ensure that the House of Commons is never given estimates. That is what it says in terms. We are never to be given estimates of the sums which are to be paid in this way; and I thought that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) brought out very acidly a very important point when he elicited the contrast between these payments and our present internal agricultural arrangements, where, however difficult it may be for the Chancellor of the Exchequer to estimate what the cost of agricultural support is going to be, he has to put in an Estimate, and if he turns out to be wrong has to come back for a Supplementary Estimate, and stand the criticism of the House at every stage if the House wishes to criticise.
    So, in the first element of this subsection we say that, not for a short period
    730
    of time but for ever, these payments are not in form to be brought before the House of Commons at all. One can put it another way, and say that this is the last legislative Act the House of Commons is ever going to perform in relation to payments to be made by the Government to the member States and to the Communities.
    I remember as a new Member of the House being taught, under the tuition of the learned Clerks, how many keys had to be turned in the locks before the money voted on behalf of the taxpayers could be paid out by the Government. This is the last turning of the last key for ever. After this subsection is in the Bill, there is not even a door—certainly none which the House of Commons can control.
    I was fascinated by the quotation which the right hon. Gentleman made from the speech of my hon. Friend the Chief Secretary to the Treasury on 22nd February when my hon. Friend said that such and such a proposal was not "in the wind". But this subsection is not limited in time. I am not merely complaining that there is not an annual limitation, though annual vote and appropriation has been the basis of the financial control of this House hitherto. What I am bringing to the attention of the Committee is that there is no time limit whatever—that, whatever is "in the wind" at any time in future, no further legislative act is necessary to authorise the payments which it will require. Never will any future Government have to come back with an Estimate, for a Vote or, still less, for legislation.
    Sir A. Meyer: With deference to my right hon. Friend's great knowledge, may I ask him whether he is maintaining that by passing this sub-section we are inhibiting the House of Commons in future from altering these arrangements if it so wishes?
    Mr. Powell: We shall have opportunity at a later stage to debate how far we are, either in practice or in form, binding ourselves in this Bill for the future. But it is a poor argument for or against what is being done in a Bill to say. "But this can be changed if it is not satisfactory." I am saying that on the face of it it is not satisfactory; and I will add that year by year, as this remains in force, if

    731
    it ever comes into force, it will appear more and more impracticable and impossible ever to revert to the constitutional forms which we are deliberately destroying in this subsection.
    Now I come to the second phrase, which charges upon the Consolidated Fund
    "any Community obligation in respect of contributions to the capital or reserves"
    of the European Bank, and any loans to the bank. I must confess here that I think that my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) perceived and expressed by his Amendment an important point; for it is true that constitutionally we have always regarded it as appropriate that loans and the service of loans should be charged upon the Consolidated Fund. So far at least as the service of loans is concerned, once the obligation has been accepted, then, of course, it follows as a matter of course that the consequence must be fulfilled. So, in a technical sense—and we shall have to express an opinion on it later this evening—my right hon. Friend was probably right to distinguish this element of the subsection from the others. Yet it is still grossly defective, and in this important respect—that never before has the House of Commons given to the Executive the power to advance capital sums without limit. Of course, there are dozens of Statutes on the Statute Book which contain the power to raise and to advance sums. The nationalised industries are financed on this principle; and, significantly, the best opportunities the House gets to debate the nationalised industries arise whenever it is necessary for the Administration to come back for more power to lend them money.
    4.45 p.m.
    [Mr. E. L. MALLALIEU in the Chair]
    Let hon. Members realise that there will be none of that so far as these capital sums are concerned. There will be no question of an Administration having to explain, let alone justify, let alone quantify, the size of the capital sums which are to be advanced. Once this subsection is in the Bill, there will be none of that. It will be a matter in which the House is entirely short-circuited and bypassed. We shall no longer
    732
    have the power, which we historically always have had, to control the lending of the Executive as well as the borrowing.
    Indeed, it is the next phrase—and a very ominous one, too—which brings us from lending to borrowing. I ask the Committee to look narrowly at these next words:
    "…the amounts required…to redeem any notes or obligations issued or created in respect of any such Community obligation…"
    that is, of any Community obligation either to make payments to the Communities or Member States or to make capital contributions. What this is saying is that there is to be charged on the Consolidated Fund everything that is necessary to enable the Government to raise loans, to incur debts. It says that the Government can issue Government securities, short-term and long-term, floating and funded, without any limit specified in the Bill, provided that they are "in respect of" the Community obligations described in the earlier part of the subsection.
    Hitherto, in examining this Clause it has been literally correct to say that we were being invited to go back beyond the 17th century, that we were being invited to undo all the principles of control over the Executive which were established in the struggles of the 17th century. But here we are going much further back, because the very germ of parliamentary control arose out of the consequences of borrowing by the Executive.
    In what we are doing in this part of subsection (3), we are not merely going back beyond the 17th century; we are going back to the 13th and 14th centuries. Henry III and Edward III used to raise great loans and then, when they found they were unable to satisfy their creditors, they came to Parliament and said "You must get us out of this". The House of Commons soon realised that it was no good just controlling the current expenditure of the Government, but that unless it could also control the borrowing of the Government, it had lost control over the policies, the behaviour and the finances of the State. So it was in the very earliest stages of the evolution of the financial control of the House of Commons that the borrowing of the

    733
    Executive was put firmly within the control of the House.
    Until this moment all borrowing by the State is authorised specifically by Parliament. I realise that the operations on the floating debt are authorised by standing Statutes; but all the funded debt which is incurred by the Government hitherto can be carried back to specific statutory provisions which authorise them to borrow and tell us for what purpose they are authorised to do so. With this phrase, all that will be gone. With this phrase—and this is its purpose—the Government can issue notes and create obligations in respect of payments, capital and current, to be made to the Communities. These are to be charged on the Consolidated Fund and no more will be heard of the matter legislatively in the House after this Clause is passed. These are the three fundamental erosions of the very pillars of the control and the authority of the House of Commons.
    Mr. Ridley: I do not quite see my right hon. Friend's argument, because we borrow, presumably, from the British public and the International Monetary Fund under some past Statutes which give authority so to do. I see no difference between those Statutes and this projected Statute in that, once they are all enacted, the Government are free in all cases to raise such sums as they so wish according to the Budget.
    Mr. Powell: Once again my hon. Friend has really conceded the point, because he used the words "such sums". "Such sums" in the proposition which he is putting to us are the sums which Parliament by Statute has authorised the Government to raise. My hon. Friend also referred to sums being authorised in the Budget. But the Budget is the beginning of the cycle of parliamentary control of expenditure. The point of the words in the Bill is that they take borrowing for Community purposes out of the scope of these forms of financial control, which my hon. Friend, because he is so good a parliamentarian, cannot help mentioning because it is the only vocabulary in which he, like the rest of us, can talk about these matters.
    I direct attention now to yet a fourth innovation which is taking place. I would carry the eyes of hon. Members to subparagraph (b) of subsection (3), which
    734
    is concerned with the sums which, hopefully, are going to be paid into the Consolidated Fund, which are going to be "received under or by virtue of the Treaties". They are to be paid into the Consolidated Fund "save for", and I ask the Committee to look at this phrase:
    "such sums as may be required for disbursements permitted by any other enactment".
    Not even "permitted or required for Community purposes" but "permitted by any other enactment." That means that it will be possible, in effect, to appropriate in aid sums received by the Treasury, by this country, "under or by virtue of the Treaties" and offset them against any other kind of Statutorily authorised expenditure whatever.
    Here again we breach a most important principle, namely that the receipt of sums by Government is as jealously watched over by the House as the disbursement of sums; for, if a Government were able to disburse sums which we had not authorised to be received or raised, then to a large extent they would have escaped from that control of expenditure which it has always been our purpose to exercise. That is why a Ways and Means Resolution is as much required for a receipt as it is for a disbursement. That principle too is abrogated in paragraph (b) of this subsection.
    Finally, I come to paragraph (a), which is the one exception. It is the one authorisation in due parliamentary, constitutional form and, it speaks of expenses which:
    "may be paid out of moneys provided by Parliament."
    Those are the magic words which invoke all the panoply of parliamentary financial control. What are these "other expenses"? They are not any of the expenses set out above in the subsection. Obviously there will be incidental expenses, administrative expenses; but I believe that these "other expenses" go beyond that. There is no provision so far in this Clause for payments made "under or by virtue of the Treaties" to individuals or to firms, or indeed to anyone but the Communities, the member States and the institutions set out in the preceding lines. Yet there are many payments already, and there will be many more in future, which will fall to be made by the Government "under or by virtue of the treaties" to individuals and the rest.

    735
    I refer again briefly to the case reported in the week ending 19th May, the case of Signora Leonisio before the European Court:
    "In its judgment the court declared that the Council regulation was directly applicable and that it created rights for individuals which the national judge was under obligation to uphold. Payments to creditors accruing from such regulations became due once the prerequisites laid down in the regulation had been complied with".
    Now, it may be that the particular payment would fall under Clause 6, as part of the common agricultural policy in the widest sense of the term—I think not; for I cannot in Clause 6 find anything which would cover this kind of payment—but what is quite certain is that under the further policies in which we have been told the Community will be encouraged to engage, large payments will have to be made from time to time—for example, in connection with a regional policy—to individuals and firms and to recipients other than the Communities, the institutions of the Communities and the member States. All these payments, therefore, whatever they are for—my hon. Friend the Chief Secretary may later inform the Committee what they consist of or may consist of—will be
    "paid out of moneys provided by Parliament."
    Are my hon. and right hon. Friends going to say that this is all right because they are optional payments? I think not. They would be hard put to it to say that the payments which fall under paragraph (a) are a filigree, a luxury, an optional expenditure which is entirely within the control of our Government. They know perfectly well that the payments falling under paragraph (a) are just as much or as little a necessity "under or by virtue of the Treaties" as any other of the payments with which this subsection is concerned.
    So the Government have given away their case for this subsection by paragraph (a). They have admitted that it is perfectly feasible to apply the normal parliamentary procedures of control to disbursements which have to be made "under or by virtue of the Treaties". We found this before. In discussing the provisions of the previous two subsections of this Clause we found that the Government had admitted by the drafting of their own Bill, as did the Prime Minister
    736
    in the Second Reading debate, that the Bill could have been drawn otherwise, that it could have been drawn so as to preserve the parliamentary control of expenditure in form. That cannot be denied.
    5.0 p.m.
    But it is not only in form, and here I come to the last point; it is also in substance. The reply which we are accustomed to receive at this point from my right hon. and learned Friend is that since the treaty is binding upon us, either directly or in principle, it would merely be a formality if we nevertheless insisted upon the proper forms of parliamentary control. My right hon. Friends say "There is no real problem; for you will be told about all these things long before they happen. You will be shown accounts. Probably the Commission will produce accounts which could be obtained through the Vote Office by special arrangement and special courtesy. What is more, out of our superabundant generosity we will occasionally arrange a debate. Normally we will expect it to be in the Supply time of the Opposition; but now and again the Government might be generous enough actually to invite this House to debate some of the budgetary arrangements, some of the expenditures of the Community." Therefore, they ask, what is the difference?
    There is a world of difference when the forms which have to be complied with require, first, a full statement in advance to this House of what is required; secondly, an explanation of what is required; and, thirdly, a vote of this House, which, even though it may realise that the vote is implicit in membership of the Community, nevertheless involves a reality of debate and a reality of examination which cannot be obtained in any other way. We are not this afternoon arguing about tradition and forms; we are arguing about the substance, and we are doing so all the more because of the nature of the bodies which will be taking these decisions, which will be incurring these expenditures, and to which we shall be making these payments. If at any time in the past, over these many hundreds of years, a Government had come forward with a Bill to do what subsection (3) does, they would have been received not with anger or mockery but with incredulity. It would not have

    737
    entered the thoughts of any Government to deprive this House so comprehensively as this subsection does of our powers of financial control. Yet that would have been, in my imaginary case, the arrogation of powers to a British Government; it would be a shift as between this House and the Executive of this country.
    Mr. Neil Marten: That is what they want.
    Mr. Powell: That may well happen, too; but the essence of this subsection and of the form in which deliberately and intentionally it has been drawn is to transfer those powers not to the Executive here but to an Executive over which Her Majesty's Government will have no control and over which they will have only a varying degree of influence. How much more incredible, therefore, must it then be if we were to show ourselves willing to give up what our predecessors have gained over so long a period of time?
    As so often, we find in these debates that in the end it is not really a debate between those who are for or against what is miscalled "Europe". This is a debate for or against Parliament, for or against the House of Commons. Parliamentarians on both sides of the Committee, those who are in favour of British membership or association and those who are opposed to it, will be just as much in support of these Amendments. I ask them, when they come to cast their vote on this, to remember that it is not form but substance about which we decide and that we do, demonstrably on the face of the Bill, have the choice both of form and of substance. We ought to exercise our choice as true parliamentarians.
    Mr. Jay: I wholly agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) that this subsection strikes at the root and substance of parliamentary Government and as it stands it is a constitutional outrage which has been presented to the Committee. I also believe that the declaration which my right hon. Friend the Member for Stepney (Mr. Shore) has made, that no Labour Government would ever in any circumstances accept these arrangements, will be widely applauded throughout the country.
    738
    I want to supplement what my right hon. Friend said about the economic damage implicit in the Clause. This subsection would be responsible for the main economic injury which would be done in this country just as Clause 2 and the subsections we have already discussed would be responsible for a great deal of the political damage. If these subsections were allowed to go through in this form a crippling burden would be placed from 1973 onwards on the United Kingdom's balance of payments, which is already moving into the red, and which would inevitably deteriorate thereafter, year by year, as the financial burden steadily rose.
    This is, therefore, an appropriate moment for the Committee and the country to abandon the complacency which is all we get from Ministers about the economic prospects implicit in the Bill and in these policies and to realise the economic dangers into which we are being led. This subsection, together with the Treaty of Accession, would extract by 1978, at the end of the transitional period an annual sum of about £500 million by way of indirect taxes, mainly food taxes, from the British consumer and channel it across the exchanges to the EEC budget. The figure I gave of £500 million is probably an under-estimate, even for 1978.
    As long ago as February, 1970, and before food prices had risen very substantially, the Labour Government's White Paper put the figure at about £400 million prospectively for 1977. The Chancellor of the Duchy presented his own official estimate to the EEC in July, 1970, although he has never admitted doing so in this House. The subsequent negotiations have not materially affected the situation as it will be at the end of the transitional period, and he estimated that by the end of 1978 the United Kingdom would be paying 45 per cent. of the total food levy income of the enlarged EEC and 31 per cent. of the total of the whole EEC revenue. That is an outrageously unfair proportion for this country.
    The right hon. and learned Gentleman also estimated the total net contribution of the United Kingdom after generous allowances for repayments, at $1,100 million or about £470 million. Since then

    739
    food prices in the EEC have risen even further and no firm guarantees have been obtained from the Community about return payments for development areas or for any other purpose in this country on the scale hoped for by the right hon. and learned Gentleman. It is clear enough, therefore, that the right hon. and learned Gentleman's estimate of £470 million in 1978 must be regarded as an under-estimate, and even if we optimistically accept this outdated figure the economic burden on this country would be intolerably heavy.
    Three main consequences follow if the subsection and the annual tribute are allowed to be enforced on this country. First, higher food prices would make it certain that the burden of entry would be paid mainly by the poorest sections of the community in this country. We have had an up-to-date estimate of this from Mr. T. E. Josling, who is, I believe a pro-marketeer. In his book "Burdens and Benefits of Farm Support Policies" he concludes that the reason why the costs of the CAP would in this country
    "fall so heavily on the poor is because it would be felt largely that a rise in the price of food bulks particularly large in low income budgets."
    This process has already begun.
    Mr. Eric Deakins: It does not require the attention of an economist in a book published recently to point out what has been obvious to most of us on the Labour benches; namely, that any rise in food prices as a result of the CAP would undoubtedly hit the poorest sections of the community.
    Mr. Jay: Anyone should see that but it seems to need an expert to drive it into the heads of some hon. Members. The rise in food prices since the Government took office, already over 17 per cent., and the present beef prices, are very largely an effect of the Government's incipient Common Market policies—the levies already enforced and the remarkable decision by the Minister of Agriculture only last week, not to ban the export of beef from this country, which would have been an obvious short-term solution to the crisis. As food prices rise the public are beginning to learn what entry into the Common Market means for ordinary people.
    740
    In my judgment retail food prices are likely to be at least 50 per cent. higher by 1978, even if we do not accept these arrangements. We have just heard from an expert in the baking industry that a 40 per cent. to a 100 per cent. rise in bread prices is likely when these arrangements come fully into force. It is a fascinating fact that the £500 million or so a year tribute which has to be extracted from the British family by means of consumer taxes is only about half the annual sum officially estimated to be lost in France through evasion of income tax.
    5.15 p.m.
    The French National Institute of Statistics estimates that about £1,100 million, or one-third, of French income tax revenue is lost through evasion every year. So the truth is that if only half the tax revenue illegally evaded by the French ruling classes was honestly collected there would be no need for this annual payment by the United Kingdom. We have learned only recently the interesting fact that the French Prime Minister pays no income tax. The poorer British taxpayers are being asked to subsidise not merely inefficient continental agriculture but mass tax evasion in France and Italy as well. When this is properly understood I believe that most people in this country will regard it not only as ludicrous but as utterly indefensible.
    The most serious consequence for this country, I believe, is the threatened burden which we are now incurring on our future balance of payments. The first consequence in balance of payments terms of joining on these conditions will be abudget payment across the exchanges starting at the end of the transition of about £500 million a year. But this is only the start and in itself it less than half the total burden which will be incurred. Next comes the loss to this country on visible trade for items other than food. The net trade loss resulting from higher industrial costs due to higher living costs, the loss of free entry or preference throughout the Commonwealth and EFTA, and the worsening of our trade balance with the EEC was estimated in the Labour Government's White Paper at about £200 million. Here again the Chancellor of the Duchy has made an estimate to help us. On 16th December, 1970, he estimated that this burden would be between £200 million and £300 million

    741
    a year; that is, after allowing for higher exports to the EEC. I believe that is an under-estimate, but let us accept the right hon. and learned Gentleman's figures at, say, £250 million.
    So far that is an extra burden on the balance of payments of over £700 millions a year after the transition period. In addition, there will be the higher import cost of food and feeding stuffs which will have to be bought from the EEC instead of from cheap and efficient producers in the rest of the world, and the much higher prices for the food we already buy from the EEC.
    Since grain, sugar, meat and dairy produce prices in the EEC are now 30 per cent., 50 per cent. or even 100 per cent., higher than world prices, this item cannot be put realistically at less than a further £200 million a year. Even that allows for a forced reduction in food consumption by the British public as a result of the higher prices. The February, 1970, White Paper put that item at about £170 million before the widening of the gap between EEC and world grain prices which has occurred since.
    On current balance of payment account alone, without allowing for capital exports, the prospective extra and unnecessary burden in the United Kingdom after the transitional period cannot with any semblance of honesty or realism be put at much less than £1,000 million a year. In addition, since all restrictions on capital exports to the EEC would also be removed, the total burden must be a good deal higher, and, since sterling would be weakened by the current account deficit, it would probably be very much higher as a result of capital movements.
    Therefore, the Committee should realise what all this means and should not continue to blind itself to these facts, as the Government apparently are doing, and ignore the inevitable consequences of what we are being asked to undertake. If the Committee accepts this subsection and all it implies, these burdens would begin to be felt in 1973 and 1974.
    It so happens that the National Institute for Economic and Social Research only this week published the fact that it expects the United Kingdom's current balance of payments surplus in 1973 to fall to a very small figure—a reduction from £950 million in 1971 to only £250
    742
    million in 1973—and that it expects a prospective larger deficit in 1974. If one adds that to the rising burdens in the EEC which I have described, the prospect after 1973 is for a mounting overall deficit which would gravely weaken sterling and bring economic growth in this country nearly, if not completely, to a stop. No British Government in those balance of payments circumstances would be able or willing to stimulate the sort of consumer boom needed to achieve rapid economic growth.
    Some people lightheartedly try to escape these conclusions by blithely suggesting that if all this happened all that we would have to do would be to devalue sterling once again. But under these arrangements if we join the EEC food prices will be fixed in dollars or units of account, as they call them; and if we devalued in these circumstances in this strait-jacket we would automatically raise our internal food prices still further. This would give a further twist to the decline in living standards and to the rise in our industrial costs, indeed to the whole vicious spiral process in which we would be involved.
    Secondly, if we try to devalue, we should be caught up in what is the EEC's worst folly of all—more rigidly fixed exchange rates, ending in complete monetary union. We should have lost the freedom to devalue without the permission of the Brussels authorities whose professional prejudice would be against allowing countries to do so. In those circumstances there would be no solution other than drastic deflation and the end of all prospects of economic growth for a long time ahead. The fact is that the whole package of economic policies involved in this settlement which is to be enforced in this subsection is a recipe for economic decline for this country, just because these policies were never designed with the interests of this country in mind.
    It is time that the Committee realised that this is the sort of situation into which the policy of the Government and the provisions of the Bill are leading this country. What the Government are doing—the Committe can judge this from the speeches we have had from Ministers ever since these debates started—totally ignores all realistic estimates of the balance of payments prospects and they are taking

    743
    refuge in a few soothing platitudes and pious hopes.
    It is not good enough to assert that all the estimates made by my right hon. Friend are wrong and much to pessimistic. If Ministers want to be taken seriously they must advance serious arguments to show how, why, and by how much these estimates are wrong. So far they have entirely failed to do this and, in my view, are merely misleading the Committee and the country at large by irresponsibly refusing to apply their minds seriously to the problem.
    If these policies are pursued, then I believe that when in 1973 and 1974 and thereafter the country wakes up to what is really happening there will be no kind feeling of forgiveness for Ministers who have led the country into that situation. Since the heart of the whole mischief is the EEC's outrageous common agricultural policy, which gets more costly with every year that passes, and since that policy is in turn enshrined in this subsection, far the best thing for the Committee to do in the interests of our national future is to reject this subsection.
    Mr. J. Selwyn Gummer: There have been certain similarities in the way in which these matters have been dealt with by the right hon. Member for Stepney (Mr. Shore) and the remarks of the right hon. Member for Battersea, North (Mr. Jay). The similarity does not arise in each sentence but in the cast of the argument. It is the difficulty of the double argument which has been shown so clearly in speeches by the two right hon. Gentlemen.
    The righthon. Member for Stepney seeks to suggest, when speaking from the Opposition Front Bench, not that there is something wrong in the agreement to enter the EEC, but that there is something particularly wrong about the agreement which has been made. He finds the argument a little difficult and uses a technique which, if superficially heard, is extremely effective but which, in fact, is wrong. That technique is to suggest that what we are doing is coming to an agreement with some kind of foreign body with which we have no connection and that somehow or other—[Interruption.] If hon. Members will allow me
    744
    to develop my argument, perhaps they themselves will be able to make speeches and disagree with what I have to say.
    5.30 p.m.
    The right hon. Member for Stepney spoke about our new taxing masters. He mentioned not our rôle as part of the Community but our being taxed by new taxing masters. The whole suggestion must be that the Committee and the country should voluntarily give up powers not to a community or to ourselves in association with others but to some kind of dangerous foreign organisation no doubt supported by the evil French or by the Italians, who were singled out by the right hon. Member for Battersea, North.
    It is important for us to underline this factor because often the efficacy of statements derive more from the conditions in which they are made than from the statements themselves. The context is to build up in the minds of the British people something which is rather curious for an Opposition Member to do—namely, a kind of narrow nationalism of fearing the foreigner. [Hon. Members: "No."] Anybody who has sat through these debates as long as I have will agree that that is what is being done. This is a thoroughly reactionary and dangerous thing to do, particularly when the Labour Party has always set itself out to be an internationalist party.
    The right hon. Member for Stepney expressed what he called genuine surprise. He has expressed surprise often in these debates, and whether on those occasions it was genuine we do not know, but on this occasion he expressed genuine surprise at the existence of this provision and at the fact that there should be reference to "own resources"—
    Mr. Shore Mr. Shore rose—
    Mr. Gummer: It would be more sensible if I were to continue my remarks. I will give way to the right hon. Gentleman a little later.
    The fact is that the "own resources", to which the right hon. Gentleman referred, was something which the present Government and the Labour Government originally did not want. The right hon. Gentleman referred to a waiver. I do not know upon what he bases that suggestion.
    Mr. Eric S. Heffer: Will the hon. Member for Lewisham, West (Mr. Selwyn Gummer) stop quoting my right hon. Friend the Member for Stepney (Mr. Shore) and then refusing to give way? There is a rule, which the hon. Member will know when he has been here as long as I have, that if in a speech a reference is made to an hon. Member and the Member concerned intervenes, he is allowed to make his comments. The hon. Member must not ignore my right hon. Friend.
    Mr. Gummer: Although the hon. Member for Liverpool, Walton (Mr. Heffer) has been in this House longer than I have, he has not sat through these debates as long as I have. Had he done so he would know that his right hon. Friend the Member for Stepney has refused to give way to those he has directly attacked. However, when I have completed what I have to say on this point, I will gladly give way to the right hon. Gentleman.
    The fact is that there has been no statement from the Government that we have wanted a waiver of the "own resources" provision. All the statement said was that we would work together to find a solution to the basic problems which arise through the financing of the EEC. I suggest that the "own resources" part of this proposal is an essential, important, vital and valuable factor.
    If we are to join a Community which is to have no life of its own and is unable to make any of its own decisions, we are joining a Community which is not able to carry out the things which many of us believe it should carry out and the things which are essential and basic to the European ideal. If the Community is to have no resources of its own it will be permanently unable to create the kind of association in Europe which has so often been proposed by the Leader of the Opposition and by my right hon. Friend the Prime Minister. But if the Community is to have a life of its own, it has always been agreed that it should have some resources of its own.
    The proposition has been advanced that we have no firm figures for the period after the ending of the transitional period—in other words, that there are no proper budgetary figures for 1980 and beyond.
    Mr. Shore: I rose originally in order to save time and to remind the hon. Gentleman that what I said about being "particularly surprised" related to the lack of the three-year estimates on budget expenditures which the Commission had proposed to produce, reference to which was made in the Luxembourg decision of 21st April, 1970. The hon. Gentleman should be corrected on that point.
    On the "own resources" argument, I think that there are great objections to "own resources", especially to the package of "own resources". Indeed, those objections were held just as strongly by the hon. Gentleman's Government when they opened the negotiations as undoubtedly they would have been by my party had we been in charge of negotiations at the time. But if the hon. Gentleman has any doubt about it, may I refer him to the statement by the Chancellor of the Exchequer in Luxembourg, in the course of which he said:
    "We were not a party to your agreement of April, 1970."
    He said that if we had been the position would have been different. He went on:
    "If I appear to labour the point, it is only because, unless a solution is found, the burden on the United Kingdom could not be sustained and no British Government could contemplate joining."
    That was the Chancellor's statement and not ours. The tragedy of these negotiations is that the right hon. Gentleman swallowed the words of the right hon. Gentleman who preceded him.
    Mr. Gummer: If I may interrupt the interrupter, we now see why I drew attention to that very phrase. The right hon. Member for Stepney misquoted it. He used the word "waiver". That does not appear in the phrase. I submit that there is a difference between a demand for a waiver and a demand to find a solution together to this basic problem. I am sure that on reflection the right hon. Gentleman will agree that there is a difference between the two. The argument of my right hon. Friend the Chancellor of the Exchequer was that we had to come to an agreement which was satisfactory to both sides and which would mean, and has meant, a long transitional period.
    It is true that we were not a party to these argreements. How sad it is that

    747
    we were not. If it had not been for the opposition of right hon. and hon. Members on both sides of the House early on, we might have been. Having not been a party to those agreements—[Interruption.] I am addressing myself to the remarks in respect of which I gave way to the right hon. Member for Stepney. It was the hon. Member for Penistone (Mr. John Mendelson) among others who demanded that I should give way to the right hon. Gentleman.
    The real argument is not against the fact that there will be "own resources" in the Common Market. It is not against the common agricultural policy. These were facts recognised and accepted on all sides for some time. It could be argued that there is something in the nature of the negotiated terms which makes the deal so enormously bad for us that we are unable to accept the terms—
    Mr. Jay: Hear, hear.
    Mr. Gummer: The right hon. Member for Battersea, North, says "Hear, hear". But that is not his argument. His argument is that the common agricultural policy is wrong and that no terms would be suitable. However, his own Front Bench say that the common agricultural policy is acceptable. I believe that the Leader of the Opposition has said as much. The Front Bench opposite argue that the deal that has been done is unacceptable. That is the distinction.
    Even here, the argument falls down, because it ignores the fact that the common agricultural policy is admittedly the one area of complete common policy which so far has been carried out and that we shall be having similar areas of regional policy, for example. I believe that the right hon. Member for Stepney referred to this matter. He said that we should have negotiated that before coming to an agreement. I find that very odd. If it is wrong to have a common agricultural policy which ties this country to the payment for that policy and gives to a central authority powers which hitherto we have had exclusively to ourselves, it seems equally odd to get round that problem by having another common policy and doing the same. If it is constitutionally unacceptable to run a community in this way on a common agricultural policy, surely it is even more
    748
    constitutionally unacceptable to run it in this way on two or three.
    I believe that we should be better advised to remember that we are here giving an earnest of the fact that we are becoming part of a Community and that that Community will have resources partially chosen individually by each of the countries and partially "own resources" which will be used together for the benefit of the whole community. What is sad is that right hon. and hon. Members who are rightly concerned for the aid that this country gives to those who are less well off than ourselves always exclude those who are less well off in Italy and Southern France.
    This subsection, far from being objectionable and far from being one that we should delete from the Bill, is the absolute kernel of our case for entry. What it does is to say that this country, having developed over the years a system and method of organising itself not as individual countries living totally separately but first as a Kingdom in Britain and then in Scotland, and having built up a system which works for us, will now move into a wider and more valuable association in which we shall be part of a community. This continual insistence that increasingly we shall be a spectator of something which will go on outside ourselves is to describe not the situation when we have entered the Common Market but the situation if we were not to enter.
    The one way of ensuring that we have very few of our own resources and that increasingly we are a spectator is to make sure that we do not pass this subsection and do not take part in a growing community, not where we are ruled by "tax masters" but where we are in association with our neighbours not only using our own resources as a community for the creation of a better standard of living for the people of Britain and Europe as a whole but using that wealth which comes from this association for the real development which is necessary in this world, which is the development of the whole world. That development will come about only if we use our wealth and unity in Europe satisfactorily.
    Mr. Raymond Fletcher: I am afraid that I cannot accept or follow any of the speech of the hon. Member

    749
    for Lewisham, West (Mr. Selwyn Gummer). It was an excellent performance, thoroughly qualifying for membership of certain sections of these benches, but it had nothing to do with the Clause that we are discussing and the Amendment at present before the Committee.
    What we are discussing, and what I intend to discuss, is one of the two major themes which have run through this debate like a broad red thread ever since the Committee began its deliberations. The first theme was stated, as usual, clearly by the right hon. Member for Wolverhampton, South-West (Mr. Powell). We are not discussing the price of lamb cutlets in Paris. We are discussing the future of this Parliament. We are also discussing another majestic theme, which is that of no taxation without representation.
    I trust that I shall not trespass upon the patience of the Committee or transgress its rules if I state parts of that theme in the language used by those who first stated it in the 1750s and 1760s. It may make a change from the discourse to which we have just had the misfortune to listen.
    What is running through the arguments of the pro-Marketeers on both sides of the Committee is that the European Economic Community is a benevolent institution. There is no need for me to challenge that assumption in order to proceed with my argument. In the history of this country there have been benevolent monarchs who had to be dealt with rather severely. I would not describe the late Charles I as the most malignant person to sit upon the throne of England, though I wish to refer to another monarch who had very good intentions and to whom I am said occasionally to bear a facial resemblance. I refer to George III.
    George III has gone down in infamy because he committed his offences against a country which has the largest communications system in the world. But I remind the Committee that George III was a much more benevolent gentleman than some of the Eurocrats who sit in Brussels or some of the half-baked admirers of those bureaucrats who go on free trips to see them at work.
    5.45 p.m.
    In the celebrated proclamation of 7th October, 1763, which the entire Com-
    750
    mittee has forgotten, George III referred specifically to what was happening in the then colonies of Northern America. He said that
    "great frauds and abuses had been committed in purchasing the lands of the Indians, to the great prejudice of our interests and to the great dissatisfaction of the said Indians."
    He went on to say that many of the actions, whether taken or rejected, by the governments which ruled our North American colonies were benevolent in the extreme.
    The colonists objected. At times they seemed almost as frowsty a lot as hon. Members on these benches, including myself. They were objecting to what in many cases were desirable measures. But the argument began when taxation was imposed to raise resources from these colonists, and one assembly after another asked why those resources were being raised. Were they to be used for the betterment of life in Massachusetts, Virginia or any of the 13 supposedly sovereign States which formed His Majesty's dominions at that time? No, they were not. They were intended to be used, as was made specific in the Townsend Acts of 1767, to create a colonial civil list which would have removed the Royal Governors away from any kind of control of the assemblies of the various States. To refer to these matters is to bring in the Boston Tea Party. But the imposition of the tea tax was by no means the most malevolent act inflicted by this Parliament on another.
    That was the question to which the colonists of that time addressed themselves. It was not the right of the Crown through Parliament to impose taxation. What concerned them was the purpose for which that taxation was to be used. That was how the argument began, and it seemed a very narrow one when it first began in 1764 with the Revenue Act, when we had a lenient Government here who changed their minds from time to time much the same as the present Government, to whom lame ducks are now becoming flying eagles.
    The Revenue Act, 1764, reduced the duties on molasses entering the American colonies from the foreign-dominated parts of the West Indies, as compared with the totally unenforceable Molasses Act, 1733. But this reduction in taxation,

    751
    because of the way in which it was carried through, was not welcomed by the colonists. It was resented by them because they realised that it represented the derogation of a certain degree of power from the sovereign assemblies then in control of the 13 States to this House and the monarch who then, by bribery and corruption rather than oratory, controlled this House. That is what the argument was about, and it is most interesting to read such people as Mr. Otis on Revenue, and Mr. Otis generally profoundly regretted what he was writing about.
    It is even more interesting to go through the account that was given by a French agent, the Chevalier d'Annemours. It was not certain that it was him, but this is a report by a French agent written in delightfully bad English. It is pointed out in this report of a debate which took place in an Assembly of Virginia on 30th May, 1765 that certain members objected to the Stamp Act. That was objected to equally violently in this country, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) is well aware. He was not, of course, present on that occasion. The Act was objected to by the representatives of the State of Virginia, one of whom was the celebrated Patrick Henry.
    Certain Members said that the tax was wrong and they were accused of treasonable conduct. The Speaker stopped them from saying what he considered was wrong, and the whole affair was dropped, but on the following day, 31st May, 1765 the matter was raised again. These quotations illustrate a point, as I intend to demonstrate before I sit down. I am not trying to introduce an element of comedy into an otherwise boring and uninstructive debate. I am introducing these quotations for a definite purpose.
    This French agent states that on the following day
    "One of the resolves that these proposed"—
    and this was moved by Patrick Henry himself—
    'was that any person that would offer to sustain that the Parlement of England had a right to impose or lay any tax or dutys whatsoever on the American colonys, without the consent of the inhabitants therof, should be looked upon as a traitor, and deemed an enemy to his country: there were some others to the
    752
    same purpose, and the majority was for entring these resolves; upon which the Governor disolved the Assembly, which slightly hinderd their proceeding."
    In the eighteenth century they had sharper measures than the guillotine. Again I draw the attention of the Committee to the elegant prose in that report of the proceedings by a Frenchman. In those days Frenchmen learned English, and not the other way around. The resolves themselves could be tabled as Motions in this House and even the hon. Member for Lewisham, West would be compelled to vote for them because they contained certain essential principles.
    Mr. Gower: I am jusure that the hon. Gentleman does not wish to mislead the Committee. He mentioned the purpose of the tax. He will recall that money was required to pay for the defensive war against French Canada and the French and Indians who had penetrated into New England at that time.
    Mr. Fletcher: That was taken into account by Mr. Otis when he published his famous regrets. As we are debating the Bill under the guillotine, I am not permitted to take up too much time otherwise I should—
    The Second Deputy Chairman: Order. I hope that the hon. Member will not penetrate too far into the forests of North America. It is all right to do so only as an illustration of what he is saying.
    Mr. Fletcher: Thank you for your guidance, Mr. Mallalieu. The money was essential for the war with the French, but the colonies objected to the purposes for which the resources were to be applied, to the extent that the application of these resources lifted royal governors and others from popular control by popular elected assemblies. Their minds were concentrated upon these matters, as they realised that their whole colonial system was fitting into a system not unlike that of the Common Market, based on the ideas of merchantilism. It is interesting to read the full texts of the Acts of Trade and Navigation in force in February, 1769. One gets the same lists that we are getting, the same large volumes of regulations as my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) once brought into the Chamber and I believe was instructed to remove.
    Mr. Arthur Lewis: No.
    Mr. Fletcher: I beg my hon. Friend's pardon and I withdraw that remark.
    There was then a plan of union presented by Mr. James Galloway in 1774 to avoid what everybody realised would be a fatal defeat and which eventually became a fatal and disastrous conflict. The point that I was trying to make before the Chair drew me back from the North American forests was simply that all the great arguments that have taken place in this House and in other popular assemblies have started with tiny points of law such as who controls whom, and for what purposes resources are going to be used.
    The great American revolution which opened up an entire century of revolutions began in this way when lawyers—and they were mostly lawyers who were totally loyal to King George III and the Parliament which then sat in London—felt themselves compelled to ask certain questions. We are asking the same questions 200 years later, and our descendants, if Brussels does not abolish this place completely and turn it into a county council, will be asking the same questions too, because, as the right hon. Member for Wolverhampton, South-West has said time and again, it is of the essence of Parliament to talk about taxation, to discuss taxation, not by Statutory Instrument in a debate lasting an hour and a half, but in a debate lasting for a whole week on the Budget and then grinding through a whole Finance Bill for many more weeks.
    That is not one of the fringe benefits of being a Member of Parliament. It is the essence of being a Member, and if we are to surrender any part of the powers which we now enjoy to even the best intentioned institutions in Europe, or anywhere else, we are flying in the face of history. I may not be a very clever politician, and I am certainly not a lawyer, but I know a thing or two about history. In the end the will of the people will not be denied. I hope that it will not take the form—it cannot take the same form—but public wrath transformed the argument about taxation in the American Colonies. The argument that was accepted as taking place inside this place, since people described themselves not as rebels and as monarchists, but as
    754
    Whigs and Tories, was regarded there as an extension of the party struggle in this House of Commons.
    It exploded into a revolution because the popular will was denied for too long far too vigorously. It is because I do not want to see that happen, in however modified and mild a form in this country, because I do not want to see the people of this country turning against this House in wrath and fury, because the powers of the House which we hold in trust for them have been transferred, and also because I do not want to see a repetition of history that I study it, and because I study history I support the Amendment.
    Mr. Marten: This is the fourth occasion on which I have had the honour and privilege of following the hon. Member for Ilkeston (Mr. Raymond Fletcher) in these Common Market debates. On each occasion I have regretted doing so because I have known that my contribution would be far less knowledgeable than his. He has throughout the debates followed the projection of this matter through the eyes of history in which the hon. Gentleman is so well versed, but perhaps I may skip from the eighteenth century and bring the debate, back to the present day and concentrate on one fairly narrow issue which I regard as important.
    Nearly every speaker today has dealt with the constitutional matters involved in the subsection, and some have dealt with economic matters. I wish to raise the issue of the money which, whether we like it or not, flows from this country, and how we examine that expenditure and attempt to exercise some control over it. These are vast sums—hundreds of millions of pounds a year—raised from the people of this country. Whether it as said in the Bill or whether it is the intention of the treaties that it belongs to the Communities, this is money from the pockets of the housewife in the shape of levies. We who oppose the Common Market regard this as a useless and absurd exercise when it is now emerging that we could have had this wider home market by going for a free trade area, without all this waste of money.
    [Mr. JOHN BREWIS in the Chair.]
    6.0 p.m.
    Under the Bill, we have no effective control over the amount that goes to the

    755
    Community. We need to ensure that, once it has flowed, our money is properly spent. I say this because of a statement by Professor Dahrendorf in a paper called Die Zeit in July last year, in which he said that the EEC has no public accountability and that whoever spends money accounts for it himself.
    This, on my standard of authorising parliamentary expenditure, as one of many M.P.s, is merly a sick joke. We have our Expenditure Committee, which took the place of the Estimates Committee. On that Committee—I have the honour to be chairman of one of its subcommittees—we can examine how money is spent and how it is wasted. We can examine the future policy of spending and can call for persons and papers. At the end of it we issue our report, which is published in the Vote Office for the public and may, very occasionally, be debated here. We can question Ministers on it. This is a check on some of the absurdities which Governments of all parties get up to when they have too much unchecked power.
    We also have the Public Accounts Committee, which goes into the expenditure of public money. One of its reports published last month discovered the absurdity of the refining of sugar partly by Tate and Lyle. That was a good investigation and a sensible recommendation. We also have Parliamentary Questions which we can put to responsible Ministers—
    Mr. J. T. Price: And Supply Days.
    Mr. Marten: Yes, indeed.
    The Common Market has only the Audit Board, which is roughly the equivalent of our Auditor General. I should like confirmation that that is the only check on this expenditure, and that there is no parliamentary control of expenditure as we understand it.
    Politicians in the Common Market are always saying that one of the reasons why they want Britain in—apart from our market, which the French farmers will grab—is that they want our parliamentary experience in Brussels. We should start here and now and give them this important advice, based on British experience, on the control and examination of expen-
    756
    diture. This system has done a great deal to ensure the high standards of this country and its Civil Service. It has set a standard for the whole life of this country.
    One hears alarming stories from the Common Market about how they cheat over there. We heard today about French taxation cheating and so on. If we are to go into this curious organisation, let us educate them in decent behaviour. We should write into the Bill that the Expenditure Committee would have the right to examine how our money is spent.
    I questioned the previous Lord President about this on 1st March. I asked:
    "…if he will list the powers under which Select Committees of this House will be able to send for persons, papers and records in investigating expenditure of British taxpayers' money in the European Economic Community".
    The answer that I got was:
    "Select Committees have such power to send for any persons, papers and records as the House may expressly authorise."—[Official Report, 1st March, 1972; Vol. 832, c. 407.]
    That was the sort of answer that I got from the Finance Secretary during a previous debate just after the Second Reading of the Bill.
    But that answer entirely misses the point. This House may authorise the Expenditure Committee to go to France and examine farming and the waste of money there and the well-known rackets in the Communities, particularly in food production and distribution. But, once there, what power has a British parliamentary Expenditure Committee to call for papers and to summon witnesses? None at all. The writ of this Parliament does not run in the countries of the Community.
    As things stand, this Parliament can exercise no control or examination over the expenditure of British money. The Financial Secretary will probably say that there are similar cases, that, for instance, we pay money to the United Nations and that the Estimates Committee went over and did a report on how the money in our aid programme was being spent. But that is not on all fours. We voted that money through Parliament, and we could have voted a lesser sum; we could have controlled that money. So I hope that the Minister will not say that the Expenditure Committee can do this with other

    757
    money that we pay out to international organisations.
    Anyway, when the Estimates Committee went to India to examine our aid programme there it was only by courtesy that witnesses gave evidence. Our writ did not run there. If we are to go in, this should be fixed up beforehand.
    I have a proposition for the Government. If, as they must, they admit that they share my view that we should exercise control over the expenditure of British taxpayers' money, then on Report I undertake to table a new Clause setting out three factors.
    My new Clause will set out clearly the right of the British Parliament properly to examine Common Market expenditure. It will, next, contain a provision giving us the right to call for persons and papers in the Common Market; in other words, our writ would run there. It would, thirdly, say that this Measure would not become operative until the Common Market had so adjusted its laws that this House of Commons had power, through its Expenditure Committee, to go into Europe and call for persons and papers.
    This is a case where the Government have every justification to stand up for British interests and illustrate to the EEC before we go in, if we go in, that we are determined to get this matter right. When doing that, the Government can surely count on the support of every pro-Marketeer because I challenge any pro-Marketeer to say that he does not want to examine the way our money is spent.
    Mr. Fell: How does my hon. Friend propose to overcome the obstacle that the Government are foresworn to have no Report stage to this Bill?
    Mr. Marten: I do not take that too seriously. I do not believe that my right hon. and hon. Friends are so keen to go grouse shooting that they are determined to get away by the midnight guillotine on 11th August. In any event, I do not think that the Ministers concerned with the Bill are grouse shooters. The image is changing.
    Here is an example of the Government being able to stand up for the British Parliament and its right to examine the way in which our taxpayers' money is spent. This should be demanded whether or not one is in favour of joining Europe.
    758
    A number of important matters in connection with our joining the EEC remain unsettled. There is, for example, the question of the reform of the CAP. This policy is the classic sick joke in Europe these days. There is also the question of the harmonisation of VAT. Will it be imposed on food in this country?
    Mr. Arthur Lewis: Of course it will.
    Mr. Marten: We know that, but the Treasury Bench will never admit it. The rumour in Brussels is that VAT will be harmonised at 15 per cent. generally and 7½ per cent. on food. Then there is the important question of big Euro-lorries coming off the cross-Channel ferries and pounding through, for example, the delightful Cotswold villages I represent.
    Mr. J. T. Price: I have been discussing this very problem this afternoon in another Committee upstairs. My information is that, against the general drift of policy in the Common Market, the Government are themselves sponsoring a Bill under which we shall be able to arrest some of these lorries when they come off the cross-Channel ferries and into our ports. This is being done in answer to strong criticism which I and others have been directing at the Government for the last couple of years. Something must be done in view of the danger to our people and the already congested conditions on British roads.
    6.15 p.m.
    The Temporary Chairman: Order. I hope that the hon. Gentleman will not answer that intervention in depth.
    Mr. Marten: The trouble is that while the Bill to which the hon. Member for Westhoughton (Mr. J. T. Price) referred is going through this Parliament a regulation will be passed by the Commission and will be self-enacting so as to override our legislation. In other words, what we do will be irrelevant because it can be overridden by people miles from this country.
    Mr. Arthur Lewis: Is the hon. Gentleman aware that, in addition to all the other costs which have been mentioned today in relation to our joining Europe, it will cost about £300 million a year to keep our roads and bridges in a strong enough condition to take these

    759
    heavy lorries coming from Europe, leaving out of account the cost in terms of damage to historic and other buildings?
    Mr. Marten: Before I am reprimanded by the Chair, I will refrain from answering that and stick to the Amendment.
    Many other questions, such as the textile industry and regional policies, are fundamental to this issue. All should be settled before we join Europe. It is time for the Government to say clearly to the Six "Whether we have an October summit or whether President Pompidou says that we should not have one, we will not give this Bill a Third Reading until these outstanding matters are settled." These are not complicated issues. If the political will exists in Europe, which I doubt, they could be settled rapidly. Or are we to live with a procrastinating organisation which cannot settle anything in under 10 years?
    Her Majesty's Government would be in a strong position at the summit meeting or whatever deliberations take place instead of it if they were to say "Unless you give us satisfaction on such issues as the axle weight of lorries and the future of textiles, it is highly doubtful whether this Measure will be given a Third Reading". If we said that, the Six would, if they really wanted us in, meet our demands. Why should they not? Let our slogan be "Stand up for Britain", and I urge the Government to use it.
    When we debated the White Paper on 28th October we were told that the Americans were not interested in any sort of free trade area, and the vote was taken on that basis. Hon. Members who oppose the Common Market said that the Americans were interested, and it now transpires that they are and are moving towards a free trade area. There is, therefore, a second strong card that the Government could play in urging that we be given satisfaction before passing this Bill.
    I urge the Government to be firm with the Common Market. They must get tough and move into the attack in the negotiations. Only then can we be sure of our ability to look after British interests and, above all, the British people.
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    I hope that in bringing my speech back to where I started the Minister will bear in mind the Expenditure Committee and will see that before we go into the EEC it is established that Parliament has the right to call for persons and papers in the Community, and that that writ shall run with every satisfaction of law.
    Mr. Emlyn Hooson: I am in favour of the Amendment but I differ greatly in my reasoning from that contained in some of the speeches delivered today. I have no doubt that when the House voted in principle for entering the Common Market on the basis of the Treaty and for the Second Reading of the Bill, all hon. Members who voted in favour were deluding themselves or being entirely hypocritical if they had not appreciated the consequences of their actions. They were taking a momentous decision and in so doing they were abrogating to a degree the sovereignty of this country and surrendering to a degree the control exercised by the House.
    As I understand the argument—I have heard it many times from my own colleagues—the people who are for entry at present say that what we shall obtain by entry will be of such great value for the future of this country that they are prepared to pay a heavy price. They say that even if they are not prepared to defend some of the details of the deal, the package in the end is worthwhile.
    I perfectly understand the people who take that viewpoint, although I disagree with them. I will make my reasons clear. There has been a danger in some of these debates that, on the one hand, we have a continual rehearsal of the arguments against the Common Market and on the other, we have a basic generalisation of the position in favour of entry with no attention to the details in the Bill.
    It has been perfectly legitimate for the Government on many of the proposed Amendments to say, "We have the authority of the House to proceed with the Bill. We have to implement the Treaty. We cannot do so unless we adhere to the particular Clause or subsection in the Bill." That is a perfectly legitimate argument which any Government would take with the authority the Government have as a result of the votes in the House.

    761
    But I entirely agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) when he said at the conclusion of his remarks that basically the Amendment is not concerned with whether one is for or against the Common Market. It is concerned with whether one is for or against Parliament. It is not necessary for the implementation of the Treaty that the Government should adhere to subsection (3).
    The way that Parliament provides the moneys necessary to carry out its obligations to the Common Market under the Treaty is a matter which can be decided in a number of ways internally. The Government have selected a particular way, namely, through the medium of the Consolidated Fund. The fact that the subsection by paragraph (a) provides for the voting of moneys in the ordinary way by Parliament shows that that way need not have been accepted. I was brought up firmly in the old principle of no taxation without representation.
    Mr. J. T. Price: Without redress of grievances.
    Mr. Hooson: That is an amendment which for the moment I will not accept as necessary for my argument. Unlike the right hon. Member for Wolverhampton, South-West, who believes that there should be no abrogation of parliamentary sovereignty, I would be prepared to see a reduction of that sovereignty if I were satisfied that in its place, through the evolution of a larger Community, there would be adequate parliamentary or democratic control and adequate parliamentary representation. But I do not think we shall have that. That is one of my principal doubts about the whole of the operation. That is why the House is making a great mistake when at times answers are given to detailed objections by way of generalisations about the desirability of the Common Market as a concept. One can be in favour of a much greater unity in Europe or even much greater political co-operation in Europe, and yet be much against joining the Common Market on these terms at the present time.
    The Common Market has developed in a certain kind of way. There are few people who will defend the common agricultural policy in the privacy of the
    762
    smoking room. They have to put a face on it. It is the price that France extracted from its European partners for the evolution of the European Economic Community. The argument that is put forward is that whether we are for or against it, we should accept it as a necessary evil on the basis that we are more likely to change or modify it if we are inside the Community. Therefore, we are told that we must not pay too much attention to these fine legal points of whether Parliament will have adequate control over expenditure.
    The right hon. Member for Wolverhampton, South-West made a fascinating discussion of the various provisions of subsection (3). He allied to this an interesting historical analysis of the growth of parliamentary sovereignty through financial control. He showed how the strength of the House is rooted in its control over expenditure and how that control came about. I will not follow him save to say that, as the Government do not have to accept or insert subsection (3) to satisfy their obligations under the Treaty, and as this could be voted for every year, it could be a useful weapon in the plans of any Government who were trying to reform the Common Market from inside.
    If the Common Market countries were aware that the Government of this country had to go back to the House every year for the approval of expenditure necessary under the Common Market budget, that would be an interesting prospect. The Government could say, for example, to their French allies in the Common Market, "You must modify this policy and appreciate the effect that it will have on us. You will realise that you now have the benefit of our industrial market for your agricultural produce, and we shall need to have some modification." It could be a useful weapon in the hands of a British Government.
    The Government have not been sufficiently aware of the advantage of being able to say to its allies, "We have a tradition in our country of control over expenditure and it is necessary for us to go back to Parliament on this matter." That could be a most useful adjunct which might be required by the Government in future within the Common Market.

