Sitting of 11 April 1973

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

    EEC—Commonwealth Consultations
    Mr. Dormandasked the Secretary of State for Foreign and Commonwealth Affairs if the Government will now take steps to seek to arrange frequent consultation between the EEC and member nations of the Commonwealth.
    The Chancellor of the Duchy of Lancaster (Mr. John Davies): It is for the independent Commonwealth Governments to decide for themselves on the degree of consultation they wish to have with the European Communities. I am glad to say that many of these Governments have already accredited their representatives to the European Communities and others are in the process of doing so.
    Mr. Dormand: Does not the equivocation of that answer demonstrate yet again that in the eyes of this Government the Commonwealth is a very poor second to the EEC? One concedes that the present disintegration of the Commonwealth is not entirely the fault of this Government, but will the right hon. Gentleman recognise that that disintegration is now a matter of deep concern to many people within the House and outside? Does he not agree that this country has a special responsibility to try to restore the bonds which formerly linked this Commonwealth?
    Mr. Davies: My right hon. Friend the Secretary of State dealt with this point on 21st March, very fully and well, in answer to the hon. Member for Easington (Mr. Dormand). There is no question
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    of regarding the Commonwealth as in second degree to the Community. The truth, however, is that in these matters Commonwealth countries have an independent position to demonstrate to the Community, and naturally they do so with the full understanding and support of Her Majesty's Government.
    Mr. Marten: Would not one of the best ways to help the developing Commonwealth be for the Common Market to come out absolutely clearly and say that it will accept the 1·4 million tons of Commonwealth sugar from the developing countries at the right price, rather than just saying that it will "have it at heart" to do so?
    Mr. Davies: As my hon. Friend knows, the countries principally concerned in the Commonwealth met here at the end of last month. I think that they went away from that meeting with a real sense of satisfaction that their interests were both understood and considered—not just sympathetically but effectively—here and in the Community.
    Mr. Callaghan: If the Commonwealth as a whole decides that it would like to make a common approach to the EEC, whether on the subject of sugar or anything else, may we have an assurance that such a co-ordinated move will have the support of Her Majesty's Government?
    Mr. Davies: Clearly, it would have to be seen in what fields the Commonwealth as a whole—which, after all, includes this country—was involved in making a direct approach to the Community. This country is now a member of the Community. There are considerable areas for movement by groups of Commonwealth countries—particularly in sugar producing— to take direct action with the Community, and they are, as they know, strongly supported and helped by Her Majesty's Government.

    Rhodesia
    Mr. Strangasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement outlining the representations he has made to the illegal régime in Rhodesia on recent developments in that country.
    Mr. Haselhurstasked the Secretary of State for Foreign and Commonwealth

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    Affairs if he will make a statement on the latest developments in Rhodesia.
    Mr. Molloyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest developments in Rhodesia.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): As the House knows, I made representations to the Rhodesian authorities following the detention of Mr. Niesewand and leading African National Council members. I have also taken up with Mr. Smith the matter of the recent trial of Mr. Niesewand.
    I have seen the statement made by Mr. Smith on 5th April indicating that he would make a further attempt to secure a settlement. But, as I have all along made clear, what is now required is agreement between the races in Rhodesia on the basis for a settlement.
    Mr. Strang: Will the right hon. Gentleman assure us that the Government will follow up last Friday's message of protest to Ian Smith about the trial of Peter Niesewand? Will he take this opportunity of making it absolutely clear that no negotiations will take place with the illegal régime unless the Africans are directly represented, and, further, that any talk of independence means that political detainees will have to be released first?
    Sir Alec Douglas-Home: It is quite clear that there must be a basic agreement between responsible Africans and the Rhodesian administration before any proposals can be seriously considered. As for the trial of Mr. Niesewand, what all of us on both sides of the House and in the country as a whole deplore is the fact that the Rhodesian authorities held these entire proceedings in camera and have allowed no details of the charges to be known, so that no one is in a position to judge either the charges or the penalties. That is the real offence that has been committed, which we thoroughly deplore.
    Sir G. Nabarro: The demerits of the Niesewand case aside, can my right hon. Friend say what progress or otherwise has been made in the matter of adherence to sanctions, and why this country should put up with the fact that an increasing
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    number of our international colleagues— Japan, West Germany, Italy, France and several other members of the European Economic Community—are now trading freely with Rhodesia, whereas British goods are, evidently, wholly debarred?
    Sir Alec Douglas-Home: As my hon. Friend says, we are maintaining sanctions. Many other countries are not. We are representing each case that comes to our notice where, in our opinion, there is conclusive evidence that sanctions have been broken. We must continue to do that and hope that the performance of other countries will improve.
    Mr. Molloy: Regarding the Niesewand trial, is the right hon. Gentleman aware that his prompt and condemnatory statement has gained the overwhelming support of all hon. Members, and that he is to be congratulated? Will he see to it that any further indulgences of this sort of vulgarity receive the same treatment from him, as it must be quite clear to him that the Smith régime intends to trample on human rights and offend all canons of freedom, justice and democracy? Our nation has a responsibility to people of all colours and creeds in Rhodesia. Will the right hon. Gentleman make it clear that he intends at all times, as he has done recently, to be on their side?
    Sir Alec Douglas-Home: A Bill of Rights must be included in any future settlement. It was in the provisional proposals of 1971. Certainly there must be a Bill of Rights. But, returning to what I said earlier, the fact that the entire proceedings of the Niesewand trial were in secret has created the worst possible impression.
    Mr. Soref: Does not my right hon. Friend concede that Rhodesia is in a state of war, being invaded by terrorists trained in Russia and China who are slaughtering black and white men, women and children in Rhodesia? In these circumstances is it not reasonable to expect stringent security regulations in Rhodesia, of the kind which would obtain in any other country?
    Sir Alec Douglas-Home: I agree with my hon. Friend that there is considerable pressure on Rhodesia and that terrorists are operating. That is true. But when charges are brought in court they should be made public, as, for example, they are

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    in Northern Ireland now. That is not so in Rhodesia at present.
    Mr. Whiteheadasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the operation of sanctions against the illegal régime in Rhodesia concerning asbestos exports from that country.
    Sir Alec Douglas-Home: No, Sir.
    Mr. Whitehead: Is the Foreign Secretary aware that the latest figures released by the United Nations show a discrepancy of 96,000 tons in the amount of asbestos that South Africa claims to have exported and the amount which other countries are shown as importing from her? Bearing in mind that Rhodesia is believed to be exporting over 100,000 tons of asbestos to and through South Africa annually, and the fact that we are the second largest importers of South African asbestos, will the Foreign Secretary order an inquiry into the question whether we are inadvertently importing Rhodesian asbestos? Will he make strong representations to the United States, which now does so openly and flagrantly?
    Sir Alec Douglas-Home: On the point about the United States, the hon. Member knows that we have made representations but the United States administration says that it is powerless to deal with the matter. As for British importation of asbestos, if the hon. Member has evidence which leads him to think that this country is importing asbestos against sanctions I hope he will let me have it.
    Sir G. Nabarro: Does my right hon. Friend the Foreign Secretary mean, in further reference to my earlier question, that the United States administration now disclaims any statutory responsibility for preventing the entry of such raw substances as chrome direct from Rhodesia? If that is the case the United States is virtually contracting out of its obligations in the United Nations.
    Sir Alec Douglas-Home: It is one of the facts of life that the United States does contract out in respect of this particular strategic material, which it says it would otherwise have to obtain from the Soviet Union.
    Mr. Ronald King Murray: Is not the most inflammatory thing to have hap-
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    pened in Rhodesia since UDI the detention of Mr. Niesewand? Will the Foreign Secretary see that the absestos stays in Rhodesia, for political purposes?
    Sir Alec Douglas Home: We covered that question a few moments ago.

    Bangladesh (Biharis)
    Mr. Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs what further information he has received from the British High Commission in Dacca about the condition of the Biharis in Bangladesh.
    The Minister of State for Foreign and Commonwealth Affairs (Lord Balniel): Reports this month from the British High Commission at Dacca indicate that the present position of the Biharis is generally better than it was 12 months ago. All Biharis now have shelter and daily food. Although most of them are still without work, materially their position is no worse than that of most Bangalees.
    Mr. Fowler: I thank my right hon. Friend for that reply. Does he recognise that in the last month both The Times and The Guardian have carried reports of the plight of the Biharis which do not altogether confirm the tone of that reply and, in particular, point to the present hopelessness of the Biharis' position? Is there not a serious danger that the Biharis will become permanent refugees unless urgent action is taken not only by Bangladesh but by Pakistan?
    Lord Balniel: Yes, indeed. We are most anxious that there should be a quick solution to this terrible human problem. My hon. Friend will know that arrangements are being made through the Red Cross for India and Bangladesh to release certain categories of civilians and for Pakistan to permit certain Bangalees in Pakistan to return to Bangladesh. These arrangements are welcome. It is regrettable that they are not proceeding more quickly. We understand that the Red Cross is continuing its discussions with the countries concerned.
    Mr. Wilkinson: Does my right hon. Friend agree that, although the condition of the Biharis in Bangladesh may be better than it was a year ago, it could hardly then have been worse, and that many of these people had positions of responsibility and influence within

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    Bengali society? Will he consult the United Nations High Commissioner for Refugees on what should be done to concert action to ameliorate their conditions, particularly as some Biharis have escaped to Thailand, Nepal and Burma?
    Lord Balniel: I take note of my hon. Friend's comments. The Secretary-General of the United Nations has recently visited Bangladesh, India and Pakistan and is considering whether he can constructively help in this problem.

    Malawi
    Mr. Sydney Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations between the United Kingdom and Malawi.
    Sir Alec Douglas-Home: The United Kingdom's relations with Malawi continue to be close and friendly.
    Mr. Chapman: Will my right hon. Friend make personal representations to President Banda to ask him to use his considerable influence to end the vicious religious persecutions of certain Christians in Malawi who, because of their faith, will not and cannot subscribe to or join the Malawi Congress Party?
    Sir Alec Douglas-Home: The matters to which my hon. Friend refers are matters internal to Malawi. I should have to consider very carefully before I made any representations in this respect. As far as I know, no British subjects are involved in the matters to which my hon. Friend refers.

    Soviet Jews
    Mr. Greville Jannerasked the Secretary of State for Foreign and Commonwealth Affairs whether he will instruct the British representatives at the United Nations to raise at the Human Rights Commission the continued failure of the Soviet authorities to permit Jewish persons to leave freely for Israel in accordance with the Universal Declaration of Human Rights.
    The Minister of State for Foreign and Commonwealth Affairs (Mr. Julian Amery): During the meeting of the Commission which ended on 6th April our representative, Sir Keith Unwin, spoke on
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    two occasions in support of the right of individuals to leave their country and to return to it. He also said in particular that these rights were
    "one of the basic factors for promoting international understanding and tolerance".
    He subsequently voted for the adoption of the draft principles on the right of everyone to leave any country, including his own, and to return to it, and so contributed to securing the adoption of the principles. The House will remember that these draft principles have been on the agenda for over 10 years, and their adoption is a significant step forward.
    Mr. Janner: I appreciate greatly both the Minister's statement and his approach to this problem. However, does not he agree that the current show trials of Jewish people in outlying areas of the Soviet Union, together with the continued refusal of the Soviet authorities to release many scientists and others, is wholly abhorrent and uncivilised? Will he continue to use his best endeavours to draw to the attention of the Soviet authorities on appropriate occasions the very strong and humanitarian feelings of this House regarding the continuing persecution of Jewish people in the Soviet Union?
    Mr. Amery: The general principle I have stated applies to every particular case, and very particularly to the Jews in the Soviet Union. Sir Keith Unwin's statement should be read as being full support for that case. We are watching with close interest what appears to be an improving climate in the Soviet Union towards the granting of exit visas.
    Mr. Normanton: Would my right hon. Friend and the House care to note that hon. Members on both sides of the House are taking such steps as lie in their power to draw to the attention of the individuals to whom the Question refers —and, indirectly, to the authorities in Russia—the deep concern of all hon. Members at this thoroughly unacceptable situation?
    Mr. Amery: I think that the Soviet authorities are well aware of the views held in all parts of this House on the matter.
    Mr. Mayhew: Will the right to return to the country referred to in the Question

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    include the right of Palestinians to return to Palestine, according to the United Nations resolution? Was this the same session of the Human Rights Commission which, by 18 votes to two, condemned Israel for war crimes against the Palestinians?
    Mr. Amery: I understand that the Israeli authorities have allowed a certain number of family reunions to take place since 1967. As the hon. Gentleman knows, there is a scheme under which a large number of Arab visitors may enter Israel for temporary visits. We have frequently represented to the Israeli authorities that the more they can extend these arrangements to allow Palestinians to return to their homes the greater the contribution they will be making to a final settlement.

    Aerospace Equipment (Sales Promotion)
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the efforts being made in United Kingdom embassies and high commissions to promote sales of British aerospace equipment; and what steps are taken to refute allegations made by foreign diplomatic representatives which are aimed at damaging British interests.
    Mr. Amery: The staffs of British embassies and high commissions do their best to promote the sales of British aerospace equipment. By the same token they do their best to counter any adverse publicity about British products. In all this, of course, they co-operate closely with the Department of Trade and Industry and the companies concerned.
    Mr. Adley: I am grateful to my right hon. Friend for that reply. Did he see a recent article in the Daily Express by Chapman Pincher which indicated that a degree of commercial warfare was being undertaken by certain of our overseas competitors, seeking to prevent the sale of British aerospace equipment in a number of countries? Will my right hon. Friend take a suitable opportunity to discuss this with the American authorities, which are named in the article, because if what is alleged in the article is in any way true it must surely lead to a souring of Anglo-American relations?
    Mr. Amery: My hon. Friend will appreciate that from long experience in these matters I know that the line between boosting one's own aerospace equipment and knocking that of others is rather fine.
    Sir Harmar Nicholls: Will my right hon. Friend bear in mind that, while in recent years there has been considerable improvement in the commercial outlook in our embassies, we must not let up on it? The commercial warfare which has been mentioned is a true and serious matter. We must have people who understand the idiom of business to make certain that we get a fair crack of the whip.
    Mr. Amery: I entirely agree with my hon. Friend. I think he will find that there has been a marked improvement in the contribution that the Foreign Service has made to this matter over recent years.

    Zambia
    Mr. David Steelasked the Secretary of State for Foreign and Commonwealth Affairs if he has received a copy of the report of the United Nations Security Council special mission established under Resolution 326 (1973); and if he will make a statement.
    Sir Alec Douglas-Home: Yes, Sir. The report has reached me.
    Mr. Steel: In view of the loyalty which Zambia has shown to our policy of sanctions, is the Foreign Secretary able to say yet what steps the Government intend to take in view of the report's conclusion that only adequate and timely assistance will make it possible for the Zambian economy to continue developing in a normal fashion? Can he yet add to the announcement made last month of £1 million aid for road transport?
    Sir Alec Douglas-Home: I cannot add to that as yet, but my right hon. Friend the Minister for Overseas Development has been in Zambia and we are considering development schemes. It must be remembered that most other countries engaged in this matter of trying to help Zambia are starting from scratch. We do not, of course. In addition to the £1 million for road transport, which was given because the Zambians said this was a matter of particular concern, we provide £7 million a year for technical development and we are subscribing in a big way

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    to the International Bank. I will keep the hon. Member informed of any projects, however.

    Committee of 24
    Mr. Juddasked the Secretary of State for Foreign and Commonwealth Affairs whether he will seek to appear before the Committee of 24 at the United Nations.
    Miss Lestorasked the Secretary of State for Foreign and Commonwealth Affairs if he will invite the United Nations Committee of 24 to visit the United Kingdom.
    Mr. Amery: No, Sir.
    Mr. Judd: Does the Minister not accept that an early visit to this committee would give him an opportunity to explain to a wide cross-section of world public opinion how the British Government reconcile their stated commitment to human rights and opposition to colonial oppression with their anxiety this year to demonstrate in every way possible their unquestioning friendship with Portugal?
    Mr. Amery: I would have thought that this country had a record second to none in supporting the principle of self-determination. The Committee of 24 normally meets at the United Nations headquarters in New York. We in the Government are proud of our old alliance with Portugal, which has made a very great contribution over six centuries to the interests of this country, as perhaps to theirs, and we stand by it.

    Council of Ministers
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs what matters are to be discussed at the next meeting of the EEC Council of Ministers which he will be attending.
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the agenda for the next meeting of the EEC Council of Ministers.
    Mr. John Davies: In accordance with the arrangements announced on 13th March by my right hon. Friend the Lord President of the Council, an estimate was placed in the Vote Office setting out the subject headings likely to come up for
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    discussion in April.—[Vol. 852, c. 1115– 25.] The next such estimate will be lodged in the Vote Office towards the end of April.
    An additional meeting of the Council of Ministers (Agriculture) is to take place in Luxembourg on 16th-17th April. My right hon. Friend the Minister of Agricul-tere, Fisheries and Food expects to attend that meeting, which has been called primarily to continue the discussions on the Commission's proposals for increases in farm prices.
    Mr. Marten: At the Foreign Affairs Council of Ministers meetings will Britain be putting forward for discussion the question of the Middle East? Is my right hon. Friend aware that this is one area where the Common Market should be able to speak with one voice if it is to be taken seriously? Will my right hon. Friend say what is the view of the Common Market collectively on the Middle East? Does it agree on it, or does it disagree? If it disagrees, what are the differences of opinion?
    Mr. Davies: I have nothing new to say on the subject of the Community's views on the Middle East at this stage, although this, like other matters, is perfectly able to be raised at the quarterly meetings on political problems attended by my right hon. Friend the Foreign Secretary.
    Mr. Callaghan: Turning to a more domestic matter, have the Government considered putting on the agenda the subject of how best to deal with surplus commodities that may mount up in individual countries of the EEC? For example, would they consider putting on the agenda the possibility of distributing the butter that has mounted up at reduced prices to the old-age pensioners of the EEC countries?
    Mr. Davies: I have no doubt that that issue, as indeed other similar issues, could well be discussed at the Council of Ministers' additional meeting to which I have referred, thus bringing together the Ministers of Agriculture. I am not able to say at this stage whether or not that will form part of the discussion next week.
    Mr. Body: As we are back on butter again, does not my right hon. Friend agree that it is much more sensible to send this commodity to Moscow, where it can be eaten by humans, than for

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    it to be disposed of as was the last butter mountain by being fed back to cows, which is not a sensible thing to do?
    Mr. Davies: Most hon. Members would agree that this is a slippery subject, but for my part the real anxiety is to try to ensure that excessive stocks are not accumulated through the operation of the policy.
    Dr. David Owen: If the Community is to develop a political identity would not the right hon. Gentleman consider that it might discuss the question of French nuclear testing and the fact that only one member of the Community is a non-signatory of the Non-Proliferation Treaty and also of the Partial Test Ban Treaty, namely, France?
    Mr. Davies: It is, generally speaking, the normal procedure that the agenda for the meeting to which I have referred dealing with political matters is subject to previous agreement between the various Governments concerned, and, of course, it would prove necessary to have the agreement of all the Governments in order to put such a matter on the agenda.

    Middle East
    Mr. Clinton Davisasked the Secretary of State for Foreign and Commonwealth Affairs if he plans to seek to make an official visit to Cairo.
    Lord Balniel: My right hon. Friend has no present plans to visit the Middle East.
    Mr. Davis: Having regard to recent events, would it not be advantageous for the Foreign Secretary to indicate to President Sadat that it would be infinitely more desirable for him to stop making warlike noises and to stop giving aid and comfort to terrorists and, instead, to agree to get round a table to talk peace with the Israelis?
    Lord Balniel: We believe that a just and lasting peace is very desirable in the area. The basis on which it is most likely to be achieved is that of Security Council Resolution No. 242, which the Government sponsored.
    Mr. Walters: Will my right hon. Friend, when he has the opportunity, express to President Sadat our appreciation of the fact that there was a positive res-
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    ponse by his Government to Ambassador Jarring's questionnaire at a time when there was a completely negative response by Israel? Will he also continue to put as much pressure as possible on the United States? Surely the way to get peace is not to supply a great number of Phantoms to Israel and thus perpetuate the great imbalance of power that already exists in the Middle East?
    Lord Balniel: All those considerations will no doubt be borne in mind. The important thing is that the countries which are involved in the dispute should find a way of resolving it. The best way in which they can do that is by Resolution No. 242.
    Mr. Hugh Jenkins: When the right hon. Gentleman is dealing with Middle East matters, will he convey to the Israeli Government, with which many of us have had the most friendly relations in the past, that their international standing has depreciated as a result of the savagery recently carried out in the Lebanon?
    Lord Balniel: The incidents which have taken place underline the importance of reaching a solution. This House has repeatedly deplored acts of violence, from whatever quarter they come. Such acts merely postpone the possibility of reaching a peaceful solution.
    Mr. Dykes: Will my right hon. Friend convey to the Egyptian Government by one means or another the fact that the United Nations has not proved to be a very effective forum for a coming together of Egypt and Israel in terms of real negotiations? Will he point out that there would be no loss of face or prestige for the UAR or for the Arab Federation if direct talks were to take place eventually between the two countries?
    Lord Balniel: Ultimately, direct negotiations will have to take place between the parties. We are in favour of such negotiations. However, if they are to be successful there must be a negotiating procedure which has the agreement of both sides. At present direct negotiations do not have that support.
    Mr. Roy Hughesasked the Secretary of State for Foreign and Commonwealth Affairs if he will pay an official visit to Israel.
    Lord Balniel: I have nothing to add to my answer to the hon. Member for Hackney, Central (Mr. Clinton Davies) earlier today.
    Mr. Hughes: If the right hon. Gentleman were to undertake such a visit, would it not give him the opportunity to urge the need for a full, independent and international inquiry into the shooting down of a Libyan civilian airliner over the Sinai desert on 21st February, with the loss of 106 lives? Would it not also give him the opportunity to point out that the events of the last few days are no answer to the problems of the area and can only further increase bitterness and resentment? Does not he agree that the root of the problem will remain that of the annexation and colonialisation by Israel of territory which did not belong to it?
    Lord Balniel: That is a hypothetical question. I hope that I shall be able to visit Israel at a suitable time. We supported the resolution calling for an inquiry into the shooting down of the Libyan airliner and we are glad that it is now under way.
    Mr. Fidler: Has my right hon. Friend noticed that what was said by the hon. Member for Newport (Mr. Roy Hughes) contained no condemnation of the terrorist outrages in Cyprus a few days ago? Would he not welcome condemnation of that kind of terrorism as well? Will he also bear in mind that the best way to make sure that no further incursions into the Lebanon take place is to remove the facilities made available there for the training of terrorists, just as King Hussein has removed such facilities from Jordan? In relation to the Libyan air disaster, is my right hon. Friend aware that the International Civil Aviation Organisation now has a team visiting the Middle East, including Israel, which is being given every possible facility for its inquiry?
    Lord Balniel: The shooting down of the airliner, the massacre in Khartoum, the terrorist activities in Nicosia and the act of violence in Beirut are all acts of violence which we deplore and which most certainly do not contribute to a peaceful solution in the area.
    Mr. Mayhew: I entirely agree with what the right hon. Gentleman has said, but is he aware that those who have been assassinated by the Israelis have included some terrorists and some political organisers and propagandists but have mostly been civilians who were not even politically active? Is he further aware that since the assassinations of terrorists and political organisers in Frankfurt, Beirut and Rome there is a widespread feeling that Israeli authorities are about to turn their attention to London? Will he, therefore, make representations to the Israeli Government that, whatever the provocation, we shall regard as an outrage the same kind of tactics in London as we have seen in other parts of the world?
    Lord Balniel: If the hon. Gentleman has any reason to believe that the Israeli Government are going to act in the way he has described in London, I hope that he will provide the information to Her Majesty's Government. We shall then take steps to ensure that it does not take place.
    Mr. Goronwy Roberts: Bearing in mind that the dangers of the situation are probably going to escalate in future, as my hon. Friend the Member for Woolwich, East (Mr. Mayhew) has indicated, will the right hon. Gentleman consider proposing that Dr. Jarring should make a fresh visit to the area, visiting not only Cairo but Tel Aviv?
    Lord Balniel: We will bear, and have borne, that suggestion in mind. But, as I have said, we believe that the basis on which the countries concerned should continue to work is that which has been provided by Security Council Resolution No. 242.
    Mr. Wilkinson: Will Her Majesty's Government make it clear to the Israeli Government that uncommitted nations in the free world do not welcome policies of massive reprisal or overkill, but look to Israel to remove the source of those grievances which lie at the root of the terrorism?
    Lord Balniel: I am sure that the Israeli Government will take note of the views which have been expressed both in the news media and in the House.

    Panama Canal
    Mr. Laurance Reedasked the Secretary of State for Foreign and Commonwealth Affairs why Her Majesty's Government's representative abstained on the recent vote at the Security Council on the question on United States sovereignty over the Panama Canal.
    Mr. Amery: Her Majesty's Government take the view that this is essentially a bilateral issue between Panama and the USA. We considered that it would not help towards the success of further bilateral negotiations for the Security Council to pass a resolution which was unacceptable to one of the parties concerned.
    I will, with permission, circulate in the OFFICIAL REPORT the statement by the United Kingdom representative on 22nd of March explaining his vote.
    Mr. Reed: Bearing in mind that the canal is an important international seaway, I do not understand how the Government can make sovereignty a bilateral issue. If the American Government were to relinquish their sovereignty over the canal, would the Government favour the canal zone being brought under international rather than national control?
    Mr. Amery: That is a hypothetical question. We attach great importance to the canal. There are about 14,000 transits of the canal in a year, and British shipping constitutes a significant proportion. We are, therefore, interested that the canal should function efficiently and economically without interference to international shipping. We would be glad to accept any régime for the canal which was agreed by the two parties concerned.
    Mr. Leonard: Bearing in mind Britain's unhappy experience of trying to prolong sovereignty over the Suez Canal long after it was unacceptable to international opinion, does the Minister realise that it is not an act of friendship to the United States to encourage it to maintain sovereignty over this area when that can no longer be justified in the modern world?
    Mr. Amery: I think that the present situation in the Suez Canal might cast doubt on the historical analogy which the hon. Gentleman has raised.
    Following is the information:
    TEXT OF SIR COLIN CROWE'S EXPLANATION OF HIS VOTE ON THE DRAFT RESOLUTION ON THE PANAMA CANAL IN THE SECURITY COUNCIL AT PANAMA CITY ON 22ND MARCH 1973.
    "As I said in my statement yesterday and as several other representatives have also said in their statements, my delegation regards this question as essentially a bilateral issue between the parties concerned. If it had been possible to arrive at a formulation which took account of the concerns of both parties I believe that the adoption of a resolution by the Security Council at the end of its meeting in Panama might have been helpful in improving the atmosphere for further negotiations. It is a matter of profound regret that efforts to find such a formulation have been unsuccessful. In this sort of situation, for any resolution to be useful it must be at least generally acceptable to both parties to whom it is addressed. If, as in the present case, it is unacceptable to one of the two parties, a resolution does not serve any useful purpose. My delegation accordingly abstained."

    Turkey
    Mr. Hugh Jenkinsasked the Secretary of State for Foreign and Commonwealth Affairs if he is aware that since the declaration of martial law in Turkey thousands of people have been arrested, including the leadership of the Turkish Labour Party; and if he will support protests being made in the Council of Europe at the violation by the Turkish Government of the European Convention on Human Rights.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Royle): I am aware that people have been arrested since the declaration of martial law in parts of Turkey. I am also aware that concern has been expressed by some members of the Consultative Assembly of the Council of Europe. This is, however, a matter for the Assembly itself.
    Mr. Jenkins: But what is the attitude of Her Majesty's Government? Have the Government no attitude on the acts of military dictatorships? Is it impossible for the Government to express any opinion, one way or another? What is the Government's position?
    Mr. Royle: We should recognise that Turkey is at present passing through a very difficult phase. The Turkish authorities have had to deal with a serious terrorist problem. Untimely intervention by any foreign country might encourage

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    those elements dedicated to the destruction of democratic rights in Turkey.
    Mr. Heffer: Is it not a lot of nonsense to suggest that the Turkish Labour Party is dedicated to undermining democracy in Turkey? In fact, the Turkish Labour Party wants to see democracy in Turkey. That is the very opposite to what the hon. Gentleman has said. If the Government can have an attitude towards the Greek colonels which is supported by the Opposition, surely the Government should have an attitude about the present lack of democracy in Turkey?
    Mr. Royle: I recognise the concern which has been expressed by the hon. Gentleman and his hon. Friends. It must be accepted that violent events have taken place in the past few years in Turkey, including the murder of British and Canadian technicians a year ago. Those events are evidence of the scant regard for life which has been shown by some who oppose the present Turkish Government.

    India, Pakistan and Bangladesh
    Mr. Pavittasked the Secretary of State for Foreign and Commonwealth Affairs what further efforts have now been made to secure the trilateral settlement between India, Bangladesh and Pakistan which will enable the speedy return of prisoners of war.
    Mr. Barnesasked the Secretary of State for Foreign and Commonwealth Affairs whether he has received any requests from the Governments of India. Pakistan or Bangladesh to assist in negotiations regarding the recognition of Bangladesh by Pakistan and the return of the prisoners of war held in India.
    Mr. Croninasked the Secretary of State for Foreign and Commonwealth Affairs what requests he has received asking him to mediate between India and Bangladesh and Pakistan.
    Lord Balniel: Her Majesty's Government are anxious to see an early political settlement in the sub-continent that will include the repatriation of the prisoners. Our views on this are known to the three countries concerned. We have said that we are ready to help if, together, they could let us know what rôle we might play. But for the moment they wish to
    1314
    work for a settlement without outside involvement. I believe that this holds the best prospect of success.
    Mr. Pavitt: Will the right hon. Gentleman bear in mind that now that Bangladesh is recognised by so many countries, including our own, it would be wrong for India not to make a unilateral settlement about the situation of the prisoners of war? The only thing that is holding up a settlement is the recognition by Pakistan of the sovereignty of Bangladesh. Should not the rôle of Her Majesty's Government be to try to help Pakistan to reach an agreement recognising the sovereignty of Bangladesh?
    Lord Balniel: I do not think that that is the only consideration in a very complex situation. The important thing arising from the hon. Gentleman's question is that, at Simla, India and Pakistan agreed to discuss further the repatriation of prisoners of war and civilian internees. We welcome that and the progress which has been made under the Simla agreement.
    We believe that the best hope of success lies in the countries concerned getting together and themselves negotiating.
    Mr. Wilkinson: Will the British Government make representations to the Government in India and suggest, following the visit of Mr. Haksar to Dacca and Dr. Kamal Hussain, the new Foreign Minister of Bangladesh, to New Delhi, that Britain looks to India to break the logjam and release the prisoners of war now held in their camps so that other benefits may follow for the sub-continent?
    Lord Balniel: I do not think that it is for us to look to one country to solve the problem by itself. The problem must be solved by Bangladesh, Pakistan and India. It is not for us to point a finger at one country and tell it that it must reach a solution.
    Mr. Richard: Does the right hon. Gentleman not agree that, so long after the war has finished, it is very wrong that prisoners of war should continue to find themselves being used as political pawns in a diplomatic game in the Indian sub-continent? We have some leverage in the area. I should have thought that the Foreign Office could be a bit firmer than it has been this afternoon.
    Lord Balniel: Whether statements made in this House which the hon. and learned Gentleman regards as firm will contribute to the release of the prisoners of war is debatable. It depends on the nature of the statement made. The best prospect of achieving the return of the prisoners of war to their own country is that negotiations between the countries concerned should be allowed to continue.

    South Africa (Departmental Staff)
    Mr. Robert Hughesasked the Secretary of State for Foreign and Commonwealth Affairs if he will state the weekly wages rates paid to locally recruited employees of the embassy and consular offices in South Africa; and how this compares to equivalent employees of the Foreign Office in the United Kingdom.
    Sir Alec Douglas-Home: There are 73 United Kingdom-based staff and 153 locally engaged staff employed in our posts in South Africa. I have no plans to increase this number. I am arranging to have circulated in the OFFICIAL REPORT details of salary scales of locally engaged staff in South Africa. A direct comparison between these and rates paid in the United Kingdom would not, I believe, be useful.
    Mr. Hughes: Bearing in mind the recent revelation of how badly British companies behave in South Africa in terms of payment of wages, is the right hon. Gentleman satisfied that his own house is in order? Would it not be a good idea for him to take the lead in this matter and ensure that wages paid to locally recruited staff, especially Africans—who tend to be paid much less than they should be—are at least at the same level as those of comparable posts in this country? Will he also ensure that employees of the Foreign and Commonwealth Office not resident in embassies—which employ many people from outside—have their needs carefully considered and are also paid decent wages?
    Sir Alec Douglas-Home: Yes, Sir. It is right to do so. We want to be good employers, and I hope that the figures which the hon. Gentleman will see in the OFFICIAL REPORT will convince him that we are making progress in this direction.
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    We pay various salary levels in different countries. One must take account of local conditions. For example, in the United States one has to pay very high salaries, while in other countries they are not so high. We try to be good employers in the conditions of the country concerned.
    Mr. Evelyn King: If we are to investigate the wage rates paid by private firms in foreign countries, should not we also look at India, South America and half a dozen other countries where the wage rates are very similar to, and in some cases worse than, those in South Africa, about which complaint has been made?
    Sir Alec Douglas-Home: Wherever we are in the world, in whichever country, I hope we shall be good employers and pay a reasonable rate for the job.
    Mr. David Steel: Aside from the question of salaries, will the right hon. Gentleman examine the conditions under which some of our local staff are employed in South Africa? Is he aware that they are subject to the same migration rules as other Africans and that we have not so far created a diplomatic compound there in which they could live with their families? The result is that many of them are forced to live hundreds of miles from their families.
    Sir Alec Douglas-Home: As the hon. Gentleman knows, a great deal of the labour in South Africa is migratory, in the sense that it comes in for a few years and then leaves again. If he has a particular case in mind, perhaps he will correspond with me. I should like to look into these matters.
    Following are the details:

    SALARIES PAID TO LOCALLY ENGAGED STAFF IN SOUTH AFRICA

    Local Grade

    Monthly Salary Scale (Rand)

    Senior Commercial Officer

    R480–680

    LE I

    R 370–520

    LE II

    R 280–430

    LE III

    R 175–295

    LE IV

    R 140–220

    LE V(a)

    R 100–164

    LE V(b)

    R 87–132

    LE V(c)

    R 85–100

    Immigrants (Pakistan)
    Mr. Kaufmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will cause an examination to be made of arrangements in Her

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    Majesty's Embassy in Islamabad to interview potential dependants wishing to join immigrants in this country in view of the long waiting time for such interviews.
    Mr. Douglas-Mannasked the Secretary of State for Foreign and Commonwealth Affairs what are, respectively, the shortest, longest and average periods taken to process application for entry certificates by wives or other dependants of British subjects to the immigration department of the embassy in Islamabad.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Kershaw): For some time the inflow of new applications has greatly exceeded the rate at which potential dependants can be interviewed. Consequently there is a substantial waiting period. The embassy is currently reviewing its arrangements for handling applications.
    As the information requested is rather long I will, with permission, circulate details in the OFFICIAL REPORT.
    Mr. Kaufman: I very much appreciate and acknowledge the hon. Gentleman's attitude towards this problem. Does not he agree that waiting periods of up to seven months for the undisputed dependants of people living in this country to be interviewed involve heartbreaking separation of husbands from wives and parents from children? Will he, therefore, take a very close look at the arrangements at Islamabad, including, if necessary, supplying further staff there in order that the waiting periods can be cut down as quickly and as effectively as possible?
    Mr. Kershaw: We examined the position last year, and a joint mission from the Home Office and the Foreign and Commonwealth Office went out to make changes, which have been implemented. This is by far the largest post we have for interviewing people who want to settle here. We have 46 officers engaged entirely on this business, and there is a limit to what we can do.
    Mr. Fowler: Does not my hon. Friend agree with some of us who have visited the department there that there is another side to the question put by the hon. Member for Manchester, Ardwick (Mr.
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    Kaufman)? Is it not the case that these delays are caused basically by the pressure of illegal or would-be illegal immigrants wanting to come here, and that it is that pressure which is causing the potential breakdown of the whole system there?
    Mr. Kershaw: It is unfortunately true that a fairly high proportion of the applications are bogus. That means that all applications have to be looked at very carefully. That is the duty laid upon the officers by this House and it is being done.
    Mr. Douglas-Mann: Does not the hon. Gentleman agree that a period of seven months' delay—which he has not disputed, and the fact of which is unchallengeable—would be regarded as intolerable for indigenous British citizens who were making application? Does not he also agree that delays of this kind, in these circumstances, suggest a discrimination in treatment which is very bad for race relations in this country?
    Mr. Kershaw: I deny that there is any discrimination. I emphasise that the delays take place only in the case of people who want to come here to settle. Visitors and others—who total more than double the number of those who want to come here to settle—get their applications granted at once over the counter.
    Mr. Wilkinson: Does my hon. Friend agree that the Government must match expedition with closeness of scrutiny, and that the officers of the department work very hard for very long hours to carry out their difficult duties thoroughly? Will he remember that the immigration section of our embassy there may be the only department that Pakistanis see, and that therefore the job must continue to be done well?
    Mr. Kershaw: It is true that we must do the job properly, because the House has said that we must make sure that those who seek to come here have a right to do so. A high proportion of applicants have no right to come, so we must look at all the applications. I join my hon. Friend in paying tribute to the way in which the officers work long hours under very difficult conditions.
    Dr. Miller: Will the Minister confer with the Home Secretary on the matter,

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    to ensure that sympathetic consideration is given to these cases? Will he also ensure that the statement he made a few moments ago is correct, and that intending visitors are accorded the right to come to see their relatives in this country? I have evidence that that is not so.
    Mr. Kershaw: I shall be glad to examine any evidence that the hon. Gentleman has. He talks about sympathetic consideration. I hope that we are sympathetic, and well-mannered, but we have a duty to find out whether applicants are dependants.
    Following is the information:
    At present the shortest, longest and average periods taken to process applications for entry certificates from persons applying as dependents of United Kingdom nationals settled in this country, inclusive of the time required, where necessary, to make references to the Home Office and for the hearing and ordering of appeals against the refusal to grant entry certificates, are 8 months. 4 years and approximately 2 years respectively.

    Greece
    Mr. Woodhouseasked the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to improve diplomatic relations with Greece.
    Mr. Anthony Royle: It is already the policy of Her Majesty's Government to work for good and constructive relations with Greece as a NATO ally.
    Mr. Woodhouse: I realise that the only step that could produce a real improvement in Anglo-Greek relations is beyond the Government's power, but will my hon. Friend make it unmistakably clear to the Greek Government that it can only make relations worse if they persist in arresting, harassing and persecuting long-standing friends of this country, such as Professor John Pesmazoglou, Mrs. Virginia Tsouderos and Professor Dimitrios Tsatsos, whose only offence is that of preferring democracy to military dictatorship? May I press my hon. Friend for an assurance that so long as those conditions persist there is no question of a visit to Greece by a Foreign Office Minister?
    Mr. Royle: I appreciate the feelings of sympathy which my hon. Friend has expressed—and which I know are shared by hon. Members on both sides —for political detainees anywhere.
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    My right hon. and noble Friend the Secretary of State for Defence made it clear to Greek leaders during his unofficial visit to Athens last September that the question of political prisoners causes considerable concern in this country. I can also give my hon. Friend the assurance that no ministerial visits are planned at present.
    Mr. Frank Allaun: Is it not a fact that tomorrow there is to be an official visit by Admiral Sir Peter Hill-Norton, Chief of the Defence Staff? Lest that create the false impression that the British people support the brutal regimé of the Greek colonels, will the Minister ask his Cabinet colleagues to cancel the visit?
    Mr. Royle: The hon. Gentleman is probably aware that the visit of the Chief of the Defence Staff is in return for the visit of General Angelis, Chief of the Greek Defence Staff, and Admiral Margharitis, Commander in Chief of the Greek Navy, in 1971 and 1972. It is interesting that there was no complaint or Question in the House in 1971 or 1972. Greece is our ally in NATO, and the visit by the Chief of the Defence Staff is in the NATO context. The policy carried out by the Government is essentially the same as that followed by the previous administration.
    Sir Harmar Nicholls: Will my hon. Friend keep in mind that we all live in the same world and that although there may be great differences of approach in various countries the best way to get people to appreciate what we regard as a reasonable line is to keep in touch with them, visit them and try to share minds?
    Mr. Royle: I agree with my hon. Friend.
    Mr. Freeson: Does the Minister recall that NATO is an alliance set up in defence of freedom and democracy? Therefore, will he undertake to make representations to the Greek Government and the Turkish Government—[An HON. MEMBER: "And Portugal."]—yes, and all the areas for which the hon. Gentleman is responsible in the Foreign Office, that we deplore and object strongly to allies who are with us in the defence of freedom undertaking to establish dictatorial regimés, and carrying out political persecution, torture, arbitrary arrest and

    1321
    the arrest of lawyers defending people who have been arrested by the régimes?
    Mr. Royle: I cannot do better than to read to the hon. Gentleman the following quotation:
    "Actions against Greece in NATO would not necessarily help the Greek people, but would undermine the security of the southeast flank of NATO, thus putting at risk democratic ideals and parliamentary institutions on a scale far wider than Greece."— [OFFICIAL REPORT, 16th December 1969; Vol. 793, c. 1139.]
    That statement was made in 1969 by Mr. George Thomson, the then Chancellor of the Duchy of Lancaster.
    Mr. Frank Allaun: In view of the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    European Parliament (Minister's Speech)
    Mr. George Cunninghamasked the Secretary of State for Foreign and Commonwealth Affairs in what capacity the Chancellor of the Duchy of Lancaster addressed the European Parliament on 15th March.
    Mr. John Davies: As I made clear in my speech, I was speaking in my capacity as a British Minister, and expressing the views of Her Majesty's Government.
    Mr. Cunningham: In that case, why did the right hon. Gentleman tell his Conservative colleagues in Strasbourg that he had altered the views he expressed to take some account of the views of the rest of the Council of Ministers? Is it to be the practice that British national representatives in Community institutions will alter the British view in order to compromise in advance with the views of the people with whom they are negotiating?
    Mr. Davies: I recognise the Press report to which the hon. Gentleman is referring. It proves once again that even the Press can be wrong and can erroneously report what is said.

    Icelandic Fisheries
    Mr. McNamaraasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the Icelandic fishing dispute.
    Sir Alec Douglas-Home: We are now in touch with the Icelandic Government with a view to agreeing a mutually convenient date after Easter for the resumption of ministerial talks.
    Mr. McNamara: Have the Icelandic Government said that they will have the talks at ministerial level after Easter, or are the officials still merely fishing around to try to find suitable items for an agenda to make an agreement? What has been the Icelandic Government's reaction to the repeated protests made by our ambassador about the harassment of our trawlers in the disputed waters?
    Sir Alec Douglas-Home: I hope to receive an answer tomorrow about dates that I have proposed for ministerial talks towards the end of the month. I hope that the Icelanders will accept that ministerial talks are necessary. Allies should talk, and not confront each other. We have received no clear assurances that there will not be harassment.
    Mr. W. H. K. Baker: Has my right hon. Friend had any recent consultation with the West German Government after their consultations with the Icelandic Government? Have any consultations taken place between the United Kingdom Government and the Russian Government?
    Sir Alec Douglas-Home: We are in almost daily touch with the German Government on the matter. There is no immediate problem demanding urgent consideration with the Government of the Soviet Union, but they are aware of our position.
    Mr. James Johnson: As the safety and welfare of our fishermen are equally dear to both sides of the House, this is not a party issue. The Opposition have therefore consistently backed the Government's policy, and we shall continue to do so. Did not the Icelanders wish to come before Easter? Is it not possible for the right hon. Gentleman to see them in London during the week beginning 30th April?
    Sir Alec Douglas-Home: I will not say exactly what I have proposed, but the hon. Gentleman is not far off the dates I have suggested.

    Republic of Ireland (Arms Imports)
    Mr. McMasterasked the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government have made to the Government of the Republic of Ireland with a view to preventing the illegal import of arms through the Republic for use by the IRA in Northern Ireland.
    Sir Alec Douglas-Home: We are in touch with the Government of the Republic of Ireland whenever we believe they are in a position to help prevent supplies of arms to the IRA for use in Northern Ireland. For obvious reasons details must remain confidential.
    Mr. McMaster: I thank my right hon. Friend for his reply but, in view of the publicity which has been given to the "Claudia" affair, the unlikelihood that that ship was carrying only five tons of arms from the Mediterranean, and the fact that the most modern Russian rockets are now being used by the IRA in Northern Ireland, will my right hon. Friend use his maximum efforts to ensure that the border is properly closed to the illegal import of arms into the United Kingdom from Eire?
    Sir Alec Douglas-Home: Yes, Sir.

AIRCRAFT ACCIDENT (SWITZERLAND)
Mr. Wiggin(by Private Notice) asked the Secretary of State for Trade and Industry whether he would make a statement about the air disaster at Hochwald involving a Vanguard of Invicta International Airlines.
The Minister for Aerospace and Shipping (Mr. Michael Heseltine): An Invicta International Airlines Vanguard G-AXOP (Oscar Papa) on a flight from Bristol to Basle yesterday crashed at about 10 a.m. GMT into a forest in a mountainous area near the village of Hochwald some ten miles south of Basle Airport during the course of an overshoot following an unsuccessful approach to land.
Of the 139 passengers and six crew it is now believed that more than 100 passengers and four crew lost their lives.
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I know the House will wish to join me in expressing deep sympathy with the relatives and friends of those who lost their lives in this disaster.
The terrain in the area where the crash took place was very difficult and access to the wreckage was greatly hindered by heavy snow and by mist. In these particular circumstances a great tribute must be paid to the Swiss rescue organisations for their efforts to get the injured to hospital and in particular to the farmers and villagers of Hochwald for the enormous effort they made to locate and help the survivors.
A formal investigation into the accident has been instituted by the Swiss authorities who have invited the United Kingdom to appoint an accredited representative and advisers to assist them. A party from the Accidents Investigation Branch accompanied by a team from the Royal Air Force Institute of Aviation Pathology arrived at Basle early yesterday evening.
Invicta International Airlines have made arrangements to fly relatives to Switzerland today in two flights scheduled to leave at 3 p.m. and 4 p.m. One of these flights is expected to return this evening bringing those survivors fit to travel.
Mr. Wiggin: I thank the Minister for his expressions of sympathy. The expressions of sympathy received from Her Majesty and the Prime Minister were much appreciated. This is a terrible and sudden disaster of great magnitude to three parishes in my constituency. In extending my sympathy and thoughts to the bereaved, I know that the House will understand my personal feelings when I explain that many of the dead came from the little town where I live and were personal friends of mine and of my family. I also wish to join in expressing gratitude to those in Switzerland who assisted yesterday.
Although it will probably come outside the terms of any technical inquiry, will the Minister investigate the long delays in getting information to England? Is he aware that the list of injured was not received until eleven o'clock last night, and even now the names of three injured persons are not known. This places great stress on the relatives of all those involved in the disaster, most of whom are

1325
bound to be tragically disappointed. Does the Minister have any information on when a list of the dead will be available and will he say whether the flight recorder has been recovered?
Mr. Heseltine: I am sure that the whole House understands my hon. Friend's deep feelings. The House will sympathise with the people whose anxieties arise from the delay in notification. There has been great difficulty in effecting rescue operations and in finding the dead and identifying them and there has been a delay which, although regrettable, is in these circumstances understandable. The lists of the dead and the survivors are being published as soon as they are available.
The flight recorder has been recovered. I understand that it has reached Heathrow and is on its way to Bournemouth. In the absence of any unlikely event, we expect a preliminary read-out this evening.
Mr. Benn: May I join in the expressions of sympathy so movingly expressed by the hon. Member for Weston-super-Mare (Mr. Wiggin) with those who have been bereaved by this disaster which is so cruelly focused on these small con-munities. I thank the Government for the rapid action they have taken in sending out a team, and the Opposition also associate themselves with the thanks that have been expressed to the Swiss rescue teams.
Will the Swiss inquiry be held in public, and will the report be published in accordance with normal practice? Secondly, in view of the good record of the Vanguard aircraft, and of Invicta, will the Minister see that the fatigue factor, which received some publicity over the weekend, will be looked at especially carefully in the inquiry? Thirdly, will the Government give further help to the communities which have been so badly afflicted and will they assist in seeing that the notifications to the next of kin are made as expeditiously as possible?
Mr. Heseltine: The decision to publish the report is a matter for the Swiss authorities. We would, of course, have the opportunity to make representations about that decision, but in the last resort it is a matter for them.
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In referring to the fatigue factor, I believe that the right hon. Gentleman is referring to pilot fatigue as opposed to aircraft fatigue. Perhaps I may ask him to await the findings of the Bader Committee which has been established by the Civil Aviation Authority to look into this matter.
The Government, obviously, are very concerned about the effect on the communities and would do everything possible to speed up publication of the information if it were within their control, but regrettably it is not.
Mr. Tom King: I have close personal and family connections with the villages affected by this tragic disaster, and I am grateful for the opportunity to associate myself with the expressions of sympathy from both sides of the House. I support my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) in asking for every possible help to be given to those who are in Switzerland now, and on their return.
Mr. Heseltine: Certainly, any requests that are made will receive immediate, sympathetic attention.
Mr. Stonehouse: Is the Minister aware that the preliminary investigation by the Swiss authorities points to human error being a likely factor in this disaster? Will he please ensure that the Bader Committee report is acted on quickly? Will he consider controlling the number of hours that British airline pilots are allowed to fly, as according to the recent BALPA report British airline pilots are expected to fly longer hours than are almost any other country's airline pilots? This must be dealt with urgently by the Government if disasters of this sort arc to be avoided.
Mr. Heseltine: I am sure that the right hon. Gentleman would not expect me to comment upon any preliminary views expressed on this matter. The purpose of the inquiry is to ensure that all factors are considered carefully and in detail. As for the findings of the Bader Committee, it seems to be logical to allow the Committee to reach its conclusions before commenting on them.
Mr. Michael McNair-Wilson: I join in the expressions of sympathy which have been voiced to those who have been

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bereaved in the accident. Will my hon. Friend ask our accident investigators to check why the aircraft was allowed to attempt to land at Basle in such bad weather and why it was not diverted to another airport in Switzerland?
Mr. Heseltine: As I am sure my hon. Friend will understand, that is a matter for the inquiry.
Dr. Miller: In associating myself with the expressions of sympathy, may I ask the Minister how old was the aircraft, whether it was fitted with navigational instruments efficient enough for blind flying and whether under those conditions it had sufficient power to gain height immediately?
Mr. Heseltine: I am sure that the hon. Gentleman would not expect me to comment on the aircraft in advance of the inquiry, but I can tell him that it was 11 years old and had had 16,367 hours in operation, which is probably about half, or under half, the expected design life of the aircraft.
Mr. Tebbit: On a point of order, Mr. Speaker. Might I seek your guidance and put it to you that if the practice of Private Notice Questions is to continue in the circumstances of disasters and the like, it would be prudent if you could advise hon. Members about the way in which that facility is offered to the House and as to the inadvisability of using such an occasion for ignorant speculation and posture?
Mr. Speaker: The hon. Member has made a fair point. I do not believe that it is a matter for me.

BUTTER (EEC-SOVIET AGREEMENT)
Mr. Shore(by Private Notice) asked the Minister of Agriculture, Fisheries and Food if he will outline the terms of the agreement between the EEC and the Soviet Union on the sale of butter and whether this was approved by the Council of Ministers.
The Minister of State for Agriculture, Fisheries and Food (Mr. Anthony Stodart): I understand that the European Commission has approved the sale of 200,000 tons of butter now in the hands
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of intervention agencies of the six original Member States at a price ex-store in the Community of about 30 units of account per 100 kg. This is equivalent to £141 per ton. The decision was within the competence of the Commission, based on the advice of the Management Committee for Milk and Milk Products. It was not referred to the Council of Ministers.
Mr. Shore: I thank the Minister for that statement. Does he not agree that this is a singular example of the total lunacy of the common agricultural policy in continuing to generate these enormous unwanted stocks of butter and then disposing of them—not selling them to the consumers of Britain and the other Member countries but selling them at dumped prices in third markets? Does he not also agree that the loss of £110 million, which is what we understand is the difference between the compensation paid to the farmers who produced the butter and the amount that will be received from the Soviet Union, is a fantastic figure? Will he please tell us whether the British Government will have to contribute to it?
May we have an assurance, since we continue to import butter from Poland, Rumania and other East European countries at rather more than that price— indeed double the 8p per lb. at which we are now selling this butter to the Soviet Union—that the same butter will not be re-exported to us at double the price? Is it not an absolute disgrace that a matter of such importance should not even go to the Council of Ministers but should be handed over for a decision to a number of unenlightened despots who would speak in our name, without any mandate from the British people in Brussels?
Mr. Stodart: If I may take the last question first, the constitution provides for the views of Member States on the disposal of butter to be given to the Management Committee. If the latter takes an unfavourable view, the matter then goes to the Council of Ministers. The views of the Management Committee were favourable on this issue, by a majority, and so no reference went to the Council of Ministers.
This is one of the features of the common agricultural policy which needs

1329
changing. This undesirable feature has been highlighted by this deal. We have always recognised that the common agricultural policy has these weaknesses— [Interruption.] I remind hon. and right hon. Gentlemen opposite that the principles of the common agricultural policy were accepted by the Labour Party.
I am not certain as to the precise figure but our share is limited in 1973 to 8¾ per cent. of the cost. I can assure hon. and right hon. Gentlemen that one of the conditions of the deal is that the butter must not leave the Soviet Union and come back here.
Mr. Scott-Hopkins: Does my hon. Friend not agree that one of the results of the present confrontation and the negotiations in Brussels and Luxembourg between the Minister of Agriculture and the other Member States is a thoroughgoing review by the Commission of the workings of the common agricultural policy? Will he tell us whether one of the issues which will be reviewed and discussed will be this kind of sale of surplus production at a loss? Is it not right that we should try to keep down this surplus production in Europe and thus to bring down prices?
Mr. Stodart: I suggest that our highly successful experience of running a pretty balanced agricultural system in this country will be of great use in the Community. How we could have brought that influence to bear until we joined the Community I do not know.
Mr. Milne: Is the hon. Gentleman aware that this is at least one answer for which he does not deserve a pat on the head? Is it not a fact that about £100 million of British taxpayers' money will be contributed towards the decisison to sell butter to Russia? Will he note that Northumberland housewives, who are having to pay about 28p per lb. for butter, are prepared to negotiate with the Ministry for the same price as the butter being sold to Russia?
Mr. Stodart: The hon. Gentleman is totally inaccurate in most of what he says. He is 25 per cent. out in his quotation of the price of butter in Northumberland. Even to mention the figure of £100 million as the cost to the British taxpayer is sheer rubbish.
Mr. Charles Morrison: Is it not a fact that by far the greater proportion of this butter was produced before this country had any influence on the common agricultural policy? Does my hon. Friend agree that changes in that policy are much more likely to occur quickly if Conservative Members of Parliament serving on the delegation to the European Parliament are supported by hon. Members opposite?
Mr. Stodart: The answer to both questions is "Yes, Sir."
Mr. Jay: After this performance, does the Minister think that the common agricultural policy requires any further condemnation?
Mr. Stodart: I am quite convinced that the common agricultural policy can produce as balanced a system of production as did the deficiency payments system.
Mr. Powell: Was any view on this subject expressed by or on behalf of Her Majesty's Government and, if so, what was that view?
Mr. Stodart: Our representatives on the Management Committee abstained from voting—[HON. MEMBERS: "Resign."]—because, as my hon. Friend the Member for Devizes (Mr. Charles Morrison) said, all the stocks had accumulated long before we joined the Community. The responsibility was not ours and that was why we abstained from voting.
Mr. John Mendelson: Does not the Minister recall that throughout the long debates on the Common Market legislation the Government were warned time and again that this butter surplus was accumulating and that they made light of it, rather than preparing a policy for the occasion when they could have expressed an opinion and voted against it? Is it not clear that this mad policy will have to be abandoned without delay? Must not all those who voted for these terms on which to enter the Common Market, without warning the British people about what was going to happen, now accept the grave responsibility for treating the people in this way?
Mr. Stodart: No, Sir, I do not agree.
Mr. John E. B. Hill: Should we not get this matter in better perspective if

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we agreed that this amount sold to Russia represents about two months' production, that it is being sold to Russia at about two-thirds of the world price, and that it is inherent in the common agricultural policy—which the Labour Government when negotiating agreed they would have to take on board —that those surpluses in the ordinary way are sold at world prices. Is it the situation that the measure of loss is about one-third of the world price—about £14 million, which would be less than the cost of storage for the next 18 months? Does my hon. Friend agree that it is better in this case that the butter should be disposed of to the Soviet Union, rather than that it should be dumped on the world market, which would injure the interests of New Zealand?
Mr. Stodart: My hon. Friend is entirely correct in the prices which he quotes. While I agree with him that we should get the matter in perspective, I still think that this is something on which we must bring all our thoughts, wisdom and experience to bear to prevent this happening again.
Mr. Hooson: Are we to take it that the question of surpluses did not arise in the negotiations and that Her Majesty's Government in no way discussed what to do with surpluses?
Mr. Paget: Well, the hon. and learned Gentleman voted for entry.
Mr. Hooson: Does not the Government appreciate that the people of this country object to subsidising consumers in Russia when consumers are not subsidised in this country?
Mr. Stodart: Even though the hon. and learned Gentleman comes from Wales, he must agree that it is difficult to influence an agricultural policy until one is a member of the Community.
Mr. Shore: How can the Minister possibly justify Britain making a contribution to sell off surplus butter which was produced before we even became a member of the EEC? Would it not have been a better deal for Britain if we ourselves had put in a bid for it?
Mr. Stodart: Such was the ebullience of Opposition Members that I did not
1332
catch the right hon. Gentleman's last remark, but the reason for our contribution is that it is part of our commitment.

