Sitting of 7 March 1973

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

    Bus Licensing Regulations
    Mr. Roger Whiteasked the Secretary of State for the Environment when he is proposing to introduce legislation to revise the bus licensing regulations; and broadly what form such revision will take.
    The Minister for Transport Industries (Mr. John Peyton): Whenever parliamentary time permits.
    Mr. White: As my right hon. Friend knows, this is a very important matter. I wonder whether the industries concerned will be satisfied with his reply. Has he any further statement to make?
    Mr. Peyton: My proposals have been fully discussed with the industries concerned. I think that they now understand the Government's viewpoint. I cannot add to what I have already said about finding a place in the parliamentary timetable: that is not really a matter for me.

    General Improvement Area Schemes
    Mr. Hardyasked the Secretary of State for the Environment what is the number of general improvement area schemes and the total number of houses included in these schemes which were completed during 1972.
    The Minister for Housing and Construction (Mr. Paul Channon): There are at present 580 general improvement areas in England and Wales. Work was completed on a total of 7,217 dwellings in these schemes in 1972.
    Mr. Hardy: The hon. Gentleman's answer is unsatisfactory. Does he not agree that the position in the private rented sector is pitifully disappointing? Will he ensure that local authorities are given sufficient powers to ensure that a positive and imaginative approach can be pursued?
    Mr. Channon: Naturally I am considering all these matters in our review of the improvement grant system. I am not sure that I would say that it is wholly unsatisfactory. There were three times as many completions in general improvement areas in 1972 as in 1971.
    Mr. Wilkinson: May I suggest to my hon. Friend that the schemes far from being unsatisfactory have transformed the whole area of industrial Yorkshire, particularly in the West Riding wool textile district? If we have any complaint it is that these schemes will terminate too soon.
    Mr. Channon: I am grateful for what my hon. Friend says. There is no question of terminating the general idea of general improvement areas. I am most anxious to encourage them even more strongly than at present.
    Mr. Kaufman: Is the hon. Gentleman aware that in the Brailsford Road general improvement area of my constituency the tenants of private landlords are absolutely fed up with the failure of private landlords to take part in the improvement of the area? They have come to me to complain about the lack of action of these private landlords. When the local authorities are taking action will the hon. Gentleman push private landlords to do the same?
    Mr. Channon: The local authorities have many powers open to them. I suggest that the hon. Gentleman gets in touch with his corporation.
    Mr. Sydney Chapman: Will my hon. Friend consider the possibility of encouraging local authorities to carry out the external works more quickly in general improvement areas? That will give encouragement to the residents to take up the opportunities open to them and thus make it more likely that the schemes will be expedited.
    Mr. Channon: I will certainly consider my hon. Friend's suggestion.

    Improvement Grants
    Mr. Farrasked the Secretary of State for the Environment if, in view of increased building costs, he will now raise the maxima of both standard and discretionary improvement grants.
    Mr. Channon: This is one of the matters I am considering in the course of my review of policy affecting older housing.
    Mr. Farr: When my hon. Friend is considering this matter will he also take into account the fact that it is three-and-a-half years since the maximum grant level was established? It is calculated that in that time building costs have risen by over 50 per cent., thus making these grants rather unrealistic now.
    Mr. Channon: I note what my hon. Friend says. I must point out, however, that the average limit for grants approved in 1972, even in the last quarter, was less than the maxima, although quite a proportion of grants were getting within £100 of it.
    Mr. Crosland: Is not the central idea probably to persuade private landlords to improve their property? The Minister said that local authorities have all the powers that they need. In that case will he recognise that when a local authority wishes to put a compulsory purchase order on property for the purpose of improving it, it can effectively do so only when he gives his permission? Will he from now onwards give his permission for such compulsory purchase orders?
    Mr. Channon: The right hon. Gentleman will not expect me to comment on any particular case that might in due course come before my right hon. Friend for decision. I repeat what I said to the hon. Member for Manchester, Ardwick (Mr. Kaufman), that local authorities have considerable powers.
    Mr. Blenkinsopasked the Secretary of State for the Environment whether he has received the comments of the Association of Public Health Inspectors on the effects of the payment of housing improvement grants; and if he will make a statement.
    Mr. Channon: I am glad the association has welcomed the Government's drive to deal with the problems of un-
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    satisfactory houses. I was pleased to receive its helpful memorandum, which I will study carefully in the course of my review of policy on older housing.
    Mr. Blenkinsop: Does not the hon. Gentleman recognise the many pertinent and practical suggestions that the association makes, and the criticisms that it offers? What is the hon. Gentleman's attitude to extending the period for special 75 per cent. grants for improvement schemes in development areas and the linking up of a new and better standard of accommodation generally? Ought not one to relate to the other?
    Mr. Channon: I welcome the idea of a better standard of accommodation. My right hon. Friends and I have made it clear that there is no question of extending the Housing Act beyond June 1974, which is already a 12-months' extension. I am considering the whole question of policy on older houses at present.
    Mr. Blenkinsop: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's replies, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible moment.

    Transport Policy
    Mr. R. C. Mitchellasked the Secretary of State for the Environment if he will publish a White Paper on his longterm transport policy.
    Mr. Peyton: Not yet, Sir.
    Mr. Mitchell: Is the Minister aware that decisions relating to new road building are being made inside his Department and that decisions relating to railway development and closures are being made by British Rail? There often appears to be no co-ordination between the two. Does not the Minister think that it is time we had a long-term co-ordinated transport policy over the next few years?
    Mr. Peyton: There is a co-ordinated transport policy. I do not believe that a White Paper is necessary to achieve it.
    Sir G. Nabarro: With or without a White Paper, can my right hon. Friend give the House an assurance that from every aspect, economic and otherwise, he will give proper regard to the overwhelming claim of the railways to have a real

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    expansion programme and not a further whittling down on the Beeching model?
    Mr. Peyton: The whole question of the future rôle of the railways is now being examined very carefully by the railways themselves, in consultation with my Department.
    Mr. Bradley: Given the present state of confusion and uncertainty, does not the Minister realise that even a short-term statement on future policy would be welcome? Does not he recall his undertaking to me last July to consider publishing a White Paper on railway finances? Is not he aware that the present policy of piecemeal financial solution is wholly unsatisfactory and unsettling for the industry?
    Mr. Peyton: I am conscious of the need to produce, as soon as possible, a statement on the future role for the railways. That is what I intend to do. But as I have said to the hon. Gentleman before, I do not want to produce a lot of half-baked temporary answers. The present position of merely helping the railways on an ad hoc basis is not satisfactory. It must be brought to an end as soon as possible, but I do not want to be hurried. As for the hon. Gentleman's reference to the present confusions. I am not sure what he means, but I am not the cause of them.
    Mr. Leslie Huckfield: Does not the right hon. Gentleman realise that a simple statement from him such as "I believe in railways" would be a start? What estimate has his Department made of the amount of traffic suitable for a realistic and practicable transfer from road to rail?
    Mr. Peyton: As I have said before, this matter is now being subjected to an extensive examination. In answer to the first part of the hon. Gentleman's question, I am only too happy to oblige him. I do believe in railways—but not tomorrow.

    Motorway Service Areas
    Mr. Fowlerasked the Secretary of State for the Environment whether he is satisfied that Great Britain's motorway service areas compare favourably with service areas in other Common Market countries; and whether he will make a statement.
    The Under-Secretary of State for the Environment (Mr. Keith Speed): Some of the service areas I visited recently in France, Germany and Switzerland were undoubtedly attractive. I shall shortly be visiting further representative service areas in England in order to acquaint myself more closely with the facilities they provide and the standard these facilities achieve, particularly in the catering field. These visits will be followed by joint talks with the operators to see what improvements can usefully be sought.
    When these discussions are complete I hope to make a general statement.
    Mr. Fowler: I thank my hon. Friend for that reply. Will he confirm that some of Britain's motorway service areas, including some on the M1, are amongst the worst in Western Europe? Is not there a serious safety point here, in that even when they are tired drivers will not stop at these areas because they consider that they get neither adequate refreshment nor rest?
    Mr. Speed: Our best service areas are amongst the best in Europe, though of course there are many which are not as good. There are safety aspects to consider, and I am determined, with the operators, to improve the standards of service areas so that they compare favourably with the best in Europe.
    Mr. Cormack: Has my hon. Friend considered the provision of certain areas where drivers can pull off motorways for a rest without necessarily having refreshment?
    Mr. Speed: I am interested in the provision of picnic and toilet areas which do not have the full provision of refreshment facilities. We are looking at this possibility.

    Breathalyser Tests
    Mr. McCrindleasked the Secretary of State for the Environment whether he will consider setting up an inquiry into the workings of the law on breathalyser tests, in view of the anomalies shown by recent cases.
    Mr. Peyton: No, Sir.
    Mr. McCrindle: Has not it become clear that the procedure through which the police have to go is proving excessively complicated? Has my right hon.

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    Friend noticed the large number of acquittals in recent months, largely on technical grounds? Does not he feel that an inquiry would be of some advantage to the community even if it took into account only the possibility of introducing random breath tests?
    Mr. Peyton: I shall consider the matter which my hon. Friend has raised, though questions of police enforcement are more for my right hon. Friend the Home Secretary.
    Dr. Glyn: When my right hon. Friend is considering these matters, will he consider whether some other form of test might also be used, such as that which existed before the breathalyser, where people are tested for their efficiency in carrying out certain functions? Is my right hon. Friend aware that the level of alcohol in the blood shown by a breathalyser will vary considerably from individual to individual?
    Mr. Peyton: I take due note of what my hon. Friend says, backed by his expert knowledge.

    Palace of Westminster (Cleaning)
    Mr. Cormackasked the Secretary of of State for the Environment when he proposes to continue with the exterior cleaning of the Palace of Westminster; and if he will make a statement.
    Mr. Channon: I hope shortly to submit proposals to the appropriate authorities of the two Houses. We now have a successful method of cleaning by using a dry grit "mini-blast" and an elastic filler on cracks, open joints and stubborn tarry patches, followed by overall treatment of the surface with fine sprays of water and bristle and phosphor bronze brushes.
    Mr. Cormack: I thank my hon. Friend for that extremely technical and comprehensive reply. May I express the hope that it will be followed by quick action, using all the methods that he has described, so that this Palace may become a fitting complement to Whitehall?
    Mr. Channon: I note my hon. Friend's views. As I say, I hope shortly to submit proposals to the appropriate authorities.
    Mr. Lipton: In view of the millions of pounds that we intend to spend on the
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    car park in New Palace Yard and the architectural monstrosities on the other side of Bridge Street, will there be enough money left to titivate the Palace of Westminster? Cannot we leave well alone and allow the Palace of Westminster to grow old gracefully? If we do not, it will begin to look like the South Bank, and that would never do, would it?
    Mr. Channon: It would be ungallant of me to draw attention to the hon. Member for Brixton (Mr. Lipton) in connection with growing old gracefully. However, he is anticipating a decision of this House by saying that we are necessarily proceeding with the new building.

    Derelict Land
    Mr. Dormandasked the Secretary of State for the Environment if he will make a statement on his request to local authorities to carry out a broader survey of derelict and despoiled land by the summer of 1974.
    The Minister for Local Government and Development (Mr. Graham Page): The new form of survey announced in the Department's Circular 7/73 has been prepared in close consultation with the local authority associations. This wider survey will be one of the first tasks of the new authorities and should provide the information they will need for pressing ahead with reclamation.
    Mr. Dormand: I welcome the broader survey that the Minister has ordered, but is not it likely to turn out to be more a technical exercise than one of reclamation? Will not there be considerable difficulty in getting qualified staff for the work, especially in view of the upheaval that local government reorganisation will cause? Will the right hon. Gentleman say whether the new survey will affect the Government's 10-year target for the clearance of all dereliction?
    Mr. Page: The survey covers more than derelict land for which a grant can be made. It will be useful if ever we wish to extend the grant facilities. As for the timing, it is true that some local authorities would have wished it to be a little later. However, the majority feel that they can undertake it in 1974.
    Mr. Farr: Will my right hon. Friend pay special attention to the time scale of

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    operations by opencast mineral operators? Is he aware that in some instances they tend to take a great deal of time in their cycle of operations, leaving land in a despoiled state for far too long?
    Mr. Page: This will come out in the survey. We are asking for information on land which has planning permission for mineral workings, where mineral workings have to be restored, and how soon they will be restored.
    Mr. Roderick: Will the right hon. Gentleman look at the regulations with a view to extending the limits of grant aid to public corporations other than local authorities? Is he aware that bodies like the National Coal Board could be involved in the work of clearing dereliction? I know that it can assist local authorities, but it always leaves them with the residue to find, which smaller authorities cannot afford.
    Mr. Page: Generally speaking, it is working well through local authorities. Local authorities acquire the derelict land and therefore have it when they have cleared it. I have not come across any serious problem where a local authority had not been able to deal with it.

    Housing Finance Act
    Mr. Skinnerasked the Secretary of State for the Environment how many representations he has now received asking for repeal of the Housing Finance Act.
    Mr. Channon: Very few, Sir.
    Mr. Skinner: We are getting fed up making requests to a Minister who is so obdurate. Is the hon. Gentleman aware that the result of the Act, as exemplified again yesterday on the Stock Exchange, has been that millions of pounds have been made by property sharks? Why is it that councillors who have carried out their election promises in keeping down rents can be surcharged and fined and at the same time hon. Gentlemen opposite, who voted for the Act and represent property companies, can line their own pockets? What kind of a carry-on is this?
    Hon. Members: Withdraw.
    Mr. Skinner: Look at the books on the Table there.
    Mr. Channon: I think that the hon. Gentleman, even by his usual standards, goes a bit far this afternoon. There are two different views in different parts of the House about the merits of the Housing Finance Act. Whether hon. Members support it or not, I should think that there was overwhelming agreement by at least three-quarters of the House that when a law is passed by this House it is the duty of people to obey it.
    Mr. Frank Allaun: Is the hon. Gentleman aware that the Government are shortly to be approached by the big guns —the Association of Municipal Corporations backed by the TUC—over the further rent increases to be deliberately inflicted? Does he recognise that the Government are on highly vulnerable ground in proceeding with this proposal at a time when they are talking about curbing prices?
    Mr. Channon: I hope that in his discussions on this topic the hon. Gentleman will draw attention to the fact that the increase in the needs allowance announced by my right hon. Friend will mean—before hon. Gentlemen opposite laugh too much—that all 1¼ million tenants entitled to a rebate or rent allowance will get an increase in their weekly rebate allowance of between 60p and 88p if their rent remains unchanged. Over 750,000 council tenants entitled to the rebate now whose rent goes up at the end of April will, after that rent increase, pay at least 30p less in rent than today.
    Mr. Redmond: Will my hon. Friend tell the House how many people will be getting the rebates and whether any representations have been made asking for their cancellation?
    Mr. Channon: My hon. Friend may be astonished to learn that I have not seen any yet.
    Mr. Freeson: In the light of the Government's counter-inflation policy, will the hon. Gentleman indicate whether he is in a position to give us his latest assessment of the prospective average rent increases in both the private and public sectors from April 1973 to April 1974?
    Mr. Channon: I cannot give those detailed figures. If the hon. Gentleman puts down a Question, naturally I will

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    answer it. Even if rents are to go up in April this year, the result of the increase in the needs allowance means that nearly all those who are on low wages and unable to afford the increases in rent will be paying less rent.

    Railway Networks (Scotland)
    Mr. William Hamiltonasked the Secretary of State for the Environment if he will now publish the proposed Green Paper on the alternative patterns of the railway system in Scotland.
    Mr. Peyton: I have nothing to add to my reply to the hon. Member for Kingston upon Hull, West (Mr. James Johnson) on 14th February.—[Vol. 850, c. 343.]
    Mr. Hamilton: Is the right hon. Gentleman aware that there is acute anxiety in Scotland about possible cuts in the Scottish railway system? Will he take urgent steps to allay that anxiety? More particularly, since the announcement yesterday about North Sea oil revenues accruing to the Government in the next few years, will he reassess the situation in the light of possible further discoveries of North Sea oil and the consequent need for vastly improved transport facilities?
    Mr. Peyton: I assure the hon. Gentleman that the effect of North Sea oil supplies on rail communications will be borne in mind. There is no reason for him to fear savage rail cuts in Scotland. In due course proposals will be put before the House and the public and will be fully discussed.
    Mr. Brewis: Will my right hon. Friend keep in mind the need for rail communications with Northern Ireland through the West of Scotland?
    Mr. Peyton: Yes, Sir.
    Mr. Baxter: Is the right hon. Gentleman aware that the railway system of Scotland is one of our great national assets, that it should be preserved to the fullest possible extent and utilised for the movement of goods free, gratis and for nothing, on much the same basis as the canal system of Central Europe? Will he bear in mind that we have to compete with European countries and that if we do not maintain a good transport system we shall ruin the outback of Scotland?
    Mr. Peyton: I should be the last to throw any doubt on the suggestion that the railways can play an enormously useful part in our transport system. Indeed they can, and do. I should remind the hon. Gentleman, in view of what he said, of the very slight cut there has been in route mileage under this administration.
    Mr. Mulley: The Minister frequently refers to the fact that he has not cut many miles of the railway system. Is he aware that every mile of railway that he has closed is against a decision that I or one of my predecessors in the Labour Government took to keep it open. Otherwise it would not have been there for him to close?
    Mr. Peyton: I do not think that the right lion. Gentleman wishes to invite me to compare again the route mileage cut by the Labour Government and that cut by this Government.

    Electricity and Gas Meters
    Mr. Redmondasked the Secretary of State for the Environment what representations he has had from the Electrical Association for Women on the subject of siting of electricity and gas meters and what replies he has sent.
    The Under-Secretary of State for the Environment (Mr. Reginald Eyre): The Electrical Association for Women wrote to my right hon. and learned Friend on 3rd February. Its main requests were that in the preparation of new legislation on building control consideration should be given to providing for the accessibility of meters and fuse boxes in houses and flats and for external meter reading facilities. In reply it has been assured that these points will be considered.
    Mr. Redmond: I thank my hon. Friend for that reply. Is it not obvious that we should get things moving rather faster? Surely it is common sense that if a meter can he read from outside a house the people who are out at work all day will get accurate bills and old people will feel happier because they will know that a bogus meter reader has not come to "case the joint".
    Mr. Eyre: I accept my hon. Friend's points. The Electricity Council has

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    recently reported an increasing popularity for outdoor electricity meter cupboards, and a significant number of new houses are now being equipped with them.
    Dr. Glyn: Will my hon. Friend consider a similar proposal for gas meters? Does he realise that the amount of time spent reading two meters separately is unwarranted, and that both gas and electricity meters should be placed so that they can be easily read together by meter readers outside the premises?
    Mr. Eyre: Yes. The considerations that I have mentioned apply mainly to gas meters.

    Derelict Industrial Buildings
    Mr. David Clarkasked the Secretary of State for the Environment if he is satisfied with the operation of his policies for the clearance of derelict industrial buildings.
    Mr. Graham Page: Yes, Sir.
    Mr. Clark: I thank the right hon. Gentleman for his honest and illuminating reply. Is he aware that many of these areas with derelict industrial buildings are areas of rural rateable value? Does he realise that many local authorities are unable to take advantage of the Government's help to clear these industrial eyesores? Will he consider giving a 100 per cent. central Government grant for the removal of derelict industrial buildings?
    Mr. Page: In development areas there is the 85 per cent. grant, in derelict land and land clearance areas there is the 75 per cent. grant, and with the resources element that sometimes comes up to a 95 per cent. grant in particular areas. We have altered the rules on industrial buildings and include those as derelict if they really are derelict and come within the grant. I think that I have answered that pretty well without a brief.
    Mr. Oakes: Is the right hon. Gentleman aware that the hesitation and dilatoriness with which he answered that question is paralleled only by his Department in tackling the serious problem of industrial dereliction? Will he look particularly at the North of England and the Midlands, and realise that many of these industrial buildings are not only ugly but are extremely
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    dangerous to children? Many children are killed each year in these derelict buildings. Will he step up the programme of clearing these industrial sites?
    Mr. Page: Yes, but this depends entirely on the local authorities. I welcome any local authority which wishes to carry out such clearance. There is no obstruction whatever. It is open-ended, so far as they are concerned. I hope that the speed with which I have answered the hon. Gentleman now makes up for any dilatoriness at the start.
    Mr. John: Does not the right hon. Gentleman recognise that in areas of poverty there is often a gap of years before local authorities can acquire land in order to remove derelict buildings? Does not he think that a grant to the nationalised industries would secure that the dereliction was removed before the sites upon which they stood were vacated?
    Mr. Page: I think that on the whole the programme for the clearance of derelict land is going well. About three times as much has been cleared this year as last. There has been a substantial increase. I do not think that anything further could be taken up, but this is open-ended so far as local authorities are concerned.

    Operation Eyesore
    Mr. Edward Lyonsasked the Secretary of State for the Environment what progress he has made with his review of the question of extending for a further period after 30th June 1973 the environmental assistance scheme "Operation Eyesore".
    The Secretary of State for the Environment (Mr. Geoffrey Rippon): I have been studying the many representations I have received that this scheme should be extended. Many factors have to be taken into account, and I cannot yet say whether an extension will be possible.
    Mr. Lyons: I am pleased to hear that there is still hope for an extension of this scheme, but would not the right hon. and learned Gentleman agree that 17 months is too short a period for it to be in operation, particularly in view of the extreme good that it does in industrial areas such as the West Riding? Is the Minister aware that if the scheme ends on the

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    scheduled date it will end at a time when many councils and firms are just becoming aware of its existence, and that the ending of it will throw many men out of work?
    Mr. Rippon: They should not be taken by surprise at this stage of the operation. The scheme has been very successful, and there have been a large number of projects which I am sure have been valuable. The scheme was intended and planned to be a short-term boost, and I think that that has to be borne in mind. There are many demands upon public expenditure, and all these and other factors have to be taken into account.
    Mr. Idris Owen: Is my right hon. and learned Friend aware that eyesores are not short-term, but continue throughout the ages? I support the hon. Member for Bradford, East (Mr. Edward Lyons) in his appeal to my right hon. and learned Friend to give favourable consideration to extending the period, particularly in the North-West, where the problem of blight, dereliction and eyesores is much greater than in other areas of the country. The area has been impoverished for many years, and any environmental assistance which my right hon. and learned Friend can continue will be more than appreciated.
    Mr. Rippon: I shall bear those factors in mind.
    Mr. Sheldon: Is not the right hon. and learned Gentleman aware that in the North-West in particular considerable advantage has been taken of this scheme? It took a number of authorities some while to realise the advantages that were available to them from carrying out its provisions, and an extension for 12 months would be massively welcomed.
    Mr. Rippon: I know that the scheme has been popular and successful, and those authorities that were quick off the mark have benefited considerably. We all appreciate the environmental considerations that have been raised, apart from the help that it has given to local employment, as the hon. Member for Bradford, East (Mr. Edward Lyons) said. At the same time, we have to bear in mind that there are many demands on public expenditure, not least in relation to homes and homelessness.

    North-East Lancashire Motorway (Blackburn)
    Mrs. Castleasked the Secretary of State for the Environment whether he can now announce the date when he expects the line of the North-East Lancashire motorway where it passes through Blackburn to be announced.
    Mr. Peyton: I would refer the right hon. Lady to the reply given to her similar Question on 14th February.—[Vol. 850, c. 1270–1.]
    Mrs. Castle: But cannot the right hon. Gentleman at least give me an approximate date so that my constituents know where they are? Will it be within the next three months?
    Mr. Peyton: I promise the right hon. Lady that I have no desire to keep her or her constituents in the dark. I shall gladly give her all the information that I can at the earliest possible moment. I should not wish to mislead her.

    Driving Licences
    Mr. Ewingasked the Secretary of State for the Environment if he will review the position whereby drivers who, because of a medical condition, have to renew their driving licence annually are required to pay £1 for their annual licence as opposed to the normal procedure of paying £1 for a licence covering a three-year period.
    Mr. Peyton: Under my proposals for replacing the existing three-year licence by one valid to the age of 70, drivers will pay a "once-for-all" fee to cover all future full licences. Drivers with limited-period licences would then pay no more than other people.
    Mr. Ewing: I am sure that many disabled and medically sick drivers to whom I refer in the Question will be grateful to hear the Minister's reply. Having been taken by surprise by his answer, all that I can say to the right hon. Gentleman is that I am grateful for it.
    Mr. Peyton: I am grateful to the hon. Gentleman, whom I am delighted to take by surprise.
    Mr. Scott-Hopkins: Does not my right hon. Friend think that all drivers over 60 should take a medical test?
    Mr. Peyton: I know one or two under the age of 60 for whom a medical test would be just as appropriate.
    Mr. Leslie Huckfieldasked the Secretary of State for the Environment what representations he has received to date from the Association of Optical Practitioners about eyesight testing and the introduction of driving licences for life; and what reply he has sent.
    Mr. Peyton: The association suggested higher eyesight standards and periodical tests. Neither would be likely to increase road safety.
    Mr. Huckfield: is the right hon. Gentleman not going to take notice of the increasing evidence provided by the British School of Motoring and organisations such as the Association of Optical Practitioners that many people who are driving cannot see properly? Is he not aware that the driving test number plate requirement does not constitute what an optician considers to be normal vision? Does the right hon. Gentleman propose to continue giving all these people driving licences for life? Will he institute a trial period during which anybody involved in a road accident can have his eyes fully tested by a qualified optician?
    Mr. Peyton: There is nothing to stop people from doing that now. I have no sufficient evidence of a significant connection between defective eyesight and road accidents. Anybody in my position has to be careful before he imposes upon the public restrictions and requirements which are not really necessary.
    Mr. Mulley: In this context, can the right hon. Gentleman give the House information about the draft proposals of the EEC? As I understand them, they would make demands for a completely different approach to driving licences in this country. Will the right hon. Gentleman say to the Community what he has just said to my hon. Friend the Member for Nuneaton (Mr. Leslie Huckfield)?
    Mr. Peyton: I might very well do just that.
    Mr. Kenneth Lewis: Is my right hon. Friend aware that when there is fog on the motorway, or any other road, many people who can see properly apparently do not want to see, and that if those who
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    can see would concern themselves with what they can see during fog there would be fewer accidents?
    Mr. Peyton: My hon. Friend has made a characteristically shrewd point.

    Development Land (Rating)
    Mr. David Mitchellasked the Secretary of State for the Environment whether he is aware of the high proportion of land for which planning permission has been granted but which remains undeveloped; and whether he will consider changes in the system by way of partial rating for such land in order to expedite its release for development.
    Mr. Rippon: I am aware that there are substantial amounts of such land. As my right hon. Friend the Chancellor of the Exchequer announced yesterday, we propose to introduce a land hoarding charge, further details of which will be announced as soon as possible. This is intended to expedite the release of land for development.
    Mr. Mitchell: Is my right hon. and learned Friend aware that I am delighted that the Chancellor of the Exchequer has seen fit to fulfil my request before the third time of asking?
    Mr. Rippon: I am glad that my hon. Friend is so content.
    Mr. Frank Allaun: Has the right hon. and learned Gentlemen read The Times, The Guardian and the Financial Times this morning, which all report sighs of relief among property owners? Cannot landowners avoid the proposed charge by delaying seeking planning permission until the very moment when they intend to sell, with the result that less, rather than more, land will be available for building purposes?
    Mr. Rippon: The hon. Gentleman had better await details of the proposals, when I hope we shall satisfy him that things will be better.
    Mr. Winterton: Will my right hon. and learned Friend lay details of the proposed land hoarding charge before the House before the end of the month, so that legislation can be put through as an urgent priority?
    Mr. Rippon: My right hon. Friend has announced the general policy and

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    the details will be brought before the House as soon as possible. I propose to have consultations with the local planning authorities.
    Mr. Freeson: Is the right hon. and learned Gentleman aware that the Government are probably the only source of satisfaction with regard to these proposals? Very few people think that they will have much impact on the situation. More specifically, may I ask whether, without waiting for the proposals to be placed before the House, the Minister will take action with regard to the 1,000 acres in the Greater London area with planning permission for 46,000 dwellings, most of them over three years old, which have not been started? Will the right hon. and learned Gentleman seek to get that land brought into use by getting it purchased by the GLC?
    Mr. Rippon: There was a general discussion on these matters in our recent debate on housing. The proposal for a land hoarding charge must be regarded only as part of a general policy of getting land for development as quickly as possible.

    House Prices (Northern Region)
    Mr. Horamasked the Secretary of State for the Environment what was the average price of a new house and of a second-hand house in the Northern Region at the latest available date.
    Mr. Eyre: The average prices for new and second-hand houses in the Northern Region were £5,904 and £5,280 respectively in 1972.
    Mr. Horam: Do not these figures show that the repeated assertion of the Minister for Housing and Construction that house owning is within the means of the average family on average or below-average earnings is the sheerest moonshine, even in a region with an unusually high proportion of very cheap houses? Is it not a fact—and will it not emerge even more clearly when the Budget implications for mortgage lending rates become even clearer—that in terms of house owning we are still sharply divided between the haves and the have-nots?
    Mr. Eyre: The national figures show that first-time purchasers were holding their own in the market during 1972. Mortgages for first-time purchasers rose
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    from 301,000 to 371,000 and mortgages for borrowers under 25 rose from 117,000 to 144,000.
    Mr. Fernyhough: In view of the substantial increase in the price of both new and second-hand houses, particularly during the last three years, what does the Minister intend to do about it? How does he expect the fellows on £20 and £25 a week to stand aside and not put in for wage claims when house prices are rising with the rapidity that they have done under this Government?
    Mr. Eyre: There are reports from some building societies that during the last three or four months there has been a marked levelling off in prices, for existing houses in particular.

    A1 (Bedfordshire)
    Mr. Hastingsasked the Secretary of State for the Environment when he expects to receive the report by his regional controller on the safety of the Al in the vicinity of the villages of Beeston, Wyboston and Chawston.
    Mr. Speed: We have decided to provide a footbridge at Wyboston as soon as possible and propose to close openings in the central reservation here and at Chawston. Study of the rest of Al in Bedfordshire, including Beeston, is still proceeding.
    Mr. Hastings: Is my hon. Friend aware that this will cause a great deal of relief to the people of Wyboston and Chawston, but that Beeston is still in a perilous position? Does he recall that this stretch of the Al was disgracefully badly planned in the first place? There can only be one answer—a footbridge or an underpass. Now that he has made this welcome announcement about the stretch through Wyboston and Chawston will he ensure that as soon as the controller reports something is also done about Beeston?
    Mr. Speed: As my hon. Friend knows, we are awaiting a report on traffic and conditions from the county council, and we will certainly be considering the Beeston situation very carefully when we have received that report.

    Water Supply (Northern Region)
    Mr. Sutcliffeasked the Secretary of State for the Environment when he

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    expects to have completed his review into the sources of water supply in the Northern Region.
    Mr. Rippon: As yet, it is too early to say how long this will take. I will do all I can to bring the question at issue to a speedy conclusion.
    Mr. Sutcliffe: Is it not the case that, without taking any account of the demands of the Redcar steel complex or Teesside oil developments, the Tees area is expected to absorb its water yield by 1977, and that, whether it is Kielder or Irthing, it will take five years to bring water to the Tees; that delay is critical, and that uncertainty is bound to affect the expansion of existing industry and the attraction of new industry?
    Mr. Rippon: Nobody has been disputing the need for the water and no one is denying the need to have regard to the timetable. The question at issue is the most suitable source of supply.
    Mr. Armstrong: Will the right hon. and learned Gentleman tell us what extra information he expects to receive that was not given at the exhaustive public inquiry which was held and which convinced his inspector about the urgency of the case? Is he aware that every Member of Parliament in the Northern Region—apart, apparently, from the Secretary of State himself—has been inundated with demands from every section of the community to get ahead with the project at Kielder? Can he tell us whether he gets any support among his hon. Friends?
    Mr. Rippon: I cannot anticipate what evidence may be brought forward by those concerned.
    Mr. R. W. Elliott: Has my right hon. and learned Friend noted—I have no doubt he has—that it is satisfying to those of us who have been concerned with regional development in the Northern Region for many years now that the region leads the field in the take-up of the much improved incentives to industry coming in that are now offered by the present Government? Bearing this in mind, will he take note that considerable Press publicity was given to a firm which has now decided against considering the Northern Region because of the danger
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    of shortage of water? Will he therefore hasten his decision?
    Mr. Rippon: I appreciate the need for getting on with these matters as quickly as possible. I found when I got to the Department that a good deal of time had already been taken. I am sure that, whatever the reasons for its decision not to go to the North-East, the firm my hon. Friend mentioned should not have taken it on the basis he suggests.
    Mr. Tinn: Is the right hon. and learned Gentleman aware that the possibility of the Irthing development was fully considered and rejected for good reasons by the Northumbrian River Authority? Is he not further aware of the great concern and alarm which the delay in his decision has caused to all responsible people in the North, presumably outside his own constituency?
    Mr. Rippon: I have set out my reasons for the view that I expressed as Secretary of State in the letter in which I conveyed my decision. I must stand on that for the time being.

    Planning Applications and Appeals
    Mr. Sydney Chapmanasked the Secretary of State for the Environment if he is satisfied with the progress being made in reducing the time taken by local planning authorities in deciding planning applications and by himself in giving decisions on planning appeals; and if he will make a statement.
    Mr. Rippon: Over the past two years there has been a sharp increase in the number of planning applications. Despite this, most authorities are still giving decisions on the majority of applications within the two-month period. Discussions with the local authority associations are in progress to establish what further action can be taken with regard to both applications and appeals.
    Mr. Chapman: While welcoming that answer and the measures that my right hon. and learned Friend has taken and is taking to expedite decisions on planning appeals, may I ask him to consider what many people who have to deal with planning applications are increasingly realising are unnecessary delays by far too many officers of some local planning

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    authorities, who are delaying, over minor details, decisions on planning applications? Does he not agree that a much more positive approach, within good planning policies, should be understood by these officers?
    Mr. Rippon: That may well be so, and I am considering what further advice can be given to local planning authorities on how to deal with these matters.
    Mr. Loughlin: What percentage of planning appeals relate to rural authorities or rural areas? Would it not be a good idea if the Secretary of State prepared some guidance notes to county councils in dealing with rural applications for planning permission, so that county planners do not apply urban planning principles to rural areas?
    Mr. Rippon: I cannot give the breakdown of figures which the hon. Gentleman requests. If he puts down a Question, I do not know whether I shall be able to do so. But certainly a planning authority must consider the merits of planning applications in relation to the needs of its own areas.
    Mr. Edwin Wainwright: Will the Secretary of State give special priority to those areas where unemployment is high, so that planning can go forward and jobs be found where they are badly needed?
    Mr. Rippon: One must deal with planning applications on their merits, and the primary responsibility rests with the local planning authorities. Where there are difficulties, cases can, of course, be raised on appeal.

    Bridport Bypass
    Mr. Wingfield Digbyasked the Secretary of State for the Environment whether he will order a public inquiry, with wide terms of reference, into the proposed Bridport bypass, in view of the local opposition from many quarters.
    Mr. Peyton: Yes, Sir.
    Mr. Wingfield Digby: May I thank my right hon. Friend for that welcome decision? Since the borough council, the rural district council and the National Farmers' Union have all come out against this scheme, will he ensure that the widest terms of reference are given to the inquiry?
    Mr. Peyton: Yes, Sir; I give that unqualified assurance to my hon. Friend.

    Dams and Reservoirs (Design)
    Mr. Trewasked the Secretary of State for the Environment what representations he has had about the adequacy of the regulations concerning the design of dams and reservoirs; and what action his Department is taking as a result.
    Mr. Graham Page: The Institution of Civil Engineers has proposed amendments to the certificates and forms prescribed by regulations made under the Reservoir Safety Provisions Act 1930. These proposals will be discussed at a meeting later this month between the institution and the Department.
    Mr. Trew: I am grateful to my right hon. Friend for that reply. Is he satisfied with the general level of third party insurance against dam disasters? If not, will he bring forward legislation to provide for this?
    Mr. Page: That is a matter for the owners of the reservoirs. There is no power to make regulations in that connection at present; as my hon. Friend said, it would need legislation. On the reorganisation of water services, the resources of the regional water authorities should remove any anxiety about the capability of meeting any claim for damages.
    Mr. Robert C. Brown: Is the Minister aware that the people of the North are more interested in getting the Kielder Dam proceeded with than in its design, and that unless his complacent right hon. and learned Friend makes a speedy decision he will go down in history in the North as the Minister who murdered the industrial future of the north-east of England?
    Mr. Page: That is rubbish. There is no complacency about the matter at all. The question has already been answered.

    Housing (London)
    Mr. Clinton Davisasked the Secretary of State for the Environment what plans he has for the establishment of a new strategic housing authority for the whole of London, consequent upon the recommendations of the Layfield Report: and if he will make a statement.
    Mr. Rippon: As I have said in my statement upon the publication of this

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    report, the Government will wish to consider this proposal over the longer term. However, the upheaval involved, coming so soon after the 1963 reorganisation of London government, might mean that any benefit in the long run would be at the cost of short-term loss of effectiveness.
    Mr. Clinton Davis: Will the right hon. and learned Gentlemen indicate whether or not he is in favour of outer London boroughs being required to make land available to deal with the stress areas of inner London, such as Hackney? Is he aware that we cannot hope to solve the problems of housing in areas such as this unless we get help from what have hitherto been extremely selfish Tory outer London boroughs?
    Mr. Rippon: All London boroughs have committed themselves to voluntary co-operation, and I hope that that will continue. I hope that the work of the London Action Group will also be beneficial. As I have explained to the hon. Member previously, local authorities have certain statutory powers to make compulsory purchase orders to acquire land outside their own area. Some of these may from time to time come before me. I shall have to judge them on their merits.
    Mr. Jessel: Is my right hon. and learned Friend aware that we already have a regional housing authority in the form of the Greater London Council, which has recently increased its annual number of lettings from 22,000 to 24,000? Will he remember the very sound advice of the 12th century philosopher, John the Scot, who said, "Do not multiply entities beyond necessity"?
    Mr. Rippon: That seems very sound advice.
    Mr. Crosland: Is the right hon. and learned Gentleman aware that few people will think much of the GLC as a strategic housing authority? Is he also aware that no changes of machinery will produce more houses in London as long as the construction industry is incapable of building them? I am sure that the right hon. and learned Gentleman knows that the National Federation of Building Trades Employers has been writing to the chairmen of London housing committees which have a desperate housing shortage saying that nearly all the leading
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    contracting organisations have been forced to adopt a policy of opting out of public authority work, particularly housing, in the London area. In the light of that fact, how does the Secretary of State propose to get more houses built in London?
    Mr. Rippon: I agree with what the right hon. Gentleman has said about changes of structure. In themselves, they achieve nothing. But the right hon. Gentleman is less than fair, both to the GLC—which has made very considerable progress on housing in the last few years —and to the construction industry. We ought also to recognise that the other London boroughs which have housing responsibilities have also been making a constructive effort. I hope that the right hon. Gentleman will lend his support to what they are trying to do to improve the situation further.

    Greater London Development Plan (Layfield Report)
    Mr. Thomas Coxasked the Secretary of State for the Environment how many letters he has now received from residents living in the Greater London area concerning the Layfield Report: and what replies he has sent.
    Mr. Rippon: I have received very few letters specifically concerned with the Layfield Report since it was published on 19th February, but I receive many letters every day on the various issues in London with which the report is concerned.
    Mr. Cox: The right hon. and learned Gentleman is, therefore, fully aware of the deep concern which many Londoners are now expressing on certain comments made in the report, especially those applying to employment, housing and transport, but will he give a firm assurance to the House and to Londoners that there will be no attempt to bulldoze through that report, and that every Londoner will be given a fair opportunity to express his views and his concern about points made in the report?
    Mr. Rippon: Of course. That was the object in publishing the report, as many hon. Members on both sides of the House asked me to do, at the earliest opportunity. I published the report with certain general statements of the Government's view. But there ought to be a lot

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    of public discussion of the very important issues that are raised in the report.
    The hon. Gentleman will remember that when the old London County Council development plan was first put forward, years ago, after the report was received it was two years before it was published, with a thousand modifications. I have adopted this unusual procedure in order that the public should express their views.
    Mr. Grylls: With regard to the housing aspect of the report, will my right hon. and learned Friend use his influence to dissuade the Opposition from their proposal to nationalise all rented housing and land, which would result in fewer rented houses and less land being available to London?
    Mr. Rippon: That is not a very con-structive or helpful proposal, but it would be unfair to saddle the official Opposition with such an absurd suggestion.
    Mr. Driberg: Is the right hon. and learned Gentleman aware that there is widespread public concern at the news that the implementation of this report would mean the destruction of 15,000 houses? Is he also aware that that destruction and the enormous expense of the motorway box plan could be avoided if the very sensible and ingenious plan referred to in Question No. 61 today were adopted instead?
    Mr. Rippon: I doubt that we shall reach Question No. 61. But I am prepared to reply on this point. At this stage it is impossible to estimate the number of houses that might be affected by any particular road construction, because all that I have done in certain circumstances is to indicate decisions in principle. There will have to be a lot of further discussion.and, if necessary, further public inquiries on any detailed line of any route.

    Green Belt (East Berkshire)
    Dr. Glynasked the Secretary of State for the Environment if he is aware.of the continuing concern about the lack of a decision on the confirmation of the proposed green belt areas in East Berkshire, particularly following the action taken in respect of the proposed green belt areas in the adjoining counties of Buckinghamshire and Surrey: and if he
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    will now make a statement on the confirmation of the green belt in East Berkshire.
    Mr. Graham Page: The green belt proposals have to be processed as modifications to the Berkshire County Development Plan and the draft of those modifications was sent to the county council for comment on 21st February.
    The intention of the draft modifications is to give formal approval to that part of the proposed green belt in East Berkshire which lies outside the Reading/Woking-ham growth area defined in the Strategic Plan for the South East.
    Dr. Glyn: Is my right hon. Friend aware that after his decisions in Cookham and Windsor these proposals will be widely appreciated by not only constituents but local authorities? I have one important question. Will my right hon. Friend use his power sparingly on appeal and in general try to back up the local authority's decisions rather than have "planning on appeal", which is becoming the vogue at present?
    Mr. Page: Until the green belt is approved, the proposed green belt will be protected on the same lines as the approved green belt.

    A41(M) and North Orbital Extension
    Mr. Raphael Tuckasked the Secretary of State for the Environment whether he has decided to modify in any way the plans he originally approved for the A41(M) and the North Orbital Extension from Maple Cross to Hunton Bridge.
    Mr. Speed: No, Sir, other than those set out in the decision letter of 22nd January.
    Mr. Tuck: Does the Minister realise that his present proposals are causing alarm and despondency among the people of Watford? Why does he consistently and stubbornly still refuse to meet a delegation from Watford Borough Council—the people whose lives are affected by this decision—in order at least to hear their views and to consider their alternative proposals?
    Mr. Speed: The council advanced its views very strongly at the public inquiry. Those views were considered by the inspector, and considered in great detail

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    by my right hon. Friend. That is why there is really no point in going over them again.
    Sir Gilbert Longden: Does my hon. Friend understand that there is great alarm and despondency elsewhere than in Watford, namely, in my constituency and in the Hertfordshire County Council? This road is being driven flat through between two schools. Will my hon. Friend kindly reconsider the matter?
    Mr. Speed: I understand the concern my hon. Friend mentions, but we are taking the greatest steps to see that this road is environmentally as attractive as possible—and this will be helped by the legislation currently before the House.

    Housing Land
    Mr. Arthur Jonesasked the Secretary of State for the Environment what further progress has been made with regard to release of land for residential development by Government Departments and British Rail; and if he will make a statement.
    Mr. Rippon: In 1972 about 7,400 acres of surplus land were disposed of by Government Departments and 7,500 by British Rail. Information is not available on the amounts used for house building. The Government will release additional land as soon as it becomes surplus, and the nationalised industries are being urged to do the same.
    Mr. Jones: Will my right hon. and learned Friend say whether the announcement made yesterday by our right hon. Friend the Chancellor of the Exchequer includes Government land and British Rail land?
    Mr. Rippon: It would be wise to await the details of the proposals—which I shall lay before the House in due course—setting out the way in which the land hoarding charge might work. My hon. Friend will realise that a great deal of progress has been made in this matter in the last year or so.
    Mr. Kaufman: Will the right hon. and learned Gentleman put a rocket behind British Rail—[HON. MEMBERS: "No."]—and Mr. Richard Marsh, personally, in order to make them at last do something to clear up the derelict land at Broom Lane, Levenshulme, Manchester? It is a
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    health hazard and a danger to children. It has been festering for too long, and something must be done about it.
    Mr. Rippon: We could certainly do with a driver or two. I will bear in mind the hon. Gentleman's constituency point.

ICELANDIC FISHERIES
Mr. James Johnson(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement regarding the attacks by Icelandic coastguard vessels upon seven British trawlers, including the "Ross Resolution" and the "Arctic Vandal"' sailing from St. Andrew's Dock Hull and what protest he has made to the Icelandic Government.
The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): On 5th March, vessels of the Icelandic coastguard cut one or both trawl warps of five British trawlers and damaged one warp of a sixth. On 6th March there were two more such incidents.
This renewal of the interference with British trawlers on their lawful business is deplorable. Her Majesty's Ambassador at Reykjavik delivered an immediate oral protest to the Icelandic Government on 6th March and is today delivering a formal note of protest.
In addition, on 6th March, my noble Friend the Minister of State for Foreign and Commonwealth Affairs summoned the Icelandic Ambassador and protested against the renewed activities of the Icelandic coastguard, which are not only dangerous but run counter to the International Court of Justice's interim order of 15th August 1972.
I am today sending a message to the Icelandic Foreign Minister reminding him of my proposal to him of 22nd January that discussions should be resumed, and I am asking him now to set a date for this, since it is obviously intolerable that the present situation should continue. I am also reminding him that the British Government have all along made it clear that we are ready to take whatever action is necessary including the use of the Royal Navy to protect British trawlers.
Mr. Johnson: I accept the moderate attitude which the British Government

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have adopted so far in an effort to avoid any provocation to Iceland. Is the Secretary of State aware that at least nine Humberside vessels have had their warps cut and that blank shots were fired by the Icelandic flagship "Aegir"? Open warfare is a terrifying experience. What is the Seceretary of State doing to counter this new hard fist within the Icelandic glove?
Is the right hon. Gentleman aware of the need for more tugs to act as buffers against these attacks? Is he aware also that there are only six or seven tugs of this type in the world and that we need to scout about and find them before it is too late? He must know that our fleet is moving on the 15th of this month to the North-West, fishing off the doorstep of Reykjavik.
Lastly, is the Secretary of State aware that angry skippers have hit back and that the cutting gear of the "Aegir" has been confiscated and is now on the way to Hull? Will he ensure that the Ministry of Defence examines this cutting gear thoroughly, because at the moment our men have no deterrent to attacks of this nature? If things get any worse, the Navy will have to intervene.
Sir Alec Douglas-Home: The answer to this is that the Icelandic Government should re-engage themselves in negotiation. I am glad that the hon. Gentleman agrees that a policy of moderation is right. These incidents are very dangerous when blanks are fired and there is very close proximity to our trawlers by the Iceland gunboats. The tugs are in position. I will look again at the question whether more tugs are available. As the hon. Gentleman says, there are only six or seven of this type of tug in the world and it is not easy to get them. It is more a question of co-ordination of the tugs that are there and securing a better pattern of movement. We must consider all these matters.
In the last resort, I must impress upon the Icelandic Government that it may be necessary to use Her Majesty's Navy.
Mr. Scott-Hopkins: Does my right hon. Friend realise that many people are getting rather tired of this matter continuing for such a length of time? Leaving the naval aspects to one side, will my right hon. Friend consult our
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European allies so that a policy of boycott and pressure can be applied to the Icelandic Government with a view to persuading them to conform to civilised standards and not to continue to endanger life as they have in recent weeks?
Sir Alec Douglas-Home: The European Community is in agreement that none of the facilities which are available should be available to Iceland. I do not think that the Community can go further at present. It is necessary to watch the position from day to day, as we are doing with the industry, and decide on the right level of protection.
Mr. Crosland: As the Secretary of State said, this is a deplorable and extremely dangerous escalation of the cod war. It is particularly deplorable in the light of the repeated judgments of the International Court.
The Secretary of State will know that those of us who represent fishing ports have been very restrained about demanding the involvement of the Navy, that it has been our view that the Navy should go in only as a last resort, and that we would like the tugboat solution to succeed. We also think that it has been an almost unanimous view in the fishing ports that the tugboat solution, which had its first success yesterday with the "Aegir", could not succeed as long as there were only one or two tugs present. If this peaceful and moderate attitude is to succeed, the Secretary of State must now plan to bring in at least four or five more tugboats.
Sir Alec Douglas-Home: I will certainly consider the possibility of increasing the number of tugs. The right hon. Gentleman is right. I am sure that the policy of restraint has been right up to now. There is a limit to patience. The Icelandic Government had better know it.

SOCIAL SECURITY
The Secretary of State for Social Services (Sir Keith Joseph): With permission, Mr. Speaker, I should like to make a statement about increases in social security benefits and contributions. My right hon. Friend the Chancellor of the Exchequer has already announced the main increases, to take effect in the week beginning 1st October—that is, exactly 12 months after those of last year. In

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due course I shall be presenting a White Paper to the House together with a Bill and the Government Actuary's Report, and I shall be laying the associated statutory instruments.
I am circulating details of the new rates of benefits and contributions in the OFFICIAL REPORT. These, with copies of my statement, are available in the Vote Office.
As my right hon. Friend said yesterday, unemployment and sickness benefits, injury benefit and maternity allowance will go up by £1 married and 60p single. The Government feel that it is right to do more for the pensioner. There will, therefore, be increases of £1·60 in the married and £1 in the single rate of pensions and other long-term benefits, including invalidity pensions and widows' pensions, bringing them up to £12·50 for a married couple, to £12·75 where one of them is over 80 and to £13 where both of them are over 80, and to £7·75 a week for a single pensioner or £8·00 for a pensioner over 80. These increases reflect the Government's determination to concentrate resources on the long-term benefits as a continuing measure.
Attendance allowance at the day and night rate will go up from £5·40 to £6·20 and at the day or night rate from £3·60 to £4·15 a week.
The increases in the main scale rates of supplementary benefit will be the same as, and will operate from the same dates as, the increases in the related national insurance benefits. The increases of £1·60 for a married couple, and £1 for a single person, proposed for retirement pensioners will also go to supplementary pensioners and other supplementary beneficiaries who have qualified for the longterm addition—that is, to people under pension age who have received supplementary benefit for two years or more, with the exception of those required to register for work.
For these categories we also propose, since it has given rise to some confusion, to incorporate the long-term addition, of 60p for those under the age of 80 and 85p for those over 80, into new long-term scale rates. But, as at present, 50p of these new long-term rates, or 75p for those over the age of 80, will be regarded as covering any extra expenses, other than heating to which I shall refer later.
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Thus a supplementary pensioner living alone who is now entitled to £7·15 a week plus rent and rates—because of course no one has been required to live on the national insurance pension alone —will become entitled from October to £8·15 a week plus rent and rates, or £8·40 a week plus rent and rates if he or she is over 80.
A supplementary pensioner couple now entitled to £11·25 per week plus rent and rates will become entitled to £12·85 a week plus rents and rates or £13·10 plus rent and rates if one of them is over 80. Extra benefits can be paid where there are special needs.
Other supplementary benefit scale rates will go up by £1 for a married couple and 60p for a person living alone, to match the increases in the short-term national insurance benefits. All children's scale rates will be increased proportionately to these latter figures.
The war and industrial injuries disablement pensions for 100 per cent. assessment will go up from £11·20 to £12·30. The standard war widow's pension will be increased from £8·80 to £10·10 and the industrial injuries widow's pension from £7·30 to £8·30.
We also propose certain selective improvements. The invalidity allowance which we introduced in 1971 and which goes with invalidity pension for the chronic sick, at one of three rates dependent upon the age at which incapacity started, will be raised by 40 per cent. in each case, from 35p to 50p, from 70p to £1 and from £1·15 to £1·60 a week respectively. This is a much more than proportionate improvement—in addition to the increase in the basic invalidity pension itself—and will go to the chronic sick and also to unemployable pensioners under the war pensions and industrial injuries schemes. The net cost will be £3 million in a full year.
I turn now to special heating needs for old people and others on supplementary benefit. As from 1st October extra heating allowances will be paid on top of the new rates of supplementary benefit, instead of being offset against the longterm addition. Thus, for the first time, supplementary benefit recipients will be entitled to the full amount of any additional heating allowance awarded because of their individual circumstances. The Supplementary Benefits Commission

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intends to apply this provision to all cases where a need for extra heating has been identified but offset in the past. This will be done as they come up for normal review. It is estimated that over 400,000 supplementary benefit recipients may benefit, at a cost in a full year of about £6 million.
Upratings of prescribed earnings levels for the family income supplement will in future be made in the general autumn uprating programme, instead of in April. We shall therefore include in the October uprating a small increase in the prescribed levels of income on top of those coming into force next month. Income levels will be raised by 50p a week for families with up to four children, and there will be higher increases, in steps of 50p, for families with five or more children. Further, the maximum weekly benefit will be increased from £5 to £6 for families with three or more children.
These increases in benefits mean that an extra £570 million in a full year will go to the pensioners, the sick, the disabled, the unemployed and other special groups. About £500 million will fall on the National Insurance Funds.
I now turn to contributions. As my right hon. Friend said yesterday, the weekly earnings limit up to which graduated contributions are paid will be raised from £48 to £54. The full rate of graduated contributions for employers and employees will be increased from 44 per cent. to 5 per cent. The flat rate contribution for employed men will be reduced by 4p. In the result, the man earning £54 a week will pay an extra 36p a week; the man on average earnings of £36 will pay 2p a week more than now; and the man earning £18 will pay 2p a week less than he does at present. The employer's share of the flat rate contribution will be increased by 14p for men and 12p for women. In this way more of the contribution increases will fall on employers. These changes will bring us rather closer to the contribution arrangements under the Social Security Bill, which is due to come into force, if Parliament agrees, in 1975.
The Treasury contribution will continue at about 18 per cent. of the other income from contributions.
When it becomes operative, this uprating means that, since the last uprating of
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the Labour Government in November 1969, pension will have increased by no less than 55 per cent. in money terms. Between November 1969 and January 1973 the Index of Retail Prices had gone up by 28·3 per cent. This is an uprating which redeems our promise of price protection for all the 11½ million people who will benefit from it, and, I would emphasise to the House, in conclusion, much more than redeems it for the elderly, the widows and the chronic sick among them.
Mr. John Silkin: We on this side of the House are glad that the Secretary of State has announced some increase in social security benefits. The Secretary of State will fully understand that his rather long and detailed statement needs a good deal of study, but there are one or two points that I should like to put to him today and to which I imagine he will be in a position to reply.
The first point concerns the heating allowances. We welcome the fact that heating allowances will no longer be offset against long-term addition, but this is a mere correction of an anomaly. Will the Secretary of State confirm that the Fox Report found not that 400,000—the figure which I think he quoted—pensioners were suffering from unacceptably low temperatures, but that 50 per cent were?
My second point concerns sickness and unemployment benefits. These, I think he will agree, lag behind the retirement pensioners' increase. In view of this fact, how can he claim that he is being fair to the long-term 250,000 who, through no fault of their own, are still unemployed?
The third point concerns the right hon. Gentleman's reference to family incomes supplement. As he knows, there has been no increase in family allowances since 1968 and we have faced an utter failure of the family income supplement to reach those in greatest need. In view of this —and if he does not know the answer he might ask the Prime Minister who is sitting next to him—when will he be in a position to honour the Prime Minister's commitment of 1st June 1970 to raise family allowances?
Sir K. Joseph: Certainly our anxiety is to reach those who, through lack of enough money, cannot provide sufficient

417
heating for themselves, because either their housing or their health conditions, or both, make special heating necessary for them. It is our judgment that about 40 per cent. of supplementary pensioners living alone—the most vulnerable group —will benefit from this arrangement which I have announced today.
The right hon. Gentleman asked about the long-term unemployed. Governments of either party have provided an addition for the long-term unemployed and we do not propose to make a change in this. The family income supplement, while not reaching more than about half of those whom it is intended to reach, does reach those who are poorest, and therefore it is quite wrong to write it off as an utter failure. The reason we did not bring in any increase in family allowances was that we found when taking office that the previous Government had so lowered the tax threshold that it was impossible to increase family allowances plus claw-back and give any benefit whatsoever to the poor.
Dame Joan Vickers: As my right hon. Friend mentioned war widows, may I ask what has been done for war widows who were widowed before 1950?
Sir K. Joseph: I think this is a subject that affects my right hon. Friend the Chancellor of the Exchequer as well as myself. Nothing special is being done for them today.
Mr. McBride: Would not the right hon. Gentleman have another think? Does he not consider that retirement pensioners have a right to a pension of £10 for a single person and £16 for a married couple? Does he not think that the pensioners have a prior claim to extra money —a claim much greater than those who are shortly to enjoy tax remissions to which they are not entitled?
Sir K. Joseph: Once again, the Tory record in real increases for the pensioner is better than the Labour record, as it was between 1951 and 1964. We should all like to go faster. The difficulty is that increases in contributions tend to increase prices, and rising prices are the prime danger to pensioners.
Sir B. Rhys Williams: I congratulate my right hon. Friend on his very welcome statement. Is it intended for future years
418
that 1st October shall become established as the date on which upratings take effect?
Sir K. Joseph: I should not like to bind Governments for the future to any precise date, except that it will be in the autumn.
Mr. Pardoe: Is the percentage increase in pension for a married couple as great as the percentage increase in average industrial earnings from October to October? Second, how many pensioners will still be below the poverty line and have to beg from the Supplementary Benefits Commission after 1st October?
Sir K. Joseph: We cannot tell what the rise in average earnings will be between October and October, in an expanding economy under stage 2. But it is our judgment that a significant real increase of buying power will be provided for pensioners. I am not one who exaggerates these things; on both previous upratings, I have spoken of the real improvement in the pension as marginal, and this time I call it a significant real improvement in prospect. As to the hon. Member's second point, just over a quarter of pensioners are drawing supplementary benefit.
Mrs Castle: Does the Secretary of State realise that, if he really wanted to do something about family poverty, he would move now to the position visualised under the tax credit scheme, that is, he would pay now a family allowance of £2 a week in respect of every child—payable, of course, to the mother—and offset that by withdrawing child tax allowances? Does he appreciate that, if he did that, it would cost £350 million, which he could save by withdrawing the tax reliefs to the rich?
Sir K. Joseph: I agree with the right hon. Lady that the initiative of my right hon. Friend the Chancellor in introducing the tax credit idea opens up new prospects of non-means-tested help to the poor and the hard pressed, but while this scheme is being considered by a Select Committee, and while there are wide implications which must be examined by the House, it would be wrong to make any precipitate movement. As for withdrawing child tax allowances, the effect on most wage earners with families would be a sharp fall in their take-home pay; this would

419
need a great deal of consideration before it could be embarked upon.
Mrs. Kellett-Bowman: Will my right hon. Friend take it that many of us on this side, and, no doubt, some hon. Members opposite among those who are quiet, greatly appreciate his concentration of assistance on those needing longterm benefits, such as the elderly, the disabled and people needing the attendance allowance? Will he note also that we welcome, in particular, the additional heating allowance, which is so important in parts of the country such as that which I represent in the North-far more important, perhaps, than it is in places in the South?
Sir K. Joseph: I am grateful to my hon. Friend. I believe that directing particular help to those who have longterm needs will be considered a sensible step in social policy.
Following is the Information:

MAIN INCREASED NATIONAL INSURANCE BENEFIT RATES

Proposed Weekly Rate

Existing Rate

£

£

Standard rate of invalidity, widows' and retirement pensions, and widowed mother's allowances

Single Person

7·75

6·75

Wife or other adult dependant

4·75

4·15

Standard rate of unemployment and sickness benefits:

Single person

7·35

6·75

Wife or other adult dependant

4·55

4·15

Married woman (normal rate)

5·15

4·75

Persons under 18

4·05

3·70

Widow's allowance (first 26 weeks of widowhood)

10·85

9·45

Widow's basic pension

2·33

2·03

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

35

1·60

1·15

45

1·00

0·70

60 for men or 55 for women

0·50

0·35

Attendance allowance:

Higher rate

6·20

5·40

Lower rate

4·15

3·60

Old persons' pensions:

Wife

2·85

2·50

Any other person

4·65

4·05

Guardian's allowance

3·80

3·30

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

First child

3·80

3·30

Second child*

2·90

2·40

Any other child*

2·80

2·30

Increases for children of all other beneficiaries:

First child

2·30

2·10

Second child*

1·40

1·20

Any other child*

1·30

1·10

*Family allowances are payable for second and subsequent children.