    763
    I am accepting for the moment, whatever my personal vote will be, that this country will enter the EEC. However, once we enter there will be much greater agreement on either side that we need to use a great deal of pressure—all the pressure we can—to modify, change and liberalise the Common Market in many respects. Any Government will be pushed to do so.
    I believe that our influence outside the Common Market is greater than if we were inside. We shall find the French particularly intransigent. The great economic growth period of the Common Market is over. We shall see a contraction of world trade. There are four million or five million unemployed in the United States. We have an intractable unemployment problem at home. There has been an immense slowing-down within the most prosperous country in the Common Market, West Germany and this will not change when we get in. These problems will remain with us.
    The Common Market could be a most stultifying experience for this country. Although I accept that it could be a most adventurous, expensive period in our history, I do not think that it will be so, for various reasons.
    6.30 p.m.
    I represent an agricultural constituency. Many farmers in my constituency are happy at the great increase in, for example, beef prices, but they are not such fools and so lacking in historical sense and perspective that they do not appreciate that, though agriculture prospered under the corn laws, when they were repealed some years later there was a devastating agricultural slump in this country.
    Many people, whether for or against entry into the Common Market, would like to see a considerable element of our agricultural policy imported into it. We are not likely to see that happen unless the Government are much tougher with their partners in the Communities and retain, as far as they can, all possible weapons for argument in their own councils.
    Representing an agricultural constituency I put to myself the question: is it in the interests of my constituents that
    764
    on this Clause I should vote to pass out of the United Kingdom Parliament control over expenditure, which is of vital importance? I am not prepared to do so unless I am satisfied that there will be equal democratic control in the Common Market. It does not exist now. We should not delude ourselves. We might hope that one day it will exist, but it does not exist at present. Therefore, as the Clause is not necessary for the purpose, why should the Government adopt it?
    Sir A. Meyer: The hon. and learned Member for Montgomery (Mr. Hooson) has at least brought the debate back to the point and touched on the heart of the subject. Speaking from the Liberal Benches, he has also aggravated the bad tendency in the debate to be totally and grossly unrepresentative. Because of the way the dice falls, some 90 hon. Gentlemen opposite who are strongly in favour of British membership of the Common Market are gagged by their Whips and forbidden to speak—[Hon. Members: "No."]—and on these benches 20 or so of my hon. Friends who are opposed to our entry suffer from an infelicitous combination of total recall and verbal diarrhoea. This represents a somewhat unrepresentative picture of the feeling in the Committee on this matter.
    I am glad that the hon. and learned Member for Montgomery entered into the heart of the subject as I wish to speak from an opposite point of view on the topics which he raised. I believe that the business of "own resources", of moneys which automatically flow through to the Communities without interposition of the British Parliament, is an essential and indispensable element if the Common Market, with us in it, is to fulfil the high hopes which many of us place in it.
    While on this point and while temporarily we have the right hon. Member for Stepney (Mr. Shore) with us, I should like to take the opportunity of putting to him the point which I wanted to raise when I sought in vain to intervene during his speech. I want to try to ascertain from the right hon. Gentleman whether what he said about a future Labour Government—should any such misfortune befall us—not accepting these provisions carries the full support of the Opposition for a firm commitment to renege on this

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    obligation. Regardless of whether a future Labour Government decide to withdraw from the Community, have we had a firm commitment from the Opposition not to implement the provisions for "own resources" financing? I take it that this is a firm commitment on the part of the Opposition. It is good to know where we stand.
    I return to the point about the essential importance of "own resources" financing for the Common Market if it is to fulfil the hopes which we place in it. The experience of jointly financed projects which have operated outside the Common Market—Concorde is a clear case in point—is that all such projects are at the mercy of periodic changes of will or economic crises in the countries which are party to those projects. This produces a discontinuity, an irregularity of rhythm, which to a large extent is responsible for the escalating costs of the Concorde project. This is merely one aspect.
    The element of continuity, which can arise only if there is an automatic flow through of finance to the central institutions of the Community, is indispensable if a coherent policy of growth is to be pursued.
    We have heard much about the drawbacks for the United Kingdom of the common agricultural policy. I would stick my neck out so far as to say that the concept of the common agricultural policy, though not necessarily its details, is one which, on the whole, I welcome. However, I do not wish to be drawn further into the subject of the CAP because I want to talk about certain other aspects of common financing.
    It would be greatly to the benefit of this country, even seen only from a purely nationalist point of view, if the scope of the common budget of the Community were to be greatly enlarged to cover two further matters: first, the financing of research, development and procurement in advanced technology; and, secondly, the Community's regional aid policy. If the enlarged Community, with Britain in it, were to embark on ambitious projects in these two spheres this country would undoubtedly be a net gainer.
    There is a third sphere of expenditure—[Interruption.] I do not think that any-
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    body seriously contests that if there were to be an expanded regional policy—
    Mr. J. T. Price: I realise the hon. Gentleman is putting forward a sincere argument, but merely to make dogmatic assertions of that kind without any effort to supply background evidence on which such conclusions can be based is not good enough for this Committee. Let us bring the matter down to basic facts rather than speculation. How would the hon. Gentleman decide as between the demands, for example, of the Orkney and Shetland Islands or the remote recesses of Northern Scotland and those of Taranto and the Strait of Messina in Sicily, two distressed areas by definition of low income, in any equitable manner in favour of the people of this country as against the rival claims of Continental people who are equal partners in the Common Market? These are purely theoretical, academic arguments which do not impress me at all.
    Sir A. Meyer: I did not want to get drawn too far into the details of the regional development programme. However, I must point out that, once we are in the Community, there will be certain natural allies in this cause and that the United Kingdom, Italy, Ireland and Norway as peripheral countries will be concerned to combine their influence to secure precisely an expansion of the regional aid programme.
    It may be that there is a case for altering the character of the programme within the Common Market. The programme is primarily one of aid to distressed rural areas. Our principal problem is one of aid to areas of declining industry. I am not sure whether there is not an advantage in a little cross-fertilisation. A little more emphasis on reviving rural areas in our peripheries as practised within the Community might be greatly to our advantage.
    I return to the point that this element of continuity in financing is essential if the Common Market is to become anything more than merely a free trade area with a cumbrous mechanism of bureaucracy planted on top of it. Without some such element of continuity we shall not succeed in making the Common Market into anything more than a glorified free trade area.

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    It follows that the growth of democratic control within the Community for which all of us devoutly wish, is, in a curious way, dependent on the acquisition by the Community of its own resources. As long as the Community's resources are provided by national Governments and are subject to the control of national Parliaments, it is only realistic to expect that no European Parliament will acquire the habit of controlling finances. There is agreement on both sides that the control of finance is an essential element in organising proper democratic control.
    It therefore seems that there is a indissoluble connection between "own resources"—Community financing—and the growth of effective European parliamentary institutions. This is another reason why I am anxious to see a growth of Community financing.
    Mr. Evelyn King: This is a very interesting point. Is my hon. Friend saying that he would deny his constituents the power of inquisition into a country's contribution because he would rely on a European parliament to conduct its financial control? This is the essential part of the argument.
    Sir A. Meyer: If my hon. Friend were talking about our constituents losing control over the great bulk of the revenues with which we are concerned, he would have a valid and powerful point. We are not concerned with the great bulk of the revenues. This is a very small proportion of the total revenue. It is not just an acceptable price; it is an indispensable price to pay to secure the element of continuity which will enable the Community to grow into something real, live and positive, and to enable the growth of effective democratic control of the Community's institutions.
    I am one who believes in the Common Market, not just as a device for get-rich-quick on the part of the United Kingdom, but as a real contribution to the growth of a saner pattern of international relationships. It therefore saddens me to see the Labour Party renege on everything it has stood for about the Common Market. I used always to respect the Labour Party at least for its strong internationistic feeling, but it now seems to be animated by the idea that we are internationalists so long as that does
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    not involve us and so long as the process does not start now.
    I am proudly and unashamedly internationalist. I am very glad that it is my party which is to make a major contribution to a saner pattern of international relationships. I fully support the subsection and I shall without hesitation vote against the Amendment.
    6.45 p.m.
    Mr. Deakins: I am grateful to be called at this stage, Mr. Brewis, because the hon. Member for Flint, West (Sir A. Meyer) made a number of interesting comments, particularly about the growing move towards federalism. I must correct the hon. Member on one or two points.
    Pro-Market Members on this side of the Committee have in no way been gagged. We who are anti-Market root and branch have been encouraging them to come here, because we believe that it would make for a more balanced debate if every point of view which is held on the back benches on both sides were to be expressed. A number of my right hon. and hon. Friends have made some fairly long, and sometimes very witty, speeches—this applies particularly to my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever)—to explain their points of view. My right hon. Friend the Member for Birkenhead (Mr. Dell) has on at least two occasions moved Amendments. Obviously the hon. Member for Flint, West could not have been present on those occasions.
    The hon. Gentleman made great play of the argument that the Community needed its own resources because of continuity of financing. Continuity of financing in that context appears to mean no system of annual parliamentary control or any other form of control. On the basis of the hon. Gentleman's argument it could be argued that the United Kingdom has never had continuity of financing, because we have always had an annual Budget with Votes of Expenditure and it has always been open for this Parliament democratically to change the Government's economic and financial policies as the needs and interests of the British people have changed from year to year.
    I do not think that the Community necessarily needs to have continuity in its own resources. They could be voted

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    annually and the Community could well survive and prosper, if indeed that is what the hon. Gentleman wants, without the benefit of the measures in Clause 2(3).
    I want first to examine the figures in detail. I apologise in advance for going into the figures in detail, but I have discovered in the two years that I have been in Parliament that the only opportunity an hon. Member gets to examine the Government's proposals in detail is in Committee—so this is what I propose to do.
    The point in which Parliament and the British people are mainly interested, in terms of our contribution to the Community budget, is what is to be the position in 1980 when we start paying the full amount. However, the Government have made great play about the position in 1977. Therefore, it has made my job a little more difficult. What I must do, first, is to consider the Government's claims for 1977 and then go on to see what is likely to be the position in 1980.
    Starting with the 1977 position, in Cmnd. 4715 the Government themselves stated that our net contribution to the Community budget would be £200 million a year, made up of a gross contribution of £300 million, minus receipts of £100 million. The Government have made the very interesting assumption that for every £3 Britain pays into the Community budget it will get back £1. They made an estimate in July, 1970, which was never given to the House but was published in Europe. It was as official as any estimate of that nature can be. Their estimate then was that we would make a gross contribution of 31 per cent, to the Community budget and that we would receive back 6 per cent.; consequently our net contribution would be a rather smaller proportion of the total amount we paid over.
    I wonder why, in their latest estimate in the White Paper Cmnd. 4715, the Government have reached a more optimistic conclusion as to the receipts from the Community budget. We are told that we shall get £100 million. We have never had an explanation as to the breakdown of this figure—at least, not a full breakdown. As the Chief Secretary and Minister for the Department of Agriculture are present in the Chamber, I wonder whether we could have some
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    breakdown of this £100 million in receipts.
    It can be based only on two forms of reasoning—either on Community assurances or on wishful thinking. I suspect very strongly that it is the latter, if one examines the three possible ways in which this country could benefit under the existing Community argicultural budget, one sees straight away that the amounts paid out on surpluses which are subsidised and shipped to other countries—thereby distorting world trade—cannot possibly apply to this country. We are, and shall remain, even when we are a member of the Common Market, a net importer of food, whether from other overseas countries or from Common Market countries is irrelevant for the purposes of this argument. Therefore, no money will be coming to us from the Community budget to subsidise exports of food.
    The second aspect of the Community budget by which we might possibly benefit is in structural reform payments. But, as our farm structure is so superior to that which exists in the Common Market at present—for example, our average-farm size is at least double, and they have about five times the proportion of working population engaged in agriculture—it is most unlikely that we shall benefit in any way from structural reform proposals, and the structural side of the FEOGA Fund. That leaves only one possibility and it is obviously on this that the Government are pinning their hopes of getting £100 million a year by 1977. That is the guarantee section, where the Community subsidises support buying, and one or two direct measures of deficiency payments in the case of one or two commodities, aid to private storage in times of glut, and so on.
    When one looks at the Community budget for 1972 and the figures given by the Minister of Agriculture at column 468 of Hansard for 25th May, it becomes clear that out of the total of roughly 2,500 million dollars of the guarantee section of the FEOGA budget, no less than 1,159 million dollars went on export subsidies, as was pointed out by my right hon. Friend the Member for Stepney (Mr. Shore). We could benefit only from that part of the FEOGA budget, the guarantees section—dealing

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    with the amounts paid out in support buying, deficiency payments and so on.
    There are a number of commodities set out which we do not grow in this country. I shall not go through the complete list, but we do not grow tobacco, and a vast sum of money went in domestic intervention in the tobacco markets of the Six. Nor do we produce olive oil. A vast amount of domestic intervention in 1972 is scheduled for olive oil, quite a large amount for oil seeds, and a fairly large amount for wine. We produce very small amounts of wine and oil seeds. I cannot believe that we shall be getting £100 million a year for these two commodities. Obviously we shall not. The £100 million, therefore, must be on the commodities such as cereals, milk and milk products, where we ought to be able to benefit from intervention arrangements under the CAP.
    Mr. John Farr: The hon. Gentleman may be interested to know that a considerable amount of tobacco is grown in this country and is smoked by many people.
    Mr. Deakins: That is news to me—and, probably, to the Inland Revenue. I hope that it is not like Irish whiskey and things such as that—[Hon. Members: "Oh."] I am sure that it is all done very legitimately. I do not wish to upset the susceptibilities of hon. Members. However, the hon. Member for Harborough (Mr. Farr) would probably agree with me that the amount of tobacco grown is very small and that we are unlikely to benefit substantially—certainly not to the extent of £100 million a year.
    That leaves us with cereals, milk and milk products, where we ought to benefit to some degree. But the total Community budget expenditure on these items is only 36 per cent. of the total amount. That means, therefore, that we reckon that we shall get, by 1977, about a quarter of all the Community aid which goes on those commodities that we grow in this country. That is never likely to be the case. First, we do not have that proportion of the cereals market in the Ten, or the milk and milk products market. Therefore, the Government's estimate of £100 million receipts by 1977 is wishful thinking. I should not like to put a figure on it, being without the resources of Govern-
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    ment Departments. But the Government could well arrive at a more accurate figure if they were willing to break it down for us.
    My second point follows that made by the hon. Member for Flint, West, namely, that we should benefit in the long term, if not under the agricultural parts of the Community budget, under a regional policy. I do not want to go over speeches that I have made previously in Committee about the absence of a regional policy in the Community and on the fact that if it should ever develop such a policy, it would not be a policy which, by and large, would benefit those depressed regions of this country which need outside assistance.
    Mr. Neil McBride: Is my hon. Friend aware that the hon. Member for Flint, West (Sir A. Meyer) and myself, who represent Welsh constituencies, have never been furnished with one fact or figure from the Welsh Office to show us, as Welsh Members, how the Principality would be affected, making our task precisely as large today as when entry to the Common Market was first contemplated? This is enormously important to the Welsh people.
    Sir A. Meyer: As the hon. Member mentioned my name, may I say that the Welsh Council has furnished an extremely valuable account of how entry to the EEC will affect Wales.
    Mr. Deakins: I am grateful for those two observations. I should not like to intervene in this internecine strife between the Welsh. [Hon. Members: "Oh."] Although my hon. Friend the Member for Swansea, East (Mr. McBride) speaks with a rather strange accent, he represents a Welsh constituency. I should have said "between Welsh Members", and not "between the Welsh".
    My point is that the Community, even if it develops a regional policy, is unlikely to develop one which will necessarily help the regions of this country. Even on the most optimistic assumption that certainly all pro-Marketeers are making, including some of my right hon. and hon. Friends, that the Community does develop a regional policy, they are assuming, as are the Government—I think wrongly—that the cost of that regional policy will come out of the existing Community budget,

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    that we shall cut down on the amount going to agriculture and that we shall increase vastly the amount going on the sort of regional assistance which will assist our depressed areas. Is it not much more likely that, if and when the Community should develop a regional policy, and if it should be effective in this country and designed to help this country, that regional policy will be in addition to the existing agricultural policy of the Community and will, therefore, have to be financed additionally to the financial burdens on this country already in terms of the CAP? It may well be that we may contribute less to such a regional policy than we take out, but that cannot possibly be an argument to be used between now and 1977 for saying that we shall benefit rather more from the present Community budget than some of us suspect.
    That brings me to my major point which is the position that will obtain in 1980. It was possible for the Labour Government, in their White Paper of February, 1970, to attempt some broad estimates of the position in 1980. The present Government have declined to do so. But we all know the facts about 1980 even if we do not know the details of the figures. We shall have to hand over 90 per cent. of our agricultural levies and customs duties. Whatever be the level of those agricultural levies in particular—this is doubtful because we do not know yet—one thing is absolutely certain: the payment of 90 per cent. of them to the Community will hit the United Kingdom harder than any other member of the Ten, because in 1980 we shall still be the largest net importer of food from third countries and, therefore, we shall be producing the vast bulk of the agricultural levies. Therefore, we shall be giving a disproportionate part of the total Community budget, even in 1980. That position will obtain even if, as I am sure we all hope in the House of Commons, we produce more at home or even if we get a bigger proportion of our imports from the Community rather than from third countries.
    This leads me to the point that this makes it almost certain that in 1980 we shall have to hand over a full I per cent. of our value added tax under the Luxembourg agreement of April, 1970, as part of the "own resources" of the Community. What will that mean? Apart
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    from the question of tens of millions of ponds—and no one can say what a 1 per cent. Value added tax will come to, except to suggest that it will be between £35 million and £80 million, depending on the coverage—we have to bear in mind that by the time 1980 comes along the VAT rates and coverage will have been harmonised. Undoubtedly, VAT will have been extended to food by that stage and this country will have had no option but to agree. Therefore, apart from the foreign exchange burdens of our contributions to the Community budget, the British housewife, in addition to having to pay higher food prices under the common agricultural policy, will have to pay at least some rate of VAT on food by 1980. That is something that ought not to be lost on the public.
    [Sir ROBERT GRANT-FERRIS in the Chair]
    7.0 p.m.
    The Government made an estimate in July, 1970 of the position in 1978, two years short of the final position in the White Paper. They estimated that our net contribution would probably be about £400 million to £470 million. One has to make allowance for the fact that the Community budget is already getting near that level and that by 1980 therefore the budget will be even larger than was expected this time last year. If there is a larger budget, this country will obviously on the same proportion be paying a largernet contribtuion.
    One wonders why the Government, having given an estimate in July, 1970 of £450 million for 1978 and a figure for 1977 in the White Paper of nearly £200 million, now refuse to give any estimate after 1977. Surely this can only mean that the Government are frightened to reveal the truth and tell Parliament and people that instead of its being a £200 million net contribution, as set out in the White Paper, it is likely, on the most optimistic of their assumptions, to be over £400 million, at least double what they have told the public for 1977.
    Paragraph 96 of the Government White Paper refers to "unacceptable situations". We are comforted with the thought that if an unacceptable situation should arise we shall all put our heads together and something will no doubt be done about it. But what is meant by

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    "unacceptable situation"? An unacceptable situation in 1980 to this country, paying our £400 million at least to the Community budget, will not be unacceptable to the rest of the Community. It will be perfectly acceptable to the other members because we shall be shouldering an even bigger burden of the common agricultural policy. If that is to be the case, what hope is there in this vague phrase in paragraph 96 that we shall sit down and talk about it? Surely even our 1977 contribution is likely to be unacceptable, let alone the full burden we have to bear in 1980.
    My last point is slightly different. I have been talking about the details of the budget and our contributions and receipts. I want to conclude by referring to the wording of subsection (3) and its implications. Here I am not treading new ground because it has already been fully discussed by the Committee. But it seems to me that subsection (3) is basically a federalist provision. It could have been put into a Bill only by a Government bent on a federalist solution in Western Europe. Subsection (2) in particular, with other parts of the Bill, is designed to prepare the way. It deprives Parliament of rights which need not at this stage be lost to the Common Market. Yet we are giving them up. This, of course, is the path to political unity for Western Europe, and federation will be very much easier for the Government of the day because Parliament, by virtue of subsection (3), will be less able to protest effectively at the time since one of its financial weapons will have been taken out of its hands.
    In this course, the Government are being aided by pro-marketeers on both sides of the Committee, more and more of whom are beginning to reveal themselves, if not in words but in the implications of what they say, as federalists. If one scratches most of the pro-Marketeers on both sides of the Committee, one finds that they will admit to being federalists. It is a very serious situation because this is something which has yet to be put to the British people, and I have no doubt what their reaction will be. It is therefore because, as I think, most of my right hon. and hon. Friends and, I hope, a majority of right hon. and hon. Members in the Committee feel that a
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    federalist solution is absolutely wrong for this country that we should reject this federalist subsection.
    Mr. Edward Gardner: I cannot help feeling that this discussion of subsection (3) has been confused, and, one suspects, deliberately confused, by some superficial complexities. The subsection deals with the way in which our contributions to the European Communities will be paid, and the method chosen and set out is that the money representing our contributions shall be taken out of the Consolidated Fund or the National Loans Fund. As one understands it, those who oppose subsection (3) rest their opposition mainly on the ground that Parliament will not be able to refuse the contributions which are to be paid if we remain a member of the Community, will not be able or be allowed to reduce the amount of money paid by way of contributions.
    The trouble when we discuss these matters is that we are creating by the very size of the units we are dealing with a quite artificial complexity. We are dealing with a large number of countries, each with a large population. We are dealing with large sums of money. It seems to me that all these things come together and make our appreciation of the essential simplicities of this important issue very difficult to understand. I ask the Committee to indulge me if I suggest that in place of the Community we consider for a moment by way of comparison a club, and instead of looking at this country we put in its place an individual about to join that club.
    The question would arise of how much that individual will have to pay by way of contribution to the club. I hope the Committee will forgive me for reducing this to simple terms, but the first thing that is obvious is that the contribution he will have to pay will be the contribution that has been decided upon by the present members of the club, and if he does not want to pay that contribution the alternative is not to join the club. If, however, he does join, the question may well arise of what the contribution is to be in future. That decision about the contribution in the future will not be made by the individual as such but will be made collectively

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    by the members of the club of which he will then himself be a member.
    Mr. Fell: But surely the analogy falls to the ground, for that individual does not have to pay the contribution. He can leave the club and join another. Indeed, he can join another club at the same time as he is a member of the first club. There is no analogy.
    Mr. Gardner: There is indeed, because this club—the European Community—is a club from which no member has made any move to resign nor has shown any signs of wanting to resign. They all show the greatest enthusiasm for remaining in the club for benefits which are apparent to many people but, it seems, not to some hon. Members of this Committee.
    I well understand that some of my right hon. and hon. Friends have consistently over the years—some at a later stage, having taken a different view initially—opposed our entry into the Common Market. One respects what they say and frequently admires the way in which they say it. But I cannot help wondering, when one listens to the right hon. Member for Stepney (Mr. Shore) whether he is speaking with the inspiration of personal revelation and conviction or whether, as one assumes he must be, he is speaking on behalf of the Opposition.
    This elementary and quite accurate view of the need to pay a contribution, and of the means of assessing the size of the contribution, is something which the Labour Government must have well understood and appreciated. They accepted the uncertainties—and there are uncertainties. This was part of their understanding of the Common Market which they were prepared to accept and upon which they were prepared to act. Today the right hon. Gentleman talks about our new tax masters in Europe. He spoke, in terms of some kind of financial nightmare, of the contributions this country will have to make towards Europe. He asked—and we should all like to know the answer, although we would have to have a good crystal ball to arrive at it—what the contribution will ultimately have to be.
    We all know that the figures are very well rehearsed, but all know that they
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    have no degree of decisiveness or certainty about them. The White Paper of July, 1971, put our contribution to the European budget for 1973 as £1,400 million. This was estimated to rise by equal amounts to £1,600 million by 1977. These are the figures with which the right hon. Member for Stepney has been dealing. If I may say so with respect, he said that this was a responsible Committee, having a responsible debate but he did not, as I understood him, deal with the other side of the coin, with the receipts that we can expect to flow into this country from Europe and which will affect the gross cost of our entry and our contribution once we are in the Community. These receipts, as they are estimated, will reduce the net cost in 1973 to £100 million.
    Mr. Jay: No.
    Mr. Gardner: I am not giving this authoritatively; I am quoting the figures and I ask the Chief Secretary to confirm them.
    Mr. Jay: Has the hon. and learned Gentleman not grasped what has been made clear several times in the debate, that the estimate of July, 1970, gave the net contribution of this country, after allowing for the in-payments, as £470 million net in 1978?
    7.15 p.m.
    Mr. Gardner: I appreciate that. I am quoting the basic figures. I am sure that everyone in the Committee would like to have up-to-date comments on the figures. I am merely reminding the Committee that the net cost was estimated to be £100 million in 1973 and £200 million by 1977. The right hon. Member for Stepney said that he did not want to increase the prosperity of Europe, which was already prosperous, by adding our contributions. This is as I understood it, as I took it down. If he said that and meant it, then I submit that he exposes by those words the sophisticated fallacies in which he deals and his contempt for the obvious.
    Mr. Shore: The hon. and learned Gentleman has, I am sure, genuinely misunderstood me. I was drawing a contrast, posing a choice, and saying that if we had that amount of money to contribute across the balance of payments there were other claims upon it. I

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    mentioned specifically the developing countries, and I still think that they have a much greater claim.
    Mr. Gardner: If that was the meaning which the right hon. Gentleman say she intended to give to his words, I accept that. What is glaringly clear is that when we enter Europe, if, as the right hon. Gentleman says, the countries of Europe are already prosperous and apparently increasing in prosperity, I believe, although I would not put it as the major reason for entering the Community, that we can hope with some degree of certainty that we, too, will be able to share much of the prosperity being experienced in Europe. The manner in which we are to pay these contributions, upon which we shall receive profits beyond all our dreams, is set out in the subsection. It is the right method, and it is the one for which I shall vote.
    Mr. Nigel Spearing: I am glad to follow the hon. and learned Member for South Fylde (Mr. Gardner) and I will immediately take up his closing remarks. He said that he hoped this country would share the prosperity of Europe. Of course it is something which we can have in many ways. The hon. and learned Gentleman would agree that the prosperity of a nation in its material and economic aspects can also be effected by the security of the inhabitants. "What profiteth it a man" as The Times asked not long ago, "if he earns a salary at the rate of £5,000 a year for one week and then finds himself on the dole the next?" The hon. and learned Member will agree that there are many other things besides the account book total, the gross national product or whatever. It is the fear of many people on this side of the Committee that the sort of problems which are not financial or tangible in an economic sense will be exacerbated by the Common Market.
    The hon. and learned Member mentioned joining a club and spoke about the subscription. If he or I joined a club I think it would be on a fixed subscription basis. In this instance it is an open-ended levy, and, therefore, the analogy he drew is incorrect. Further, if he or I joined a club we would not be taking our family with us; at least that is not usual. If we did so we would surely consult them. If the family
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    budget on which the club's subscription was based was raised by the wages of all the family it would only be right that we should get the consent of the family before joining. The hon. and learned Gentleman will probably agree that that has not been done by the Government or the Prime Minister, and, therefore, I fear that his analogy is wanting in many respects, not least in terms of consent and it is consent in financial terms to which I wish to draw the attention of the Committee.
    Subsection (3) deals with the money, and, as we know only too well, money can be the source of a great deal of power. It is with consent and power that I wish to deal. My hon. Friend the Member for Ilkeston (Mr. Raymond Fletcher) drew attention to the past and to the fact that it is the power of the House to approve taxes which is the basis of its sovereignty. It is the means by which the House has achieved sovereignty over this country, by the consent of the people. I suggest, too, that the social nexus in which we find ourselves depends upon the consent of people in society.
    It is only too clear that when there is a debate the hon. and learned Member and others of his thinking bring up the question of authority. It is not there, they say, there must be more discipline; people are not prepared to do what they used to do. Of course they are not, and it may be right. But that has also happened in the past when kings tried to impose taxes on people who had no representation over the way in which they were raised. This is the source of "no taxation without representation" which is not just a slogan, because it means that people will accept taxes and associated legislation only when they have some sort of say about how the taxes are to be imposed and how the legislation is to be formulated.
    Mr. John Tilney: I have some sympathy with what the hon. Gentleman says, but there is a lot of taxation without representation in this country. We have only to look at local government and what is paid by way of rates by local companies which have no representation at all.
    Mr. Spearing: The hon. Gentleman knows that about half local government

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    expenditure in this country is based upon an Exchequer grant of one sort or another. That may or may not be right. In terms of rating there are many other ways in which ordinary organisations can make their voice heard, as he will know from his constituency work. The big point which the hon. Member has missed is that any form of local government, large or small, is subject to the sovereignty of the House of Commons in respect of the financial arrangements it makes. Whereas he may object that businesses do not have a representative vote, there is no reason why, if the House thought fit, the legislation, which was changed some little time ago, should not be changed again. The hon. Gentleman may want that. I am suggesting that we are here talking about parliamentary sovereignty, and that is a different thing.
    To return to my main point, the fact is that government in any country in the end operates only by consent. Whether it is discipline in schools, whether it is law and order in the criminal sense or whether it is a case of industrial relations, consent and confidence are absolutely vital. That is something which hon. and right hon. Gentlemen opposite, as a result of their background and experience, are learning only by slow degrees. That is why in the House of Commons taxation is only with the consent of the people on whom the taxes are levied. That is why there is also the ancient tradition of "grievance before supply". This is not just a slogan; it is part and parcel of the consent by which the sovereignty of the House is exercised.
    If subsection (3) is passed, that goes completely because there will be taxation of a substantially new variety. The right hon. Member for Wolverhampton, South-West (Mr. Powell) explained this excellently earlier today. There will not be a comparable chance of accountability and representation. Some hon. Gentlemen opposite are happy for that to be the case for themselves. But they are all too often on the giving-out end. Many hon. Gentlemen opposite, by their background, have not been on the receiving end and do not know what it is like to live on a small income year after year. They have not looked upon Parliament and the Government as "they" and "them" in a way which is getting dangerous in this
    782
    country. If they had had that sort of experience, which is the experience of perhaps 90 per cent. of the population, they would not be so glib about voting away the rights of the House over taxation.
    That is the key to it. People will accept taxes and legislation only if they have some confidence that they have influence and can change things, can go to an hon. Member and say "We do not like that. Speak against it. Vote against it on our behalf." Parliamentary democracy and accountability is a social safety-valve of considerable significance. At least that is my view.
    I come to the remarks of the hon. Member for Lewisham, West (Mr. Selwyn Gummer). He completely missed the point about representation. His speech was one of great facility, which I enjoyed but with which I thoroughly disagreed. If we had a federal European Parliament, as my hon. Friend the Member for Walthamstow, West (Mr. Deakins) suggests many hon. Gentlemen want; his speech might have been apposite. But we have not got that. All that we have is a Minister who occasionally sits on a Council of Ministers, who can act only on a suggestion from the Commission. That is not representation, and the hon. Member for Lewisham, West could not pretend that it was. I fear that his constituents certainly would not think so. The nub of his argument thus falls almost entirely to the ground.
    As the hon. Member is here, I would like to put this point to him. He said that we are doing this for a European ideal, that we are to contribute to these "any other expenses" or the other open-ended capital or loan commitments, or whatever, to do good in the world, or words to that effect. He said that we will help to build a united world. Tell that at UNCTAD III! That is directly counter to the facts as we understand them. Consider sugar, which is an emotive word. There was 1 million tons of European sugar dumped on the world market, sugar which was subsidised by the housewives of the EEC, and if the situation were to arise again when we were in the Community it would be subsidised by the housewives and wage-earners of this country. That sugar was dumped on the world market, a market

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    which was very sensitive, in a world in which certain countries depend upon their tropical production of sugar. Perhaps the hon. Member for Lewisham, West, if he says that this great ideal of the European Community is to achieve greater world unity, will explain this 1 million tons of sugar, and the fact that some of our open-ended payment will be to subsidise that sort of dumping on world markets, which is quite contrary to all we understand about proper trade and price relations between third world and ourselves. If the hon. Member wishes to answer the point I am wiling to give way
    Mr. Selwyn Gummers: This is the hon. Member's speech and he would prefer to answer my questions, rather than have me answer his. But in view of his remarks would he explain why the EEC has recently made decisions about preferential trading agreements with the rest of the under-developed world which are more generous than any organisation has ever made before?
    [Sir ALFRED BROUGHTON in the Chair]
    7.30 p.m.
    Mr. Spearing: I would question the statement that the arrangements were more generous. The whole point about relations between the EEC and the third world is not necessarily the conditions which the hon. Member has mentioned but the quotas, and we hope that at a suitable time, if the guillotine allows, we shall be able to take this matter up in more detail. I shall be glad to debate the point with the hon. Gentleman then. But the fact, which is uncontested by him, that the EEC dumped on the world market 1 million tons of sugar produced by European farmers places at least a question mark over the EEC's intentions in this respect.
    The hon. and learned Member for South Fylde referred to the subscription, and he spoke about the price of entry solely in terms of subsection (3). But the right hon. Member for Wolverhampton, South-West showed us earlier that subsection (3) is a parliamentary bypass. He showed that the power of taxation and the power of granting supply is the power of control and if we give it away we give away our power completely.
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    The subscription which the hon. and learned Member pointed out in his speech is not just the financing of the Bill but the surrender of parliamentary sovereignty as we have understood it in the last 200 or 300 years.
    The hon. and learned Member is at liberty to say that he is happy to pay that price, and I see that many hon. Members on the Government side are apparently quite prepared to pay it, too. I hope they will tell their constituents they are prepared to see the accountability of the executive, which is going to have a very great power in this land, made independent of Parliament. Let them say that in their constituency, because that is what they are saying here in voting against the Amendment. They can say they are prepared to pay that price for some ideal or other which they believe in. I challenge any of them now to say that is not so. That is what the right hon. Member for Wolverhampton, South-West has argued, and that is what the Clause is all about.
    Hon. Members opposite have every right to say so, but if they are prepared to do away with the accountability of the executive to this House they are destroying the whole process of confidence, the basis of consent on which the structure of our democratic life has been built for 200 or 300 years. The political stability of this country is the envy of the world. That is why we are the Mother of Parliaments.
    I feel in speaking on this Amendment as though I am in a nightmare. Who would have thought 10 years ago that any hon. Member like myself or, perhaps my hon. Friend the Member for Walthamstow, West would ever have to take part in this sort of debate? If that accountability goes, if that confidence goes, the whole structure goes with it, and the power resides elsewhere. What are the people to do then? The people of this country are already starting to write off this place. I try to explain why they should not do so. If hon. Members vote against the Amendment tonight, as they will, how much worse will the situation become? People will demand more authority. The Solicitor-General will say that there must be more and better laws and that if what must be done cannot be done by consent people will have

    785
    to be made to do it, as in the case of industrial relations. Look at the mess he has with the Industrial Relations Act.
    That attitude will cause social chaos, and it may be that if the Bill and the Clause go through those of us left in this House will be fighting a rising tide of social unrest and political chaos for the rest of our political lives. The hon. and learned Gentleman can pay that price if he likes, but I beg hon. Members to consider this very carefully, because that is what the subsection and the Bill are about.
    Mr. Ridley: The hon. Member for Acton (Mr. Spearing) exaggerated the case he was making, a case which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) put with greater precision and greater moderation. It may be that the subsection takes away from Parliament the right to control Government expenditure, and it is that to which, very briefly, I should like to address myself.
    The way that Parliament has come to control the expenditure of the executive has been, in the main, through agreeing a programme of expenditure and then allowing it to proceed over the years, keeping an eye on its cost. The sovereign decision, the decision involving this House, is the decision whether to start or terminate a programme of expenditure.
    With a lending programme, or the borrowing by Governments to finance lending and sometimes other matters, Parliament, having approved a statute that the Government may lend to one group of citizens or to one type of organisation, exercises no further surveillance of that lending, other than the Budget itself. The same may be true if this subsection remains in the Bill because the Government will have power under the Clause to make loans to such organisations as the European Investment Bank and there will be no further approval by Parliament if the Act receives the Royal Assent. These loans will appear in the national accounts and will be part of the Budget and, therefore, I believe my right hon. Friend is wrong in alleging that the Bill changes the system on lending.
    Mr. Powell: Perhaps I could point out the difference. In all other cases the
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    amount is limited and the purpose is specified.
    Mr. Ridley: The purpose is clearly specified in the Bill which is that loans should be in pursuance of the treaties we are joining. The amount is not specified and it would be difficult for it to be so.
    Turning to expenditure grants, rather than loans, Parliament, in addition to giving statutory authority to a programme, has traditionally had Votes each year for the annual cost of that programme. But these have fallen into desuetude and on the Supply Days, when thousands of millions of pounds are voted through on the nod, the subject chosen for debate bears no relation to the financial costs of the programme. Parliament is not wrong to do this. It has done it for many years. Although it is a token form of control, Parliament finds it more convenient to settle programmes through the enactment of legislation and to settle costs through the control of the Budget. The only change which exists in relation to spending is that the annual presentation of an Estimate which will have to be passed by Parliament will not take place. Otherwise it involves the initiation of a new programme—a programme in which the European Communities will pay the costs and provide the loans attendant on that decision.
    I believe it is right that there should be no ceiling on lending and that there should be no presentation of an Estimate to Parliament. It is right because by joining the Communities we have undertaken an obligation to make these payments. Having undertaking that obligation, it is ridiculous and silly to say that, although we have promised to do this, we wish every year to go through a ritual dance of pretending to pass things which we know we shall have to pass. The decision will be whether or not we should come out of the Community.
    If the price is more than a country wishes to pay, there are two alternatives. One is that the country concerned should pay it; the other is that it should come out of the Communities. To remain in the Communities and to vote against the estimate in Brussels is the one course which makes no sense; and it would be totally unconstitutional because we would

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    be voting against an obligation which we have undertaken. Therefore the Amendment is rubbish, and I intend to vote against it.
    We are voluntarily undertaking to go into the Community to achieve certain objects. The symbol of that co-operative effort is that the budget of the Community is its own and is not granted by permission of the national Parliament.
    The second point, which is entirely different, relates to the common agricultural policy. The vast bulk of the money will go to finance the CAP. This has been universally condemned by opponents of the Common Market and also by the majority of people who are in favour of joining Europe. The CAP was described by the right hon. Member for Stepney (Mr. Shore) in the following words:
    "No serious person in Britain or Europe wishes to justify the CAP."
    I claim to be a serious person and I wish to justify the CAP. I wish to do so by saying that as a result of accident or mismanagement in the past there exists in France, Germany, in other countries to a lesser extent, and in the South of Italy perhaps to a greater extent, millions of farmers who practise farming in a peasant way and are far from efficient or mechanised. The result is that their prices of production are high and their standard of living is appalling low.
    Those right hon. and hon. Members opposite who profess to be Socialists and put as their first priority the care of those in need and those who live in poverty have attacked the common agricultural policy, and in doing so they are attacking the poorest people in the land. They are attacking them, first, because they are agricultural instead of industrial—[Hon. Members: "No."]—and, secondly, because they are foreigners instead of nationals. I believe this to be a disreputable point of view. I personally believe that if one looks for a good cause in Europe the best cause one can find both in this country and in the Six is to rehabilitate European farming so that those working in it can get a decent living.
    Mr. Deakins: I realise that the hon. Gentleman is not an agricultural expert and would not claim to be one, but does he not appreciate that those of us who
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    are opposed to the CAP are arguing not against a common agricultural policy in principle but against this particular common agricultural policy which does not even succeed. This is why we have the Mansholt reform plan which seeks to give farmers an amount of money to enable them to have a decent standard ofliving—a standard of living which year by year falls below that of the rest of the population in Europe.
    Mr. Ridley: I am grateful to the hon. Gentleman for reminding me of the Mansholt plan. It is an instrument which, however modified, will give these poor people, who number many millions, an opportunity to leave farming or obtain gainful employment in industry or to modernise and mechanise their farming operations so that they can earn a proper living. The funds which we shall contribute under this subsection will go to implement the Mansholt plan. I can think of nothing more honourable and worthy as an objective.
    There has been a certain tongue-in-cheek attitude over this matter. Practically all the British, whether they are in favour of or against joining the Common Market, say "The common agricultural is ridiculous and we must stop spending so much money on feather-bedding European farmers". They say "Look at us in Britain. We have a desperate regional policy problem; we have unemployment and are experiencing a lack of industrial development in half of our country. Surely we should stop spending money on these farmers and spend more money on British regional development".
    I am not against spending more money on British regional policy, but it does not sound convincing to a European. The European can see us coming a mile off. All we do is to go into every conference room and say "Abolish CAP and have a bigger and better regional policy". This is all too obvious. If we think that charity begins at home and that our first priority should lie in regional policy, equally we must acknowledge the case for CAP and for helping the European farmer to modernise and improve. This is as strong as, if not stronger than, the case for regional policy.
    Mr. Marten: I know that my hon. Friend is concerned about the poorer farmers—for example, those in Southern

    789
    Italy and also those in certain areas of France. However, on the question of sugar within the common agricultural policy, when it comes to renegotiation these people will be competing with Commonwealth sugar producers in the developing Commonwealth countries. Which, in my hon. Friend's view, will have priority, the Commonwealth developing countries or the poorer people in the industrial countries of Europe?
    Mr. Ridley: These are questions which I hope we can work out in future with our European friends. I would remind my hon. Friend that 35 per cent. of sugar which comes in under the Commonwealth Sugar Agreement comes from Australia. We must get our priorities right.
    I end by saying that those who wish to set right the problems involving sugar, exports from underdeveloped countries, surpluses and shortages, the beef problem and other agricultural problems have a glorious and golden opportunity to work towards a solution. If Europe has a bad policy, if the CAP is not perfect as an instrument, let us at least accept its objective and its ends and see whether we can improve its means. We know that we cannot do this without the centralised resources which will enable the necessary funds to be invested.
    Let us pass this subsection unamended, because it gives an opportunity to put these things right. I cannot understand why there is such continuing opposition to the central theme, the ideological gem at the centre of the Common Market—opposition from those who fear domination, who are frightened of the future and who, like the hon. Member for Ilkeston (Mr. Raymond Fletcher), are looking only to the past.
    7.45 p.m.
    Mr. Farr: As the debate draws to a close it must be said that we have heard many speeches of quality. We have heard my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) warn us of what will happen if we pass subsection (3) and of the fact that we shall lose all control of the money to which reference is made in the subsection. One of my hon. Friends was suggesting that we should not mind too much that we should lose control of the money, but we must look at the matter
    790
    as one of 10 nations. In other words, we must rejoice in the fact that we shall have a tenth of a say in the expenditure which will be sent to Brussels in the form of revenues which we shall be raising.
    If subsection (3) is not the heart of the Bill—and I do not think the Bill has a heart—it must be said that it is the guts or the nuts and bolts of the Bill. Long before this debate began we must all have decided how we would behave in the Division Lobby tonight. The Bill without subsection (3) will be largely ineffective.
    I should not detain the Committee long, but I wish to examine one point which has not been discussed. This relates to the manner in which the £400 or £500 million per annum net, which will be left in Brussels arising from the charges we shall make in this country, will be utilised in Brussels. Various estimates have been made and the most current is that made by my right hon. and learned Friend the Chancellor of the Duchy of Lancaster in July, 1970, who said that the net annual deficit will be about £470 million per annum.
    How will that money be utilised by Brussels in 1973 and each year thereafter as it will probably increase? It seems certain from what we have heard from the Mansholt plan that this money will be used to modernise European farming. It will probably be spent on amalgamating farms and giving cash bonuses to those who allow their farms to be amalgamated. No doubt generous cash handouts will be given to farmers who retire early. These are laudable objects, but we must remember when we vote tonight that this will be done largely with money provided from this country. Not much will return to this country when those objectives are pursued.
    What shall we get back from a policy of encouraging amalgamation of farms? It must be remembered that the average farm size in the Six is 20 or 21 acres; the average farm size in this country is about 100 acres. Not much of the money will be spent in this country on farm amalgamations. What shall we get from it in terms of the improvement of our own farming? On every count of efficiency, whether it be size of herd of cattle—incidentally, the average herd size

    791
    here is three times that in Europe—yield of crops per acre, or any other count, farming in this country is far more efficient than it is in the Six.
    No country in the Six has a record to equal that of British agriculture, with an annual increase in productivity of 6 per cent. Therefore, I have come to the reluctant conclusion that if subsection (3) remains in the Bill, European farmers will be given an opportunity to catch up to the level that British fanners enjoy today, while British farmers mark time for a decade or more. What is more, they will do it at our expense.
    My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) recognised this. He seemed to accept it. I hope that he will be able to explain it in his constituency. It is not a view that I have heard expressed by any Government spokesman on the subject. Apparently, my hon. Friend accepts with equanimity the prospect of our contributions to Brussels helping to bring up the level of the standard of living of Italian peasants. I wish that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster would make it clear in the country that that it is where our levies will go. That worthy object will be achieved at a price. The price is that British agriculture will stay where it is for a decade or so while European farmers catch up at our expense.
    Mr. Tilney: Does not my hon. Friend agree that in recompense for that those engaged in industry will have the benefit of being able to catch up with the standard of living of the industrial countries of the Community, bearing in mind that we are 94 per cent, an industrial country?
    Mr. Farr: The point that troubles me is that my right hon. and learned Friend has never made this clear to the National Farmers' Union and to British agriculturists. If he were to do so, I believe that there would be a considerable withdrawal of the present wholehearted support of British farmers for the Government's approach to Europe.
    I look forward to hearing what my hon. Friend the Chief Secretary says, though I must be frank and say that, whatever he has to say, I shall not support him. I hope that the subsection will be deleted from the Bill.
    Mr. Patrick Jenkin: I can agree with my hon. Friend the Member for Harborough (Mr. Farr) on one point, and that is when he said that we have had an extremely good debate with speeches of a very high quality.
    I find it surprising that it is now 3½ months since I last took part in any proceedings on this legislation. It was as long ago as 22nd February that I moved, and the House accepted, the Money Resolution and the Ways and Means Resolution necessary to support the Bill. Despite the passage of time, I am sure that the Committee will have recognised many echoes of that debate, when we went over much of this ground, and I make no apology if in what I say there is some repetition of the points that I made to the House on that occasion.
    I am glad to see the hon. Member for Ebbw Vale (Mr. Michael Foot) in his place, because I am entitled to say that the point that I made and that he was good enough to acknowldege that the two Financial Resolutions that we passed then would in no way restrict debate on this part of the Bill has been amply borne out by what has happened today.
    Mr. Marten: Except the guillotine.
    Mr. Jenkin: I was talking about the effect of the Financial Resolutions.
    Before I come to the many interesting points and seek to answer some of the pertinent questions asked by the right hon. Member for Stepney (Mr. Shore), among others, I think that it might be helpful if I spelt out precisely what is entailed in the financial provisions contained in Clause 2(3). In the course of that, I shall be answering some of the questions asked from both sides of the Committee.
    The subsection is needed in order to provide parliamentary authority for the expenditure which will be entailed as a consequence of our joining the Communities. The first part of the subsection, down to the semi-colon in line 24, contains the authority for our payments to the Communities, to member States and to the European Investment Bank; it also authorities the redemption of notes or obligations issued or created in respect of any of these payments.

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    The next Amendment we shall be coming to, Amendment No. 419 is directed to that part of the subsection which charges these payments to the Consolidated Fund. Although a number of hon. Members have raised points about the appropriateness of that procedure, I hope that I shall be forgiven if I leave that part of the argument to the debate on Amendment No. 419. It seems to me that that Amendment is directed specifically to that, and perhaps it will make for more orderly debating if I dealt with this matter, assuming that I caught your eye, Sir Alfred, during the course of the debate on the next Amendment.
    Let me deal with the various payments in turn. I take first our payments to the Communities. These will consist, in the first place, of certain capital payments at the outset to the ECSC, and secondly, our contributions to the annual budget of the Communities. Taking first the Coal and Steel Community payments, the Committee will know that under Protocol 24 of the Treaty of Accession, we agreed to make a contribution amounting to some £24 million to the Coal and Steel Community's accumulated reserves. This is by way of an entrance fee in order to entitle us to have access to these reserves.
    Perhaps I should explain that these reserve funds, which now amount to about £90 million, have been built up mainly as a result of the levies collected being in excess of expenditure in the early years of the Community's existence. The levies themselves are paid by the relevant industries at a current rate of about 0·3 per cent. per annum of the average value of the products concerned and are used to make grants for the retraining and re-settlement expenses of redundant coal and steel workers and also to make grants for coal and steel research.
    The important point to note is that the United Kingdom confidently expects to be a net beneficiary in the levy arrangements, mainly because we are facing a continuing run-down of the labour force in our coal and steel industries in circumstances precisely appropriate to the purpose of the funds.
    Mr. Marten: To what extent shall we benefit?
    Mr. Jenkin: It is not possible at this stage to say, but we expect to be a beneficiary.
    The accumulated reserves, however, to which our entrance fee will entitle us to access, are available for different purposes. They are mainly used for loans to coal and steel firms, for loans for housing for workers in the industries, for loans to new industries wishing to establish themselves in declining coal and steel areas, and for various other purposes. Thus I think the Committee will be satisfied that in return for our subscription of about £24 million we shall gain access to funds which could be of the greatest help to our coal and steel industries in the difficult years which they face.
    Mr. Marten: My hon. Friend has just made that statement, but there must have been some discussion about the extent to which in broad terms we are expected to benefit. May we have some guidance?
    Mr. Jenkin: I should like to help my hon. Friend the Member for Banbury (Mr. Marten), but I am afraid that I cannot at this stage. What I can say is that we expect to be net beneficiaries.
    The second main item in the expenditure that falls under the subsection is our contribution to the Communities' budget. This arises by virtue of the Community Decision of 21st April, 1970, and the so-called Financing Regulation of 2nd January, 1971. These instruments provide that from 1st January, 1971, various payments should be made by member States to the Communities' budget and should constitute the Communities' own resources. These payments comprise, first, the agriculture levies, and second a gradually increasing proportion of Customs' duties, in each case less 10 per cent. collection costs.
    An important point to note is that the effect of the instruments is that these sums are to belong automatically to the Communities, the member States acting as collecting agencies. On 1st January, 1975, the balance to meet the Community budget is due to be made up by a proportion of the proceeds of a harmonised VAT—up to a maximum of a 1 per cent. rate. Until unanimous agreement is reached on a harmonised VAT, that

    795
    provision cannot apply. Until then, member States will make up the balance needed to finance the Communities' budget by making contributions based on GNP.
    I have so far dealt with our payments to the ECSC and to the Communities budget, and they as it were constitute the first element.
    The second element covered by the subsection consists of payments to member States. These may arise in two ways. The first, which is likely to be very minor, could arise as a result of the operation of the so-called correctives which are applied in calculating a member State's share of the Community budget. The second may arise under the Community scheme for medium-term support to member States who face balance of payments difficulties. The Committee will know that the purpose of this scheme is very similar to that of the IMF facilities and the United Kingdom has accepted a maximum lending obligation under the scheme of £250 million.
    The third element consists of payments to the European Investment Bank. It is not perhaps necessary for me to describe the operations of the Bank at great length. The Committee will know that it has made a notable contribution to the development of the regions in the Community, and it will certainly be a useful additional source of finance in this country. We have agreed to a contribution to the paid-up capital of the Bank of £37·5 million, and in addition we shall be required to make a proportionate contribution to the reserves of the Bank as they will stand at the end of this year. We estimate that the sum will be roughly £20 million. These payments will be made in five equal instalments, the first in cash, and the rest in the form of non-interest bearing and non-negotiable promissory notes.
    Here I should mention the point raised by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who sought to base an argument on the passage beginning in line 23
    "…or to redeem any notes or obligations issued…"
    It is because the subscription to the EIB will, after the first one, take the form of non-negotiable promissory notes that
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    these words are necessary in the provision to allow us to make the payments. However, the Bill says
    "…issued or created in respect of any such Community obligation…"
    Those words cannot be used to relate to obligations arising otherwise than under subsection (3).
    Mr. Powell: Does my hon. Friend say that it is limited in practice to contributions to the Bank? In terms, the provision covers the whole of the preceding part of the Clause.
    Mr. Jenkin: That is right in theory; any of the obligations in the preceding part of the Clause which are in the first place discharged by the issue of a note. That note subsequently could be redeemed. What is envisaged as a matter of practice is that it is only these payments to the EIB which will take the form of non-negotiable promissory notes.
    I should perhaps also mention that member States could be required to make loans to the Bank for specific projects. However, the Bank's normal method of operating is that it raises the finance it needs on the capital markets; it has not so far found it necessary to invoke the power to raise loans from member States, and it is unlikely to do so in the future. Nevertheless we felt it right to make provision in the Bill for this remote eventuality, and that is the explanation of the words in line 22
    "or in respect of loans to the Bank".
    I have so far been dealing with the subsection down to line 24, and I must now turn to the rest of it.
    Paragraph (a) deals with all the other expenses arising under the Treaties or the Bill and provides that these should be charged to Votes. Broadly they consist of domestic expenditure. The main element will be the expenditure involved in carrying out the price support system of the CAP; of course, this will be broadly matched by corresponding receipts into the Consolidated Fund from FEOGA. We shall also have to meet the domestic expenses of the Intervention Board, and there might well be payments made by the Department of Trade and Industry on schemes enabling us to take advantage of the ECSC grants. My right hon. Friend the Member for Wolverhampton, South-West pointed out the

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    difference and asked why, if these payments could be made by Votes, all the rest could not be made in the same way. All I can tell him is that the nature of the payments is different from the main Community payments, but perhaps we can return to this argument on the next Amendment.
    Mr. Powell: My hon. Friend confirms, does he, that there is as much obligation to make the payment in paragraph (a) as there is to make any of the other payments with which the subsection is concerned?
    Mr. Jenkin: There is not the same automaticity. That is the key, but perhaps we can explore this on the next Amendment.
    Paragraph (b) refers to receipts and provides that all receipts arising from the Treaties or the Bill must be paid into the Consolidated Fund or, if the Treasury so decides, into the National Loans Fund. Receipts fall into two groups—from the Communities, and from domestic sources. The main receipts from the Communities will be from FEOGA, though there will be some from the European Social Fund. There will also be some from the ECSC. Domestic receipts will be the agricultural levies and Customs duties which, subject to the transitional arrangements and the refund for collection costs, will be paid over eventually in full to the Communities under their own resources system.
    I apologise to the Committee for having spelled this out again in detail. It is complicated, and I believe that the Committee would wish the position to be made clear. Perhaps more important, I hope that by what I have said in describing the nature of the payment and the nature of the obligations which we shall undertake on ratification of the Treaty it has become apparent to the Committee that the subsection is needed and is an essential part of the Bill, and that without it there would be no standing cover for the payments arising under the Treaties or under the Bill.
    It would, I suppose, be possible in theory for all these payments to be included in annual Estimates presented in the normal way and be the subject of Votes without any such standing cover, but even if that were done it would be most unusual, not to say unconstitutional,
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    for a Bill with financial consequences of the major kind which I have described to have no standing financial cover at all. Indeed, I suggest to the Committee that it would be a matter for serious criticism. It is for that reason that the Amendment cannot be accepted, and at the appropriate time I shall only be able to advise the Committee to reject it.
    Mr. Deakins: Can the hon. Gentleman explain the meaning of the words in paragraph (b)
    "save for such sums as may be required for disbursements permitted by any other enactment"?
    8.15 p.m.
    Mr. Jenkin: I was coming to that, but perhaps I can deal with it now because it is a point which merits an answer.
    That phrase is linked primarily with Section 10 of the Exchequer and Audit Department Act, 1866. That Section provides that the Commissioners of Customs and Excise are able to deduct certain outgoings before paying over their gross revenues to the Consolidated Fund. The outgoings are mainly the clawback payments, the statutory repayments of duty on exported goods or goods used for specified purposes, and repayments where excess duty has been paid. If the saving words had not been included in paragraph (b) the Commissioners would have had to pay over all their revenues into the Consolidated Fund without having the power provided by the 1866 Act to make these necessary deductions.
    If those saving words were not included, any contrary provision, including that in Section 10 of the 1866 Act, would have had to yield to the wording in paragraph (b), by virtue of the provisions of subsection (4) that
    "any enactment passed or to be passed…shall be construed and have effect subject to the foregoing provisions of this section".
    In addition, the saving phrase in subsection (3)(b) covers the Treasury's powers under Section 2(2) and (3) of the Public Accounts and Charges Act, 1891, to specify that funds can be treated by Departments as appropriations in aid for their votes, and here I come to the point made by my right hon. Friend the Member for Wolverhampton, South-West who suggested that this represented a dangerous and unconstitutional increase of the power for receipts to be applied

    799
    as appropriations in aid. I think that I can set my right hon. Friend's mind at rest. In every such case there has to be a Treasury direction before any receipt can be applied as an appropriation in aid, and Treasury Ministers will be as fully answerable to the House under this procedure as they are present.
    Mr. Powell: Surely this goes very much further than the present practice? At present, appropriation in aid is permitted within a single Vote, whereas this would appear to permit—I do not think the expression is correct, but perhaps it is graphic—a virement of the appropriation in aid as between—not merely one vote and another—but between these receipts and the whole range of the ordinary Votes. This seems to go very much further than present practice.
    Mr. Jenkin: I am not sure why my right hon. Friend makes that assumption. It seems to me that the Treasury, which has this general power, is most meticulous in making sure that appropriations in aid are expressly limited to the purposes for which the expenditure is incurred, and I have no reason to believe that things will be any different as a result of this subsection.
    Mr. Powell Mr. Powell rose—
    Mr. Jenkin: I am sorry, but I must get on and deal with some of the other arguments which have been deployed during the debate.
    One major theme running through the debate—it was deployed at some length by the right hon. Member for Battersea, North (Mr. Jay)—is that the burden represented by these obligations will constitute a threat to our balance of payments. Let me restate as simply as I can our assessment of the balance of payments effects of entry into the Communities.
    No one has ever disputed that the costs which can be identified—the Budget contribution and the increased cost of food imports—are significant. Taken together they might amount to up to £250 million by 1977. But the additional burden on the balance of payments which we shall have to absorb will begin at a level of about £100 million a year in 1973. It will build up only gradually. Moreover, the figure needs to be kept in perspec-
    800
    tive. In relation to the large aggregates which make up our balance of payments, the costs arising from EEC entry are not out of line with the kind of random and cylical swings which we expect to be able to handle without much difficulty in the ordinary course of events.
    Last year we had a record balance of payments surplus on current account of nearly £1,000 million. This was due to a surplus on visible trade, where we normally and indeed almost invariably expect to incur a deficit, and it was due also to a further increase in our invisible surplus. As a result of the Government's expansionary measures to stimulate the economy we expect imports to rise faster this year.
    So far this year export performance has been rather sluggish. This is partly a reflection of a general slackening in world trade as well as of special factors, such as the coal strike. But exports should recover once the expansionary policies being followed in most industrial countries lead to renewed growth in world trade. Visible earnings continue to be buoyant. The current account surplus will thus be lower than last year, but perfectly adequate for our needs. Moreover, our reserves are high, and we have repaid all outstanding official short- and medium-term debt.
    Mr. Jay: Would the hon. Gentleman not give an estimate, as the Chancellor of the Duchy did even in July, 1970, of the net contribution which this country would have to make after the transitionary period is over?
    Mr. Jenkin: We have heard a lot in previous debates of what has been referred to as the "numbers game". I will not be drawn into making what would be bound to be highly speculative and uncertain guesses where the margins of uncertainty are far greater than any possible advantage which could accrue from giving the figures.
    I cannot accept that the balance of payments implications bear any resemblance to the extravagant dangers which have been enlarged upon by the right hon. Member for Battersea, North and his right hon. Friend the Member for Stepney.
    Some pertinent questions have been asked by the right hon. Member for Stepney. He asked first about the forecasts

    801
    for the Community budget in 1973 and 1974. These forecasts have been made by the Commission. The figures have been prepared and they have been forwarded, among others, to the European Parliament and other European institutions and they have been made available to member States. The United Kingdom Government has the figures and are making arrangements that they should be put in the Library in a suitable form.
    But perhaps I can summarise the figures as they stand. I emphasise that they are at current prices, not on a constant price basis. In 1972, to give the base figure, the budget was 3,400 million units of account, approximately £1,400 million. In 1973, the figure will be 3,650 million units of account, equivalent to about £1,500 million. In 1974, it will be 3,900 million units, equivalent to about £1,600 million. Of course, these figures take into account the likely impact of inflation, but I would stress that they are provisional and that past experience has shown that they have been frequently revised, so I can only advise the Committee to treat them with caution.
    One point worth making is that they make provision for rather higher expenditure, on, among other things, regional policy, than does the budget for the current year.
    Mr. Shore: Do those figures refer to the total budget of the Community or to the agricultural budget?
    Mr. Jenkin: I will come to this, because some of the figures that the right hon. Gentleman mentioned were on a different basis and I think that I can explain this.
    I was also asked whether changes since the White Paper was published in July last year would lead us to make any change in the estimates in it. We see no reason at present to depart from the estimates which we then gave. In particular we see no reason to suppose that the agricultural price increases agreed in the Community in March, when taken together with the movement in world prices which has taken place, would significantily increase the size of the Community budget.
    The Commission has not yet published its results of the revisions necessary as a result of the price changes, and there-
    802
    fore we see at present no reason to make any adjustment for ourselves.
    Sir Robin Turton: Could my hon. Friend explain exactly what he is telling us? I have here the figures submitted to the Council on 1st September 1971, which are, curiously enough, about 1,000 million more units of account than those which he has given.
    Mr. Jenkin: This is the same question that the right hon. Member for Stepney asked and I think that I will be be able to answer it.
    One or two hon. Members referred to any change of impact on food prices as a result of the price increases agreed. My right hon. Friend the Minister of Agriculture on 11th April gave a Written Answer to the hon. Member for West Ham, North (Mr. Arthur Lewis), of which the core was:
    "…it is now estimated that the effect on retail food prices in the United Kingdom would be about 2 per cent. per year over the transitional period."
    —compared with the figure of 2½ per cent, which was in the White Paper.
    "Similar considerations apply to the estimate of the effect on the Food Import Bill, and the combined effect of the EEC price increases and changes in world prices is to reduce somewhat the White Paper estimate."—[Official Report, 11th April, 1972; Vol. 834, c. 168.]
    I come to the rather complicated point raised by the right hon. Member for Stepney and to which my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) has just referred. A substantial part of the right hon. Gentleman's speech was related to the future size of the Community budget. He sought to compare the figures in paragraph 93 of last year's White Paper with a figure which he quoted, and I suspect that these are the same figures which my right hon. Friend has—of 4,100 million units of account, or approximately £1,700 million for the current year, 1972.
    The right hon. Gentleman drew the conclusion that, by comparing that figure with the figure in paragraph93, as he put it, one saw that already the Community budget was above the 1977 figure predicated in the White Paper. There are three points of substance to show that that conclusion simply does not begin to be justified.