RESTORATION OF CAPITAL PUNISHMENT BILL
Mr. Speaker: Order. Before I call the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor), I wish to remind the House that under Standing Order No. 13 there can be only one speech opposing the hon. Member's application for leave to bring in his Bill. Several hon. Members have intimated to me their desire to oppose the Bill, but I repeat that under the Standing Order I can select only one.
Mr. Kenneth Lewis: On a point of order, Mr. Speaker. In view of the supreme nature of the subject we are about to discuss and in the light of your announcement that there can be only two speeches on the Bill, is it possible for you to use your discretion so that until we have a proper debate on the subject we seek to avoid a vote being taken, following only two speeches, which will not enable a full discussion to take place?
Mr. Speaker: I think that the answer is "No".
3.52 p.m.
Mr. Edward Taylor: I beg to move,
That leave be given to bring in a Bill to provide for capital punishment to be the penalty for murder involving the use of firearms or explosives and for the murder of a police or prison officer.
It is now about eight years since Parliament passed a Bill abolishing capital punishment. As a new Member at that time I was conscious of the fact that those who promoted and supported the Bill did so with sincerity and conviction and believed that the decision they were taking was a step forward to a more civilised, more enlightened and more progressive society.
At that time the big debating issue was whether abolition would result in an increase in killings, in crimes of violence and in the use of firearms by criminals, but there was no hard, detailed evidence because for centuries we had retained the death penalty.
For this reason during that debate hon. Members quoted evidence from countries

1333
all over the world—South Africa, New Zealand, Australia, France, various States of the United States, and even Portugal, to prove whether capital punishment was or was not a deterrent. Some argued that the experience in foreign countries was not relevant here and others argued that it was. We could use this information only to support the opinions which we held as to the likely effect in Britain. But we have now had eight years' experience of abolition and we can look back to see what has happened in our own country.
I believe that whether we look at the figures sideways or from any other direction, indeed from whatever standpoint— whether we include murder alone or murder and manslaughter—we see an upsurge in the number of killings and in the whole range of crimes of violence in these eight years.
The Silverman Bill was introduced in 1964. In the previous year, which was by no means an unusual year, a total of 36 people were convicted of murder in England and Wales, according to Table 6 of the Home Office Report "Murder". In Scotland it was a relatively low year and only three persons were convicted of murder. By comparison, in 1971, the last year for which figures are available, as was shown in an. answer given to me by the Minister of State on 22nd January, 97 persons were convicted of murder in England and Wales and in Scotland the total was 40. There has been a substantial increase in the number of murder convictions.
I am told that the figures are not absolutely comparable because the Home Office publication was considering the number of convictions in relation to murders which occurred in that year. The 1971 figures relate to the number of convictions in that year. But I am told that there is not a great statistical difference between the two.
But murder statistics do not tell the whole story. Some of the people who before 1957 were convicted of murder would now be convicted of manslaughter. In 1963, according to the Home Office publication, 90 persons were convicted of manslaughter. In 1971 the number of convictions was 195—more than double. In this connection it is interesting to note that 1963, far from being a low year, was itself a near record at the time.
1334
Crimes of violence have also escalated alarmingly. In 1963 there were about 20,000 crimes of violence made known to the police in England and Wales. In 1971 the total was 47,000—again more than double.
There can be no reasonable doubt that violence and killings have increased. But the real issue is not whether there has been an increase in violence but whether any connection can be established between that and the abolition of capital punishment. Are the two linked—or is it simply, as suggested in an article in the Daily Telegraph today by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), the fact that it was simply an "irony of fate" that abolition coincided with an increase in violent crime?
I believe that the connection is clear and that the real evidence can be obtained from the rather startling information given to me by the Minister of State on 12th March. In 1967 the Home Office began for the first time to collect separately the statistics of the number of crimes in which firearms were fired, used as a blunt instrument to cause injury or damage or used as a threat. In that year the total recorded was 792 such crimes. Provisional figures for 1972 just published show that the total is over 2,000. There has been a dramatic increase of 161 per cent. in five short years.
It is common knowledge that when we had the deterrent of the death penalty criminals went to considerable lengths to avoid carrying or using firearms. Now the situation has changed dramatically, and I believe that the supporters of abolition must ask themselves frankly why, despite the considerable penalties of the Firearms Act, there has been such a dramatic escalation in the use of guns by criminals in this relatively short time. In the light of these changes in the pattern of crime, I believe that it is our duty to consider urgently whether capital punishment should be reintroduced.
The main purpose of this Bill is to establish whether there has been a significant change in Commons opinion since the abolition Bill was passed by 180 votes in 1964 and confirmed by a majority of 158 in 1969. It would also pave the way for what I believe we should have—a full-scale discussion on this issue. I know

1335
that some of my hon. Friends, such as my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden), while not being convinced about the Bill, feel that it is right that we should have a full discussion of the issue after eight years of abolition.
I want now to say a brief word about the Bill which I seek leave to introduce. If one agrees that there is a case for the reintroduction of capital punishment, an immediate issue to be faced is whether it should be the penalty for all murders, subject to the discretion of judges and the Home Secretary, or whether categories of murder should be specified. I propose that we should specify categories, because it is wrong for Parliament to put the full responsibility on judges to decide which murders warrant the death penalty without the guidance of this House. Apart from this, although I believe that capital punishment is a deterrent, there are few of my supporters who would suggest that it is a deterrent to all murders.
I have selected as categories murders involving the use of firearms or explosives and also murders of police and prison officers. I appreciate that a number of brutal murders will be excluded. However, all the four categories fall within the ambit of terrible murders, and they have the additional advantage of being clear and unambiguous. I am seeking to bring in a Bill which would strike fear into the hearts of criminals in possession of guns, of terrorists who contemplate murder by explosives, and of criminals and prisoners who encounter those whom we have charged with the special and dangerous responsibility of upholding the law and of holding prisoners in custody, I have arrived at this formula after discussions with my colleagues and others outside. But I accept that there may be a more effective and just way of deciding on these categories.
If my application is approved, we can at least have an opportunity for the collective wisdom of the House to consider this in all its aspects. I know that my colleagues, including my hon. Friend the Member for Preston, South (Mr. Green) and my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), would prefer the simple definition of
1336
"… murder in pursuit of another crime."
I respect their knowledge and experience and hope that the respective merits of the two suggestions can be debated.
One other point is that the Bill does not specify the reintroduction of hanging. It is concerned with the reintroduction of capital punishment. I know that there are some who regard the technique of hanging as objectionable and would wish to consider alternatives. My co-sponsors and I have open minds on the issue and accept that it should be fully probed, as it was in the Report of the Royal Commission.
I accept that any judicial decision on killing is a desperately serious matter and that those who support it are taking a very grave responsibility on themselves. However, I believe that the evidence points clearly to the fact that the upsurge in violence and killing is related to the abolition of capital punishment and to the absence of a meaningful deterrent. My own view is that if capital punishment is reintroduced, lives will be saved and criminals will be deterred from carrying or using guns.
However, we are not making law today. I ask the House to agree that the events since the 1965 Bill justify consideration whether the death penalty should be reintroduced. I believe that the House will be failing in its supreme responsibility if it does not agree to this.
4.4 p.m.
Mr. Roy Jenkins: I rise to oppose the motion.
None of us will underestimate the widespread public concern about violence and the private fear which this can arouse. Clearly we should be neglecting our duty if we sought to sweep it aside. But in my view we should also be neglecting our duty as a House of Commons if we were to respond to it by voting, in however loose and general terms, for a Bill which in my opinion would be ineffective, impractical, damaging and wrong.
Let us be clear that what is proposed is a return in a slightly more limited form to the Homicide Act 1957. That Act, by the time that it had run its eight years of life, and perhaps well before it, had come to be regarded by almost

1337
everyone concerned with its administration as an ineffective and illogical compromise raising far more problems than it solved.
Murder by shooting is by no means necessarily a more vicious crime than murder by poisoning or a knife. Nor is it a crime peculiarly associated with the sane, cold-blooded criminal. A higher proportion of those involved in murder by shooting commit suicide or are found insane than is the case with the general run of murders.
Murder by explosive is associated, though not invariably, with terrorism. This causes more concern now than it did eight years ago. But does anyone seriously believe that in cases of political terrorism capital punishment would be a helpful deterrent? To take this view seems to me to show a grave misunderstanding of the motivation of those who commit such crimes.
Let us consider for a moment the two main areas of current concern. The first is Northern Ireland—and its repercussions. Can anyone who begins to look at this in the context of history think that to have IRA terrorists executed in a London gaol would assist the cause of reconciliation in Northern Ireland?
The second area of concern is Black September and similar organisations. What in hard practical terms does the House consider would be the position of a Home Secretary with such terrorists here under sentence of death? Would he be able to consider in a calm, judicial atmosphere whether to exercise the prerogative? Is not there a horrible possibility that, on the contrary, he would find himself faced with the impossible choice of having either to give way under duress or to condemn a group of innocent hostages —perhaps a whole plane load full—to die as well? Not deterrence but an escalation of violence would be the likely outcome.
I come to the special category of police and prison officers. Concern for both the safety and the morale of this group of public servants must be very present in the mind of anyone who has or has had responsibility for public law and order. But we must not get the matter out of proportion. In England and Wales there have been 22 such murders since the war. Six took place in the 12 years
1338
with full capital punishment. Eight took place in the eight years of special protection under the Homicide Act. Eight took place, three of them in one appalling incident, in the seven years since abolition. I do not see here even the beginning of a significant statistical case. In Scotland there have been only two in the past 16 years and four since the war.
There are considerations which go deeper than the statistics. The whole effectiveness of the police in their fight against crime depends overwhelmingly on two factors: first, public support and understanding; and, second, the likelihood of their detecting and the courts then convicting those who are guilty.
If the murderers of policemen received a different and more severe punishment from murderers of those who are killed in a private attempt to resist criminals and to uphold the law, I do not believe that this would, in other than the very short term, assist the public position of the police.
Public sympathy can be a fickle emotion. Without capital punishment it is all on the side of the victim, where it should be. With capital punishment, strange though it may now seem, when one gets to the dreadful panoply of the execution of the sentence, with the suspense, the family circumstances, the last visits and the faint doubt which is sometimes there, all of these much publicised, it can easily flow the other way.
If the House doubts this, let it consider one phenomenon. When we had capital punishment it was the names of the men and the women who were hanged —Bentley, Ruth Ellis and Hanratty— which were most remembered. Their victims were forgotten. Without capital punishment it is the other way round— and this, in the strange psychosis of criminality, is not without significance.
I turn to the likelihood of conviction. In the Criminal Justice Bill 1967 I decided, as a matter of personal judgment, to propose to the House the introduction of majority verdicts. It was a heavy battle to get it through this House. Many hon. Members on both sides, but most on the then Opposition side, had grave doubts and there was a lot of opposition. Those doubts have mostly disappeared. I believe that the system has worked well. It has certainly not

1339
been without significance. For instance, in 1970 nearly 10 per cent. of those found guilty on indictment of criminal charges were found so on majority verdicts. I am informed that these included many of the worst and most professional criminals.
However, I must tell the House that with the finality of capital punishment I should not have thought it right to propose this change. I believe that if capital punishment were reintroduced this would have to be reconsidered and probably gone back on. And I do not believe that it would in practice be possible to accept one category of verdict for one category of offence and another for others. The present Commissioner of the Metropolitan Police, with this point very much in mind, wrote an article in 1965 entitled,
"The High Cost of Hanging."
I do not believe that he has changed his mind since.
It may surely be said that any question of doubt can be dealt with by the Home Secretary's prerogative. I do not think so. First, this is too great a burden to place upon any one man. It hung heavy over the whole atmosphere of the Home Office. Second, it did not work in practice.
I was in the position of receiving a judge's report which told me that in the case of one man, Evans, had all the subsequent evidence been before the court, he, the judge, did not believe that a jury could have been convinced beyond reasonable doubt. I thought it right then to take the unprecedented step of giving a posthumous pardon. I fear that it did
not do the man much good. He had been hanged 16 years before.
Nor is this the only case with a scintilla of doubt. I had another case—a shooting, a firearms case—where the same procedure did not seem appropriate. With the passage of time the likelihood of arriving at the truth had become less, not greater, but there was unease and the man had been hanged.
I believe that there have been at least two other murder cases where similar concern has arisen since I left the Home Office. The penalty is too final to be controlled by the frailty of human judgment. I therefore ask the House to reject this motion and I hope that it will reject it decisively.
There is no significant new statistical evidence to show that, following abolition, murder has increased more than other crimes. On the contrary, it has increased less. The evidence previously available, both here and abroad, has never supported the view that hanging was a uniquely effective and necessary deterrent. Surely that at least should be shown before we contemplate returning to this gruesome penalty. It has not been shown. Let us therefore not return to a running battle on this issue which in my view can only divert energy and attention from the real battle against crime.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of Public Business):—
The House divided: Ayes 178, Noes 320.

Division No. 104.]

AYES

[4.17 p.m.

Adley, Robert

Bullus, Sir Eric

Farr, John

Allason, James (Hemel Hempstead)

Burden, F. A.

Fell, Anthony

Atkins, Humphrey

Cary, Sir Robert

Fenner, Mrs. Peggy

Awdry Daniel

Churchill, W. S.

Fidler, Michael

Baker W. H. K. (Banff)

Clark, William (Surrey, E.)

Finsberg, Geoffrey (Hampstead)

Barber, Rt. Hn. Anthony

Clegg, Walter

Fletcher-Cooke, Charles

Batsford, Brian

Cockeram, Eric

Fookes, Miss Janet

Bennett, James (Glasgow, Bridgeton)

Cooke, Robert

Fox, Marcus

Bennett, Dr. Reginald (Gosport)

Coombs, Derek

Fry, Peter

Berry, Hn. Anthony

Cooper, A.E.

Gibson-Watt, David

Biggs-Davison, John

Cordle, John

Gilmour, Sir John(Fife, E.)

Boardman, Tom (Leicester, S.W.)

Corfield, Rt. Hn. Sir Frederick

Glyn, Dr. Alan

Boscawen, Hn. Robert

Costain, A. P.

Goodhart, Philip

Goodhew, Victor

Bowden, Andrew

Crowder, F. P.

Gorst, John

Braine, Sir Bernard

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

Gower, Raymond

Bray, Ronald

Deedes, Rt. Hn. W. F.

Gray, Hamish

Brewis, John

Digby, Simon Wingfield

Grieve, Percy

Brinton, Sir Tatton

Dixon, Piers

Griffith's, Eldon (Bury St. Edmunds)

Brown, Sir Edward (Bath)

Doig, Peter

Gurden, Harold

Bruce-Gardyne, J.

Drayson, G. B.

Hall, Miss Joan (Keighley)

Bryan, Sir Paul

Elliot, Capt. Walter (Carshalton)

Hall-Davis, A. G. F.

Hamilton, Michael (Salisbury)

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

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

Hannam, John (Exeter)

Mitchell, David (Basingstoke)

Soref, Harold

Harrison, Col. Sir Harwood (Eye)

Moiyneaux, James

Spence, John

Hastings, Stephen

Monks, Mrs. Connie

Sproat, Iain

Hawkins, Paul

Monro, Hector

Stainton, Keith

Hicks, Robert

Montgomery, Fergus

Stanbrook, Ivor

Hiley, Joseph

Morgan, Geraint (Denbigh)

Stewart, Donald (Western Isles)

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

Morgan-Giles, Rear-Adm.

Stewart-Smith, Geoffrey (Belper)

Holt, Miss Mary

Mudd, David

Stodart, Anthony (Edinburgh, W.)

Hordern, Peter

Murton, Oscar

Stoddart-Scott, Col. Sir M.

Hornsby-Smith,Rt.Hn.Dame Patricia

Nabarro, Sir Geralo

Stokes, John

Howell, Ralph (Norfolk, N.)

Neave, Airey

Sutcliffe, John

Hunt, John

Nicholls, Sir Harmar

Taylor, Sir Charles (Eastbourne)

Iremonger, T. L.

Noble, Rt. Hn. Michael

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

Irvine, Bryant Godman (Rye)

Normanton, Tom

Taylor, Frank (Moss Side)

Jessel, Toby

Oppenheim, Mrs. Sally

Taylor, Robert (Croydon, N.W.)

Kaberry, Sir Donald

Orr, Capt. L. P. S.

Temple, John M.

Kellett-Bowman, Mrs. Elaine

Owen, Idris (Stockport, N.)

Thatcher, Rt. Hn. Mrs. Margaret

Kershaw, Anthony

Page, John (Harrow, W.)

Thompson, Sir Richard (Croydon, S.)

Kimball, Marcus

Percival, Ian

Tugendhat, Christopher

King, Tom (Bridgwater)

Pink, R. Bonner

Turton, Rt. Hn Sir Robin

Kinsey, J. R.

Quennell, Miss J M.

Vaughan, Dr. Gerard

Kitson, Timothy

Ramsden, Rt. Hn. James

Waddington, David

Knight, Mrs. Jill

Redmond, Robert

Wall, Patrick

Le Marchant, Spencer

Reed, Laurance (Bolton, E.)

Ward, Dame Irene

Lewis, Arthur (W. Ham, N.)

Rees-Davies, W. R.

Weatherill, Bernard

Longden, Sir Gilbert

Renton, Rt. Hn. Sir David

White, Roger (Gravesend)

Loveridge, John

Ridley, Hn. Nicholas

Wiggin, Jerry

McAdden, Sir Stephen

Ridsdale, Julian

Wilkinson, John

MacArthur, Ian

Roberts, Michael (Cardiff, N.)

Wlnterton, Nicholas

McCrindle, R. A.

Roberts, Wyn (Conway)

Wolrige-Gordon, Patrick

Maclean, Sir Fitzroy

Rost, Peter

Wood, Rt. Hn. Richard

McMaster, Stanley

Russell, Sir Ronald

Woodnutt, Mark

McNair-Wilson, Patrick (New Forest)

Scott-Hopkins, James

Wylie Rt. Hn. N. R.

Marples, Rt. Hn. Ernest

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

Younger, Hn. George

Marten, Neil

Shelton, William (Clapham)

Mather, Carol

Shersby, Michael

TELLERS FOR THE AYES:

Maudling, Rt. Hn. Reginald

Simeons, Charles

Mr. Patrick Cormack and

Mawby, Ray

Sinclair, Sir George

Mr. Norman Tebbit.

Maxwell-Hyslop, R. J.

Skeet, T. H. H.

NOES

Abse, Leo

Cocks, Michael (Bristol, S.)

Foot, Michael

Alison, Michael (Barkston Ash)

Cohen, Stanley

Ford, Ben

Allaun, Frank (Salford, E.)

Coleman, Donald

Forrester, John

Allen, Scholefield

Conlan, Bernard

Fortescue, Tim

Archer, Jeffrey (Louth)

Corbet, Mrs. Freda

Foster, Sir John

Armstrong, Ernest

Crawshaw, Richard

Fraser, John (Norwood)

Ashton, Joe

Cronin, John

Freeson, Reginald

Astor, John

Crosland, Rt. Hn. Anthony

Galpern, Sir Myer

Atkinson, Norman

Crossman, Rt. Hn. Richard

Garrett, W. E.

Baker, Kenneth (St. Marylebone)

Dalyell, Tam

Gilbert, Dr. John

Balniel, Rt. Hn. Lord

Davidson, Arthur

Gilmour, Ian (Norfolk, C.)

Barnes, Michael

Davies, Denzil (Llanelly)

Ginsburg, David (Dewsbury)

Barnett, Guy (Greenwich)

Davies, G. Elfed (Rhondda, E.)

Golding, John

Barnett, Joel (Heywood and Royton)

Davies, Ifor (Gower)

Gourlay, Harry

Benn, Rt. Hn. Anthony Wedgwood

d'Avigdor-Goldsmid, Sir Henry

Grant, George (Morpeth)

Benyon, W.

Davis, Clinton (Hackney, C.)

Grant, John D. (Islington, E.)

Bidwell, Sydney

Davis, Terry (Bromsgrove)

Griffiths, Eddie (Brightside)

Bishop, E. S.

Deakins, Eric

Grimond, Rt. Hn. J.

Blenkinsop, Arthur

Delargy, Hugh

Grylls, Michael

Body, Richard

Dell, Rt. Hn. Edmund

Gummer, J. Selwyn

Hamilton, James (Bothwell)

Booth, Albert

Dempsey, James

Hamilton William (Fife, W.)

Bossom, Sir Clive

Dormand, J. D.

Hamling, William

Bottomley, Rt. Hn. Arthur

Douglas, Dick (Stirlingshire, E.)

Hannan, William (G'gow, Maryhill)

Brocklebank-Fowler, Christopher

Douglas-Mann, Bruce

Hardy, Peter

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

Driberg, Tom

Harper, Joseph

Buchan, Norman

Duffy, A. E. P.

Harrison, Brian (Maldon)

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

Dunn, James A.

Harrison, Walter (Wakefield)

Buck, Antony

Dykes, Hugh

Hart, Rt. Hn. Judith

Butler, Adam (Bosworth)

Eadie, Alex

Haselhurst, Alan

Butler, Mrs. Joyce (Wood Green)

Edelman, Maurice

Hattersley, Roy

Callaghan, Rt. Hn. James

Edwards, Robert (Bilston)

Hayhoe, Barney

Campbell, I. (Dunbartonshire, W.)

Edwards, William (Merioneth)

Healey, Rt. Hn. Denis

Carlisle. Mark

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

Heath, Rt. Hn. Edward

Carmichael, Neil

Ellis, Tom

Heffer, Eric S.

Carr, Rt. Hn. Robert

English, Michael

Heseltine, Michael

Carter, Ray (Birmingh'm, Northfield)

Ewing, Harry

Higgins, Terence L.

Castle, Rt. Hn. Barbara

Faulds, Andrew

Hooson, Emlyn

Channon, Paul

Fernyhough, Rt. Hn. E.

Horam, John

Chapman Sydney

Fitch, Alan (Wigan)

Hornby, Richard

Clark, David (Colne Valley)

Fletcher, Raymond (Ilkeston)

Houghton, Rt. Hn. Douglas

Clarke, Kenneth (Rushcliffe)

Fletcher, Ted (Darlington)

Howe, Rt. Hn. Sir Geoffrey

1342

1343

Howell, Denis (Small Heath)

Madel, David

Rossi, Hugh (Hornsey)

Huckfield, Leslie

Mahon, Simon (Bootle)

Rowlands, Ted

Hughes, Rt. Hn. Cledwyn (Anglesey)

Marks, Kenneth

Sandelson, Neville

Hughes, Mark (Durham)

Marquand, David

Scott, Nicholas

Hughes, Robert (Aberdeen, N.)

Marsden, F.

Sheldon, Robert (Ashton-under-Lyne)

Hughes, Roy (Newport)

Marshall, Dr. Edmund

Shore, Rt. Hn. Peter (Stepney)

Hunter, Adam

Mason, Rt. Hn. Roy

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

Hutchison, Michael Clark

Mayhew, Christopher

Short, Mrs. Renée (W'hampton, N.E.)

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

Meacher,Michael

Silkin, Rt. Hn. John (Deptford)

James, David

Mellish, Rt. Hn. Robert

Silkin, Hn. S. C. (Dulwich)

Janner, Greville

Mendelson, John

Sillars, James

Jay, Rt. Hn. Douglas

Mikardo, Ian

Silverman, Julius

Jenkin, Patrick (Woodford)

Millan, Bruce

Smith, John (Lanarkshire, N.)

Jenkins, Hugh (Putney)

Miller, Dr. M. S.

Spearing, Nigel

Jenkins, Rt. Hn. Roy (Stechford)

Mills, Stratton (Belfast, N.)

Speed, Keith

John, Brynmor

Milne, Edward

Spriggs, Leslie

Johnson, Carol (Lewisham, S.)

Miscampbell, Norman

Stallard, A. W.

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

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

Steel, David

Johnson, Walter (Derby, S.)

Moate, Roger

Stewart, Rt. Hn. Michael (Fulham)

Johnson Smith, G. (E. Grinstead)

Molloy, William

Stoddart, David (Swindon)

Jones, Arthur (Northants, S.)

Morris, Alfred (Wythenshawe)

Stonehouse, Rt. Hn. John

Jones, Dan (Burnley)

Morris, Charles R. (Openshaw)

Strang, Gavin

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

Morris, Rt. Hn. John (Aberavon)

Strauss, Rt. Hn. G. R.

Jones, Gwynoro (Carmarthen)

Morrison, Charles

Stuttaford, Dr. Tom

Jones, T. Alec (Rhondda, W.)

Moyle, Roland

Summerskiil, Hn. Dr. Shirley

Jopling, Michael

Mulley, Rt. Hn. Frederick

Tapsell, Peter

Joseph, Rt. Hn. Sir Keith

Murray, Ronald King

Taverne, Dick

Judd, Frank

Oakes, Gordon

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

Kaufman, Gerald

Ogden, Eric

Thomas, John Stradling (Monmouth)

Kelley, Richard

O'Halloran, Michael

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

Kerr, Russell

Onslow, Cranley

Thorpe, Rt. Hn. Jeremy

King, Evelyn (Dorset, S.)

Oram, Bert

Tinn, James

Kinnock, Neil

Orbach, Maurice

Tope, Graham

Knox, David

Orme, Stanley

Torney, Tom

Lambie, David

Oswald, Thomas

Trew, Peter

Lamborn, Harry

Owen, Dr. David (Plymouth, Sutton)

Tuck, Raphael

Lamont, Norman

Padley, Walter

Urwin, T. W.

Lane, David

Page, Rt. Hn. Graham (Crosby)

Varley, Eric G.

Latham, Arthur

Paget, R. T.

Vickers, Dame Joan

Lawson, George

Pannell, Rt. Hn. Charles

Wainwright, Edwin

Leadbitter, Ted

Pardoe, John

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

Lee, Rt. Hn. Frederick

Parker, John (Dagenham)

Walder, David (Clitheroe)

Leonard, DicK

Parkinson, Cecil

Walker, Harold (Doncaster)

Lestor, Miss Joan

Parry, Robert (Liverpool, Exchange)

Walker, Rt. Hn. Peter (Worcester)

Lewis, Kenneth (Rutland)

Pavitt, Laurie

Wallace, George

Lewis, Ron (Carlisle)

Peart, Rt. Hn. Fred

Walters, Dennis

Lipton, Marcus

Pendry, Tom

Warren, Kenneth

Watkins, David

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

Perry, Ernest G.

Weitzman, David

Lomas, Kennett

Peyton, Rt. Hn. John

Wellbeloved, James

Loughlin, Charles

Powell, Rt. Hn. J. Enoch

Wells, William (Walsall, N.)

Luce, R. N

Prentice, Rt. Hn. Reg.

Whitehead, Phillip

Lyons, Edward (Bradford, E.)

Prescott, John

Whitlock William

Mabon, Dr. J. Dickson

Price, William (Rugby)

Willey, Rt. Hn. Frederick

McBride, Neil

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

Williams, Alan (Swansea, W.)

McCartney, Hugh

Probert, Arthur

Williams, Mrs. Shirley (Hitchin)

McElhone, Frank

Proudfoot, Wilfred

Williams, W. T. (Warrington)

McGuire, Michael

Raison, Timothy

Wilson, Rt. Hn. Harold (Huyton)

Machin, George

Reed, D. (Sedgefield)

Wilson, William (Coventry, S.)

Mackenzie, Gregor

Rees, Meriyn (Leeds, S.)

Woodhouse, Hn. Christopher

Mackie, John

Richard, Ivor

Woof, Robert

Mackintosh, John P.

Rippon, Rt. Hn. Geoffrey

Worsley, Marcus

McLaren, Martin

Roberts, Rt. Hn. Goronwy (Caernarvon)

Macmillan, Rt. Hn. Maurice (Farnham)

Robertson, John (Paisley)

TELLERS FOR THE NOES:

McMillan, Tom (Glasgow, C.)

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

Sir Geoffrey de Freitas and

McNair-Wilson, Michael

Rodgers, Sir John (Sevenoaks)

Mr. Ernle Money

McNamara J. Kevin

Rodgers, William (Stockton-on-Tees)

Maddan, Martin

Roper, John

Question accordingly negatived.

ORDERS OF THE DAY

  FINANCE BILL
  (Clauses 3, 4, 10, 12, 18 and 38)
  Considered in Committee [Progress, 10th April].
  [Sir ROBERT GRANT-FERRIS in the Chair]

Clause 10

  SURTAX RATES FOR 1972–73
  Question proposed, That the clause stand part of the Bill.
  4.30 p.m.
  Mr. Brian Walden: Regrettably, although the Opposition want to make progress as much as do the Government, we cannot let Clause 10 go through without some comment upon it.
  The scheme that will be implemented this year was legislated for in 1971 and the rates were fixed in 1972. The system becomes operative from 1st April 1973. It therefore had all the classic marks of what the House is increasingly being persuaded is the right way to do things—namely, that this was a long-term well-planned tax change.
  I want to say this for it. I have no objection to the fact that it established a unified tax system. I believe that was right, with one provison which I shall make later. Indeed, my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) never disguised the fact that he had himself wished to produce a unified tax system. For reasons which I confess I do not know and for that matter nor, I suspect, do the Government Front Bench, given the way that these things are done, quite properly, in the Treasury, my right hon. Friend explained to us that a technical reason prevented him from bringing about this change. What that technical reason may be I do not know, because I have been very careful not to ask him and, rightly, it cannot be a subject of debate in the House.
  I therefore accept the unified system as a good thing, but I make one proviso. If we are to have these fundamental tax changes, something might have been done
  1346
  about the plateau between the entrance into the tax system and the £5,000-a-year limit, because the common rate at varying levels in that amount is probably a nonsense. There ought possibly to be a greater refinement and differentiation. But that is not the principal point to which I wish to speak on Clause 10.
  There is no way of getting out of the case—and I intend to examine briefly the ways in which the Government have tried to get out of the case—that a significant concession is being given here to the better-off. The Labour Party in any year at any time would be opposed to that and would be particularly opposed to its being done at a time when the Government are operating a prices and incomes policy.
  First, I wish to attempt to get rid of of what may be confusions existing between the two sides. The £300 million is not being "taken back", if that phrase worries hon. Members opposite; it is being forgone by lessening the stiffness of the progression above £5,000 a year on earned income and by granting concessions to investment income. I therefore accept at once that part of the £300 million will be going to people whom one does not normally regard in any meaningful sense as rich.
  Nevertheless, there is no way in which the Government can explain away, for instance, the following facts. I try never to bore the House with statistics, and I promise to quote only one. Under this system, the tax burden of a married couple with a £15,000-a-year investment income—not an extravagent sum for a whole category of people by any means —will be reduced from the former level by £1,482. In other words, there will be a retention increase for that couple of 29 per cent.
  Mr. John Hall: Will the hon. Member remind the House of the level from which that reduction was made?
  Mr. Walden: I will take up that point in a moment when I come to the equations of what happens in West Germany. It was reduced from a very high level of tax as, indeed, could truthfully be said to be the case in the reduction from 90 to 75 per cent. on earned income. These are high levels, but then

  1347
  the sums of money involved are very considerable.
  One has to consider philosophically whether one wants significant disparities of wealth at any time. As a philosophic belief, the Labour Party does not. Least of all does it want a married couple with a £15,000-a-year investment income to have its retention increased by 29 per cent. at a time when hospital workers have to take £1 plus 4 per cent.
  This seems to us to be entirely the wrong way to secure compliance in a policy which, as I have said before and I repeat, I wish to see succeed, namely, the Government's counter-inflation policy.
  Mr. J. Bruce-Gardyne rose—
  The Chairman: Does the hon. Gentleman appreciate that these rates are for one year only and that we should therefore discuss them in the light of that fact?
  Mr. Walden: Yes, Sir Robert, I understand that. The surtax rates for 1972–73 obviously go wider than that, but I will endeavour to confine my remarks to the ruling you have made, and I will give way to the hon. Member for South Angus (Mr. Bruce-Gardyne) in a moment.
  It is undeniable that although part of this £300 million forgoing of income goes to people whom one does not normally regard as rich, the greater part of it and the substantial benefit from it goes to the people in this country who least need the money and who least need to make sacrifices.
  I ought at this point to give way to the hon. Member for South Angus after which I will examine the reasons why I believe the Government did this and why I intend to try to show that they have become increasingly embarrassed about what they are doing.
  Mr. Bruce-Gardyne: I am grateful to the hon. Member for giving way.
  He promised us a feast of relative statistics which I say, in all sincerity, we look forward to hearing. In the course of giving these statistics, will the hon. Gentleman show us the relative position before the change introduced in the clause now under discussion of an elderly retired married couple such as he has referred to,
  1348
  living wholly on an investment income of £15,000 a year, and that of a similar married couple living on the proceeds of a top hat pension scheme, and the relative tax treatment of those two couples?
  Mr. Walden: My hon. Friend the Member for Heywood and Royton (Mr. Joel Barnett) has promised to get me exactly that figure. But the hon. Member for South Angus will not think me to be joking when I say that I am a little sceptical of the old, the widows and the orphans. They tend to bulk very large. Whenever the Tory Party is handing out substantial sums of money to the rich, we always hear about the widows and the orphans and the retired—all the cripples of capitalist society. The hon. Member knows as well as I do who will mostly benefit from this concession. Should there be any doubt on the subject, let me repeat what the original argument was.
  One must bear in mind the climate of opinion in 1971. The Government did not then have a prices and incomes policy, they did not then foresee a borrowing requirement or a rate of inflation of the size that they now have. The argument then was, "Competion will solve all our problems, we must give more incentives to"—in the immortal phrase of the right hon. Lady the Member for Finchley (Mrs. Thatcher)—" the pace-setters". This was a pace-setters' incentive and it was advocated as such. The Tory Party then made no bones about it. This was meant to be a concession to better-off executives—not only executives, but principally—in order to induce them to turn out a good economic performance for this country.
  Apart from the fact that I regard that as psychological twaddle, it has never been established as being correct or true and I do not believe it to be the reason that executives actually do their jobs in the way they do. However, leaving that aside, that was the argument.
  As I have so often said to the House or to various committees, as usual, the Government's taxation arrangements are entirely "out of synch" with their demand management. Increasingly, they have become embarrassed about that argument. If one compares the word of the Chancellor in his Budget Statement this year with the words that he used when he originally brought forward

  1349
  this idea, one will notice that an apologetic note has crept in.
  Of course, in the case of the Chancellor, of whom I am very fond, an apologetic note always takes the form of a counter-attack.
  "The wicked flee when no man pursueth".
  He gave us a great lecture about how other countries have lower rates of taxes and that therefore it did not fall to the Labour Party to criticise anything that the present Government were doing, about which I have only one thing to say: if there are to be these naive and ludicrous comparisons with foreign countries, we must take into account the entire social industrial system that they operate, their wage rates, their rates of benefit, their holidays, the disparities that exist in their society—and I leave out of account the factor that I would regard as most significant, namely, their history. Let us not worry ourselves with that.
  If we are to have German examples quoted, as the Chancellor quoted them in his Budget Statement, we should be told what the average German earns, how many German workers are unemployed, what the German worker receives in social benefit and in holidays, what his employer's contribution is and what the German Treasury's contribution is to all the things that finance his social wage. Then, I suggest, we shall have a picture painted which significantly modifies what it is that the Chancellor wishes us to misunderstand.
  What I think he wants us to assume is that Germany is a country in which there are greater disparities, less egali-tarianism, than is the case in this country. That is at least a questionable proposition. Nor do we ever hear anything about the advanced countries of Scandinavia, among the most civilised, the most decent, the most peaceful in the world, from which one could produce an argument which would show that by no means is it necessary to reduce taxation on the rich in order to produce the sort of society that can efficiently conduct its affairs.
  I want to try to conclude now, because I do not want the discussion to go on too long—not because I think that it is not important but because I think that the points of view of the two parties have been expressed so frequently that con-
  1350
  stantly to reiterate one adds no strength to it.
  4.45 p.m.
  I want to turn finally to counter-inflation policy. Whatever the hon. Gentleman may think, fiscally speaking, in vacuo, this change is bound to do nothing but harm in our circumstances. The sense that that may be so has crept into the Chief Secretary's own remarks. The Chief Secretary has now come up with a dodge—I categorise it exactly as such—which has entirely convinced, among others, his hon. and learned Friend the Member for Dover (Mr. Peter Rees). What the Chief Secretary said— by the way, it is absolutely true—was, "Does not the Labour Party grasp the fact that, as a result of the changes that are being made, surtax payers will actually pay more in the next three years than they have previously paid?" This has so inflamed the imagination of the hon. and learned Member for Dover that he recently gave us a speech about the terrible burdens which will fall upon surtax payers as a result of what the Government were doing, with a strong plea that some further mitigation should be given.
  Mr. Peter Rees: Of course the hon. Gentleman will have his fun, but perhaps he will not take it too far. I was not complaining about the great burdens which would fall on surtax payers, although there are burdens. Speaking in the context of his speech, I was merely trying to demonstrate that the position of surtax payers is not quite so rosy at this moment as he would have us believe. After all, the hon. Gentleman is making the point that, at this moment, it is wrong to give them any concessions at all. I just wanted to redress the balance. While one admires his debating skill, perhaps the hon. Gentleman will come down a little and face the facts squarely.
  The Chairman: Before the hon. Member resumes his speech, it would be as well if I again reiterated that we should keep to the terms of the clause and not talk about concessions. I am afraid that, if hon. Members interject, that will only encourage the hon. Member perhaps to go wider than in his heart he wishes to do. I hope that we can now hear all about surtax in connection with the next year.
  Mr. Walden: I think that I can safely do that, Sir Robert, in terms of 1972–73, without straying out of order, and still answer the hon. and learned Member very quickly. I am a surtax payer myself and I am well aware of what he has said. Of course it is true. It is the implication of that remark that is untrue. What one is supposed to understand from the remark that surtax payers have to pay more in the next three years is that somehow they have not been given the concession at all, that they are actually worse off.
  In the long term, of course, that is complete piffle. What is actually being done is that surtax payers, like those on PAYE, are being requested to pay their tax—but in the long term they are, of course, securing a concession. Therefore, all the explanation that I read by the Chief Secretary—I heard it, but I also read it with great interest—is quite true. The Chief Secretary is not saying anything in the least false when he says that surtax payers will have to make more money available to the Treasury by paying off their back taxes in the next year and the succeeding years than has been the case in the past. But that does not affect the issue in the least.
  The plain truth is that these rates still give a significant concession to the better-off members of the community. There is no way of arguing oneself out of that proposition. Now, for the last time in view of your desire to get on, Sir Robert, I give way to the hon. Member for Wycombe (Mr. John Hall).
  Mr. John Hall: The hon. Gentleman was suggesting that it was wrong to make these concessions to surtax payers during a period when wage earners are being asked to accept restrictions on the amount of the increase they were allowed to have at any one time. That means that he was arguing that, as the money going into the pockets of the average worker was limited, there should not be a relief of this kind to surtax payers. In the short period about whioh the hon. Gentleman is talking, this is precisely what is happening. The surtax payer is paying out more, not less, in tax. In that respect the surtax payer is not better off than the working man in the period under review.
  1352
  My earlier question to the hon. Gentleman concerned whether he would be kind enough to remind the Committee of the amount paid in tax before this proposed remission for the example he gave of a couple with £15,000 investment income.
  Mr. Walden: Perhaps, Sir Robert, in view of your rulings, it would be easier if I wrote to the hon. Gentleman. I have been supplied with the necessary figures from table 18. I shall supply them to the hon. Gentleman. However, on the hon. Gentleman's substantive point, the House should not too readily assume that the ordinary man is quite that stupid. He always worries about freezes of dividends because he has got it into his head that the dividends stay in the company and that sooner or later they are paid to people. He will not grieve about the fact that in a given period surtax payers have to pay rather more of tax which they ought to be paying anyway. He will have grasped the fact that they are being given a concession. That will be the psychological impact during the counter-inflation period.
  There is no guarantee that the glorious bonanza which the hon. Gentleman is obviously foreseeing for the future will come about. The Government may need to maintain a restraint on prices and incomes over a considerable period, so the argument may well fall in that respect, too. I could foresee a set of circumstances in which these concessions would become actual in terms of that particular year's income for the better off at the very time when the Government wanted a very tight policy in regard to monetary wages paid to the average man. But the fact remains that this is a concession to the better-off. It is, therefore, misplaced and out of line with the kind of restraint which the Government are now trying to apply.
  If these tax changes had not been devised so long in advance, if the Government, in December 1972 for example, were first thinking of their Budget, they would not have made a concession of this kind because the Chancellor would have felt and would certainly have been advised, that this was an unwise change to make in a period when one is enforcing wage restraint by law. To us that seems a proposition entirely undeniable.

  1353
  The arguments about the merit of the unified tax system are about how preferable it is to have a very gradual rather than a sharper progression, how valuable to this nation are executives, and how important it is to assist people who are making savings by not taking too much of those savings in tax. Valid though those arguments may be, none of them affects the fact that this is an exceedingly mistimed change which is bound to harm the Government's counter-inflation policy and which, in the view of the Labour Party, does not have the merit of social justice. When we are asked questions about where we would find the money for this, that and the other, the Opposition can say emphatically that this is £300 million worth of income that in no circumstances in any year could we have forgone. For that reason, the Opposition will divide the House against the clause.
  Mr. Nicholas Ridley: We always much admire the hon. Member for Birmingham, All Saints (Mr. Brian Walden) when he speaks with his fluency and conviction. But I did not find his speech today quite as convincing as many I have heard from him. Admittedly, I must excuse him because you, Sir Robert, would have brought him to task had he gone at all wide. The hon. Gentleman was treading a narrow path on surtax rates. He was not, therefore, able to mention capital wealth or inflation.
  I would have expected the hon. Gentleman to say that the possession of capital was perhaps the biggest way whereby people insulated themselves from the problems of modern-day life and maintained their standard of living. But equally, the effects of inflation are very important when considering this question of surtax. One must take into account when considering investment income just what ravages inflation can cause. For example, if someone invests money in Government stocks at present, he may well get a 10 per cent to 10½ per cent. yield, which would go to make up his surtaxable income. But if inflation is running at 7 per cent. or 8 per cent., as it was last year and may well this year, and if in addition to that he is paying 50 per cent. or 70 per cent. tax, possibly, he is making a loss on the investment in Government securities which might
  1354
  amount to 3 per cent., 4 per cent. or 5 per cent. loss on capital.
  In considering whether tax rates are too high, the hon. Gentleman, to be fair, must take into account things of that sort. I know that the Treasury Bench may say that inflation has been brought to a halt by the counter-inflation policy. But I do not think that hon. Gentlemen would feel that. It is certainly true that without the ability to make fortuitous capital gains and to survive the capital gains tax, all people who are living on capital or investment income are progressively getting steadily worse off. Inflation is probably the biggest wealth tax, especially combined with capital gains tax and the high rates of surtax which have prevailed and will still prevail after the rates in the Bill have been adopted. That effect, a force greater than those in the Finance Bill, is the great leveller, with the exception of those bright sparks and spirits who are able to make great fortunes by some means or another.
  I am not an egalitarian. I recognise that the hon. Gentleman is an egalitarian. He argues from a Socialist point of view. But even if I were tempted to share some of his egalitarianism, I would ask him to moderate the zeal with which he put his case. It seems that in this age we must also take account of the circumstances in which people live and earn their livings. It is not fair, either, to compare, as is done so often, the hourly rate paid to a working man with the gross annual salary paid to a surtax payer and to draw conclusions of gross inequality from them. It is easy to say that a docker earns £2 an hour whereas a Member of Parliament earns £4,500 a year. It sounds grossly unequal. But if the number of children is, perhaps, slightly different and if there are one or two expenses which a Member of Parliament must pay, they could end up with not far off the same net income.
  Secondly, it is grossly unfair to assume that the expenses of a London docker are the same as those, for example, of a Member of Parliament. I do not mean the chargeable expenses but the real expenses of the job that he has to do, the clothes that he has to wear, the entertaining he has to do and the sort of place in which he has to live. If we compare various categories of workers in this analytical way, we have to begin

  1355
  to feed into the analysis something more of the true expenses of the work that is being done.
  Mr. John Horam: While the hon. Member is dealing in comparisons, does he think that a docker, for example, or a Member of Parliament, or even someone earning rather more than a Member of Parliament—let us say an executive on £7,000 a year—should all be paying the same income tax rate, as they are now in the vast majority of cases?
  [Miss HARVIE ANDERSON in the Chair]
  5.0 p.m.
  Mr. RidleyI do not believe there ever will be ultimate justice in these things. We never will find the perfect formula. I was trying to put the egalitarian argument slightly more fairly than did the hon. Member for All Saints.
  In our society boredom will be a problem as leisure increases. More and more the problem will arise of people believing that the fulfilment of life is to knock off early and either go to Barcelona or sit at home and watch the television, or some activity of that sort. There has to be room within the tax system for a person to say that, if he can earn more, he will do more. He must be able to say that he could enjoy himself more, be able to contribute to some charity he is keen on, or take part in some activity which will cost him money but which is for the benefit of the social and cultural life as well as for his own life.
  There has to be room in the tax system for people who may be earning quite substantial sums, like £10,000 a year, to feel that it is worth engaging in extra paid activity in order to earn more and that the marginal increase in their net income will not be so small as not to make the effort worth while. That is another criterion which should enter into the view of members of the Socialist Party in deciding on their own egalitarian criteria. I do not think that under the arrangements proposed by my right hon. Friend this could be faulted.
  I want to take the hon. Member for All Saints to task on one other ground. He said that it did not matter what the comparisons were in Germany or the United States for the rates of tax on higher
  1356
  incomes. He said that the whole climate and economic existence in these countries should be taken into account before one element such as tax was singled out. That is, of course, exactly what the best brains have done, are doing and will continue to do. They do not bother to wait for us to change our tax laws—they just go. If there is one thing which I believe is insular and old fashioned in the Labour Party's attitude on this matter it is that it would prefer to ignore the attractions of other countries' tax regimes and let our most ambitious and striving people leave these shores rather than concede its old-fashioned egalitarian dogma and accept that there has to be some elasticity in incomes.
  Where I think the hon. Member was on the strongest ground was when he talked about the Counter-Inflation Bill and the area we are entering where government is beginning to take views about what every citizen should earn. Of course, if we are to take a view about what the gross earnings of hospital workers, coal miners, Members of Parliament or company directors should be, equally we must take a view about what the after-tax earnings must be. It follows that the more Government control is entrenched on prices and wages, and the more comparability studies are undertaken and tables written about various occupations, and the more fairness is considered, the more one is forced to take views about net incomes, and that means incomes after surtax.
  So I part company with the hon. Member there and say that this is probably a reason for avoiding going down that road. Once we take a view about what the net income after tax should be of someone who is a high earner, we may be right in egalitarian terms and in terms of unfairness, but we may be wrong because that high earner will hop the country and go somewhere else. The truth is that we live in a world where there is not only competition from industrial goods which are imported and exported but competition from employers all over the world who are enticing the best brains out of this country with better remuneration, and whose Governments fix tax rates to be attractive to them.
  I think that the Government have it about right. The difficult side of this whole question concerns capital and

  1357
  wealth, but we cannot discuss that now, and I do not want to. But I think that the Government have taken cognisance in regard to taxes and incomes of the need to retain the best people in this country. They have taken cognisance of the need for people to be able to earn substantial extras by substantial extra work. They have not by any means given much help to the rich, because inflation is eating into that wealth in the vast majority of cases. It is wrong for the Opposition to keep beating this drum, to keep trying to stir up envy as if there were no difference between the remuneration of, perhaps, a London docker and a Member of Parliament and as if it were their target that there should not be. It is not.
  The hon. Member for All Saints said that he did not want to see all these rates equal. For him to suggest, as he has, that we are widening the gap and making gross inequalities in our society is false and is not helpful to his own professed wish of making the counter-inflation policy work, even though I may not share that wish.
  Mr. John CroninI should like to make a few brief points in support of the admirable speech by my hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden). I support everything he says. I am a little puzzled by what the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said about inflation being a severe tax on wealthy people. My impression concerning property and industrial equity shares, which form the major part of the wealth of wealthy people, is that during the recent period of severe inflation there has been a steady increase in their capital. [Interruption.] I take the point made by the hon. Member for South Angus (Mr. Bruce-Gardyne) that over the last year there has been a retrogression of the stock market. Over the years, however, wealthy people have steadily become very much wealthier. They are seeing their capital increase enormously and as a result the increased inequality in this country is causing general discontent.
  One of our greatest troubles is the big difference between the wealthy—those who have, and those who have not or have not enough. In giving a concession of £300 million to those who are so much
  1358
  better off, not only are the Government increasing the inequality and creating something of a social blot but, as my hon. Friend the Member for All Saints pointed out, it is an act of reckless tactlessness to give it just at the time when the incomes of industrial workers, civil servants and those in the lower income groups are frozen.
  Most of us on both sides of the Committee are of the opinion, for instance, that the hospital workers are a particularly deserving case. All my professional colleagues in the hospitals think that they are being very shabbily treated. How can hospital workers, for example, be expected to accept the burden of a wage freeze and a reduction of their standard of living when they see that the Government are at the same time handing over £300 million to people who are very much better off? That is an extraordinarily tactless and foolish thing to do and it must greatly damage the Government's effort to obtain more co-operation from those who work in industry.
  The hon. Member for Cirencester and Tewkesbury painted a rather lugubrious picture of the disincentive effect of high taxation on people who are at the spearhead of our industrial and technological effort. He talked about such people emigrating. I do not think it has been suggested before that emigration is due to taxation. I know of nobody in my profession who has emigrated to avoid taxation. I agree that wealthy men sometimes impose on themselves exile abroad for the purpose of retaining more of their money and for avoiding taxation. That seems to be a strange form of masochism. Such men exile themselves and give up the pleasures of living in Britain. They choose to live in unattractive places so as to retain a greater part of their more than adequate possessions.
  Mr. Percy Grieve: Does not the hon. Gentleman appreciate that the pressure on retired people living on investment incomes, because of the fall in their standard of living on retirement, has been such that a great many have gone to live abroad?
  Mr. Cronin: I am merely suggesting that people who live abroad are subjecting themselves to an inconvenience which seems to be out of all proportion to their tax gains.
  Mr. Horam: That is precisely the point. Many people who go to live abroad do so when their energies are declining and when they have less to give to the economy. They go when they have made their pile. Good riddance to them.
  Mr. Cronin: My hon. Friend has made a useful point. It has been suggested by the hon. Member for Cirencester and Tewkesbury that our taxation system drives abroad those who help to maintain Britain's progress in exports and industrial technology. As my hon. Friend the Member for Gateshead, West (Mr. Horam) has said, it is retired people who seem to go abroad.
  Mr. Grieve: Does not the hon. Gentleman appreciate that if such people take their capital abroad, this country is deprived of its use?
  Mr. Cronin: Surely there should be stricter rules about exporting capital in those circumstances. Anyway, I say good luck to the people who retire and wish to go abroad to live in a sunny climate.
  I am concerned about incentives. This factor is laboured excessively by Members on the Government side. It can be argued that increased taxation reduces the incentive to work, but there are arguments to the contrary. One of the most authoritative examinations of our taxation system was carried out by a Royal Commission which published its report during the late 1950s. I well remember having the report in my hands when making a speech on a Finance Bill at that time. In any event, the position has not changed enormously since 1955.
  5.15 p.m.
  In its report the Royal Commission made it clear that there was no evidence that increased taxation was a disincentive to do more and better work. There are two sides of the argument I can understand that a man who has to pay more tax may decide to do less work, but that does not apply to most people. A man who has to pay more tax surely has an incentive to work even harder so that he can get his maximum income after he has paid tax.
  We have heard the Secretary of State for Education and Science make a moving plea in favour of those who make an im-
  1360
  portant contribution to technology, industry and the export drive. I happen to be a director of a successful electronics company which exports 70 per cent. of its products. I frequently see young men working hard in their laboratories producing better electronic equipment. I frequently meet young executives who spend much of their time abroad selling the company's goods. They scarcely see their families. Sometimes they work 16 hours a day. Such people make the maximum possible effort to increase exports and to increase our technological supremacy. Britain is supreme in many areas of technology.
  I have never heard the young fellows whom I have met grumbling and saying "I shall not do any more work because I shall have to pay more tax." They are working hard all the time to get better jobs and a better income. They do not slacken in their efforts because they feel that they will lose more in tax. Conservative Members should appreciate that there are many people who work hard in science, engineering and commerce not merely for money but for job satisfaction. Of course, Conservative Members think always in terms of money. An incredible amount of avarice comes into their political thinking. I accept that being a Conservative hon. Member may mean that one has a limited job satisfaction.
  Mr. Brian Walden: Especially these days.
  Mr. Cronin: Indeed. However, there are many people who think in terms of job satisfaction, of increasing their status and regarding the people with whom they work as a team and being engaged in a team effort. Such people have no real disincentive because of increased taxation.
  Many Conservative Members tend to exaggerate the importance of private expenditure. They feel that a person should retain as much money as possible and should be able to spend it himself. [HON. MEMBERS: "Yes."] I am glad to hear that the point I am making has support. Members on the Government side live in the days of Gladstone, who in the 1860s said that he would like to leave people's money to fructify in their pockets.
  We hear from the Government curious examples of retentive avarice. They do not appreciate that public expenditure is

  1361
  equally helpful to the person who is being substantially taxed.
  I agree that a worker who is paying a large amount of income tax would much prefer to retain more money himself so that he could have a second television set, a deep freeze or better furniture. I suggest, however, that such a man should feel a sense of pride when he sees a new and better school being built in his neighbourhood, when he sees his local hospital being provided with better facilities and public services being improved.
  Those are matters about which people should be proud. They should not be concerned only to keep their money in their pockets. We must inculcate more of a corporate sense of public spending. I think that that sense is increasing gradually.
  I strongly support the speech of my hon. Friend the Member for All Saints. I believe that Clause 10 as drafted not only perpetuates inequality but is most recklessly foolish at a time when the Government are expecting the workers to moderate their wage claims.
  Mr. Bruce-Gardyne: I could not resist interjecting during the speech of the hon. Member for Loughborough (Mr. Cronin)—from, I regret to say, a sedentary position—a wish that he would examine the conditions of his own profession when he talked about illusions which he believes we on this side have about the impact of high levels of taxation on the propensity of people who have a contribution to make to our community to live abroad.
  I interjected because of my experience over the years of the Labour Government—and I am bound to say that it is not an experience that has entirely evaporated over the years with the present Government. At least once a year I learn of a further case of a member of the medical profession who is leaving general practice or the hospital service in my constituency to practise abroad, usually in Canada or the United States and occasionally in Australia.
  These are not people who are retiring and are going to spend their declining years abroad when they no longer have a contribution to make. They are often quite young men at the height of their professional powers and they are going
  1362
  abroad, in numerous instances as I have discovered, and clearly in a large majority of cases, because they find that they are able to enjoy a much more attractive tax system in Canada, the United States or Australia than they have experienced in this country. That is the reason why they go abroad and I am amazed that the hon. Member, coming from that profession, has not come into contact more with cases of this kind.
  Mr. Cronin: I take the hon. Member's point, but he must realise that in the majority of cases young doctors and consultants who go abroad do so on account of dissatisfaction with the conditions of the National Health Service, and that is based largely on the fact that not enough money is spent by the Government on the National Health Service.
  Mr. Bruce-Gardyne: I do not mean that the tax issue is always the prime motive, but in my experience of contact with numerous doctors in this category from my constituency who have gone abroad I have found that tax was an important factor in virtually every case. I am amazed that the hon. Member, coming from the medical profession, should not have come across that himself.
  Mr. Horam: Will the hon. Member tell us how many of these people come back?
  Mr. Bruce-Gardyne: I regret to say that none of those who were practising in my constituency has come back, although I know that some doctors do.
  I want to turn now to the speech by the hon. Member for Birmingham, All Saints (Mr. Brian Walden). I always feel that he is incapable of making a bad speech, and sometimes one feels that the worse the cause the better his speech. I sometimes speculate on the thought that he would have made a splendid job of defending the Massacre of the Innocents. He would no doubt have announced that Herod was worried about the population explosion, and would have done so charmingly.
  Today, however, I thought that the hon. Member was labouring a bit— if that is the right word to use—though, like my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), I thought that he was on his

  1363
  strongest ground when he was talking about the interface, if I may use the popular and fashionable jargon, between this clause and the investment income surcharge, which is the substance of our discussion, and the prices and incomes policy. He made great play with the interpretation which would be put upon the passage of the clause by those who were caught in the vicious claws of phase 2 or phase 3 of the prices and incomes policy.
  On that part of the hon. Gentleman's argument I think that we cannot entirely ignore the logic behind what he was saying. I read the other day of a claim that incomes policies must be based on attempts to redistribute incomes in favour of the lower paid. That was a sentiment that the hon. Gentleman might well have uttered this afternoon. We hear it frequently uttered from the Opposition benches.
  The dramatic thing about this statement was that it did not come from the Government benches but was apparently from a gentleman we have chosen to appoint as deputy chairman of the Pay Board. So we might say that this is a voice which is emerging from within the bowels of Whitehall. He is called Mr. Derek Robinson, and his appointment should have attracted a good deal more attention than it has in the light of evidence he gave to the first Wilberforce Commission on the electricity supply workers' dispute. However, I thought I heard you cough, Miss Harvie Anderson, and I had better go no further in that direction, except to say that we hear these sort of noises emanating now from the bowels of Whitehall.
  It is not a dilemma which concerns me particularly because I do not believe it is given to Governments to devise an elaborate scenario for prices and incomes based on the concept of fairness which will appeal equally to the docker and the High Court judge. I do not think that it can be done by this Government, and it certainly was not done by the last Government. Nor can it be done by any Government. As far as I am concerned, the dilemma to which the hon. Gentleman drew attention is a dilemma to which my hon. Friends on the Front Bench will no doubt address themselves. I do not
  1364
  think that it is a dilemma with which those of us who have expressed substantial reservations about the curious gymnastics of the prices and incomes policy from the back benches need concern ourselves very much this afternoon.
  Instead, I want to raise three arguments which I do not think have been advanced very far and were certainly not advanced by the hon. Gentleman in support of Clause 10. They follow a rising order of importance. First, the argument that we used to advocate, and which I hope we still advocate, in favour of a more equitable treatment of investment income is that it was and is desirable for the more efficient working of the economy that public companies should be encouraged to distribute a higher proportion of their income so that their investment requirements could be obtained in the market, where they would be judged on their performance. This has always seemed to be a powerful argument—one of the most powerful, in my view—behind the new system of corporation tax which is also incorporated in the Finance Bill. But one of the ways in which public companies can be encouraged to go in for larger distributions and a wider degree of submission of their records to the judgment of the market is to make investment income less onerous in the hands of the recipient. That is not the least of the arguments in favour of the way in which the investment income surcharge is to be introduced.
  5.30 p.m.
  The second argument—and I state the arguments in rising order of importance —concerns the respective treatment of different sources of income, from different forms of saving, according to the type of asset from which it comes. That was the point on which I interrupted the hon. Member for All Saints. There is no logical reason why we should tax a retired couple whose income comes from an occupational pension scheme or from investing savings on totally different scales.
  The hon. Gentleman referred us to the Red Book but he was discreet enough not to mention the figures. I shall give him the figures, which are highly relevant to the clause. A married couple with an income of £15,000 a year—the figure the hon. Gentleman took—arising exclusively from a top hat pension scheme from

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  which the husband is the beneficiary would have a tax liability in the financial year 1973–74 amounting to £6,375 on that sum. A similar couple with an income of £15,000 arising exclusively from investments would have a tax liability amounting to £8,546. I can see no logical reason for that differentiation.
  Mr. Brian Walden: May I suggest one to the hon. Gentleman? When the recipient of the pension dies, the pension dies with him, but the investment income is not rubbed out on the death of the person concerned. It passes on to someone else. Therefore, there is every logical reason for maintaining a differential.
  Mr. Bruce-Gardyne: The hon. Gentleman has heard of estate duty. We do not need to pursue that argument further. The fact is that those two married couples are treated in a totally different way under our tax system for no logical reason.
  Mr. Joel Barnett: The hon. Gentleman is not comparing like with like. What is received from the top hat pension is not wholly income; it is partly capital and partly income. That is why the man in the pension scheme is paying less tax.
  Mr. Bruce-Gardyne: The hon. Gentleman cannot get away with that. The man is paying less tax because the income is treated as earned income and not investment income, like all forms of pension income. That glaringly exposes the illogicality of the present system.
  The hon. Member for All Saints treated us to an elegant disposition, as only he can, about the tremendous fringe benefits enjoyed by the German worker that are not enjoyed by the British worker. In my view the largest fringe benefit enjoyed by the German worker is that of operating in a society which has most effectively of all advanced industrial countries since the war operated a free market economy. If we could follow that example our employees might enjoy similar fringe benefits and similar advances of income.
  What the hon. Gentleman overlooks is that we have now moved within the walls of the European Community. If we are to apply to investment income in this country a tax régime vastly more onerous than that which is applied to investment
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  income in other parts of the European Community, we shall unavoidably face an egress of capital to those parts of the Community where the tax régime is more favourable and less discriminatory against investment income.
  Under the rules of the European Community, when once we apply them in full, as pray God we very soon will, we shall quite rightly not be able to prevent egress of capital along those lines. That is an overriding reason why we must make sure that our system of taxation for investment income is much more closely related to the more sensible régimes that have applied over the years within the territories of our fellow members of the European Community.
  For all those reasons, I strongly support the clause.
  Mr. Horam: I am glad that I caught your eye, Miss Harvie Anderson, because someone who is not a surtax payer should speak in this debate.
  Mr. Bruce-Gardyne: I am not.
  Mr. Horam: The hon. Member for South Angus (Mr. Bruce-Gardyne) believes in inequality and yet he is not a surtax payer. What a tragedy!
  I want to speak on behalf of the vast legion of non-surtax payers, who include the hon. Gentleman and me. I hope that he avoids being a surtax payer by a very small amount. [Interruption.] I note that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is not a surtax payer either. Splendid!
  Mr. Ridley: I wondered whether there was any hon. Member present who was not a surtax payer. Why does the Labour Party feel steamed up about the subject? Only six Opposition Members have been able to bring themselves to the debate, and three of them are on the Front Bench. The subject interests only three back benchers.
  Mr. Horam: There are some rather important local government elections going on. I imagine that that has something to do with the sparse attendance on both sides. I do not think that the Government would have a big majority if there were a Division now. Perhaps more professional interests are represented on the Government benches. I do not know how many Conservative

  1367
  Members present have an interest in accountancy or taxation.
  One of the things that always strikes me about surtax is how little is collected. For example, the estimates for 1972–73 suggest that surtax payers will fork out only about £350 million in surtax. That may seem a rather healthy sum, but when we compare it with the total of income tax—no less than an estimated £6,600 million—we see how relatively little the tax bites.
  The main reason is that there is a vast industry devoted to relieving high income earners of their liability to income tax and surtax. I think it has been said that only fools and idiots pay estate duty. It is also true that only fools and idiots and the atrociously well-paid pay surtax. I am afraid that I must include in that some of my hon. Friends on the Front Bench.
  Mr. Brian Walden: All of them.
  Mr. Horam: I should not call them fools. They are outrageously honest and declare everything—
  Mr. Joel Barnett: Of course.
  Mr. Horam: I think my hon. Friends would concede that there is a vast body of accountants and tax specialists whose main object in life is to relieve high income earners of their liability to surtax and possibly avoid that dreadful cut-off where they begin to pay at a higher rate.
  Let us take the man earning £8,500 a year as an example. That may not seem a great deal to hon. Members present, though perhaps it does to the hon. Member for South Angus, who may not earn that amount, to judge by what he has revealed. Certainly I do not earn that sum. It is a great deal to the vast majority of my constituents and, I imagine, to the vast majority of constituents of all hon. Members here. If they could get £8,500 a year they would rest content for life.
  A man on £8,500 knows that if he is to avoid surtax he must get his personal allowances up to about £3,500, assuming all his income is earned. He will then pay tax only at the standard rate of 30p in the pound. If he is married with three children, his personal allowances are £1,470. Suppose that he has a large
  1368
  house. His tax accountant will tell him to take out a large mortgage. If he has an endowment mortgage of £15,000 his tax liabilities are reduced by about £1,400. That brings his personal allowances to about £2,800 or £2,900. If he is in a pension scheme, similar to the one in which Members of Parliament partake, to which he makes a contribution of £200 or £300 a year, which qualifies for tax relief, that will bring his allowances to over £3,000.
  Suppose that the man is self-employed and has personal expenses which he can offset against tax. It is easy to add on a fairly handsome sum in personal expenses, perhaps another £200 or £300. He may have a small overdraft on which, as a result of a recent Finance Act, the interest is allowable. In that way it is easy for a person earning £8,500 a year to get personal allowance in excess of £3,500 and totally escape surtax.
  Mr. A. E. Cooper: Will the hon. Gentleman give us some more suppositions and tell us how that man could avoid paying income tax?
  Mr. Horam: I cannot do that. I am speaking specifically of a man earning £8,500 or £9,000 a year, which is what I regard as a high income, as would most of our constituents. One cannot argue that there is any equity when a man earning £1,000 or £1,500 is paying 30p in the pound and a man earning £8,500 is paying 30p in the pound.
  The Secretary of State for Employment, as he now is, said in a debate on a similar clause two years ago:
  "… on the whole those who have the largest income should pay higher rates of tax and contributions towards communal expenditure."—[OFFICIAL REPORT, 11th May 1971; Vol. 817, c. 331.] That is the general proposition that the Opposition are arguing. If the right hon. Gentleman accepts that, I do not see how he can accept that people earning £8,500 a year should pay the same rate of tax as those earning £1,000 a year.
  That was why I intervened in the speech of the hon. Member for Ciren-cester and Tewkesbury when he said that we should not talk about gross salaries, whether of people earning £1,000 or £20,000, but should talk about aftertax salaries. It cannot be right that

  1369
  people with such huge disparities in income should be paying the same rate of tax.
  It is not therefore surprising that our tax system as a whole is not merely not progressive and not proportional but is regressive. According to the Central Statistical Office, total taxes as a percentage of original income in 1971 worked out at 35 per cent. for people earning between £800 and £986 a year, declining to 32 per cent. for those earning over £3,750. Even if we add cash benefits— which are of greater benefit to a person on less than £1,000 than to a person on more than £3,000 or £4,000—the figures still work out at 32 per cent. total tax as a percentage of original income with cash benefit for those at the bottom end of the income scale as well as 32 per cent. for those earning more.
  5.45 p.m.
  We have heard much about international comparisons of marginal tax rates. We hear about the 90 per cent. as it was and the 75 per cent. as it is now. We hear about the German rate of 50 per cent., now 60 per cent. as a result of the 10 per cent. surcharge on surtax. These are not important comparisons. What is important is the effective tax rate paid by people on relatively high incomes in different countries, what they actually pay as a result of the personal allowance system and the marginal rate of taxation. There is little to be said for the present system.
  I concede the case argued by the hon. Members for South Angus and for Ciren-cester and Tewkesbury that if one pays no regard to equality one need not take account of these arguments. But that is not a case that the Government can deploy, given the counter-inflationary policy they are pursuing. They have to pay regard to post-tax as well as pretax equity, and they clearly are not doing so in Clause 10, nor are they likely to do so in the future. We cannot conceive of any major changes if the Conservative Government remain in office.
  What should we do about this? I have two suggestions. First, there should be tighter limits on allowances which can be set against tax. There is the good example of insurance premiums. One cannot set against income tax more premiums than would add up to one-
  1370
  sixth of the total taxable income. In that way a limit is set. But the Government have relaxed all the previous limits. There is now no restriction on the amount of allowable bank overdraft interest, and close companies are allowed to lend money at favourable rates to a far greater extent than previously.
  Secondly, the point of entry to the surtax range should be set at a lower level. I should like to see the level set at £2,000 instead of £5,000, given all the allowances which bring the level higher. That would make the taxation system far more progressive.
  Mr. Bruce-Gardyne: Clive Jenkins.
  Mr. Horam: Let us forget him. We should pay more attention to my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) who may agree with what I am saying. If that were threatened, the Tories—as they have done to some extent today—would moan about incentives and savings. We would counter those moans with our views about equity.
  People are increasingly becoming aware of the differentials in both pre-tax and post-tax incomes. The economic facts of life and the appeal for wage restraint which any Government, whether Conservative or Labour, have to make are producing a change in the climate of opinion about equality and tax avoidance at the surtax level. Whatever the hon. Members for South Angus and for Ciren-cester and Tewkesbury may think, the present Government, let alone any Labour Government, will have to pay some attention to this, or all their economic strategy will fail.
  Mr. Peter Rees: The hon. Member for Gateshead, West (Mr. Horam) has given us his budget. We have also had the budget of the hon. Member for Bolsover (Mr. Skinner). I suspect that I would be out of order in commenting in detail on either of them. Apart from that, the speeches of Opposition Members have been mostly in the nature of a replay of last week's Second Reading debate.
  In that debate the hon. Member for Birmingham, All Saints (Mr. Brian Walden) made a characteristically attractive speech in which he said in ringing