Mr. Meacher: Will the Secretary of State confirm that, even after this proposed pension increase next autumn, the pension will still be worth only about 19 per cent. of national average earnings, compared with more than 21 per cent. in 1967—[Hon. Members: "Oh."]—I am quoting Government figures—and that by the end of the review period it will be worth considerably less than 18 per cent? Will he acknowledge that he has completely failed to give pensioners a fair share in rising living standards?
Sir K. Joseph: I do not quarrel with the general point that the ratio has fallen, but this is so far more because average earnings have risen much more under this Government than under Labour than for any other reason.
Several Hon. Members rose—
Mr. Speaker: Order. This is becoming a debate.

MAIN INCREASED INDUSTRIAL INJURIES BENEFIT RATES

Proposed Weekly Rate

Existing Rate

£

£

Injury Benefit

…

…

…

10·10*†

9·50

Disability benefit (100 per cent, assessment)

…

…

…

12·80*

11·20

Unemployability supplement

…

…

…

7·75‡

6·75

Special hardship allowance (maximum)

…

…

…

5·12

4·48

Constant attendance allowance (normal maximum)

…

…

…

5·15

4·50

Exceptionally severe disablement allowance

…

…

…

5·15

4·50

Industrial death benefit:

Widow's pension during first 26 weeks of widowhood

…

…

…

10·85

9·45

Widow's pension now payable at £7·30 rate

…

…

…

8·30

7·30

Widow's pension now payable at £2·03 rate

…

…

…

2·33

2·03

*Increases will also be made in the juvenile rates.

† Increases for adult dependants and children will be the same as those for unemployment and sickness benefit and maternity allowance—see National Insurance table.

‡ Invalidity allowances and increases for adult dependants and children will be the same as those for invalidity pensions—see National Insurance Table.

MAIN INCREASED WAR PENSIONS RATES

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

Part I. DISABLEMENT BENEFITS

Proposed Weekly Rate

Existing Rate

£

£

Disablement pension for private at 100 per cent, rate

…

…

…

12·80

11·20

Unemployability allowances:*

Personal allowance

…

…

…

8·40

7·35

Increase for wife or adult dependant

…

…

…

4·75

4·15

Comforts allowance:

Higher rate

…

…

…

2·20

1·70

Lower rate

…

…

…

1·10

0·85

Allowance for lowered standard of occupation (maximum)

…

…

…

5·12

4·48

Constant attendance allowance:†

Special maximum

…

…

…

10·30

9·00

Special intermediate

…

…

…

7·75

6·75

Normal maximum

…

…

…

5·15

4·50

Half and quarter day

…

…

…

2·60

2·25

Age allowance with assessments of:

40 and 50 per cent.

…

…

…

0·60

0·55

60 and 70 per cent.

…

…

…

0·90

0·80

80 and 90 per cent

…

…

…

1·30

1·15

100 per cent.

…

…

…

1·80

1·60

Exceptionally severe disablement allowance

…

…

…

5·15

4·50

Severe disablement occupational allowance

…

…

…

2·60

2·00

Clothing allowance:

Proposed Annual Rate

£

High

…

…

…

…

…

…

…

…

…

22

19

Intermediate

…

…

…

…

…

…

…

…

…

14

12

Low

…

…

…

…

…

…

…

…

…

8

7

*Invalidity allowances and increases for adult dependants and children will be the same as those for invalidity pensions—see National Insurance Table.

†The three-quarter day allowance (existing rate of £3·40) will be abolished: those receiving it will become entitled to the new normal maximum rate.

A further change is also proposed which will benefit some disablement pensioners. Increases for dependants with national insurance benefits and unemployability supplement will be paid in full, without deduction of dependency allowances paid with the disablement pension.

PART II. DEATH BENEFITS

Proposed Weekly Rate

Existing Rate

£

£

Widow's pension—private's widow:

Standard rate

…

10·10

8·80

Childless widow under 40

…

2·33

2·03

Rent allowance

…

3·90

3·40

Age allowance for elderly widows:

Between age 65 and 70

…

0·65

0·50

Over age 70

…

1·30

1·00

Widower's pension

…

10·10

8·80

Widow's children:

Eldest child

…

4·00

3·50

Other children with family allowances

…

3·50

3·00

Other children without family allowances

…

3·85

3·35

Motherless and fatherless children aged:

Under 15

Eldest child or other children with no family allowances

…

4·00

3·50

Over 15

5·50

5·00

Under 15

Other children with family allowances

…

5·00

4·50

Over 15

7·75

6·75

Adult orphans

…

7·75

6·75

MAIN INCREASED SUPPLEMENTARY BENEFIT RATES

Proposed Ordinary Weekly Rate

Proposed Long Term Weekly Rate*

Existing Rate

Ordinary scale

£

£

£

Husband and wife

…

…

…

…

11·65

12·85

10·65

Person living alone

…

…

…

…

7·15

8·15

6·55

Any other person aged:

Not less than 18

…

…

…

…

5·70

6·60

5·20

Less than 18 but not less than 16

…

…

…

…

4·40

—

4·05

Less than 16 but not less than 13

…

…

…

…

3·70

—

3·40

Less than 13 but not less than 11

…

…

…

…

3·00

—

2·75

Less than 11 but not less than 5

…

…

…

…

2·45

—

2·25

Less than 5

…

…

…

…

2·05

—

1·90

Blind scale

Husband and wife:

If one of them is blind

…

…

…

…

12·90

14·10

11·90

If both of them are blind

…

…

…

…

13·70

14·90

12·70

Any other blind person aged:

Not less than 18

…

…

…

…

8·40

9·40

7·80

Less than 18 but not less than 16

…

…

…

…

5·30

—

4·95

Less than 16 but not less than 13

…

…

…

…

3·70

—

3·40

Less than 13 but not less than 11

…

…

…

…

3·00

—

2·75

Less than 11 but not less than 5

…

…

…

…

2·45

—

2·25

Less than 5

…

…

…

…

2·05

—

1·90

Non-householder rent allowance

…

…

…

…

0·80

—

0·70

Attendance requirements:

Higher rate

…

…

…

…

6·20

—

5·40

Lower rate

…

…

…

…

4·15

—

3·60

*These figures incorporate in each case the present "long-term addition" of 60p. Where the claimant or a dependant is aged 80 or over a further 25p is to be added to these long-term rates

PROPOSED NEW RATES OF CONTRIBUTION FOR ADULTS

(including NHS contributions but excluding Redundancy Fund contribution)

CLASS 1—EMPLOYED PERSONS

Insured Person

Present Rate

Decrease

Increase

New Rate

Total

Flat Rate

Graduated

Flat Rate

Graduated

Total

£

£

£

£

£

£

EMPLOYED MAN CONTRACTED-OUT

Earnings—

£15

…

…

…

1·04

0·04

0·02

0·96

0·06

1·02

£20

…

…

…

1·16

0·04

0·03

0·96

0·19

1·15

£30

…

…

…

1·64

0·04

0·05

0·96

0·69

1·65

£40

…

…

…

2·11

0·04

0·08

0·96

1·19

2·15

£50

…

…

…

2·47

0·04

0·22

0·96

1·69

2·65

£54

…

…

…

2·47

0·04

0·40

0·96

1·87

2·83

NOT-CONTRACTED-OUT

Earnings—

£15

…

…

…

1·18

0·04

0·01

0·84

0·31

1·15

£20

…

…

…

1·43

0·04

0·02

0·84

0·57

1·41

£30

…

…

…

1·90

0·04

0·05

0·84

1·07

1·91

£40

…

…

…

2·38

0·04

0·07

0·84

1·57

2·41

£50

…

…

…

2·73

0·04

0·22

0·84

2·07

2·91

£54

…

…

…

2·73

0·04

0·40

0·84

2·25

3·09

EMPLOYED WOMAN CONTRACTED-OUT

Earnings—

£15

…

…

…

0·87

0·04

0·02

0·79

0·06

0·85

£20

…

…

…

0·99

0·04

0·03

0·79

0·19

0·98

£30

…

…

…

1·47

0·04

0·05

0·79

0·69

1·48

£40

…

…

…

1·94

0·04

0·08

0·79

1·19

1·98

£50

…

…

…

2·30

0·04

0·22

0·79

1·69

2·48

£54

…

…

…

2·30

0·04

0·40

0·79

1·87

2·66

NOT-CONTRACTED-OUT

Earnings—

£15

…

…

…

1·05

0·04

0·01

0·71

0·31

1·02

£20

…

…

…

1·30

0·04

0·02

0·71

0·57

1·28

£30

…

…

…

1·77

0·04

0·05

0·71

1·07

1·78

£40

…

…

…

2·25

0·04

0·07

0·71

1·57

2·28

£50

…

…

…

2·60

0·04

0·22

0·71

2·07

2·78

£54

…

…

…

2·60

0·04

0·40

0·71

2·25

2·96

PROPOSED NEW RATES OF CONTRIBUTION FOR ADULDS

(including NHS contributions but excluding Redundancy Fund contribution)

CLASS 1—EMPLOYED PERSONS

Employer

Present Rate

Increase

New Rate

Total

Flat Rate

Graduated

Flat Rate

Graduated

Total

£

£

£

£

£

£

EMPLOYED MAN CONTRACTED-OUT

Earnings—

£15

…

…

…

1·147

0·14

0·02

1·247

0·06

1·307

£20

…

…

…

1·267

0·14

0·03

1·247

0·19

1·437

£30

…

…

…

1·747

0·14

0·05

1·247

0·69

1·937

£40

…

…

…

2·217

0·14

0·08

1·247

1·19

2·437

£50

…

…

…

2·577

0·14

0·22

1·247

1·69

2·937

£54

…

…

…

2·577

0·14

0·40

1·247

1·87

3·117

NOT-CONTRACTED-OUT

Earnings—

£15

…

…

…

1·287

0·14

0·01

1·127

0·31

1·437

£20

…

…

…

1·537

0·14

0·02

1·127

0·57

1·697

£30

…

…

…

2·007

0·14

0·05

1·127

1·07

2·197

£40

…

…

…

2·487

0·14

0·07

1·127

1·57

2·697

£50

…

…

…

2·837

0·14

0·22

1·127

2·07

3·197

£54

…

…

…

2·837

0·14

0·40

1·127

2·25

3·377

EMPLOYED WOMAN CONTRACTED-OUT

Earnings—

£15

…

…

…

0·981

0·12

0·02

1·061

0·06

1·121

£20

…

…

…

1·101

012

0·03

1·061

0·19

1·251

£30

…

…

…

1·581

0·12

0·05

1·061

0·69

1·751

£40

…

…

…

2·051

0·12

0·08

1·061

1·19

2·251

£50

…

…

…

2·411

0·12

0·22

1·061

1·69

2·751

£54

…

…

…

2·411

0·12

0·40

1·061

1·87

2·931

NOT-CONTRACTED-OUT

Earnings—

£15

…

…

…

1·161

0·12

0·01

0·981

0·31

1·291

£20

…

…

…

1·411

0·12

0·02

0·981

0·57

1·551

£30

…

…

…

1·881

0·12

0·05

0·981

1·07

2·051

£40

…

…

…

2·361

0·12

0·07

0·981

1·57

2·551

£50

…

…

…

2·711

0·12

0·22

0·981

2·07

3·051

£54

…

…

…

2·711

0·12

0·40

0·981

2·25

3·231

CLASS 2. SELF-EMPLOYED PERSONS

Present Rate

Increase

New Rate

£

£

£

Men over 18

…

…

…

…

…

…

…

1·68

0·25

1·93

Women over 18

…

…

…

…

…

…

…

1·40

0·21

1·61

CLASS 3 NON-EMPLOYED PERSONS

Present Rate

Increase

New Rate

£

£

£

Men over 18

…

…

…

…

…

…

1·33

0·19

1·52

Women over 18

…

…

…

…

…

…

1·04

0·15

1·19

SOCIAL SECURITY
  NEW MEMBER
  Dick Taverne, esquire, for Lincoln, made the Affirmation required by law.

  BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 23RD MARCH
  Members successful in the Ballot were:

  Mr. Dennis Skinner.

  Mr. Alfred Morris.

  Mr. Frank Allaun.

SCOTLAND (POLL) BILL
3.57 p.m.
Mr. William Baxter: I beg to move,
That leave be given to bring in a Bill to provide for the holding in Scotland of a poll with respect to the establishment of a Scottish Parliament.
I recognise that up to now the holding of referenda or polls in Great Britain has never been an accepted practice. However, we live in changing times, and it is important that we as politicians recognise that fact. The changes which we see are not only economic; they are political, too. This seems to have been recognised by the Prime Minister and the Leader of the Opposition. In certain aspects of our political life, in the light of changes, different lines of policy and different approaches are required, and we have witnessed considerable changes of mind by both the Prime Minister and the Leader of the Opposition on various matters of policy which they previously propounded.
A few years ago, few people in this country, and probably fewer in the House, were in favour of the principle of a poll to decide whether Britain should become a member of the Common Market. But times change, and attitudes alter. The great Opposition party in the House today has nailed its banner to the mast, saying that if it becomes the Government it will renegotiate the terms and hold a referendum in Britain to determine the attitude of the electors to the renegotiated terms. The present Prime Minister has not agreed to the principle of a referendum on Britain's membership of the Common Market, but he has accepted the principle of a referendum for Northern Ireland.
Once the principle has been conceded and accepted, it is difficult to deny the right of the people of Scotland to express a view by referendum on whether they should have a Scottish Parliament. It is obvious to every hon. Member, and it is also becoming evident to the people outside, that the power of Members of Parliament is gradually receding. They do not have the influence they once had. At the same time the power of the Prime Minister is increasing to an ever greater degree, and it will continue to do so when
430
the Common Market countries become stronger and, more important, as unity grows within the EEC.
This will be to the detriment of our parliamentary system of government. It would presuppose that, in view of the diminution of the influence of Parliament, there is a need for a fundamental change in our parliamentary system of government. This, I think, should give hon. Members food for thought. It is the belief of many in Scotland that through our going into the Common Market there has been a violation of the principles and the intent of the Treaty of Union. Not only has that happened in respect of the Common Market but the Local Government (Scotland) Bill, now in Committee, also violates the spirit of that treaty. The taking of Scotland into the Common Market as a part of the United Kingdom and not as a nation in its own right brings about considerable disadvantages to my country. It cannot be justified in any circumstances.
Take steel as a good example. Most of the basing or uplifting points are in central England. That will mean considerable transport charges to bring raw steel to many of the old-established steel-using industries in Scotland, and it will act as a deterrent to any industries which use steel as a raw material against setting up factories in Scotland. The industrialists will, naturally, seek to establish their new concerns as close to the basing point as possible. Scotland as a region, not as a nation, will be dependent upon the generosity of the Common Market countries as to how it will be given regional incentives. It will have no claim as of right but it will be given assistance according to the generosity or otherwise of the Common Market countries. Everyone must surely agree that the greater the distance from the administrative centre of control the greater the difficulties of getting decisions made.
Look what has happened about Scottish oil. The Public Accounts Committee has reported that both this and the previous Government have to be condemned for their mismanagement of the affair, and it is the contention of many in Scotland, including me, that if Scotland had a Parliament of its own it would never have made such a blunder which now requires the Chancellor of the Exchequer to introduce new measures to

431
rectify the wrongs of the two past Governments.
Time and the rules of order do not permit me to go deeper into these questions now. I have been asked, however, why I have brought the measure before the House now. It is because the people of Scotland, irrespective of party, cannot at a General Election, due to the many facts and issues that occupy their time, make a decision on whether or not we should have a Scottish Parliament. It is true that many members of the Conservative Party, amongst them the Foreign Secretary, and many members of the Labour Party, amongst them myself at least, believe that there should be a degree of devolution for Scotland. Yet, at a General Election the question is bypassed because of the many other issues which present themselves. At a by-election, however, a different story unfolds, and it is then possible to get a true and clear picture of the views of the people of Scotland. There has been an election in Dundee. Neither of the two great parties can take much satisfaction from it. Most of the people in Dundee voted for candidates who were in favour of a Scottish Government, and I make bold to say that there were considerable numbers who voted Labour and Conservative but favoured a Scottish Parliament.
It has been suggested that the violation of the Treaty of Union could be justified on the ground that no Parliament can bind a future Parliament. But I contend that all Parliaments bind future Parliaments until Parliament itself rescinds the law or treaty which has been passed previously. The Treaty of Union has not been rescinded by any Parliament of the United Kingdom, and its contents have been violated and broken by the Parliament of the United Kingdom. That is tantamount to breaking the law, and is something that every hon. Member should deeply abhor. We cannot decry others for breaking the law if we are prepared to break a sacred treaty of union in this place.
My Bill is very short and to the point. It asks three definite questions of the Scottish electors: do they wish to have a Parliament with full powers? Do they wish to have a Parliament with partial powers? Do they wish to remain a part of the United Kingdom? It is a simple
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measure which I trust and hope hon. Members will provide with an opportunity for debate so that we can achieve a consensus to see whether or not we should now agree at least to giving the people of Scotland an opportunity to raise their voices in favour of or against a Parliament in Scotland.
Mr. George Lawson rose—
Mr. Speaker: Order. Is the hon. Member opposing the Bill?
Mr. Lawson: Yes, Mr. Speaker, I am. It was not my intention originally to speak against the Bill but my hon. Friend the Member for West Stirlingshire (Mr. Baxter), for whom I have great affection, talked so much rubbish and, in so many ways, such dangerous rubbish that I feel obliged to say a word against the Bill.
I dispute, for example, the contention that Scotland has suffered at the hands of London over the years. His reference to the steel industry might be answered in this way. The industry is centred in my constituency, and it was a fact that the steel owners in Scotland, the great Colville concern, which was the Scottish steel industry, were committed against the strip mill development which subsequently came to Motherwell. A London Government under a Conservative Prime Minister intervened and more or less instructed—and certainly involved or inveigled—Colville to build a strip mill in the Lanarkshire area. If there had been a Government in Edinburgh there could be no doubt that the steel industry—Colville—which was against a development of that sort would never have had that development in Scotland.
I have said on many occasions that the Scots have unfortunately over the years suffered from the Scots. It was the Scots who depopulated the Highlands; it was the Scots lairds who turned so much of that great region into sheep areas and deer forests.
We should recognise that it was not until the union of Parliaments that Glasgow became an area of any worth from a trading point of view. When we had the union of Parliaments we had access to what was until then the English Empire, and the Scots profited very much from that English Empire. They built over a considerable period of time on the

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basis of the English Empire, and they almost ran that English Empire, which subsequently became the British Commonwealth and Empire. We had a great deal to do with the running of the Empire.
You yourself, Mr. Speaker, came to Scotland and in Scotland had an excellent education which has enabled you to render so much service.
There are a number of disadvantages inherent in my hon. Friend's proposal but let me take only one of them. Think of the situation which would confront the ordinary working-class fellow in Scotland, the ordinary keen football supporter, if he had to get a passport to come down to Wembley. If it is argued that passports would not be necessary, that the English would be quite happy to have us come here, I say that that would depend on the English, not upon us.
Finally and seriously, to my mind government by referenda is a primitive method of government. It was tried many years ago in the trade union movement. What we found in the trade union movement was that on the basis of referenda members were regularly passing
votes to raise benefits which came to themselves and passing votes to reduce the contributions they made. The kind of government which we need to have in these complex days, these involved governmental machinery days, is government where the many issues can be weighed, and, the many involved issues having been weighed, we can come to decisions as wise as possible. Referenda are appeals to passion, appeals to prejudice and feeling, not judgment.
Since for a long time we have claimed as one of the characteristics of the Scots that when we come to Parliament we exercise judgment, I say that it would be a very bad thing, a very stupid thing, and against the national interest, even to begin to think in terms of a referendum on this question. Therefore, I am opposed to permission being given to bring in such a Bill.
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 49, Noes 82.

Division No. 79.]

AYES

[4.14 p.m.

Allaun, Frank (Salford, E.)

Hooson, Emlyn

Pavitt, Laurie

Ashley, Jack

Hunter, Adam

Rankin, John

Baxter, William

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

Ridley, Hn. Nicholas

Bidwell, Sydney

Jenkins, Hugh (Putney)

Rost, Peter

Biffen, John

Jessel, Toby

Sandelson, Neville

Butler, Mrs. Joyce (Wood Green

Johnston, Russell (Inverness)

Spence, John

Carmichael, Neil

Kelley, Richard

Summerskill, Hn. Dr. Shirley

Clark, David (Colne Valley)

Lambie, David

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

Davis, Terry (Bromsgrove)

Lamond, James

Thorpe, Rt. Hn. Jeremy

Driberg, Tom

Le Marchant, Spencer

Tope, Graham

Eadie, Alex

Lipton, Marcus

Turton, Rt. Hn. Sir Robin

Edwards, Robert (Bilston)

Machin, George

Weitzman, David

Ewing, Harry

Miller, Dr. M. S.

White, James (Glasgow, Pollok)

Freeson, Reginald

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

Galpern, Sir Myer

Morris, Alfred (Wythenshawe)

TELLERS FOR THE AYES:

Gray, Hamish

Oakes, Gordon

Mr. David Steel and

Grimond, Rt. Hn. J.

Palmer, Arthur

Mr. Donald Stewart.

Hamilton, James (Bothwell)

Pardoe, John

NOES

Astor, John

Dalyell, Tam

Johnson, Carol (Lewisham, S.)

Atkins, Humphrey

Dixon, Piers

Jopling, Michael

Bell, Ronald

Doig, Peter

Kellett-Bowman, Mrs. Elaine

Benyon, W.

Drayson, G. B.

King, Tom (Bridgwater)

Boscawen, Hn. Robert

Farr, John

Kinsey, J. R.

Bossom, Sir Clive

Fisher, Nigel (Surbiton)

Kitson, Timothy

Bray, Ronald

Fletcher-Cooke, Charles

Knox, David

Brinton, Sir Tatton

Fox, Marcus

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

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

Goodhew, Victor

Loveridge, John

Bruce-Gardyne, J.

Green, Alan

Luce, R. N.

Burden, F. A.

Grieve, Percy

Mabon, Dr. J. Dickson

Butler, Adam (Bosworth)

Hall, Miss Joan (Keighley)

McCrindle, R. A.

Clarke, Kenneth (Rushcliffe)

Hamilton, William (Fife, W.)

Maclean, Sir Fitzroy

Clegg, Walter

Harrison, Brian (Maldon)

Mitchell, David (Basingstoke)

Cockeram, Eric

Hawkins, Paul

Monks, Mrs. Connie

Cormack, Patrick

Hayhoe, Barney

Montgomery, Fergus

Crawshaw, Richar

Hornby, Richard

Murton, Oscar

Crouch, David

Irvine, Bryant Godman (Rye)

Nabarro, Sir Gerald

Neave, Airey

Simeons, Charles

Weatherill, Bernard

Page, John (Harrow, W.)

Sinclair, Sir George

White, Roger (Gravesend)

Parker, John (Dagenham)

Small, William

Wiggin, Jerry

Percival, Ian

Soref, Harold

Winterton, Nicholas

Raison, Timothy

Tapsell, Peter

Woodnutt, Mark

Redmond, Robert

Taylor, Sir Charles (Eastbourne)

Worsley, Marcus

Rees-Davies, W. R.

Thompson, Sir Richard (Croydon, S.)

Roberts, Michael (Cardiff, N.)

Trew, Peter

TELLERS FOR THE NOES:

Rodgers, Sir John (Sevenoaks)

Vaughan, Dr. Gerard

Mr. George Lawson and

Rodgers, William (Stockton-on-Tees)

Vickers, Dame Joan

Mr. William Hannan.

Short, Mrs. Renée (W'hampton,N.E.)

Waddington, David

Question accordingly negatived.

ORDERS OF THE DAY
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [6th March],
  WAYS AND MEANS

    AMENDMENT OF THE LAW
    That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of amendments with respect to value added tax so as to provide—

    (a) for zero-rating or exempting any supply;

    (b) for refunding any amount of tax;

    (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

    (d) for any relief other than relief applicable to goods of whatever description or services of whatever description.

    Question again proposed.

BUDGET RESOLUTIONS AND ECONOMIC SITUATION
4.21 p.m.
Mr. Denis Healey: I congratulate the Chancellor of the Exchequer on presenting the Budget with his usual crispness, clarity and good humour. I think we all agree that that is a remarkable feat when we recall his other preoccupations over the last few days. I hope he will forgive me for saying that I thought his high standard of clarity was a little lowered in the long passage in which he sought to reconcile his hon. Friends to the enormous borrowing requirement and to excuse the absence of any guidelines for the related increase in the money supply. Nevertheless it was an impressive performance, as we have come to expect from the right hon. Gentleman.
This is the first occasion on which I have had the honour of addressing the House on the Budget. Consulting precedent, I find that most Shadow Chancellors have tended to start by listing the miscalculations in the previous 12 months and the consequent reversals of Government policy. That would be supererogatory today, and in any case the situation this year is far too serious. My purpose will be to examine the new strategy which the Government have
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adopted over the past 12 months and to consider whether the measures which the Chancellor put forward yesterday will help it to succeed.
As we all agree, it is difficult for any Chancellor in any country to combine in satisfactory proportions his three major objectives, namely, a sustained rate of growth and full employment, the maintenance of stable prices, and a satisfactory international payments position. During the past 12 months the Government have adopted a new model policy to achieve each of these objectives.
In the Budget of nearly a year ago the Chancellor committed himself to a 5 per cent. growth rate and the reduction of unemployment. He sought to do this by stimulating consumer demand, even at the expense of incurring an enormous Government deficit. On the second objective—to meet the balance of payments position—the Chancellor decided to meet the consequences of the growth which he had chosen to achieve—his first objective—by letting the pound sink, and that policy was adopted nine months ago. On his third objective—to control the resulting inflation—he sought to take statutory powers for the Government to prevent the laws of supply and demand from determining wages, prices and profits. This element in his strategy he adopted four months ago.
I do not recall any occasion—certainly in the life of most hon. Members—when a Government have made so remarkable and unprecedented a change of front on so many issues of major economic policy in so short a period. Indeed, if there is any modern publication qualified to fall within the category of historic documents which the Chancellor will now accept in lieu of estate duty it must be the 1970 election manifesto of the Conservative Party.
The next question is to decide how far these three new strategies are working. On his first objective—to achieve a 5 per cent. growth rate and to produce a fall in unemployment—the Chancellor seems to be bang on target, and I congratulate him on that. There has been a substantial and welcome fall in unemployment, allied to an impressive rise in vacancies. I am sure that the whole House will wish to congratulate him on this success. I confess that the fall in unemployment

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has been bigger than I expected a year ago, although at that time—being new to my job—I was rather too influenced by the Chancellor's conclusion, expressed in his Budget speech, that unemployment could not fall if earnings continued to rise. It is most striking that the fall in unemployment coincided exactly with the biggest earnings explosion in our history. I hope that we shall have no more of that nonsense from the Government Front Bench in future.
As the Chancellor will agree, unemployment is still far too high, particularly in the regions.
Here I mention the first of the many dogs that did not bark yesterday afternoon. What does the Chancellor propose to do about the regional employment premium? He must by now be well aware—the CBI has reminded him—that employment in the regions will depend critically on the maintenance of the premium, and on employers knowing that the premium will be maintained beyond the date, a year ahead, when the Chancellor has decided to drop it. I was astonished that the Chancellor chose to ignore this topic and I hope that the Secretary of State for Trade and Industry will say something about it.
As the Chancellor said, the three major indicators of growth are contradictory and confusing, but I accept his conclusion that the underlying trend of growth has for several months been on or about the 5 per cent. target which he set himself. The Chancellor will be aware of the deep uncertainty, especially in the business community, whether this 5 per cent. growth rate is likely to be maintained or whether it is just a peak in the normal four-year business cycle. The Prime Minister and the Chancellor have both committed themselves in recent months—and the Chancellor did so again yesterday—to maintaining a 5 per cent. growth rate for at least another 18 months or two years, but so far unemployment has fallen because we have taken up the slack in the economy, and some bottlenecks, particularly shortages of skilled labour, are already beginning to appear. No one would dispute that once employment has fallen to a more normal level continued growth at 5 per cent. will depend on raising productivity growth above the 3 per cent. or 4 per cent. rate at which it
440
now appears to be running. That, in turn, depends above all on business investing more in new plant and machinery.
It would be interesting if the right hon. Gentleman would tell us whether he shares the view of the Confederation of British Industry that investment should double as a percentage of the gross national product—namely, rise from about 9 per cent. to 19 per cent.—if we are to sustain over a prolonged period a growth rate of 5 per cent. There is no doubt that it is in this field that the Government's greatest failure in economic management lies. The country has suffered for the last two years from an investors' strike.
The Government have poured out incentives—tax giveaways, grants and allowances—but we had a fall of 8 per cent. in manufacturing investment in 1971 and a fall of 10 per cent. last year. This is confirmed in the Financial Statement. If ever there was a vote of no confidence in a businessman's Government by the business community—which this Government regard it as their purpose to serve—this investors' strike is that vote.
We would all agree that the low rate of productivity growth in Britain is our greatest economic problem, and that it has been ever since the end of the Second World War. Even our existing rate of price inflation would be tolerable if our productivity had been rising as fast as that in Japan, or even Western Germany. I was disappointed by the paucity and poverty of the Chancellor's speech on this topic.
A month or so ago the Department of Trade and Industry forecast that the increase in investment this year would be between only 2 per cent. and 5 per cent. In the Financial Statement the Government predict an overall increase in investment of 7 per cent. The Chancellor must know that the situation facing investors is in many respects more sombre today than when they replied to the Department's questionnaire. Rightly or wrongly, most businessmen regard the Government's proposals for control of prices and profits in the recently published code as a real disincentive to new investment.
Mr. J. Bruce-Gardyne: Do you?
Mr. Healey: I am saying that, rightly or wrongly. As the hon. Member knows,

441
it is the view of business which on this issue will determine whether there is investment.
At present we face punitive interest rates. Some hon. Members do not fully recognise that with interest rates—particularly for some of the smaller companies—running at 12 per cent. to 14 per cent. and the normal rate of return on capital for quoted companies being only 13·6 per cent., it is impossible for a small company to borrow with any chance of repaying both its interest and capital as a result of its investment. The Chancellor made it clear yesterday that he expects interest rates to remain high and probably to go higher in the coming year, rather than to fall substantially.
In addition, the whole of business was deeply shaken last week by the threat of a joint Common Market float which would have compelled us to peg the pound at an unrealistic exchange rate and which might have led to its being dragged up further, along with the deutschemark and other European currencies. Business feared that if we were to go into such a joint float we would be compelled willy-nilly to meet any future attack on sterling by deflation rather than by dropping the rate.
I confess that I found some comfort in what the Chancellor had to say on these matters yesterday afternoon. The conditions that he has set for joining a joint float are so unrealistic as to be clearly unacceptable to any of our partners. What is he asking for? Here is the Chancellor, who yesterday announced that he plans that spending over the next 12 months should exceed revenue by over £4,000 million or 15 per cent., asking his business partners for an unlimited and unconditional credit. Does any hon. Member opposite really believe that borrowing is possible on these conditions?
The Chancellor made the whole thing an even greater nonsense by saying that although the purpose of this support from his Common Market partners would be to enable him to maintain sterling at whatever rate was fixed in the float, he nevertheless reserved the right to change his parity whenever he wished. I strongly applaud these conditions but I do not believe, and nor does anyone else in the House, that they could ever conceivably be met. This is one issue on
442
which I agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) who said the other day that he did not mind the Government's being committed to European unity in principle provided they were clearly against it in practice.
If I may return a graceful compliment which the Chancellor paid me a few days ago, perhaps in more generous terms than he made it, I would like to congratulate him on choosing this of all times to expose the ambivalence of his views on European affairs. The Chancellor is asserting his right—we must all draw this conclusion from his remarks on the European currency crisis yesterday—to allow the pound to sink indefinitely. But he knows that if he actually allows this to happen it will have a disastrous impact on his whole strategy for countering inflation.
I want to say a few words about the Chancellor's second objective, so far met by sinking the pound—the maintenance of a satisfactory balance of payments position. I thought that Micawberism ran riot in what he had to say on the balance of payments and even more in the predictions made on this matter in the Financial Statement. What are the facts? Over the last three months our balance of payments deficit on current account has been running at the rate of £400 million a year.
Both the National Institute and the London and Cambridge Review estimate that by the end of the year the deficit will be running at about £1,000 million. Both expect it to get even greater in 1974. Yet the Chancellor told us yesterday that he expects the balance of payments to improve during the coming year rather than to get worse, which is the view of independent observers. He said he thought that exports would go up 7 per cent. in volume during the coming year. We cannot have very much confidence in him as a prophet on this matter, because last year he said that exports would rise in volume by 4·6 per cent. when they actually went up by only 0·7 per cent.
We learn from the Financial Statement that imports went up in volume by 10 per cent. last year. The Chancellor says he expects them to fall substantially in volume this year. Yet this is the very year when he also expects investment and stock-building to rise—when he expects

443
to see the economy set fair on a sustained growth path at 5 per cent. I hope that the Secretary of State for Trade and Industry will explain why he thinks imports will fall in volume to this extent during the coming year.
The only explanation the Chancellor offered yesterday was that he thinks that during the year the country will have recovered from the classical blunder which he made last year when he produced an import-led boom by encouraging consumption in expensive consumer items at a time when British industry was incapable of meeting the demand. He had been warned of that by such people as Lord Stokes. As a result, last year we lost £200 million on the balance of trade in the automobile industry alone. Imports of colour television sets trebled.
It may be that the Chancellor believes that this was a once-for-all explosion and that the solid markets established by foreign exporters inside Britain will be lost in the coming year. I hope that the Secretary of State will tell us why this is so. The other day I was speaking at a conference in Munich attended by German businessmen and I heard the head of the British BMW organisation predict that he would increase imports into Britain of the most expensive BMW motor car from 1,000 last year to 10,000 this year.
There is no evidence—if there is I hope that we shall hear it—to suggest that the import boom which the Chancellor engineered last year will turn into an import slump in the current year. As he knows, if the balance of payments moves as unfavourably as most independent observers expect he can manage this only in one of three ways. He can have a big increase in borrowing from private and public sources abroad, pushing up interest rates in Britain even higher and running down our reserves. That is one option. If he does not succeed in borrowing enough, or if the reserves run out, his second option is to devalue yet again—to let the pound sink still further. That would be the coup de grâce to his counter-inflation policy. A third alternative is to adopt some form of artificial control of imports. My view is that import controls, although necessary in some situations—both we and the Americans have found them necessary at times in the past
444
—do not help to solve the underlying problem. Indeed, they can make it worse.
Have the Government considered such an unconventional means of correcting our balance of payments as a payroll subsidy differentiated according to regions? I know that it would be unacceptable on the face of it, as every other means of meeting the balance of payments situation would be to many of our trading partners. However, in many respects it would be far preferable, particularly in its social and economic effects, to a continuing sinking of the £ sterling.
I may be wrong—of course, we can all be wrong and often are—about how the balance of payments will move.
Mr. Robert Redmond: I hope that the right hon. Gentleman is wrong.
Mr. Healey: I am sure the hon. Member does. If he thinks seriously about the problem he will try to put the same pressure on the Chancellor that I am trying to put.
Mr. Redmond: The right hon. Gentleman has been talking the pound down ever since he began speaking. He has been telling us about BMW cars which are selling so well in this country. Would it not be a good idea to tell the Jaguar workers to get back to work and to get on with the production of the XJ12 to compete with the BMW? Instead of putting forward such pessimism, cannot we have a boost for Britain?
Mr. Healey: If I were to identify one cause of our economic difficulties, I should say that it is the unwillingness of hon. Members to face unpalatable facts. If the hon. Gentleman's party shares his views, the country is doomed. Unless we can face the facts as I have put them forward—and if I have misinterpreted them it is open to Government Front Bench spokesmen to correct me—there is no chance of taking the measures needed to correct the situation.
Mr. Nicholas Ridley rose—
Mr. Healey: No, I must get on. I shall give way from time to time. The Chancellor was interrupted only once in two hours. I do not propose to observe quite such an ungenerous ration. Equally,

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I do not propose to be thrown off the flow of my argument by continuous interventions, particularly of the nature of that made by the hon. Member for Bolton, West (Mr. Redmond) a short while ago.
Mr. Ridley rose—
Mr. Healey: Whatever our predictions on the balance of payments, I think we can all agree that there is little hope of combining sustained growth and meeting our balance-of-payments problems without much better controls over inflation than we have had during the last few years. Inflation was a major theme of the Chancellor's Budget, in so far as it had a theme, and it is a major theme of the Government's economic policy at present. I shall devote the rest of my speech to discussing it.
Before I come to the prices and incomes policy by which the Government hope to control inflation, I shall look at the role of the Government's deficit in terms of the inflation from which it is now suffering. Hon. Members do not have to accept the Friedman doctrine, or even to understand it, to know that a continuing deficit on the present scale is bound to lead to inflation and to suck in excessive imports. That is beyond argument.
The £3 million tax give away, of which the Chancellor has boasted so frequently, was not met by cuts of a similar size in public expenditure. That has led to the cost of borrowing rising to quite unprecedented rates, and high interest rates hit the poor worst. Hire-purchase rates, for example, on which the poor depend critically for their purchases of so many goods, are not subject to tax reliefs like interest of over £35. Mortgages have become impossible for many young couples because of the high mortgage rates.
The proposal which the Chancellor made yesterday for meeting next year's unprecedented Budget deficit by borrowing will raise the high interest rates even higher. We shall shortly be in a position where the building societies will have no money to lend unless they can raise their rates to a level which ordinary people cannot pay. I hope that the right hon. Gentleman will say something about that. It is of critical importance to young people who have to try to get a mort-
446
gage on a new house without having an old house to sell.
One of the new proposals for borrowing is share options for workers in industry. I regard that proposal as being a complete farce. First, it does not help the bulk of the low paid. All that they get is an extra 4p a week by way of a reduced contribution. Incidentally, they will pay much more tax than they would have been paying a year ago. It does not help those who are working in some of the industries which are most important for the country's survival—for example engineering, which has very low profit rates. I should like to know at what rates workers in the new Rolls-Royce concern will be sold shares over the next few years.
The most important thing is that public employees will not get a look in. There are no companies in which they can buy shares. The only people who can look at this proposal with any pleasure are bank clerks, because of the high rates of profit which the banks have been earning over the past few months owing to Government policy.
If there is to be any justice in share earnings there must be a generalised scheme so that everyone will enjoy part of the increase in the share values of any industry. There must be a scheme along the lines being discussed in Denmark, which is one of the Chancellor's partners in the Common Market.
In the long run, the only real answer is to bring public expenditure and taxation revenue closer together. I find it astonishing that the Chancellor had nothing substantial to say about cuts in public expenditure in the Budget. We all know how difficult it is to cut expenditure quickly. Equally, the Chancellor has learnt to his cost in recent months how difficult it is to raise public expenditure quickly.
Surely this was the time to announce a plan to bring down the percentage of our gross national product which we spend on defence to the level which our German competitors and partners are planning. This was the time to announce that we shall not go ahead with some of the expensive luxuries of public expenditure like the Maplin airport and the London motorway box to which the Government are committing themselves.
Mr. Bruce-Gardyne: Surely the right hon. Gentleman must appreciate—incidentally, I share his doubts about Maplin—that to abandon the Maplin airport project at this time would have no impact on public expenditure in 1973–74 or 1974–75, which are the years with which we are concerned. What proposal is he making for a reduction in public expenditure which would begin to have an impact during that period?
Mr. Healey: The Chancellor missed his great opportunity when he allowed defence expenditure to go up £500 million this year. After coming into office Lord Carrington boasted in his first defence White Paper that he would keep defence expenditure consistently below the level planned by the last Labour Government. Exactly the opposite has happened because the Chancellor has not exercised control over defence spending. Possibly the noble Lord chose not to do so either. In any event, we shall be discussing that next week.
Mr. Ridley rose—
Mr. Healey: It is also necessary to increase taxation. First, the Chancellor could withdraw all the tax concessions which he has made to the rich over the last three years. He could withdraw the tax concessions which he made to companies which he now knows have had no effect on their investment plans, except possibly a negative effect.
The only new proposal that we had yesterday for new taxation was one for taxing oil profits in the North Sea. This, like the cancelling of the Maplin project, could produce no revenue in the immediate future. However, the Opposition are very dissatisfied with the limited nature of the proposals in the right hon. Gentleman's Budget. They go nowhere near as far as the Public Accounts Committee did in its recommendations. They would leave British revenues way below the revenues which Norway and OPEC are deriving from their oil. What is more they do nothing to correct the Government's many mistakes during the fourth round of licensing. I have no doubt that the Secretary of State for Trade and Industry will deal with this matter later. So will the House, because the Chancellor does not propose to do anything about it this year.
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The right hon. Gentleman seems to have abdicated his personal departmental responsibility for bringing public expenditure and tax revenue into line. He made it clear yesterday that, instead, for controlling inflation he is relying wholly on his power to force working people to lower their living standards by limiting wage increases. Many of us who watched the right hon. Gentleman on television last night were disgusted by his attempt, as a responsible Minister, to pillory people for whom he is personally responsible, together with his colleagues in the Cabinet. I refer to people like civil servants, hospital ancillaries, gas workers and London teachers, whom the right hon. Gentleman described as extremists devoured by hate and envy. If ever anything was calculated to stiffen the resolve of those people to take industrial action to overcome the right hon. Gentleman's policies it was the attack that he made on television last night.
At the beginning of January, when we were told that the right hon. Gentleman intended to bring forward his Budget by a month, we were informed that his main reason for having an early Budget was to sweeten the pill of the Government's wages policy before phase 2 came into force. In this Budget the right hon. Gentleman had a unique opportunity to make his counter-inflationary policy more acceptable to ordinary people. He threw away that opportunity wantonly in the Budget that he put forward yesterday. All that he had to do was to show that he was seriously concerned to reduce the cost of living for ordinary people and introduce more equality of sacrifice in income restraint.
What has happened? The keys to the cost of living are food and housing. They account for between 40 and 50 per cent. of the average family budget, and they are elements which were rising much faster than any other element even before the freeze was imposed last November.
Let us consider the question of food. In the 17 weeks since the freeze came into force the price of food has risen two-and-a-half times as fast as it did in the comparable 17 weeks a year ago when there was no prices freeze in force. If it goes on this year at the same rate, £1 will buy only 80p worth of food next October. Its value will have fallen in food terms

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by 20 per cent. Yet the right hon. Gentleman still refuses to help to reduce the cost of essential foods. He still insists on cutting school milk and on raising the price of school meals. The only reductions that he offers are on peanuts, candy floss and the cheapest humbugs that we have had for 30 years.
The Chancellor of the Exchequer and the Minister for Trade and Consumer Affairs have used two arguments repeatedly purporting to demonstrate that food subsidies are impossible. First they say that they would mean rationing. That is absolute bunk. The Chancellor of the Exchequer knows as well as I do that he has been subsidising foods right up to the present time and is still subsidising some without rationing. He has been subsidising bacon until now at the rate of £11 million a year. As a result of the withdrawal of the subsidy we shall be paying an additional 3p a lb. by midsummer. He has been subsidising sugar to the tune of £38 million a year. That will go up 17 per cent. by midsummer as a result of the withdrawal of the subsidy. Incidentally the 17 per cent. increase in sugar prices will wipe out most of the effect of abolishing purchase tax on confectionery.
Mr. Ridley: The right hon. Gentleman has proposed a payroll subsidy to wages and food subsidies on an impressive scale. He has spent the remainder of his speech contending that the Government's deficit is too big. His proposals will make it even bigger. How does he propose to finance these subsidies?
Mr. Healey: That was to be my next point. If the hon. Gentleman had contained himself for a moment or two he would have sunk back satisfied—or otherwise, as the case may be.
The other argument of the Chancellor of the Exchequer against subsidies is that in the end it is the people who get the subsidised food who pay the cost of it, so that they are no better off. But he is giving up £110 million in tax to relieve ice cream, lollipops, candy floss and peanuts instead of concentrating the money on essential foods where it is most needed by ordinary families.
In the past 12 months the Government saved between £120 million and £130 million on deficiency payments which the
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right hon. Gentleman could have used to reduce the price of the beef and cereals to which they were previously attached. He chose not to do so—
Mr. Bruce-Gardyne: By reducing Government expenditure?
Mr. Healey: He could have used them as a direct subsidy—
Mr. Bruce-Gardyne: By reducing Government expenditure?
Mr. Healey: Much as I should like to carry on a private conversation with the hon. Member for South Angus (Mr. Bruce-Gardyne), I do not look quite as attractive in a recumbent position as he does. Perhaps I ought to continue addressing the whole House.
The Chancellor of the Exchequer has done nothing of consequence about food except about the least essential foods of which one could possibly think.
Then let us look at housing—at some of the other dogs which did not bark in the night yesterday. There is to be no suspension of the rent increases which are due to come into force just as the right hon. Gentleman's phase 2 policy comes into force. There is to be no action on tax reliefs on second houses, which would reduce the demand for houses. All that we have is the prospect, if not the certainty, of higher mortgages in the coming year.
I have no doubt that the right hon. Gentleman will boast of his £10 million in rate reliefs, but they affect only those increases which are due to revaluation alone—and only those increases above 10 per cent. That is a point which most news commentators did not get clear this morning. According to the Association of Municipal Corporations, in my own city of Leeds, for example, the rate bill will have to rise 38·6 per cent for an individual before he begins to get help from this source. In Liverpool 87½ per cent. of the population will get nothing from this proposal.
Next, I take building land. I do not believe that even the Chancellor of the Exchequer expected us to take seriously the one tiny little mouse that he pulled out of the hat on that. The only answer to speculation in building land is penal taxes on speculative profits, allied with the power of compulsory purchase if land is

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withheld from development. All that the right hon. Gentleman has done is to produce a tax on the failure to build on land which development has already been permitted. As the Financial Times housing correspondent pointed out this morning, this was simply a cosmetic political gimmick.
People who want to make money out of land for housing can buy land and not ask for development permission until they are satisfied that its price has gone up to the level that they want. If they have got development permission they can build a series of Centre Points on it and keep the buildings empty until they get the price on the land and the buildings that they want. The Chancellor and the Secretary of State know perfectly well that this will have almost no effect on the supply of building land, and certainly no effect on the terrifying and obscene speculative profits which some rich men are making out of the shortage of building land and housing.
On top of the Chancellor's failure to act in these areas, we have him deciding to increase the cost of living by at least 1 per cent. through the imposition of value added tax at 10 per cent. We have debated value added tax, and I will not repeat what so many of us have said, but the Chancellor had a wonderful opportunity at least to suspend the introduction of the tax—[An HON. MEMBER: "Why?"] I will tell the hon. Gentleman. Because at the present time at most two-thirds of those who should register have been registered. Thanks to the overtime ban by the Customs and Excise which the Chancellor has brought about, there is a three weeks' delay in registrations. My information is that it is unlikely that when the tax comes into force all those who have applied for registration will have been registered, and hundreds of thousands of people who should have registered will not even have applied. The Financial Secretary knows that I am speaking no more than the truth when I say that, because he is wearing the quizzical expression that he wears when he knows there is no answer rather than the eager and alert expression he wears when he is determined to leap to his feet to deny the foul imputation that I am levelling against him.
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The Chancellor had a wonderful opportunity to hold up and think again about a tax which is already sending small businessmen and shopkeepers wild with worry. I can give the Minister, who is smiling with glee at the thought of bankruptcies among the backbone of Conservative supporters, individual cases if he doubts the truth of what I am saying. Many small shopkeepers are selling up because of the administrative burdens they face through the imposition of VAT. Indeed, the consequence of bankruptcies in the coming year could be serious.
I turn now to the question of justice in the Government's incomes policy. I have demonstrated that the Government are not attempting to control the cost of living for ordinary people in terms of land and housing. Only one major category of the poor is to get help from the Budget—the old-age pensioners. I think that the whole House is grateful to the Chancellor for what he has made possible in this respect, even though those on this side of the House would have wished it to go further.
The Secretary of State for Social Services confirmed this afternoon that when the increase comes through, old-age pensioners will be getting about the percentage of average earnings which has been normal over the last 20 years, namely, 20 per cent. That is a little less than it sometimes was and a little more than it sometimes was. Many of us believe that that percentage, in a rich country—we are very much richer now than 20 years ago—is far too low. The old-age pensioner is allowed a much smaller increase than the £1 plus 4 per cent. allowed to the lowest-paid worker. We would certainly wish to see this substantially improved.
For the rest of the poor population, all that is offered is a small increase in the family income supplement, affecting about 70,000 families, because the take-up is even now only about 50 per cent., and a reduction of 4p on the national insurance stamp, which no doubt will be used to buy shares in profitable companies.
As against this—in my view this is the real crime of the Budget—the Chancellor has refused to raise the tax threshold after a year in which prices have risen more than in any year since

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the war. This was the one year that he chose not to raise the tax threshold. The result is that at least 1 million people who were taken out of the tax into which they had been plunged by inflation last year are now pulled back into tax, and another 1 million will be plunged into tax in the coming year because the Chancellor has chosen to do nothing at this time. Of course, the £1 a head about which the Chancellor boasted last year was wiped out long ago by the inflation over which he has presided. The Chancellor will collect about £600 million during the coming year from people who would not be paying tax at all but for inflation.
More brutal still is the Chancellor's refusal to raise family allowances, again in a year when prices have risen faster than in any year since the war and food prices much more than ordinary prices. For the Chancellor to pretend—as he did on television and radio last night—that he is showing concern in his Budget for the lower-paid worker is a cruel deception of millions of our people. The extraordinary thing is that he is choosing this year to refuse to raise the tax threshold and family allowances—the very year when he still insists on giving away £300 million, in the main to people living on investment income or on over £5,000 taxable earned income a year. The benefit to others from this £300 million relief is to be measured only in pennies.
Mr. Adam Butler: I am sure that the right hon. Gentleman does not want to mislead the House or the country. Indeed, I know that he would not wish to exacerbate the present industrial unrest by misrepresenting the so-called surtax benefit. Is he aware that all surtax payers this year and for the next two years will be paying more in tax? For example, the surtax payer with an income of £10,000 will be paying £1 a week more in tax. At the £20,000 level he will be paying £1,000 more this year, and for the next two years. Surely this is not unfair.
Mr. Healey: I was well aware of that—[Interruption.] The hon. Gentleman must curb his impatience. He has been very patient so far. If he will be patient a little longer all will be made plain.
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The tax reliefs on these high incomes are even more than appears from the Financial Statement. For these people to get the equivalent in earned income would require much higher wage increases than the tax reliefs show.
I have often quoted the case—I do not think the House will blame me for doing so—of an unmarried man earning £15,000 a year taxable income, like the Prime Minister. Starting on 1st April he will get an extra £6·20 a week in take-home pay. To get that amount extra in take-home pay from earned income his income increase would have to be £17. The Prime Minister insists that the maximum wage increase for any worker should be £5 and that the average wage increase should be £2·50. Yet he is getting benefit from the Chancellor equivalent to a £17 wage increase with no apparent improvement in productivity.
Let us consider some of these individuals, because we are told that they do not really exist. Let us consider first the Chairman of ICI. Last year he had his income increased from about £48,000 to about £66,000. That was an increase of £18,000 awarded by his shareholders. On top of that, from the Chancellor of the Exchequer he gets an increase of £1,000 in take-home pay by way of tax relief.
Let us consider next a less wealthy person, the Chairman of Guest Keen and Nettlefolds. He has a salary of £37,000 a year, and I guess that he probably has at least £1,000 by way of investment income as well. If he has not, no doubt he will write to me to say so. He gets £35 a week, or £700 a year, in take-home pay this year as a result of the Budget which the Chancellor says is the basis of justice on which he is appealing to the country. I am glad to inform the House that last year GKN gave £33,000 to the Conservative Party. I am sure that it will warm all our hearts to know that there is still some gratitude left in politics.
Mr. Christopher Tugendhat: Now tell us your salary.
Mr. Healey: My salary is the same as yours.
Mr. Deputy Speaker (Sir Robert Grant-Ferris): The right hon. Gentleman is mistaken—mine is more.
Mr. Healey: I agree, Mr. Deputy Speaker, and I regret that I did not recognise that the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) was making a personal inquiry of Mr. Deputy Speaker rather than of me when he made his interjection.
The plain fact is that the whole of the Chancellor's tax policy belongs to what is now a bygone age in the history of the Conservative Government, the age of confrontation. The whole of the Chancellor's tax policy is pulling in the opposite direction from his new economic strategy. The imputation tax is intended to encourage the distribution of dividends while at the same time the counter-inflation policy is trying to discourage their distribution. VAT will increase the cost of living while the counter-inflation policy is trying to hold it down. The tax reliefs of the new unified system at current rates will create gross injustice at a time when the Chancellor must try to persuade people that his policy is fair.
I believe that the Government are right to abandon the market economy approach. I believe that they must protect the public and the State against the blind brutality of the so-called laws of supply and demand. But I warn the Government that if they decide to adopt Socialist methods for controlling the economy they will find that they cannot stop just where they would like to stop. A twentieth century economic machine cannot be run smoothly with Selsdon Man in the driving seat. That way lies not a Socialist society but the corporate state of Hitler and Mussolini.
If the Government want to get consent for their new policy, if they want to make their counter-inflation policy work without force, they must learn to understand the needs and aspirations of ordinary men and women, and this has been their great defect through all their tergiversations in the technical economic field. Consent will not be achieved by this or any other Government unless Socialist economic techniques are allied to Socialist moral values.
The Budget represents a reversal to the Neanderthal period in the history of the Government. The Chancellor is giving £300 million mainly to the rich, while the poor are being asked to pay £500
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million to £600 million in tax which they should not have to pay. Relief is given on lollipops and candy floss, but school milk is cut—[interruption.] Hon. Gentlemen on the Government side should try to understand how ordinary people feel about this issue. If they cannot understand it, they should go down to a picket line at a hospital and see ordinary men and women who have a great sense of public duty goaded beyond endurance by the Government's failure to understand their problems.
While the Government are wrecking their economic strategy by sticking to a social attitude long outdated, the fundamental problems of the economy are being left over until they can make up their minds and pluck up the courage to do what is necessary. The last two days have made fairly obvious the Prime Minister's "game plan". He is treating this as a mini-Budget and plans to have the real Budget in the summer or in the autumn after a Cabinet reshuffle so that Ministers do not have to eat their own words.
By throwing away any chance of making his counter-inflation policy work—and that is what he has done—the Chancellor faces the risk of having to introduce a tough Budget perhaps in the middle of the new balance-of-payments crisis predicted by outside observers, and certainly at a moment when all his prices and incomes controls are breaking down and he is compelled, whether he likes it or not, to introduce a much looser phase 3 policy than the tough policy for phase 2.
The way that the Chancellor has handled his responsibilities in this Budget is more than a crime. It is a blunder of the first magnitude, and there will be very few in our land who will not have to pay the price for it.
5.16 p.m.
The Secretary of State for Trade and Industry (Mr. Peter Walker): I suppose that as that was the first speech of the right hon. Member for Leeds, East (Mr. Healey) following a Budget, in the same way as he congratulated the Chancellor I should congratulate the right hon. Gentleman. There were moments when I thought that he was going to speak for rather longer than the Chancellor did yesterday.