    803
    The first is the obvious one, that the figures in the White Paper were expressed at constant prices and therefore make no allowance for inflation. Therefore, as inflation is already having some effect, this will obviously have to be taken into account.
    But, more significant, the £1,700 million includes substantial sums attributable to earlier years. Under the guidance and guarantee arrangements of the Community, FEOGA expenditure accounts for earlier years are kept open for several years after the year to which they relate. Nevertheless, the sums which are likely to be disbursed in the later year are added to the current budget of that later year. They are, of course, kept separate and, by definition, they are not sums to which we as new applicants can be asked to make any contribution. So those sums are left out of account and then one comes back to the earlier figures that I quoted, which are the real figures.
    8.30 p.m.
    The third element is that the 4,100 million units of account include what are called the Mansholt reserves. It is generally recognised to be highly improbable that all or even any of the reserves will be called up, but the 1972 figure has to include them because in theory they could be a potential liability.
    For these three reasons the figure of 4,100 million, from which the right hon. Member for Stepney drew certain conclusions, is not comparable with the figure in paragraph 93 of the White Paper or with the figures which I have quoted to the Committee. Naturally there is bound to be some variance between the figures, but the divergence is nothing like as great as the right hon. Member for Stepney seemed to think and I hope that what I have said will be some reassurance to him.
    A number of other questions were asked, but I have sought to concentrate on those questions which have dwelt on the costs of entry. My hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer), my hon. Friend the Member for Flint, West (Sir A. Meyer) and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out that the costs of entry were only part of the picture. With a favourable economic environment at home, which is
    804
    what our policies are designed to create, membership of the EEC will undoubtedly help us to improve our economic performance.
    It is in this connection that I will mention four ways by which this can be achieved. First, membership will provide greater opportunities for our exporters. An enlarged Community will be an enormous market, guaranteed—I stress the word "guaranteed"—permanently free from tariffs or quota control. This is an economic factor of enormous importance and if hon. Members cast their minds back to 15th August last year they will see what can happen to a major market overnight. They will appreciate what can happen when countries are enabled to put on tariffs, surcharges or other restrictions. We shall get a major advantage from joining the Community.
    Second, access to this large and fast-growing market will allow British companies to take full advantage of specialisation and economies of scale, so enabling them to plan ahead with confidence.
    Third, increased competition will improve efficiency in British industry.
    Fourth, these improvements in opportunities, confidence and efficiency will raise both the quantity and quality of investment in British industry. None of these things will happen automatically—[Interruption.] Nobody has ever said that they would—but membership will create a framework within which it will be possible for a radical transformation to take place in our disappointing economic growth, under Governments of both parties, since the war.
    I take great comfort from and confidence in the fact that the overwhelming majority of British industrialists—those who will have to take the action which will result in our reaping these benefits—are firmly convinced that what I have said is the case. I am talking about industrialists and firms who provide the employment, sell the goods and win the exports. They are full of confidence.
    The main burden of the case made by hon. Gentlemen opposite has been that these financing arrangements represent an appalling burden which we cannot sustain. Again I make the point and I do so with great firmness, that there is nothing in this arrangement,

    805
    barring the transitional arrangements negotiated by my right hon. Friend the Chancellor of the Duchy of Lancaster, which was not known to the Labour Government.
    It was in December, 1969, that the members of the Community agreed in principle on a new system of financing the Communities, and this was referred to in considerable detail in the Labour Government's White Paper of February, 1970. In the debate on the Financial Resolutions I challenged the right hon. Member for Stepney to say what was new in the Bill or in the arrangements which I then described and which I have described again today. I asked him to say what was new or what was not known to the Government of which he was a member before the last General Election. I never received an answer. The Solicitor-General repeated the question at the end of that debate and he never received an answer—at least not one that would wash.
    Any hon. Gentleman opposite who supported our application in 1970 or who was a member of the last Labour Government cannot now be heard to argue that these arrangements are intolerable or cannot be sustained. The right hon. Member for Stepney used some extravagant language in this context. They were known then and they were accepted then. These provisions simply give the necessary statutory authority for the 1970 arrangements, and I therefore ask the Committee to reject the Amendment.
    Mr. Shore: I am sure that until the Chief Secretary's record got stuck in the groove of his last few sentences his general intention was to be helpful and to attempt to answer the pertinent questions which have been asked by hon. Members on both sides in discussing these important issues.
    The hon. Gentleman's comments helped a little to elucidate the various categories of expenditure authorised by the Clause, and I was grateful for what he said about my remarks concerning the 1972 figures as they appeared in the annual report of the Communities as compared with the estimates which appeared in the Government's White Paper. I am grateful for his comments on that matter. I will look at the figures he has given at leisure and with even greater care.
    806
    My main object in dwelling on these figures was not so much to demonstrate a particular figure as being accurate or significant but to point to the trend of growth of the Community's budget not merely over the last year or two but back to the beginning. It has been a remarkable growth. If we lok at that growth against the commitments that are entered into by the Government under Clause 2(3) and the arrangements made in April, 1970, about which we shall have yet another boring word in a moment, the effect of these two things together is undoubtedly severe and heavy on our balance of payments and quite disproportionate in its effect on Britain.
    The Chief Secretary did not attempt to answer the case put forward by my right hon. Friend the Member for Battersea, North (Mr. Jay). At least, the answer he gave on the total balance of payments aspect, which I did not touch upon, was extraordinarily complacent and not what one would have expected.
    I understand that there must be a little euphoria left in the Treasury as it has been presiding for the last two years over the phenomenon not only of post-1967 devaluation but post-1969 currency realignments and 1971 currency realignments, a situation which has been favourable to Britain't trade. In addition, it has had such benefit, if one can call it benefit, arising from the recession which its own policies have imposed on a large part of the country, which has led to a falling off of imports.
    But the balance of payments surplus that we had in 1970–71, against which the figures we have quoted at the present time do not look terribly menacing, are wholly unrepresentative. Within a year's time the picture will be different. The Chief Secretary made no attempt to describe the implications of his own estimate of at least £700 million net payment, in the first quinquennium in reference to our reduced contributions. After that I am sure he will agree that, however much he may wish not to give figures, there will be a substantial increase in the years that follow.
    That is the burden which we undoubtedly face, against which there is no earthly reason to believe that the other arrangements of membership will balance. They will not. One must not be

    807
    over-emphatic about this matter, but there is no evidence and no real reason to believe that we shall gain more by getting rid of our own tariffs and pulling out of the preference system to which we now belong.
    There is not a great deal in it. Right hon. Gentlemen opposite have told us that it is their expectation that for a few years we shall be worse off as a result of the changes in trading effects in leaving two preference clubs and joining a third. That is their estimate. Certainly they are not entitled to argue now that we shall be better off and that one can offset the result of being better off against the burden that this system of Budgetary payments is bound to impose upon us.
    Colonel Sir Tufton Beamish: Will the right hon. Gentleman give way?
    Mr. Shore: No. The hon. and gallant Gentleman has taken little or no part in the debate, there is not much time, and there are other important matters to be discussed.
    Underneath the argument about the size of our contributions there has been the very important worry, expressed by everyone, about what is involved in the loss of control under Clause 2(3). We shall no doubt hear more about the Chief Secretary's defence of this matter later.
    It is not clear to me, taking account of the Chief Secretary's contribution on 22nd February and his contribution today, whether his main approach is that it is an essential part of the business of joining the EEC that we should relinquish control in this way, or whether, to use his word, it would be unconventional and strange if we did not supply a continuing cover to these payments. It is not the kind of point on which one can get men to go to the stake or, indeed into a particular Lobby. It would be a little odd not to supply a continuing cover.
    I have a feeling that something more important is involved in the hon. Gentleman's mind. I think that what is involved is his own philosophy that we have lost control, that it is not our money any more, and that, as he once put it to us, it flows from the British people to their
    808
    new tax authority. I take account of the objection which was taken earlier to my use of the phrase "tax master". I thought I used the expression "tax master" quite properly. We did not have any part in framing these taxes which we are to pay. We may become partners in or part-authors of future impositions if the Chief Secretary has his way, but we should not pretend that these are British taxes. They are not. They are imposed upon us as part of the conditions of entry which the Chancellor of the Duchy negotiated, and wrongly negotiated. That is the most important matter that we face. We are undoubtedly losing control. How much we shall hear more about in the debate that is to follow.
    I do not believe that it is essential to a customs union to have a method of financing based upon so-called "own resources". My hon. Friend the Member for Walthamstow, West (Mr. Deakins) made a point of great force when he said that this was basically a federalist Measure. It is not crucial to the working of a customs union. It may be that a customs union needs revenue, but there is nothing to indicate that that revenue has to be obtained only by the ceding of the power of taxation in perpetuity by the member countries of that customs union to an authority which it has set up.
    We on this side are accused by some very odd people of not being concerned about our fellows in Europe or of not showing sufficient international spirit. I must point out to those who make this silly accusation—I do not believe in throwing accusations of this kind about—that what should genuinely concern them is, in a sense, the counter-charge to which they are inevitably exposed: that they have insufficient concern for democracy itself. I do not pretend that there is not a genuine dilemma here: that in order to have a supra-national authority we have to destroy our own democracy. However, that puts the onus all the more strongly on those who advocate surrender of our democratic power to demonstrate that we are handing over to another democracy which is equally well founded in the people as is our own. It is their inability to do this which undermines wholly their case and undermines it in particular because they have not asked the British people first whether they are

    809
    prepared to start on this process of ceding their own democratic powers.
    It is with that in mind that I ask the Committee to consider our Amendment favourably and to vote for it.
    Question put, That the Amendment be made: —
    The Committee divided: Ayes 252, Noes 258.

    Division No. 212]

    AYES

    [8.46 p.m.

    Abse, Leo

    Fletcher, Ted (Darlington)

    McNamara, J. Kevin

    Allaun, Frank (Salford, E.)

    Foot, Michael

    Mahon, Simon (Bootle)

    Archer, Peter (Rowley Regis)

    Ford, Ben

    Mallalieu J. p. W. (Huddersflild, E.)

    Armstrong, Ernest

    Forrester, John

    Marks, Kenneth

    Ashley, Jack

    Fraser, John (Norwood)

    Marsden, F.

    Ashton, Joe

    Freeson, Reginald

    Marshall, Dr. Edmund

    Atkinson, Norman

    Garrett, W. E.

    Marten, Neil

    Bagier, Gordon A. T.

    Gilbert, Dr. John

    Mason, Rt. Hn. Roy

    Barnett, Guy (Greenwich)

    Ginsburg, David (Dewsbury)

    Meacher, Michael

    Barnett, Joel (Heywood and Royton)

    Gourlay, Harry

    Mellish, Rt. Hn. Robert

    Baxter, William

    Grant, George (Morpeth)

    Mendelson, John

    Benn, Rt. Hn. Anthony Wedgwood

    Grant, John D. (Islington, E.)

    Mikardo, Ian

    Bennett, James (Glasgow, Bridgeton)

    Griffiths, Eddie (Brightside)

    Millan, Bruce

    Bidwell, Sydney

    Griffiths, Will (Exchange)

    Miller, Dr. M. S.

    Biffen, John

    Hamilton, William (Fife, W.)

    Milne, Edward

    Bishop, E. S.

    Hamling, William

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

    Blenkinsop, Arthur

    Hannan, William (G'gow, Maryhill)

    Moate, Roger

    Boardman, H. (Leigh)

    Hardy, Peter

    Morgan, Elystan (Cardiganshire)

    Body, Richard

    Harper, Joseph

    Morris, Alfred (Wythenshawe)

    Booth, Albert

    Harrison, Walter (Wakefield)

    Morris, Charles R. (Openshaw)

    Bottomley, Rt. Hn. Arthur

    Hart, Rt. Hn. Judith

    Morris, Rt. Hn. John (Aberavon)

    Bradley, Tom

    Hattersley, Roy

    Moyle, Roland

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

    Heffer, Eric S.

    Murray, Ronald King

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

    Hooson, Emlyn

    Oakes, Gordon

    Brown, Ronald (Shoreditch & F'bury)

    Horam, John

    Ogden, Eric

    Buchan, Norman

    Houghton, Rt. Hn. Douglas

    O'Halloran, Michael

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

    Howell, Denis (Small Heath)

    Oram, Bert

    Butler, Mrs. Joyce (Wood Green)

    Huckfield, Leslie

    Orbach, Maurice

    Callaghan, Rt. Hn. James

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Orme, Stanley

    Campbell, I. (Dunbartonshire, W.)

    Hughes, Mark (Durham)

    Oswald, Thomas

    Cant, R. B.

    Hughes, Robert (Aberdeen, N.)

    Owen, Dr. David (Plymouth, Sutton)

    Carmichael, Neil

    Hughes, Roy (Newport)

    Padley, Walter

    Carter, Ray (Birmingh'm, Northfleid)

    Hunter, Adam

    Paget, R. T.

    Carter-Jones, Lewis (Eccles)

    Hutchison, Michael Clark

    Palmer, Arthur

    Castle, Rt. Hn. Barbara

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

    Pannell, Rt. Hn. Charles

    Clark, David (Colne Valley)

    Janner, Greville

    Pardoe, John

    Cocks, Michael (Bristol, S.)

    Jay, Rt. Hn. Douglas

    Parker, John (Dagenham)

    Cohen, Stanley

    Jeger, Mrs. Lena

    Parry, Robert (Liverpool, Exchange)

    Concannon, J. D.

    Jenkins, Hugh (Putney)

    Pavitt, Laurie

    Conlan, Bernard

    Jenkins, Rt. Hn. Roy (Stechford)

    Pendry, Tom

    Cox, Thomas (Wandsworth, C.)

    John, Brynmor

    Pentland, Norman

    Crawshaw, Richard

    Johnson, Walter (Derby. S.)

    Powell, Rt. Hn. J. Enoch

    Crosland, Rt. Hn. Anthony

    Jones, Dan (Burnley)

    Prentice, Rt. Hn. Reg.

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

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

    Prescott, John

    Cunningham, Dr. J. A. (Whitehaven)

    Jones, Gwynoro (Carmarthen)

    Price, J. T. (Westhoughton)

    Dalyell, Tam

    Jones, T. Alec (Rhondda, W.)

    Price, William (Rugby)

    Davies, Denzil (Llanelly)

    Kaufman, Gerald

    Probert, Arthur

    Davies, Ifor (Gower)

    Kelley, Richard

    Rankin, John

    Davis, Clinton (Hackney, C.)

    Kerr, Russell

    Reed, D. (Sedgefield)

    Davis, Terry (Bromsgrove)

    Kinnock, Neil

    Rees, Merlyn, Leeds, L,

    Deakins, Eric

    Lambie, David

    Rhodes, Geoffrey

    de Freitas, Rt. Hn. Sir Geoffrey

    Lamborn, Harry

    Richard, Ivor

    Dell, Rt. Hn. Edmund

    Lamond, Jamas

    Roberts, Albert (Normanton)

    Dempsey, James

    Latham, Arthur

    Robertson, John (Paisley)

    Doig, Peter

    Leadbitter, Ted

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

    Dormand, J. D.

    Lee, Rt. Hn. Frederick

    Rodgers, William (Stockton-on-Tees)

    Douglas, Dick (Stirlingshire. E.)

    Lever, Rt. Hn. Harold

    Roper, John

    Douglas-Mann, Bruce

    Lewis, Arthur (W. Ham, N.)

    Rose, Paul B.

    Driberg, Tom

    Lewis, Ron (Carlisle)

    Ross, Rt. Hn. William (Kilmarnock)

    Duffy, A. E. P.

    Lomas, Kenneth

    Rowlands, Edward

    Eadie, Alex

    Loughlin, Charles

    Sandelson, Neville

    Edwards, Robert (Bilston)

    Lyon, Alexander W. (York)

    Sheldon, Robert (Ashton-under-Lyne)

    Edwards, William (Merioneth)

    Lyons, Edward (Bradford, E.)

    Shore, Rt. Hn. Peter (Stepney)

    Ellis, Tom

    Mabon, Dr. J. Dickson

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

    English, Michael

    McBride, Neil

    Short, Mrs. Renée (W'hampton, N.E.)

    Evans, Fred

    McCartney, Hugh

    Silkin, Rt. Hn. John (Deptford)

    Ewing, Harry

    McElhone, Frank

    Silkin, Hn. S. C. (Dulwich)

    Farr, John

    McGuire, Michael

    Sillars, James

    Faulds, Andrew

    Mackenzie, Gregor

    Silverman, Julius

    Fell, Anthony

    Mackie, John

    Skinner, Dennis

    Fitch, Alan (Wigan)

    Maclennan, Robert

    Smith, John (Lanarkshire, N.)

    Fitt, Gerard (Belfast, W.)

    McMaster, Stanley

    Spearing, Nigel

    Fletcher, Raymond (Ilkeston)

    McMillan, Tom (Glasgow, C.)

    Spriggs, Leslie

    Stallard, A. W.

    Stoddart, David (Swindon)

    Varley, Eric G.

    Whitlock, William

    Stonehouse, Rt. Hn. John

    Wainwright, Edwin

    Willey, Rt. Hn. Frederick

    Strang, Gavin

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

    Williams, Alan (Swansea, W.)

    Summerskill, Hn. Dr. Shirley

    Walker, Harold (Clitheroe)

    Williams, W. T. (Warrington)

    Swain, Thomas

    Walker-Smith, Rt. Hn. Sir Derek

    Wilson, Alexander (Hamilton)

    Taverne, Dick

    Wallace, George

    Wilson, Rt. Hn. Harold (Huyton)

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

    Watkins, David

    Wilson, William (Coventry, S.)

    Thomas, Jeffrey (Abertillery)

    Weitzman, David

    Woof, Robert

    Tinn, James

    Wellbeloved, James

    Torney, Tom

    Wells, William (Walsall, N.)

    TELLERS FOR THE AYES

    Turton, Rt. Hn. Sir Robin

    White, James (Glasgow, Pollok)

    Mr. James A. Dunn and Mr. James Hamilton

    Urwin, T. W.

    Whitehead, Philip

    NOES

    Adley, Robert

    Fenner, Mrs. Peggy

    Langford-Holt, Sir John

    Alison, Michael (Barkston Ash)

    Fidler, Michael

    Legge-Bourke, Sir Harry

    Allason, James (Hemel Hempstead)

    Finsberg, Geoffrey (Hampstead)

    Le Marchant, Spencer

    Amery, Rt. Hn. Julian

    Fisher, Nigel (Surbiton)

    Lewis, Kenneth (Rutland)

    Archer, Jeffrey (Louth)

    Fletcher-Cooke, Charles

    Longden, Sir Gilbert

    Astor, John

    Fookes, Miss Janet

    Loveridge, John

    Atkins, Humphrey

    Fortescue, Tim

    Luce, R. N.

    Awdry, Daniel

    Fowler, Norman

    McAdden, Sir Stephen

    Baker, Kenneth (St. Marylebone)

    Fox, Marcus

    MacArthur, Ian

    Balniel, Rt. Hn. Lord

    Fry, Peter

    McCrindle, R. A.

    Barber, Rt. Hn. Anthony

    Galbraith, Hn. T. G.

    McLaren, Martin

    Batsford, Brian

    Gardner, Edward

    Maclean, Sir Fitzroy

    Beamish, Col. Sir Tufton

    Gibson-Watt, David

    McNair-Wilson, Michael

    Bennett, Sir Frederic (Torquay)

    Gilmour, Ian (Norfolk, C.)

    McNair-Wilson, Patrick (New Forest)

    Bennett, Dr. Reginald (Gosport)

    Gilmour, Sir John (Fife, E.)

    Maddan, Martin

    Benyon, W.

    Glyn, Dr. Alan

    Madel, David

    Berry, Hn. Anthony

    Godber, Rt. Hn. J. B.

    Mather, Carol

    Blaker, Peter

    Goodhart, Philip

    Maude, Angus

    Boardman, Tom (Leicester, S.W.)

    Goodhew, Victor

    Maudling, Rt. Hn. Reginald

    Boscawen, Hn. Robert

    Gorst, John

    Mawby, Ray

    Bossom, Sir Clive

    Gower, Raymond

    Maxwell-Hyslop, R. J.

    Bowden, Andrew

    Grant, Anthony (Harrow, C.)

    Meyer, Sir Anthony

    Braine, Sir Bernard

    Gray, Hamish

    Mills, Peter (Torrington)

    Bray, Ronald

    Green, Alan

    Miscampbell, Norman

    Brinton, Sir Tatton

    Griffiths, Eldon (Bury St. Edmunds)

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

    Brocklebank-Fowler, Christopher

    Grylls Michael

    Mitchell, David (Basingstoke)

    Brown, Sir Edward (Bath)

    Gummer, J. Selwyn

    Money, Ernle

    Bruce-Gardyne, J.

    Gurden, Harold

    Monks, Mrs. Connie

    Bryan, Paul

    Hall Miss Joan (Keighley)

    Monro, Hector

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

    Hall, John (Wycombe)

    Montgomery, Fergus

    Buck, Antony

    Hall-Davies, A. G. F.

    More, Jasper

    Burden, F. A.

    Hamilton, Michael (Salisbury)

    Morgan, Geraint (Denbigh)

    Butler, Adam (Bosworth)

    Hannam, John (Exeter)

    Morgan-Giles, Rear-Adm.

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

    Harrison, Col. Sir Harwood (Eye)

    Morrison, Charles

    Carlisle, Mark

    Haselhurst Alan

    Mudd, David

    Carr, Rt. Hn. Robert

    Havers, Michael

    Murton, Oscar

    Channon, Paul

    Hawkins Paul

    Neave, Airey

    Chapman, Sydney

    Hayhoe, Barney

    Normanton, Tom

    Chataway, Rt. Hn. Christopher

    Higgins, Terence L.

    Nott, John

    Chichester-Clark, R.

    Hiley, Joseph

    Onslow, Cranley

    Churchill, W. S.

    Hill James (Southampton Test)

    Owen, Idris (stockport, N.)

    Clark, William (Surrey, E.)

    Holland, Philip

    Page, Graham (Crosby)

    Clegg, Walter

    Holt, Miss Mary

    Page, John (Harrow, W.)

    Cockeram, Eric

    Holt, Miss Mary

    Parkinson, Cecil

    Cooke, Robert

    Hornby, Richard

    Percival, Ian

    Coombs, Derek

    Hornsby-Smith Rt Hn Dame Patricia

    Peyton, Rt. Hn. John

    Cooper, A. E.

    Howe, Hn. Sir Geoffrey (Reigate)

    Pike, Miss Mervyn

    Cordle, John

    Howell, David (Guildford)

    Pink, R. Bonner

    Corfield, Rt. Hn. Frederick

    Howell, Ralph (Norfolk, N.)

    Price, David (Eastleigh)

    Cormack, Patrick

    Hunt, John

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

    Costain, A. P.

    Iremonger, T. L.

    Proudfoot, Wilfred

    Crouch, David

    James, David

    Pym, Rt. Hn. Francis

    Crowder, F. P.

    Jenkin, Patrick (Woodford)

    Quennell, Miss J. M.

    Davies, Rt. Hn. John (Knutsford)

    Jessel, Toby

    Raison, Timothy

    d'Avigdor-Goldsmid, Sir Henry

    Johnson Smith, G. (E. Grinstead)

    Ramsden, Rt. Hn. James

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

    Joseph, Rt. Hn. Sir Keith

    Rawlinson, Rt. Hn. Sir Peter

    Dean, Paul

    Kellett-Bowman, Mrs. Elaine

    Redmond, Robert

    Deedes, Rt. Hn. W. F.

    Kimball, Marcus

    Reed, Laurance (Bolton, E.)

    Dixon, Piers

    King, Evelyn (Dorset, S.)

    Rees, Peter (Dover)

    Drayson, G. B.

    King, Tom (Bridgwater)

    Renton, Rt. Hn. Sir David

    du Cann, Rt. Hn. Edward

    Kinsey, J. R.

    Ridley, Hn. Nicholas

    Dykes, Hugh

    Kirk, Peter

    Ridsdale, Julian

    Eden, Sir John

    Kitson, Timothy

    Rippon, Rt. Hn. Geoffrey

    Edwards, Nicholas (Pembroke)

    Knight, Mrs. Jill

    Roberts, Michael (Cardiff, N.)

    Elliot, Capt. Walter (Carshalton)

    Knox, David

    Roberts, Wyn (Conway)

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

    Lambton, Lord

    Rost, Peter

    Emery, Peter

    Lamont, Norman

    Royle, Anthony

    Eyre, Reginald

    Lane, David

    St. John-Stevas, Norman

    812

    813

    Scott, Nicholas

    Tapsell, peter

    Ward, Dame Irene

    Sharples, Richard

    Taylor, Sir Charles (Eastbourne)

    Warren, Kenneth

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

    Taylor, Frank (Moss Side)

    Weatherill, Bernard

    Shelton, William (Clapham)

    Taylor, Robert (Croydon, N.W.)

    Wells, John (Maidstone)

    Simeons, Charles

    Tebbit, Norman

    White, Roger (Gravesend)

    Sinclair, Sir George

    Temple, John M.

    Wiggin, Jerry

    Skeet, T. H. H.

    Thatcher, Rt. Hn. Mrs. Margaret

    Wilkinson, John

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

    Thomas, John Stradling (Monmouth)

    Winterton, Nicholas

    Soref, Harold

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

    Wolrige-Gordon, Patrick

    Speed, Keith

    Thompson, Sir Richard (Croydon, S.)

    Wood, Rt. Hn. Richard

    Spence, John

    Tilney, John

    Woodhouse, Hn. Christopher

    Sproat, Iain

    Trafford, Dr. Anthony

    Woodnutt, Mark

    Stainton, Keith

    Trew, Peter

    Worsley, Marcus

    Stanbrook, Ivor

    Tugendhat, Christopher

    Wylie, Rt. Hn. N. R.

    Stewart-Smith, Geoffrey (Belper)

    van Straubenzee, w. R.

    Younger, Hn. George

    Stodart, Anthony (Edinburgh, W.)

    Vaughan, Dr. Gerard

    Stoddart-Scott, Col. Sir M.

    Waddington, David

    TELLERS FOR THE NOES:

    Stokes, John

    Walker, Rt. Hn. Peter (Worcester)

    Mr. Michael Jopling and Mr. Kenneth Clarke.

    Stuttaford, Dr. Tom

    Wall, Patrick

    Question accordingly negatived.
    [Mr. E. L. MALLALIEU in the Chair]
    Mr. Ronald King Murray: I beg to move Amendment No. 419, in page 3, line 16, leave out from beginning to 'the' in line 18 and insert:
    "There may be paid out of moneys to be provided by Parliament."
    The Second Deputy Chairman: With this it would be convenient to discuss Amendment No. 53, in page 3, line 18, leave out from 'meet' to 'any' in line 20, standing in the name of the right hon. Member for Thirsk and Malton (Sir Robin Turton).
    Mr. Murray: Clause 2 contains two subsections of paramount importance. The first is subsection (1) and the second is subsection (3). By subsection (1) the writ of Brussels runs unhindered through this land, its charge underwritten in advance by the House. By subsection (3) a blank cheque is permanently signed in advance—a blank cheque without limit which subjects us permanently to heavy financial commitments, commitments which could indeed be crushing without the parliamentary control on which the power of Parliament now rests.
    The sovereignty of Parliament has twin sources—the power of legislation and the power of financial control. The eggs of sovereignty once scrambled can hardly be restored to their shells. If that is true of legislation it is doubly true of financial control. The object of Amendment No. 419 is to retain the maximum of parliamentary control consistent with meeting the financial burdens of membership of the Communities, the maximum parliamentary scrutiny over Britain's budgetary contributions.
    814
    What is the measure of that parliamentary control as it now stands? It is set out in classic terms on page 676 of Erskine May and summarised in the centre of the passage, where it says:
    "Thus the Crown demands money, the Commons grant it, and the Lords assent to the grant;"
    On page 677, Erskine May deals with the cycle of financial business, to which reference has already been made, and stresses the importance of the principle of annuality, the annual control of the finance of this country by Parliament. It is a procedure by Estimate, Vote and appropriation, a well-worn path whereby annual scrutiny and control ensure to Parliament power over the national purse strings.
    9.0 p.m.
    Does this subsection put that power at risk? The answer must be an unqualified "Yes". I quote what the Chief Secretary to the Treasury said on this subject on 22nd February when dealing with the contributions with which we are concerned under this subsection:
    "In other words these funds"—
    the funds in question—
    "never really belong to the United Kingdom. By a coninuous process throughout the year, they flow through the Consolidated Fund to the Community budget. The Community's entitlement to the money is absolute from the moment that a claim on the importer for the levy or the duty is established."
    Later he said:
    "My point is that, bearing in mind the reality and the nature of these payments of levies and duties and the fact that they flow through the Consolidated Fund, I suggest that voting them annually would be wholly inappropriate."
    The subsection thus attaches to this country a permanent drain, one which remains permanently open beyond our

    815
    control and through which our economic lifeblood can continually drain, and indeed, judging by the figures quoted in the last debate by my right hon. Friend the Member for Stepney (Mr. Shore), the acute imbalance of our budgetary contribution would appear to make this probable. But we could do nothing directly about it.
    There are, of course, two kinds of public expenditure at present, permanent Consolidated Fund expenditure—the current expenditure—and annual expenditure, and, of course, it is said by the Government today that there is some faint analogy there for the provisions brought out in subsection (3), but the balance is entirely different. The vast bulk of expenditure is at present for the public services in respect of supply services paid on an annual basis—the moneys provided by Parliament, to use the words of the Amendment, echoing the Treasury terminology. The effect of the Amendment would be to ensure this kind of regular annual parliamentary scrutiny and control over our budgetary inter-relations with the Community.
    In the view of the Opposition, nothing less will ensure that we reserve our ultimate financial sovereignty as well as our formal legislative sovereignty. At least it would enable us to plug the drain once a year, rather as the owner of a private access may physically close it once a year to prevent the creation of a public right of way. The case seems overwhelming for parliamentary scrutiny and for doing it in this way.
    What is the case against? This was stated by the Chief Secretary on 22nd February when he said:
    "My point in relation to the agricultural levies and the duties is that, as has been recognised ever since the necessary Community Regulations were passed, these do not in reality belong to member countries but flow through, in our case, the Consolidated Fund to the Communities. I suggest that an annual Vote in these circumstances would be wholly inappropriate."
    The argument is pivoted on appropriateness, but we treasure not appropriateness but the liberties and powers of Parliament. These are not to be weighed in the same scale. He goes on:
    "It would not recognise the reality of our obligation. Such an obligation can be properly reflected only by charging the payments directly on the Consolidated Fund. Any-
    816
    thing else would be incompatible with the decision and the Reaulation."—[Official Report, 22nd February, 1972; Vol. 831, c. 1147–9.]
    He is referring to the decision under which this Regulation was imposed.
    The argument when examined rests on bald assertion and the drafting of paragraph (b), as has been pointed out, belies this because it provides for annual supply. We must ask: why has this been done? Is there a sinister reason? Is it because some Brussels bureaucrat has vetted the Bill and dictated what must be provided in it?
    We want a clear answer to that because our suspicions are growing. To what extent has the Bill in draft been shown to the Commission and the controllers in Brussels and to what extent have they approved its terms? To what extent are our rules of order being dictated from Brussels?
    The financial control of Parliament rests on two historic pillars, the Standing Orders of this House, starting with Standing Order No. 89, which dates in substance from 1713, and the Bill of rights of 1688. In case any of my Scottish colleagues should think that I am guilty of dereliction of duty, there is also the corresponding Claim of Rights for Scotland. It stands on these twin foundations. Let us see what Standing Order No. 89 says. It says:
    "This House will receive no petition for any sum relating to public service or proceed upon any motion for a grant or charge upon the public revenue, whether payable out of the Consolidated Fund or the National Loans Fund or out of money to be provided by Parliament or for releasing or compounding any sum of money owing to the Crown, unless recommended from the Crown."
    There is nothing there about Brussels. This historic Standing Order and those that go with it are in peril, in jeopardy and must be changed. That is one of the twin pillars gone.
    What about the other pillar? I turn to the Bill of Rights. Historically this takes us back to Hampden and the case of ship money in 1637. It required Parliament to reverse that inequitable decision of the Court of Exchequer Chambers. In the fourth declaration of the ancient liberties and rights of Parliament, enshrined in the Bill of Rights of 1688, we find this:
    "A levying of Money for or to the Use of the Crown, by Pretence or Prerogative without

    817
    grant of Parliament for longer time or in other manner then the same is or shall be granted is illegal."
    Again, for my Scottish colleagues there is a corresponding declaration, the seventh, in the Claim of Rights for Scotland. I ask the Committee to note those words
    "without grant of Parliament for longer time or in other manner".
    How can it be said that a permanent alienation of these rights is within the meaning of the Bill of Rights? That is the other pillar of our ancient liberties gone. I cannot help feeling that the Government benches are intoxicated by this vision they have of Europe.
    Mr. Fell: Some of them.
    Mr. Murray: We have a few representatives. I begin to wonder how it is that there is this strange preoccupation, this strange fascination. Another curiosity is the odd preoccupation that Europe seems to have had with bulls and beef, ever since the White Bull of Jupiter carried Europa off to Crete, borne aloft no doubt by the rising spiral of beef prices. The ancient liberties of Parliament are to be set against dreams of this kind, dreams which we feel to be illusions. Instead of arguments we find bald assertions. We feel that the ancient pillars of parliamentary power are not merely historic, they are part of its very substance, and for those reasons we invite the maximum support for this Amendment.
    Sir Robin Turton: With this Amendment we are discussing Amendment No. 53, which stands in my name and the names of my hon. and right hon. Friends, and which is different from and narrower than that moved by the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray).
    There are always two considerations. There are those people who believe that it is in the country's interest to join the Community and there are those who take the opposite view. But, quite apart from that division of opinion, there is the other dominating fact that all hon. Members should be considering, and that is how, if we are to accept the Bill, we can secure proper parliamentary control. In Amendment No. 53 I have proposed what I believe to be an improvement
    818
    which will secure adequate parliamentary control.
    First, I want to consider exactly what the change would be if the Amendment were adopted. Any sum required to meet any Community obligation to make payments to any of the Communities or member States would come under the normal system of Votes and not the Consolidated Fund Standing Services. On the previous Amendment we were told that such a proposal would be highly unusual. But why? Is it because this is, to a certain extent, an automatic payment? If it is, let us consider exactly what is involved. By taking it out of this part of the Clause we shall put it in under subsection (3)(a), where it will be met by moneys provided by Parliament.
    What will come under paragraph (a)? I stand to be corrected if I itemise rather more fully than did my hon. Friend what is already coming under the paragraph as the Bill stands. This will include payments by the Government pursuant to directly applicable Community regulations and payment by the Government pursuant to Community directives. These are automatic obligations, and yet they will be voted under subsection (3)(a). Also included are incidental expenses incurred by Departments and payments pursued under order of Clause 6(2) by way of remuneration to the intervention board for agricultural produce and the payment to the sugar board under Clause 7(2).
    Nobody can say that the acceptance of the Amendment would revolutionise the Bill. But if we do not accept it, what is the position if we put the money directly on the Consolidated Fund Bill? The hon. and learned Member for Leith quoted Erskine May; I find, therefore, no need to quote large extracts from Erskine May. We can find out exactly what is involved without that. Any payment in the Civil List at the moment comes under the Consolidated Fund Standing Services. Payments for the National Debt, the salary of Mr. Speaker and the salary of the Comptroller and Auditor General and that part of the taxation of Northern Ireland, the reserve taxes, form the whole of the Consolidated Fund Standing Services.
    We were told by my hon. Friend that it would be unusual for these Community

    819
    contributions not to be under the Consolidated Fund Standing Services. But in fact, it would be a very grave exception. Why is it that Mr. Speaker's salary comes under the Consolidated Fund Standing Services? It is because it is inconvenient for Parliament to have an inquisition on it. That is the dominating factor in all the Consolidated Fund Standing Services.
    9.15 p.m.
    I suggest that we should reconsider this point. What is the difference between an expenditure which comes under a Vote and one which comes under a Consolidated Fund Standing Service? If it comes under a Vote, the House has to have details of the amount that our electors will pay towards the object concerned. That is the whole point. In other words, there is an opportunity for the redress of grievance before supply. That is the whole basis on which the financial structure of this House has been built.
    If the Government make a mistake, they have to come to this House to ask for more and to justify the increase. It was my hon. Friend the Member for Barry (Mr. Gower) who pointed out earlier that Governments always make bad estimates. That was giving the case for this Amendment. I appreciate that it is right for any Minister to say that he cannot say how much something will cost us in 1980. No one can work out what the cost of entry will be in 1980. However, this matter of is great interest to our constituents, and we want to be able to bring it back to this Chamber so that it may be discussed and investigated. That means by the system of Estimates and Supplementary Estimates which we are sacrificing by the device that the Government have adopted in this Bill.
    Thirdly, there is the annual inquest on accounts. There is no provision for the Comptroller and Auditor General or the Public Accounts Committee to deal with Consolidated Funds Standing Services. The whole of the House of Commons machinery of inquest will be removed from this contribution.
    When we discussed this matter on 22nd February, my hon. Friend the Chief Secretary tried to deal with the point that
    820
    I had made on Second Reading in asking why it was not to be in the Estimates, and he said that we did not often vote down an Estimate. He reminded us that the last time that we had done it was in the case of Lord Haldane's bath.
    Mr. Patrick Jenkin: Perhaps I might take this opportunity to correct a mistake that I made on that occasion. It was not Lord Haldane but Lord Birkenhead whose bathroom was voted down.
    Sir Robin Turtson: I am grateful to my hon. Friend. I had not that correction. I was referring to an uncorrected version of the Official Report. It was Lord Birkenhead's bathroom, and my hon. Friend pointed out that that occurred as long ago as 1919. However, it is not a question of voting down an Estimate. The question is for this House to have an inquest on the Estimate.
    I remember saying, when my hon. Friend spoke of the wrong Peer's bathing facilities, that he should think of the debate that we had on the groundnuts scheme. We could not vote down Mr. Strachey's scheme, but we had an extremely good debate on it. We were outnumbered by the Government of the day, who defended the expenditure on the groundnuts scheme. However, as a result of the debate the scheme was abandoned. To me, that is the purpose of our procedure. The House must have an inquest on expenditure, and that is not provided for in this subsection.
    I have been a member of the Select Committee on Procedure which has been responsible for recommending that on these Supply days it is possible to have the Supply taken formally and use the time as an Opposition day. But that does not remove the right of the Opposition or, for that matter, of any hon. Member to treat a Supply day as a Supply day. Though I admit the contribution can be raised by the Opposition, we have cut down the number of opportunities.
    I am trying to give a balanced point of view and to show the parliamentary opportunities. Now that we have done away with the Estimates Committee, it may be said that this contribution can be looked at by the Select Committee on Expenditure. However, here there is a difficulty. The Community's financial year is different from our own. Therefore, in the Financial Statement and

    821
    Budget Report there will not be the full amount of our annual contribution for any one year. It will not be possible for the Select Committee to examine our contribution properly. This is a matter which the Government must reconsider. The fact that we shall have two different financial years operating makes matters extremely difficult. In my view, it would be far better to get this expenditure on to the proper Vote system, as the Government are doing for the other matters that I itemised at the beginning of my remarks.
    I turn to consider the need for the House to have an inquest on the expenditure on the contribution. I was alarmed when I heard the attitude of some of my hon. Friends as to whether this House should inquire into expenditure. For example, my hon. Friend the Member for Flint, West (Sir A. Meyer) said that he thought that the money should flow, and that it would be wrong for his constituents to take any interest in the flow of money, which ought to be automatic. I interrupted him to ask whether he thought his constituents would have an interest in this contribution. He gave the impression that once we decided to go into Europe, our constituents would not need to be bothered by the matter.
    My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said that this was a wonderful project and that his constituents would be delighted that money should flow from them to the poor people of Southern Italy. But this is not our function in Parliament. Our job here is to see that the money which is extorted or extracted from our constituents in taxation for definite objects shall have proper House of Commons investigation before it is voted.
    This is particularly true when we come to the vexed question of contributions. I gained a great deal of new knowledge from what my hon. Friend the Chief Secretary said in explanation of the White Paper. He gave me an entirely new outlook on the subject. He said that the figures in paragraph 93 of the White Paper were agreed in negotiation and that the key percentage which the British taxpayers would have to pay was based on constant prices. Apparently, although we have been discussing this Bill for a very long time, all our figures have been wrong. We have heard Ministers say that
    822
    in 1977 the gross contribution will be only £300 million and that the net contribution will be £200 million. The Chief Secretary has said that it is all wrong and that the figure will be far more because account has not been taken of the effect of inflation.
    This is why I got my figures entirely wrong. I was working on the official Community budget figures, which show an expenditure in 1972 of 4,100 million units of account, and the new March agricultural figures brought the figure up by an extra 6½ per cent. He said that did not matter. But it has to be paid for and we have to pay our share. It may be that the Community can get some of this sum out of reserves, but there comes a time when it has to bring in a supplementary estimate to justify the expenditure, but it cannot always go on getting money out of reserves.
    Mr. Jenkin: My hon. Friend has mentioned a figure of 4,100 million units of account. I must stress that that includes substantial sums from earlier years from which there is no question of our making any contribution at all.
    Sir Robin Turton: I am reading from the Fifth General Report of Activities in the Community in 1971:
    "The first draft of the Communities' general budget for the financial year 1972 was submitted to the Council…This first draft, which used a new budgetary nomenclature, was based on a total of 4,100 million units of account…".
    The figures in the White Paper relate to 1973. Therefore, whatever figure we start with, if I am right the figure is 4,100 million units of account, and if the Chief Secretary is right and it is a lower figure we have to upgrade for 1973–74 and for the years to 1977.
    Budget figures have been given for the years following 1972. If we look at paragraph 559 of the document "Financing of Community Activities" issued by the Community we see that in 1973 the increase will be 6·65 per cent. over 1972, and in 1974 6·94 per cent. over 1973. This shows an increase in the Community budget which it has agreed without any supplementary estimate. It has had to have an increase of over 6 per cent. It is interesting to look at paragraph 93 of the White Paper and see that there is an increased amount in four years to a total of 14 per cent.; in other words.

    823
    an average increase over the four-year period for 1973 to 1977 of 3 per cent. when already there will have been increases of 6·65 per cent. and 6·94 per cent. This illustrates why it is important for the House to find some device for controlling expenditure and for becoming acquainted with the increases in our contribution as the years go by and sometimes in the course of the financial year.
    I ask my hon. Friend to consider how the problem of parliamentary control of expenditure which is directed to the Community will be dealt with. I do not say this as one who is opposed to the Community, but as one who has attached great importance to the position of Parliament in the world and to what we have done in terms of financial control.
    9.30 p.m.
    As I see it, if the Bill is to be passed in this form Parliament is not even being a rubber stamp. It is rubber, but it does not have the stamping device. It is all automatic. If the Government do not use the Votes I beg them not to use the Consolidated Fund Standing Services, which is a device used for something entirely different.
    Whether because of the need to maintain discretion, or whether out of shame, we do not at present debate these issues in Parliament. There must be some form of dealing with the expenditure of the Community and our contribution to it. This is something in which the country will be vitally interested, and there must occasionally be great debates on our Community expenditure, rather on the lines of the forward-looking debate in the autumn. That is the kind of picture that I see.
    At the moment Parliament has not begun to attack the problem of how it will keep itself informed of what is happening in the Community. Reports should be given to Parliament by our representatives on the Council of Ministers, but there is no provision for that. On the legislative side, there is not even a Committee looking into the matter. There should be an inquiry by a Select Committee into the whole question of financial control. The best way is to put it on the Votes, and I hope, therefore, that the Government and the Committee will accept Amendment No. 53.
    Mr. Martin Maddan: I listened to my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) with the attention that is due to a Member who has not only served for so long but has served with such distinction. Nevertheless, when one considers the issues that we are debating, I hope that my right hon. Friend will forgive someone who is very junior to himself for questioning some of his assumptions and for suggesting that there are superior ways and proceedings to those which he suggested.
    My right hon. Friend seemed to think that any disbursement of funds from the Consolidated Fund was a kind of hole-in-the-corner business. That was one of the assumptions on which he rested his argument. If it is a hole-in-the-corner business—I do not for a moment agree that it is—that is something to which Parliament should address itself not in the context of the European Communities Bill, but in a far more wide-ranging context of its whole control over the executive and its expenditure of money.
    The fact that my right hon. Friend does not like the method of using the Consolidated Fund—he does not seem to think that it has any appropriate part to play at all in the procedure of public finance—is not a reason for rejecting its use for the purposes of the Bill.
    Sir Robin Turton: My hon. Friend has referred to the Consolidated Fund. That is not the point. The point is whether this comes directly out of the Consolidated Fund. If he looks at Erskine May, he will see that some things come out of the Consolidated Fund as Votes and some come out as Consolidated Fund Standing Services. It is this device which is being used, and it is normally used for the Civil List, Mr. Speaker's salary and the National Debt.
    Mr. Maddan: The words that my right hon. Friend used included the phrase "some hole and corner business of which we are rather ashamed". I am not ashamed of the uses to which the Consolidated Fund is put when they are the purposes that he instanced. Nor would I be ashamed of it being used for the purposes of this Bill—for two reasons.
    First, in joining the Communities, we have to recognise that we are doing

    825
    something fundamental. In doing something fundamental, to which the House assented on Second Reading, we must not be surprised if it makes some differences to our habitual way of doing things. If my right hon. Friend is saying that he does not like the purposes of the Bill and is using this subsection as a peg on which to hang his dislike, that is something that he is entitled to do. But he supported the Amendment not on grounds of opposition to the Bill but on grounds of his wish to adhere to parliamentary practice and financial control.
    My second reason concerns whether Parliament will find itself unable to question anything which goes on in the Community and leads to the need for the finance and perhaps increase in the finance to which my right hon. Friend referred. Although we have had a mammoth amount of time debating this subject this Session, from 1st January next year, when we are members of those Communities, I am certain that we shall still spend a lot of time debating those matters—
    Mr. Arthur Lewis: We cannot amend them.
    Mr. Maddsan: I am not talking about amending but about debating the affairs of the Community
    Mr. Lewis: Just talking.
    Mr. Maddan: Is talking control? Do Ministers take notice of what is said? Yes, they do. So we shall have many debates on the affairs of the Communities and we shall, through Ministers, have an effective leverage point which will influence them, although perhaps not control them—but that is in the nature of being a member of the EEC.
    Mr. Lewis: The hon. Member will agree, I hope, that over the years both parties have had revolts which have forced the executive to do things that the executive did not want to do. Examples are Suez and some of the things that our people have done. Under this proposed procedure, we shall be able to debate, but after the Council of Ministers has reached a decision, our representative will report back to the House without our being able to amend that decision or do anything about it. We must either like it or lump it. Is that good democracy?
    Mr. Maddan: In addition to accepting it and lumping it the hon. Gentleman might have referred to liking it because I am sure that he will like it when it happens.
    The hon. Gentleman considers that a change came over events in Suez because of a debate in Parliament. I take it that he means that that debate stopped the advance of British troops along the Suez Canal. In my view it was pressure from the American Government and not any debate in this Parliament which resulted in that course. That example brings us close to realising the advantages this country will have from being a member of the EEC.
    As part of a greater whole, we are bound to have influence over many aspects that concern us vitally. We shall certainly have more control over them than we have today. If I am asked whether we shall have total control, I must answer "No", save that in matters which Her Majesty's Government consider to be in our vital interest we shall have at least negative control rather than being forced into adopting policies or postures.
    Mr. William Baxter: The hon. Gentleman seems to be unaware of the fact that many excellent reasoned Amendments have been movingly proposed but have been rejected by the Government. Where lies the power of this assembly if we have been unable to persuade the executive to accept-even one such Amendment?
    Mr. Maddan: The hon. Gentleman condemns himself. He is saying that we have no power now to persuade the Government. What is the difference? He is fighting a paper battle.
    Nor do I agree that many of the Amendments which have been tabled and rejected have been proposed so convincingly. Those who table Amendments are frequently certain of the case for their proposal, but mere conviction does not necessarily mean that one's case is right in the eyes of the majority. In many respects, therefore, there is no difference between what is happening in our deliberations on this Measure and our deliberations on many others, though I agree that this one is vitally important.