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  tones, quoting his distinguished predecessor:
  "What ransom will capital pay for the security that it enjoys?"—[OFFICIAL REPORT, 2nd April 1973; Vol. 854, c. 147.]
  It was a memorable phrase, and it stuck in my memory. What security does capital enjoy? Since Messrs. Glyn and Sutcliffe are compulsory reading for Opposition Members, one may ask that question, because the return on capital is shrinking in the Western world generally and certainly in this country. What security does capital enjoy and what ransom should it pay? By putting the question in that way the hon. Member dodges half the issue because we are not talking exclusively about investment income. We are also talking partially about earned income. He glossed over that.
  Mr. Brian Walden: The hon. and learned Gentleman ought to be fair to my distinguished predecessor, Mr. Chamberlain. He did not, nor did I, refer to "capital". He referred, as did I, to "property". He asked "What ransom will property pay for the security that it enjoys?" There is a distinction.
  Mr. Rees: There is. The hon. Gentleman, with his deep knowledge of taxation matters, will know that income from property as well as from capital is classed as unearned income and bears a more onerous rate of tax. I am seeking to draw the distinction between earned and unearned income and point to the different rates of tax on both.
  Mr. Peter Trew: Would my hon. and learned Friend not agree that, with the widely publicised plans of the Labour Party for the public ownership of land, property enjoys even less security than capital?
  Mr. Rees: There are various categories of industry which the Opposition have promised us they will take over when they return to power. I throw back at the hon. Gentleman the question: what security, and, therefore, what price should property pay?
  The hon. Gentleman also took the point against us that we have referred to widows and orphans. It must come hard to him that in fiscal matters we espouse the cause of widows and orphans. When
  1372
  it comes to social security debates the Labour Members claim a monopoly of concern in this sad and perhaps neglected area. It is not a monopoly which we concede. The rôles are reversed in fiscal matters because the hon. Gentleman and his hon. Friends are apt to pull out that rather weather-beaten figure, the bachelor with £50,000 of unearned income. I am grateful that today we have been spared the intervention of such a person.
  I return to the hon. Gentleman's proposition. What ransom shall property pay? How are we to judge this? Are we to judge it in absolute terms? If we approach it in that way we must start from a bed-rock of prejudice and emotion, and we must be frank about this. What proportion of a person's income should a Chancellor leave? Should it be 10 per cent., 20 per cent. or 30 per cent.? There are no criteria by which we can judge this except our own internal standards. I ask him to bear in mind the corrosive effect of inflation, which he appears to have underestimated or to have brushed aside. I apologise for inflicting a statistic upon the Committees, because I was conscious last week of having inflicted a great number of them upon the House. It was only in self-defence, because I anticipated what we might expect from the hon. Member for Oldham, West (Mr. Meacher). I am sorry that he is not present at the moment.
  I want to give the Committee one statistic. A married man with two children and unearned income of £50,000 a year in 1950–51, the last year of the postwar Labour Government, was left £5,000 a year. In 1970–71 that fisure was £8,000 a year and in 1972–73 £9,000 a year. Taking account of the decline in the value of money, the adjustments which the Chancellor is introducing will barely, if at all, put that person back into the same real position as he occupied in 1950–51.
  If we move from the absolute approach we are bound to do it in a comparative way. The hon. Member for All Saints, as we expected, referred to the Socialist Arcadias in Scandinavia. We all have our own favourites. A more realistic comparison, and one which the Committee will appreciate, is with our competitors in the Common Market. If we look at countries which have basically the same industrial structure and population

  1373
  as ourselves—France and Germany— people at every level of income retain a greater proportion than they do here.
  Mr. Horam: That is not true.
  Mr. Rees: It is not good enough for the hon. Member for All Saints to be taken in by his own arguments. He is too clever for that, but he was carried away by his own debating skill in saying that it is necessary to look at every facet of national life.
  An exact comparison is not possible but the hon. Member was rash enough to say that we have an historical past. Let me remind him that Germany was devastated by defeats in two major wars and that the French have endured two, possibly three, revolutions. We have not been through those experiences. By that test we should, perhaps more conservatively, be leaving our taxpayers with a greater proportion of their incomes.
  Mr. Brian Walden: Let me put this to the hon. and learned Member, because it may be a point which interests him, although it is not particularly partisan. He may be wrong in regarding those events as necessarily disastrous for economic performance. I noted with great interest that the Hudson Institute, when it made its predictions about France, specifically said that it was the traumas which French society had undergone which had produced its rate of capital accretion. It specifically said that our major disadvantage was that we had not gone through a similar trauma. I would suggest that perhaps it is not so easy as it looks.
  Mr. Rees: The hon. Gentleman knows that that point neither strengthens his case nor weakens mine. It is interesting, and I would be happy to debate it with him later. I hope that this country will never have to pay the price which those countries have had to pay. I am glad that it has not had to do so. I take the hon. Member's point but it does not bear on my point, which is to do with the reference to the traditions and the historic past of various countries. The taxpayers of Germany and France have no reason to expect a better deal than our taxpayers and yet they get a better deal in terms of direct taxation.
  1374
  The hon. Gentleman then says, "All right, ignore the comparative statistics". We shall not be able to ignore them, because, as my hon. Friend the Member for South Angus (Mr. Bruce Gardyne) has pointed out, with the free movement of capital and labour inside the Common Market we shall lose our best entrepreneurial talent upon which the success of our economy must ultimately depend. [Interruption.] The hon. Member for Gateshead, West is obviously not aware of the economic facts of life. He constructed an interesting budget, and no doubt some of his advice will filter through to the clients of his hon. Friend the Member for Heywood and Royton (Mr. Joel Barnett). May we perhaps return to the central theme of the debate rather than deal with peripheral subjects?
  The hon. Member for All Saints would say, if he were forced from the absolute or comparative approach that this is not the right moment. I ask him, in all honesty: when has it ever been the right moment for members of the Socialist Party? There have scarcely been any circumstances in which a Socialist Chancellor has cut direct taxation. There were minimal cuts between 1945 and 1951 but so minimal that they can be disregarded. We are forced to the conclusion that no moment is ever right for a Socialist Chancellor to cut direct taxation.
  The hon. Member has overlooked one significant point. We are talking about the surtax rates for 1972–73, not the rates for 1973–74. In 1972–73, speaking from memory, centrally bargained wage rates went up by more than 10 per cent. Judged by this standard, it would not, in my view, be unjust for some relatively modest cuts to be made now in the rates of direct taxation.
  The hon. Member for All Saints concluded by referring to "the ordinary man". I say with confidence that the ordinary man recognises that by slicing the problem, taking account of our competitors in the Common Market, we still bear a higher burden of direct taxation than they do. The ordinary man recognises that the tax rates put forward by the Chancellor of the Exchequer amount to a long-overdue measure of justice to those who have paid far too much tax for far too long.
  6.0 p.m.
  Mr. Tam Dalyell: I shall not go in detail into the comparisons between this country and our Common Market partners put forward by the hon. and learned Member for Dover (Mr. Peter Rees), other than to say that if social security benefits, pension contributions and various welfare payments are taken into account the amount which the State in Western Germany takes from the individual is rather higher than the amount extracted in Britain. Therefore, in pursuing that argument there are many other things to be taken into account.
  I wish to take this opportunity to put a question to the Chief Secretary. It concerns the mechanism of the collection of surtax, and, in particular, whether it is true that many of those responsible for the often rather complicated collection of surtax have had to be transferred to the organisation concerned with the collection of VAT. Has a crisis been created in the Inland Revenue because of the collection of VAT?
  I should like to quote from an article in the Observer on 14th January this year:
  "The Chancellor of the Exchequer, Mr. Anthony Barber, has been warned that there will be little defence against extensive cheating by traders when value added tax is introduced on 1st April. There is a serious shortage of staff to administer the switch-over from purchase tax. Although 5,000 new civil servants have been taken on, work is so seriously behind schedule that many existing Customs and Excise staff have also been switched to the new work."
  The article then quotes the words of Mr. John Macreadie, National Officer (Customs and Excise) of the Civil and Public Services Association:
  "We have no way of completing the verification processes on purchase tax rebates. Quite simply, there is insufficient staff to ensure that traders are not overclaiming. If they do, many will get away with it."
  Can the Chief Secretary tell the Committee whether it is true that a number of Customs and Excise staff have been transferred to duties concerned with VAT? If so, has this transfer made work on surtax and estate duty matters—and all the allied highly skilled work that goes with those duties—more difficult?
  Mr. Grieve: I know that the Committee is anxious to conclude the debate, and
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  I shall be brief. I intervened in the speech of the hon. Member for Lough-borough (Mr. Cronin) to emphasise the problem which faces retired people who are living on investment income, and I should like now to enlarge on that comment.
  Ever since the end of the war in almost every fiscal change we have seen until the present Government came into office investment income has been discriminated against. When Mr. Speaker was Chancellor of the Exchequer and introduced his 1961 Budget, the surtax threshold was raised from £2,000 to £5,000—but investment income was expressly excluded from that major concession. I understand why that was done at the time, but there has always been a measure of discrimination against investment income in the sense that there has been only earned income relief; nevertheless, the 1961 Budget marked a watershed in the treatment of investment income.
  Furthermore, when my right hon. Friend the Chancellor of the Exchequer rightly announced that married women were for the first time to have the option of being taxed separately so that they might pay far less tax, the concession was granted in respect only of earned income and not in respect of their investment income. There are women who might find it cheaper to live in sin than to live in marriage, and I made this point in a speech during the Budget debate. I hope that in due course my right hon. Friend will remedy the situation.
  The result of the discrimination against investment income has been to hit retired people very severely. This topic has been echoed in a number of speeches this afternoon, and I have seen the effects in case after case in my constituency. People have sold their businesses in the hope of living in reasonable comfort in their retirement, but those people, having worked hard all their lives, have found that their standard of living has been shatteringly reduced. Instead of living on earned income, they are living on what is termed "unearned income", although that so-called unearned income is the fruit of a lifetime's labour. Surely as a matter of principle and fairness, this is a situation of which the Committee cannot approve. It redounds greatly to

  1377
  the disadvantages not only of the individual but of the country as a whole. The system discourages people from saving money for their old age and encourages them to live in countries in which tax rates are very much lower.
  My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), and also my hon. and learned Friend the Member for Dover (Mr. Peter Rees) said that we were now moving to a time when capital movements within the European Community will be free. At the moment those who seek to live abroad are severely shackled in terms of the amount of capital which they are allowed to take with them. At the moment capital can be taken out of the country only in dribs and drabs. But the time is coming when somebody seeking to go from this country to live in say France, will be able to take his capital with him and invest it there, thereby avoiding British income tax on the income from that capital.
  Unless we go a long way to mitigate the harsh burdens which we have imposed on the investment income I believe that this will lead to a substantial amount of capital moving abroad. It will go abroad to enable the owners of that capital to enjoy more of it in their lifetime, and they will also be able to leave more of their money to their descendants, because death duties in France are certainly lower than they are here and there is a lower level of direct taxation on income.
  Reference has been made in the debate to the comparative figures in other European countries. The country which I know best is France, where both direct taxation of income and death duties are a good deal lower than they are in this country. I commend the concessions which have been made in respect of the issues we are now considering. I commend the clause to the Committee and hope that in future the Government will go a long way towards mitigating further the imposition on investment income.
  Mr. Cooper: This debate seems to have been primarily about surtax. In the course of it we have seen demonstrated all the natural envy which emanates from members of the Opposition of anyone who is earning more than a pittance. In the view of the Labour Party, anyone in
  1378
  that position must be treated as an outcast.
  As I have said many times in this House, the future prosperity of the country depends largely upon the drive, initiative and hard work of the young executive who is entering the surtax class. He and those like him are the people upon whom we have to rely. He is the man who is not concerned to join a union. He is not content to work from 8 until 5. On the contrary he is prepared to work 16. 17 and 18 hours a day and more or less destroy his family life by spending long weeks abroad. This is the type of man we should encourage. We rely upon his efforts for our future.
  Instead, we limit a man in that position to £8,500 a year, as if that was a fanciful sum which would make him rich beyond the dreams of avarice. In spite of the views of the curious accountants with whom the hon. Member for Gateshead, West (Mr. Horam) appears to have become involved, £8,500 leaves the earner with not all that much on which to live if he is to achieve the standard which he is entitled to enjoy. There are many young men aged about 35 who have good positions in industry and are obliged to give up in direct taxation about 45 or 50 per cent. of their incomes—
  Mr. Robert Sheldon: Rubbish.
  Mr. Cooper: It happens to be true. That is a common loss in income tax and surtax. Under the old system the top rate was 19s. 6d. in the £. Was that right? Do the Opposition think it fair that a man who is working very hard should get only sixpence in the £? Would they ask a Ford worker or anyone else who is a trade unionist to accept that state of affairs? Of course not. But simply because the man is the director of a company or of a group of companies, he is fair game.
  Even today, with the reductions that we are accepting in this year's Finance Bill, the top rate of 75p in the £ is still exorbitant by any standards and higher than the rates demanded by our Common Market partners. I do not care what the Opposition say. Incentives are still vitally important. Young men must be able to see that by working hard they can make a go of life and do something for their children and their children's

  1379
  children. Is it wrong that at the end of their lives they should have some money in the bank, some share certificates or some property which they can leave to their children? Are they to be subject to swingeing rates of estate duty when all that they have tried to do during their working lives is to fulfil their obligations to their country? The Socialist Party says that a man in that position has earned too much in his life and that it must be clawed back, and so we have this swingeing level of estate duty.
  I come back to unearned income. What are we talking about when we refer to "unearned income"? It is ridiculous. It may be that there are some people who happen to have won £500,000 on Littlewoods Pools, but they are few and far between. There are some who win the big money from Ernie. They too are few and far between. The bulk of savers and those who own shares in companies do so with money which has already been taxed. They do it out of the difference between their incomes and their expenditures. They may be saving to produce a retirement pension. In the view of the Labour Party they have been far too good citizens and should be made to walk about in hair shirts for the rest of their lives.
  We have to face the fact that anyone who has money or resources is the enemy of the Labour Party and will be subjected to its envy, malice and hatred. On the other hand, we in the Conservative Party wish to encourage hard work because we know it is the only way by which the country can prosper.
  6.15 p.m.
  The Chief Secretary to the Treasury (Mr. Patrick Jenkin): My hon. Friend the Member for Ilford, South (Mr. Cooper) opened his remarks by saying that this debate seemed to be about surtax. He must have been listening very attentively. The debate is about fixing the rates of surtax for 1972–73 at exactly the same rates as applied in the previous year, 1971–72, and it is right that we should have that fact clear from the outset. Although I shall be referring in passing to the new unified system of tax which has just come into effect, the debate is about the rates of surtax for the
  1380
  year which has just passed, and the clause is directed to them.
  It had been my intention to refer to the characteristic speech of the hon. Member for Birmingham, All Saints (Mr. Brian Walden). However, I must agree with some of my hon. Friends who felt that today he was not up to his usual form. He was having to make bricks with some rather thin straw. However, I agreed with one or two of his remarks. He welcomed the change to the new unified system of tax, as well he might, because there is no doubt that the complications, not least for those who have to calculate surtax under the existing system, are almost incomprehensible. If one takes anyone who has an income which is partly earned and partly invest ment income and it is liable to surtax under our old system, I bet that of all the hon. Members present at the moment only my hon. and learned Friend the Member for Dover (Mr. Peter Rees) and the hon. Member for Heywood and Royton (Mr. Joel Barnett) could be relied upon to produce the right answer.
  There is no doubt about the complications involved in determining the amount of an individual's income which is liable to surtax. He is entitled to deductions of the amount by which the total of the personal allowances due to him exceeds the basic single person's allowance, of any earned income relief deduction now due to him, which for 1972–73 was two-ninths of earned income up to £4,005, plus 15 per cent. of earned income in excess of £4,005, and, finally, of any allowance due by way of the special surtax "earnings allowance". I quote from my advisers' description of it:
  "This allowance is due where the taxpayer's earned income, less the earned income relief deduction, would be above £2,000; the ' earnings allowance ' is equal to the excess (if any) of the earned income, after deducting earned income relief, over £2,000 subject to a maximum allowance of £2,000."
  It is for that reason that I venture to suggest that a large number of hon. Members would have been quite unable to work out their own surtax under the existing system.
  We now have the new system where all is infinitely simpler. The hon. Member for All Saints wondered why his right hon. Friend the Member for Birmingham,

  1381
  Stechford (Mr. Roy Jenkins) had not introduced it, because he, too, would have liked to do it. He said that it was for some technical reasons. I agree with him that we do not know the reasons. The right hon. Gentleman always made it clear that it was the administrative problems which defeated him. Those of his hon. Friends who pressed this reform upon him were constantly told that it was administratively impossible.
  The hon. Member for All Saints said that we would not have made these changes if we had not planned them long in advance. I should say to him that we would not have made any of these changes at all if we had not planned them long in advance. I suspect that the right hon. Member for Stechford felt unable to introduce this widely welcomed reform because he had been unable to plan it sufficiently far in advance.
  The hon. Member for All Saints made some play with the single man on £15,000 a year and quoted the difference of tax in the liabilities for the year. I shall be coming later to the amount of tax that is paid in a year. When we talk about these high figures of income it is important to realise how few people are earning such sums compared with the total body of taxpayers. There are only 35,000 people, single and married, with incomes in excess of £15,000 a year.
  The hon. Gentleman referred to a person with an investment income of £15,000 a year. There are only 2,000 people in the whole country out of 25 million taxpayers with investment incomes of that size. This has some consequence. It means that what we do with the incomes of those people is wholly marginal in relation to the yields to the Exchequer as a whole. Indeed, my hon. Friend the Minister of State, in a Writen Answer to my hon. Friend the Member for Eastleigh (Mr. David Price) on 3rd April last, gave some figures. If the whole of every income above £15,000 were taxed away— if there were a 100 per cent. tax on every pound above £15,000—the total additional yield to the Exchequer would be £30 million a year, which is equal to 02 per cent. of the total Exchequer revenue. So when we bandy about these high incomes we should remember that the direct effect on the economy and on the income of the Exchequer is minimal.
  1382
  The hon. Member for All Saints agreed that, speaking in the Budget debate, I was right to point out that as a result of the change to the new system and of the overlapping surtax, as we came to know it, a large number of surtax payers will be paying more tax not just this year but next year and the year after that than they paid last year.
  I take as an example the man on £20,000 a year. Whereas in 1972–73, after the tax that he was due to pay to the Inland Revenue, he was left with an income of £9,378, if he takes the maximum advantage of spreading the overlapping surtax over three years, his income, after tax over the next three years, will be £8,375. That is almost exactly £1,000 less of net spending income over each of the next three years.
  The hon. Gentleman, when he said that the change to the unified tax was out of kilter with the Government's general stance on prices and incomes and on the economy, could not have been more wrong if he was basing his case on those figures.
  The hon. Member for West Lothian (Mr. Dalyell) asked a question which, with respect, was more about VAT than the Inland Revenue. I assure him that a number of officials from the Inland Revenue chose to go to the Customs and Excise in order to get in on VAT on the ground floor. We are happy that they should take advantage of this transfer and, in many cases, to better themselves. There is no question of the Inland Revenue collection or, indeed, the assessing services for surtax or for income tax being in any way put at risk as a result of those transfers. If we had not raised the threshold for surtax to £3,000 of surtaxable income, as we did last year, we would have had to recruit considerably more staff for the surtax office.
  The hon. Member for Loughborough (Mr. Cronin) made some interesting points in his speech. I am sorry that he is not here to listen to my speech. He gave the Committee an emotional account of the way that young turks in the firm of which he is a director devote themselves to their work day and night 15 hours a day for the love of the job and for job satisfaction. The firm of which the hon. Gentleman is a director is Racal Electronics. During the debate I looked up some of the facts about that company.

  1383
  It is not only their inadequate incomes which stimulate these gentlemen to their flights of technological expertise. I discover from Moodies Services that employees of that company enjoy the benefit of outstanding share options on over 43,643 shares of 25p each at a value of £86·625p per share to be exercised before 31st December 1974. So it is not only job satisfaction that stimulates these people.
  I welcome the fact that these chaps have their share options. It has no doubt been a major influence, has encouraged the company to increase its profits by over 42 per cent. last year, according to the chairman's review, and has well justified the increase in directors' remuneration over the last two years by some 50 per cent. So, when we hear about the absence of financial incentive and that people work for other things, I believe we are entitled to take it with a certain amount of electronic salt.
  As the Opposition know, when they talked to their supporters at the last General Election and sought to justify the increased taxation that the Labour Government had imposed upon people by saying that they ought to be looking at the social income, the income spent by the Government on their behalf, they got a lot of dusty answers. All that is—I was going to say "nonsense", but that is perhaps too strong a word. All the words that we have heard about high taxes being necessary in order that we may enjoy a high standard of social living do not cut ice with ordinary people if the effect is to take away in tax what they regard as too high a share of their pay packets. There is no doubt that under the Labour Government when taxation rose sharply, particularly direct taxation, many of their erstwhile supporters complained bitterly.
  We have heard a good deal about international comparisons. I take the point made by the hon. Member for All Saints that we need to look at the whole picture. This is not the debate in which to do that. Indeed, I should not have the time to do so. Nevertheless, I think that I can add one particularly representative figure—the marginal rate of tax on the extra pound, mark, franc, or whatever it may be that is earned at different levels of income. I concede that up to incomes
  1384
  in the lower reaches of surtax we are not now seriously out of line with our competitors. Apart from the one figure of £5,000, which the right hon. Member for Stechford quoted in a number of debates, we were out of line, but we are not now.
  The tax reductions which have been made in the last two or three years put us in the middle of the spread until we get to the higher incomes. When we get to the higher incomes—after all, this is what the debate is about—we find that with the sole exception of Ireland, which nominally taxes all incomes above £6,000 a year at 80 per cent., when we get up to about £10,000 to £12,000 we begin to go out on a limb. There is no Common Market income tax rate of anything like our top rate of 90 per cent. on investment incomes above £20,000. Therefore, we are entitled to have regard to that sort of international comparison when we say that our rates of tax are certainly not too low. Indeed, many people would agree that they are too high.
  [Captain WALTER ELLIOT in the Chair]
  6.30 p.m.
  I think that many would agree with my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) and my hon. and learned Friends the Members for Solihull (Mr. Grieve) and Dover (Mr. Peter Rees) when they say that even after these changes the rate of differentiation between investment and earned income is higher than in any competitor country. The change to the new unified system of tax, with the first £2,000 of investment income taxed at the earned rate, has done more than any other post-war provision to help those who are retired and living on modest incomes from investment.
  For 1971–72, the first full year for which we were responsible, a retired married couple with an investment income of £2,000 a year paid nearly £600 in tax. Had the income been earned, the tax would have been £422. In 1973–74 a couple with that income, whether it is earned or from investment, will pay tax of £367·50. I think we can justifiably claim that that category of people has been helped considerably.
  All the Opposition speeches during the debate have sought to argue that the

  1385
  Government have given a great boost to the wealthy and by comparison have ignored the lower-paid. I utterly refute that suggestion, and perhaps I may quote two or three more figures to illustrate my case. Here I take the net income of two-children families as they have moved over the two years from October 1970 to October 1972, the latest date for which figures are available.
  I take into account changes in price levels, and tax rates, and the adjustment of incomes for family allowance, family income supplement and National Insurance contributions. I also take into account charges for school meals, welfare milk, prescription and dental charges, and so on. I take account of all the changes which have affected those families. Those with about half the average earnings figure for the country as a whole have increased their standard of living by 6·3 per cent. over the two years. If I take a figure of seven or eight times the average earnings of the country as a whole, I find that the standard of living has risen not by 6·3 per cent. but by 3·5 per cent.
  Mr. Sheldon: If the hon. Gentleman is taking pride in the way in which income tax changes have benefited the less well off, why is it that he refuses to publish the Gini co-efficient which is probably the best indicator of the true position?
  Mr. Jenkin: That is published every year in the Inland Revenue statistics. The point that I wish to make is that it is not mainly, let alone solely, by income tax changes that people are made better off. The improvement is made because the economy grows and because the growing resources which the economy produces are able to be used to raise standards of living. By adjusting social charges and tax rates, by lowering the rate of direct taxation, and particularly by raising allowances at the lower end of the scale we have made sure that out of the rising resources of the nation as a whole the standards of living of those at the lowest end of the income scale have risen appreciably faster than those of people higher up. If that is the test by which the Government are to be judged they are content to put their record before the people, and I believe that the people would back it.
  1386
  The clause merely repeats for 1972–73 the surtax rates which were applicable in 1971–72. As such, the clause is essential, and I hope that the Committee will leave it as part of the Bill.
  Mr. Brian WaMen: One thing that is certain is that the Government will not put their record before the public in the near future. I listened to the Chief Secretary in the earnest hope that he and I could reach common ground and that it would not be necessary to divide the Committee on the clause, but that does not seem to be possible.
  I am sorry that the Chief Secretary felt—though he did not express it in this way—that I was not up to my usual form, but it is difficult for those who earn enough to pay surtax and, as the hon. Member for Ilford, South (Mr. Cooper) explained, ruin their family life by working 16 hours a day not to become dead tired in their desperate attempts to earn the increased sums in order to pay the amount to be demanded by the Chief Secretary in the next three years. But I stick to what I said earlier. I have been given a concession, as have all surtax payers, and it would ill befit anyone to try to pretend otherwise.
  We have heard a lot of hogwash about how people will hop out of the country unless we provide them with the tax system they want. I liked Noel Coward because he was a witty man and made me laugh, but I think his attitude was deplorable. It was not our responsibility to devise a tax system which would keep him in the champagne that he wanted to drink. I took the view that if he must inconvenience himself by living somewhere else in order to have that standard of living, good riddance, and I maintain that point of view.
  One might argue that Noel Coward was an exceptional case and that it would be terrible if we were to lose our best brains and talents; but that is not happening. What is the evidence on which the Chief Secretary bases his case? The Jones Report on the brain drain did not substantiate the claim that we lose a great deal of our talent because of our tax system, and I should hope not.
  The hon. and learned Member for Dover (Mr. Peter Rees) referred to my question about what ransom property would be prepared to pay. When I quoted that—and I am certain that the

  1387
  same considerations applied when Chamberlain quoted it—I was not thinking only of tax rates. I was thinking, as the hon. and learned Gentleman should be thinking, of the enormous security enjoyed by people in this country. Ours is one of the most peaceful societies in the world, and one of the ways of keeping it like that is not to exacerbate class feeling, which is what the clause does.
  The Chief Secretary said that we discovered at the last General Election that many of our supporters did not like paying tax. I have news for the hon. Gentleman. We discovered that a long time before the last election. Nobody ever likes paying tax. It is easy and glib to talk about tax cuts. That is why the Government keep on talking about them. If they think that in the long run they will be able to "con" the people who voted for them last time that they are doing better under the new system than
  they were before, and that they will not be able to detect where the basic substantial benefit has gone, and that they will not realise that their increases in real income are nothing like the increases given to those at the top end of the scale, I urge them to make that appeal to the people at the earliest possible moment. The Chief Secretary says that there are not many people at the top end of the scale. That makes the matter worse, not better. If the Chief Secretary does not agree with that, I urge him to put it to the test.
  For the moment all that we can do is to express dissatisfaction, and I therefore advise my right hon. and hon. Friends to divide the Committee.
  Question put, That the clause stand part of the Bill: —
  The Committee divided: Ayes 167, Noes 129.

  Division No. 105.]

  AYES

  [6.39 p.m.

  Astor, John

  Gray, Hamish

  Maxwell-Hyslo R. J.

  Atkins, Humphrey

  Green, Alan

  Mills, Stratton (Belfast, N.)

  Awdry, Daniel

  Grieve, Percy

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

  Baker, W. H. K. (Banff)

  Griffiths, Eldon (Bury St. Edmunds)

  Mitchell, David (Basingstoke)

  Bell, Ranald

  Grylls, Michael

  Moate, Roger

  Bennett, Sir Frederic (Torquay)

  Gurden, Harold

  Molyneaux, James

  Benyon, W.

  Hall, John (Wycombe)

  Money, Ernle

  Biffen John

  Hamilton, Michael (Salisbury)

  Monks, Mrs. Connie

  Biggs-Davison John

  Hannam, John (Exeter)

  Monro, Hector

  Boardman, Tom (Leicester. S.W.)

  Harrison, Brian (Maldon)

  Montgomery, Fergus

  Boscawen, Hn. Robert

  Harrison, Col. Sir Harwood (Eye)

  Morgan, Gerai (Denbigh)

  Bowden, Andrew

  Haselhurst, Alan

  Morrison, Charles

  Brinton, Sir Tatton

  Havers, Sir Micheal

  Mudd, David

  Brocklebank-Fowler, Christopher

  Hawkins, Paul

  Neave Airey

  Bruce-Gardyne, J

  Hicks, Robert

  Normanton Tom,

  Bryan, Sir Paul

  Higgins, Terence L

  Nott, John

  Burden F. A.

  Hiley, JosePh

  Onslow, Cranley

  Chapman, Sydney

  Hill, John E. B (Norfolk, S)

  Oppenheim, Mrs. Sally

  Churchill, W S.

  Hill, S. James A. (Southampton.Test)

  Owen, Idris (StockPort, N.)

  Clark, William (Surrey, E.)

  Holt, Miss Mary

  Page, Rt. Hn. Graham (Crosby)

  Clarke Kenneth (Rushcliffe)

  Hornby, Richard

  Page, John (Harrow, W.)

  Clegg, Walter

  Hornsby-Smith, Rt. Hn. Dame Particia

  Peyton, Rt. Hn. John

  Howell, David (Guildford)

  Powell, Rt. Hn. J. Enoch

  Clockeram, Eric

  Hunt, John

  Proudfoot, Wilfred

  Cooke, Robert

  Hutchison, Micheal Clark

  Pym, Rt. Hn. Francis

  Coombs, Derek

  Iremonger, T. L.

  Quennell, Miss J. M.

  Cooper, A. E.

  James, David

  Raison, Timothy

  Corfield, Rt. Hn. Sir Frederick

  Jenkin, Patrick (Woodford)

  Ramsden, Rt. Hn. James

  Costain, A. P.

  Kellett-Bowman, Mrs. Elaine

  Redmond, Robert

  Crowder, F. P.

  King, Evelyn (Dorset, S.)

  Rees, Peter (Dover)

  d'Avigdor-Goldsmid, Maj. Gen. Jack

  King, Tom (Bridgwater)

  Rees-Davies W. R.

  Drayson, G. B.

  Kinsey J. R.

  Renton, Rt. Hn. Sir David

  du Cann, Rt. Hn. Edward

  Knight Mrs. Jill

  Rhys Wllliams, Sir Brandon

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

  Knox, David

  Ridley, Hn. Nicholas

  Emery, Peter

  Langford-Holt, Sir John

  Ridsdale, Julian

  Eyre, Reginald

  Le Marchant, Spencer

  Rippon, Rt. Hn. Geoffrey

  Farr, John

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

  Roberts, Michael (Cardiff, N.)

  Fenner, Mrs. Peggy

  Longden, Sir Gilbert

  Rodgers, Sir John (Sevenoaks)

  Finsberg, Geoffrey (Hampstead)

  Loveridge, John

  Rutsell, Sir Ronald

  Fisher, Nigel (Surbiton)

  Luce, R. N.

  Scott-Hpkins, James

  Fookes, Miss Janet

  McCrindle, R. A.

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

  Fortescue, Tim

  McLaren, Martin

  Shelton, William (Clapham)

  Fowler, Norman

  Maclean, Sir Fitzroy

  Simeons, Charles

  Fox, Marcus

  McMaster, Stanley

  Sinclair, Sir George

  Goodhart, Philip

  McNair-Wllson, Michael

  Skeet, T. H. H.

  Goodhew, Victor

  Marten, Neil

  Speed, Keith

  Gower, Raymond

  Mather, Caro

  Spence, John

  Grant, Anthony (Harrow, C.)

  Mawby, Ray

  Sproat, Iain

  Thomas, John Stradling (Monmouth)

  White, Roger (Gravesend)

  Stanbrook, Ivor

  Thompson, Sir Richard (Croydon, S.)

  Wilkinson, John

  Stewart-Smith, Geoffrey (Belper)

  Tilney, John

  Wolrige-Gordon, Patrick

  Stokes, John

  Trew, Peter

  Wylie, Rt. Hn. N. R.

  Tapsell, Peter

  Tugendhat, Christopher

  Younger, Hn. George

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

  Turton, Rt. Hn. Sir Robin

  Taylor, Frank (Moss Side)

  Walder, David (Clitheroe)

  Tebbit, Norman

  Walters, Dennis

  TELLERS FOR THE AYES:

  Temple, John M.

  Ward, Dame Irene

  Mr. Michael Jopling and

  Thatcher, Rt. Hn. Mrs. Margaret

  Weatherill, Bernard

  Mr. Oscar Murton.

  NOES

  Atkinson, Norman

  Hamling, William

  Oram, Bert

  Barnett, Guy (Greenwich)

  Hannan, William (G'gow, Maryhill)

  Oswald, Thomas

  Barnett, Joel (Heywood and Royton)

  Harper, Joseph

  Owen, Dr. David (Plymouth, Sutton)

  Bidwell, Sydney

  Harrison, Walter (Wakefield)

  Padley, Walter

  Blenkinsop, Arthur

  Hattersley, Roy

  Paget, R. T.

  Booth, Albert

  Healey, Rt. Hn. Denis

  Pannell, Rt. Hn. Charles

  Broughton, Sir Alfred

  Hooson, Emlyn

  Pardoe, John

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

  Horam, John

  Parker, John (Dagenham)

  Brown, Ronald (Shoreditch & F'bury)

  Houghton, Rt. Hn. Douglas

  Peart, Rt. Hn. Fred

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

  Hughes, Robert (Aberdeen, N.)

  Pendry, Tom

  Callaghan, Rt. Hn. James

  Janner, Greville

  Prentice, Rt. Hn. Reg.

  Campbell, I. (Dunbartonshire, W.)

  Jenkins, Rt. Hn. Roy (Stechford)

  Probert, Arthur

  Clark, David (Colne Valley)

  John, Brynmor

  Reed, D. (Sedgefield)

  Cohen Stanley

  Johnson, Walter (Derby, S.)

  Roberts,Rt.Hn.Goronwy(Caernarvon)

  Coleman Donald

  Jones, Dan (Burnley)

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

  Corbet, Mrs. Freda

  Jones, Gwynoro (Carmarthen)

  Rodgers, William (Stockton-on-Tees),

  Cox Thomas (Wandsworth, C.)

  Jones, T. Alec (Rhondda, W.)

  Sheldon, Robert (Ashton-under-Lyne)

  Crosland Rt Hn. Anthony

  Kaufman, Gerald

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

  Dalyell, Tam

  Kelley, Richard

  Sillars, James

  Kinnock, Neil

  Silverman, Julius

  Davies, Denzil (Llanelly)

  Lawson, George

  Smith John (Lanarkshire, N.)

  Davis, Terry (Bromsgrove)

  Lee, Rt. Hn. Frederick

  Steel, David

  Deakins, Eric

  Lestor, Miss Joan

  Stewart, Donald (Western Isles)

  Delargy, Hugh

  Lomas, Kenneth

  Stoddart, David (Swindon)

  Dell, Rt. Hn. Edmund

  Loughlin, Charles

  Strang, Gavin

  Dempsey James

  Lyons, Edward (Bradford, E.)

  Summerskill, Hn. Dr. Shirley

  Doig, Peter

  Mabon, Dr. J. Dickson

  Taverne, Dick

  Duffy, A E. P.

  McGuire, Michael.

  Tinn, James

  Eadie, Alex

  Machin, George

  Torney, Tom

  Edelman, Maurice

  Mackenzie, Gregor

  Urwin, T. W.

  Ellis, Tom

  Mackintosh, John P.

  Varley, Eric G.

  Ewing, Harry

  McMillan, Tom (Glasgow, C.)

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

  Faulds, Andrew

  Mahon, Simon (Bootle)

  Walker, Harold (Doncaster)

  Fernyhough, Rt. Hn. E.

  Marquand, David

  Wallace, George

  Fitch, Alan (Wigan)

  Marshall, Dr. Edmund

  Weitzman, David

  Foot, Michael

  Mason, Rt. Hn. Roy

  Wells William (Walsall, N.)

  Ford, Ben

  Mayhew, Christopher

  Williams, Alan (Swansea, W.)

  Freeson, Reginald

  Mellish, Rt. Hn. Robert

  Williams, W. T. (Warrington)

  Galpern, Sir Myer

  Mendelson, John

  Wilson, Rt. Hn. Harold (Huyton)

  Gilbert, Dr. John

  Mikardo, Ian

  Woof, Robert

  Grant, George (Morpeth)

  Millan, Bruce

  Grant, John D. (Islington, E.)

  Miller, Dr. M. S.

  TELLERS FOR THE NOES:

  Grimond, Rt. Hn. J.

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

  Hamilton, James (Bothwell)

  Morris, Alfred (Wythenshawe)

  Mr.Ernest Armstrong and

  Hamilton, William (Fife, W.)

  Murray, Ronald King

  Mr. Michael Cocks.

  Question accordingly agreed to.
  Clause 10 ordered to stand part of the Bill.

Clause 12

  ALTERATION OF PERSONAL RELIEFS
  Mr. Dalyell: I beg to move Amendment No. 8, in page 8, line 5, leave out '£700 and £1,000', and insert '£800 and £1,100'.
  The Temporary Chairman (Captain Walter Elliot): With this we are to take Amendment No. 9, in page 8, line 5, leave out ' £1,000 ' and insert ' £1,050 '.
  Mr. Dalyell: I commend the amendment because it means neither more nor
  1390
  less than it says. After the discussion that took place yesterday with the Financial Secretary on the tabling of amendments that may have been probing amendments and may have been legitimate amendments, I ask for a certain sympathy for the amendment because we mean it exactly as it is printed on the Paper.
  In introducing the amendment I say simply, first, that some of us think that the tax threshold should have been increased in any event. I offer, secondly, another reflection which has come out on top in some discussion with the Pre-Retirement Association and its secretary Mr. Lorinz. All hon. Members must know this from their personal experience

  1391
  in the House. When people are working hard, or are supposed to be working hard on a Friday night when they are 65, it is a considerable shock to them on the Monday morning when they are retired. We must study the statistics of those who die months, if not a year or two, after retirement.
  There is perhaps an explanation of this. Suddenly the life style of these people changes entirely. The fact that their life style changes entirely is not wholly to do with finance but is partly to do with finance. It is partly to do with the psychological feeling that they no longer have the wherewithal to pursue the life and hobbies to which they have been used.
  Anything that goes in the direction of giving those with fairly modest incomes a feeling that by retiring and by their job having ended they are perhaps not so badly off as they might think themselves to be is in the direction of the good.
  I therefore base my case generally on the fact that in society there is far too much of a gap between work and retirement and that anything that goes in the direction of making people feel at the time they retire that they have the wherewithal to continue the life they have been used to and to exploit certain hobbies is in the direction of the good. That is the philosophical basis of the amendment.
  Getting down to brass tacks, I always like taking the strongest arguments of those who reject a proposition. In Standing Committee on the Finance Bill last year the Minister of State said this:
  "The proposed amendment, far from saving work, would add materially to the pressures on the Inland Revenue at a time when their resources will be very stretched indeed by work on unification. It is impossible for them to undertake the additional work involved in the exemption of these pensions."—[OFFICIAL REPORT, Standing Committee E, 19th June 1972; c. 1189.]
  Is that much more work involved in increasing a threshold along the lines which were suggested last year and which we suggest this year?
  On 12th July 1972 the Chief Secretary, in rejecting a roughly similar amendment, said this:
  "I want to make three points in that connection. Many people of pensionable age who have not retired—my hon. Friend referred to some—and who are therefore not drawing the National Insurance pension and therefore
  1392
  derive no benefit from this clause, could justly be aggrieved if people of the same age who had retired and had pensions—and in many ways exactly similar incomes—were allowed tax reliefs. We have to face that this year, but we could not regard it as a permanent feature of the system."
  I do not believe that those who continue in work after age 65 are as a group so ungenerous as to say "We should deny tax advantages to those who perforce have been required to retire". If that is the Chief Secretary's argument, it is an uncharacteristically weak one. If it is true that some people say "They are getting money and we are not getting it", I do not believe that the majority of those who go on working will crib simply because of tax advantages for those who are over 65.
  The second reason given by the Chief Secretary was this:
  "the effect of giving this tax relief this year is to give relief to pensioners who have enough income to pay tax, without being able to do anything for the people on much lower incomes who are below the tax threshold. That was certainly not the objective of the exemption, but it happens to be an unavoidable consequence When I say that this year the age exemption limit for a married couple is £929 "—
  I accept that it has been increased this year—
  "while the national insurance pension for a married couple is £504 one sees that the pensioner must have considerably more than £8 a week in income from pay and pension before he can benefit from this temporary concession."
  If the argument is to be that, by helping the category we are discussing, we are not helping the worst-off, I counter that by saying that there are other ways of helping the worst-off. The contrast is not between those whom we are trying to help and those who are less well off than they are. The contrast surely could equally well be between for example, those whom we are trying to help in the amendment and those who benefit from disaggregated children's incomes or many of the other give-aways which we discussed in Standing Committee last year and which are being continued this year.
  If we are talking about contrasts, the contrast is not necessarily between those whom we seek to help in the amendment and those who are even worse off as pensioners than they are. If contrasts are to be drawn as an argument for rejecting the amendment, that is not necessarily the best contrast that can be drawn.

  1393
  The Chief Secretary continued:
  "Thirdly, the general principle that we apply is that if resources are available to improve the lot of the pensioners … it is not necessarily the most effective way to do it through the tax system, because that can, by definition, benefit only those who are within the tax net. Instead, it is better to use the resources to uprate benefits, because that helps all—within the tax net or not."—[OFFICIAL REPORT, 12th July 1972; Vol. 840, c. 1788.]
  As a general argument I find that quite attractive, but on the basis of that argument why have any exemption? If the third reason given by the Chief Secretary last year is valid, why have any exemption? We all know why we have exemptions. In a balanced system which we hope is reasonably just, this kind of exemption is thought to be helpful and a humane form of operating the tax system.
  If this proposal is rejected on the grounds that it is not the best of all possible worlds, it may be a case of where the best is the enemy of the good. If I have spent time on the reasons why I think that the Treasury will reject the amendment it is because I hope that serious consideration will be given, perhaps on Report, to the proposal, which I believe is a just one.
  Sir Robin Turton: I hesitated a good deal before tabling Amendment No. 9, which seeks to increase £1,000 to £1,050. The Government have a very good record of increasing retirement pensions every year and also—again every year—dealing with tax exemption limits, in strong contrast with their predecessors, who raised the pension only twice in six years and in only three of those six years did they alter the tax exemption limits.
  I want the Government to explain the line they have taken in the last two Finance Bills where they have increased the exemption limits for the married proportionately far less than for the single. This has resulted in the age exemption working to the advantage of the single as opposed to the married and has created considerable hardship.
  Under previous Finance Acts, the margin for the married household over the single was 50 per cent. For example, the 1971 Finance Act put up the margin for the single person by £26 and for the married couple by £39. In earlier years, the difference between the increase of margin for the married household and for the
  1394
  single was sometimes 50 per cent. and sometimes 60 per cent. Last year, however, the increase was exactly the same for married and single households, £104. This year, it is £66 for the single and £71 for the married.
  7.0 p.m.
  We are dealing here with the person over 65—I had better declare an interest, since I happen to be in that age group—and not, as the hon. Member for West Lothian (Mr. Dalyell) said, just those in retirement. If they receive an occupational pension, like an Army pension, in addition to their retirement pension, they come into this consideration. I find that increasing numbers of my constituents, particularly those who served in the Army and were exempted from paying tax, are being brought into the tax net if they are married, whereas they escape if they are single. This is an injustice which the Committee should correct, if possible today.
  I would sum up this picture by comparing the position of single and married pensioner households in 1965 and today In 1965 a single person had a pension of £204 less than the exemption limit, so he could almost have had an additional occupational pension of roughly the same amount as his retirement pension. Under this Budget the single pensioner's pension leaves him £313 below the limit, which is more than before, so again he could have an occupational pension of roughly the same size as his retirement pension.
  A different picture emerges from a study of the two-pensioner household. In 1965 the margin for married pensioners was £209 over the two pensions. In this Budget the margin is reduced from £205 to £194. Bearing in mind the difference in purchasing power between 1965 and 1973, one can see that considerable hardship is caused to these households. That is why I ask my right hon. Friend to consider this matter. Under the pension arrangements, the two-pensioner household will have increases this year of £104, yet the increase in exemption limit is only £71. That, at first sight, suggests hardship, bearing in mind that most of these households are drawing not just the National Insurance pension but also an occupational pension of some kind.
  I would ask my right hon. Friend to consider increasing the exemption limit to bring it back, proportionately, to the level

  1395
  which obtained under Finance Acts before last year. That would put an extra £50 on the married person's pension.
  The Labour amendment would have the reverse effect. By giving the extra £100 to both the single pensioner and the married household, it would create a greater hardship than before for the latter. The single pensioner would have a much bigger margin than the married pensioner, and that cannot be commended.
  There is a general case for the Government to reconsider the age exemption limits. It is wrong that the older people who have had a much lower rate of earnings in the past and have already paid their taxes should have to pay tax after retirement on earnings and savings which come to very little.
  I had great sympathy with the hon. Member for West Lothian when he referred to the common feeling of the elderly pensioner that he is being unjustly treated when the average earnings are so much higher than these age exemption limits, yet he still has to pay his tax of £1 or 50p a week from a meagre income. There is a strong case for saying that the national retirement pension should be free of tax. That would be a great help to the older people, bearing in mind now that the contribution is no longer deductible.
  I agree that that is not the proposal that we are considering, but I would ask the Government, first, to give an increase to the married pensioner household somewhere near the figure of £50 which I am suggesting, either now or on Report. Second, I hope that before the next Budget the Government will look at the whole question of the taxation of the elderly and of pensioners. Considerable hardship is involved. People are moving into the tax net who before escaped. This is wrong, bearing in mind how much harder it is for people to live on their incomes in the face of higher prices. I hope that in a future Budget the Chancellor will make a radical alteration to the taxation of elderly peole.
  Mr. George Cunningham: I should like to tell the Father of the House, the right hon. Member for Thirsk and Malton (Sir Robin Turton), that there is one respect in which the feature he is now complaining about
  1396
  will be infinitely worse if the Government get their way with their proposals. I am thinking of the taxation position of the proposed new State reserve pension scheme proposed in the Social Security Bill. It is the Government's dishonourable intention to make the pension from that scheme taxable, although contributions to it will not attract tax relief.
  The right hon. Gentleman may have noticed that by the good sense of hon. Members on both sides of that Committee an amendment of mine was carried to change that situation. I hope that he will give serious consideration to stopping the Government from getting rid of that amendment when the matter comes before the House, in view of the principles which he has just enunciated.
  Dame Irene Ward: I should like first to make a personal comment about this proposal. I have a genuine desire that my right hon. Friend the Chancellor should deal with this matter. This exemption from taxation was put into the Finance Bill many years ago by Sir Godfrey Nicholson and myself. I have always taken a great interest in those living on small fixed incomes. It was one of my first interests. Sir Godfrey Nicholson was a Member of Parliament at the time. We had this idea and collected together some Members of Parliament to form a committee.
  I cannot remember his name but we had a very nice Chancellor at the time. We had many deputations and arguments, but finally we managed to get this provision into the Finance Bill. We did not do it by an amendment or by discussion in the House of Commons, or by voting for it or anything like that. We simply persuaded the Chancellor that it was a very good move forward. It shows how long I have been a Member of the House of Commons that I cannot remember when we did this. However, we were very grateful to the then Chancellor.
  I have always been very proud of the fact that we had that great success under a Conservative Government. Naturally, today I am supporting the amendment of my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) and that of the hon. Member for West Lothian (Mr. Dalyell). I am not very good at figures. At one time my right hon. Friend was Minister of Pensions.

  1397
  He probably knows more about the situation than the Treasury. Although very often I find the Treasury helpful, and although I am devoted to all the Treasury Ministers and the Chancellor in particular, I find that sometimes those who advise the Chancellor do not know as much about life as do my right hon. Friend and I.
  The Treasury has made a move forward but has not got its figures quite right. It is exciting to know that occasionally the Treasury can make a mistake. I do not believe that the Treasury meant to do this. It was intended that the individual, man or woman, trying to live on a small fixed income should have the benefit of this little portion of the Finance Bill which Sir Godfrey Nicholson and I managed to insert with such pleasure and pride many years ago. My right hon. Friend the Member for Thirsk and Malton is much better at calculating figures than I am. I should be very upset if we did not get a suitable reply from the Government. I could not support with my vote the doing of anything which detracted from the achievement of so many years ago.
  In the House of Commons one wins only a few battles, and it generally takes about 10 years to win anything. But when one does so, one is proud. Without getting into any serious difficulty, the Treasury can deal with the point which has been made so eloquently and with such sound common sense by my right hon. Friend. Fortunately, I know enough about Government machinery to know that it is unlikely that the Treasury Minister will be able tonight to commend my right hon. Friend and to say that the Government realise the emotional interest which I have in this matter and will, therefore, put the matter right.
  I was very proud that we had made this provision for those living on small fixed incomes. But it must be fair and right. It looks as though something has gone wrong. Ministers will not be able to say now that they will accept my right hon. Friend's amendment. But I shall be upset if they do not recognise their mistake and are not prepared to correct it.
  I assume that the Minister of State will say "Thank you very much" to my right hon. Friend and will be grateful to the hon. Member for Islington, South-West (Mr. George Cunningham), who spoke
  1398
  about what has happened in a particular Committee and what he has been able to do.
  Looking after those living on small fixed incomes is not a party matter. We all want to do the best we can. Neither of the major parties has more soul than the other, but sometimes the Conservative Party is better able to provide the money because it has a better economic policy. That is my view, and that has kept me in the House of Commons for 39 years. In my part of the world people must like Conservative Governments and their economic policies.
  This is a very small but very important matter. I try to understand the Chancellor when he is talking about big overall problems. Sometimes it is difficult to get Treasury Ministers to deal with small points. In relation to human happiness and making just decisions, it is of as much importance to get the small things right as the large things. I hope that the Government will not let me down.
  The present Treasury Ministers were not Members of Parliament in the past of which I have been speaking. That concerns only my right hon. Friend the Member for Thirsk and Malton and myself. My right hon. Friend is the Father of the House and has watched this matter all along. He knows about the problem of trying to help those living on small fixed incomes. I do not expect Treasury Ministers repeatedly to refuse all my requests. They do not always do what I want. However, I hope that the Government will look at this difficulty which has been so cleverly outlined by my right hon. Friend and, when we come to Report stage, make everyone happy so that those living on small fixed incomes may benefit by having got something from the Treasury. That will be wonderful.
  The Treasury must feel just as warmhearted about these people as the Chancellor who originally inserted the provision. In those days it was even more difficult to persuade Chancellors to examine the position of those on small fixed incomes. The present Ministers on the Treasury Bench can show me how good they are by saying that they will adopt the new arrangement mentioned by my right hon. Friend. I should be heartbroken if we did not get that promise. I shall certainly not vote for

  1399
  doing anything which the Treasury did not mean to do or anything which would hurt this little part of the Finance Bill. This matter has caused me concern for many years, even though I cannot remember the name of the Chancellor who was kind enough to introduce it.
  Mr. Horam: I should like to intervene more briefly than did the hon. Member for Tynemouth (Dame Irene Ward) because I have just received a letter from one of my constituents which expresses in a dignified way the very strong feelings which exist on this point.
  My constituent, a lady, says:
  "Dear Mr. Horam, As a constituent of Gateshead West I am writing to you on behalf of many of your constituents who are in the same position as myself. I am a widow who like other members of the teaching profession paid into a Superannuation Fund for many years. Now we find on retirement that we are taxed on both our Retirement Pension and Superannuation. As an example I quote my own position. Each month I find that from my Superannuation of £43·22 the sum of £12·73 is being deducted in tax. The result is that I am worse off financially than those who draw Retirement Pension plus Social Security and all the extras this carries with it. I would ask you to do your best to bring this anomaly most forcibly to the notice of the Minister of Pensions, and ask him to bring this to an end and to give those like myself who saved for their old age a 'fair crack of the whip'."
  I do not intend to go into all the arguments that have been advanced but merely to quote that letter. It expresses in very human terms the feeling there is on this point.
  The Minister of State, Treasury (Mr. John Nott): I am sure that the whole House will agree with the sentiments which were expressed by the hon. Member for West Lothian (Mr. Dalyell) when he moved the amendment. All of us on both sides of the Committee agree with him when he says that the country as a whole has an obligation to those who reach retirement age. I hope to go on to show very briefly that I believe that the Government have met that obligation over the past few years.
  But, before I give some of the reasons why I feel that the Government have done a lot in this year's Budget to help the pensioner, I am sure that pensioners throughout the country should know, if they do not already, of the great efforts
  1400
  that my hon. Friend the Member for Tynemouth (Dame Irene Ward) has made over many years on their behalf. We in this House certainly recognise the energetic way that she has spoken up on their behalf each year in the Budget debates. The same applies to my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton), who I know has also supported or spoken for pensioners in these debates.
  Although my right hon. Friend the Chancellor was not able to propose any general increase in tax allowances this year the special claims of the elderly have once again been recognised by raising the income limits for age exemption. This is the third increase in the age exemption limits to be made in the last three years. As my hon. Friend the Chief Secretary pointed out on Second Reading, this represents an increase, taking the three years together, for a single person of over 45 per cent. in money terms and nearly 20 per cent. in real terms since June 1970. I am referring to the tax threshold for the elderly.
  During our period of office the tax threshold for the elderly single person has been raised from £9·13 to £13·46 per week. The age exemption gives elderly taxpayers a higher tax threshold than younger people. In general, the single person starts to pay tax when his income reaches £595 a year and a married couple at an income of £775 a year. Under the proposals this year the corresponding figures for elderly people will be £700 for the single person and £1,000 for the married couple. In other words, we are giving the elderly single person an advantage of £105 and a married couple one of £225 compared with younger people. So, there is already in our tax system a fairly wide margin which fulfils the obligation which the hon. Member for West Lothian mentioned in his opening remarks.
  I remember very well the debates we had on this subject last year when many of my hon. Friends and many Labour Members spoke up for the pensioners. I remember particularly that my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) raised the question of irregular figures which existed in the past for age exemption limits. He described these irregular figures as "potty"—I think that was the word he used. He also recommended that the

  1401
  threshold for income tax should be raised to £675 for a single person and £1,000 for a married couple. This year we have followed his advice implicitly in regard to the married couple, but we think that a more regular figure of £700 is even better than his irregular figure of £675.
  One consequence of last year's changes in personal allowances was that the tax threshold of a single elderly person was only £42 above that of a younger taxpayer in similar circumstances, and that of a married couple was £157 above. Arguably this was too narrow a difference between elderly persons' age exemption and the ordinary personal allowance. The new limits will restore the position very nearly to what it was in 1971–72.
  So the limits proposed in the Bill give elderly people a substantial tax advantage. The starting point for an elderly married couple is now slightly higher than the point at which a married couple with one child under 11 begin to pay tax. Their starting point is £995. I give these figures only to illustrate that we accept the points made by the hon. Member for West Lothian when he moved the amendment.
  I must refer to the point made by my right hon. Friend the Member for Thirsk and Malton. He said that over the years the margin between the age exemption for the single person and the age exemption for the married couple had narrowed. I take his point. It was an accurate comment, of course, but this derives from the rise in pensions. The age exemption limits, as my right hon. Friend knows, are, broadly speaking, intended to reflect the increase in the pension for both single and married persons. I do not wish in any way to avoid answering his point, but in a way his comments are perhaps more appropriately addressed to my right hon. Friend the Secretary of State for Social Services. The age exemption limits follow very closely and derive from the increase in the single and married persons' pension.
  In 1970–71 the single person could have an income of £215 a year over and above the State taxable pension before he began to pay tax. This year such a person will be able to have an income of £322 above the State pension before coming into the tax bracket. In 1970–71 a married couple could have had a joint income of £319 above the
  1402
  State pension before beginning to pay tax. This year, 1973–74, the married couple will be able to have an income of £391 above the State pension before coming into the tax bracket.
  7.30 p.m.
  I take my right hon. Friend's point that the margin between the single and married age exemption allowance has over the years tended to narrow, but the age exemption limits are intended broadly to cover the increase in the pension of the single and married person.
  [Miss HARVIE ANDERSON in the Chair]
  Sir Robin Turton: In the old days when the pension was put up it was increased 50 per cent. more for the married couple than the single person. Now the amount of the rise is exactly the same. The increase in pension is still 50 per cent. more for a married couple than a single person in the case of a one-pensioner household, and in the case of a two-pensioner household it is exactly 100 per cent. more. What has happened is quite contrary to the argument which my hon. Friend is addressing to the Committee.
  Mr. Nott: My right hon. Friend referred to 1972–73 and said that the increase was exactly £104 for both—I think I am correct in saying that—and was exactly comparable. I am sure that my right hon. Friend will remember that we were in the process last year of re-coding for unification. It was for that reason that the increase in the State pension last year did not bear tax. The figures which were quoted for 1972–73 were unusual in that respect. I hope that I have made it clear to my right hon. Friend that the age exemption limits follow broadly the increase in the State pension which is paid to single and married persons. My right hon. Friend has made an accurate and correct point, but he must address it to my right hon. Friend the Secretary of State for Social Services, who is ultimately responsible for deciding what the increase in the State pension each year should be.
  Dame Irene Ward: The point which my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) and I raised did not relate to social security. In the old days there was no Department dealing with social security. We want

  1403
  to do something for those who are living on small, fixed incomes. The idea which my hon. Friend is putting forward is new. He is putting his argument forward with great Treasury skill but he is not carrying out what Sir Godfrey and I persuaded the then Chancellor to do. It seems a pity to go back on something which was not in any way related to pensions. We persuaded the Chancellor of the day to help those on small fixed incomes. I hope that my hon. Friend will not hang on to pensions now. They have nothing to do with the matter.
  Mr. Nott: I appreciate the point that my hon. Friend is making. However, I must tell her that in 1970–71 a married couple were able to earn £319 above the State pension before coming into the tax bracket. In 1973–74 a married couple will be able to earn £391 over and above the State pension before coming into the tax bracket. That is what led me to say that in the three Budgets which we have had since coming into office we have raised the tax threshold by 20 per cent. in real terms. That has been a considerable achievement.
  The raising of the tax threshold—we have raised it considerably in real terms —cannot be divorced from all the other measures which the Government have taken to benefit pensioners. We have introduced an annual review of pensions, and there have been substantial increases in the real value of the pension since we took office. The pension will have been increased in just over three years by 55 per cent. in cash terms. In real terms over the same period the pension will have been increased by almost twice as much as the increase in prices. In the current year, with the pension uprating, pensioners will be sharing in the increased prosperity of the nation in accordance with the undertaking given at the time of the tripartite talks.
  We are increasing, too, the supplementary pension. A supplementary pensioner living alone will be entitled from October to £8·15 a week plus rent and rates. I am sure that my hon. Friend will appreciate the many excellent provisions which the Government have made to benefit the position of pensioners claiming social security.
  Sir Robin Turton: Will my hon. Friend answer the point? The Government have raised the single person's pension by £52 a year. They have raised the tax exemption margin by £66 a year. They have put up the married person's pension by £83 a year and put up the tax exemption margin for the married person by £71. That, in a nutshell, is what the argument is about. That is contrary to what my hon. Friend has been saying. Will he consider this matter before Report and try to put it right?
  Mr. Nott: I take the point which my right hon. Friend is now making. There is a slight discrepancy, because we felt that it was simpler this year to talk in terms of £1,000 for the age exemption limit rather than the sort of irregular figure to which my hon. Friend the Member for Worcestershire, South referred last year. It was for that simple reason that we chose the regular figures of £700 and £1,000. We considered that they were simple and clear and would enable the pensioner to understand, rather than the exactly comparable figure of £1,035. [HON. MEMBERS: "Oh."] Opposition hon. Members are laughing, but there is nothing in their record which entitles them to do so. Pensions have risen in real terms far faster while we have been in office than when hon. Members opposite were in office.
  For the reasons that I have given, I ask my right hon. Friend not to press his amendment. We have substantially raised the age exemption limit this year. My right hon. Friend's point is valid that the exactly comparable figure would be £1,035 and not £1,000. We felt that it was right to go for £700 and £1,000, taking into account the very substantial increase which has been proposed for the October uprating.
  This year we went for a neutral Budget. My right hon. Friend the Chancellor of the Exchequer decided to concentrate most of the tax relief available on the zero-rating of further food items. In a year when personal allowances generally were not raised, we felt that we were being fair to pensioners in proposing a substantial increase in the age exemption limits.
  Dame Irene Ward: I hope that my hon. Friend will forgive me if I point out that

  1405
  people living on small fixed incomes are not interested in making matters simple for the Treasury. I am not interested in making things simple for the Treasury either. The Treasury probably has the best mathematicians in the world. I agree with and am proud of all that the Government have done, but this is a different matter. It is not fair to argue that the decision was taken so as to make things simple for the Treasury. If we are going to consider the matter in that way, I want to make things as difficult as possible for it. I cannot understand my own income tax, but that does not matter. My hon. Friend should not argue as he is doing. He should produce something better than that.
  Mr. Nott: Last year we were criticised for the irregular figure which had been taken for the raising of the age exemption limit. Many of my hon. Friends criticised us for this and said it was difficult for pensioners to understand the irregular figure. If my hon. Friend reads the debate on the subject last year, she will find that that was widely said, and this year we took full account of it and decided that a round figure of £1,000 was the most convenient. It makes no difference to the administrative side. We simply thought it better to have regular figures of £700 and £1,000, and that is why we did it. As my hon. Friend knows so well, the real value of the pension has increased substantially in the past few years and the age exemption limits have been raised, while the tax threshold for the elderly has over three Budgets risen by 20 per cent. in real terms. That is a substantial achievement, and I would hope that, in that spirit, my hon. Friends will support us.
  Mr. Dalyell: How much does the Treasury estimate that the amendment will cost?
  The Temporary Chairman: Order. Did the Minister of State give way or had he finished his speech?
  Mr. Nott: I gave way.
  The cost of Amendment No. 8 would be £14 million in 1973–74 and £24 million in a full year.
  Mr. Sheldon: We welcome the amendment moved by my hon. Friend the Member for West Lothian (Mr. Dalyell). It is always a pleasure to hear him in
  1406
  the Committee, and he moved this important amendment very well.
  One of the things that all Oppositions get is a whole sheaf of letters on these matters, which we sift through, as indeed previous Oppositions have sifted through similar letters in their time. One of the things that has come repeatedly to our attention is the great dissatisfaction arising from the ending of the two-ninths earned income allowance in a situation such as that which I shall now describe. I shall quote a passage from only one letter but one could multiply this example many times.
  The writer states:
  "I am 68 years of age and in addition to the national retirement pension I receive a superannuation allowance of a little over £10 a week in respect of 47 years service with British Railways. The possession of these two pensions means that I am liable to income tax for the current financial year. I shall have to pay approximately £20. For the next financial year 1973–74 I was astounded to find that due to the implementation of the Government's new income tax compulations my liability will jump to £63".
  Of course, we know that this is due to the abolition of the two-ninths earned income relief.
  That letter, I believe, puts the matter into perspective and shows that the great reform of the Chancellor has hit at certain people in our society who are not so well placed to withstand these assaults on their standard of living, having nothing to hope for in the future but facing the great problems that all old people face. As my hon. Friend the Member for West Lothian pointed out, these problems are associated with life-style changes and the absence of any income from unknown sources and the problems of not having any future income to look forward to because of their retirement.
  7.45 p.m.
  Mr. Nott: The hon. Member is perfectly well aware that the first £2,000 of investment income will in future be treated as earned income. For him to stand up and criticise us, when we have made this most important reform which will be of great benefit to many elderly people living on small incomes, is quite ridiculous.
  Mr. Sheldon: But the Minister has failed to understand that no provision has been made for this pension. Of course we know about investment income, but this is a case of someone living on a

  1407
  second pension and for which she will not get the two-ninths earned income relief which might have been available before. This is the problem that many of us see in the dozens of letters we have received.
  I find astonishing the argument used by the hon. Gentleman when he adheres to the figures that the Treasury has selected this year as being simple. He says that rather than give the extra money the Chancellor wanted to maintain the simplicity of rather less money. The hon. Member for Tynemouth (Dame Irene Ward) and the right hon. Member for Thirsk and Malton (Sir Robin Turton) were among those who expressed their astonishment at a kind of simplicity which involves giving less money to those concerned. The hon. Gentleman pointed out that, rather than give the extra money, he would give people the great benefit of the sweets and cheese straws which the Budget has provided for them. I do not think that anybody will be under any misapprehension that this substitute will satisfy old people in our midst. Over the years we know that many people have suffered from low fixed incomes, and year by year when the Conservatives were in Opposition they used to rail at the Labour Government for lack of concern for old people.
  The way in which the Government are now treating these people is particularly saddening because so many of their difficulties are directly related to the problems of inflation which have been created by the Government. The Government must understand that Amendment No. 8 is needed to take account of the inflation which these old people suffer from more than anybody else in our society today, and to take account of their constant worries that they will have no new sources of income and that all they can look forward to is a pension which is likely to decline in value with inflation caused by the policies of the Government. The capital of modest means which these people might have must also decline in value as they draw from it and as inflation whittles it down further.
  Mr. Nott: The example which the hon. Gentleman quoted cannot be right. If he
  would like to send the letter to me, I will give him an answer and explain in detail why his example is wrong. As he knows perfectly well, we have raised the tax threshold substantially in three Budgets. It is raised again in this year's Budget. The charges the hon. Gentleman is making are not accurate. I shall be happy to correct the statements about the case to which he has referred if he will send details to me.
  Mr. Sheldon: I will with great pleasure send it to the hon. Gentleman for a full examination. But I was not basing my case on that one constituent. All of us have received many letters—the hon. Gentleman must have received some of them —expressing great dissatisfaction at the way in which those with more than one pension, approaching retirement age or in retirement, suffer as a result of the Government's actions.
  In pressing the amendment we must point out that it is closely allied to the inflation caused by the Government. The main sufferers tend to be those on fixed incomes that we have been discussing. The Government have created the inflation. We are trying to protect those who are suffering most from it. Accordingly 1 am sure that my right hon. and hon. Friends will support me in the Division Lobby.
  Mr. Dalyell: There are times when Governments would do well to listen to what is said in the House of Commons, and this is one of those occasions.
  The Minister of State courteously invited me to withdraw the amendment. The boot is rather on the other foot: we should invite him to discuss with the Chief Secretary and the Chancellor whether something can be done on Report. I would not even wish to hold them to doing anything definite. But the whole tenor of the debate, in the contributions not only of Labour Members but of Conservative Members, has shown the situation to be less than satisfactory. It is up to the Government to say "We shall look at it before Report".
  Question put, That the amendment be made: —
  The Committee divided: Ayes 105, Noes 142.