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The general tone of the right hon. Gentleman's remarks are a change from his pre-election utterances. For example, in one of those lively articles in Socialist Commentary before the last election he said:
"When I go into these Labour clubs in my constituency on Saturday night, four out of five complaints are that income tax is too high and that we should not pay out so much in family allowances."
The right hon. Gentleman will have a pretty rough night this Saturday after his speech today.
It was rather remarkable that the right hon. Gentleman said that having studied the manner in which Shadow Chancellors had tackled this task in the past, and having found that normally they listed the inaccurate calculations of the Chancellor's previous Budget, he had decided not to do that on this occasion. I do not blame him, because many of the major calculations of the Chancellor were correct on this occasion.
I can understand the right hon. Gentleman's being hesitant about having an exchange on the predictions of the last Budget, because he took a hand in and made some predictions about how the last Budget would work out. The right hon. Gentleman said:
"we cannot look forward to any significant fall in unemployment over the coming year."
That was his first prediction, and he was massively wrong, as he kindly conceded.
The right hon. Gentleman went on to say:
"There is no sign whatever of that sustained and faster growth which he confidently predicted as a result of his three previous Budgets. Why should there be any confidence in his prediction that we shall get faster growth as a result of this Budget?"
We were delighted to hear again his confession that there had been a faster growth.
The right hon. Gentleman then said that
"for large sections of the working class there must have been a fall…in living standards."—[OFFICIAL REPORT, 20th April 1972; Vol. 835, c. 797–800.]
As we know, in real personal terms of disposable income there has been a bigger improvement in the standard of living in the last 12 months than in any year since the war.
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As for the predictions and the accuracy of the forecasting of the Shadow Chancellor—of course, most people do not take much notice of the forecasts of Shadow Chancellors—he then started on a remarkable record of inaccurate forecasting of the effects of Budgets. One has some sympathy with the dilemma of the Shadow Chancellor and the Leader of the Opposition in tackling a Budget such as this. When the right hon. Gentleman started talking about an autumn Budget—a later Budget was also mentioned by the Leader of the Opposition yesterday—one or two former Chancellors present were seen to twitch and look slightly guilty as to their record in this pastime.
When they are representing a party that, in its six years, had 10 Budgets, in eight of which they raised taxation, one can understand their difficulty. To the right hon. Gentleman, this is not a real Budget, because the only real Budget that a Socialist Government understand is one that increases taxation. This one is certainly typical of Conservative Budgets in not doing that. Here we see an Opposition that in six years of office raised taxation by £3,000 million trying to oppose a Government who, in their three years, have reduced taxation by £3,000 million. We have an Opposition during whose period of office the rate of growth fell from 5·6 per cent. to 1·9 per cent. trying to oppose a Government who, in their period of office, have increased the rate from 1·9 per cent. to 5 per cent.
There are difficulties. The whole tenor of the Opposition's case, both yesterday and today, is roughly this, "We do not like growth, because that might adversely affect the balance of payments. We do not like savings because that might help to reduce taxation." One almost expected to hear them say, "We do not like these enormous increases which you have made in the old age pensions, because that is an increase in public expenditure." They did not do that.
As for the percentage earnings argument on old-age pensions, I expect the right hon. Gentleman felt a little twitch of guilt about that ridiculously selected statistics about some date in 1967. If, after six years of a Labour Government in which they raised pensions by £2·65, compared with three years of Tory Government in which we have raised them by

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£4·40, the real condemnation of us is that the percentage of earnings has varied, then in six years of Labour Government earnings must have had a pretty bad time if that is all they could do for the pensioner. It is interesting that they showed no regret for the remarkably bad record that they had towards the pensioners in six years.
As for the general forecasts of the coming year, the right hon. Gentleman—I thought surprisingly—went out of his way to give the gloomiest picture he could of our export prospects. It was remarkable that the Leader of the Opposition referred yesterday to the Chancellor's predictions of exports as being unusually complacent. The statistics that the Shadow Chancellor tried to use on exports, giving the impression that the forecast of 1972 had not been met, failed to convey to the House something which, presumably, as Shadow Chancellor he must know—the remarkable growth which has taken place in past months and is now taking place in exports.
In ridiculing the Chancellor's forecasts—I believe that there was an 0·7 per cent. growth in exports over the past year, instead of the 4 per cent. expected growth—the right hon. Gentleman did not tell the House that in the last quarter of 1972 exports—in volume, not price—were 12 per cent. higher than in the last quarter of 1971—a very real increase of substantial proportions. The figures since then are improving still faster. The January figures were about 22 per cent. up, in value, on the previoius year, and we expect the March figures to show a substantial improvement upon the same quarter of last year.
Turning to the position of world trade, the United States is certainly going in for a period of substantial growth during this coming year, which will present considerable benefits to our exporters. Last year our exports to America were 11 per cent. up. Our exports to Europe are rising faster, and last year were 15 per cent. up on the previous year. There is Ito doubt that there is an immense amount of activity by British business throughout the European market, which will result in substantial increases in exports there.
We are achieving considerable growth in a number of Far Eastern markets. I
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predict that the markets in the Far East and those in Africa and South America will be rising far faster in terms of export trade than anything that has been contemplated in the past. And Britain is taking an active part in these spheres. Later this month Britain is to put on probably the biggest outside trade fair which has ever taken place in Communist China. The activity of British businessmen throughout the Far East is accelerating our exports there. The same is true of Eastern Europe.
There are other factors which are important for our export prospects. First. we are achieving a substantial improvement in our services to exporters. The British Overseas Trade Board is far more active in promoting export trade than anything which has been seen in the past. Our commercial counsellors there are constantly being strengthened and they are far more active. The link-up with manufacturers is doing a great deal, too.
When one adds to this the fact that, in this country, with the Export Credits Guarantee Department, we have probably the best export credit services in the world, plus the positive incentive to exports of VAT and the fact that in phase 2 there is a considerable advantage to the exporter in the application of that policy, there is no doubt that the prospects for exports in the coming year are very good.
That is not just a view of the Department, or the Chancellor, or myself. For every businessman who expects a decline in his export orders during 1973 there are six who expect an increase. The latest survey shows that, for everyone who expects export orders in the coming four months to go down, 14 expect them to rise. In a range of commodities—farm equipment, aerospace products and wool textiles—our exports are expanding remarkably.
We should add to this the exciting way in which a number of our major retailing organisations are setting up retail organisations in Europe and the United States, taking with them large volumes of British goods. This all adds to the confidence that we have in the progress of exports during the coming year.
But that, of course, is only part of the picture. I want now to turn to the other pessimistic picture of Britain that the

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right hon. Gentleman tried to provide when he spoke of the depressing position of industrial investment and current industrial conditions. Let us examine what has happened. The Opposition do no good at all by trying to give the impression that the British economy is doing far worse than it is. They do positive harm both to business confidence and to our prospects abroad. Let us have a look at the current state of the service industries—
Mr. Healey: If the Secretary of State really takes that view, will he persuade the Chancellor to withdraw the Financial Statement 1973–74, because I based my statistics entirely on figures that the Government provide there?
Mr. Walker: The trouble with the right hon. Gentleman is that since he has taken on this job he has spent too much time reading books and figures; when he does that, the trouble is that he does not understand what he reads. That puts him at a grave disadvantage. Let me give the right hon. Gentleman some of the facts and figures which he might have looked up before making his depressing speech. He might, for example, have studied the machine tool industry's latest available figures, for the third quarter of last year. The figures show that orders for that industry were the best ever received in its history, for the third quarter of last year. The right hon. Gentleman might then have turned his attention to the engineering industry, where orders have been fast rising. The November figures, which are about to be published, show that export orders in November were 33 per cent. up, and they show a 37 per cent. rise in home orders.
Mr. Neville Sandelson: But this is recovery from a low base.
Mr. Walker: The recovery from the low base has reached such a stage that these are all-time record figures. Engineering and machine tool orders are higher than those of any time in the six years of the Labour Government. In terms of recovery from a low base, this is a remarkable recovery.
Mr. Joel Barnett: I do not know whether the right hon. Gentleman is disagreeing with
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the Chancellor, but will he apply his mind to total manufacturing investment and not a single sector? The Chancellor has told us that after an 18 per cent. fall in manufacturing investment, it will rise, on his forecast, by from 2 per cent. to 5 per cent. But the Chancellor got last year's forecast rather badly wrong.
Mr. Walker: I am giving the facts of what is currently happening in British industry. I have mentioned machine tools and engineering. Let us now look at the shipbuilding industry. In the last quarter of last year the industry obtained more orders than it obtained in the previous nine months. In the first two months of this year it has obtained more orders than it obtained in the previous two years.
The commercial vehicle industry has the highest ever home orders. The steel industry is reaching record production.
Productivity in the coal industry is fast increasing. The North Sea is the fastest developing oilfield in the world when compared with oilfields in anything like similar conditions. It is bringing a great deal of investment activity in Britain. Therefore, considering the latest forecast of businessmen, one is not surprised that for every businessman who had lower orders in the last four months 37 had higher orders. The optimism of businessmen is shown in every survey.
What of the effect of this situation in relation to investment? First, the investment conditions provided by the present Government are better than those provided anywhere in Europe or in the United States. The effects of free depreciation will be considerable as the investment boom develops. Already the regional policies pursued by the present Government have resulted in substantial reductions in unemployment in the regions. The operation of the Industry Act as a further instrument in encouraging investment is beginning to have substantial effects on a number of industries. We shall be investing about £300 million a year in North Sea oil in the coming years. We have announced the steel industry modernisation programme, again with an investment of £300 million a year.
Mr. Tam Dalyell: Does the Secretary of State consider it wise to bring to an end the regional employment

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premium? He was specifically asked about this by my right hon. Friend the Member for Leeds, East (Mr. Healey). Does not he agree that this is an important factor in any confidence that industry has, and that it is to be regretted that it has been brought to an end?
Mr. Walker: We have stated that we shall discuss the basis of phasing out regional employment premium with industry. These discussions are taking place at present. There is no doubt about the high rate of investment being achieved by the regional policy.
I am also pleased to tell the House that some of our major industries are announcing major increases in their investment programmes. Imperial Chemical Industries has just announced an investment programme for the next two years which is substantially higher than its programme has been for some years past. Courtaulds is investing about £90 million in the coming period, £60 million of which will go to assisted areas. Coming to British Leyland, seemingly the right hon. Gentleman was suggesting that Lord Stokes in some way did not want the increase in purchasing power for the motor industry to take place so quickly. All that I can say is that in view of what has happened in the consumer purchase of motor cars Lord Stokes has decided that although for some years now he has been investing £50 million a year in new factories and equipment, in the coming two years that sum will be doubled to £100 million a year.
Mr. Healey: The right hon. Gentleman does not want to be unfair to Lord Stokes. Lord Stokes' complaint did not relate to investment. Far from it. It related to the point—the right hon. Gentleman must know this—that at a time of a colossal increase in demand for motor vehicles, the industry did not have the capacity to meet it. As a result, it was able to export far less, as it was meeting home demand. Imports rose to a terrifying degree. Many foreign manufacturers were able for the first time to establish themselves firmly in the British market.
Mr. Walker: I do not remember British motor manufacturers ever saying, "Will you do less to increase demand than you are doing." What they said was,
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"We have had ghastly stop-go conditions under the previous Government which have done a great deal to undermine our confidence." I am glad that that confidence has now been resumed.
In all the major sectors of British industry not only are we now getting a strong push in exports; we are getting the very strong investment programmes that the economy needs. Perhaps the most important thing in my right hon. Friend's Budget yesterday was that he clearly committed the Government to continue upon a policy of growth in Britain. The one thing that would in any way have detracted from confidence was a Government that had decided immediately to start cutting back, when the present Government's policies are resulting in a considerable rise in exports and a great volume of sound investment and modernisation is about to take place.
Mr. Timothy Raison: Is it not relevant that the one area in which the Shadow Chancellor said that there should be big cuts in public expenditure was the defence programme—the right hon. Gentleman talked of £500 million—and that if those cuts took place this would have a very damaging effect on the industries which my right hon. Friend has been discussing?
Mr. Walker: Certainly this could well be a factor. But most people, certainly on this side of the House, and many people outside it, will agree that the right hon. Gentleman's record as Secretary of State for Defence does not warrant our paying much regard to what he says on defence matters.
The climate of British industry at present shows confidence. There is now the assurance given by the Budget that growth will continue, and at a considerable pace. That also applies to investment.
Many people in the business community are now taking much-needed action to meet these problems. They should be encouraged by the message of the Budget that consumer demand will continue, that the very high incentives for regional development will continue, and that the very high incentives for investment including free

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depreciation will continue—this in a period when world trade is expanding and when our export effort is doing very well. This is the first time for many years that the British economy is experiencing the effects of sustained growth. I hope that we shall have less of the moanings and uncertainties that tend to occur during such a period. There is always a tendency by certain sections of the Press and the business community to show more gloom in a boom than they show depression in a recession, and this at a time when we can, for the first time, break through with sustained growth in this country. It is vital that that tendency is quashed.
Mr. Bruce-Gardyne: Surely the recent comments of the CBI have not really been concerned with gloom in a boom but with the impact of the Government's counter-inflation policy, and on the ability of industry to earn profits to finance future investment. That cannot quite be dismissed as a question of gloom in a boom.
Mr. Walker: Whenever one meets members of the CBI at present and asks them individually how their order books, investment programmes and export prospects are going, the great majority answer with considerable confidence that they are looking very much better. This is shown by their present surveys, which show a more remarkable degree of optimism than anything one has seen from the CBI for a very long time.
As to fears about the investment programme, during our consultations about the Price and Pay Code we shall pay particular attention to the question of its possible effects on investment.
As the Government have repeatedly said, and as our policies have shown, we are anxious to encourage new investment to the maximum possible extent in the interests of sustaining growth. Although, therefore, we shall do everything to keep prices down in the next stage of the counter-inflation policy, we intend to do so in a way which does not harm investment. We shall be prepared to listen carefully to views of industry and the City on this important aspect of the code.
I wish to bring to the attention of the House the basic difference in philo-
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sophy towards economic growth that is developing between the two major parties. Not one passage in the speeches of the Leader of the Opposition and the Shadow Chancellor showed that the Opposition are in any way any longer committed to a policy of growth. As for the reference to historic documents, if an historic document on growth is required I recommend hon. Members to turn up the National Plan, published at the beginning of the last Labour Government. They can there see how completely the objectives expressed in every chapter failed and were not achieved by the Labour Government.
Judging by the remarks of the two right hon. Gentlemen about public expenditure and taxation they abandon the policy of growth. There was a remarkable absence from both speeches of any mention of the policy of nationalisation and the part it has to play. In a number of Press hand-outs and documents the Labour Party committed itself when in Government to nationalise no fewer than eight major industries, ranging from pharmaceuticals, the banks, motor insurance, North Sea oil, through a whole range of other industries.
I hope that at some time during the debate, when talking about the whole position of public expenditure and public borrowing, we shall hear how the philosophy of a substantial extension of nationalisation and public ownership will fit in with these plans.
As for the encouragement of investment, judging by the manner in which the threat of nationalisation and its final achievement completely destroyed for five years the investment programme in the steel industry, I hope that the Labour Party will be a little more careful when, for example, in its nationalisation package it includes industries such as shipbuilding, in view of the major damage it is likely to cause to the investment freedom of such industries.
Mr. Dalyell: As the right hon. Gentleman is on the question of the borrowing requirement, may I ask whether he has any serious reflections on the effect of an increase of this size in the borrowing requirement on the rate of interest later in the year?
Mr. Walker: I believe that in terms both of borrowing requirement and public expenditure the Opposition completely fail to see the effects—the diminishing adverse effects—that such features had during a period of sustained growth.
Mr. Denis Howell: Answer the question.
Mr. Walker: I am sorry that the hon. Gentleman does not understand that there is a close relationship between the success of growth and the impact of high interest charges at present, added to which I believe that one of the important aspects of bringing down interest rates is the effect it will have in helping to ensure the success of our policy of counter-inflation.
The Labour Party remains preaching now that it formerly practised. Opposition Members are advocates of higher taxation, far less growth, and more nationalisation. They ignore the reality of our present boom, the fall in unemployment, and the real improvement in people's standards.
This traditional choosing of people such as the Chairman of ICI and the Prime Minister is pointless. I am sorry that the right hon. Gentleman left out the Leader of the Opposition. I will tell the right hon. Gentleman, for his trip round Leeds on Saturday night, exactly what has happened to some of the people he mentioned as being the worst hit. This has happened to them as a result of our taxation policies and the growth of the economy which has taken place.
During the two years to October 1972, due to tax changes introduced by this Government and increased earnings, the take-home pay of Post Office workers—that is, the postal and telephone manual workers—rose by 36 per cent., which was double the rise in the cost of living, at 18 per cent., which took place during the same period. Can right hon. and hon. Members opposite point to any two years under the Labour Government when such a thing happened?
The right hon. Gentleman said that the health service ancillary workers were driven to terrible conditions. Let us consider how we drove them after we came to power. From October 1970 to October 1972, taking their take-home pay—
Mr. Denis Howell: Take their wages.
Mr. Walker: I shall be only too pleased to take both. Their take-home pay rose by 34 per cent. during that period.
Mr. Howell: From what?
Mr. Walker: From the position they were suffering under the Labour Government. It is a remarkable piece of hypocrisy on the part of Labour Members for them to say how sorry they are for these workers, when during six years of the Labour Government the biggest increase those workers received was 95p; yet they can have £2 next week.
The British people have benefited from the real growth that has taken place. The Labour Party, so long as it clings to the policies that failed in six years of a Labour Government and tries to create gloom in the time of the fastest economic expansion that we have enjoyed for years, the best export performance we have enjoyed for years, and a very considerable increase in investment, shows how completely out of touch it is with economic reality.
5.48 p.m.
Mr. Jeremy Thorpe: The Shadow Chancellor congratulated the Chancellor of the Exchequer on the delivery of his Budget. With those congratulations I wish warmly to be associated. The Secretary of State for Trade and Industry congratulated the Shadow Chancellor on his first appearance at the Dispatch Box in this rôle. I wish to be associated with that too. As the right hon. Gentleman has made his first appearance in this rôle too, and as I have taken part in rather a lot of debates from this place, I feel that I am in a position to congratulate him. All of this is on the basis of Greek politics—you scratch my back and I will scratch yours or I will scratch your eyes. On that note at least we can all be fairly non-controversial.
The first point that I find rather difficult to understand is why we should have had an early Budget. It is true that it has enabled the Chancellor of the Exchequer to make certain decisions about VAT before 1st April. That is accepted, although that could have been done by a statement or by other measures without

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the full machinery of the Budget being introduced.
Most hon. Members—this is true of all parts of the House—believed that the Budget would be introduced early because it would be a psychological weapon in the Government's hands in dealing with phase 2 and would be a clear indication to the nation as to the signposts which the Government proposed to follow. If it be right that the Chancellor's own tests are that the Budget shall contain inflation and maintain growth, with those two objectives I am in wholehearted agreement. I think, therefore, that the strategy is right.
Where I criticise the Government is that I think their psychology is wrong. The Chancellor of the Exchequer kept saying that this is a neutral Budget. As far as I am aware, a neutral Budget is one in which the Government give back as much as they take. Table 16 shows that the total reduction of net receipts is about £120 million. Taking into account the fiscal drag whereby inflation causes the tax revenue to claw back, because it is progressive in nature, at a faster rate than the gross national product, it is fair to say that the fiscal drag will produce between £400 million and £500 million over and above what the Chancellor is at this moment estimating, as against his so-called giving away of £120 million.
It is therefore not, in my view, a neutral Budget. It is a deflationary Budget. It may well be that it is that very quality which will defeat the objective of the Chancellor to get 5 per cent. growth. I think it may knock as much as ½ per cent. off the growth rate in the coming year. I hope that is wrong, but I believe that to be the case. It is for that reason that the Economist on 3rd March, subject to the Government's accepting certain anti-inflationary measures with which I do not wholly agree, none the less took the view that in the present climate the Government could remit as much as £800 million in taxation in this fiscal year.
Where I believe the main criticism can be made of the Budget is as follows. My colleagues and I supported the Labour Government and voted for the Labour Government's attempts to introduce a prices and incomes policy. We did not think it was perfect but we felt that the
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discipline of some measure of restraint in prices and incomes was the price that one had to pay for full employment. Unfortunately the Tory Opposition at the time did not give such support, and predictably when the rôles were reversed a Tory Government tried precisely the same thing, albeit in a slightly different context, and the then Opposition opposed it. Predictably the Liberal Party, being consistent, voted for both attempts.
Despite the groans with which truth is sometimes received in this House, as a Liberal I feel that one is entitled to say to the present Government that as important as the mechanics of the Budget is the psychological impact of this Budget in convincing people that the present Government, who are asking for a measure of restraint, are running the economy in a way which is seen manifestly to be fair. If they can do that, it seems to me that this is a vital weapon in phase 2.
The first criticism that I would make is that I think this Budget does far too little to attack poverty. I naturally welcome the zero rating of VAT on childrens' clothes and on food. I hope the Chancellor will forgive us if we do not indulge in a wave of gratitude to him, because I do not believe one should congratulate and thank Chancellors for abolishing taxes which they have mistakenly introduced the year before. None-the less that is a move in the right direction, and we hope that the Chancellor will be able to solve the problem of ladies of advanced years who have the same measurements as children aged 12. I was pleased to learn that he is not prepared to refer that matter to the weights and measures inspectors.
Likewise I believe that the right hon. Gentleman has made a start towards dealing with those who hoard land, although I believe that he has adopted a very blunt instrument and I should like to suggest more effective ways of dealing with it, which I shall do presently.
One also welcomes the increase in pensions, although I happen to believe that the point made by the hon. Member for Oldham, West (Mr. Meacher) was perfectly correct: that one is entitled to see what is the linkage between pensions and overall industrial earnings. I believe that the percentage linkage ought to be very much higher. I shall say a word about that in a moment.

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I welcome and give unqualified support to the wider share ownership proposals, which are long overdue and which, I hope, will be the beginning of a move in this country to make the free enterprise system something which is not the product of monopoly capitalism but is something in which many people have a share.
Mr. Dalyell: I should like to be clear about the nature of the shares proposed. They have no voting rights; there are no dividends; they produce a situation in which people are less mobile between firms. Perhaps these are not the shares which the right hon. Gentleman's party has advocated.
Mr. Thorpe: I am aware that there are certain defects, but one advantage is that it is not possible for people to put in their savings and lose them. I believe that we have to go very much further. That I accept. I should like to see the Companies Acts amended so that workers have precisely the same voting right as shareholders have. I should like to see a dual board system, as there is in West Germany, where workers have a real stake in the running of the firm. I should like it to be possible for workers' votes to sack directors as shareholders' votes can. I should like to see the French system adopted whereby a certain proportion of profits are free of corporation tax if they are paid into a savings account on behalf of the workers and are subsequently transferable. All of these things are long overdue.
I have been in favour of these things for many years. When one sees a Government going a little way in that direction it is churlish to refrain from welcoming not the repentance of a sinner so much as a total abstainer going in the right direction.
Where I believe that the present Government lack the human psychology which, if I may say so, has been conspicuous from time to time by its absence in this Government is that I do not believe, when we are asking for restraint in prices and incomes, that this is the moment to carry on with the £300 million worth of benefit which the unification of the unearned and surtax arrangements has designed for this year. If ever there was a time for postponing or for reducing the total sum if the Government
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want to win the battle of prices and incomes, it is this year.
When the right hon. Gentleman spoke, one might have thought that everything in the garden was perfect. But what we must realise is that, without going into the merits, we are faced with a situation of confrontation between the Government and organised labour. We are in the middle of a go-slow on the railways. We have the knowledge that the TUC has voted for a one-day general strike. I believe that unless we can get a new deal and a package between the Government and the trade unions—and both sides have got to give—despite the optimism which was apparent in the right hon. Gentleman's speech, on the basis of this confrontation the economic future of the country will be very bleak indeed.
Therefore, I believe that the Government should have attacked poverty by doing something about children's allowances for the first child. This would cost something of the order of £250 million and could be well afforded within the present context of the Budget. I do not believe that it would have been inflationary.
The Government could have said something about the need for guaranteed minimum earnings of, say, £20 a week which would increase the wages bill of the country by only 2½ per cent. Perhaps it could be slotted into the completion of equal pay for equal work when that Act becomes operative. If the Government could have done this, and if they could have indicated that they are waiting for the report of the Select Committee on credit income tax and that they believe that housing and rates should be brought within the purview of credit income tax, they could have begun to indicate that they are genuinely anxious to help the lower paid. If they had done that, their chances of getting an agreement would be considerably enhanced.
Let us remember that it is not the Labour Party which is interested in the plight of the lower-paid worker. The Labour Party does not care a damn for the lower-paid worker. It will back every claim for £15 and £20 a week or more for people earning £36 a week, but not for the 3½ million people earning less than

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£20 a week, not for changes in the differentials which would bring up the minimum earnings of the lower-paid worker. The Labour Party today is the party of the higher-paid trade unionist. That is why in my constituency average earnings are exactly half the average earnings of the gas workers in this country, and that is why I have less sympathy for the gas workers than I have for the lower-paid among my constituents.
Mr. Sydney Bidwell: What authority has the right hon. Gentleman for that assertion, marring what I considered an otherwise excellent speech? He says that the Labour Party—these were his words—is opposed to higher earnings for lower-paid workers. What possible authority has he for saying that?
Mr. Thorpe: Si monumentum requiris circumspice. Every time there is a wage demand, however high, however unreasonable, however inflationary, automatically the Labour Front Bench, provided that it is in opposition, will back it. When in government, the Labour Party was pressed—[Interruption.] We had a superb example in the right hon. Member for Bristol, South-East (Mr. Benn)—Wedgwood was for the rule of law, and Benn for those who broke it. We had the case of the dockers. We now have the reaction of the Leader of the Opposition to the gas workers' case. [Interruption.] There has been no occasion when pressure put on the Labour Party to bring in guaranteed minimum earnings for the low paid has had any response whatever. I remember doing it time and again when there was a Labour Government.
For that reason, it will not be either the Labour Party or the trade union movement as at present constituted which will see any change in differentials, and only when there is a change in differentials will the position of the lower paid, which in many cases is pitiable, be brought up to a proper level.
The Liberal Party has just carried out a six-months' survey of the plight of the low-paid. For example, we found that secretaries in County Durham have £10 a week take-home pay. Men work five days a week in the catering trade in South-East England with £12 a week take-home pay. These people and their like, together with pensioners, are the present casualties of inflation. The
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Labour Party may express its concern for pensioners—I acknowledge it to be wholly genuine—but as regards the low paid all I can say is that one has to judge the Labour Party by what it has done and by its present example.
Mr. Joel Barnett: A few minutes ago the right hon. Gentleman said that the situation would be bleak unless the Government's counter-inflation policy worked. Does he think that it will help to settle the gas dispute, for example, if he simply tells the workers to go back without any increase?
Mr. Thorpe: I ask the hon. Gentleman to cast his mind back to the Labour Government's short-lived attempt when in power. He will realise that, if and when there is a freeze, exceptions cannot be made. If an exception is made for any particular category, exceptions have at once to be made for the lot. Having voted for phase 2, I accept that it permits no exceptions save—[Interruption.] I do not know whether the hon. Member for Heywood and Royton (Mr. Joel Barnett) wishes merely to shout or wishes to elicit information. I assume the latter. The Government have suggested certain increases as the norm in phase 2, with percentage increases in exceptional circumstances. Either one makes an exception in every case which comes up or one maintains a policy which will admit of no exceptions. I believe that the latter course is right and, having voted for phase 2, I believe that that position must be obtained.
Later, in phase 3, I hope that we shall move into the situation in which there are plant bargaining and productivity agreements. At that stage also I hope that it will be decided—I am sorry that the Government did not accept it at the Report stage of the Counter-Inflation Bill—that any profit-sharing in a company should be totally exempt from the provisions of the Bill.
The time has come—here I agree with the hon. Member for Oldham, West—to link pensions to average industrial earnings. My colleagues and I have long advocated that the pension for a married couple should be half of average national industrial earnings and for a single person it should be one-third. That would produce pensions at present of

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about £18 and £12, respectively. Those figures are not high in comparison with some of the social security benefits provided elsewhere in Europe today. The idea that we give an inflated, generous, philanthropic sum to pensioners in this country is totally without foundation.
The Government say that they want to convince the lower-paid workers that they are genuinely anxious to improve their lot. I do not believe that there will be a grateful march down Whitehall of men earning under £24 a week who are now to be saved 4p a week off their national insurance contribution. This is not the beginning of the millenium for them.
As regards land, we have not yet learned who is to be surcharged, the owner or the developer. If it is the owner, there is a grave risk—this is one of the defects—that applications for development will be discouraged. In my view, we shall not solve this problem until we have site value rating on all building land the minute it becomes available for development. I offer also to the Government the observation—it is one of the Liberal Party's policies which, I suppose, they will adopt in time; they usually do, though for the wrong reasons and rather late in the day—that again we shall not solve the problem until we have full rates on unoccupied office blocks and empty houses, and until councils are prodded to release land which in many cases they are hoarding. Very often councils hoard land just as much as private speculators do.
I agree with the Shadow Chancellor when he says that it is a great defect that we have not done more about regional incentives. The Secretary of State said that the Government were discussing the phasing out of the regional employment premium. Perhaps he was pressed by lack of time, but what lie said gave me the impression that he was seeking to imply that the regional employment premium would be phased out and there was no possibility of anything taking its place.
I hope I am wrong in that impression because I am convinced that regional incentives, and the REP in particular, are vital to growth in the regions. Again, one can make a comparison with what is done on the Continent. There was an interest-
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ing table published a few months ago in the Financial Times showing the incentives in Europe compared with the incentives here for development in the regions, and our incentives came out as low as any in Western Europe. If the REP is not to come back, I hope that the Government will consider the concept of a regionally varied payroll tax. In some way we must encourage growth in the regions.
I am delighted that the Government are tackling the North Sea oil question. If he catches the eye of the Chair during the next few days, my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) will develop this matter. At least, we have an admission that the Government—blame attaches here to both Governments—have made an appalling hash of the whole North Sea oil business, which, no doubt, has given great happiness in Texas.
Basically, I believe that the Budget's objectives are right. In their psychology, however, they have missed an opportunity to attack poverty as it should have been attacked. The Government could have gone much further to convince the trade union movement that they genuinely want to run the economy fairly, but by their decision regarding surtax and their failure to do more for the lower-paid they will make it very difficult for that concept to be accepted.
I am delighted that the Chancellor has come out as such a firm devotee of the floating pound. A fixed pound always used to be regarded by the Treasury as a sort of virility symbol. I am pleased that we have overcome that. I dread to think what would have happened to sterling if we had had a fixed pound during the last difficult economic crisis.
We should continue to float the pound unless and until we have a European reserve currency. I hope that that will come, but it will take time. I do not share the Shadow Chancellor's view of the five conditions which the Chancellor put to his colleagues in the Nine. I do not believe that they are impossible of achievement and I do not regard them as unreasonable. But progress will take time, and I look forward to the day when a European reserve currency comes about.
I hope we shall get growth. I hope we shall be able to defeat inflation. If the Government showed a little more of

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the right psychology in their approach, they would have rather greater chances of success—and that goes not least for the Prime Minister himself.
6.10 p.m.
Mr. Christopher Tugendhat: This is the second time I have had the privilege of following the Leader of the Liberal Party in a Budget debate and I feel therefore that I need not go through the round of compliments that have characterised previous speeches.
There were aspects of the right hon. Gentleman's speech with which I disagreed but I hope that he will take my remarks in the spirit in which they are meant when I say that his contribution provided a welcome contrast to that of the right hon. Member for Leeds, East (Mr. Healey). The right hon. Member for Devon, North (Mr. Thorpe) at least put forward a coherent strategy and he made a number of specific references to policies which he felt could be altered or changed or where he thought there had been omissions which he would have liked corrected.
The most depressing feature of the speech of the right hon. Member for Leeds, East was the total lack of a counter-strategy. He attacked, for instance, the Government's high level of public expenditure. Some of my right hon. and hon. Friends tend to do that too but one would have expected that the right hon. Gentleman would have told us where the cuts would come this year—not on futureistic things like Maplin. The only point in his speech when he was explicit was when he was talking about the various chairmen of private enterprise concerns and their salaries. I refer particularly to the Chairman of Guest Keen when the right hon. Gentleman based his argument on unverifiable assumptions about whether that gentleman had an investment income and, if so, how much.
When he was talking about value added tax the right hon. Gentleman produced a figure which he alleged would represent the increase in the cost of living caused by VAT. He did not, however, take into account that the National Institute which produced that figure later brought it down slightly. The figure of 1 per cent. takes no account of the changes made by the Chancellor by extra
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exemptions and so on yesterday. The Labour Party might wonder why it is not deriving more support mid-term and why it is losing support to the Liberals. Perhaps by comparing the speeches of the right hon. Member for Devon, North and the right hon. Member for Leeds, East it will find some explanation why people do not wish to vote for the Labour Party and why people choose the Liberals rather than Labour.
Mr. Ridley: Should we not then have the Budget of the hon. and learned Member for Lincoln (Mr. Taverne), and then we really would know what to do?
Mr. Tugendhat: The hon. and learned Member's Budget would, I am sure, be very interesting. We were all much more impressed by his contributions to economic debates than those of the right hon. Member for Leeds, East, though we are fortunate that the hon. Member for Heywood and Royton (Mr. Joel Barnett) is still with us.
It is important at the outset of any discussion on the Budget to recognise the real achievements which the Government have made over the last year. As my right hon. Friend the Secretary of State for Trade and Industry said, one is always particularly concerned with the difficulties and troubles but no one who is in the least degree objective could possibly doubt that the present rate of growth is a remarkable achievement by post-war British standards. It is not one that many people believed could be achieved when the Chancellor announced it last year. It has been achieved and it is a remarkable phenomenon in view of the record of the growth rate of the economy under successive British Governments since the war. The decline in unemployment is also something which many people believed the Government would not be able to secure and also something of which we can be proud.
The trouble with so many of our economic debates and with the economic debate in the country as a whole is that it tends to seem so esoteric. The objective of economic policy is so often forgotten. It is simply to make people more prosperous and to enable them to have a better standard of living. The fact that the Government have brought about a situation in which the real standard of living is 10 per cent. higher than in June 1970 should be an object of pride

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and it would serve the cause of economic debate better if the realities of the achievements were recognised as well as the difficulties and frustrations that the Government are facing. The danger and drawback of the present situation is due to inflation which, as the Chancellor said, embitters society, endangers the rate of growth and makes it difficult if not impossible for people to recognise the real gains which have been achieved.
When one looks at the Budget strategy there can be no doubt that the Chancellor is taking enormous risks. One has only to look at three examples to realise the magnitude of the risks he is taking, although there are others. For example, on the balance of payments I hope that my right hon. Friend is correct when he paints his encouraging picture of the future for British exports for the coming year. Certainly the record of British exporters in the past will suggest that if he is right it will be as much an achievement as the reduction in unemployment or the 5 per cent. growth rate.
The borrowing requirement, which I imagine a number of my right hon. and hon. Friends will wish to discuss, is another example of the real dangers of which we are running the risk. The prospect of ever-higher rates of interest is something which must fill us with alarm. It not only makes life extremely difficult for ordinary people—the house-buyer about whom we hear so much—but it is also a deterrent to investment when an investor can get 11 per cent. Merely by doing nothing at all. The rate of growth also implies great risks where the margin of spare capacity in the economy is concerned. I hope that my right hon. Friend is right when he assumes that there is sufficient margin in the economy and that we will avoid the bottlenecks which have characterised past periods of expansion. But here again we have to recognise the great risks that are being taken.
I say that I recognise these risks because I feel that the Chancellor is right to take them. I recognise the nature of the gamble that this entails. If we are to break out of our present economic difficulties the gamble is justified. Confidence is still brittle. It is true that a number of large companies—and most recently
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ICI—have announced substantial investment plans. The surveys of business opinion which have been carried out by impartial outside organisations are encouraging. The outlook for business is certainly good at the moment but we must accept that confidence, as I said, is brittle.
The record of this country since the war is such that many industrialists do not believe that the sort of growth targets we are talking about can be achieved. If the Government were to show hesitation at this stage, if they were to say that they were already beginning to draw back from the implications of what they were doing, that would have a harmful effect on the confidence which is only now beginning to blossom. This is not a time when the Government can afford to take half-measures. If the policy which they are pursuing fails to deliver its fruits, we all know that we shall be facing a crisis. A policy of half-measures would only be certain not to achieve the desired results. The policy that the Chancellor is pursuing carries with it a reasonable prospect of success. That prospect depends entirely on the Government's counter-inflation strategy.
If the Government can avoid major disruption to production, investment and exports, during the remainder of the year, if they can hold to the phase 2 targets for prices and wages, the odds on this country achieving a rapid rate of growth, coupled with rapidly increasing prosperity, will be extremely good. If the counter-inflation policy fails in the sense that we cannot achieve our investment and export targets, and if inflation accelerates rather than decelerates, the outlook for all people in Britain, regardless of the party they support, will be extremely dismal.
I come to my final point. The Chancellor said in his Budget speech that he would be prepared to keep his policy under review and pointed to various aspects of it on which he might think again as the year progressed. I feel that the jibes by the right hon. Member for Leeds, East about the fact that another major economic statement might be given later in the year were not relevant to our discussion. We have learned that one Budget every 12 months is not a suitable way of handling our economic affairs. Our economic affairs move

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rapidly. They are subject to many outside influences. If we can demote the importance of the Budget and perhaps rely more, as it were, on less important but more frequent economic statements, this would I think be a desirable development and not a cause for attacking the Chancellor in any way at all.
I agree with those points on which my right hon. Friend said he would keep an open mind. I was glad to hear him talk in that way, but I hope he will keep an open mind on one or two other points which he did not mention in his Budget speech.
The first of those points is food prices. It was probably right not to introduce subsidies at this stage. I say that because we are at a time of year when seasonal factors will lead to a secular decline in food prices during the coming months and, moreover, we do not know what the outcome of the harvests will be in countries where we buy most of our food. If it emerges as the year progresses that the prices of imported food continue to rise at anything like the rate at which they have been rising, I think that the Government ought to look very seriously at the prospect of taking additional action on food prices. I am well aware of the disadvantages of subsidies, and I do not regard them as an inherently desirable policy, but I would regard the continuation of food prices rising at the rate at which they have been as something infinitely more undesirable than the disadvantages of subsidies.
The other point on which I hope the Chancellor will keep an open mind is the whole question of credit rationing or, if not credit rationing, the directing of credit. The level of interest rates is now such as to pose a serious threat to the Government's counter-inflation policy, and this too is an element in the overall picture which the Chancellor may, I think, have to look at again.
To conclude, the emphasis of this Budget has been on expansion and on counter-inflation, and with that we can all agree. The emphasis is certainly one which will provide the country with a more encouraging economic future than its past. As long as the Government can bear in mind the main points of their programme—expansion and counterinflation—and put those above any dedication to particular policies or particular
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theories for managing the economy, so long as they can remember that it is the end which is important and not the means, I think that the gamble the Chancellor is taking has a reasonable chance of success.
6.22 p.m.
Mr. Alex Eadie: I do not take any exception to the way the hon. Member for Cities of London and Westminster (Mr. Tugendhat) has tried to argue his case, but if I may make a comment it is that, as has been shown in the whole debate, there is a mood of complacency among the Government's supporters in the face of the reality which we have today in political and economic affairs.
I do not know how the Government can find any great satisfaction from the fact that in three by-elections they polled a total of 23,000 votes. That would certainly not inspire confidence in the present Government in anyone examining the reaction of the electors. Although I do not dispute with the hon. Gentleman I think he should be worried and that the Government should be worried as well.
I mention this complacency because yesterday an hon. Member opposite talked about our not having unemployment. He said that what we were having was a sort of spin-off, or a shake out in industry; but it was not unemployment. When we have over 120,000 unemployed in Scotland I take great exception to that and to hon. Members talking about unemployment as a shake-out. Unemployment is real—real and positive. My hon. Friend the Member for West Lothian (Mr. Dalyell) will have a colliery closed in his constituency this year. That is real to those people. It was announced in Scotland today that another colliery is to close. That is not a shake out.
My reaction today to the Budget is the same as it was yesterday. It does not spell out a great deal of hope for people in my constituency. The costs of trying to build homes still remain frightening if not impossible for many. I listened with a great deal of interest to the Government's proposition that people who hoard land after getting planning permission will be taxed, but that will not solve the problem. Vast fortunes are still being made and still will be made in the housing market. It is, for example,

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an indictment of the Government that it has been calculated that 18 new millionaires have been created during the last two-and-half years as a result of the Government's policy in housing.
I find it difficult to understand the Government's statement on housing. Having had some experience in local government I can understand our talking about planning permission being given to build homes or houses, or to undertake housing development, but I cannot understand how the Government expect their statement to be very helpful to people about to purchase homes. What we generally do is to zone land according to planning for housing development. Land is zoned for housing development, but that does not necessarily mean that planning permission has been given to build the houses. I assume that we shall still have the same problems with building development even if land is sold for building. I am flabbergasted that the right hon. Gentleman had the temerity to put forward the proposition he did and then assert that this would be of great assistance in solving housing development problems in my constituency—problems which many other hon. Members will have in their constituencies.
I welcome the Government's statement on North Sea oil and taxation. This matter was drawn to the Government's attention in the Scottish Grand Committee. I did it myself in a speech, when I said that some oil companies
"arranged their prices so that a profit was made in countries with a very low tax rate. In 1970 Texaco lost £2·8 million. Petrofina UK lost £2·5 million, and Mobil Oil lost £1·4 million. I could give other examples. These figures are before payment of interest, so the tax loss is even greater. Unless the Government take a firm control of pricing policies it is unlikely that oil companies will ever pay 40 per cent. tax on the profits from North Sea oil."—[OFFICIAL REPORT, Scottish Grand Committee, 5th December 1972; c. 30.]
I make that point for two reasons. I have never quoted a speech of my own before, but there was a mix-up in the reportage and it was not clear whether I made the speech of the right hon. Member for Orkney and Shetland (Mr. Grimond), or whether he made the speech I made. There was a great deal of confusion.
I also mention it because the Chancellor will require to spell out in much
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greater detail what he proposes to do about oil taxation à la the Report of the Public Accounts Committee. I believe that the House will not be prepared to accept the Chancellor's statement as it is, and it really is of paramount importance, in my view, that the Public Accounts Committee's Report should be debated in the House. I hope that the Chancellor was not giving us a sop for not having one or putting it off. There are other issues as well as taxation which the House requires to debate arising from that report. Although the Chancellor intends to do something about taxation, I hope that we shall have an assurance that there will be an opportunity to debate the Public Accounts Committee report.
United Kingdom private investment abroad has risen from £744 million to £1,350 million. Is the Chancellor happy about the size of the investment abroad? At the same time, private firm investment in the United Kingdom fell from £932 million to £645 million. How does this arise, when there is all this North Sea oil investment? Is the North Sea oil investment included in the figures? Is the Chancellor happy about this downward trend, or is there an explanation for it?
May we be given information about how the rating relief to which the Chancellor referred will apply in Scotland? There is confusion about the quinquennial review and the difference in the way in which the assessors work in Scotland and the Inland Revenue in England. Discussions are going on in Scotland about central heating installations being exempt from any rating burden. There are differences between England and Scotland in the rate burdens imposed. Ratepayers will look upon the Chancellor's statement about rating relief with a great deal of interest and will want to know how it will apply in Scotland.
All hon. and right hon. Members will welcome the VAT zero rating of children's clothes and shoes. Many people will claim that they are responsible for this change of policy. Some will say that the Chancellor had a late conversion, but all I say is that I am glad he did it. It will be of great assistance to many families in my constituency.

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I find it perplexing that confectionery, crisps, ice-cream and so on should be zero rated at a cost of about £110 million, while nothing is being done for dad, the breadwinner. Dad has to provide the shoes, the clothes, the ice-cream, crisps and sweets, but if he works in a pit or on a building site he has to buy a helmet, on which he will have to pay tax. He wears it to save his head getting smashed in on a building site. If he is a miner he will not be able to go down the mine unless he is wearing a helmet. The miner is encouraged to buy spine pads to minimise the risk of his getting a broken back, but spine pads are taxed. The miner needs knee pads to prevent his getting what is commonly called housewife's knee.
Joe Corrie, the miners' poet described what the miner does, by writing:
"Crawling about like a snail in the mud
Covered with clammy clae,
Who made me in the image of God
Jingo but its laughable tae."
The miner needs knee pads when he is climbing about in the coal seams. He is encouraged not to lose his safety equipment, and not to buy inferior equipment. My right hon. Friend the Leader of the Opposition spoke about the psychology of the Government. I shall be cruder and call it the total ignorance of the Government. But the House must consider the psychology of the Government.
Children's boots are to be zero rated, but dad's protective boots that save him from a broken foot at work are taxable. Dad will be tempted to buy a cheaper boot because the proper safety boots are much more expensive. That is an absurd situation. It shows that the Government are as divorced from reality in the planning of a Budget as they are in provoking confrontation between themselves and industrial workers. No wonder ordinary working people ask whether the Government know where they are and what they are doing.
Worse is to come. At his work place dad will be encouraged by management to become safety conscious. He may get an invitation to join a safety committee. Accidents and deaths at work not only cause great sorrow but cost the nation millions of pounds. Dad, inveigled by management, may enter safety competitions, perhaps with rival firms. I can
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speak with some authority about the mining industry. Some of the stretcher training done by our first-aid teams would not disgrace a commando unit in the British Army. The teams have to go underground and crawl about in extremely difficult conditions.
Prizes are sometimes offered as an encouragement to the men. If dad wins a cash prize in a safety competition he is liable to pay tax on it. If it is a prize of a certain value he must include it in his income tax return. The Government say that they are "with it". The Government tell us that they understand what the people are thinking. It is an insult to our intelligence for the Government to talk of lollies and ice-cream and yet to make workers put up with this nonsense. I cannot condemn the Government too strongly.
Dr. M. S. Miller: Before my hon. Friend leaves the question of safety measures and protective clothing may I ask him whether he would not agree that it is ridiculous for the country to spend millions of pounds on scientific research into new forms of safety clothing when the Government are positively discouraging workers from wearing it?
Mr. Eadie: I could not agree more. The Government's policy acts as a disincentive to people to wear this safety clothing. Their policy is a disincentive to people to participate with management in being safety conscious. I cannot indict the Government too strongly for forgetting about this in the Budget.
Mr. Dalyell: I thank my hon. Friend for helping me about a West Lothian pit for many years, both before he became a Member and afterwards, but I put it to him that in the light of the closure of that pit he and I know that it is totally frivolous of the Government to withdraw regional employment premium. The Minister of State represents part of North Cornwall which, in a different way, has similar problems. He must know that the withdrawal of REP, given closures of this kind, is extremely damaging and unwise.
Mr. Eadie: My hon. Friend has a good point. There are many other aspects of the Budget with which I would have liked to deal, but I have spoken for long

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enough. The Minister has to understand that in Scotland we still have about the second highest unemployment figure in the United Kingdom. In 1963 it was 134,000; now it is 120,000. That is not a great achievement. If REP goes it will have a very damaging effect upon job opportunities in Scotland. It will place firms in a difficult position.
The psychology of the Government is all wrong. More days have been lost through industrial disputes in one year under this Government than were lost in the last five years of the Labour Government. The Chancellor's concluding statement yesterday showed that the Government have not learned that their policy of confrontation with workers is a failure. The Government's policies have eroded the wealth of the nation. We could have been much richer. This can be remedied not by a change of Chancellor but only by a change of Government. Pensioners, civil servants and many other workpeople, once they have had time to examine the Budget, will come to the same conclusion as me—that the Government have tackled our economic problems with no understanding of how ordinary people try to live.
6.43 p.m.
Mr. Nicholas Ridley: I hope that the hon. Member for Midlothian (Mr. Eadie) will forgive me if I do not follow him over the subjects of North Sea oil, safety and the Scottish economy which he has been traversing. I want to direct my remarks to the central economic issues contained in my right hon. Friend's Budget. First I congratulate him, not only on the manner of presentation and his excellent speech yesterday but upon the great trouble to which he always goes to iron out anomalies, to meet the points put by hon. Members individually or in groups, on both sides of the House, and the great amount of care he takes to meet all reasonable requests.
I am particularly pleased with my right hon. Friend's action over North Sea oil and the hoarding tax on land. The temptation to go too far is probably more dangerous than the temptation not to go far enough. He has got it just about right. I would have preferred an increase in family allowances to help through VAT with children's clothes and food.
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It would have achieved the same object but perhaps arrived at its beneficiaries more accurately if it had been done through an increase in family allowances. All of those adjustments which my right hon. Friend has made will, I am sure, be warmly appreciated by people throughout the country.
The borrowing requirement has risen from the out-turn of £2,855 million to an expected £4,423 million in the coming financial year. That latter figure is a major one. Last year's borrowing was met partly by a large reduction in the investment of nationalised industries, which was greatly down. That is to be regretted in a sense. Although it helps Government finances it is not a good thing to buy solvency at the expense of investment in the public sector. It was also met, as to £1,200 million, by borrowing from the non-bank public which is exemplary and which I hope will continue.
Thirdly, it was met by the influx of £1,600 million due to the June crisis about which the Chancellor told us yesterday. There must have been a considerable amount of bank finance in addition or the money supply would not have been growing so quickly last year. Looking to the future, it is unlikely that the Government will be able to get very much more from the non-bank public by way of borrowing. Even if my right hon. Friend's most elaborate and ingenious schemes for extra borrowing produce a good deal more money than the £1,200 million of last year, I cannot see but that that money must come from other forms of savings and investment.
If it comes out of building societies, the building societies will have to raise their rates to attract it back again. There will be an interest war between the Government and the institutions to attract what money there is. If it comes out of equities the consequences could be even more serious because if equities fall much lower, to the point where their yield becomes comparable with the gilt-edged yield rate, the share values will be so low that companies will find it extremely difficult to raise extra finance on the market. There will be serious industrial investment problems.
I would regret a honing-up of the interest rate war which could be the result

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of trying to finance too much of the deficit by borrowing. This is not in any sense because I have departed from my views that monetary policy is vital but is because I do not believe that we can close a revenue deficit as big as this one entirely by seeking to borrow.
The third factor is the question of what will happen overseas. This is a fascinating and complicated subject. The first thing which I always find it difficult to get my mind round is that when we have to buy our own currency as "hot" money leaves London, this is meeting the Government's deficit and is therefore deflationary. If our currency is being pushed upwards, which has not happened for some time, that is inflationary because money is available to be consumed by people within the country.
We had a windfall of a deflationary £1,600 million last year. It would only be if we had a run against the pound again in the coming year that we could look forward to a similar bonus for the Government's financing efforts. That would require, first, the fixing of the pound and, secondly, fixing it at too high a level. Both of those things may well happen but I hope very much that they do not. If we finance our deficits in that way we will use up our reserves and we shall come to the end of our reserves before very long.
The Government's decision about how to conclude the negotiations in Europe about the fixing of the pound is of the utmost importance. My right hon. Friend would have found it extremely difficult to take account of next year's activity in his Budget without knowing of the conclusion which is likely to be arrived at by the end of the week in Europe.
If we do not fix, we can continue to inflate in the way that we are doing at the moment but we can look to no benefit to the borrowing requirement. If we fix at too high a rate we can expect a run on the pound which will be good for financing the Government's deficit but will soon eat into our reserves and cause us to borrow heavily from France and Germany, which will be required to support the pound. That will in some senses be a safeguard to the Government's policy, but in the end it puts such pressure upon the currency that a further devalua-
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tion might be necessary. Therefore, that is not desirable.
If we fix at too low a rate, hot money will come into London and push up the value of the pound, which will be highly inflationary. The alternatives of fixing too high and too low are highly undesirable and not at all beneficial to the Government's financial policy.
The third alternative of letting the pound float, which is highly desirable in every other aspect, makes no contribution to financing the borrowing requirement. The Chancellor made a remarkable job of what is an extremely difficult situation. I understand why he has not been able to reduce the deficit. That is because of these dilemmas and because of inflation. It would be difficult for him now to put up taxation, which he probably should have done under normal circumstances, because we have just had a counter-inflation policy which declares that certain levels of remuneration for everybody are "fair". Therefore, to take some of that money away from them would, by definition, be "unfair". He cannot very easily increase taxation.
Many right hon. and hon. Members have been saying for some time that public expenditure should be reduced. The most obvious category which I personally favour for reduction is the subsidies to the nationalised industries, which run at £500 million a year. They go to every man, woman and child, rich and poor. They go to those who travel by air and who use the airports as well as those who are poor who rely on gas and electricity to keep warm in the winter.
I should prefer an increase in benefits to help the less-well-off and total abolition of the subsidies so that we do not subsidise all indiscriminately. But to do that would put up the costs of those whose incomes have been fixed at "fair" levels. In all I say the word "fair" is in inverted commas. I cannot be a judge of what is fair and what is not. That is why it is difficult to reduce expenditure.
There are some programmes which could be reduced, although they would make little difference to the accounts for the coming year. Every hon. Member who has mentioned Maplin has said that it should be postponed. We must look at the area of high technology which costs

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us so dear—for example the RB211, Concorde and International Computers Limited. The amount of money which is being spent on these projects is getting very big—it is getting bigger and not smaller, even when the returns should be coming in.
My right hon. Friend the Secretary of State for Trade and Industry seems to have an appetite for expenditure which perhaps could be kept a little under control in the months to come. He talked this afternoon with great optimism about the boom. He said that we have a high level of export orders and he spoke of the great boom which is taking place. Surely, in a boom we should apply our counter-cyclic policy. That means not spending more but spending less. When my right hon. Friend was challenged by the hon. Member for West Lothian (Mr. Dalyell), he said that the remedy for a boom was to have a bigger deficit because that did not matter when there was a boom. But we should have a smaller deficit in a boom, or even plan for a surplus.
We cannot do much about controlling the deficit in the short run because the counter-inflation policy makes it difficult, if not impossible, to adjust the level of demand. It could be argued that the counter-inflation policy has become counter-productive in the pursuit of reducing the level of inflation. It has shackled my right hon. Friend so that it is difficult for him to reduce expenditure. It is also difficult for him to increase taxation. Therefore, he is forced to rely upon a huge borrowing requirement at a time when the uncertainties and risks which attend us overseas are very great indeed. That is why I suspect that, in the time honoured words,
"other measures will be laid before you".
6.58 p.m.
Mr. Kenneth Lomas: I think that the House will agree that what we have heard from the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is a typical Conservative speech in every sense of the word. He poses the questions but does not give the answers.
We heard from the hon. Gentleman that it is undesirable for the pound to be pegged at a fixed rate and that a
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floating rate makes no difference. We understand that. However, I totally disagree with his view about subsidies to nationalised industries. British Rail, for example, must be treated as a social service for those who live in rural areas. They must be so treated in my constituency, where the link lines are required. They are vital and necessary to the people who work and commute in the area. We cannot say that nationalised industries should be an essential service on the one hand and then say on the other that they must be commercially viable. The two do not go together.
When the hon. Gentleman says that cuts should be made in public expenditure, I remind him that one matter which has not been mentioned is the fantastic amount of money that is spent on defence. We are now spending on defence approximately £70 every second; that is over £4,000 a minute. In the course of the hon. Gentleman's speech and my speech we shall have spent between us £100,000 on defence. I should have thought that this was an area where we could see whether it was possible to reduce the amount that we spend on weapons, armoury and defence of all kinds.
Mr. Hugh Dykes: The hon. Gentleman will bear in mind, I hope, that the great preponderance of defence spending is on wages and salaries.
Mr. Lomas: Of course, I accept that. Nevertheless, the logistics ought to be looked at. Having served in the North Atlantic Assembly, I speak with some experience when I say that I do not believe that our defences should be run down. It is essential that we have an adequate defence. However, certain economies could be made when expenditure is running at the fantastically high figure that it is at present.
Whatever our differences may be, we must all be agreed that this Budget was introduced against the very sombre backcloth of an international monetary crisis and increasing industrial unrest at home. It may be that the Chancellor could not avoid the first, though that is being charitable because the right hon. Gentleman inherited a surplus of about £600 million or £800 million and in the course of two and a half years has turned it into a £1,000 million deficit. However,

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the right hon. Gentleman could have avoided the industrial unrest that we see at the moment.
There are some items in the Budget which are to be welcomed. When I spoke in the course of one of the debates on last year's Finance Bill I made strong representations to the Chancellor of the Exchequer that soft drinks should be relieved of VAT. A firm in my constituency, Ben Shaw Limited, was extremely concerned about this. I am glad to know that the right hon. Gentleman has taken my suggestion on board. I know, too, that my hon. Friend the Member for Widnes (Mr. Oakes) fought the same battle in respect of crisps and that he will be delighted that the right hon. Gentleman has taken the line that he has.
Having said that, it is worth asking whether it was necessary, in view of our current problems, for the right hon. Gentleman to introduce VAT at 10 per cent. Would not it have been better to have brought it in at a lower rate, say, 7½ per cent., or even to have decided on a tier system with rates of 7½ per cent., 10 per cent. and possibly 12½ per cent.? This is a matter which I believe the Chancellor should reconsider, because people at the bottom end of the wage scale will feel the effect of VAT more than anyone else.
At a time when the right hon. Gentleman is appealing for wage restraint or imposing a freeze, it is totally wrong for him to be giving tax concessions to the wealthier sections of the community. We should remember that one man's tax relief is that same man's pay rise. It is no use telling people at the bottom end of the income bracket that they cannot have pay increases when, as from 1st April, those in receipt of a fair amount of money will get increases in the form of having to pay less tax.
I welcome the step taken by the Chancellor against land speculation, timid though it is. It has not gone far enough. There is no doubt that the house prices that newly-married couples have to pay today are largely determined by the price of land. This is forcing up house prices to a tremendous extent. This is not just a matter requiring certain taxes to be levied. It is essential for the State to take over the land and then lease it to people who wish to build houses. It was
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once said that God left the land to the people but that he made very bad arrangements for its management. That is even more true today.
I regret that no action was taken on family allowances. Here was an area where the lower-paid worker with family responsibilities could have been helped. Apparently the Chancellor has turned his back on them.
The Opposition have been urging the need for food subsidies in order to keep down and control the price of food. The Chancellor said nothing on this subject. It is obvious that he is not interested in trying to keep down the price of food.
The right hon. Gentleman could have said that the Housing Finance Act, which will push up rents once again on 1st April, was to be held in abeyance.
A part of the right hon. Gentleman's speech was devoted to rates. He said that in the event of an increase of more than 10 per cent. the Government would give half. This is not good enough. If rates are allowed to go up 10 per cent. or more it will be one more imposition upon the responsibilities of the lower-paid worker.
I hope that this Government or a future Labour Government will look at the system of rating, recognising how ancient it is, and come to some conclusions on the lines that there should be some form of local income tax instead.
I welcome the concessions on children's shoes and clothing. But one is entitled to ask why they were not announced before. In the past 12 months the point was made again and again that it was essential that these were relieved of VAT. The right hon. Gentleman set his face resolutely against making any change. Yesterday he repented. He said that he was a sinner and that he had been wrong. If he were wrong about that, on how many other occasions has he been wrong and thereby affected the country's economy?
I welcome the increase in pensions, but again it is too little and too late. It is all very well saying that this is a sizeable increase. It is. But it has to be, in order to keep up with the ever-increasing cost of living. What is more, by the time that pensioners get the increase, for which they have to wait another six or seven months, it will already have been partly eroded by the increase in prices. Since

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the General Election, food prices have gone up by more than 25 per cent., rents by over 30 per cent. and rates by a similar amount.
If the Government want the support of ordinary people and trade unionists, they must earn that support by acting in a very positive way. The Chancellor of the Exchequer spoke of the increasing amount of industrial unrest and the present round of strikes. I wish to declare my interest as a Member sponsored by the National Union of Public Employees. I can assure the Government that the ancillary workers in the National Health Service are on strike not because they want to be but because of the blatant, gross and totally inflexible behaviour of this Government in operating their so-called "fair" prices and incomes policy.
I have always been and always will be an unrepentant believer in a prices and incomes policy. I say that because, as a Socialist, I believe in a planned economy, and if we are to plan the economy, we must plan growth rates, investment rates, income rates, and of course prices.
Since this Government came to office they have adopted a policy of taking on the public sector. It is the public sector which has suffered most in every instance. The Government have shown that they are not concerned about a just and fair incomes policy, no matter what the Secretary of State for Trade and Industry may have said today. It is a fact of life that the vast majority of ancillary workers in the NHS earn less than £20 a week. No one can deny that that is a very low rate of pay. It is obvious that they have a very special case—more special perhaps than that of gas workers and others. Yet these very people who are on extremely low rates of pay are suffering all the injustice that goes with it.
What is more, many of them are caught in the poverty trap. A married man with two children who is earning less than £22 a week, which scores of thousands are, qualifies at the moment for family income supplement, free dental treatment, free milk and free school meals. If the increase offered by the Government were taken, many of these families would be worse off because it would just about take them over the threshold and they
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would lose many of the social benefits that they receive at present.
The strike by the ancillary workers is not wanted by anyone—the union, the members, the hospital authorities, and, I am sure, the Government—so we must find an answer to it.
The first point to be borne in mind is that under phase 2 the £1 plus 4 per cent. is manifestly unfair. A man earning £50 a week would get £1 plus £2, a total increase of £3 in his pay packet, whereas a man earning £20 a week would get £1 plus about 80p. This is not narrowing the gap; it is widening it. I have always thought that we should try, if possible, to narrow the gap between those who have and those who have not, between the rich and the poor, rather than widen and make greater that gap. This is what is wrong.
The Leader of the Liberal Party said that we in the Labour Party were not concerned about the lower-paid workers. Yet he and the rest of his party voted for phase 2 of the Counter-Inflation Bill which perpetrated this injustice on the lower-paid workers.
Just as I suggest that the Government must act, so must the Trades Union Congress. There must be some kind of voluntary restraint. It is totally wrong that those with the highest wages or salaries in industry should get the largest increases and those with the lowest wages and salaries should get the lowest increases. The whole policy on which the Counter-Inflation Bill and the whole Budget judgment is based—that groups of workers should work out between themselves what the wage bill is and what the employers can afford and then get the £1 plus 4 per cent.—simply means that a man already in a group of lower-paid workers will always be lower paid. There is something fundamentally wrong with that.
The trade union movement, the Government, and some of my hon. Friends must recognise that if a large industry—be it, for example, the Ford Motor Company—makes a fantastic profit, it is wrong that those profits should simply go to the people in that industry. They should be spread across the board so that all can benefit. The public service and the hospitals service cannot make profits. I do not know how productivity is measured in the hospital service. It cannot

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be measured by the number of bed pans carried in the course of a day. Hospital workers are performing an essential service to the community.
In the context of the Chancellor's speech I should like to offer a word of advice to some trade unionists. I recall reading a play by John Osborne in which one of the characters said, "There are people who spend their time looking forward to the past." This is a fair criticism of some people in the Government and in the trade union movement. This is not 1926. There is no need, no call, no necessity, as far as I can see, for a general strike. It would not achieve anything, except perhaps to turn the average individual against the possibility of returning a different Government from that which we have who are introducing a measure such as we had yesterday.
By all means let us be militant, but let us think where our militancy will lead us. The militants must think things through. We must think again on many issues. Of course I want the Labour Party to win the next election, but to do that, as we are doing, we must be able to present a good alternative policy.
I reject the free-for-all policies of the Conservative Government. I do not want that kind of society. I think that the Chancellor or another Minister in the course of this debate should come forward with some proposal which could get the Government off the hook and would help to solve the problems with which the nation is faced.
We have been told that those who consider that they have a special case can refer it to the Pay Board which can look at it and that something may be done in the autumn. But the Pay Board is an agent of Government policy. Therefore it will not work. That is why there will not be co-operation by the trade union movement. The Pay Board should be totally independent of the Government. If, looking at the cases submitted to it, in its judgment it decided that there was a special case, then it should be given authority to make an interim payment immediately or at least in the autumn in a retrospective manner.
I believe that what we heard yesterday was a mini-Budget. I believe that we shall have another Budget in two, three
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or four months. Inevitably we shall have another Budget. That is why I agree with the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) who said that it was wrong on this, the occasion of the annual Budget—I agree that it is an archaic system—to look forward to something dramatic happening in either March or April. We must change our attitude. Therefore, I accept the Budget knowing that it will be changed drastically during the next few months.
I sincerely believe that the Government are taking this country and the average individual down the path of disaster. We want a different form of Government. But if we are truly democratic we must accept the laws of the country, however bad they might be. The only way to change the law is to change the Government. I am convinced that the feeling of the people of this country will create a situation where the Government will be compelled to fight on their miserable record and I am sure that they will be defeated and that a Labour Government will take their place to the benefit of all.
7.17 p.m.
Mr. David Knox: Whatever view we may take about the importance of the Budget in any financial year, it is and should be an occasion for an important debate. I am not making a party political point, but attendance throughout the proceedings today has been disgraceful. It appears that only a handful of hon. Members are interested in one of the most important of the events that take place in this House in the course of the year. It is not the first time, nor, I expect, will it be the last, that this has happened in this Session. It may be that both the major political parties should learn the lessons from certain by-elections last week.
I should like to take the hon. Member for Huddersfield, West (Mr. Lomas) to task on one point only in his interesting speech. At one stage he said that if the Government wanted the support of the trade unions they must earn it. I should point out that by any standards this Government have earned that support more than the Labour Government did between 1964 and 1970.