    827
    The European Communities are bound to change in many respects and some of these changes will be welcome. I agree that membership will result in changes taking place in this country and in many of our institutions. Becoming a member of a larger whole makes that inevitable. There is no greater touchstone than on the financial side, and that is why we are discussing an important part of the Bill.
    Shall we have such adequate control and such benefits, in return for the money spent as we have from the way we do things now? When one is listening to this debate one sometimes has the impression that the United Kingdom of 1972, in the eyes of hon. Members opposite and many of my right hon. and hon. Friends, is "Paradise Regained". It was not so good when we were discussing other matters such as the Rents Bill or some Clauses in the Finance Bill. But suddenly, when we discuss this Bill, we start at the point of having regained paradise; everything is perfect and any change must be for the worse.
    Mr. Fell: A load of rubbish.
    Mr. Maddan: I think my hon. Friend said that it was rubbish.
    Mr. John Hall: "A load of rubbish".
    9.45 p.m.
    Mr. Maddan: He will have his opportunity to expose the rubbish he believes I am talking. He will have the opportunity to say that the circumstances of today, when we are not in the Community, are far from ideal. What we have to compare are the circumstances of human life, which are never ideal, which we enjoy today with our circumstances as members of the Community, which also will not be ideal.
    The point I want to make to my right hon. Friend is that there are weaknesses in the control which Parliament will have over these funds under the European Economic Community. However, are they worse than the weaknesses that exist now? I do not agree for a moment that they will be worse in any way as this country will have the advantages of being a member of a wider community. Such membership will perhaps enable us not to suffer from outside sources of pressure
    828
    such as the United States at the time of Suez, to which felitous reference has been made.
    Mr. Lewis: The hon. Member for Hove (Mr. Maddan) is making the point for me. What he is saying—and I agree with him—is that the EEC will decide and, their having decided, we shall not be able to do a thing about it. When considering the Finance Bill, the Housing Bill or any of the other Bills, we can, if we get both sides agreeing in a majority, get Amendments through and force the Government to take action. But when we get into the Common Market the Government will tell us that the EEC and the Council of Ministers have agreed on X Y Z and we must accept it in to to and cannot alter or amend their decision in any way. Hon. Members have seen my pile of 1,750 regulations. Not one of them is debatableor amendable. Not one was prepared or made available to hon. Members until nine months after the event. There have been 144 pages of amendments and corrections. Today I received a letter from the Minister of Agriculture apologising for the fact that one of the amendments to the correction of an amendment is incorrect and that he has had to issue a statement to say that he has made a mistake and wants to correct that correction.
    Mr. Maddan: I do not want to comment on the correspondence between the hon. Member for West Ham, North and my right hon. Friend the Minister of Agriculture. However, the hon. Gentle man did indeed point out in his previous intervention that by the time we debate these matters it will be too late. The hon. Gentleman is like somebody who goes into a sleazy cinema where the film is shown in—
    Mr. Lewis: In Paris.
    Mr. Maddan: I should inform the hon. Gentleman that, regrettably, he does not need to go as far as Paris. I do not suppose he knows that, but it is true. I do not wish to give any undue publicity to these matters. Perhaps I should suggest a cinema showing an educational film as a continuous performance, which means that as soon as it is ended it starts again. The hon. Gentleman seems to have the impression that if one comes in at that time, that is when the process started. That is not so. One point which

    829
    has come out of the debate as prominently as the 1,001 orders, or whatever it was that the hon. Gentleman brought into the Chamber, is that in practice there is more prior discussion about any matter that is likely to be of concern to right hon. and hon. Members than is typical of orders issued by our own Government.
    Coming back to the question of "Paradise Regained", in which apparently we are living, I wonder how we have done in examining Statutory Instruments issued by the Government under our own authority during the last six months.
    Mr. Lewis: We are debating the European Communities Bill.
    Mr. Maddan: The hon. Gentleman does not like what I say and now asks me to talk about something else. What I say is in response to the hon. Gentleman's intervention.
    I am coming to a conclusion—
    Mr. Lewis: Hear, hear.
    Mr. Maddan: —and I have had every help and assistance from hon. Gentlemen opposite, which I welcome.
    If any hon. Member, professor of political science or any political commentator wants to expose weaknesses in control over financial expenditure exercised in any circumstances by this or any other Parliament, he can make a marvellous job of it because the public domain and public affairs today involve expenditure, on so many different objects that no legislature or democratic assembly can keep track of and examine them all. It is the fact of life with which we live in the United Kingdom in June, 1972. There will, of course, be changes. However my contention and the reason I oppose the Amendment and support the provisions of the Bill is that in practice and in effect as a Member of the Community we shall have every bit as much, if not more, control and influence over the amounts—
    Mr. Lewis: Even the Government do not believe that.
    Mr. Maddan: We shall hear what they say in due time. I doubt that they will confirm the hon. Gentleman's opinion.
    Mr. Lewis: They have all the time the hon. Gentleman has been in Brussels.
    Mr. Maddan: I hope the hon. Gentleman will have an opportunity of making a speech.
    Hon. Members: No.
    Mr. A. E. Cooper: Spare us that.
    Mr. Maddan: I am sure the hon. Gentleman will not be discouraged by my hon. Friends.
    I want to emphasise again that as a member of the Community in practice and in effect we shall have as much opportunity to influence expenditure of moneys by the European Communities for purposes in which we are interested as we have at present within the confines and context of the United Kingdom. At the same time we shall gain influence over what is happening in neighbouring countries. If we do not have such influence, things may happen substantially to our disadvantage.
    The experience of member States of the Community so far has been not that they have given up something and gained something in return, but that they have given up nothing—
    Mr. Norman Buchan: On a point of order, Mr. Mallalieu. Is it in order for an hon. Gentleman who voted for the guillotine to filibuster in this disgusting fashion?
    The Second Deputy Chairman: I have heard nothing out of order.
    Mr. Michael Foot: Yes, you have, Mr. Mallalieu—tedious repetition.
    Mr. Maddan: Mr. Mallalieu, my speech has been rather longer than I intended, but I have had the most able assistance from hon. Members opposite and I did not wish to be discourteous to them by not taking up the points they made and developing them as fully as I could. As one who voted for the guillotine I can exonerate myself from the charge levelled at me by the hon. Member for Renfrew, West (Mr. Buchan) by pointing to the very few column inches in the Official Report which I have taken up compared with those occupied by many hon. Members opposite.
    The Second Deputy Chairman: Order. The hon. Gentleman should speak to the Amendment, not to the point of order.
    Mr. Maddan: I shall be glad to do that, Mr. Mallalieu. I have been, with the greatest difficulty, trying to come to the end of my speech. The experience of the Member States of the Community has been that they have given up nothing but gained a lot; and that will be our experience, too.
    Mr. William Hamling: This is only the second time that I have intervened in our debates on the Common Market. The last time I spoke was in the debate leading up to the decision on 28th October. In that debate I was concerned with the economic terms, which I regarded then as deplorable. Today I regard them as doubly deplorable.
    The Amendment concerns the powers of the House of Commons and of Parliament. In October's debate there was not the understanding and perception of the political implications of entry into the Community that there is today. We had not been brought face to face with the limitations on our parliamentary sovereignty that have been brought home in debate after debate from this side and by some right hon. and hon. Members opposite, to their great credit.
    To dismiss the destruction of parliamentary democracy by saying, as did the hon. Member for Hove (Mr. Maddan), that we have not a complete parliamentary democracy at the moment is no argument. The power to control the Executive in the House of Commons lies with back benchers now. There is this to be said about Ministers who may, in the words of the supporters of the present Government, exercise dictatorial control and be not answerable to parliamentary control: they are still amenable to re-election and are still answerable to the people of this country.
    Mr. Harold Lever: And to the House of Commons.
    10.0 p.m.
    Mr. Hamling: They are, I agree. For once, a Daniel comes to judgment. They are answerable to the House of Commons. That is a complete reply by one of their fellow supporters of the EEC. Ministers are still answerable to the people,
    832
    and Ministers have been known to be defeated when they have faced the electorate. The Government will face defeat when they challenge the electorate again. I am quite confident of that.
    The significance of the Amendment is that in the Bill we are handing over powers that we have fought for, sustained and maintained in this Parliament for hundreds of years, without any real debate or objection from the vast battalions who support the Government, to a handful of people who are not answerable to any Parliament, let alone this one.
    It comes as a shock to me that in 1972, after centuries of parliamentary democracy, we should be discussing these momentous matters, the destruction of British parliamentary democracy—indeed, not its destruction but its abandonment by the present Government—with an attendance which is a mockery and with an attention to the argument which is an abuse of intelligence. That is what we are reduced to. It will go down in history as an example of betrayal that we should be so supine in our defence of the principles of British democracy.
    The control of taxation and supply is one of the integral parts of British parliamentary democracy. In a couple of lines in the Bill we are betraying that and ending it for all time. We are giving it up. One thinks of the would-be conquerors of this country who would have invaded these shores in order to destroy this parliamentary democracy. Yet here the situation is that people of our own country are giving away the very things that they have fought for over the years. That is what the Bill and this Amendment are about.
    In the Amendment we are saying that these are powers that we have no right to give up. We were not sent to Parliament to betray it. We were not sent to the House of Commons by the British people to betray everything that the House of Commons stands for, and to betray it in the supine fashion one sees throughout these debates. We were sent here by the people of this country to defend British democracy. That is what the Amendment is about.
    This is only the second occasion on which I have spoken in these debates on the EEC. With all the vehemence and power at my command, I say that

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    I was not sent here to betray British democracy. I shall go into the Lobby tonight to fight for parliamentary control, control by the elected representatives of the British people, over the interests of the British people.
    [Sir ROBERT GRANT-FERRIS in the Chair]
    Mr. Michael Grylls: I am delighted to follow the hon. Member for Woolwich, West (Mr. Hamling), for whom I have great respect quite apart from his being a fellow Royal Marine.
    Mr. Maddan: Is it not an interesting point worthy of comment that the last three speakers have been Royal Marines?
    Mr. Grylls: The concern which the hon. Member for Woolwich, West expressed about the dilution of the power of the House of Commons was, I am sure, sincere, but I believe that he was wrong. It was clearly accepted in the Labour Government's White Paper, as it was in our White Paper, that the Community's system of finance is the central pillar of the Community and that we cannot in honesty talk about joining the Community on the one hand while on the other hand say that we do not approve of the system of Community finance. I believe, therefore, that in a sense the debate has been somewhat Alice in Wonderland-like, because some hon. Members opposite have said that they do not approve of the Community having its own budget. But I believe that the automaticity of the system of the Community having its own budget, with its own control over that budget, is one of the most vital things about the Community.
    The point is to guarantee to the Community a steady flow of funds so that the funds cannot be turned off and on by national Governments from time to time. The very continuity of its funds surely means that the Community can live and be virile. We all know how other international organisations, as it were, hang from day to day because they cannot get enough money. The United Nations itself is in a permanent state of semi-bankruptcy, having to pass round the hat the whole time. That is not my idea of an organisation that is virile and is likely to make a real impact.
    The hon. Member for Woolwich, West referred to funds from this country almost
    834
    being" pinched"—he did not use the word but that was the implication—and passed over to Brussels, to the Community. He said that these were funds over which we previously had control. But the funds we are talking about as our contribution to the Community budget are very special moneys levied for the Community itself. If one is to join this organisation, it is surely fair that these funds should be controlled jointly by the Community and should not be under the sole control of this Parliament.
    Mr. Marten: These are the funds which flow automatically, but the money does come from the British people. What some of us want is for it to be followed and vetted as to how it is spent. Would my hon. Friend agree that the Select Committee on Expenditure should have the power to go to Europe and examine how our money is spent?
    Mr. Grylls: I will come shortly to the question of parliamentary control because it has been the centre piece of the debate. I believe that it is important first to look at what we are likely to gain from the Community. The right hon. Member for Stepney (Mr. Shore), who is not present, made a violent but not very successful attempt to fix attention only on the debit side of the Community budget—the expense side rather than the advantage side. A good accountant does not do that sort of thing. We must be fair, whatever our views on the Community as a whole. There are two sides to the budget—what we put in and what we hope or expect to get out of it in the future.
    Britain can expect to gain substantially in a financial way from such things as the European Investment Bank, the investment funds and regional policy, as well as from the retraining of men in new technologies and the starting of new technological projects. These are the things which the country can expect, and from which, I believe, we shall gain very substantially.
    But to be fair, and as the Government's White Paper made clear in paragraph 96, it is not possible to put an accurate figure on either side of the balance sheet. This is the difficulty we face. It was acknowledged in the Labour Government's White Paper as well. If it is not possible to

    835
    get an absolutely accurate figure in forecasting our contribution, it is equally difficult to forecast with absolute accuracy what our receipts will be. The case has been fairly presented in the White Paper by the Government as a balance between the two in considering the overall net cost to the country.
    I want to come to the question of parliamentary control. This has clearly been the main concern in the debate. Frankly, I think that we are going to have a dilution of the control of the House over these funds, and we must accept this because it is part of joining the Community. If we do not accept it, then we do not want to join the Community. I believe that we must see a greater amount of control through the European Parliament. When I was there last year, many of the present members wanted to see greater control by the European Parliament of the Community budget. In 1975 there will be the first tentative steps in this direction, and I believe that Britain, with her long parliamentary history and experi-
    836
    ence, would wish to see this process speeded up considerably. I should like to think that the British Government would press the Community, once inside, to move forward more quickly towards control by the European Parliament of the overall budget so that we could directly influence the way these funds are used.
    I hope that the Chief Secretary will tell us something about this. It is something which this Parliament would like to see changed once we are in the Community and it is also something which the majority of the Community members would like to see changed. It is vital that we should reject this Amendment. Those who seek to excise this part of subsection (3) from the Bill are trying to cut out the life blood of the Community. The funds that the Community has are the things that will make it big. To be able to have its own budget and security of funds is something that will make it a modern and progressive Community, able to do the things for this country and the other countries in Europe that we want to see done.
    10.15 p.m.
    Mr. Geoffrey Finsberg: Unlike the hon. Member for Woolwich, West (Mr. Hamling), I can claim that this is the first time that I have intervened in these debates. I have not listened to many of them but I have carefully read the daily Hansard, column by column, page by page. Sometimes it has saved me from listening to the sedentary interventions of one or two hon. Gentlemen opposite.
    I am coming to the conclusion that much of the opposition is very much overdone. Each Amendment seems to be taken up by the Opposition and claimed as being fundamental if we are to remain a free and independent country with a free and independent Parliament. It reminds me very much of a Pearl White serial—the credibility becomes less each time the argument is adduced, certainly by the hon. and learned Member for Edinburgh, Leith (Mr. RonaldKing Murray). One does not have to be a Privy Councillor, a lawyer or a Front Bench Opposition spokesman to be the sole judge of what is democratic. I do not impugn the sincerity of those hon. Members, but let them reciprocate instead of always putting their arguments in such a way as to suggest that those who believe the Bill is right and the Amendment wrong are in the wrong. This is a line they are always taking, and I am getting a little tired of it. [Interruption.] If the hon. Member for West Ham, North (Mr. Arthur Lewis) wishes to intervene I will allow him.
    Mr. Arthur Lewis: All I am saying is that perhaps we should do what they do in the Common Market and agree without question with what the hon. Member says.
    Mr. Finsberg: I am sure that that has shed a lot of light on the debate. I yield to no one in my desire to be a free man in a free Parliament, but I do not see Amendment No. 419 or Amendment No. 53 as destroying the citadel of freedom or the citadel of liberty.
    I have looked carefully at the effect of this Amendment and the others that we are discussing with it. I have listened carefully to the hon. and learned Member for Leith and to my right hon. Friend the
    838
    Member for Thirsk and Malton (Sir Robin Turton). [Interruption.] I hear someone saying" Haven't we all?" The analogy of what I have understood hon. Members to say is that if I want to join a club and bind myself to accept its rules and subscriptions I am somehow wrong because I am not giving myself a chance in advance of saying that the way the contribution is levied does not suit me or of saying that if I am asked to sign a banker's order to guarantee my subscriptions it is wrong and that I should want the opportunity each year of questioning the club. If I want to join an organisation I believe that I must conform, and if that organisation wants me, for good or ill, to bind myself in advance to payment of subscriptions I see nothing wrong with that.
    Mr. Ernle Money: My hon. Friend is on an important point because when he joins a club he becomes a member and has control over what that club does.
    Mr. Finsberg: I was coming to that point about power.
    Mr. Marten: Power?
    Mr. Finsberg: Yes, power, as my hon. Friend the Member for Banbury (Mr. Neil Marten) may learn in a moment. [Laughter.] I meant that courteously, and I apologise if I sounded discourteous. I was about to say that I thought that the comment of my hon. Friend the Member for Chertsey (Mr. Grylls) was most germane when he pointed to what is happening in the United Nations. If it had the power to bind its members to pay their subscriptions we would not have Russia and others welshing over and over again on their obligations.
    Mr. Edward Taylor: I wonder whether my hon. Friend has ever joined a club which says, like the common agricultural policy, that the subscription can be changed only by unanimous decision of all the members?
    Mr. Finsberg: I cannot without a lot of research say" Yes", or" No" to that. I will certainly look into it, and if I find that I have a suitable answer I will take an opportunity, perhaps on the Question" That the Clause stand part of the Bill" to intervene and reply to that point.

    839
    I want to join this club in the same way as the country and the House want to join it.
    Mr. Spearing: Rubbish.
    Mr. Finsberg: With very few exceptions, most hon. Members including, if my research is right, the hon. Member for Woolwich, West voted for entry in 1967, so that if they supported entry now they would be consistent.
    If I take the decision to join 1 must abide by the rules and everything that those rules stand for—here I agree with my hon. Friend the Member for Ban-bury—until I have joined and become a full member and have the powers to persuade my fellow members to see my point of view. Having done that, I can then seek to alter the method of contribution and the amount of subscription. I see nothing in the Bill that makes that impossible. I see nothing in the assurances and speeches I have heard from my right hon. Friends to give me cause to doubt that what I have said is right.
    My right hon. Friend, the Member for Thirsk and Malton referred in a passing remark to the Select Committee on Expenditure. That was an important comment. As a member of that Select Committee I do not accept fully that we would be unable to examine our contributions. My hon. Friend the Member for Banbury said something about being able to go to Brussels to examine the documents and call witnesses. I am not certain from the terms of reference of the Select Committee whether we are debarred from so doing.
    Mr. Marten: I thank my hon. Friend for giving way because I know that my hon. Friend the Chief Secretary wants to wind up. If my hon. Friend would care to read the speech I made earlier, he will find all the arguments on this point.
    Mr. Finsberg: While I have great friendship for my hon. Friend the Member for Banbury and for the Chief Secretary, I believe that back benchers occasionally have the right to make speeches. Comparing the number of column inches that my speeches have occupied with the column inches occupied by the speeches of my hon. Friends, it shows that I am entitled to make my speech.
    840
    I am coming to the end of what I wanted to say. I do not believe that the Select Committee would be debarred from carrying out that very important task. I hope this is something to which the Defence and Foreign Affairs Sub-Committee will give its early attention.
    I certainly need to be convinced far more than I have been by the argument put forward by my right hon. Friend the Member for Thirsk and Malton before I am prepared to think otherwise. He said that the House might wish to find some device to carry out the task, and that that device might be a Select Committee. The only difference I can see between Amendment No. 419 and Amendment No. 53 is that the latter allows the European Investment Bank moneys to be charged solely to the Consolidated Fund. For the life of me, I cannot see the reason for this hair splitting unless the object is to have two separate Amendments to try to separate certain arguments and certain hon. Members. I find this illogical.
    However well argued the Amendments have been, however persuasive the speeches, they do not convince me and 1 doubt whether they will convince the Committee. It should not be assumed by any set of hon. Members that because they have put up a good argument that is the sole argument to be considered. I do not believe that the arguments in favour of these Amendments are right, and I hope that Committee will not accept either of them
    Mr. Richard Hornby: I want to intervene briefly at this point, having made a speech in the main debate last November—
    Hon. Members: Let us have a Division!
    Mr. Hornby: Amendment No. 419 has been advanced as a protection of the rights of Parliament at a time when it is being suggested by the opponents of this Measure that our rights are being eroded by the Bill. I believe this to be a total misunderstanding of the situation. The House took a major decision on this matter last year. That decision having been taken, the problem now before us is how best to see that the Measure which we have decided should go forward can go forward with the best possible efficiency and in good working order.

    841
    The suggestion in the Amendment is that various moneys should be provided only out of individual Votes of the House and, indeed, through the nine other Parliaments which would be represented in the Community. The decision of intent having been taken, it is important that the machinery which will enable the association to go forward should not be too torn to pieces by individual distractions of one kind or another. The machinery is there to scrutinise expenditure and to check on the decisions of the Council of Ministers to which the Commission in Brussels must report.
    What is involved here is that we are ensuring that, the decision of intent having been taken, inadequate power should not be left at the centre to go forward with the decisions which have been taken. It is with this issue and on no other that this Amendment is concerned, and it seeks to wreck the adequacy of power at the centre. Having taken the decision of intent, I believe we must take care to ensure that the machinery of, and exchanges in, the Community should not be wrecked by too many requirements in relation to any powers in the Community.
    Mr. Patrick Jenkin: 1 appreciate that there are still one or two of my hon. Friends who are anxious to participate in this debate, but, since I have the impression that the Committee is anxious to come to a decision on these Amendments, I thought it right to intervene at this stage. [Interruption.] The last debate was dominated by speakers who were in favour of the Amendments and against the Bill.
    The issue raised in these two Amendments is a narrow one, but I agree with those who have spoken in the debate, particularly the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) and my hon. Friend the Member for Thirsk and Malton (Sir Robin Turton), that the issue is very important in the context of our joining the Communities.
    Briefly, the question is what parliamentary machinery we should adopt for making the payments which the Committee agreed at the end of the last debate should be made. The Bill provides that the payments should be charged directly on the Consolidated Fund, or,
    842
    as the Treasury may direct, on the National Loans Fund. Amendment No. 419 would have the result that all the payments arising under the treaties and under the Bill would be charged to Votes. Amendment No. 53 would charge our contributions to the E.I.B. on the National Loans Fund, but for the rest would make them subject to annual Votes.
    10.30 p.m.
    As I have said, this is an issue of some significance, and, while we gave it a brief airing during the debate on the financial Resolutions last February, it is wholly right and proper that the arguments either way should be fully spelt out during the Committee stage.
    The difference between a direct charge on the Consolidated Fund and charging the payment on Votes has been referred to by many honorable Members on both sides during the debate, and perhaps I can summarise the position briefly. Payments charged on the Consolidated Fund—they are sometimes referred to as Consolidated Fund Standing Services—are payable in a sense, automatically, without further intervention by the House. On the other hand, payments that require to be made by Votes depend on the House passing each year the relevant Estimates and Consolidated Fund and Appropriation Acts. When I use the word" automatically", I must not be misunderstood; of course there is proper machinery within Government to make sure that any payments made out of the Consolidated Fund or out of the National Loans Fund are properly made. There are two clear safeguards. In the first place, the Treasury has to be satisfied that the payment is, in fact, due under the terms of the Act of Parliament authorising it, and secondly, the consent of the Comptroller and Auditor General must be secured. These are valuable safeguards, for the reality is that if the Treasury is not satisfied that sums due to the Communities are properly payable it can simply refuse to make the payment. Certainly payments could be delayed if, as a result of proceedings in this House, serious doubts were thrown upon the propriety of any claims or the amounts of the sums alleged to be due. Of course, this could give rise to serious difficulties with the Commission, but it is not right to say, as some hon. Members have suggested, that by charging these payments on the Consolidated Fund the

    843
    United Kingdom is somehow surrendering all right or power to challenge or query payments claimed by the Community.
    As the Committee well knows, Standing Charges on the Consolidated Fund are as a general practice reserved for those categories of payment which Parliament recognises as involving a high degree of commitment. My right hon. Friend the Member for Thirsk and Malton suggested they were payments where it would, in his view, be inconvenient to have regular inquisitions. I do not deny that that may be one of the factors which colour the decision. But the real question is the commitment, and, as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) said earlier, interest on the National Debt or on a loan is properly charged to the Consolidated Fund because it is a commitment, and there is no gainsaying that. Indeed, the other payments charged on the Consolidated Fund are commitments. With respect to my right hon. Friend the Member for Thirsk and Malton, who has long experience in these matters, I do not think that the convenience or inconvenience of debating a matter is a dominant issue.
    The payments to the Standing Services include payments in respect of the net cost of the National Debt, the repayment of post-war credits, the salaries and pensions of the judges, the salaries and pensions of a number of parliamentary officers, including Mr. Speaker, the Parliamentary Commissioner and the Comptroller and Auditor General. Indeed, my researches on this, somewhat to my surprise, led me to the interesting information that the salaries of the Leader of the Opposition and the Opposition Chief Whip are charged directly on the Consolidated Fund. I do not think that there is any question of the inconvenience of debating those. It is a question of commitment.
    As I have said, the primary reason for making these payments in this way is that to do so recognises the reality of the commitment which is inherent in the very nature of the obligations—a commitment which would be incompatible with the right of Parliament to exercise a power of veto simply by rejecting in any year the relevant Estimate.
    That being the nature of payments charged on the Consolidated Fund, I think that it is now incumbent upon me to explain to the Committee why the Government have felt it right that the payments to be made under the Bill fall into that category and not into the category of payments on Votes. Here 1 can answer the hon. and learned Member for Leith categorically by saying that there is no scintilla of evidence that pressure has been brought to bear either by our future partners or by the Commission that we should deal with the matter in this way. This is a decision of the Government, and it is right that it should be debated in the House as such.
    Mr. Jay: It is the Government's responsibility.
    Mr. Jenkin: I accept that it is the responsibility of the Government. The decision has been made, and I now come to the reasons why we have made that decision.
    The nub of the case is that by virtue of the Rome Treaty and the relevant decisions and regulations made by the Communities by which we shall be bound on ratification of the Treaty of Accession, our obligation to make payments involves a degree of commitment which can be recognised only by charging them directly on the Consolidated Fund—or, where appropriate, the National Loans Fund.
    Let me explain why this is so. Take first our obligation to contribute to the Communities' own resources. As I explained in the previous debate, this obligation, subject to the transitional arrangements, consists, under the decision of 21st April, 1970, and the implementing regulation, of various items including levies and customs duties. The decision describes the obligation—and I refer to Article 3—in the words that the relevant revenue
    "shall be entered in the Budget of the Communities".
    This means, and can only mean, that the sums concerned, although collected in the first instance by member States, belong from the moment at which the payment arises to the Communities. To use the phrase which I have used on an earlier occasion and which has been

    845
    quoted by the hon. and learned Member for Leith and the right hon. Member for Stepney (Mr. Shore), the payments" flow through the Exchequers of member States to the Community Budget." Of course, this is possible only if the definition of what is intended to be paid is clear, if the proportion to be handed over is clear and if the timing is clear. There is no doubt that all these requirements are satisfied by virtue of the decision and of the regulation to which I have referred.
    In respect of these levies and duties it is not a question of the Government collecting sums due from traders and manufacturers and then from time to time separately paying a subscription due to the Communities, because that is not what the effect of the decision is. Our obligation is not satisfied by our simply making a payment from funds which first belonged to the United Kingdom Exchequer. The payments belong from the outset to the Communities, and it is merely for convenience that the actual collection is to be undertaken through the existing machinery in each member country. The Communities' entitlement to the money is absolute from the moment a claim on the importer for the levy or duty is established.
    This is clear beyond a peradventure from Article 2 of the regulation of 2nd January, 1971, that
    "a claim shall be established as soon as the corresponding debt has been duly accepted by the services or competent agency of the Member State".
    Article 9 provides for a period of 60 days before member States have actually to account to the Commission for the sums due.
    This being the case, it must be evident that, unlike any other international subscription or contribution which the United Kingdom is obligated by treaty to make, almost all of which have hitherto been charged to Votes—there have been one or two exceptions—that procedure simply would not be compatible with the obligations that I have described. This has been said in an earlier debate. The hon. and learned Member for Leith said that it was a matter of assertion. I am not sure what else he expects it to be. An analysis of the situation and an analysis of the parliamentary procedure leads to a recognition that the one is incompatible with the
    846
    other. That is a matter of argument on which one is entitled to rely. The Communities' own resources system is, clearly, incompatible with any arrangement which allows Parliament to intervene through a Vote procedure.
    I recognise—I concede a point to the Opposition—that these arguments do not apply with quite the same force to certain other payments—for instance, a member State contribution, which has far more of the character of an annual subscription than the levies and duties to which I have been referring. A member State contribution is the surviving element of the original EEC revenue system, and, as I said in the last debate, it is due to be replaced in 1975 by part of the revenue of a uniform VAT.
    It might be compatible with the obligation inherent in a member State contribution to charge such a payment on the annual Votes, but it is only a residual element of the own resources system. It would be a niggling refinement to have a different procedure for that part of the contribution. For these reasons, it has seemed right to the Government, and the simplest course, to charge these, too, on the Consolidated Fund.
    In the last debate, my hon. Friend the Member for Banbury (Mr. Marten) referred to the obligation to pay up to a 1 per cent. yield on a value added tax. If and when the enlarged Community reaches agreement on harmonising VAT and activates that part of the April, 1970, decision, own resources will include the proceeds of that tax obtained, to quote Article 4,
    "… by applying a rate not exceeding 1 pet cent. to an assessment base which is determined in a uniform manner for Member States according to Community Rules."
    It will be clear that, unlike the levies and customs duties, it would not be possible to identify a defined slice of the VAT revenue accruing to member States so as to argue that it belongs from the outset to the Communities. It is a matter not simply of convenience but of stark necessity that each country should manage its own VAT and raise its own revenue and only subsequently account to the Communities for the Communities' share.
    Yet the nature of the obligation, as and when it arises, will be very much closer to that of the duties and levies

    847
    than, for instance, to the member State contribution. Thus, the Government have felt it right to charge these payments, too, on the Consolidated Fund.
    Perhaps the test can best be made the other way round by asking" Would it be compatible with the obligation embodied in the April, 1970, decision if Parliament could impose its own decision on whether or not to make the payment or as to the amount of the payment?" The answer could only be" No".
    Finally, there are the capital payments. My right hon. Friend the Member for Thirsk and Malton has recognised that a direct charge on the Consolidated Fund is appropriate for dealing with our payments to the EIB. I suggest to him that our payments to the ECSC are on all fours, being a once-for-all entry fee, even though payable by instalments. Both involve a degree of commitment, no less than that involved in our participation in the Community budget. Finally there are our obligations under the medium-term assistance scheme, and loans, if any, to the EIB. These, too, are clearly appropriate either to the Consolidated Fund or to the National Loans Fund, and it is right that subsection (3) should recognise that.
    Three main arguments challenging these propositions have been advanced during the debates. The first contention was that all this is incompatible with Parliament's basic and traditional right to control public expenditure. The second contention—this was made last February, and there have been references to it today—was that we have gone much further than existing members of the Community, who, it is said, have retained powers of veto which we would be surrendering. My right hon. Friend the Member for Thirsk and Malton quoted from Michael Niblock's book and made that assertion. Third, it is said that none of this is appropriate until the European Parliament is better equipped, and my hon. Friend the Member for Chertsey (Mr. Grylls) referred to this. I will deal with these in turn, and I start with the control of expenditure argument.
    10.45 p.m.
    Mr. Michael Foot: Does the hon. Gentleman realise what he is doing? He did this before. If he continues with his
    848
    speech, the sole effect will be to prevent the Committee from voting on the Amendment moved by the Father of the House, who probably knows more about the procedure of the House of Commons than any other right hon. or hon. Member. In other words, with the assistance of some of his filibustering hon. Friends, the Chief Secretary is, by continuing to speak, preventing a Division on this important Amendment from taking place.
    His behaviour is disgraceful and involves a breach of faith. If he insists on these tactics, he will be fought all the way. He must realise that if he continues with his speech he will continue to prevent hon. Members from reaching a decision in the Lobby on this issue.
    Mr. Jenkin: I have said nothing that is not in direct answer to points raised in the debate and the hon. Gentleman has absolutely no right to make that sort of accusation. Every speaker has referred to this point and has described the Clause as an infringement which will curtail the rights of this Parliament to control expenditure. It cannot be right that I should be deprived of an opportunity to reply to that assertion, and that is what I intend to do.
    Mr. Foot Mr. Foot rose—
    Mr. Jenkin: No, I will not give way.
    The reality of the power of the House of Commons to control expenditure has long since ceased to reside in what has become a quite theoretical right to reject estimates.
    When I advanced this proposition in February it was greeted with cries of horror from the radical traditionalists on the benches opposite. But, then, the rôle of the boy who points out that the emperor is not wearing any clothes has never been a popular one. I am certain that we do Parliament no service by seeking to pretend that that exists which has, in fact, long since ceased to exist. I say this in no spirit of mockery or iconoclasm, but simply as a realistic statement of the present position.
    I recognise, of course, that if this stood alone it would indeed be a very sad day for Parliament to have to admit that the Estimates no longer constitute an effective method of controlling public expenditure, but that is not the position.

    849
    The right of Parliament to influence the pattern of public expenditure is, of course, central to Parliament's existence. Recent Administrations of both parties have recognised it and have vigorously set about creating machinery and institutions for making that much more effective.
    The reality of Parliament's control rests in its power to scrutinise—I emphasise "scrutinise"—expenditure and to call Ministers to account for it. We all know that that is the reality. So far as the new machinery and institutions are concerned, I need only remind the House that it is now three years since the Labour Government instituted the new series of annual White Papers on public expenditure covering a five-year rolling programme, and each subsequent White Paper has shown this in greater detail and with more supporting narrative.
    The payments made under the Clause are fully comprised within the public expenditure White Papers. They are subject to the control of the Expenditure Committees, of the Public Accounts Committee, and of the Comptroller and Auditor General.
    My right hon. Friend the Member for Thirsk and Malton suggested that the Comptroller and Auditor General did not have access to payments from the Consolidated Fund. It is with hesitation that I correct him. I am told that the Comptroller and Auditor General audits the Consolidated Fund each year and issues a formal report on the payments. If he had occasion to issue a substantive report he would do so, and the Public Accounts Committee would consider it in the normal way. For the PAC the
    consequences are the same, whether the payments are made from Votes or from the Consolidated Fund.
    Other points were made in the debate, but, obviously, the Committee is anxious that I should sit down. We are taking on no more than is accepted by our fellow partners in the Community. We are certainly determined that the Community Parliament should become stronger. I remind the Committee of the Anglo-Italian Declaration of 28th April, 1969:
    "The European Communities should be sustained by an elected Parliament as provided for in the Treaty of Rome. The rôle of the present European assemblies must be enhanced."
    We entirely agree with that. The Measures are in hand. The Vedel Report, which is lying in the House of Commons, has shown what needs to be done to strengthen the European Parliament and parliamentary control over the budget.
    I suggest that, with that and the argument I have advanced about control over the Consolidated Fund payments, the Bill is entirely right, having regard to our obligation, and that the Amendments are misconceived and unnecessary. I hope, therefore, that the Committee will reject them.
    Amendment negatived.
    Amendment proposed: No. 53 in page 3, line 18, leave out from 'meet' to 'any' in line 20—[Sir Robin Turton.]
    Question put, That the Amendment be made: —
    The Committee divided: Ayes 254, Noes 264.

    Division No. 213.]

    AYES

    [10.54 p.m.

    Abse, Leo

    Bradley, Tom

    Crawshaw, Richard

    Allaun, Frank (Salford, E.)

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

    Crosland, Rt. Hn. Anthony

    Archer, Peter (Rowley Regis)

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

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

    Ashley, Jack

    Brown, Ronald (Shoreditch & F'bury)

    Cunningham, Dr. J. A. (Whitehaven)

    Ashton, Joe

    Buchan, Norman

    Dalyell, Tam

    Atkinson, Norman

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

    Davies, Denzil (Llanelly)

    Bagier, Gordon A. T.

    Butler, Mrs. Joyce (Wood Green)

    Davies, Ifor (Gower)

    Barnett, Guy (Greenwich)

    Callaghan, Rt. Hn. James

    Davis, Clinton (Hackney, C.)

    Barnett, Joel (Heywood and Royton)

    Campbell, I. (Dunbartonshire, W.)

    Davis, Terry (Bromsgrove)

    Baxter, William

    Cant, R. B.

    Deakins, Eric

    Benn, Rt. Hn. Anthony Wedgwood

    Carmichael, Neil

    de Freitas, Rt. Hn. Sir Geoffrey

    Bennett, James (Glasgow, Bridgeton)

    Carter, Ray (Birmingh'm, Northfield)

    Dell, Rt. Hn. Edmund

    Bidwell, Sydney

    Carter-Jones, Lewis (Eccles)

    Dempsey, James

    Biffen, John

    Castle, Rt. Hn. Barbara

    Doig, Peter

    Bishop, E. S.

    Clark, David (Colne Valley)

    Dormand, J. D.

    Blenkinsop, Arthur

    Cocks, Michael (Bristol, S.)

    Douglas, Dick (Stirlingshire, E.)

    Boardman, H. (Leigh)

    Cohen, Stanley

    Douglas-Mann, Bruce

    Body, Richard

    Concannon, J. D.

    Driberg, Tom

    Booth, Albert

    Conlan, Bernard

    Duffy, A. E. P.

    Bottomley, Rt. Hn. Arthur

    Cox, Thomas (Wandsworth, C.)

    Dunn, James A.

    Eadie, Alex

    Leadbitter, Ted

    Reed, D. (Sedgefield)

    Edwards, Robert (Bilston)

    Lee, Rt. Hn. Frederick

    Rees, Merlyn (Leeds, S.)

    Edwards, William (Merioneth)

    Lestor, Miss Joan

    Rhodes, Geoffrey

    Ellis, Tom

    Lever, Rt. Hn. Harold

    Richard, Ivor

    English, Michael

    Lewis, Arthur (W. Ham, N.)

    Roberts, Albert (Normanton)

    Evans, Fred

    Lewis, Ron (Carlisle)

    Robertson, John (Paisley)

    Ewing, Harry

    Lomas, Kenneth

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

    Faulds, Andrew

    Loughlin, Charles

    Rodgers, William (Stockton-on-Tees)

    Fell, Anthony

    Lyon, Alexander W. (York)

    Roper, John

    Fitch, Alan (Wigan)

    Lyons, Edward (Bradford, E.)

    Rose, Paul B.

    Fitt, Gerard (Belfast, W.)

    Mabon, Dr. J. Dickson

    Ross, Rt. Hn. William (Kilmarnock)

    Fletcher, Raymond (Ilkeston)

    McBride, Neil

    Rowlands, Ted

    Fletcher, Ted (Darlington)

    McCartney, Hugh

    Sandelson, Neville

    Foot, Michael

    McElhone, Frank

    Sheldon, Robert (Ashton-under-Lyne)

    Ford, Ben

    McGuire, Michael

    Shore, Rt. Hn. Peter (Stepney)

    Forrester, John

    Mackenzie, Gregor

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

    Fraser, John (Norwood)

    Mackie, John

    Short, Mrs. Renée (W'hampton, N.E.)

    Freeson, Reginald

    Mackintosh, John P.

    Silkin, Rt. Hn. John (Deptford)

    Garrett, W. E.

    Maclennan, Robert

    Silkin, Hn. S. C. (Dulwich)

    Gilbert, Dr. John

    McMillan, Tom (Glasgow, C.)

    Sillars, James

    Ginsburg, David (Dewsbury)

    McNamara, J. Kevin

    Silverman, Julius

    Gourlay, Harry

    Mahon, Simon (Bootle)

    Skinner, Dennis

    Grant, George (Morpeth)

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

    Smith, John (Lanarkshire, N.)

    Grant, John D. (Islington, E.)

    Marks, Kenneth

    Spearing, Nigel

    Griffiths, Eddie (Brightside)

    Marsden, F.

    Spriggs, Leslie

    Griffiths, Will (Exchange)

    Marshall, Dr. Edmund

    Stallard, A. W.

    Hamilton, James (Bothwell)

    Marten, Neil

    Stoddart, David (Swindon)

    Hamilton, William (Fife, W.)

    Mason, Rt. Hn. Roy

    Stonehouse, Rt. Hn. John

    Hamling, William

    Meacher, Michael

    Strang, Gavin

    Hannan, William (G'gow, Maryhill)

    Mellish. Rt. Hn. Robert

    Strauss, Rt. Hn. G. R.

    Hardy, Peter

    Mendelson, John

    Summerskill, Hn. Dr. Shirley

    Harrison, Walter (Wakefield)

    Mikardo, Ian

    Swain, Thomas

    Hart, Rt. Hn. Judith

    Millan, Bruce

    Taverne, Dick

    Hattersley, Roy

    Miller, Dr. M. S.

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

    Heffer, Eric S.

    Milne, Edward

    Thomas, Jeffrey (Abertillery)

    Hooson, Emlyn

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

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

    Horam, John

    Moate, Roger

    Tinn, James

    Houghton, Rt. Hn. Douglas

    Morgan, Elystan (Cardiganshire)

    Torney, Tom

    Howell, Denis (Small Heath)

    Morris, Alfred (Wythenshawe)

    Turton, Rt. Hn. Sir Robin

    Huckfield, Leslie

    Morris, Charles R. (Openshaw)

    Urwin T. W.

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Morris, Rt. Hn. John (Aberavon)

    Varley, Eric G.

    Hughes, Mark (Durham)

    Moyle, Roland

    Wainwright, Edwin

    Hughes, Robert (Aberdeen, N.)

    Murray, Ronald King

    Walden, Brian (B'ham, All Saints)

    Hughes, Roy (Newport)

    Oakes, Gordon

    Walker Harold (Doncaster)

    Hunter, Adam

    Ogden, Eric

    Walker-Smith, Rt. Hn. Sir Derek

    Hutchison, Michael Clark

    O'Halloran, Michael

    Wallace, George

    Irvine,Rt.Hn.SirArthur(Edge Hill)

    Oram, Bert

    Watkins David

    Janner Greville

    Orbach, Maurice

    weitzman, David

    Jay, Rt. Hn. Douglas

    Orme, Stanley

    Wellbeloved, James

    Jeger, Mrs. Lena

    Oswald, Thomas

    Wells, William (Walsall, N.)

    Jenkins, Hugh (Putney)

    Owen, Dr. David (Plymouth, Sutton)

    White, James (Glasgow, pollok)

    Jenkins, Rt. Hn. Roy (Stechford)

    Padley, Walter

    Whitehead, Phillip

    John, Brynmor

    Paget, R. T.

    Whitlock, William

    Johnson, Walter (Derby, S.)

    Palmer, Arthur

    Willey, Rt. Hn. Frederick

    Jones, Dan (Burnley)

    Pannell, Rt. Hn. Charles

    Williams, Alan (Swansea, W.)

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

    Parker, john (Dagenham)

    Williams, Mrs. Shirley (Hitchin)

    Jones, Gwynoro (Carmarthen)

    Parry, Robert (Liverpool, Exchange)

    Williams, W. T. (Warrington)

    Jones, T. Alec (Rhondda, W.)

    Pavitt, Laurie

    Wilson, Alexander (Hamilton)

    Kaufman, Gerald

    Pendry, Tom

    Wilson, Rt. Hn. Harold (Huyton)

    Kelley, Richard

    Pentland, Norman

    Wilson, William (Coventry, S.)

    Kerr, Russell

    Powell, Rt. Hn. J. Enoch

    Woof, Robert

    Kinnock, Neil

    Prentice, Rt. Hn. Reg.

    Lambie, David

    Prescott, John

    TELLERS FOR THE AYES:

    Lamborn, Harry

    Price, J. T. (Westhoughton)

    Mr. Joseph Harper and Mr. Ernest Armstrong.

    Lamond, James

    Price, William (Rugby)

    Latham, Arthur

    Probert, Arthur

    Rankin, John

    NOES

    Adley, Robert

    Bennett, Sir Frederic (Torquay)

    Brocklebank-Fowler, Christopher

    Alison, Michael (Barkston Ash)

    Bennett, Dr. Reginald (Gosport)

    Brown, Sir Edward (Bath)

    Allason, James (Hemel Hempstead)

    Benyon, W.

    Bruce-Gardyne, J.

    Amery, Rt. Hn. Julian

    Berry, Hn. Anthony

    Bryan, Paul

    Archer, Jeffrey (Louth)

    Biggs-Davison, John

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

    Astor, John

    Blaker, Peter

    Buck, Antony

    Atkins, Humphrey

    Boardman, Tom (Leicester, S.W.)

    Burden, F. A.

    Awdry, Daniel

    Boscawen, Hn. Robert

    Butler, Adam (Bosworth)

    Baker, Kenneth (St. Marylebone)

    Bossom, Sir Clive

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

    Balniel, Rt. Hn. Lord

    Bowden, Andrew

    Carlisle, Mark

    Barber, Rt. Hn. Anthony

    Braine, Sir Bernard

    Carr, Rt. Hn. Robert

    Batsford, Brian

    Bray, Ronald

    Channon, Paul

    Beamish, Col. Sir Tufton

    Brinton, Sir Tatton

    Chapman, Sydney

    852

    853

    Chataway, Rt. Hn. Christopher

    Hornsby-Smith,Rt.Hn.Dame Patricia

    Pym, Rt. Hn. Francis

    Chichester-Clark, R.

    Howe, Hn. Sir Geoffrey (Reigate)

    Quennell, Miss J. M.

    Churchill, W. S.

    Howell, Ralph (Norfolk, N.)

    Raison, Timothy

    Clark, William (Surrey, E.)

    Hunt, John

    Ramsden, Rt. Hn. James

    Clarke, Kenneth (Rushcliffe)

    Iremonger, T. L.

    Rawlinson Rt. Hn. Sir Peter

    Clegg, Walter

    James, David

    Redmond, Robert

    Cockeram, Eric

    Jenkin, Patrick (Woodford)

    Reed, Laurance (Bolton, E.)

    Cooke, Robert

    Jessel, Toby

    Rees, Peter (Dover)

    Coombs, Derek

    Johnson Smith, G. (E. Grinstead)

    Rees-Davies, W. R.

    Cooper, A. E.

    Jopling, Michael

    Renton, Rt. Hn. Sir David

    Cordle, John

    Joseph, Rt. Hn. Sir Keith

    Ridley, Hn. Nicholas

    Corfield, Rt. Hn. Frederick

    Kaberry, Sir Donald

    Ridsdale, Julian

    Cormack, Patrick

    Kellett-Bowman, Mrs. Elaine

    Rippon, Rt. Hn. Geoffrey

    Costain, A. P.

    Kershaw, Anthony

    Roberts, Michael (Cardiff. N.)

    Crouch, David

    Kimball, Marcus

    Roberts, Wyn (Conway)

    Crowder, F. P.

    King, Evelyn (Dorset, S.)

    Rost, Peter

    Davies, Rt. Hn. John (Knutsford)

    King, Tom (Bridgwater)

    Royle, Anthony

    d'Avigdor-Goldsmid, Sir Henry

    Kinsey, J. R.

    St. John-Stevas, Norman

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

    Kirk, Peter

    Scott, Nicholas

    Dean, Paul

    Kitson, Timothy

    Sharples, Richard

    Deedes, Rt. Hn. W. F.

    Knight, Mrs. Jill

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

    Dixon, Piers

    Knox, David

    Shelton, William (Clapham)

    Douglas-Home, Rt. Hn. Sir Alec

    Lambton, Lord

    Simeons, Charles

    Drayson, G. B.

    Lamont, Norman

    Sinclair, Sir George

    du Cann, Rt.Hn Edward

    Lane, David

    Skeet, T. H. H.

    Dykes, Hugh

    Langford-Holt, Sir John

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

    Eden, Sir John

    Legge-Bourke, Sir Harry

    Soref, Harold

    Edwards, Nicholas (Pembroke)

    Le Merchant, Spencer

    Speed, Keith

    Elliot, Capt. Walter (Carshalton)

    Lewis, Kenneth (Rutland)

    Spence, John

    Elliott, R. W. (N'c'tleupon-Tyne,N.,

    Longden, Sir Gilbert

    Sproat, Iain

    Emery, Peter

    Loveridge, John

    Stainton, Keith

    Eyre, Reginald

    Luce, R. N.

    Stanbrook, Ivor

    Fenner, Mrs. Peggy

    McAdden, Sir Stephen

    Stewart-Smith, Geoffrey (Belper)

    Fidler Michael

    MacArthur, Ian

    Stodart, Anthony (Edinburgh, W.)

    Finsberg, Geoffrey (Hampstead)

    McCrindle, R. A.

    Stoddart-Scott, Col. Sir M.

    Fisher, Nigel (Surbiton)

    McLaren, Martin

    Stokes, John

    Fletcher-Cooke, Charles

    Maclean, Sir Fitzroy

    Stuttaford, Dr. Tom

    Fookes, Miss Janet

    McNair-Wilson, Michael

    Tapsell, peter

    Fowler, Norman

    McNair-Wilson, Patrick (NewForest)

    Taylor, Sir Charles (Eastbourne)

    Fry, Peter

    Maddan, Martin

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

    Galbraith Hn. T G.

    Madel, David

    Taylor, Frank (Moss Side)

    Gardner, Edward

    Mather, Carol

    Taylor, Robert (Croydon, N.W.)

    Gibson-Watt, David

    Maude, Angus

    Tebbit, Norman

    Gilmour, Ian (Norfolk, C.)

    Maudling. Rt. Hn. Reginald

    Temple, John M.

    Gilmour Sir John (Fife, E)

    Mawby, Ray

    Thatcher, Rt. Hn. Mrs. Margaret

    Glyn, Dr. Alan

    Maxwell-Hyslop, R. J.

    Thomas, John Stradling (Monmouth)

    Godber, Rt. Hn. J. B.

    Meyer, Sir Anthony

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

    Goodhart, Philip

    Mills, Peter (Torrington)

    Thompson, sir Richard (Croydon, S.)

    Goodhew, Victor

    Miscampbell, Norman

    Tilney, John

    Gorst, John

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

    Trafford, Dr. Anthony

    Gower, Raymond

    Mitchell, David (Basingstoke)

    Trew, Peter

    Grant, Anthony (Harrow, C.)

    Money, Ernle

    Tugendhat, Christopher

    Gray, Hamish

    Monks, Mrs. Connie

    van Straubenzee, W. R.

    Green, Alan

    Monro, Hector

    Vaughan, Dr. Gerard

    Griffiths, Eldon (Bury St. Edmunds)

    Montgomery, Fergus

    Waddington, David

    Grimond, Rt. Hn. J.

    More, Jasper

    Walker, Rt. Hn. Peter (Worcester)

    Grylls, Michael

    Morgan, Geraint (Denbigh)

    Wall, Patrick

    Gummer, J. Selwyn

    Morgan-Giles, Rear-Adm.

    Ward, Dame Irene

    Gurden, Harold

    Morrison, Charles

    Warren, Kenneth

    Hall, Miss Joan (Keighley)

    Mudd, David

    Weatherill, Bernard

    Hall, Jonn (Wycombe)

    Murton, Oscar

    Wells, John (Maidstone)

    Hall-Davis, a. G. F.

    Neave, Airey

    White, Roger (Gravesend)

    Hamilton, Michael (Salisbury)

    Noble, Rt. Hn. Michael

    Wiggin, Jerry

    Hannam, John (Exeter)

    Normanton, Tom

    Wilkinson John

    Harrison, Col. Sir Harwood (Eye)

    Nott, John

    Winterton Nicholas

    Haselhurst, Alan

    Onslow, Cranley

    Wolrige-Gordon, Patrick

    Havers, Michael

    Owen, Idris (Stockport, N.)

    Wood, Rt. Hn. Richard

    Hawkins, Paul

    Page, Graham (Crosby)

    Woodhouse, Hn. Christopher

    Hayhoe, Barney

    Page, John (Harrow, W.)

    Woodnutt, Mark

    Higgins, Terence L.

    Parkinson, Cecil

    Worsley, Marcus

    Hiley, Joseph

    Percival, Ian

    Wylie, Rt. Hn. N. R.

    Hill, James (Southampton, Test)

    Peyton, Rt. Hn. John

    Younger Hn. George

    Holland, Phillip

    Pike, Miss Mervyn

    Holt, Miss Mary

    Pink, R. Bonner

    TELLERS FOR THE NOES:

    Hordern, Peter

    Price, David (Eastleigh)

    Mr. Tim Fortescue and Mr. Marcus Fox.