  Division No. 106]

  AYES

  [7.53 p.m.

  Armstrong, Ernest

  Barnett, Joel (Heywood and Royton)

  Blenkinsop, Arthur

  Barnett, Guy (Greenwich)

  Bidwell, Sydney

  Booth, Albert

  Broughton, Sir Alfred

  Harper, Joseph

  Oram, Bert

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

  Harrison, Walter (Wakefield)

  Oswald, Thomas

  Brown, Ronald (Shoreditch & F'bury)

  Healey, Rt. Hn. Denis

  Padley, Walter

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

  Hooson, Emlyn

  Pardoe, John

  Campbell, I. (Dunbartonshire, W.)

  Horam, John

  Parker, John (Dagenham)

  Clark, David (Colne Valley)

  Houghton, Rt. Hn. Douglas

  Peart, Rt. Hn. Fred

  Cohen, Stanley

  Hughes, Robert (Aberdeen, N.)

  Prentice, Rt. Hn. Reg.

  Corbet, Mrs. Freda

  Janner, Greville

  Probert, Arthur

  Cox, Thomas (Wandsworth, C.)

  John, Brynmor

  Reed, D. (Sedgefield)

  Dalyell, Tam

  Johnson, Walter (Derby, S.)

  Roberts,Rt.Hn.Goronwy(Caernarvon)

  Davies, Denzil (Llanelly)

  Jones, Dan (Burnley)

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

  Davis, Clinton (Hackney, C.)

  Jones, Gwynoro (Carmarthen)

  Rodgers, William (Stockton-on-Tees)

  Davis Terry (Bromsgrove)

  Jones, T. Alec (Rhondda, W.)

  Sheldon, Robert (Ashton-under-Lyne)

  Deakins, Eric

  Kaufman, Gerald

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

  Dell, Rt.. Hn. Edmund

  Kelley, Richard

  Silkin, Hn. S. C. (Dulwich)

  Dempsey, James

  Kinnock, Neil

  Sillars, James

  Lawson, George

  Smith, John (Lanarkshire, N.)

  Doig, Peter

  Lee, Rt. Hn. Frederick

  Stoddart, David (Swindon)

  Duffy, A. E. P.

  Lomas, Kenneth

  Strang, Gavin

  Eadie, Alex

  Loughlin, Charles

  Summerskill, Hn. Dr. Shirley

  Edeiman, Maurice

  Lyons, Edward (Bradford, E.)

  Ellis, Tom

  McGuire, Michael

  Tornery, Tom

  Ewing, Harry

  Machin, George

  Urwin, T. W.

  Variey, Eric G.

  Faulds, Andrew

  Mackenzie, Gregor

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

  Fernyhough, Rt. Hn. E.

  McMillan, Tom (Glasgow, C.)

  Walker, Harold (Doncaster)

  Foot, Michael

  Mahon, Simon (Bootle)

  Wallace George

  Ford, Ben

  Marquand, David

  Weitzman David

  Freeson, Reginald

  Marshall, Dr. Edmund

  Wells, William (Walsall, N.)

  Galpern, Sir Myer

  Mason, Rt. Hn. Roy

  Williams, W. T. (Warrington)

  Gilbert, Dr. John

  Mellish, Rt. Hn. Robert

  Woof, Robert

  Grant, George (Morpeth)

  Mendelson, John

  Grant, John D. (Islington, E.)

  Mikardo, Ian

  TELLERS FOR THE AYES:

  Hamilton, William (Fife, W.)

  Millan, Bruce

  Mr. Michael Cocks and

  Hamling, William

  Miller, Dr. M. S.

  Mr. James Hamilton.

  Hannan, William (G'gow, Maryhill)

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

  NOES

  Astor, John

  Hamilton, Michael (Salisbury)

  Morgan, Geraint (Denbigh)

  Atkins, Humphrey

  Hannam, John (Exeter)

  Morrison, Charles

  Baker, W. H. K. (Banff)

  Harrison, Brian (Maldon)

  Mudd, David

  Bell, Ronald

  Harrison, Col. Sir Harwood (Eye)

  Murton, Oscar

  Benyon, W.

  Haselhurst, Alan

  Neave, Airey

  Biffen, John

  Hawkins, Paul

  Noble, Rt. Hn. Michael

  Biggs-Davison, John

  Hicks, Robert

  Normanton, Tom

  Boscawen, Hn. Robert

  Higgins, Terence L.

  ott, John

  Bowden, Andrew

  Hiley, Joseph

  Onslow, Cranley

  Brinton, Sir Tatton

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

  Oppenheim, Mrs. Sally

  Bruce-Gardyne, J.

  Hill, James (Southampton, Test)

  Owen, Idris (Stockport, N.)

  Bryan, Sir Paul

  Holt, Miss Mary

  Page, Rt. Hn. Graham (Crosby)

  Burden, F. A.

  Hornby, Richard

  Powell, Rt. Hn. J. Enoch

  Chapman, Sydney

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Proudfoot, Wilfred

  Churchill, W. S.

  Howell, David (Guildford)

  Pym, Rt. Hn. Francis

  Hunt John

  Clark, William (Surrey, E.)

  Hutchison Michael Clark

  Quennell, Miss J. M.

  Clarke, Kenneth (Rushcliffe)

  Hutchison, Michael Clark

  Raison, Timothy

  Iremonger, T. L.

  Clegg, Walter

  James David

  Ramsden, Rt. Hn. James

  Cockeram, Eric

  Jenkin, Patrick (Woodford)

  Reed, Laurance (Bolton, E.)

  Cooke, Robert

  Kellett-Bowman, Mrs. Elaine

  Rees, Peter (Dover)

  Coombs, Derek

  King, Evelyn (Dorset, S.)

  Rees-Davies, W. R.

  Corfield, Rt. Hn. Sir Frederick

  King, Tom (Bridgwater)

  Rhys Williams, Sir Brandon

  Costain, A. P.

  Kinsey, J. R.

  Ridley, Hn. Nicholas

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

  Knight, Mrs. Jill

  Ridsdale, Julian

  Drayson, G. B.

  Knox, David

  Roberts, Michael (Cardiff, N.)

  du Cann, Rt. Hn. Edward

  Langford-Holt. Sir John

  Rodgers, Sir John (Sevenoaks)

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

  Le Marchant, Spencer

  Russell, Sir Ronald

  Eyre, Reginald

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

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

  Farr, John

  Luce, R. N.

  Shelton, William (Clapham)

  Fenner, Mrs. Peggy

  McCrindle, R. A.

  Simeons, Charles

  Fidler, Michael

  McLaren, Martin

  Sinclair, Sir George

  Finsberg, Geoffrey (Hampstead)

  McMaster Stanley

  Skeet, T. H. H.

  Fisher, Nigel (Surbiton)

  McNair-Wilson Michael

  Speed, Keith

  Fookes, Miss Janet

  Marten, Neil

  Spence, John

  Fortescue, Tim

  Mather, Carol

  Sproat, Iain

  Fowler, Norman

  Mawby, Ray

  Stanbrook, Ivor

  Fox, Marcus

  Maxwell-Hyslop, R. J.

  Stewart-Smith, Geoffrey (Belper)

  Goodhew, Victor

  Mills, Stratton (Belfast, N.)

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

  Gower, Raymond

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

  Taylor, Frank (Moss Side)

  Grant, Anthony (Harrow, C.)

  Mitchell, David (Basingstoke)

  Tebbit, Norman

  Green, Alan

  Moate, Roger

  Thomas, John Stradling (Monmouth)

  Grieve, Percy

  Molyneaux, James

  Thompson, Sir Richard (Croydon, S.)

  Grylls, Michael

  Money, Ernie

  Trew, Peter

  Gurden, Harold

  Monks, Mrs. Connie

  Tugendhat, Christopher

  Hall, John (Wycombe)

  Monro, Hector

  Walder, David (Clitheroe)

  1410

  1411

  Weatherill, Bernard

  Wolrige-Gordon, Patrick

  TELLERS FOR THF NOES:

  White, Roger (Gravesend)

  Wylie, Rt. Hn. N. R.

  Mr. Michael Jopling and

  Wilkinson, John

  Younger, Hn. George

  Mr. Hamish Gray.

  Question accordingly negatived.
  8.0 p.m.
  Mr. Brian Walden: I beg to move Amendment No. 10, in page 8, line 8, at end insert:
  'and a further £100 in excess of the limits so substituted shall be exempt from tax if it is derived from ordinary deposits with the National Savings Bank or ordinary deposits with a trustee savings bank or deposits with a seamen's savings bank'.
  This is the anti-brainwave amendment. It attempts to compensate the Government for the thought that flashed through the Chancellor's mind when he was in the bath that he should subsidise his competitors. The amendment will encourage people to put money into what the Government wish them to put money into and will help to compensate for the building societies taking money out of what the Government wish them to put money into. The amendment is an attempt to be helpful and to compensate for the damage that the Chancellor has done to his policy by his brainwaves.
  I will quote a few figures to show that, in comparison with the War Loan yield of over 10 per cent., we are treating unfairly people who save through the National Savings Bank or the trustee savings banks. On ordinary deposit the yield from the trustee savings banks is 4 per cent., for special investment for a six months' period it is 8 per cent., for a three months' period 7 per cent. and for one month 6 per cent.
  In the Post Office the general rate is 4 per cent. and on investment account it is 8 per cent. I take into account the tax-free element of 5·7 per cent. of savings certificates. With SAYE the figure is 7·2 per cent. over the five-year period and 7·6 per cent. with the extra two years.
  Those figures demonstrate that we should do more to encourage the ordinary saver, particularly people who are over 65. The amendment is our attempt to do so. It allows £100 in excess which may be put into the kind of savings that the Government wish to encourage. I admit that this is speculative, but I should be interested to hear whether the Government have estimated the additional yield that this would be likely to create.
  1412
  The amendment also has a social purpose. With a borrowing requirement of such size, we should do everything we can conceivably do to encourage people to provide money for the Government to meet it. Although the Opposition have many reservations about Government policy, and about the borrowing requirement, the country will not be helped if the Government have difficulty in getting the sort of savings that are required.
  I am well aware that in recent years National Savings have done extremely well. When we cite things which have done well or badly we tend, perhaps understandably, to refer to the immediate past. That we have done well with savings in recent years does not prove that we could not do much better, and I trust that we shall.
  Socially, the amendment would be of assistance to elderly people with small incomes. The further £100 would be discounted from their tax liability. It is also desirable on social grounds in that it does not conflict with the Government's monetary requirements. Were there money enough, there is a great deal that the Government would like to do, but there is always only a certain amount of money that can be spent and the Government have to take account of priorities.
  In this way the Treasury would forgo a certain amount of income but the Government would be assisted by getting it back in additional savings. Although it would be a forgoing of income it is one of the more adept ways of doing it, and I recommend the amendment to the Committee.
  Mr. Nott: Only yesterday I was standing at this Dispatch Box when the Government were being criticised by the right hon. Member for Leeds, East (Mr. Healey) for indulging in the subsidising of their competitors. The Opposition Front Bench speaks with two voices. One day Opposition spokesmen say one thing, and next day they say something different.
  The hon. Member for Birmingham, All Saints (Mr. Brian Walden) is suggesting what might broadly be described as an additional help for National Savings. He is right in saying that not all the securities offered by the Department for

  1413
  National Savings are suitable investments for low-rate taxpayers. A low-rate tax-paper will be advised, for instance, to invest in British Savings Bonds, which will be giving a yield of 8½ per cent. gross, or to put his money in the investment account of the National Savings Bank or trustee savings bank at 8 per cent. rather than to purchase, for instance, National Savings certificates. It is true that gilt-edged stock is yielding 10 per cent. on the stock market, but there is a means whereby the small investor can purchase gilt-edged stock through the Department for National Savings.
  These were purely opening comments by the hon. Gentleman and I will refer as briefly as he has to the amendment. It would allow an extra £100 savings bank interest to remain tax-free in the hands of those entitled to age exemption. This would entitle them to receive up to £121 for 1973–74 and up to £140 for 1974–75 of savings bank interest without having to pay any income tax on it.
  The proposal must be regarded either as a special extension of the age exemption limit to cover the extra savings bank interest or as an extension of savings bank interest exemption in the case of people who are entitled to age exemption. There are logical grounds for giving special tax relief for elderly people on modest incomes in the way which was debated on the last amendment.
  There are also logical reasons for giving people some help to invest in a manner which is particularly helpful to the Government. But there is not much virtue in additional arrangements which would reserve exclusively for elderly people on small incomes a special privilege for investing in a particular way. An unjustifiable consequence of the amendment would be that for 1973-74 an elderly person with an income up to the age exemption limits would get £121 of savings bank interest tax-free while another person, identically placed and perhaps receiving, for instance, interest on War Loan, would still suffer tax on that interest.
  This is the kind of discrimination which would result from what the hon. Member for All Saints is proposing. We see logical reasons for encouraging investment in Government securities on the one hand, and we have raised the limits. We also see good reason for raising the
  1414
  exemption limit for elderly people, as we have done; but to put the two together would result in a considerable number of anomalies which even the hon. Member for All Saints would not wish to see.
  Mr. Brian Walden: I can see that the Minister is obdurate. I do not think I will be able to persuade him. Therefore, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Question proposed, That the clause stand part of the Bill.
  Mr. William Hamling: I wish to speak in general terms about taxation of pensions and deal with some of the arguments which have been advanced.
  It is often claimed in Finance Bills that increased reliefs are concessions, but I am sure that the Government are aware that these increased reliefs to a large extent merely keep pace with the rate of inflation from which the country is at present suffering.
  Hon. Members have referred to receiving letters from their constituents. I have received more letters on the question of taxation and pensions than on any other subject. The Chief Secretary knows, through the correspondence I have had with him over the years, about the difficulties which many pensioners meet through getting into arrears on tax. I am sure that hon. Gentlemen on both sides are also aware of this problem.
  8.15 p.m.
  I particularly have in mind pensioners who are doing a part-time job. In my constituency there are many pensioners who besides getting the State pension also receive a small pension from another source. I have noticed that these people have to pay a marginal rate of tax on their part-time employment. I have in mind particularly pensioners doing part-time jobs. Many pensioners in my constituency have a small pension from the Arsenal—not the football team, but the Royal Arsenal Co-operative Society. Sometimes they get a little pension from the gas board.
  One of my constituents wrote to me recently about a small increase in wages which he had received in his part-time

  1415
  job. The increase had been £1·40 a week, which resulted in a deduction being made from his State pension as well as a deduction for tax. In the end the increase amounted to only 50p per week. The marginal rate of tax in that example is phenomenal. The constituent rightly asks what is the point of working and getting an increase which is subject to this sort of deduction while his household expenses and cost of living continue to increase. In a sense this man is almost worse off than if he gave up the job, because of the deductions.
  I am sure many people share my belief that the elderly should be encouraged to continue to work, perhaps in part-time employment, and so retire gradually. Many pensioners are doing jobs in the service industries and performing the work admirably. Others are employed as messengers or are in similar posts. This can help to give them an interest in life. Much more should be done to reduce the amount of tax which is exacted from pensioners by way of either their combined pensions or their pensions plus earnings from part-time work. I would like to see in some future Finance Bill much more generous relief for pensioners.
  What is needed is the sort of relief which not only takes account of the increased rate of inflation but recognises the social value of encouraging people to continue working. We have been brought up on the idea that one of the conditions of payment of the State pension is that people should retire. We should get away from that philosophy. One of the things which Sir William Beveridge had in mind in those days was that it would help to relieve the unemployment situation if more elderly people were encouraged to retire earlier. But that is not the position today. I am sure that a great many doctors, social workers and people concerned with the problems of the elderly recognise the virtue of people continuing to work, even though their job on retirement may be a step down from their former job and even though the work may be part-time. I hope that the Minister of State will let us into the Government's thinking on this important topic.
  Those of us who are approaching pensionable age—I number myself among
  1416
  them—do not feel like retiring just because we reach a particular age. Indeed, I hope that the electors of West Woolwich will see to it that I do not retire at the next election. Judging by the force of public opinion at the moment, it looks as though the signs are promising. I do not feel any older than I did 30 years ago, and I do not feel that my vitality has subsided. I am certain that a great many other right hon. and hon. Members in my age group feel exactly the same. This attitude must also be true of a great many other people in society. One of the great tragedies of our society is that we expect people to retire when many of them should not do so.
  I should like to turn to the question of the effects of living costs on elderly people. People who retire generally suffer a catastrophic drop in income. I should like to mention some figures contained in a survey published in the Department of Employment Gazette in February this year. Some interesting figures emerge from the retail price indices as they affect pensioner households.
  It is significant that the total expenditure in the two-person pensioner households as outlined in that survey was about £14·49 per week. The total expenditure in the general index household, on the other hand, amounted to £33-59 per week—a remarkable disparity. There is a tremendous difference in the incomes which go into pensioner households and those which go into other households, and yet pensioners must pay the same price for commodities as do the rest of us. Their cost of living also has risen. The survey shows that in the pensioner households in respect of all items the average cost of living index in 1972 was 11·4 points higher than it was in 1971. In 1972 in terms of food it was on average 14·4 points higher than it was in 1971.
  If we look at the level of personal reliefs and the alterations which have now taken place, we see that the lower level has risen by 10 per cent. and the higher level by 8·5 per cent. The Minister of State in his reply may mention tax thresholds, but they must be considered as pro rata developments in the sense that they barely keep pace with the rate of inflation.
  Other significant facts are brought out in the survey. Total expenditure on food in a two-person pensioner household was

  1417
  33 per cent. of family income, whereas total expenditure on food in the general index household was only 24 per cent. In other words, a far higher proportion of the family income in pensioner households is spent on food. Surely the fact that in the last two years food prices have been rising faster than other prices should be reflected in the reliefs.
  There are other significant figures set out in the survey. Out of a total expenditure in the two-person pensioner households the amount spent on fuel, light and ipower was £1·61 per week. In the general index household this expenditure was only £1·98 per week out of a total expenditure of over £33. In other words, again a far more significant proportion of the pensioner's expenditure was dissipated on fuel, light and power.
  These are basic things, and we are entitled to ask what is the situation which obtains in this country when so much of a pensioner's family expenditure must be spent on basic necessities of life, such as fuel, light and power and food, and we must ask ourselves what amount is left for other things. On transport and vehicles, according to the survey, general index households spent £4·76 per week and pensioner households only 61p. There is a very wide disparity there. On clothing, pensioner households spent only 64p a week, with general index households spending more than £3 a week. Then come television and radio licences and rentals. The pensioner household spent 34p a week and the general index household 41p. This is relevant to the discussions that we have had on other occasions about television licences and pensioners. For pensioners, television comes in the same category as food or fuel and light. It is one of the necessities of life.
  The other remarkable feature is that both types of household spent pretty much the same on furniture. This came as a surprise to me. Apparently pensioners spend almost as much per week on furniture as general index householders. One might have supposed that that was not so, but the figures indicate that it is.
  The next item in the survey is hotel and holiday expenses, subscriptions and donations, with general index householders spending £1·29 a week and pen-
  1418
  sioners 26p a week. That seems to indicate that there are not many pensioners who have holidays—at least, that they can afford—comparable with those which ordinary householders enjoy.
  Behind this debate, that is the picture of the living conditions in pensioner households, with so much of their household expenditure being devoted to the necessities of life and with very little left for other expenditures such as theatre and concert going. It seems that pensioners are having to do without many of what might be termed the frills of life.
  In terms of the reliefs in our tax system for pensioners, I suggest that we ought to bear in mind some of the general considerations upon which I have dwelt. Certainly we ought to be far more generous than we have been about the general level of taxation on pensions. We would save an awful lot of heartache for our old people if we were.
  [Mr. IFOR DAVIES in the Chair]
  8.30 p.m.
  Mr. Joseph Hiley: I agree with the hon. Member for Woolwich, West (Mr. Hamling) that reductions in taxation and increases in pensions have a salutary effect on all those who enjoy the advantages of them.
  I noticed that in the course of the debate on the two amendments which we have just dealt with there was considerable emphasis on savings. It is on the savings approach to the problem of relief for persons over the age of 65 that I wish to say a few words.
  When the Opposition talk about reductions in taxation, they always refer to them as "handouts" to their fortunate recipients. But rather than talk about handing out money which has already been taken from an individual, I prefer to describe them as "diminishing demands" by the Inland Revenue on that class of person.
  A few days ago I re-read the Budget speech of my right hon. Friend the Chancellor of the Exchequer and I noticed that he devoted four columns of it to praising savers. He was right to do so and I agreed with all that he said. I believe, however, that savers, especially those whose incomes are higher than those whom we are now discussing, will ask themselves "What is the Chancellor

  1419
  doing to compensate us for our efforts to produce for ourselves sufficient funds to avoid making any further demands on the State?" Unfortunately the answer is that, despite all the advantages in Clause 12, nothing has been done in respect of any investment income of people earning more than £2,000. That figure was fixed for surtax purposes more than 50 years ago. Today we still use the same figure by which a surcharge or its equivalent is added to the taxation bill of people in that category. They are only a small body of taxpayers.
  I tabled a new clause proposing that the figure should be increased from £2,000 to £3,000. If a relief of that kind were granted it would cost the Exchequer only £5 million a year, but it would do some little justice to those to whom my right hon. Friend has referred, and I suppose that every hon. Member feels that they are the very people who should be encouraged.
  The hon. Member for Woolwich, West said that the effects of reductions of any kind are salutary. I believe that there are adverse effects when the individual feels that he is being penalised for the thrift and industry he has displayed during his working life.
  Mr. George Cunningham: Will the hon Gentleman confirm that he is talking about people with an investment income of £2,000 a year, which means that they must have accumulated assets of about £30,000? If he is dwelling on the fact that the amount of tax relief would be only about £5 million, may I ask him to tell the Committee how many individuals would be sharing the £5 million?
  Mr. Hiley: I cannot answer that question now. The answer to my question was that it would cost £5 million. We are talking about investment income. I shall never again talk about unearned income, because people who have been able, industrious or hard-working enough to provide that amount of capital have done more for the State than most others. I hope that when the time comes, which will probably be in Committee upstairs, the Minister will look favourably at the proposal that there should be an extension to relieve those in the category I have described.
  Mr. Charles Loughlin: May I ask the hon. Gentleman to clarify a point? I am certainly sympathetic when he talks about people who, by thrift, have managed to make provision for their old age. Will he tell me how it is possible, on the basis of thrift as we know it in the general sense, for someone to make provision of £2,000 a year for his old age?
  Mr. Hiley: Plenty of people have done it, thank goodness.
  Mr. George Cunningham: I should like to dwell on the point that has just been the subject of an exchange. I doubt whether there are many people, but there must be some, who, by means of thrift rather than of inheritance or gift, accumulate about £30,000.
  Mr. Loughlin: No, not £30,000.
  Mr. Cunningham: We are talking of an investment income of £2,000 a year.
  Mr. Loughlin: Exactly.
  Mr. Cunningham: To get an investment income of £2,000 a year would require accumulated assets of £20,000 to £30,000. To dwell upon an investment income figure of £2,000 a year seems to suggest that we are dealing with people not far above ordinary people. The hon. Member for Pudsey (Mr. Hiley) has been talking about people with assets far higher than those of the vast majority of people in this country.
  If the Government have any more tax reliefs to offer I have a suggestion, to which I shall be coming, which I think commands greater priority in the queue than the one mentioned by the hon. Gentleman, although I accept that the surtax level for investment income has remained static for about 56 years in cash terms and, therefore, that the threshold has fallen in real terms.
  Clause 12 relates to various ways in which we deal with the tax treatment of elderly people directly by means of the age relief and indirectly by means of the dependent relative allowance. I support any moves to increase tax reliefs offered either directly or indirectly for people over 65 years of age.
  I want to draw attention to one way in which the Government are proposing,

  1421
  quite disgracefully, to make the tax treatment of people over retirement age much worse in future than it has been in the past. I refer to the proposal that those who are forced, by not having an occupational pension scheme, to be in the State reserve pension scheme will be taxed upon that pension after they retire in the way that normal pensions attract tax, but the contributions which they make in order to gain that pension will not attract tax relief.
  This matter was the subject of a Government defeat in Committee upstairs. My amendment to correct the Government's proposal in the Social Security Bill was carried by 11 votes to 5. Two Conservative Members were detached from their allegiance to the Government, and I give them praise and credit for their action, because the amendment would not have been carried without Conservative support. Those two hon. Members were prepared to support my amendment, while three Conservatives consciously abstained although they were present. The Minister was left with his entourage of his Whip and his PPS and two other Conservatives.
  That is a measure of the strength of the case—this is not my oratory—that it is possible to muster on this matter, and I hope that the Government, in the context of the Finance Bill and of this clause, will say that it is not their intention to undo that decision by the Standing Committee considering the Social Security Bill by dragooning Conservative Members who may not have heard the argument—but they will—into the Lobby to alter the Bill back to its original form.
  This is not the time—though it is proper to refer to the matter—to go through the whole argument in detail, but there are one or two points which I should like to make for the benefit of hon. Gentlemen opposite who will, I hope, pay serious attention to this issue when it comes back to the House.
  It is estimated by the Government Actuary that 7 million people will contribute to the Government's pension scheme. The surprising fact—it was a surprise to me—is that of those 7 million an estimated 5 million to 6 million will be taxpayers. That is a high proportion of the total. We are therefore talking not about a few who will contribute to
  1422
  the scheme but about the vast majority, and I am told officially that if tax relief were granted the sum involved would be about £25 million.
  The Government's case for their proposition that contributions to the State scheme, unlike those to every other pension scheme in the country, should not attract tax relief consists of three parts, and all three were advanced on Second Reading. The first part is that those who will contribute to the scheme are relatively poor and will, therefore, get the least advantage from tax relief. The answer to that is that according to the Government's own figures 5 million to 6 million of the 7 million people involved pay tax. Without proving it I assert the fact—it can be proved, but I shall not now take the time to do so—that only a tiny number of people pay so little tax that they would not get the full relief if any relief were granted.
  The second part of the case—it is upon this that the Government rely principally —is that they have slanted the contribution to the State scheme to make the employer contribute 2½ per cent. of salary and the employee only 1½ per cent., and that by departing from some supposed norm of a 50-50 split they have provided something which takes the place of tax relief.
  I was able to show in Committee upstairs—I can show again at any time on the basis of the Government's own figures—that a 5:3 ratio for contributions to pension schemes is normal throughout the private sector, the public sector and both sectors taken together. It is also the ratio that we have adopted for our own pension scheme. When we did that last year, or whenever it was, we said that we need to contribute only three-eighths of the total of the contribution; yet we give ourselves the tax relief. Why, then, if a person is contributing to the State reserve scheme should he not get the tax relief too when he will have to contribute the three-eighths?
  8.45 p.m.
  The third argument of the Government is that it is administratively easier not to give tax relief, which is undeniable. Administrative ease is not an unworthy rationale in these matters. One must be consistent and say it prevents the giving

  1423
  of relief either to all contributors for pension purposes or to none. One cannot say that, because people are contributing to this scheme, administrative ease means we cannot give them their tax relief whereas if they are contributing to any other scheme, perhaps even on more favourable ratios than those I have mentioned, they still receive tax relief.
  In 1965 when the Labour Government, in my view ill-advisedly, abolished the tax relief on the basic pension scheme, there was a quid pro quo. An increase in the personal allowance was given to taxpayers. Nevertheless, even with that quid pro quo, the Conservative Party opposed that change. It did not say merely that it did not like it, but it advanced the most carefully thought-out reasons of principle why it was bad. This was done not only from the back benches. The Front Bench spokesman on finance for the Conservative Party, the right hon. Member for Finchley (Mrs. Thatcher), said at that time that what was being done was totally contrary and—I take her word for it—went back to Pitt in 1799. She then said that the Labour Government, if they did this, which they did,
  "will be reversing a principle which has stood the test of time since 1799. When Income Tax was first introduced, in that year, Pitt himself emphasised the principle that where benefits were taxable, contributions should be deductible".
  I find it hard to see Pitt using those exact words, but that is what the right hon. Lady said he said.
  Referring to the Chancellor of the Exchequer, the right hon. Lady concluded:
  "what I believe he is doing is paving the way to disallow private pension contributions for relief … the next stage is to disallow contributions for life assurance or occupational pension schemes ".—[OFFICIAL REPORT, 20th May 1965; Vol. 712, c. 1747–50.]
  It has been the boast of the Conservative Government that their new State reserve scheme is an occupational scheme like all the others. It is to be funded, it is to be free of Government control, it is to be a money purchase scheme just like the others except that its management will be in the hands of a publicly appointed board. If it is like any occupational pension scheme in other respects it must be like it in this respect too.
  1424
  I suggest to the Government that it will be dishonourable, apart from unfair, if the Conservative Party goes back upon the principles it enunciated in 1965, which at that time were right. They did not bear exactly on the change the Labour Government were making because of the quid pro quo I mentioned, but the principles were surely right.
  I do not believe the Front Bench can get away with dragooning a sufficient number of Conservative Members into the Lobby on this matter if they know the case, so they must hope that hon. Members will read their papers instead of listening to the case. That is the only way in which they can get it through.
  But I give the Government the promise that if they get through here they will have the same struggle in the House of Lords, because I will work up the Lords and the Government will not get it through quietly: they will have opprobrium. There is no doubt that the Lords can be worked up. This is very much a House of Lords point. They will not stand for the Government doing something as dishonourable and unfair as this even though the Commons may put up with it.
  Mr. Dalyell: Will my hon. Friend disclose a secret? Precisely how does one work up the Lords?
  Mr. Cunningham: I shall work out precisely how one does that before the time comes.
  It would be very unfair to distinguish in the way the Government propose. It would be a contravention of the stated principles of the Conservative Party. The effect of this is not small. Anyone who contributes to a normal scheme and gets tax relief would pay, say, £1·50 into the scheme and his employer might pay £2·50. Thus, £4 would go into the scheme for his benefit. Because of tax relief, it would cost the contributor only £l·05p. It will cost a contributor to the State reserve scheme £1·50, with no tax relief; thus, for every pound a man pays in he gets 30 per cent. less in benefit in the fund.
  This is a situation which Conservative Members will not stand if they understand the case. I hope that Treasury Ministers can say now—I do not mean when the Social Security Bill comes back

  1425
  on Report—that they will accept the resounding defeat inflicted on them in the Standing Committee, with the assistance of the hon. Members for Kensington, South (Sir B. Rhys Williams) and Billeri-cay (Mr. McCrindle), with three of their colleagues abstaining, and will treat contributors to the State reserve scheme on the same basis as we treat contributors to every other pension scheme.
  Mr. Nott: Although I may be unpopular with my hon. Friends to say this, I hope that the hon. Member for Woolwich, West (Mr. Hamling) does not retire. At any rate, I hope he does not retire voluntarily. He is a most valuable member of the Committee on these occasions. We should all be sorry to see him go.
  Our income tax system is based on the principle that tax is chargeable on income from all sources, so that people with the same total income and similar family commitments pay the same amount of tax. In this way the burden of taxation is spread as fairly as possible over the community by relating each individual's tax liability to the amount of total income and to his personal or family circumstances.
  Despite this, we have recognised the special position of the elderly. As I pointed out on the previous two amendments, the recognition which we give to the special position of the elderly is such that an elderly single person enjoys an advantage in the tax allowance of £105 over the single person's allowance and an advantage of £225 over the normal married couple's allowance. So we have recognised the special position of the elderly by setting the age exemption levels a certain margin above those of the personal allowances.
  In certain circumstances the marginal rate can be high. The hon. Gentleman mentioned one or two examples. There might be the operation of the earnings rule. This is primarily a point for the Department of Health and Social Security. Nevertheless I take the hon. Gentleman's point. There can be cases where the pensioner comes out of marginal relief for age exemption and, in just a small band, the tax on the margin can be at a hight rate. This is a point that we understand and accept, but, as the hon. Gentleman knows, this
  1426
  problem of a high rate of marginal taxation occurs in many circumstances.
  One of the features that we have discussed in our Green Paper on the tax credit scheme, for instance, is the way in which such a scheme would help to reduce the marginal rate in certain circumstances. We have mainly been discussing the case of low income families when dealing with the reduction of the marginal rate under tax credits, but I do not dispute that the marginal rate can be high in certain conditions.
  The pensioner, the elderly person, can have considerable income above the State pension before he comes into the tax net. I quoted the figures in the debate on an earlier amendment. A single person over 65 in 1973–74 can have an extra income of £322 a year, roughly £6 a week, above his State pension before he is liable for tax. A married couple can have an additional income above the State pensions of £391 before they start paying tax.
  So it is not the case that additional earnings immediately above the level of the State pension bring a person into the tax bracket—the threshold is higher than that—but nevertheless I accept the points that the hon. Gentleman made. There is a high marginal rate at certain points of income and in certain circumstances.
  Mr. Hamling: Does the Minister also accept that many pensioners regard this as the greatest imposition they have to face?
  Mr. Nott: I think it is true to say that the community generally regards taxation as something of an imposition. I started by saying that the general principle of our tax system, whether the nation likes it or not, is that people are liable to tax on their income from all sources. This applies to pensioners as much as to other people. I do not deny that taxation is not the most popular of impositions, but we all have to make our contribution to it.
  The hon. Member said that he did not want to discuss tax thresholds for the elderly, but I repeat that for a single person the tax threshold has been raised from £913 to £13·46 a week over the last three Budgets. This amounts to an increase of 20 per cent. in real terms.
  Mr. Hamling: But this applies to taxpayers as a whole. I said that all the amendment would do was to take account

  1427
  of existing inflation. It would not give greater reliefs.
  Mr. Nott: I am sorry, but that is not right. The 20 per cent. that I talked about is an increase in real terms. The increase in money terms is considerably greater than that. I repeat the point I made on an earlier amendment that in real terms, over the period we have been in office, the pension has increased by almost twice as much as the increase in prices. Over three years, in money terms, the pension has been increased by 55 per cent. but, as I said, in real terms that is an increase almost twice as great as the increase in prices.
  My hon. Friend the Member for—
  Dr. John Gilbert: I have been listening carefully to the Minister. Will he make it clear that he is talking about the relativities between the level of pensions and the average level of prices and is not referring to the level of prices which would enter into most pensioners' budgets, which would be a very difficult thing indeed?
  Mr. Nott: Yes. I was referring to the retail price index.
  Dr. Gilbert: Colour television sets.
  9.0 p.m.
  Mr. Nott: The hon. Gentleman mentions colour television sets, but perhaps he will remember that the Labour Government twice raised the high levels of purchase tax. Therefore, when his Government were in office the tax on television sets was twice raised. As the hon. Gentleman mentions television sets, let me say that with the introduction of VAT the amount of tax on a television set has come down.
  Dr. Gilbert: The hon. Gentleman is making my point for me. The Government are bringing down the price of colour television sets, Mars bars, Coca Cola, potato crisps, Kit Kat and liquorice all-sorts as their contribution to an attack on the cost of living of the ordinary pensioner. To talk about average prices is irrelevant. The hon. Gentleman should talk about the ratio between pension increases and the price of food. That would be more to the point.
  Mr. Nott: I do not know whether the hon. Gentleman has been present during the debate—
  Dr. Gilbert: Yes, I have.
  Mr. Nott: He could not have heard his hon. Friend the Member for Woolwich, West who pointed out that television sets are a particularly important item in the expenditure of pensioners. It is too absurd for me to answer his hon. Friend and say that the tax has come down on an item of expenditure which his hon. Friend said was important for pensioners and then for the hon. Gentleman to complain about it.
  Dr. Gilbert: I was talking about colour television sets.
  Mr. Nott: I come now to the point raised by my hon. Friend the Member for Pudsey (Mr. Hiley). I appreciate that this is a matter of great concern to my hon Friend, who raised it last year. The additional cost of raising the figure from £2,000 to £3,000 for those over the age of 65 would be more or less as my hon. Friend stated.
  We have said that all investment income up to £2,000 will be treated as earned income in the future. I think that the reason why his elderly constituents are not aware of this fact is that it comes into effect only in the current tax year. This makes a very considerable difference to the amount of tax paid by those to whom my hon. Friend referred—the elderly person who has worked all his life, who has been thrifty and deserves to live in reasonable comfort for the final years of his life. Taking investment income of £1,300 a year from his lifetime savings, in 1971–72 his income tax and surtax, if any, would have been £325. In the current year, 1973–74, it will be £157. His effective rate of tax will be about half what it was in 1971–72. This will be of very great benefit to large numbers of elderly people living on a lifetime's savings. It is no use the hon. Member for Islington, South-West (Mr. George Cunningham) commenting adversely. These are people who have saved throughout their lives. I see no reason why they should be taxed at an especially high rate and more than anyone else because they have been thrifty. The hon. Member for Gloucestershire, West (Mr. Loughlin) said that he was in favour of this concession. I am glad to know this.
  Mr. Loughlin: There is reasonable ground for us to be at least honest with each other.
  Mr. George Cunningham: What a suggestion!
  Mr. Loughlin: If the Minister is telling me that someone, whether over or under 65, has an investment income of £1,500 as a result of thrift, will he tell me how much capital must have been accumulated to produce that income?
  Mr. Cunningham: Twenty thousand pounds.
  Mr. Nott: It depends very much in what securities he has placed his savings. If they were yielding 10 per cent., the amount of capital would be £15,000.
  Mr. Cunningham rose—
  Mr. Nott: I shall not give way again. It all depends, of course, where the person invested his savings. There are a great many people who have, as a result of a lifetime's savings, been able to put aside sufficient money to have a modest income.
  Mr. Cunningham rose—
  Mr. Nott: The hon. Member has taken up a great deal of time and I now come to his remarks. He spoke at length about the Social Security Bill. We are here debating a fairly narrow clause in the Finance Bill concerning the raising of age exemption and dependent relative relief. I would be wholly out of order if I discussed events which happened in Committee on the Social Security Bill.
  I do not want the hon. Member to leave the Committee believing that we have not taken the point he was making. We have. Although relief is given on employees' contributions to approved occupational schemes, there is no injustice in not having it on reserve scheme contributions because the employees' share of the contribution has been kept down to take account of this. Under our proposals an employee will pay 1½ per cent, of his reckonable earnings compared with the employer's 2½ per cent., and in the result the employee who is liable to tax will pay about the same as his net contribution would have been had he enjoyed tax relief on an equally divided contribution of 2 per cent.
  Mr. Cunningham rose—
  Mr. Nott: I cannot give way to the hon. Gentleman at this point because he is pursuing a matter which arose on the Social Security Bill which is not in any way connected with the clause we are discussing. I understand that he was a member of the Committee on the Social Security Bill and he will have plenty of opportunities to debate the matter when that Bill comes back to the House.
  Every time I refer to the hon. Member for Woolwich, West he leaves the Chamber. I was about to say that of course we realise that a great deal of the basic income of pensioners is spent upon necessities. That is why we took great care in the revision of the indirect taxation system to protect low-income groups, particularly pensioners. The zero-rating of food has been extended in the Budget this year. Fuel, fares and transport are all zero-rated. This will ensure that the changeover has not been regressive.
  In conclusion I should like to say to the hon. Member for Woolwich, West, who has once again left the Chamber, that we are conscious of the special needs of the elderly and we understand the pattern of their expenditure. My right hon. Friend the Secretary of State for Social Services keeps their problems and their needs continually under review. I believe that since we took office we have done a great deal to improve the position of pensioners, and the Committee no doubt recognises that fact. If it does not, it should.
  Mr. Brian Walden: It seems that I cannot leave the Minister of State alone for 15 minutes. When I left the Chamber for refreshment everything was nice and pleasant. I came back to hear a terrible and rancorous argument. The reason is that the Minister of State—the Financial Secretary took the same attitude last night—has been more pernickety than the Chair. I suggest to Treasury Ministers, that, if the Chair allows a certain discussion to continue and does not rule that it is out of order, it is their responsibility to answer that discussion until such time as the Chair indicates that it is not too happy and that things are getting out of order.
  I wish that the Government Front Bench would stop doing the Chair's job.

  1431
  The Minister of State, if the remarks of my hon. Friend the Member for Islington, South-West (Mr. George Cunningham) were in order, should have the courtesy to reply.
  Mr. Nott: I did.
  Mr. Walden: The Minister did not. He said that the remarks were much more pertinent to the Social Security Bill. That may be so, but it is not for him to make that judgment. My hon. Friend's remarks were not ruled to be out of order, and we will not continue to put up with the Government Front Bench doing the Chair's job. It was said yesterday, and the pretext has been used today, that were the matter in order they would like to tell us much. We would like them to tell us much and to wait until they are ruled out of order.
  Mr. George Cunningham: I have no wish to incur the Committee's displeasure by taking this matter too far. I am appreciative of the understanding that has been shown to me so far.
  I gladly give the Government credit for introducing a system by which investment income is taxed at the same rate as income. That is a long overdue change for which the Government deserve credit. However, there is a legitimate argument about the amount of income which should be freed from a surcharge. To say that income derived from an investment of about £25,000—of course, the amount of the investment depends on the interest rate—should be free from a surcharge is giving benefit much further up the scale than is justified.
  The Minister sought to justify the denial of tax relief to the State reserve pension scheme. The argument which he used was used in Committee, and utterly demolished, to the satisfaction of five Government hon. Members. It has been said that more is taken from the employer than the employee. More than what? Very few pension schemes take the same amount from the employer as from the employee.
  The Government Actuary's report on Government pension schemes says that employees in contributory schemes contribute 33 per cent. to 35 per cent. of the total contribution. In the reserve scheme employees will contribute 37½
  1432
  per cent. In other words, they will contribute more than the norm. Hon. Members make a three-eighths' contribution to their pension scheme. That figure was arrived at—hon. Members might like to look at the Boyle Report—because it was in line with outside practice. We give ourselves the tax relief. If we do that for ourselves, and if we give tax relief to all the other schemes which contribute three-eighths or less, we cannot deny tax relief to the reserve scheme contributors. I could go into lots of figures but I am sure that I should incur the Committee's displeasure if I did so.
  In Committee the Government's argument was not acceptable to two Conservative hon. Members who voted for my amendment. Three other Conservative hon. Members abstained. If the facts are known there will be even more support, I believe, from Government hon. Members than from my hon. Friends for the proposition that I am putting forward.
  Question put and agreed to.
  Clause 12 ordered to stand part of the Bill.

Clause 18

  SHARE OPTION AND SHARE INCENTIVE SCHEMES
  Question proposed, That the Clause stand part of the Bill.
  9.15 p.m.
  Dr. Gilbert rose—
  Mr. Patrick Jenkin: I thought for a moment that we were getting the clause "on the nod".
  Dr. Gilbert: It is interesting that the Chief Secretary should murmur that kind of comment on Clause 18, because we on the Opposition side understood that it was to be discussed at the behest of Government back benchers, of whom I see a great number panting to take part in the debate. I have no wish to prolong our proceedings. We made clear last year our views on share options and share incentive schemes. We have no objections to share incentive schemes in principle but we have profound objections to their receiving preferential tax treatment. Our objections on that score have in no way diminished since last year.

  1433
  We believe that benefits under these schemes should be related—and visibly related—to employees' contributions to companies' profits. But that is mainly the concern of the companies which set up schemes of this nature. We believe also—and this should be the province of the Chancellor of the Exchequer—that benefits received under these schemes should be taxed at marginal rates for any beneficiary as with any other form of unearned income.
  It might be argued that the scheme to which Clause 18 refers, which is detailed at greater length in Schedule 8, introduces two new principles. That was a point which the Chancellor of the Exchequer tried to establish in his Budget speech. He pointed out that these new save-as-you-earn share incentive schemes must apply to all employees of a company which introduces them. In our view this is little more than a cosmetic effect. These schemes are limited to a contribution of £20 per month for ordinary employees, whereas the executive schemes—the top-hat schemes—can have for the member an entitlement of four times his annual salary.
  It was interesting to read in one of the newspapers recently that a new scheme was being introduced by the Shell Company which was being restricted to no more than 40 of its top executives. The last balance sheet of the Shell Company showed the chairman as holding a total emolument of between £60,000 and £65,000. Under the existing scheme, the Government's provisions and the scheme which Shell is introducing, that gentleman will be entitled to stock options of about £250,000, and the profits he could make therefrom could be vastly more. This compares with the £20 a month which is being set as the bare minimum for the ordinary individual on the shop floor in the Government's save-as-you-earn option scheme.
  Another inflation factor will be the down-side protection in the scheme for workers, but what the Chancellor failed to say was that if one takes purely the cash option, having made one's contributions over the years, one gets one's cash options without any reinvested earnings or interest; and price inflation means that the amount of cash one would take up, if taking the cash option at the end of the
  1434
  period of saving, would be worth a lot less than would otherwise have been the case had it been in any form of investment, for the simple reason that the initial contributions in terms of pounds and pence were worth more than if the option had been exercised.
  We still maintain our original fundamental objection that all schemes of this sort tend to reduce mobility of labour and that they are at variance with the social objectives of transferability of industrial pension schemes. Equally, the objection we voiced last year still holds good: that there is nothing in these schemes either for people in the public service or nationalised industries, on the one hand, or for the self-employed, for people working for professional firms or, for that matter, firms without schemes, on the other hand. We still have profound objections to encouraging the creation of a new privileged class of taxpayers in this way, whatever cosmetic treatment is given to the types of schemes introduced.
  Our distaste is in no way mitigated. We stand by our commitment to eliminate preferential tax treatment for all such schemes. We promise to give the details of the scheme, in so far as they are revealed in Schedule 8, the most searching scrutiny in Committee upstairs. We also promise to give such scrutiny to the subsequent orders, because I am sure that that is where we shall find the guts of the matter. There will be far more in the orders than in Schedule 8.
  We do not see a great deal of enthusiasm by Government back benchers to discuss the matter, although we were originally led to believe that there was such enthusiasm. I am tempted to advise my hon. Friends to divide against the clause, but we shall see what the Chief Secretary says.
  Mr. Peter Rees: I should hate to cheat the hon. Member for Dudley (Dr. Gilbert) of the spectacle of Conservative back benchers showing enthusiasm for the clause. I hope that I can speak for many of my hon. Friends in saying that there is widespread enthusiasm for it. [HON. MEMBERS: "Hear, hear."] Comparing the number of back benchers behind me with those on the Opposition benches, I think that we are showing by

  1435
  our attendance that we feel that it represents a substantial advance on the enlightened measures introduced last year.
  I must deprecate his insensitive use of language, although we have come to expect it from the hon. Gentleman. The clause is not a question of giving preferential tax treatment to any particular class; it is mitigating the unconscionable burdens imposed by Labour Chancellors who imperfectly understood the tax system that they were trying to operate.
  The hon. Gentleman's arguments were as flimsy as those he advanced last year. That is not surprising, because they were precisely the same. His thinking has not developed, although my right hon. Friend the Chancellor and my hon. Friend the Chief Secretary clearly have had further thoughts about the advisability of share option and share incentive schemes. We are delighted that they should have had further thoughts.
  The fact that such schemes cannot be extended to employees of the public sector is regrettable, but Labour Members must take the consequences. They are in favour of extending the public sector year after year, remorselessly, and this is one objection, but not the only one, that can be raised to such an extension. It is egalitarianism run mad to say that because all cannot have the benefit of share option and share incentive schemes, therefore none can. I am sure that that is not a view that will commend itself to the country.
  I could make detailed criticisms of the measures introduced last year, because, generous though they were, they could be broadened, and some of the rules could be relaxed a tiny bit. We could also make detailed criticisms of the measures proposed this year, by reference to the restraints last year, particularly the limitation that the share option and share incentive schemes can relate only to quoted companies. [Interruption.] If they can be extended to private companies, that is good news. I hope that my hon. Friend will examine the provision that they cannot relate to a subsidiary in a group.
  These are in essence points of detail that we can no doubt debate in Committee upstairs.
  An Hon. Member: Why did not thehon. and learned Gentleman make those points last year?
  Mr. Rees: That was a point I made last year, but I was unable to press it in Standing Committee as I was not privileged to be a member of it. This year I am in such a fortunate position, and, therefore, hope to be able to press the point on my hon. Friend.
  The points I have raised are matters of detail, and I had not wished to deploy them now. I wished merely to correct the erroneous impression the hon. Gentleman tried to create that there is not widespread enthusiasm, both on the Conservative benches and in the country, for these far-sighted measures, which I hope will go far to associate people who work in industry with both capital and management. These measures will perhaps emphasise to them more than have previous measures their ultimate identity of interest with the people who put up the capital for the industries and the executives who manage that capital.
  This is a modest beginning, but it is none the less welcome, and I hope that is presages many further developments in the years to come.
  Mr. Loughlin: I wish to intervene only on the subject of the value of what the Liberals call co-partnership. It is not only the people who are employed in socially-owned industries who are dis-advantaged by co-partnership or profit-sharing schemes. The hon. and learned Member for Dover (Mr. Peter Rees) forgot the vast numbers of people who are employed by local authorities or in the hospital service and are part and parcel of the apparatus of the State but are denied any advantage from share ownership no matter how the scheme is devised.
  I have been associated with certain sectors of industry which have had share ownership schemes. My experience is that most of the share ownership schemes in private industry are completely phoney. They carry no voting rights and difficulties arise with the buying and selling of the shares. No hon. Member on the Conservative benches would ever invest in shares on the basis of the net return of dividend.
  Mr. Ridley: How does the hon. Gentleman know?
  [Sir ROBERT GRANT-FERRIS in the Chair]
  9.30 p.m.
  Mr. Loughlin: I am willing to give way to the hon. Gentleman, but if he does not wish to rise I will tell him why. The ratio of interest to the total investment is low. A person would not invest in equities on the basis of the net dividend return. It would be more profitable to invest in a building society. Such a person invests on the basis of the growth rate of a share. Almost all the share schemes with which I have come into contact and which are related to this clause provide no opportunity for the shareholders to obtain additional capital from them. If we consider the nationalised industries, the National Coal Board and the Central Electricity Generating Board for example, it would be just as easy for them to introduce share option schemes for their employees as it would be for any private employer.
  Those who are disadvantaged are not those in the nationalised industries, to whom the hon. and learned Member for Dover referred in his witty and vacuous speech. They are the men and women in the public service, such as those in the hospital service who are taking home £15 a week. As their employers we ought to be thoroughly ashamed of that.
  Mr. Peter Rees: Since the hon. Gentleman has called me, in a sense, frivolous and vacuous I would like to put two points to him. Because of the lateness of the hour I will not debate the level of hospital workers' wages. In any case that would be out of order. First, workers in the public sector enjoy a degree of security not enjoyed by those in private industry. He will be aware that two major private companies have been in serious difficulties and have laid off workers. I refer to Rolls-Royce and BSA. Secondly, I would welcome any development of a scheme which would enable workers in the nationalised industries to take a shareholding in them. If the hon. Member can propose a practical scheme to give National Coal Board employees an equity participation in the board he can count on my support.
  Mr. Loughlin: The hon. and learned Gentleman demonstrated to the Com-
  1438
  mittee that he was vacuous. I merely put the label on it. His speech was witty but if he looks at HANSARD tomorrow he will see that he did not say a thing. I appreciate that there are difficulties in introducing equity shareholding schemes in the nationalised industries. I would be glad if such schemes could be arranged.
  The hon. and learned Gentleman twitted my hon. Friend the Member for Dudley (Dr. Gilbert) about what happens in the nationalised industries. On this issue many Conservatives are more concerned about scoring political points than about doing anything constructive. I do not know what you are laughing at—or, rather, Sir Robert, I do not know what the hon. Gentleman the Minister of State is laughing at.
  Mr. Patrick Cormack: Withdraw!
  Mr. Loughlin: The hon. Member for Cannock (Mr. Cormack) is half asleep again. I have already withdrawn the word "you"and referred to" the hon. Gentleman ".
  To get back to what I was saying, share options may be of some marginal value in private industry, and it may be advisable in productivity terms to give those who are engaged in private industry the opportunity of having an equity interest in the company in which they are engaged. That is a proposition with which nobody could argue. The only argument that can arise is as to the value of the schemes which have so far been introduced by private industry and whether they give the right kind of interest to an employee in an industry who has invested in that firm not only his own life but the life of his family.
  It is incumbent on Conservative Members when discussing these problems to rid themselves of their prejudices. It must be remembered that the great proportion of the working population who must of necessity be excluded from any share option schemes are those who are employed as industrial civil servants, or even civil servants themselves. After all, one could not give the Permanent Secretary of the Treasury an equity share in the Treasury Department. I hope that the Financial Secretary will give me his attention.
  Mr. Ridley: The Financial Secretary is not here.
  Mr. Loughlin: If we think in terms of the industrial civil servants and, for example, the total number of people employed in the Department of the Environment and the Department of Health and Social Security, and if we also think of all those employed in public authorities, we can take all the tax measures we like but we shall find that in the totality of those employed the tax relief given in terms of this kind of share option scheme is not worth while.
  Mr. Dalyell: I wish to echo some of the views expressed by my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin). Government Ministers should recognise that there is a problem here. If it is argued that share option schemes are good, as my hon. Friend says they have to be extended somehow to a great many more people than at present, and there is the problem of those working in the public sector. It is no good saying that those in the public sector have security, as the hon. and learned Member for Dover (Mr. Peter Rees) says. That is not quite the issue. For those in circumstances similar to my hon. Friend's hospital workers there is a very real problem.
  I want to pick up the point made by my hon. Friend the Member for Dudley (Dr. Gilbert) and to return to a point which I laboured last year in Committee upstairs, possibly at unconscionable length. It concerns the nature of schemes and the bad blood which is often caused in a company.
  It so happens that I have with me the letter which Shell sent out about its share option scheme. It says:
  "Only executives in full-time Group service and working in the United Kingdom will be eligible to receive options under the Scheme, so that Shell Petroleum's existing Stock Option Plan will still be needed for executives of Shell Petroleum's subsidiary and associated companies overseas. It is the intention of the Board of Shell Petroleum to renew that Plan in due course. You will, however, appreciate that the existence of several schemes or plans applicable to executives of different Group companies does not mean that there is, in fact, a multiplication of benefits; they are, and will continue to be, administered in such a way as to be complementary, not cumulative, in however many parts of the world an executive may have worked in the course of a Shell career."
  1440
  Now comes the operative part:
  "If the Scheme comes into operation it is expected that the number of executives selected to participate at the outset will be in the neighbourhood of forty."
  In an enormous concern like Shell, just imagine the human situation. Why should 40 key people in a huge enterprise get this kind of benefit? It so happens that I have friends in Shell who are of a seniority just outside the option scheme. I can assure hon. Members that it has created a great deal of bad blood. If one goes round a number of major companies, especially multi-national companies, as some of us have been doing in the past year, one knows the situation only too well. I echo the point that I laboured last year. It is a situation which can create a great deal of bad blood and dissatisfaction.
  When we come to Schedule 8 it will probably be more in order to go over the arguments which the Chief Secretary answered during the Budget debate, as always very courteously, when I raised the subject of stock options. Tonight I wish simply to concentrate on a number of specific points because possibly this is the only opportunity I shall have to refer to them. If the hon. and learned Member for Dover is to join us in the Standing Committee considering the Finance Bill, he will have to learn as I did to my cost at an early stage that there are many matters which are out of order and that one has to take one's opportunity when it comes. Therefore I do not apologise for raising the subject of share option and share incentive schemes as it affects part-time directors, one reason being that the matter has been raised with me.
  As I understand it, one of the conditions for approval of a share option or share incentive scheme is that eligibility to participate must be limited to persons who are full-time directors or full-time employees of the company concerned. In practice, in accordance with an undertaking given by the Chief Secretary in Committee last year, a person who works full-time as a director or employee of two or more companies within a group of parent and subsidiary or associated companies, but not for any one company in the group, will be treated as eligible to participate in a scheme which is open to directors or employees of any of the companies for which he works.