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The TUC and the trade union movement asked for economic growth. They have had it from this Government. They did not have it from the Labour Government. The unions asked for rising living standards. They are having this from this Government in real terms. They did not get them from the Labour Government. The trade unions asked for increased social public expenditure. They are getting it from this Government on a greater scale than they had it from the Labour Government.
The trade unions asked for measures to reduce the level of unemployment. These were introduced and are now beginning to take effect. Unemployment is falling. Unemployment rose, on and off, but continuously from 1966 to 1970. Much of the early increase in unemployment under this Government came about because of the time lag between the introduction of measures to reduce unemployment and the time that they started to take effect. Therefore, by any of these standards, I believe that any independent person would be bound to concede that this Government have earned the support of the trade union movement.
All Budgets should be examined from two standpoints. First, the individual changes which the Chancellor intends to effect should be considered. Secondly, the Budget should be considered from the point of view of the effect on demand management. I have no doubt that the second of those two things, demand management, is very much more important than the former, but that is not to underestimate or in any way to deride the importance of some of the measures which my right hon. Friend announced yesterday, all of which I welcome and support. It is merely to say that the general direction in which the economy moves in response to the management of demand is of much greater and more profound importance to, and of greater influence on, the well-being of the British people.
I should like to concentrate on the demand management aspect of the Budget. First, I welcome the commitment which my right hon. Friend gave again to 5 per cent. growth. I believe that that is right, and that economic growth should enjoy the highest priority in the economic management of the economy. That
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after all, is what an economic system is about. That, after all, is what people want, and it enables us to improve the material well-being of the people of this country.
For those of my hon. Friends—and perhaps one should include here the editor of The Times—who question the importance that I give to economic growth perhaps I may remind them that according to Disraeli one of the three great principles of the Conservative Party is to elevate the condition of the people. That is more than can be said for the control of the money supply or for the operation of a market economy in inappropriate circumstances.
I congratulate my right hon. Friend on keeping his nerve about the rate of growth. He was subjected to a certain amount of pressure from the Press and from other sources to ease up on this but I hope that he will continue to keep his nerve and not succumb to the Jeremiahs who, as always, are forecasting doom and who seem to regret it whenever Britain seems to be doing well. My only regret about my right hon. Friend's reaffirmation of his support for this faster rate of growth is that he did not commit himself for a rather longer time, but perhaps I may return to that.
There has been considerable public discussion during the last 12 months about the nature of our inflationary problem. This obviously has a strong bearing on demand management as related to the Budget. Some people, including a number of my hon. Friends, believe that there is only one kind of inflation and that the Chancellor should have taken certain action to deflate the economy to deal with it.
I believe—and I think that this is the logic of the Budget—that that is not the case. I think that there are two kinds of inflation—demand inflation and cost inflation; and that an understanding of those two concepts is of much greater importance in understanding how a modern economy works than all this talk of money supply, and so on. I may have got it wrong, but I thought that the late Lord Keynes debunked the money supply theory about 35 years ago, and I find myself siding with those who regret that this piece of nonsense has been resurrected in recent years.

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Let us go back to demand inflation and cost inflation. What is demand inflation? It is that situation where the total demand for goods and services in the economy as a whole exceeds the capacity of the economy to supply and meet that demand. It seems to me absurd to suggest that we are anywhere near that situation in Britain today. Total effective demand is nowhere near supply potential, and I am fortified in that view because it has been supported recently by none other than Professor Paish in his article in Lloyd's Bank Review for January.
This is a case of a sinner coming to redemption, because for a long time I have taken a different view from Professor Paish on this issue. Of course he is right. We still have substantial unused capacity in the economy. There are more than 700,000 unemployed, which is still by any standard a big figure, and far too high. In addition, there are a large number of people who are not registered as unemployed but who, nevertheless, are available for work. This always happens when demand is slack, and it has happened in recent years.
If one looks at the figures for 1966, one sees that more than 23 million people were in employment at that time, while the figure for 1972 was just under 22 million. There was, therefore, between 1966 and 1972, a drop of 1¼ million in the number of employed. During this period unemployment rose by about 600,000, which was half the fall in employment. But the National Plan estimated that the work force available today would show an increase over 1966. I do not want to get bogged down in detailed figures, because there is a danger in so doing. Calculations of this sort are, inevitably, imprecise, but it is reasonable to assume that there are about 1 million people in Britain today not in employment, but not registered as unemployed, who would he willing to work if work were available.
If on top of that, one assumes that the irreducible minimum unemployment figure at any time is between 300,000 and 400,000, it is then reasonable to assume that about 1¼ million people who are available for work are not in employment. If one adds to that the fact that there is still considerable underemployment in British industry and commerce of people at work, for reasons of inadequate demand, that hardly suggests a situation
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of labour shortage or of pressure of demand on the labour market. There may be exceptions in particular places here and there but, in general, there is a shortage of jobs.
The same is true in terms of plant capacity. There is plenty of spare capacity in British industry today in terms of plant and equipment. There is no pressure of demand, except in very small areas. Indeed, surely the failure of investment to rise during the last year or so has largely been because plant and equipment installed in the past is not yet fully utilised.
I think it follows from all this that there is no great pressure of demand in the economy today. There is no danger of the economy overheating, and it is therefore nonsense to suggest that we are living in times of demand inflation.
This also makes nonsensical the money supply theory of inflation as applied to our present conditions, because if the theory has any meaning it is that the increase in the money supply has created demand or has given latent demand the means of becoming effective which has resulted in a total effective demand in the economy as a whole being in excess of supply potential. But the total effective demand is substantially below supply potential, so clearly the money supply explanation of our present inflation is nonsense.
I am one of those who have grave doubts about whether it is possible to control the money supply anyway, because it seems to me that the velocity of circulation, non-banking sources of money, and so on, render it impossible for the Government to control it anyway. But whether my doubts are correct or not, whether they are justified or not, it seems to me that an increase in the money supply can be inflationary only if total effective demand is already equal to or in excess of supply potential.
Since that is not the case today it seems that one has to look elsewhere for the cause of our present inflation. One comes back to the fact that it is a cost inflationary problem. Putting it simply, one cannot have an increase in income of 15 per cent. and an increase in output of 5 per cent. without something giving, and that something is clearly the price level. We have a cost inflationary situation today.

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To some extent this is due to a rise in import prices. I do not want to waste time on that now because there is not much that we can do about it. But the situation is due mainly to the rise in incomes in excess of output.
About this, there is something that we can do. Income-cost inflation arises because of the effect of monopolistic influences in the labour market and the general sluggishness of that market. The monopolistic forces are, of course, well known. They are trade unions, not just of wage earners but of salary earners—and professional bodies—as well. There is a third factor which has the effect of a monopolistic force, and that is public opinion. In recent years, public opinion has tended to support every wage claim, fair or unfair. Public opinion has become important in influencing a settlement, so it has the effect of a monopolistic force.
In the '50s and early '60s, so long as we had fairly fast growth and accelerating growth and accelerating increases in living standards, the monopolistic forces in the labour market tended to act with considerable restraint, but in recent years, from the mid-60s until 12 months ago, there has been little or no growth in the British economy.
As a consequence, in an effort to opt out of the consequences of little or no growth, these monopolist powers have been used. Unions have flexed their muscles. Exorbitant wage and salary claims have been demanded and granted. The fact that these are very soon eaten away by the consequent inflationary price rises is of course irrelevant. The unions have used the monopoly power that they have had for a long time to try to enable their members—again I am talking about salary earners as well as wage earners—to opt out of the consequences of little or no growth.
I am not trying to pass any moral judgment on them. They are entitled to do as they have done. But, equally, this does not and should not stop the Government trying to do something about it. The Government have a duty to try to stop it and this is why I supported the freeze, why I support phase 2 and why I support an incomes policy. Of course I would prefer a voluntary policy, but since that does not seem to be possible
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at present or in the foreseeable future, we must have a statutory policy.
We are now on the path of growth again. I would hope that, over a period, as people get used to growth again, some of the pressures of the monopolistic forces in the labour market will lessen, but whether that happens or not does not matter. At present, we have this cost-inflationary situation and the only way to deal with it is to have a statutory policy but at the same time to pursue a growth policy come what may, since in the long term the only conceivable way of lessening these pressures is to ensure that people are getting wealthier and wealthier as each year goes by. I can see no hope at all of ending cost inflation unless we can succeed to do that.
I said earlier that I was sorry that my right hon. Friend did not commit himself to growth for a longer period. He committed himself to 5 per cent. growth for just over a year. He could have gone much further. On a very conservative estimate, we have about 10 per cent. spare capacity in the British economy. I understand, although I am subject to correction, that the Treasury estimate is that the underlying increase in the capacity of the economy is 3 per cent. each year. This means that, with no increase in the underlying increase in the capacity of the economy, we could have 5 per cent. growth for five years.
But surely, if the Government were to pledge themselves to 5 per cent. growth for a long period, and if they were to make it clear beyond the slightest doubt that, come what may, they were going to stick to this, and if they showed that they would go about it with some determination, I should have thought that investment in new plant and machinery would increase. Thus the underlying increase in the capacity of the economy would increase, too. Then, we might even be able to have 5 per cent. growth indefinitely.
But if we are to achieve this, there has to be an absolute pledge that stop-go is out for all time. We have to convince businessmen that this is the case and that they have reason to have confidence in the future. People do not invest for fun or create more capital capacity for the sake of doing so. Many of those who invested in the early and

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mid-60s on the basis of promises of 4 per cent. growth got their fingers badly burned. Some of the capacity that they created then is still not being used now.
This time, if we are to succeed, we have to convince them that growth will go on and that it will be worth investing on a long-term basis. There is no other way to go about this, and I would despair of the future of this country if we could not do it.
Over the past 20 years, we have lost out far too much with stop-go policies and all the associated evils. We have lost out against all our international competitors. The time has come to say, "Enough of this", and to go for growth as our principal economic aim. I hope that, if my hon. Friend cannot say so tonight, my right hon. Friend will be able to go a little further when he winds up the debate on Monday by affirming his belief in 5 per cent. economic growth, not just for a year or 18 months but for five years ahead, to give this country the environment in which it can begin to compete not only in the Common Market but in the world at large.
7.26 p.m.
Mr. John Fraser: I think that everyone on this side of the House would agree with the hon. Member for Leek (Mr. Knox) that we would like to see a period of sustained growth. The difficulty in the past, as it no doubt will be in the future, is that it is easier to state the proposition than to succeed with it. But I think that we all echo the hon. Member's sentiments.
I am as concerned as my hon. Friend the Member for Huddersfield, West (Mr. Lomas) about the pay of public service workers. I do not want to devote much of my speech to that, but we must get to the point at which we try to have a settlement of public service workers' pay in one go at the beginning of each year. Time and time again it is predictable that, if local government employees receive an increase, it will be reflected in increases to nurses, hospital workers, probation officers, policemen, social workers and a whole series of pay claims which will follow.
What we must try to aim at is a series of discussions about public service workers' pay, probably before the Budget
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each year, which will do a number of things. First it should achieve, as one tries to do with the Civil Service and to some extent with teachers' allowances, a comparison between the pay of a public service worker and the pay of his counterpart in private industry.
Secondly, those negotiations should take into account the demand for certain kinds of employee. It is monstrous that we should all worry about the increase in crime yet not pay enough money to produce an adequate supply of policemen, or pay so little that experienced officers leave the force and go elsewhere. That demand for workers must be taken into account.
Thirdly, and perhaps most important, one needs a round of negotiations with public service employees which takes account of the relationships between one set of workers and another. It is impossible to reach a pay settlement with probation officers without at the same time affecting the pay of social workers and other people doing similar jobs. Until we get around to that kind of discussion—for instance, a discussion about pay in the gas industry which takes place at the same time as a discussion about pay in the electricity industry, linked together each year—we will have very little success.
An overall settlement would do two things. First, the Chancellor would know before presenting his Budget in March or April the kind of demands for pay that had already been settled in a very large sector of employment. Secondly, it would also set the tone for the pay discussion which often takes place in private industry rather later in the year.
There would have to be a compact between the two sides that pay in private industry would not race ahead of that for public service employees; one would have to try to achieve that compact. I believe that it could be done very much by voluntary means. The trouble at the moment is that many Governments try a policy of divide and rule and find that they are utterly unsuccessful. Unless these discussions are linked together it is impossible to have a special case, because one man's special case becomes the next man's special case and the whole point of a special settlement is lost.

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I now wish to turn to a subject in the Chancellor's speech which very much disturbed me. It relates to interest rates. What the Chancellor seems to have chosen to do, in pushing interest rates up to about 9 or 10 per cent. on gilt-edged securities and public savings, is to produce an inflation which helps the moneylender in order to fight an inflation which might help the worker. The Chancellor had a choice between the two, and he has chosen the form of inflation which will assist people who have money and who lend it. There is no doubt that high rates of interest are inflationary in themselves.
On 25th February an interesting article appeared in the Sunday Times on this subject. It said:
"Rising interest rates, which have accelerated in recent weeks because of the Bank of England's efforts to curb the money supply, have now become a major inflationary element in their own right. Increases already made over the past 12 months could lead to a staggering £1-a-week rise on the cost of living for British families and there could be worse to follow."
It is clear that even the Government's Green Paper allows interest as an essential element in the inflationary spiral.
On page 5 of the Price and Pay Code we are told that
"Increases in interest charges payable by an enterprise are allowable cost increases."
That means that if that element in the increased costs of a producer is money which is paid in interest, unless he is on the fiddle—that is briefly summarising the exceptions—he can pass on that cost to the consumer.
It is impossible to separate inflation in interest rates from other forms of inflation. The Government have got away with it fairly well by abolishing Bank Rate. They hope that no one will know what is going on. In the past, when Bank Rate rose from 6 per cent. to 8 per cent., the fact was spread across the evening newspapers, with headlines such as "Home loans will cost more" and "More unemployment." A rise in Bank Rate was always regarded as a very bad sign. The ordinary man on the Northern Line does not understand Treasury bill rates quite as well.
I must admire the Government for devaluing and not calling it a devaluation but a floating; and for putting up interest
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rates not by abolishing Bank Rate but by calling it something else. Between 12th October last year and the present day the Government have engineered an increase in interest rates of 50 per cent. I was amazed to learn this morning that a finance house, on first-class security of building land which is in demand, is lending money at the rate of 6 per cent. above the finance houses' base rate. That means a rate of interest for building, on a first-class security—not on second or third mortgage—of 16 per cent. That money eventually is added to the price of houses.
How does that appear to the man in the street? The worker receiving £30 a week qualifies for a rise under the £1 plus 4 per cent. formula of £2·20 a week. The worker earning £60 a week qualifies on the same basis for a rise of £3·40 a week. Consider, however, the man whose income is £60 a week derived from interest on money which is lent, who has £50,000 invested at, for example, 6 per cent. last October and, therefore, an income of £60 a week in interest. With the rise in interest rates from 6 per cent. to 9 per cent., taking the very lowest base rates, he receives a rise in income of £30 a week.
If a worker works for 30, 40 or 50 hours a week and earns £60 a week, he gets £3·40. But if a man sits on his bottom waiting for the bank to send him interest quarterly for doing nothing he gets a rise in income, thereby adding to inflation, of £30 a week. It is no £1 plus 4 per cent. for him. What is more, as from 1st April such a man will have the additional benefit that out of his £3,000 per annum unearned income, for sitting on his bottom, he will receive a considerable saving because the first £2,000 of that income is to be taxed at the basic rate of 30 per cent. and he will also have personal allowances.
There is gross unfairness as between the worker and the person who does not work. The rises in interest rates add to inflation. Let us take more concrete examples. Let us assume that the £30-a-week man has a mortgage of £5,000. It is absolutely certain, as certain as we can ever be, that mortgage interest rates will rise by about ½ per cent. very soon. They are bound to rise. As a result of what the Chancellor has said, people will

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be taking their money out of building societies. Perhaps they would be unwise to put it into premium bonds, but they will put it into some of the more attractive options that are now open.
If the building societies want to retain money to lend to house purchasers, they will have to increase their rate of interest. The banner headline across the back pages of the evening newspapers tonight is
"Building society interest rate to go up to 9 per cent."
Whether that is an official announcement is neither here nor there because we all know that that is what will happen. So the man earning £30 a week and with a £5,000 mortgage, even assuming that the rise in interest rates is only ½ per cent., will have to pay an extra 50p per week on the cost of buying his house.
Let us look at the situation of such a man. His permitted rise under the Green Paper is £2·20. After he has paid income tax it will be even less—£1·54 a week. Then he pays, allowing for tax allowances, an extra 35p per week on his mortgage. That reduces his real income increase to £1·19 per week. On a £30-a-week wage that is a net increase in income of 4 per cent. Can the Chancellor or any hon. Member on the Treasury Bench assure such a worker that the cost of living will not rise by 4 per cent. in the coming year? What is more important, can the Chancellor assure that worker that the man who derives unearned income from interest payments will be restrained in the same way as he is? There is no justice in this
I turn to the effect of the rises in interest rates on investment. These must affect investment because 9 per cent. is about the basic, gilt-edged rate, the base rate. But one can approach banks and finance houses, and for first-class security the interest rate will often be 14 per cent. to 16 per cent. We are told that the Government's strategy is that profit margins are to be reduced. But if profit margins are to be reduced, people will not be prepared to borrow money at high rates of interest in order to invest. No one will borrow money at between 10 per cent. and 15 per cent. unless he can make a greater profit on it by selling goods to the public. Therefore, the effect
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of the rise in interest rates must be to reduce the amount of investment.
I conclude by dealing with house purchase. One answer we could have is that the rise in building society interest rates will mean a fall in the price of houses. Provided that the supply of houses remains constant, a reduced amount of money available for house purchase will mean a drop in price because fewer people will be able to buy. I do not regard that as a satisfactory answer, least of all to many of my constituents who are living in the most appalling housing.
The other answer might be that the Government are to make more land available for development by means of the hoarding tax. But even the most favourably inclined commentators have recognised the hoarding tax to be a mere gimmick which may well have the reverse effect and may even cause people not to apply for planning permission in order to avoid paying the tax. Therefore, that looks like being a gimmick as well. Thus, the result may be that we have even fewer houses built than the appalling total which the Government give us at present, the lowest total for about nine years, even in the private sector.
I shall make a number of suggestions. First, there should be public ownership of land or development and redevelopment. We have tried gimmicks such as the betterment levy. Either local authorities or a development authority must be empowered to acquire land needed for development and make it available to the market quickly, particularly for house building. Only in that way can the supply of houses for sale be increased and their price kept down.
Secondly, just as we have no market in land because it is a monopoly situation, so we have no market in interest rates because they are essentially controlled by the Government. The Government fix the rate at which money is lent. The result is that the profits of banks soar enormously. Nobody can be complacent about the amount of profit that banks have made out of Government operations. The banks should be in public ownership.
Thirdly, we know that the banks do not accord the right degree of priority to people who want to borrow. Many people who want to buy the freehold of

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their house or want to add a bathroom to it or buy an essential addition cannot borrow the necessary money from the bank. Most of us know that anyone with reasonable credit status can still borrow the money to acquire an XJ6 or some luxury. During the period of the Labour Government, time and time again money was not made available according to the right priorities. We need the land in public ownership, because that is an essential element in getting the country's problems sorted out. We need the banks in public ownership. We should not have to resort to gimmicks when the power to control the economy could be considerably increased if the banks were in public ownership and were accountable to the public. The right priorities in lending could be established for social lending purposes. We could control interest rates to a much better extent, and if necessary we would be able to control the money supply.
If the banks were in public ownership we could control the money which was lent. Instead of the Government having to pay people 9 per cent. to put their money into public funds, the money could remain dead in the banks if the banks were publicly controlled. For far too long the public have allowed themselves to be controlled by factors in the financial set-up which have not been accountable. If the banks were publicly controlled, the people would be better able to control their own affairs and they would be able to accord to themselves the priorities which are socially right.
7.54 p.m.
Mr. Hugh Dykes: The hon. Member for Norwood (Mr. John Fraser) has one endearing quality which stands out from his other qualities. He is always carried away and succeeds in going too far. It is bad enough considering the logical economic effects—there is none—arising from the nationalisation of the steel industry. It is worse to consider the logical economic effects—there is none—arising from the nationalisation of the motor industry.
It would be impossible, disastrous, and inconceivable to consider what possible benefit could accrue from nationalising the banking system so that we could, in some curiously artificial way, fix the going rate of interest. That does not stand up to any analysis that is within
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the parameters of our society, unless we go right away from society to the Marxist form of society where presumably these things are possible, because that sort of society ends up by banishing the rate of interest in the real sense.
Mr. John Fraser: Will the hon. Gentleman concede that fixing the rate of interest is precisely what the Government are doing at present?
Mr. Dykes: Not in the institutional sense on a continuing basis, which is what I think the hon. Gentleman was referring to. The Government, in so far as they are the ultimate determinant of the money supply, fix the rate of interest at any one time through the Treasury bill system as the prime source of credit. Then the whole thing permeates through the banking system, and various rates of interest are established at different levels.
That is different from saying that the Government can, in a concerted way, in our mixed economy—despite the counter-inflation proposals, it is still very much a mixed economy and a mixed society—impinge on the interest rate in a physical way, as the hon. Gentleman was suggesting. However, I do not want to prolong the discussion on this point. This is a matter that the hon. Gentleman and I can discuss outside the Chamber.
That does not gainsay the overwhelming priority now for the Government to be within the perspective of seeing a reduction in interest rates. I am as anxious as is the hon. Member for Norwood about the prevailing level of interest rates and its effect on private consumers as well as on the totality of the credit system, on building, on building society mortgages, and so on. There is common ground as to that. It is means rather than ends which are perhaps at issue.
None the less, my impression about interest rates is that we are probably approaching the peak of interest rates. They may be at or very near their peak now. Undoubtedly the prospect over the coming months and into 1974 will be much better.
As to the Budget and its overall impact, I add my congratulations to those which have been expressed from this side—there was even a grudging indication of some admiration from one or two hon.

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Members opposite; it was perhaps trying for one or two hon. Members opposite to admit such admiration—not only on the way in which my right hon. Friend handled the modalities of his proposals, but also on his sticking to a clear-cut strategy for the year ahead. This is not a Budget which is full of measures, but it impinges upon several key priority areas in terms of economic management and in terms of one or two important and outstanding social and economic proposals which have been made and which should be accorded a universal welcome in the House.
I therefore think that my right hon. Friend the Secretary of State for Trade and Industry went too far when he became angry with the Opposition. It is not necessary to become angry with the Opposition. I am sorry for the Opposition at present as they try to respond to what my right hon. Friend the Chancellor of the Exchequer has been saying and doing and proposing in the Budget statement. It will be welcomed outside. Clearly there are a number of things that for social and economic reasons remain to be done, but all of these things cannot be done at the same time.
The one pillar of the Budget statement—namely, management of the economy—by and large, and subject to detail, the Chancellor will have got right. His priority of the 5 per cent. growth rate is welcome. There were commentators outside who may have imagined last year that this commitment was weakened by the Government because of the difficulties facing them on other fronts. I am very glad that that is not so.
I believe that all hon. Members will welcome heartily the increase in pensions, which I calculate at just over 14 per cent., in comparison with a 12½ per cent. increase last time. As regards special assistance for the elderly, through one fiscal device or another, it is worth remembering that age exemption relief against income tax has been increased three times in three successive principal spring Budgets since the Government came to power. This is therefore a considerable step forward and I hope that it is only the beginning of a longer-term process to accord much more generous treatment to the retired, either by way of direct payments from the community through the pension
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system or through fiscal reliefs and other inducements. Therefore, one is extremely encouraged by the overall tone and theme of the Budget Statement. But since the Minister is here I should like to put one or two points about various aspects, and I would welcome answers later.
It is a little like talking when the water has long since flowed under the bridge, but I have never been an enthusiast for the imputation tax system. In a long scenario of many things that the Government have done since June 1970 which I applaud, I have always been sceptical about the tax system. None the less, it is now a decision of the Government and I only hope that they will be prepared to look closely at its effects. When we see the taxation changes in Britain over the years, through one Government or another, it seems to me more and more difficult and increasingly problematical even to draw any meaningful conclusions of one kind or another about the effects of a particular tax structure on companies so far as distributions are concerned, or so far as retentions are concerned, depending upon one's political philsophy.
I think the disadvantage and the complexity of the imputation tax system will not be outweighed by any potential and possibly imagined benefits from a greater distribution as and when the counter-inflation policy allows a normal distribution process to resume. If one wanted to encourage that, the one thing that one should have done would be to continue to lower the central rate of corporation tax, and although it was introduced by the Labour Party it was to my mind a far more logical system than those in Europe now or the imputation tax system.
None the less, that is a minor criticism in so far as it is possible to judge the effects of a particular tax policy on the net cash flow and gross cash flow in a company. It is also difficult to be dogmatic about it one way or the other. I hope the Treasury will be able to give assistance and advice to many individual companies which are still in a genuine confusion about the effects of the imputation tax system on themselves, especially if they derive any earnings from overseas.

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I turn to the motor car tax, which was confirmed by my right hon. Friend at 10 per cent. The combination of the car tax at 10 per cent. and VAT at 10 per cent. is a considerable reduction on the rate of purchase tax at 25 per cent., following a reduction last year—if I am right in my recollection—and a considerable improvement on the rate of purchase tax prevailing on motor cars when the Labour Party was in power. None the less, I am one of those excessive optimists who hope that the car tax itself will eventually disappear, either in steps or in one go.
I think I am right in saying that in Table 9 of the Financial Statement, relating to tax receipts, the estimates for 1973–74 net on a partial year basis are about £120 million, and presumably somewhat more than that on a full-year basis. That is not a large amount of money emanating from this tax. Taking the totality of the Budget and the totality of the net borrowing, it would be possible to see the practicality of suppressing this tax. I hope that it will be a temporary measure—not that the Government have indicated that it will be, but clearly if one wants a logical system it should apply to all goods and services with the exceptions, which so far Parliament has welcomed, of particular categories, and I do not see any logical reason for the car tax to persist.
Despite the administrative burden of so doing and despite the fact that Treasury officials, the Inland Revenue and Customs and Excise have all been over working and are therefore reluctant to take on more, I hope the fact that interest relief on credit and credit-sale transactions is not available for under £35 of interest will eventually lapse because, despite the administrative burden of covering all the tiny transactions, it is inequitable that we should have this kind of provision. That is a minor point but a necessary one.
I now wish to refer to the remarks of my hon. Friend the Member for Leek (Mr. Knox), who is not in the Chamber at the moment. By now it is well known that my hon. Friend the Member for Leek is not only merely keen on economic growth; he is a fanatic about economic growth. We on this side of the House should pay tribute to him for what was an outstanding economic analysis of the problems facing us. One of the things
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which have always concerned many people outside the House—perhaps more outside the House pro rata than inside—and have worried me over the years is that we do not seem to have established in our minds as a psychological factor the acceptance of the overriding priority of economic growth. On this occasion I believe that my hon. Friend uncharacteristically was rather modest and cautious.
I should like to see as a target a higher rate of growth than the 5 per cent. commitment which apparently exists—not that I believe that it can be higher than the 5 per cent. level now or in the foreseeable future. There are too many alternative problems facing the Government's economic policy for that. But in the future the country must face up to the daunting, sobering but none the less unavoidable challenge of trying in one way or another over the long term to resume a rate of economic progression which will once again narrow the gap between ourselves and principally our European competitors and friends and other advanced industrial societies.
I very much fear for the future of this country, even in purely sociological terms, if we do not express the growth philosophy with the frank zeal which my hon. Friend the Member for Leek shows on these occasions. If not, we shall be in trouble over the long term. It is easy to say that a combined collection of short terms means only a long term and that we should face only those factors which will arise in the immediate future. That would be fatal, and the Government are aware of that. The economy is not only capable of a 5 per cent. rate of growth this year but is capable of doing that and more next year.
There are already some indicators that the rate of growth in the economy could at this time be in excess of 5 per cent. That is encouraging, and I only hope that the Government will continue this commitment. I hope the Government will be bold about the balance of payments. I know that it is difficult to talk about these matters now and it is impossible to talk about currency matters whilst this week's discussions are going on.
If I may refer to my right hon. Friend's statement yesterday, reported in column 246 of the OFFICIAL REPORT, when he mentioned the tremendously encouraging surplus on invisibles now running at £700

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million per annum, he refrained from giving any figure for any estimate of the visible trade deficit which he mentioned as likely to persist throughout the year. That is the normal pattern and it is difficult to quarrel with it. There are fairly obvious reasons why no specific figures are given because they can cause difficulties. They can have an effect on confidence.
Perhaps I am too ambitious. None the less, I would be glad if the Minister would be bold about this and give an indication of the figures which he and his right hon. Friend have in mind. So far as I can recall from the ensuing comments last night, nothing was said, and nothing so far has been said today. I say this not because I wish to be mischievous, and not because I do not wish to acknowledge the importance of being cautious about the balance of trade estimates bearing in mind the overall repercussions. I say it for precisely the opposite reason—because I believe that the obsession with the balance of payments is in danger of growing once again, although the currency is now on a different basis.
To my mind, far from being dangerous in the traditionally accepted sense, it is very sensible to talk about these figures and in that way to defuse the danger. I say it, above all, because I believe that the figures of current visible deficit which have appeared from one source or another—£850 million from one quarter recently, and the original alarmist forecast of £1,000 million in the London and Cambridge Economic Bulletin—should be defused and neutralised so that they do not create an overall alarmist effect.
It seems to me that we should now be sophisticated enough to say that the character, structure and style of the United Kingdom economy, its overseas trading obligations and the position of its currency—subject to what emanates from any discussions this week—are such that, by and large, this country will incur a fairly sizeable trading deficit, and the main thing to ensure is that we have a healthy progression of exports. There are now encouraging signs in this latter respect, and I consider that we ought not to be excessively concerned about the level of the trading deficit itself, so long as it does not get out of hand. Taking one year with another over the long term,
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if this country is able to trade with a small visible deficit, the position is satisfactory.
We have made many mistakes over the years, disastrous and easily avoidable mistakes, by being obsessed with the idea of behaving, as it were, as a proper creditor in local bank manager terms. But this is not the rôle and function of a sophisticated society with its many obligations.
8.12 p.m.
Mr. Tam Dalyell: The hon. Member for Harrow, East (Mr. Dykes) extended his sympathy to the Opposition in having to reply to such an excellent Budget, as he saw it. I always remember the late Iain Macleod telling my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), the then Chancellor, that a Budget which looked good in the spring almost invariably looked bad by July. I will make a bet with the hon. Member for Harrow, East. When he and I are sitting in that hot and sticky Committee Room 10 at the beginning of June, he will not be nearly so happy with this Budget. I believe that, far from being neutral, the Budget is reckless to the point of irresponsibility, and a gamble which should not have been taken.
I recall—this is the only vituperative comment I shall make—that last year's Budget was cheered to the echo. But let us not misunderstand the situation. It was the effect of that Budget and the measures within it—the give-away to a whole sector of society which could afford to do without it—which led to the present situation, with the civil servants striking for the first time in their history and the hospital workers in a critical situation in West Lothian and many other places tonight. If the Budget looks good to the hon. Gentleman today, that may well not be as good an omen as he thinks it is.
I turn now to the question of the public sector borrowing requirement, which has risen from £2,855 million to £4,423 million. Some of us doubt whether selling to the non-bank public is more than tinkering with the problem, and we believe that the various ingenious ways of selling to the non-bank public are almost certain to fail. Is there any evidence that these eight measures are attractive enough to

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the non-bank sector to implement the policy which the Government desire?
I put to the Secretary of State in an intervention that there will be a sharp increase in interest rates, after allowing for the expectation of rising prices. It was clear that the right hon. Gentleman could not answer the question which I put about the effect on interest rates in the summer and autumn of this enormous borrowing requirement. Perhaps the Financial Secretary can do better when he winds up the debate?
As it was clear that the right hon. Member for Worcester (Mr. Peter Walker) could not answer the question, I ask again now what the effect on interest rates will be, because I thought that the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was more right than most of us would care to admit when he talked in terms of an interest rate war. Will that not be the situation if there is a failure to do something about the borrowing requirement?
In the same context, is it not fair to say that in all that the Government have said about their Budget so far there has been an absence of money supply targets? I find this worrying. Anyone who is concerned about these matters, whether Friedmanite or not, must be concerned about the money supply, and we detect in the Budget no definite guidelines as to what the policy is.
The truth is that the Government are in a frightful fix, because, as the Financial Secretary knows, the Chancellor knows, and many others know, the frank answer in this situation would be to increase taxation. Here lies the difficulty. If one increases taxation, how can one operate a counter-inflation policy? The dilemma is real.
I hasten to say that I am not one who has ever said that there is an easy way out by somehow getting the money which is needed from the very wealthy. I put a slightly different argument. Last year, the tax changes benefited people with large incomes, and in this Budget the Chancellor has refused to withdraw those concessions. We have the contrast between no increase in family allowances and the continuance of disaggregated income for rich children, the money given away in stock options, and so on.
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It is not sufficient of itself, it is no panacea, to say that the Chancellor should have gone back on his give-away to the rich last year. But it is a prerequisite for any increase of taxation which some of us must frankly say is necessary. We cannot have an increase in taxation on those, say, above £40 a week without going back on all the giveaway to the really wealthy last year. Cancellation of the give-away, therefore, is a precondition for the policy which I believe has the best chance of success, namely, some rise, though not a dramatic rise, in personal taxation.
I emphasise once again, less it be misunderstood, that in the context of the basic economics with which the Treasury has to deal I am not saying that the cancellation of last year's give-away is sufficient of itself. It is not. But unless it is done any increase in taxation such as I suspect may be necessary in June or July cannot be carried out. That is the argument, and I leave it at that.
I wish now to put a specific point to the Treasury about public sector borrowing. I do not propose to go into Concorde, post-Apollo or many of the other projects, but I must say that I think it high time that the Treasury interested itself in the lending to International Computers Limited. I have it on the authority of people I trust in the computer industry that what at the moment is a figure of £14 million, and is generally increasing, will over a decade rise to £100 million or more. I repeat the figure—£100 million plus. I have it on the judgment of people in the computer industry not connected with IBM whom I trust in these matters. We have to think very early of the price we are prepared to pay for a British computer industry. At least, it should be discussed. It would make a very good debate or a very good investigation by a Select Committee again. Here a valued judgment must be made: are we sure we are prepared to Day that amount of money over 10 years for a British computer industry, rather than put our eggs in the IBM basket. It may be that we are prepared to pay for a British computer industry.
The Financial Secretary is here and it would be churlish of me not to say that I am glad about the arrangement for

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children's shoes after all those questions I asked and all the speeches I made in Committee. I am glad that it has been done. I do not know whether the Financial Secretary can claim virtue for not doing something which was ill-conceived in the first place. Nevertheless, I give him the benefit of the doubt and I say. "Thank you".
There is one matter about which I wish to be churlish and it concerns the share savings scheme. It is quite true that in Committee last year I asked many questions at some length to, I think, the Chief Secretary to the Treasury, about whether the share option scheme could be extended to everybody working in a particular industry. At the same time I expressed grave doubts about the whole concept. I should like to return to those doubts. The Government say that there should be a chance to buy shares on specially favourable terms for as little as 70 per cent. of the normal price ruling when a man joins the scheme, and that he could still retain the option at a later date either to take up his shares at a profit or to keep his savings in cash, which would provide a system of save-as-you-earn payments.
All this in a package looks good but on further examination it is highly suspect. First, though it is true that there will be protection against a fall in the value of the shares during the saving period because there will be a right to opt out of the share purchase when the SAYE contract matures and instead to keep the cash proceeds, nevertheless, there is no protection—nor can there be—once the shares have been acquired in full by the employee. Those of us who have something to do with Rolls-Royce shares know of the very grave problems involved.
All right, it has been successful in the United States perhaps, in a different context, or has it? The Americans have doubts about their own experiences. But given our set-up, I have considerable doubts about the scheme, partly because it is a drag on mobility. When a man of 30 or 40 finds suddenly that his face does not fit in the firm to which he has been attached for 10 or 20 years, I am not sure that he should be bound to that company. I ask the Treasury therefore, to say that it can make real provision for transfer rights. I am unhappy about shares which have no dividend or voting
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powers and I am unhappy about the question of transfer rights.
Even supposing that it is a good scheme, that it will create a greater sense of loyalty and hard work, I cannot think in the present situation that it is unobjectionable to do this in private industry and not to make similar advantages available, if they are advantages, to hospital workers, post office workers, teachers, and those who by the very nature of their employment, cannot benefit, if it is a benefit. It is for these reasons that I pour a good deal of cold water on the proposition.
My right hon. Friend the Member for Norwood (Mr. John Fraser) raised the question of public service workers and the civil servants, and I agree that some serious thought has to be given, along the lines that he suggested, perhaps in a debate or in some other kind of investigation, to each occasion when various promises which we had thought were biparty are broken. Once one goes back on Priestley and that kind of idea, either there must be a debate in the House or we must return to the original promises.
I regret very much a Budget that not only does not make proper provision for payment to those who are in immediate crisis but does not make a proper provision for the long term for those who by the very nature of their employment cannot benefit from the kind of scheme that the Chancellor has put forward. We must be serious about Priestley because the Government's answers have been wholly unsatisfactory.
I turn to the regional question. The Chancellor said
"…specific additions to programmes contrated on the regions, and those additions run down rapidly after the coming financial year to 1973–74."—[OFFICIAL REPORT, 6th March 1973; Vol. 852, c. 249.]
I wonder whether the Financial Secretary will expand on the answer that the Secretary of State for Trade and Industry gave me this afternoon when he said that discussions were going on on the phasing out of REP. I refer, as did my right hon. Friend the Member for Leeds, East (Mr. Healey), to the discussions which he and I and a number of our colleagues had with Lord Stokes, George Turnbull, Ron Ellis, John Barber and other senior members of Leylands. I am surprised that the

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Secretary of State should say that the motor industry had never complained to the Government, because Leylands said to us, and it is public and can be quoted, "All right, let us expand but we want a Government which is a bit more cosy for us in that it gives us a warning".
As the Financial Secretary knows the big truck and tractor factory is in my constituency which is Bathgate. A warning of Government measures must be given to the motor industry so that its investment plans can be adjusted so that it will not be faced with a situation which means an influx of a great many foreign vehicles. If Leylands, like others, wishes to return to REP—it was stated publicly that it is an extremely important part of its investment programme—and if the talks are going on at the eleventh hour, I shall not turn round and say that we shall have a great victory if the Government agree to continue the scheme. I just plead on behalf of the areas like Scotland that the REP, which has worked well and has brought some sense of continuity into investment programmes, be looked at favourably and also that there should be some consideration given to warning the motor industry of changes in policy.
The Financial Secretary to the Treasury (Mr. Terence Higgins): The hon. Member will appreciate that one of the main problems under the previous Government was the rapid fluctuation—generally in an upward direction—of purchase tax. He will understand that the change to VAT and the car tax—for the reasons I explained last year, that if there is any need to change the level of tax on cars it is likely to result in smaller fluctuations than on previous occasions—will mean that the industry can therefore invest with more confidence than before.
Mr. Dalyell: In candour I must say—or is it hindsight?—
Mr. Higgins: Both.
Mr. Dalyell:—in candour and in hindsight I think that there was too much mucking around and changing under my own Government. I think this is what happened in the 60's and we should learn our lessons. All I am saying is that for heaven's sake let us pay the motor in-
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dustry the compliment of warning it of changes in good time so that it can be in a competitive position, because with the upturn in the number of vehicles coming into this country we ought to be prepared so that we can at least compete on equal terms not only with our continental friends but also with the very formidable Japanese competition.
I should like to ask the Financial Secretary why the Chancellor in his Budget judgment did not decide to put up the tax threshold. I am baffled by this, because it seems that this Budget will hit many of the poorest members of the community by not helping them with allowances against inflation. A good deal has been said about fiscal drag. The fact is that tax-free allowances set off some of the cost of inflation. It is the poorest members of the community who benefit less than before. So I ask this as a question. Why was it that it was decided not to raise the tax threshold? I would have thought there would be some administrative advantages to the Revenue in raising the tax threshold.
Incidentally, while talking about the Revenue, I should like—and I make no apology for doing so—to pay a considerable tribute to the work of the East Kilbride tax centre. It gets many brickbats, especially from the Press. I should like to say that I have found the uttermost co-operation, quick, well-informed and helpful, at East Kilbride and I would like the Financial Secretary to let it be known to the East Kilbride staff, who, incidentally, are not my constituents and do not vote for or against me, how helpful they are.
I ask a question on VAT. Why is it that small companies seem to have been left out of the transitional arrangements? This is the complaint they have been making. They say that they are left out of the transitional arrangements, and that those arrangements work to their disadvantage. Perhaps the Financial Secretary would comment on that.
Mr. Higgins: I wonder whether the hon. Member would spell out what he means. I am afraid I have not quite caught it.
Mr. Dalyell: The representations we have had are that small companies under the VAT transitional arrangements are not at the same advantage as major firms.

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They say those transitional arrangements operate to the disadvantage of the small companies.
Mr. Higgins: Does the hon. Member mean the companies with taxable turnover of less than £5,000 a year?
Mr. Dalyell: Yes—the CBI.
Mr. Higgins: If so, the answer is that they will not be paying VAT on output tax thereafter.
Mr. Dalyell: I am not clear what the turnover is of the people who have made representations to me. I will find out more about it and write to the Treasury. This may be an ill-conceived complaint. I put it only as a question.
I come to North Sea oil. As a former member of the Public Accounts Committee I can only pay tribute to what our parliamentary colleagues have done on that Committee. I would like to raise an issue which, to my knowledge, has not been raised before. This concerns land speculators. It is associated with the finding of oil in the North Sea. The fact is that one particular firm seems to have acquired a considerable part of Shetland, which is valuable for North Sea operations, and also extensive land holdings in the Cromarty Firth area, and is now trying to acquire areas in West Scotland which would be a good springboard for the Celtic Sea for getting any oil which is found in the Western Approaches. This may be all very well, but after all that has been said about oil companies, I should like to ask whether the buying up of land by a particular firm is right, whether it is right that it should put pressure on the oil companies to pay exorbitant prices for land once it is acquired.
The Shetland islanders, whom I like very much indeed, are very secretive people about their own business. For anybody who knows the Shetlands the truth is that Shetland people are a very secretive lot. On the whole one does not tell one's neighbour in Shetland what one is up to, and, lo and behold, they have now awakened to the fact that this single company has purchased a substantial part of the land—one neighbour not knowing what another neighbour was doing. It might be a comic opera situation, but it is not at all so funny, because what is at stake is not only the
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future life of the Shetland islanders but whether it is right that those who operate in land, however shrewd, able and hardworking they may be, should make excessive profits at the expense, in this case, both of the oil companies, and, indeed, of the people of Britain as a whole
I should like the Treasury to interest itself, in the formidable way that Great George Street can in the land speculation that is associated with Scottish oil and to ask the Scottish Office, the Department of the Environment, the Department of Trade and Industry to join in a co-ordinated departmental inquiry into the ethics and the legal aspects of what has happened about the acquisition of land which would serve as a springboard for finds near the Shetlands, in the Cromarty Firth and off the Western Approaches. I echo what my right hon. Friend the Member for Birkenhead (Mr. Dell) and others have said about the fourth round licences.
We are told by the Sunday Telegraph that the Government have decided to order three through-deck cruisers. As they cost at least £60 million a time, I question whether that is wise public expenditure.
If the Secretary of State for Trade and Industry thinks that our Far East markets will expand dramatically, he should disabuse himself of the idea that we can extend o r trade with China to a great extent. As the Financial Secretary knows, I had the good fortune to go with the Scottish trade delegation to Peking. There is no more ardent supporter of British trade with China than I, and I wish the trade fair in Peking well, but the Secretary of State should not think that trade with the Chinese is the panacea answer to our overseas trade problems.
When the Finance Bill goes to Committee Room 10 I shall pursue in detail and at length the ways in which pollution legislation call be geared to the fiscal system. The Financial Secretary and his advisers helpfully wrote many letters to me last year, so I am stocked up with a great deal of information. I warn the Financial Secretary that this weekend I shall be going to the Anglo-American conference on pollution at Ditchley Park which will be attended by American congressmen—McClosky, Mosher, Professor Paul Doty and others, full of admiration

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for Senator Muskie's Bill and Mr. Ribicoff's legislation.
I hope that my hon. Friend for Heywood and Royton (Mr. Joel Barnett) will not keep me off the Finance Bill Committee for saying this, but I shall come with bundles of information accumulated from Ditchley and elsewhere on ways in which the fiscal system can be geared to more effective anti-pollution measures for the protection of the environment. The Treasury has been warned, and I hope it will give some thought to it—it might even introduce a clause into the Finance Bill.
8.40 p.m.
Mr. David Crouch: I was interested to hear that the hon. Member for West Lothian (Mr. Dalyell) is going to Ditchley this weekend. I am sorry that I shall not be with him. I was invited but I have other engagements. I would have liked to have been there to confirm that the hon. Gentleman is not really so gloomy about our prospects as he sometimes sounds in this Chamber. It has been said of my hon. Friend the Member for Leek (Mr. Knox)—a fellow Scot—that he is a fanatic who lives up to his name. I think he is a fanatic. But sometimes in our debates, particularly on the economy, the hon. Member for West Lothian fills me with an air of depression if not gloom.
For example, in referring to the Chancellor's share savings scheme the hon. Member used the phrase, already used by others, that it might create a lack of mobility of labour. I cannot see how this can be so because it is so easy for a person in a share savings scheme who chooses to move to get out of the scheme by taking his savings in cash. That is how I understand my right hon. Friend's proposal.
We must try to see most of the proposals put forward by any Chancellor in at least two ways. First there has to he a conservative approach, and secondly a more generous approach. In this case I agree with the right hon. Member for Devon, North (Mr. Thorpe) who said today that it was an important step in the right direction.
I am pleased about three elements in the Budget. I am glad about the Chancellor's determination to continue with a high rate of growth. This was the most
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important and overriding element in his statement yesterday. I was concerned beforehand that he might have felt that he should not continue with the rate of growth which we have now achieved. It is remarkable, with all the vicissitudes on the industrial scene and the world monetary scene, that we have been able to gear ourselves up, thanks to the Chancellor's measures, to a growth rate of 5 per cent. I am glad that he has given such a clear indication that he is determined to keep that up for a long time.
It pleases me too that the Chancellor did not have cold feet about VAT. If ever a new tax has been given the wrong publicity by the Press and by many other spokesmen it is this one. This is an across-the-board tax and we now know that the Chancellor has fixed it at 10 per cent. I am glad that we have one rate and not two rates, as is the case on the Continent, and that it is not 12½ per cent. or 7½ per cent. The Chancellor has stuck to his guns and has not deferred this tax. I could not understand the right hon. Member for Leads, East (Mr. Healey) suggesting—and this was the only constructive thing he said—that the Chancellor should defer the introduction of the tax. He did not say what other form of taxation he would have continued. He did not say whether he would have continued with a half-rate SET or a half-rate purchase tax. All that he could offer us was that he would not have done anything because he had cold feet.
The hon. Member for West Lothian spoke of the North Sea oil and gas revenues and the failure of the Government in recent years to take a sufficient share from those facilities on the North Sea shelf. I accept the Chancellor's decision and the recommendation of the Public Accounts Committee. The Government were not entirely wrong to be so generous in deciding not to recover more taxation. At least the exploration was done rapidly. There has never before been such rapid industrial exploration and development. I have had close briefings from some of the oil companies and the Gas Corporation about this and I feel that when the public know what is happening in the North Sea, especially the northern part, they will realise that the work done in the last five years has laid the foundations for an

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entirely new future for Great Britain. By 1985 the North Sea will be producing enough oil to make us self-sufficient. In three years from now in the gas industry we shall be using only North Sea gas. The Government were not altogether wrong in having a rather less tight tax arrangement, thus encouraging such rapid development.
About a week ago I recorded with a certain Mr. William Hardcastle a speech on the Budget of about one minute in length which, I understand, was put out yesterday while the public were waiting to hear what the Chancellor was saying. A number of us had been asked what we hoped for from the Budget. My present speech will last rather longer, but in that one minute I expressed the hope that the Chancellor would do two things. I was rather schizophrenic because I wanted him to spend more in one direction while curtailing expenditure in another. My disappointments are that he has done neither. Perhaps it was a pity that he did not hear my one-minute speech before making his Budget speech yesterday.
I wanted my right hon. Friend to spend more of the taxpayer's money on those who today are finding it very difficult to meet the sudden rise in the cost of living which has occurred in the last year, particularly in food prices. I had hoped to see an additional sum allocated to family allowances. This to me was the most readily available mechanism for meeting a real problem which everyone of us faces today.
Only the other day in a radio broadcast I heard the Prime Minister's housekeeper saying that she had to ask for an increased allowance from the Prime Minister himself. The same has happened in my family. The same happens in every family. To every retirement pensioner, every young family and every family with children this is a problem of real magnitude and I am sorry that my right hon. Friend did not see fit to do as I suggest.
Mr. William Baxter: I am interested in the hon. Gentleman's line of argument. He welcomes VAT which replaces a tax which made the more or less wealthy pay a higher rate on such things as jewellery and furs. That burden is now being spread to the poorest of the poor, who, when they need household linen and other goods, have to
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pay their proportion of VAT. The hon. Gentleman weeps crocodile tears about the great burden which is being placed on those people. Does he not recognise that the greatest burden is being placed on the poorest of the poor by VAT?
Mr. Crouch: I will leave my hon. Friend the Financial Secretary, who is perhaps the greatest expert in the House on this question, to deal with the hon. Gentleman's interjection. I believe in VAT, because I believe in a type of indirect taxation which involves an element of choice in payment. What is excellent about our version is that we are not putting it on the essential requirements that we buy each week, such as food, as distinct from the practice in some of the Common Market countries.
My second disappointment is that I had hoped that the Chancellor would announce a reduction in public expenditure. I must confess that I am one of those who for a long time have felt that the annual rate of public expenditure is too high for our economy to bear. Towards the end of his speech the right hon. Member for Leeds, East hinted that perhaps the Chancellor would bring forward another Budget at the end of the year. My right hon Friend said very strongly that he did not intend to do so but hinted that he was not overlooking the problems, of which expenditure was one, and would not hesitate to take the necessary action if he felt that expenditure was running at too high a rate.
Expenditure is something that we must consider. If the Chancellor is satisfied with it now, I hope he will institute considerable studies in depth to assure himself that we are not overheating and causing an inflationary pressure on the economy by the large sums of public expenditure on which we are now embarked.
Mr. Baxter rose—
Mr. Crouch: My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) referred to the subsidies given to the nationalised industries which, he said, were running at £500 million a year. That distresses me very much. We cannot go on in that way. We cannot subsidise nationalised industries and produce a service to the public

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at below the correct price. We must move towards the time when the nationalised industries sell their services at the proper price. We are getting further away from the real price of the service which they sell. Gas is no longer a viable industry, and electricity is being sold at less than its cost and the industry is running up debts all the time.
We must introduce a new discipline into the management of our nationalised industries to avoid getting into a position when the Government must ultimately pick up the tab of excessive deficits into which we are running. I know the difficulty which the Chancellor faces. He must say "I cannot do it now because under phase 2 it would immediately raise the price of essential services." I agree. All I am asking the Chancellor to do is to reconsider subsidies to the nationalised industries in future. We must try to catch up with the problem and bring the nationalised industries back into economic reality.
The hon. Member for Huddersfield, West (Mr. Lomas) said that the nationalised industries should not attempt to be economically viable. That is a fallacious argument. It is true that a large sector of the services they provide is a social obligation. The House has accepted that. However, a large sector of the goods and services which the nationalised industries supply—in fact, the largest part—should not be subsidised and could be separated and sold at the economic price.
We have a massive expenditure programme still in hand for the nationalised industries sector which we have debated. I have spoken in favour of the massive support for the British Steel Corporation by means of a £300 million a year investment programme. I have supported the £1,000 million for the coal industry. Together those two programmes over 10 years total £4,000 million.
We are thinking today of very large figures. We let them trip off the tongue very easily. I am afraid that there is sometimes not the same restraint on expenditure that there used to be. It is having its effect on the nationalised industries. They are no longer so concerned about their costings or estimates. I meet them a lot as a member of the Select Committee on Nationalised Industries.
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There is no doubt that there is a considerable change. The nationalised industries tend to think that the Government are a generous supplier of finance.
We are also spending a lot of money in high technology areas—for example, nuclear energy and reactor systems. I understand that the Atomic Energy Authority has been spending nearly £1,000 million on the development of reactor systems. This is the new and exciting technology in which we must engage. We share an expenditure of another £1,000 million on Concorde. As we all know, there is a risk element in Concorde. A great amount of money has gone behind another risk venture—namely, the RB211 engine. The catalogue is there and the sum mounts up.
I am concerned above all with one area in which the Government contemplate a very large expenditure on a project which is not even adventurous. On the contrary in my view, it is foolhardy. I refer of course to the Maplin project. It was said earlier that a project costing £1,000 million as seen today is not one with which we shall be concerned in 1973–74. However, we are concerned about it in the medium and the long term and to spend £1,000 million on Maplin will buy us nothing. It is not even a high adventure, like the Concorde.
I believe and have said many times that it is a wrong project; it is wrongly conceived. I am glad that it is to be examined in depth by a Select Committee of this House which, I hope, will study every possible aspect of it, hear all the petitions against it and report back to this House eventually so that we may know exactly what the Select Committee's deliberations arc. I hope too that the Government will think about this. I ask the Treasury and my right hon. Friend the Chancellor of the Exchequer to think about Maplin. I want to see my right hon. Friend exercising a restraining hand on these vast expenditures. That is what I expect of a Chancellor of the Exchequer. It may be that my right hon. Friend's hand has not been sufficiently strong in the past in this way.
I know that there is about Maplin more than an airport. A seaport will be attached to it. It may be that a seaport there would be viable. The Port of London Authority believes sincerely that

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a seaport is an essential development of its whole complex. It wants to move down the estuary and build at Maplin a seaport which is comparable to Rotterdam. It is prepared to finance it. It is not looking to the Government for money. But it will depend on the Government to provide the infrastructure, and it is that which is so expensive for the Maplin complex. It will cost £500 million, before an airport is built, to construct the necessary road and rail links, and it is that £500 million worth of expenditure which the Port of London Authority will enjoy. However, my real criticism does not concern the seaport so much as the airport. I criticise the vast expenditure proposed against a very indifferent prospectus of return.
There is another area on which I am concerned to see that the Government do not embark and which they should not accept readily if the proposition is put to them. I refer of course to the Channel Tunnel. We have heard it said all along that the French railways want it. British Railways have said that they want it. The French Government have said that they want it, and I believe that the British Government are about to say that they want it—
Mr. Baxter: On a point of order, Mr. Deputy Speaker. Are those two propositions included in the Budget?
Mr. Deputy Speaker (Mr. E. L. Mallalieu): It is a very wide motion and these are very large expenditures.
Mr. Crouch: Thank you for your protection, Mr. Deputy Speaker. All that I ask the Government is, in their consideration of announced expenditure programmes and possible future programmes, to consider very seriously whether we can afford such additional expenditure programmes as the Channel Tunnel. I believe that it will be yet another candidate for the White Elephant Club.
I hope it will not be thought that when my right hon. Friend the Chancellor of the Exchequer gives a nod on these matters it is as good as a wink. I hope he will begin to use his iron hand on these matters concerning public money. I want the chairmen of the nationalised industries to feel that the Chancellor has an iron
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hand. I want my right hon. Friend the Secretary of State to feel the iron hand of the Chancellor. I want my right hon. Friend the Secretary of State for Trade and Industry also to recognise that the Chancellor has an iron hand upon some of the areas of expenditure where his Department might be perhaps over-enthusiastic. Above all, I want the economy to feel the result of my right hon. Friend's restraining hand on any expenditure which may look like a risk which we should not be taking.
We must consider this Budget along with phase 2 and phase 3 of the prices and incomes policy. I believe, as my right hon. Friend said this afternoon, that if we can get over the hump of our present difficulties in the next six months with so much going well for us—we have a good rate of growth; expansion and investment have really got under way again—and with recognition of this by the CBI, both private and public sector employees and the TUC and its members, there is a chance for Great Britain thanks to this Budget and the prices and incomes policy.
9.0 p.m.
Mr. Denis Howell: No doubt the House will be surprised to find me winding up today's debate on the Budget—no more surprised than myself—but there are two matters of considerable importance to which I wish to refer—first, the new land hoarding tax and, secondly, the Government's proposals about rating revaluation.
I find it odd that both these matters should find their way into this Budget. It is a measure of the lack of substance in the Budget that these two matters, which are causing concern throughout the country, had to be planted in the Budget to give it any semblance of relevance to our social problems.
The Secretary of State for Trade and Industry made a typically rumbustious speech today. We always enjoy his speeches. However, I was extremely sad that he should think it right to lecture hospital orderlies and cleaners about their wage demands in terms which were inaccurate and may be bitterly resented by a class of workers to whom the nation as a whole owes a great deal and who are being driven to the point of absolute distraction.