    Hornby, Richard

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

    Proudfoot, Wilfred

    Question accordingly negatived.
    It being after Eleven o'clock, The CHAIRMAN left the Chair to report Pro-
    854
    gress and ask leave to sit again, pursuant to the Order of 2nd May.
    Committee report Progress; to sit again tomorrow.
    ADJOURNMENT
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]

  IDENTICAL OFFENCES (SENTENCES)
  11.4 p.m.
  Mr. Ivor Richard: According to the Order Paper, I am supposed to be raising on the Adjournment of the House what is described as
  "the subject of uniformity of detention for those convicted of identical crimes."
  It is true that what I shall have to say will have some general application, but what I propose to raise this evening can better be described as the specific sentences which were passed on the various defendants who were convicted of complicity in what came to be known as the Great Train Robbery.
  As the House will remember, this crime took place in 1963, and in the course of it a very large sum of money was stolen. As for the trials, what happened was that in 1964, in what I would call the main trial of the defendants, seven of them—Messrs. Wilson, Biggs, Wisbey, Welch, Hussey, James and Goody—were convicted, firstly, of conspiracy to rob the mail and, secondly, of armed robbery.
  On the first count, the conspiracy, they were each sentenced to a term of 25 years' imprisonment. On the second count, the armed robbery, they were each sentenced to 30 years' imprisonment. No doubt, Mr. Deputy Speaker, you and the House will recollect the interest and stir that those very large sentences caused at the time.
  In the same trial, two others were convicted of conspiracy to rob and were each sentenced to 25 years' imprisonment, the same as the main seven defendants. Two other defendants, Messrs. Boal and Cordrey, were in a totally different category from that of the main defendants. Mr. Cordrey pleaded guilty and received 20 years' imprisonment. Mr, Boal received 21 years for conspiracy and 24 years for robbery.
  On appeal, the convictions of two of the defendants who received 25 years for conspiracy were quashed, and they, there-
  856
  fore, passed from the picture. The main convictions and sentences of 25 years for conspiracy and 30 years for robbery on what I call the seven major defendants—Messrs. Wilson, Biggs, Wisbey, Welch, Hussey, James and Goody—were upheld by the Court of Appeal. The only two sentences which were reduced were those of Messrs. Cordrey and Boal, which were reduced to 14 years apiece. They were in an entirely different category and were recognised as such by the trial judge, Mr. Justice Edmund Davies, as he then was, and by the Court of Appeal. Mr. Boal has since died, and I think that Mr. Cordrey was released on bail in April, 1971.
  That was, so to speak, the initial trial, with the main seven receiving 25 years' imprisonment for conspiracy to rob and 30 years' imprisonment for the robbery.
  No doubt the House will remember that at the time it was said—as it turned out, with some justification—that there were obviously others involved in this crime who had not then been apprehended.
  The next event was that Mr. Edwards surrendered. Eventually, at Nottingham Assizes, on 9th December, 1966, he was tried on the two identical counts—conspiracy to rob the mail and armed robbery of the train. On that occasion he did not get the same sentences—25 years and 30 years. On the contrary, on the conspiracy charge, unlike those who got 25 years, he got 12 years; on the armed robbery charge, unlike the others, who received 30 years, he got precisely half, 15 years. In 1966 also, Mr. White, again in a separate trial, was convicted of the two identical offences and sentenced not to 15 years or 30 years but to 18 years. Finally, Mr. Reynolds, arrested in Torquay in November, 1968, was convicted of the two identical offences and received a sentence of 25 years.
  Therefore, we have this spread of sentences for the identical crime committed on the same night—namely, robbery of this one train—varying from as low as 15 years for Edwards, to 18 years for White, 25 for Reynolds and 40 years for the seven first convicted. I reiterate that these sentences were for precisely the same crime.
  On these facts, it seems to me that two questions arise. First, is it possible in a

  857
  situation like this that one could produce any greater degree of uniformity of sentencing? Secondly, indeed should one try to produce any greater degree of uniformity of sentencing? I will deal with the second question first, since it is probably better to deal with the "shoulds" before one gets on to the possibilities.
  I say at once that I am not in the least criticising any of the judges who passed any of the sentences in this case. Those of us who had had any experience, either appearing in court or sitting as a judge in one form or another, charged with the responsibility of passing sentence, all recognise that this is one of the most difficult and thankless tasks the judiciary has to carry out. Sentencing is extremely difficult.
  From the sentences in this case it is clear that the first judge, now Lord Justice Edmund Davies, at the Aylesbury trial, and the Court of Appeal, which considered the sentences he imposed, thought that it was impossible to distinguish between any of the major offenders. Had the judge thought it possible to distinguish, no doubt he would have passed different sentences. Had the Court of Appeal thought it right to distinguish, no doubt it would have imposed different sentences. The fact is that they did not. Not only did the judge take the view that it was right to treat all the robbers in one category, but the Court of Appeal also took the view that he was entitled so to do. To anyone looking at the facts as we know them, and reading what the learned judge and the Court of Appeal said, it is undeniable that that was the position then taken up by the courts.
  If that is right, it would seem that had Edwards, White and Reynolds been standing alongside the other seven in the dock at Aylesbury they would have received identical sentences from the same judge, and it would seem—if their cases had gone up on appeal—they would have been judged in precisely the same way by the appellate tribunal. In the event, certain conclusions seem to me to flow from these facts.
  It seems to be fundamentally unjust and basically insupportable, taking the two cases, to have Wisbey in one cell and Edwards in another, both convicted on armed robbery, an identical offence, but
  858
  both convicted on different occasions before different judges, and one sentenced to precisely twice the length of the term of imprisonment imposed on the other. One could have the position in which one of the seven at the first trial, Wisbey for example, with 30 years, is in one cell and next door one could have Edwards with 15 years. I submit—
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I am sorry to interrupt the hon. and learned Gentleman. I am listening carefully to his argument and I am a little worried about exactly where Ministerial responsibility comes into this. If he can assure me that there is Ministerial responsibility, then he can proceed with his argument. If he cannot, it is very difficult for me to permit him to go on.
  Mr. Richard: With great respect, Six Robert, I am reasonably well aware of the rules governing Adjournment debates. Had I not thought there was Ministerial responsibility I would never have asked for an Adjournment debate, and had there not been any Ministerial responsibility I am certain that Mr. Speaker would not have granted it. The second half of my argument will be devoted to trying to establish how the Home Office can do something in relation to these sentences and I will urge upon it that it should do so. I have already been in correspondence with the Minister and I have had a negative reply. Perhaps I may continue.
  I turn to the second part of my argument, namely that if there is a basic injustice and a basic anomaly in the sentences as they now appear, what, if anything, can be done? The answer may lie in the parole powers which the Home Office has as a result of Section 60 of the Criminal Justice Act, 1967. We know that the right of the Home Office to use these powers must depend upon an examination of the facts of each individual case and upon an examination of the character and the background of the antecedents of each individual. I totally accept that as the general position.
  I must also accept the fact that as a general principle it would not be right merely to use the parole powers to produce a situation in which the Parole Board or the Home Office was saying, "We do not think that the decision of a particular judge in relation to two

  859
  offenders, where he has given one perhaps a greater sentence than the other, was right and therefore we will use this power for equalising purposes." But that is not the situation here. Here we have had not decisions by one judge who saw fit to distinguish between two or more defendants, but different decisions by no fewer than five judges in five separate trials dealing with identical offences in respect of which totally different sentences have been passed.
  In that situation I should have thought that the Minister could say that in principle, having regard to the extraordinary nature of this crime and the extraordinary disparity that exists in the sentences, he would see nothing wrong in the Parole Board using its powers so as to produce uniformity of detention, even if, quite clearly, it would no longer be possible to produce uniformity of sentences. The Minister is a humane man, experienced in these matters and could do much tonight to bring some hope to the man at present serving a 30-year sentence. It is a dreadful thought—whether or not the sentence is justified—that people in this country might be facing a sentence as long as 30 years. I find it difficult to envisage how an individual faced with that sort of sentence and that sort of possibility would react.
  When I wrote to the Home Office about this the Minister replied on 17th March:
  "I appreciate your point about the difference in the sentences imposed in this case It has always been recognised that there is a wide disparity between the sentence of those, including Wisbey, who were dealt with at the first trial in 1964, and of White and Edwards who did not stand trial until 1966. The position is, however, that the Court of Appeal considered the 30 years' sentences and found that 'they were not wrong in principle or excessive'. In the knowledge of those sentences the judges who dealt with White and Edwards found reasons for differentiation.…"
  Pausing there, one knows not what were the reasons for differentiation. It is difficult to imagine precisely what they could have been. The Minister of State continued.
  "even if it were accepted that there were no grounds for distinction it does not necessarily follow that justice requires that the longer sentence should be consequentially reduced."
  I see the argument that he is putting up. It seems to me that in all con-
  860
  science it is wrong for two men who have committed an identical crime and have been convicted before a different court to find themselves in a situation in which one is serving exactly double the sentence that the other is bound to serve. I should have thought that the Minister could say in principle that he accepted the use of paroling powers as a method of putting it right.
  11.21 p.m.
  The Minister of State, Home Office (Mr. Mark Carlisle): As the hon. and learned Member for Barons Court (Mr. Richard) has said, under this rather wide term of "uniformity of detention for those convicted of identical crimes" he has chosen to concentrate his argument on the case of those convicted of the Great Train Robbery and the disparity of sentence passed on those who were convicted at different times for their part in that offence.
  This is a matter which the hon. and learned Gentleman has raised with me in correspondence and I shall try to deal with the specific case of the Train Robbery before making more general remarks. In dealing with this specific case I must make it clear that it is not in any way the function of a Minister nor would it be appropriate for myself as a Minister, to comment on the merits of the individual sentences passed in any particular case.
  I am sure the hon. and learned Gentleman will be the first to agree that the sentence passed on any individual in any particular case is, and must remain, a matter for the judiciary at the time of sentence with knowledge of all the facts. It is essential that we should retain that separation of powers that exists between the judiciary and the Executive and a sentence in any particular case is a matter for the courts and not for the Government of the day.
  I do not dispute any of the facts which the hon. and learned Gentleman has raised. The offence that came to be known as the Great Train Robbery, which was one of the utmost gravity, took place in 1963. The main trial took place in 1964, when seven men were convicted on the principal charges of armed robbery and conspiracy to rob and were sentenced to 30 years' imprisonment.

  861
  Since then three individuals have been arrested and convicted at separate trials for the same offence: namely, James White in 1966, who received a sentence of 18 years; Ronald Edwards, who was sentenced to 15 years in the same year; and Bruce Reynolds, who was sentenced to 25 years.
  The wide differences between the sentences imposed at the main trial and some of those passed later is a plain matter of fact, and it is not for me to explain or justify them. At the original trial the learned judge found no reason to distinguish between the seven men convicted of robbery and conspiracy and sentenced them to equal sentences of 30 years. The sentences were appealed against, and the Court of Criminal Appeal found that they were not wrong in principle or excessive having regard to the exceptional gravity of the crime. The appeal court found it not appropriate to distinguish between the seven men convicted. In regard to those tried at a later date, each of the judges involved in the later trials was aware of the sentences passed at the earlier trials, and they were aware of the views of the appeal court, but in each case the individual judges found reasons for differentiating in the sentences which were passed.
  I come to the general point that different sentences imposed for identical offences are not unusual. What is unusual is that where there are long sentences the differences are much more marked.
  Mr. Richard: But no court has ever reviewed—indeed no court could ever do so—all the sentences which were passed on all the robbers at one and the same time. Nobody has sat down and compared the individuals, all of whom were convicted.
  Mr. Carlisle: That is true, but I must repeat that individual judges in imposing sentence in the case of White, Edwards and Reynolds were aware of the sentences which had been passed in the previous case and of the comments of the appeal court on them. The hon. and learned Member must accept that the Home Secretary's responsibility in these matters is not to attempt to act as a further or additional court of appeal. If we are to retain the necessary distinc-
  862
  tion between the judiciary and the executive, the Home Secretary must realise that if he is to use his exceptional power of the Royal Prerogative of mercy, it is only right for him to do so if facts come to light at a later stage which were not available to the court at the time when sentence was passed. There was nothing in these sentences which I can see, having studied the letters sent to me, to justify interference by the Home Secretary on the basis of evidence coming to light at a stage which was not available to the court at the time of trial.
  The hon. and learned Gentleman is saying that, despite our judicial processes, where there remain differences between sentences involving the same or similar crimes the Executive should seek administratively to equalise the terms of detention, presumably by scaling down the longest to correspond with the lower sentences, since he would not suggest that the Executive should attempt to raise the lower sentences to correspond with the higher ones.
  There are weighty objections in principle to the course which the hon. and learned Member suggests. I fear it would give the opportunity and freedom to the Executive to interfere with the judicial function and to go behind the decision of the courts as it thought fit. That would involve a fundamental departure from the constitutional principle—a departure which the House would find unacceptable. That is why I do not believe it would be right for my right hon. Friend the Home Secretary to attempt to interfere directly with these sentences.
  Quite reasonably, the hon. and learned Gentleman points out that now there is parole, which is the power provided by Parliament for the Secretary of State, at his discretion, and on the recommendation of the Parole Board, to provide for immediate release on licence after a person has served a third of his sentence or a year, whichever expires the later. The hon. and learned Gentleman asks why the parole mechanism should not be used as a method of limiting or reducing differentials in sentences for identical offences. I must make the point that the procedure of parole has to operate within the framework of the sentences already determined by the courts. It is not, and never was, intended to be a means of reviewing the decisions of the

  863
  courts or of purporting to ensure a standardisation of sentences. The Parole Board itself has been careful to point out that in many ways it must reflect the differences between the length of sentences passed in similar cases rather than attempt to undo differences which have been provided.
  Mr. Richard: I am not saying that. I am saying that in the case to which I have referred there is a clear unfairness and that in those circumstances it would be right for the Parole Board to try to correct that unfairness.
  Mr. Carlisle: I must repeat that I am not prepared to comment on the merits of the sentences passed in that case. It would be improper for me to do so. It would not be right for parole to be used to deal with what were thought to be extraordinary disparities in any case.
  Parole is granted on the basis of criteria which take into account the likelihood of future offences, the previous conduct of the prisoner and his behaviour in prison. There is no question of using it to achieve a uniformity which the court of trial has not attempted to impose.
  Taking the hon. and learned Gentleman's argument, what does he suggest should be done in the case of a sentence which was felt to be unduly light? Does he suggest that the Parole Board should refuse parole for so long as necessary to bring up the sentence to what was felt to be the appropriate period passed in the other cases? If so, that would mean that certain people would never receive parole, not on the basis that the board did not think them suitable but because an associate in the same crime had received a longer, and what was considered a more appropriate, sentence.
  Using the hon. and learned Gentleman's example, the time will come when certain of the offenders who received shorter sentences will become eligible for consideration. That will happen be-
  864
  fore those who received sentences of 30 years. I am sure that the hon. and learned Gentleman does not suggest that those cases should not be reviewed when the time is appropriate.
  Within reason, the Parole Board always looks at the cases of associates in the same crime, irrespective of whether there is a recommendation by the local review committee. But it makes it clear that it is its duty to notice any differentiation in sentence passed on people convicted of the same offence. However, there are two fundamental points which must not be overlooked. Cases are considered for parole after the minimum interval, and, when they are, parole is granted at the earliest moment considered acceptable in the interests of the offender and the public. There could be no question of granting release on licence to an individual before that point was reached merely on the basis of other people having received shorter sentences.
  The consideration which is of crucial importance for the continued successful operation of the parole scheme is the essential one of maintaining a correct relationship between the Parole Board and the judiciary to ensure the continuation of confidence not merely between the judiciary and the board but also between the public and the board. Members of the board include High Court judges and recorders. Thanks to its wisdom under the chairmanship of Lord Hunt the Parole Board has succeeded in achieving public support and the support of the courts in carrying out its task. But the board's continuing success depends on its seeing its function as reviewing individual cases—
  The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-six minutes to Twleve o'clock.

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Preamble
The House met at three of the clock:
The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Guildford.

LORD HEWLETT
Sir Thomas Clyde Hewlett, Knight, C.B.E., having been created Baron Hewlett, of Swettenham in the County of Chester, for life—Was, in his robes, introduced between the Lord Chelmer and the Lord Harvey of Prestbury.

JUSTICES OF THE PEACE
3.18 p.m.
LORD BESWICK: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what consultations were held prior to the recent extension of the categories of individuals held not to be eligible for appointment as justice of the peace.
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE): My Lords, I should like to begin by saying how grateful I am to the noble Lord for having agreed to postpone, for my convenience, his two Questions which he first put down for answer on May 18.
There have been no recent alterations to the rules governing the qualification of candidates for appointment as justices of the peace. In June, 1971—a year ago—in the course of a routine examination of the criteria of appointment, I made it clear that the existing restriction against full-time paid secretaries and agents of Parliamentary constituency parties acting as justices of the peace within their constituencies should extend to such officials, whether paid or unpaid, part or whole time. It is not correct to say that they are not eligible for appointment as justices of the peace. They are so eligible except within the Commission covering the constituency concerned. Except for day-to-
406
day contacts with advisory committees and the Magistrates' Association no outside bodies were consulted. I am advised that this was in conformity with the established practice of my predecessors. The changes were published shortly after the time when they were announced. I have received only one complaint that outside organisations were not consulted. This came from a high official of the Labour Party organisation. I did not think such consultation necessary at the time, and I share the view, which I understand was held by my predecessors, that it is not constitutionally desirable that consultation between Party organisations and the Lord Chancellor's Office should take place regarding the criteria for judicial appointments, though of course the Lord Chancellor remains responsible to Parliament for his policies in this regard.
LORD BESWICK: My Lords, we are grateful to the noble and learned Lord for that Answer. May I ask him whether he is aware, when he says there has been no recent alteration, that that is only under his own definition of the word "alteration"? Is it not the fact that, whereas before it was undertood that unpaid part-time secretaries of Party organisations were allowed to hold a Commission, since the noble and learned Lord's intervention they are not so allowed? Is the noble and learned Lord further aware that his action has stimulater a good deal of disquiet and allegations of Party bias in an area where there should be no such disquiet? May I ask him whether he would be good enough to have a look at this matter again?
THE LORD CHANCELLOR: My Lords, as regards the first part of the noble Lord's question, I made it clear in my Answer (if he will refer to it), that when I say there was no recent alteration there has been no recent alteration at all since June, 1971, which is a year ago. There was the alteration in June, 1971, to which I drew attention in my original Answer. It is of course true that for a very long time, certainly before the Commission of 1948, there was a discrimination between agents and secretaries who were paid and agents and secretaries who were not paid; and I made it clear that in the latter part of the 20th century I thought this distinction between "gentlemen" and "players" ought to be abolished. I still

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think so, because the same suspicion of bias to which the Royal Commission pointed in their Report must, I think, at the present date apply to both classes. The only bias that there could be would be if a Lord Chancellor appointed political constituency secretaries and agents to the Bench to act within their constituencies. That is the only bias there could be, and that is precisely what I am trying to prevent, because I do not think that justice would be seen to be done if I made such appointments. Only the other day I appointed a Labour Party agent to sit as a J.P. immediately outside his constituency; but inside his constituency, no.
LORD BESWICK: My Lords, may I ask the noble and learned Lord whether he is aware that had he had some form of consultation he would have found out that, certainly in the Labour Party and I rather suspect in the Liberal Party too, there is a predominance of part-time unpaid agents and secretaries, and that in the Conservative Party, on the other hand, the majority are paid and are full-time? Therefore, by drawing this distinction as between chairmen of political Parties and part-time secretaries he is thereby penalising the Labour Party and those within the Labour movement who would otherwise wish to serve as Justices of the Peace.
THE LORD CHANCELLOR: My Lords, I thought I made it clear that I have drawn no distinction at all but I have abolished the distinction. It seems to me that if one is to avoid discrimination one has to choose between abolishing the restriction on all agents or imposing it on all agents alike. All I said was that I would not appoint any political agents for constituencies to sit within their constituencies, and I regard the distinction of whether they are paid or not as being irrelevant for the purposes of my appointment. So far from there being any discrimination in what I have done, I have abolished discrimination.
LORD BESWICK: My Lords, may I ask the noble and learned Lord two further questions? Can he justify the appointment of a chairman of a constituency Conservative organisation, which is permitted under his present arrangements, and not at the same time
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permit the appointment of the secretary, part-time, unpaid possibly, of a Labour Party organisation? May I further ask him whether he is aware that although there would appear to be some justification for barring the spouse of a Member of Parliament from sitting within the confines of the constituency of a Member, there can be no conceivable reason why the spouse of an unpaid part-time local secretary should not be allowed to sit?
THE LORD CHANCELLOR: My Lords, with regard to the first question, I do not think the noble Lord has put it in at all a fair way. The chairmen of Parties, whether they are Conservative Party chairmen or Labour Party chairmen, are not restricted, and that was in accordance with the findings of the Royal Commission. All I have done is to say that the distinction as regards secretaries and agents, between those who are paid and those who are unpaid, is not meaningful in 1972. If I were pressed as to the position of chairmen, to restrict them too, I would of course consider the situation, and it would apply equally to the chairmen of all Parties but the only way in which the position of chairmen has ever been introduced at all into this discussion is to ask me to extend to agents the freedom which is given to chairmen, and on the whole I am not prepared to do that.
I certainly would not draw a distinction between a Conservative chairman and a Labour agent. The chairman must be considered in one category whether he is a Conservative chairman or a Labour chairman, and agents must be considered in one category whether they are Conservative agents or Labour agents. This is the only way in which we can avoid Party bias.
With regard to spouses I have made no change at all, except to this extent, that my predecessors and I have always reluctantly but firmly said that where there is a restricted category—namely, for instance, policemen or solicitors or Party candidates or Members of Parliament or paid agents—in any restricted category the spouse of the restricted person is also restricted. That again has been solely in the interests of justice being seen to be done, and is not and has not been at all inspired by any kind of other motive. As regards my own policy, I made no

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change in the rule but if we restrict a new category, even in theory, the general operation of the rule regarding spouses applies to them equally with all other restricted categories. I must add that I was Lord Chancellor for 12 months before June 1971. I must have appointed at least a thousand J.P.s during that time, and so far as I know it was never suggested to me by any of the advisory committees that a candidate who was in fact a political agent should be appointed to the Bench, nor do I imagine that any advisory committee would ever have done so, whether I made the rule or not.
BARONESS LEE OF ASHERIDGE: My Lords, may I respectfully disagree with the sentiments expressed by the noble and learned Lord—
SEVERAL NOBLE LORDS: No!
BARONESS LEE OF ASHERIDGE: My Lords, may I respectfully ask the noble and learned Lord the Lord Chancellor whether he will reconsider some of his remarks regarding wives? For 13 years I was in a different political Party from my husband. There is no reason at all to assume that a Member of Parliament or an agent should find his wife simply reflecting his point of view. May I ask whether the noble and learned Lord does not think that to assume that the wife, whether the wife of a Member of Parliament, an agent or anyone else, is merely a reflection of her husband's point of view is at this period of time shockingly out of date?
THE LORD CHANCELLOR: My Lords, as regards wives, in fact I said nothing about wives. The rule applies also to husbands. It applies generally, and that is why I used the word "spouse", and I think the noble Lord in his Question also uses the word "spouse". It is not so much that I have expressed any sentiments; all I have said is that my predecessors and I for many years have restricted the spouses of restricted persons in this way. As those who have discussed this matter with me will know, I have a great deal of sympathy with what the noble Baroness has said. But if, for instance, the wife of a chief constable or the husband of a chief of the women's police, or the husband or wife of a solicitor practising before the Bench, were to sit on the Bench, or the
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wife or husband of a Member of Parliament were to sit on the local Bench, in nine cases out of ten I do not believe that the public would think that justice was being seen to be done. I am not in the least trying to suggest that they are mere reflections of their husbands or wives, as the case may be, but for very many years this has been the rule and I very much doubt whether the public would welcome a change in the more liberal direction in which the noble Baroness has suggested.
LORD GARDINER: My Lords, may I ask the noble and learned Lord whether when he made this change he bore in mind that the Royal Commission in paragraph 140 of their Report carefully considered this question, and unanimously recommended that whole-time paid political agents should be excluded but no other political officials? And secondly, am I not right in saying that, with the exception of himself, every Lord Chancellor since 1948 has followed that recommendation of the Royal Commission.
THE LORD CHANCELLOR: My Lords, I not only bore it in mind but I made it clear in both my original and first supplementary Answer that I did so bear it in mind. I specifically referred to the finding of the Royal Commission that paid agents should he restricted in this way and of course their wives. although they did not mention it, but I considered that in 1972 this distinction between "gentlemen" and "players" really is unmeaning in the present political context. Yes, I certainly considered it. It is also for that reason, as I said in, I think, my first supplementary answer, that I did not extend it to chairmen because that again is in accordance with the Report of the Commission. But the noble and learned Lord will not forget that in the very next sentence in paragraph 140 to which he referred the Royal Commission went on to say that there would be other cases from time to time where political bias would be an excluding factor, although they did not at that date suggest that there should be an inflexible general rule.
BARONESS SUMMERSKILL: My Lords, could the noble and learned Lord tell me why he does not feel that the wife of the chairman would be suspect?
THE LORD CHANCELLOR: My Lords, the chairman is not restricted; therefore, the wife of the chairman is not restricted—or as it may be the husband of the chairman is not restricted.
LORD LEATHERLAND: My Lords, may I ask the noble and learned Lord this question: is he aware of the fact that in many districts it is the chairman who is the active Party boss and that the unpaid part-time secretary of a Party is frequently little more than a clerical officer?
THE LORD CHANCELLOR: My Lords, I am not: prepared to say that the secretary of any political constituency Party is little more than a clerical officer. On the contrary, if he were I should have thought that was exactly one of the reasons why one did not want to put a person who was under orders in a judicial position. I do not think it is fair to secretaries to call them that. So far as chairmen are concerned, I am aware that the position differs from constituency to constituency; and that is precisely why I agree on that point, on balance, with the Royal Commission.
LORD NUGENT OF GUILDFORD: My Lords, as this question has already taken half an hour, may I suggest that it might be pursued by, I was going to say a mini-debate but perhaps a maxi-debate might be better, on some other occasion?
LORD BERNSTEIN: My Lords, with your Lordships' permission may I ask of the noble and learned Lord, who said that justice must be seen to be done, that there is no doubt that some people feel—
SEVERAL NOBLE LORDS: That is a speech.
LORD BERNSTEIN: I will make it a question. Will he also consider that political bias should not be seen or considered?
THE LORD CHANCELLOR: My Lords, that is precisely what I have been trying to convey.
LORD BESWICK: May I address one last question to the noble and learned Lord? Is it not clear both from the replies which he gave in letters which extend back now over some period of time, and from his replies to-day, that he
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was really unaware of the position that existed in the local Party organisations of the Labour Party and had he taken consultation he would have properly understood this? In the light of this misunderstanding might I ask him whether he would at least undertake to have discussions with the parties concerned to see whether some arrangements or corn-promise could be reached?
THE LORD CHANCELLOR: My Lords, I do not think I can accept the latter because of what I said at the end of my original Answer. I am advised that it is not desirable for consultation to take place with political Party organisations, although of course I am very open to receive any members of any Party, the noble Lord's Party or any other, who happen to be Members of Parliament of either House. I would certainly undertake to do that. May I say this by way of conclusion to the noble Lord although it perhaps does not arise out of the question: that all the steam would be taken out of this if and when, as I hope, after the next Session, I have had an opportunity to consider the alterations which will follow on the Local Government Bill. I may then be in a position to introduce legislation to abolish the Commission system altogether which will give me a very much greater degree of flexibility than I now possess. I would really suggest that therein lies the possibility of satisfying the noble Lord without interfering with the administration of justice.
LORD BESWICK: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will establish an appropriate independent inquiry into the procedures involved in the appointment of justices of the peace.
THE LORD CHANCELLOR: No, my Lords, the procedures now followed are those recommended by the Royal Commission on the Appointment of Justices of the Peace in 1910 and approved by the Royal Commission on Justices of the Peace in 1948. While I am always prepared to consider suggestions for improvement, I do not think there is a case for a fresh inquiry of the type suggested by the noble Lord.
LORD BESWICK:My Lords, I am grateful to the noble and learned Lord for that Answer, although is he aware that the latter part of the last answer he gave to the previous series of questions really answers my Question much more satisfactorily? I was going to ask him whether he does not appreciate that there will be a difference in the situation with the passing of the Local Government Bill, with the extension of the areas of the Commission, and is there not a case now for looking at this matter again? But if he undertakes to have consultations within the reasonably near future, may I ask him whether he is aware that that would go some way to satisfying the request I am making?
THE LORD CHANCELLOR: Of course, the noble Lord's Question related to the procedures involved in the appointment of justices of the peace. His previous series of questions related to the criteria of eligibility. My own belief is that the right way forward—I am perhaps talking slightly out of turn—is to abolish the Commission system altogether and that would enable a Lord Chancellor to have complete flexibility within the administrative powers of his office to appoint justices of the peace notwithstanding that their house happens to be on one side of the road rather than the other. If, as I hope, I get to that situation, I do not believe there will be any steam in this at all. In the meantime, any further inquiry would be superfluous. As I said to the noble Lord I am always willing to receive him or anybody else as a Member of Parliament about this or any other matter relating to my Office.
BARONESS GAITSKELL: My Lords, would not the noble and learned Lord Chancellor agree that with all these argument ever since the noble and learned Lord Lord Gardiner instituted a new and fairer way of appointing justices of the peace, happily continued by the present Lord Chancellor, things are really not as bad as we might think?
THE LORD CHANCELLOR: My Lords, I am very grateful indeed to the noble Baroness and I yield to no one in my admiration of my immediate predecessor. I do not think, to be completely accurate, that he did introduce a new system. The system has been developed as I indicated for more than seventy
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years. What I think my predecessor did was this: right up to the time when he became Lord Chancellor, successive Lord Chancellors—certainly going back as far as my father—had tried to balance the parties inside the local bench but the noble and learned Lord saw that that was not quite good enough and tried to balance the occupations and the social strata from which they came. I have very conscientiously tried to follow him in this, and I am grateful to the noble Baroness for perhaps indicating that that was so.

AMERICAN SPACE PROGRAMME AND BRITISH PARTICIPATION
3.40 p.m.
TIIE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether a decision has yet been reached to support our European partners in participation in the American post-Apollo programme.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, we are examining the merits of participation jointly with our European Space Conference partners. A meeting of the Conference is being planned for July for the purpose of taking decisions on participation.
THE EARL OF KINNOULL: My Lords, while thanking my noble friend for that reply, would he agree that it is very important to British aerospace technology that we should play a part in this programme, and can he say how long we have in which to make up our minds so far as the Americans are concerned? Finally, if we do go in, can he say what length of programme we should be committed to?
LORD DRUMALBYN: My Lords, so far as the first part of the question is concerned, the National Aeronautics and Space Administration of the United States of America envisage placing contracts to United States prime contractors about the middle of this year. They would also like a decision in principle to participate in the tug or orbital systems development, so there is not very much

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time for us to take a decision; but of course this meeting, which is to take place in July, will take that decision.
LORD WYNNE-JONES: My Lords, can the noble Lord tell us whether Her Majesty's Government are paying close attention to the presentation on this issue which was made by M. Giscard d'Estaing to the North Atlantic Assembly, where the great importance of building up an industry, both in this country and in Europe, in order to collaborate with the Americans was emphasised?
LORD DRUMALBYN: My Lords, naturally Her Majesty's Government are aware of this presentation and are taking it into account.

DEPARTMENT OF EDUCATION AND SCIENCE
LORD BEAUMONT OF WHITLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what they intend to do about the facade of the headquarters of the Department of Education and Science in Curzon Street.
LORD MOWBRAY AND STOURTON: My Lords, the facade will be improved during a major internal refurbishing which is due to start soon.
LORD BEAUMONT OF WHITLEY: My Lords, I am most grateful for that Answer, which is very satisfactory. May I ask whether it means that the Department of the Environment is now taking a very real interest in some of the major eyesores of Government buildings in this country, including possibly their own?
LORD MOWBRAY AND STOURTON: My Lords, to the first question the answer is a completely affirmative, Yes. To the last part, we have it and we must enjoy it.
LORD LEATHERLAND: My Lords, can the noble Lord tell us whether this major internal refurbishing which is to take place in the premises of the Department of Education will also take place in regard to its policy?
LORD DERWENT: My Lords, may I ask my noble friend, if I am not out of order, whether when the facade is dealt with the appalling working conditions inside the building will also be improved?
LORD MOWBRAY AND STOURTON: Yes, my Lords; that is one of the intentions of this exercise.

DEVON COUNTY COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
HAMPSHIRE COUNTY COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

HOUSE OF LORDS OFFICES
3.44 p.m.
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move that the Fourth Report from the Select Committee on House of Lords Offices be now considered.
Moved, That the Fourth Report from the Select Committee on House of Lords Offices be now considered.—(The Earl of Listowel.)
On Question, Motion agreed to.
The Committee's Report was as follows:
1. THE ROYAL GALLERY
The Committee have further considered the proposal that increased use should be made of the Royal Gallery. They recommend that for a trial period with the concurrence of the Lord Great Chamberlain suitable armchairs, sofas and tables should be set out in the Royal Gallery; the type of furniture and its arrangement to be considered by the Committee on Works of Art.
2. CONTROL OF MASS LOBBIES
The Committee have considered and approved a recommendation from the Administration Committee that in order to control lobbyists waiting to enter St. Stephen's Entrance, a barrier of removable railings should be installed across Old Palace Yard from St. Stephen's Entrance to the Victoria Tower. Outside these railings and marking the Western limits of the car park, a line of permanent stone bollards will be set up. The Scheme has

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the approval of the Westminster City Council and the Fine Art Commission.
3. THE MOSES ROOM
The Committee recommended that air conditioning should be installed in the Moses Room.
4. TIMING OF SPEECHES
The Committee recommend the permanent installation in the Chamber of the time indicators now displayed to enable the duration of speeches to be timed in accordance with the recommendation of the Procedure Committee.
5. LANGUAGE TRAINING FOR PEERS
The Committee were informed and took note with approval that a scheme will be forthcoming to provide language courses in Common Market languages for Members of both Houses.
6. SUB-COMMITTEE ON WORKS OF ART
The Chairman of the Sub-Committee reported to the Committee that a portrait of H.R.H. The Duke of Edinburgh by Major Davidson-Houston commissioned by the Lord Great Chamberlain will be hung in the Royal Gallery with that of Her Majesty the Queen. The Committee noted that this will involve some rearrangement of existing pictures.
7. PARLIAMENT OFFICE AND LIBRARY
The Committee were informed of the retirement on the 1st June of Miss J. P. Culverwell, M.B.E., Examiner of Private Acts, after 33 years in the Parliament Office, and asked the Clerk of the Parliaments to convey to her their appreciation of her long and valuable service to the House.
The Committee were informed of the rearrangement of duties in the office of the Examiner of Acts and authorised appropriate rates of pay.
The Committee also authorised the appointment of an additional Senior Office Assistant in the Judicial Office, an additional Office Assistant in the Library, and an adjustment of the Salaries paid to certain of the staff in the Accountant's Office.
8. OFFICIAL SHORTHAND WRITER
The Committee approved an increase in the Official Shorthand Writer's annual fee for Judgments with effect from 1st November, 1971.
9. DEPARTMENT OF THE GENTLEMAN USHER OF THE BLACK ROD
The Committee were informed of the forthcoming retirement of Lieutenant-Commander S. E. Glover, O.B.E., D.S.C, after 21 years as Staff Superintendent and asked the Chairman of Committees to convey to him their appreciation of his long and valuable service to the House.
(a) The Committee were informed of the appointment of Major Donald McNab Whyte, M.B.E., as Staff Superintendent from 1st June, 1972.
The Committee authorised the payment of the salary of the post additionally to Lt.-Cdr. S. E. Glover, O.B.E., D.S.C, until his retirement on 31st August, 1972
(b) The Committee also authorised the appointment of an additional Clerical Officer, an additional Attendant and three additional Housemaids on the staff of the Gentleman Usher of the Black Rod
10. HANSARD REPORTING STAFF

(a) The Committee authorised the employment of:

(i) up to five temporary Reporters;

(ii) teams of seven additional relief Transcribers from Palantype Organisation;

(iii) Recording Operator supplied by Tannoy Products Limited, at the discretion of the Clerk of the Parliaments for the reporting of Debates.

(b) The Committee also authorised the payment of an increase in the charges for transcribers supplied by Palantype Organisation with effect from 1st November, 1971.

(c) The Committee were informed of provisional arrangements for the temporary secondment of verbatim Reporters from the Northern Ireland Parliamentary Reporting Staff and authorised the payment of the cost of travelling, subsistence allowances and attendance fees.

11. MEAL ALLOWANCES
The Committee approved an increase in the rate of meal allowances payable to certain officials working late in the evening after a normal day's duty.
THE EARL OF LISTOWEL: My Lords, I beg to move that this Report be agreed to.
Moved, That the Report be agreed to.—(The Earl of Listowel.)
LORD SHACKLETON: My Lords, I think noble Lords will have noticed that in this Report there is a tribute from the Offices Committee to Commander Glover on his forthcoming retirement after 21 years as Staff Superintendent. Those of your Lordships who, like the noble Earl the Leader of the House and my noble friend Lord Beswick, and no doubt the noble Lord, Lord Denham, and other noble Lords, have been concerned with the housekeeping and the administration and security of this House will know that Commander Glover has given quite outstandingly devoted service. I doubt whether we could find another man, either in this House or indeed in this country, who so signally demonstrates his feeling of loyalty, a somewhat old-fashioned but rather fine loyalty, of service to the Crown and of duty to your Lordships. The fact that he has had, I do not doubt, great satisfaction in this work does not in any way detract from the quite exceptional quality of the work. He is always on the

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job. I feel that this might be an opportunity, because I am sure the noble Earl agrees with me, for some of us in this House to put on record how much we owe to Commander Glover, and to wish him a happy retirement.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, may I say that I wholeheartedly agree with the sentiments expressed by the noble Lord the Leader of the Opposition. Commander Glover's example is an astonishing one of service, generally and to this country: 30 years in the Navy, coming (if I may say so with a certain amount of salt water in my veins) as he did from a naval family; and his father, incidentally, happened to be the greatest exponent of the hornpipe the Navy have ever seen. Thirty years' service in the Navy followed by no less than 22 years' service to your Lordships' House—52 years in all—is a very remarkable record, and the responsibilities which Commander Glover has discharged in his dual appointment as Staff Superintendent and Superintendent of Custodians have been extremely onerous, and he has made them no less onerous. I believe that a great deal of the extraordinary courtesy with which we meet as we go round this House, and also the efficiency with which its housekeeping is run, is in itself a tribute to Commander Glover's service. I should like to echo what the noble Lord has said in wishing Commander Glover a very well-earned retirement, and assuring him that he will always be a very welcome guest in this House, in which we know him so well and to which he has made so long a contribution.
LORD BYERS: My Lords, my colleagues and I would endorse in full measure what has been said by the noble Earl the Leader of the House, and practically everything said by the noble Lord the Leader of the Opposition. We are very fortunate in the servants we have in this House, but at no time could any one of them, particularly Commander Glover, be accused of an old-fashioned type of loyalty. His loyalty is 100 per cent., and we wish him well in his retirement.
LORD SHACKLETON: My Lords, I regard old-fashioned loyalty as the finest loyalty.
On Question, Motion agreed to.

PROCEDURE OF THE HOUSE
3.49 p.m.
THE EARL OF LISTOWEL: My Lords, I beg to move that the Sixth Report from the Select Committee on Procedure of the House be now considered.
Moved, That the Sixth Report from the Select Committee on Procedure of the House be now considered.—(The Earl of Listowel.)
On Question, Motion agreed to.
The Committee's Report was as follows:
1. SHORT WEDNESDAY DEBATES
The Committee have considered the experimental short Wednesday Debates held in pursuance of the Second Report of the Procedure Committee of this Session. They recommend that the experiment should be continued in the next Session on the same lines as in the present Session (see Appendix). From the beginning of next Session until the Recess at Whitsun 1973 one Wednesday a month should be set aside for the purpose of Short Wednesday debates, but the actual dates should he arranged not more than a month in advance.
2. USE OE CLOCKS FOR TIMING SPEECHES IN THE CHAMBER
The Committee have considered the way in which the clocks should be used. They recommend that they should be principally used for those debates when lists of Speakers are issued. They should also be used to measure the total time taken for Starred Questions and Ministerial Statements. They should not be used for proceedings in Committee or on Report. Interruptions to a speech should count as part of the speech for the purposes of timing. The clocks could also be used for Divisions. The Committee recommend that the clocks should be operated by the Clerk at the Table.
The Procedure Committee will review the experiment in due course.
3. PROCEDURE ON THE CONSIDERATION OF REPORTS FROM SELECT COMMITTEES
The Committee have considered the procedure whereby two separate Motions are moved, when a Report from a Select Committee is considered and agreed to by the House.
They consider that the moving of two Motions on such occasions may lead to procedural difficulties and is a waste of the time of the House. They, therefore, recommend that the House should dispense with the Motion: "That this Report be now Considered"; and that one Motion only should be moved, namely:—
"That this Report be now agreed to".

APPENDIX
SHORT WEDNESDAY DEBATES
The main features of the experiment in limited-time debates, as approved by the Procedure Committee for the purpose of continuing the experiment next Session, are:—

(1) Until the Recess at Whitsun one Wednesday a month is set aside for two debates each of 2½ hours duration.

(2) The right to propose subjects for these debates is reserved to Back and Cross Benchers.

(3) The resulting Motions are entered in Part II of No Day Named.

(4) The purpose of these debates is to provide a forum for discussion rather than questions which the House is required to decide, if necessary, on a Division. Motions should not, therefore, be couched in a form to provoke a challenge.

(5) The choice of the two subjects for debate on a selected Wednesday is by ballot. This is carried out by the Clerk of the Parliaments on a day which is announced in advance three or four weeks before the debates are due to take place.

(6) It is assumed (unless notice to the contrary is given to the Clerk of the Parliaments) that any Lord who has a Motion down in Part II of No Day Named on the day of the ballot will be in a position to move his Motion on the day selected.

(7) Once a Motion has been set down for a particular day, it may be amended in form but not in substance (i.e. a Lord who has been successful in the ballot may not substitute another subject for the one originally proposed).

(8) A Lord who has been successful in the ballot may not enter another Motion in Part II of No Day Named in the same Session.

(9) If the period of 2½ hours allowed for a debate is interrupted by other business, e.g. a Ministerial Statement, the time limit is extended by the time taken by the interruption.

(10) In such circumstances the new time limit is announced from the Government Front Bench at the end of the speech following the interruption.

(11) The speakers' list is prepared in the usual way after consultation through the usual channels and with the mover of the Motion.

(12) At about 20 minutes before the end of the debate, whoever may be speaking is expected to give way to the Minister so that the House may hear the Government reply.

(13) On the expiry of the time limit, if the debate is still continuing, the Clerk at the Table rises and the Lord on the Wool sack brings the debate to an end by inquiring whether the mover of the Motion wishes to withdraw his Motion; or by putting the Question.

Of these arrangements, No. (13) alone requires an Order of the House. The remainder of the experiment can be conducted within existing Standing Orders, with the acceptance of the House.
THE EARL OF LISTOWEL: My Lords, I beg to move that this Report be agreed to.
Moved, That the Report be agreed to.—(The Earl of Listowel.)
LORD SHACKLETON: My Lords, I do not think we ought to let this Report go by without noting that, if we pass it, this will be the last time that we shall have the Motion, "That the Report be now considered" before the Motion asking that the Report be agreed to. This is a great simplification in our procedures, and noble Lords will not, as I have so often done, jump up at the wrong point.
There is one other aspect of this Report that I would mention, and that is the Appendix, concerned with the short Wednesday debates. The Committee have proposed that the experiment of holding short Wednesday debates should he continued for another year, and I think your Lordships will agree with that proposal. But it is an experiment, and of course we shall watch it. There is, however. one passage in the Appendix, paragraph (4), which says:
"The purpose of these debates is to provide a forum for discussion rather than questions which the House is required to decide, if necessary, on a Division. Motions should not, therefore, be couched in a form to provoke a challenge."
I in no way disagree with that. It was intended that these Motions should be somewhere half way between one of our main Wednesday full Motions and the type of Adjournment Motion which they have in the Commons, but I should be very concerned if this passage gradually came to be interpreted as laying down that Motions had to be entirely neutral in form. Clearly, a Motion which condemns the Government and calls on them to resign is calculated to provoke a challenge and would be inappropriate, at any rate for a mini debate. It might be too much to hope for.
None the less, although it is stated in the Companion under "Motions for Papers"—and we always use the formula

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"Motions for Papers" in these minidebates—that such a Motion
"is treated as a neutral motion and there is neither advantage nor significance in pressing it. The opinion of the House is expressed in the speeches.…",
and I entirely agree with that, I think that the House would get into great difficulty if total neutrality were sought in its Motions. We should end up by merely having Motions to take note. I do not believe it was anybody's intention consciously to achieve that. But there having been some discussion on a recent Motion, I think it is important that the House should recognise that any Member is free, within the ordinary standards of language such as is used in our House, to put down an appropriate Motion. Clearly it is undesirable that it should be worded in such an extreme form that it would promote a challenge, but that does not mean that it could not, in appropriate language, be a critical Motion. It is rather important that we preserve our freedom and do not allow ourselves gradually to get into a bowdlerised attitude to such Motions.
LORD FERRIER: My Lords, I should like to ask the noble Earl the Chairman of Committees a question. Is there any provision in regard to a twelfth man? Under paragraph (6) a Peer might say that he was net able to move the Motion on the day he won the ballot. Moreover, in the month that might elapse between the ballot and the date a Peer might fall sick.
3.54 p.m.
EARL JELLICOE: My Lords, perhaps I could say a word on what the noble Lord the Leader of the Opposition has said. I think the test is whether Motions are couched in such a form that they are likely to invite a challenge or indeed a Division. This is an echo of what was said by the Chief Whip in the Statement on February 17 last:
"It seems to me most undesirable and contrary to all the traditions of the House that
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the House should be asked to divide in a limited-time debate in which not necessarily all those who wish to speak may have had the chance of doing so."
It is important to preserve this principle. That said, I think it is a question of judgment, and usually we can rely with great confidence on the judgment of our Members to steer something of a middle course between the entirely anodine and colourless Motion—a bore to read and possibly a bore to discuss—and a Motion couched in unduly dogmatic and controversial language. There is a middle way, and I hope that it is the middle way which your Lordships would choose to follow. That said, I believe that these mini-debates, warts and all, have been at least a certain success in the first instance. I think that this is an area of our affairs which we could keep under review, but I have been gratified by the way the experiment has gone on up to now.
THE EARL OF LISTOWEL: My Lords, I am grateful to the noble Lord, Lord Ferrier, and may I remind him of the Statement made on February 17 by the noble Earl, Lord St. Aldwyn, the Government Chief Whip, on the procedure for Wednesday about debates? In the course of his Statement the noble Earl said:
"… in order to provide for the unforeseen contingency such as illness or accidents, the Clerk of the Parliaments will draw, and keep in reserve, two other Motions in addition to the two successful ones."
In other words, the two Peers who come third and fourth in the ballot will be kept in reserve in case one or other of the noble Lords who have been successful falls ill. I should like to thank the noble Lord, Lord Shackleton, for the proposal to reduce the number from two to one of Motions required for asking the approval of the House for Reports from Select Committees. It will save me time as well as the time of the House. I beg to move.
On Question, Motion agreed to.

HOUSING FINANCE BILL
3.56 p.m.
LORD DRUMALBYN: My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Drumalbyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 2 [The residual subsidy]:
LORD SHEPHERD LORD SHEPHERD moved Amendment No. 12.
Page 3, line 21, leave out paragraph (b).
The noble Lord said: Before speaking to this Amendment, I think I should draw the attention of the noble Lord, Lord Drumalbyn, to the time—it is now four minutes to four. This is a controversial Bill. There is a good deal of work to be done and a good deal of examination, and I suspect that a good deal of time will need to be provided. I can well understand that the Government will be anxious at the end of this evening to see progress, but I hope that the noble Lord will recognise that on Tuesday we lost, I think, over half an hour because of the way in which business had been arranged. To-day we have lost, I suppose, another 35 minutes which we had intended to use for consideration of this Bill. Therefore, having drawn the attention of the business managers to the loss of time of these two days, I hope we shall have no criticism of the progress which the Committee makes on the Bill.
So far as Amendment No. 12 is concerned, I regard this as a probing Amendment. I think it is true that local housing authorities in big conurbations like London, particularly where they have considerable pressure and need for housing development, have attached very con-considerable importance to the use in operation of Section 11 of the Housing Subsidy Act 1927. As I understand it, the local authorities can receive, I think, some 90 per cent. subsidy in order to acquire expensive land in advance in order that building can be undertaken
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perhaps later on. In the Bill, subsection (4)(b) on page 3, the Government appear to be taking away from such local authorities the payments that could be made under the Housing Subsidy Act 1967. If this is correct, it is running counter to what I believe has been the policy of Her Majesty's Government; that is, to encourage local authorities to purchase land as it becomes available, even in advance of its immediate need or capability of development. I may be wrong here. In fact, I should be surprised, despite all the iniquities of this Government, if they adopted this policy. But, on the face of it, it appears that that is what the Government are doing. I have moved this probing Amendment merely in order to get an explanation from the Government of what they intend to do. I beg to move.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): I am grateful to the noble Lord for giving me an opportunity to explain the Government's intentions in this respect, because this is a very important matter. The noble Lord is not wrong in assuming that this subsidy, together with the 60 other existing subsidies set out in full in Schedule 7, is being removed and the eligibility to an advance payment under the subsidy goes with it. But that is not to say that the need for assistance in buying expensive sites for housing is not recognised. What is being substituted under the rising costs subsidy, which we are coming to, will be more beneficial. That is because it will not be subject to the limitation of 90 per cent., which the noble Lord mentioned, nor will it be subject to the limitation which exists on the present subsidy, of being payable only for the purchase of a site exceeding £20,000 in cost per acre. The rising costs subsidy—and we shall see in a moment exactly how it works—will be applicable to all the additional reckonable expenditure incurred by a housing authority, which needs to continue with a heavy and expensive housing programme. I hope that that explanation will reassure the noble Lord.
LORD SHEPHERD: I am not quite reassured. It seems to me that the importance of the existing subsidy is that a local authority can receive a subsidy in advance, in order to make purchases

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of land which it is not yet ready to develop. Since we have not yet reached the rising costs subsidy, I am not quite certain whether a local authority will still be able to obtain a subsidy in advance. I do not know whether the noble Lord can reassure me that a local authority will be placed in no worse position in terms of immediate grant.
LORD SANDFORD: I do not think it would be convenient to get on to a discussion of the rising costs subsidy before we really come to it. But I can certainly give the noble Lord the reassurance that the dispensations available to housing authorities for dealing with this problem will he more favourable to them under the rising costs subsidy than under the present subsidy, even allowing for the possibility of an advance payment.
LORD SHEPHERD: I think I can respond and can assist the Committee by not pressing this Amendment. But we shall need to have another look at it when we come to the clause which deals with the rising costs subsidy. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.4 p.m.
LORD SHEPHERD LORD SHEPHERD moved Amendment No. 13:
Page 3, line 25, leave out from ("question") to end of line 35.
The noble Lord said: This is more than a probing Amendment. It may be that our fears are not justified and perhaps the Government can put them at rest. It has been said on a number of occasions by the noble Lord, Lord Sandford, and the noble Lord, Lord Drumalbyn, that the Government's case for this Bill is so to rearrange subsidies that greater assistance may be given in those areas with greatest need. Local authorities attach very considerable importance to the existence in their localities of hostels. There are hostels for the elderly. and I was told by my noble friend Lady Bacon that the local authority in Leeds provides a hostel in order that old people will have somewhere to go when their families, who look after them, go away on holiday. Of course there are also other hostels for youth and for people who are temporarily homeless. Most of these hostels are expensive to purchase,
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and conversions, maintenance and repairs also cost a lot of money. Therefore, if local authorities lose the subsidy which is available to them under the sections of housing Acts which are detailed in subsection (5), that will have very serious consequences for them and could mean that they would have to cease development or even to close hostels. That would be a very serious matter.
The noble Lord, Lord Sandford, and the Department must be aware that there has been considerable correspondence from various local authorities and charitable organisations which are running hostels. Therefore, the noble Lord will be well aware of the very deep concern which exists among people who run hostels. We on this side certainly do not like to use the word "poverty" in relation to old people or those who are homeless, but it is often the case that these people are suffering from poverty and we feel it would be wrong to place upon a local authority the entire responsibility for maintaining a service of this sort, which is at present undertaken by the State out of general taxation. I hope that the Government can explain why they are proposing these changes in regard to hostels. I also hope they will recognise that these hostels are of continuing and increasing importance for local authorities in dealing with people who are in difficulty through no fault of their own. I beg to move.
LORD AVEBURY: I am most grateful to the noble Lord, Lord Shepherd, for raising this point, which was touched on during the Committee stage in another place, but which was never satisfactorily dealt with, because Mr. Channon, who was replying on behalf of the Government, said, when the matter was raised under Clause 2, that that was not the right place to raise it and that it should be raised later. But when it arose later the guillotine had fallen and therefore, although a new clause, which is now Clause 90, was introduced on hostel subsidies, it was never discussed. So the people who are providing hostel accommodation did not have an opportunity of expressing their views on the provisions of the new Clause, or of saying whether it met their objections to the omissions from Clause 2 which is now before us. Therefore, unless we raise the matter now and get a satisfactory answer from the

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Government, we shall be in the same position as the other place and shall not know whether we have to put down Amendments to Clause 90 later on, or whether we are satisfied with what has already been done.
The noble Lord, Lord Shepherd, was very modest in moving this Amendment, because he mentioned only some of the categories of people who are likely to be affected by the provision of hostels. It is not only the elderly who are concerned, although in the discussion in the other place the needs of the elderly were predominant. The Abbeyfield Society wrote to some Members and their views were laid before the Committee. The Hanover Society, which as I understand it also provides accommodation for old people, wrote to honourable Members who were on that Committee, and they, too, voiced the opinions of that society, which is one of the largest in the country providing accommodation for old people; and yet Mr. Paul Channon was able to tell the Committee that no opinions had been sent to the Department of the Environment, which really surprises me. I would ask the noble Lord who is to reply this afternoon what opinions he has had since that discussion in the Commons from the societies which are responsible for providing hostel accommodation for old people, and whether these opinions have been properly noted in the provisions of Clause 90. I hope I am not out of order in doing this, but we do need the views of the Government at this stage so that we can decide whether we want to let Clause 90 go through when we finally reach it, or whether it is necessary. in the light of the opinions of responsible organisations such as the Abbey-field Society and the Hanover Society, to put forward our own Amendments.
But these are not by any means the only organisations concerned. We are not talking only of the elderly: we are talking of people such as itinerant workers, discharged prisoners and students. I do not think homeless persons are covered by this clause, because they are dealt with under the National Assistance Act 1948; but the other category for which very little provision has been made and which might just be mentioned is that of single persons, who are very much neglected, as I think, by local authorities.
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Now the enactments mentioned in this subsection which is to be left out under the Amendment before us relate to payment for hostels which are excluded from the meaning of the phrase "subsidies for the year 1971–72". As I understand, what this means is that subsidies which have been payable in respect of these hostels are now going to cease, and they may or may not be replaced by another clause in the Bill. When I came to look these up, I found a curious thing, in that Section 40 of the Housing Act 1949 was in fact repealed by Chapter 42 of 1958 Statutes. Section 59(1) and Schedule 6; Section 22 of the Housing (Financial Provisions) Act 1958 was repealed by 1967 Statutes, Chapter 29, Section 14(1), and Schedule 14, Part I: and the same applies to Section 9(3) of the Housing Act 1961. Although the names of these provisions were repeated in, I think. Schedule 2 of the Housing Subsidies Act 1967. I want to ask the noble Lord how, in the Bill which is now before us, reference can be made to provisions in Statutes which have been repealed.
This is a minor point; it is not a point of substance. But it is a point of drafting which I should like the noble Lord to consider before he comes to reply, and I should like him to say how it is that when you look up the Statutes Revised (which, I may say, is not available in our House to bring into the Chamber; it is available in another place) you see these sections struck out. How is it that reference can be made to them in legislation which is before us now? But that, as I say, is a minor point. What is important is the substance of the argument which has been made to us by people who are concerned with the provision of hostels for the elderly, the prisoners, single persons and so on. I think I am right in saying, but I am not absolutely sure because of the confusion to which we arrive as a result of the repeal of the Statutes concerned, that we are talking only about hostels that are provided by local authorities and not those which are provided by private organisations. I think the noble Lord should clarify this when he comes to reply.
It is clear to me—and I would hope it will be to your Lordships—that whatever assistance is given by the Government to

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local authorities towards the provision of this kind of accommodation ought equally to be available to private organisations, that there should be no discrimination whatsoever. If the Abbeyfield Society are going to provide accommodation for old people, they should be on an equal footing with the local authorities who are doing precisely the same job. I am sure that the Government will agree with me that we ought to encourage both to compete in doing the best that they can for the people who need hostel accommodation; and that, as Mr. Channon said in Committee in another place, perhaps it is time we took an overall look at the assistance which the Government give for the provision of hostel accommodation and brought this on to a uniform basis. We have the opportunity now that we are looking at this Bill. If we can have a preliminary answer from the noble Lord who is to reply this afternoon, I hope that we on this side of the Committee can bring forward constructive suggestions which will enable us to do this job satisfactorily, and not to leave it to another occasion, when we might have to bring, forward separate legislation regarding hostels, which I think would be undesirable.
In this connection, may I tell the noble Lord who is to reply about some correspondence which my noble friend Lord Wade has had from the Huddersfield Young Men's Christian Association? I think this illustrates rather well the problem that: we face, because the Y.M.C.A. in Huddersfield have constructed a hostel for the use of single people. That was done under the 1958 Act. They received a payment of £5 per bedroom, which was intended to continue over the space of 60 years. But they were informed when this Bill was introduced that that payment would cease; and, of course, if one looks at Clause 90 one sees that the concession applies only to new hostels constructed after this Bill has been enacted. So as they understand it, they will be deprived of the £5 per bedroom subsidy which has been available to them in the past, and this sum will have to be added on to the amount that they charge to people living in that accommodation, who by definition are those in greatest need. I come back to the point made by the noble Lord, Lord Shepherd, that these provisions appear to us to be inconsistent
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with the declared objectives of the Government.
When the Huddersfield Y.M.C.A. requested the views of the Department of the Environment on this subject, they received a letter back from one of the officials whose name I think I had better not quote, as your Lordships will see when I come on to the substance of the letter. This official quoted the provisions of Section 15 of the 1958 Act. Of course, that applies only to hostels provided by local authorities, and not at all to those provided by the Y.M.C.A.; so the official was quite incorrect in drawing the attention of the Y.M.C.A. to an Act which did not affect them. The official went on to quote the fact that a new subsidy would be payable up to £30 a bedroom for a maximum of 10 years, but she did not say that under the provisions of Clause 90 this would not be available to hostels that were already constructed.
So that we can decide what we do when we come to Clause 90, I should like the noble Lord to tell me what help the Government are going to give to people like the Y.M.C.A., who have already constructed hostels which are available for the use of single persons, or for elderly persons in the case of the Abbeyfield Society or the Hanover Society, as I mentioned, or for discharged prisoners, or for people discharged from mental hospitals. I do not want to complete the list, because it is a fairly lengthy one. All I am saying is that local authorities and private organisations which are providing hostel accommodation are doing an extremely important job in our community, and while we have this opportunity we must not let Clause 2 pass without having a thorough explanation from the Government of what their intentions are in this regard. If they do not declare clearly that they will continue with the help given hitherto then we see their declarations—those declarations to help the weakest members of the community, the people in the most need —for what they are; that they are of no validity.
LORD DONALDSON OF KINGS-BRIDGE: Before the Minister replies, may I ask whether he can take up specifically the point which the noble Lord, Lord Avebury, raised on hostels for discharged prisoners? I have an interest in this matter. It has never been suggested