  1441
  The guts of the issue is whether the Treasury will be rigid in keeping it to full-time employees or whether, if these are to be benefits, they are to be extended to those who are in any sense part-time.
  9.45 p.m.
  Quite a number of people involved in the export trade of British companies are, by the very nature of their employment, part-time employees. Many of these people sweat their guts out to sell British goods abroad. If there are to be any goodies going, clearly it is wrong that these people should be excluded. Therefore I raise the question of the Treasury's attitude towards part-time directors, many of whom work extremely hard in the interests of companies. Many of us have reservations about part-time directors, but I wonder whether they should be excluded from the scheme.
  The second question I wish to put arises out of Schedule 12 to the Finance Act 1972. A Treasury release of 7th November 1972 on share option and share incentive schemes states:
  "At the same time they will, where it seems appropriate, draw the applicant's attention to the possibility that, in the light of the Chief Secretary's announcement, any approval given may have to be withdrawn as respects shares acquired after 18th October. If a company wishes to guard against this possibility, it will be open to it to include a suitably worded provision in the scheme. This would empower the directors, after the Finance Bill 1973 becomes law, to amend the scheme, if necessary, as regards shares acquired after 18th October 1972 merely in such a way as to comply with the approval conditions then current."
  How does the Treasury intend to monitor these rather complex conditions? In particular, how much Inland Revenue and Customs and Excise time will the scheme take up? It is pretty complex. The example of the problem that I have given shows just how complex it is.
  I should like now to refer to a Question that the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) asked the Chancellor on 18th October. The Chief Secretary, in the course of a long reply, said:
  "In such cases the restrictions will not reduce the value of the shares and an employee who acquires them at less than market value will be liable to income tax on the difference; but unless the shares are of a special class, subsequent increases in their value will not be subject to income tax whether or not the scheme is approved by the
  1442
  Inland Revenue."—[OFFICIAL REPORT, 18th October 1972; Vol. 843, c. 102.]
  What is meant by the phrase
  "shares … of a special class"?
  Precisely what special classes do we have? We want to know about this matter.
  Finally—I could go on at length on this matter, but I do not want to detain the Committee—I should like to refer to a letter in The Times of 18th September from Mr. C. A. Norman, managing director of Lowndes Management Incentives Ltd., in which he says:
  "From a technical viewpoint option schemes appear to suffer from certain disadvantages the importance of which varies from company to company. One example … is that the issue price of a share under a share incentive scheme can be as low as 80 per cent. of the ordinary share price at the date of issue, whereas under an option scheme the minimum option price is 100 per cent. This discount can be used to great advantage where high targets are included in a scheme or where the prospective growth rate of the company's shares is modest. Other technical advantages of share incentive schemes include greater flexibility on cessation of employment and the ability of a loan scheme to provide participation in dividends, votes, etc., during the subsistence of the credit period."
  I should like to be given some comment on that rather technical point. I shall not go into the various political points that Mr. Norman made or his other reservations about the scheme. As it seems that this is the only opportunity that we shall have to discuss these things seriously, I should like to hear some Government comment on them.
  Mr. Ridley: I propose to say a few words on this matter at this stage but we shall come back to it on the schedule, which is not being taken with the clause, when we get into Committee upstairs.
  The hon. Member for West Lothian (Mr. Dalyell) made clear what a complex area this is, and I think it will be very difficult for the various schemes— development, option, deferred shares and loan shares—from the 1972 Act to be kept on a reasonable basis of parity with each other and, as the hon. Member for Gloucestershire, West (Mr. Loughlin) said, with persons who cannot participate in any of those schemes.
  I have always had a slight doubt about share incentive and option schemes from the point of view that people who are not in public companies do not have the opportunity to buy these shares. I include

  1443
  all those who are not able to join in these schemes and not, as the hon. Member for Gloucestershire, West did, solely those in the public service. There are many people in the private sector who do not have such an opportunity, and I could not help wryly feeling, as the hon. Gentleman longed for shares in the nationalised industries, that perhaps at last I had a convert to my view that denationalisation of much of the public sector would be in the long-term interest of the country, but perhaps the hon. Gentleman has not quite thought that one through.
  As I understand it—I hope that I shall be corrected if I am wrong because this is a complex area—the intention is that where shares are bought by an employee with money loaned to him by the company through trustees he shall be able to obtain them at 70 per cent. of the market price at the time of purchase. But that will involve very heavy borrowing if the shares are bought on any scale, and borrowing which, at present rates of interest—although he can deduct the interest for tax purposes—will be a considerable load on the employee.
  It is thought that the principal way in which these shares will be purchased by employees will be through their entering into Save-As-You Earn schemes and buying them on a deferred basis. I hope that I shall be corrected if I am wrong, but I understand that if the second channel is used, instead of buying the shares at 70 per cent. of market price the employee will have to buy them at 125 per cent. of market price.
  Here I refer to the income tax leaflet IR16 published in February 1973, where these matters are set out. The last table makes it clear that if over a seven-year period an employee takes up 5 per cent. as his initial payment he will have to pay 125 per cent. of the market price at the time of entering into the transaction. That is what is called the premium in respect of the deferral, and it is untrue to suggest that shares will be available to employees who undertake a SAYE scheme at 70 per cent. of the market, because in fact they will cost 125 per cent. I understand that to be the position, but it may be that I have got it wrong.
  I have some doubts about the second scheme. Within the context of various
  1444
  principles which hon. Gentlemen may or or may not have, the first scheme seems to be in line generally with what is being offered to executives. But I doubt very much whether this is a sufficiently attractive scheme to be commendable to people on the shop floor.
  First, its main benefit will go to the Treasury. Every £10 a month put in SAYE by an employee to buy shares will produce a complete term of SAYE for the Treasury. It will contribute towards the Government's borrowing, which is desirable from the Government's point of view, but the main beneficiary will be the Treasury, which will receive the benefit of £840 for every £10-a-month-term completed.
  Secondly, the employee will be subject to capital gains tax if the shares subsequently show a profit, but before he makes any money at all they must show a profit in a seven-year period greater than 125 per cent.
  I have done a few calculations on the sort of performance which will have to be expected if it is to be worth the while of the employee to take up the shares. It may be of interest, though I know it is a little complicated, if I give here a few figures.
  If in the period of seven years, the shares double after the employee has paid capital gains tax, the employee would receive a profit of £412 provided he had paid the full £10-a-week which I am assuming in the calculations for the five-year period of SAYE. He has invested his £600, which becomes £840 after the end of the seven years, and he receives a further profit of £420. But if he had invested his £600 in gilt edged at the present yields he would have received £420 as oppose to £412 interest. Leaving aside income tax, therefore, he may well do better to put his money into gilt edged at present rates of interest rather than to buy shares in the Save As You Earn scheme when the value of the shares doubles in the next seven years.
  To put it in another way, it would be necessary to have a gain of about 80 per cent. in the share value over seven years before the employee did better than by taking interest solely from gilt edged. This, I admit, neglects the value of the dividends which he may receive, but as

  1445
  the hon. Member for Gloucestershire, West said, they are likely to be low.
  I question very much whether there will be much advantage in these schemes for the employee. It is a very big gamble to say that in seven years' time the value of the shares will have outstripped the pace of inflation. He can always refuse to take them up at the end of the period, but then that is an inducement to the employee to invest in SAYE and not in shares.
  I hope my hon. Friend will be prepared to look again at this figure of 125 per cent. of the market price given in the Inland Revenue leaflet which seems to put the individual at a severe disadvantage as against the employer who can take up an option at 80 per cent. or an employee who can take up an option at 70 per cent. with his non-assisted purchasing power.
  I believe this is nothing like the bargain it appeared to be when my right hon. Friend the Chancellor put it forward in his Budget speech. The difference between allowing loan-assisted schemes to purchase shares at 70 per cent. and SAYE-assisted schemes to purchase shares at 125 per cent. will totally discredit the scheme in the eyes of workers who might otherwise be induced to take up these shares.
  We need some clarification whether what I have pointed out is right. I hope that my hon. Friend will be able to reassure us that the value of making purchases of this sort is better than it seems to be.
  10.0 p.m.
  Mr. Patrick Jenkin: This has been a useful debate on the general principles of the schemes which we are discussing.
  I endorse what my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said. Perhaps this will be of some comfort to the hon. Member for West Lothian (Mr. Dalyell)—we are discussing only Clause 18, which is merely a paving clause for the schedule. The schedule that goes with this clause will be fully open for discussion in Standing Committee, when I have no doubt that we shall be able to return to some of the matters that have been raised this evening. Indeed, we shall be able to tackle them in greater detail, and more
  1446
  appropriately, in a smaller Committee than in Committee of the whole House.
  We heard from the hon. Member for Dudley (Dr. Gilbert) his now well-known criticisms and strictures on the measures which we took last year and which we are taking in this Bill to encourage those who are employed by companies to become shareholders in those companies as well as executives. We understand but do not accept the reasons for the hon. Gentleman's criticisms.
  We believe that it is broadly in the interests of the economy as a whole that we should do what we can to break down the divide that exists between those who own and those who work for these enterprises. Last year we dealt with executive share option and share incentive schemes.
  Under pressure from the hon. Member for West Lothian, I gave a number of undertakings that we would consider most carefully how it was possible to extend schemes of this nature to benefit shop floor workers with the rather different considerations that inevitably apply in those cases, not only because the incentive aspect is not and cannot be as direct when one is dealing with shop floor workers but because of the need to take greater steps to protect the capital of shop floor workers in the period before they come full shareholders.
  We believe that these schemes are of advantage, because they give to employees a chance to share in the prosperity of the company they work for. They will help to reflect the community of interest that must exist between all who contribute to the wellbeing of an enterprise, whether as providers of capital or of labour.
  The hon. Member for Dudley, in voicing his criticism, poured a certain amount of scorn upon the measures that we are introducing in the Bill for the SAYE share-saving scheme. The hon. Gentleman was wrong in saying that there is no advantage because there is no reinvested interest if the shareholder decides to withdraw. Once his SAYE contract has matured, the shareholder is perfectly entitled to take the contract. That is what the hon. Gentleman called the down-side protection. Until the shareholder has exercised the final choice, until he has made the election to take the shares—an

  1447
  election which remains open to him all during the savings period while he is making his contribution of up to £20 a month under SAYE—he always retains the right simply to take the money instead of the shares. That is the protection. He takes the money with the full benefit of the SAYE accumulations at the end of the period.
  As the hon.. Member for Dudley knows, SAYE was introduced by the Labour Government. We welcomed the scheme at the time. We hope now to extend its use through its extension to the share-incentive schemes.
  The hon. Gentleman said that this would affect the mobility of labour. This was a point which the hon. Member for West Lothian raised during the debates on the Budget Statement and which I answered at some length. It will be open to firms introducing these schemes to have a number of different ways of dealing with the employee who leaves during the currency of the saving period. Once he has the shares at the end of the saving period there is nothing to tie him to those shares or to that company. Some employees might decide at that stage that their right answer is then to sell their shares, which is their only answer to capital gains tax relief if they are above the limit and to invest more widely, perhaps in a unit trust or something of the sort.
  Mr. Dalyell: On 12th March the hon. Gentleman said:
  "I agree that we should aim to avoid any drag, and we have various means in mind to achieve this."—[OFFICIAL REPORT, 12th March 1973; Vol. 852, c. 901.]
  This was in relation to mobility. Shall we, not tonight perhaps, but certainly in Standing Committee, hear what means the hon. Gentleman has in mind?
  While I am on my feet, in candour I must admit that perhaps my own view has changed rather from last year. This is not a matter of great credit, but certainly, as one has talked more about it, so one's view has changed.
  Mr. Jenkin: I do not think that this is discreditable in the least. To adhere originally to a view that one has expressed earlier is not always the wisest course. But the more I see of this, the
  1448
  more I move in the other direction: the more attracted I am by these schemes. As we were working on them in the Treasury before the Budget, I gained the hope that a large number of companies would feel it right to embark on schemes of this sort.
  The hon. Members for Gloucestershire, West (Mr. Loughlin) and Dudley said that the schemes are defective because they are limited to employees of private sector companies. But it is not only public companies. The schemes are open to those who work in unquoted companies. What one cannot do is to have a share in an unquoted subsidiary of a quoted company. My hon. and learned Friend the Member for Dover (Mr. Peter Rees) asked about that.
  It is right to make a start. I would welcome the possibility of some form of expansion, if we could devise a system whereby it becomes possible for those who work in the public sector, whether nationalised industries or elsewhere, to become share owners. The division between those who own and those who do not own is one of the sources of discontent and disruption in our society. I am as anxious as anyone to try to break this down, and this is a modest step in the right direction.
  Mr. Loughlin: Tell that to the dustmen.
  Mr. Jenkin: I would like this to be extended to the dustmen, the hospital workers, civil servants, or anyone else. I see no reason against that. That is no reason for decrying this scheme, which makes a sizeable start in a practical way, in a way that I believe managements will find attractive.
  I was slightly puzzled by the hon. Member for Gloucestershire, West, who, in one breath, complained bitterly that the advantages of these schemes would not be open to the employees of nationalised industries or to the Civil Service and the rest, and, in the next, said that the existing schemes of this sort were phoney.
  If he studies Schedule 12 of last year's Finance Act, the hon. Gentleman will see that we have gone to great lengths to make sure that these schemes are not phoney. We provided in paragraphs 3 and 4 of our schedule that the shares which are the subject matter of this scheme—this applies equally well to the

  1449
  employees' SAYE scheme under this Bill —must be of a class quoted on a recognised stock exchange or shares in a company which is not under the control of another company—that is to say, not a subsidiary—and the majority of shares of the same class must be shares acquired otherwise than as mentioned in section 79. There cannot be a special category of non-voting shares issued to employees. The hon. Gentleman's criticisms of some existing schemes, which I agree are phoney for the reasons he mentioned, will not apply to schemes approved by the Inland Revenue under this clause.
  Mr. Loughlin: As the hon. Gentleman reached his concluding point, he recognised that I was talking about the generality of the co-partnership concept. I was not referring to the specific clause in the Bill. I was talking in a general sense about my complaint against the general concept of co-partnership which has been plotted by the Liberals for the last 20 years. Most of those schemes were phoney. It was only in that respect that I used the word "phoney".
  Mr. Jenkin: I am grateful for that explanation. Equally, I hope I have satisfied the hon. Gentleman that we have gone to considerable lengths to make sure that the schemes introduced in last year's legislation and this year's legislation will be anything but phoney. They will be genuine schemes.
  The hon. Member for West Lothian raised a number of points. I do not disagree with him that the disadvantages of the limited kind of schemes with which we were dealing last year generate so much bad blood that they are hardly worth having. When one has a limited scheme for senior executives, there will be those who feel a sense of deprivation if they are just outside the limits. I have been aware of this in companies concerning people who do not have carpets or desks of the same size, and so on. One cannot escape that. The advantage and incentive of a well-run share option or incentive scheme is now well established.
  We have examined very carefully the question of part-time directors and part-time employees. Perhaps this matter may be further considered in Committee. But we have felt that the disadvantages of
  1450
  its being open to manipulation, particularly in the sector of the wife who is nominally an employee of the company and so on, lends itself to abuse. We need to look at this a good deal more carefully before we come to the part-time aspect.
  The hon. Member asked about the number of staff. The section of the Inland Revenue which will deal with this will be tiny. Probably about five people will be enough to administer the scheme.
  The hon. Member then came to the point which was, in essence, the same as that raised by my hon. Friend the Member for Cirencester and Tewkesbury, who expressed considerable doubts about certain types of share incentive scheme, notably the so-called partly paid schemes. I am not sure whether the hon. Member for West Lothian and my hon. Friend the Member for Cirencester and Tewkesbury recognise that the limited category of scheme to which they were directing their criticism was the partly paid scheme. I can set my hon. Friend's mind at rest in that it is certainly not true to say that any scheme under the Bill which makes use of the SAYE contract must of necessity be a partly paid scheme which suffers from the disadvantages to which he drew attention. That is not so. It is perfectly possible for a scheme to be set up with trustees and loan-assisted purchase of shares when there is no question of having to discount for a partly paid share and, therefore, where the full benefit of the 30 per cent. discount and shares issued at 70 per cent. of market value will be open to employees who participate in the scheme.
  There has been a good deal of misunderstanding about this matter. Some people genuinely have not understood it —I do not mean in the House of Commons but outside it—and some have appeared almost wilfully to have ignored the arguments. The fact is that if someone is in a position to buy an asset and is equally in a position to pay, let us say, only 5 per cent. of the price of that asset now and postpone the payment of the rest of the price until seven years' time, that price has to be enhanced to take account of the right to postpone. The advantage of postponement has to be discounted. It is for that reason that with a partly paid share scheme one can go up to the figure of 125 per cent.

  1451
  If that were the only way of developing schemes of this sort, my hon. Friend's criticisms and apprehensions might have more justification. But it is not the only way. In the case of an executive it is perfectly possible for shares to be transferred under last year's legislation under a loan scheme, for a loan to be made to the executive for the incentive shares, for him to pay either no interest or limited interest and get tax relief on it and to be able to take advantage of the 20 per cent. discount available to executives under last year's legislation.
  10.15 p.m.
  Equally under this year's legislation it will be open to the company to make a loan to the trustees who can buy the shares under the existing Companies Act legislation which the trustees then hold for the benefit of the participants during the savings period. In these circumstances, if the full price is paid there is no question of having to discount for the deferral of the purchase price.
  We envisage that the majority of companies embarking on schemes of this sort will prefer to go for the loan-assisted scheme as this is the most straightforward and is most likely to be beneficial to those participating. It is perfectly possible for the loan-assisted scheme to be run in conjunction with the SAYE contracts. There is no necessity, as my hon. Friend feared, for the SAYE contracts to be confined to the partly paid scheme, so that the discounting for the deferring of the purchase price has to apply.
  Mr. Ridley: Surely the SAYE savings scheme against the loan advances to trustees is not only not partly paid but not paid at all and the option remains for the employee not to take up the shares. Will my hon. Friend confirm, because that was what he said, that if an employee takes out an SAYE policy the trustees may advance to him a loan to pay for the shares at 70 per cent. of the market value at the time of the transaction provided that he continues to subscribe to SAYE for the purpose eventually of repaying the loan? What happens if the value of the shares drops below the 70 per cent. figure at the end of seven years? The trustees surely get left with the shares because the employee decides not to proceed with the purchase. How is that situation to be dealt with?
  Mr. Jenkin: On the first part of my hon. Friend's question, with the kind of SAYE savings scheme which is dealt with in this year's Bill we would not envisage that companies would wish the shares actually to be transferred to the employee during the savings period. They would be held by trustees on the employee's behalf while he was making his savings under the SAYE scheme. Of course, the company would have loaned the money to the trustees to buy shares and the money would then go back to the company for the purchase of the shares.
  On the second part of my hon. Friend's question, in that eventuality the shares are left with the trustees. That is part of the risk which the company takes. My hon. Friend will remember that under last year's legislation a scheme of this sort had to be approved at a general meeting of the company, but it is part of the risk that the company takes in embarking upon this sort of scheme. It is a risk that the shareholders take because to them it is a dilution of their equity. They may regard it as having an advantage in that it might improve their relations with their employees and build up the sense of community of interest between themselves, the employees and the thing in which they are all investing.
  But if the employee does not take up the shares, as he is perfectly entitled not to, at the end of the savings period, and takes instead his savings money, the trustees are left with the shares for the time being. These are shares which subsequently are open to be allocated to other employees who may wish to start taking out new SAYE contracts.
  Dr. Gilbert: I am grateful for the hon. Gentleman's lucid exposition. Will the schemes bar trustees, who may find themselves with a lot of stock on their hands and apparently no continuing enthusiasm on the part of the employees to take out new contracts of this sort, from selling the shares back to the company? If not, will the company be able to take a capital loss where the shares have fallen in value?
  Mr. Jenkin: The trustees in those circumstances would not be allowed to sell the shares back to the company. It is my impression—I am speaking without having studied the matter carefully— that the company would not be allowed

  1453
  to purchase its own shares. It would be open to the trustees to sell the shares on the market if it was a quoted company. Alternatively, in the last resort, if a company finds itself with a lot of shares, it can go to court and apply for a reduction in capital and a reduction in the shares. That would be rather an extreme step.
  In most cases, we envisage that once a scheme has got going a steady stream of employees will go into it and that at the end of seven years they will become full ordinary shareholders free to dispose of their shares as they wish. In those circumstances, the only tax to which they would be liable would be for any capital gains. They would be in exactly the same position as any other shareholder.
  The Government believe that these are sensible and attractive schemes. We hope that a large number of companies, when the Act becomes operative some time in the autumn—possibly in conjunction with phase 3 of the counter-inflation policy—will examine the situation carefully and decide that it is in their interests and in the interests of their employees to take up these schemes, introduce them and get them to work.
  I noted the careful language which the hon. Gentleman used when referring to
  1454
  this legislation. His language was in contradistinction to the rather more sweeping condemnatory language that he used when speaking about last year's legislation. I hope that he feels that this legislation makes some contribution to the removal of sources of discord and of disruption which undoubtedly harm the nation's industrial life. If the schemes become widespread, and if the hon. Gentleman ever has any say about these matters whilst speaking from this Dispatch Box, I hope that he will be prepared to smile upon them.
  Dr. Gilbert: I repeat that I am grateful to the hon. Gentleman for his lucid exposition. One or two of the matters which he has raised, which we suspected lay behind the new schemes, such as a company loaning money to the trustees to buy shares, in effect add to the tax discrimination enjoyed by the beneficiaries of the schemes. Features of that sort help only to make the schemes rather more obnoxious in the eyes of the Opposition. Having said that, I am content to let the matter rest.
  Question put and agreed to.
  Clause 18 ordered to stand part of the Bill.

Clause 38

  ACCEPTANCE IN SATISFACTION OF ESTATE DUTY OF CERTAIN OBJECTS AND COLLECTIONS
  Dr. Gilbert: I beg to move Amendment No. 11, in page 30, line 8, after 'manuscript', insert 'or'.
  Mr. Deputy Speaker: With this amendment the Committee is to take Amendment No. 12, in page 30, line 9, leave out 'or other thing '.
  Dr. Gilbert: The Opposition have put down a series of amendments to Clause 38, and I should emphasise that none of them is intended to be hostile to the spirit of the clause. Most of them are intended to be no more than probing amendments. Where they go a little further than that they are intended, if we have drafted them adequately—we are always willing to take instruction on such matters—to widen, if anything, the provisions of the clause. The Opposition welcome the general principle of the clause. I wish to make that clear beyond peradventure.
  Clause 38 refers to Section 34(1) of the Finance Act 1956, but it has some rather significant changes in language which no doubt will be referred to by hon. Members opposite in connection with amendments standing in their names. Section 34(1) gives the Commissioners of Inland Revenue power to accept.
  "any work of art which the Treasury are satisfied is pre-eminent for its aesthetic merit or historical value ".
  It confines the powers of the commissioners, in other words, to a work of art, without definining precisely what a work of art shall be, whereas Clause 38(a) specifies
  "any picture, print, book, manuscript, scientific object or other things ".
  What we want to know is what the Treasury has in mind by "other thing". The clause continues by defining these articles as being of
  "national, scientific or historic interest."
  These three categories are intended to be complementary and the "thing" does not have to satisfy all three criteria in order to be acceptable to the Inland
  1456
  Revenue. In other words, it does not have to be national, scientific and historic, but one of the three. It means that the Treasury will have power, as I read the provision, to accept any "thing" of historic interest.
  That opens up a large range. I can think of many things of historic interest. The provision does not say that they have to be of value or that they have to have great pecuniary value. It merely says that anything of historic interest can be accepted. I accept that, but we would like guidance.
  One does not want to be frivolous, but one could widen this to sport—for example, Sir Stanley Matthew's football boots, or the ball with which Jim Laker took 10 wickets in a Test match. These would be of great historic interest.
  One should be careful also in considering the clause to recognise that the skill and passion going into collecting things is not the exclusive prerogative of those who have great sums of money at their disposal. People of modest means collect matchboxes, cigarette cards and so on, which can turn out in the end, through the expenditure of modest sums, to be collections of great historic value.
  We want to be clear that in the definition which the Treasury has in mind for historic things it will not be exclusively concerned with collections of the very rich aesthete. We want to know that the ordinary man's collection of historic interest will also be considered under the clause. When we have had guidance on that point, we would like to know to whom the Treasury intend to turn for guidance if it interprets the clause as widely as I have suggested it might be intepreted and as widely as I hope it will be.
  10.30 p.m.
  Mr. Nott: I would be happy to explain to the Committee at some length the full underlying reason for Clause 38, but it may be more convenient if I answer the specific question put by the hon. Member for Dudley (Dr. Gilbert), since it is late, and then if a fuller explanation is required I will naturally give it.
  Amendment No. 11 and Amendment No. 12 concern the expression "or other thing". What the hon. Gentleman said

  1457
  is more or less correct. The power to accept objects in lieu of estate duty is an important part of the system which has been used by all Governments since 1956 to keep outstanding parts of the national heritage in this country. "Other things" could cover such items as costumes or photographs or domestic items, which might be of outstanding historic interest and represent major additions to the great national or regional collections. It may well be, to take the hon. Gentleman's own example, that Stanley Matthews's football boots could in future years be considered to be in that category. I cannot commit myself on that, and no one must take that statement as constituting a promise.
  It is important to draw the new powers wide enough to cover items which do not fall tidily within the other categories. The restriction involved in acceptance of the amendment would be an unfortunate limitation of the power to acquire outstanding objects.
  As has been the case for some time, the decision whether items are pre-eminent lies in the hands of the Treasury, which must be satisfied that they pass the test of pre-eminence. The standard is high, and the final decision is taken by Treasury Ministers. The Treasury first refers each case to its own experts, drawn from the great national institutions.
  Dr. Gilbert: Who is the expert on football boots?
  Mr. Nott: We should have to turn to an expert in one of our great national institutions to advise us whether the boots were, in his opinion, items which would be a pre-eminent addition to a public collection. That is the test. A preeminent addition could easily be a collection of matchboxes or some famous football boots, but I could not comment on individual items.
  I hope that I have explained the position to the hon. Gentleman, and that he will seek to withdraw the amendment.
  Dr. Gilbert: I am happy to have the Minister's assurance. He may find himself collecting experts in rather more exotic fields than he has expected, but if that contributes to the education of the Treasury I can only be the happier for it.
  1458
  I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  [Miss HARVIE ANDERSON in the Chair]
  Mr. Cormack: I beg to move Amendment No. 15, in page 30, line 8, after 'manuscript', insert "work of art".
  The First Deputy Chairman (Miss Harvie Anderson): With this Amendment we may discuss Amendment No. 16, in line 10, leave out 'or historic' and insert 'historic or artistic'.
  Amendment No. 18, in line 12, at end insert 'works of art' and Amendment No. 20, in line 15, leave out 'or historic' and insert 'historic or artistic'.
  Mr. Cormack: I should like to move the amendment, with which we are discussing other amendments tabled by my hon. Friend the Member for Ipswich (Mr. Money) and myself, in the same spirit as the hon. Member for Dudley (Dr. Gilbert) moved his amendment. We are in no way seeking to carp or be churlish, because we appreciate what the Government have done in recent months particularly and in two Budgets to assist those who are concerned about the nation's treasures and their permanent place in this country.
  There has been a welcome broadening of the definition of works of art which may be accepted in lieu of duty. This was announced in a written reply on 20th June. My hon. Friend and I are delighted at the reply he received some weeks ago to the effect that the Treasury is preparing a statement of the ways in which advantage can be taken of the laws and administrative practices which encourage the channelling of works of art to public museums and institutions. When it comes, it will be invaluable to owners, executors and legal advisers and to the fine art trade, which is so often called in to advise on policy and negotiate on values.
  The proviso in the "in lieu of duty" regulations whereby if an individual item is worth less than 25 per cent. of the total annual purchase grant of the museum that museum cannot receive it in lieu of duty but has to pay for it is more debatable and gives cause for concern. I would welcome a comment from my hon. Friend on this point. No doubt

  1459
  the condition was inserted in a laudable attempt to help provincial museums, but even they could be caught by this provision.
  I think my hon. Friend will agree chat much remains to be done. We sincerely hope that the Government will continue along the lines they have set themselves, because many of our lesser treasures which may not necessarily be works of international importance but are of national significance are in danger of leaving these shores, and the recent figures of Japanese exports underline this danger.
  The amendments arise from a certain puzzlement on the part of my hon. Friend and myself. When we studied the clause it was obvious that the phraseology of the categories of object and of the types of national interest is derived from Section 4 of the Finance Act 1930, but there is the inexplicable and not easily defensible omission of "works of art" among the objects and of "artistic" among the types of national interest. These defects could easily be rectified by acceptance of the amendments, and my hon. Friend and I sincerely hope that the Minister will be able to give at least some satisfaction on these scores. If he could make a helpful reference to Ihe effect that the Government recognise the problem created by the 25 per cent. regulation we should be doubly grateful.
  Mr. Dalyell: Under Amendment No. 18 I think it is in order for me to raise the question of the difficulties of the art trade in relation to VAT.
  I refer to correspondence with the Financial Secretary on 18th August 1972, and to a letter from Mr. Hugh Leggatt which appeared in The Times of 21st March 1973 in which he says:
  "Lord Eccles has added to the confusion surrounding value added tax on works of art. He said in the House of Lords (Hansard March 15, col. 513) 'when a museum buys an object from a dealer the tax will be approximately 1 per cent. on the price; that is to say, 10 per cent. on the dealer's margin of 10 per cent.'
  This is incorrect, as an art dealer's profit margin is variable "—
  The First Deputy Chairman: Order. I think that the hon. Gentleman perhaps himself had doubts of the relevance of what he is saying.
  Mr. Dalyell: In candour I must admit, yes. Equally in candour I do not see
  1460
  where else in the Bill I can raise this. Much more to the point, the excellent Clerk, Mr. Mackenzie, upon whom we all depend, with all his ingenuity, could not stretch that far. I am always one who obeys the Chair and I will not press the matter too far.
  Mr. Ernie Money: I warmly support my hon. Friend the Member for Cannock (Mr. Cormack). As he rightly said, the Finance Act 1956 marked a preliminary breakthrough in this respect. It was concerned with executors dealing with a large estate and with certain works of art of major public importance. That legislation was not concerned with destinations.
  In the welcome announcement of 30th June the Treasury very much widened the scope of this scheme, giving weight. I think, to some of the remarks which have been made on this subject as recently as 15th March in another place —[Interruption]—by the Paymaster General—
  The First Deputy Chairman: Order.
  Mr. Money: I hesitate to interrupt the private conversation of the Opposition Front Bench.
  Mr. Ian Mikardo: I apologise.
  Mr. Money: I am most grateful to the hon. Gentleman. It is a nice change.
  On that occasion the Paymaster-General said:
  "The inflation, if that is the right word, has escalated in the last three or four years at such a rate that it is unreasonable to expect any Government to increase the grant for acquisitions to the same extent."
  Here I pay tribute to the extent to which the Government have substantialy raised the acquisition grants, for both the major national and the provincial museums. The Paymaster-General went on:
  "Therefore we have to be more, and not less, selective in the use of the funds available, and each case must be judged on its merits and according to the financial circumstances."
  Early in the same debate the noble Lord said:
  "we have been quietly improving the benefits to a British owner who gives, sells or bequeaths some work of national importance to a public collection or offers it in lieu of estate duty. The improvements that we have made are in the nature of a deliberate reply to the United States tax reliefs which

  1461
  we think Would not be suitable in this country. The Finance Act of 1972, as noble Lords have already mentioned, made changes relating to cash gifts and bequests to national collections and arts charities. The Government also broadened the standards for acceptance of works in lieu of duty."—[OFFICIAL REPORT, House of Lords, 15th March 1973; Vol. 340, c. 510–11.]
  It is against that background that we are slightly puzzled—when the Treasury is in a giving mood, which is received most gratefully by all of us concerned with the possible loss of works of art and the prominence of our great national heritage—that it now feels it cannot give way, to tidy the whole thing up, on what has been the major factor in the relationship between the collector and the destination of the collection—namely, the desire which that collector has to see specific works of art go to particular collections after his death in accordance with the scheme without penalising those collections with the purchase grant. The amount that would come back to the Treasury with the 25 per cent. caveat would be minimal. The amount it would save the nation in terms of works of national importance being safeguarded would be immense.
  10.45 p.m.
  Mr. Nott: I thank my hon. Friends the Members for Cannock (Mr. Cormack) and Ipswich (Mr. Money) and the hon. Member for West Lothian (Mr. Dalyell) for the pleasing remarks they have made about the clause. My hon. Friend the Member for Cannock commented on the explanatory note which is being prepared. I am glad to tell him that this is at an advanced stage and a draft has been sent to the reviewing committee of the Standing Commission on Museums and Galleries. There will be consultations on this draft.
  Both my hon. Friends then referred to the change that we made last year, and we debated it at some length. I am aware that there has been a little disquiet on the part of the national institutions about the change that we made. But I feel, and I felt last year, that there were good grounds for encouraging a wider distribution of works of art round our provincial museums and galleries. As my hon. Friends know, that was the purpose behind the change.
  Mr. Money: My hon. Friend is aware that it was the director of one of our great provincial galleries in the city of Birmingham who said specifically about this concession that the works offered in lieu go the rounds of the national institutions first, and then the country cousins are invited to the feast afterwards if there is anything left.
  Mr. Nott: That is a useful point. The system that we devised can be criticised. It is possible that we might have devised an alternative method. But our aim was to try to ensure first that we did not deny to a great national collection an important work of art, and secondly that we made it more possible for the provincial galleries to receive works of art which were likely to improve their own collections for the benefit of the public.
  As for the 25 per cent. rule, I know that my hon. Friends realise the result of this test. Taking the National Gallery as an example, its annual purchase grant is £480,000. If it were allocated a work of art, a group or a collection costing the National Land Fund £121,000, it would not have to reimburse the fund. If the value was more than 25 per cent. of its annual purchase grant, it would not have to reimburse the land fund. If it were less, the amount would have to be found out of the allocation to that national institution.
  I feel that it is not unreasonable that these great national institutions, with their grants, should be asked to find sums out of their own allocations where they do not form a very major proportion of their total annual allocations.
  Mr. Cormack: Obviously one can go some way with my hon. Friend, but, in the case of the National Gallery, most of the really important pictures it is likely to have the chance to acquire will fall somewhere in the region of £120,000 in any event, so the problem probably does not arise. But if one considers the National Portrait Gallery and realises that it is still possible to buy a very good portrait of some worthy not represented in the gallery—one thinks of the Wilkie Collins sold yesterday—for £1,000 or £1,500, surely these are the institutions which could be caught by this 25 per cent. provision. Does not it need a little further thought?
  Mr. Nott: I appreciate my hon. Friend's point. But there has to be some conflict, given the objective of distributing these works of art more widely, between the National Portrait Gallery, say, which is anxious to acquire for itself a specific work of art and a provincial gallery which would also like to receive it.
  In the last resort, this comes down to the allocation of funds which each gallery receives each year. I am afraid that on that I cannot go any further than I have already. Clearly the Government have a reasonably good record in this regard. Certainly I take note of the point that my hon. Friend the Member for Cannock makes about the 25 per cent. rule. We are aware of his views and those of some individuals in the great national institutions on this point, although this whole matter is not strictly within the terms of the amendment or those of the clause. In view of that, perhaps I ought to come to the matters which we are meant to be debating.
  Mr. Dalyell: I applaud the offer to help the provincial galleries. It is all very well to talk of the allocation, but may I ask whether it is appreciated that the allocation of the Scottish National Gallery, for example, is committed for the next two to three years?
  Mr. Nott: That is a wider point. It is a question of the sums which are allocated to particular galleries. I take the point that the hon. Gentleman would like the annual allocations to be greater. I have noted the point. I cannot go further on it tonight.
  The Government have no policy objections to Amendments Nos. 15 and 16. The corresponding amendments to the second part of Clause 38 are acceptable. The objection is that the amendments do not add to the existing powers contained in Section 34 of the Finance Act 1956 under which the Government can accept
  "any work of art which the Treasury are satisfied is pre-eminent for its aesthetic merit or historical value'.
  The phrase "aesthetic merit" is equivalent to the word "artistic" proposed in Amendment No. 16. The phrase "work of art" is already in the Finance Act 1956 which is not modified by Clause 38. Therefore, we have no policy objections to the amendments. However, I assure my hon. Friend the
  1464
  Member for Cannock that they are not necessary as they are already covered by legislation.
  The Government are prepared to accept Amendments Nos. 18 and 20 which seek to ensure that the powers to accept collections are exactly in line with the categories of object which can be exempted from estate duty under the Finance Act 1930. The addition of "works of art" will not add significantly to the power in the clause since the words "or other things" would cover items such as sculpture which would not come under other artistic categories such as pictures. The word "artistic" is acceptable to ensure that there is a corresponding reference in the power to accept collections to the "aesthetic merit" provision for individual works of art. If at the appropriate stage my hon. Friend will formally move Amendments Nos. 18 and 20 the Government will be happy to accept them.
  Mr. Cormack: I thank my hon. Friend for his extremely helpful reply. In view of what he has said, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Dr. Gilbert: I beg to move Amendment No. 13, in page 30, line 10, leave out 'national'.
  This is rather more than a probing amendment. It seeks to remove what appears at first sight to be a constraint in the wording of the clause as it stands. The clause provides that the Commissioners of Inland Revenue may accept any object
  "which the Treasury are satisfied is preeminent for its national, scientific or historic interest".
  The wording of the clause implies a distinction between something that is of national interest and something that is of historic interest. In other words, that is why the word "or" is there, rather than "and". It implies three distinct categories of criteria, and therefore an item could be of national interest without being of historic interest.
  There could be certain items which are of neither historic nor national interest but which could be of great regional or local interest and be suitable for inclusion in the types of goods with which

  1465
  the clause is concerned. I thought that the Minister touched on this in his reply to the first amendment when he referred to items of national or regional interest, but there is nothing in the clause about something being of regional interest, and the amendment is intended to remove what appears to be a constraint.
  Things might not be of historic interest in the sense that they are not 100 years old, but they could be of historic interest at some time in the future, and they could be of great local or regional interest. Perhaps I may give an example from my constituency where the Black Country Museum has just been set up. Many items are being contributed to the museum. Some items are of historic interest in a sense, but they are not particularly old some having been produced since the turn of the century.
  I have in mind tramways, old trams, early canal barges, chain-making equipment, locomotives, and so on. Locomotives are often themselves of regional interest. There are all sorts of items which are of great regional interest but not of any national interest. One could not say that they will have historic interest, though I hope that they will be caught under that provision. It is important to identify and preserve these things now, because they might be of historic interest in the future.
  That is the sole purpose of the amendment, and I hope that if the Minister cannot accept it he will give a clear assurance along the lines that we are seeking. If the Minister cannot accept the amendment, perhaps he will consider inserting "regional or local" as alternatives. I think that I have made clear the sense of the amendment.
  Mr. Nott: I think that I can satisfy the hon. Gentleman, because our objection to leaving out the word "national" is that to do so would narrow the position. I am sure that the hon. Gentleman is concerned to keep the provision as wide as possible.
  Dr. Gilbert: Yes.
  Mr. Nott: We feel that the omission of "national" from the clause would mean that some items would be exempted from estate duty under
  1466
  the "national" criterion, but would not then be eligible for acceptance in lieu of estate duty. While many acceptable objects forming part of the national heritage would be classified as historic or of aesthetic merit, some major items might escape both definitions and run the risk of being exported if they could not be accepted in lieu of estate duty and if the public collections lacked the funds to buy them.
  I assure the hon. Gentleman that the word "national" has been in this legislation for a considerable time. We are not seeking to make any change in the legislation which has governed these matters. If "national" were taken out, the definition of the clause would be narrowed. I cannot immediately think of an item which would be national and yet would not be historic or of aesthetic merit, but we want to keep the clause wide on the basis of what it has always been.
  Dr. Gilbert: If we are trying to achieve the same objective, will the Minister undertake to insert the word "regional" at a later stage? If "national" and "historic" are exclusive categories, as the clause indicates they must be, there may be items which are not of historic or national interest but which are of regional interest and ought to be part of important collections.
  11.0 p.m.
  Mr. Nott: I take the point, but as we discussed earlier, the test is: would the item be a pre-eminent addition to a public collection? I do not think the hon. Gentleman's fears are necessary. However, if on further consideration I find any grounds at all for concern I will let him know, in writing if I may.
  Dr. Gilbert: I thank the Minister for that assurance and beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Dr. Gilbert: I beg to move, Amendment No. 14, in page 30, leave out lines 12 to 15.
  The First Deputy Chairman: With this we shall also take Amendments Nos 17 and 19, in page 30, line 12, after 'collection', insert 'or group', and in line 14, after 'collection', insert 'or group'.
  Dr. Gilbert: I would wish hastily to reassure hon. Members on both sides that Amendment No. 14 is intended only as a probing amendment. We are interested to know precisely what power paragraph (b) gives to the Treasury which paragraph (a) does not.
  We understand that a collection, as such, can be of interest simply by being a collection and that a collection may be of more value than the sum of the values of the individual component parts. We want a real reassurance that the Treasury will not be blackmailed into accepting a whole load of junk in some circumstances as the price of getting a few good pieces. That is what lies behind this amendment.
  Mr. Money: I wish briefly to call the attention of the Minister of State to the anomaly in the phraseology of Clause 38. As my hon. Friend the Member for Cannock (Mr. Cormack) rightly said, the phraseology of the part of the Finance Bill seems to arise out of Section 40 of the 1930 Act which was specifically concerned with exemption from estate duty.
  This is concerned with the offering of objects in lieu of estate duty, which raises a different type of problem. I should like to make clear to my hon. Friend the many types of worry which might arise in the mind of a testator about whether a group of objects makes a collection or not.
  I specifically recommend to him, in the interests of ceramic history, the hon. Member for Smethwick (Mr. Faulds)—
  Mr. Andrew Faulds: In view of the need for historical accuracy about these things I must point out that I had to sell my ceramic collection simply because I came to this place.
  Mr. Money: Many sacrifices are made by the hon. Member for Smethwick to come into this place, just as there have been many sacrifices by this place to retain him.
  In the interests of all of us who collect what might be called, particularly in the truncated sense used by the hon. Gentleman, groups of objects rather than collections, I hope my hon. Friend will say that he can accept these amendments.
  Mr. Nott: The clause—[HON. MEMBERS: "Say 'Yes'."]—I cannot accept
  1468
  the amendment, because we should be in a very much worse state than we are now if I were to do so.
  One of the two main restrictions in the Finance Act 1956 power to accept objects in satisfaction of estate duty was that it was limited to the individual preeminent work of art and did not extend to collections some items of which might not be pre-eminent individually.
  We cannot accept the amendment, because the proposed deletion of the power to accept pre-eminent collections would be serious. We are endeavouring to make it possible for collections to be accepted. Under the present position, in some circumstances it is limited to individual items and we want to say that the collection as a whole may be accepted. The effect of the amendment would be serious, because it would severely limit what we could accept. I know that that is not the intention of the hon. Member for Dudley (Dr. Gilbert).
  The Government are happy to accept Amendments Nos. 17 and 19, because they will add an intermediate category between the individual work of art which may be accepted under the Finance Act 1956 and the individual object which could be accepted under Clause 38(a), and the collection which could be accepted under paragraph (b). These amendments are desirable for the Treasury and for individual museums.
  Mr. Cormack: I am grateful to my hon. Friend for accepting the amendments. Does this mean beyond doubt that anyone possessing a very fine collection will be able to leave it to one, two or more institutions in various groups?
  Mr. Nott: I need to give that point consideration, because it raises the question of the procedure for acceptance of the individual groups of works of art within the total collection. What is helpful about my hon. Friend's amendment is that it enables the Government to accept the whole of the collection offered by an estate or a particular part of it. I will have to check whether the amendment would enable a single collection to be split up into different groups and offered to different galleries. I think that that would be possible under what we intend.

  1469
  I must refer the question to my advisers and I will advise my hon. Friend in writing whether my initial reaction is correct.
  Dr. Gilbert: It is clear that the combination of Tellers for the Ayes and Tellers for the Noes on a previous occasion has proved irresistible to the Minister of State, who clearly cannot refuse them. I congratulate the hon. Members for Ipswich (Mr. Money) and for Cannock (Mr. Cormack) on having had far more success than the Opposition have had, though I am glad that we have spent more time talking about hanging objects and works of art than we have about hanging people.
  Having said that, and in view of the Minister of State's very helpful explanation, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made: No. 17, in page 30, line 12, after 'collection', insert 'or group'.
  No. 18, in line 12, at end insert 'works of art'.
  No. 19, in line 14, after 'collection', insert 'or group'.
  No. 20, in line 15, leave out 'or historic' and insert 'historic or artistic'. —[Mr. Cormack.]
  Clause 38, as amended, ordered to stand part of the Bill.
  Bill (Clauses 3, 4, 10, 12, 18 and 38) reported, with Amendments; to lie upon the Table.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.— [Mr. Fortescue.]

  METROPOLITAN POLICE (INVESTIGATION OF COMPLAINTS)
  11.10 p.m.
  Mr. Ian Mikardo: I take as my text for the short observations that I shall make at this late hour the words of the Secretary of State for the Home Department on Second Reading of a Private Members' Bill moved by my hon. Friend the Member for Derby. North (Mr. Whitehead) in a speech which won the warm approval of the whole House.
  1470
  The right hon. Gentleman said:
  "As Home Secretary, I must stand up for the police—for the 999 police officers of all ranks"—
  I suppose he meant, "out of 1,000"—
  "who do their work for us with outstanding integrity as well as courage and a very high sense of duty. However, if I am to do this and to carry conviction with the people in doing it, I must also be able with confidence to tell people that the rare black sheep among the police forces will be sought out and dealt with without fear or favour and without any suggestion of matters being covered up."— [OFFICIAL REPORT, 23rd February 1973; Vol 851, c. 994.]
  Such suggestions, of things being covered up, are widely made and are widely held, not least in East London, the part of this great metropolis with which I am most familiar.
  That is an area where the police force has no easy task and where a policeman's lot is by no means at its happiest. But for that very reason it is an area where the police, overstretched and under-manned as they are, most need the confidence of the general public if they are to carry out the tasks allotted to them.
  One matter that I want to raise is the time it takes to investigate complaints against the Metropolitan Police. I am not referring here so much to inquiries carried out under the Section 49 procedure, because that procedure is laid down in detail in law, has many stages and is inevitably a long-drawn-out procedure. However, even on those inquiries, I know of two or three cases in which the time could reasonably have been halved without interfering at all with the procedure or cutting any corners. What I am thinking of much more than the Section 49 procedure is the simple business of getting a report from the Commissioner.
  In common with other hon. Members, and especially those who represent constituencies within the Metropolitan Police area, I have had the experience from time to time of directing the Home Secretary's attention to some complaint against the police, in the same way as every hon. Member from time to time directs the attention of other Ministers to some complaint against the workings of a Government Department.
  In the last couple of days I have examined all my files. I have been a

  1471
  Member of the House for a long time and I have taken up a great many cases. I find that the average time taken to get replies from the Home Office in cases involving the Metropolitan Police is more than twice as long as the time taken to get replies from all other Ministers on all other types of case.
  I am not talking about Section 49 where people are tied down by the procedure. I am talking about exactly parallel situations in which a Minister has to get a report from the chief officer and pass it on to an hon. Member who writes to him. Getting a report from the Commissioner should be exactly the same as getting a report from the office of the Department of Health and Social Security in my constituency. But it takes more than twice as long.
  What makes matters worse is that the reply is nearly always totally uninforma-tive. One waits for eight to 10 weeks, and sometimes for three months, for a simple report. But then it says nothing. The reply gives a verdict without backing that up with evidence or argument. Almost invariably the reply states the Commissioner's or the Home Secretary's conclusion on the complaint. But the Home Office treats hon. Members with contempt in that an hon. Member is not considered sufficiently competent to be told of the considerations which led to the conclusion of the Home Secretary or the Commissioner on the complaint.
  That is not the case with any other branch of our public life or any other sector of public servants. I know of no other branch of our public life or sector of the public servants in relation to which a Member of Parliament puts forward a complaint and is told "We have looked at it. We do not think that it is right. But mind your own business about the reasons which led us to that conclusion."
  When one is dealing with the public it is not the soft, quick answer but the clow answer which arouses suspicion. The delay and the fact that the reply, when one gets it, is so uninformative give substance and encouragement to suggestions of cover-up and whitewash.
  I have said that no other sector of our public life and no other group of
  1472
  public servants are so relieved of examination as this group. In no other sector can a public servant be so totally absolved from the consequences of his errors or even the consequences of improper activities.
  I should like to quote to the House the case of one of my constituents. I shall not mention his name. The Minister of State knows the name. As I do not want to cause any further difficulty, I shall not mention the names of the police officers who were involved in the case. The Minister of State knows the case because I put down a Question to him about it.
  It concerned a constituent of mine who was wrongly arrested, taken to the police station, examined by five police officers— a police constable, two detective constables and two detective sergeants—and beaten up very badly, to the extent that he could not go to work. He complained about this, and, according to the reply which the Minister gave me a few weeks ago, my constituent's complaints
  "were duly investigated under Section 49 of the Police Act 1964. The Director of Public Prosecutions advised that the evidence was not such as to warrant criminal proceedings against any police officer. The Commissioner … after considering the evidence … decided that no disciplinary action was justified."— [OFFICIAL REPORT, 13th March, 1973; Vol. 852, c. 333.]
  In 999 cases out of 1,000 that would have been the end of the matter and my constituent would have been branded as a liar, as a man who made accusations against the police which did not stand up. But in this case my constituent proved himself to be the one citizen in 1,000 who knew his rights, who believed that it was his civil duty to assert his rights, and who was prepared to spend time and money in asserting his rights. So he sued the police officers for damages.
  In an action heard in January this year in the High Court my constituent was awarded £950 damages against the five officers for the assault which they had made upon him. Included in that amount was compensation for the loss of his earnings when he could not go to work because he was so badly beaten up. In addition, he was awarded a further £100 damages for wrongful arrest.
  So it became clear as soon as the matter was subjected to examination under our proper judicial principles

  1473
  under which evidence has to be sworn to that it was not my constituent who was the liar, but the officers who were the liars, that it was not he who was making a frivolous complaint, but they were.
  Let us be clear what the verdict of the court was. The five officers faked an arrest. That is what the court said. They beat the man up. Having done that they lied to the investigating officer. They must have lied or the investigating officer would not have found that there was nothing wrong with their behaviour. In spite of that, no disciplinary action has been taken against them. They have not even been reprimanded. One of the five, a detective sergeant, has since left the force. I would love to know why, but we shall never be told. The four others are there doing the same jobs without a word of reprimand.
  I should like to know in what other walk of life anybody would get away with that. That is why the Home Secretary must get a move on to bring in the new proposals he promised in the debate on 23rd February, and he should do that not only in the interests of the public but in the interests of the police. The police need the confidence of the public, and they are not going to get the confidence while cases such as the one I have quoted, stinking to high Heaven, are still happening.
  Therefore, I add my voice to those who in the House a few weeks ago were urging the Home Secretary not to use the process of consultation as an excuse for procrastination. We know he has to consult people before changing the arrangements. I hope he will not consult only the police. I urge him not to allow the vested interests that he must consult to bar the way to progress. The majority of our police are men of integrity who are doing a fine job. They can do that job only if the public is behind them. We should remove this hangover of a century which has driven a gap between the police and the public, this business of them being the only people who are judges of their own affairs.
  11.25 p.m.
  The Minister of State, Home Office (Mr. Mark Carlisle): The hon. Member for Poplar (Mr. Mikardo) has raised the
  1474
  whole issue of complaints and the administration of the complaints procedure. My right hon. Friend the Secretary of State for the Home Department announced in February that he is proposing to set up an ex post facto inquiry into the procedure of police complaints, which would include an independent element. I can assure the hon. Gentleman that the Home Office does not intend to delay. As my right hon. Friend said, it is necessary to enter into negotiations, discussions and consultations with the police service and the police authorities with a view to working out and introducing the arrangements that he proposes. The timetable which he announced still stands.
  The hon. Gentleman mentioned a case concerning one of his constituents. He said that one of the officers concerned in that case had since retired from the police force. He asked to know the basis on which that officer had retired. I am told that it is right that one of the officers concerned in the case which the hon. Gentleman has mentioned has retired since the incident which gave rise to the hearing. The officer who resigned was a detective constable. He resigned from the police force because of illness following a heart attack that he suffered in 1969.
  The Police Act 1964 requires that any complaint made by a member of the public must be recorded and investigated. That investigation is not a matter for my right hon. Friend, but a matter wholly for the chief officer of the area concerned. That investigation is set out clearly by Section 49 of the Police Act.
  The hon. Gentleman referred to the fact that there are often delays in receiving reports from chief officers of police when hon. Members write to the Home Office. The cause of much of that delay—I accept that it is substantial in many cases—is due to the care and the thoroughness with which any complaint by the public is investigated by the police. When I tell the hon. Gentleman that, for example, in 1972 there were 5,671 complaints made against the Metropolitan Police and 15,543 complaints made against all police forces, and that 95·8 per cent. of the complaints made against the Metropolitan Police and 91·4 per cent. of those made against all forces were found to be unsubstantiated, he will

  1475
  realise that a great deal of the time of senior officers is taken up in investigating complaints which in the end prove to be unsubstantiated. The other 4 per cent. were found to be substantiated.
  When such a volume of complaints is referred to the police, and have to be dealt with by the careful scrutiny under Section 49, it is inevitable that a certain amount of time must be taken up in proper investigation, and those complaints which are justified are affected by the volume of unjustified complaints which are also made.
  Mr. Mikardo: We are talking different languages. The hon. and learned Gentleman and I need an interpreter between us. He says that there are all these complaints and that over 90 per cent. have been proved unjustified, and argues that for saying that complaints were frivolous. That is rather like Stalin's votes at elections. No one believes it. It is too good to true. The case of my constituent and similar cases in Leeds and Sheffield prove that point.
  Mr. Carlisle: I do not think that it proves that point. I will stick to the fact that, after thorough investigation, over 95 per cent. of the complaints against the Metropolitan Police in 1972 and over 90 per cent. of the complaints against all police forces were found to have been unjustified.
  Mr. Mikardo: By whom? By policemen.
  Mr. Carlisle: Of course by policemen. The hon. Gentleman must accept that the only body which can inquire into complaints made against the police in this country is the police, who we trust to carry out all other complaints against individuals.
  I accept, as my right hon. Friend has accepted, that there is a need for an independent element in an ex post facto review of the investigation of complaints, but having thought about this very carefully, I do not believe that there is any body other than the police which could carry out the investigations of complaints against the police themselves.
  I believe that the investigations are thorough and that the independent
  1476
  element in all ex post facto inquiries into the investigation of complaints will find that the police in the vast majority of cases investigate very closely into the allegations made against policemen.
  The hon. Gentleman asked who can do it. In the Metropolitan Police, there is now a procedure for dealing with complaints, which was set up by the present Commissioner, Sir Robert Mark, under the general supervision of A Department of New Scotland Yard. It is directly responsible to the Deputy Commissioner. That procedure was designed to ensure that the investigations should be clearly seen to be absolutely impartial, that investigating officers of the appropriate rank and experience are always appointed, and that the investigating officers have no operational responsibility for or in connection with the officers against whom the complaints are directed. The General Orders of the force provide that the investigating officer must in general be serving in a different division or branch from the officer complained against.
  Within A Department is A10 Branch, which became operational on 1st June 1972. It was set up specifically to investigate all serious complaints. The branch is composed of senior officers specially selected for their experience and suitability to carry out the most important investigations. In this context, "serious complaints" includes allegations of crime and those which also have serious implications as a result of the circumstances, the number or rank of the officers involved, or the extent to which the complaint has been the subject of publicity. All such cases are now referred to the A10 Branch of the Metropolitan Police.
  If I may move rapidly to the case raised by the hon. Gentleman about his constituent, I understand his concern about this matter. I must tell him that in this case the Commissioner of Police decided that no disciplinary proceedings, just as the Director had decided that no criminal proceedings, should be taken against the various officers mentioned in the case. I am satisfied, having looked into the case, that it was thoroughly investigated by the police.
  The essence of the complaint against the police was that they had committed

  1477
  a serious assault which was not only a disciplinary offence but also a criminal offence. The investigation was conducted under Section 49 (1) of the Police Act under a then detective chief inspector. It was a careful and thorough investigation. As a result of it, as a result of interviewing all the people who it was considered could possibly give relevant information, a report was made which, in accordance with the Act, was referred by the Commissioner to the Director of Public Prosecutions. The Director advised that no criminal proceedings should be instituted against any of the police officers concerned. That decision was reached by the Director not only after his own careful consideration of the facts but after consulting Treasury counsel.
  Of course it is right for the hon. Gentleman to say that since then a civil action has been successfully taken by the individual complainant against the police, but I must point out that there are two major differences. First, in civil proceedings the complainant does not have to establish that any individual officer of the officers concerned was responsible for the assaults, whereas the Director would have to be satisfied that there was evidence against any individual officer before bringing criminal proceedings.
  Secondly, the burden on the complainant is lower in a civil action than in a criminal case; and on the view of the investigation which was carried out the Director was satisfied, after consulting Treasury counsel, that there was no case to bring criminal proceedings.
  Mr. Mikardo: Is the Minister saying that the High Court was wrong?
  Mr. Carlisle: Not at all. I am saying that the issue before the High Court was slightly different from that which the Director had to consider I am saying also that, the Commissioner of Police being faced with the decision of the Director and asking himself whether disciplinary proceedings would be appropriate, it would be wrong for chief officers of police to bring any form of disciplinary proceedings which related to the same facts as had gone before the Director of Public Prosecutions on the basis that a lower burden of proof was necessary in disciplinary proceedings than was necessary in criminal proceedings.
  Mr. Mikardo: How wonderful if one can get away with it!
  Mr. Carlisle: I believe that this was before A10 Branch was brought into existence but I am satisfied that a thorough investigation was made of the case and that the Commissioner acted on the advice he received from the Director and from senior Treasury counsel.
  I am particularly satisfied also that, with the advent in June 1970 of A10 Branch, set up to investigate serious allegations of crime against the Metropolitan Police, the procedures for investigating complaints against the Metropolitan Police are working satisfactorily. The public should realise that complaints against the police are fully investigated and that where a bad policeman—if that is the right word—is found as a result of that investigation, appropriate action is taken.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to Twelve o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS
  South Africa (Departmental Staff)
  South Africa (Departmental Staff)
  Commonwealth Sugar Producers
  Commonwealth Sugar Producers
  Turks and Caicos Islands
  Turks and Caicos Islands
  Pakistani Prisoners of War
  Pakistani Prisoners of War
  World Fish Resources (Conservation)
  World Fish Resources (Conservation)
  Zambia
  Zambia
  Somalia
  Somalia
  European Development Fund
  European Development Fund
  World Population Institute
  World Population Institute
  India (Drought)
  India (Drought)
  Sudan
  Sudan
  Overseas Aid
  Overseas Aid
  Overseas Development Administration
  Overseas Development Administration
  General Agreement on Tariffs and Trade
  General Agreement on Tariffs and Trade
ENVIRONMENT
  A57, South Yorkshire
  A57, South Yorkshire
  Local Government Reorganisation (Yorkshire and Humberside)
  Local Government Reorganisation (Yorkshire and Humberside)
  Road Building (Warwickshire)
  Road Building (Warwickshire)
  Derelict Land (East Suffolk)
  Derelict Land (East Suffolk)
  World Environment Year
  World Environment Year
  Council Rents
  Council Rents
  Ordnance Survey Maps
  Ordnance Survey Maps
  Drink and Driving
  Drink and Driving
  Railways (Financial Support)
  Railways (Financial Support)
  Coast Protection
  Coast Protection
  M11 (Contracts)
  M11 (Contracts)
  Surplus Land (Local Authority Sales)
  Surplus Land (Local Authority Sales)
  Radioactive Waste (Disposal)
  Radioactive Waste (Disposal)
  Council House Building (Durham)
  Council House Building (Durham)
  House of Commons (Accommodation)
  House of Commons (Accommodation)
  Option Mortgage Scheme
  Option Mortgage Scheme
  Housing Subsidies
  Housing Subsidies
  Fatal Road Accidents (EEC Countries)
  Fatal Road Accidents (EEC Countries)
SCOTLAND
  Airfields (Orkney)
  Airfields (Orkney)
  Housing
  Housing
  School Leaving Age
  School Leaving Age
  Mr. Gilhooley
  Mr. Gilhooley
  EEC Regional Commissioner
  EEC Regional Commissioner
  School Leavers
  School Leavers
  Auchinleck Health Centre
  Auchinleck Health Centre
NATIONAL FINANCE
  European Economic Community
  European Economic Community
  National Debt
  National Debt
  Value Added Tax
  Value Added Tax
  Mortgage Interest
  Mortgage Interest
TRADE AND INDUSTRY
  Developing Countries (Aid)
  Developing Countries (Aid)
  Tomatoes (Import Duty)
  Tomatoes (Import Duty)
  Seamen (Pay and Conditions)
  Seamen (Pay and Conditions)
  Institution of Heating and Ventilating Engineers
  Institution of Heating and Ventilating Engineers
  Pottery Imports
  Pottery Imports
  Steel Industry (Redundancies)
  Steel Industry (Redundancies)
  Chlordiazepoxide and Diazepam
  Chlordiazepoxide and Diazepam
  Industrial Development (Windscale)
  Industrial Development (Windscale)
  Advance Factory, Mosshill
  Advance Factory, Mosshill
  EEC Regional Commissioner
  EEC Regional Commissioner
  Building Grants
  Building Grants
AGRICULTURE, FISHERIES AND FOOD
  Training Grants (Northern Ireland)
  Training Grants (Northern Ireland)
  Prices
  Prices
  WELSH LANGUAGE (COURTS)
  WELSH LANGUAGE (COURTS)
CIVIL SERVICE
  Government Publications (Liverpool)
  Government Publications (Liverpool)
  CIVIL SERVANTS (EMPLOYMENT)
  CIVIL SERVANTS (EMPLOYMENT)
DEFENCE
  Aircraft (Low-flying Training)
  Aircraft (Low-flying Training)
EDUCATION AND SCIENCE
  Urban Aid Programme (Liverpool)
  Urban Aid Programme (Liverpool)
EMPLOYMENT
  Retail Prices
  Retail Prices
  Steel Industry (Wales)
  Steel Industry (Wales)
  Leek
  Leek
  Industrial Accidents (Biddulph)
  Industrial Accidents (Biddulph)
  Industrial Disputes (Conciliation)
  Industrial Disputes (Conciliation)
NORTHERN IRELAND
  Brucellosis Grant
  Brucellosis Grant
  Public Authority Tenants (Rents)
  Public Authority Tenants (Rents)
SOCIAL SERVICES
  Medical Staff (Insurance)
  Medical Staff (Insurance)
  Retirement Pensioners (Incomes)
  Retirement Pensioners (Incomes)
  Hospital Land (Sales)
  Hospital Land (Sales)
  Children in Care (London)
  Children in Care (London)
  War Widows (Retrospective Pensions)
  War Widows (Retrospective Pensions)
  Hospital Patients (Family Visits)
  Hospital Patients (Family Visits)
  Dentist /Patient Ratio (Leek)
  Dentist /Patient Ratio (Leek)
  Drug Prescriptions (Staffordshire)
  Drug Prescriptions (Staffordshire)
  Tooth Decay
  Tooth Decay
  Reserve Pension Scheme
  Reserve Pension Scheme
  Old Trafford Limb-Fitting Centre (Closure)
  Old Trafford Limb-Fitting Centre (Closure)
  Cigarettes and Tobacco
  Cigarettes and Tobacco
  Supplementary Benefit (Household Repairs and Insurance)
  Supplementary Benefit (Household Repairs and Insurance)
WALES
  Educationally Subnormal Children
  Educationally Subnormal Children

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Salisbury.

POSTAGE STAMP SALES AT SEA
LORD MERTHYR: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is true that a foreign vessel on the high seas is prohibited from selling to its passengers British postage stamps for use at a British port; and, if so, why.
LORD DENHAM: My Lords, there is no such prohibition.
LORD MERTHYR: My Lords, I am grateful to the noble Lord, and I will not waste any further time but will pass on that information to the company concerned.

E.E.C. AND THE SUGAR INDUSTRY
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached at the Commonwealth Conference on the sugar industry.
EARL FERRERS: My Lords, the Governments of the developing Commonwealth countries, which were present, agreed to pursue a unified approach in the forthcoming negotiations on sugar with the European Economic Community, and they have set up a high-level Standing Committee for this purpose. They considered that the negotiations ought to be handled under a separate
638
timetable and that every effort should be made to bring them to an early conclusion. We reaffirmed our assurances to the Commonwealth, and the Conference unanimously welcomed the Community's intentions towards the International Sugar Agreement.
LORD BROCKWAY: My Lords, I thank the noble Earl for that very full reply. Is there not still a good deal of concern among the sugar producing countries about the effect of Britain's joining the Common Market? As these matters are mostly technical and statistical, might I forward to the Ministry the points that I have in mind?
EARL FERRERS: My Lords, I should be delighted if the noble Lord, Lord Brockway, would forward to me any points over which he is concerned. I would stress to him that Part III of Protocol 22 of the Treaty of Accession states that the Community will have as its firm purpose the safeguarding of the interests of all the countries referred to in the Protocol whose economies depend to a considerable extent on the export of primary products, and particularly sugar.
LORD BROCKWAY: My Lords, arising from that reply, may I ask whether the Minister has seen the very interesting proposal brought before the European Commission that there should be an insurance scheme which would stabilise the price of sugar and other primary products, and could not that be extended to Commonwealth countries which are not associated with the European Community?
EARL FERRERS: My Lords, this will doubtless be one of the many issues which will be discussed between the Community and the sugar producing countries.
LORD SHEPHERD: My Lords, can the noble Earl give an assurance that, if there is an Agreement on sugar between the developing countries and the E.E.C., before it is ratified by the Council of Ministers Parliament will be acquainted with its terms and possibly a debate may be arranged?
EARL FERRERS: My Lords, I will certainly draw the views of the noble Lord, Lord Shepherd, to the attention of my right honourable friend.

NATIONAL COAL BOARD: EXPENDITURE ALLEGATIONS
2.40 p.m.
LORD SHINWELL: 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 allegations by two ex-employees of the National Coal Board have been brought to their notice to the effect that between 1969 and 1972 an extra £70 million, that could not be accounted for by higher costs, was spent on materials; from which firms these materials were purchased, and who are the directors of the firms involved.
THE MINISTER WITHOUT PORTFOLIO (LORD
DRUMALBYN): My Lords, Her Majesty's Government are aware of allegations that the Board have bought too many spare parts at too high prices. These allegations were investigated by the Board's auditors who are appointed by my right honourable friend the Secretary of State for Trade and Industry. The auditors found that there was no substance in them, but recommended some minor improvements in procedures which the Board are considering. The auditor's report has been released by the Board.
The Board yesterday announced that Mr. E. C. T. Humberstone, Sir Henry Benson and Sir William Slimmings have been appointed as independent experts to conduct a general review of the Board's purchasing procedures. I have seen Press reports that a union representative has stated that the Board overspent by over £70 million but he did not say how this figure was calculated. I am assured by the Board that there is no justification for this statement.
LORD SHINWELL: My Lords, may I ask whether the noble Lord thinks it remarkable that in the first instance, round about the time that I asked my previous Question on the subject, the Board decided to refer the matter to their own auditors, who refuted the allegation? Now they have been forced to appoint an independent board to investigate because of allegations by two very high-ranking employees who, incidentally, have been dismissed from their employ
640
ment, at any rate temporarily. Is it not remarkable that this should have happened? Are not the Government concerned about it? I think that Members of your Lordships' House must be concerned, as I certainly am, about the credibility of public ownership, because that is a matter of primary concern. May we have an assurance that the Government will watch the process of this independent investigation and inform your Lordships' House of the consequences?
LORD DRUMALBYN: My Lords, as to the first point, the auditors were, of course, appointed because it was alleged that there was corruption or deliberate deception by suppliers, and they looked into that aspect of the matter. The committee that has now been appointed is looking into the efficiency of purchasing, which is a quite different matter. On the second point, which the noble Lord raised incidentally, I am informed that the employees have not been dismissed. As to the third point, of course the Government will watch the outcome of the investigation very closely because of their great interest in the success of the operations of the Coal Board. But it is essentially a matter for the Coal Board.
LORD SHINWELL: My Lords, will the noble Lord accept it from me that I am grateful for his latter assurance? In regard to the implication contained in the latter part of my Question, can the noble Lord explain this reluctance to disclose the names of the directors of the firms involved? Is he aware that when I asked a previous Question on the subject I was referred by the noble Lord to the National Coal Board, and he assured me that they would reply. That was several weeks ago, and I have had no reply. It is obvious that they consider me, as a Member of your Lordships' House, of no importance. That may well be so, but is not the subject one of primary importance?
LORD DRUMALBYN: My Lords, I am sure that no-one in this country would consider the noble Lord to be of no importance, and I am sorry to hear that he is still awaiting a reply. I shall try to expedite that for him. However, I think he will agree that, since the allegations are not accepted in any way, it would not be right or fair for me to name names in this respect.
LORD WIGG: My Lords, would the noble Lord not agree that, if there is a question of honesty involved here, it is not a matter for the auditors either of the Government or of the Coal Board, but a question for the police?
LORD DRUMALBYN: My Lords, in the first place, it would be necessary for the Board, possibly by the use of the auditors, to find out whether there was any evidence on which the matter could be referred to the police.