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The right hon. Gentleman is usually fair-minded. If he thinks, for example, of the male domestic workers in our hospitals earning £17·65, of the people running hospital kitchens earning £18·10, and of the male porters working a 40-hour week earning £18·56, whose take-home pay, after deductions for superannuation, tax, and so on, is only a little over £14 a week, he will realise what a disgrace that is to the country as a whole.
It is true that these matters should have been dealt with years ago. I think that we are all in favour of giving increases to nurses, doctors, teachers and hospital orderlies, but generally against providing the taxation out of which our public servants can be properly recompensed. The right hon. Gentleman's reference to these workers was extremely unfortunate.
We heard a remarkable speech by the Leader of the Liberal Party, who cannot be here this evening. I make no complaint about that, though I think that he might have spared one of his colleagues to attend. I understand that the right hon. Gentleman cannot be here because he has gone to the Central Hall to launch the local government policy of the Liberal Party. I thought that was what he was doing this afternoon. I can only hope that what he is doing at Central Hall is more relevant than what he did in Parliament this afternoon. No doubt as he had a good turn out on the Liberal Benches then, that explains why they have gone to hear him a second time.
The right hon. Gentleman made some astonishing assertions. He complained about the Labour Party's attitude to what he called "workers on high pay", whom he said we continually support.
When asked to give an example, he referred to the gas men. They are the workers on high pay whom the Leader of the Liberal Party is attacking the Labour Party for supporting. I do not think that the right hon. Gentleman was saying that last week when he was going round Chester-le-Street trying to get votes for his candidate.
Another of the right hon. Gentleman's statements which caused me to lift my eyebrows considerably was that the Liberal Party had been doing a survey on the low paid and had found a secretary
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in Durham who was earning £10 a week. I have to declare an interest. I happen to be president of the Association of Professional, Executive, Clerical and Computer Staff which organises the employment of secretaries throughout the country. As the right hon. Gentleman referred to this case, I rang Newcastle to find out the current rate of pay in Durham and to ascertain the accuracy of the right hon. Gentleman's statement. I am glad to be able to report to the House that the going rate at Newcastle and in the North-East generally is £18·60 at the age of 18 for a properly qualified secretary. For adult secretaries, the rate is between £21 and £23.
I had intended asking the Leader of the Liberal Party what he intended to do with his survey now that he had it. Either he is incapable of interpreting it, or, if it is a fact that he has discovered a secretary earning £10 a week, he has an obligation to advise that lady to join my trade union. I hope that I may be forgiven that commercial. If this is an authentic case, it must be one of the worst examples of exploitation to be drawn to the attention of the House for a long time. It may be that like so many of the utterances of the Leader of the Labour Party—[Laughter.]—the Liberal Party. That was not a Freudian slip. No doubt the right hon. Member for Devon, North (Mr. Thorpe) would like to be the Leader of the Labour Party. We ought not to pay too much attention to him on this matter.
I know that the Financial Secretary expects me to say something about the imposition of VAT on sport. The hon. Gentleman has represented his country on the sports field with great distinction, but he has disappointed all his friends in the sporting world. There is a strong feeling of resentment in British sport that all the pleadings of the sporting bodies have been rejected by the Government and that VAT is to be imposed on sport. It will mean a considerable handicap to professional sport—soccer, cricket, and so on—but it might be an absolute knockout blow for most of our amateur sports and semi-professional sports such as rugby league which my hon. Friend the Member for Pontefract (Mr. Harper) cherishes and always refers to when we discuss sporting matters.
I am sure that everyone was sad to read in the papers this week about the

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women's cross-country team that is taking part in the world championships. What has happened is a national disgrace. Not having the financial resources to enable them to get to the venue in time to rest properly before taking part in the championships, the members of the team have had a whip round and put in money themselves in order to be able to travel overland in a Land Rover. This is a shocking state of affairs.
The 10 per cent. tax on sport makes nonsense when it comes to taking the money at the gate. I ask the House to imagine 60,000 people trying to find 1 p or 2p in order to get into the Arsenal football ground. It will be a physical impracticability for this tax to work well where large numbers of people are going in to watch sport. But the main complaint against it from all the sporting bodies is that sport is an essential part of the national environment and it has been treated badly. For the first time for many years, it is to be taxed, and there is considerable resentment about it.
I want to turn now to the two provisions in the Budget that affect local government. The first is the land hoarding tax. The most that any of us can do about that tax is to welcome it as a gesture in the right direction. It is nothing more than that—it is not a tax with any substance—but at least the Government are acknowledging the position. Indeed, when one considers the problem of people who hoard land or the failure of builders to get land in the right place to build houses for young married couples or of local authorities in our crowded urban areas to get land to build houses for people who are homeless or overcrowded, one wonders what is the relevance of the tax.
The Government specifically ruled out this tax only a few months ago on 9th August, when the right hon. Member for Brighton, Pavilion (Mr. Amery), speaking as the Minister for Housing and Construction, referred to a question about hoarding land and said:
"I doubt whether there is a great deal of serviced land hoarded at present."
So, as the Minister responsible, he was denying the problem. He went on:
"The problem is not so much about land being hoarded and how to get it into circulation."—[OFFICIAL REPORT, 9th August, 1972: Vol. 842, c. 1811.]
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He specifically ruled out the prospect of a tax. One is bound to ask what has changed since the right hon. Gentleman made that speech.
The second point about this tax is that it completely lets the speculators off the hook. The real speculators are the people who get hold of land, parcel it up, get planning permission and then flog it at extravagant prices to local authorities and others who must have it. This tax is totally irrelevant to that problem. Indeed, in August 1972, acknowledging the problem—I am glad he did—the Chancellor used the word "offensive", about the "gross profits" being made by speculators. If those gross profits are offensive, why have the Government done nothing in the Budget to deal with them? This tax will have nothing to do with the offensive profits that the Chancellor admits have been made.
The Financial Times on 23rd February this year reported that there had in one year been an increase of 52 per cent, in the profits of property companies. No wonder that these profits were grotesquely offensive. Again, that is the measure of the failure of the Budget to deal with one of the greatest social evils of our time.
Mr. Eadie: I think that my hon. Friend is on to an important point. Would he bring out the difference between land zoned for housing purposes on the development plan and the proposition by the Chancellor which is entirely different, since zoned land will not be affected by the Budget proposals?
Mr. Howell: I am grateful to my hon. Friend. I shall touch on that point among the other things I want to say about this tax, although not quite in that direct way.
What all the pundits seem to believe about this tax is that it will be totally unworkable and will solve no problems. First, anyone can apply for planning permission. One does not have to own land to apply for planning permission. Let us just think of the situation which will be created when someone else can apply for planning permission on one's land and, having got it, if one does not develop that land one will be taxed on it. The Chief Secretary shakes his head, but that is the situation as I see it. I hope that

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that sort of matter will be dealt with. The hon. Gentleman may shake his head, but certainly we ought to have had a much more adequate statement about the way in which this tax is to be interpreted. It only proves my point that it is just a political gimmick and that that is why it has found its way into the Budget.
I come to another matter. A man may own a piece of land somewhere, probably next door to his house, and may want to test the market price of his house. The way to do it is to apply for planning permission and to find out what is offered for it. That is a perfectly honourable practice. If a man does that under these proposals he will be taxed for just finding out the value of his land and whether he could have development permission for that land from the local authority.
Builders need a land bank. If a successful builder wants continuity of employment for his work people, he has to have land. If he wants to build about 10 houses a year—most of our building industry is comprised of small concerns—he will be taxed if he is proven to have enough land to keep his employees in work for seven or eight years. That is a piece of nonsense.
Many builders who have planning permission cannot get ahead because there are no sewers. Perhaps the local authority has not provided drainage or, perhaps, there is no access road to the land for which the builder has planning permission. How do the Government intend to deal with that sort of situation? Will they impose this tax on a builder who has planning permission but who cannot build through no fault of his own but probably through a failure of the local authority or because the owner of access land is trying to force up prices when the builder is trying to do a public service by keeping them down? It is a ridiculous situation.
Most important, this proposal totally ignores the capacity of the building industry. It also fails to deal with the most essential question of what we should do about the land speculator who is not applying for planning permission. That is the essence of the matter—the man who has a lot of land, who parcels it up and sits on it hoping that inflation will push up the price. He will not apply for
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planning permission to build. A hoarding tax which applies only when planning permission has been given is totally irrelevant to that central question. As my hon Friend the Member for Norwood (Mr. John Fraser) said, the only relevant way of dealing with a shortage of building land is to take into public ownership all land needed for development purposes. That is the only practical possibility, and the House will have to face that sooner or later.
My final objection to this tax is that it will be passed on. It is not a tax which will be paid by the speculator. It will be passed on to house buyers. It will he counter-productive. It will force up the price of houses, as we all know. That is why it is totally irrelevant to the problem that faces us.
This tax could be relevant to the problem facing the Government only if it were accompanied by the control of house prices. If house prices were controlled it might be relevant, but it is quite impracticable to control house prices. Anyone who has been in the industry or knows anything about it will know that that is so. If we are not controlling house prices, there is nothing to stop the builder or whoever is paying the tax from passing it on immediately to the house buyer.
There are no proposals in the Budget to deal with mortgages. It is a scandal that so many young married couples are being prevented from buying a house. To be able to borrow money to buy a house it is necessary to have an income way above the national average.
Another notable absence is that there is no mention of action to deal with properties such as Centre Point which stand empty. It is now months since the then Secretary of State for the Environment, in a purple passage, said that the scandal must stop—specifically, Centre Point—and that, if they did not get on and use the building, he would take action.
I turn finally to the question of revaluation. The Government propose to try to help those hit by revaluation. Some of us were present at the Guildhall on 13th December and heard the Prime Minister say:
"…it would be totally unreasonable for revaluation to be used as an excuse for increasing the total of the demands on the ratepayer."

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The Prime Minister could not have put the matter more simply or more pungently.
However, it would be impossible to find a solution to the problem of revaluation which was more hamfisted, more ineffective, more costly to operate and more irrelevant to ratepayers' needs than the one that the Government have produced after months of dithering. They propose that ratepayers shall carry, not only any burdens due to inflation and the expansion of the social services, but also the first 10 per cent. of any further burden due to revaluation, and then the Government will help as to only half of the remainder. No wonder it will cost the Treasury only £10 million.
Liverpool tells us today that 87½ per cent. of its domestic ratepayers will get nothing from this solution. Leeds tells us today that a 38·6 per cent. increase for the domestic ratepayer in Leeds is the minimum which will be required if there is to be any help under this solution. Birmingham tells me that a 25 per cent. increase will be necessary there before the Government proposal produces any relief or, to put Birmingham's case in another way, there will have to be an increase up to 2·91 times the present rateable value before help is granted under this proposal.
To illustrate the point, I will give some examples which I have been able to obtain in the short time we have had at our disposal. Consider, under the revaluation proposals, a house in Birmingham which at present has a rateable value of £63 and carries rates of £59·53. The rateable value will rise to £192. On a rate of 40·5p which Birmingham is likely to levy, the ratepayer will pay not £59·53, but £77·76, and all he will get under this proposal to assist him to meet that tremendous extra burden is £1·68—less than £1 per half year. What a ridiculous proposition to put to the House.
A pre-war council house in Bristol with a rateable value of £55 is to rise to a rateable value of £144. This will mean an increase of rates for this council house tenant of £22, in addition to the increased rent he will pay. Under this proposal he will get the magnificent relief of 67p a year on that fantastic increase. A prewar council flat in Bristol with a rateable
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value of £50 will rise to £146, which means an increase of £27 in rates to be paid by the tenant. He will get relief of £4.
Let us see how totally inept these proposals are from the point of view not only of revaluation but of the general question of rates. There is nothing in the Budget statement which helps ratepayers. I am not surprised that the Association of Municipal Corporations put out a statement today expressing its dismay that all the things which the association told the Government have been neglected. I am not surprised to find that the association made clear to the Government as long ago as last November that in the current wages policy a 10 per cent. increase in rates was the maximum considered reasonable to impose on anybody. The association expressed its dismay at the Government's refusal to do anything to meet the situation.
It is well to remind ourselves that local government is about housing the people. It is about educating their children, providing for the sick and elderly and caring for the deprived. This is not a luxury service. It is part of the essential fabric of our society. When the Government refuse, as they are doing, for one reason or another, to give help where it is most needed, they are strikiing a blow at the fabric of society. I know that the Government say they are giving 60 per cent. this year, but they are giving it mostly in the wrong places.
Mr. Higgins: Do not be silly.
Mr. Howell: The Minister says, "Do not be silly". Birmingham is not getting 60 per cent. It is getting 51 per cent. Many other of our large cities which told the Prime Minister four weeks ago about their problems are not getting anything like 60 per cent. The present rate formula is totally inadequate to meet the needs and social requirements of our cities. The Government recognise that. They say that they will try to deal with the problem next year. But it is not next year when the ratepayers will have a stop imposed on their wage increases. It is this year. Therefore, it is this year when the Government should face the situation and produce better solutions to the problem.

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In Birmingham and other places the Government's policy has placed additional burdens on the ratepayers. It costs Birmingham £1 million to operate the Housing Finance Act. Then there are interest charges in Birmingham alone. These amount to an additional £3 million this year, and they are likely to go up again. That is a direct result of Government policy.
One is entitled to express dismay at the treatment which the local authorities have received. The local authorities, in particular the six large cities, have put their problems to the Prime Minister, but they have not been listened to. They have waited week after week. Rate demands are going out. Local treasurers are in a devil of a mess. They get this mouse of a solution, a solution of revaluation, which will cost more to administer than the relief itself. It is ironic that local authorities, which are complaining about revaluation, are to be given £10 million. That is because they sell housing, education and welfare. If they were selling ice cream and lollipops the relief would have been £110 million. That is the best commentary that one can make on the social values of the Government.
The Budget proposals for dealing with land speculators acknowledge the problem but fail to meet it. Nobody in this country, either in the building industry or outside it, believes that these proposals will work. We await the further announcements of the Secretary of State for the Environment. We hope those announcements will be much more realistic because we want the Government to measure up to the size and importance of land shortage and land speculation. As to rates, we very much regret that the Chancellor has let this opportunity pass by. In the middle of a wage restraint, he is allowing a vital factor, rates, to get out of control in the way that I have described. He has failed to do anything to help the cities. He has no word of comfort or encouragement for the owner-occupier. Mortgage rates will continue to soar, and will probably take another leap this week. It is our judgment, therefore, that on these matters the budgetary policy will not help the Government in their economic policy, and it will certainly fail to meet the nation's social needs.
9.30 p.m.
The Financial Secretary to the Treasury (Mr. Terence Higgins): Although we listened with interest to the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), we do not accept what he said on the subject of rates and I have no doubt that on a later occasion others of my hon. Friends will take up some of the matters he raised. On the question of land, as the hon. Gentleman said, my right hon. Friend the Chancellor stated yesterday that the Secretary of State for the Environment will make a full announcement before the end of the month. I think it appropriate that we should listen to what he has to say on that occasion. We are familiar with the points which the hon. Gentleman made with regard to planning permissions and so forth.
I intervene at this stage in the debate to comment on the two main threads of the Government's fiscal and economic policy. In taxation our objective has been to reduce taxation and to reform our tax structure. In economic management our objective is to maintain economic growth and the improvement in living standards which goes with it and to win the battle against inflation.
I take first the question of taxation and in particular our reform of indirect taxation, the abolition of SET and purchase tax and the introduction of VAT. It is worth stressing at the outset that the Government are happy to stand on their record in relation to the general burden of taxation as compared with that of the Labour Government. In appraising the Opposition's complaints about the distribution of the tax cuts, it is well to remember that such complaints were hardly relevant in the years 1964 to 1970, when the annual tax burden was massively increased. Apart from the Budget shortly before the 1970 election and the only other Labour Budget in which there was a massive decrease of taxation—of £5 million—Budget after Budget introduced by the previous Government resulted in enormous tax increases. Given that history, I could not help but think in the debate on children's clothing a few months ago that it was a trifle curious that tax cuts equivalent to £55 million were then dismissed as trivial by the Opposition.

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On this occasion the Budget reduces revenue by about £120 million in 1973–74, but its effect is broadly neutral. The case for a neutral Budget has been generally recognised and I think that those who, like the hon. Member for West Lothian (Mr. Dalyell), have advocated tax increases and the others who have advocated reductions have roughly balanced out.
Given the scope for change this year, my right hon. Friend has been right to concentrate help on pensioners and those with large families. He announced in his Budget speech that young children's clothing and footwear are to be zero rated under VAT, and this concession has been generally welcomed. It may be helpful if I say a word or two about the proposed relief.
As my right hon. Friend said yesterday, we had reluctantly to reject relief in this sector last year, principally because of the serious abuse of the concession through sales to adults of children's clothing. But the scheme which the Customs has now devised will, I hope, substantially reduce the scope for avoidance. The new relief applies to young children's "clothing" and "footwear", not "garments and footwear", so that VAT will not apply, as purchase tax did under the previous Government at a rate of 13¾ per cent., to young children's ties, braces, belts and school caps. Another change from the purchase tax is that the law specifically excludes from VAT relief clothing suitable for wear by older persons.
The Customs and Excise is to issue a notice, No. 714, setting out in more detail the relief and how it is to be implemented. I may say that this notice is eight pages long as against the previous purchase tax notice which was 32 pages long. This notice will be posted to all those who are registered in the relevant groups and will be available in local value added tax offices.
There are two points which I should add in this connection. The maximum measurements in respect of certain garments will be deliberately reduced below the limits used for the purchase tax, and in particular the design tolerances, which had I think been excessive, will be reduced. On the other hand, we are taking care to safeguard the position of clothes genuinely made for young children. With
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a multi-stage tax like VAT it will be possible for us to control matters in a way which was not possible under purchase tax by way of reference to the manner in which the articles are sold to the final consumer.
I turn now to the question of charities. I know that although the concessions for goods sold in charity shops will be generally welcomed by the House as they have been by the charities, some people felt last year that local branches of charities should be treated as separate entities instead of as part of their parent body so that, in the jargon which we developed in Committee last year, they should be disaggregated. After talking to a number of charities concerned, however, we found that there had been second thoughts on the suggestion and attention was concentreated on a better solution—the zero-rating of the sale of goods donated to charities such as Oxfam, War on Want and Help the Aged.
That means that not only will these charities be able to sell the goods without paying tax on them but that they will also be able to reclaim tax on business expenditure such as telephone bills and stationery. No tax will be payable on sales of donated goods even if they individual turnover of a shop exceeds £5,000 a year. A shop approaching that level will not have to worry about being penalised for being more successful by taking itself into the sphere of VAT, as would happen if it were simply disaggregated.
Last year we asserted from the Treasury Bench that the changeover from purchase tax and SET to VAT should not result in any significant increase in prices and that there was no reason to suppose that the changeover would be regressive. This was true then and it would still be true now even if my right hon. Friend the Chancellor had not announced the changes in the cover of VAT yesterday. Obviously, however, the changes he announced with regard to children's clothing and purchase tax foods in particular will be of particular help to those with larger families.
Since coming into office we have made substantial reductions in indirect taxation. If we had not made such reductions it would have been necessary to introduce VAT not at 10 per cent. but at

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15 per cent. But, understandably, some members of the public are apprehensive, particularly those who feel that the changeover from purchase tax and SET to VAT will resemble decimalisation.
It is therefore worth pointing out two important differences between the changeover to VAT and the changeover to decimalisation. First, unlike the changeover to decimalisation there will be no new techniques for the housewife to learn. She will not be concerned with the mechanics of VAT but she will need to know on which items the tax burden will go up, remain about the same or go down, so that she can know what price changes to expect. That is why we have undertaken to publish details of the changes so that shoppers will have a clear guide. We shall therefore be beginning a major campaign in newspaper and television advertising, starting next week, to inform the public about changes in prices which people can expect as a result of the introduction of VAT and the abolition of purchase tax and SET.
The first advertisement showing what goes up in price, what stays the same and what comes down will appear in the Press and will cover a list of more than 150 items. This will appear next Tuesday and the first television advertisements will appear the same day. By 26th March a shoppers' guide leaflet will be available in post offices throughout the country.
The second point, which is a vital difference between decimalisation and the present changeover, is that we have proposed powers in the counter-inflation legislation to ensure that no price increases are greater than are justified and that price reductions take place when they should.
Perhaps at this point I might take up one question which was asked by the right hon. Member for Leeds, East (Mr. Healey). He has asked it I think on two occasions, one of them yesterday during my right hon. Friend's speech. He asked whether the fixing of the appropriate rate for prices affected by VAT will enable retailers to maintain a constant percentage margin rather than a constant cash margin. Someone referred earlier today to the fact that
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the right hon. Gentleman tends to read too many facts and figures. Alas, he does not appear on this occasion to have read the Green Paper. "The Price and Pay Code." If he had done so he would have found his answer in paragraph 56. We are taking steps to ensure that the retailers change their prices in such a way as fully reflects the change in tax burden. It means that we are asking them to keep their gross cash margins constant, except in so far as the abolition of SET calls for reductions. This is consistent with the definition of gross percentage margin as a tax-exclusive basis in the code.
Mr. Peter Rost: On the question of the Government's advertising, will it include also a campaign to cover all prices and reductions for services, particularly where there should be a marginal reduction. perhaps less than 10 per cent.?
Mr. Higgins: I will certainly bear in mind the point my hon. Friend makes. He will appreciate that this is a shoppers' guide and that, therefore, the items will be largely those which can be purchased in the shops or are likely to be purchased in the shops, but I will bear in mind the point he has raised.
There is one other point I should make about the transition. Unlike our original proposal for a tax holiday there will be no transitional period. The change in the system will be instantaneous because of the arrangements made for the refund of purchase tax on stocks.
In this connection I stress that the purchase tax rebate scheme will apply also to purchase taxed foods, so that along with many other items VAT will be less than purchase tax and SET, and the price reduction for confectionery, fruit squashes, ice cream and so on should be made with immediate effect from the introduction of VAT.
Mr. Baxter rose—
Mr. Higgins: I am coming to the hon. Member's point in just a moment.
Mr. Baxter: But I have another rather important point. The Minister, quite rightly, is directing our attention to the simplified method of applying the tax in the shops, but how does he apply the tax to repairs in houses? Suppose

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that someone calls in a plumber to put in a new hand basin and the plumber, while he is there, repairs a pipe. How does the tax apply in a case like that?
Mr. Higgins: I would like to answer the other point the hon. Member made earlier. As for the second point I will gladly send him a detailed answer on it. I do not want to interrupt the main stream of my argument because I have a considerable amount to cover. I will come to his earlier intervention in just a moment.
As for the change in the tax rate on purchase-taxed foods, I believe that hon. Members opposite, who have been inclined to describe the change as trivial or even flippant, have grossly underestimated the extent to which these items are of importance in the budgets of large families or, indeed, the budgets of all those who have families with small children. To them it is an important item. They will cover, for example, items such as Ribena, and ice cream, of which children eat a great deal.
It is also worth making this point. Last night in the debate the question was raised about sweets and their effect on children's teeth. Clearly, this is a matter about which parents themselves will be concerned. The fact is that if tax on these items is reduced they may give priority to that and will buy more of these items. Alternatively, they will buy the same amount as before and have a saving to spend on other foods. This is a matter we can reasonably leave to them. It is quite irresponsible of hon. Members opposite not to realise that this is an important concession. It is one which will be regarded as such by those who have small children. To say what the right hon. Member for Leeds, East said this afternoon shows that he is out of touch on these matters if he does not believe that this is so. I know from my own experience and in discussions with those who are expert in this field that this is a valuable concession.
I come to the final point which was made by the hon. Member for West Stirlingshire (Mr. Baxter) in an intervention about half an hour ago. He asked how this tax will affect people on low incomes. He completely misunderstood the posi-
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tion. Following my right hon. Friend's further concessions in his Budget speech yesterday, we are giving relief to the most important items in the budget of low-income families. We are giving relief on all food, fuel, fares, housing and children's clothing and shoes. The tax, therefore, is specifically designed, as we intended, with the interests of low-income families in mind. The tax on a number of items which enter into the budgets of low-income families will be less than the tax imposed by the Labour Government, and that is an important matter.
I turn to a particular VAT proposal in the context of our counter-inflationary policy. It is not a proposal put forward by the Government but by others, including the National Institute of Economic and Social Research. I refer to the proposal for a "Negative rate of VAT on food".
In my view, it is not so much a proposal as a slogan and those who have been using the slogan have not taken the trouble to understand how VAT works. Indeed, most if not all of those who use the slogan have not even attempted to suggest whether such a negative rate should apply all the way down the credit mechanism chain, or whether it should, like zero-rating, apply only at the final stage. At all events, the House will appreciate that the difference is important. Unlike the National Institute of Economic and Social Research, which dismisses the technical problems in a single sentence—
"Such a system might not be all that difficult administratively inasmuch as most enterprises will already be required to fill in VAT forms."
the House will appreciate after the debates of the last two years that such a system involving negative rates of VAT would be vastly different from the simple, single, positive rate system which the Government have devised.
Moreover those who use the slogan have not thought out some of the economic effects. Personally, I have some reservations about a form of subsidy which automatically gets bigger if the basic price gets higher, for one is effectively subsidising the inefficient more than the efficient. One of the advantages of VAT at present, in contrast with purchase tax, is that if a price is cut the tax is cut. With a negative

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rate of VAT if the price is raised the subsidy is raised. Is this what those using the slogan want?
When the TUC advocated a negative rate of VAT, was it in favour of a system which would give far more subsidy to someone buying, say, expensive cuts of meat than to someone buying cheap cuts?
However, clearly the argument about food subsidies—leaving the slogan on one side—is important and I would like to deal with it. The fact of the matter is that if the price of food in the world market goes up, then we as a country have to pay more. There is nothing which the Government or anyone else in this country can do about that. None the less it is sometimes argued "Well, none the less you ought to subsidise food". Now one can do that in such a way that the burden which is imposed on us by the higher food prices in the world market is redistributed between one group and another—
Mr. Dan Jones rose—
Mr. Higgins: This is a complex argument and I should like to get to the end of the paragraph. Unlike the right hon. Leeds, East (Mr. Healey), who thinks that even if he has only one interruption he is being continually interrupted, I have given way several times. I want to develop my argument.
One can do that in such a way that the burden which is imposed on us by the higher food prices in the world market is redistributed between one group and another, but one must be absolutely clear what the consequences will be. First, across-the-board subsidies going to everyone, whether in need or not, would he immensely expensive. Moreover, because the elasticity of supply in many of these cases is likely to be very low, most of the subsidy would go, not to the consumer in the form of lower prices, but to the supplier. There would probably be some increase in the total quantity consumed and some reduction in prices below the level prevailing before the subsidy, but much of the subsidy would not go to the consumer.
If that is so, the essential point arises that the money must come from somewhere. Either we would have to put up direct taxes, such as income tax—but this
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would reduce take-home pay and as a result there would be pressure for bigger wage claims and we would be back on the old vicious spiral—or we would have to put up indirect taxes, which would raise prices in the shops and which again would be self-defeating. There is no panacea to be found there either.
What we can do is to ensure that the position of those most in need—for example, pensioners and people on supplementary benefits—is protected. We have said that we shall do that by raising pensions on an annual basis rather than on the previous two-year basis, and the effect of increased food prices will be taken into account in deciding the amount by which the pensions should be increased. That is a more sensible and rational method of dealing with this problem than that advocated by a number of hon Members opposite.
I turn to the question of the relationship between the Budget and our counter-inflation legislation. I start by stressing one very important political point about objectives and one of analysis. The point about objectives is this. The previous Government consistently adopted throughout their period of office a policy of deflation with a prices and incomes policy backing up their deflationary fiscal measures. The result was a period of prolonged stagnation. Real personal disposable incomes per head rose very slowly—on average, by 1·6 per cent. a year. I have no doubt that that stagnation in the growth of real incomes has been responsible, to a very large extent, for the growing militancy with which wage demands have subsequently been promoted.
In contrast, the Government have pursued a policy of expansion backed up by policies to tackle cost-push inflation, and as a result real personal disposable income per head over the last 12 months for which we have figures has risen by 7·7 per cent., or more than all the four previous years taken together. That is an important point.
Mr. Joel Barnett: Is the hon. Gentleman arguing that real growth had nothing whatever to do with the deficit which the Chancellor of the Exchequer spoke about yesterday?
Mr. Higgins: It was important that we should expand and put the economy on a sound basis, which is what we have done. But, as we made clear yesterday, as we proceeded with expansion we would expect there to be a growth in imports. My right hon. Friend the Chancellor analysed this question at great length yesterday.
I stress that the purpose of this Budget is to ensure that economic growth continues at a fast rate, but the threat of cost-push inflation is manifest. That is why the question of analysis is important. The House listened with great interest to the speech of my hon. Friend the Member for Leek (Mr. Knox). It is vital to distinguish cost-push inflation from demand-pull inflation. I do not think I have ever heard the two so badly confused as they were in the immensely witty speech of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) on 29th January. He said in terms:
"It has been the policy of…the Chancellor for the past 18 months or more to reflate. Now, if inflation is proceeding as it was when he initiated this policy, at the rate of 5 per cent. to 6 per cent. per annum, then reflation can only have one natural meaning, more and faster inflation."—[OFFICIAL REPORT, 29th January 1972; Vol. 849, c. 982.]
No doubt hon. Members have considered what the level of unemployment and real income per head would have been if the Chancellor of the Exchequer had taken no reflationary measures in 1971 and 1972 which, if I understand his argument correctly is what my right hon. Friend the Member for Wolverhampton, South-West would have liked.
But in any event it is absolutely essential to recognise that an increase in level of demand is not necessarily inflationary. Certainly it cannot be taken as axiomatic as the quotation I have just made would seem to suggest. It depends on the relationship between the total demand in the economy and the total capacity which is available for producing things in the economy. Given the level of unemployed resources which we had a year or more ago, I am sure that it was quite right for us to increase in the last Budget, by fiscal means and by monetary means, the level of the demand in the economy in order to get us going at a faster rate and to mop up unemploy-
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ment. We have been very successful in both those respects, and this is important in terms of the real standard of living.
But the question then arises whether one can in some mystical way stop inflation simply by controlling the money supply. Here I think that the question one has to ask oneself is whether there is a legitimate distinction between monetary and fiscal policy. In fact, they are two sides of the same coin. A deflationary monetary policy and a reflationary fiscal policy would be sheer economic schizophrenia. If one were to try now to control monetary policy in such a way that total demand were reduced in a situation where there is still much unused capacity, of course one would stultify growth and increase unemployment.
It has been argued that it is far more difficult for a prices and incomes policy to succeed if there is excess demand in the economy than if there is not. I can agree with that. But the question remains, and was best put by my hon. Friend the Member for the Cities of London and Westminster (Mr. Tugendhat) this afternoon, whether there is now excess demand in the economy. To that question, given the level of unemployment and excess capacity which exists, I believe that the answer is "No".
A deflationary Budget is therefore neither necessary nor appropriate at the present time. That there is a danger of creating demand inflation we must recognise. Indeed, that is why the Budget is broadly neutral and why, after full boost at take-off to get the economy going, my right hon. Friend has already taken stringent measures to reduce the rate of growth in the money supply and encouraged the financing of the borrowing requirement from the non-bank public.
None the less, the danger of cost push inflation remains and despite the naive suggestion, if it was naive, of the right hon. Member for East Ham, North (Mr. Prentice) on Monday that inflationary wage claims were not really all that important, it is essential for our counter-inflationary legislation to succeed. This legislation and the Budget together provide the basis for a sustained fast rate of economic growth and for victory in the battle against inflation. In his speech yesterday my right hon. Friend laid the

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foundations, I believe, for the rate of economic growth which we in this country have the right to expect, but it depends on the success of our counter-inflationary policies which we are determined to pursue.
In Labour's last full year of office—that is in 1969—living standards in terms of personal disposable income per head at constant prices did not rise at all: Labour was committed to stagnation. In the last two years living standards have risen by 10 per cent. in real terms. We are committed to the expansion of the economy and the improvementof real liv-
556
ing standards. Towards that objective I believe that the Budget makes an important contribution and I commend it to the House.
Debate adjourned.—[Mr. Murton.]
Debate to be resumed tomorrow.

BUDGET RESOLUTIONS AND ECONOMIC SITUATION

  COMMITTEE OF PUBLIC ACCOUNTS
  Ordered,
  That during the remainder of the present Session—
  Standing Order No. 86 (Committee of Public Accounts) shall have effect as if the word 'three' were substituted for the word 'five' in line 10.—[Mr. Murton.]

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

MR. WALTER MORRISON (EMPLOYMENT)
10.0 p.m.
Mr. Bruce Millan: I am glad to have this opportunity of raising the case of a constituent of mine, Mr. Walter Morrison, who is a disabled person and on the Disabled Persons Register. He is a man in his late forties. He was previously employed in the building trade. He has been disabled for a considerable time. Some years ago he was trained as a screen printer and was so employed by a firm in my constituency called McCormick's Screen Printers for about four years until November 1971.
At the time at which I want to take up the story, Mr. Morrison was a shop steward at McCormick's factory. In late October 1971 McCormick's gave notice to Mr. Morrison that he was to be made redundant. Mr. Morrison strenuously resisted that notice from the beginning. He asserted that there was no redundancy at McCormick's and that the firm were using redundancy as an excuse for getting rid of his services. Mr. Morrison's union, the sign and display section of NATSOPA, asked for the matter to go to arbitration. That was a solution which was not accepted by the employers. Mr. Morrison was made redundant on 19th November 1971.
There was a considerable amount of feeling in the factory about this matter. The number of workers involved is quite small—namely, approximately 24. The workers concerned came out on strike because of Mr. Morrison's position on 24th November 1971. They were immediately sacked by the management. Apart from one employee, who was a foreman, none of the people who were sacked has returned to work for McCormick's. Mr. Morrison started a sit-in in the premises. That continued for some time but he was not reinstated by McCormick's. His trade union even-
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tually dropped the action that it had against McCormick's, largely because the firm had threatened to close the factory unless industrial action was called off.
The firm subsequently re-employed other people and it is still in operation. At the time I felt that it was a pity that the Department did not use its conciliation powers, but that is not a part of the story that I want to deal with now.
Mr. Morrison did not accept and has never accepted since that there was a genuine redundancy situation. He was awarded redundancy pay of £139. He did not accent that until the very last month, which was six months from the date of his alleged redundancy. He was told that unless he accepted it there was a danger that no payment could be made. Even then he accepted the position and signed for the money that was paid to him, as he described it, as "under duress". There was no hearing on the merits of the redundancy situation because such a hearing normally only applies when an employee has been refused redundancy payment and there is an appeal to a tribunal.
Similarly, there was no opportunity at that time for Mr. Morrison to pursue his case as an unfair dismissal because the relevant position of the Industrial Relations Act did not come into operation until April 1972. However, Mr. Morrison raised the question, before he was dismissed on 19th November 1971, whether his employers in dismissing him were in breach of Section 9(5) of The Disabled Persons (Employment) Act. 1944, which states that an employer is not entitled to discharge a disabled employee without reasonable cause if in so doing he reduces the number of his employees below the quota which he is required to have for the purpose of The Disabled Persons (Employment) Act.
This point was raised first by Mr. Morrison in a letter to the then Secretary of State for Employment dated 7th November 1971, before he was dismissed from the firm. The first letter that he had in reply from the Department stated that the matter was being looked into and was dated 30th November 1971.
Soon afterwards McCormick's started to advertise again for screen printers. There was a good deal of coming and going, with Mr. Morrison applying for

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his job back and the rest of it. But that never happened. He made various approaches, writing various letters to the Department and to a number of others. He wrote to the Prime Minister on 27th March 1972. Eventually he got a reply from the Department on 25th April 1972 which by that time was nearly five months after his dismissal. The letter apologised for the delay in dealing with his case and said that the matter of his dismissal in terms of the 1944 Act was being looked into. It also explained the various procedures that had to be gone through.
There was again a good deal of correspondence with Mr. Morrison, and he wrote again to the Prime Minister on 6th June 1972. On 8th June he had a letter from the Department saying that the disablement advisory committee in Glasgow would be meeting on 19th June 1972 to consider his case, the point being that, before any question of a prosecution of an employer under Section 9(5) of the 1944 Act could take place, there had to be a reference to the local disablement advisory committee and a report from that committee to the Minister.
One of the matters about which I complain is the manner in which the findings of these hearings are dealt with subsequently. The disablement advisory committee met on 19th June 1972. Mr. Morrison attended. McCormick's were not represented, but they sent a statement. Mr. Morrison was refused a copy of the full statement made by his employers so that he did not know the case that they were putting up against him.
It is not for me to say whether in terms of the question of redundancy the employers have a better case than Mr. Morrison. It is no part of my case to argue that because I do not know the full facts of the situation. However, the first and only time that the question whether Mr. Morrison was genuinely redundant was considered was at the disablement advisory committee meeting on 19th June 1972 in circumstances where Mr. Morrison, although able to put his own case, was not made aware of the case made against him.
Since the committee had to decide whether the employers had reasonable cause for dismissing him, which is the phrase used in the section, the question
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arose whether the disablement advisory committee felt that Mr. Morrison was genuinely redundant or whether his employers were using redundancy as an excuse for getting rid of him.
The very unsatisfactory feature of this case is that the disablement advisory committee came to a decision but that to this day neither Mr. Morrison nor I—nor for that matter anyone else, apart from the Minister and the committee—knows what the decision was. Disclosure to Mr. Morrison was refused at the time. As the Under-Secretary knows, subsequently I asked for the decision to be disclosed to me. I was also refused it.
For the purposes of this debate it is my very strong conviction that the disablement advisory committee found in favour of Mr. Morrison. No other inference is consistent with what happened after the finding of the disablement advisory committee. I am as certain as can be, without having seen the papers, that the committee decided in favour of Mr. Morrison. If so, it must have decided that he was not genuinely redundant and, therefore, that the employers were dismissing him for a reason other than redundancy. It must also have recommended to the Minister—in my view, no other finding is consistent with what happened subsequently—that McCormick's be prosecuted under the provisions of Section 9(5) of the Act.
I repeat, by the time of the advisory committee's meeting, seven months had elapsed from the date of Mr. Morrison's dismissal. Since Mr. Morrison had got in touch with me I put down a Question on 27th July 1972 asking what the decision of the committee was. I was told that it was confidential and could not be disclosed to me.
On 3rd August I wrote to the Under-Secretary expressing surprise and concern and asking to be informed as soon as possible of the Minister's decision regarding prosecution. I got no reply to that letter—only an acknowledgement.
On 11th September I wrote again pointing out that it was then nearly 10 months since the dismissal and saying that it was a gross injustice to Mr. Morrison or anybody else in his situation that there should be this continual delay.
On 9th October the Under-Secretary replied that the reason for the delay—I

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do not accept this—was that before the matter could be considered and passed to the Lord Advocate, who had the ultimate decision whether prosecution of the employer should take place, corroborative evidence had to be obtained, and that meant that various inquiries had to be made.
This was nearly 11 months after the date of Mr. Morrison's dismissal. It was extraordinary that the matter should have been before the disablement advisory committee and 11 months from the date of Mr. Morrison's dismissal the Minister was still talking about obtaining corroborative evidence. I understand that solicitors acting for the Department were extremely active. No doubt they interviewed the employer. They certainly interviewed Mr. Morrison.
On 20th October 1972 the Under-Secretary wrote to me saying that eventually the papers had been referred to the Lord Advocate for his decision.
On 14th November I wrote to the Lord Advocate. The Act provides that any prosecution has to be initiated within a year of the offence taking place and, as the offence in that sense had taken place on 19th November 1971, this was within a week of the end of the year. The matter went to the Lord Advocate and I wrote to him on 14th November, only five days before the year was up, asking what was happening.
On 20th November 1972, a day after the period had expired, the Lord Advocate wrote to me saying that in his view prosecution would not be justified. I am not criticising the Lord Advocate. I believe that he approached this matter as he approaches other matters—in a fair and judicial manner. Obviously if he felt that a prosecution were justified he would have proceeded with it.
In a situation where it has taken literally a year, right up to the last moment, for a decision to be made and in the intervening period the employee concerned has had no information about what has been going on, about the disablement advisory committee's decision, and so on, it would be surprising if the person concerned felt that anything like natural justice had been done.
Mr. Morrison is still unemployed. He has applied for various jobs. There is no doubt that in a sense, whether by deliber-
562
ate action or effectively in other ways, he has been black-listed by employers, screen printers, in Scotland.
I appreciate that Mr. Morrison is in some respects a difficult man with whom to deal. He is very persistent. He writes long letters to many people. He has been in touch with the Press, television, and so on. I have a feeling—and I hope that the Minister will reassure me about this because if it were true it would be serious—that the Department and others felt that Mr. Morrison was probably rather a nuisance and therefore his various complaints did not have to be taken seriously. That is a possible explanation of the considerable dilatoriness on the part of the Department in dealing with his affairs. The fact is that Mr. Morrison had uncovered an important point about the working of the Act and it is extremely unfortunate that his case was dealt with in the way it was.
I understand that there have been no prosecutions under Section 9(5) of the 1944 Act during the last five years. I understand, too, that since the Act came into force in 1945 there have been only five prosecutions. My complaints against the Department are as follows: first, that it was dilatory in that it took nearly a year to deal with this case. Secondly, as far as I can see there is no reason why, according to the provisions of the Act, the disablement advisory committee's recommendation should not have been made known to Mr. Morrison. To make it known to him would have been a matter of natural justice.
It seems to be a matter of policy, which is not laid down in the legislation, that the committee's findings were not disclosed to Mr. Morrison. I think that the case would have run out of time and never reached the Lord Advocate before 19th November 1972 had it not been for the fact that Mr. Morrison was persistent and I had put down parliamentary Questions and written to the Minister. If the complainant himself is extremely active, and if a Member of Parliament is active on his behalf, and still the papers go for decision only a week or two before the time limit is un, one is led to ask what would happen to some unfortunate complainant who did not have the persistence of Mr. Morrison or did not have the help of a Member of Parliament with his case. I think one can fairly conclude that nothing

563
would happen and that the matter of prosecution would never be considered by the Lord Advocate.
The 1944 Act is deficient in many of its provisions. I know that in an Adjournment debate I cannot argue about how it should be improved, but I must tell the House that there is a considerable feeling of unease among disabled workers about many aspects of it. The matter that I have raised is only one of them. There is the whole question of exceptions which allow employers to employ people who are disabled. These exceptions are granted at the rate of more than 20,000 a year. There are many other aspects of the Act which are unsatisfactory.
In recent years the disabled of this country have asserted themselves very much more effectively—and I support them wholly—than ever before. They have said that society gives them a raw deal and they are sticking up for their rights in a way that they did not do before. In this I support them 100 per cent., and that is why I have brought Mr. Morrison's case before the House this evening. I think that the Act is unsatisfactory but, more particularly, I think that the way in which the Department dealt with this case offended against the principles of natural justice to which my constituent was entitled.
10.19 p.m.
The Under-Secretary of State for Employment (Mr. Dudley Smith): The hon. Member for Glasgow, Craigton (Mr. Millan) has argued his case with typical moderation and has made a number of charges against us. Having been involved with this matter over recent months, I know that the hon. Gentleman has been assiduous on behalf of his constituent, for which he deserves full marks, but I must disabuse him of one thing.
The hon. Gentleman may feel that but for his efforts we should have let things slide. I assure him that we should not and that the case was progressing. By raising the matter tonight the hon. Gentleman has perhaps in some way helped to speed things up but, whatever happens in the long run, there would still have been a proper decision within the time available.
564
The hon. Member makes three charges against my Department which boil down to these: first, undue delay—"dilatoriness", to use his word; second, injustice to his constituent; third, the procedures of the disablement advisory committee in not informing his constituent of the outcome of its deliberations, and certain other matters in respect of the evidence the committee took.
It is probable that this case could have been handled more quickly, and I can tell the hon. Gentleman that my Department is reviewing the procedures for dealing with complaints under Section 9(5) of the Act to see whether there are ways in which it can be speeded up. I must, however, stress that a careful and painstaking review of all the circumstances of this particularly complicated case was clearly essential before reaching a decision as to whether to put the papers to the district disablement advisory committee as the Act lays down and subsequently, under Scottish law, to my right hon. and learned Friend the Lord Advocate.
We were meticulous about this. If there was a fault, it was because we were making absolutely sure that all the possible evidence was gathered. Hence the allegation of slowness. I can assure the hon. Member that there was no question of any dilatoriness or any lack of care or interest on the part of the Department. We went into this very thoroughly.
Initially a formal interview with the employer by the wages inspector—nowadays the wages inspectors go into these questions on behalf of the Department—was delayed for some weeks in view of the delicate industrial relations situation which obtained in the factory at the time. It was then necessary to review the case carefully within the Department before the all-important decision was taken to refer the matter to the district advisory committee. Clearly, the Department has to be satisfied that there is in its view a prima facie case for prosecution before taking that step.
After the district advisory committee had reported, it was necessary, as the alleged offence had occurred in Scotland, to refer the case to my Department's Scottish legal officers and for them to investigate the matter thoroughly, to seek further evidence and then to prepare the

565
case for submission to the Lord Advocate. This may seem a long and tortuous process but these are matters which can involve criminal prosecution and one needs to be very careful in the preparation of cases and the examination of the evidence.
There was one further hurdle, which the hon. Member will appreciate, because Scottish law is somewhat different from English law. Under English law the affirmation of my right hon. Friend the Secretary of State would be required before a prosecution could take place. Where Scotland is concerned, we could not act without a remit of the Lord Advocate.
I must make it absolutely clear, though, that what delays there have been have had no untoward effect on Mr. Morrison's position. In the first place, full consideration of the case was completed within 12 months of the alleged offence, so there was no question of a possible prosecution being statute barred by time. Therefore, there certainly was no question of allowing it to run over the period in which a prosecution could take place.
In the second place, and more importantly, the Department's handling of the case can have resulted in no injustice or hardship whatever for Mr. Morrison. The issue which has been in question and which the hon. Member has been pursuing is whether the employer should be prosecuted. There has never been any question, under the Disabled Persons (Employment) Act, of any remedy for Mr. Morrison himself, whatever view one may take of his case—and the hon. Member fairly said that there is a great deal of controversy around it.
But even if it were proved—I put this hypothetically—up to the hilt that Mr. Morrison or some other individual had been badly treated and a prosecution took place, there is no remedy in law under this Act for the individual. The Act, unlike the Industrial Relations Act of 1971, to which the hon. Member referred, does not provide a remedy for a registered disabled person who feels himself aggrieved under Section 9(5). We know that the Industrial Relations Act does so provide and that an individual can bring a case for unfair dismissal. But at the time that this came about it was not in operation and, therefore, this remedy did not exist for Mr. Morrison.
566
The 1944 Act which we are discussing makes no provision for re-engagement or for compensation. Therefore, any delay which may have taken place in reaching a decision has not affected the hon. Member's constituent's position in any material way. I hope that the hon. Member feels that that is an important point and that, whatever he may feel regarding whether or not the Act should have contained some provision in that respect, under the Act as it stands the constituent has not been harmed in this respect.
This is clearly a complicated and difficult case. Having considered it carefully and having taken into account the views of the district advisory committee and the evidence available, the Department thought it right to submit the papers to the Lord Advocate with a view to his considering a prosecution. However, he decided that the evidence available did not justify criminal proceedings. I agree very much with the hon. Member—he was very fair in saying this—that one does not question the Lord Advocate's decision The Lord Advocate is a man of great integrity who obviously arrived at the decision which he thought was the correct one.
If I may again refer to the other point which the hon. Member made about the district disablement advisory committee, he asked about the treatment of his constituent as regards this committee and the lack of information which was forthcoming from it to his constituent. The report of the committee is, in these circumstances, part of a possible prosecution procedure and it must, therefore, be regarded as confidential. The Department does not put papers to district advisory committees unless the Department feels that there is a prima facie case for prosecution. It was the employer who was in danger of prosecution, and he was not informed of the committee's report and what its deliberations were.
It is a fact that in a case such as this the individual concerned, the man or woman, does not have a right to appear before this committee. In this case Mr. Morrison went before the committee at its invitation, but there is no prescriptive right to do so; whereas indeed the committee is under an obligation to invite the employer to appear or to submit evidence, because it is really he who is likely to be the person to be proceeded against.

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The hon. Member asked why Mr. Morrison was refused a copy of the employer's representations at the committee. This again is a matter for the committee, which is properly constituted and which carries out its own particular inquiry, and is not a matter for the Department. But I must remind the hon. Member that it is the employer who is in danger of prosecution. There is no suggestion of any action to be taken against the individual whose complaint originally initiated the particular inquiries.
The hon. Member said that he regretted that we did not use our conciliation powers at the very outset of this case. It was a difficult case. There was industrial trouble which grew out of this case. But our disablement resettlement officers use a great deal of conciliation when this type of case arises. We get criticised sometimes for not prosecuting enough under this Act. We believe in persuasion, We think that if we can persuade, this carries so much more weight with employers than using the big hand of
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legality, waving a big stick at employers. It is a matter of opinion whether this is right, but on balance I think that we have done a very great deal at various times with certain employers who were about to get rid of a disabled person and thus go below quota, and who were persuaded eventually, through the good offices of some of our officers, to reinstate those people. In this case that did not happen and Mr. Morrison was not reinstated. Relations went from bad to worse. I assure the hon. Member however, that although there have not been very many prosecutions, the whole of the disablement area is under review at present, particularly the quota—a special document has been prepared on this—and that cases such as this one are those which have a relevance—
The Question having been proposed at Ten o'clock, and the debate having continued for half an hour Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at half-past Ten o'clock.