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to me before this minute that this Bill was going to be concerned in any way with them. At the moment there is a per capita grant from the Home Office which is rather more than £30. I do not want to give it away before I am sure that I am going to get something better. I should like to be certain, if this general situation is going to be disturbed, that it is going to be disturbed for an improvement. I should like to ask for a specific reply on this point.
LORD HYLTON: I am sorry that the noble Lord, Lord Grenfell, is not in the Chamber since he raised this question of hostels on a very broad front earlier this year. If we are to have a review it must take in not only the Department of the Environment but also the Home Office and the Department of Health and Social Security.
BARONESS BIRK: Following that point, I too am very concerned about the question of hostels because it goes even wider than the question of discharged prisoners. We who sit on magistrates' benches know that there is a lack of accommodation for people whom we do not want to send to prison and would like to go into a hostel. The accommodation varies according to the local authorities. At the present time, there is a scarcity of hostels for a whole variety of people who need them both temporarily and for longer residential use. One of the results of the changes in the whole structure of the social services has been an increase in the demand for hostel accomodation. It seems to me that as this Bill stands at the moment (and I have also read Clause 90) none of it will help the situation where a local authority is backward in the sense of provision of hostel accommodation. This Bill would be an incentive to local authorities to say, "No, we cannot afford to do this." The local authority which has been more progressive in outlook is going to find the cost prohibitive and is going to be left with an ever decreasing variety of alternatives with which it can deal with its tremendous list of case histories.
Those not closely concerned with some aspect of this work find it impossible to recognise the tremendous demand for what one could call "halfway accommodation" for persons such as unmarried mothers, old people, those who have been referred to hostels by the courts perhaps
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because of some mental disturbance—who for all sorts of reasons—need a period in an hostel. The whole social inclination and structure should be towards an increase in the number of hostels. I think those who are concerned with (and have signed petitions for) the radical alternatives to prison and who would like to see not a new Holloway Prison for women but more money spent in hostels, must feel anxiety over the way this matter has been dealt with.
As it comes from the Commons, this Bill seems to me to be another example of great confusion. If almost anything can be read into it—which means that anybody can do what he likes or do nothing at all—then the future for the hostel situation is going to be very gloomy.
4.25 p.m.
BARONESS YOUNG: May I begin by saying that we regard the whole question of hostels as a very important one. We are well aware of the very great and personal interest taken by many noble Lords in all parts of the Committee on this question. I will answer what I think is the first point put by the noble Lord, Lord Shepherd—what I may call the narrow accounting point—which arises in Clause 2. The reason why this particular part is included is that we are concerned in this clause with the residual subsidies, the subsidies paid to the housing revenue account. It is based on the subsidies at present paid to the credit of the Housing Revenue Account, less the withdrawal factor. The present subsidies paid towards the cost of hostels are not paid into the housing revenue account but into the general rate fund. Therefore subsidies paid in this way cannot be included in the calculations for the residual subsidies. That is the very narrow accounting point.
But the question is much larger than that. If noble Lords look at Clauses 73 to 75 they will see that the Secretary of State has power to phase out, over either a long period or a short period, the existing subsidies. The proposals are very flexible in this arrangement. Unless the total hostel grant is insignificant compared with the association's activities or resources it will be phased out at an annual rate of not more than £5 per bedroom. Where this rate may cause hardship to the association because it is

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concerned solely with the provision of hostels the rate of phasing out will be only £2·50 a bedroom. This represents an increase in weekly charge to residents of as little as 5p a week. It is certainly not our intention to jeopardise in any way existing hostel schemes by withdrawing the hostel grant too quickly.
I turn now to Clause 90 which is concerned with grants for new hostels. First, I should like to make it clear that they are available both to local authorities and to housing associations. Secondly, the Bill is not concerned with grants given by the Home Office. The present grants are being replaced under Clause 90 by a new hostels subsidy of up to £30 per bedroom, payable for up to ten years, for schemes approved after the Bill comes into force. The amount of subsidies will thus be flexible, being related to the cost incurred in providing hostels and the standard of amentities provided in respect of the associations' hostel grants.
I hope that I may allay the fears that have been expressed by saying that the Government consider that more thought needs to be given to the whole question of hostel provision. It may be appropriate to take a fresh look at the type of accommodation likely to be needed in future and at the type of person for whom it might be provided. The providers of hostel accommodation are the best people to begin such a new reappraisal and we should expect the voluntary housing movements to take a prominent part in such an appraisal. The National Federation of Housing, Societies has suggested possible ways of considering the issues. Representatives of the Government Departments which have an interest in this matter would be prepared to join such discussions at an appropriate stage. I hope that this will go some way to allay the fears that have been expressed and to see that we shall hope to hold these future consultations.
BARONESS BIRK: May I ask a question before my noble friends who know more about this subject than I do intervene? The noble Baroness said, "not withdrawing the hostel grants"; and then, after a pause, added: "too quickly". May I ask what "too quickly" means? It sounds like the
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young lady who invited out to dinner intends to say, "No" at the end of the evening but who sits through a very expensive dinner and at the end says, "No", and her male escort goes home feeling very upset about it. The pause I referred to seemed to indicate this sort of thing in withdrawing hostel grants "too quickly". If that is the message that it to be passed to the local authorities, it is going to confuse them completely and make them reluctant to continue what they are doing at the moment. In fact it will make them feel that they would be quite justified in running down even the existing accommodation, apart from the question of whether they put up new hostels. I find it extremely disturbing.
VISCOUNT GAGE: I am not going to follow the metaphor of the noble Baroness, Lady Birk, who compared the position with her friend's experiences. But I was glad to hear from the noble Baroness, Lady Young, that this whole question is to be gone into with the National Federation of Housing Associations. One of the things which also might be investigated, I think, is the exact difference between a hostel and a home, which I, in my great ignorance, find a little difficult to follow. I notice that my noble friend Lord Brooke of Cumnor has down a series of Amendments about students. I have always understood that students are considered to be appropriate tenants of hostels. But my noble friend, who knows a great deal more than I do about this matter, has put down an Amendment about homes for students. I suggest that the whole question of the definition of these two forms of institutions requires some thought.
LORD AVEBURY: Before the noble Baroness, Lady Young, replies, may I say a word or two about her speech? Of course one is glad to hear her say, on behalf of the Government, that hostels are important. But that does not mean anything unless she is prepared to back up her words with some money. She has told the Committee that these subsidies are to be phased out over a longer or shorter period, under Clauses 73 to 75. That is not at all satisfactory. If the noble Baroness has given an undertaking to the Committee that more

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thought will be given to the whole question of hostel provision, the existing subsidies should be left as they stand until that review has been made by the Government.
I think it entirely unfair to say to the Y.M.C.A. in Huddersfield, or to any of the other associations that I mentioned, "You are going to lose your money under Clauses 73 to 75 over a period which we will determine, not after consultation but at our own discretion. Later on, we may decide that the work you are doing is worth while, and restore part or whole of the grant you were previously receiving." In the meantime the Y.M.C.A. may have gone out of business and the people who have enjoyed the benefit of the accommodation which the Y.M.C.A. provided have become homeless. The noble Baroness ought to think again about what she told the Committee. Naturally, we are delighted with the expressions of sympathy which she has voiced. But before we leave Clause 2 and come on to Clauses 73 to 75, which she has mentioned, and to Clause 90, which I mentioned, we want a much more firm undertaking from the Government about their intentions.
I agree with the noble Baroness that the whole question of hostel subsidies needs to be reviewed. That is precisely what Mr. Channon said as long ago as December 7, 1971. It appears at column 241 of the Report of the proceedings in Standing Committee E. It is not good enough for the noble Baroness, despite the fact that she has no Departmental responsibilities, to come to the Committee six months later and say precisely the same as her colleague said in the Commons. I asked what representations had been received from the authorities which are concerned in the voluntary field with the provision of hostel accommodation. The noble Baroness neglected to answer that question. I know perfectly well that the Abbeyfield Society, the Hanover Society, the Young Men's Christian Association and many others have written to the Department, since they read the Report on the proceedings in Standing Committee E, and have expressed themselves in the strongest possible terms. She ought to tell the Committee what replies she has given, what guarantees have been afforded to those associations that they will not be put out
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of business by the provisions in this Bill, pending a long-term review of the whole question of hostel accommodation. Unless she can give that undertaking—I do not know what my noble friends on the Labour Front Bench will do—I shall feel strongly inclined to press this matter to a Division.
BARONESS YOUNG: I am happy to give that assurance immediately, and I am sorry that my words should have conveyed any other impression. I thought I made it quite clear, when talking about the withdrawal of these subsidies, that it was not the intention of the Government to jeopardise any existing hostel at all, and that their whole approach was a flexible one. I thought I made the point that the subsidies would he phased out at an annual rate of not more than £5 a bedroom and that it might be less; that if the phasing out at that rate was going to cause real hardship we would adopt a lower rate, or even suspend the phasing out altogether for a period. I hope that that provides the assurance asked for by the noble Lord.
LORD SHACKLETON: I fear that I have been too long in the game to be taken in by Ministers' saying that of course they have a very great interest in the subject. We all have a great interest in any subject with which we are dealing. I am bound to say to the noble Baroness, Lady Young, that I find her answer extraordinarily depressing, particularly in the light of what the noble Lord, Lord Sandford, said on Tuesday, that one of the purposes of this Bill was to concentrate resources to aid those in the greatest need. There is no doubt at all that those who, by misfortune, age, or misdemeanour, or for some other reason, are required to enter some form of institution, such as a hostel, are people in the greatest need. It is perfectly clear, is it not? that the rate of subsidy is to be cut. Is it not equally clear that residents, particularly the elderly, are to be called on to pay a higher rent? Whether the increase is 5p is immaterial; the fact is that they are to asked to pay more. This runs completely counter to what the noble Lord. Lord Sandford, said on Tuesday and what was in fact the only reason for the imposition of the provisions in this Bill.
Did not the noble Baroness say (I ask her to correct me if I am wrong) that

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under Clause 90 the Secretary of State would be making subsidies for the next 10 years? If the noble Baroness agrees to that, I fear that the Committee must have its attention drawn to the drafting of this clause. It does not say that these subsidies will be given for 10 years; that is the limit. Subsection (6)(a) says that the hostel subsidy payable to housing authorities or housing associations in respect of a hostel scheme
"shall be payable for such number of years, not exceeding ten, as the Secretary of State may determine."
There is a great deal of difference between the statement that a subsidy is to be available for ten years and what is in the Bill, which may mean only for one year, or two, and the local authority is to proceed on this basis. I find the position thoroughly unsatisfactory. The Government are hitting at those local authorities who are working to ease the problems of those people who, by misfortune, need to live in an institution. It may be that when considering Clause 90 we can look at it with even greater care, but I hope that now we may vote to show our complete dissatisfaction, if not repugnance at what the Government contemplate in dealing with hostels.
LORD SANDFORD: The noble Lord, Lord Shepherd, must do what he feels right to do. At the moment I cannot think of any terms which I could use to increase and redouble the assurance I gave earlier on in our discussions on the Bill, and which my noble friend has just given, about the Government's attitude towards hostels. As my noble friend has said, we shall come later to the specific clauses dealing with hostels. But, as my noble friend has also said, we regard this as a most important sector. We have not the slightest intention of doing anything which will damage it: rather, we think that it ought to be reviewed so that it can play a fuller role. Furthermore, as the noble Lord, Lord Avebury, has said, this is a sector which contains a number of people whose need is the greatest. The whole purpose of the Bill is to concentrate help on that very sector. At the moment, I cannot think of any terms in which to make my assurance clearer. I may be able to do so before we get to Clause 90; but if, in spite of that, the noble Lord wishes to divide
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the Committee, then of course he will do so.
LORD SHEPHERD: The noble Lord can give an assurance which I am sure the whole Committee would wish him to give and they would, I think, applaud him if he would do so. Will he give an undertaking that during the next ten years, so far as the present Secretary of State is concerned, local authorities and those associations now in receipt of subsidy for hostels will not receive one penny less, and that no person living in a hostel today due to misfortune, through sickness, age, or whatever it may he, will be required to pay more as a consequence of this Bill? If the noble Lord will give me that assurance, then I certainly will not press the Amendment to a Division. But if the noble Lord cannot give such an assurance, then I think the Committee is entitled to divide.
LORD SANDFORD: I say again that the noble Lord must do as he thinks fit. But I cannot possibly give that assurance, because it is not consonant with the assurance that I gave before. The assurance that I gave before was that we are seeking to concentrate help on where the need is greatest. Most of the people in hostels are in great need, but there are some who are not, and some who ought to pay something nearer the fair rent.
LORD GARNSWORTHY: Would the noble Lord tell us just who he means when he says that there are people living in hostels who are not in need? I think we need to know this percentage wise and numerically, because it will be a very small number indeed.
BARONESS BIRK: The people who are living in hostels who refuse the opportunity of other accommodation because for some reason they prefer to live in a hostel—who are they; where are they and why are they?
LORD SANDFORD: I agree with the noble Lord, Lord Garnsworthy, that it is certainly a very small group. There are young workers who are moving into areas where there is not a great deal of what is called lodging accommodation, and hostels are provided for them. There is no reason to suppose that they are not earning a quite good standard of wages.
LORD GARNSWORTHY: Is there any reason to suppose they are not paying

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already a reasonable sum for living in the hostels?
LORD SANDFORD: Many of them may be. But it would be quite impossible to say that we are following the principle of concentrating help where it is needed if the effect of that was to leave out of consideration those who are in hostels and who are paying less than the fair rent for their accommodation
LORD SHEPHERD: Can the noble Lord say how many hostels fall into this class?
LORD SANDFORD: No. But I offered, in giving my assurance, that between now and when we come on to the main clause on hostels—and we are not on the main clause on hostels at the moment—my noble friend and I will see whether there arc any ways in which we can increase the strength and firmness of our assurance; and if giving statistics of that sort will help, I am sure we can do it. if I find that we can do it before we reach that stage, then I will write to noble Lords who have shown concern.
LORD AVEBURY: May I suggest that the answers the noble Lord has given this afternoon are totally unsatisfactory? But if he does manage to write to us before we reach Clauses 73 and 75, and particularly Clause 90, and can give us the sort of assurance that we have sought, he will do himself a service, because he might be able to shorten the discussion on those clauses.
LORD SANDFORD: I am grateful to the noble Lord for that suggestion. It is an offer that I have already made, and I confirm it.
LORD SHEPHERD: The purpose of this Amendment is to see that local authorities and associations who run hostels shall not be placed in a worse position than they now are, and that those who live in those establishments shall not
be required to pay more as a consequence of this Bill—except of course if there is justification, in the terms of young workers. I accept what the noble Lord says. It may be that between now and Clause 90 the noble Lord can give us satisfaction. But I will say this to the Committee. There are occasions when Ministers on that Front Bench need to be strengthened in dealing with their Departments, and I would therefore invite the Committee to vote on this Amendment for this purpose alone; that is to say, to show to the Secretary of State, through the noble Lord, Lord Sandford, that this Committee believes that local authorities and associations and other independent organisations who work for the unfortunate should not be placed in a worse position than they are to-day, and should not be required to pay more, as a consequence of this Bill. If we pass this Amendment, and if the noble Lord, Lord Sandford, can give us satisfaction between now and Clause 90, then I will undertake to move an Amendment to put this paragraph back into the Bill. I ask the Committee to express its view on this very important subject.
LORD SANDFORD: I think the Committee have come to a pretty poor pass when two Ministers have given the fullest possible assurances, and have offered to follow them up during the passage of the Bill—
SEVERAL NOBLE LORDS: No!
LORD SANDFORD: However, if the noble Lord wishes to press the Amendment to a Division, it is up to him.
LORD SHEPHERD: I am still helping the noble Lord.
4.48 p.m.
On Question: Whether the said Amendment (No. 13) shall be agreed to?
Their Lordships divided: Contents, 50; Not-Contents, 92.

CONTENTS

Arwyn, L.

Citrine, L.

Garnsworthy, L. [Teller.]

Avebury, L.

Davies of Leek, L.

Granville-West, L.

Beaumont of Whitley, L.

Diamond, L.

Hale, L.

Beswick, L.

Donaldson of Kingsbridge, L.

Hall, V.

Birk, Bs.

Douglas of Barloch, L.

Han worth, V.

Blackett, L.

Evans of Hungershall, L.

Henderson, L.

Braye, L.

Faringdon, L.

Hughes, L.

Brockway, L.

Foot, L.

Leatherland L.

Champion, L.

Gaitskell, Bs.

Llewelyn-Davies of Hastoe, Bs

Chorley, L.

Gardiner, L.

Lloyd of Hampstead, L.

Loudoun, C.

Phillips, Bs. [Teller.]

Strabolgi, L.

McLeavy, L.

Platt, L.

Summerskill, Bs

Mais, L.

Samuel, V.

Wells-Pestell, L.

Masham of Ilton, Bs.

Segal, L.

White, Bs.

Meston, L.

Shackleton, L.

Willis, L.

Noel-Buxton, L.

Shepherd, L.

Wynne-Jones, L

Nunburnholme, L.

Shinwell, L.

NOT-CONTENTS

Aberdare, L.

Emmet of Amberley, Bs.

Merrivale, L.

Abinger, L.

Ferrers, E.

Milverton, L.

Alexander of Tunis, E.

Ferrier, L.

Molson, L.

Allerton, L.

Fortescue, E.

Monck, V.

Amherst of Hackney, L.

Gage, V.

Montagu of Beaulieu. L.

Balerno, L.

Goschen. V.

Morrison, L.

Balfour, E.

Gowrie, E.

Mowbray and Stourton, L. [Teller.]

Barnby, L.

Greenway, L.

Beauchamp, E.

Grenfell, L.

Napier and Ettrick, L.

Belstead, L

Grimston of Westbury, L.

Nugent of Guildford, L.

Berkeley, Bs.

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

Rankeillour, L.

Bessborough, E.

Reay. L.

Boyle of Handsworth, L.

Harvey of Tasburgh, L.

Reigate, L.

Camoys, L.

Hertford, M.

Sandford. L.

Carrington, L.

Hood, V.

Sandys, L.

Colville of Culross. V.

Howard of Glossop, L.

Savile. L.

Cork and Orrery, E.

Hylton, L.

Sempill, Ly.

Cottesloe, L.

Hylton-Foster, Bs.

Sinclair of Cleeve. L.

Craigavon, V.

Ilford. L.

Somers, L.

Crathorne, L.

Ironside, L.

Strange of Knokin, Bs.

Daventry, V.

Jellicoe, E. (L. Privy Seal.)

Strathclyde, L.

de Clifford, L.

Kemsley, V.

Strathcona and Mount Royal, L.

Denham, L. [Teller.]

Kilmarnock, L,

Derwent, L.

Latymer, L.

Teviot, L.

Digby. L.

Lauderdale, E.

Thorneycroft, L.

Drumalbyn, L.

Limerick, E.

Tweedsmuir, L.

Dundee, E.

Long, V.

Tweedsmuir of Belhelvie, Bs.

Dundonald, E.

Lothian, M.

Vivian, L.

Eccles, V.

Lyell, L.

Wakefield of Kendal, L.

Elgin and Kincardine, E.

Mancroft, L.

Wolverton, L.

Elles, B.

Massereene and Ferrard, V.

Young, Bs.

Elliot of Harwood, Bs.

May, L.

Resolved in the negative, and Amendment disagreed to accordingly.

4.55 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 14:
Page 3, line 41, leave out ("the Secretary of State") and insert ("arbitration")
The noble Lord said: I beg to move this Amendment. If any of your Lordships should be in doubt as to the reason for my moving this particular Amendment I would say it is in response to a prayer I thought I heard while going through the Division Lobby—a prayer on behalf of one of the Tories after the onslaught of my noble friend on the last occasion, saying "Come back, Jack; all is forgiven! "This Amendment refers to part of the same section where the discretion to decide any issue which affects residual subsidy is given to the Secretary of State. Subsection (6) states:
"For the purposes of this section,"—
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that is the whole of Clause 2—
"… any question whether all or any part of any payment under any of the enactments described in Part I or Part II of Schedule 7"—
that is virtually all the present subsidies—
"to this Act is to be regarded as made for the year 1971–72, or as made in respect of property within the authority's Housing Revenue Account, shall be determined by the Secretary of State."
There is not a word there, incidentally, about consultation; but I think it goes beyond consultation.
The Secretary of State should not have the power to determine on his own any issue which affects how much the Secretary of State shall pay to a local authority. He is one party to the dispute. Of course there may be honestly-held differences of opinion, and of course questions may arise on apportionment. Naturally there will be differences of that kind, and where there are such differences the Secretary of State will of course be

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concerned to put forward the Government's point of view and the local authority will be concerned to put forward the local authority's point of view: the difference will be merely a matter of money. One will be wanting to pay less and the other wanting to receive more. In those circumstances there cannot be any feeling that the local authority's case is being fairly considered if the complete discretion is left in the hands of the Secretary of State to decide how much he will or will not pay with regard to any disputed amount.
I am bound to say that this is one example—there are many in the Bill and we shall come to them time and time again—of an excessive authoritarian approach in the Bill. This is quite excessive. There are occasions when full consultation is provided for in the Bill. There is one coming up very shortly in Clause 4(12), which reads:
"…and the Secretary of State in exercising his powers under subsection (11) above shall follow such methods and principles, and take account of such matters, as he may from time to time decide after consultation with such associations of housing authorities as appear to him to be concerned, and with any housing authority with whom consultation appears to him to be desirable."
That is consultation; but I repeat there is not one word about consultation in this particular subsection, which refers to the whole of the residual subsidy where there is any question involved. So I am suggesting that a far better method of resolving a dispute of that kind would be by means of some form of arbitration—either in a statutory form or in such other form as is convenient to the Government. I do not think we can leave it to the Secretary of State himself to decide whether or not he wants to pay out a certain sum.
5 p.m.
LORD SANDFORD: The noble Lord, Lord Diamond, sounds very persuasive, but in deciding issues of the sort set out in the subsection to which the Amendment refers the Secretary of State is only continuing to do what he has been doing in respect of all the housing subsidies for many years past. It was what he was doing in 1966 when the Party opposite introduced their last Housing Subsidies Act of 1967, and I am sure it never occurred to them to alter the procedure in any way; certainly,
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if it occurred to them it was a thought which they soon rejected, because they have made no such provision at all. In many cases, if one looks through the legislation, one finds, for instance, that Clause 3(5) of the Housing Subsidies Act 1967 says:
"The Minister may determine the approved cost of any dwelling may be reduced by…"
and so on. All legislation up to now in respect of problems such as this has been shot through and through with discretion vested in the Secretary of State for deciding issues of this sort.
Furthermore, if we were to adopt the proposal that the noble Lord is now advocating to the Committee the effect would be to slow up and delay the settlement of issues such as this. Because the attraction of the new subsidies depends on deciding the issues, the only effect would be to delay the payment of the subsidies to the housing authorities concerned. All we are doing in this clause is to continue a discretion which hitherto nobody has quarrelled with; a discretion which the Party opposite certainly never thought of changing when they last introduced a Housing Subsidies Act. For those reasons I cannot commend the Amendment to the Committee in any way.
LORD LEATHERLAND: I wonder whether the Minister when, saving that in the 1957 Act—
LORD SANDFORD: 1967.
LORD LEATHERLAND: —there was no provision for arbitration, inadvertently overlooked the fact that on this occasion slashing attacks are being made on the local authorities and on their subsidies. Therefore the position to-day under the present Bill is entirely different from what it was when previous subsidies were arranged by previous Governments. In this case, the clause refers to the Secretary of State having almighty power over all the matters mentioned in Part I of the Bill. Part I of the Bill deals with all the eight subsidies that are to be paid under this new legislation. It also says that the Secretary of State shall have almighty power over everything in Part II of the Bill, and Part II of the Bill deals with the whole question of rent rebates and subsidies to local authorities, whereas Schedule 7 to

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the Bill, which is also mentioned, deals with 18 or 19 Acts of Parliament under which the Minister is due to make payments to local authorities. Therefore this is a very important matter, and as the whole flavour of this Bill is to penalise local authorities by reducing the amount of Government money that is to be available for rents and housing, I do not think that it is quite correct to try to compare it with previous legislation.
With regard to the ethical aspect of the matter, we in this country are sometimes cursed with industrial disputes. We are invariably told on such occasions that the trade unions should go to arbitration because arbitration is fair; it will ensure a fair deal between one party and the other. I should like to ask the Minister whether he considers that arbitration is something virtuous or something vicious. If it is virtuous when applied and recommended for trade unions, why should it not similarly be virtuous to settle disputes between local authorities and the Minister? For those reasons I support my noble friend in urging the adoption of this Amendment.
5.6 p.m.
LORD DIAMOND: I am grateful to my noble friend for the persuasive and helpful remarks that he has made. They were very much to the point. I do not have with me the relevant sections to which the noble Lord, Lord Sandford, very briefly referred. One is not supplied with all the Acts one would like to have. Certainly Schedule 7 has 60-odd Acts mentioned in it so I found it a little difficult to equip myself as adequately as one might and at the same time accommodate myself in one place on one Bench. However, my recollection is that the Act of 1967 was an Act substantially to increase subsidies so far as local authorities were concerned. It was an Act to provide that any interest rate over 4 per cent. should fall on the central Government. That would be the measure of the subsidy. If interest was at 8 per cent. it meant that one-half of the capital cost spread over the period was being provided by way of subsidy from central Government to local authorities. That was the context of that Act.
In that context of giving, I can imagine that there were different circumstances in which the giver would have some right
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of deciding how much he was going to give in any disputed area, it being in any case more than what otherwise would have been given. What we are deciding here is the rate at which the existing subsidies shall be withdrawn. That is what the context of this provision is and it is totally different from the context of the other provisions. I repeat that I have not in front of me the exact sections so I do not know what the exact wording is: I am only going on conjecture, but I think I am fairly accurate in describing the totally different context in which these two powers are given. I am not satisfied that a discretion left with the Secretary of State in those circumstances is comparable with the discretion handed to the Secretary of State in these circumstances. I repeat that it is a very wide discretion indeed.
Nor am I at all impressed with the argument that this Amendment will delay payment. It is a very regular proceeding that when an item is partly in dispute—and that is what we are talking about—the undisputed element is paid and the disputed element goes to arbitration. The disputed element, if it went to arbitration, would be delayed until the arbitrator had settled it. But under the Bill the disputed element would not go to arbitration and would never be paid. There is no difference whatsoever in terms of delay, whether this Amendment is accepted or not. If the Amendment is accepted there is hope that the arbitrator would see the point of view of the local authority. There is certainty that there would be an unbiased approach, the approach of an arbitrator, a judicial approach. That is the difference between getting a judicial approach and getting an approach from the person who has to dip his hand further into his pocket to satisfy the point of view of the person who is appealing to him—here the local authority.
I do not think that we can be at all satisfied with the reply made by the noble Lord. But I want to help the noble Lord: I spend most of my time trying to help the Government in improving the Bill in one way or another. I am such a modest chap that I do not mind reminding the Committee that the only Amendment which has been accepted so far is the most important drafting Amendment that has been suggested from this side of the Committee. The noble Lord,

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unfortunately, said nothing about the point that I touched on—consultation. It would cost the noble Lord and the Government nothing. I understand the difference between money and courtesy: money is very difficult to provide; courtesy is very easy to provide. The noble Lord could easily say, "Of course we will consult fully with all the parties concerned before reaching a decision". That would not be wholly satisfactory as a result of this Bill which reduces the revenue of the local authorities, and the result of another Bill which extinguishes their powers, which is, so I am told, very haltingly on its way from another place to this House. They may find that it slips and breaks its leg before it gets here, for aught I know.
As a result of the combination of these two Bills, local authorities are feeling about as warm towards the Government as are most trade unionists. They love them to the same extent! It would hurt the Government nothing, therefore, to get up and say: "We recognise that power ought not to be exercised arbitrarily. This is a method by which previous Governments have, in perhaps different circumstances, resolved disputes. But we will undertake fully to consult any party concerned before the Secretary of State exercises his discretion under subsection (6)." If the Government say that, then we would be able to reconsider our point of view.
LORD SANDFORD: I am most grateful to the noble Lord for his assistance. Of course I can say that this is not a unilateral decision. The local authority makes a claim for subsidies. The Secretary of State makes the determination and the local authority is certainly free to make a representation on that determination if it wishes to; and that representation is most carefully considered. Furthermore, if in the course of this exchange, or these exchanges with a number of authorities, matters of general application and importance arise, then further consultations go on not only with the local authorities concerned but with their associations, in order that these matters can be resolved. I must apologise to the Committee for not having made that point in the first instance, and I am grateful to the noble Lord for giving me an opportunity to add it now.
LORD DIAMOND: In view of what the noble Lord has said and out desire to get on as fast as we can with this Bill—I thought I detected a murmur but it was obviously something entirely in my own head—I would say simply this. The noble Lord has made clear not only that during the normal process of making representations will the local authorities' point of view be heard and considered by the Secretary of State, but that associations representing local authorities will also have an opportunity of making representations which will be carefully considered. Although that is not as satisfactory as giving an appearance of justice to what at the moment is not given an adequate appearance of justice, I do not think, subject to what my noble friend who obviously shares my view about all this feels, we would want to press the matter to a Division, and in accordance with the custom of your Lordships' House I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.14 p.m.
LORD AVEBURY LORD AVEBURY moved Amendment No. 15:
Page 3, line 43, at end insert:
(" (8) The Secretary of State shall circulate to local authorities, within one month of the passing of this Act, an algorithm for the calculation of the residual subsidy.").
The noble Lord said: The noble Lord, Lord Diamond, said that only one Amendment has been accepted so far and that had been presented from the Opposition Front Bench. I feel sure that we are about to break that precedent when the noble Lord, Lord Sandford, has had an opportunity of listening to what I have to say on this minor Amendment, which would be of great assistance to the treasurers and the members of local authorities who have to consider the calculation of the subsidies provided for under Clause 2 and so on.
It surprised me, when I put this Amendment down, to find that very few people knew what an algorithm was, and in fact when it first appeared on the Marshalled List of Amendments it was spelt in a most peculiar way, no doubt as a result of my poor handwriting, and I had to alter it. But I am sure that the noble Lord, Lord Sandford, knows what an algorithm is, and I am equally sure that the noble Lord, Lord Diamond,

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with his experience at the Treasury, is well aware of the meaning of the word. But in case there may be one or two who are not familiar with the term, I should perhaps explain it, particularly as when one looks at the Oxford English Dictionary one finds an out-of-date interpretation of the word based on the surname of an eminent Arab mathematician who I am told flourished early in the 19th century.
LORD LEATHERLAND: The ninth century.
LORD AVEBURY: I am sorry: the ninth century. He gave his name to the system of numerals that we now employ in this country. But the modern meaning of the word "algorithm" is something quite different.
The noble Lord, Lord Sandford, will be well aware of the word from his knowledge of the work that has been done by the Treasury O. and M. Department on algorithms for use in the Civil Service. I would refer particularly to the C.A.F. Occasional Papers, No. 2, published as long ago as 1967, entitled, Flow Charts, Logical Trees and Algorithms for Rules and Regulations. This paper was mainly concerned with a number of practical examples of the use of algorithms in the calculation of capital gains tax; of the use of S.T.D. telephones and so on. But there is quite a useful explanation of how algorithms are supposed to operate in the introduction to this paper which is entitled "Some basic terminology". If I may generalise and be simplistic about the subject, an algorithm is a flow chart, a logical tree or a directed graph which enables one to make a logical sequence of decisions for arriving at a solution to a particular problem.
When one looks at the particular clause to which I attach this Amendment one sees that the wording is very complicated indeed. I am sure that local authority treasurers are highly intelligent people and can follow their way through the mass of verbiage here; they can decide how to calculate the residual subsidy as a function of the subsidies for 1971–72 and the withdrawal factor multiplied by some constant depending on the year concerned. But I believe that most people when they try to interpret this clause will find the greatest difficulty in doing the arithmetic;
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and I may say that the same applies to the following clauses, Clause 3 and so on. I put this Amendment down only for the purpose of illustration.
The reason why I feel so sure that the noble Lord will accept my Amendment at once is that the O. and M. Department of the Treasury has employed algorithms, as I have said, in the case of capital gains tax and other matters in the past. This is a means of instructing people who have to carry out this legislation as to what they should do. It greatly alleviates the burden on them in understanding the legislation, and enables them to carry it through with the minimum of bother and the minimum of additional staff. I should have thought this was an ideal case where the noble Lord's Department could publish an algorithm which would be of use to the local authorities, and indeed to the people in his Department who have to check the work which has been carried out by the local authorities when they finally submit their calculations under Clause 2 and so forth. I think that that is probably enough explanation, and that the noble Lord will immediately rise and accept my Amendment.
LORD SANDFORD: I am most grateful to the noble Lord. the noble Lord's Amendment certainly contains a good idea. I am not only aware of what an algorithm is but I have an algorithm with me. This particular problem is really too easy for an algorithm. All that is required of a local authority here is to know what its current subsidies under the old system amount to (and treasurers have successfully managed to overcome the difficulties involved in that); to know the number of houses in its housing revenue account (and most local authorities know that), and to multiply the last figure by 20 and take it away from the first number. That is not too difficult. I am not in any doubt at all that algorithms come into this Housing Finance Bill. The one I have here with me now—and I will pass it across the Table first for the noble Lord, Lord Diamond, to look at and then for the noble Lord, Lord Avebury, to keep—is for rent officers who will have the very onerous task of operating, for instance, Part IV of this Bill. If the noble Lord, the Lord Chairman, will be kind enough to pass it over I think that both the noble Lord, Lord Diamond, and the

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noble Lord, Lord Avebury, will see that there indeed we have a task which fully justifies the use of an algorithm, and here is an algorithm in the process of composition for that purpose. So I am grateful to the noble Lord for having introduced this splendid idea and I am glad to reassure him that it has not been lost upon us.
BARONESS GAITSKELL: All this sounds very plausible, and I have listened carefully to the explanation given by the noble Lord, Lord Avebury; but I am afraid that it does not mean anything to people like myself. It seems to me that an algorithm is a secret among a few noble Lords on both sides of the Committee, and it needs more than one algorithm really to explain this unnecessarily complicated Bill.
LORD SANDFORD: I am sure that that is not really the case. If the noble Lord, Lord Avebury, and the noble Baroness, Lady Gaitskell, would have tea together and share the algorithm between them they would be much enlightened.
LORD AVEBURY: I am extremely grateful to the noble Lord for his kind remarks about the value of my Amendment. He will realise that I did not put it down on this particular clause because I thought the calculations in Clause 2 were particularly complicated but because I saw that the whole way through this Bill there are matters that require careful consideration by housing managers, rent officers and so on. The noble Lord has done us a great service, for which we are grateful to him, in allowing us to see this enormous algorithm, which I take it is the calculation of registered rents. Perhaps I may say, for the purposes of the Record, that this algorithm is about three feet long and at least two feet wide. It contains a mass of detailed wording which the rent officers have to interpret, and while I am sure that they will be grateful to have an algorithm so that they may understand this Bill when it becomes an Act, it illustrates the point that we have been making all along; that we are faced here with complicated legislation which has to be understood not only by the persons who are applying it—that is to say, in this case, the rent officers—but also by the tenants. I defy the noble Lord to give this to any local authority tenant, in whatever area he happens to live, and
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say, "Please find your way through this maze".
LORD SANDFORD: The algorithm is designed for the rent officer, not for the tenant.
LORD AVEBURY: I agree; but if the tenant reads the legislation he finds that difficult to interpret, and so do his representatives—those who are looking after the interests of local authority tenants. The algorithm is designed to make the job simpler, and this document has been produced by the noble Lord—quite rightly—for the purposes of the rent officer who is making his calculations. Equally, one might ask how the tenant is to find his way through the mass of verbiage in this legislation. He can do this only through the associations which represent him, and I 'hope that I may have the noble Lord's permission to make this algorithm available to organisations like the Association of London Housing Estates. Perhaps he will make a brief reply on that point. But certainly this algorithm illustrates what I was trying to put over to the Committee in moving this Amendment in the first place, not particularly in relation to Clause 2: that we are faced in this Bill with a mass of complicated legislation which will be difficult for the ordinary tenant to understand.
LORD LEATHERLAND: I do not want to discuss the rights and wrongs of algorithms, but I want to take up a point which was mentioned by the noble Lord the Minister in his original reply to the noble Lord, Lord Avebury. He said that a copy of this three-foot long document was being given to rent officers to help them to come to decisions where they have to determine rents. I was under the impression, perhaps mistakenly, that these rent officers operated in a quasi judicial capacity and that they heard the evidence from both sides and made their decisions. If they are to be primed in advance with a document from the Minister in which the Minister tell9 them how he thinks they must operate, it is a rather startling revelation and no doubt the noble Lord can give us some satisfaction on this point.
5.26 p.m.
LORD DIAMOND: The Committee are indebted to the noble Lord, Lord Avebury, for having raised this issue of

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complexity in the Bill and the need for everybody concerned—local authorities, rent officers and, in particular, tenants, to find their way through it, and he has suggested one particular method by which the path may be more easily followed. I want to say straight away that I am grateful to the noble Lord, Lord Sandford, for having handed over that algorithm. Although of course I have been familiar with algorithms ever since the age of two, I was hesitant because I did not know for certain whether it would bite or not. Now I know for certain that it does not, I am happy to receive it.
We now come to a really serious point, and my sense of humour must not mislead the Committee into thinking that I do not regard this aspect of the matter most seriously. I have said to the noble Lord. Lord Drumalbyn, several times that the Committee would be greatly helped if we could have figures or a graph, or examples, or some method of finding our way through the whole of Part I—the subsidy part—with which we are now dealing. I agree with the noble Lord, Lord Avebury, that Clause 2 is by no means the most difficult clause in the Bill to follow. If one looks shortly at Clause 3 one finds that the draftsman has been compelled to put in an explanation in the Bill—not of any legislative effect but just an explanation—for in subsection (2) we find:
"accordingly, transition subsidy, and the associated rate fund contribution, for any year (later than 1972–73) may comprise elements by reference to shortfalls for two or more different base years."
That is purely an explanatory comment to help the reader to understand what the legislation is about.
Having tried very hard, I still cannot get a picture in my own mind—and may I assume that I have the average capacity and the average interest and the average subjectivity to read a Bill of this kind—of how the total subsidy position would work in relation to different sets of circumstances. Presumably the Government knew what they wanted, and presumably this Bill came to light in the way in which Bills always have come to light; namely, by a Government's deciding what they want and saying to the draftsman, "Please draft that". So the Government cannot say that they cannot
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follow what effect the Bill will have; they would not dare to say that. We may suspect it, but they would not dare to say it, so they must be in a position of saying, and indeed of knowing, what it is that the Bill is trying to provide.
I repeat to the noble Lord, Lord Drumalbyn, that we on this side of the Committee cannot see what the impact is. My understanding is that there are many local authority treasurers in exactly that same position. Therefore I am using this opportunity which the noble Lord, Lord Avebury, has given to the Committee—very valuably—to underline once more how I think we should all be helped in our understanding and, of course, in our quicker appreciation of the points of the Bill if we could be supplied with something to help us find our way through Part I of the Bill.
The document which the noble Lord, Lord Sandford, was good enough to let us have is indeed an interesting comment on this Bill. It shows that if you ("you" being a rent officer) want to find your way through this Bill, through just one small Part of this Bill, then you need a guide which is three feet long and chock-a-block with instructions, showing how to get from point A to point B, and so on—a real maze. That, I am sure, is the greatest simplication which it is open to the Government to give to a rent officer of how to get through this part of the Bill. In those circumstances I do not wholly apologise for my inability to understand how the whole of the subsidy arrangements, the whole of Part I, would have effect in the various circumstances which one can imagine. I repeat my request that the Government should sympathetically consider giving the House on paper some method by which one can find one's way through—be it an algorithm or be it some other method.
VISCOUNT GAGE: May I add this point? I personally have found a very great contrast between the different Amendments moved from the other side, some of importance, some of less importance, and some of very much less importance. But I do agree that the question of understanding—
LORD DIAMOND: Would the noble Lord forgive me for interrupting him? He has got it quite wrong: some of our Amendments are important; some are

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more important and some are most important.
VISCOUNT GAGE: I accept that, and I also note what the noble Lord said about adding to simplicity. The Amendment that he has on the Paper to Clause 20 does not look as though it adds to the simplicity of the Bill, but it may do. Unlike the noble Lords opposite, I believe that this Bill is on the right track, but I am afraid that there will be difficult cases arising from the fact that the rent officers, the housing managers and the treasurers now in local government will be in somewhat of a state of uncertainty about their own future. I hope this will not happen, but I am very glad that my noble friend Lord Sandford, is determined to do what he can to simplify their task.
LORD HYLTON: I wonder whether, before my noble friend replies, he could give us an assurance that all algorithms brought out by his Department which bear on the rights of tenants will be published. That would be very helpful, and it would also he very helpful if, when they have been published, they could be explained to tenants by such bodies as housing aid centres who I am quite sure will be flooded with inquiries on points of this sort.
LORD DRUMALBYN: If I might reply at once to the noble Lord, Lord Diamond, I would say that we are most anxious to help the noble Lord and other Members of the House in any way we can. I see some force in what he has said, because I myself had some difficulty in following the Bill in the early stages. He asked for something comparable the other day. He asked for two things: the first was relatively easy to supply, but the second, as I think he will recognise, is a little more difficult to get out. But I am hoping it will be available to him before long.
LORD SANDFORD: May I first of all reply briefly to my noble friend Lord Hylton? Of course this Bill is complex. Its main complexity lies in the transition arrangements from one system to another, and of course it will call for a wide range of circulars, explanatory pamphlets and heaven knows what! But the algorithm is not a suitable thing for a tenant. Tenants want much simpler pamphlets
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concentrating on those aspects of the matter which affect them. The rent officers asked for and have produced the particular algorithm which I have used for illustration because they have a most complex part to play in the Bill, and the algorithm is a suitable device for assisting them with their particular proceedings. It is not suitable for a whole lot of other practices, though circulars and other forms of explanation will undoubtedly be needed.
LORD AVEBURY: May I make one brief comment on those final words of the noble Lord. Certain types of algorithms might be more suitable for the tenant than the rent officer, but l do not say without giving it proper study whether this algorithm would be the most convenient form in which to display the information for the tenant. Perhaps a list structure, or what is sometimes called the branching programme would be of greater help to the tenants in explaining what sort of calculations they should make to check the validity of what is being done by the rent officer. I do not want the noble Lord to think that I am not extremely grateful for the explanation he has given and his—well, it goes further than a "duty "—allowing me to see this copy of an algorithm which has been prepared for the use of rent officers.
I hope that nothing that has been said in the course of this debate will inhibit the noble Lord from being just as forthcoming on other Amendments in later stages of the Bill. This is precisely what we are after, to try to get to the bottom I of what is meant by some of the clauses so that we can make constructive criticism. This is precisely the object achieved. Although in fact I tied the Amendment to Clause 2, that was not the purpose of the exercise; it was to display the whole complexity of the Bill. The noble Lord, Lord Drumalbyn, has already said that he finds some parts of the Bill difficult to understand. The only thought that I should like to leave with the Committee in conclusion before I withdraw this Amendment is this. Perhaps the ordinary Explanatory and Financial Memoranda attached to the beginning of Bills are unsuitable when it comes to legislation of such complexity as we have in the Housing Finance Bill. Perhaps the noble Lord might go back to his Department, or perhaps to the Management Service

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Department of the Civil Service Department—that is the thought that I throw out, off the cuff—and ask them whether, in the case of very complex legislation, and particularly with such matters as subsidies which are dealt with from Clause 2 onwards, they might help in the drafting process by supplying, instead of the normal Explanatory and Financial Memorandum, some algorithms which could go into that section which precedes the body of the Bill itself. With those words, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question. Whether Clause 2 shall stand part of the Bill?
5.39 p.m.
LORD DIAMOND: I rise to address your Lordships on the various reasons why Clause 2 should not stand part of the Bill. Clause 2 is a bad clause in a bad bill. It is the first effective clause and the one that determines the shape of the Bill. Therefore I am going to put before your Lordships shortly, but I hope persuasively, the reasons why we should not pass Clause 2.
The first reason is one that was touched on earlier but to which no satisfactory reply—in fact I do not think any reply at all—was given; that is, the inflationary effect of this clause. This clause is based on an increase in rents which will mean that for all those local authority tenants whose authorities have taken the view that until there is an Act there is not an Act, and therefore rent increases can only start after this Bill becomes an Act, there will be an increase in rent in the second half of the current financial year of £1 per week. Their rents on average over the country amount to £2 per week, and therefore they are faced with an increase of 50 per cent.
I have made the point before and I do not want to labour it, but I want your Lordships to appreciate the importance of the rent book to the council tenant and the importance of the rent to his, and more particularly his wife's, budget. This is a most permanent and important element in their living and in their calculating. Nothing more important than the rent book and nothing more important than the rent which, as I have said before, is mostly found on the mantelpiece, put
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on one side week after week for payment of the rent. To those of your Lordships who are unaware of payment of rent—because it goes through by banker's order if you are tenants, or if you are a freeholder you do not pay it at all—it is very difficult to realise the ever-present importance of rent books and rent payments. I can think of nothing which would be more calculated to give a twist in the wage spiral than an increase of 50 per cent. in the rent of a council tenant. And this clause presumes and is drawn up with that figure in mind; that is what subsection (3) is about. So that is the first reason. And I am astonished that the Government in the current circumstances or the circumstances as they are likely to be in the autumn of this year, should be contemplating taking this course. The economic damage that the Government are doing by this over-hasty withdrawal is, in my view, totally unnecessary, and I hold them to be totally irresponsible in continuing with that level of rent increases.
I recognise that we are on Committee stage, and that the other House has passed this Bill and that it has received its Second Reading in your Lordships' House. There is no reason whatever why the rest of the Bill, the main purposes of the Bill, should not be carried out—carried out more slowly—if the Government want to do it. I do not want them to do it, but they want to do it and they have the authority to do it. They could achieve the purposes of their Bill without inflicting economic damage and stirring up wage negotiation difficulties. They could do it by slightly slowing down the process of removal of the residual subsidy, which is under Clause 2, and thereby making it possible to slow down the increase in the amount of the rents. Therefore I say to the Government that that is the first reason why we cannot contemplate giving approval to Clause 2. I must not be forced into saying anything about the Government's being, in relation to these matters, some of the biggest twisters I could ever contemplate; it is an economic twist, and I must not be quoted out of context, because that would be very discourteous indeed. That is the first reason.
The second is that this clause is the first one which shows the pattern, which

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is repeated throughout the Bill, of ignoring the local authority's self-respect and need to feel important and to be able to continue to make a contribution. This Bill, as so many local authority officers have said, is withdrawing one of their main freedoms, the freedom to fix rents, which is a major responsibility of any housing authority. It is withdrawing the whole of that freedom and taking the power from the local authority into the hands of Whitehall. And throughout this Bill there is inadequate reference to consultation or no reference to consultation, and the whole Bill is redolent of that authoritarian approach. This is the first clause which demonstrates that. I have already referred to it in subsection (6). That is the second reason.
The third reason is that the Government have said that their justification for damaging the self-esteem and sense of importance of local authorities and for doing harm to the economy is that they want, while maintaining the level of subsidies, to concentrate them where help is most needed. We have clearly established—we have not got the exact figure yet—that the Government's statement that it is maintaining the level of subsidies cannot be sustained. It is not maintaining the level of subsidies; the level of subsidies is falling by an amount which any one of us could calculate, but the estimate might vary. If the Government would agree to give us a calculation we should be grateful If the Government say to us, with regard to the financial effects of the Bill, that
"… as a result of the provisions of the Bill, annual total net charges on the Consolidated Fund… in connection with housing in England and Wales…including payments towards rent…made by the Supplementary Benefits Commission, are estimated…"
to fall until 1975–76 to the figure of X at constant prices—constant prices instead of current prices—we should know what the Government's estimate was and the amount by which the level of subsidies was being reduced. It is not merely that the level of subsidies which would otherwise increase is being kept stationary; it is that the present level of subsidies is being further reduced. It is being reduced by at least the amount of inflation arising annually over the next years. If we are considering a 10-year period—and 1981–82 is a year frequently
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referred to—it is over those 10 years. I am saying to the Government, first of all, that their claim that they are maintaining the level of subsidies is a sham. We had better have it clear. It is not supportable at all, as my noble friend says.
As to the second part of the justification, that they are going to maintain the level of subsidies and to concentrate them where need is greatest, every single Amendment we have had illustrating need and asking for special concentration on that need has gone unheeded. In particular, the noble Lord, Lord Avebury, referred to the particular hostels he was concerned with on the Amendment which my noble friend Lord Shepherd moved with such force, and we got no satisfactory answer there. I referred the day before yesterday to the case of Crawley, which I chose because it is an example of a large category of cases, all those local authorities which have a small stock of housing but have a large requirement in building, who will find it impossible to cope with the rate increase resulting from this Bill. It is a local authority which needs to house its citizens; their needs are very great and they come precisely within the definition that the Government gave of concentrating subsidy where need is greatest. I chose Crawley because Crawley has been in lengthy correspondence with the Government, and the Crawley figures show that for them to cope through the rates with the disadvantages this Bill will impose on them will mean increasing the rate by one shilling in old coinage—5p. That is an enormous increase in the rates purely to make up for the damage that they are going to suffer through the effects of this Bill.
It is all on record in correspondence with the Government. The Government have not disputed it. The Government have simply said, "Oh well, this is a transitional difficulty", which is an extraordinary argument to me, because time and time again in legislation where one is moving from one situation to a new one and transitional difficulties are encountered the Government have found it their duty to make special arrangements to cover those transitional difficulties. It is, incidentally, not a transitional difficulty: it is a permanent difficulty so far as Crawley is concerned, as they have made clear. I am only saying that the

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Government's reply was wholly irrelevant. I repeat, we are in this situation that whereas the Government have said that they want to maintain the level, they do not; they want to reduce it, and that is what they are doing. Whereas they have said that they want to concentrate the subsidies on those in greatest need, they do not; and this Bill—I repeat the major point that I put to the noble Lord, Lord Drumalbyn on Tuesday—is framed on a conception which the Government themselves have destroyed, a conception of increases in rent which, so far as Birmingham and all similar authorities are concerned, has now been withdrawn.
So what do the Government propose to do with this Bill, and particularly this Part of the Bill? It is a totally new situation created by the Government and the fact of the local elections—for which we are grateful. Justice comes in in odd ways: even if it is at the time of local elections it does come. Therefore I am saying to the Government that this clause cannot pass for these three reasons, and I should be grateful if the Government would say whether they are thinking now of withdrawing the Bill because it is no longer relevant to the purpose that they had in mind. They have altered that purpose. Their original purpose was to put up rents, by given figures to reach a certain maximum—the fair rent, as they called it. The position now is that the structure of the Bill is no longer relevant for the purpose so far as Birmingham, and all the other "Birming-hams" are concerned, and many local authorities will equate themselves with Birmingham and are no doubt hard at work getting out figures to justify that equation. This is a convenient opportunity for the Government to say whether they are now proposing to withdraw the Bill. In any event we are going to vote against Clause 2.
5.52 p.m.
LORD SANDFORD: In that case I will not delay the Committee long, except to confirm that we have no intention of withdrawing the Bill. My noble friend and I have not said very much about rents or the progression to fair rents in the course of the debate on this clause because the clause is not about that subject. If the noble Lord will help us to get on to Parts V and VI we shall be
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ready for a full discussion of that important matter. Clause 2, which we are now discussing, is about the residual subsidy, and that is not based on rents. It is based upon the existing subsidies set out in Schedule 7, and upon their phased withdrawal. That phased withdrawal is part of the beginning of the changeover from what we believe to be an outworn, indiscriminate system to a fairer system which is fair to all concerned and at the same time concentrates help where help is most needed. Because it is a fairer system we want to get on with it.
LORD SHEPHERD: I really wondered why the noble Lord did not choke. He again repeated what he said on Tuesday regarding the purpose of this Bill so far as he is concerned; that is, to see that resources are made available to those who are in greatest need. I think the Committee was generally and genuinely dissatisfied with the way in which the Government responded to our debate and our fears in regard to hostels, so I really wonder—in fact I nearly choke at the thought of the noble Lord spinning these words out time and time again when they appear to be unable to convince anybody, certainly on this side of the House, that their intentions are going to be achieved in this Bill. There is no doubt that the subsidies are going to be cut.
I wonder whether the noble Lord, Lord Sandford, could give us any indication as to the rise in the cost of building land in London and the South-East. The rise in the last six to nine months has been absolutely astronomical. I know of one building plot, in which—I will not say I had some interest, but I hoped that one of our building companies might have succeeded in the auction. I will tell the noble Lord, Lord Sandford, what happened. It was a 5½acre site in Kent and there was planning permission for 12 houses—no more. Do you know how much that land went for at public auction? It went for £150,000. The price of land in the conurbations and the suburbs of London has gone up at a rate even greater than that. This is what local authorities have to raise in the next few years if they are going to fulfil their building programme. But in the meantime the subsidy that is going to be available under Clause 2 is going to be cut. Clearly, there can be only one consequence. Either the local authority

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has got to increase its rates on that particular locality—seek ways and means of raising rates where it can—or cut its building programme. The noble Lord shakes his head. If there is less subsidy available to a local authority and the cost of land rises as it has done, plus the cost of the building itself, what alternative does a local authority have?
LORD SANDFORD: Clause 4, the rising costs subsidy, deals precisely with the situation which the noble Lord has been talking about. If he can be patient until we reach that clause I shall explain how it works.
LORD SHEPHERD: I certainly look forward to that, but it seems to me, taking Clause 2—and that is the only thing that is before the House and we have not yet had an opportunity of having the noble Lord's assurances so far as Clause 4 is concerned—that this is the only judgment we can make at this moment. I think local authorities are going to be in a very serious position, and considerable hardship is going to be placed on people who at this time can ill afford the major increases to which my noble friend has drawn attention.
This is not the moment to discuss the consequences of joining the E.E.C., but costs are going to rise as a consequence of that. On top of this, I tremble at the thought of the sort of wage demands which we are going to see in the next 12 to 18 months, especially when I see that the C.B.I. are making strenuous efforts with the T.U.C. to find ways of restricting unnecessary wage increases. I think the Government are stirring the fires of a very grave inflationary period.
VISCOUNT MASSEREENE AND FERRARD: May I point out that one of the reasons for the very high price of building land is its scarcity, and when the noble Lord's Party was in office, through their legislation for planning permission they made the release of land for building so difficult that of course the prices went up sky high. You have got to release more land.
LORD SHEPHERD: I know that the noble Viscount takes an interest in matters concerning the working classes in this country, but I am sure he will agree that land prices have soared in this last nine months on a scale that has no
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relevance and no comparison with the rises in the past century. The noble Viscount knows that as well as I do.
VISCOUNT MASSEREENE AND FERRARD: That is because not enough land is released.
LORD DIAMOND: I hesitate to interrupt the noble Lord, but we must make progress. Grateful as I am to the noble Lord, Lord Sandford, for the brevity of his reply, I do not think he has advanced the argument a great deal. In fact, I heard him say something which I did not understand at all. He said, as I understood him, that there is no relationship between this clause dealing with the withdrawal of the residual subsidy, and the rent increases. I thought that was what he said, because he was inviting us not to consider the rent increases until we get to Parts V and VI of the Bill dealing with rent increases. But the whole tenor of my argument is that the residual subsidy is related to the proposed rent increases. I hope the noble Lord will make clear what he said, because if one wants to contemplate smaller rent increases then one must deal with the residual subsidy. The residual subsidy phases out at £20 a year, but the increase in rents will be £26 a year, and after rates increases and so on the figures will very nearly balance. That is what is contemplated.
If the noble Lord says that that is not so, then may I say that the Bill has deceived me. And I am in the best of company; it has deceived all the local authorities, too, because the local authorities are pressing as hard as they can for a slowing down. May I read a letter dated June 2 this year addressed to me from the Association of Municipal Corporations? It states in paragraph 3:
"As you will know, throughout the consultations with the Government the Association pressed the view that the progression to fair rents should be more flexible. The importance therefore of the suggested amendment to Clause 2"—
that is, to reduce the £20 to £10—
"is that the rate of withdrawing existing subsidies is related to the increase in rent income."
I thought that was a fundamental part of the structure of the Bill. Perhaps the noble Lord said something which I misheard, or said something which he did not intend to say, or—perish the thought—he does not have the foggiest idea of

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what the Bill is about. He is trying his hardest to persuade us to the last conclusion. But I have to repeat that that is the situation as it is understood by all of us, including all of the local authorities. Therefore, it is no good the noble Lord saying, "We will not talk about inflation because that has nothing to do with rent increases. Rent increases do not arise until Clause 6 and we are still on Clause 2." We shall be grateful if the Government will tell us why they are insisting on this over-hasty withdrawal of subsidies, coupled with an over-hasty increase in rents, which will do such damage to the economy of the country, resulting in an increased twist of enormous magnitude to the wage spiral.
LORD SANDFORD: The noble Lord thanked me for being brief. I shall now try to be a little briefer, because there really is not much more to say. As I said the day before yesterday, of course there is a connection between the progression to fair rents, which we shall deal with in Parts V and VI, and the withdrawal of the existing subsidies which we are now discussing. I am looking forward to a discussion on progression to fair rents; but the object of a Committee stage is to look at one Part of a Bill at a time, and at the moment we are looking at residual subsidies and their withdrawal. There is not the direct connection which the noble
Lord, Lord Diamond, believes there to be, because, as I explained, there is the transition subsidy which comes in between. The speed of withdrawal of the residual subsidy represents the speed with which we get on with the changeover, from what we believe to be an outworn and indiscriminate system to a fair and better one. It is for that reason that we are sticking to the terms of Clause 2.
LORD LEATHERLAND: I do not want to prolong this discussion, but the only way I can be in order in making my request is to make it now before the clause is passed. May I please have from the noble Lord a copy of the algorithm? He has provided the noble Lord, Lord Avebury, with the only copy, and I should like to be able to study it in the leisurely atmosphere of my home during the weekend.
LORD SANDFORD: I am not sure that I can respond as quickly as that to the noble Lord, but I will do my best.
LORD LEATHERLAND: It seems to be duplicated, so it must be possible to run off another copy.
6.5 p.m.
On Question, Whether Clause 2 shall stand part of the Bill?
Their Lordships divided: Contents, 88; Not-Contents, 40.