THE CORONET THEATRE
2.46 p.m.
BARONESS STOCKS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether in view of the present controversy concerning the listing of the Coronet Theatre in Notting Hill Gate, they consider that in such cases the Historic Buildings Listing Committee should contain a member with special knowledge of local and environmental feeling.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, my right honourable friend the Secretary of State for the Environment and I have every confidence that the present members of the Listing Committee of the Historic Buildings Council have the knowledge, experience and judgment to give the proper advice in cases such as this.
BARONESS STOCKS: My Lords, as a suplementary question may I ask whether the noble Lord is aware of the environmental conditions which are here concerned? If the noble Earl the Leader of the House will wait one moment, I can assure him that I am not reading a supplementary question; I am holding in my hand a picture postcard which has on it a date that I wish to quote accurately. Is the noble Lord aware that in Kensington 10,000 signatures have been collected, from mainly young people in the area, in support of their belief that the Coronet is, or should be, a viable theatre? Is he aware that they are supported in theatre
642
circles by such people as Sir Alec Guinness, the late Dame Sybil Thorndike, and many others? Is he further aware that there is strong support for the possibility of making the Coronet a viable theatre? Lastly, is he aware that on November 26, 1898, a publication called The Era described what was then the new Coronet as
"a theatre of which the County of London could well be proud"?
LORD SANDFORD: My Lords, I am aware of almost all of that. If there is such strong local feeling—and I know there is—the local authority, the Kensington and Chelsea Council, can deal with the matter by embracing this theatre as a conservation area and using the powers now available under Section 8 of the Town and Country Planning (Amendment) Act 1972 to deal with it. But I would confirm that my right honourable friend the Secretary of State and I have already received a deputation from the Theatres Advisory Council about the whole future of theatres in London, in general, and my right honourable friend has agreed to receive another deputation about this theatre in particular.
BARONESS STOCKS: My Lords, while thanking the noble Lord for his helpful answer, may I ask whether he is aware (and I am sure that in another connection he must be) that the Book of Common Prayer contains a service in which the priest is required to say:
"Cursed be he that removeth his neighbour's landmark. And all the people shall say, Amen"?
LORD MAELOR: My Lords, perhaps we should correct one observation made by my noble friend. She referred to Dame Sybil Thorndike as "the late Dame". She is, I think, very much alive.
LORD SEGAL: My Lords, would not the Government encourage as a general principle the maintenance of the activities of theatres away from the crowded areas of the West End? Is not this one of the theatres that serve a special population and should it not be encouraged to remain viable?
LORD SANDFORD: Yes, my Lords: I would agree with that as a general proposition.
BARONESS SUMMERSKILL: My Lords, can the noble Lord say how many

643
there are on the Listing Committee, and how many of these are women?
LORD SANDFORD: My Lords, there were seven at the time of the original decision, but the chairmanship and membership changed and there were five at the time when the Secretary of State asked them to reconsider their decision and they confirmed the original decision. There were no women on the Listing Committee on either of those occasions.
BARONESS SUMMERSKILL: My Lords, may I ask the noble Lord whether this is not one answer to my noble friend Lady Stocks? Will the Government not learn that the advice and help of women, particularly in matters of this kind, is an enormous contribution? Why do the Government continue to make mistakes and then finally amend these lists and invite women to join them?
LORD SANDFORD: My Lords, I can assure the noble Baroness that that point of view, which is ever before us, will be taken especially into account when we are considering new appointments to the Historic Buildings Council.
LORD KENNET: My Lords, is it not really the point that local authorities ought to have power to preserve any building anywhere if their people really want it, as in this case? The Secretary of State should have a reserve power behind that so as to avoid more and more of these socially useful buildings being swept away by the boring old developers and speculators.
LORD SANDFORD: My Lords, as the noble Lord knows, only last year we introduced for the first time power to control the demolition of unlisted buildings in conservation areas. I am sure the noble Lord will agree that was a useful step. In the course of the debate we are about to begin we can look into the suggestions he has just made.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, I wonder whether I might intervene for a second to congratulate the noble Baroness and my semi-kinswoman on the dexterity she has shown, as she almost invariably does, in staying within the strictest confines of our Rules of Order.

LORD DIAMOND: PERSONAL STATEMENT
LORD DIAMOND: My Lords, with the leave of the House, I desire to make a personal statement. During yesterday's debate on E.E.C. Regulations and the Professions, I stated that the view of the Committee of Vice-Chancellors was that there was no need to extend the existing arrangements for consultation. This was an error on my part, for the opposite view is held. I offer my apologies to your Lordships and my gratitude for giving me this opportunity for putting the Record straight.

HISTORIC TOWNS AND VILLAGES
2.52 p.m.
LORD RAGLAN LORD RAGLAN rose to call attention to the Report on Historic Towns and Villages of the Preservation Policy Group; and to move for Papers. The noble Lord said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper. The Motion itself is quite old; I first put it down for debate in December 1971, since when about 300 buildings on the Department of the Environment's list of buildings of historic importance have been pulled down. How many old buildings which the department has not managed to list and which might have been saved it is not possible to say, but it probably runs into thousands; and the destruction continues. The Preservation Policy Group was a Committee headed by my noble friend Lord Kennet which began in 1966 to examine what the Government could do to aid preservation and conservation. Their Report (which, I may say, is well written and concise) was published in May, 1970. It sets out what the legislative and administrative state of affairs was in 1966. It reviews legislation enacted since then: the Civic Amenities Act 1967; the Town and Country Planning Act 1968, though not of course the Act of 1972; the Transport Act 1968; the Housing Act 1969; and the administrative changes connected with them. Then there is a summary of the surveys commissioned on four historic towns: York. Chester, Chichester and Bath. There is a review of the position in other European countries and, finally, there is a discussion of what recommendations could be made, and a summary of recommendations.
The Report was promptly accepted by the then Government, the acceptance being published in the OFFICIAL REPORT of May 20, 1970, cols. 1163–4, in a Written Answer to my noble friend Lord Faringdon. I shall refer to that answer later. For the moment, I will only say that most of the legislation necessary for preservation and conservation is on the Statute Book already, but the will to use it has not been forthcoming where it matters so much, which is in the local authority planning offices. If the interest and awareness were there, a small fraction of the huge sums for which it seems to me Departments seem cheerfully to indent for dubious schemes such as the London Ringways would arrest the ruin of our historic towns and the older areas of our cities.
My purpose in this debate is to persuade the Government to press on with recommendations in the Report; that if legislation is lacking it should be framed; that they should use their influence to generate the will to use the existing powers; and that if money is lacking for that purpose it should be found. I am very encouraged that the noble Earl, Lord Jellicoe, is opening for the Government. Your Lordships know how much he has already contributed, including his taking the Civic Amenities Bill through this House. I have no doubt where his heart is; I only hope he can get the Treasury to fill it with gold. I should like to thank the noble Lord, Lord Sandford, for his help to me regarding this debate, including the mounting of the exhibition now in the Moses Room.
The list of distinguished people who hope to speak has been sadly depleted by enforced absence—for instance, the noble Lord, Lord Goodman, is down with the 'flu—but a most notable list is left, and your Lordships will be glad to see that the noble Duke, the Duke of Grafton, is in his place at last, after almost insuperable difficulties over establishing his identity. We are relieved to see that he is a perfect modern replica of the Earl of Euston, a leading preservationist for many years. I wish the noble Duke well in his speech, and I am sure your Lordships will not want him to be too brief on this subject which he knows so much about.
Only for archæological reasons should I wish to preserve a building just because it is old. Living as I have done in a
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house open to the public, the last thing I should wish upon anybody is that they should live in a museum—even a quasi museum. For me, it made the place stiff and unlifelike, and I am not "sold" on the idea of preserving old towns for the tourist trade as a primary reason, though the income must be a useful by-product to the towns concerned and to the country. The reason for the preservation of old towns is that people not only like looking at them; they increasingly like living in them. The Department's statistics now show that second-hand houses are fetching more than new ones. Perhaps I should not make too much of that interesting fact, because older houses tend to have more space for one thing, and to be better built for another. These statistics are a pointer to what I believe to be the case: that if the Government aid preservation they will not only be rescuing what is aesthetically and environmentally attractive; they will be making a good and profitable investment.
It is totally erroneous to dismiss the desire for preservation as a mere, cranky vogue for the antique. The reasons are much deeper. There is, for one a great dissatisfaction with much of contemporary architecture; it is harsh, ugly and discordant. I sense in much of new architecture a great contempt, a professional élite's contempt, (for the people who have to live among it. In the uncouth intrusions into pleasant townscapes there seems to be a wilful pleasure in causing disruption. Whatever the motives of the architects, the fact is that there is now widespread opposition to most redevelopment schemes, stemming as much from fear of what will be built as from distress at what will be lost. I am very well aware of the deep desire that there has been, especially in the great industrial areas, to sweep away the old and build new. It is easy to sweep away the old, and though new building has been very successful in many places under favourable circumstances, we have found it is not so easy after all and that frequently the old has been condemned for the wrong reasons. The house improvement grant, which has been so enterpriseingly taken up by some councils who have been renovating at half the cost of building new, may turn out to be as beneficial to conservation as any other

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single piece of legislation, because it has opened the eyes of so many people to the real reasons why they may have deemed their housing to be unsatisfactory.
One is constantly being told that a building has reached the end of its useful economic life but thousands of what are called "artisan cottages", let alone the bigger houses, were built as solidly as stately homes, and it should of course be clear that the longer a building has stood the more likely it is to be fundamentally a sound one. Surely there could not be any more satisfactory economic, creative and responsible task than to make good houses better, and at the same time to prevent any more depredations on our miserably low housing stock, and avoid disruptions to communities.
What then of the planning departments and their development schemes? In one way we are the victims of our own success. Parliament having created the most comprehensive planning legislation in the free world, administrative machines have grown up all over the country with immense powers to control development. I dread to think of the state of things now if that had not been so. Yet it needs only one or two insensitive people in charge of one of these departments to wreck a whole area, and very quickly, too. Planning departments have a life and momentum of their own. Once they have started, it is difficult to stop them. They do not like objections as objections mean delay and delay costs money and may cost jobs as well. But planning officers are public servants and they will listen eventually. They are tussling with catering for cars, the changing habits of shoppers, requests for communal halls, sports complexes and other provision for leisure, and so on. These are the things they are giving priority to; and one cannot blame them for that, because that is what people want.
How are they to be persuaded that it is not necessary to devastate a town in order to accommodate these things? The officers and committees need to have pointed cut to them the value of what they are spoiling. But, then, it is not easy to explain what it is that they are spoiling. It is far simpler to advocate making a definite concrete thing like a new road than to define the feeling of
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community in the area which that road will annihilate and the social intercourse which it will prevent. It is much easier to advocate the building of a new office block or a shopping centre than to defend the small houses which it will replace, which are set randomly together in a human size, a varied texture, of mellow aspect and intimacy. One says, "Look, this is how people like to live. Do they really have to have towers and windblown piazzas?" Planners are trained to do things, to change things. How does one say to a planner, "Please don't"? It can seem more interesting to think up a new development, believing it to be an improvement, than to study what really makes a town a desirable place to live in.
It is significant how strongly the conservation movement has been growing in every walk of life as the old buildings have disappeared. As well as the fear of what replacement may come (which I mentioned earlier) many dislike the change, which they frequently see as change for change's sake. Others are realising for the first time, and too late, why they had such an affection for a town. A town is a living organism, grown up with time. The older it is, the less rough surgery it can withstand; and it takes cunning and care, delicacy and sympathy, to adapt its fabric to modern circumstances.
Thanks to the continuous efforts over many years by amenity societies and by individuals I think it can be said that we no longer have to fear the loss of fine set pieces of obvious merit. It is the lower grade buildings which are the worry. I suggest that the nomenclature which is used for classification has itself an air of snobbery which may inadvertently contribute to the loss. Grade I—very important; Grade III—well, it really does not matter. Perhaps the Government will consider that point as there are hundreds of thousands of buildings which lack appreciation, it may be as works of art or as pleasant dwellings (and usually both) which make up the whole character of towns. Rows of cottages, Victorian and Edwardian terraces, buildings of all sorts from all centuries which, with no more than ordinary care, have more years of life in them than they have behind them. These are threatened everywhere, though their value to the community where they belong is immeasurable. In

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their way they create the community. They can be threatened as much by domineering, out of scale neighbouring development as by insensitive intrusion into their midst. Protected from this and adapted to modern use they can be made safe.
There is a growing apprehension, and often outrage, at what is happening. It is happening so quickly, for never has it been so easy to knock things down before public opposition has become articulate. I think the Government are in a difficulty: they know the situation but they are reluctant to move, and not just through diffidence in interfering in local authority affairs. Private developers, sectional interests as they are sometimes called, are traditionally Conservative supporters and they are making as much of a hash of things as anyone else. Conservative controlled councils are among the worst offenders of all.
But perhaps not enough members of the Government have so far seen the situation as being very worrying. There is no doubt in my mind that they have dragged their feet over accepting this Report. Although the Labour Government had accepted it this Government shelved it as soon as they came into Office, and it was only in January, 1971, that a circular went out in which the idea of the new type of general conservation scheme was accepted. It was only a "wait-and-see" type of document. It was not until August, 1972, that the money to pay for these general development schemes was got under the Town and Country Planning (Amendment) Act, and then, I fancy (though this is one of the questions I wish to ask the Government) the money made available for the schemes looks as if it is less than that proposed by the previous Government. I should like to quote from the Answer previously mentioned in which my noble friend Lord Kennet said:
"The Group recommend a substantial increase in the amount of grants made on the advice of the Historic Buildings Council for individual outstanding buildings and for 'town schemes'. We also propose an Exchequer Grant for historic areas which are to be the subject of a new type of general conservation scheme prepared by local authorities. This grant would meet half any net annual loss incurred by the authority on an improved scheme.
"The Government accept the Report. As a first step, the amount of grants which the
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Historic Buildings Council can recommend has been increased from £575,000 to £700,000 in the current financial year. At an early opportunity the Government will introduce legislation to enable the payment of the proposed new grant on general conservation schemes. It is impossible to forecast precisely how expenditure would run under these proposals, but my right honourable friend would regard a gradual increase up to a figure of £1½t million in 1973–74 as an acceptable rate.
"In the meantime, I am to-day inviting the local authorities in Bath, Chester, Chichester and York to discuss with me the possibility of joining in carrying out pilot general conservation schemes in those cities which were the subject of the Four Towns Reports."—[OFFICIAL REPORT, 20/5/70; col. 1164.]
So we lost two years and the money which would have been forthcoming for those years (and incidentally, Chichester has not yet come in on a pilot conservation scheme). The Government cannot make up the lost time and the potential conservation areas which must have passed away with it. But can the Government tell me this? The Report proposed that the Exchequer should meet half the cost of general conservation schemes and the present Government changed that. In what way do the Government consider their policy to be better than the proposal in the Report, and how much money is being made available towards it? In view of the worsening of the situation and the tremendous increase in building costs, is that money really enough? The Government have laudably increased the grants made available through the Historic Buildings Council, but by the same token are they really satisfied that it is nearly enough? I believe that we need a great deal more.
On No. 4 of the Report's recommendations, have the Government considered the possibility of a subsidy towards the repair of listed buildings not included in general conservation schemes? I think I interpreted the answer given by the noble Lord, Lord Sandford, this afternoon as meaning that they have. On Recommendation No. 5: in view of the greatly increased value of old houses I am not convinced that the Government need to guarantee advances from building societies, though discussions with them would obviously be useful. On Recommendation No. 6, I think that the Government should legislate at an early date to enable local authorities to charge owners when they themselves repair existing buildings. As to neglecting a building to

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realise "break-up" value, I am not sure whether that is done very often now, though I hope that a careful watch will be kept. Perhaps your Lordship will know of some instances of this happening. Recommendation No. 8 refers to the impact of new roads on historic areas and is obviously of prime importance. I should add that of course the provision of bypasses should be a matter of top priority. Heavy traffic damages buildings through vibration and physical impact, and the noise, smoke and danger to foot traffic engenders a rapid decay by making the building uninhabitable and unusable. The last Recommendations, Nos. 10 and 11, are to do with the very important matter of general education. The Government have done some good things but they could, with profit, do a great deal more. Has the excellent film made by the Civic Trust, but with a grant from the Government, which was shown here last night, called "A Future for the Past", been offered to the television circuits and to other cinemas? There must be many other ways in which general interest can be stimulated on how to set about good conservation.
The last Government more than doubled the number of Department investigators. Are the Government certain that there are now enough of them to help planning authorities with their schemes? Have the Government enough general staff to cope? Could not local authorities appoint trained conservation officers, at a suitably high grade, in the same way as many of them are now appointing landscape architects? Whatever the importance of responsibility of local planning authorities, the Government are themselves the ultimate planning authority and (the legislation mostly being already enacted) they must give a lead. They must find the money for what is not going to be a permanent drag on the Exchequer but is essentially a "pump-priming" operation. If a local authority will not submit to persuasion and offers of subsidies, the Government have the power to call in every planning application. But that would be a very clumsy thing to do continually. The Insall Report on Chester suggested a central historic buildings corporation to take charge of the disbursement of funds with the power to "acquire, repair and manage property, and thn to dispose of it
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efficiently". That sounds rather drastic but drastic measures may be needed in particular cases—and I am thinking of the City of Bath, which is an international treasure and where the appalling destruction has to be seen to be believed. For these cases I ask the Government to bear in mind the possibility of creating Historic Town Corporations, somewhat on the lies of New Town Corporations, and staffed by people who have a real understanding of the problems involved.
I commend this Report to your Lordships. I could say a lot more as there is so much in it that I should like to discuss but, in view of the list of speakers, more discussion by me would be superfluous. I hope that the Government will act with speed and energy on its recommendations and will feel obliged to do much more than just take a careful note of what your Lordships say this afternoon. My Lords, I beg to move for Papers.
3.18 p.m.
VISCOUNT ESHER: My Lords, I am not going to speak at great length this afternoon because I am particularly anxious to listen to other noble Lords who have put their names down to speak in this debate. I am particularly pleased that one of those speakers is the noble Duke, the Duke of Grafton. The noble Duke succeeded my father as Chairman of the Society for the Protection of Ancient Buildings, after my father had served in that capacity, I think for 28 years. I see no reason why the noble Duke should not serve just as long actuarially and from every other point of view, and I hope that he will. We all know him as a passionate defender of our historic towns and cities. He has a sharper style than my father had, but in this day and age I am afraid that one needs that.
The noble Lord, Lord Raglan, has chosen a very opportune moment to introduce this debate, because as I see it the conservation movement in this country has recently moved into a completely new and quite different phase. Until lately conservationists—as we like to call them now—all over the world, and particularly on the continent of Europe, thought of the protection of ancient buildings as essentially something to do with what they described on the Continent as monuments and science. These listed buildings were thought to be what it was

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all about. Agencies of all kinds were set up to get to work on this and of course this country, as we all know, was well to the fore in this movement. I think that by and large one can now say that in so far as the protection of our great buildings is concerned the situation is more or less under control. The great houses, through the heroic efforts of the National Trust and the Historic Buildings Council, with a few tragic losses, can be regarded as secure. Our parish churches, which were terribly at risk until a year or two ago, are now covered by machinery which, though cumbersome, and even divisive, I think can be relied on to ensure that we shall not lose any of our beautiful and romantic parish churches.
When I say that a new stage has been reached I mean that we have come to realise, through a process of disillusion, that just looking after historic monuments is nothing like enough. This disillusion has taken perhaps two forms: the disillusion of architects with the commercial and financial pressures under which they have had to work in our cities, and the disillusion of laymen with architects. The noble Lord, Lord Raglan, just now gave us a characteristic illustration of that feeling that so many have about my profession. I do not want to defend it at any length, except just to say that I do not think it is ever right to criticse the whole of a group of people collectively. The fact is that our New Towns, our new schools, the work done by the old London County Council since the war, have an international reputation, unmatched, I think, in any other country. The fact also is that architects of all generations have been deeply involved in the conservation movement, have been members of every conservation society, and all of us who try to build in this difficult world are equally concerned, even more concerned, with the buildings we inherit.
But, that said, it is true that many of us have begun to care more about what we inherit than what we make; I know that is true in my personal case, and I often ask myself why. Of course, it is easy to regard it as a symptom of advancing age. In fact, strangely enough, that is not the case. The people who are most concerned about the protection of our environment are the young. It is they who are out in front demon
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trating whenever a building that they think livable is going to be destroyed. The movement of conservation is now not just a matter of conserving monuments but conserving the whole of the artefacts of human beings and indeed the whole of our planet. This is the change that has taken place, and in this count-try once again I hope and believe that we are in a position to take a lead in the world, because we are fortunate enough to possess towns that are more livable, more human in scale, more suitable to adaptation than those of any other country in Europe.
Compared, for example, with the problems of the Italians, whose beautiful hill towns and ancient mediæval cities are real slums and are really pitch dark and are really scarcely habitable by people of the 20th century, our villages, our country towns, are eminently livable and we are in a very strong position to show the world how to do it. So I think that all architects and planners and conservationists these days think of conservation much more broadly than we ever did before. We see the conversion and improvement of old houses, the renewal of whole neighbourhoods as a part of conservation, and consequently we see conservation as a part of planning, not separable, not a separate activity. If it is a part of planning, it has to fit into the economics of planning, into the cost-benefit studies in which planning to some extent consists. If one approaches it in this way one is bound to be slightly suspicious of the concept of conservation areas. For example, that half the Royal Borough of Kensington and Chelsea should be a conservation area, the half that the better-off live in, whereas the other half is not, seems to me to divide that great part of western London artificially and socially undesirably. There are parts unlisted in North Kensington equally good, equally livable, but written off for a variety of reasons, not all of them, I think, correct in principle. But still we have these conservation areas and I think we ought to look rather closely into what they mean in economic terms.
What one is doing with a conservation area is to take it out of the market. One is taking large areas of our cities away from the forces which historically have shaped them all through the centuries, and applying to them what one,

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I suppose, could fashionably call dirigiste economics—all the rage at the moment, but not necessarily the right thing to do unless one knows very clearly what one is doing and has a carefully thought out technique for doing it. I should like to suggest very briefly the sort of considerations that this involves.
I think that the economics of conservation must in principle boil down to this: to conserve by planning so as to avoid having to conserve by spending. Old buildings disappear, broadly speaking, for two reasons: either an excessive demand for their sites so that their sites become more valuable than they were, or an inadequate demand for them for building for any possible human use—if you like, overloading of demand or underloading of demand. By planning, we can temper the wind to the shorn lamb, and perhaps I may give one or two examples of what I mean. If we take population, there is no question that if one allows an historic city to grow too much and too fast the threats to its core, what we know it by, will become almost unbearable and uncontainable. The classic example of this, of course, is Oxford. But now every modern capital is in the same state, and it is tragic to see what used to be small historic capital cities, like Rome, like Bangkok, like even the little Baroque city of Quito in Equador, because they are the capitals of their countries, subjected to pressures which their centres cannot contain.
Those of your Lordships who, like me, do not read the Daily Express may not have seen Osbert Lancaster's cartoon today, in which a squirrel speaks to a little deer in a Green Belt and says, "I told you this was all eyewash". We know of the pressures of space and the need for housing. None of us must turn a blind eye to those pressures. It is a sad thing that this rampart which has held us within reasonable bounds is now to be breached. Right or wrong, beautiful or plain, the Green Belts are critical elements in the fight to contain the size of cities and therefore to reduce the pressures on their centres.
I have spoken of population as one danger to the historic core of a town or city. Another planning factor which can be played to protect historic buildings, if
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it is played aright, but can certainly be played wrong, is zoning; the location of new development. If a multi-storey car park is built a few hundred yards from the centre of an old town the pedestrian route from that car park to the centre will inflate the value of properties on that route overnight and old buildings, if they happen to be on that route, will become supermarkets. One must therefore be very careful where one puts such a route because the pressures on those old buildings will be more than they can stand up to if they find themselves in the way of that kind of commercial development. Again, the plot ratio technique, invented I think by the noble Lord, Lord Holford, some years ago, can be used to protect old buildings and can be used to destroy them. The great city of Glasgow survives almost intact as a Victorian city for the simple reason that it has refused to allow redevelopment at any higher plot ratio than exists on the site at present so there is no incentive to destroy the solid Victorian mansions and office buildings in the heart of the city, but if there is money to be made out of those buildings they will go.
Finally, and most dramatic and most familiar to your Lordships—traffic. Anyone who drives out to London Airport will have seen how a plain but decent late Victorian crescent on which the Cromwell Road extension has been aligned, as an architectural concept which seemed quite sensible, has in fact been turned into a slum by the noise of the new road which has made it totally uninhabitable. This is true of the radial routes out of all our cities. You cannot combine living and traffic on that sort of scale. In the little country town of Wallingford, which I am glad to find is to be the capital of the district in which I live, there is a Georgian inn called "The Lamb" which some of us were involved ten years ago in protecting from destruction. It lies at the central crossroads of that fundamentally Roman little town, and we won. It is just still there but this word "erosion", generally used figuratively, applies literally and physically to "The Lamb" at Wallingford. This building is now a ruin simply from the pressure of heavy vehicles passing within a few inches of its walls and very often actually hitting them, and until Wallingford receives its by-pass its historic buildings may be

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saved theoretically but will be lost in reality. Everyone therefore must welcome the Government's decision of a year or two ago to give special priority to road projects in historic towns.
This road business at the moment is going through in the public mind a period of anxiety and I think misunderstanding. A powerful combination of opinion has been formed to oppose all new road construction, and it is powerful because it combines the working-class inhabitants of what in some circles is called the urban ghetto, with the articulate middle class looking for a political cause, and it is easy to whip up feeling in those areas against roads, to describe the motor-car as a kind of middle-class symbol and to elevate the bus as a working-class symbol. I think we must keep cool about this and do all we possibly can to avoid this extraordinarily difficult problem taking on a political tinge. I myself, like all of us, am torn in two by the problem of new roads. As long ago as 1958 Sir Basil Spence, when he was President of the R.I.B.A., and myself appeared on television to warn the people as best we could about what lay ahead. The fashion for spaghetti junctions in the United States was at its peak—they had not yet hit this country—and it seemed opportune that public opinion should be alerted, but this does not mean that no roads should be built.
In my opinion, the Buchanan theory of the need to strike a subtle balance between accessibility and environment, in his phraseology, has never been dented. I think Sir Colin is worth ten of all his opponents put together and I totally disagree with those who regard him as a philistine who is prepared to lose beautiful cities in the interests of the motor-car. It is so easy to talk about the motor-car when what is also at stake of course is the lorry, the heavy transport and the servicing vehicles which all cities have to accommodate. It is a great load of traffic which we have to contend with and the motor-car is by no means its only element. We need to strike a balance in this matter. Adequate accessibility is absolutely vital to the survival of our historic cities. Without it we shall have the American style of dead centres and hypermarkets out in the country.
In the case of York, I have always thought it was essential that York should
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remain a shopping centre and that it was not feasible or desirable to move that thriving, happy and industrious shopping out to the fringe of the city. It must also be a place for living in and neither of those aims is achievable without the construction of roads. Perhaps your Lordships will forgive me if I read two sentences out of my report on York.
"Benefits can only be claimed if the job is earned through and carried through entirely. In conservation, as in other fields, there are economies of scale and fatal diseconomies if a project is approached half-heartedly or spread over an excessive time span. The campaign to restore and regenerate the heart of York will bring its benefits if it is handled as a campaign and seen to be fair. Then private investment will follow the public need. Conversely, if public action is tentative, halfhearted and tedious it will cost the public more. The factor which will settle the issue is speed and decisiveness one way or the other and with it the credibility of the campaign to regenerate York is the road programme outside the walls."
I was not asked to advise, and have never really been able to say, where that road should go, but that it should be constructed, that the heart of York should be relieved of the intolerable burden of traffic which it has to bear at the moment, is unquestionable. But all we have had—and I should mention that I wrote that Report in 1967, which is six years ago—is one statement in the Preservation Policy Group's Report to this effect:
"We recommend that pilot projects be carried out in each of the Four Towns. These exercises will, we hope, serve not only as a practical demonstration of what can be done in the way of renovating and maintaining historic areas, but show how far existing powers are adequate, and how far local authorities can recoup the losses."
York City Council gallantly went ahead with this exercise and established pretty soon that the losses would be substantial—of the order of £2 million—on the first and largest of these renewal projects. Eighteen months ago, to the great excitement of people in York, Mr. Walker suddenly announced his intention to visit York and make a statement. By then we knew the money we wanted and we naturally hoped that we would get at least a good share of it from the Government. Mr. Walker was not able to give us anything more than the normal comprehensive development area procedure—a 50 per cent. grant, as for all central area redevelopment. This is a very unappetising exercise for a local authority, if it is housing rather than commercial

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development with which one is concerned. It is terribly expensive to buy out industrial and commercial property, and to substitute residential property in the centre of a city. But I am convinced that it will eventually pay, when the roads have been built and our city centres are once again habitable. Just as in London, so in our other great cities, living in the centre will be attractive to people and will therefore be commercially viable.
At the moment, however, it quite obviously is not and no pilot project at this point of time makes any kind of commercial sense. It seems silly to spend money in this way, proving something we know already. The only value of doing anything at the moment is to demonstrate how well it could be done; to demonstrate, in other words, not the economics but the æsthetics. Everyone wishes that in the four towns this could be set on foot, because the æsthetic demonstration is just as important as the economic one and is not, by Government standards, expensive to pay for. If a 75 per cent. grant, such as has been made available with immense success—with almost embarrassing success—in the case of Operation Eyesore, could have been made available to the four towns, these so-called pilot projects which we are all wanting to see might have got off the ground, and would indeed have gone like a bomb instead of going like a snail or perhaps, to be kinder, I should say like a tortoise. It is this tragic loss of momentum, which I feared when I wrote my Report on York, which we now have to accept as a fact.
We all recognise the steady increase of Government spending on the repair of historic buildings, and the slow but significant decline in the losses of historic buildings in relation to the total number of listed buildings. But we all hope that local authorities will not regard the £1,500,000 made available to the Historic Buildings Council as letting them out of their own obligations to make grants themselves. At the moment, the level of local authority grants to historic buildings is only about one-fifth of the central Government grant, and I fear very much that this feeling that Whitehall will take care may have been partly responsible, and that this rather miserable perform
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ance itself conceals individual cases that are really shameful. So we have far to go in this field of grants to historic buildings.
Of course, if the Government persist in their present intention to charge V.A.T. on the repair of listed buildings, the situation, instead of getting slowly better, could get dramatically worse. I have been told of one Oxford college which has a very big repair bill to face in the next two years, and if it has to pay V.A.T. on that bill it will have to pay the Government £85,000. I cannot believe that it is right or sensible for the Government to take away with one hand what it gives with the other. While the demands for zero rating are no doubt becoming very tiresome to the Chancellor of the Exchequer, this is a very simple one because the definition is unquestionable as statutorily listed buildings define themselves, and the simple exception of them from value added tax would, at least, ensure that such momentum as we have does not suddenly evaporate.
Conservationists are, I am afraid, rather a gloomy lot, accused of grumbling a great deal, and I should like to end by saying that I think this gloom can be overdone. Despite what we have lost, despite what people may say about modern architecture, historic buildings are now unquestionably better looked after than they have ever been in living memory—indeed, I suppose, ever been at all. Anyone who has seen the incredible achievement of York Minster in the last couple of years cannot fail to be moved by a great effort of that kind; and I am very pleased to see the most reverend Primate the Archbishop of York here today. At the other end of the scale of size, we are putting back the interiors of great houses with a degree of scholarship and skill—such as, for example, at Clandon Park—not shown by any earlier generation. I think we can be proud of all this. Even poor London, so often decried, is to my mind a finer city now than it was before the war. I know that this is an unfashionable view, but the cleaning of the air, the cleaning of the buildings and the floodlighting of the buildings at night have transformed the atmosphere of this great City, and I am not ashamed of being one of its citizens. My Lords, I really believe that, within this comparatively

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narrow field of the care and protection of historic buildings, the tide has turned and I only wish that in the broader field of planning as a whole the same could be said.
3.48 p.m.
LORD CLARK: My Lords, I rise to speak on this complex issue with great diffidence, which is all the greater as I am speaking after the noble Viscount, Lord Esher, whose Report on York was the finest document on conservation and planning of our time. This is a subject fraught with technicalities, many of which I confess I do not understand, and in so far as I can see it in simple terms it seems to involve a conflict between material welfare, ordinary human needs and the belief that, however much our society has changed, we must keep some lifeline with the past. I might perhaps add the belief that architecture is an art, and that some works of art are worth preserving. One hundred and fifty years ago our towns and villages were the visible expression of a way of life which had evolved, with ups-and-downs, throughout the centuries. I do not think one can doubt that the ancient harmonious character of these towns had a deep effect on the minds of the citizens. It gave them a sense of continuity, of belonging somewhere. It was a source of pride. From the 14th century onwards men thought a great deal about making money, but they were willing to restrict their profits in order that their city or town might gain new lustre. They did not grudge the high price paid for a civic building any more than the people of Manchester today grudge the high price paid for a footballer.
Well, styles changed. Towns grew bigger. The cathedral was no longer the centre of life. But up to the mid-19th century the changes were organic. Each new style could be related to its predecessors. Then a new force appeared, too strong to be resisted: the Industrial Revolution, with its philosophy of laissez-faire, its greed for money and the inevitable accompaniment, the unprecedented growth of population. The result was that in the 19th century many of the most famous ancient cities in Europe were almost completely destroyed, knocked down and built over. Cities like Toulouse and Lyons lost their existence; Glasgow,
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which was mentioned by the noble Viscount, Lord Esher, as a beautiful city—though I have never really quite seen it in that light myself—was a beautiful mediæval city.
LORD BOOTHBY: Nonsense!
LORD CLARK: It was; and it still contains one of the most refined and intelligent pieces of Gothic architecture in Britain. But ask anyone in Glasgow the way to the cathedral—ask the noble Lord, Lord Boothby, the way to the cathedral—and his face is a blank. Even the taximen have never heard of it.
So much for the first wave of destruction. It ruined the character of many great cities and a few small ones; but other towns, and most villages, which had not been industrialised retained their old plans and contained whole streets of good houses, often built during a period of three hundred years, but harmonising with each other. It may have seemed as if by 1900 greed and laissez-faire had done their worst. But the destroyers of the 19th century were mere amateurs. With the help of cost accountants, greed became far more professional. In towns, solid, well-designed buildings with large rooms were knocked down to make room for taller buildings, made up of small rooms with low ceilings, which could naturally be more profitable. These buildings tended to be made of glass and concrete. If I may venture to differ for a moment with the noble Lord, Lord Raglan, whose speech I agreed with almost throughout, I should not wish to attack modern architecture as such. The modern style is a wonderful new creation. It has produced great buildings in the United States, in Brazil, in West Germany and in Italy. But it is a complete split with the architecture of the past, for three simple reasons: it is purely rectilinear, it is based on the steel girder, and it is without ornament. Put quite a second-rate Victorian building into Oxford High Street and it would be absorbed; no one would notice it. But put quite a good building in the modern style, what we might call the Bauhaus style into the High Street and it would ruin the street. It would be comforting to think that modern towns could develop organically as old ones did, but I fear this is simply not true. Modern architecture

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is a clean cut with the past, and a compromise architecture is not likely to achieve much distinction. The age of the great pasticheur, like Sir Edwin Lutyens, is over.
Then, of course, came the motor car—or the internal combustion engine, to include the lorry, the mammoth lorry, and so forth—and in some ways it was the most disastrous blow struck against traditional architecture. The narrow streets of old towns are blocked; the squares lose their character by being made into car parks. What can be done? The obvious answer is to widen the streets by knocking down the old buildings. The noble Viscount, Lord Esher, gave a most painful instance, familiar to all of us who make our way to London Airport. Of course, the result of this widening of roads and knocking down of old streets is that a lot of people make money out of erecting profitable packing cases. To make new streets that go round the town involves again greater destruction. But here I will not speak of motor roads, because I believe the noble Lord, Lord Aldington, who has far greater knowledge than I have, will deal with that question.
Is there any way of dealing with this wholesale destruction? I must confess that hitherto the proposals made in this country do not look to me as if they will ultimately be effective. They are almost all based on giving power and responsibility to the local authorities. Papers and documents on the subject speak of "recommendations", of "good will", of "informed public opinion". Almost every sentence in any report is in the conditional mood: "The importance of preserving historic towns should be given proper weight", et cetera. I ask your Lordships to put yourselves in the position of a city council confronted with a growing population, a demand for modern housing conditions and a natural desire to keep down the rates. How can they be asked to spend money on propping up old, uneconomic houses when the vast majority of their citizens are clamouring for new ones?
Let us make no mistake about it, my Lords, those who wish to preserve old buildings are a very small minority—a minority that includes most of our friends, but a minority all the same. I was
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interested to hear the noble Viscount, Lord Esher, say that the young were in favour of preserving old buildings. I am sure the very intelligent people who go to the Royal College of Art are on our side, but take a survey of the whole country and I am afraid it would produce a very different result. And this feeling that conditions in towns must change is not confined to England; it is universal. Ask any young Venetian or young Florentine what he thinks about his city. He will tell you, "I want to get out of it. I am sick of living in a museum."
This, of course, is exactly the answer given by the city architect of Bath, Dr. Howard Stutchbury. He has said that it is his duty to bring Bath into the 20th century, and he is supported by a very eminent architect, Sir Hugh Casson, who combines the position of paid consultant to the city of Bath with a place on the Royal Fine Art Commission. It is true that a map of Bath exists in which certain areas are painted blue and called conservation areas, but it is entirely for the city architect and the city council to decide whether or not they pay any attention to this blue wash. As a result, over 300 houses in Bath have already been knocked down and we are told that au-other 300 will be knocked down next year. You can call this civic humanitarianism, or you can call it vandalism. Either way it is going to be the end of one of the most complete, harmonious and beautiful cities in the world. Of course, a few showpieces will be left—the crescents, the circuses, Pulteney Street—but without their setting, surrounded by very undistinguished modern buildings, I am afraid they will become museum pieces, without the organic relationship to their surroundings that is essential to fine architecture.
I quote Bath because it is unique and because its destruction is taking place now at a really astonishing speed, but this could happen in many, many other cities and towns, large and small. Suppose a new industry decided to base itself on Burford—a branch of the aircraft industry, for example. What chance of survival would Burford have? This is not as fantastic as it seems, because in the last few years a number of industries have decided (for some, to me, totally mysterious reason) to settle in Lincoln, which I believe is now one of

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the most prosperous cities in England; and every week I see in the newspapers advertisements inviting industrialists to base themselves on King's Lynn.
This is a problem that exists in the whole of Europe, and in many places it has been dealt with successfully. The architectural harmony of Copenhagen and Amsterdam is almost entirely unspoilt; in France and West Germany many fine buildings have been saved; the centre of Leningrad is entirely untouched. How has this been achieved? The answer, I feel, is quite simple: by giving mandatory power to the central Government. I know well that it is the policy of Her Majesty's Government to increase the strength and autonomy of the regions; and I suppose that none of us would be glad to see any increases of governmental machinery. The thought of adding a new block to the Ministry of the Environment is indeed a daunting one. But I am afraid that any effective control will involve staff very different from the (believe it or not) five or six devoted men in central Government who are concerned with conservation to-day.
Such a body would not merely respond to local appeals for help: only a few old towns have lively local preservation societies. I believe that something on the lines of M. Malraux's schedules, or the similar plans drawn up in Denmark and Holland, will be necessary; that is to say, conservation areas laid down in a number of towns, large and small, where all new building schemes must be referred to the central authority. Of course, the reasonable way to deal with a sudden expansion such as that which has taken place in Lincoln is to build a new town, complete with shops, supermarkets, bingo parlours and so forth, a mile or two away, so designed that it could absorb motor traffic. But such towns would probably be outside the rateable area of the city, and heaven knows how much complication the purchase of the land would involve!
However, this debate is not the occasion for a discussion of ways and means: it is concerned with principles, and I am proposing a principle which I fear will be distasteful to many Members of your Lordships' House. It is that the conservation of fine buildings and old towns runs contrary to the claims and responsi
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bilities which must be uppermost in the minds of local authorities, and that it can be achieved only by giving mandatory powers to the central Government. Unless this is done, I am perfectly certain that in twenty years' time the old towns and streets that are a link with our past, a lifeline of our society, will have vanished. And I do not believe that persuasion, propaganda, climates of opinion, seminars, publicity or films will weigh against material interests. To conserve what is best in the architecture of the past is not to be a conservative: in fact, as I have suggested, it has been practised most extensively in the communist countries of the East. It is simply to realise that no society, no association of human beings, can cut itself off from its history or pull up its deepest roots without impoverishing or even destroying, its spirit.
4.5 p.m.
EARL JELLICOE: My Lords, we are grateful to the noble Lord, Lord Raglan, for giving us the chance to debate this important subject this afternoon and for the informed, thoughtful and civilised speech which he made in introducing his Motion. I must congratulate the noble Lord, not only on the distinction of his speech but also on the distinction of the speakers whom he has managed to attract into this debate. He has managed to magnetise Lord Clark—"Lord Clark of Civilisation", as one is almost irresistibly compelled to term the noble Lord these days—and that is no mean feat. That has been proved by the speech—a powerful plea for dirigisme, but a very powerful speech—to which we have just listened. Perhaps it is invidious to mention too many names, but I have listened with special interest, as I am sure your Lordships have, to the words which have fallen from the noble Viscount, Lord Esher, a former President of the R.I.B.A. and the distinguished author of a very distinguished Report on York.
I am also particularly glad that we shall have the opportunity to-day to hear the views of two distinguished members of the Historic Buildings Council—the noble Lord, Lord Holford, and my noble friend the Duke of Grafton. Lord Holford is a modest man. He may not tell us that he has been for twenty years chairman of the committee of the Historic Buildings Council which decides

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what standards should be fixed for the protection of buildings to be placed on the national list; and he is now chairman of a new committee concerned with deciding whose proposals for the enhancement of which outstanding conservation areas should get what slice of the cake of grants. I am particularly looking forward to the maiden speech, in a very short time, of my noble friend the Duke of Grafton. As your Lordships well know, my noble friend is far from a maiden in these matters of conservation. We all know his matronly, I was going to say, but I think I prefer to say passionate and professional interest in these matters of conservation; and he is in fact chairman of the joint committee of all the national amenity societies.
My Lords, since both the noble Lord, Lord Holford, and my noble friend are leading members of the Historic Buildings Council, I think it would be right for me to say at the outset of these remarks how much the Government value the work of the Council and how glad we are that my noble friend Lord Glendevon has accepted its chairmanship. I should also like to take this opportunity to wish him well in this new and important task, and at the same time to express our appreciation to my noble friend Lord Hailes for his ten years of valuable service to the Council. Both he and the noble Lord, Lord Faringdon, who has retired after nine years' service on the Council, deserve our thanks. My Lords, while I am in this cordial mood may I say how glad I am, too, that the noble Lord, Lord Kennet, the chairman of the group which produced the Report which we are debating, will be speaking in this debate. I have no doubt at all that some of his remarks will be pointed, but I am equally in no doubt that your Lordships will wish me, from these Benches, to acknowledge the really outstanding contribution which he has made, and is making, in this field.
My Lords, it is now six years or so since we enacted the Civic Amenities Bill—the Act which is a monument, I think one of the many monuments, to Duncan Sandys' devotion to the cause of civilised conservation. My aim will be to review some of the progress since then and to survey, very perfunctorily, I fear, the scene as I see it now. May I at the outset apologise for the fact that, as a result
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of a long-standing commitment, I shall not be able to be here at the conclusion of the debate. That means that my noble friend Lord Sandford will wind up for the Government; but, of course, this is right and proper, since my noble friend now wears the Ministerial mantle which the noble Lord, Lord Kennet, wore in the old Ministry of Housing and Local Government, and wears it in a Department—the Department of the Environment—the activities of which embrace almost all aspects of the physical environment. My noble friend's presence during these last two or three years in so many of the places which one sees in the exhibition in the Moses Room which we have been discussing, is evidence of the passionate interest he, too, brings to this work.
When I introduced the Civic Amenities Bill to your Lordships six years ago just over 100,000 or so of our historic buildings were safeguarded by being listed. To-day, nearly 170,000 have this protection and the continuing re-survey of our inventory of historic buildings is bringing in a further 20,000 or so each year. All this is evidence of progress, in this area at least; but a better indicator of progress is the fact which the noble Viscount, Lord Esher, mentioned, that while in 1967 we were losing historic buildings at the really horrific rate of 400 a year this haemorrhage is now being cut down to something like 200. It is still far too much: but at least a tourniquet has been applied and is beginning to work. At the outset of what I hope will be a not too long speech, we are dealing with individual buildings. We have our failings here, although I think I agree with the noble Viscount, Lord Esher, that by now we can be confident that most of our great historic buildings are probably secure. But we also have our successes. The noble Viscount, Lord Esher, alluded, rightly, to one of the greatest of our successes in this field; that is, the salvation of York Minster. It has been a triumph for the Dean and Chapter, and a triumph too for all the private and local people who raised the £2 million that made it possible—for there was no Government grant. It was a triumph not least from the point of view of the civil engineering firm who carried out this work. I think, too, that we must be glad for what we see being done with the restoration of the fabric of some of

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the others of our great cathedrals, St. Paul's, Chester, Salisbury, Winchester and so on. It is my view that as a group our English cathedrals constitute one of the supreme manifestations of English and European art. Whatever else we lose, we must not lose them or suffer them to fall into disrepair.
My Lords, it is not only our great cathedrals, one of our great national glories, that we need to care for; we need to recognise the debt we owe to the Churches who continue to maintain over 11,000 listed buildings—more by far than any other organisation in the land. These churches, from the great ones like Tewkesbury and Edington to the tiny parish church, are part and parcel of our architectural heritage and are the centrepieces of many of our conservation areas. That is why I particularly look forward to hearing what the right reverend Prelate the Bishop of Rochester will have to say. 1 should like straightaway to assure him, of a sympathetic hearing from Her Majesty's Government when his Working Party has analysed the scale and nature of the problem of maintaining our historic churches, the problems of which they are seized. I am glad again to echo what the noble Viscount, Lord Esher, has said. We now have machinery, perhaps too cumbersome, for ensuring that by means of the Redundant Churches Fund there is care for churches no longer needed for worship.
If we are going to preserve buildings, we cannot preserve them, as it were, in aspic. Preservation and use, be it of the ecclesiastical, the ex-ecclesiastical or the lay building, are vitally interlinked. That is why again I welcome what we see now in St. John's, Smith Square, or in the use to which Holy Trinity, Southwark, is going to be put, and also why I welcome what can be seen in the exhibition in the Moses Room; what is done, for example, in Crescent Road, Alvestoke, at the Corn Exchange at Sudbury or the Maltings at Farnham. This type of work, very often a partnership between local amenity societies and local authorities, in finding new uses, valid modern uses, for old buildings, is a vital part of effective and sensible preservation.
So much for the buildings themselves. I would agree with those who feel that, important though they are, it is the areas
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as a whole which are more important. It is worth remembering that six years ago there were no conservation areas. I note what the noble Viscount, Lord Esher, had to say about conservation areas, but I am an unrepentant defender of the concept until we find something better. But, here again, we can point to some real progress. In 1966, as I have said, there were no conservation areas; now, at the latest count, there are 2,288 up and down the country. I do not think we should be wise to minimise the importance of designation as an act in itself. A boundary on a map is worth something; it is a statutory and formal recognition for all to see that there is something worth conserving; it is a signal calling for vigilance; it should be a halt to thoughtless and incongruous development, a sign that the car should if possible be curbed and the lorry diverted. That is why I should like to express the hope on the part of the Government that this process of designation will continue to roll forward. Rather meaningless designation—designation by the dozen, if I may so term it—is without value. Nevertheless, I believe there are many areas in this country which could do with more designation; and, greatly daring, I will instance just one—one from my home county of Wiltshire. There I note that nine areas only have been designated—nine only in an area rich in townscape and in villagescape.
Noble Lords have referred to the four town studies, the classic studies of Bath, Chichester, Chester and York. If one reads those studies, one gets a measure of the scale of what full-blooded conservation really means. It is good to know—again, it is a sign of progress, although I do not wish to exaggerate the progress—that the example set by these classic studies has been adopted, adapted and expanded in so many other historic towns of great distinction. On the larger scale, the towns I would instance are Norwich, Winchester and Cheltenham. On the smaller scale but no less precious I instance Stamford, the first conservation area of all, Blandford, Deal, Banbury, Whitney, and Whitehaven; and across the Border in Scotland we have seen all that is being done in Edinburgh New Town.
But I think it would be a mistake to talk only of our towns.The Motion

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refers to villages as well, and I believe it is just as important in looking at our heritage to do what we can to preserve the character of our villages. I believe that progress is being made, with Somerset and Warwickshire taking the lead. West Sussex, I instance as just an example which, starting late, now has conservation proposals in preparation for over 120 villages.
There is a point I should like to make in passing. My right honourable friend the Secretary of State for the Environment made clear in his Statement and White Paper last Monday that the pressure over housing accommodation means that many of our villages will need to be expanded. Living, as I do, close to the spine of one of our great new motorways, the M.4, I know what this can mean in terms of pressure on some of our smaller villages. All I would stress is that very great care will be needed, if there is to be this expansion—and I believe it is to some extent inevitable—to ensure that it does not spoil the essential character of our villages; and the new local authorities will need to be very vigilant and alert to ensure sensible and sensitive expansion.
My Lords, designation, surveying, planning, policy formulation are one thing, but action positively to enhance and improve our historic towns and villages and the historic hearts of our great cities is another thing. Here again I believe that progress is being made, partly as a result of the guidance and stimulus provided by the Preservation Policy Group. Again, I would not wish to generalise but to particularise by way of example. We have recently seen the completion of the inner ring road in Chester. We have seen the introduction of a really civilised car-parking policy in Chichester, and we have seen the efforts of the Civic Trust in York. In 1967 there were only nine town schemes; now there are 41, and they involve an expenditure of nearly a quarter of a million pounds a year.
I have touched, I hope without too much complacency—because, goodness knows!there is a lot of ground to be made up, which is clear enough from the speeches we have already listened to—on some of the progress which we have
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been making in preserving our inheritance. May I refer to one part of our inheritance that, I am glad to say, we are making great strides in destroying. I refer to the encrustations of grime and soot which have been, and are being, erased from our buildings up and down the country. I was glad that the noble Viscount, Lord Esher, referred to this. Here I believe that central Government, apeing Malraux, have played their part as good landowners. Whitehall really does live again in its fresh new clothing, and that is a source of pleasure to me as I walk up and down Whitehall each day. In this weather it is astonishing and exhilarating to walk up and down this now new, clean thoroughfare. Now that the clean air policy has made our urban atmosphere freer than it has been for a century or so from smoke and soot we can be confident that this cleansing will not be a temporary palliative but will have a lasting and beneficial effect upon our townscapes up and down the country. I believe that the effect is more than physical. It makes our towns and cities more pleasant, and I feel that it helps to reawaken and recreate that civic pride which I believe lies not very far below the surface and which may easily be re-created.
What are the problems? I will touch on them only cursorily. There is the problem, perhaps the greatest one of all, of learning to cope with Henry Ford's "Frankenstein", a motor-car. I am glad that the noble Lord, Lord Clark, drew attention to the priority which my right honourable friend the present Secretary of State for Trade and Industry, then Secretary of State for the Environment, accorded in the road programme which was then announced to relieving a large number of towns and villages of the noise, dirt and danger caused by traffic from which they suffer. We must not "kid" ourselves that these aims will be realised quickly. The dangers and difficulties are only too evident and I have a shrewd suspicion that my noble friend Lord Aldington may be touching on some of them in his forthcoming remarks. But I would say that this is a matter very much in the Government's mind.
Secondly, there is the problem posed by an industry which, unlike many of our industries, is expanding with dynamic speed. I refer, of course, to tourism. It

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presents its problems, but also I believe it affords us a great opportunity if we handle it sensibly. Any one of us who has seen the Mall on a fine summer's day, or seen the crowds that populate and the charabancs that pollute the centre of London, will feel that London is becoming "over-touristed", if only because of the mean quality of many of the new hotels which we see rising around us. But there are towns and places off the normal tourist beat which are immensely attractive but little visited and which could benefit from the stimulus which a greater number of visitors would bring. I believe that the sensible policy would be to do what is possible to divert some of our tourists away from the normal tourist "milk run"—the Tower of London, Whitehall, Stratford-upon-Avon, Oxford and Cambridge, Edinburgh and so on—to less familiar but no less beautiful places. I will not here particularise, as some might object.
The third problem, a not unfamiliar one, is that of finance. I think that the exhibition in the Moses Room shows what can be done, sometimes in small but significant ways, when we bring together the combined financial resources of Whitehall, town hall, county hall and individual owners, upon whole groups of buildings. I should like to make clear that so far as the Government are concerned, we believe that the sort of work illustrated in that exhibition should continue, and continue to be encouraged. That is why I am glad that the Historic Buildings Council will be able to allocate £750,000 this year as the Government's contribution to work in outstanding conservation areas. Some noble Lords may wish for, and may ask for, more. That I readily appreciate. I shall be cautious here because my noble friend Lord Sandford will be dealing with the financial aspect. Very often one hears pleas to the Government to curtail public expenditure. These things have to be weighed in the balance, but I believe that, without being complacent, we may claim that at least on certain fronts these last six years solid progress has been made. Yet none of the achievements which I have just touched on compares in significance with the quite remarkable revolution in public attitudes which has taken place.
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I think there are three powerful tides of public opinion which have been running and gaining strength. First, over the past two decades there has been a rising interest in our past. I think that here I side with the noble Viscount, Lord Esher, and against the noble Lord, Lord Clark, because I feel that this is something the young feel very deeply. Among our young people there is a passionate interest in archæology, and that is one sign of the rising interest. The second ingredient in this flood tide of opinion is the increasing concern for the totality of our physical environment. The third component of this movement of public opinion is, I think, the growing recognition of the value in human terms of the familiar and the longstanding. My Lords, in looking back on my short experience it is striking how opinion has moved in the last six years.
I should like to instance an example. I remember well a discussion in your Lordships' House, a debate on the Leslie Martin plan for Whitehall—it must have been six or seven years ago—a plan commissioned, as it were, by the Government of the day. There was no great objection when it was commissioned, and the terms of reference, so far as I recall, were given. It was a plan which nowadays I think we should totally reject, treating historic Whitehall as a tabular rasa from which to work. Only six or seven years ago we were seriously prepared to contemplate it. I believe that this is a symptom of an astonishingly rapid turnabout in opinion, and one which I personally greatly welcome.
My Lords, there is one aspect of this to which I wish to refer before I come to my conclusion, and that is the sign of this new movement of opinion in the growth in the whole amenity society movement. Six or seven years ago there were just over 500 civic societies; now there are over 1,000 affiliated to the Civic Trust. Four of the national amenity societies—the Society for the Protection of Ancient Buildings, the Georgian Group, the Victorian Society and the Ancient Monuments Society—undertake work as part of the procedure of handling applications for listed building consent in respect of buildings of special architectural or historic interest. The Government are grateful for the advice of such national experts on architectural history, and to assist with

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the costs which they incur I am glad to say that we shall be able to give each of them a grant, modest but I think none the less valuable, of £2,500 per annum to help towards the cost of this work: and similarly, arrangements have been made, I think for £750 per annum to the Scottish Georgian Society and the Scottish Civic Trust. These are small sums, but they can do a great deal to help and encourage work which is of real national value.
I have been speaking in an insular context, and in conclusion I should like to emphasise our view that English art and English architecture, although it has its own distinctive idiom, like English history, is essentially European. Other countries of Europe are rightly proud of their heritage, and as I think the noble Lord, Lord Clark, has particularly convincingly demonstrated, we may be able to learn quite a bit from them, too. In any event, the Council of Europe has designated 1975 as European Architectural Heritage Year. The Government have warmly welcomed this initiative and have stated thcir intention that the United Kingdom should make an effective and distinctive contribution. I think we must all be glad that His Royal Highness the Duke of Edinburgh has agreed to serve as President of a specially formed United Kingdom Council, and that the Queen Mother and the Prince of Wales will be serving as Presidents on the Committees for Scotland and Wales respectively. I think, too, that the fact that the day-to-day running of the campaign will be under the direction of an executive committee chaired by Lady Dartmouth is a guarantee that a considerable impulse and a lot of fizz will be imparted to this work. As your Lordships doubtless know, the Government have made £150,000 available for schemes which are likely to produce these results by 1975 in conservation areas which are perhaps not of the highest quality but which are crying out for care and attention and which can be completed in time to make our practical contribution to European Architectural Heritage Year.
So much, my Lords, for this progress report. Despite all the difficulties and the many frustrations, I think I can honestly claim a measure of significant progress these last five or six years. But none of
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us can afford to be complacent or to rest on our oars. I am sure that from this debate my noble friend and his Department will draw encouragement, and I can certainly assure those noble Lords who have spoken, or will be speaking, in it that the suggestions made by them in this discussion will receive our careful consideration.
I should like to assure your Lordships, in conclusion, of one further thing: that is, that the Government for their part attach the very highest importance to the preservation and conservation, and wherever possible the enhancement, of what is best in our heritage of architecture and of civilised urban living: that heritage which has been passed down to us over the centuries, for which we are at a perilous moment for that heritage, but also a moment of opportunity, the temporary trustees. It is the aim of this Government, as it was of the last Government, and indeed as it should be of any Government, to act as good and, within the bounds of prudence and the bounds of practicality, as large-minded trustees.
4.36 p.m.
LORD KENNET: My Lords, I have just heard that the other place have voted 2 to 1 against the restoration of capital punishment, so if I accuse noble Lords opposite of getting away with murder it will not be such a serious matter as it might have been. This is one of those debates, I think, where politicians ought to take a back seat and listen to those who know about the subject—but of course I shall do nothing of the sort. With Lord Esher, Lord Clark, the Duke of Grafton and Lord Holford speaking, it is one of those occasions, which are less frequent than we often say, when we in this House are exceptionally well-qualified to debate a matter. Before going further, may I join with the noble Earl, Lord Jellicoe, in thanking and congratulating the noble Lord, Lord Hailes, on all his long years of work at the Historic Buildings Council. When I first got to the hot seat now occupied by the noble Lord, Lord Sandford, and learned who I should have to be working with on that front as the chief statutory adviser, I thought it a very wrong thing that this intensely professional body should be chaired by an ex-Chief Whip, and a Tory ex-Chief Whip at that. Then we met, and I learned that this was an excessively theoretical

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and bigoted approach to the matter, and I think it is fair to say that never in my short experience has a body of statutory professional advisers better served a Government. Let me also wish the noble Lord, Lord Glendevon, long and successful years as his successor.
My Lords, may I start with Bath? It is a paradigm of our troubles. The character of Bath, as everybody knows, is dual: it consists of four or five majestic set pieces of town planning, and a great mass or podium of so-called artisan housing of the 18th and early 19th centuries. They go together. There are few examples in the world of a city built so much of one style, so coherent, in so short a time. Dubrovnik is another. The noble Lord, Lord Clark, can no doubt think of many more, but I can only think of those two at the moment. We are all right on the great set pieces. They are safe, I think, although I should like to tell the House that it was only in our own term of office that my noble friend Lord Greenwood and I had the pleasure of dismissing a proposal by a cement company for a glass office block virtually touching the north transept of the Abbey. That, if I remember rightly, was in 1968. So it is not so long since even the great set pieces in Bath became safe. What with that point, the Buchanan proposals for the tunnel and one or two refinements on the wilder shores of Sir Colin's proposal, we got rid of the cut—the noble Lord knows what I am talking about—I thought, O.K.; even if we lose the Election, Bath is safe. But it has not really happened like that, because here we have the City Council taking Sir Colin Buchanan's tunnel proposal, which is a pretty hazardous one in any case, and twisting the approach road right into the heart of historic Bath for a reason I do not know. Here we have that podium of artisan houses round the great central pieces going by acres, bull-dozing down.
My Lords, I have three photographs here. One shows an old lady standing in several acres of Georgian rubble looking at what used to be her house, while behind stands a row of Georgian houses identical with what has been knocked down. So one can see how unnecessary it was to knock them down. Another is a photograph of Pulteney Bridge, the Ponte Veccio of England, standing against its new background, which is a
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large, heavy, absolutely linear hotel which entirely dwarfs the bridge. The third picture is a handsome view of Bath Abbey and the approach to it, which is entirely overshadowed by a ventilator apparently some 80 feet high for extracting fumes from underground car parks. It has artistic slats on top. This ventilator is about the size of a Gothic church which is across the street. On the other side you can see the big new, flat-topped hotel dominating and killing the river which Pulteney Bridge crosses. In the foreground there is an excellent lamp post with a fluroescent light and a large notice saying "Toilets" on it. I should like to pass these photographs to the Leader of the House for him to be thinking about in the more boring bits of what I am going to say.
There is to be another building between the hotel and Pulteney Bridge; some law courts. I do not think the bridge will be visible from anywhere after that is built. I am sorry that the Government did not find room in their exhibition in the Moses Room for some of these photographs. The Bath Preservation Trust wanted to show some photographs of what went wrong and, acting with the Civic Trust, I approached the noble Lord to see whether he could find a corner for some "failure" photographs as well as his excellent departmental "success" photographs; but no, it would not be done. I approached the House authorities and was told that I could easily have an exhibition in my office if I was ready to move out of that. Since I share my office with seven others I was embarrassed about proposing that to them. I inquired whether there was any other room in the House but was told that that was impossible. A couple of days ago I discovered that the Government's exhibition was being transferred from the room where it was announced it would be held into another one, which has been, presumably, available all the time. I make no further comment.
In 1968 or so, the chairman of what they laughingly call the Development Committee at Bath—any other City Council would call them the Planning Committee—said that he thought that it would have taken about £8 million over ten or fifteen years to look after all the listed buildings in the city. I shall come in a moment to a passage where I shall