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  Burchenwood Coke and By-Products Limited
  Redundancies (Wandsworth)
  Redundancies (Wandsworth)
  London
  London
  Average Earnings
  Average Earnings
  Gas Industry (Dispute)
  Gas Industry (Dispute)
AGRICULTURE, FISHERIES AND FOOD
  Sugar Agreements
  Sugar Agreements
  Sugar Beet
  Sugar Beet
  Beef and Rye (Deficiency Payments)
  Beef and Rye (Deficiency Payments)
CIVIL SERVICE
  Average Earnings
  Average Earnings
  "Head of the Household"
  "Head of the Household"
EDUCATION AND SCIENCE
  Psoriasis
  Psoriasis
DEFENCE
  "Head of the Household"
  "Head of the Household"
  Northern Ireland
  Northern Ireland
HOME DEPARTMENT
  Gartree Prison
  Gartree Prison
  Football Violence
  Football Violence
  Shoplifting
  Shoplifting
  Crime Statistics
  Crime Statistics
  Crime (Alcohol)
  Crime (Alcohol)
NATIONAL FINANCE
  Retirement Pensions
  Retirement Pensions
  Tax Offices
  Tax Offices
  Industrial Investment
  Industrial Investment
  Gross Domestic Product
  Gross Domestic Product
  Gross National Product
  Gross National Product
  Price and Pay Code
  Price and Pay Code
  Capital Equipment (Leasing)
  Capital Equipment (Leasing)
  Estate Duty
  Estate Duty
  Purchase Tax
  Purchase Tax
  Inflation
  Inflation
  Value Added Tax
  Value Added Tax
WALES
  North Wales Hydro-Electric Scheme
  North Wales Hydro-Electric Scheme
  Council Housing (Cardiganshire)
  Council Housing (Cardiganshire)
NORTHERN IRELAND
  Rent and Rates
  Rent and Rates
  Border Poll
  Border Poll
  Economic Expansion
  Economic Expansion

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

AID TO VOLUNTARY BODIES
LORD MOLSON: 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 payments were made in the year 1972 out of the £3½ million promised by the Prime Minister on December 8, 1971, to help the voluntary bodies to operate more effectively; to what voluntary bodies and for what purposes and through what channel they were made; and what plans have been made for payments in 1973.
THE MINISTER OF STATE, HOME OFFICE (VISCOUNT COLVILLE OF CULROSS): My Lords, the sum referred to by the noble Lord has been apportioned among the Government Departments concerned, which decide how their share is distributed. The assistance given is not limited to any particular type of activity, and I think that the best way in which I can help the noble Lord is to circulate in the OFFICIAL REPORT details of the provision made in 1972–73 and proposed in 1973–74. The intention is that the full £3½ million will be disbursed by 1975–76. There then follows an extremely long and detailed list of sums of money, the Departments concerned, and the purposes for which the money has been granted, and I hope that I may circulate that in the OFFICIAL REPORT.
LORD MOLSON: My Lords, I should like to thank my noble friend for the full Answer which will be forthcoming when we obtain the OFFICIAL REPORT. It is most important that we should have these particulars. Does my noble friend realise that I did not quite expect a
1140
Home Office Minister to be replying, but had thought that it would be a Minister for the Environment. It is because of this slight complication in the distribution of funds as allocated between the Home Office and the Department of the Environment that I shall read the full report with great interest, and perhaps ask a subsequent Question in order to obtain further elucidation.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am glad to be able to clear up at least one point. Although the Home Office are now the co-ordinating authority, they are not a major grant-giving authority. Apart from ourselves, grants are made by a number of other Departments—the Department of Health and Social Security, the Department of Education and Science, the Scottish Office, the Welsh Office, and of course the Department of the Environment. All this will appear in the list to be published. It is a widescale operation.
LORD MOLSON: My Lords, I hope the Government realise that when the full Answer is available we may want to raise this matter again and obtain further elucidation.
LORD WELLS-PESTELL: My Lords, with regard to the last part of the noble Lords Question which reads,
"and what plans have been made for payments in 1973",
would I be right in assuming that many of the grants made in 1972 would have been for a period of three years and therefore will be repeated?
VISCOUNT COLVILLE OF CULROSS: My Lords, the Departments concerned make their own arrangements with the bodies to receive the grants. I do not know what arrangements they have made, but it looks to me as though there are recurrent payments in some cases and increased payments in the coming year in others. I think that would have to be dealt with in detail by asking the Departments concerned.
LORD SHACKLETON: My Lords, is the noble Viscount aware that one effective channel through which the Government could help voluntary bodies would be to review the arrangements of V.A.T. as it affects them?
VISCOUNT COLVILLE OF CULROSS: Yes, my Lords; I am aware of that.

Payments made in 1972–73 £

Estimated amounts for allocation in 1973–74 £

GRANTS THROUGH THE URBAN PROGRAMME TO VOLUNTARY ORGANISATIONS' PROJECTS IN AREAS OF SPECIAL NEED

180,000

219,000

GRANTS FROM THE HOME OFFICE FOR NEW CENTRAL SERVICES

13,275

65,000

Grants made to: Volunteer Centre; National Council of Social Service for volunteer bureaux organiser and officer to advise charities on taxation problems.

INCLUDED IN GRANT FROM THE HOME OFFICE TO THE COMMUNITY RELATIONS COMMISSION FOR SPECIAL PROJECTS

10,000

10,000

GRANTS FROM THE HOME OFFICE TO MARRIAGE GUIDANCE ORGANISATIONS IN ENGLAND AND WALES FOR ADMINISTRATION EXPENSES

40,000

40,000

Grants made to: National Marriage Guidance Council; Family Welfare Association; Catholic Marriage Advisory Council; Jewish Marriage Education Council; Institute of Marital Studies.

GRANTS FROM THE HOME OFFICE TO PRISON AND BORSTAL AFTER-CARE ORGANISATIONS IN ENGLAND AND WALES

100,500

135,500

Grants made to: The Church Army for hostel running expenses; The Salvation Army for hostel running expenses; The Dashiki Project for hostel running expenses; Cambridge Cyrenians Ltd. for hostel running expenses; Langley House Trust for workshops at Norwich and House of St. Martin; Royal London Aid Society for epileptics hostel; Margery Fry Memorial Fund, Stoke Prior; Bath Advice and Care Unit; Bristol after-care and support effort; Catholic Fund for Homeless and Destitute Men for vehicle; The North West Trust for administrative expenses; Surrey Community Development Trust for publicity; Winson Green Wives and Families Centre; Wives and Families Centres, Brixton and Pentonville; Dartmoor Overnight Stay Project; Surrey Community Development Trust for advice centre at Farnham; National Association for the Care and Resettlement of Offenders for documentary film.

GRANTS FROM THE DEPARTMENT OF THE ENVIRONMENT TO VOLUNTARY BODIES CONCERNED WITH IMPROVEMENT OF THE ENVIRONMENT

16,000

36,000

Grant made to: British Trust for Conservation Volunteers.

GRANTS FROM THE DEPARTMENT OF EDUCATION AND SCIENCE TO ORGANISATIONS PROVIDING VOLUNTARY SERVICE FOR YOUNG PEOPLE

18,000

25,000

Grants made to: Community Service Volunteers for headquarters expenses; Young Volunteer Force Foundation, increased general grant.

GRANTS FROM THE WELSH OFFICE TO THE COUNCIL OF SOCIAL SERVICE FOR WALES AND MONMOUTHSHIRE TO FURTHER VOLUNTARY EFFORT IN WALES.

Nil

18,000

GRANTS FROM SCOTTISH OFFICE TO VOLUNTARY SOCIAL SERVICE (INCLUDING URBAN PROGRAMME) IN SCOTLAND

18,000

80,000

Grants made to: Enterprise Youth; The Conservation Corps Community Service Volunteers; Regional Hospital Boards for allocation for voluntary service in hospitals.

TOTALS

395,775

628,000

LANDED PROPERTY AND CAPITAL GAINS TAX
2.40 p.m.
LORD ALLERTON: 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 are the limits of delay which may
Following is the information referred to:
be expected in settling the capital gains tax which accrues on the disposal of landed property.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, I believe it would be misleading to quote any average time to settle cases. The time taken to determine the capital gains tax chargeable on the disposal of landed property will depend on a number of factors some of which are outside the control of the

1143
Inland Revenue. Naturally, it is in the interests of all concerned that these matters should be settled as expeditiously as possible, and if my noble friend has a particular case in mind and will give me details, I shall be happy to arrange for it to be looked into.
LORD ALLERTON: My Lords, I thank my noble friend for that reply. Would he not agree that in many cases this delay extends to years rather than months, and that it bears very heavily upon people who on a falling stock market have to sell securities to meet this charge when it is eventually determined?
EARL JELLICOE: My Lords, I would agree that sometimes, for a number of factors which I could go into, but only at some length, there may be a period of years involved. I should think this is probably an advantage both to the Inland Revenue and to the person concerned. Nevertheless, I would repeat that generally I think it is in the interests of both sides that, whenever possible, these matters should be settled as quickly as possible.
LORD HAWKE: My Lords, are the Government aware that it bears much harder on the would-be buyer if the capital gain is in land rather than in Stock Exchange securities, where it is very easy for a person to make an approximate estimate of his ultimate liability, whereas in land it is extremely difficult? Therefore, it is most important that the valuation of the land should be speeded up.
EARL JELLICOE: My Lords, I would not dissent from that proposition; but in fact one of the reasons which causes delay concerns the safeguards to those involved, and these safeguards can work very much to their advantage, and not necessarily to the advantage of the Inland Revenue.
LORD SOMERS: My Lords, would the noble Earl tell me whether one has to pay capital gains tax if one is selling one's house simply for the purpose of buying another? If so, is that not a little unfair?
EARL JELLICOE: My Lords, I think that is a completely different question. I should be very glad to try to answer it if the noble Lord would put down a Question.

CHILDREN'S PLAN: YORKSHIRE REGION
BARONESS BACON: 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 when the Children's Regional Plan No. 2 (Yorkshire Region), submitted in 1971 and due to come into operation on April 1, 1973, is likely to be approved.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, my right honourable friend the Secretary of State for Social Services has now given his approval to this plan for the Yorkshire region.
BARONESS BACON: My Lords, in thanking the noble Lord for that reply, may I ask him this question? Is the noble Lord aware that the local authorities will be very relieved to know that they can go ahead with their plans on April 1?
LORD ABERDARE: My Lords, I am very glad to know that. I am grateful to the noble Baroness.

BUS LANES: USE BY TAXI-CABS
2.44 p.m.
LORD FARINGDON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they consider that the extension of the use of bus lanes to include licensed taxi-cabs would facilitate the flow of traffic.
LORD MOWBRAY AND STOURTON: My Lords, the advice of my right honourable friend the Minister for Transport Industries to local authorities is that taxis should be allowed to use bus lanes only where this would not interfere with the primary aim of improving the bus flow.
LORD FARINGDON: My Lords, is the Minister aware that two metropolitan boroughs have adopted this

1145
scheme, and as one has been adopted subsequent to the other, is it not probable that the scheme has been found satisfactory? May I ask whether there are to be any further extensions of the scheme?
LORD MOWBRAY AND STOURTON: My Lords, the boroughs, which are the local traffic authorities, have power to do as they wish. The Department has issued advice in the form of a Circular (No. 1) which was sent out on January 1, 1972. It is our policy not to adhere rigidly to any particular attitude as to the advisability of allowing taxis to use bus lanes, since circumstances alter in each case.

SOCIAL SECURITY BENEFITS AND CONTRIBUTIONS
LORD DENHAM: My Lords, my right honourable friend the Secretary of State for Social Services is making a Statement in another place this afternoon on social security benefits and contributions. It has been agreed through the usual channels that this Statement need not be repeated here, but with the leave of the House I will arrange for it to be circulated in the OFFICIAL REPORT.
Following is the Statement referred to:
"With permission, Mr. Speaker, I should like to make a statement about increases in social security benefits and contributions. My right honourable friend the Chancellor of the Exchequer has already announced the main increases, to take effect in the week beginning October 1—that is, exactly 12 months after those of last year. In due course I shall be presenting a White Paper to the House together with a Bill and the Government Actuary's Report; and I shall be laying the associated statutory instruments.
"I am circulating details of the new rates of benefits and contributions in the OFFICIAL REPORT. These, with copies of my Statement, are available in the Vote Office.
"As my right honourable friend said yesterday, unemployment and sickness benefits, injury benefit and maternity allowance will go up by £1 married and 60p single. The Government feel that it is right to do more for the pensioner. There will therefore be increases of £1·60 in the married and £1 in the single rate of pensions and other long-term benefits, including invalidity pensions and widows' pensions, bringing them up to £12·50 and £7·75 respectively. These increases reflect the Government's determination to concentrate resources on the long-term benefits as a continuing measure.
"Attendance allowance at the day and night rate will go up from £5·40 to £6·20 and at the day or night rate from £3·60 to £4·15 a week.
"The increases in the main scale rates of supplementary benefit will be the same as, and will operate from the same dates as, the increases in the related National Insurance benefits. The increases of £1·60 for a married couple, and £1 for a single person, proposed for retirement pensioners will also go to supplementary pensioners and other supplementary beneficiaries who have qualified for the long-term addition; that is, to people under pension age who have received supplementary benefit for two years or more, with the exception of those required to register for work.
"For these categories we also propose, since it has given rise to some confusion, to incorporate the long-term addition, of 60p for those under the age of 80 and 85p for those over 80, into new long-term scale rates. But, as at present, 50p of these new long-term rates, or 75p for those over the age of 80, will be regarded as covering any extra expenses, other than heating to which I shall refer later.
"Thus a single supplementary pensioner living alone who is now entitled to £7·15 a week plus rent and rates—because of course no one has been required to live on the National Insurance pension alone—will become entitled from October to £8·15 a week plus rent and rates, or £8·40 a week plus rent and rates if he or she is over 80.
"A supplementary pensioner couple now entitled to £11·25 per week plus rent and rates will become entitled to £12·85 a week plus rent and rates or £13·10 plus rent and rates if one of them is over 80. Extra benefits can be paid where there are special needs.
"Other supplementary benefit scale rates will go up by £1 for a married couple and 60p for a person living alone, to match the increases in the short-term National Insurance benefits. All children's scale rates will be increased proportionately to these latter figures.
"The war and industrial injuries disablement pensions for 100 per cent. assessment will go up from £11·20 to £12·80. The standard war widow's pension will be increased from £8·80 to £10·10 and the industrial injuries widow's pension from £7·30 to £8·30.
"We also propose certain selective improvements. The invalidity allowance which we introduced in 1971 and which goes with invalidity pension for the chronic sick, at one of three rates dependent upon the age at which incapacity started, will be raised by 40 per cent. in each case, from 35p to 50p, from 70p to £1 and from £1·15 to £1·60 a week respectively. This is a much more than proportionate improvement—in addition to the increase in the basic invalidity pension itself—and will go to the chronic sick and also to unemployable pensioners under the war pensions and industrial injuries schemes. The net cost will be £3 million in a full year.
"I turn now to special heating needs for old people and others on supplementary benefit. As from October 1 extra heating allowances will be paid on top of the new rates of supplementary benefit, instead of being

1147
off-set against the long-term addition. Thus, for the first time, supplementary benefit recipients will be entitled to the full amount of any additional heating allowance awarded because of their individual circumstances.
"The Supplementary Benefits Commission intend to apply this provision to all cases where a need for extra heating has been identified but off-set in the past. This will be done as they come up for normal review. It is estimated that over 400,000 supplementary benefit recipients may benefit, at a cost in a full year of about £6 million.
"Upratings of prescribed earnings levels for the Family Income Supplement will in future be made in the general autumn uprating programme, instead of in April. We shall therefore include in the October uprating a small increase in the prescribed levels of income on top of those coming into force next month. Income levels will be raised by 50p a week for families with up to four children, and there will be higher increases, in steps of 50p, for families with five or more children. Further, the maximum weekly benefit will be increased from £5 to £6 for families with three or more children.
"Mr. Speaker, these increases in benefits mean that an extra £570 million in a full year will go to the pensioners, the sick, the disabled, the unemployed and other special groups. About £500 million will fall on the National Insurance Funds.
"I now turn to contributions. As my right honourable friend said yesterday, the weekly earnings limit up to which graduated contributions are paid will be raised from £48 to £54. The full rate of graduated contributions for employers and employees will be increased from 4¾ per cent. to 5 per cent. The flat-rate contribution for employed men will be reduced by 4p. In the result, the man earning £54 a week will pay an extra 36p a week; the man on average earnings of £36 will pay 2p a week more than now; and the man earning £18 will pay 2p less than he does at present. The employer's share of the flat-rate contribution will be increased by 14p for men and 12p for women.
"In this way more of the contribution increases will fall on employers. These changes will bring us rather closer to the contribution arrangements under the Social Security Bill, which is due to come into force, if Parliament agrees, in 1975.
"The Treasury contribution will continue at about 18 per cent. of the other income from contributions.
"When it becomes operative, this uprating means that, since the last uprating of the Labour Government in November, 1969, pension will have increased by no less than 55 per cent. in money terms. Between November, 1969, and January, 1973, the Index of Retail Prices had gone up by 28·3 per cent.
"This is an uprating which redeems our promise of price protection for all the 11½ million people who will benefit from it, and, I would emphasise to the House, in conclusion, much more than redeems it for the elderly, the widows and the chronic sick among them.

TRANSPORTATION PROBLEMS AND THE RAILWAYS
2.46 p.m.
LORD POPPLEWELL LORD POPPLEWELL rose to call attention to the problems of transportation, with special reference to the railways; and to move for Papers. The noble Lords said: My Lords, as all will be aware, the Government have under consideration a Departmental report on railways. According to a leak in The Times some little time ago, there is very great concern about what is in that Departmental report. It would appear, according to the leak, that one of the matters embraced in the report is a further reduction in rail traffic. This is reminiscent of the document entitled Trunk Lines for Railways which was published in 1965 and then rejected. This visualised a still further big run-down in the railway system.
Present financial considerations compel the Railways Board to consider separately each unit of their undertaking, whether it be branch lines, railways shops, or whatever it may be, and these must be established on a strict actuarial basis as being profitable or otherwise. In consequence, with this financial obligation laid upon the Railways Board, we have seen the considerable run-down that has taken place not only in branch lines—and it is possible that many of your Lordships will have a lot to say about this run-down in branch lines—but in the feeder services to factories and commercial undertakings, and in many other ways. With such a policy it is understandable that after short recoveries the Railways Board commenced to run into a deficit again. I think that is what is taking place this year and what took place last year.
Under the present set-up, the Railways Board have had to establish many different companies, and many of these undertakings have been established as separate companies, where the profitable lines ancillary to the railways have proved themselves down through the ages under the old private enterprise system. Whereas at one time it was possible to trace a profit or loss account or to have a statement published so that accountability could be traced, to-day many of these companies that have been established no longer have to submit accounts for public

1149
accountability. So long as they conform and publish their accounts in the ordinary company way, that is sufficient. This is a considerable set-back on what was envisaged. With the serious cutback that has taken place there is a growing change of opinion in the country. Many eminent people, many organisations, are seriously perturbed because of the present lack of transport facilities. Among these people are many local government authorities. In their desire to provide country services for many areas they have had to enter into undertakings with bus companies and are subsidising them in order to keep some semblance of a rural service.
In addition, transport authorities themselves are concerned. On the whole a change of official thinking in transport needs is required. I hope the Government will take careful note of this debate to-day with a view to having some new thinking, as distinct from financial accountability. Many of your Lordships will have heard of the campaign, "Transport 2000", which ended in Central Hall last night. That hall was three-quarters full last night, which shows the great enthusiasm people have for getting some improvement in transport as a whole. This indicates the change that has taken place and the public's desire for a more efficient transport system. I understand that within the Ministry of Transport only a small section deals with rail planning and the general outlook, compared with a large section for the road interest. In the interest of the whole nation this problem has to be looked at again with a view to improving all transport.
Your Lordships will remember that a week ago to-day we discussed energy requirements. One of the cardinal facts which arose from that discussion was the complete lack of a fuel or energy policy. I suggest to noble Lords that it is exactly the same with transport. Each section of transport is looked at separately—whether it is roads, inland waterways, coastline shipping, the development of new aircraft, the development of a new aerodrome at Foulness, or whether it is a question of embracing the Channel Tunnel. This is not in the best interest of the nation. In my opinion, there is an overwhelming case for a complete overall transport policy. At the present over 15 million motor vehicles are on
1150
the roads. By the turn of the century the figure will have more than doubled. What will be the fate of our towns and cities unless we take some drastic action to deal more effectively with motor vehicles? We allow heavy lorries, juggernauts, to travel on our roads, which in many cases are not built to carry them. The juggernauts create environmental difficulties; they destroy the foundations of many buildings which reflect our ancient heritage. York Minster is a case in point. Heavy traffic ceaselessly flows by and in my opinion that has had some effect upon the foundations of York Minster. The cost to industry of delays on the roads has been estimated and various figures, even up to as much as £700 million a year, have been put forward. It is difficult to obtain accurate figures. In many instances there is a very good rail service which is under-used and could carry much of the heavy traffic now on the roads.
We have the problem of parking. We build motorways, we allow speedy, quick transit by the motor vehicle along motorways. But when a vehicle reaches its destination what happens? We all know the chaos in our towns and cities caused by problems of parking. We know of the senseless driving round we motorists do in order to find a parking place. Once we get in a car—I include myself—we become selfish individuals: we want to step into the car at our home and arrive at our destination with the minimum of difficulty. Consequently, we find our streets in towns and elsewhere cluttered with parked cars. Roads are being built now at heavy cost in order to ease traffic flow, in order to keep traffic moving. But what happens? Streets are cluttered up with parked cars. We have established parking meters; we encourage motorists to add to the congestion instead of sensibly arranging for park-and-ride facilities at the peripheries of towns for long-stay parkers. In the towns, multi-storey car parks should be used for the short-term parkers. Motorists should be able to park cars in the multi-storey car park inexpensively. This, however, involves heavy expenditure so far as land is concerned—this is a pet theme that I have enumerated on more than one occasion—and therefore the nation should come in to help the local authority provide multi-storey car parks near shopping centres or business centres for short-stay parkers.

1151
The long-term parkers should be prohibited from entering the towns. A cheap, or even a free, public service should be provided to bring them into the towns from the car parks on the outskirts.
There is also the problem of congestion on roads, the problem of pollution and the problem of social dislocation. There is the destruction of houses and shops; there is loss of land for food production. There are the high cost of land and the increasing death and accident rates on our roads. These factors have created an environment difficulty of increasing magnitude. We as a nation must face up to these problems; they are the problems of real life. Transport is an essential characteristic of our life. We venture on to space projects, we venture on to the Concorde project, and the prestige involved is highly desirable, but I suggest we have our priorities wrong. First we must deal with the problem of transport which is so necessary to our way of life.
Again, in my view—and I believe this reveals itself in the thinking of the remit to the Railways Board—transport is not in itself a production unit. Transport does not produce commodities; transport does not produce anything for sale. Transport is a service, a point that we often overlook. Transport as a service must make itself efficient. This represents a tremendous problem. A large number of vehicles must be available to deal with commuters in the rush hours. Many different vehicles of various kinds must be on hand for goods traffic, but these vehicles cannot be used to maximum capacity because we have rush hours in our conurbations—in London from seven o'clock until nine o'clock in the morning, and again in the evening. A large number of rail coaches have to be provided for the rush hours, but for most of the day-time they are unproductive.
The same observations apply to heavy goods vehicles. Each particular industrial undertaking has to provide its own goods vehicles but often they are not used to maximum capacity. In addition to the difficulty in regard to the transport service there is the labour force difficulty. I suggest to noble Lords that because it is a service given to industry and commerce, and also because there is a social need involved, it is essential that all forms of transport should be co-ordinated to obtain maximum efficiency. There is
1152
a growing demand for improvement in both the quality and quantity of public transport. Our rail city to city service, the extension of London's tubes, and vast road schemes is our present answer to the problem. The London "box" scheme, the Layfield scheme and similar ring roads in other areas are palliatives that I suggest would be most costly and not in the best interest of the nation. What happens? We find that where we develop these ring roads and the additional urban motorways they are self-generating in regard to traffic and within a short space of time—a year or two, or three years—we find congestion on those very roads that have been so expensive to produce.
Therefore, there must be new thinking in connection with this problem and I suggest that the amount we are spending on some of these roads would be better spent in establishing more adequate parking arrangements and taking the cars and lorries off the roads completely, thus allowing the roads to be used for the purpose for which they were built. Then too, in many of the conurbations, particularly in regard to the long distance travelling, there is an overwhelming case for providing some motorways underground. Experiments are taking place in the development of underground services in most of the big cities and towns throughout the world—Berlin, Munich, Paris and also in America. This development is taking place in those places, whereas we appear to be almost afraid to tackle it.
Another important factor in adding to the congestion is the withdrawal of feeder services by rail to industry and commerce. It seems senseless to pay lip service to the development areas and to attract industry into various areas in order to provide employment, yet not to consider what is to happen to the product produced. The only alternative is to send the goods by road, thus cluttering up the roads even when commercial and industrial undertakings are actually beside the railway lines. In many places the railway sidings have been taken up and all the heavy traffic now goes on the roads.
If I may quote a personal experience, in my own little village of Sherburn-in-Elmet there is a gypsum factory which is developing the largest gypsum bed—it extends, I am told, right to Poland—and is within a few hundred yards of the

1153
railway. In 1954, when first this project was agreed upon an agreement was made for a branch railway line to go into the factory when it commenced production. Production has now been in progress for some four or five years; there are no railway lines, and these heavy gypsum lorries, long vehicles weighing 20, 30 or 40 tons, travel from the centre of Yorkshire down to the South Wales ports and elsewhere. Over 60 per cent. of their product travels long distances. This situation seems to me to be entirely fantastic. Naturally, from the people producing the gypsum there was a call that the country roads in the surrounding area should be strengthened in order to carry their vehicles. It seems to me to be common sense that a railway loading bay should have been established so that this product might travel by rail.
Of course the Railways Board is in a difficulty because in the self accountancy of every phase of its undertaking there is nothing allowable for the freight side. Some allowances are made with a view to keeping some of the branch lines open. The assessment is based on passenger takings, and a subsidy being given for that. But even a small branch line, costing a few hundred pounds, is probably not immediately financially viable although of course the Railways Board know that financial assistance is given to them in that case; in consequence, they are deliberately refusing goods traffic because they cannot deal with it.
If we look at a table that has been produced, in the United Kingdom there are some 62·6 vehicles per mile of our roads; in Italy the figure is 56, in West Germany 55, in the United States of America 28, in France 28 and in Japan 24. These figures indicate that we are the most densely populated in terms of motor vehicles per mile of road. It is time for some fresh thinking on the problem. Under the 1947 Transport Act provision was made for an outline national plan co-ordinating road, rail, inland waterways, coastal shipping, and so on. Under the able chairmanship of the noble Lord, Lord Hurcomb—who we congratulate on achieving his 90th birthday only a few days ago—
SEVERAL NOBLE LORDS: Hear, hear!
LORD POPPLEWELL: —at that time a beginning was made on developing a co-ordinated network. That development
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was continued under his immediate successor, Lord Robertson. But then the blow fell. With the Government at that particular time under the Marples régime, what did we get? We got the Beeching Plan and the noble Lord, Lord Beeching—Dr. Beeching at that time—had to work under the remit that was given to him by the Government. He carried that out according to his lights at that time. In consequence, we get the terrible mess that we are now in so far as transport is concerned.
We need a system of transport for carrying people and goods in safety, and comfort, which is reliable, with a good interchange and with reasonable speed. We can achieve that, in my opinion, only by a careful examination of all our resources and by assessing the energy facilities and environmental needs. We are, as we all know, a small, densely populated island. Our economy is severely strained in many instances. Therefore we must prevent sectional interests from dominating our transport requirements and allow the most efficient form of transport to develop. Imported hydrocarbon fuels have been lavishly used to the neglect of our own indigenous energy-producing fuels. An outstanding example of this waste was the conversion of our railways from steam to diesel instead of to electric power. The noble Lord, Lord Robertson, at that time proposed electric traction for main line running and diesels for branch line running. That suggestion was overruled. Eventually we got the electrification of the North-Western route. It went as far as Crewe and was hung up for some years before being completed. That was a deliberate policy. Now that that route is fully used, we have found that the increase in traffic due to electrification has increased by approximately 150 per cent. since its installation. In a reply to me some years ago, the noble Lord, Lord Robertson, said that for a diesel-electric locomotive of similar horsepower to an electric locomotive, the cost was £25,000 more per locomotive. Although there is the very heavy capital cost involved in erecting overhead electric wires, the maintenance was only two-thirds that of the diesel and the life of an electric locomotive is much longer, to say the least. By producing our own electricity, that is something that we could have used instead of depending upon imported oil as we must to-day.

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For the reasons I have given, we find that transport is a problem for all nations, and all nations heavily subsidise their transport system in some way. So far as our own railways are concerned, they have to meet the cost of their own track maintenance, signalling and policemen, all of which are a direct cost to the railways. They have interest to pay on any capital expenditure on these things, whereas the nation provides the roads, the policemen and the signalling for roads. The estimated cost involved here is terrific. That seems to me to be rather ridiculous. The most recent figures for capital investment for rail, according to the 1971–72 1976–77 forecast in the public expenditure figures, comes to about £100 million a year. I am subject to correction on those figures but it is somewhere in that vicinity. Yet the railways have interest to pay on the whole of the capital that they use for that purpose. The cost of roads is somewhere in the region of about £1,000 million. Here we see a contrast: a congested road system against a good, viable rail system that is there but under-used.
We have had a considerable rundown in rail traffic. Between 1962 and 1971 were was the closure of 5,228 road miles; 4,025 miles of passenger road; 685 marshalling yards; 3,909 stations were closed; locomotives were reduced by 8,500—very understandably, from steam to diesel; we had 15,000 fewer passenger coaches; 196,000 fewer wagons; and staff were reduced by over 40,000 in that particular period. Those are the reductions that are taking place, particularly on the freight side, where wagons are being put out of commission. Of about 300,000 railway wagons in existence now, many are obsolete. They are not equipped to come into the rail service and to run on the same tracks and alongside the new high speed or advanced passenger train that is to be developed. That is something that the Railway Board simply have not the facilities or capital to do.
On the investment side—and I have the correct figures here—we find that, in 1972 according to Command Paper 4829, the investment for 1972–76 was £456 million, but in a later Command Paper, No. 5178, that figure was reduced to £361 million on gross fixed investment. The infrastructure grants increase the
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figure, but that is what is actually taking place. There is a considerable reduction there. On branch lines, my Lords, I do not want to say very much. I feel certain that many other noble Lords will have a great deal to say. But between 1964 and 1972, 3,553 miles of branch sidings were closed. We then have the particular difficulty of the commuter problem, with 1¼ million people making journeys into London between 7 a.m. and 10 a.m.—the rush hour period. Of those, 40 per cent. use British Rail, 34 per cent. travel by Underground, 14 per cent. by bus and 12 per cent. by private transport. Still our streets are cluttered up with parked cars. If we take the commuter traffic coming from outside London of a quarter of a million people, 83 per cent. use British Rail, 4 per cent. travel by Underground, 2 per cent. go by bus, and 11 per cent. use private transport. I feel that these are figures that we ought to take more seriously.
In the last three or four years we find that additional goods traffic has been generated to the degree of some 400 million ton miles. Of course much of that is the "daily delivery man", and no one wants to interfere with him in any shape or form. But over 150 million ton miles is run on distances of 55 to 60 miles. This is a type of traffic that should be brought back to rail. It is ironical that we spend the amount of money that we do in development areas, with this neglect.
The estimated benefits, using the recognised social benefit criteria, of the electrification of the G.N. section coming into London, are: £11 million value of relief to road congestion; £5 million reduction in journey times; £2 million additional revenue to rail, and £0·8 million reduced road charges. Here, by the electrification of that particular area, is a saving of no less than £19 million. We talk about the Layfield Report, while British Rail have many plans for extending their rail system, not just to the main stations, Victoria, King's Cross and elsewhere, but by branch lines right into the city itself. This would be a very big step forward to ease the burden considerably, compared with what is taking place.
In connection with this subject, I urge that the Government should do some

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completely new thinking. The piecemeal development that is taking place is strangulating our cities and bringing our national life to a standstill. We have all experienced the hours of waiting in motor queues, the congestion that is taking place. I sincerely urge the Government to have another look at this problem and to have a comprehensive approach to it. Get the experts, not just from rail, not just the oil and gas and electricity people; get the inland waterways—there is a vast job for the inland waterways to do in carrying heavy, slow-moving bulk loads. This was visualised under the 1947 Act. Sooner or later we shall have to get back to the principles involved there, because, as I indicated at the commencement of my speech, there are over 15 million vehicles on the roads to-day, and by the turn of the century, at the present rate, there will be 30 million. This will bring our national life to a standstill, unless we have this new thinking and a new line of approach. I beg to move for Papers.
3.24 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, we all know the lifelong interest of the noble Lord, Lord Popplewell, in the railways, and I am sure I speak for all your Lorrdships in thanking him for introducing this timely Motion to-day. What with one thing and another, it is a possibility that by the time we reach the end of this debate there may not be a train running to take the noble Lord home; but I should like to give him an expression of my own gratitude by assuring him that if that were to be so we should be very glad to provide him with a bed tonight in Westminster.
LORD POPPLEWELL: My Lords, I have already booked in the hotel.
LORD SANDFORD: That is very prudent. The debate to-day is over-shadowed by the threat of a one-day strike to-morrow and by other acts to-day of non-cooperation by ASLEF members. At the outset of this debate I should like to say, on behalf of the Government, how deeply we regret the large amount of discomfort and hardship that is being imposed upon the long-suffering travelling public, and I hope all
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Members of the House will join with me in appealing to ASLEF to recognise, before it is too late, the lasting harm that they are doing to their own industry, to call off their industrial action and to seek solutions to the very real problems which everybody acknowledges of restructuring, but through agreed negotiating machinery.
I want to start this debate by saying something about the broader context of the environment in which, as the noble Lord says, our whole comprehensive transport policy has to be set, before we deal with the specific matter which in the terms of his Motion we shall we dealing with primarily to-day, namely, that of railways. The noble Lord, Lord Popplewell, rightly said that transport is not a unit of production, and I would add to that, nor is it an end in itself. I agree with him that it is there to serve, and to serve as a means towards the fuller and richer quality of life. People expect to be free to move about, to have more and better goods brought to them, some to the door, others to their shops. What we have to deal with in the first instance is the fact that these freedoms can conflict with other freedoms and rights, such as the right to peace and quiet and safety; so an environmental balance has to be struck right away between our individual personal priorities in order that the overall quality of our life together does not suffer but rather is enhanced.
Safety, for instance, is more important than speed. The means by which we satisfy our transport needs, whether by road vehicles, by aircraft or by trains, must be developed so as to minimise the damage which they cause to the environment and to reduce the danger to which they expose people. On safety grounds the railways score extremely well. In the two years 1970 and 1971, the last two for which statistics have been published, a total of five passengers were killed on the railway systems of this country, compared to 15,000 on the roads. That is something we have to take in and keep in the front of our minds—five to 15,000. During those years, the number of passenger journeys on British Rail and London Transport amounted to 2,964 million and the total passenger mileage amounted to 44,000 million miles. That, to my mind, is a remarkable safety record, and

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as well as pointing to the inherent safety of rail it reflects very great credit on those responsible for operating the train services.
Safety is not the only advantage of rail. The trains, when they are running, are by far the most efficient way of providing services for commuters. This, perhaps, is not the day to make that point. In fact it is only trains that can move large numbers of commuters into densely packed urban areas without totally wrecking the urban environment. Rail is also well adapted, as the noble Lord rightly stressed, to heavy, regular flows of freight. Merry-go-round trains link collieries and power stations moving large quantities of coal in a single, continuous and largely automatic process, providing valuable revenue to the Railways Board and, by moving coal cheaply, helping to keep down the price of electricity—and a whole lot of other things which rely on it. All of us in your Lordships' House to-day will have experienced the fast, comfortable and convenient travel which rail can provide on inter-city trains, although, not I think, without wincing a bit at the price of our tickets. So, my Lords, these are the strengths of the rail system.
However, it is no good glossing over the fact that the system has weaknesses, too. Rail cannot collect or deliver goods or passengers door-to-door without expensive transhipment costs and delays, not all under the control of the consignor. Worse still, the operation of rail services is not under the control of the user—we shall all feel the disadvantages of that to-morrow. Indeed, as we are now seeing, the entire network can be denied to would-be users in a way and to a degree, and alas! with a frequency, that car drivers and lorry operators hardly ever have to face. The basic inflexibility of rail means there are areas where it is inevitably less efficient than road.
In 1962 a major attempt was made to treat the problem of the railways on a national scale. The intention was that, by writing off capital debt and extinguishing the railways' liability to pay interest, conditions would be created in which they could become financially self-supporting; but they never did. The 1968 Act, the most recent attempt to put the railways on a sound footing, was a departure from previous thinking. But despite a further
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write-off, grants for unremunerative passenger services and for infrastructure projects bringing benefits to urban areas, as well as a number of other less important forms of specific assistance, the railways are in the red yet again. The Board incurred a substantial deficit in 1972. There present deficits are met from the Exchequer and, if present policies were continued, there would be no prospect whatever of the Board's attaining viability. So we need to look once again critically at the present policies, and the Department and the Railways Board are accordingly engaged in a far-ranging review covering the whole field of railway policy. This review is giving full weight, as the noble Lord rightly said it should, to environmental issues, so this is not another "hatchet job" designed merely to minimise the level of public support, with no thought for the environmental damage which the decimation of the railway system would cause. I must stress that this exercise is going on not in the Ministry of Transport but in the Department of the Environment where, I hope, we are as fully alive to these environmental considerations as anybody else.
There has been a lot of talk in the Press recently, and some of it rather alarmist, about supposed plans for drastically slashing the rail network. One Sunday newspaper published a document, one of a number of studies of the future of the system, in such a way as to suggest that it represented the Government's firm intentions. Nothing could be further from the truth. We have to recognise that journalists are noted for their powers of imagination, and the map purporting to show the network was a good illustration of this particular talent. There was, in fact, yet further speculation in the Sunday Times last weekend about the nature of the work now going on within the Railways Board and the Department to evaluate the alternative options for the future of the railways. Again, the report lacks authority. I know your Lordships will be patient and allow my right honourable friend the Minister for Transport Industries time to make a thorough investigation of these difficult and complex issues which he considers to be necessary following the initial presentation to him of the Board's ideas. There is no question of British Rail and the Department getting out of step. The joint studies—and

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I would stress they are joint studies—are proceeding along agreed lines, and they will enable my right honourable friend to submit fully worked out proposals to Parliament in due course. Until we know more about the fact, it would be wrong to form any premature judgments.
We all know that in considering the future of the railways we must find what is right for the community as a whole and the environment as a whole. This involves using railways to do the things that railways are good at doing. It involves a sensible financial structure for a continuing railway system. But there is no getting round the fact that there are severe and so far intractable problems to be faced. Some unremunerative passenger services are undoubtedly very lightly used and very expensive to subsidise—probably over £70 million in this year alone. Obviously, we shall eventually have to take decisions on their long-term future, but for the moment we are keeping options open. We recently announced that all grants for unremunerative passenger services were being renewed for 1973.
Let me turn to London and the special problems there. Your Lordships will be aware that the Panel of Inquiry into the Greater London Development Plan, headed by Mr. Frank Layfield, reported recently. The Panel recommended, and my right honourable friend the Secretary of State has already accepted, that public transport in all forms should be given higher priority than was proposed in the Plan, and that it must be reliable, convenient and comfortable—it certainly is not those at present. The Panel also recommended a re-examination of the investment proposals of the Railways Board as incorporated in the Plan and we agree that this is needed, and have accepted a suggestion made by the Greater London Council that there should be a joint study of the London commuter services to be carried out by the Department of the Environment, the Greater London Council, the British Railways Board and the London Transport Executive, under the direction of an independent chairman, Sir David Barran. This study will not, however, hold up in the meantime urgent improvements that are justified in their own right.
I mention London, which is perhaps the urban area where the problems such
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as these are most acute, but it is by no means unique among the big cities. It is not the only place where an integrated approach to transport planning and provision, making proper use of the strengths of the various transport systems, is necessary. The Government support the Passenger Transport Executive concept as a means of ensuring that the various components in the transport investment mix are properly related, and here we have comprehensive transport planning in action. We are encouraging all authorities to adopt a comprehensive approach to their transport planning—that is what the noble Lord, Lord Popplewell, was urging us to do. We pay a 50 per cent. grant towards approved transportation studies and the Department give guidance to local authorities on traffic management techniques, road design standards, pedestrianisation, systems for giving buses priority, and other measures which in one way or another help to ease the urban transport problem. We also make specific grants for transport infrastructure, and we recently approved a grant of £50 million for the Tyneside Rapid Transport Rail System. I think that is rather more than lip-service to a development area.
So far I have spoken mainly about public transport—I think that is what the noble Lord wanted us to concentrate upon—and about the way in which we make the best use of the existing rail and road transport infrastructure. But we have to recognise that, however much we may recoil at the thought (and some of the extremists positively shy off the process of thinking at all), most roads inside towns will continue to be needed and more will have to be added, and we really cannot get round that. Therefore, we must concentrate our efforts and thinking on fitting these roads better into the existing environment, and we certainly believe that that can be done. The Urban Motorways Committee specially set up to go into this matter has examined the various problems in great detail. It reported to the Government last year. We have accepted the Committee's recommendations and have encouraged local highway authorities to conform with them in designing and constructing their new schemes. The Committee's recommendations will, I am sure, ease the hardship and the injustice which has hitherto been occasioned by new and improved roads in the past.

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Outside and between towns more new roads will also be needed, and once again there is no getting round that. Here again we are equally concerned with seeing that they too are properly fitted into the environment. The Government's plans for further new trunk roads and motorways were announced by my right honourable and learned friend the Secretary of State for the Environment in June, 1971. They initiated a new strategy for constructing a 3,500 mile high quality trunk road network by the early 1980s, including large quantities of motorway. We aim to speed the flow of goods to the ports, thus making our exports more competitive and bringing economic advantages to all of us. We shall be taking through traffic out of town centres by providing by-passes for relief roads, and in other cases the provision of an alternative main trunk route on the same axis as an existing trunk road will cause a significant reduction in through traffic. The effect of the M4 on places lying on the A4 is an example. Outside the main urban areas there are at present 530 towns with a population of over 10,000. One hundred and five of them already have by-passes or high quality relief roads catering for the needs of through traffic. In addition, 149 towns will be relieved of through traffic by the 1980s following the completion of schemes which make up the network that is now in preparation. We are giving particular attention and priority, as your Lordships know, to by-passing historic towns.
In designing new roads just as much care is taken in the country as in the towns. The Landscape Advisory Committee is invariably consulted on major trunk road schemes, and a considerable body of skill and expertise has now been developed in the field of road design and landscaping. I think that your Lordships can judge the success in this field by comparing the bottom of the M1 with the top of the M6 and the quality of the design of the two. Four of the Department's road schemes won Civic Trust Design Awards in 1972: The design of M6 in Lune Gorge, Westmorland; the Scammonden and Pennine Way footbridges on M62, and the Washington/Birtley motorway service area on A1 motorway section in Durham.
It is often suggested—I think it was rather implied in the speech of the noble
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Lord, Lord Popplewell, that nowadays we could cut down the volume of resources we devote to new roads as well as secure immense environmental benefits, by transferring back to rail much of the freight that now goes by road. Indeed, rail must carry all the freight and all the passenger traffic that it can carry efficiently; nobody gainsays that. But the two systems, road and rail, are complementary and not alternative—or only in a minor degree—and this is the point I would ask your Lordships to take in and digest. A 50 per cent. increase in the amount of freight carried by rail, even if it were possible to achieve that—which I am sure would not be practicable—would amount to only a 2 per cent. reduction in road freight. That is the balance and proportion to bear in mind. Or to put it another way, it would take up rather less than one year's increase in road freight traffic. So however successful the Railways Board are in getting freight back on to their system—and they could never be so successful as to take 50 per cent. more than they are taking now—new roads will continue to be necessary, at least until the proposed new network is complete.
In deciding how much money to spend on the roads programme and where to spend it, the Government pay full attention to the overall effects of each new scheme. We do not concentrate exclusively on the economic savings which the scheme will bring, although that is one factor, but we take into account the broader social and economic considerations which constitute an important part of the case for building new roads. The roads programme already brings widespread advantages to all of us, whether we live in the town or the country. The growth of the programme has done much already, and over the next few years will do more still, to relieve areas which at present suffer far too much from heavy lorries being in the wrong place. It also provides a reliable, countrywide and cheap system for moving goods, beyond anything that the railways ever did or could do. We all recognise the environmental damage that is done when more heavy lorries are being driven on roads and through places to which they are totally unsuited and which were never designed to take them. The new road network will remove many of them

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from these places. But there is no one solution to all the problems of heavy lorries or of too many cars. The balance between the need to move about easily and deliver goods economically and conveniently, and the need to protect the environment and people's safety, peace and quiet, must largely be worked out locally. The trunk road network is only part of the total network.
LORD GRIMSTON OF WESTBURY: My Lords, the noble Lord said that a 50 per cent. increase of rail freight traffic would only mean a 2 per cent. reduction in road traffic. Can he say how those figures are arrived at? Do they take into account the latest proposals of the Railways Board which were leaked in the Sunday Times on Sunday?
LORD SANDFORD: My Lords, I do not think that the system is relevant to the point I was making. What I was saying was that the balance is such that if you add 50 per cent. to the freight the railways are carrying and you subtract the same tonnage from the road system, the reduction on the road system would be 2 per cent. I just mentioned that to illustrate the balance between the two. I hope that what I have said is enough to satisfy most of your Lordships at any rate.
LORD POPPLEWELL: My Lords, on this question of transferring traffic, which is most important seeing the noble Lord is making a big point of it, is it not more honest to say to the House that a lot of this traffic is short distance delivery traffic within a small radius—and everyone will agree that that is much more suitable to road, and no-one would want to interfere there—and would it not present quite a different picture to break the long-distance traffic down into ton miles?
LORD SANDFORD: My Lords, the noble Lord is quite right in his desire, which is our desire, that the railway system should carry as much as possible of the traffic for which it is suited, and heavy regular freight traffic is in that category. I was trying to deal with the rather more extreme views (which the noble Lord did not put, but which nevertheless often are put), that we can do a great deal for our environment by shifting massive amounts of freight from the roads to rail. First of all, it is not practical to do that for the reasons that the noble
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Lord has just given, because a good deal of the road freight traffic—in fact some 85 per cent. of the total—is going only a distance of 25 miles or so. Therefore, it is not practical to do it. Even if it were possible, a 50 per cent. increase in rail freight amounts to a 2 per cent. decrease on road.
LORD POPPLEWELL: My Lords, not on long distance?
LORD SANDFORD: No, my Lords.
LORD JACQUES: My Lords, the question is, do those figures relate to tonnage, or to tonnage multiplied by miles?
LORD SANDFORD: No, my Lords, just freight tonnage. May we leave this point now? I was making the point that we have to look in a comprehensive way at the steps that are taken to protect the environment from the effects of our transport policies, and that applies not only to my own Department's trunk road network, but to local authorities as well. Our job is to provide the right framework for them to take their decisions. We also have to provide, and I think we do provide, advice based on research into new technological solutions of the transport problem, funds for schemes related to the national transport network and powers so that local authorities can introduce the measures appropriate to their particular local circumstances.
Local authorities already have wide powers under the Road Traffic Regulation Act 1967 to restrict the movement and the parking of heavy lorries. But there are often practical difficulties in implementing these restrictions, particularly in advance of there being alternative routes. Proposals for strengthening the existing powers and for making them more effective are now being discussed in another place, and we look forward to the opportunity of debating them in your Lordships' House quite soon.
But a good deal can and is already being done under existing powers. The moving lorry may be banned from going through residential areas and through town centres, and we know of proposals in Central London. My right honourable friend is considering the issuing of further advice to local authorities to remind them of the steps which may be taken and the essential consultation and other processes which should accompany them. Parking

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by heavy lorries, particularly overnight in residential areas, is a serious problem. Traffic regulation alone cannot solve that, but before bans are introduced adequate off-street parking must be available. The police cannot be expected to prevent lorry drivers from parking their vehicles in restricted areas unless they can direct the drivers to somewhere else appropriate. The Government are taking their part in all this: £10 million has been allocated for setting up a national network of secure lorry parks to cater for long-distance lorries in transit. It is essential that local authorities should take their part and provide other parks for locally based lorries where they cannot be accommodated in the hauliers' own depots.
My Lords, I have stressed that it will continue to be important to build new roads. But the question is, how we will use those roads when we have them. That is important also, and the noble Lord, Lord Popplewell, was right in saying that we must not start using them as car parks. I want to say something about what we are doing for rural transport, since lack of transport in country areas, with the consequent isolation of one community from another, gives rise to great hardship to some people. All bus services currently benefit from relief from fuel tax and from the system of grants for new buses; but additional and more specific help is needed to ensure the continuance of the least remunerative but none the less socially important country bus services. Local authorities are empowered under Section 34 of the Transport Act 1968 to pay grants towards individual rural services, and where they do so the Government pay half and the remainder qualifies for rate support grant. Specific grant payments for rural bus services have now increased to some £1·5 million a year.
How services are operated is as important as who pays for them, and we can see that conventional services may not always be the only possibility. As your Lordships know, we have undertaken studies in the more remote parts of Devon and Suffolk and the results were published a year or two ago. They brought out the possibilities in certain circumstances of using mini-buses, Post Office buses and so on, tailored to local requirements.
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My Lords, I referred earlier, by comparison between the road and railway system, to the appalling number of people who are killed on the roads year by year—over 7,000. I now want to say something about the work we are doing on road safety because this is a field in which research is of very great importance. The causes of accidents are so complex and varied that it is only by very painstaking analysis of statistics that it is possible to assess the relative importance of various factors. The eminent position achieved in the analysis of accident statistics by the Transport and Road Research Laboratory will be well known to your Lordships. I know that several of your Lordships have visited the Laboratory. The Laboratory also does valuable work in three fields in which improvement must be sought—the vehicles, the roads and the drivers.
Improving the roads and the vehicles is something on which some progress will always be possible, but it is increasingly true that we must seek to improve driver behaviour for any substantial reduction in the slaughter on the roads, which really is very serious indeed. The T.R.R.L. devote more and more of their resources to behavioural research. They have recently developed a method of assessing the accident risks attached to a given road configuration by the study of "conflict situations". They have shown that there is a correlation between the occurrence of such situations and the frequency of actual accidents. This enables the accident risk to be measured without having to wait until accidents actually occur. It promises to be a useful research tool.
My Lords, we have heard much in the past, and the noble Lord has mentioned it again, about the need for a co-ordinated transport policy. We do have now a co-ordinated Department and we have been able to produce a co-ordinated policy, not only for transport but for transport in the environment. We do not favour, however, rigid policies which would needlessly remove choice from the individual transport user and needlessly reduce people's freedom to choose the mode of transport best suited to their needs and to their pockets, though some restraint is certainly necessary. Such a set of policies, rigid in that sense, would not serve the best interests of the

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community or a free society, but I can and I do claim that our comprehensive policies for transport in the environment are fair, just, sensible in themselves and related in a coherent way to our other environmental policies. I submit that they give good value for money, are well designed to reduce danger to people and to minimise damage to the environment as well as to contribute to the quality of life for everyone.
3.59 p.m.
LORD KINGS NORTON: My Lords, I think we should all be grateful to the noble Lord, Lord Popplewell, for initiating this debate to-day. I am particularly grateful to him because it gives me an opportunity for speaking about a matter which I regard as of vital technological and economic importance. This is an opportunity that I intend to take, my Lords, but before doing so I want to thank the noble Lord, Lord Popplewell, for something which he probably did not expect to be thanked for. When I read his Motion on the Order Paper, "To call attention to the problems of transportation", I wondered whether I should dare to remonstrate with the noble Lord about the use of that awful word; but since he wrote his Motion down, clearly he has seen the philological light and he did not use the word once: throughout his excellent speech he used the word "transport". The noble Lord, Lord Sandford, only failed once in that respect. We have an unfortunate habit, my Lords, of copying some of the worst American customs, one of which is using long words when short words with the same meaning will do; but from now on in the field we are now discussing I hope we shall take the excellent example of the noble Lord, Lord Popplewell, continue to refer to "transport" and restrict "transportation", as it has always been in the past to the penalty of transferring overseas people who have offended against the law.
But, serious as these matters of linguistics are, the matter to which I want to refer is more serious because it is more urgent. I shall not this afternoon be following the noble Lords who have spoken in a broad approach to the problems of transport; I shall talk about one matter only, because I believe it is of primary importance. I refer to what is popularly known as the hovertrain, and
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the chief purpose of my remarks is to induce the Government to reconsider their policy for the future of this project.
There are several ways in which the train of the future can be held above the ground. It can be supported on a cushion of air, on wheels, by suction from above, by magnetic repulsion, by magnetic attraction. But with all of them there is likely to be in the train of the future the same method of propulsion—the linear motor. If the Government feel that support on an air cushion, despite recent demonstrations of its great merits, need not be developed further for hovertrain purposes at the present time, then I shall not quarrel with them unduly because I believe that there is an even better method of supporting a tracked vehicle, as I shall explain, and because there are other opportunities, notably in the sea-going hovercraft, of developing the air cushion principle. But if the Government are only lukewarm, as the insignificant aid which they are at present proposing suggests they are, in their support of the method of propulsion which has been used in the hovertrain and which has been brought to a high pitch of development—I refer, of course, to the linear motor—then I shall quarrel bitterly with them. For in the linear motor, as developed in this country by Professor Laithwaite and his colleagues at Imperial College, and by Mr. Fellows and his team in Tracked Hovercraft Limited at Earith in Huntingdonshire, we have a national asset of the first order. To fail to exploit it to the full would be a grave error, my Lords, a very grave error indeed.
Government have a poor record in their attitude to the development of inventions. I do not mean this Government in particular or the last Government, but all British Governments in this century. There seems to be a chronic inability in high places to appreciate the economic and technological merits of new inventions. I could refer at length to opportunities that have been thrown away, but I should be weeping bitter tears and that would embarrass your Lordships as much as it would embarrass me. I would only say that the great Whittle invention of the jet propulsion gas turbine would have withered on the vine except, when at its last gasp, for the threat of war. It had

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the great demerit in official eyes of being unconventional, and despite the economic benefits which we in this country manifestly have gained, notably in the last century, from British technological initiative, innovation and invention, we now seem reluctant in times of peace adequately to support novelty even when we have, as I believe we have in the British version of the linear motor, an obvious winner. I can say without a shadow of doubt that the German linear motor system, the Japanese system, the American system and the French system, all of which exist, are inferior to the British linear motor system. They are years behind and they will in the end, if they can, copy ours.
It is possible that there are one or two noble Lords who are a little vague about what a linear motor is, so perhaps noble Lords will bear with me for a minute or two while I attempt an elementary explanation—elementary, I hasten to say, not because I believe noble Lords would not understand a complete and scientific description, but because an elementary exposition is all I am capable of. The common electric motor, with which most of us are familiar, is a circular, or, to be more precise, a cylindrical device in which a central core spins within a statutory ring. If you imagine cutting this machine from the periphery to the centre and unrolling it, you will then have a linear motor. The stationary part can be extended indefinitely in either direction and the moving part, with a bit of reorganisation, will move horizontally—linearly—along it. The linear motor is British to the very core of its windings. It was described by Wheatstone in 1843 and, two years later, one was built by that amazingly gifted amateur, Fox-Talbot, who was the father of modern photography. The father of the modern British linear motor is Professor Laithwaite, who gave an amazing demonstration of its powers at the Friday evening discourse of the Royal Institution on February 2. I had the privilege of being in the chair on that occasion. Some of us, too, have been privileged to see the vehicle which Mr. Fellows and his team developed down at Earith, in which he used the linear motor for propulsion.
We have already gone a long way, and the most notable advance has been in
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supporting the vehicle by electro-magnetic forces. This is the method that I described as being better than the air cushion. We are not alone in this. The Germans and the Japanese are experimenting, too, but we are much further advanced than they are. Professor Laithwaite divides electro-magnetic supporting systems into two classes: those which in principle are magnetic, and those which in principle are electric. The bigger you make the former, the less efficient they become, but the bigger you make the latter, the better they become. To take an analogy, I mean by this that if you have a 1 h.p. motor of the magnetic kind and multiply all its dimensions by two, it will then be eight times as big but it will give considerably less than 8 h.p. But if you do the same with an electro-magnetic 1 h.p. motor, it will give considerably more than 8 h.p. The leading German suspension system of Krauss-Maffei is, very oddly, of the first kind and, in consequence, is encountering serious problems in application. The British and Japanese suspension systems are of the second kind, but the Japanese one is wickedly complex and ours is devastatingly simple.
But the British system is not only simple; it is Protean. Certainly, the foreign systems achieve suspension, but it is necessary with all of them to have, in addition, linear motors for propulsion and apparatus for stability. They are like our present hovertrain, which has one system for support—the air cushion—and another for propulsion—the linear motor. But the British linear motor in its latest form, without needing any addition to the energy required for propulsion, provides its vehicle at the same time with levitation and automatic stability. This is invention on the grand scale, and it would not be wrong to mention it in the same breath as Perkins' aniline dyes and Whittle's jet engine.
The time has come to demonstrate this splendid device on the full scale. This was indeed a plan of Mr. Fellows and his team. We have the vehicle at Earith; we have the track. The minimum that is need is to take out the present air cushion apparatus and put in the latest form of what I have called the moving part of the linear motor. The fixed part is there; it needs a little change, but there it is. This is why, on February 15

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last, I asked in a supplementary question in your Lordships' House whether the track at Earith had been maintained. For a really complete demonstration, the track should be extended from the present one mile to three miles. That has long been planned by Tracked Hovercraft Limited. In fact, the material exists there; it is in store. If that is not done, then it will not be possible to demonstrate the full performance of the vehicle.
My Lords, if the Government still maintain, as I believe they have maintained, that they see no application in this country for years to come, I shall disagree. The advanced passenger train will not seem all that advanced in ten years' time. The noble Lord, Lord Popplewell, spoke eloquently about the effect of transport systems on the environment. Here we have one, my Lords, which cannot pollute and is virtually noiseless. For urban and inter-city travel, what a priceless boon! I cannot believe it has no future here. But even if that were true, very high-speed, noiseless, fumeless transport is an absolute certainty in many other countries. To have propulsion, levitation and stability in the same electrical machine is amazing and unique. The others will want it. We have the patents and the know-how. The export potential in material and in technology is, I suggest, manifest. My Lords, when you have good stable information, which we have in this case, you can be pretty sure of backing winners. I implore Her Majesty's Government to take their courage in both hands and to back this technological Brigadier Gerard with a really significant investment.
LORD CHAMPION: My Lords, before the noble Lord sits down, I wonder whether he could tell us what would be the cost of getting this system beyond the experimental stage. I think this is extremely important to all of us who are at this moment frightened by the cost of Concorde and what that has meant to our economy.
LORD KINGS NORTON: My Lords, to do what I was proposing—namely, to convert the vehicle and adjust and extend the track—would cost, I suppose, subject to correction, about £3 million or £4 million.
LORD DAVIES OF LEEK: Chicken-feed!
LORD KINGS NORTON: Exactly. But I have not done a precise calculation, which could be done quite readily.
4.13 p.m.
LORD BURNTWOOD: My Lords, I think I carry the whole House with me when I say that we have seldom listened to a more informative and more interesting speech, with all its possibilities, than the one to which we have just listened. We live in a period, as the question posed by my noble friend on the Front Bench exemplifies, when we have begun to be afraid of new designs and new inventions because of the cost and the charge upon the taxpayer. If the figures which the noble Lord, Lord Kings Norton, has just quoted are anywhere near reality, then this is a matter which I should have thought ought to receive the most urgent attention of the Government and of the public at large.
I fear I must now revert to some rather more humdrum matters, which is no sign of disrespect to the speech which has just been made. They concern the speech which has been made by the noble Lord from the Front Bench this afternoon, which quite frankly has appalled me. I am well aware of the fact that his advisers will have provided him with a brief that should support the general contention he has made that the Government accept the need for a complementary transport system. All I can say is that it shows what power has been exercised by the road transport lobby in its influence on thinking by the public and by people whose duty it is to advise the Minister. Because I do not see that the Minister's speech this afternoon was really a demonstration of the need for a comprehensive system; rather it was a demonstration of how utterly hopeless and uncompetitive railways must remain unless they are to be cut down where they no longer provide an adequate service to the public.
I do not understand, basically, why it is that it has taken so long for the public to be better informed. Take, for instance, a comparison of the subsidies paid to railways and to the road interests in this country—and I do not mean motor-car manufacturers; I mean road users' interests. For the year 1971, as I read