CONTENTS

Aberdare. L.

Drumalbyn, L.

Latymer, L.

Abinger, L.

Dundonald, E.

Lauderdale, E.

Ailwyn, L.

Eccles, V.

Long, V.

Allerton, L.

Elgin and Kincardine, E.

Lothian, M.

Alport, L.

Elles, Bs.

Loudoun, C.

Amherst of Hackney, L.

Emmet of Amberley, Bs.

Margadale, L.

Balfour, E.

Ferrers, E.

Massereene and Ferrard, V.

Barnby, L.

Ferrier, L.

May, L.

Beaumont, L.

Fortescue, E.

Merrivale, L.

Belstead, L.

Gage, V.

Milverton, L.

Berkeley, Bs.

Gainford. L.

Molson, L.

Bessborough, E.

Garner, L.

Monck, V.

Bledisloe, V.

Goschen, V.

Monsell, V.

Brougham and Vaux, L.

Greenway, L.

Mowbray and Stourton, L. [Teller.]

Carrington, L.

Grenfell, L.

Colville of Culross, V.

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

Napier and Ettrick, L.

Cork and Orrery, E.

Nugent of Guildford, L.

Cottesloe, L.

Harvey of Tasburgh, L.

O'Neill of the Maine, L.

Cowley, E.

Hertford, M.

Orr-Ewing. L.

Craigavon, V.

Hood. V.

Rankeillour, L.

Crawshaw, L.

Howard of Glossop, L.

Reay, L.

Cullen of Ashbourne, L.

Hylton, L.

Reigate, L.

Daventry, V.

Hylton-Foster, Bs.

Ruthven of Freeland, Ly.

de Clifford, L.

Inglewood, L.

Sandford. L.

Denham, L. [Teller.]

Jellicoe, E. (L. Privy Seal.)

Sandys, L.

Derwent, L.

Kemsley, V.

Savile. L.

Digby, L.

Killearn, L.

Sempill, Ly.

Sinclair of Cleeve, L.

Tweedsmuir, L.

Wakefield of Kendal, L

Stamp, L.

Tweedsmuir of Belhelvie, Bs.

Wolverton, L.

Strange of Knokin, Bs.

Vivian, L.

Young, Bs.

NOT-CONTENTS

Barrington, V.

Gardiner, L.

McLeavy, L.

Beaumont of Whitley, L.

Garnsworthy, L.

Mais, L.

Beswick, L.

Gifford, L.

Nunburnholme, L.

Blackett, L.

Granville-West, L.

Phillips, Bs. [Teller.]

Brockway, L.

Greenwood of Rossendale, L.

Seear, Bs.

Burntwood, L.

Hale, L.

Shackleton, L.

Chalfont, L.

Hall, V.

Shepherd, L.

Champion, L.

Henderson, L.

Stow Hill, L.

Davies of Leek, L.

Hughes, L.

Strabolgi, L.

Diamond, L.

Jacques, L. [Teller.]

Summerskill, Bs.

Donaldson of Kingsbridge, L.

Leatherland, L.

Wells-Pestell, L.

Evans of Hungershall, L.

Llewelyn-Davies of Hastoe, Bs.

Willis, L.

Faringdon, L.

Lloyd of Hampstead, L.

Wynne-Jones, L.

Gaitskell, Bs.

Resolved in the affirmative, and Clause 2 agreed to.
Clause 3 [The transition subsidy, and associated rate fund contribution]:
6.14 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 16:
Page 4, line 13, leave out ("the percentage of").
The noble Lord said: I beg to move Amendment No. 16, and perhaps it would be convenient if we could take with it the following Amendment, No. 17, as the two are linked. The purpose of these two Amendments is to give effect to many of the statements of the noble Lord, Lord Sandford. When we were dealing with an earlier clause and were talking about subsidies, the noble Lord, Lord Sandford, frequently told us, "You see, the transition subsidy comes into it, and that makes up the balance", or words to that effect. Now we are on Clause 3, and we have got the transition subsidy; and this Amendment is a simple and, I am sure, an acceptable one. It achieves the purpose which at present the clause fails to achieve of making the subsidy a full subsidy instead of a part of a subsidy. I have no need to bother your Lordships with what part, because the part is described later on, in the Table; and the part that is not made good by the subsidy has to be made good by the local authority by a charge on its rate fund.
What we are doing here is to delete the words which refer to a percentage and, instead, we propose that the subsection should read:
"transition subsidy shall be payable to the local authority of an amount equal to the amount of the shortfall"—
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simply that. The shortfall is something which, again, is described in more detail in the later part of this clause, but, broadly, it is the difficulty which the noble Lord, Lord Sandford, has referred to many times as being overcome by the transition subsidy. The only difference the noble Lord, Lord Sandford, and I have had hitherto is that I distinguish between 100 per cent. and something less than 100 per cent.—it is just part of my nature; I just feel like that—whereas the noble Lord seems to think there is no difference between 100 per cent. and 90. 85, 80 or 75 per cent., or such other percentage as may be substituted for 75 per cent. Therefore, I am giving the noble Lord an opportunity to achieve his purpose. I beg to move.
BARONESS YOUNG: We have, I think, already discussed this principle on a preceding clause. The principle is as to whether or not the local authority should make a contribution to each of the subsidies—in this particular case to the transition subsidy. The position is as set out in the Table, and it is, of course, that, in 1972, 90 per cent. of the subsidy is paid by the Government and 10 per cent. by the local authority, which rises in 1975–76 to 25 per cent. by the local authority. It does not go beyond that until after the years 1982 or 1983, and even that is a matter which has to be determined then. I think the point is that those of us who value local authority freedom feel that if the Government paid the full 100 per cent. subsidy then inevitably the Government would want to see how the money was spent, and it would lead to further restrictions and further inquiry into the whole matter. Indeed, the 100 per cent. deficit

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subsidy would be unlikely to benefit the issue of local authority freedom, and for that reason we feel that it would assist towards a much better relationship between central and local government to leave the proportions as they are.
LORD DIAMOND: Your Lordships will have noticed that whenever the Government have an impossible task to perform they put up the noble Baroness to try to perform it for them, and no Government could be wiser than using their best batsman when they are on a sticky wicket—an extremely sticky wicket. So I am saying to the noble Baroness that we are delighted to hear from her again, but—I hope she will not misunderstand me—she whets my appetite. I had better hasten to add that I want to hear some more from her. What I want to hear from her is a little more explanation about the new situation which has arisen—and, of course, she has far more experience of local authority work than I have—under which chairmen and treasurers of municipal bodies, chairmen of local authorities, mayors and particularly chairmen of finance and general purposes committees are so concerned with their liberty that when the Government come along and say, "We would rather not give you 80 per cent.; we would rather give you 90 per cent.", they immediately put their hands up in horror and say, "No, please do not do that—that would sully our liberty".
What I am saying to the noble Baroness is that she can tell that story to the Marines! I am sorry, but it just does not make any impact so far as I am concerned. A local authority has a very hard time; it is being battered by public opinion to keen its rates demands down, pressed by public opinion to increase its services and the whole time is finding it very difficult trying to make ends meet, as everybody who is concerned with local authority work knows. It comes to the Government for help. The Government have such control of its affairs in most ways that the local authority is not going to feel that its freedom is denied if instead of getting 80 per cent. it gets 90 per cent.
I am bound to say to the noble Baroness that I am sorry that she picked on that argument. It did not do her justice. If the liberty is to be maintained
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by giving 90 per cent. instead of 100 per cent., what is it that happens in Year Two when it is reduced to 85 per cent., or in Year Three, to 80 per cent., or in Year Four, to 75 per cent.? Why should I, as a local authority representative, feel my liberty is secure in one year only if I receive 90 per cent. and that my liberty can only be maintained in security in the following year when it is reduced to 85 per cent., 80 per cent., or 75 per cent. "or such other figure as the Secretary of State may by order direct"? I am sorry, but that will not wash.
The serious point here is that this is a transitional subsidy; it is not a permanent subsidy. It is not likely therefore to affect the permanent relationship between the local authority and central Government; and, as we know, the local authorities attach importance to it. There is no reason why the local authorities should not (as was indicated to us by the noble Lord, Lord Sandford) rely on this subsidy to make up the deficit in other subsidies. That was the whole purport of his argument: that whatever other difficulties there were, they would be put right here. I hope that we are not going to get into a situation where, when on Clause 2, we were told that we cannot consider rent increases, for example, because this comes in a later clause; and that when we come to the later clause (as now on Clause 3) we are told that this was really decided in principle on the earlier clause and therefore we cannot discuss it now. I am sorry, we want to progress as rapidly as possible, but at the same time we want to press the point that there is no justification whatever for having falling percentages or any percentages at all. We invite the noble Baroness to have another go.
BARONESS YOUNG: I am bound to say that in the course of my public life, logical as I am, I have not always convinced Members of the opposite Party of the rightness of my case. I was very pleased with what Lord Diamond said and I shall have to try to tell him—even if he is not a Marine! I think that the argument was not whether we were talking about a 90 per cent. subsidy but whether or not we were talking about a 100 per cent. subsidy. It was on that particular issue that I hung my argument about local authority freedom. I think

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it still stands. If a local authority has a 100 per cent. subsidy for a function, it will have less freedom than if it makes a contribution from its own finances.
On the second point, the residual subsidy is a subsidy concerned with the phasing out of present subsidies. The transitional subsidy is to meet the shortfall that could arise in the course of this phasing out. It is a sort of second subsidy. I do not think any of us have indicated that it would ever meet all the difference; it meets the major part of it until 1975–76. What happens after 1982 has yet to be decided. It is for these reasons that I return to the argument that we consider it essential to keep this right relationship between central and local government. We feel the subsidy ought to be divided in these proportions between central and local government.
6.26 p.m.
LORD GARNSWORTHY: I should like to say a word on the question of local authority freedom because I do not follow the noble Baroness in what she had to say. Shortfall is being created as a result of the pursuance of Government policy. The Government are responsible for whatever shortfall local authorities will have. Can she please explain, if the Government accept responsibility for the policy they are forcing on local authorities, how this possibly interferes with their freedom? My noble friend asked about the difference between 90 per cent., 85 per cent., 80 per cent. and 75 per cent. How does that affect freedom? If the local authorities got 100 per cent. of their shortfall this will give them freedom. It will give the ratepayers freedom, a freedom they would very much appreciate, instead of being penalised.
THE EARL OF BALFOUR: Before the Minister replies, I wonder whether I might say a few words on this point. I speak as a county councillor of Scotland. I have never felt as a councillor that the 100 per cent. subsidy is a good thing; because local authority councillors have never taken the care they would otherwise take if they were involved in an expense which occurred in the rates. I have found this from past experience particularly in education which, some years ago, attracted a 100 per cent. grant Although housing tends to be an ever
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increasing expenditure, even if the rents are increased it may be some time before the housing deficit is written off. I assume that this transitional subsidy is to assist the local authority during this period when it has a deficit or shortfall.
LORD SHEPHERD: I hope the noble Earl will ensure that what he has just said in general criticism of the way in which local authorities administer their subsidies receives the widest prominence in the district in which he serves. I hope he will ensure that it receives wide circulation, because he clearly believes it. I think that in those local authorities, those persons responsible for his election are entitled to have his views before them.
I certainly join with my noble friend in the joy felt on this side of the Committee when the noble Baroness replies to the more difficult Amendments that are moved from this side. I think the noble Baroness was beginning herself to believe that by reducing subsidies you somehow give local authorities a greater sense of freedom. I think the noble Baroness believes that this is the Government's intention. I know it is irregular, but it may be that it would help the noble Baroness in impressing upon us that it is the Government's genuine desire to see this increased responsibility and sense of freedom.
In Clause 18 which is the clause dealing with rent rebates and rent allowances, subsection (3) says:
"No rebate from the rent of a dwelling shall be granted by virtue of this section to any person …"
There then follow three categories of people. Here there are laid down specifically by Her Majesty's Government through an Act of Parliament certain things that a local authority cannot do. In Amendment 87E I seek to give discretion to the local authorities to be able to use their discretion as to whether these three groups of individuals should be entitled to a rent rebate. If the noble Lord responsible for that Part of the Bill is prepared to say that he will accept Amendment No. 87E, which gives this discretion to local authorities, I shall find the case made by the noble Baroness infinitely stronger.
I agree with my noble friend. I do not see how a local authority can feel

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any real increase of freedom by a reduction in the subsidy. Its sense of freedom will be infinitely less because its opportunity and ability to meet major housing problems will be that degree less as a consequence of this continuing reduction in the State contribution to the subsidy and the increases which, clearly, will have to be laid on the general ratepayers. If any noble Lord opposite can advise me that the Government will accept Amendment No. 87E, or the spirit of it, I should find the case made by the noble Baroness a good deal stronger.
6.31 p.m.
BARONESS YOUNG: May I say, in answer to the noble Lord, Lord Shepherd, that I do not think I ever said that by reducing subsidies one increased a local authority's freedom. The point of the argument is whether or not the subsidy is 100 per cent. I am saying that if a local authority does not pay something towards it, inevitably the Government will interfere increasingly to see how the subsidy is spent. They will ask for detailed reports; they will be restrictive. I should like to thank my noble friend Lord Balfour for his remarks, because I think the general principle is always true that if you have to pay for something it increases your sense of responsibility.
LORD DIAMOND: Regretfully, we are not wholly satisfied, and that is putting it mildly. But we are always in the position of being willing to pick any crumb from the table of the rich Ladies and rich Lords opposite, and that is what I am proposing to do. But first I must make the point that the freedom involved in the matters with which this clause is concerned is, in any event, nil. The local authority is required to put up the rents and this clause deals with the amount by which the rent increases are less than the
"standard amount for that year as defined below ".
I am reading from subsection (6). So there is no real point in the argument that freedom in this clause is affected, because there is none to begin with.
The noble Baroness insists on her point that in the general relationship between the local authority and central Government a greater sense of freedom is felt if something less than 100 per cent. is
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given. There is a smaller sense of dependence if you receive something less than 100 per cent. Let us see whether we can reach agreement from that premise. We have, therefore, in the first year a contribution by the local authority of 10 per cent. and a subsidy by the central Government of 90 per cent. Therefore we have a situation in which the sense of freedom of the local authority is preserved and maintained because there is a 10 per cent. contribution out of the ratepayers' pockets. Good! Let us assume that that is established and that everybody in the local authority goes about waving flags, whatever the local flag may be, and saying, "Good!, we are now free; we are paying 10 per cent."
I am saying now to the noble Lady that, as she will appreciate, the Amendment excludes the whole of that table. If she will say that we can exclude part of that table and merely leave it at the first line of 90 per cent., we have then met her argument completely. The freedom of the authority is maintained and held inviolate for all time. There is a 90 per cent. contribution by the central Government and a 10 per cent. independence sign by the local authority and therefore everything is fine. If the noble Baroness will say that that, which was her only argument, can be accepted by both sides of the Committee, it is satisfied by the first line of the table. Will she tell us that she is quite happy to receive an Amendment at a later stage deleting the rest of the table which is quite unnecessary having regard to her argument? As your Lordships will perceive, it merely goes on to increase the contribution made by the local authority. But once a local authority has achieved a sense of independence and freedom, at a cost of 10 per cent., why should it pay 15 per cent. or 20 per cent. or 25 per cent.—or such figure as the Secretary of State may determine? One never knows—it may be a Socialist Secretary of State. That should set the noble Baroness thinking.
In those circumstances I am asking the noble Baroness whether she will assure us that an Amendment would, in principle, be acceptable if it stopped at the first line and left it at 90 per cent./10 per cent. In such circumstances I would seek the permission of the Committee to withdraw this Amendment and to

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introduce, at a later stage, an Amendment giving the local authority the feeling of freedom which the noble Baroness thinks it so essential to be demonstrated by a 10 per cent. contribution, and leave it at that.
BARONESS YOUNG: That, of course, would be a somewhat different Amendment from the one which the noble Lord has on the Marshalled List. But it seems to me that the point about percentages is that the normal percentage would be 25 per cent., which is what one would expect, and not just a 10 per cent. contribution. I am quite sure that the noble Lord, who knows the conventions of your Lordships' House better than I do, will know that I could not accept his proposed Amendment. But, it must be accepted that it is a transition subsidy we are talking about, whose purpose is to help authorities who have made losses on their Housing Revenue Accounts because of the withdrawal of present subsidies which have not been made up by the residual subsidy and increased rents. It is a subsidy which is on a sliding scale to help local authorities through the most difficult years, which will be the first ones, and the normal level will be 75 per cent. from the Government and 25 per cent. from the ratepayers.
LORD DIAMOND: The noble Baroness entices me further and further. I have an Amendment down which tests this very point. That Amendment is on the Marshalled List and is not a theoretical one. We are at a point when it might be convenient to move from this Amendment to the next one, and so in the hope—I am not putting it any higher than that—that the noble Baroness may see reason if we withdraw this Amendment, in order to get on quickly to the next Amendment, I seek your Lordships' permission to withdraw this Amendment.
Amendment, by leave, withdrawn.
6.46 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 18:
Page 4, line 37, after ("1981–2") insert ("and subsequent years").
The noble Lord said: I beg to move Amendment No. 18 and perhaps it will be convenient if, at the same time, we consider Amendment No. 19 as the two are linked. While everything is fresh in the mind of the noble Baroness may I
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say that we are dealing with stage three of her argument; that is, that where you have to have a sense of freedom by the local authority, which we have established, and also what the noble Baroness calls the normal relationship of 75/25 per cent. I am now dealing with an extraordinary, exceptional provision, overlooked by the noble Baroness and her advisers—your Lordships see I am so persuaded by the noble Baroness that I march with her step by step; I am sticking to her like a leech. The Bill, surprisingly enough, provides under Clause 3(4) that, instead of having the normal 75/25 per cent.:
"The Secretary of State may from time to time by order, for such years after 1981–82 as may be specified in the order"—
clearly it would be a Socialist Secretary of State—
"in column 2 of the Table above for 75 per cent. substitute such other percentage, not being less than 60 per cent., as may be specified in the order".
I am sure that the noble Baroness had not noticed that figure of 60 per cent., because of course this is abnormal and totally outside her philosophy. Therefore the noble Baroness and I want to delete the 60 per cent. and restore for present purposes what she calls the normal relationship of 75/25 per cent.
I will not say that I am wholly persuaded by the noble Baroness's argument about the 75/25 per cent., but in these matters it is a case of noblesse oblige, and in my new ennobled state I felt that I must show a little courtesy to the noble Baroness and move from the immediately preceding Amendment to this one to give her an immediate opportunity of saying: "Yes; this is an error in the Bill, and now that it has been called to my attention, we will restore the normal situation of 75/25 per cent.". I look forward to sharing the noble Baroness's enthusiasm on having her normal relationship as between local authority and central government reestablished. I beg to move.
LORD SANDFORD: I think the noble Lord has had enough of the noble Baroness for the time being, and I will deal with the question of what happens after approximately 10 years from now. It is perfectly true, as my noble friend says, that the 75/25 per cent. relationship is in many ways the normal and

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standard financial relationship between central Government and local government. It confers on the relationship all the advantages for which my noble friend claimed—and no one is in a better position than she is to express that, because she does so from her personal experience. But the fact remains that after 10 years of this new system there will undoubtedly come a moment when a review is called for to see how it has been working out.
In the great majority of cases a transition subsidy will have faded out of the picture altogether, and those authorities who need subsidy at all will be relying mainly on the rising cost subsidy to which we shall come in the next clause. But there may be some that are still relying on a small measure of transition subsidy. Most of them will be those who are under housing stresses and still face major housing problems, and it may well be that in their case the percentage ought to be increased. There may, on the other hand, be others who for one reason or another are still drawing transition subsidy, but are not in anything like such great need as others. There may then be an occasion to invoke Clause 16, which the noble Lord will have noticed enables the Secretary of State, after consultation with the local authority associations, and subject to a Negative Resolution of either House of Parliament, to make adjustments in respect of all local authorities, in respect of certain classes of local authorities, or in respect of particular local authorities.
So we reach a position where, under the clause as it stands, it will be possible for the Secretary of State in those conditions to make further adjustments towards concentrating the subsidies available on those places which at that time, 10 years hence, are still in need of particular subsidies, and, in order to do so, reducing somewhat the subsidies that would then be payable or under payment to authorities that do not really need them. That is the reason why we need the flexibility provided for in this clause as drafted. That does not mean to say that there may not be cases where in certain circumstances it may be necessary to amend the standard rate of 75 per cent., which has all the advantages that my noble friend claimed for it, upwards in some cases, or downwards as far as
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60 per cent. in others. I hope that that explanation of the way in which it is intended to use this discretion in the course of this review will satisfy the noble Lord.
LORD DIAMOND: I hope the noble Lord, Lord Sandford, will not take amiss what I am now going to say, and I hope that it will not cause any difficulty. But, having listened to the noble Baroness and to the noble Lord, I still prefer the noble Baroness. The noble Baroness persuaded me that, at all events for the moment, it was right to have regard to a figure which is not unknown in local authority circles; namely, the 75/25 per cent. relationship as between local authority finance and central government finance. The noble Baroness persuaded me that it was right in those circumstances for me to withdraw the previous Amendment so that we could immediately consider this one. Now the noble Lord, Lord Sandford, moves off that ground completely and says that, looking forward to 1982–83 (which is a pretty long time for any Conservative Minister to look forward to as a Minister; though I do not wish the noble Lord any ill), he thinks the Minister at that time ought to have a certain flexibility.
To be quite serious about this, we are talking about an authority which still finds that it is collecting less by way of rent increases in the standard amount even as long ahead as 10 years' time. So there clearly must be difficulties there. The noble Lord says that there may be circumstances in which 75 per cent. or more should be paid. That is quite all right: one is only saying that a reduction is not wanted. The noble Lord and I are at one in our desire to give the Minister of the day flexibility in paying a subsidy which is more than 75 per cent., because it may prove over the years that that is necessary. But that does not in any sense justify a reduction of the percentage to a figure of 60 per cent. This is an absurd proportion as between local authority and central Government—66/40 per cent. The noble Lord cannot give any other examples of it. It is a situation arising out of the Government's own Bill. It is intended to be a transition subsidy. When we were talking about other subsidies the noble Lord, Lord Sandford, said that the transition subsidy would take care of that; and now, when we

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come to the transition subsidy, the noble Lord says that the increase in rising cost subsidy will take care of that. We feel that we have gone far enough along this road of trying to reach agreement by accepting even the tiniest crumb. We feel that the Government are now saying that they have no intention other than to extract the maximum possible from the ratepayer and the tenant in order to save Exchequer money—of course for
LORD DRUMALBYN: I beg to move that the House do now resume.
the ultimate benefit of the taxpayer. This is a situation to which we are wholly opposed, and on this occasion I must seek to divide your Lordships' Committee.
6.51 p.m.
On Question, Whether the said Amendment (No. 18) shall be agreed to?
Their Lordships divided: Contents, 32; Not-Contents, 70.

CONTENTS

Avebury, L.

Henderson, L.

Segal, L.

Beswick, L.

Hughes, L.

Shackleton, L.

Blackett, L.

Jacques, L. [Teller.]

Shepherd, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, Bs.

Southwark, Bp.

Diamond, L.

Lloyd of Hampstead, L.

Stow Hill, L.

Douglas of Barloch, L.

Mais, L.

Strabolgi, L.

Gaitskell, Bs.

Milner of Leeds, L.

Summerskill, Bs.

Garnsworthy, L.

Noel-Buxton, L.

Tanlaw, L.

Greenway, L.

Phillips, Bs.

Willis, L.

Greenwood of Rossendale, L.

Rea, L.

Wynne-Jones, L.

Hale, L.

Ruthven of Freeland, Ly.

NOT-CONTENTS

Aberdare, L.

Dundonald, E.

Merrivale, L.

Ailwyn, L.

Eccles, V.

Milverton, L.

Allerton, L.

Elles, Bs.

Monck, V.

Alport, L.

Ferrers, E.

Monckton of Brenchley, V.

Balfour, E.

Ferrier, L.

Monsell, V.

Barnby, L.

Fortescue, E.

Mowbray and Stourton, L. [Teller.]

Beaumont, L.

Gainford, L.

Belstead, L.

Goschen, V.

Nugent of Guildford, L.

Berkeley, Bs.

Gowrie, E.

Pender, L.

Bessborough, E.

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

Rankeillour, L.

Boyle of Handsworth, L.

Reigate, L.

Brougham and Vaux, L.

Helsby, L.

Sandford, L.

Carrington, L.

Hood, V.

Sandys, L.

Colville of Culross, V.

Hylton, L.

Savile, L.

Cork and Orrery, E.

Hylton-Foster, Bs.

Sempill, Ly.

Cowley, E.

Kemsley, V.

Sinclair of Cleeve, L.

Craigavon, V.

Killearn, L.

Somers, L.

Crawshaw, L.

Kinnoull, E.

Terrington, L.

Cullen of Ashbourne, L.

Lauderdale, E.

Tweedsmuir, L.

de Clifford, L.

Lothian, M.

Tweedsmuir of Belhelvie, Bs.

Denham, L. [Teller.]

Loudoun, C.

Vivian, L.

Derwent, L.

Margadale, L.

Wakefield of Kendal, L.

Digby, L.

Massereene and Ferrard, V.

Wolverton, L.

Drumalbyn, L.

May, L.

Young, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

Moved accordingly, and, on Question, Motion agreed to.
House resumed.

POLICE BILL
6.59 p.m.
LORD WILLIS: My Lords, I beg to move that this Bill be now read a second time. It is a very simple and short Bill to amend Section 44(2) of the Police Act 1964, and I stand here really as a "spear carrier and messenger" rather than as a principal, because the real work behind this short measure has been done by my right honourable friend in another place, Alfred Morris, on behalf of the Police Federation, which he advises. The Bill has the full support of the Police Federation and of the Scottish Police Federation. Its roots lie back in the history of the police force of this country, because 54 years ago in 1918 there was great unrest in the police, especially in London, and the police began to organise, quite illegally at that time, the National Union of Police and Prison Officers. They put forward demands for better pay and conditions and union recognition. As a result, their leaders were dismissed from the force and a strike was organised. This strike was settled, after some bitterness, on terms which gave the policemen most of their demands except for recognition of the union. It was understood that there were certain difficulties in recognising a straightforward trade union with a body of men like the police who have clearly a duty to be impartial.
In 1919 a Departmental Committee was set up and this recommended the establishment of the Police Federation, which has existed ever since. It was a sort of company union, financed out of official funds and deliberately insulated from any contact with any outside bodies. In spite of these difficulties it could, and did, speak for the ordinary policeman and it won growing respect. For example, in 1953 the Police Council for Great Britain was set up as a Whitley negotiating body for police pay. In 1955 the Federation had progressed so far that it was permitted by Parliament to raise its own funds by voluntary subscription. In recent years the Federation has increased in scope and influence and it would be impossible for anybody who knows anything at all about the operation of our police force in this country to imagine the efficient running of the force without it. But it is still hampered by the restrictions which were imposed over
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fifty years ago in vastly differing circumstances. Among these restrictions was the insistence that the Police Federation:
"shall be entirely independent of and unassociated with any body or person outside the Police Service."
The Federation feels that it is now old enough and responsible enough to decide what company is shall keep, and that is really the purpose of this Bill. It will enable them—within limits—to do exactly that. There is obviously no question of taking on political associations or of affiliation, for example, to the Trades Union Congress, because the leaders and members of the Federation realise that the independence and impartiality of the police must be protected and must be visibly seen to be protected. In the Bill I am now introducing there is a safeguard that lies with the Home Secretary, because he has the right of final approval of any association the Police Federation wish to make with an outside body.
What the Federation wants to do is to end the ridiculous situation which exists to-day in which it is illegal for it to associate, for example, with the National Association of Retired Police Officers, which is clearly nonsense. It wishes—and this is very important with the coming of the Common Market—to extend its links with the appropriate European and overseas police organisations. That, in a nutshell, is what this Bill is all about: to amend the 1964 Police Act so that the police have the right to do these simple things, always bearing in mind that the Home Secretary has the final right of approval. That is the Bill and I hope that it will commend itself to your Lordships.
For my part, I am delighted to have this opportunity to introduce it to your Lordships' House. The first speech I made in this House was on the police, during the Second Reading of the Police Act 1964 which this Bill now seeks to amend. I said then that the British public expect incredibly high standards of its police force. What is extraordinary is how often these high expectations are fulfilled, not how often they are let down. Recently I have been doing some research in the Midlands for a new police series that I am going to produce for television. I have been very active and have spent a great deal of time with the local police force of a small town in the Midlands.

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Anything less like the "Fascist pigs" that the police are called in some quarters would be hard to imagine. They are—as they were in 1964, and as they were in 1918 when they went on strike—a collection of human beings who are trying to do their jobs, with all the variety of human beings ranging, if you like, from Barlow on the one hand to Dixon on the other. They are not perfect; but then they would not be human beings if they were perfect. Those who seek to attack them as "Fascist pigs" might pause to think: would they rather have no police force at all? Can they imagine a society that could exist without a police force? Would they rather have the police force of some other country? I cannot think of any force which is better than the one we have at present. This little Bill that I have the honour to introduce to your Lordships' House will help our policemen to do their job just a little better, and I therefore commend it to your Lordships' House. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Willis.)
7.8 p.m.
LORD STOW HILL: My Lords, may I apologise for intervening in this debate on Second Reading without having put my name down to speak. I do so because I was delighted to hear what my noble friend said with regard to the police force generally in this country. We have a most admirable police force and it is a great pleasure to me in particular, because I have had some association with them, to listen to what was said in praise of them. They deserve every word of it. I had a lot to do with the Police Federation some years back; I found them extremely helpful and very responsible. I am quite sure that this Bill, which makes further provision for their independence—and, may I add, independent dignity—is a Bill which comes not a minute too early. I am very glad to see it brought before this House from another place, and I cordially hope that your Lordships will think it right to give it a Second Reading.
7.9 p.m.
LORD SHACKLETON: My Lords, since this is a Bill which I understand has the support of all Parties, it is right that I should also support my noble friend Lord Willis who has moved the
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Second Reading with such eloquence and knowledge. Let me on this occasion congratulate him on being in his place in time—remembering a previous occasion. The British public have a love/hate relationship with the police. I am certain that, like every other institution, the police need the recognition and gratitude of so many of us for what is at times a most difficult task, which is discharged with greater moderation, discipline and decency than by any other police force in the world. The fact that there is to-day this recognition of the Federation—and it has taken rather a long time for people to recognise that it has grown up, so to speak—is very proper. We have had the endorsement of a former Home Secretary and we are hoping for endorsement from the noble Baroness.
I hope that this Bill will pass rapidly into law and that it will do so with the blessing of your Lordships. On these occasions I think it is also right to congratulate the Member in another place, Mr. Alfred Morris, who has been responsible for more than one Bill which has cone before your Lordships' House. His own sponsorship and support has been valuable, and I congratulate him particularly on picking a great expert in my noble friend Lord Willis.
7.10 p.m.
BARONESS YOUNG: My Lords, on behalf of Her Majesty's Government I should like to welcome this Bill and to thank the noble Lord, Lord Willis, for introducing it. It is a Bill which has the support of the Government. The Police Act 1919 made provision in Section 1 for the introduction of the Police Federation, later split into a Federation for England and Wales and one for Scotland. As the noble Lord, Lord Willis, said, in the years immediately preceding the 1919 Act industrial relations in the Police Service had deteriorated to the extent that there was a strike over the right of the police to form a trade union. The 1919 Act was designed to provide for adequate representation while at the same time preserving the impartiality of the Service and ensuring that it should not be a party to any industrial dispute. Section 2 of the Act barred members of police forces, with minor exceptions, from trade union membership; and Section 3

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made an offence any attempt by persons inside or outside the Service to cause disaffection. Section 1(2) of the 1919 Act provided that:
"The Police Federation and every branch thereof shall be entirely independent of and unassociated with any body or person outside the police service."
Essentially the same provision is repeated in Section 44(2) of the current Police Act 1964 with which the present Bill is concerned.
The Police Federations made representations to the previous Government that Section 44(2) was unnecessarily restrictive. These representations resulted in an undertaking to amend the Act at a suitable opportunity, and that undertaking was repeated by the present Government on assuming office. The Bill has the support of both sides of this House and the Secretary of State for Scotland has also indicated his support of the Bill. In the view of the Federations, Section 44(2) debars them from links with eminently respectable and responsible bodies; and the noble Lord, Lord Willis, has given examples such as the National Association of Retired Police Officers and certain international or European police bodies. The Federations have not asked for any amendment of Section 47 of the 1964 Act which bars membership of trade unions and similar associations. The Bill does not offer unrestricted freedom to the Federations. It empowers the Secretary of State to authorise either a federation at national level or a branch at police force level to be associated with a specified body or person outside the Service. It also empowers him to impose such conditions as he may see fit and to restore or modify any authorisation previously given. He therefore has full power to safeguard the public interest.
In conclusion, my Lords, I would say that this gives us all an opportunity to say how grateful we are for the work the police do, often in difficult and dangerous circumstances. We are very glad to have this opportunity of showing our appreciation publicly and of being able
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to say so at this time. The Police Federations have always been responsible organisations and it seems eminently reasonable that the House should approve the small concession to their wishes which the Bill represents. I am very happy to support this Second Reading.
7.14 p.m.
LORD WILLIS: My Lords, I should like briefly to thank the noble Baroness for what she has just said and also to thank the Government, the Home Secretary and members of the Home Secretary's Department for the help they have given to the Federation in the drafting of this Bill and in the discussions that led up to it. As we all know, it is a small measure but it will help the Police Federation to do its job better, and make for a happier policeman, and that, after all, is what we are all looking for. I thank your Lordships very much.
On Question, Bill read 2a, and committed to a Committee of the whole House.

HOUSING (FINANCIAL PROVISIONS) (SCOTLAND) BILL
Brought from the Commons; read 1a, and to be printed.
ROYAL BANK OF SCOTLAND LIMITED WIDOWS' AND ORPHANS' FUND ORDER CON- FIRMATION BILL
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
CIVIL EVIDENCE BILL
Bill read 3a, and passed.
NATIONAL INSURANCE (AMENDMENT) BILL
Report received.

DEFECTIVE PREMISES BILL
7.16 p.m.
LORD STOW HILL: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Stow Hill.)
On Question, Motion agreed to.
Clause 1 [Duty to build dwellings properly]:
LORD STOW HILL: My Lords, this is purely a drafting Amendment in order to bring that particular part of Clause 1 to which it relates into consonance with the earlier parts of that clause. I beg to move.
Amendment moved—
Page 2, line 27, leave out ("completion") and insert ("provision").—(Lord Stow Hill.)
On Question, Amendment agreed to.
Clause 2 [Cases excluded from the remedy under section 1]:
LORD STOW HILL LORD STOW HILL moved Amendment No. 2:
Page 2, line 32, leave out ("erection") and insert ("provision").
The noble and learned Lord said: My Lords, I beg to move Amendment No. 2. When we were discussing this Bill on Committee it was pointed out by the noble Earl, Lord Kinnoull, that there was a difference in the wording of the opening part of Clause 2 which seemed not to accord with the wording of Clause 1. In answer, I offered the explanation that really the wording of Clause 2 covered protection of the kind that was given by the National House building Registration Council's scheme. On further reflection, it has occurred to those responsible for the Bill and to me that it would be desirable to widen that wording in Clause 2 in order to cover schemes which might be approved hereafter which might be outside the scope of the existing word "erection". The word "provision" is wider in scope and accords with the similar word used in Clause 1. I beg to move.
THE EARL OF KINNOULL: My Lords, may I shortly thank the noble and learned Lord for having looked at this point
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again, and his advisers, and for proposing this Amendment.
On Question, Amendment agreed to.
7.20 p.m.
THE EARL OF KINNOULL THE EARL OF KINNOULL moved Amendment No. 3:
Page 3, line 33, at end insert:
("(7) Where an interest in a dwelling is compulsorily acquired—

(a) no action shall be brought by the acquiring authority for breach of the duty imposed by section 1 above in respect of the dwelling; and

(b) if any work for or in connection with the provision of the dwelling was done otherwise than in the course of a business by the person in occupation of the dwelling at the time of the compulsory acquisition, the acquiring authority and not that person shall be treated as the person who took on the work and accordingly as owing that duty.")

The noble Earl said: My Lords, I beg to move Amendment No. 3 on the Marshalled List. The House may recall that the question of compulsory purchase order and the effect it would have on this Bill was raised in Committee. It was pointed out then that the procedure of a compulsory purchase order was unlike that of any other normal procedures of a contract of sale, particularly as you were faced with an unwilling vendor as against a willing vendor under normal circumstances. For that reason it was considered that the compulsory purchase order qualified as a special case. It was also argued that the character of the sale under compulsory purchase procedures was entirely different owing to the fact that the purchaser or acquiring body took over no liabilities from the vendor, particularly, as an example, restrictive covenants.
It was also suggested that possibly eight cases out of ten of compulsory purchase orders came usually for the demolition of a property for a road widening scheme or some other purpose. In this one is only dealing with a small minority of cases of houses being held by the acquiring authority after purchase and perhaps let on a temporary basis. Indeed, I believe the acquiring authority would have quite a job to establish and justify the use of a compulsory purchase order in those circumstances. So we are dealing under compulsory purchase orders in this Bill with a very few cases

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—the special nature of the unwilling vendor. It was suggested in Committee that such vendors should be entitled to be excluded under Clause 2 of the Bill, along with certain other cases. The noble Lord, Lord Stow Hill, with his usual persuasion, expressed great sympathy with the Amendment then moved, but came down nevertheless against it after, he said, having followed the advice of his advisers. I understand that the primary reason why he came down against it was that he saw no reason why the general duty under Clause 1 should be an exception in the case of an acquiring body. After all, the house being built was built not only for the lifetime of the vendor but would be in use for subsequent purchasers.
The noble Lord also put forward the view that in cases of compulsory purchase the vendors receive full compensation from the acquiring body, which would possibly cover any cost of indemnity. On reflection I believe there are many good reasons to ask the noble Lord to reconsider this matter. In particular one has the example of the owner builder and the difficulty he may have in getting an insurance company to accept the indemnity insurance. In addition to that there seems to be no certainty that a district valuer will be able to evaluate with any accuracy the loss caused by the indemnity, but there is of course much greater certainty that the district valuer could judge the value of the house in its present condition.
My Lords, again I submit that the compulsory purchase order is a special procedure which only in limited cases deserves special attention. I have done my best, with the assistance of my advisers, to see that the Amendment is technically sound, but I appreciate that the noble Lord has not had long to examine it. Subsection (7)(a) contains a general exclusion of all vendors from claims under Clause 1 from acquiring bodies. However it is only from the acquiring bodies, and I believe the intention would be that any vendor would not subsequently be free of claims against tenants of the acquiring body or, for that matter, any new purchaser. Therefore it has only a limited scope.
Under subsection (7)(b) full exclusion of liability would be granted to owner builders against the acquiring authority in any subsequent claims. The noble Lord thought that previous Amendments on the Committee stage went rather wide, and I certainly agree with that; but I hope he will accept that this Amendment has a limited scope and gets to the core of the problem as one sees it. I beg to move.
LORD DOUGLAS OF BARLOCH: My Lords, I should like to support this Amendment because I think it is justified. This is a Bill which makes an inroad upon the ancient principle of caveat emptor—and quite justifiably—because buying a house is a difficult transaction for somebody who is not highly skilled, and not all purchasers of houses have expert advice. But in the case where a property is acquired compulsorily by a public authority we all know that those authorities have very skilled advice and that they do not pay more than the property is actually worth in its existing condition. It would therefore, I submit, be highly unfair if, after the property had been acquired at a price which was perfectly satisfactory to the acquiring authority, there should then be a recourse against the vendor under this Bill. I am sure that was not really intended and I hope that my noble and learned friend will accept the Amendment.
7.27 p.m.
LORD STOW HILL: My Lords, as the sponsor of this Bill I should like, if I may, to express my personal gratitude to the noble Earl for having given such a great deal of thought to this particular aspect of the Bill. When we were discussing it in Committee, as he has reminded us, there was obviously a considerable amount of sympathy for the purpose behind the Amendment that he then put down. I shared that sympathy, and I know that the noble and learned Lord who sits on the Woolsack equally shared it. As the noble Earl has reminded us, when I was answering his case on that Amendment I submitted that perhaps it went rather too wide and indicated that in my view the argument on the whole was weightier against the Amendment than in favour of it. But I intimated that view with some hesitation and I think it was the general desire of the Committee

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that we should revert to the matter on Report.
The noble Earl has now tabled a different Amendment, indicating a different approach, and his present Amendment, as he has pointed out, is much narrower in scope. I saw it for the first time this morning and have been studying it since, and it is possible that I have missed some of the implications of this rather complicated Amendment. If I have, I hope your Lordships will feel that it will not be unreasonable for me to revert to it on Third Reading. As it is, however, giving it the best consideration that I can, I feel that the advice I ought to offer to the House is most certainly to accept it. Therefore I give that advice to your Lordships. Once again I should like to express my personal gratitude to the noble Earl for all the trouble he has taken to get this part of the Bill right.
THE LORD CHANCELLOR: My Lords, before anything more is said perhaps I ought to make plain where the Government stand on this Amendment. As the House will remember, I intervened at the Committee stage to indicate that a question of policy was involved and that my noble friend Lord Kinnoull should perhaps be given another chance to think this subject out. What excited my sympathy on that occasion was not merely the thinness of the House (which I am afraid has been to some extent repeated on this occasion) but also the fact that this Bill, which carries with it full Government support—and I have always expressed my gratitude to the noble Lord, Lord Stow Hill, for becoming its godfather—is an important Bill from the point of view of consumer protection. But the object is to protect the individual consumer of this kind of service, rather than to protect acquiring local authorities who acquire property by compulsory purchase. The first part of the Amendment would undoubtedly achieve the object of protecting the consumer fully without extending the protection to the local authority, and therefore it struck me that it would achieve an excellent purpose if it was within the desire of the House to pass an Amendment of this kind. I cannot give him full Government support, because it would take a great deal longer than I have been able to have to have the necessary consultations, but if it is the will of the House to
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pass an Amendment of this kind, I certainly do not wish to express any hostility to it. I would rather play the part of the honest broker (which I attempted to play at the Committee stage) and leave it at that. And in view of the advice given to the House by the noble Lord, Lord Stow Hill, and his noble friend who spoke immediately before him, it may be that the House will wish to accept this Amendment, although as I have said the Government must remain entirely neutral upon it.
THE EARL OF KINNOULL: My Lords, may I thank the noble and learned Lord for his words of guidance? I also thank the noble Lord, Lord Douglas of Barloch, for his support. May I finally thank the noble Lord, Lord Stow Hill, for his qualified acceptance? I fully understand that he may wish to have a further look at the wording.
On Question, Amendment agreed to.
Clause 6 [Supplement]:
LORD STOW HILL LORD STOW HILL moved Amendment No. 4:
Page 5, line 42, leave out from ("provision") to end of line 43 and insert—
("(3) Any tern) of an agreement which purports to exclude or restrict, or has the effect of excluding or restricting, the operation of any of the provisions of this Act, or any liability arising by virtue of any such provision, shall be void.")
The noble Lord said: My Lords, I beg to move this Amendment, which also deals with a matter that was raised by the noble Earl, Lord Kinnoull, at the Committee stage of this Bill. He pointed out, in an argument which I thought, if I may say so, was very effective, that the provision against contracting out which now finds its place in Clause 6 of the Bill was perhaps not completely effective. He indicated that in his view its operation might be circumvented by an indemnity being taken from the person to whom the duty was owed. I then invited the Committee not to accept the noble Earl's Amendment, and my reason for doing so was that I felt it would be a pity if indemnity in general were made unlawful. I had in mind, for example, the kind of situation in which a builder gave an indemnity to a sub-contractor. An indemnity of that sort, I felt, could hardly be said to be against public policy or

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against the spirit of the Bill. Equally, insurance companies, after all, provide indemnity and it might interfere with the free taking out of policies to deal with this sort of risk. But I did indicate that it would be my intention to give further careful thought to the point that the noble Earl had raised, and I, together with those who advised me, have done so. I hope that we have now come forward with a new Amendment which achieves the objective that I believe the whole Committee would have desired to achieve and which the noble Earl had in mind.
My Lords, what this Amendment does is to introduce wording to the effect that there must be no agreement which has the effect of excluding the operation of any of the provisions of the Bill. Those words are far wider in scope, so I would submit to this House, than the words which at present appear in the Bill, and after giving it the best consideration that I and those who advise me have been able to give it we have come to the view that it would be interpreted by learned judges—although of course we cannot bind them in any way—in such a way as to prevent any of the sort of devices that the noble Earl had in mind and which might be resorted to in order to frustrate the operation of the Bill. That is the object of this Amendment. I hope that it is a satisfactory one and that it may commend itself to your Lordships. I beg to move.
THE EARL OF KINNOULL: My Lords, I would just briefly thank the noble Lord for his kind reference to myself, and also for looking at this matter again and for producing this Amendment, which I fully support. I am most grateful to the noble Lord.
On Question, Amendment agreed to.
EARL FERRERS: My Lords, I beg to move that the House do adjourn during pleasure until fifteen minutes before eight o'clock.
[The Sitting was suspended at 7.35 p.m. and resumed at 7.45 p.m.]