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claim that that is just about what they would have got under the Labour Government's reforms in the Report we are discussing. I want to know whether that is just about what they are going to get under the alternative scheme of the present Government. I share very much Lord Clark's feeling regarding Bath and the battlefield it has become. It is a political battelfield because the council is rent from top to bottom. Professional advisers are retained on all sides; they disagree with each other; they impugn each other's good faith. The amenity movement itself is rent between extremists and moderates. Matters are moving so fast and the Council over the years has shown so little ability to come to grips with them, and the Government have shown so little ability to force them to come to grips with them, that I share Lord Clark's feeling that the time has come for a more centralised and sterner approach, at least in this one key city. He said we must give mandatory powers to the Government to do something about it. We do not need to give them mandatory Dowers; they already have them.
Every single planning application in the country may be called in by the Secretary of State of the Environment for his own decision—every single one: important, unimportant, large, small, on a mass scale, or on an individual scale. If the Secretary of State were to say to the city council of Bath, "I am going to call in every planning application in your city for the next two years, starting on June 1, unless you adopt what I think is a right policy, and here it is", this would administer a salutary shock, not only to the local organism but to the national one too. It might be so salutary that it would not be necessary to do it. Even if it were done in Bath, that would not be the end of the world. I do not believe that it would be against the wish of Parliament, which gave those powers to the Secretary of State, and if it were done in Bath it would probably never have to be done again anywhere else. When the noble Lord, Lord Sandford, comes to speak I do not expect him to say, "We will do that", straight away to-night, because we know this is a rigorous measure, but can he hold out hope that the idea will be examined and that he will, on behalf of Parliament,
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mention the idea to the City Fathers of Bath? Even when Parliament set up local authorities like the Bath City Council, they were all on sufferance. The Minister has always had the power to dissolve them entirely if he wants to and assume all their functions by means of a Commissioner. The present Government are doing that about housing in one or two places. This power is being used for the first time. So let us not say that the Government cannot control what is happening in our historic towns, or must be given more powers before they can be expected to control what is happening. It is not so; they can do it now, and I hope that they will.
Before coming to the general point, may I turn to one other particular question: churches in use as such. This prosaic, hyphenated phrase covers the great question of the relationship between the State and the Church about fine old churches which are not redundant and which are still being used for worship. There is this increasing difficulty: what kind of church are we talking about? Maybe we have a picture in our minds of a beautiful village church or a cathedral; but it is more often the urban church. Perhaps the House might like to think as an archetype of Christ Church, Spitalfields, the masterpiece of Hawksmore, who was the chief of the few British baroque architects, which has stood closed now for 15 years in the heart of the East End. The fact that the church is closed means that people do not know it as well as they ought. But if they go in the church they will realise that they are inside one of the small handful of the greatest buildings that have ever appeared on our soil.
In 1913 Archbishop Davidson, sitting presumably on the Bishops' Bench opposite, told the Government, sitting where the present Government are sitting, that the Church did not want to come into State preservation law. That was the beginning of State preservation law with teeth in it. He said, "Leave the churches out; we will look after our own. We would rather not have any State control". The Government of the day agreed with that request, and so it has been ever since. Many years later Governments began to make grants for the restoration and maintenance of old buildings, and they made them to buildings over which

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the State had control. The two naturally went together. It has always been taken for granted that you do not get State money without State control, because this is in theory pouring away the taxpayer's money into something over which he no longer has any control. The theory is important, though of course the practice would not work like that.
In 1968 the Church approached the State to open a discussion about the possibility of revising the 1913 Act. It fell to my lot on behalf of the State to see the body, who came under the chairmanship of Professor Phillips, from the Churches. We opened discussions and they said, "What about some money for churches in use?" At that time I had to say, "Not a hope for a year or two at least; but there may be hope later, so let us begin talking about what arrangements we could have if and when the money becomes available". We did this. It quickly became apparent that there was going to be a difficulty about the so-called "ecclesiastical exemption", which means that churches in use are not under planning law. The Church can pull them down without permission from any planning authority and in many ways make extensive alterations to them without consulting anybody on the State side of the fence.
We decided at that time that it would not be right to make State money available without also extending State planning control. There was a feeling in the backwoods—not among the central negotiators of the Church—that maybe you would get a desperately bigoted sectarian Minister who would start telling parsons where to put the altar, and intervene in liturgical decisions and experiments. That of course is ridiculous. There is nothing any Minister would sooner do less than become involved in that particular spiritual hornets' nest. I have heard with great pleasure that the contacts are continuing and that the noble Lord, Lord Sandford, is handling them for the State. I believe the right reverend Prelate the Lord Bishop of Rochester is handling affairs for the Church. I hope they will come to a satisfactory conclusion and that State money will be made available, as we in our Government would have made it available for churches in use. But I do not think Parliament would accept that the ecclesiastical exemption
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should continue. I believe that these particular buildings in receipt of State money must come under planning law just as all the lay buildings are under planning law. This is an important constitutional point.
I have heard it said that the Government are considering one possible solution, which would be the appointment of State representatives to the bodies which advise the Churches on the question of demolitions, alterations and architectural questions generally—that is to say, the Cathedrals Advisory Committee (or Council) for the cathedrals, and I imagine the Central Council for the Care of Churches for parish churches. We on this side of the House do not think that would be sufficient. The appointment of State representatives to bodies which have no more than an advisory function towards property owners who are not bound by the law would not be a sufficient substitute for normal State control over these buildings, as over any other buildings.
There are one or two general points upon which I should like to touch. It is extraordinary that V.A.T. is not going to apply to new building but is to apply to the restoration and the repair of old buildings. I understand that it will not apply to a repair that totally changes the character of the original fabric, but will apply to the sensitive restoration of historic buildings. I hope the Government will be able to rethink this manifest nonsense. I am not asking them to impose V.A.T. on new buildings, but to exempt the restoration of old buildings from the 10 per cent. charge.
It is very good news that the Government are producing money for the amenity societies, as the noble Earl the Leader of the House has just said. I am not sure whether this was an announcement; I had not heard the details of it before. It is in accordance with the report of Mr. Denis Stevenson and—
EARL JELLICOE: My Lords, I am sorry to interrupt the noble Lord. I am not quite certain what the noble Lord means by "an announcement", but I think this was the first time that this news has been imparted to an impatient world.
LORD KENNET: My Lords, the noble Earl imparted it with such characteristic mildness and humility that I thought from his manner it must be something everybody knew already.
EARL JELLICOE: My Lords, it was merely my normal diffidence.
LORD KENNET: My Lords, that is exactly what I was saying. Now we know that it is an announcement, I should like to say, with what I hope is normal diffidence, that we on this side of the House are glad to hear of it, that we have been urging it for some time and my only fear is in regard to how far the Government will go, because there will be a lot of others queueing up behind the Georgian Group. I hope the Government will go as far as they possibly can and will be generous. It is part of democracy to enable people effectively to say what they want to see done.
EARL JELLICOE: My Lords, I hesitate but I am going to interrupt the noble Lord just once more. I should like to thank him for his reception of this announcement and I am glad that my normal diffidence has in fact highlighted the importance of the announcement.
LORD KENNET: My Lords, we shall always give a good reception when the noble Earl announces good things. The noble Earl told us about the rate of loss of listed buildings and said, "We have halved that". The situation, as he so correctly and vividly reminded us, was that when our Government first found out how many listed buildings were being lost, because nobody had taken the trouble to inquire before, the answer we received was "about 400 a year". As a result of that we passed the 1968 planning Act, which for the first time required people to ask permission before they demolished a listed building. It is not generally known that they did not even require to have permission before. Since then permission has been necessary, and I rather thought I remembered that that had cut the rate by one half almost within the first year of its operation. If it is still only cut by a half, from 400 to, say, about 200, what has been happening recently? When the noble Lord, Lord Sandford, replies to the debate will it be possible for him to give the yearly figures for—I suppose 1969 was the first full year of operation—1969, 1970, 1971 and 1972, so that we may see how the curve is going? That would be most helpful.
There is one small but important question: has the Department now got ex
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perts in Victorian buildings? It used to have, but I have heard it said that they have all gone elsewhere. If true, this would be sad. May we be told? A further question: the Government recently took the deplorable decision to subject all these matters in regard to listed buildings, historic towns, and so on, to decision by the district councils—the second tier in the reformed local government—instead of the top tier councils who alone would have the people who are skilled to do it. We could not get them to change their minds; they assured us that it would be all right and that the district councils would in fact use teams belonging to the top tier councils, which would be a complete waste of time, of course, but it would be better than nothing. Can the Government tell us whether they are doing that and what news there is on that front?
I come at last to the Report which is nominally the subject of this debate and which I hope has formed a useful peg for it. This Paper, which was accepted by the outgoing Government on May 20, 1970, suffered a peculiar fate. The date on which the Government accepted it was, if I remember aright, the day on which the date of the General Election was announced. So it was totally unknown to the general public that it had been (a) published, and (b) accepted. That is just the luck of the draw, but it is a fact. None of us on this side of the House would claim that it necessarily contains the best solution to the total problem of our old towns, but it does contain a detailed and careful solution, and when Lord Sandford replies I want to know what is his detailed and careful solution, so that the House may compare like with like.
I should like to make two points in amplification of the very full and accurate account which has been given by my noble friend Lord Raglan. The general conservation schemes that it proposed have quite a special character. They were to be schemes covering not only the repair of old buildings, to stop them falling down; they were to be integrated schemes whereby each local council would roll up all its strength and sweetness in one ball, and push it through the bars of life, its housing powers, traffic control powers, road construction powers, preservation powers, land-owning

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powers and housing management powers. There would be five or six different types of power rolled into one scheme which was then going to operate at a loss, obviously, otherwise it would have been done already: and a good deal of public land ownership was to be included. The point of this scheme was that the Exchequer would bear half of that loss.
I come now to the financial provisions. I shall be a little detailed here because I want the Government to be equally detailed when they come to their own scheme. The finance which would have been flowing now if this scheme had not been rescinded by the present Government would have fallen into three parts, as follows: the Historic Buildings Council's grants for England (as we know them now) would have been flowing at such higher rate than three quarters of a million pounds a year as increasing costs would have dictated. That is Part I. Part II is itself bipartite. Part II is the money for the general conservation schemes which we would have been putting into effect. The first part of Part II would have been the Exchequer half of the loss on those schemes. That, according to the Statement made by the Government on May 20, 1970, would have risen by this year to £1½ million a year. The second part of Part II would have been the local authority contribution to those schemes, which would have been equal; it too would have been £1½ million per year.
Your Lordships will see that we are now at a level of at least £3¾ million, and probably over £4 million because of the increase in costs. Then there would have been the third element I have mentioned, which would have been the quite minor contributions that the local authorities would have continued to make (as they do now) to the old-fashioned "town schemes" and to other historic buildings around the place. This would probably only have been less than £500,000 a year. It has never been above that sum, and often way below. So I can say that the State, taking central and local government together, would by now under the scheme rejected by the present Government, have been paying well over £4 million a year to the historic towns and villages.
What is the global figure under the Government scheme? That is my main
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question for this debate. Let me repeat: I do not claim that our scheme was the best in the world, but I do claim that I do not fully understand the Government scheme, and if I do not understand it I am not sure that many other people will. Does it involve an integrated general conservation approach with all those six types of local authority power rolled up? Are the grants introduced by the Government in the 1972 Act payable to local authorities on losses incurred under the use of any of those powers? Or, do they all have to go towards propping up old houses? Can they go towards traffic schemes, for instance, and building an odd road for conservation purposes? Can they go towards land acquisition? Can they go towards more expensive forms of housing management? Those are the sort of questions posed. If the answer to all that is, "No", then I shall be forced to conclude that the Government's present scheme is an inferior one, though I hope that the answer will be, "yes".
Then I have a few points to wind up. I am not sure that the Department of the Environment has succeeded in absorbing ing the old Ministry of Transport. I am worried about this. It still seems to have a life of its own in the stomach of "big Daddy". I wish it had not. Can anything be done to digest it further? One still sees these enormous traffic signs in conservation areas, instead of the little ones which is all one needs if one is going at five miles an hour, which is all one should be going in a conservation area, if not walking which would be better. What about pedestrianisation? It is not going well in England, is it? The whole centre of Bonn, where I was two days ago, is now pedestrianised. It takes 10 minutes to go from one side to the other and it is full of people standing around laughing because they are so happy about it. It is a remarkable sight. Let us have more of that in England, please, can we?
I want to end up with personalities. I know that it is deplorable and against the custom of the House but I shall. I want to praise Mr. Peter Walker now that he has left this life and gone to a commercial one. I want to praise him for his courageous decision about the Avon Gorge Hotel. I do not know when that has been done before by a Minister with his powers. He cancelled a deplorable

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planning permission already given by a council and let the council incur the compensation, as they richly deserved. That was a brave decision. I hope that we shall see more decisions of that nature.
I have been speculating about what we shall call Lord Rippon when he comes to the end of an honourable term of service in the House of Commons and joins us here. It will be a personal pleasure to us to welcome Lord Rippon of Bassenthwaite, Lord Rippon of Winchester or Lord Rippon of the London Green Belt. I shall not dwell on that last one, because it is still not clear whether he really means it. But if he does, one can only say that this is a reversal of the very heartland of all our planning policy in the last 25 years in this country. Two thousand acres of the London Green Belt is to go on housing. Do we need housing in London? I should say that we jolly well do. There is no doubt about that. But it was only a week before this decision that a survey returned the fact that there are 100,000 empty houses in London. I am sorry to be polemical, my Lords, but what are we to say about a Government which cannot find the courage to squash the speculators, and developers, the tapeworms of our economy, so as to get those 100,000 houses occupied, but can find the courage to take 2,000 acres of the Metropolitan Green Belt for development? It is a most deplorable situation. In order not to leave the matter on a rancid note, let me say, to come back to historic towns, that I think the time is due for a shake-up. I hope that I have suggested something positive in the much freer use of the call-in procedure, and that the Government will say that they are going to do precisely that.
5.5 p.m.
THE DUKE OF GRAFTON: My Lords, I count it as very fortunate to be able to make my maiden speech to-day on a subject about which I feel so strongly. Mercifully, public opinion also seems to be beginning, at last, to feel equally strongly about it, and this is surely a non-controversial subject if ever there was one. Incidentally, I should just like to mention that I do not think my family has troubled your Lordships much of recent years because I understand that
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the last maiden speech by a Duke of Grafton was in 1845.
Looking back over the last 10 years, it is certainly immensely encouraging to see how far and how fast public opinion has moved behind those in the amenity societies who for years have been struggling with this problem of preserving historic towns and villages. I count it as a very good omen that I should be making my maiden speech on the day when my noble friend Lord Jellicoe has made his most welcome announcement that Her Majesty's Government are now proposing to give a grant to the four national amenity societies: The Society for the Protection of Ancient Buildings; the Ancient Monuments Society; the Georgian Group; and the Victorian Society. On behalf of those four societies I thank the Government most warmly for this generous recognition of our work.
I should like to start on this subject by telling a true story about the late Lord Esher, the noble Viscount's father, who, when discussing the problem of preserving historic towns, had an entertaining experience. As I remember, he was speaking at the annual general meeting of the Kensington Society some fifteen years ago, and in the course of his speech he said, "London is rapidly losing its character. One day it is going to become like any town in Minnesota." What he had not realised was that his speech went out on world radio, and when he was finishing breakfast the next morning, he was rung up from Minneapolis, from the very heart of America, and a furious voice was heard to say: "Say, Lord Esher, what's wrong with us anyway?" It is surely this very subtle character of or historic towns with which we are concerned to-day.
The Society for the Protection of Ancient Buildings, for which I have now worked for some 22 years and of which I am Chairman, was the parent of the whole amenity movement and was, of course, founded by that great man William Morris, 96 years ago, in 1877. It is interesting to look back to realise that there was then practically no legislation to take care of a single historic building in this country. In those 96 years enormous strides have been made, and far the most

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important step, I feel, has been the establishment of national funds to preserve historic buildings. I have now sat on the Historic Buildings Council for England for 20 years. I think I am one of the three original members; the noble Lord, Lord Holford, is, luckily, another. During our 20 years we have dealt with buildings of all sorts and kinds, from dovecotes and windmills to manor houses and palaces. But increasingly of recent years our efforts have been directed towards historic streets and the whole centres of towns. Much the most important town we have helped is Bath, and Bath has been spoken of a great deal to-day.
I should just like to say that the Historic Buildings Council has tried to help here. I have sat on the sub-committee with Sir John Summerson now for 16 years, and we have, necessarily, because of our limited funds, had to concentrate on the most important architectural showpieces in Bath. But we have really rebuilt the Circus. Any of your Lordships who has been to Bath will, I am sure, have noticed how splendid the Circus looks now. Fifteen years ago, when we started, it really was falling down. We are now undertaking major work in Pulteney Street. But, of course, I agree with the noble Lord, Lord Clark, and others, that other absolutely vital areas in the city are suffering and will continue to suffer, and nobody who goes to Bath and sees the new buildings on the slopes of Lansdowne can feel complacent about what is happening there.
While mentioning the problem of Bath, I feel that the role of a consultant in an historic town is an extremely difficult one. Many historic towns have consultants of international repute. In my experience, this very often does more harm than good. The unfortunate consultant is often not consulted, and as a result of not knowing the full picture of the town in question he is often ignorant of what is going on; in any case his advice need not be taken. It seems to me that if you are a consultant the very first thing you must do is to discover what are the long-term plans of the corporation for that particular town.
From the point of view of historic towns, we on the Historic Buildings Council, I am sure, realise that we are simply touching the fringe of the problem. As
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has been mentioned, within the last six months we have been allocated an extra half million pounds a year for conservation grants, purely for conservation, not for repair. This is opening quite a new chapter, and a very large one, in our existence. So far we have dealt with comparatively few applications, but I think this is a very important step forward.
My society, the Society for the Protection of Ancient Buildings, can, I think, claim a good deal of credit for the existence of the Preservation Policy Group's document which we are discussing to-day. In spite of the creation of the Historic Buildings Council in 1953, we in the Society had become so concerned about the problem of our historic towns that in 1963 we set up a pressure group consisting of all the national organisations to study the problem. Over this we were very greatly helped by Mr. Nicholas Ridley, Conservative Member of Parliament for Cirencester and then secretary of the Arts and Amenities Group in the House of Commons. We held various meetings, and a memorandum was produced, which was really, looking back, very largely the forerunner of the Policy Group's document. Owing to the change of Government in 1963 there was delay, and it was not until the beginning of the Labour Government in 1965, and in particular with the arrival of Mr. Crossman as Minister of Housing and Local Government, that we made any real progress. It was he who convened a conference at Churchill College, Cambridge, of everybody particularly interested in this subject, and I think it was really as a direct result of the Churchill College Conference that the four pilot studies were commissioned and published in 1968.
It is perhaps unnecessary for me to remind your Lordships of the great disasters which have already befallen so many of our historic towns. Whatever we do now, and do not let us forget it, in some cases it is too late. We have only to think of London itself, and in particular of the City of London, where it appears that the whole fabric of its history is disappearing under the high rise blocks. One has perhaps to admit that the City of London presents a very difficult problem, but surely it cannot be right to allow its history to disappear in this absolutely wholesale manner.

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Think for a moment about some of our country towns, cities like Gloucester, the old buildings of which, apart from the cathedral precinct, have virtually disappeared over the past 20 years. I do not think the ghost of the tailor of Gloucester, of Beatrix Potter fame, would find it very easy to recognise the city he knew. Think of Worcester, when only 10 or 12 years ago the whole area North of the cathedral, immediately jutting right up to the cathedral, was completely sacked, laid waste, and redeveloped by developers from outside the city.
Think of Norwich, where I always feel it is ironic to be greeted by a large notice saying "Welcome to a fine city", where very great damage has been done, with the notable exception of the pedestrian precinct. One has to remember that Norwich has a particular problem in possessing vast numbers of mediaeval churches, many of which are bound to be declared redundant, and the corporation, to their very great credit, have taken responsibility for them. There are 32 of these churches. I believe that Norwich and the city of Novgorod in Russia are the only walled cities in Europe with this huge number of churches within the walls. When I visited Novgorod some six years ago I must say it was very interesting to see the Russians rebuilding, as part of the essential townscape of their city, all the churches which had been destroyed during the war.
Think of King's Lynn in Norfolk, where without the activities of the splendid King's Lynn Preservation Trust some of the finest buildings in the town would certainly have disappeared by now, and where without great vigilance on the part of these societies I believe that the whole historic core of the town would by now have suffered irreparable damage. Think of Newcastle where the remaining half of Eldon Square, a part of the great Dobson-Grainger complex, is, I understand, at this moment being demolished.
In the last year I have had the opportunity of looking at this problem from a rather different angle, through being a member of the Royal Fine Art Commission. This Commission is presented with problems of really incredible complexity and importance. Quite frankly, what worries me is how these problems are
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brought before us. The city of Lincoln has already been mentioned by the noble Lord, Lord Clark, and the Royal Fine Art Commission has been consulted during the past year about various individual projects there. Anybody who read the magazine called The Built Environment for February may have read the article about the wholesale development of the lower half of the city. The upper half surrounding the cathedral is a conservation area and is safe. But from the cathedral one is going to look out over a new city, totally out of scale with the old, and, so far as I can judge it, the product of the jungle law of modern uncoordinated development, on such a scale that it appears to me to be something far beyond the control of the Royal Fine Art Commission. The Department of the Environment is the body which surely must have this matter under review. Might a solution be found in the strengthening of the Department's team of investigators, possibly at regional level, with power to act as conservation advisers, as suggested by the noble Lord, Lord Raglan? They might advise on amenity and environmental aspects of these huge and alarming new developments.
May I put this problem in a international setting, because I have had a good deal of experience in this field over past years, in the creation of an international body for preservation. This body is a child of UNESCO and is called the International Council of Monuments and Sites. It was set up some eight years ago at a constitutive meeting in the city of Warsaw, where the Poles had had the great good sense to invite this international body and to show us their really extraordinary achievement, not only, of course, in rebuilding the city of Warsaw, but in building alongside it a very fine new city. It was an unforgettable experience to visit Warsaw; and the recreation of Warsaw, more than any other town I have ever been to, showed that what we are discussing to-day in fact represents the whole spirit of a nation. The determination of the Poles to rebuild their city after its total destruction during the war is an example to many other countries.
We have in the International Council learned a very great deal from other countries such as France, particularly about the preservation of historic towns.

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The French twenty years ago had listed their historic towns, of which I believe there were a thousand, and they have put into operation various pilot schemes such as we are now beginning to administer here. The French Government have in fact given the International Council a headquarters in the Marais District in the City of Paris which is a notable example of preservation of a whole area, and I am very glad to be able to announce that an Englishman has been made the first director of this centre which is to collect information about the preservation of historic buildings throughout the world. Forty-six countries are now affiliated to this centre. I think myself that this is potentially a very important step forward and I hope very much that financial aid of some kind will be given to this project by Her Majesty's Government. For Western Europe of course a body called Europa Nostra, under the indefatigable chairmanship of Mr. Duncan Sandys, has been doing extremely valuable work particularly over legislation affecting preservation.
One has to travel far afield to continents such as Australia, and indeed America, to realise just how blessed we are in the towns which still survive here. You have to go to towns in the outback of Australia, or to New Zealand, where I have been on a lecture tour, and where there really is not one single building of any merit, to realise that what we take for granted here is something quite exceptional. One looks at Independence Hall in Philadelphia, where the Declaration was signed, and sees that it is now entirely surrounded by skyscrapers.
One can set the problem on the world scene. What are we going to do here? The action of Her Majesty's Government in recent months in the provisions of the Town and Country Planning Act 1972 relating to conservation areas, and the conservation and preservation in the Local Government Act 1972, is very much welcomed and in particular the Department of the Environment's recent explanatory circular is an encouraging document, with every word of which I agree except for what I feel is the serious omission of giving county councils concurrent powers with district councils over listed buildings. My feeling is that the document is somewhat complacent in its constant references to teams of experts
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and individual experts who can advise councils on these highly complex matters of planning and conservation. In my experience experts in this field can be numbered almost on the fingers of two hands. There are not nearly enough of them and obviously the training of more experts is one of the most important factors we should press for. My society has in fact for some twenty years been running courses for architects and planners and we have now had two courses, over 1,000 people, but this is only touching the fringe of the problem.
What else can one do? First of all, surely it is of major importance that our historic towns should be categorised. An official list must be made of historic towns similar to the list made by the Council for British Archeology some years ago, but a great deal more thought needs to be given to this list. It is quite clear, as has already been said, that priority must be given to by-passing these historic towns which are being mauled to bits by traffic. Surely the Department of the Environment should be given power to express opinions and be able to amend the conservation areas and a time limit should be set for the designation of these areas.
Value added tax has been mentioned by various noble Lords. It must be possible, surely, to zero rate all listed buildings. The role of the Department of the Environment in all these matters is absolutely crucial, particularly in the transitory period while the new authorities are getting established for 1974. There must be overall control from the central Government if we are going to tackle this problem as it deserves. Again, as has been mentioned, the Council of Europe has set a specific target in declaring 1975 European Architectural Heritage Year. I am a member of the Executive Committee for this country and I would beg your Lordships to use your influence to promote schemes of conservation which will draw public attention to the importance of this country's producing really worthwhile schemes for 1975 which will not only increase public awareness of the problem but will, one hopes, in the future attract a permanent and much wider interest in this very vital subject.
5.26 p.m.
LORD HOLFORD: My Lords, I rise without blushing, although I might well

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blush after what a few noble Lords have said about me. Any unaccustomed pinkness of my face is entirely the reflection of these speeches. Let me put the matter straight at once. The noble Earl, Lord Jellicoe, referred to me as a modest man, and in relation to this particular subject I would only say that I do not think I have any right to be anything but modest. First, however, I should like to congratulate the noble Duke, the Duke of Grafton, on his maiden speech. It was thoughtful and knowledgeable; it had force and it had humour, and I do not think anyone can ask more from a maiden speech than that. I know that every noble Lord will want me to congratulate him on it.
As regards our subject of debate to-day, there is so much to be said and so much to be done at this very critical time that one hardly knows where to begin. Many noble Lords have referred to the fact that it is a critical time, and I would begin by making two special points on this issue. The first is that the tide of financial inflation in building is very much against us. I think the average increase in building costs is running at something between about 7 and sometimes as high as 10 per cent. per annum. That is sufficiently horrifying. The cost of certain kinds of building however is actually going down and this is due of course to mechanisation and other improvements in building techniques and to the fact that mass production is able to make certain types of building cheaper. But, of course, none of that helps in preservation, restoration and repair. The inflation of craftsmen's costs, of the cost of masons, joiners, decorators, plasterers, and all the work that historic buildings so urgently need, is more like 12 to 15 per cent. a year, and this means that if you postpone work on an historic building for five years it is certain to cost, at the end of that time, at least twice as much. This is an appalling financial problem and one which I think makes this debate come, as I said, at a very critical time.
As to V.A.T., this, as the noble Viscount, Lord Esher, said, makes the problem even more difficult. It makes it particularly difficult for owners of historic buildings who are repairing them themselves. I had the privilege of looking after a vast number of buildings at Eton for twenty years after the war, as the
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noble Lord, Lord Glendevon, knows. In that area, to about 57 buildings, most of them historic, no repairs whatever had been done throughout the Victorian period, the late 19th century. We spent five of those twenty years in bringing Eton back into repair, repairing things such as drains, electricity conduits, brickwork and stonework, making the roofs watertight and putting in modem kitchens. That kind of work, which was carried out without any grant from the State, will cost owners a very great deal in future, and the cost is escalating.
I have one suggestion which I hope the Minister will consider. Towards the end of the war we were concerned about the disappearance of the craft of silversmiths and goldsmiths, and, purchase tax being very high at that time, the Goldsmiths Company approached the Government and suggested that there should be a purchase tax exemption panel. The procedure worked very simply. If a goldsmith came and said, "This is a genuine piece of design. I am not putting it out in hundreds of thousands of replicas for commercial use", it was exempted from purchase tax. We must draw a distinction between the kind of repairs that an owner ought to do to his house, which would obviously create a frightful fiscal problem for the Treasury, and the kind of repairs which will really restore a building and bring it back into a condition where people will recognise its historical features, which should be authentic. A lot of money is necessary to do such repairs, and that money should not have an additional tax put upon it. I should have thought it might be possible for an application to be made to a V.A.T. exemption panel in genuine cases.
The second reason why this debate has come at a critical time and why it is so useful that the noble Lord, Lord Raglan, has initiated it is that the public and local government effort is at the moment not even commensurate with the resources; that is to say, there is more money available to help local authorities and the public than is really being used. Worst still, local authorities do not parallel, complement or increase very much the funds available from the Treasury. Therefore, so many historic towns—not only Bath—stand like discarded scenery in the wings of the stage of a small but very precious opera house,

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which is England. This scenery is subject to destruction, or is being replaced by modern sets at an increasing rate as new actors and new plays are put upon the stage. Following his Question on Bath in the House last July, the noble Lord, Lord Raglan, has now called another rehearsal and I must say that it is very necessary to call it.
There are two special features of this debate to which I should like very briefly to refer. The first is that, as the noble Duke, the Duke of Grafton, said, it is twenty years since the Historic Buildings Council was formed. In that time we have had only two chairmen. We had Sir Alan Lascelles for ten years, and for the next ten years we had Lord Hailes, who retired at the end of last month. I hope I can say, without any sort of presumption, that he has retired at the full height of his powers of persuasion, diplomacy and occasional dragooning, which he did to his great credit and to our very great loss. We had only one committee at the start, but we now have four committees of the Council. One is concerned with looking at new cases and asking, "Is this something which could be regarded as outstanding?" If it is, it goes on to the Council. Secondly we have the Listed Buildings Advisory Committee, of which I was chairman for a long period and, which was started as long ago, believe it or not, as 1945 by Lord Silkin.
It is relevant here to mention the Question asked by the noble Baroness, Lady Stocks. I could listen all afternoon to supplementaries by the noble Baroness on the subject of the Coronet Theatre, or on anything else. But the climate has changed very slowly. There was a time when the Listed Buildings Advisory Committee went around with nothing but abuse. I remember, only a few years ago, being rung up by a very indignant and very famous lady, who said to me on the telephone, "The most frightful thing has happened. My house has been listed. What power of appeal do I have?" I had to tell her that she had no power whatever of appeal, and it took me a very long time indeed and two visits to the house to persuade her that it was no insult to her or to the house and it could do her a great deal of good. The Listed Buildings Advisory Committee has now passed into a stage where people are
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asking for buildings to be listed, and I think that this little theatre is one of them. It is a theatre made famous by Sarah Bernhardt, and had other people, such as Dame Sybil Thorndike, appearing in it. It seems to me that now that the pump has been primed by the Government and the Minister has, I think, listed more theatres in London in the last year than his predecessor would ever think possible, it is time that the local authorities said, "We are going to ask for this building to be listed", and I hope they will do that for the Coronet Theatre.
The third committee of the Historic Buildings Council is called Town Schemes. This considers all the buildings in a marked area where a contribution is made by the Minister, by local authorities—sometimes the county and the district together—and by the owner. These schemes, starting very slowly, have now reached the number of 41, as the noble Earl, Lord Jellicoe, said, and there is allocated to them something like £250,000 a year. I should add that not all this money is taken up, because it is one of the features of this grant scheme that it takes a little time to get the particulars right and to spend the money. Nevertheless, it is a very considerable achievement to have £250,000 allocated to town schemes in this country.
The fourth committee, of which I have been chairman for only a few months, deals with the provisions of the Act of 1972, with a grant of £500,000 which has now been increased for conservation areas. I am afraid I must leave it to the Minister to answer the question of the noble Lord, Lord Kennet, about the way in which this Committee works and what is included in its statement of accounts. But I should like to say that if you are going to have a scheme which includes housing grants, improvement grants and road scheme grants all wrapped up together with a conservation area, I believe—and I hope the Minister will agree with me—that you will need an army of bureaucrats to administer it. We are finding it very difficult, in our amateur and unofficial way, to get schemes which are sufficiently coherent for us to be able to make them a grant. We are completely flexible at the moment and are listening to tiny little schemes, such as that at Park Crescent in Oxford, where the inhabitants want to replace the railings which were knocked

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down for half-a-crown in 1940. They want to bring back a little open space in the middle, and that is a scheme where the amenities of that area will be enhanced by conservation.
Then we go up to enormous schemes like Bath, where obviously the problem is exactly the opposite. It is that most of Bath should be a conservation area and this does not fit in with the development plan for that city which is being pursued on quite a different level from the level of conservation, as Lord Clark has pointed out. I will return to this point in one moment.
Another special feature of the debate to-day, as I have mentioned, is the maiden speech of the noble Duke, the Duke of Grafton; but it is important for another reason in that it makes the return of the S.P.A.B., which I am delighted to learn from the Minister is one of the bodies given a small grant to help it, as it were, to do its administrative work and to be more effective. I was once asked as a young architectural lecturer to address the S.P.A.B. in the time of Lord Esher's father. I was extremely nervous, and when I referred to that ancient society I unfortunately called it the Society for the Prevention of Ancient Buildings, much in the same way as one talks about accidents or cruelty to children. I think today that would be called a Freudian slip, because most young architects feel they can do something better than the building which is threatened or about to be demolished. Nevertheless, the proposer of the vote of thanks, when he was woken up to make it, got his own back on me by saying, "Young Mr. Holcroft had made a very provocative speech". The sad feature behind this story is that when architects learn more about the history of their own houses, their own buildings, their own towns it does not spur them on sufficiently to make their own history; and I part company, as I believe the noble Lord, Lord Raglan, does, with the conservationists when they say that it is no part of conservation to make opportunities for people who really care about the buildings they are designing—make an opportunity for them to build them.
I have two major points and I will deal with them fairly briefly because there are other speakers who will deal with
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them much better, but I think they are very important. The first, relating to the matter of cost, is that the scale of operations is now going to take a turn upwards; the curve of expenditure must rise. In a generation from now more buildings will have been constructed than exist to-day. This means two things. It means that we have to be extra careful about keeping the relatively smaller proportion of old buildings that remain, and it also means that the curve of conservation, including its cost, must rise with the curve of new development, and that is quite rapidly. I think one has to look at the history of expenditure on these buildings. I happen to have seen it from a very honest back seat, so to speak, since 1945. The first stage was as far back as 1932 when in the planning Act of that year the local authorities had permissive power—they were not expected to do this, but they were allowed—to preserve historic buildings and to use money to do so. That was not exercised very much before the war and during the war the War Damage Act and the 1944 Town Planning Act quite deliberately placed the emphasis on the Minister's making lists and required him to consult opinion—S.P.A.B., the Georgian Group and others—in so doing, so that we had listed buildings starting in 1945. And it is interesting that the European Architectural Heritage Year of 1975 is exactly 30 years later.
The third and important stage came with money. For the first time, in 1953 the Historic Buildings and Ancient Monuments Act provided a sum from the Treasury for the Minister, on the advice of the Historic Buildings Council, to use in the making of grants for the repair and restoration of historic buildings. There has been a slow increase in funds available for grants, and personally I think that slow increase has been absolutely correct. You cannot spend this money as quickly as you expect. Everyone is enthusiastic about restoring some very dilapidated and beautiful building, but when you get down to it it takes a long time to do. Therefore, it is no good taking that money and holding it in reserve. You ought to spread it over a great many schemes and gradually, as time goes on, you have to increase the capital fund. Secondly, public opinion has to be carried along with you, and

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at the same rate, and owners have to be persuaded to help themselves. I think many conservationists entirely forget how much work is done, not only in financial terms but in the time and care given to their buildings, by owners and occupiers. Thirdly, the local authorities have to adjust their ideas from saving the rates to the idea that conservation is an enormous job, just as big a job really as new construction, and this is going to take a long time, I am sure, to sink in.
Then, as has been said, Sir Duncan Sandys produced his Bill on civic amenities and we had first the idea, in 1967, of designating conservation areas, and from that point preservation entered the planning field, so the curve now starts to rise more rapidly. Because, just like population and information and technology, and in fact monetary inflation generally, the curve rises very slowly for a long time and then suddenly rises extremely steeply, and it is the rate of the increase that I think matters most in our historic buildings fund rather than the actual monetary sums referred to. I think for the moment there is also enough to do the jobs, not all the jobs but most of them. But within five or 10 years Parliament is going to have to face the fact that these funds are going to be totally inadequate, when it is realised that Venice, for example, has a bill of over £200 million to spend, after years and years of discussion with UNESCO and the Italian Government; and our own Venice, Bath, is suddenly going to come to a point where it is going to require not tens of thousands but hundreds of thousands of pounds a year to do the job properly. I think all one can say about money is that all Governments have been generous since 1953—they have not been over-generous; they have been shrewd in the way they have handed out the money—but they must now be prepared, and public opinion must be prepared, for the curve suddenly to rise extremely fast.
In this connection I would make one point from our short experience in conservation grants and that is the difficulty of the local authorities' raising their other 50 per cent. The grant recommended on conservation areas is not always as high as 50 per cent. but it very likely may be so, and you will find the local authority looks askance at you, saying, "It's no good
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your giving us all that money. We've got to find the other 50 per cent. out of the rates, and we have education, housing and so on to think about." The only thought I put forward on this is related to the second bigger point which I wish to make, and that is the question of priorities or selectivity in what we do.
I take only three places: Bath, at one end of the scale, Berwick-on-Tweed on the other—with no money and yet a perfect little walled town sitting on the border between Scotland and England—and Liverpool. Liverpool also has a Georgian town hall, designed by John Wood of Bath. When I asked for help in finding out what Liverpool looked like in the 18th century, I found that Liverpool was a beautiful Georgian city, exactly as Bath is now. The difference, of course, is that Liverpool was a port and Bath was a resort, and Bath therefore had a season and could afford, as it were, to keep up these buildings in what one might almost call holiday costume to a much greater extent than a commercial and mercantile city such as Liverpool. Liverpool now has only three buildings of the Georgian period left in it. On the other hand, under the Victorians Liverpool built some extraordinarily interesting modern buildings—modern for their time—like Oriel Chambers, for example, in Water Street.
The point is that we have to understand the degree of public expenditure which is appropriate to these different tasks. In the case of Berwick-on-Tweed it is absolutely a question of money, because if money can restore those stone houses, the town walls and all the other public buildings in Berwick-on-Tweed I think it will be possible to get people to go to Berwick to live there and to recreate in the 20th century a small Liverpool town that belongs to so many earlier periods. I believe that the Wigans, the Skelmersdales and the other new towns can look after themselves. I believe that they will make their own urban history; and therefore the problem of a town like Bath becomes more and more special and more and more isolated. As Lord Clark said about Glasgow, you have there a fine mediæval city which had some interesting Victorian additions, and at the present day it ought to be able to look after itself. But in the case of Bath you are running right counter to the local

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government principle that there should be equality, or at least equity, in the finances as well as the proposals of local authorities and once one tackles this problem of distinction, which is so alien to the equalisation theories of local government, one is at the beginning of deciding that there must be special remedies for special cases.
I cannot offer a total solution to this problem. I am devastated, as Lord Clark has been devastated, and, as he said in that noble letter to The Times some months ago, shocked by the rate at which not the principal actors but the supporting cast are being removed from the stage in Bath. On the other hand, I feel that you cannot go to a town like Bath, which still has its future as a regional shopping centre, and say, "You should be nothing but a conservation area". They have their own lives to live. It seems to me that what has been most attractive about to-day's debate is the idea which I think Lord Raglan himself suggested, that there should be some kind of conservation corporation on the lines of the new town corporation that we thought of in 1946. I believe that there must be some special coming together, or else that a part of the local authority must be hived off to deal solely for a period of years—say, 10 or 15 years—with this problem of the conservation of Bath.
My Lords, I have only one other point which I should like to make, and that is a point on what happens below stage: what the Council for British Archæology call the erosion of history. This is very significant in the four cities which have been chosen by the Preservation Policy Group, and perhaps one of the most interesting at the moment is York, which is the one we are indebted to the noble Viscount, Lord Esher, for writing his Report about. The Leverhulme Trust has given a grant to the York Archæological Trust to help them with their excavations in this very historic city, and has at the same time asked them to report after three years on the problems that they found in dealing with this work in a city which is subject not only to a large amount of redevelopment but also to a large amount of conservation.
It will be very interesting to see whether we can resolve the at present very (I
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think) tricky situation between scholars and archæologists who wish to have complete access to sites when they are uncovered by the demolition of buildings, or even before those buildings have been demolished and during the process of rebuilding, and those who realise, to their cost, that every week spent in delay once a contract is signed may mean perhaps £10,000 lost on the building that is to be erected. There are two extremes here that must be brought together. Years ago, the Marquess of Queensberry did this for the boxing ring, and I cannot help feeling that we should have some rules—a code of practice, if you like—not necessarily mandatory, of which the archæologists and historians, plus the owners of buildings, the developers and the people who apply for planning permission, should be made aware and made to use.
My Lords, I must really bring this rather long speech to an end. May I summarise by saying that I should like very much to see three things happen. I should like to see more money, not immediately but very soon, to raise more effort. I think we shall all have to do more work on the selection of what the central Government are asked to aid and what local authorities are now starting to assist by grants. I think we shall want more scholarship and skill, not less and, as the noble Duke, the Duke of Grafton, said, the training of these people and the finding of them is a major problem. I think we have to accept the inequalities of history because, after all, the more the cost accountants get at everything the more ordinary people go away and look for fantasy and for even the splendours and the opulence of Victorian and Georgian buildings. It is the fantasies of the past that people are so extremely keen to keep to-day, and all this is an aspect of selectivity.
Lastly, I think we want better stage management below stage as well as on the stage itself. I think we shall have to invent, as we invented the new town corporation, a new form of conservation corporation, whether it works with the local authority or even, in extreme cases, in place of it for a period and then hands the thing back. These, I take it, are some of the lessons of the Kennet Report which we have been debating.
5.58 p.m.
LORD FISKE: My Lords, I am sure we are all very grateful to Lord Raglan for giving us the opportunity to debate this Motion this afternoon, as well as to Lord Kennet for the excellent Report which is the subject of the debate. I also noted particularly during our discussions the enthusiasm of the noble Earl the Leader of the House, and I know that that enthusiasm will be matched by the noble Lord, Lord Sandford, when he comes to reply to the debate. But this is an important subject, and I want to deal with it in a rather different way from that in which anyone has dealt with it so far, in the sense that I want to deal with working it in practice.
It so happens that I think it was 21 or 22 years ago now that, as chairman of the London County Council's town planning committee I set up an historic buildings sub-committee, with quite simple terms of reference. The first one was to consider and recommend to the Council on what buildings blue plaques should be erected commemorating the residence there of eminent men and women as long as they had been dead for at least 20 years. The second was to take over from the voluntary committee that had been doing it the work of writing the London Survey, a work which has been going on all this century, a distinguished work of scholarship which continues under Dr. Shepherd's skilful guidance, and which will go on for the rest of the century.
The third of the terms of reference was to advise the council on town planning applications for the alteration and development of historic buildings, and also to advise the council on its own historic buildings. This was a very worthwhile exercise and I think that it had some salutary results. The first thing that I would call to your Lordships' attention is that my wish that the Government insist or recommend (I do not know which) that local authorities have this sort of job done by a small sub-committee not cluttered up with other urgent business. In that sub-committee we could sit back and argue all the afternoon on the merits or demerits of buildings if we so wished. It meant that a lot of consideration was given and that a lot of careful study was done. In that work, incidentally, I was assisted by two Members of your Lord
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ships' House, first the noble Lord, Lord Brooke of Cumnor, and then the noble Lord, Lord Carrington. We set a policy and we found out something that alarmed us. Some of those things I should like to put to your Lordships because they only came to notice when one really started to study the thing with intensity.
We looked first at our own historic buildings. I think that the first one we looked at was Marble Hill House. Your Lordships will now all know Marble Hill House as one of the more delightful of London's amenities. It was not in the area of the London County Council but it belonged to the London County Council. If they had not stepped in and bought it earlier in the century it would have become a building estate on the banks of the River Thames. Marble Hill House had been used as a seed and implement store by the Council's parks department during the war and it was being so used in 1952. This was something that obviously could immediately be put in hand; and it was.
We then moved to the next historical building, which was the house called Claremont on the border of Roehampton and Richmond Park. Claremont was a beautiful house of the Adam period and was literally in tatters. We had to spend £40,000 to restore it to order in the middle 1950s. Your Lordships will remember the middle 1950s. It was a lot of money to spend at that time and one had to spend it against the criticism. "What are you going to use it for?" Neither I nor anyone else could have said, looking at that building in ruins, that anybody would ever want to use it. This is another point which local authorities must be aware of: that you have to take your faith in your hands and know—literally know—that once you have restored the building somebody will come along who is prepared to use it. Before it is restored people cannot visualise how it is going to look. That house at Claremont is now the central building of a very successful teachers' training college.
The next two examples illustrate the point that in the case of large cities or conurbations particularly you must endeavour to have a geographical distribution. It would not be proper that all the historic buildings of London should be centred in Westminster or round the Tower or in any other one place. So

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that the next "parcel of buildings"—for that is what they literally were—which came up for consideration were the Trinity Almshouses for Decayed Mariners in the Mile End Road. Here was a group of 24 almshouses round a quadrangle with a chapel at the end—again in ruins. It was of the period of Wren although I think not by Wren. We knew that they would not be suitable for old people because they were on two very awkward levels and should not have been built as almshouses in the first place; but we thought that they had an intrinsic part to lay in the life of Stepney; and so we restored them. While restoring them we were told that we could not do so within the council's ordinary housing subsidy and that it would have to be done at economic rents. That had a profound effect; but we still went on. In the end, when they were done, delightful as they were, they were immediately snapped up by all the many people who are engaged in social work in the East End of London. They have been greatly successful ever since.
The fourth that we tried was a large Tudor mansion in Hackney called Brooke House. It was the home of the Earl of Oxford, he whom some people think "wrote Shakespeare". This was really beyond anything we could possibly visualise. With great reluctance we agreed to its demolition but, mainly because of intensive study and because we were ready and armed to keep the bulldozers out (for the L.C.C. had a very efficient fleet of bulldozers and, in fact on two of the sites that I have mentioned they were literally ready to go in) we were able to prevail; and it was worth while.
The lessons that emerged from these examples are: first, you must have a specialist committee to do it; second, you must have geographical distribution; and third, you do not have to worry about whether anybody will be prepared to use it when you have done it. They are three important lessons that we learned in the very early days.
The work developed rapidly from that point. Obviously I cannot go into all the details, but there are now many very fine terraces and crescents in London which would never have remained but for the activities of that committee, energetically
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supported by the council. One needs to be served on that sort of work by a team of highly qualified and highly conscientious officers. Here one runs into the question of choice to which the noble Lord, Lord Holford, referred. What is a historic building within the ambit of the council? I have no doubt that by the end of this century we shall be rushing around trying to preserve terraces of the semi-detached houses built between the two wars; because in my opinion preservation is not so much a matter of intrinsic merit but a matter of time—the time it was built and the time you happen to be living in—and fashion.
This is to some extent unfortunate, but for me it can be illustrated in one simple way. When I was a very young man the two most execrated buildings in London were the Albert Memorial and the St. Pancras Hotel. I dare say that many of your Lordships who are roughly my age will have had the same views. Now it would be absolute sacrilege to lay hands on either of those buildings in spite of the fact that in the case of the St. Pancras Hotel, so far as I know, nobody has ever found that its vast rooms could be used in a modern context.
But, my Lords, there we are. It is against this background of changing fashion, of the passage of time, that a conscientious historically-minded architect has to choose what he is to recommend for preservation and what he is to withhold. All the members of his committee will, of course, be amateurs. We all think we are planners and judges of architecture in a way that we would not dream of judging engineering or medicine or anything else. Somehow we refuse to admit that planning and architecture are highly professional matters and that we need guidance, and we shall have to see that in this connection we get it.
My Lords, in conclusion I would come very much to the same point as did the noble Lord, Lord Holford; that if we can have more money so much the better, but we do need a vast programme of education, particularly, I think, among local authorities. This should be easier in their new and larger context because, presumably, in their very much enlarged architects departments they will be able to have a small section of highly qualified antiquarians—if you like to use that word. I do not quite know what is the real word

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to describe an architect concerned with the past—he is not quite an "archeologist". In this way it should be possible to speed the work and to preserve for posterity our great heritage in practically every town and village in the country; and that, I am sure, is what most of your Lordships who have spoken this afternoon would like to see.
6.12 p.m.
LORD ALDINGTON: My Lords, I am glad to follow the noble Lord, Lord Fiske, and in particular to have heard him, rightly, say what he had been able to contribute to the preservation of buildings in London. He will know that I am connected with the dockland area and I hope that I—or if not I, my successor—shall be able to pass on to posterity some of the wonderful buildings which are, as it were, being uncovered in that area. In that I shall seek to emulate the noble Lord's example later on. I should like to start my remarks by saying, "Thank you", as we all have, to the noble Lord, Lord Raglan, for giving us the chance to debate, and perhaps to take a bit further, the principles in the valuable Report of the Preservation Policy Group on Historic Towns and Villages which was published in 1970. I should like also to thank him for the distinguished way in which he opened the debate.
At the start of his speech the noble Lord, Lord Raglan, spoke of the importance of the will to use the powers available. I shall be referring to that point in what I have to say on one facet of this fascinating problem. May I also add my thanks to the noble Lord, Lord Kennet, and his colleagues for the Report. He is not at present in the Chamber, I am sure for very good reasons, but may I congratulate my noble friend the Duke of Grafton on his powerful and most interesting maiden speech. I speak with more than usual humility and more than usual diffidence, even greater than the diffidence professed by my noble Leader. For I know that though I feel deeply about the conservation and preservation of our national heritage everywhere, I have not the knowledge, nor have I the experience, nor have I the eloquence—not even the elegance—of so many of your Lordships who have made this debate fascinating to someone who is a newcomer to discussions like this in your
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Lordships' House. I fear that I may prove to be rather more abrasive than some of your Lordships on one point, if I get roused.
I have to admit also that I have a fair number of Philistine occupations at present, which might indicate to your Lordships that I should not have this interest in the preservation of the buildings and also the character of our historic cities, towns, villages and buildings. But the truth is that I am as glad to support a crusade for Bath or the other cities, and the villages, as I am to spend a few minutes to-day—and perhaps again on a later occasion—asking your Lordships to support the crusade for the preservation of the character of Britain's ancient capital city, Winchester, against the threat of destruction by a proposed new motorway. As a new crusader, perhaps I should at the outset not only acknowledge but also pay tribute to the work done over many years by amenity societies, the national and also the local societies, and by what are now called environmental correspondents in the national Press and local newspapers. With the help of many of your Lordships this has led to the revolution of opinion so rightly mentioned in paragraph 8 of Lord Kennet's Report; a revolution which I think has been continuing. I do not pay that tribute only in the hope of favours to come. Also, may I pay a sincere tribute to the achievements of the Department of the Environment and their predecessors.
This revolution of opinion has led, quite rightly, to the expenditure of relatively large amounts of public and private funds on the preservation and improvement of historic buildings. We have heard much about that to-day. Also it has led to the acceptance by the Government of the proposition that on occasions strict economics will have to take second place to the need to preserve the character of historic areas. It would be great folly to give out funds with one hand and destroy the purpose of that expenditure with the other; for a substantial part of the Government's activities must impinge on the historic areas, and no greater part than transport and road policy. In the case of traffic and roads the Government have sought to follow the recommendations in Lord Kennet's Report, particularly the recommendation in paragraph 70. In a circular

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issued by the Department of the Environment in mid-1971—I think it was No. 56/71—there is a paragraph, No. 6, which I will quote:
"The Department further accepts that preserving the character of historic towns, or individual buildings in it, may sometimes mean incurring increased costs of road construction."
So money costs, my Lords, are not to be used by the Department or its inspectors as an argument for destroying historic areas rather than putting a road or motorway somewhere else. I do not imagine that there is anyone who now thinks that it is not right to relieve historic areas from through traffic. There will be—and in certain places mentioned to-day there are—considerable arguments about how best to do this, but the principle is accepted.
Many good things have been done, not least in Winchester city, to relieve the centre of historic places from heavy traffic, and indeed from any traffic at all. But if we are to preserve the character of historic towns and cities the surrounding area also must be protected. My noble friend Lord Clark, in his powerful speech, spoke of the organic relationship between historic buildings and their surroundings. In the debate in your Lordships' House on January 31, my noble friend Lord Sandford referred to the character of our cities, particularly cities with historic buildings. He referred specifically to the growth of public opinion in favour of "conserving the familiar and cherished local scene". I am the more able to quote my noble friend's words because they are on the front page of a circular which is awaiting us in the Printed Paper Office to-day. The noble Lord could not have helped me more in the argument I am about to put.
Let me now tell your Lordships about the madness that it is proposed shall happen at Winchester which will vitally affect its character. The madness arises in this way. A very necessary by-pass was built to the immediate East of the city in the mid-1930s. That road has been improved since, but it is clearly not going to be sufficient to cater for the through traffic not only from London, but from the Midlands, to Southampton in the next decade—and it is in many ways not a really safe road. So the City Council want a better by-pass—and I
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think they are right. At the same time, the motorway authorities wish to extend the existing M.3 part of the south-western motorway from London down to Southampton. I think that they made a mistake in directing the motorway from Southampton towards London. It should be directed at Birmingham, joining the London motorway somewhere further up, perhaps near Andover. But that is a matter for another debate.
The existing M.3 stops at present at Popham, which is approximately immediately North of Winchester, which is approximately immediately North of Southampton. It is not surprising if you start the road at Popham that the cheapest way of building it to Southampton is to take it due South and to pass as near as possible to Winchester on the East of it. Out of various alternatives, therefore, the route chosen and approved by the Minister is the cheapest route, and is to pass inside the existing by-pass within about half a mile of the Cathedral and the College, across the edge of the College playing fields and then across the Water Meadows to less than one-quarter of a mile from the old St. Cross buildings. As many of your Lordships know, this means coming between St. Catherine's Hill and the Cathedral and College and St. Cross, allowing the hill to act as a sounding board for the noise of the traffic, to throw it back on to the historic areas of the South part of the city.
The motorway is to be a six-lane motorway, with vehicles up to 80,000 a day, so we are told, moving at motorway speeds, and, of course, vehicles of hideous motorway sizes, familiar to me in the docks and to most of your Lordships too—very different from the idea of the mid-1930s by-pass. There will be the noise. There will be the unsightliness, particularly of signboards, referred to by one noble Lord earlier to-day. Something could be done to mitigate the nuisance from these, but not to remove the damage. Most important of all, there will be the wide stone barrier of road, in all about 100 yards or more wide, with its high banks. This, with the by-pass next to it, will together form a barrier of movement to people, whether they be the citizens of Winchester or visitors from all over the world, between the beautiful Water Meadows and the open country

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beyond. For about 1,000 years now these Water Meadows have provided the lungs of Winchester City, and for many hundreds of years have been as much a part of this historic area as the Cathedral, the College and St. Cross on which they border—in Lord Sandford's words: "the familiar and the cherished local scene". Who can deny that the construction of a motorway along that route will for ever destroy the character of that historic part of Winchester City? It is not extravagant to say, as has been said, I think, by the headmaster and myself on another occasion, that the construction of this proposed extension of the motorway would be an act of desecration.
My Lords, in the Report, Lord Kennet and his colleagues were asked to consider measures adopted in other countries for preserving the character of historic towns. As your Lordships will know, motorways in Italy, motorways in France, and I believe it is true in Germany, too, do not pass through or even on the edge of historic areas of such a character.
Reference has been made to the European Architectural Heritage Year 1975. The objectives of that year are given as four: to awaken the interest of the European peoples in their common architectural heritage; to protect and enhance buildings and areas of architectural or historic interest; to conserve the character of old towns and villages; and to assure for ancient buildings a living role in contemporary society. Her Majesty's Government support the United Kingdom Council for this Year, and support it well. But they will in my opinion not be acting true to their money, or true to their personal participation, if they allow this new motorway to destroy the character of Winchester; and they will surely be running counter to each one of those four objectives that I have just read out. One can pause for a moment to ask how decisions like this come to be taken.
LORD SHACKLETON: My Lords, perhaps I may interrupt the noble Lord if he is leaving the subject of the place where he went to school. Can he tell us how many buildings are likely to be demolished, and where he would route the motorway? I go about once a fortnight on that very inferior and dangerous
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by-pass, and I wondered what his alternative would be.
LORD ALDINGTON: My Lords, I will tell the noble Lord, but I have a different way of doing it, if he will just listen. I realise of course that anybody who was at one of these famous public schools and refers to it in a debate like this is open to the slight jibe that he is really only concerned with protecting the playing fields of Eton and Winchester, or whatever. I cannot believe that the noble Lord the Leader of the Opposition is really making that jibe, but I think he is making the point that this does not do direct damage to any historic building. I am arguing that it does damage to the character of the buildings in the City and to the surroundings. That is the argument. If I have not made it clear to the noble Lord, then I am about to do so. If I may come to the alternatives, I propose to deal with them quickly, because this is not a road debate or a transport debate.
LORD SHACKLETON: My Lords, the noble Lord should not assume that I am hostile. I am trying to help him. He should not be so sensitive.
LORD ALDINGTON: My Lords, if I have proved sensitive, I warned your Lordships that I might. I am trying to speak quickly. If I can go back to my question of how decisions like this can be taken. I think I will best deal with the point that is worrying the noble Lord. The first answer, I think, is that it is had road planning. People have been writing letters to The Times about this relating to a number of roads. The fact is that road planning procedures appear to deal with problems of new big motorways piecemeal, and nobody ever looks at the conservation aspect of the whole route, which presumably is in somebody's pigeonhole and does not come out for many years. The second answer is that the plans which made this route necessary were thought up before Lord Kennet's Committee had reported. I think that is indubitable. It appears that the inspector who conducted the inquiry was not aware of the Department's policy and the circular implementing the recommendations in the Report was not issued until after the inquiry. The third answer is that the Government do not understand that the Water Meadows and their quietude form

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an organic part of Winchester's historic buildings. This may be a matter of opinion, and it is something on which your Lordships may have different opinions from mine. But at least some of your Lordships will agree with me on that. The fourth answer is that in road planning, in my opinion, mistakes will continue to be made unless there is a very clear directive to road planners about conservation policies such as this.
My noble friend Lord Clark referred to the need for Central Government to have mandatory power. He gave us his reasons and, with humility, I agree with his thinking. But, of course, so far as motorways are concerned, the Government already have that mandatory power. The trouble is that they do not appear to have used it. They can say to the road planners: "Thou shalt not put a motorway so close to historic cities, towns and buildings as to destroy forever the character of such places whether by noise, or by disfigurement, or by sealing off people from their environment." They can say that and I wish they would. I said at the outset that I hoped we should take this excellent Report and the principles in it a little further. The noble Lord, Lord Sandford, helped us to do this in his speech to us on January 31 in the Quality of Life debate. I have already referred to his remarks. I stress again that in recent years there has been the change from worrying only about the preservation of buildings to worrying about the preservation of the character of the cities or the villages or the towns, and of the environment of those buildings.
Secondly, I must refer to the motorway aspect. I cannot believe that Lord Kennet's Committee had in mind that anyone would be so crazy as to threaten historic cities and towns with motorways connecting other great urban centres. I hope now that others, as well as myself, will be reminding the Government that there is a difference, not only of size, between a motorway and an ordinary road—a difference that arises because of the number of vehicles, the size of them, the speed of them, and the size of the road itself. One might suggest to your Lordships that there should be a special study of motorways in relation to historic cities, towns and villages.
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I believe that Cambridge is under the same or similar threat to that to Winchester from a motorway which really ought not to be anywhere near it, any more than the M.3 ought to be anywhere near Winchester. It may be that York and other cities are likewise threatened. Motorways are designed for long-distance journeys and not for bypassing cities. But that, as I have indicated to my noble friend Lord Sandford, is another story for another debate, as is the case for alternate routes. There are alternate routes: one costs £1 million more, and only £1 million more, than the preferred route. I am concerned here simply to make the case that the highest priority should be given to the preservation of the character of Winchester city, particularly the character of the cathedral, the college, St. Cross and the areas between them. My submission is that the only way to secure this highest priority is for Ministers to direct that a motorway shall not be built so close as to destroy the character of that area. It is never too late for them to do that.
Looking back on other controversies that have raged around roads and historic buildings, I come to think most easily of the case of the proposed Christchurch Meadows road at Oxford. I have always understood that that argument was not really settled until someone at or near the very top said that a new road shall not go there. Whether or not that is true, it is that kind of firm decisive decision that is required if we are to implement to the full the purpose of the Report of Lord Kennet's group. Someone must say, "A motorway shall not go between St. Catherine's Hill and Winchester city".
6.33 p.m.
THE LORD BISHOP OF ROCHESTER: My Lords, any Member of your Lordships' House who speaks from these particular Benches has the privilege of taking as part of his own name and signature for so long as he holds office the name of a historic city. I happen to be the 104th person to bear the name of the See city of Rochester. Although the area of the Bishop's jurisdiction has varied enormously down the centuries (a hundred years ago he had the whole of Essex and Hertfordshire in his care) the name of the See has remained unaltered for 13½ centuries.