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the figures, grants to the railways amounted, in the first instance, to £63 million; and then, because of a further deficit, a supplementary additional grant of £15 million became necessary—a total of £78 million. In that same year, total Government expenditure on roads amounted to £812 million, from which, of course, should be deducted the revenue secured by road vehicle taxation, which in that year amounted to £432 million. So the National Exchequer (that is to say, the taxpayer) had to find, for the provision of what was considered to be an adequate road programme, the sum of £380 million—very considerably more than was paid in subsidies to the railways.
What has been the main feature of the discussion so far in this debate, I would suggest, is that the real loss element on the railways is the loss of freight; and it is very curious to notice the position in other countries comparable to our own. I take West Germany as a case in point—and I say West Germany because many people now have in mind the old, overall Germany. The West German figure for freight shows that 40 per cent. of all goods are carried by rail. In this country, the comparable figure is 23 per cent., and I am not persuaded that different geographical and other factors lend to these two figures a distortion which makes the comparison unreal. We are the only European country which, between the years 1950 and 1969, actually had a decrease in freight carried by rail. Indeed, freight per ton mile between 1956 and 1970 decreased in this country by 24 per cent.
But there are other misapprehensions in this country about the tendencies of railway traffic, not specifically concerning freight. For instance, journeys have increased fairly adequately over the years. In point of fact, between 1969 and 1971 the number of journeys increased by 2·3 per cent. and, in spite of the disincentive of fare increases, fares actually increased by 45 per cent. in the same period. I therefore put it to your Lordships that public thinking needs a bit of readjustment. People still think in terms of competitive transport systems. I would suggest that the Government have a job to do in educating the public, bearing in mind particularly the commuter public, on the need to realise how their money is being spent with this disparate expenditure
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on the two systems of transport. I think that in this debate a great disservice would be done if anything that I or anyone else should say were converted into an argument of one system against the other. I am pleading for the public to be better educated so as to realise that there is justification for giving a greater slice of the national cake to the railway system.
I can give to the House the amount of subsidies paid to the railways in other countries. In Germany, for the last period for which I have been able to secure information, the annual subsidy has been running at the rate of £700 million a year; in France, at the rate of £400 million a year; in Japan, £300 million a year direct subsidy plus £500 million a year capital expenditure, making a total of £800 million a year. In the United Kingdom the grand total including grants and capital expenditure plus interest is £150 million. Is it any wonder that recently in this House a Minister on the Government Front Bench said that he was not prepared at that point (this is no criticism) to answer a supplementary question I put to him on this matter? The question was this. Is it correct to say that in about 10 years' time we shall have running on our main lines trains comparably technical to those existing now in Japan? This is the sad thing one must accept—technical ability based on national subsidy.
One need not be ashamed to ask for a subsidy for the railways to produce comparable technology when other countries are doing precisely this. It may be asked why we should slavishly follow the practice of other countries. I suggest that if one thinks deeply enough one concludes that transport costs are fundamental to the economy of any country and especially to those competing in the world on exports. I should have thought that we should think more in terms of the paying ability of the railways in the United Kingdom, and of whether British Rail under their present rules and practices are really getting down to obtaining the optimum benefits from the subsidies they get or from the technical know-how at their disposal. Incidentally, is it not curious that in our society we lose in tax revenue something like £1,000 million a year out of company car provisions under the existing taxation system? It is a bait, well known in

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employing circles, that in offering a man a job you can reduce the salary by offering him a car on which you obtain tax relief. This is a very substantial sum of money. It should be set against or added to the subsidy being paid to the road element in our transport system.
To speak in general terms of a system for the whole of the Kingdom can serve a useful purpose only if the effect on it of the more local transport problems is also considered. I make no apology for introducing a local transport problem which affects those of us in East Anglia. I am referring specifically to the line from Ipswich to Lowestoft which from year to year is threatened with closure and where from year to year the grant payable under the 1968 provisions seems to increase. This year the subsidy under the Act will amount to £371,000. I can assure your Lordships that it is difficult to understand where all this money is going to. The freight loss alone on that little line (which is not taken into account in providing the subsidy for passengers) is added to by the deliberate policy of British Rail—and this is the only criticism that I shall make of them—of not taking on certain freight jobs. I was very interested to read a note, received through their courtesy, about the loss of sugar freight which has been experienced in East Suffolk for the last 12 to 15 years. In East Anglia there are 17 plants refining crude beet sugar. Most farms are within 20 miles of a refining plant, all are within 40. It has been calculated that to bring the sugar beet to the refining plant is not economic; although the finished product, and the animal feed that results from the pulp, goes out by rail freight. I wonder whether this calculation has been recently computerised and whether mechanical handling by the railways' own plant and transport facilities has recently been taken into account.
All your Lordships will have noticed the huge loads that travel; along the motorways of this country and will have asked yourselves the question, "Why is that going by road?" From the nods of assent by various noble Lords I see that I have made a point. The fact is that the convenience factor in being able to load a huge freight lorry, a juggernaut, at the factory production point is an
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overwhelming argument for its use. I can see that. But is there not a case for giving inducements, as was done in the past, to route such freights on to the railways? Here is something which surely justifies an outside technical and economic appreciation so that we can be sure that British Rail are using the right sort of information and making the best use of their plant and equipment.
The subsidies paid on the passenger traffic only on these branch lines are now computed by the so-called Cooper Brothers formula. The factors of this formula were given in a Parliamentary Answer in another place in February last year. It is a very difficult formula to understand. Certainly that Answer did not give the actual weighting given to each factor. I hope I am not being discourteous to anybody, but I wonder whether, however well qualified chartered accountants or a specialised firm may be, they really appreciate the benefit of securing a computerised assessment of these problems. I believe there is a great degree of insensitivity about the usage of these lines and about the data collected on that particular line. At one time a survey on passenger usage was carried out during the school holidays. Immediately, therefore, one factor was never taken into account. Why it was timed for that period I cannot imagine. Again on that particular line I myself had to draw attention to the fact that one little train of four coaches had two coaches with locked doors and therefore unusable. You could hardly stir in the remaining two and the ticket collector himself told me that so great was the congestion that he did not have time to collect the fares before he got to Ipswich. I should have thought in those circumstances that it is illogical to criticise railway workers when they take industrial action to try to obtain better wages.
This is not the time or the place, and I am not the person, to argue the case for railway workers against other workers. The fact is that in this country wages paid for such categories of railwaymen as top-grade locomotive drivers, signalmen and length men are below those paid in France and Germany. When I hear the noble Lord, Lord Kings Norton, talking about the speeds which we may achieve with trains in future I should like to know what is being done to assess the

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physical ability of some drivers to cope with these increased speeds? It is not their fault if they are not capable, any more than it is the fault of B.A.O.C. pilots who are pronounced unfit. The time may come when a driver may not be suitable for driving a train at these great speeds. I think that a matter which should be looked at. In France, top-grade drivers retire five years earlier than their opposite numbers in this country. The State pays them a good pension, and we should pay our drivers a similar pension. My Lords, I have rambled a little, I must confess. But we who try to secure a readjustment of public thought about railways are absolutely convinced that a great many road users, and for that matter railway users too, need better information on the subject. They have no idea of the great imbalance of Government subsidies. They should be brought to face the facts of life, and to see that our railways are given proper support and equipment and that manpower is used to the best advantage.
4.32 p.m.
LORD TEVIOT: My Lords, I should like to join other noble Lords in congratulating the noble Lord, Lord Popplewell, on introducing the subject of transportation. I make no apology for using that inculcatory term, even though it may be more than three syllables. It is high time that we had a chance to discuss this matter. I have been in your Lordships' House for five years, and apart from the debates on the Transport Act of 1968 I do not think that we have had a debate on it. We have discussed important subjects like pensions, but this is the first time we have been able really to get down to the subject of transport. The noble Lord has given us every opportunity to do so. While he concentrated on the railways, he touched on every aspect of the subject.
I disagree with the noble Lord, Lord Burntwood, who said that my noble friend Lord Sandford emphasised the need for a road transport system. I did not get that impression. I thought that my noble friend was most impartial in his references to the railways. There is one point I should like to make before saying anything specific about transport; it is the point that was brought out by the noble Lord, Lord Popplewell, when
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he referred to the need for an integrated transport policy. I am all for competition, but when it comes to competition between forms of public transport—buses, railways and aircraft—they are all rather like top football teams; for example, Leeds United, Tottenham Hotspur and Aston Villa. They vie with each other to try to be the top team without getting down to the specific problems and working as one unit.
My Lords, I wish to discuss the railways from a local aspect. I live on the South Coast, at Hassocks, which is between Haywards Heath and Brighton. There the railways are a very sore point. The passengers are very much subjected to delays, but I do not propose to go too much into the industrial dispute side of the matter. An astronomical number of passengers travel on the London to Brighton line, and commuters in particular have to suffer delays, hold-ups, breakdowns and cancellations by no means all of which are due to industrial unrest of one sort or another. That is the position now, and there is to be a large population increase in the Crawley, Horsham, Haywoods Heath and Burgess Hill area. This is why it would be a very good thing to consider the problems of transport and environment together, so that we might discuss them under the same heading and come to some understanding. The increase in the population will add considerably to the pressure on an already overcrowded line on which there are one or two potential hazards, such as the Balcombe tunnel and the Ouse Valley viaduct.
If the Government are prepared to meet the influx of potential customers I would ask my noble friend whether they will consider constructing double tracks from the North side of Balcombe tunnel to Brighton. I am aware that that would involve vast capital expenditure. Three new tunnels might have to be constructed, and a new bridge. No one quarrels with the idea of building motorways all over the place or with catering to the needs of road transport; but I do not think we ever hear of a major construction on the railways, though it would be much easier to carry out construction work now than when the railways were first built. When one reads the history of the railways and the railway "navvies", it is apparent that the construction which took place

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in the 1840s, 1850s, and 1860s stopped in the 1890s when the Great Central Line was built, and now one never hears of capital expenditure on such projects.
My first point is that we should have an alternative to main lines. I will continue to use the South Coast area as an example, although this situation could arise all over the country. Referring to the Uckfield to Lewes line, I gather that there is a scheme of electrification to extend as far as Uckfield from South Croydon. If the passenger traffic figures quoted by the noble Lord, Lord Popplewell, could be increased 100 per cent., the line would more than pay for itself, and I hope that the Government will pay some attention to that aspect and will hasten this experiment. The alternative train route to Brighton would be via Littlehampton and Horsham which adds a great deal of time to the journey. On December 16, 1972, there was a crash at Copyhole Junction, Haywards Heath. I would hasten to add that no one was killed, which brings out the point that it is much safer to travel by rail. But thousands of people were greatly inconvenienced and normal services were not resumed for nearly a month. The cost of this must have been prohibitive. The crash resulted from purely a human error, and it is a matter of extreme luck that such a crash had not occurred before. The driver concerned did not shilly-shally about the matter, but said that his mind was on other things at the time.
This brings me to another point upon which I would touch gently; namely, the psychological effect of driving a train. The noble Lord, Lord Burntwood, mentioned the pay of railway men. A driver may join the railways at about 18 years of age and I think that the footplate section experiences very little turnover in manpower. Their turnover in staff is probably less than that in any other occupation in the country. I do not know the figures, but many people join at an early age and retire on pension. Engine drivers are to a great extent shielded from the public. I feel that it is necessary that they should come more closely into contact with the public. Since railway guards have become responsible for collecting tickets they have become very much "public relations" experts. When there are delays they walk through their
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train and explain to the passengers what is happening. If a guard sees people who he knows will be inconvenienced by the delay, because they will be unable to catch a connection, he will inform the signalman, and the managerial staff of a station will meet the passengers' requirements.
I know it is difficult for drivers. It used to be rather different in the days of steam, because then they were there to he seen; the driver and the firemen were on that splendid vehicle and one could say, "Good afternoon" or, "Thank you for a nice journey." It was all cosy, and we knew where we stood. Now this man stands in this miserable little cab; he arrives at a station and lie might see hundreds of angry faces. His job is just to take them from A to B. The only thing lie wants to do is to finish his job and get hack to his garden, or whatever it may be. There is no incentive or feeling of achievement, and no satisfaction. I believe that where railway drivers are in contact with the public in an open diesel vehicle, they get to know them and understand them. I know that when I was driving a bus one felt shut off from the passengers; one got the most horrible feeling, and sometimes one became bloody-minded (if I may use that un-Parliamentary expression) for apparently no reason at all. I do not say that railway drivers are like that. A friend of mine on the buses would say: "I have got to go and pick up my next load of offal now." Quite often, when you see the facial expression of a driver when he pulls into a station, one feels no more than a piece of lice, or a piece of kidney, or I do not know what. My noble friend mentioned the behavioural effect on motorists. I should like there to be a study of the behavioural effect on railway drivers.
My Lords, I wish now to move to another subject; that is, fuel tax so far as it concerns road transport. I reiterate the fact that we are looking for an integrated services. Road and rail use identical fuel now, which is rather hard to imagine, because once one used coal and the other used petrol. Now they all use diesel oil. The railway pay 1p per gallon tax, whereas buses pay for stage services 10p a gallon. My noble friend mentioned that on rural services the Government were helping, but I gather

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that they still have to pay 10p full stage. But any other type of public service transport has to pay 22½p per gallon, and apart from the express motor service, this includes school transport and contractors for factories. Also, special trains are used for pleasure, and that has been a great thing with the railways. I am sure that this will bring back the pleasure traffic on mystery trips, where people can travel at little cost and have a jolly good day out 200 or 300 miles away. The railways pay much less for fuel than road transport. It must be borne in mind that a public service vehicle is the most economical road user of all services, and it must be in the national interest to make it a reasonably cheap and efficient service.
It has been argued that the distinction between fuel tax for road and rail services is justified because infrastructures used by road transport are largely provided at public expense, whereas the railways have to provide and maintain their own infrastructures. In view of the massive Government support which has been given for rail electrification schemes, this argument is hardly logical. And what about those pleasure boats on inland waterways? It is not denied that it is in the public interest for the railways to receive financial support, and one hopes that this will be so when one hears about the possible closure of a line in East Anglia.
As has been stated, no distinction is made between business and pleasure travel by rail, yet this distinction is made—though, in practice, on a totally distorted basis—for passenger road transport. There are services offering exclusive holiday travel under a road service licence for stage carriage operation; there are other essential services, such as school and works contracts, which do not qualify for the same grants as these so-called stage services. The same distinction extends to the new bus grant, where grant-aided vehicles are being used to compete quite unfairly with operators who cannot receive such assistance. It is repeated that the public interest demands support for public transport; moreover, the basis of the present discrimination is no longer relevant to circumstances to-day. The fact is that all forms of public transport should be enabled to give the best possible service.
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Passing mention has already been made of school transport, and at the moment the Secretary of State for Education has a Working Party studying this situation. But it must be hoped that the educationists will not regard their transport requirements as being distinct from those of the community as a whole. The practical solution is to place all such requirements under the control of a transport co-ordinating officer who will act for his local authority on all transport matters arising from the 1972 Local Government Act. I suppose that we shall he seeing that in a year or two's time. These co-ordinating officers can see the problems from the point of view of the public, road and rail transport operators, and their own councils can do more than anyone else to overcome the transportation problems being debated.
My Lords, to wind up what is perhaps a somewhat inadequate speech, I am grateful for the privilege of batting in such a high position as No. 5 in the debate. I hope that the Government will pursue a policy on all sides of integration so that in the years to come public transport will speak as one voice: and road public transport is contributing to that effect with the express coach service. Long ago railway branch lines went by the board and the coach services took over. We shall see the day when the roads are utterly choked up, and therefore the capital expansion of the railways, adding to the paying trunk lines, is essential.
4.48 p.m.
EARL AMHERST: My Lords, I, too, should like to thank the noble Lord, Lord Popplewell, for introducing this debate on a most important subject. Before I go further, I must apologise both to the noble Lord and to the noble Lord, Lord Mowbray and Stourton, because owing to a previous engagement I may not be in my place when this debate winds up. As I understand it, the Board of British Rail is one of the agents of the Government in carrying out their transport policy. It cannot of itself determine or formulate policy. Consequently, the Government retain the options. As has already been mentioned by the noble Lords, Lord Popplewell, and Lord Sandford, at the moment this Board is busily engaged in preparing comprehensive schemes and plans as to how British Rail is to be developed and marketed, both in

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the short and in the long term. Can we be told that, when the Minister and his advisers have had time to digest the plans, before seeking to implement them, either by amending the 1968 Act or by a White or Green Paper, or some other Government document, we shall have full opportunity in this House to debate what has been recommended? It is perhaps a little premature to ask the noble Lord who is to wind up whether he has any idea when we might expect such a thing.
At present the development of projects and programmes of British Rail is strictly regulated and restricted to the terms and conditions and limits of the 1968 Act. That Act prescribes that British Rail must conduct their affairs on a strictly commercial basis. As regards new projects and developments they are, to put it mildly, somewhat in a straitjacket. They are urged to avoid embarking on new businesses or continuing with old ones if these show a loss: hence the closing of branch lines, which has already been mentioned. Mention has also been made of the desirability of inducing more freight traffic off the roads and on to the rail. Of the total freight traffic carried in this country only a comparatively small portion offers a commercially profitable proposition for the railways. All those loads carried on innumerable local delivery vans—milk, bread, laundry or whatever it is—and the small lorry travelling possibly 20 miles, do not offer a practical commercial proposition to the railways.
Even so, there are still heavy loads that could be off-loaded from road to rail but for the strictly commercial restriction. As an example, I would give the case of those big bulk shipments that arrive in our ports from trans-oceanic freighters. Owing to weather and multiple other causes, these often arrive at the destination port several days late. Meanwhile, British Railways have arranged for rolling-stock to meet them. But the ship arrives late, so the rolling-stock remains waiting for a load. At the factory the load arrives off schedule and so the trucks are again kept waiting until something happens. As I think your Lordships will know, there are few things that run away with money faster than a transport vehicle of any kind which is not going somewhere with a paying load. Such a business probably falls outside the strictly commercial bracket, and so the railways
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do not cater for it and therefore it stays on the roads.
However, even in its straitjacket, I think we ought to congratulate British Rail on the many improvements that have been made in the last few years: the recent electrification, which is still a long way off completion, the Inter-City expresses, the introduction of welded rail, the developing of new high-speed trains and modern rolling-stock, and the rebuilding of so many of those rather sordid, tumbledown relics of Victorian railway stations which we see scattered about the country, especially in the suburbs. It is interesting to note that with the introduction of the Inter-City trains between Euston, Manchester and Liverpool the traffic in the first year jumped 32 per cent. Inter-City traffic has always had alternative means of travel, so there had to be a major development in speed and comfort to induce so much of it back on to rail. But this is not true of the commuter traffic which, too often, like it or not, has little alternative but to use the rail, public transport being too often unavailable or inconvenient. The only alternative available is the motor car, if the commuters can afford it, and of course the motor car is now the subject of considerable blame for cluttering up our city streets and suburban roads.
There is a great deal to be done. New stock and retracking to cope with increased speeds, the rebuilding of some stations—these are not the least of the problems. There are also peaks in traffic to be considered, and in most businesses and from a strictly commercial point of view a sure way into losses is to cater fully for peaks of any traffic. To cater fully for the commuter traffic must mean that at off-peak periods they will have a large amount of stock lying idle in some siding. Are British Rail to be allowed properly and fully to provide for these peaks and so induce the traffic off the roads and on to the railway, or do we again come up against the straitjacket?
I am told that the forward plans which British Rail are now preparing for the Minister include within their orbit the real possibility of a rail connection to the Continent through the completion of a Channel Tunnel. Such a development must surely mean a major breakthrough for all types of traffic, even though in

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the initial stages the passage through the tunnel itself might have to be restricted to special types of rolling-stock until the demands and difficulties of the loading gauges on both sides of the Channel can be met fully. We should think here in terms of through traffic from, say, Edinburgh to, say Turino or between Bristol and Antwerp, and not just as between London and the Continent. Eventually it should be possible for these loads to travel right through, avoiding London, without intermediate change of vehicle. That would mean that much of the heavy traffic now travelling on our roads, at least in the South East, should go by rail and be taken off the road.
I would urge that in considering the development schemes that are being prepared for them, the Government should, as a first consideration, take British Rail out of its present straitjacket of strict commercialism, because unless this is done British Rail must be considerably hamstrung in its project developments and may lag behind its opposite numbers in the Common Market, through no fault of its own. The prospect of a Channel Tunnel makes this doubly important. I would further urge that in all new planning there must be real and full coordination between the development of the road systems, the canals, the internal air services, coastal shipping and the rail systems. This has been mentioned by every noble Lord who has so far spoken, and it is covered by the general word "environment" which is a portmanteau word. It needs to be specifically set down so that all the different sorts of transport systems are taken into consideration when these plans are considered, and the matter is not dealt with piecemeal.
My Lords, I have some figures which may be slightly at variance with those given by the noble Lord, Lord Burntwood: we may not be talking about the same period, perhaps. I am credibly informed that during the years 1971–72, £810 million was invested in road development but only £108 million was invested in British Rail. Government research in aviation is running at about £300 million a year, but only £3·5 million is spent on railway research. It may be of interest to note that in 1971 Germany spent about £700 million on its railways and the French spent about £500 million on theirs.
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I believe that, apart from ourselves, the Swiss are the only Western European nation who do not fully subsidise their railway system, and that is because they have plentiful and cheap hydro-electric power available. In conclusion, my Lords, I would urge the Government to take British Rail out of the straitjacket and make it absolutely clear that all forms of transport should be co-ordinated properly when planning is done.
5.0 p.m.
LORD CRAWSHAW: My Lords, at this stage in the debate there is no further need for me to stress the size of the problem of our transport systems, and as the noble Lord, Lord Popplewell, said, this is the second debate at Westminster on this subject in the past 24 hours. There was a meeting, as he said, last night; and I received a copy of this green pamphlet—I believe sent out by the N.U.R. Perhaps rather surprisingly, I found myself in total agreement with almost all of it. I believe that the solution to many of our problems is the more intensive use of the railway system, which in turn would help in the improvement of our environment. I sat last week for nearly two hours in a traffic jam at the Southern end of the M.1. This was the day after the train drivers' strike. During that time I counted about 10 or 11 trains on the adjacent parallel railway line linking St. Pancras and the Midlands. There must be something wrong with a situation like that, with the road congested and the railway so little used.
I have just driven down the M.1 from near Derby where the M.1 cuts through my farm. In my view one motorway is enough, for once you let the planners build one, you tend to get a proliferation. I am now threatened with at least two motorways crossing my farm, one of which is the M.1-M.6 link. The countryside is at present being cut to ribbons, and although this may be all right for giants from outerspace playing noughts and crosses, it seems to me fatal for the prospect of future generations to see anything at all of England's green and pleasant land. I fear that the Department of the Environment all too often does not give enough consideration to this aspect.
We must do more with the railways; as the noble Lord, Lord Popplewell, said, they tend to be a declining industry with declining investment—£108 million in

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1971–72. The public image is regrettably bad, and I believe the morale is low. Yet from my experience—and I travel on the railways quite a lot, and on the staff of the railway meet people whom I regard as friends—the men themselves seen to be fine, typical, down-to-earth Britons, always extremely helpful, interested in things like sport, gardening and so on, that everybody else is interested in, and friendly to everybody. I cannot see a lot wrong there. One has to look at the overall organisation, the management, and, indeed, at the accounts.
It is possibly fair to ask, after 26 years' experience: Is a total State control and State monopoly in this field the best way for all concerned? Does what appears to me to he the present amorphous and impersonal structure give the customer any choice? Does it give the staff a feeling of remoteness and despair which is incompatible with their individuality which I have mentioned? When one compares this situation with the obvious throbbing success of many private road haulage firms, one yearns to see an experiment in a private enterprise company operating a complete road-rail system. I believe that this can be a way of integration and co-ordination—perhaps a different solution from those put forward by the noble Lord, Lord Popplewell, but, nevertheless, one well worth trying. I believe that would break the inflexibility, which my noble friend Lord Sandford mentioned, with which we are at present faced.
I wish now to move from that brief railway excursion in the realms of speculation and surmise more towards a few hard facts. I would ask your Lordships to consider the position of those people in society who have the greatest problem of transport or transportation of all: I can loosely term them, the least physically agile. These include three million impaired people over the age of 16 living at home, a lot more temporarily disabled people with broken bones, those who are pregnant, et cetera, and I suppose to a certain extent the one in six of the population who are elderly. One can claim to talk for a large proportion of the community. Adapting transport systems to assist the physically handicapped, even if it costs money in the short term, will help the able-bodied as well, people with parcels,
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babies, and so on, and should increase use and therefore profits.
I was glad to see the noble Earl, Lord Longford, in his place a minute or two ago. He would probably remember during the passage of the Chronically Sick and Disabled Persons Act through this House in 1970 I withdrew a clause imposing obligations on transport operators to provide access for the disabled, on the understanding that the Department of the Environment would distribute a circular to public transport operators and vehicle manufacturers. Discussions about the content of this document have recently been going on between the joint committee representing the disabled and the Department of the Environment. I know that a draft has been agreed. I hope that when my noble friend Lord Mowbray and Stourton comes to wind up he will say when this is to be published. It is eagerly awaited, and it is nearly three years since this campaign was started.
In the meantime, I should like to report a little progress, as I see it, in the various forms of transport with this aspect in mind. I suppose I should not do this, but I cannot resist at the outset saying a few words about one of the most ancient and enjoyable forms of transport which I have recently enjoyed—that is, the horse. I will not recount all my recent experiences, because they are rather large, but the subject is fresh in my mind because I suffer from a fairly well bruised elbow encountered last Saturday. Any of your Lordships who has ridden a horse downhill at a fair speed with the wind behind it, seeing a road at the bottom of the hill, will realise that this poses certain problems of transportation. In my case the problem ended with a painful and hard encounter with the road.
This is a digression; I suppose in the days of William Cobbett, the greatest rural rider of them all, it was a more practical method of transport. Certainly he made sure that his views were recorded, even if not heeded, by being the originator of Hansard. I suppose that Dick Turpin's reputed 16 hour journey from London to York would not be considered rapid even in to-day's congestion. So reluctantly I must pass from this theme to the horseless carriage, or private car, which, at any rate so far as the less agile are concerned, is usually the most

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convenient form of transport. The great difficulty here is that those in charge of traffic management policy in London, and other similar places, are bound to do all they can to keep cars out of metropolitan areas. So with public transport being at present so inaccessible, it could easily happen that the disabled will be rendered almost immobile.
In the field of public transport, I regret that there is not much progress as I know it with the adaptation of buses or the underground system. The London Transport Passengers' Committee were approached in October 1971 and made aware of the problems; but I regret that none has yet been overcome. On the other hand, the Licensed Taxi Drivers' Association have been in touch with me and other representatives and have asked for views about future design. I wish to thank them very much for this invitation, which of course will be only too eagerly taken up. I remember speaking here once before and being a little bit sharp with the taxi drivers' Association, but now I think we are liable to become very good friends.
Aircraft I have mentioned here before and they have always been pretty good. One gets a little healthy competition between airlines and a little gentle blackmail is sometimes helpful. So I return to the railways, and after nearly 20 years of travelling in guards' vans I am beginning to see a ray of hope of improvement. I believe that a wheelchair-bound person can expect to enter the passenger compartment of British Rail's new Mark 3 carriage, anyway the first class one, and could enter the second class with minor alterations. I believe this also applies to the advanced passenger train—A.P.T.—which the noble Lord, Lord Popplewell, mentioned.
What all this amounts to is that we must in some way make the public transport system more flexible, convenient and accessible. This will help all, and will make all systems more widely used and profitable. Finally, the increased efficiency must reduce the slaughter on the roads and the ruination of the countryside.
5.12 p.m.
LORD SOMERS: My Lords, I should like to join with practically everybody who has spoken in this debate in thanking the noble Lord, Lord Popplewell, for
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having introduced it, because so far it has proved to be most constructive and interesting. I must begin, however, by apologising both to Lord Popplewell and to the noble Lord, Lord Mowbray, for having to leave very soon after I have made my speech, simply because there is some problem about whether I shall be able to get home to-night, as I travel by railway. However, there is not always trouble on the railways and I am very much in favour of spending more on them and bringing them up to a greater state of efficiency. We once had the finest railways in the world and with a little thought and a little more money spent on them I think they could easily be so again.
I am going to divide my remarks into two sections, the first goods, and the second, passengers, because I think the two problems are rather different. Our system of goods transport on the railways is now hopelessly outdated. We still use the old marshalling yard, the old loose-coupled stock, which I think is now dated. I believe we should go over to fast-coupled stock, and possibly even to trains running to timetable. One of the main objections to goods transport by rail is that of loading and unloading at stations, which involves extra labour. That difficulty could perfectly well be overcome—and I believe it is true to say that in one or two cases it has been overcome—by using the roll-on roll-off system whereby the lorries simply drive on to the train and at the other end are driven to their destination. Of course this would apply mainly, as the noble Lord, Lord Sandford, implied, to long-distance goods traffic: short distance deliveries would be chiefly by road. But it is the long-distance traffic that we want to get off the roads. Incidentally, this would have one very advantageous result: it would force the lorries to conform to the railway loading gauge and therefore they could not be either too high or too broad. If one were to have goods depots at fairly frequent intervals around the country, one need not be more than, say, 40 miles from the nearest depot and one could travel across country with a very short road journey and a long rail journey. That seems to me to be perfectly practicable. Most certainly it would not be cheap to begin with, but on the other hand in the end I believe it would pay for itself head over heels.

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To come to passenger services, I admire very much the advances that have been made on the inter-city lines of British Railways; the much higher speeds and the greater comfort. But those are for long-distance travellers only; they are not for us poor commuters who come from about 15 to 20 miles outside London. I think the average train traveller wants comfort more than speed; he wants to feel that he is being looked after, that the train staff are interested in his welfare, and that while he is waiting for a train he is waiting not in some horrible, cold, stone dungeon with no heating but in a comfortable waiting-room with upholstered chairs.
Incidentally, could we not make our railway stations a little more attractive? I should not have thought that it would be beyond the wit of British architects (though I must say I rather despair of British architects at the moment) to design a railway station that did not look like a sawmill, or something of the sort. I do not expect the platforms to be covered with red carpet, but surely railway stations could be made a little more attractive. I know that one of the objections to making waiting-rooms more comfortable is the fact that they are so easily destroyed by hooligans. That of course points to one of the great disadvantages the railways suffer to-day, that of under-staffing. Possibly this is a case where a little extra grant by the Government could help. If a man could be in attendance in the waiting-rooms, perhaps serving drinks or something like that, one would not get that destructive hooliganism.
The two stations which I use most are Waterloo and Victoria. Noble Lords will be surprised, unless they know them, to learn that neither station has a waiting-room at all. That is a surprising thing for large London termini, is it not? Waterloo had one a few years ago, but it was destroyed in order to build a large ticket office with about twelve positions, although I have never seen more than three open. That is another example of under-staffing, of course. I believe that many more people would use the railway if they felt that it was going to be more comfortable, and, incidentally, more pleasant. Too often have I asked ticket collectors at the barrier which platform my train was
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going from, and have received the answer, "I don't know; why don't you look at the board." That does not make for pleasure in travelling by rail. They should know more than that.
One final point on branch lines. I believe it was the noble Lord, Lord Teviot, who said that long ago branch lines went by the board. I am afraid that I cannot agree with him. Branch lines are very much wanted. After all, they are tributaries to the main line. What would the Thames be, for instance, if it were without the minor rivers which flowed into it? The same applies to the main lines and the branch lines. There is no doubt that some of them do not pay. I understand from a letter that I had from Mr. O.H. Prosser, who is a very keen railway enthusiast and who writes to me on these occasions, that the right honourable Minister in another place, Mr. Peyton, said:
"All renewed grant undertakings"—
that is, for branch lines—
"have been limited to a period of one year since from January 1, 1974, financial support for loss-making railway services will be made mainly under E.E.C. Regulation 1191/69."
That is another area where we are not being allowed to rule in our own country. However, be that as it may, I cannot see any reason why a State-owned railway and privately owned branch lines should not run side by side. They do it very successfully in Switzerland where there are many privately owned branch lines, but the State railways are among the most efficient that I have ever come across. I cannot see why, if British Railways feel that they do not want to run a private line, they cannot sell it to some undertaking which will run it and run it efficiently. All these things are worthy of consideration.
Now may I say one word about the railway driver. I think it was the noble Lord, Lord Popplewell, who brought up the matter of driver behaviour. I have twice had the privilege of having a run on the footplate and I know what the driver has to go through. To my mind, they are among the finest class of men in the country. They are responsible to the nth degree. They have hundreds of peoples' lives in their charge but they never take the slightest chance. They are almost 100 per cent. safe. Therefore, I feel that we are doing them a very great

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wrong in rating their pay below that of somebody who just makes a part for a car or something like that. I believe that needs very serious consideration by the Government. My Lords, I feel that the railways can be, with improved design and improved services, what they once were and more.
I should like to end by commenting on another point made by the noble Lord, Lord Popplewell, apropos of electricity as against the diesel. I thought his remarks were particularly interesting in view of what was said yesterday during the debate on the Coal Industry Bill. Coal is plentiful. Oil by the year 2000 at any rate, is likely to run out; but coal is not and coal makes electricity. Therefore I feel that electrification of our railways, though expensive at first, is the only logical solution in the end.
5.27 p.m.
LORD REDESDALE: My Lords, I should like to join in thanking the noble Lord, Lord Popplewell, for introducing this debate. He made an excellent speech covering so much ground, in fact covering rather more ground on the roads than on the railway. However, I feel that the railways are such an important subject that I shall concentrate on them alone. The noble Lord, Lord Popplewell, made a few rather sad comments about current statistics—closures and all the rest of it. I am fully aware of these as they are written up in such excellent documents as the British Railways own document for the Senate Hearings in 1971. In dealing with that, it is a pity that there is not an up-to-date version of that document for your Lordships in the Printed Paper Office. It would he rather nice perhaps if British Rail could be invited to prepare a presentation for your Lordships as opposed to the United States Senate.
Passing on from that, I found the noble Lord, Lord Sandford, a little depressing, I have to confess, when he said that the remarks in the article in last Sunday's Sunday Times did not have any truth in them. That was rather sad, because I thought that it was the most hopeful thing there was. I believe that the railways must—and I repeat "must"—have a bright future because of the impending energy crisis which we are told about from time to time and because of the railways
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environmental cleanliness. It is ridiculous for us to have 30-ton individual loads of freight thundering down the roads and having to compete with road users who need to go from point to point. I believe that this is even more dangerous, and is borne out by a document which has been prepared by the Transport and General Workers Union, which was raised in the March 1 issue of The Times, where the Transport and General Workers Union said that there is an urgent need for clearer legislation for the transport of dangerous chemicals and better training for the drivers of lorries carrying them. We have seen a number of very sad disasters on the road where these chemical lorries have been involved in crashes and it is said that these lorries have to travel on the same roads with ordinary drivers.
I wish to develop the point of individual loads and the railways and freight later on in my speech, but may I point out that at present 75 per cent. of passenger miles travelled are by car. Only 9 per cent. are by train. One can understand the reasons: one of which of course is cost. We know that railway fares are now extremely high but the convenience of high speed travel is evidenced by the dramatic increases in passenger miles travelled on the Manchester route. This has gone up and up. Freight at the moment is 61 per cent. by road and only 19 per cent. by train. The roads use up so much of the precious land we still have; in fact one mile of trunk road takes up 40 acres. We hear about there being more roads. I am rather sad about this because we have an enormous and to a large extent unused network of railways. A lot of these lines are unused. I hope that these will not be sold off, because I think there is tremendous potential for these lines.
It is obviously unworkable to legislate freight off the roads. You can keep it out of the centre of towns. I have an interest in this, because I have freightliners passing my own house in central London. An economic incentive has to be offered to freight users, and only by a tremendously large investment in the railways can this be done. I feel this is going to be necessary anyway. The first thing that is needed is the electrification of the routes which were mentioned. The noble Lord, Lord Kings

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Norton, spoke in some detail about the magnetic levitation system and the hovertrain. If we have concrete lines—that is, using the new slip form paving techniques—the railway lines could in fact be adapted later on to take a magnetic levitation system. It may still need pick-up points, and therefore the high-level wire system could be used as well. Therefore, I feel that investment now, which is very necessary because of the future energy crisis, could also take on development for magnetic levitation trains in the future. Although the noble Lord, Lord Sandford, said this was not going to be proceeded with, or possibly might be partially proceeded with, the estimated cost of electrification of these routes would be £1,500 million. This is obviously a vast sum of money, but at the same time a cut-back in our rail system would cost us considerable sums of money as well.
I believe that what we really need is very heavy investment in research and development now. We see the possibilities that there are with magnetic levitation; we see what could be done with A.P.T., which should be running by 1976, and that is expected to last for 10 years. After that we shall obviously need much more sophisticated methods of transport. Research and development could do a tremendous amount for us on the freight side. British Rail have already investigated the possibility of the autowagon; that is a self-propelled single or multiple wagon operating without a crew. These systems are computerised. The trains run round the systems without having to be looked after, apart from the computer control. I appreciate that this would cause a number of staff problems, but let us look at the staff side of British Rail. Back in 1948 there were 648,000 people employed. Sadly, in 1970 there are only 250,000. One can understand the unions' anxiety about jobs. I feel that if we could take the bull by the horns and formulate an integral transport policy now, with a planned heavy investment programme, the railways could be our salvation in the years to come. The expanded system would offer many new jobs. Unfortunately, a certain amount of growing up will have to be done on both sides, both by the Government and the unions. I think the N.U.R. might appreciate it. ASLEF at this moment might not
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be so keen to look to the future in this way, but there will obviously have to he a different sort of job.
The noble Lord, Lord Burntwood, spoke about the problems of drivers on highspeed systems. Well, the systems that have now been developed in fact make it unnecessary to have a driver. It is unnecessary really to have a driver on the Victoria Line. I appreciate that this is a jump forward which the unions will not readily accept, but in time to come this is the system which will probably have to be developed. Certainly a driver cannot function on his own at high speed without very advanced signalling systems. These systems obviously naturally lead on to totally automatic control. There is probably need for a driver as well, for the reassurance, anyway, of passengers.
I think that research and development can offer many more exciting prospects as well. As I said, there is this enormous unused railway network. Some are closed lines; some are lines which are now only operating two lines on the whole route and have closed down the other two. Research and development can produce lots of wonderful ways in which these could he used. For instance, there must be a way of integrating the lorry with the railway. We have talked about roll-on roll-off—the noble Lord, Lord Somers, mentioned this. I think even more sophisticated systems of roll-on roll-off could be used.
The next thing is this, I think, exciting prospect of the A.P.T. I see the British Rail advertisement says, "Fly British Rail", I like the idea. It reminds me of the story of the not so intrepid little old lady who said she wondered why we had any need to fly as God had given us the railways. Perhaps she would have been confused by British Rail now. The A.P.T. offers us immense possibilities. It can in fact reduce costs, provided that it is operating on an electrified system, and provided also that we have the concrete lines, which require far less maintenance. British Rail's existing R. and D. budget is £5 million. Just recently British Rail have started to market their R. and D., which is most imaginative of them. So far it has produced £280,000 return this year, but next year this should he £1·5 million. This could finance considerably more R. and D., which in the end would

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be the salvation not only of this country's transport problems but also of the world's.
5.38 p.m.
EARL BALDWIN OF BEWDLEY: My Lords, I was beginning to feel rather disheartened at the knowledge that has been shown by all the speakers. I happen to have with me a list of the speakers in a debate on transport (not transportation) in 1960 when I made my maiden speech, and there is nobody in the House now who is named on that list—but three minutes ago the noble Lord, Lord Swansea, slid quietly into his scat. This gives me such heart that I think I shall be able to get through what I was going to say.
I speak as one of the last splinters from the boards of the old main line railway companies which were broken up at the end of 1947. I thought I might risk a few remarks on this most baffling subject, although I can throw no light on it, far less offer any solution. But I am standing here partly in gratitude to my noble friend (if I may call him so) Lord Popplewell, and partly to give one sad "toot" in memory of the railway of which I was lucky enough to be a director—the old Great Western. First of all I want to make a very swift sketch of the railway decline over the past fifty years, because I think it is rather important to know how this all came about. It happens to cover my own adult lifetime. The story may not be so familiar to most of your Lordships and I think it should be generally known and understood. Soon after the end of the First War, long before we started to go spiral and lose control of things, the dozens of private railways were consolidated into four great railway systems. They were called the London Midland and Scottish, the London and North Eastern, the Great Western and the Southern—in order of magnitude that is; not nationalised you understand, but with boards of directors and stockholders, and everything correct as of old.
Of course, it is easy enough to laugh backwards at people who are trying to squint forwards, and they laid their plans as well as they could, based and calculated upon figures of traffic before the 1914 war, I suppose inevitably because they had nothing else to go on. In those
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days, public opinion was really afraid of the power of the railways. I remember it well—in the Press all the directors were regarded as bogeys. Therefore, it was ruled that the companies were compelled to carry all traffic offered to them—I think the technical term for that is "common carriers". That is a very important point. They had to carry traffic at fixed rates of carriage which were to be published for all to see. That is the start. These rates were calculated so that raw materials had to be carried below cost and finished goods had to be carried at well above so as to afford a profit on balance for the companies and an advantage for the trade of the country. I am afraid I cannot remember where the passengers were to get in—first, second and third class as we had in those days—but it must be remembered that in the years between the wars the revenue from freight was always much larger than that from passengers, at least on all the systems except the Southern.
So in 1921 all seemed set fair. I am very glad to see the noble Lord, Lord Hurcomb, has just come in, because he will be able to correct me if I get any of the old facts wrong about the start of the railways after the First War. All seemed set fair, or what my friend the late Mr. Randolph Churchill used to call, with his wide command of English, "tickety boo". I was glad to learn, by the way, last week when some of us in this and the other House were most charmingly received at the headquarters of British Rail, Marylebone Road, by Mr Marsh, his board and officers, that they are now allowed to take or reject whatever freight they please. My Lords, just think of it! It took forty years to set the railways free from that commercial tourniquet. No one would listen to us in those days. What happened? The thinkers had left the nonexistent lorries out of their reckoning. There were none to speak of before 1914; there were very few motor-cars on the roads in 1921—nor many good roads, either. I remember potholes. But very soon appeared thousands of ex-Army and other lorries whose owners were entirely free to study the published rail charges and underquote them to scoop as it were the cream, the profitable part of the traffic, which they did for the next 18 years until the Second World War broke

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out and once again made nonsense of commercial statistics. That unfair competition by the roads was the reason for the railways campaign for what was called a square deal to free them from these mandatory restrictions. Add to this fact a short boom in trade in 1919 until about 1921, followed by a very long slump, with worse to come in the form of what was sometimes referred to as the world economic blizzard of 1931, and that is quite briefly the inter-war tale of our long-mocked rail system.
In 1939, at the beginning of the Second World War, the Government took over the railways and for the next six years a very grand profit indeed was had by all—hundreds of millions of pounds, the old modest pre-war average annual earnings going to the stockholders and the enormous remainder to the Treasury. The end of 1947 saw the end of private ownership of the railways. I have no opinion about that except to say that, in view of subsequent events, the stockholders, who were thought by many to have been rather meanly treated, can count themselves lucky to have escaped with what they had.
This is such a big subject that I will take only two points—one on freight and the other on passengers. Incidentally, I read in Whitaker's Almanack the other day that gross receipts for passenger traffic in 1971 greatly exceeded those for freight, which is a reversal of the situation before the war as I knew it, and rather significant, I think. With regard to freight, I must go back a bit. When I used to work in a lowish position in the iron and steel trade, the period when I was most closely involved was from 1925 to 1935. At our rural canal-side steel sheet and blackplate works almost all of our raw materials came in horse-pulled barges and we had the choice of despatching the finished goods either by rail a couple of miles away or by road. I might mention here that the barges, usually carrying steel bars or coal, took quite a long time on their way between us and Wolverhampton, a distance of some 30 miles to the North; there were 50 locks, 21 inside Wolverhampton itself, I believe. I do not know why, but I always remember some amateur had painted on one of the old barges the name "Madcap". My job in those days had to do with not what came into the works but what went out. I had to deal with impatient customers,
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plaintive customers, angry customers, hysterical customers, and I had to give them promises. Trade being very hard to come by in those days, I had to keep those promises.
My Lords, much as I love the railways and admire the men who operate them, I learned my lesson there on the manufacturing spot: that I simply could not risk our steel sheets becoming, as they often did, buckled, rusted, delayed or lost on the complicated journey, when by using our three or four small lorries (they were only about three-tonners at the most, probably with solid tyres, or I am fantasticating? I have the feeling they had solid tyres) these bright and smooth steel sheets of ours would get to their destination in the same condition in which they had started, and at twice the speed or better. There was no question about it. I blame no one for that. As we used to say in the Forces, it was the system. When I read, as I did last week, in a pamphlet I was sent called Transport. It's your Choice, to which I think the noble Lord, Lord Crawshaw, referred, I caught my breath when I saw at the end of its powerful message the words:
"Solution. The answer lies in"—
among other things—
"the transfer of freight from road to rail".
I thought, "Just try telling the trader and his customer what form of transport has to be used, and see what happens—that's all". I suppose the jargon-mongers would say my experience so long ago was traumatic.
As for passenger traffic, I choose one event out of many to make my only other point, which is that I do not think it wise to order British Rail to prune its costs quite to the quick where the passengers suffer hurt or deprivation. They can probably put up with lack of luxury. But I know a bridge, a small but important footbridge, over the main line at a country station that I use from time to time across which have to trudge all passengers bound for London. Until about six or seven years ago this bridge, with its roof and sides of corrugated iron, gave protection from rain and snow, if not always from wind. These sheltering sheets were getting a bit rusty, I suppose—I ought to know; I may even have made some of them—and were judged to be dangerous, and so they

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were removed. The bridge remained at our service, but coverless.
After some months like this, it began to look as though there was not going to be a replacement of that cover. It seemed incredible, and there being no station master (they took him away long ago) I asked our favourite porter—he has been retired, by the way, since then, in full health and strength—whether my fears about the bridge were correct. He said that he was afraid so, and I said that I thought that I might ask Paddington the reason for this. There came upon our porter's face a look of roguish pathos such as an ex-sergeant (which is what he was) can sometimes assume when he begs some doubtful favour, and he said, "Oh, don't do that, sir. I made me a lovely chicken house out of that roof." Of course it was not the chicken house aspect of the affair that one found so depressing—indeed, that was the only cheery part of the picture. It was that our old Great Western successor had sunk to so poor a state as to confess, albeit silently, "We simply haven't the cash to waste like that on passengers. They've umbrellas, haven't they?" Surely, my Lords, this is going too far. You cannot treat customers like that if you want to retain their business.
What are we doing since nationalisation? We have had in control of the railways men of absolutely first-class quality, full of hope, and with money, in the rapturous early days, to spend on a scale that the old directors never dared to think of. Yet the job defeated each one of them in the end. The other day I came across a passage in a letter to the Minister, written by the Chairman of what was then the British Transport Commission. I kept it at the time because it had startled me when I first read it five-and-twenty years ago. It said:
"We remain completely convinced that by modernisation and rationalisation our railways can be made to pay their way. It is the key."
My Lords, it should indeed be the key to any ordinary lock, but not to this one. I think everybody knows that now. What nobody knows is what has happened to the lock. Most of us believe that we still need the railways. I think they should be carried on as a public service, but with a little less parsimony, please.
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Like Mr. Justice Shallow and his cousin Silence, I seem to be living on memories this afternoon. I hope your Lordships will allow me one more. It is of an elderly town major of one of the ports in North Africa during the last war. He had a forbidding mass of little town problems to deal with, and he said to me one day: "It would be the gravest possible mistake to go to the office this morning. Let us take a walk along the seashore." I cannot remember what I was meant to be doing at the time, but we took that walk and it cleared the old man's mind wonderfully. I am elderly, too, now I suppose; and I find that, when thoroughly stuck for a solution, the weaker brained among us tend either to sink back upon a cushion of cant and repetition or to seek temporary refuge in hilarity. I am sure, therefore, that your Lordships will not consider me gratuitously saucy if I end my rather fugitive remarks by quoting—with your Lordships leave—something written by my great-aunt Aggie to her brother-in-law, my grandfather, on his having been elected to the chairmanship of the Great Western Railway in 1905. He was Member of Parliament for the Bewdley division of Worcestershire, and she was the wife of the President of the Royal Academy and therefore perhaps overbold in stepping outside her artistic sphere and offering advice on railway economy. I must condense it slightly.
She wrote:
"My dear Alfred. Of course I am only a woman I know, and therefore may make a mistake at times (or appear to do so), but I have, in my limited way (or what may be thought so by a man), thought a good deal about your recent appointment to the Chair on the Great Western (Eastern, is it?) Railway line (and, of course, as you seem pleased we are all pleased, so far as we understand). I hear it is a very high Chair and I hope you will not let it get into your head. I have been trying to think of some way for you to distinguish yourself while they keep you on, but no doubt (being as of course I am aware, only a woman) you as a man may not at once see what a change you would work in the Railway world; you would never be forgotten.
"My idea then is (ideas often bring fortunes and I should patent it before the other Railways hear about it) for you (you need not say I suggested it) to have a universal penny fare available for the whole Great Eastern (Western, I mean, but it is all the same) system, all over England and Wales, or Paddington to Edgware Road, so that people having paid their penny could choose when they had sat down in the railway carriage, and had time to think where they would go; so much

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better than when leaving home in a hurry. You might on Bank Holidays run the trains on to Dublin, then you could charge a 1½d. return instead of 2d. I can promise you the trains would be full.
"Of course, you might lose a trifle on each ticket in an ordinary way, but on half a million passengers at holiday times there would be a huge profit. I feel sure this proposal would make a great sensation You would never hear the last of it. If you cannot do the whole thing at once, you might try penny fares to Kidderminster as I am often coming to see you, and we can talk it over. I feel sure (though only a woman) that I shall win you over to my way of thinking Your affectionate sister in law, Aggie."
Of course that was a bit crudely thought out and not up to masculine standards, but it still has a kind of wild relevance; anyway, it is not much sillier than a policy of continually increasing fares and decreasing service in an out-of-date determination to make the unpayable pay. Besides, it is making all the people who work for the railway so unhappy. I am not thinking of wages and strikes; but once upon a time, my Lords, of all the lines the Great Western was, I think, the happiest, as well as, I fear, the proudest. And now there is scarcely a pin to choose between one drab Region and another for torpor and dismay.
5.59 p.m.
LORD HURCOMB: My Lords, may I be allowed to intervene for one moment in view of the reference of my noble friend Lord Baldwin to myself. I always found the Great Western Railway a very agreeable line to travel on. They carried me to all the places I most liked. I also found them a source of ideas, and I did not realise that they had a library of correspondence such as that from which he has read, and from which ideas, economic and otherwise, may have filtered into the minds of some of their managers. On his very brief reference to what happened to the railway during the two wars, I confess that I do not feel able to correct anything that he said except on one point; it fell to me to liquidate, if that is the right word, the old war agreements for the control of the railways in the First World War.
It is quite true, as he says, that the drift of trade freight traffic away from the railways to the roads began with a great many lorries of all sorts getting into the hands of private operators who had very
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little in the way of resources and who often cut the railway rates to pieces. What he did not say was that the railways might have bought all those lorries if they had been prepared to pay a more reasonable price. I attempted to sell those lorries to the railways, not to the Great Western in particular but collectively, and they were not all as proud and haughty as the Great Western was apt to be. But their engineers all looked down their noses on these lorries and said, "Those are not the sort of thing we can really add to the rolling stock of this magnificent institution", and they refused them. They might have had them. I dare say if they had bought them up they would have been accused of merely doing so in order to spite the competition. They would not have run them as lorries. They probably would have scrapped the lot. What would have happened then I do not know. But they had the chance; they did not take it, and other people did. That is one thing that makes one wonder whether there is not some virtue in the small man and the private operator after all.
6.1 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I am very much obliged to the noble Lord for that intervention. May I first apologise to Members of your Lordships' House, particularly to the noble Lord, Lord Popplewell, and my noble friend Lord Mowbray and Stourton, if I am not in my place at the end of the debate, due to a prior engagement out of London.
My Lords, may I say how disappointed I was in the charge of the noble Lord, Lord Burntwood, that the road transport lobby influenced advisers in the transport section of the Department of the Environment to such an extent that this was reflected in my noble friend Lord Sandford's speech from the Front Bench this afternoon. I, like the noble Lord, Lord Teviot, saw no such preference. In fact I surprisingly found rather too much said about the worth and wealth of the railways and its particular part in the transportation system.
My Lords, in considering any kind of transportation policy there are four modes of transport which have to be considered: air, sea, road and rail. Notwithstanding what the noble Lord, Lord Kings Norton, had to say about the hovertrain and

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hovercraft—I am not sure into which category they fall—it must reasonably be accepted that neither air nor water transportation can make a significantly greater contribution to the whole than they do at the present moment, so that one falls back on the road and rail situation. At the end of 1971 we had left on the railways only 11,643 route miles as against some 210,000 miles of roadway. This seems to me to crystallise the long distance, the inter-city situation.
The problem then divides itself largely into two parts, that of moving people and that of moving goods. In the first group, the people problem is essentially an urban one. There is no great difficulty in moving people long distances; the congestion occurs, as has already been said, in the commuter traffic, the cross city traffic. There are few I think who would disagree that an integrated public service, a city transport system, is probably the best answer. It is not a question of forbidding, either by purse or by legislation, the use of motor cars inside an urban area until such time as a public transport service, however it may come about—underground, tramways, buses or what have you—is properly effective. Already we can see some city centres being denuded of commercial activity due to the shortsighted action of local authorities in preventing traffic coming in and so prohibiting commercial activities to continue. Indeed, the reverse is very likely to happen. In my own home town a large discount store development is being permitted some six miles away from the city centre, and it is held that there is ample parking space. This then will bring some 40,000 vehicles each week to a part of the country which so far has no traffic problem at all. All the people currently shopping in the shopping areas are to be tempted away to an area which has no such facility, which is essentially residential, and it is this kind of attitude which so many local authorities have towards the motor vehicle that will itself destroy the very thing they are trying to preserve.
On price restrictions, it is shown that any competitively freed forms of transport have very little effect on the private car user. They do not know how much a bus fare is, how much a train fare is; they do not care. What they do care
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about is that the bus or train or tram is not at their doorstep precisely when they want it, nor will it take them back to their doorstep at precisely the time they want. If there is to be a limitation on car entry into urban areas by price the rich are likely to be the only people to afford it and if as the noble Lord, Lord Burntwood, has suggested, so many motor cars are supported by companies for tax advantage that additional cost will make very little difference to the real operator of the motor car.
My Lords, much has been said about the question of carrying freight, and I suppose in any debate on transportation within the context of the environment it is the lorry that provokes the most hatred and bitterness and most vociferous condemnation, probably because over half the households in Great Britain have the use of one or two motor cars but very few have the use of a motor lorry. Nevertheless, out of some 16 million road vehicles in use to-day only 1·6 million are commercial vehicles; and of that total 4 per cent. of the whole are heavy goods vehicles, that is over one-and-a-half tons unladen weight; and the proportion of eight tons unladen weight, 32 ton gross vehicles, is even smaller, though it must be admitted in fairness that that section of the commercial vehicle market is growing. In 1980 it is estimated that there will be 23 million vehicles on the road. It is equally estimated that there will only be 1·8 million commercial vehicles. If one looks back over the last twenty years one finds that the commercial vehicle population has only doubled, whereas the private car population has very nearly quadrupled, and that kind of extrapolation will continue right through until the year 2000. So that the bogey of the commercial vehicle menace really pales into insignificance against figures of that kind.
Commercial vehicles carry 80 per cent. of the total goods tonnage in this country, leaving 20 per cent. broadly, for other services; that is, about 1,710 million tons by road, 196 million tons by rail, 51 million tons by water and 54 million tons by pipe-line. There is a paragraph in the British Road Federation publication, Finance and Roads, which I received only two or three days ago, which rather refutes the implied condemnation that if 50 per cent. of the volume of increased