HOUSING FINANCE BILL
7.45 p.m.
House again in Committee on Clause 3.
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 20:
Page 5, line 2, leave out ("not being less than 60 per cent.") and insert ("being more than 75 per cent.").
The noble Lord said: I beg to move Amendment No. 20. I suppose to the onlooker this will appear as a continuing debate, and for that there is no reason for apology from this side, for this Bill affects something like one-third to one-half of the people in this country, and nearly all of those people are in the lower income brackets. For those who earn decent wages it represents a threat to their standard of living, and to rate-payers generally a burden that they ought not to be called upon to bear. The Amendment is designed to ensure that transitional subsidy does not fall below 75 per cent., and it is further designed to limit the amount of rate fund contribution associated with that subsidy to 25 per cent.
Clause 3(2) says:
"A local authority shall be entitled to transition subsidy if for the year 1972–73, or for any subsequent year, there is a shortfall in the local authority's rent increases."
I think I am safe in saying that nobody knows what that shortfall will be. Is not this one of the great difficulties about this Bill? It is one of the great difficulties about this clause. Nobody knows exactly in terms of pounds and pence what is going to be involved—nobody, that is, except the Government, who set out from the beginning to cut subsidies. It is true that they have had to change their mind on a number of matters as the Bill went through the other place, but reading the Reports of the Committee proceedings in the other place I have been struck by the fact that, instead of firm estimates, all too often the Committee were given (and I think the Secretary of State himself called them) "guestimates". Little wonder then that we had an article in yesterday's Times which, if it was intended to present to the readers the case that we have been trying to make and are trying to make, could not have been better written. I refer to

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an article by Mr. T. J. O. Hickey in The Times of Wednesday, June 7. He certainly brings home what we have been saying and what we are saying again and again, that when members of the Front Bench opposite talk about fair rents they cannot tell us what they are; they cannot tell us the implications of the so-called Birmingham Amendment, which I think was really the lessor Amendment and was carried last November and which represented a tremendous change of front on the part of the Government—in fact two changes in one day.
In this article he states that the fair rent is presented as a kind of platonic form laid up in Heaven to which the statutory formula gives unique access. It is, strictly speaking, incoherent. It would be truer to say that fair rents are plucked from the air. But I do not want to go too far with that because we shall be coming to the question of fair rents. The point I am anxious to make is that nobody knows what local authorities are being committed to. This Government know what they do not want to give, but local authorities do not know to what they are being committed. Subsection (3) gives a table showing the transition subsidy falling from 90 per cent. in 1972–73 down to 75 per cent. in the years 1975–76 to 1981–82. It then goes on to say that in subsequent years the figure shall be
"75 per cent., or such other percentage as may be substituted for 75 per cent. for the year in question by an order under subsection (4) …"
Subsection (4) states:
"The Secretary of State may from time to time by order, for such years after 1981–82 as may be specified in the order, in column 2 of the Table above for 75 per cent. substitute such other percentage, not being less than 60 per cent., as may be specified in the order."
The effect of reducing the transition subsidy is to place an increasing burden on the associated rate fund which rises from 10 per cent. in 1972–73 to 25 per cent. in 1975–76 and stays at that level until 1981–82. Thereafter the Secretary of State's contribution from the rate fund can rise to 40 per cent. It may well be that it will be claimed that the need for the subsidy will depreciate as the years go by. In that case the Government can afford to be magnaminous and to accept the Amendment moved by my noble friend Lord Diamond—that is to say, make 100 per cent. contribution—and all the talk about interfering with the free-
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dom of local government was the most utter nonsense to which I have ever listened.
The situation being created by the Government is that local authorities can have no option, no choice; it is unrelated to anything they themselves determine. In other words, they have no say in what the shortfall will be. The shortfall is as a result of Government policy and if ever there was a notion that responsibility depended upon the contribution from local ratepayers, this is not that kind of subsidy. The Amendment would set the limit of 25 per cent., but it would at the same time allow the Secretary of State to reduce the burden so far as 'the local authority is concerned. It is not burdens but help that local authorities need. If the appropriate figure is 75 per cent. up to 1982, what possible justification can there be for giving power to the Secretary of State to reduce it to 60 per cent. thereafter?
In any case, this is budgeting for a situation 10 years ahead, and I hope that the Government will have another think about the situation. As this Bill goes through the Committee stage in this House they should begin to show that they are not inflexible in their thinking. We should like to see a little flexibility, a little willingness, to meet the arguments being put not only from this side of the House but from outside the House from various associations. Indeed we should like to feel that when a point has been reached when papers like The Times are publishing articles like this that in their own interests the Government would do some re-thinking. If they continue to show inflexibility and stubbornness, I hope that the Committee will encourage the Government to do what they are reluctant to do; that is, take a new look at a situation that is based on "guestimates" rather than factual information.
LORD SANDFORD: I am glad to respond to the invitation from the noble Lord, Lord Garnsworthy, to demonstrate some flexibility. It is because of the flexibility in the system which we are commending to the Committee that it is not possible for anybody at this stage to be precise, or more precise than we have been, about the scale of subsidies that will be payable to particular authorities. Because there is this flexibility, local authorities will be free to exercise

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their responsibilities as housing authorities in deciding what their building programme shall be: it will not be dictated to them by the Secretary of State, or anybody else. Under this system they can work out for themselves what assistance will be given to them under the combination of all these arrangements and, in particular. what amount of rising cost subsidy their expanding building programme, if that is what is required, will attract. There is no restriction, no limit, imposed by the Exchequer under these arrangements on the amount to which housing authorities can commit themselves in the way of capital investment on their housing programme. This is the reason why it is not possible for us to be more specific.
The particular Amendment to which the noble Lord was speaking is the one which seeks to substitute for 75 per cent. 60 per cent. I think I explained adequately enough our reasons for including this figure.
LORD GARNSWORTHY: I think the noble Lord has got it the wrong way round. I want to rectify that error.
LORD SANDFORD: Yes, I understood that. I am sorry.
LORD GARNSWORTHY: I can understand the noble Lord's making a mistake. Quite clearly, he thinks the figure ought to be 75 per cent.
LORD SANDFORD: I know what the noble Lord is driving at. But as I explained when we discussed the two earlier Amendments, the reason why we want this figure is that we are providing for the possibility of a review after the lapse of a long period of time—10 years—at the end of which it may well be necessary for the Secretary of State, after consultation with the local authorities and subject to a Negative Resolution in either House of Parliament, to make further modifications, further adjustments, as between one class of local authority and another, or as between individual local authorities. In those circumstances it may well be right for certain authorities to have to bear a larger share of whatever small amount of transition subsidy may remain.
If the figure goes down from 75 per cent. to 60 per cent., it will not go down
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to some figure below which Exchequer subsidy has never fallen before. The noble Lord will know from his experience in local government that the police subsidy is paid at 50 per cent., the planning grant is paid at 50 per cent., and the rate support grant is paid at something under 60 per cent. These are quite normal percentages. There is nothing particularly inappropriate or burdensome about this figure. I am not saying that this will be a general adjustment, but it may be appropriate in some cases. As I said, it may well be appropriate in other cases, where an authority is still labouring under a heavy burden of housing stress, to alter it in the other direction. But I am sure that flexibility must be there, after that long period of time has elapsed.
LORD GARNSWORTHY: I am sure that we are all grateful to the noble Lord, Lord Sandford, for the explanation which he has given. He indicated that the Government's attitude demonstrates flexibility, but I think his explanation demonstrates the need for a little more information than we have. It is no use saying that local authorities will be free to determine their own programmes unless they know that they will get subsidy help. If subsidies overall are to be limited—the noble Lord indicates that he does not agree with that—and that is surely the aim of the Government—
LORD SANDFORD: No.
LORD GARNSWORTHY: It is. The aim is to keep subsidies within a global figure. It is an argument which we have been having almost since the Bill was proposed.
LORD SANDFORD: It is a point which the Opposition have been putting to us and we have been trying to disabuse them of it. I have said it once before and I will say it again. No capital investment restriction is imposed by the Government under this system. The figures which we have been giving are estimates of what the subsidies will be running at.
LORD GARNSWORTHY: I take the point which the noble Lord is making, but I do not for one moment accept that there is anything in the Bill which leads us to anticipate that subsidies will grow to meet inflation, or to meet expanded housing programmes. We had that argument on Second Reading. We have

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already had it on a number of occasions during this Committee stage. Clearly, one of the main purposes of this Bill is to contain the contribution which the Government are prepared to make in assisting local authorities in the matter of housing provision. If I am wrong, then The Times article is wrong and everybody outside the Government is wrong on this matter. I really think that the noble Lord, Lord Sandford, will have to go a great deal further than he has done this evening, if he is to convince us that we are in error on this point. There was a wonderful opportunity when my noble friend Lord Diamond analysed these figures and asked for confirmation on the very point which the noble Lord is trying to make, that the Government would meet this situation, but he certainly did not get that confirmation. When we are told that local authorities are free to work out costs and what programmes they like, and there is to be no limit by the Exchequer, we wonder whether that is seriously meant. Is it really suggested that local authorities will be free, no matter how many houses they build, no matter what they do, to come to the Government and automatically get subsidy support?
LORD SANDFORD: That is right.
LORD GARNSWORTHY: We shall be pleased to hear what the noble Lord has to say, and particularly pleased to read it in Hansard, because I think he is saying something which nobody speaking for the Government has said to date. My Amendment is intended to avoid a growing contribution under this head on the part of local authorities. If it be said that there will be a reduction in the shortfall as the years go by, then, quite clearly, the clause with which we are dealing will lay upon local authorities the need to provide an increasing percentage of whatever shortfall there may be. It is to avoid that situation that this Amendment has been moved. I should like the noble Lord to tell the Committee whether different rates will be paid to different authorities, when that will be determined, how it will be determined and, if the Secretary of State is to determine what those different subsidy rates will be, how much freedom the noble Lord thinks local authorities will really enjoy. It is really no good talking about 50 per cent. grants
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for the police and for services of that kind.
I repeat what we have said before from this side: we regard housing as a social service. The Party opposite, who at the present time are in Government, regard housing as a profit-making exercise. That is the great difference between the two of us. I hope that we shall get from the noble Lord a little more indication than he or anybody opposite has shown up to the present time of an understanding of the position of local authorities, who want to know where they stand, not merely now but in the years to come. They want to know that they will not have to bear an increasing burden, and they have a great yearning to continue to be as free as they have been up to the present time.
LORD DIAMOND: While not wishing to delay the Committee unduly, I should like to thank my noble friend Lord Garnsworthy for the excellent contribution which he has made and for eliciting a most extraordinary statement from the noble Lord, Lord Sandford, which I wish to pursue in order to inform myself more fully of the Government's intention. As I understood him, the noble Lord indicated that there would be no bar of any kind to the size of a local authority's building programme, or to the capital expenditure raised for that purpose. That is an important and novel statement of Government policy and we ought to get it absolutely clear. Is the noble Lord saying that there is to be no limit, for example, on the amount of Treasury approved local authority borrowing for housing purposes? Is the noble Lord also saying that, for subsidy purposes, there is to be no restriction on the amount spent per house in relation to any possible limitation of the kind that used to be known as a yardstick? There are two areas there, in particular, which were excluded from the definition given by the noble Lord, and I should like him to be good enough to reassure me on both those points.
8.10 p.m.
LORD SANDFORD: I think the debate on this Amendment has been most useful, and I am most grateful for the opportunity to confirm what I have just said. I will speak with as much precision as I can on this point, because I detect a

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certain amount of incredulity on the Benches opposite. How much new council house building is planned is a matter for each local authority. No capital investment restriction will be imposed by central Government. Thus, what is done depends not upon estimates of subsidy; it does not depend upon the figures we were discussing yesterday, or on central Government public investment control. It depends on what local authorities, on their initiative, decide to spend in the light of their own assessment of need and demand.
If noble Lords will look carefully at Hansard tomorrow, they will find that those are precisely the words used by my noble friend Lady Young. I was listening carefully to what she said, and she used virtually the same words. If this point has now registered with noble Lords, then this is indeed a tremendous gain. I think it is the fact that perhaps it had not registered yesterday which was delaying us and causing a certain amount of confusion among us. The figure of £350 million was mentioned as an estimate of what the effect of the operation of all these subsidies will be. But there never has been a question—and it is only noble Lords opposite who have continued to assert it—of one of the objects of this Bill being to contain the subsidies within this figure. That figure is an estimate of what these subsidies will amount to when this system is operated.
The noble Lord, Lord Diamond, asked me about the cost yardstick, and so on. These factors will certainly apply, and when we come on to rising cost subsidies the noble Lord will already have observed that these are based on the difference in reckonable expenditure (that is, expenditure approved under the cost yardstick) as between one year and the next; and to that extent there is a restraint and a restriction. Local authorities are not allowed to count any expenditure of any kind, whether approved or not; and I do not suppose that the noble Lord, from his previous position, would ever expect that that should be so. But I want to confirm that there is no capital investment restriction imposed by the Government. I hope that with that confirmation of this absolutely cardinal point in the system the noble Lord will find a number of his misgivings and doubts
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removed. I do not think I have anything, further to say about the precise matter of his Amendment—the difference between 60 per cent. and 75 per cent. I have explained our reasons for that already.
LORD DIAMOND: I am very grateful to the noble Lord, who detected a certain amount of incredulity. Unfortunately, some of those on this side of the Committee are so advanced in years or "long in the tooth", as the case may be, that they find a little difficulty in swallowing new facts. In what he has said, is the noble Lord making a distinction between approval of borrowing and approval of development? I understand what he said with regard to no restriction on the capital expenditure of a local authority. When a local authority has freedom to spend capital, it has only one question to ask itself, and that is, "Have I any capital?", and it proceeds therefore to borrow the capital on the market either in this country or abroad, as the case may be. I leave out the point about it being abroad, because that is perhaps rather a separate question which need not detain us at the moment in this Committee. Is the noble Lord saying, therefore, that there is no requirement on a local authority which requires to borrow money for capital expenditure purposes in regard to housing to get central Government approval in any way?
LORD SANDFORD: What I have just said is a broad observation on the general policy that arises here. When we get on to particular subsidies, there will be a number of restraints, restrictions, caveats and so on, such as the application of cost yardsticks, in the calculation of reckonable expenditure. We will come to all these points as we go along; but I do not want to detract from or add at all to the main, broad observation which I have made and which I think does considerably alter the approach of noble Lords' understanding if they have thought hitherto that the object of the Bill is to keep the overall subsidy figure within a certain global amount. This is not the object of the Bill at all.
LORD DIAMOND: I understand that point. I am very grateful to the noble Lord, and I assure him that I have taken that point fully on board. I only wanted to be absolutely sure—and perhaps it is

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a little unfair to shoot this question at the noble Lord without warning—as to whether the freedom he was referring to was a complete freedom. I do not press the question now. We shall not seek to divide the Committee on this particular Amendment, having regard to the discussion which we have already had on the previous one. I am very grateful to the noble Lord, but I hope that at some convenient point, perhaps between now and the Question, That the clause stand part of the Bill, he will be able to refresh his memory as to the precise position which the Government envisage in future with regard to local authority borrowing for the purpose of capital expenditure in relation to housing.
LORD SANDFORD: I shall certainly look at that point, and when I can get more clearly exactly what it is the noble Lord is asking me to say I will respond to it. But as we go through the clauses we shall see more precisely what the exact frontiers of this freedom are.
LORD GARNSWORTHY: I am quite sure the noble Lord opposite will not be surprised if I say that we shall need to examine very carefully what he has said to the Committee. If we have long memories, well, it is because we have reason to have long memories. When he uses the term, "This is only a broad observation", then that is so wide open that I am afraid it still leaves us, and is bound to leave us, somewhat incredulous. We shall certainly probe and press as the Bill proceeds, because we are quite clear that the Government, when they first started talking about subsidies, talked about cuts. Yes, they did—when they first started talking about them. That was before we knew anything about the terms of this Bill. So far as the Party opposite is concerned we have learned that there is a point at which the leopard does not change its spots; and we have a duty to at least one-third of the people of this country, since this Bill aims at increasing their rents, at extracting more from them and at making those earning decent wages pay towards subsidies for those earning poor wages—but of course it does. It is no use the noble Lord shaking his head. Fair rents are expected to produce, overall, a profit.
LORD SANDFORD: If the noble Lord would allow me to interrupt, I cannot let
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slip this opportunity to confirm again that the rent is fixed without any relation to the factors we are talking about here. It is a fair rent fixed by reference to the principles set out in Clause 50, which have been taken over wholesale from the principles first devised by the Party of the noble Lord opposite. There is no question of anybody paying any more, of paying a subsidy to anybody else, in the course of paying those fair rents.
LORD GARNSWORTHY: I can begin to understand why the noble Lord earlier suggested that we should not concern ourselves with the principle of the Bill but should confine ourselves to points as they arose. I can understand why he made that suggestion because clearly he wants to avoid the overall picture. At this stage I think there is little point in pressing the argument further and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
BARONESS YOUNG BARONESS YOUNG moved Amendment No. 21:
Page 5, line 9, after ("water") insert ("rates or").
The noble Baroness said: This is a drafting Amendment to make it clear that the amount of any water rates as well as of any water charges is to be excluded from rent income of a local authority in calculating the authority's rent increases for the purposes of this clause. I hope that the Committee will feel able to accept it. I beg to move.
On Question, Amendment agreed to.
8.22 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 22:
Page 5, line 13, at end insert—
("Provided that in calculating the local authority's rent increases there shall be deducted from the figures of rent increases in any year an amount equal to that proportion of the rent received in that year by the local authority which it attributes reasonably to the repair and maintenance of, and the repayment of interest and capital moneys borrowed for that part of the cost of dwellings which is or was in excess of the 'approved cost' for the purposes of Part 1 of the Housing Subsidies Act 1967.")
The noble Lord said: The words of this Amendment refer to a matter which we have recently been discussing, and perhaps I could take up that point first. In the wording of the Amendment,

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"approved cost" is another way of saying the yardstick; and the yardstick is a matter that I want to probe very fully. When the Housing Subsidies Act 1967 was introduced, it was necessary to have an approved cost in the context of that Act and the approved cost system has worked reasonably well, as I understand it. Many local authorities have built at a cost in excess of the approved cost and they are authorised to borrow the necessary funds to build at that increased cost provided the increase is not more than 10 per cent. above the yardstick. The questions which arise, and which arise out of this Amendment, in connection with the yardstick are twofold. First, what is to happen under the new system of subsidies with regard to the costs which are attributable to that excess so far as existing dwellings are concerned? Secondly, what of the future?
So far as existing dwellings are concerned, I recollect that the Minister said in another place, in reply to an inquiry by the Opposition spokesman who had asked if he intended to abolish the yardstick:
"We do not. Power to impose the yardstick is taken in subsection (11)."
Later, in replying to a request from the Opposition whether the Minister could explain, where dwellings had been built since 1967 which were in excess of the cost yardstick, whether the cost of paying for and maintaining those dwellings would be reckonable expenditure for the purpose of new subsidies introduced in this Bill, Mr. Amery's answer was "Yes."
So what the Minister was saying—and adding the two quotations together—is that the yardstick is to continue; yet payments in excess of the yardstick are to be treated as reckonable expenditure for the purposes of the new subsidies. What I am first asking the Minister to do is to clarify the situation and let us know, in case there has been a misprint, what the situation is with regard to subsidies under the new system as applying to, first, the excess costs attributable to exceeding the yardstick where the dwellings have already been built; and, secondly, the costs attributable to exceeding the yardstick where the buildings are about to be built.
One of the purposes of this Amendment is to enable a local authority to
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look after the repair and maintenance of its property without suffering in any way so far as subsidy provisions are concerned. Repair and maintenance is a regular item of expenditure in all local authority housing accounts. In some cases it is treated on the basis of the actual expenditure incurred; in other cases there is a reserve charged and the creation of a reserve fund serves to level out the cost of repairs and maintenance over a period of years. The purpose of this Amendment is to ensure that either of those systems would continue to be permitted without suffering any prejudice to their subsidy entitlements. Similarly the latter part of the Amendment refers to
"repayment of interest and capital monies borrowed for that part of the cost of dwellings which is or was in excess of the 'approved cost' for the purposes of Part I of the Housing Subsidies Act i967."
I have already referred to approved cost. Those are the purposes of the Amendment. If we can get the assurances that I have asked for we should not need to press the Amendment unduly. In that sense, I beg to move.
LORD SANDFORD: I think we are getting a little ahead of ourselves but I have no complaint about that. If we can discuss matters which fall to be discussed in Clause 4 when we are on Clause 3 I shall not complain so long as we do not have to discuss them all over again. But if I could, nevertheless, deal with these matters in the context of the Amendment moved by the noble Lord, I think that would be more orderly than to deal with them straight away in the form in which he put them to me.
His Amendment is asking that expenditure on repairs and maintenance should be taken into account when we come to make calculations about transitional subsidies, which is what we are discussing now. My answer to that is "No, they cannot"—not because they do not come into the overall calculations but because they come in on the calculations of the increase of reckonable expenditure which attracts rising costs subsidy under the next clause. So I hope that will satisfy the noble Lord that the factors to which his Amendment refers are taken into account and do attract subsidy; not under this particular subsidy, but under the rising costs subsidy. If I were to agree

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to his Amendment, local authorities would get subsidies for the same factor at two different points. That would lead them to get 150 per cent. or 180 per cent.; and I do not think that even noble Lords opposite would consider that to be equitable.
Turning to the second point about the cost yardstick, I confirm that approved expenditure within the cost yardstick will attract subsidy in the terms provided for under rising costs subsidy in Clause 4. But when the Party opposite introduced their Housing Subsidies Act in 1967—and that included the housing cost yardstick—they did not provide for any subsidies to be payable towards housing costs not approved under the yardstick, and we do not propose to introduce them now. So the answer to the noble Lord is that housing costs, yardstick costs, are certainly taken into the calculation under the rising costs subsidies, but these do not go beyond what is approved cost under the yardstick; and I do not think that the noble Lord would expect them to.
8.30 p.m.
LORD DIAMOND: I am sure that it is my fault that I did not understand that, and not the noble Lord's fault. I agree that once you deal with the question of the yardstick you cross the border between Clause 3 and Clause 4; that there is no need for us to consider it again under Clause 4 and that it will save time to get the whole point cleared up now. I thought the noble Lord was saying that the yardstick will still be used, but that it will not be used for the purpose of restricting the subsidy. Is that what he was saying? If so, I do not know for what purpose it will be used.
LORD SANDFORD: It will be used for deciding what should be counted as reckonable expenditure and what should not be. And it is the increase in reckonable expenditure that qualifies the authority for rising costs subsidy.
LORD DIAMOND: So then it will not attract rising costs subsidy? That is the point I am getting at.
LORD SANDFORD: It will, but expenditure over and above the yardstick will not.
LORD DIAMOND: That is what we are talking about and I am glad that at
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last we are ad idem, as the lawyers say. We are talking about the expenditure attributable to the excess above the yardstick. The yardstick is, presumably, being used for some purpose, and what I am seeking to get clear is whether or not the Minister was right when he said, "The answer is 'Yes'". The question he was asked was: "Can the Minister explain to me whether, where dwellings have been built since 1967 which are in excess of the cost yardstick, the cost of paying for and maintaining those dwellings will be reckonable expenditure for the purposes of the new subsidies introduced in this Bill?" I repeat that the Minister said, "The answer is 'Yes'". Now we have the refreshing situation in which a Minister in the House of Commons says "Yes", and a Minister in the House of Lords says "No".
LORD SANDFORD: No, we are not quite in that position. I notice that in the other place they, too, got ahead of themselves at this point. The cost of paying for and maintaining these dwellings are two separate things. Maintenance repairs I dealt with earlier. The cost that lies within the yardstick, plus the tolerance about which the noble Lord spoke, is reckonable expenditure, and counts. Any expenditure above that does not qualify as reckonable expenditure. If the noble Lord looks carefully, he will see that what I am saying now is quite reconcilable with what my right honourable friend said then.
LORD DIAMOND: Perhaps the noble Lord has not got Hansard handy.
LORD SANDFORD: Yes, I have.
LORD DIAMOND: Then may I invite the noble Lord to look at it?—I am not allowed to refer more precisely than I am referring to what was said in another place by a non-Minister. What the Minister said I can refer to, and what he said, clearly and precisely, was, "The answer is, 'Yes'". For that to have any meaning I have to describe what the question was to which the Minister said, "The answer is, 'Yes'". And at the risk of boring everybody intensely I am bound to repeat that what we are talking about is the excess cost beyond the yardstick; and I am grateful to the noble Lord because he has now clarified that the yardstick includes the tolerance. What

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we are talking about is the excess cost beyond the yardstick tolerance. So if the yardstick is 100 and the tolerance is 10 per cent., what we are talking about is excess over and above 110. Suppose there to have been expenditure over and above 110, the question asked was: can he—the Minister—explain whether, where dwellings have been built since 1967 which are in excess of the cost yardstick, the cost of paying for those dwellings (that means paying for the figure up to 110, and paying for the balance in excess of 110) will be reckonable expenditure for the purposes of the new subsidy introduced in this Bill? Mr. Amery: "The answer is, 'Yes'". The noble Lord, Lord Sandford: "The answer is, No'".
LORD SANDFORD: We could go on for a long time like this, but it might be as well to stop now. My right honourable friend was not answering quite the same question that I am answering. He was not answering as fully as I am answering. I am dealing with the sole question of the yardstick, the tolerance and the excess above it. I am saying that the cost of the yardstick plus the tolerance are reckonable expenditure. The excess above that is not reckonable expenditure and never has been; and the noble Lord's Party, when they introduced their 1967 Subsidies Act, never provided for the excess to count as reckonable expenditure.
LORD DIAMOND: The noble Lord really keeps making the answer as plain as a pikestaff by saying that his right honourable friend was wrong in giving as an answer a simple, "Yes". What his right honourable friend should have said—this is what I thought his right honourable friend should have said and why I am pursuing it to get it clear, because I thought there must be a misprint or a mistake—is: "The answer is 'Yes', so far as the approved cost plus tolerance is concerned; and No', so far as the excess above approved costs tolerance is concerned." His right honourable friend did not say that, and therefore somebody has to clear up the Government's muddle.
LORD SANDFORD: If I may say so, we are in some difficulty because we can-
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not quote the passage immediately before that. My right honourable friend was asked a further question about maintenance, which I am not answering. Perhaps the noble Lord would be good enough to take my assurance that I will look at this point to see whether there is any other way in which I could make the position clear to him. Then we could perhaps leave it now.
LORD DIAMOND: I am broadly content with the information which the noble Lord has given. What he has said, really, is the usual ambivalent answer, "Yes, my right honourable friend made a mistake, but I am too much of a gentleman to say so." That is all right; we all understand that. It is perfectly clear now, at all events, that the yardstick is going to be maintained; and, of course, there could be no possible purpose in maintaining the yardstick unless you use it to measure. The part that you measure and approve of is paid for under the subsidy and the part that comes outside your measurement is not paid for. That I understand very well. That was one of the main purposes of putting down the Amendment—to clarify that situation. I think that the Committee has been more than generous in permitting this exchange of conversation to go on at this almost interminable length and will gladly permit me to seek to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.40 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 23:
Page 5, line 15, leave out ("amount") and insert ("sum")
The noble Lord said: It is perhaps convenient to discuss Amendments Nos. 24 and 25 together with Amendment No. 23. These are drafting Amendments, not suggesting drafting, but suggesting the need for redrafting. One finds in subsection (6) a possibility of confusion. The subsection reads:
"For the purposes of this section there is a shortfall in a local authority's rent increases for any year if the amount of those increases is less than the local authority's standard amount for that year as defined below, and the amount of the shortfall shall be equal to the difference (or, if the amount of those increases is zero, of an amount equal to the local authority's standard amount for the year)."

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There are a great many "amounts" in that subsection. That could be well understood were it not for the fact that in one case the "amount" is part of the phrase "standard amount"—
"the local authority's standard amount for that year as defined below".
So "standard amount" becomes a term of art. "Standard amount" has a separate and special meaning which is defined later on in the Bill. In those circumstances, I think it is less than elegant, and possibly confusing, to have in the same subsection continual references to the word "amount" when they are not connected with that standard amount, because one would normally use the word "amount" to identify it with the standard amount.
It is not as if there are not other words in the English language which would serve just as well. I have suggested, for example, that the word "sum" might serve; in other cases I have suggested that the word "amount" is no longer necessary where it is just a description and not a term of art; and in Amendment No. 25 I have made the matter more pointed by indicating how many "amounts" you would have to refer to if you substituted for the verb "is" the verb "amounts to". All I am indicating to the Government is that perhaps the subsection would be clearer if the word "amount" was left for use with the word "standard" to mean "the authority's standard amount", and any other use of the word "amount" were avoided by using some other word. Nobody other than a draftsman ever suggests to a draftsman what drafting should consist of, because it is a very recherché and arcane art with which nobody else would possibly attempt to interfere. Nevertheless, it seemed to me that there was a confusion here to which I might draw the attention of the Government. I will listen to what views they have, having considered the matter, which no doubt they have done. I beg to move.
LORD SANDFORD: As one layman to another in these matters, I must confess that this is the kind of Amendment which I should have liked to be able to accept if it were possible to achieve the purpose the noble Lord has in mind. I can see what he is trying to do, and I should have liked to do something on similar lines. But if we accept that
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the noble Lord has managed to introduce a measure of greater elegance with the first two Amendments, he has to add to the lack of elegance in the third Amendment, where we get the phrase, "and if the amount of those increases amounts to zero." I think this merely demonstrates the difficulty that laymen get into if they try to improve on the drafting of Parliamentary Counsel. I have looked into this, and done what I could to find which particular bits I could accept, but I am afraid I do not find it possible to accept any.
LORD DIAMOND: So long as the noble Lord has looked into it—I hope he realises that the third Amendment was a tongue in cheek Amendment, sort of rubbing of nose in it—and the draftsman cannot suggest a way of avoiding the possible confusion between "standard amount" and "amount" used in the ordinary sense, I leave it there and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 26:
Page 5, line 36, leave out subsection (9).
The noble Lord said: This Amendment is one of substance. It refers to the circumstances in which any subsidy or rate fund contribution is to be paid and relates thus to Part III of Schedule 1 and to Schedule 2 to the Bill. I realise that we have not yet got as far as Schedule 1 and that the proposal is to deal with that Schedule a little later, after Clause 12. That is what the Committee in its wisdom decided. and I think it is the right decision. Nevertheless, even though we are on a much earlier clause, it does refer to Part III of Schedule 1, and I have to refer to it to cover some of the difficulties.
There are two difficulties: one a lack of clarity, and the other a matter of substance. Part III of the Schedule, on page 113, sets out the limitation of certain subsidies, and correspondingly of the rate fund contributions, and it is a part of the Bill which is extremely complex and difficult to follow. There is a Table A (1) (2) (3) and so on, and A (2) reads:
"If the subsidy and contribution comprise elements based on different years, the reduction shall be made first in the elements, if any,

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based on the year of account, and, subject to that, in the element based on an earlier year before a reduction in the element based on a later year."
That of course is as plain as a pikestaff to everybody except me. It is because of the complexity in that Table and in the Schedule, which determine how the provisions of this clause are to apply, that I then come on to the substance. I refer to that because it seems to me that there could be a circumstance in which the subsidy being paid under this clause, varying between 90 per cent. to 75 per cent. (shall we say for the moment?)—although it could go even lower in a future year, down to 60 per cent.—could be phased out before the operational deficit subsidy under which the Government pay 50 per cent., I think it is, of the cost involved came in. It seemed to me that one way of avoiding this lacuna or gap would be to leave out subsection (9).
As to the meaning of the Table and of the Schedule, I think it would be more convenient to go into that in greater detail when we come to deal with the Schedule, and between now and then I may have had an opportunity of considering any information which the Minister has been good enough to provide which will enable one to understand the Schedule the better. But as to the substance of it, that is the reason for my moving the Amendment now—in order to prevent the occurrence of the situation I have just described.
BARONESS YOUNG: I wonder whether I may take advantage of the offer of the noble Lord, Lord Diamond, to leave the part dealing with the Schedule until we have reached that point in the Bill. I know that if there is any information we can supply by way of clarification or explanation, the Government will be very happy to supply it. The reason the Government are not able to accept this Amendment is because of the way in which both the transition and the rising costs subsidies are to work: they are paid to a local authority as a result of deficits arising in the Housing Revenue; Account. If this particular clause were removed from the Bill the subsidies could be paid regardless of whether the Account was in surplus or deficit; and that is not really the purpose of the subsidies.
LORD DIAMOND: I am grateful to the noble Baroness, and, as she says, we can come to the Schedule later. I quite see that the Government must have support for the purposes which she mentioned; but to move this Amendment was the only way in which I could seek clarification and alleviation of the anxiety which I have expressed and to which I do not think she has fully turned her. mind. This clause refers to the transition subsidy, and the noble Baroness rightly referred to the effect this has jointly with the operational deficit subsidy. My concern was to ascertain whether or not it would be possible to have the phasing out of a transition subsidy before the operational deficit subsidy applied. I am only concerned with that lacuna, or gap, and if I could be assured that when one ends the other comes in, then I should feel inclined to seek to withdraw the Amendment.
BARONESS YOUNG: My understanding is that the transition subsidy can go on—it might not, but it could go on—and the operational deficit subsidy—which concerns an authority that at present (that is to say, either in the years 1970–71 or 1971–72) makes a rate fund contribution—is a separate one and would go only to that particular authority. But the transition subsidy could go on.
LORD DIAMOND: I think we have to leave it at that and perhaps consider it further when we come to the operational deficit subsidy. I seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
Clause 4 [The rising costs subsidy, and associated rate fund contribution]:
8.56 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 27:
Page 6, line 5, leave out paragraph (a).
The noble Lord said: I beg to move. We are now dealing with a new clause which concerns the rising costs subsidies. If we leave out paragraph (a) we should leave out the reference to a figure of £6 which, according to my recollection, was a diminution from the subsidy that might otherwise be obtained. It

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is a diminution which does not apply except in the years mentioned; that is, 1972–73 and 1973–74. Paragraph (b) goes on to deal with the rising costs subsidy and says:
"(b) if for the year 1974–75 or any subsequent year there is any increase in the local authority's reckonable expenditure"
whereas paragraph (a) referred to the circumstance where:
"… there is an increase in the local authority's reckonable expenditure which exceeds £6 multiplied by the number of Housing Revenue Account dwellings …"
So what we are concerned to do in this Amendment is to achieve for 1972–73 and 1973–74 what the Bill achieves for 1974–75 and subsequent years. There seems to be no reason for differentiating those two earlier years and a very good reason for having the procedure defined in paragraph (b), namely,
"…any increase in the local authority's reckonable expenditure."
I hope, therefore, that the Government will feel able to look kindly upon this Amendment which I now move.
LORD SANDFORD: We now move on to the rising costs subsidy. The noble Lord's Amendment in fact invites me to explain why for the years 1972–73 and 1973–74 there is, as it were, a threshold of £6, over which a housing authority must go before it qualifies for a rising costs subsidy. The reason is that these are the years in which, under the movement towards fair rents, there will accrue to local authorities an increase in income amounting to roughly £26 per H.R.A. dwelling—an average increase in rents of 50p per annum per H.R.A. dwelling, which would yield an increase in income on the Housing Revenue Account of £26.
LORD DIAMOND: I am sorry: I did not quite hear the year.
LORD SANDFORD: The first two years of the changeover to this new system are expected to yield roughly those broad figures—an increase in income on the Housing Revenue Account of £26 per dwelling, corresponding to a rise of 50p per H.R.A. dwelling. That increase in income has to be seen against the withdrawal of the existing subsidy of £20 per dwelling, leaving an increase of income available to the local authorities in those areas of £6 per H.R.A. dwelling. After these years, during the initial stages
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of the progression towards fair rents, about which we shall be speaking shortly, that increase in income ceases, and therefore the threshold comes away. I think the noble Lord will agree that during these first years it is reasonable to have a threshold for the reasons I have given.
LORD DIAMOND: I do not see that it is reasonable at all. What the noble Lord is saying is, as I had indicated to him earlier but which he rejected at the time, that the whole of this Bill is drawn up on the framework of an increase in rents of £26 per annum. The first year is 1972–73. This Bill could not possibly be enacted before halfway through 1972–73 and therefore the increase for 1972–73 will fall wholly in six months and be an increase of £1 a week; that is, £26 in 26 weeks. Therefore, what the noble Lord is now confirming is that this clause is part of a whole scheme embodied in the Bill and this subsection which I wish to remove is one in which there is an assumption of an increase in rents of £26 per year and a falling away, a withdrawal of subsidy, of £20 a year which we have already passed. As we have passed the £20 a year, and as there is £6 here, it can only be on the basis of an increase of £26 a year.
I am therefore invited by the noble Lord to come back to the point that I was making that this Bill is predicated on that assumption and that that assumption has now been riddled by the Government because in the case of Binning-ham, and any authority like Birmingham, the £26 a year will no longer apply. How many "Birminghams" there are we do not yet know; what the Government are doing about Birmingham we do not yet know. The Government are being understandably coy and shy about what they are going to do about Birmingham. They have, however, introduced into the Bill a clause (I think it is Clause 63) which will come later that destroys the whole basis on which the Bill is built. This is part of the structure which has been destroyed, and that is why I am coming back to it. We could not possibly contemplate letting this Amendment go.
Am I not right in saying that the £6 referred to here is part of the framework and is the difference between the £20 which we have already passed and the

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£26 which therefore falls to be regarded as an inflexible increase in rent for those local authorities which are with reckonable expenditure being dealt with in this clause for rising costs subsidy purposes? There can be no doubt that that is the case. There is an opportunity for the noble Lord to say something more about it if he wishes to do so. It is a further example of the way in which the Bill, since it was originally conceived, has been completely altered by the Government. It is a totally different situation now. Our anxiety is to prevent the £26 increase in rent for the reasons which I have referred to many times: economic, inflationary, hardship—a whole variety of reasons. For those reasons alone, I could not contemplate suggesting to the Committee that this subsection should remain in the Bill. I want to nail it completely and clearly that I have understood from the Minister aright that this £6 is the difference that I have already indicated. It is part of the framework of the Bill and has been shot to pieces by the clause which deals with Birmingham, and all the other Birminghams—and Birmingham is the second largest city in the country; we are not talking about a hamlet—and subject to anything further the noble Lord has to say, I strongly recommend the Committee to divide on this Amendment and I hope to get considerable support upon it.
LORD HYLTON: Can my noble friend tell us whether the Secretary of State has discretion to reduce the withdrawal factor of £20 a year in those cases where the local authority made out a case for not raising its rents by the foreseen £26?
9.5 p.m.
LORD SANDFORD: The noble Lord has introduced the Birmingham case into the discussion and I agree that it has relevance here. The discretion to which my noble friend refers is contained in Clause 63, the first one dealing with the increase to fair rents. The so-called Birmingham situation is the one which will be applied only to a limited number of authorities where it will not be necessary to increase rents by as much as an average of 50p per year in order to reach the fair rent figure. Birmingham's application to be considered under this clause is before the Secretary of State at the moment, so I cannot say very much about
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it. That makes it rather difficult for me to respond as fully as I should like to the noble Lord, Lord Diamond, at this moment. I am very ready to agree that he has a point here which will apply to these particular authorities. I do not think it will apply to very many authorities; the great majority of authorities will have an increase of income of the scale which I have just described; namely, an average of £26 per annum per H.R.A. dwelling. I recognise that he deserves a fuller response than I am able to give him at this moment in respect of particular authorities that are in the same situation as Birmingham.
I will undertake to reconsider this matter in respect of those particular authorities with a view to giving him a better explanation than I am able to at the moment of how their circumstances will be met in this respect. How their circumstances will be met in respect of the rise to fair rents is clear enough from Clause 63. The noble Lord is perfectly right, it has repercussions in this clause as well. I wonder whether the noble Lord will accept my assurance. I shall be only too glad to give him further assurances and explanations when in a position to do so, which I am not at the moment.
BARONESS GAITSKELL: Is not this the real, crucial criticism of this Bill? The Minister said that there will not be many authorities to which this applies. But how is it that the Government have not worked out, do not know, which are the authorities? I think Newcastle is another of them. And how can the Minister say that there will not be many authorities? On what authority does he say it? On what knowledge does he say this? Is not this, whatever one calls it, the real criticism that all of us have of this Bill on this side of the Committee?
9.9 p.m.
LORD SANDFORD: I really do not think so. Everybody knows that Birmingham are in many ways a unique authority in the housing field. They are the only authority which have already introduced rent allowances for private tenants. They are unique in many other ways. The fact that they are in this position does not in the least invalidate the structure of the Bill as a whole for the great majority of authorities.
LORD GARNSWORTHY: I do not want to add to the confusion because the Bill creates enough already, but Birmingham surely was not the authority which sparked this off. Amendments were introduced (if my recollection is right) in November of last year and at that time I think the case was more concerned with Leicester. It really was only as the local elections approached that Birmingham came into the picture.
LORD SANDFORD: That may be so, but Birmingham has been a unique housing authority since long before the last elections.
LORD DIAMOND: It is true that Birmingham is a very special case but it is an extremely large case. The noble Lord first of all has offered to give me further information. May I say that I am grateful to him. Of course the noble Lord will do that. We rely on him and accept his assurance in that regard. The noble Lord will not consider me discourteous, however, if I say that we are at the moment considering something which is even more fundamental than his assurances with regard to information. The noble Lord is not able to give us information about the Birmingham matter although it has been under consideration. The noble Lord said that the matter is before the Minister. It has been before the Minister and everybody has inquired about it and everyone has received the same answer for two months now, although it is something which cannot take all that time to consider.
The noble Lord recognises—and I am grateful to my noble friend Lord Garnsworthy for making it clear—that Birmingham is not unique in this situation at all events. It is not unique in the situation that it is an authority
which, if it were to increase its rents all round by £26 a year, would puncture the ceiling because the fair rent figure is a maximum; it would puncture the ceiling and therefore could not do that. So the provisions of the Bill could not be enacted—the Government's own Bill could not be enacted. This is a subsection which depends upon that being enacted because it concerns £6 of that very £26. So we are in a situation where we have to recognise (with the greatest possible respect to the Minister Lord Sandford, for whose courtesy I am always grateful) that the Government themselves are in a terrible difficulty. It is clearly a difficulty which does not relate to Birmingham only. The noble Lord says that he cannot say to how many other authorities it applies. No, he cannot. But I think I can tell him that there are many authorities which are scratching their heads at the moment to see the extent to which they can come within the same walls as Birmingham has fitted itself into, acceptably so far as the Minister is concerned. You only have to have a few authorities of that size to make the Bill quite ridiculous. So I am saying to the noble Lord, Lord Sandford, that I am grateful for the information he has promised to give, but we shall obviously have to come back to this question many times if the Government insist on going on with the Bill. I repeat that this is evidence that the whole structure of the Bill has been punctured, and we certainly must show our views about this particular subsection here and now.
9.12 p.m.
On Question, Whether the said Amendment (No. 27) shall be agreed to?
Their Lordships divided: Contents, 17; Not-Contents, 60.

CONTENTS

Avebury, L.

Garnsworthy, L.

Shepherd, L.

Beaumont of Whitley, L.

Hale, L.

Stow Hill, L.

Beswick, L.

Llewelyn-Davies of Hastoe, Bs. [Teller.]

Strabolgi, L. [Teller.]

Davies of Leek, L.

Tanlaw, L.

Diamond, L.

Seear, Bs.

White, Bs.

Gaitskell, Bs.

Shackleton, L.

Wynne-Jones, L.

NOT-CONTENTS

Aberdare, L.

Balfour, E.

Berkeley, Bs.

Ailwyn, L.

Barnby, L.

Bessborough, E.

Allerton, L.

Beaumont, L.

Chesham, L.

Amherst of Hackney, L.

Belstead, L.

Cork and Orrery, E.

Cowley, E.

Gowrie, E.

Reading, M.

Craigavon, V.

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

Reay, L.

Crawshaw, L.

Redesdale, L.

Daventry, V.

Hertford, M.

Reigate, L.

de Clifford, L.

Hylton, L.

Ruthven of Freeland, Ly.

Denham, L. [Teller.]

Kemsley, V.

Sandford, L.

Digby, L.

Kilmarnock, L.

Sandys, L.

Drumalbyn, L.

Latymer, L.

Sempill, Ly.

Dundonald, E.

Lauderdale, E.

Sinclair of Cleeve, L.

Elles, Bs.

Lothian, M.

Strathclyde, L.

Ferrers, E.

Margadale, L.

Terrington, L.

Ferrier, L.

Massereene and Ferrard, V.

Tweedsmuir, L.

Fisher, L.

Milverton, L.

Tweedsmuir of Belhelvie, Bs

Fortescue, E.

Monsell, V.

Vivian, L.

Fraser of Lonsdale, L.

Mowbray and Stourton, L. [Teller.]

Wolverton, L.

Gage, V.

Young, Bs.

Gainford, L.

Rankeillour, L.

Resolved in the negative, and Amendment disagreed to accordingly.

9.20 p.m.
LORD DIAMOND LORD DIAMOND moved Amendment No. 30:
Page 6, line 18, leave out subsection (3).
The noble Lord said: I beg to move this Amendment and it would perhaps be convenient if at the same time we considered Amendment No. 35—Page 7, line 21, leave out subsection (5). The first of these two Amendments concerns subsection (3) under which the Secretary of State has power to order that the amount on which the rising costs subsidy is based
"shall be determined in accordance with a formula specified in the order, being a formula designed to reduce the amount of rising costs subsidy so far as based on any year after 1981–82 specified in the order."
In short, here is a provision under which the subsidy is to be reduced, as I understand it, after the year 1981–82 if the Secretary of State so decides.
The second Amendment, No. 35, at page 7, line 21, concerns subsection (5), which states:
"The Secretary of State may from time to time by order, for such years after 1981–82 as may be specified in the order, in column 2 of the Table above for 75 per cent. substitute such other percentage, not being less than 60 per cent., as may be specified in the order."
Really both these subsections are saying the same thing: giving the Secretary of State power, for reasons undisclosed, to reduce the amount of the subsidy after the year 1981–82. This is a subsidy which has been frequently referred to as vitally necessary for local authorities—the rising costs subsidy—and so long as the local authority is subject to a rising cost which has to be calculated annually, I cannot see 'why there should be any
524
erosion of the subsidy. I therefore move the Amendment in the hope that the Government will either justify it or accept the Amendment.
LORD SANDFORD: It would be convenient to discuss this Amendment and Amendment No. 35 together because they both form part of the review which we think is necessary to have after the year 1981–82 to give the Secretary of State an opportunity to adjust the provisions of this clause in three different ways. All the remarks I made on a similar provision under Clause 3 apply here; namely, that after this length of time there may well be a need to refine still further the selectivity under which all these subsidies apply and to make distinctions, using Clause 16, as between certain classes of local authorities or even between individual local authorities. Some may need to have their subsidy increased, as the noble Lord, Lord Diamond, himself recognised; others may no longer need to have the subsidy at the rate of 75 per cent. It may also be convenient to re-introduce a small threshold of the kind we were talking about a moment ago. The Secretary of State has power to do all this, but it is prescribed in Clause 16 that before exercising the power to make these orders he has to consult with the local authority associations and the order that he eventually makes is subject to Negative Resolution in either House of Parliament. I think there are sufficient safeguards; there is the requirement to consult. The noble Lord will recognise that after the lapse of this period of time there may well be changed circumstances which will require the Secretary of State to exercise his powers in one or more of these directions.
LORD DIAMOND: I am very grateful to the noble Lord. I take it we are still on Clause 4 of the Housing Finance Bill. One should never jump to conclusions, and I wanted to check that first of all; and I take it we are still dealing with subsection (3).
LORD SANDFORD: And subsection (5).
LORD DIAMOND: In that case I find it difficult to relate the Bill to what the Minister said, but no doubt we shall achieve success if we plod along. What the Bill says is:
"The Secretary of State may by order direct that, for such years after 1981–82 as may be specified in the order …(b) the qualifying amount, if any, shall be determined in accordance with a formula specified in the order …"
If we had left it there what the noble Lord said would, of course, he relevant. But the subsection goes on:
"being a formula designed to reduce"—
not to vary but to reduce—
"the amount of rising costs subsidy, so far as based on any year after 1981–82 specified in the order."
As I read it, that order may only reduce the amount. If he did not want to reduce the amount he would not bring in an order. If he wanted to increase the amount of the subsidy he would be stuck; he has no power to vary upwards.
I am somewhat confirmed in that daring suggestion that the noble Lord, Lord Sandford, was talking about a different clause in a different Bill by referring to subsection (5). There again it provides:
"The Secretary of State may from time to time by order, for such years after 1981–82 as may he specified in the order …" —
substitute some other percentage for 75 per cent.—
"not being less than 60 per cent, as may be specified in the order".
There is there no limitation to the direction in which the variation can go, but the indication that it could go down to as low as 60 per cent. So we have in the second case an indication of the variation being a variation downwards to anything between 75 per cent. and 60 per cent.; but in the other case—unless I am misreading the Bill completely—there is a formula which gives the Secretary of State power only to reduce the amount of rising costs subsidy
526
after the year 1981–32. So I am bound to ask the noble Lord for a further explanation, in particular of subsection (3).
LORD SANDFORD: I used the term "vary" in respect of the rate of rising costs subsidy and was referring then to subsection (5). But when we are talking about the qualifying amount it is the Whole increase in reckonable expenditure between one year and the preceding year which qualifies, and as it is a whole amount it is not possible to vary that except by a small reduction in the qualifying amount, which is the same thing as introducing a threshold. There is scope for doing that under that particular subsection; but when we are talking about subsection (5) and the variation in the rate of the rising costs subsidy there is scope for reducing it to 60 per cent., or increasing it and selecting one local authority or class of local authority against another class of local authority in order further to refine the ability of the system to concentrate need on areas that need it.
LORD DIAMOND: As for the 75 per cent./60 per cent., we have had this argument before and at this hour one does not wish to delay the Committee longer on that. We have made it clear, as the noble Baroness said in a most persuasive speech earlier, that the frequent financial relationship between central Government and the local authority of 75/25 does not mean 60/40. Sixty/forty is much too low and there is no reason to give the Secretary of State power to introduce a diminution of that order in 1981–82, and it is better that that part of it should he emitted. If we cannot get that part omitted we have to omit the whole of it.
So far as the qualifying amount of subsection (3) is concerned, the noble Lord refers to this as a "threshold". I am a simple man and I do not exactly know what a threshold is. I do know whether you get your subsidy as before, or less than before. Even at this hour I can just about encompass that. It seems to me that the subsection is providing a latitude on behalf of the Secretary of State to retain more to local government and pay less to local authorities. That is why we must vote against it.
LORD SANDFORD: The noble Lord must vote against the subsection if he thinks he has to, but I am happy to be

527
drawn further into explaining this particular part of the noble Lord's Amendment, particularly as it may save us time because the next Amendment, No. 31, refers to this point. It comes into the general view. No. 31 is an Amendment to leave out the word "reduce" and to insert the word "vary", and for the reason which I have just given, that the qualifying amount is the whole amount by which one year's reckonable expenditure exceeds another, it is not possible to vary it upwards, but you can reduce it. The possibility is to reduce the qualifying amount, for instance by saying that the first £2 per H.R.A. dwelling should not qualify for rising costs subsidy except in the case of certain local authorities.
It may well be desirable after 10 years for certain authorities to qualify for rising costs subsidy for any increase in reckon-able expenditure over the previous year and at the same time to provide certain other classes of local authority which only qualify for rising costs subsidy for that amount of increase in their expenditure over a £2 threshold.
LORD DIAMOND: The noble Lord should not be so shy. He should say in more simple terms that it means that if this subsection is passed there can be less money paid to a local authority by way of rising costs subsidy. Am I not right?
LORD SANDFORD: The operation of all three options by the Secretary of State may well enable him to increase rising costs subsidy to some local authorities and reduce it to others. That is the kind of additional selectivity which may be desirable in 10 years' time.
LORD DIAMOND: The noble Lord insists on these subtle words such as "selectivity", but I insist on these plain words such as "more" or "less". So far as this subsection is concerned, a local authority will, if this power is exercised,
get less, as the noble Lord said. It may, for example, be desirable for the Government to exclude the first £2. Then on £2 you get that proportion of subsidy less. I can see no reason whatever why the Government should be taking that power as far ahead as 1981–82 so that, for all the years from 1974–75 until the system is altered, the Bill provides for the qualifying amount to be the whole of the excess in reckonable expenditure. There is a separate issue about the percentage to be applied to it, but "it" is the whole amount. The noble Lord now seeks to argue that there should be some reduction for some selectivity basis in 1981–82.
I do not have the power of the precise foresight with which the noble Lord is gifted, and I do not recommend to the Committee that we should give a Minister those powers at this stage. It is not inconceivable that, by the year 1981–82, it will be necessary to have a further Bill on housing finance in which changes can then be incorporated. It is even conceivable, although I am not persuaded of it, that by 1981–82 the Government may be out of their legislative mess and muddle and may have got matters straight. But I do not know, and perhaps that is going too far. At all events, it is not beyond the realms of possibility that there could be another Bill to deal with the situation in ten years' time. I doubt whether there has been any period of ten years in our history when there has not been a Housing Finance Bill of some kind or other. So I am not impressed by the argument, and I think we must divide the Committee in order to show that we believe that local authorities should from 1981–82 continue to get what they will be getting up to 1981–82.
9.38 p.m.
On Question, Whether the said Amendment (No. 30) shall be agreed to?
Their Lordships divided: Contents, 11; Not-Contents, 57.

CONTENTS

Beaumont of Whitley, L.

Hale, L.

Strabolgi, L. [Teller.]

Beswick, L.

Seear, Bs.

Tanlaw. L.

Diamond, L.

Shackleton, L.

White, Bs.

Garnsworthy, L. [Teller.]

Shepherd, L.

NOT-CONTENTS

Aberdare, L.

Ferrers, E.

Mowbray and Stourton, L.[Teller]

Ailwyn, L.

Ferrier, L.

Allerton, L.

Fisher, L.

Nugent of Guildford, L.

Amherst of Hackney, L.

Fraser of Lonsdale, L.

Rankeillour, L.

Balfour, E.

Gage, V.

Reading, M.

Barnby, L.

Gowrie, E.

Reay, L.

Beaumont, L.

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

Redesdale, L.

Belstead, L.

Reigate, L.

Berkeley, Bs.

Ruthven of Freeland, Ly.

Bessborough, E.

Hertford, M.

Sandford, L

Cork and Orrery, E.

Hylton, L.

Sandys, L.

Cowley, E.

Kemsley, V.

Sempill, Ly.

Craigavon, V.

Kilmarnock, L.

Sinclair of Cleeve, L.

Crawshaw. L.

Latymer, L.

Strathclyde, L.

Daventry, V

Lauderdale, E.

Terrington, L.

de Clifford, L.

Lothian, M.

Tweedsmuir, L.

Denham, L.[Teller.]

Margadale, L.

Tweedsmuir of Belhelvie, Bs.

Derwent, L.

Massereene and Ferrard, V.

Vivian, L.

Drumalbyn, L.

Milverton, L.

Wolverton, L.

Elles, Bs.

Molson, L.

Young, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

9.45 p.m.
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 31:
Page 6, line 23, leave out ("reduce") and insert ("vary").
The noble Lord said: If I may say so, my noble friend Lord Diamond has served the Committee well. If it is the duty of an Opposition to probe and to press a differing point of view, then he has put up a remarkably good performance this evening. If he needed a rest—and I am not quite sure that he did, for he seemed to be in good form—then I am delighted that it should fall to me to give him a brief respite. I beg to move the Amendment standing in my name on the Marshalled List. I am hopeful that the Government on this occasion may accept an Amendment that is so innocent and yet could achieve so much. Although there has been much objection from the other side this evening when we have referred to subsidy reduction, and despite what Lord Sandford said just now, I should like to think that they will seize this opportunity to accept the Amendment.
I wish to make clear what the Amendment aims at doing. We are still on the rising costs subsidy. The use of the word "reduce" has an ominous connotation. As I think the Government this evening have demonstrated, they clearly do not like us to talk about reductions. The use of the word "vary" would at least avoid the conclusion that movement of subsidies could be in a downward direction only. The use of the word
530
"vary" would give the impression that there would be a power of flexibility (of which we have heard so much) up or down. The Secretary of State clearly ought to possess this power. It may be said, and I have no doubt that it will be said, that he does possess it. At this late hour I feel that I have a duty to try to be helpful and to make it clear that he has this power. The word "vary was in fact used by the Secretary of State himself, in Standing Committee E on December 9, when he said:
"We may have major housing legislation before then or during that period; but that gives the Secretary of State a fair amount of flexibility which both sides of the Committee would wish to give him to be able to vary the amounts after local authority associations have been consulted and after the 10-year period."
I hope I have spoken with clarity and perhaps with some brevity, because there is a great deal more that could be said. Those are two qualities which I hope will commend themselves to the Government and persuade them to be a little magnanimous at this hour. I can see no harm being done to the Bill.
9.50 p.m.
LORD SANDFORD: I will certainly be as magnanimous as I can in response to this Amendment, but, as I have already explained—because we strayed into this Amendment when dealing with the previous pair—when the qualifying amount to which this Amendment refers is the whole of the increase in reckonable expenditure, it is not possible to increase it. If there is a variation is must be a reduction. It is just playing with words

531
to no purpose to make the substitution which the noble Lord is asking us to make. But the scope provided for the exercise of the Secretary of State's discretion at this point is coupled with his discretion under subsection (5). Under that subsection lie has power to increase the rate of rising costs subsidy from 75 per cent., which is what it would probably be at, to some higher figure if, in 1981 and 1982, there are housing authorities still burdened with heavy problems of housing. If there were such authorities it would very likely be the Secretary of State's intention and wish to do that very thing. In that case the amount of subsidy to those authorities—and it may well be necessary and desirable to be selective—would be not reduced, but increased. But we cannot use the word "increase" in subsection (3) because it is grammatically impossible.
LORD GARNSWORTHY: I thank the Minister for that very clear statement. He has reiterated what he said earlier and I take his point, that he regards this as a quite trivial Amendment. That was why I was hopeful that the Government might have been willing to accept it. If they will not accept Amendments of vital importance one would have thought that they would want to be a little conciliatory. The use of the word "vary" would do no harm. It would indicate quite plainly that there was a possibility of the figure going even above 100 per cent. If the Minister is so unresponsive in a small matter like this I would not wish to take up the time of the Committee in pressing it to a Division. But I express regret, and if this kind of attitude, this unwillingness to make any kind of concession, is taken, clearly it is likely to temper our approach to further debates. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.53 p.m.
LORD GARNSWORTHY LORD GARNSWORTHY moved Amendment No. 32:
Page 6, line 32, leave out from ("below") to end of line 40.
The noble Lord said: I think that it might be for the convenience of the Committee if with this Amendment I speak to Amendments Nos. 33 and 34. When this Bill was in another place, during Second Reading the Secretary of State
532
said—I quote from the OFFICIAL REPORT of November 15, 1971, at column 36—
"Clause 4 provides a rising costs subsidy which will be of particular importance in encouraging local authorities with an existing programme to expand and continue their housing programmes without any fear of those expansions of programme having an adverse effect on their revenue."
As I understand it, rising rents are expected to produce a surplus which can be used to finance new building. But the more they build, the greater the likelihood, some think the certainty, of an increased burden on the ratepayer. Putting encouragement on one side, that would seem to risk positive disincentive to building.
Local authorities tend to differ in their approach to building houses. Some of the worst flatly refuse to tackle building by public enterprise; certainly they object to building to let at reasonable rentals on a scale commensurate with local need. Some feel that the home seeker should buy. Others see housing as a social service—we on this side do —realising the importance of families living and growing up in a decent environment, with rents at levels that permit a good living standard. All the means testing that features so prominently in current thinking by the present Government is disliked and rejected by masses of the people of this country.
These authorities who are keen to build, to do a good job, can be discouraged if they have to face too heavy a burden on the rates. If they are to undertake a programme commensurate with local need, then they require the financial resources to carry it through. So it would seem pregnant to inquire what advantage this new subsidy will have over the existing system, if it continues. The Amendment would ensure that the Government pay the full cost of subsidy instead of shifting the burden steadily on to the ratepayers, with all that that would involve in the building programme.
I should like to touch on the source of income which local authorities are expected to rely on; that is to say, ultimately, rent income. It has been said that when a local authority achieves surplus it can devote a good deal of money to new building projects. Does not that mean from the profits extorted from tenants? What sort of morality is that?

533
These people pay rates and taxes as well as the rest of us. Further, the issue of being in surplus is to be decided after meeting administrative costs that again are most questionable—and we shall be coming to this later in our consideration of the Bill. I beg to move.
BARONESS YOUNG: At this late hour I do not wish to take up the time of the Committee in reiterating the arguments that we have had about the proportions of the subsidies paid by central Government and local government. I can only say in answer to the noble Lord, Lord Garnsworthy, that we take the view that it is not satisfactory from the point of view of this relationship between central and local government for there to be 100 per cent. deficit subsidies, in this case in relation to the rising costs subsidy. I do not think I need go through the arguments that we had about this before. We believe that this is the right proportion, and we therefore feel unable to accept the Amendment.
LORD GARNSWORTHY: I. can only regret the reception given to this Amendment. At this hour I certainly should not wish to delay the Committee beyond an agreed time arranged through the usual channels, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
House resumed.

FRIENDS OF THE CLERGY CORPORATION BILL [H.L.]
Reported with Amendments.
THAMES BARRIER AND FLOOD PREVENTION BILL
Brought from the Commons; read 1a, and referred to the Examiners.
  A.9 ROAD AND NEW RAILWAY BRIDGE
  A.9 ROAD AND NEW RAILWAY BRIDGE
  "LOW INTENSITY OPERATIONS": ROYALTIES
  "LOW INTENSITY OPERATIONS": ROYALTIES