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This prompts me to say that at a time when changes in local government are affecting not only boundaries and councils but also local names, I believe it to be important that our concern for our historic cities and towns should include concern for the preservation of historic names. A city such as my own See city, which has had a mayor by royal charter for over 500 years, is sad to see its name erased from the list of local authorities, as is the great naval port of Chatham. Names evoke local pride and local loyalty. As we have seen in the Greater London area, it is possible for a district that is no longer a unit of government, by keeping its name and many of the associations that go with it, to preserve something of that sense of belonging which is one of the essential ingredients of an integrated local community.
A good many references have already been made to that part of Lord Kennet's Report which deals with traffic. I quote the firm statement in the Report that
"Traffic is one of the greatest threats to the historic environment."
I do not think that only Winchester among the cathedral cities would echo that sentiment. One of the paradoxes of our time is that as each year goes by more and more people make pilgrimage to our cathedral cities. Thirty years ago the redoubtable editor of Crock ford's (the Established Church's own particular species of Gadfly) wrote,
"The ancient cathedrals are objects of more widespread interest than at any previous period. It is sometimes said that the present day is the cathedral age."
Since he wrote those words the two 20th century cathedrals at Coventry and Guildford have been built, and the stream of English pilgrims to our great churches has been joined by an ever-increasing number of visitors from all parts of the world, all of them attracted by that part of our English heritage of which the noble Earl, Lord Jellicoe, spoke with such feeling.
This fact, call it tourism if you like, underlines the importance of really bold town schemes that will preserve on the one hand pedestrian precincts and fine, open views of our great buildings, and on the other hand conveniently placed and well designed parking places within easy access of the historic buildings and
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shopping centres. In Rochester the present council intends in due course to introduce a town scheme, with all the help from local and central funds, that that will bring to the owners of buildings of historic or architectural interest. But our present City Fathers are rightly of the opinion that they cannot ask property owners to be party to a town scheme until something is done about the present traffic conditions. When urgently needed traffic improvements have been carried out, the introduction of a town scheme will be a more feasible proposition.
I venture to quote this example from within my own limited experience to emphasise the importance of what is said in paragraph 70 of the Preservation Policy Group's Report about traffic management in historic areas being an integral part of conservation. In the same paragraph there is a reference to the need for the relief of historic areas from through traffic to be recognised clearly as an important factor in the assessment of alternative routes, and what is called inter-urban highways, something which the noble Lord, Lord Aldington, has spoken about so powerfully. I venture to hope that the Department of the Environment, with its overall responsibility for planning, conservation and transport, will support local councils whenever possible in their endeavours to prevent heavy commercial vehicles from using the high streets of cathedral cities as through routes.
The third matter upon which I should like to speak is that of the control over buildings listed as of architectural or historic merit. The Preservation Policy Group tell us in paragraph 3 of their Report that they were closely concerned with the drafting of the 1968 Act under which listed building consent is required before any alteration of significance can be made, or demolition put in hand. Over 50 years earlier, in a debate in this House, the attention of the Church of England was drawn to the need for closer control over alterations affecting the character of parish churches. By 1923 the Church had evolved a system in every diocese to restrain unwise alterations to parish churches. The service rendered for over half a century by diocesan advisory committees has been a notable one, even if at times they have not been the most appreciated body by some hard

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pressed clergy or struggling parochial treasurers.
Safeguarding buildings from demolition is a much more difficult task than that of unwise alterations. The Report admits as much when it reveals that in 1966 listed buildings were disappearing at the rate of 400 a year. Churches are exposed to the same pressures as are the owners of historic houses. In the Church of England the record, at least since the last War, has not been too bad. I hope it has been rather better, perhaps, than the noble Viscount, Lord Esher, seemed to suggest. It is now almost impossible for a parish church to be demolished without reference, first to a body competent to assess its architectural and historic merits, and then, without the approval of another outside body able to assess the pastoral considerations as well. In almost all cases in which demolition is proposed the Advisory Board for Redundant Churches, of which the noble Lord, Lord Fletcher, is chairman and the noble Viscount, Lord Esher, is a member, must consider the merit of the building. The proposals must be advertised, and objections may be lodged in much the same way as for secular buildings under the 1968 Act. The final decision does not rest locally but with the Board of Governors of the Church Commissioners, a body of clergy and laity, most of them elected.
I turn now to that section of the Report entitled "New Uses for Old Buildings", for this is a key to the conservation of buildings for which the former use is no more. As the Report states, the great majority of listed buildings are still capable of beneficial use in the present day, but to find an appropriate use sometimes requires considerable effort. In the Church of England we take this problem very seriously. Each diocese now has a committee whose special responsibility it is to try to find, within a statutory period, a new use for every church that is declared redundant. The use that is proposed, and any consequential structural alterations that are proposed, require the approval of Lord Fletcher's Advisory Board. Many such uses have been found already, including an Arts centre, a concert hall, a regimental museum and an agricultural store.
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There are sometimes people who are keen to convert a church to residential use, and some very skilful adaptations of churches have been made without detriment to their historic character. The Advisory Board, with the help of the Goldsmiths Company, has recently appointed a research fellow, a qualified architect, to examine ideas both here and on the Continent for the conversion of redundant churches. I would also mention the significant recommendation of the Historic Buildings Council, that redundant churches that have been successfully adapted to an alternative use should qualify for its grants on the same basis as do secular historic buildings.
This leads me, finally, to say something about State aid for churches. It is in a way something of a paradox that there should already be State aid for churches that have been declared redundant before there is State aid for churches still in use. Of course I realise that some may hold that aid for churches in use would be a subsidy to this or that particular denomination, helping to keep it in being. But perhaps one may be allowed to ask how this differs from what happens with grants to owners of historic houses at the present time. These grants must sometimes help to keep in being those who would otherwise be driven to the wall on account of economic circumstances. The case for aid is surely the same for both—that it is the nation's concern to conserve its historic treasures. These are best preserved—as Lord Kennet's Report says in paragraph 67—by being continued in use.
The distinction in treatment between historic houses and historic churches did not come about in 1913, for dwelling-houses equally with ecclesiastical buildings were excluded from the Ancient Monuments legislation of that year. An Englishman's home was then his castle. Parliament in 1913 knew well that he would not tolerate interference, whether by the Commissioner of Works or by the local authority. Yet it has been asserted that in 1913 it was the Church that was somehow uniquely stand-offish. The distinction in treatment between houses and churches first arose, I believe, through administrative decisions taken at the time of the 1953 Act, when State aid was brought to historic houses, 15 years before they were subject to any really effective control. State aid was then not

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extended to churches in use, although I think there is nothing hi the Act to exclude them.
LORD KENNET: My Lords, I wonder whether the right reverend Prelate would permit me to introduce a distinction. Is it not the case that churches were first distinguished from dwellinghouses under planning law in 1947, when for the first time the system was set up whereby listed houses might not be demolished without one informed the State and waited for objections, but churches were provisionally exempted from that control?
THE LORD BISHOP OF ROCHESTER: My Lords, I would not presume to disagree with the noble Lord on a technical matter of that kind. The point I was really making was that it does not go back to 1913.
LORD KENNET: My Lords, would the right reverend Prelate allow me to intervene? In the most meaningful sense it goes back to 1913, because the 1913 Act drew up a list of buildings, which are the most important buildings in the country, not including any dwellinghouses—castles, ruins, palaces, what-have-you—and subjected them to control by the State. But the churches, the best of which were not only as good as those but even better, were exempted from State control on—and I think Parliament understood it—the request of Archbishop Davidson in 1913.
THE LORD BISHOP OF ROCHESTER: My Lords, with respect I suggest that there is an area of debate here which is one that no doubt we shall be continuing later with Her Majesty's Government in the Working Party to which I shall refer in a moment.
I have spoken of the Church's domestic system of control that now, after fifty years of continuous care and effort, provides much the same safeguards as for listed secular buildings. Regular inspection by competent architects every five years ensures that every parish knows what must be done to keep its parish church in good repair. I never cease to marvel at the prodigious efforts made by comparatively small communities to raise the money required. Sometimes the bills are crippling and are a positive setback to the spiritual and pastoral work of a parish. Now, in addition, they must pay V.A.T. on all professional fees and
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repair bills. This problem is particularly difficult in remote country areas and in those areas where the residential population has moved away. It is help for churches in historic towns and villages of this sort that the Working Party set up by the General Synod of the Church of England had particularly in mind when it approached the Secretary of State for the Environment about the possibility of State aid for churches in use; an approach made with greater confidence because of the helpful reception to an earlier approach, to which the noble Lord, Lord Kennet, has already referred in this debate. It falls to me to be Chairman of that Working Party and I am immensely grateful to my reverend friend, the noble Lord, Lord Sandford, for the helpful way in which he has received our initial approach. If I may be allowed to say so, I am also most grateful for and immensely encouraged by the warm and generous words of the noble Earl the Leader of the House this afternoon.
The noble Lord, Lord Sandford, has. not unnaturally, asked us for facts and figures from at least two representative areas both of the Church's needs for the upkeep of its historic churches and of its resources. We hope that we shall very shortly be in a position to supply him with the detailed information for which he has asked. We shall be ready as well to answer any questions that he may have about the Church's domestic system of control. As I have indicated already. we shall be ready to discuss the question of the exemption clause if he asks us to do so, which he has not yet done; and I should perhaps say also that we shall be ready to speak not only for the Church of England but for Churches of all traditions. My Lords, I very much hope that before the start of the European Architectural Heritage Year in 1975, which will be some eight centuries after the building of so many of our finest churches, the Government will be ready to announce that in future listed parish churches will be eligible for Government grants on a similar basis to that which applies to-day to secular buildings of outstanding historic or architectural importance in our historic towns and villages.
6.55 p.m.
BARONESS STOCKS: My Lords, I should like to put in a word for our

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villages which have not received sufficient attention in the course of this debate. Our villages are a feature of Great Britain which I believe should be perpetuated and not entirely lost. When is a village a village? My answer is: when the people who live in it think of themselves as living in a village. In some cases our villages have been at risk. In the commuter areas South of London they are at risk from over-settlement by opulent commuters who live in them and who destroy the sense of being in a village. They are at risk also from being absorbed in great conurbations and they may or may not continue to regard themselves as villages. The interesting thing is that they may, even under those conditions.
In Manchester there is a big road going to the South carrying very heavy, fast traffic. It goes through Fallowfield, Withington and Didsbury. In Didsbury, which used to be a village, there are still some village shops in the main street in spite of the settlement of Boots and two supermarkets. Just off that main road here are little village streets—there were two years ago, though I do not know whether they are still there—with cottages, cottage gardens and fences. The fact remains that if you live in Didsbury you go shopping in the village and Didsbury is still, in that sense, a village.
There are villages of that sort in London. Years ago I was a professional social worker in London and became aware that when one went uphill into Woolwich from the river bank one was in a village. I do not know whether that is so now. It is true still that if you live in Blackheath you go shopping in the village and there are still village shops. There are not many villages left in London but there are vestigial remains of villages in the form of a few little village streets. In Kensington I can remember two: one was a little row of cottages with gardens behind what is now Woolworth's—I think it was called Woolmer Place, but I forget. It is now no longer there, naturally. There was another called Prince's Place, with two rows of houses with cottage gardens and fences, which is now in the process of demolition. For the most part one has to consider Kensington (with which I am very concerned because I live in it and always have) as not only a village area but a residential area. Kensington is still
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a residential area though it has suffered considerably from office building, hotel building and whatnot, but its Borough Council is determined—rather boldly for a Conservative council—to retain it as a residential area. Hampstead is a residential area; part of Paddington is a residential area; Highgate is a residential area and there is a considerable residential area north of Regent's Park. There are other residential areas where people want to live and bring up families and, as they do in Kensington, exercise dogs every evening—to the great distress of those who walk upon its pavements. They are still residential areas.
Residential areas are at risk everywhere—in London certainly. For instance, we used to have a residential area in Bloomsbury, which is now going down as a residential area owing to the banausic spread of higher education and now a National Library. Its squares no longer house that sort of resident. The refugees from the squares of Bloomsbury have now moved uphill to Islington which has equally good squares and much better street planning, and a residential area is now growing up in Islington. They can survive. The City, of course, 200 years ago ceased to be a residential area. Mayfair has long since ceased to be a residential area.
What are we to do to preserve not only our villages, but also our residential areas in London, where people who love London and want to live in London, live to bring up their families and exercise their dogs and play in its parks? What is going to happen to these residential areas? Reading a report of the first meeting of the United Kingdom Council at Lancaster House in December last year, of the very powerful group of speakers under the chairmanship of the Duke of Edinburgh who gathered to talk about Our European Agricultural Heritage in the Year 1975, one finds one very important phrase uttered by Mr. Channon, the Minister for Housing and Construction. He said that the campaign was starting at a most opportune moment; formidable pressures of change were threatening our towns and villages. How true!
Now, what are these formidable pressures? I think we all know. I suggest they can be summed up under the title: property developers, marshalled under

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the banner of the great god Mammon, out for money. It is a solemn thought that if you walk through the central parts of London, W.C., S.W., and to some extent N.W., looking as you go at your surroundings, there is not a building, not a terrace, not a square, with the exception of certain quite recently built office blocks and hotels, that could not be developed profitably if the property developers could get hold of it, and of course in many cases they can and do.
What are the restraints? The noble Lord, Lord Clark, suggested that the great restraint was more power to the central Government. I wish I could share his faith in Governments! But Governments themselves are not always unsusceptible to financial pressures. Our own Government have proved susceptible to financial pressures from the gambling industry, from the Carlisle brewers, from the commercial broadcasting lobby, although not, I think, from the trade unions, which they appear to be resisting with some obstinacy in connection with the anti-inflation Act. The Party to which I belong has not been able to resist that particular pressure and does not appear to have the intention of doing so. I mention that because this is a non-Party debate and I like my insults to be fairly divided.
There it is. What faith can we put in Government controls? What faith can we put in controls exercised by local planning authorities and housing authorities? Well, that remains to be seen. It is perfectly true that the various Departments concerned with the environment and with historic buildings and the Royal Parks can safeguard certain buildings and certain areas. One cannot imagine St. James's Park, for instance, being handed over to a property developer to develop as office blocks near Westminster, which would be extremely profitable. It could happen; it might, but I do not think it will. One cannot fear that certain very historic buildings like the Houses of Parliament or St. Paul's Cathedral will suffer the fate of property development. But what can happen and does happen, what has happened to St. Paul's Cathedral, is that its whole environment has been overwhelmed by the proximity of office blocks and tower blocks which obscure its skyline, which obscure its approach from the West, and which obscure the whole sky
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line of London which was once made beautiful by the towers of Sir Christopher Wren and is now made hideous by the towers of the office blocks. That sort of control can be exercised.
When it comes to the local authorities, some of our local authorities are very susceptible, too, to financial pressures. I would not put it past the Westminster City Council to be susceptible.
LORD STRABOLGI: Nor would I!
BARONESS STOCKS: My own borough of Kensington, I will say, has done rather well for a Conservative borough. It is standing out against certain forms of property development. But already the whole of the South side of Kensington High Street has gone; it is in the hands of the property developers and is being developed. But the borough is standing out against hotel development and to some extent against more office blocks. The trouble about local authorities is that they are wholly lacking in imagination. They mean well. They would like, if they could, to use their planning and housing powers to provide more homes for more people, but they have no imagination. They should learn the facts of life. They have no idea of the frightful importance of the terraced houses, with backyards—scruffy little backyards, but proprietary backyards. They do not realise what goes on in those backyards; that there are sheds where father can practise carpentry or breed racing pigeons; places where the children can keep rabbits and dogs and cats; places where a young man can take motor bicycles, turn them upside down and take them to pieces and put them together again; places where mother, doing her chores in the kitchen, can look out and keep an eye on the baby in the perambulator and the washing on the line, and take in the washing when it rains. Those things are disappearing from our view, and they are disappearing at the hands of the local authorities.
If you drive round South London, especially in the neighbourhood of the Elephant and Castle, you will pass row after row of little terraced houses either boarded up for demolition or partly demolished. So it goes on. If only the local authorities could learn the facts of life, and if only the central authorities could stand up to financial pressures, things might be saved.

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What hope is there? The only hope I see is in the voluntary amenity societies. We have killed the old spirit of local government. But the amenity societies are proliferating. They are a marvellous feature of the past decade. They are increasing month by month, week by week, day by day—voluntary associations of citizens organised for the protection of their own environment, by the neighbourhood, by the block of flats, by the square, and even by the street. Every day there are more of them; and more power to them, because I think they are the grass roots of democracy, and in their power to put pressure on Governments, Ministries and local authorities, lies our hope of salvation for our environment.
May I, in conclusion, say one word about nomenclature, a matter raised by my noble friend Lord Raglan. He objected to certain forms of nomenclature which he regretted, and I object to one form of nomenclature which I regret. I wish to goodness we could talk less about preservation and more about protection. I am sad that the Green Paper of the Ministry of Housing and Local Government is entitled Preservation Policy Group. I wish it were entitled Protection Policy Group. We protect live things, such as, for instance, badgers. We preserve dead things, such as pickled onions in sealed jam pots. Our history, our villages, our neighbourhood are all live things. We must work to protect the life that is in them and other life that may come to birth beside them. We must do that, and if we go on talking about nothing but preservation this great city of London and the other great cities of York, Chester, Bath and Chichester will be nothing more than museums for tourists, package tourists equipped with expensive cameras and looking only for souvenirs.
LORD KENNET: My Lords, would the noble Baroness not agree that "protection" suggests something else that you might do with pickles and jams, namely, levy a tariff on them? We were not writing about a tariff policy or the Common Market. The word "protection" I think is usually associated in the mind of the public with import duties and tariffs.
BARONESS STOCKS: My Lords, it is a very large question because there is a
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lot to be said I think for the protection of dairy products.
7.11 p.m.
LORD CONESFORD: My Lords, the noble Lord, Lord Raglan, is to be congratulated on opening the debate, to which we have had some very distinguished contributions. My only quarrel with the admirable speech of the noble Lord, Lord Raglan, is that I disagree with his reference to modern architects and I agree completely with the comments made on that part of his speech by the noble Viscount, Lord Esher. I do not think there is any more devoted admirer of 18th century architecture than myself. I was an original member of the Georgian Group, and may I say how delighted I am that they are apparently going to get a grant. I nevertheless love 20th century architecture. I mention that because I think it was the only point on which I differed from the noble Lord, Lord Raglan.
This debate has brought contributions from the noble Viscount, Lord Esher, the noble Duke, the Duke of Grafton, the noble Lord, Lord Holford, and the noble Lord, Lord Clark. All four of those noble Lords have world reputations on the subject on which they were addressing your Lordships' House, and I think that alone should be sufficient reward for the splendid effort of the noble Lord, Lord Raglan, in initiating this debate. May I join my congratulations with those of many others on the maiden speech of my noble friend the Duke of Grafton. I have known him so long as the leader of various amenity societies. I think I have been most of my life a member of every amenity society, national and local, that has been mentioned in this debate, with one exception which I shall not mention because that might lead me into difficulties.
My Lords, I do not think there is any subject to which I have devoted a greater part of my life than the question of the preservation of the beauties of town and country. In answer to the noble Baroness who preceded me, I think there is something to be said for the word "preservation" and something for the word "protection", and something also for the word "conservation"; but I do not think it really matters which we use because we all know what is meant.

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My Lords, I have nothing to add to the distinguished contributions of the noble Lords I have mentioned. Perhaps the most useful contribution I can make is based on my experience as a junior Minister in what was then the Ministry of Town and Country Planning. There are three speakers in this debate who have occupied that position: my noble friend Lord Sandford, who is to wind up, the noble Lord, Lord Kennet, whose excellent Report is the foundation of this debate, and myself. Owing to my great age I was in fact the first Minister to be appointed who was to confine his attention entirely to the question of town and country planning, and it is over thirty years since in another place I wound up the debate for the Government on a very important planning Bill, the Town and Country Planning (Interim Development) Act 1943, which was followed by the Town and Country Planning Act of 1944.
The provisions in those Acts have long been consolidated in subsequent Acts, but there are three provisions which those old Acts contained for the first time of which I venture to remind this House. The first is Section 1 of the 1943 Act, which made planning universal in England and Wales. Up till that moment only certain areas had been planned at all. Secondly, Section 6 of that Act provided for the calling in of applications by the Minister. This was wholly new and very important, and on this I will say something further. Thirdly, there was what I have every reason to remember because I was, I suppose, part author—that was Section 42 of the 1944 Act which provided for the first time for the listing of buildings. The happiest recollection of those times is that my chief professional adviser was the noble Lord, Lord Holford. I learned from him more than I have ever learned from anybody else on this particular subject, and it was the start of a long friendship.
The section that I am going to bring to the special attention of your Lordships is that provision of the 1943 Act which provided for the calling in of applications by the Minister. That was extremely important for this reason: that a fatal defect of the planning law up till that date—even in the areas which had made the necessary resolutions that they should be town planned—was that if an application for development was refused
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by the local planning authority an appeal lay to the Minister, but, if the local planning authority (at that time something much smaller than the county council) granted the planning application, then nobody had any power to intervene at all. However disastrous the development might be to the countryside or to the dignity and architectural decency of an excellent street, the outrage could take place; nobody had any power to interfere with the grant by a planning authority of permission to develop.
We had not long been studying that subject before we knew that that defect had to be remedied. I do not think I am disclosing any secret if I say that various remedies were considered. I long considered whether it would be possible to give, by Statute, power to various bodies themselves to appeal against a grant of planning permission, but there were great difficulties about that and eventually we came to the conclusion that the right way of dealing with the matter was to enable the Minister to call in the application. Those who have followed the history of town and country planning in the intervening years will know how often that power has been exercised, to the immense benefit of the public. I agree entirely with the noble Lord, Lord Kennet, in the importance he attached to that power in the speech which he made this afternoon. The principal reason why I am intervening in this debate is that I want to emphasise that the power of the Minister to call in the application is absolutely vital if we are to preserve any of the beauties of town and country in Great Britain.
I have seen various suggestions—I have not brought them with me, so I cannot quote them—that it may be the wish of Her Majesty's Government, or of the present Secretary of State for the Environment, not to exercise his powers of calling in, save perhaps in the rarest cases, and to rely entirely on the local authorities. As regards the Government's choice of the local authorities, I would agree with the comment of my noble friend the Duke of Grafton, and I am sorry that the higher level of local authorities under the Government's scheme of local government reform will not have any power on this question of the preservation of historic buildings. I

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think they might at least have concurrent powers with the smaller divisional authorities. But even if the smaller local authorities fulfil all the hopes of Her Majesty's Government, it will still be necessary that the Government themselves, in the shape of the Minister, shall have power to call in an application to develop in order that there shall be some national control of the position. I cannot stress that too emphatically.
I have spent a long life devoting myself largely to the questions which we have been discussing this afternoon, and I believe that if ever the idea got abroad that the Government themselves would hesitate to intervene to stop a bad development, then all our hopes would be frustrated. I am myself appalled at the fact that we are not saving Bath completely and absolutely. I remember, thirty or forty years ago, making speeches in the country long before I entered Parliament, to say that there were two things of great value, the town and the country, and I always thought that we should preserve both or we should preserve neither. So long as the town was regarded as a place from which to flee, we should not save the country. I said how absurd it would have appeared to the 18th century builders of Bath to suggest that a town was a place from which to flee—the town which has given us the very name of urbanity. That is the first point I want to make and it is my main ground for speaking: that in no circumstances must the Government be tempted, whatever their hope of the local authorities which they are setting up, to whittle down the power and, in proper cases, the duty of the Secretary of State for the Environment to call in the application to develop.
The other matter which I should like to mention is traffic. On traffic, so many good speeches have been made and so much good sense has been said in some of the documents that we have considered that I shall add only one point, which concerns something between a historic town and the sort of villages for which the noble Baroness, Lady Stocks, made such an admirable plea. I am thinking of some of those county towns—I had not meant to mention any, but since Wallingford has been mentioned by the noble Viscount, Lord Esher, I shall mention it,
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too. Wallingford has and, still more, had a most beautiful market place. If it only had the traffic that it had for most of the centuries of its life, it would have remained wholly delightful. Then some ass, who had the power to carry his asinine notion into fruition, broadened one of the entrances into the market place—incidentally, doing harm to the architecture of the market place as a whole—to enable entry to be facilitated to traffic at that particular place. During the period of construction, when the market place was empty, it had never looked more beautiful. Subsequently, when the widening had taken place, the effect in easing traffic was infinitesimal and temporary. There is now, on many occasions, a solid block of stationary traffic on the whole of one side of the square.
The plea that I shall make is this. Very often there are the alternatives of building a well considered by-pass, or tearing the guts out of the place. In case after case the decision in England has been to do both. You first tear the guts out of the place, in the vain hope that that will avoid the necessity of the by-pass. When you find that it will not, you decide to build the by-pass; but by that time you have destroyed the place. It is not really a good idea, when you have the choice of two alternatives either of which may do some damage, to choose both. My plea to the Government is that that insanity, at least, shall be in future avoided.
7.30 p.m.
LORD CHORLEY: My Lords, we really are having a very good debate. I am fascinated by the valuable historical survey of the noble Lord who has just resumed his seat. He gave us, out of his long experience both as a Minister and as a student of these matters, some very valuable advice. Speeches have sparkled, and I was quite tickled by Lady Stocks's division of scolding between the one Party and the other of which, very properly, the Government Benches got about three-quarters—just about the right sort of division. One could go on discussing speech after speech.
The only other speech which I will refer to for the moment is that of the noble Lord, Lord Fiske, who gave us a most interesting account of his experiences on the old London County Council, particularly in connection with the committee which he rather thought had

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arrogated to itself architectural knowledge which if it had been dealing with medicine or traffic or something of that kind it would not have wanted to do. He will not get the chance of doing this again, no doubt, but if he did I should like to encourage him by saying that architecture is completely different from all these things. Architecture is in many ways the most important of all the Arts because it is what the ordinary man and woman in the street sees all the time. More people see bad architecture than any other kind of art, and see it for longer. Surely that means that it is very important indeed that people like Lord Fiske, who have sensibility about these things, should be passing upon these schemes and not the architects, who have been pretty well scolded this afternoon not only by my noble friend who introduced this Motion but even by fellow architects. It is very difficult for anybody who has not been trained to assess an architectural drawing on the drawing board. You can do it much better from models. That is why there should always be models and people should have an opportunity of seeing them.
Of course, we all feel it was high time we had this debate and we are grateful to the noble Lord, Lord Raglan, for giving us the opportunity of having it. All who heard him are, I am sure, grateful for the speech itself, which was a very polished performance. I should also like to join in the tributes paid to the noble Duke, the Duke of Grafton, with whom I worked for many years on one of the numerous important national organisations which he has served and helped over so many years, the National Trust. It is particularly gratifying to me to see him sitting here, even though on the opposite side of the House, because I am quite sure his great knowledge of these matters will be of the greatest help to your Lordships as time goes on.
This debate has obviously given rise to a good deal of interest outside your Lordships' House. I have never had so many communications from interested societies and indeed if I were to try and put all the valuable informative material which I have found in them into a speech I would be trespassing too long on your Lordships' time, but I should like to thank those societies for sending me so much material, which is interesting to me
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not only for the purposes of this debate but also for the part I shall endeavour to play in the amenities movement as a whole. Among the material was a Government pamphlet for which I have to thank the noble Earl the Leader of the House, because in the letter which covered it it is stated that Lord Jellicoe had asked the Department of the Environment to send me this very interesting publication.
The only part of it I did not like was the Prime Minister's introduction, in which he seemed to be taking the credit for cleaning Whitehall and other important buildings in London. That has been going on for a long time and we have been enjoying it as we walked about London. It is very valuable indeed that we should have a series of pictures of this kind because it brings them all together. Of course the buildings are all spick and span at the moment. You cannot do this sort of work without, as it were, overdoing it. The beauty of London's buildings depends to a large extent on the great use of Portland stone, that very white building material, and the soot which Victorian London put on to that stone, always on the easterly side. As the wet west winds swept it off on the one side the smoke accumulated on the other and one got those delightful constrasts pointed out by many writers on the æsthetics of London's buildings. It will be some time before we get this again. When this was first pointed out, I believe about 1900 when this cleaning up began, many of these buildings had become so dirty all round that a great deal of their æsthetic value was being lost. I should also like to thank the noble Lord, Lord Sandford, for writing to ask if there were any questions we should like him to answer. He makes a practice of this and it is very valuable. Very few Ministers do it, and I would say that I appreciate it. as I think many other of your Lordships do.
My main interest is to discover how far the report of Lord Kennet's Preservation Policy Group has been implemented. It is not at all easy to tell. Some of the societies with which I am connected think it has been reasonably well implemented; others that the Government have been dragging their feet. The noble Earl the Leader of the House gave a rather optimistic report of the

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situation and I found it encouraging. A great deal of the debate has naturally centred around the reports on the four towns which have figured largely in the report. I should like to know how far the work which has been done on the four towns in the interval (to some extent this came out in the valuable speech of the noble Viscount, Lord Esher) provides guidelines for future conduct; because it has been pointed out in Lord Kennet's report, and in many other places, that the four towns are just four out of a large number; they are perhaps not even necessarily the four best although they rank very high indeed. But how far is what has been discovered as a result of the work in the four towns been made available in the many other towns in which the same sort of problems arise and much the same sort of protection or preservation work ought to be done? I should be grateful if the Minister could tell us in rather more detail the situation on this particular point.
I do not want to say anything more about the large towns. The architecture in the large towns is very much in the European tradition, and we are to have the 1975 European Architectural Year, which I was very glad to hear about, as I am sure all your Lordships were. It is a natural follow on, and a very proper one, to the Countryside in 1970 movement. It does not seem to have had quite as good a build-up, but it is gratifying to know that the Duke of Edinburgh has again taken the lead. His support in connection with the Countryside in 1970 movement was of the very greatest value, and I am sure that, here again, he will make his presence felt throughout the organisation. This he has the astonishing ability to do in a way that I think hardly anybody else in the country has.
I am also glad, as I am sure all your Lordships are, to know that Mr. Duncan Sandys is in effect the right-hand man on this occasion. With the possible exception of Lord Silkin, I regard Mr. Duncan Sandys as the best Minister of Housing and Local Government we have had since the war, and his work in connection with the Civic Trust (which he founded, I think) has been of the greatest value. Looking at the work of that Trust, the way in which they have stimulated face-lifting projects in many good old towns
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of medium size up and down the country has really been very encouraging indeed. My own native town of Kendal was stimulated in this way, and I had the very great pleasure of opening the old Market Square in this lovely old town some twelve or so years ago. It really completely brightened up the whole place, and was a great success. That has been going on all over the country, and we are indebted to Mr. Sandys and the Civic Trust.
One cannot help wondering how much real help the Government are giving to the 1975 Architectural Year. I appreciated very much the jibe—it was a very proper jibe—as to what the title of the Secretary of State for the Environment would be when he came to your Lordships' House. But in between his present position and his coming here I would recommend him to read a famous old English book in which there is a character called Mr. Facing-Both-Ways. He might consider a little the character of Mr. Facing-Both-Ways, and then wonder how he can reconcile his taking a prominent position in connection with the European 1975 Architectural Year and what he has been doing at Winchester, as Lord Kennet suggested, and what he has been doing in the Lake District, which from many points of view is a great deal worse. This is the sort of thing, of course, which makes people fed up with politics and politicians. They just do not put into practice so many of the precepts which they preach from public platforms.
But, as I was saying, I am not so much concerned with these larger towns as with the villages which the noble Baroness, Lady Stocks, referred to, and to which I am very glad the European movement attach importance in the same way, as also does the noble Lord, Lord Raglan. The English village is really quite unique. Parts of New England were settled from England at a time, very largely, when the English village was assuming its present really delightful character, and there is nothing like it anywhere else so far as I know. European villages are often, in their own way, just as attractive, with just as much character, but they are attractive in a different way and have a character of a different kind. It is not at all clear how far the quality of the English village is going to be maintained under the schemes which are at present in force in this country, and if we lose our

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English villages we shall have lost what is in some ways just as valuable as our English towns and in other ways perhaps even more valuable.
Here and there, of course, as a result of the work of organisations like the National Trust, outstanding villages have in fact been protected. West Wycombe, practically the whole of which belongs to the National Trust, is a delight; and it is very much more of a delight now to travel through it than it was before the High Wycombe by-pass was opened. Very many people like just to go meandering through West Wycombe—a perfect example of a charming village. In the case of Laycock, too, practically all of it belongs to the National Trust. But it is only here and there that the National Trust can take over a village in that way. The whole of Laycock does not belong to it, but so much of it does that it bears the impress, so to speak, of the work of the National Trust. What one really needs, I am sure, is a list of these outstanding villages. Then, I do not know that it is necessary to have a new Act of Parliament, but it is certainly necessary to have a much stronger policy in the Department to see that nothing is allowed to happen which destroys the character of the villages whose names appear on this list. Because one small, bad, new house in a village of that kind can be like a boil and can destroy, if not the whole, a very large part of its beauty and its character. So I think this aspect of the matter is one of considerable importance, and is one to which the greatest attention ought to be given.
My Lords, what we are very worried about, I think, throughout the amenities movement, not only in groups like the Georgian Society, which are concerned with architecture, but in the C.P.R.E. and the National Trust, which to a larger extent are concerned with the countryside—and this has appeared, of course, time after time this afternoon; it appeared in the speech of the noble Lord, Lord Conesford—is what is going to result from the transfer of planning powers to the district councils. Even under the recent scheme, in which the county councils still had the responsibility, it was not always possible to rely on the county planning committees, although the counties are stronger and able to pay better salaries and to recruit
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better professional assistance than the districts. Even so, from all over the country one hears terrible stories of how the V.I.P.s in the districts have succeeded in persuading county councils to abandon perfectly good schemes in order that they might carry through some nefarious enterprise of their own. I was reading a story about Devonshire. The Devonshire County Council had very properly decided, at Tiverton, to protect a listed building which the Tiverton District Council wanted to get rid of; and as a result of the negotiations between Tiverton and the Devon County Council the county council withdrew its perfectly correct decision in the first instance. That could be paralleled all over the country.
The administration of the planning Acts by the county councils has been very patchy. Some county councils have done it very well indeed; others have hardly clone it at all. I think Lord Kennet is quite right in saying that the local conservation area was a contribution of outstanding importance. I disagree entirely with Lord Esher about this; think it has in fact been a very considerable contribution to planning, if not the most important that has been made. That has been in force for quite a number of years. It was two, if not three, years before the County of Norfolk, which from this point of view is a very important county, made any orders under the scheme at all. The last I heard was that they had still made only eleven orders—four years after the law had been in operation. They are not the worst county. The noble Lord, Lord Clark, mentioned Worcestershire where the number does not reach even double figures. During the same period in Kent, a county which takes these matters seriously, the number of orders made, I understand, is well over 150. This shows the difference between one county and another.
I was interested in the question of footpaths under the National Parks (Countryside) Act in which local authorities had to designate the rights of way through their counties. Some counties just did not do it. Even ten years after the Act was passed some counties had not done anything. The Minister had to "chivvy" and threaten them. That is happening all the time. The noble Lord, Lord Clark, is right when he says that there must be very strong powers at the

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centre to see that the local authorities do their job properly. I want to know, and if possible to get an undertaking (as the noble Lord, Lord Conesford, obviously did) from the Ministry, that they will call in these cases. I think the machinery for calling in is there, but it needs to be much improved. At the moment it depends on the little local preservation societies to which the noble Baroness, Lady Stocks, referred. As President of one of the first to be started in the 1950s, I know that we have to be on our toes the whole time. Otherwise the developer gets in and gets his proposal into the planning consultant's office; and then, before you know where you are, a quite objectionable building is going up.
There ought to be some sort of organisation which has the duty, more than just the power, to take these cases to the Department of the Environment and to "chivvy" the Department into calling them in so that they can be looked at. We had a case which was called in; and the Minister quashed it. Within two or three weeks the developer had put in a scheme which was almost the same. The local authority had spent about £2,000 on costs and said that they could not do that all over again, and passed the modified scheme. I took that scheme to the President of the R.I.B.A., who was himself at that time very much in the forefront as a planner. I asked what was the difference between the two schemes. He said that any architect could see that there was no basic difference whatever. That is the sort of difficulty with which one is confronted. The Minister is himself to a certain extent in a somewhat powerless position. I should be grateful if the Minister could say how he sees this problem and what are the problems of the Department in putting it right.
I will now leave out a great deal of this prepared speech; but before I sit down I should like to raise one further point on a matter that has hardly been raised this afternoon—it has been referred to parenthetically once or twice. It is the archæological aspect of the problem. Archæology is the very foundation of history; if you do not pay attention to it, it is not possible to get local history properly built up and understood. Yet in all this work the archæologists have
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received very scant attention. Even Lord Kennet's Report, so far as I recall, does not deal with this matter, and organisations like the Society for the Protection of Ancient Buildings and the Georgian Society are not really concerned with it. It is a matter of great importance. Every now and then one reads of some wonderful Viking ship found during excavations near, say, Guy's Hospital; that it is going to be kept open for 48 hours so that people can see it before the site is filled in and it is lost for ever. That ought not to be allowed to happen. Yet it is happening all over the country—not in the case of items of that sort which are spectacular, but in the case of items of great social importance in the historical development of our country.
It seems to me these matters ought to receive much closer consideration than they have in the past. It ought to be an essential element of any town planning scheme put forward that the archaeological side of the matter should be looked at. It ought to be a compulsory element in all town plans put forward. In some of them there will be very little; in others it may be very important. I suggest that the Department, in its next circular on these matters to local authorities, should stress the importance of seeing to it that the local archaeological society or its representatives have been properly consulted.
It follows from this that provision must be made for access to particular parts of the site under discussion for planning permission, and that access should be available to archaeologists properly appointed for the purpose; because it is very difficult just to do these things on a map, and the developers dislike people of this kind coming round snooping. It ought to be part of the drill that the archaeologist should be able to look at the place if he wants to and should be given time. One cannot always tell by spending half an hour on a site whether it is one of outstanding importance or not. I do not think it would be too difficult to work out some scheme where, in proper cases, the amount of time made available would be two or three weeks. Sometimes it may be of such importance that some expert should be brought from London and given some days to ferret about and make quite sure what the position it. In that case

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provision ought to be made for the protection of the archaeological situation in that particular plan. I think it was the noble Lord, Lord Kennet, who said that ample powers exist for all these things already and that it is just a question of whether the Secretary of State takes advantage of them. I should like to know from the Minister how far that is true in cases of this kind, particularly in cases of archaeology.
If there are no Ministerial powers enabling the sort of conditions which I have tried to outline to be observed, I suggest that provision should be made in the next Town and Country Planning Bill. We get fobbed off by being told that this would require an Act of Parliament which is a long way away. If your Lordships go back over the last twenty years or so you will find that the passing of planning Acts averaged about three in ten years. We had one last year, and so we should certainly be due for another one in 1975 at the latest. Therefore it would not be very far away, and the archaeological values in England are being dissipated all the time. One of the most interesting of the pamphlets sent to me in connection with this debate The Erosion of the Past, came from the British Council of Archaeology. I had always felt that this subject was important, but a short perusal of that admirable piece of work has persuaded me that I have not taken anything like a sufficiently serious view of the position in the past. It certainly is serious, and if legislation is necessary I hope that the Government will see to it that in the next Bill provision is made for the protection of archaeology.
8.1 p.m.
LORD SANDYS: My Lords, as the fourteenth speaker in this debate I can assure your Lordships that I shall be brief. I should like to start by thanking the noble Lord, Lord Raglan, for introducing this subject. I have been looking forward to this debate, as many of your Lordships have been, for a very long time, and I am sure that all our expectations were fulfilled. It has given the opportunity for one eminent and most distinguished maiden speech, and that in itself was a justification for holding this splendid debate. My Lords, I speak as a very junior representative in the field of preservation, as chairman of a local preservation society, the Worcestershire
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Building Preservation Trust. Two principal matters to which I should like to draw the attention of your Lordships are the financial aspects and the specific problem of skilled labour. In both these factors I was so much in accord with what was said by the noble Lord, Lord Holford. It is a matter of paramount importance—I cannot stress this too much—that the question of V.A.T. on repairs be reviewed in the course of the deliberations on the Finance Bill. I may say as a member of a building preservation trust that I am convinced we shall go out of business if V.A.T. is to be levied on repairs. That is without doubt.
We should draw comfort from the fact that V.A.T. is not to be levied on improvements or new building. Surely these are two crumbs of encouragement. I hope to that may be added the major concession of exemption on repairs for listed buildings, which I think was suggested by the noble Lord, Lord Holford, and also over a wider area to cover the exemption of all building repairs. Surely the case is a good one. If we exempt repairs to dwelling-houses throughout the United Kingdom we shall be adding something to the national stock; we shall he adding to the housing stock and to the conservation movement as a whole. I hope that my noble friend Lord Sandford will bring all his great powers of persuasion to bear on that oldest and most powerful of Government Departments, the Treasury.
A problem which intimately concerns the Treasury is my second point which I do not think has been brought out by any of the 13 previous speakers. It is the question of rateable value. We are only to well aware that the revaluation this year has shown that values have risen three or four times in certain cases and possibly more in rather special areas. This is a cause for great concern in the conservation movement as a whole. It will be impossible to live in these conserved areas, in these beautifully preserved dwellings, if the rateable value reaches an astronomical level. Surely this is a matter which should be a cause for concern. It should be pointed out to the Treasury, and to their district valuers in all parts of the country, that there is a case for reviewing appeals. The valuation lists are in the hands of the local authorities but in handling the appeals, of

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which there will be many hundreds of thousands all over the country, I hope that the Department of the Environment will take a serious view of the need to bring home to their friends in the Treasury the fact that there is grave concern among owners of individual buildings and in institutions and the like, and that the rateable values ought to be abated.
The "road block" of sufficient skilled labour is of great importance. Your Lordships will be aware that in the last year the building trade has lost a large number of skilled tradesmen to other industries. Surely this is something which the conservation movement as a whole should note with great anxiety. Are there not three ways in which this problem might be tackled? First, a review of the training and retraining through Government schemes of those who wish to enter the rather technical and particular skilled crafts involved in conservation—plasterers, bricklayers and other skilled trades. This affects a large number of trades apart from building and it affects whole areas relating to the art world. Surely we ought to encourage those who are training to become mural artists, et cetera. The shortage of materials, which is tied to the shortage of skilled labour, is one of equal concern. Those who are dwelling in houses which have recently been restored will be only too well aware of the lack of seasoned timber. After twelve months this is revealed by the fact that no window or door will fit. No frame made of unseasoned timber will do so. The need to provide a stock of seasoned timber and suitable building materials is a matter of national concern. I so much agree with what many noble Lords have said about conserving buildings due for demolition, so that valuable panelling, stones, slates, bricks, fittings and tiles may be set aside and not destroyed.
Finally, my Lords, may I make a few suggestions, as my noble friend Lord Jellicoe said he would listen to those who put forward suggestions. I should like to lay before your Lordships a number of suggestions which are not taken in order of preference. First, I hope that my noble friend will blow the dust off the Gowers Report which has lain on the table for
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19 years and certain parts of which are still awaiting implementation. As your Lordships will be aware, this Report relates to the care of historic houses. Secondly, I wish to add my small weight to the question of powers of surveillance of planning applications and the calling in thereof, which has been so eloquently pronounced upon by my noble friend Lord Conesford. Thirdly, the use of the Historic Buildings Act 1962 by local authorities: as Lord Kennet's Report points out, far greater use ought to be made of this Act. Fourthly, the use of the Housing Act 1969, as pointed out by Circular 6469.
Fifthly, the much greater use and development of the National Land Fund set up in 1946. The noble Lord, Lord Aldington, referred to the surroundings of land being conserved. Surely, here is an area for greater imagination to be used by the Treasury through the Estate Duty Office. I should have liked to develop this theme at far greater length, but clearly time is against me. Sixthly, the question of the exemption from V.A.T., which I have already mentioned. Seventhly, the examination of rateable values. Eighthly, the question of the Department of the Environment investigating the number of craftsmen who are leaving their trades, and of the recruiting levels. It is a matter of constant concern to society that this should be reviewed. Ninthly and lastly, I wish to lay one final matter before your Lordships. Surely there is a case for looking upon the inherited environment as a national asset as a whole. Surely there is a case for devoting a much larger sum of money from Treasury awards than those mentioned already. We have heard of a grant of £750 to the National Trust of Scotland and one of £750,000 to the Historic Buildings Council. Surely much larger sums of money are involved. I would heartily endorse what the noble Lord, Lord Kennet, said about £4½ million or more.
8.12 p.m.
LORD SANDFORD: My Lords, we are all extremely grateful to the noble Lord, Lord Raglan, for having initiated this debate, and those of us who are particularly directly concerned in conservation are immensely grateful for the great wealth of advice, enlightenment and encouragement that has come to us as a

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result of it. We are very much encouraged by the further evidence, if any were needed, of the wide support that there is for conservation. I should like to add my congratulations to the noble Duke, the Duke of Grafton, for his speech, to welcome him here, and to hope that he will contribute to debates of this kind on many future occasions.
It is flattering to hear in this debate so many opinions expressed to the effect that all would be well if everything was done by my Department. Well, my Lords, I do not think it is practicable to do this. I will in a moment reassure your Lordships about the powers that we have, the powers we intend to keep, and the powers we intend to use. But I do not share all the criticisms that have been voiced about the deficiencies, the lack of imagination and the lack of skill that is vested in local authorities. I am perhaps more conscious than some of your Lordships, by having been round the country and seen the work that is going on on the ground, of the great skill, imagination and devotion that many local authorities, both members and mayors, planning officers and architects, are applying to all this activity, to say nothing of the amenity societies, about whom I will speak more extensively in a moment.
My Lords, this is a debate about the Preservation Policy Group Report, and, that being so, I will start by responding to Lord Chorley's suggestion and review what is going on in the four towns which were selected as part of the exercise of the Preservation Policy Group for the so-called pilot projects. I will start with Bath. It is in Bath that the issue as to whether this can really be done by the local authority, or whether we need some national corporation, appears to arise most sharply—and I will come to that point in a moment. What is happening, in practice, in Bath at the present time is something in between these two different points of view; that is to say, there is a committee of the Corporation now in being in which not only my Department is directly involved but several of the national amenity bodies are also directly involved as members and observers. Together with the local authority and the local amenity societies, they are working out a long-term conservation programme to be carried out by the local authority and based upon a much
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enlarged conservation area (which the noble Lord, Lord Holford, rightly says is what is required in Bath), within which the new powers available under the Town and Country Planning (Amendment) Act 1972 for designating and protecting unlisted buildings—the podium, as the noble Lord, Lord Kennet, described it, of the city of Bath—can be undertaken.
But, side by side with that, my Department are also involved through the Controller for Housing and Planning in our regional office in seeing what more can be done (a good deal is already being done, and I was involved in the campaign which began it) in housing improvements throughout Bath, so that these important artisan buildings which form the podium of Bath can be improved in the way that all other valuable but modest dwellings are being improved at the moment. We agree very much that it is the modest buildings here, as in so many places, that are important in the local context of Bath; hence the need to enlarge the conservation area. I will return in a moment to the general question of local and central management of conservation.
As to Chester, Mr. Donald Insall, the consultant who wrote the original report, has, I am glad to say, been re-engaged by the city of Chester and my own Department jointly, and is now undertaking a full pilot programme for the restoration of the Bridgegate action area in Chester. The whole complex of how this can be done—and it involves many different agencies—will form a useful and valuable example for other cities to follow. There are three or four other aspects in Chester that I want to mention. The fact that they have completed their inner ring road means that they can now press on with the process of pedestrianising and removing cars and lorries from the centre of the city, leaving it solely for pedestrians and for public transport. This is already having quite an effect, and there is a great deal of further improvement in prospect there. This of course has been done elsewhere, notably in Norwich among the historic towns, and extensively in Leeds and many other cities. Chester is also notable for having for some time had a conservation officer on the staff of the city who is devoting his whole time, skills and attention to conservation alone. And Chester is to be commended for having for some time devoted the product of a

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1½p rate, which is quite a substantial sum of money, exclusively to conservation. This is an example which many other cities and authorities would do well to follow.
I turn to Chichester. Among many things which have been achieved at Chichester, the one I want to mention is a proposal in which the Department have already offered to participate financially for the study of a goods storage and interchange depot. This sounds rather a prosaic thing in an historic town, but if and when we can manage to get it going (what we are waiting for is a contribution from private sources in Chichester) it will enable us to test out in practice the scope that there is for providing a depot, including, for instance, cold storage, outside the historic core of a town, into which large delivery lorries can unload their goods and from which the retailers of the town can collect their goods as and when they require them to put on the counters, as it were, in their shops in the centre. It is of course much cheaper to store goods outside the town than to store them inside where the cost per square foot of space is much greater. If this scheme can be made to operate in a viable way it will mean that only light vehicles will be using the centre of the town and all the heavy vehicles will make their deliveries outside. This is going to be a valuable exercise and we are grateful to Chichester for embarking upon it. The state of the inner ring road in Chichester is such that pedestrianisation of the Cross will shortly be possible. They have carried out a useful piece of work in advertisement control and imaginative work in providing rear servicing and car parking space at the rear of the central shops.
As to York, the outstanding achievement there is the salvation of the Minster which my noble friend has already mentioned. The essence of conservation in York, as the noble Viscount, Lord Esher, said, is a matter of well-balanced and well-harnessed prosperity. York has not any great prosperity to spare; it is under intense competition in the commercial and industrial sense from other cities like Leeds. What prosperity there is has to be carefully harnessed to conservation. The pilot project is the one the noble Lord first suggested in his
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conservation study and has since carried forward into greater detail for the redevelopment of the whole of the Aldwalk area for high-class, fine new homes for residential purposes. I share with the noble Lord the feeling of impatience about the rate at which this project is going forward. I am glad that Shepherd's, the builders responsible for the splendid restoration of the Minister, are now engaged in the first instalment of this particular scheme.
York is notable too for the activities of their civic trust of which the president is the most reverend Prelate, the Archbishop; and Mr. Shannon, the chairman, is a fine example of what the chairman of a civic trust, together with his colleagues, can do for his city. I take this opportunity of commending them for all their activities. York is a place, too, where the archaeological problems mentioned by the noble Lords, Lord Chorley and Lord Holford, are particularly acute. I shall be talking about York in connection with roads. There is a proposal for an inner ring road in York which has been to inquiry, and on which we have yet to take a decision. Assuming that the broad line proposed is the one taken, and I am not saying that it will be, one part of it goes right through the old Viking settlement (and York is a place where Viking remains are particularly well preserved because of the behaviour of the water table) and another section goes right through the Roman fortress. The problems of getting all that area excavated properly if and when a road goes through it, will be acute. We are particularly grateful, and thanks are due to the charitable trust, that Mr. Addyman is presiding over the York archaeological Trust and is doing as much preliminary survey work as is practicable.
I mention those as examples of the work that is going on in those four cities. They are just the important aspects; there is much more besides. The noble Lord, Lord Kennet, rightly wanted me to go into finance, which I gladly do. The noble Lord, Lord Raglan, said they were not paid enough; the noble Viscount, Lord Esher, said we were making a snail's progress; the noble Lord, Lord Holford, said we had got it about right. I will just say what the situation is, and leave your Lordships to judge. In the days when this Report

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was being written, the figure available to the H.B.C. was £575,000. The noble Lord, Lord Kennet, was able to raise that figure to £700,000 before the Election—the first step in the right direction. In 1971 we raised it to £1 million—the largest step so far taken—and devoted £250,000 to town schemes. In 1972, with the legislation on the Statute Book for our version of the conservation grant—and I will return to that later—we introduced £500,000 to support that, the first instalment of the heritage grant in support of the European Architectural Heritage Year, and continued the town schemes. The overall figure went up to £1,575,000. That is the figure from central Government which the noble Lord was aiming at in his Report. Since then we have increased it again and the figure now, including the increase in the conservation area grants which my noble friend has already announced to-day from £500,000 to £750,000, puts the figure at £1,825,000. That is the figure which we can compare with what the previous Government were proposing from central Government. It cannot be compared exactly with what was to be available from local government as well because we have approached the conservation area grant in a rather different way.
I will respond to the noble Lord's request that I should make a comparison between the two forms of grant. The main point to make in comparing them is that the conservation area grant which we have provided is more flexible than the one proposed here in that it can be paid for a whole variety of different schemes, some quite small, some quite complex—not quite so complex as the noble Lord had in mind, involving highways and so on. The great thing about it is its flexibility, in that it is available not only to local authorities (which his would have been) but to private owners and also—and this is the chief advantage—to amenity societies who put forward schemes. I think the noble Lord, Lord Holford, said that the slightly restricted scope as compared with what was envisaged in the P.P.G. was already proving difficult enough for the conservation area grant committee of the H.B.C. to administer. I do not feel that to limit it a little more has been a mistake.
I will say one thing in respect of local authority grant giving: this has risen.
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It was £344,000 in 1971£72, but I agree it could well rise more. I am grateful to my noble friend Lord Sandys for his plea to local authorities to make greater use of their powers under the 1962 Act. If more towns, cities and authorities follow Chester's fine example we shall be well on the way.
LORD KENNET: My Lords, before the noble Lord leaves finance (I am sure he will not be surprised if I have a go at him!) I listened carefully, and he referred to the figure of £1·825 million of central Government money, and an unknown sum of local government money. This has to be compared with £2·5 million central Government money that would have been provided under our scheme, plus over £1½ million from local authorities, making £4 million. Am I fair in comparing £1·825 million with £4 million? If not, why not?
LORD SANDFORD: My Lords, I do not know whether the noble Lord is fair or not. All I know is that when we came into office he had managed to raise the figure from £575,000 to £700,000, and we were all glad of that. He spoke as though we had rescinded something; but quite honestly, there was not anything to rescind. There was no legislation prepared, no scheme worked out in any more detail. We put the legislation on the Statute Book. He and I between us have more than trebled the amount available to the H.B.C. in a period of three years, and I would prefer to leave the matter there.
LORD KENNET: My Lords, I am sorry, but I would not. The noble Lord's Government did rescind something; they rescinded a commitment to an expenditure of £3·75 million a year. That commitment is perfectly clear in Hansard of May 20, 1970. There is no question about that. This was a commitment. Legislation was not passed but the financial commitment was there. The highest figure we can now get out of the noble Lord is £1·825 plus an unknown amount from the local authorities. Why does he not know what the local authorities are paying?
LORD SANDFORD: My Lords, I do not know precisely what the local authorities are paying because some of these grants are paid direct to private owners,

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some are paid to local authorities as owners, some are paid for town schemes where the ratio, as the noble Lord knows, is 50–50 as between central Government and local government, and some are paid as conservation area grant which, as I have just explained, is more flexible than the noble Lord's scheme inasmuch as the rate is infinitely variable. If the noble Lord wants to make comparisons, the figures to compare are what his scheme would have produced from central Government, which is £1½million, and what ours is producing from central Government, which was £1½ million until we announced the recent increases. So it is about the same.
LORD KENNET: My Lords, I am sorry to keep coming back at the noble Lord, but he is wrong. In fact, our scheme would not have produced £1½ million from central Government; it would have produced £2·2 million, being £1½ million under the new scheme and £700,000 under the familiar H.B.C. payments. I have already stated the obvious, that that £700,000 would have risen to keep pace with rising costs.
LORD SANDFORD: My Lords, I will take the noble Lord's word for it. I do not think we need pursue it any further, but I should like to go into some of the other proposals that he made in his Report and to explain how we are getting on with those. One was for the preparation of guide books by the English Tourist Board, and this I hope is now in hand by the Board. But the scheme which we are pursuing in this connection is that of interpretation centres, and Chester may well be one of the first cities to establish this in a redundant church.
The noble Lord, Lord Clark, put forward the idea of interpreting the architecture of a town as an art form and using these centres to help the architecture of each historic town to come alive in a way which even the best guide book cannot do. This is an idea which was the subject of a letter to The Times on April 4 from the President of the R.I.B.A. and the Chairman of the Arts Council of Great Britain, and it is something that we had already been working on in our own Department for ancient
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monuments as well as historic towns. So that is an interesting development.
Two of the booklets which he recommended, New Life for Historic Buildings and New Life for Historic Areas, have already been published. We are now taking up the challenge of a third, which will be entitled something like, New Buildings for Old Settings. This will serve to illustrate who is right over the question of whether it is or is not possible to put a 20th century building into an historic street scene. My own personal view, and that of most of the architects who have spoken, is that it can be done, despite the fact, as the noble Lord, Lord Clark, has said, that the architecture of the 20th century is such a tremendous break with anything that has gone before. I believe it is possible to put new buildings in an old setting, and it is all part of the conservation exercise. I hope also that we shall be able to persuade the Churches to make a contribution to this series with a set described as New Uses for Old Churches, because there are some very imaginative schemes coming forward, which certainly applies in the case of St. John's, Smith Square, and may well apply in the case of Christ Church Spitalfields. I will deal with churches again in a moment.
Another recommendation of the P.P.G. Report was the issue of technical bulletins. I do not think that has materialised in quite the way proposed by the Group. but I think they would agree that one of the very best things the Civic Trust has produced is the book entitled Pride of Place, which serves a very useful purpose in kindling the imagination of amenity societies as to what they can do in this field.
I should now like to turn to the business of central and national control of conservation. Several noble Lords, starting with the noble Lord, Lord Raglan, have suggested that something patterned on the New Towns Commission could serve, but I know that the Preservation Policy Group considered this and rejected it, and I think I agree with them. I do not believe the approach of a New Town will quite fit here. Historic towns are places in which people live and work; new houses and other buildings will be needed from time to time, road improvements become necessary, shops have to

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prosper—in other words, these are living towns which need to exercise, not just conservation powers but the full gamut of normal controls over city life. Furthermore, they need to respond to the full gamut of democratic pressures. That is not to say that central Government cannot be involved in a whole variety of effective ways, and I have already described the way in which we are concerning ourselves with Bath at the moment. We remain firmly in control of listed building demolition and alteration and we have a number of other powers which I will come to in a moment when I am speaking about other forms of management of conservation.
It is notable that although Mr. Insall in his report on Chester joined forces with those who are commending the idea of an historic towns corporation, Sir Colin Buchanan in his Report on Bath, said this:
"Conservation poses an organisational problem. More than anything else—no serious progress will be made on the scale required unless someone takes the whole subject under its wing—the only body with the necessary powers and authority is the corporation itself."
That was the view of Sir Colin Buchanan, having specifically studied the City of Bath.
I must say that I am convinced that the right course is to ensure that the ordinary framework of controls, planning, housing, roads, is applied with particular care in the historic towns and that encouragement is given to the local planning authority to use it sensitively. That is not to say that the Government are not involved. We are involved in many ways. We have to find the right answer as to whom to employ, whom to consult, whom to go to for advice for each particular set of problems in a particular town. Some will benefit from joint Working Parties such as I have described, others may prefer to use consultants—and that is what has happened in Chester; some may prefer to combine the two and have a Working Party direct the efforts of a consultant. There really are endless variations. The Preservation Policy Group which the noble Lord, Lord Kennet, himself chaired, said in their Report—and I agree with this:
"It seems to us more along the grain of English society and thus more likely to be successful if the existing local authorities
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keep the job—that is, the job of conservation—and co-ordinate their own efforts with those of individual property owners, housing trusts and historic buildings trusts."
So I agree with the noble Lord, Lord Holford, that this is a field in which we have to be flexible, although I dare say there is something to be said for the classification of historic towns, and there is a lot to be said about the way we deploy our very scarce skilled staff. I need not say a great deal about that because we have just issued a circular setting out our proposals. All I want to say is, by way of reassurance to noble Lords, that the key powers for the control of the demolition of listed buildings are held concurrently by the districts and the counties.
Counties still retain, concurrently with the districts, the power to designate conservation areas, the power to serve a building preservation notice, and the power to make directions under Section 8 of the Town and Country Planning (Amendment) Act, which serves to protect unlisted buildings in conservation areas. I hope that that will be reassuring.
The noble Lord, Lord Kennet, asked me about the losses of listed buildings year by year. In 1969 the number was 266; in 1970, 198 in 1971, 201; and in 1972, 223. The slight increase is not a sign that a hole has appeared in the net, it is the result of having more buildings listed because in fact the percentage of listed buildings lost year by year is 0·22 per cent., 0·15 per cent., 0·15 per cent., and 0·13 per cent. I hope that he finds that reassuring. I very much agree with the noble Lord, Lord Fiske, in what he says about the value of the groups of skilled staff that have been built up by the G.L.C. and other authorities, although it is undoubtedly true that we need to train more specialist staff for conservation as fast as we can. I should like to commend the Institute of Advanced Architectural Studies at York University for their course which we are financially assisting. I take the point made by the noble Lord, Lord Sandys, about the need for more skilled craftsmen.
I turn now briefly to amenity societies with gratitude to the noble Baroness, Lady Stocks, and the noble Lord, Lord Chorley, for their recognition of the valuable part such societies play. To mark that recognition we are assisting them in

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a variety of ways. We paid a grant of £16,000 to the British Trust for Conservation Volunteers in order to stimulate the activity, particularly of young people, in practical conservation work. We have paid grants to the Regional Civic Trusts for the North West and the North East, and the Yorkshire Council for the Environment. The Scottish Office have done likewise for the Scottish Civic Trust. We are asking the National Civic Trust to consider the possibility of establishing further regional Civic Trusts elsewhere in England because it is clear from the examples of the existing ones how much valuable work there is to do there. We are in touch with the munity Service Volunteers with a view to helping them develop their work in the environment. Then there are the new grants announced by my noble friend today to the four national amenity societies of £2,500 each.
I was asked, I think by the noble Lord, Lord Chorley, about our contribution to European Architectural Heritage Year. We are paying Europa Nostra £10,000 a year—that is the British contribution to that; and the Civic Trust £30,000 for their role in administering activities in connection with this year on our behalf. But the particular item I should like to announce is in response to the noble Baroness, Lady Stocks, and the noble Lord. Lord Chorley, who were concerned about villages, and we are too. We believe that conservation there can be greatly assisted if we help the local village amenity societies to co-ordinate their activities. To that end we have asked the Development Commission to find ways and means of financing the appointment of environmental offices in the rural community councils of the following counties: Gloucestershire, Durham, Bedfordshire, Cheshire, Cornwall, Kent, Leicestershire. Staffordshire, Surrey, Warwickshire and Wiltshire. I am glad to say that the first appointment in Gloucestershire has just been made. That will be of assistance to the villages in the countryside; but I agree with the noble Baroness, Lady Stocks, that development in urban areas also has to be considered, and that is being done.
I now turn briefly to the churches—and must not speak for very much longer.
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We were most grateful for the remarks of the right reverend Prelate the Bishop of Rochester. The noble Lord, Lord Kennet, will see from his remarks that we are not yet considering any particular solution of this problem. What we are waiting for, and what I am sure we must have first, is an accurate analysis of the problem both as to its scale and its nature and then we will move on to the question of how best the State can deal with it. In connection with churches in the plight of. for instance, Christ Church, Spitalfields, it is of course up to the churches to set in motion the procedures which are required when a church is no longer needed for worship and is redundant from that point of view, but is too good to pull down and for which no further use can be found. Here it is worth noting the Redundant Churches Fund designed to deal with that has a healthy credit balance of £166,000. I hope that can be put to good use. I should like to commend in passing the work of the City of Norwich which shows what local authorities can do in the care of churches. in a way that central Government is at the moment, by past agreement, inhibited from doing.
The noble Lord, Lord Aldington, introduced the question of roads. I shall not follow him too far into the question of the M.3 around Winchester except to say that that is a choice which was not arrived at because it was the cheapest route but because it was found after a long inquiry to be the best. I do not believe that the effect of that on the Water Meadows or on St. Cross or the college will be anything like as great as the objectors had made out, and from the cathedral the road will neither be seen nor heard at all. But it is true to say that the development of our highway programme can probably make a greater contribution to conservation than almost anything else my Department can do. Therefore, I should like to remind your Lordships of the strategy which we announced in the summer of 1971 which leads to the relief, when it is completed in the early 1980s, of 87 out of the 105 towns on the C.B.A. list of historic towns. My Lords, there is a great deal more that could be said about the impact of the highway programme but I have spoken for long enough, it is late enough, and I shall leave it at that by finally thanking

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the noble Lord, Lord Raglan, for giving us this debate and your Lordships for all the stimulus, guidance and encouragement that your remarks have given to all those of us who are engaged in the exacting but rewarding task of conservation.
8.49 p.m.
LORD RAGLAN: My Lords, I was going to be very brief but the noble Viscount, Lord Esher, the noble Lord, Lord Clark, and the noble Lord, Lord Conesford, defended modern architecture against what they apparently thought I said but did not. I qualified my observations. I by no means condemned all modern architecture but said that I thought some new buildings were very successful. As the Chairman of a New Town Corporation I would hardly not think that. I should like to have a discussion at some time with the noble Lord, Lord Clark, on the subject. I would say now only that I think that history shows that with the advent of a new material initially builders imitate the old style and then the new material in a way dictates the use of itself. So, of course, as the noble Lord, Lord Clark, said, modern architecture is new because concrete is new and there have been some exhilarating and beautiful buildings made of it. But I do not see many of these, and there is little around that is exciting, in my opinion. I am not advocating carbon copies of old buildings, though that may be necessary sometimes, and great artists have never been afraid to imitate. I am saying that new buildings should have the good manners to try to fit in, as I am sure they can.
Not since the last debate which I initiated have I listened to so many notable, useful and thoroughly constructive speeches. I hope that the noble Duke, the Duke of Grafton, now has no regrets that he put his name down to speak; I am sure that your Lordships are not sad that he put his name down, and found his contribution very valuable indeed, as it was bound to be. I am most grateful to every speaker, and I hope they feel, as I do, that this debate is bound to have been most helpful.
The noble Lord, Lord Sandford, did not answer the suggestion of my noble friend Lord Kennet of a "call-in blitz". The demolition figures show that the reduction we achieved with the 1968 Act has stopped. It now appears to bo about
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steady. What does he intend to do about that, I wonder? I have not heard any denial from the Government that they have been going rather slowly. The situation is not going to stand still, and I think they will have to move fast to keep up with it. Practically every speaker said how important it is that the Government should be prepared to take strong measures when it looks as if they may be needed. In view of what the noble Lord, Lord Sandford, said about that just now, we will watch with interest what happens.
There have been huge subscriptions, matched by Government money, to save famous pictures from being exported. Whichever country the picture finds its way to, at least the picture survives. Whether it be a single building or whole areas, once the bulldozer moves in they are dead and gone forever. So this truly is a case where it is better to be safe than sorry, and I hope that the Government have taken note of that message from your Lordships to-night. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

HULL TIDAL SURGE BARRIER BILL
Brought from the Commons; read 1ª, and referred to the Examiners.
  MOTOR RALLIES IN BRECON BEACONS NATIONAL PARK
  MOTOR RALLIES IN BRECON BEACONS NATIONAL PARK
  WEST CROSS MOTORWAY: INSPECTOR'S REPORT
  WEST CROSS MOTORWAY: INSPECTOR'S REPORT
  STARRED QUESTIONS: THE PERMITTED MAXIMUM
  STARRED QUESTIONS: THE PERMITTED MAXIMUM