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traffic on the roads transferred to rail, it would result in only a 3 per cent. reduction in road traffic. It was either the noble Lord, Lord Popplewell, or the noble Lord, Lord Burntwood, who suggested that we should talk not in tons of goods but in ton miles. I quote here:
"The latest information available shows that of 1,657 milion tons of goods carried by road in 1967–68 1,172 million tons"—
that is, just 70 per cent.—
"travelled under 25 miles, while only 107 million tons"—
that is, 61½ per cent.:
"involved a haul of over 100 miles."
The Chairman of British Rail stated in October last year that the railways are interested only in goods carriage over 100 miles. So if one does a quick arithmetical sum one finds that 6½ per cent., or 107 million tons, of road freight transferred to rail would increase the railways' share by only a minimal amount. Therefore, it is fairly reasonable to suggest that rail has to look elsewhere for increased usage. An economic rail load is around 200 tons, but that is an enormous amount of goods to be assembled. The noble Lord, Lord Redesdale, questioned whether 30 ton loads should rumble down the roads, but goods in this country are measured in loads of tens of tons and not hundreds of tons, so it is only reasonable that road transport with its greater flexibility should take the bigger share of the market. Even if some of the road freight traffic transferred to rail, it could not be a clean transference; it would be a transference from road, to road and rail, because British Rail have only 600 collecting and delivery points in the United Kingdom. Having got your goods, after perhaps three days on rail, to a collecting and delivery point, a road vehicle has to pick them up and take them on, but because most of these collecting points are within urban areas the traffic generated by putting more goods into them will increase the congestion. It seems to me reasonable to suggest that on the 210,000 miles of roadway, 3,500 of which will be main trunk routes by 1980, there should be many more collecting and dropping off points which do not add to congestion. Surely, my Lords, while exploring other avenues—
LORD POPPLEWELL: My Lords, the noble Lord has spoken about 210,000 miles of roads, which of course is quite correct, but will he also say how many thousands of miles are what might be termed uneconomic, kept up by local ratepayers, compared with the uneconomic branch lines on the railways which have to be closed? Secondly, as regards the increased volume of traffic carried by heavy lorries, is it not correct to say that there has been an increase of 817 per cent. in the number of lorries over eight tons in the last six years?
LORD LUCAS OF CHILWORTH: My Lords, I would not contest the knowledge of the noble Lord, Lord Popplewell, about railway track. I shall accept what he has said because I cannot challenge it. What I can say is that, essentially, there are only 3,500 miles of Class I roads and motorways out of the 210,000 miles. But I have already admitted that the problem is an urban one and not a long-distance one, to which the 3,500 miles relate. I would challenge the noble Lord, although I am open to be corrected, on the growth of the heavy goods vehicle over 8 tons unladen. I believe that the true figure is an increase of not 800-odd per cent. but of 400-odd per cent. Perhaps we could exchange figures on that. Certainly, let us accept that that kind of commercial vehicle shows the largest increase.
The noble Lord has led me on to discuss, quite briefly, some of the problems associated with this class of vehicle, because it is this class of vehicle which causes the most concern. There are Acts, measures and regulations controlling them—the Road Traffic (Foreign Vehicles) Act 1972, the Highways Act 1971, anti-pollution measures, and other measures which the Minister outlined in his speech. As these measures bite so will many of the problems associated with the heavy goods vehicle be minimised. They will certainly not disappear, but they will be minimised. There is only one way to make that process complete, and that is by a properly designed and quickly built road system, so that those vehicles are transferred from the congested urban ways on to the roadways designed specifically for them and where provision has been made by local authorities to provide overnight lorry parking, facilities for drivers and so on. It is

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quite lamentable how few local authorities have done anything about it, pleading that the land is scarce or is not available, or that it comes in their longterm transportation planning. I can only hope that, with the reorganisation of local government, the fewer transport authorities—46 in number—will take a larger and better grip on this particular problem.
My Lords, there is no doubt that local authorities, in whom lies most of the power for urban motorways, have failed lamentably to provide adequately for the kind of traffic increase which has been forecast for years and years. If the railways seek to attract more business, there is little doubt that they will have to charge a more economic price; and I do not go along with the noble Lord who suggested that passenger rates are high; I think they are extremely low and highly competitive with running a motor car. If there is a greater frequency and a better utilisation of those things they have, they are bound to get a bigger and more profitable share of both the passenger and the freight market that is available.
6.22 p.m.
BARONESS GAITSKELL: My Lords, we can all be grateful to my noble friend Lord Popplewell for his Motion. I can think of few subjects more pressing to-day and more deserving of a long-term planning approach by the Government than transport. This debate has been conducted not on Party lines at all, and I have enjoyed many of the speeches, particularly the speech of my noble friend Lord Popplewell, with whom I am in entire sympathy, and the brilliant speech of my noble friend Lord Burntwood. But there have been speeches on the other side which I have enjoyed, too, especially the enchanting reminiscences of the noble Earl, Lord Baldwin.
My Lords, few subjects need a greater understanding and participation by the general public than these growing problems. In spite of a greater awareness of the social and environmental discomforts and dangers of many transport services, in every crisis we still concentrate on the narrowest—not just the narrow, but the narrowest—economic approach, as with the Beeching Report. Here I mean no disrespect or criticism of Lord Beeching personally. He was given the
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Government's terms of reference and, so to speak, the public was served with a cheaper cut of the joint. Some of us, from both Houses of Parliament, heard an excellent account of the present position and the potential of British Railways given by Mr. Richard Marsh, the Chairman. Mr. Marsh was at great pains to say that he was not speaking as a social reformer but as a loyal employee of the Government. All the same, his analysis of British Rail's problems and accountancy, and of the enormous opportunities for progress, revealed that the purely monetary criteria of demand and supply are inadequate to-day. Real social needs have to be taken into account, and true social costs of damage to the environment and even danger to life when, let us say, we are comparing the danger from railway travel and congestion on the roads.
It was the chief engineer of the Automobile Association who said that in 1967 road accidents cost £250 million, and he estimated that in the next 30 years, if we continued as at present with a free-for-all on the roads, half the population of this country was likely to be injured—a very macabre estimate. However, the motor car has its attractions as well as its dangers, though if we are to transport most of our citizens to work or for leisure we must rely on public transport, as most of the speakers in this debate have said—our tube trains, our buses and our railways. To improve these should be our main concern. Road transport should not be expanded to the point at which it reduces the resources we need for public transport. Fortunately, we are becoming increasingly aware that we live in real danger of destroying our environment by ignorance and by affluence. Large sums are being spent by the Government to attract investment and so help relieve unemployment in the regions. These areas are in Scotland, Wales and the North East. Investment will be attracted to where there are good communications, and railways are essential to industrial development in these areas.
Nothing has driven all this home to people in this country as much as the multiplication of private cars and mammoth goods lorries which slow down traffic to the speed of a conveyor belt. Roads and rails should be part of a unified strategy in an overall transport policy. The most recent inquiry, the Layfield inquiry,

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was set up to analyse the development plan for the Greater London Council, and it was given very wide terms of reference, including predictions about future population, employment, housing and, last but not least, traffic problems. The Lay-field Report is a juggernaut of a Report, and I am not going to pretend that I have read it all; I have simply read the summary of its recommendations. These are well-intentioned though not very original—rather pedestrian, in fact—but the Report urged a greater reliance on public transport. It also stressed that provision for new roads rested on restraint of traffic, mainly by control of parking in the centre of London.
However, something must have gone wrong with the steering of the argument, for it has recommended Ringway One, a six-lane motorway through inner residential London. It is the most controversial and the most expensive recommended road, with estimates of the cost varying from £600 million to £2,000 million by the year 2000. My Lords, there is something about astronomic sums of millions of pounds that mesmerises a committee. They lose sight of the people who must pay for or suffer from their gigantic plans. Mr. Rippon, the Secretary of State, has accepted in principle that Ring-way One should remain in the plan for Greater London. I hope we shall have an opportunity to debate the Layfield Report and question the predictions and statistics on which it is based.
However, I find it difficult to understand why Mr. Rippon and the Government have gone so far as to accept such an unpopular decision, not just because it is unpopular but because such an acceptance delays a comprehensive and long-term approach by the Government and the Community, which is so close to his heart. The overall performance of our railways, despite the setbacks of panic economies over the last decade, compares very favourably with the performance of the railways in the European Community countries.
Personally I am not so much concerned about the allocation of freight to the railways as about the great benefits that rail transport gives the ordinary people for work and for leisure. There are opportunities here for really wise planning to increase speed and comfort
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that cannot be achieved on the roads by private cars; and so long as the planning is not left to the bureaucrats I think we have a hope. I sometimes think that the most dangerous animals roaming through the economic jungle of our densely populated cities are the bureaucratic planners.
6.31 p.m.
LORD GAINFORD: My Lords, I too must add my thanks and congratulations to the noble Lord, Lord Popplewell, for initiating this debate. It seems that we are having many arguments on the merits of road and rail travel. I am definitely in favour of rail. I suppose I am prejudiced because I can claim that railways are in my blood. I am proud to be a member of the Pease family. An ancestor of mine, Edward Pease of Darlington, was one day writing in his house alone but for a manservant. The servant came to him and said that two men from Killingworth Colliery had called to see him about a matter of business. At first he did not want to be disturbed; but being a devout Quaker he thought that the good Lord may have sent the men for some special purpose and he let them in himself. He gave them a cup of tea on the kitchen table. George Stephenson was one of these men and he said, "Mr Pease I understand that you have been trying to organise a tramway to carry coals from the colliery by horses drawing trucks running on rails." He said he had found a machine that could draw many trucks also on rails. From that conversation there came into being a few years later, in 1825, the Darlington and Stockton Railway. One of my earliest memories is of seeing the first steam engine of that line, "Locomotion No. 1" in operation. Before any noble Lord tries to tax me with having lived so many years longer than I have, I will say that this was in 1925 when I was boy of 3½ years. The occasion was the centenary of the Darlington and Stockton Railway. "Locomotion No. 1" had been taken from Darlington Station and made to draw a train, a replica of the first one, with passengers dressed in the clothes of 1825.
There can be no excuse today for British Rail to rest on any laurels. We have enough arguments about strikes. They seem to be all that we read in the

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newspapers and hear on the radio. British Rail may still have to be "pruned" a bit, but it has many qualities that we should try to retain. We find plenty of room to criticise but there is much on the credit side compared with other railways. It strikes me that the worst type of our second-class carriages is more comfortable than many first-class coaches abroad. The vast network of commuter railways in the South may not be exemplary but it is certainly commendable. One often is annoyed at a train's being late or cancelled but it may not be long before the next one comes along. Our railways are also a good tourist draw. Many visitors coming from abroad, particularly North Americans, want to travel on our trains. By the time a summary is made of this debate perhaps we shall have found some cause to praise British Rail and not to bury them—perhaps not "bury" but rip them up.
My Lords, there is talk of the closing of lines and I am concerned about this in view of a few Scottish interests that I have. There is talk of closing lines in North and West Scotland. The Inverness to Kyle of Lochalsh line is said to be unprofitable but it is a vital link with the West coast. There is a line I use myself in my home in Argyll, the line from Glasgow to Fort William. I get off at Arrochar. Then there is a line from Fort William to Mallaig. I believe it is still under consideration that Fort William may remain open. I hope it will not be merely a short reprieve but that it will be kept in use; because it is a vital link. May I ask the Government whether, after all the arguments it is considered necessary to close a line, the track can remain for some short period of time to make sure that the line could be opened again? I know that the sight of a disused and rusting railway track with grass growing between the rails is unsightly, but I think it is much more inexpensive to put back the old track into service than to resurrect one which has been totally destroyed.
I have tried to say something favourable about the railways and I now want to draw your Lordships' attention to another form of transport, one which I mentioned at the end of January in a debate on the quality of life in urban
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environment. The noble Lord, Lord Greenwood, spoke with concern about the amount of traffic on the roads and about heavy lorries, and asked that more freight should be put on the railway or on the canals. I pointed out the potential of some form of freight transport by air in a new design for airships. I recalled a speech on aerospace made by the noble Earl, Lord Alexander of Tunis, in a debate a year ago in which he outlined the possibility of new airship development. As I did in the previous debate, I mention a small personal interest. It was about two years ago that I asked my stockbroker whether he could find out whether there was any truth in the talk of revival of airships. He told me about a shipping company named Manchester Liners who were a subsidiary of Cargo Airships Limited. I became a small shareholder in the shipping company.
The word "airship" still conveys the horror, so much publicised, of the accidents of the R.101 and the Hindenburg. The word "airship" is at present the only word available to describe this means of conveying freight by air; but it is not the old type of Zeppelin or dirigible that I wish to advocate. The word we need is something to convey a new form of aircraft producing a new medium: the air-orientated cargo system; not the old type of airship, but the rightful successor to it. Those who are still with us who worked on those former airship designs may see in it something on what they originally worked bearing fruit. It is something that could produce a new, revolutionary and highly beneficial result to this country. I mentioned successors. I also mentioned my family connection with George Stephenson. If somebody were advocating the resurrection of the steam engine he would not think of getting back to the "Rocket" or to "Locomotion No. 1" but to their rightful successors. Today's Britain Rail are the rightful successors to what the Stephenson Brothers thought up; but the successor is different from the original conception.
On the matter of air transport, it is a return to the first principles of flight. There are two kinds of aircraft; the lighter than air and the heavier than air. Aircraft that are lighter than air are inherently safe and become more efficient as they become bigger. The old

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zeppelin structures were laborious to construct. Today they would be prohibitively expensive. They were fragile and flexible, and in flight they needed skilled and gentle handling. They needed huge sheds to house them on the ground and an army of men, or winches, to hold them steady. The new form of structure would be of the monocoque type. The strength of the aircraft would be in an outer shell made from stiff lightweight alloys or composite, rather than the skeletal framework of girders as with the zeppelin. Such structures would not only be inherently strong and more streamlined but also they would have less "drag" and consequently would need less engine power and fuel for propulsion. Less manual labour would be used in their construction and they would lend themselves more easily to mass production techniques. The gas used would be the nontoxic, non-flammable type, helium. When nuclear engines are developed for such aircraft the airship could have an unlimited range and endurance, and landing would become necessary only for maintenance. Cargo and crews could be transferred in flight. Helicopters and tanker airships could be used for this function.
Recalling the famous R.101 disaster, some of your Lordships may have seen the recent reprint of a 1930 newspaper containing a report of that disaster. Covering the newspaper was a double sheet that bore a design of a new form of airship. I have in my hand a reprint of the magazine Enginering, of June, 1971, on the front page of which the same picture is shown in colour. I cannot show it to all your Lordships, even by holding it up, but if any noble Lord would like to see it later I should be only too happy to show it to him. Inside there is a diagram which looks rather like the London Underground system in colour, showing how the author, Mr. Max Rynish, the managing director of Cargo Airships Limited, visualised the transport of freight at about 500 tons at a time at a speed of about 100 miles an our between Britain and the Continent.
This is not an attempt to usurp the position of the aeroplane. That worthy aircraft will still play its part for many years to come in commercial and military value. But in addition there is the possibility of a form of aircraft that can take
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on and discharge a considerable amount of cargo fast close to towns and factories, and which does not need the immense space and facilities required by aeroplanes at modern airports. The diagram shows some interesting connections between the Continent and this country. There are routes from Hull to Groningen, with connections to Bremen and Hamburg; from Lincoln to Amsterdam and on to Hanover, Brunswick and Berlin; and from Norwich to Rotterdam and on to Germany, down to Munich. Those three suggested routes could bring new life to the Midlands and the North of England. Routes to the West could touch towns like Leeds, Barrow-in-Furness, Sheffield, Manchester and Liverpool.
At the same time that this magazine was published the Financial Times of Monday, June 7, 1971, contained a headline "Airship chief plans air-railway cargo system." The opening paragraph reads:
"A railway system of e air with airships shuttling back and for on fixed routes at 100 miles per hour with pay loads of fifty 10-ton containers is outlined by Mr. Max Rynish, managing director of Cargo Airships, the Manchester Liner subsidiary."
On February 27 I attended a meeting—which has been mentioned in this debate already—at British Railways headquarters where a number of your Lordships and Members of another place gathered together. We had some talks and a very delightful buffet luncheon. We were shown some films, one of which accentuated the benefits of the Channel Tunnel. I hope that we shall see this wonderful project in operation before long. A map showed a link-up of the railways in this country with those on the Continent. The potentials of such a link-up are vast. Looking at that map it was seen that there was the possibility of a gigantic bottleneck as trains from all over Europe converged on the region of Calais to go through the tunnel, and then had either to pass through, or by-pass, the network of the London railway system. All this was pointed out in the film. Not much of the railway system near London could take the fast trains coming from the Continent or en route to other countries. Perhaps my noble friend Lord Mowbray and Stourton can

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give us information about what the Government may have in mind for a railway system coming from the Dover area and taking fast trains into the Midlands and the North; and whether there is any possibility of linking up this with plans for a ring rail system round London.
The magazine New Society of March, 1973, gives the proposed track as Westcombe Park, Blackheath, Clapham, Earl's Court West, Willesden, West Hampstead, Vale Royal, Stratford and West Ham; and joining West Ham and Westcombe Park with a new track with a tunnel.
Considering my argument in favour of new air transport, I hope that I shall not cover too much track—that was an unintended pun—in discussing the advantages and disadvantages of road and rail travel. To make a quick summary, road transport gives a door-to-door service; it cuts handling charges and the lorries are the replacement for the old horse and cart system. Due to increase in manufacture and trade, road traffic has increased; road systems have been improved at great expense, but the improvements are not able to keep pace with the growing volume of road traffic. Goods lorries must share the roads with private cars, both of which are increasing in numbers, and the traffic problems are worse in the centres of towns laid out in times when road traffic was considerably less than it is now. Now it is necessary to cut new motorway boxes through towns in the hope of speeding up traffic. This causes much dislocation and sociological and environmental disturbance, as was emphasised by the noble Baroness, Lady Gaitskell. The overall result is that congestion is increased, traffic is slowed down and transport charges escalate.
The roads are land hungry. They require intensive capital to build; they are expensive to maintain. All this is passed on in taxation to the users. Transportation charges for manufactured goods, and particularly for food, are passed on to the public. Large lorries are threatening the foundations of towns and there is pollution and noise. Larger lorries are needed to cut transport costs. I may be prejudiced in favour of railways but they have their disadvantages. Railways are fast and they carry heavy
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loads, as we would all agree. But they require much indirect labour, such as signalmen and platelayers. Tracks are expensive and cost far more than roads to maintain. Railways do not provide a door-to-door service. Stations are often in the wrong places. New track would be impossibly expensive, and the rising cost of the land required for this is a major factor. Railways have been losing freight to the roads until escalation of costs brought the charges of road transport closer to those of rail. The advent of containerisation has also helped the railways. Railways are very suitable for carrying containers of manufactured goods from inland manufacturing areas to ports and vice versa, and also for long distance internal traffic. Railways do relieve the pressure on the roads, but not to a significant extent. No large-scale expansion of the railway system can be foreseen. The system is liable to diminish further owing to high operation costs. But there is some future for inter-city passenger services as speeds increase and rolling stock is renewed.
My Lords, let me sum up and try to make out my arguments for a new form of cargo transportation. Cargo transport underlies the foundation of economic power. Economic power is dependent on the other two forms of power—military and political. Without an efficient economy and some surplus of wealth nations cannot afford armed forces and have to depend on others for protection. Without military power, because of lack of economic power, there is no political power, and in a country in such a situation the politicians would have no external influence. Wealth and economic power depend on trade, and trade depends on transport. It is as simple as that. There is the matter of the growth in the population and the movement of population, and this has to be considered with transport. I should like to recall an article written by my noble friend Lord Lauderdale entitled The New Geography of Growth, which appeared in the Sunday Times Business News on April 12, 1970. In this article my noble friend wrote:
"It should be remembered that the movement of people and industry is in part a function of the lines of communication. The study should chart the physical geography of freight desire lines across our value added entrepot economy. It should regard new transport techniques."

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The study was referred to as a full-scale new look at regional growth.
Your Lordships' House is not a Chamber of dreamers, but sometimes dreams can be aired in it. With all the expert knowledge available, any Member who thinks that his dream may be a good idea can either receive encouragement or be told sympathetically and with all kindness that it is not likely to work. I have presented to your Lordships a dream of a new form of transport, one in which I know I am not alone. I see it as a way to new prosperity. Shipping and shipbuilding companies, and the areas dependent on them, could become prosperous centres, particularly where they have been hit by hard times in recent years by the conversion to constructing airships. Britain has a chance now for new powerful leadership in the world of commerce, a leadership that may be far more beneficial than its former Empire. But action must be taken soon if that leadership is to be gained. We have the opportunity and the technology. Already other countries are considering a new form of transport on these ideas. However, I leave the airship dream or idea, call it what you will, for your Lordships' earnest consideration: and let us hope that if the idea is good, it will not suffer too many obstacles in order to become a fact.
6.53 p.m.
VISCOUNT MOUNTGARRET: My Lords, I should like to add my thanks to the noble Lord, Lord Popplewell, for providing us with the opportunity of debating this vitally important subject which affects all of us in our everyday lives. I feel that I might easily be in danger of repeating many of the things that other speakers have brought up, because I find I am totally in agreement with 10 out of the 13 noble Lords who have already spoken. I also feel rather like the vicar in his local parish church, where his normal congregation was about three, and he got into the pulpit and harangued his faithful three about the evils that would come upon those who did not attend church. This was all very well but he was saying it to people who were there who attended every Sunday. He needed to go and tell the people who were not in church. I think the same thing slightly applies to us here at the moment. Most of us here seem to be
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very much in favour of utilising our railways to a greater extent, but I am sure that there are many people who are not here who are busily working away trying to see how best they can expand our road system. So I wish to give my support to the cause of the railways, and to oppose those who may destroy our country with concrete and motor vehicles.
In 15 years our motorways system has continually spread—and I accept that motorways play a vital part in our method of travel. But I think they are now beginning to threaten our social lives, not only in the countryside, but also in our cities. I feel that the time has come for serious consideration to be given to limiting any further growth of our motorways system than is absolutely and vitally necessary, because it is an established principle (as has been mentioned already, I think by the noble Lord, Lord Popplewell, and it was clearly illustrated in the Observer of February 25 by quoting the case of the closure of the Albert Bridge in London) that roads generate traffic, and the traffic will always adjust to fill the road space provided. Are we to continue blindly investing thousands of millions of pounds in a system which will never achieve its ultimate goal? The existing systems, even with possible extensions, cannot be sufficient by themselves to compete with our road transport requirements if allowed to proceed unchecked—that is say, in 10 years' time.
Already, my Lords, we know that the M.1 from Watford Gap to London is at times used nearly to saturation point. The M.6 link has aggravated the position. The noble Lord, Lord Crawshaw, has already commented on his unfortunate position the other day. So what is to be done? Already a second M.1, to run parallel with the existing one where it only has dual four lanes, is proposed. There can be little doubt that in time, and not so far distant, this must be extended to the whole of our motorways system. Can your Lordships imagine that? It cannot be hard to imagine the additional complications that the doubling up of our motorways system will produce when our existing system is already causing a good deal of complication by the necessity of having a motorway box in London, which is causing a lot of concern and unrest to a great many people. Nor, indeed, is it

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difficult to imagine that London will not be the only city requiring a motorway box. In time, motorway boxes will be needed in nearly all our major cities, with all the misery and disturbance that goes with them. To add more motorways, destroying the social and environmental needs of the countryside, confiscating yet more of our diminishing agricultural land, which as a consequence will hinder the growth of our agricultural industry at a time when, as we all know, there is a world shortage of essential food, cannot be allowed to take place.
Not only do motorways cater for a volume of traffic but they also are built for the growing evil of the monster juggernauts. The noble Lord, Lord Popplewell, has stated that vehicles over an unladen weight of 8 tons have increased by 817 per cent. Perhaps I might be permitted to give a few figures of my own. Between 1956 and 1968, lorries of over 5 tons increased in number from 34,000 to 150,000. In 1956 there were only 6,000 vehicles under 8 tons unladen weight, but by 1970 these had risen to some 55,000. Of course it is quite understandable that companies should use these vast vehicles. But they are by no means confined to the roads built for them. After all, if one can get double the amount of freight on one lorry, it must be more economical than using two lorries. As I have said, these lorries are not confined to the roads which were built for them. They have to get to the motorways. They use, freely and frequently, small country lanes and they go through the centres of small historic towns, to the detriment of both. Complaints are then made of the unsuitability of such and such a road, and the road is then widened and made faster, and so a once peaceful countryside becomes a threat and a danger to man and beast alike.
I might add that these country lanes were there long before any form of road traffic, or indeed almost any horse traffic. Roads were created by the farmer to drive his cattle from his farm to the market. They were created by the agricultural industry, such as it was in those days. They are now being taken over by these monarchs of the road. Further motorway building can only increase this evil and thereby continue the destruction of what was once rural
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England. The expense of the motorways and the cost of building them are well known. There is the compensation to be made, the purchasing of land, the actual cost of building and the cost of maintaining them. All this expense seems to me too high a price to pay when with imaginative thought and planning there could be possible alternatives.
To start with, we must by law dampen the increased enthusiasm of people to use their private motor cars in cities, thereby making more road space available for essential motor traffic. It is primarily the commuter traffic which must be curtailed, and also lazy people who, like myself, choose to drive from Yorkshire to London instead of using a perfectly good railway system, where it exists, because one thinks that it is more convenient and cheaper to drive. If I may just comment on the wincing of the noble Lord, Lord Sandford—that is, his wincing at the price of rail fares, a point which was taken up by the noble Lord, Lord Lucas—the cost of a first-class rail journey is only about 3p per mile. The cost by motor car is probably 6p or 7p a mile. We only think motor travel is cheaper because we fill up with petrol at our local filling station and then we fill up when we get to the other end and we say, "Ah, that has only cost £2"—whereas in point of fact it has cost much more by the time all the other things, such as insurance, depreciation, the cost of tyres, wear and tear have been added on, and the time wasted when you ought to be doing other things.
The Layfield Committee, on whose Report I believe the noble Baroness, Lady Gaitskell, hopes we might have a debate before long, have already considered the system of road pricing under which motorists would be charged a fee for entering the central area of London. This scheme, in my view, could and should be extended to other cities which also have serious traffic congestion. I understand that the Layfield Committee is enthusiastic about the scheme, but I also understand that it could be at least ten years hence before such a scheme could be put into practice because of technical difficulties in developing meters which would record entry into the central areas. I am certainly enthusiastic about such an idea, and I think it would

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undoubtedly reduce the volume of traffic, and not only of traffic entering the city but traffic passing through it.
Why should we have to wait ten years? Could we not start by having a road pricing system? That would apply to any vehicle actually parked in the central areas, whether it be at meters, in company car parks, in underground car parks, or elsewhere. Anyone who knew that in the course of a year he was going to use his car in a city would, on application for his road fund licence, pay an additional sum. That sum must be substantial if it is to have the desired effect. He would be issued with a card allowing him to park in that particular city. If he wanted to go to another city, he would have to pay an additional licence fee which would be applicable to that city. Anyone who wanted to bring his car into a city without making such a payment could of course do so. He could perhaps purchase a yearly ticket from a post office or from a traffic warden, who would take his particulars and advise the motorist on where to forward his payment. Obviously if a car was parked at a meter, or where-will-you, without the motorist having paid the necessary fee, he would have his name taken and would have to send the money off in the normal way. Quite obviously, there would have to be exceptions, in particular in the case of people who were resident in any particular city. They would be allowed a "res-park", similar to that at present in use in certain areas.
I should like, if I may, to comment on the "res-parks" for one moment. In my view, these "parks" ought to be free. I see no justification for penalising people who live in a city and are obliged to park their cars outside their front doors by making them pay more than the normal road fund licence, while those who live in the country can park for nothing outside their houses. It does not seem to me to be fair. We each pay the same road fund licence and I think we ought to be entitled to keep our motor cars outside our front doors. Equally obviously, disabled people, delivery vans of all kinds, service vans used by the electrician, the plumber and the like, would have to be excluded from payment. This could be put into practice almost straight away. We have traffic wardens; we have the people who issue road fund licences; so
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why not try it? It is not going to cost very much. If this by itself fails to curb the growth of traffic, particularly in Central London, then and only then must consideration be given to a complete ban on all private cars and lorries in London, except those used for justifiable purposes—and I will not bore your Lordships by suggesting what justifiable purposes are: we can all use our common sense.
Several taxi drivers to whom I have talked feel very strongly about it. After all, they earn their living by providing an essential service to all. When there is, as happens now almost daily, severe traffic congestion, their turnover drops by almost half. It is not difficult to see what the net result of that is going to be. They will either go out of business or, what is more likely, increase their fares to stay in business. It does not seem to me that that helps anybody. I am sure that your Lordships could find all kinds of objections to a suggestion of this nature, but I believe that a scheme such as I have suggested would help considerably towards easing the appalling traffic congestion in our cities and which can only get worse by an expansion of the motorway system. A further conglomeration of traffic will mean that eventually each and every one of us will come to a grinding halt.
Secondly, we must take urgent steps to get the movement of freight off the roads and on to some other means of conveyance. I think that has been mentioned already several times this afternoon. We have this figure of 50 per cent. which has been given—50 per cent. on the railways would only mean 2 per cent. off the roads. This is relatively easily understood. It was pointed out, I think, by the noble Lord, Lord Lucas, that 300 million tons were conveyed by road in 1968. This was in journeys up to 24 miles. According to my figures, which are slightly different from those the noble Lord has, there are only about 58 million tons of goods to be transported in journeys over 50 miles. It is perfectly obvious that it is going to be quite uneconomic to try to put on the railways journeys of under 24 miles because they are such short distances. Conversely, it must be economic to have long-distance freight traffic sent by rail rather than by road. In 1952 37-ton miles went by road and 44-ton miles went by rail. But in

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1971 63-ton miles went by road and 18½-ton miles went by rail. This comparison shows that an increase of 100 per cent. of ton miles on to the railways would not be impossible. Such an increase, I am given to understand—and I cannot substantiate my figures—would reduce freight ton miles by 30 per cent. That is a very different figure from what the noble Lord, Lord Sandford, led us to believe earlier.
To achieve these objectives we must have a fuller comprehensive public transport system. We have one of the finest comprehensive railway systems in the world. This system is slowly but surely being eradicted. It has been the "Aunt Sally" of the nationalised industries for years, and the potential of its usefulness to the betterment of our environment has never been accepted, even if realised. At present there are some 11,500 miles of track, and yet we hear suggestions that this might be reduced to some 3,000 miles. That surely must not be allowed to happen, otherwise any hopes that may exist of providing a national transport policy must go straight out of the window. What on earth would happen to industries which have been deliberately attracted to places like Inverness, with no railways at all? And, mentioning Inverness, we have the Highland Tourist Board trying to attract people to Scotland where at present, even with the existing limited railway service, the main roads are virtually choc-a-block throughout the summer. Without railways I have no doubt that many people would just give up trying to get there. What is the point of trying to develop an area without adequate means of communication, as without such means any attempt must surely be doomed to failure? Any new area should be planned to include rail access. What is the point of developing the Advanced Passenger Train—an excellent idea in itself, but again pointless if there is not sufficient track left on which to make full use of a sufficient number of them to make the case for development worth while?
Planning for the future of the railways must be one of the most important tasks facing any Government. Further closures of lines must be halted now. This will at any rate give the Government time to think again, as they are bound to do in view of our debate to-day and the
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strong weight of opinion against any further closures of railway lines. Serious consideration might be given to reopening lines, a far cheaper, in comparison, and less damaging exercise than building motorways. Those who have been discouraged from using the roads in their private cars to the degree I have outlined earlier, would more readily turn back to travel by train, so long as there were adequate car parks at all stations at one end, and good enough in-town transport at the other end. On Merseyside, for instance, a scheme has been introduced whereby free parking has been offered at the station to those who wish to travel by train. As a result, the use of these trains has nearly doubled. Why cannot we have that over the whole country? We might even find ourselves short of trains rather than short of roads. The noble Lord, Lord Teviot—and I may have misunderstood him—referred to engine drivers' poor respect for their passengers. Perhaps if more passengers would show more respect to their engine drivers, and say "Thank you" for a journey carried out with speed, efficiency and safety, the relations between British Rail employees and their customers would be greatly improved.
So much for passenger transport, but what about freight? Here again, in order to contain our expanding motorway system, we must take steps to encourage more heavy freight to be sent by means other than road transport. Unfortunately the cost at the moment of sending freight by road is, more often than not, cheaper and possibly quicker and more convenient than by train. As an exercise, I discovered the other day that to take 100 tons of timber across the North of England from Newcastle to Liverpool was £1·50 per ton more expensive by tail than by road. My Lords, I ask the question: Is this difference in price really justified, or is it so much more expensive because the elephantine organisation of the railways consumes so much expense in overheads? The noble Lord, Lord Somers, said that the railways were understaffed. Maybe in some quarters they are, but in other quarters that is not so. To cut costs, staff should be more evenly distributed and used more efficiently. For instance, why is it necessary to have my ticket looked at and punched no fewer than four times by four different people in

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a journey from Kings Cross to Harrogate: once when one goes on to the platform, once on the train, once between Leeds and Harrogate and finally to have the ticket taken at the other end? By that time it looks a bit like a sponge. It seems unnecessary.
If we can cut our overheads, should it not be possible to investigate ways and means of making our railway system more streamlined and more efficient, and try to cut these expenses? Would it not be right, in principle, to consider subsidising the railways to an even greater extent than at present in order to enable them to compete more closely with their competitors? For instance, manufacturers should be encouraged by means of a Government grant to build private sidings to handle their goods. I should like to see, if it were possible, more rail heads at our ports, and much more use made of the "ship to rail" container services for conveyance of a particular cargo to a distribution point by rail rather than road. There are places where this has been planned for, but they are being only partially used. The Harwich Parkstone Quay is a railway-built port extensively modernised in 1968–70 at a cost of about £5 million. It was estimated that this port could take about 75 per cent. of the throughput of the whole port. According to British Railways it is taking only some 50 per cent. Why is this? Is it bad salesmanship, or bad public relations? I do not know; perhaps someone can tell me. But it is wrong whatever the reason. The remainder of transport is conveyed by road. The result is obvious: there are complaints that the road from Colchester to Harwich is inadequate. Demands are made for road improvements which will cost £20 million—four times the cost of modernising the rail port. The answer to these demands needs to be a firm "No", and, at the same time, somebody should see to it that the freight is put back on the railways where it belongs. This could, of itself, also cut the costs in our docks, although I am aware of the difficulties between unions and their members regarding redundancies caused by such ideas. These are, however, difficulties which I believe in the country as a whole would have to be faced with logic and determination, and understanding and trust between the two sides. By such a system surely the requirement of road
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transport to convey hundreds of different goods each day on our roads could and should be reduced by siphoning them off on to our railways.
As your Lordships will know, railways are not the only means of transport. What about our inland waterways?—so long forgotten and neglected and many now, as a result, downright dangerous for those who live near them. Either these canals must be used or they must be filled in. The cost of filling them in is four times as much as that of restoring them. Surely the restoration of these canals must be a most important task, for they are capable of carrying hundreds of tons of freight, and if they were restored and the need for additional motorways was thereby obviated the saving in money alone would be colossal. For instance, I understand the canal from Hull to Leeds might cost in the region of £2½ million to restore, for a distance of some 50 miles. For a motorway connecting the two cities it would cost a great deal more than that, as we all know. Freight is not the only use to which these canals might be put. Many of them pass through very attractive countryside and if we spent money on these waterways we could, at the same time as we provided alternative facilities for the transport of freight, provide facilities for many people who would gladly use clean and pleasant canals to holiday on in boats, or to enjoy generally and appreciate in many areas of this country which so many people do not even know exist. This would indeed be a most satisfactory achievement.
I had intended to mention coastal shipping, but I have taken up enough of your Lordships' time so I will sum up by saying that I speak for a very large section of the community who do not want any further motorways, and therefore my view is that the restoration of our railway and waterways systems will provide for the needs of industry, together with the control of the commuter traffic. The cost of this will not by any means be cheap and I hope that due note will be taken of our remarks and that this day will see the beginning of a new national transport policy.
There are always many people who are ready to spend many hours trying to find reasons why things cannot be done. Could we not, just for a change, spend our time getting things done? We are always being

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told of the world shortage of fuel. What happens when motor transport, as a result of fuel supplies running out and nothing to replace them, becomes as obsolete as the railways are in danger of so becoming? It may be said that this will never happen—I have no doubt that a hundred years ago people said that of the railways—but if ever it did, let no one imagine that the motorways could be as easily torn up as the railways have been. They could not; they are there forever. It will be argued that the railways never paid their way, but does that matter? Do motorways pay their way? This cannot be judged very well as road users are not asked to pay interest on the money invested in road construction. The cost of road construction falls squarely on the taxpayers. What are the road costs in relation to rail cost? When working them out we must remember the cost of accidents, as has already been mentioned—£250 million per year; congestion, £2 million per day; pollution, law enforcement, provision of parking areas, social costs arising from noise, damage to buildings by direct collision or vibration effects. All these facts must be taken into account when comparing rail and road costs.
The annual cost of subsidising railways would be cheap compared with the initial cost of building motorways, apart from the cost of the maintenance, to say nothing of the fact that railway travel happens to be the safer and more relaxing, and that travel on roads is the most hazardous and tiring method of travel. Even if the cost of subsidising a comprehensive railway system were high, I have no doubt that most people in this country would accept it as a necessary expenditure for the peace and quiet of the country, the preservation of rural England, and the betterment of society.
7.25 p.m.
LORD RANKEILLOUR: My Lords, may I first offer my thanks to the noble Lord, Lord Popplewell, for initiating this debate, which has been most useful. May I also take this opportunity to vent a few ideas, hopes and criticisms in the field of transport as it affects my hill-country area? This seems to be a little out of the general run of events to-day. With the apparent probability of discontinuing even more railway routes throughout the
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United Kingdom perhaps we should ponder awhile in order to take stock of the results.
In the West Highlands we have the West Highland Railway, running between Glasgow and Fort William (with a continuation up to Mallaig) which, we are told, may well be in imminent danger of closure. I plead that this may not take place. Quite apart from its scenic route and obvious charms, its abolition would mean many more motor cars flooding into the area at holiday times, dragging huge, unwieldly caravans and trailers, many of which their owners cannot reverse in emergencies; blocking our already inadequate and narrow road system, partly because we are very badly off for roadside vehicle accommodation and partly because we have no by-pass lanes that we could use to avoid congestion. Then, if oil comes to the North-West coast of the Highlands we shall need our railway even more than at the moment—and even if it does not arrive there are the few factories around Fort William which must depend upon a reliable entry-exit, open to free flowing transport at all times, which nobody could say would be the case with the roads.
I do not think that the Government will—or can—order the closing of the Glasgow-Fort William line, although I am not so sure of their decision for the track between Fort William and Mallaig. Instead of the Fort William town council "raising Cain" among themselves at their recent meetings, it might have been more helpful and useful if they had discussed their worries with me or others. I am the only representative in central Government for that area, apart from Inverness County's Liberal M.P., who must be terribly overworked because he is also part of the E.E.C. across the Channel! That, and the bad Press coverage given to West Highland Parliamentary affairs whenever my noble Scottish friends and myself toil to better the lot, can be a little disheartening after our efforts. Nevertheless, we shall keep trying, despite the odds.
At the moment the chance of the Fort William line remaining open seems to be somewhat stronger than that of the Kyle line, although I certainly hope that the latter will survive this storm, too! It occurs to me that if the case for the retention of the Kyle line is slim, then it

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could well be strengthened if the track could be retained as an experimental steelway for steam or the prototype hovertrain which is already in existence, thus allowing a route to be kept open for a type of maxi-taxi, formed and constructed by the inventors and innovators themselves. In the case of the hover-train the rails could well be rebuilt in stacked formation, partially to emulate its own track, referred to by the noble Lord, Lord Kings Norton.
The destruction of our railways in the very rural districts of this kingdom should never extend as far as actually ripping up the tracks (at vast expense) whatever might happen. Britain has for many years led the world in fascinating innovations, such as the hovertrain, which in this case could easily be adapted (now that it is no longer to have Government support) for light transport on one of the condemned island routes, as it needs the minimum of rail maintenance, due to its design.
Since the hover system is based on elevation designed to minimise friction between metal and metal, metal and water, metal and other forms of substances, the wearing down (with the exception of water!) of some sort of guide rail, as well as distortion of it, would be minimal and therefore it would be far more economical than might at first be obvious. Thus, keeping this in mind, there is surely a case for preserving the existing railway rails as an experimental track which could also double as an iron road for the people of the scattered communities thereabouts. British Rail's change of national policy since last year (due to public outcry) is remarkable. However, apparently their attitude has not changed so far as the Highlands are concerned, judging by recent maps of go-ahead electrification plans which all appear to stop at the Scottish industrial belt level, with their hideous overhead gantries, though Inverness may be included.
So if British Rail intend to desert the Highlands as their deliberate intention, perhaps they would have the grace to leave their rails in situ so that private enterprise may be allowed to rent or buy them at an economical rate in order to provide a paying service carrying freight and/or passengers. With three Highland lines in the balance: Glasgow to Fort William; the Crianlarich-Oban leg apparently
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due to close next year; and the scheduled closure of the Kyle line to go ahead on January 1 despite protests; surely if the worse comes to the worst they could at least defeat us with honour by giving us a legacy by which a viable form of transport could be introduced. I am informed that if all else fails, steam engine enthusiasts are very keen on acquiring the Kyle line as a passenger-carrying operation. It is said that they have been asked for £750,000, a ridiculously high figure and one guaranteed to oppose initiative and the betterment of a nation in distress. Transport is not a game, as many people are finding out as a result of the present rail strikes. So before British Railways are instructed to axe the Highland ones just let the London-based deciders consider their action. No doubt the British Railways Board have a brief that says that their trains must pay. Most directors of business have the same outlook. But if in this affair the Railways Board have no soul, perhaps they should show a little bit of heart, for this is a case of a lifeline—not one of several. Cut off a right hand and the left will seek justice, but cut off a head and the body will die.
7.34 p.m.
LORD WISE: My Lords, I should like also to express my thanks to the noble Lord, Lord Popplewell, for initiating this extremely interesting and important debate. Many noble Lords have spoken and given figures of the advantages and disadvantages of road and rail transport. Other noble Lords, in particular the noble Baroness, Lady Gaitskell, have spoken of the general social and environmental aspects of the problem. All in all, it is apparent that the transference of as much of the heavy freight traffic as is practicable from the roads to the railways would in some measure alleviate the social and environmental problems. For that reason alone, I agree with the noble Viscount, Lord Mountgarret, and would think it folly to contemplate further rail closures. Had the noble Viscount been in his seat, I should have liked to tell him that along with many other regular passengers, when we arrive at Norwich on time I tap on the window and say, "Thank you" to the driver. But I must confess also that when we arrive 30 minutes late none of us does that. However, in all fairness, that is not the driver's fault.

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The closing of so many of the branch lines, even though uneconomic in themselves, was a great mistake. At a meeting that I attended last night, Sir Sidney Greene said that the capillaries which were feeding the arteries had been cut off, and it must have been wrong. These branch lines feed the main lines and enable them to be more profitable, allowing for a far more attractive service to be given. However, there is still a national network of the railways and they are making a valuable contribution in commuter and inter-city passenger traffic; and I am sure could be used to even greater advantage in the heavy freight traffic. They are there and I feel that we should make use of them.
For instance, possibly far greater use could be made, as other noble Lords have said, of transport to and from our ports in the heavy container lines. It is wrong that road and rail traffic, and for that matter air and water traffic, should be in direct competition. I feel in some measure, as the noble Lord, Lord Sandford, said, that they must be complementary to one another and for our mutual benefit. That I know has been stressed by many other speakers. Nevertheless, it is obvious that it is impossible and uneconomic for all goods to be carried by rail. We have to live with and provide for the heavy road transport. We must have it.
If I may be allowed to become a little parochial, I should like to make a few remarks to your Lordships about the transport problems of East Anglia, and more particularly of Norfolk. Britain's entry into the Common Market has given East Anglia a new perspective. Although many of us living there would be happy for it to remain much as it is with its relative peace and quiet, we need to keep our young people there and work must obviously be found for them. We cannot and must not endeavour to retard progress, and there is in Norfolk considerable development potential. But that development should be, and I hope will be, of the type preferably ancillary to our basic agricultural industry: light industry, agricultural machinery and food processing and packaging spring to mind and most of that type of industry is dependent upon an efficient and sensible road system. In any case, in North Norfolk we no longer have any rail system, so it has got to be.
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May I quote an example? There is in the small town of Fakenham an excellent food processing and packaging firm which obtains 90 per cent. of its produce from the area around. Some 180 to 200 people are employed. That is exactly the type of industry and development which we need. That firm's sales cover only about one-third of the country and there is obviously a possibility of further expansion, so improving the lot of the Norfolk people. But that, I feel, could be hampered by the inadequacy of the roads in the district. If I may quote the general manager when he was commenting on this, he said:
"I do wish roads into and out of Norfolk were better for lorry transport".
I personally look forward with keen anticipation to the new Southern by-pass of Kings Lynn. That, I understand, is to be a dual carriageway with a new superb bridge over the River Ouse. That will eliminate a terrible bottleneck and will ensure swift and safe passage of transport around Kings Lynn and must be the right sort of development from both a practical and environmental aspect. But why are not roads so constructed elsewhere in the region? One appreciates the tremendous cost involved. One appreciates the usage of our most valuable asset, which is the land, but surely improvements that will be adequate in the years to come and not only in the very short term must be more economic than the piecemeal improvements which are perhaps inadequate for the fast flow and volume of traffic which they will carry upon their completion.
I am mindful of improvements which have been made or are designated which, although possibly alleviating the urban environmental problems, are now totally inadequate for the volume of traffic which flows on them. When travelling from Dereham to Norwich along the main A.47 I am very conscious of the frustrations caused by slow moving, heavy traffic, the inability to pass, even upon so-called improved stretches of road. A vast amount of heavy traffic from the rapidly developing trade of our East Coast ports, Felixstowe, Yarmouth, Hunstanton, Kings Lynn, will travel along this road, and dual carriageways are, to my mind, absolutely essential. The Dereham by-pass, scheduled for commencement, I believe, some time next year, is to be a single

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carriageway. Again this will to a certain extent eliminate the misery of the heavy lorries grinding their way through the centre of the town, but I think it must undoubtedly be inadequate in the future for the through traffic which will inevitably pass through.
I believe the estimated figure of expenditure for the trunk road construction in Norfolk for the period 1970 to 1975 is something in the region of £15 million. This seems to me a very small percentage of the national allocation. We badly need improved road transport; we need a better road system and we need infinitely better road connections from our ports to the industrial Midlands. I should like to ask the noble Lord, Lord Mowbray and Stourton, when he sums up for the Government, if there is any possibility of any reconsideration of this figure.
7.42 p.m.
LORD GRIMSTON OF WESTBURY: My Lords, I apologise for rising at this late hour, but I do not propose to keep your Lordships for more than a few moments in what I have to say. I rise chiefly for the purpose of supporting the plea of the noble Lord, Lord Popplewell, who introduced the Motion which is giving rise to this interesting debate, that there should be some new thinking on the matter. It seemed to me implicit in the speech of my noble friend Lord Sandford that there was not much to be done in relieving the roads of freight traffic by transferring it on to the railways. I do not believe that is the case, and I want some new thinking on that subject.
I will give an example of what I mean. There was an article in the Sunday Times, and I will give a brief quotation. It said:
"It is perfectly possible for small groups of self-powered wagons even single wagons, to route themselves through the railway system under computer control, at a cost well below that of manually driven lorries, and giving equal or better service over any distance."
I quite realise that to introduce a system of that sort, or even to introduce experiments for it, leads to staff problems. They will have to be faced. But the plea I want to make to the Government is that there shall be some new thinking on this question of transferring freight from road to rail; otherwise, in a few years'
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time the roads of this country are going to become impossible. As I say, it seemed to me implicit in the speech of my noble friend earlier that the Government have rather given up the idea that anything of this sort is possible. I would deny that, if there is new thinking given to the problem; and it is for that reason, to press for new thinking, that I have risen at this last moment.
7.44 p.m.
LORD SWANSEA: My Lords, I must apologise for not having given notice to speak and also for not having been here at the start of the debate. I was moved to get on my feet by the noble Earl, Lord Baldwin, who recollected a debate which we had in this House in 1960. Quite a lot of water has passed down various rivers under various bridges since those days. It is from the point of view of Wales that I should like to speak for just a few minutes. Like the noble Earl, Lord Baldwin, I remember the days when the railway companies were still in being, when the Great Western Railway and the London, Midland and Scottish Railway each had their territories, which overlapped somewhat in certain parts, and especially in Wales. The Great Western Railway generally covered the southern half of Wales extending to the Cardiganshire coast, and the L.M.S. extended its tentacles down from Shrewsbury into central Wales and indeed as far as Swansea.
Though your Lorships might not believe this, I can remember the time when one could get into a through carriage which started at Swansea and finished at Euston, having gone via Shrewsbury. I can see the noble Lord, Lord Champion, looking slightly incredulous, but I can assure him that that was so; I remember well travelling on such a train. In those days there was a network of little lines all over Wales. They were very useful; they served a very useful purpose during the war when petrol was short; and they were, incidentally, very useful to me as a boy travelling up and down the Wye Valley to spend the day with friends, complete with my bicycle.
But now the rail network in Wales is just a shadow of its former self. Only two main lines remain along the North and South coastal belts, one to Holyhead and the other to Fishguard. In between

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there is what one can only term a transport desert. It is relieved only by the central Wales line which I have just mentioned, from Shrewsbury to Llanelli, and the other line via Machynlleth to Aberystwyth and Pwllheli. If you have to get to London or to anywhere else you have to get to a main line station. In my case, my nearest main line station is Hereford, and that is a drive of 35 miles. The service on that line, in my opinion, has deteriorated to such an extent that I long ago gave it up in favour of the South Wales line, which means a drive of 45 miles to Newport. I have to get that "under my belt" before can get a train to anywhere.
Even in these days not everyone owns a car. Your Lordships would be surprised how many people in the rural parts of Wales do not own a car. They stand on the road and get a lift into town on market day. They catch a bus if there is one, if they are lucky, or they get a lift with a friend. They even come into town on their tractor, perhaps. There is a surprising number of people who still do not own a car and are dependent on public transport or the goodwill of people they meet on the roads. Buses are very infrequent, and their movements seem to be cloaked in such secrecy as would do credit to M.I.5. It is extraordinarily difficult to find out what buses go in what direction and at what time. The Severn Bridge and the M.4 motorway have been an absolute boon to anyone travelling to South Wales and the southern part of Mid-Wales, and having at one time travelled quite regularly by train from Newport, I find now that I can drive to London via the M.4 in practically the same time in which previously I could drive to Newport, park the car and catch a train to London.
The motorways and the main railway lines are nearly all directed at London and the Midlands, for obvious reasons connected with industry. The internal communications within Wales are woefully inadequate. The geography of the country, of course, has a large bearing on the subject, but, even so, it is surprisingly difficult to net by road, and next to impossible by rail, from North to South Wales without going over the Border. My Lords, that is all I wanted to put before you—the needs of the people in the rural parts of Wales to get to
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their county town on market day and to get about generally, and the inadequacy of the existing services, both train and bus, for those who do not own their own car. I hope very sincerely that the existing rail services in Wales will not be depleted any further.
7.52 p.m.
LORD CHAMPION: My Lords, like all noble Lords who have spoken in this debate, I thank my noble friend Lord Popplewell for having given us the opportunity to debate this whole problem of transport with its special reference to railways, and for the comprehensive way in which he opened the debate. It has been a very worthwhile debate, marked by a knowledge which one tends to find when discussing transport, because transport touches our lives at so many points. This is almost inevitable. I remember when I first got on to the local council, we then had three undertakings: gas, electricity and transport. At the first council meeting I attended I found the minutes of the committee which dealt with electricity passed through in about two minutes flat. The minutes of the gas undertaking went through at the same rate, but when we came to transport we took an hour and a half to get over the transport minutes. I wondered why, and turning to the gas manager sitting next to me, asked him. He was a Scot and he said, "Oh, they're all ruddy experts on transport". And that was the answer to the problem—we are all experts on transport. I must say that this debate would still have been worth while if we had had only one speech, that of the noble Earl, Lord Baldwin, with its recording for posterity of the gem of his Great-Aunt Aggie's letter. This was indeed a delight, and I am sure I shall refer to it from time to time.
My Lords, I very much pity the noble Lord, Lord Mowbray, who has to reply to this debate. Speeches have been so good that he will scarcely dare to leave one out, but if he does touch on all the points that have been made he will be here until ten o'clock at least, if not much longer. Transport debates normally are a male preserve which made the speech of my noble friend Gaitskell all the more welcome. I must say I remember her pressing, through the usual channels, the necessity for a debate on

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this topic. I would have thought she will be satisfied with the outcome of her pressures and the way in which the noble Lord, Lord Popplewell, took them up.
The Roberthall Committee on the transport needs of Great Britain in the next twenty years, in 1963, said that two fundamental problems faced the Ministry of Transport. First, what level of investment is called for in transport as a whole? How should this be divided between road and rail? How should road investment be divided between urban and inter-urban roads? Secondly, how should the growing traffic problem of towns and cities of varying sizes be tackled? These still remain the fundamental problems, but within them and impinging on them are a number of factors not so obvious at the time of the Report. There is the revolt of the people against the juggernauts; the widespread opposition, mentioned by several noble Lords, to covering the countryside with ever-lengthening and widening strips of concrete. There is a threat to our cities and towns of motorway-type roads with spaghetti junctions and other horrors. The reaction of people to these things and to the acknowledged danger of fumes and noise and, of course the appalling casualties on the roads is becoming more obvious with every day that passes.
It seems to me that there is a wider recognition of the social consequences of the closure of little used railway lines, and particularly that experience has shown that bus services provided initially as an alternative to the lines that were closed down soon die for the same reason that the branch line dies. What is left in many cases is a community composed very largely of old people who have no way of getting into the towns. This is one of the great problems caused by the closing of the branch lines.
Emotive language is much a part of the language of the politician, and "juggernaut" is very much an emotive word. Whoever seized upon it for use in connection with forty-ton lorries was not far out, for a juggernaut is defined as an irresistible, relentless, ruthless force which destroys all that comes in its way. By sheer weight and size alone these lorries constitute a menace, shaking historic buildings, rendering almost uninhabitable people's houses through cracked ceilings
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and so on, and by their noise they shatter peace where peace existed before; by their fumes they poison the very air we breathe.
Of course, I admit that not all the casualties on the roads are due to lorries. But a report in the Sunday Times in September last showed that every two seconds of every day a heavy lorry starts out somewhere in Britain with a load heavier than the law permits, yet the average fine a lorry owner faces if caught is only £10. The same report stated that frightening defects were found in a check on the A.40—defects which might have caused complete loss of control over steering. The very high standard of rail safety would disappear entirely if railways adopted the same sort of standards of engine preparation and examination of rolling-stock as seem to satisfy very many, too many, lorry owners.
I must thank the noble Lord, Lord Sandford, for having placed on record the figures on road and rail safety that he gave to us at the outset of the debate, and indeed for his very well balanced speech. We have to-day 208,000 miles of road for 15 million vehicles; by the year 2010 it is estimated that we shall have 40 million vehicles, and for the same ratio of vehicles to road space we shall need 550,000 miles of road. Just imagine what is going to happen to our countryside, to our towns, when we have over half a million miles of road in this country. And of course the pressure now is for wider roads, more lanes to the roads, more width, and more countryside taken away from us.
We are spending £500 million a year on maintaining and building roads. We run great concrete swathes through our lovely countryside and through our towns, destroying houses and everything that comes in the path of their progress, and overtopping houses in building these huge and unsightly spaghetti junctions. The question we have to ask in this connection is, what could not be done in the way of modernising our railways if only half that sum were spent annually for a few years on track, on signalling, and on modernising rolling stock on our railways? Incidentally, if only a tiny portion of the money spent on Concorde had been devoted to railways, something of value would have been created, for

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who really cares if an hour or two can be cut from the journey to New York?—I certainly do not. What people care about, especially if they are commuters, is getting home a few minutes earlier in something like comfort. If we really want high speeds, let us have them within this island by the development of the advanced passenger train—although I must admit to feeling that existing rail speeds on the inter-city services are high enough for me. Perhaps I have that feeling because it so happened that a few years ago, after having left Derby and passed through Burton-on-Trent at a speed of 60 miles an hour, the engine went off the track and turned on its side. My coach went off the rails and that gave me my feeling that 60 miles an hour is just about the limit for me.
For how much longer are we going to persist in the prestige folly of Concorde at the expense of people and their comfort? I must admit that here is a difficulty. We have to some extent to develop our inventions. I thought that there was a great deal in what the noble Lord said about the linear motor, which I believe runs on a sort of magnetic system which propels it along. It would still be a tracked system, but nevertheless it would perhaps be worth while attempting a development of this kind, provided that it does not cost anything like the Concorde. We do not want any more of that development for some time. As an example of what could be done, it is estimated by Mr. John Ogilvie, who has looked at this matter, that a reconstruction of Southern Region's major approaches and termini could revolutionise the reliability of commuter services, and enable them to integrate with London's buses. What could be done for the South could also be done for the North, the East and the West of London, and at a trifle of the cost of the destruction of existing houses and properties required for the London motorway plan, which is estimated at some £1⅓ thousand million or £1½ thousand million. How much I agree here with the noble Viscount, Lord Mountgarret, who I must say seemed to me to be more pro-railway than I, a railwayman.
With their existing rights of way, railways are capable of moving large numbers of people and masses of freight. It
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has always seemed to me that if it makes good sense to build roads on stilts in our bigger cities, it would make good sense to build railways on stilts but over existing railways, so that you would add to the amount of traffic that could be carried into London and into the existing London termini. Everyone who has ever looked at the movement of people in and around towns is convinced that only by strengthening, improving and expanding the public transport services can we hope to cope with modern requirements. That means the maximum use of existing railway systems and their potentialities, both underground and overground; the speeding up of bus movements by bus lanes; and some restriction on the use of the private car in town centres, where so often they take up very nearly a bus road space, with one person being conveyed as against a possible 50 or 60 in a bus. This is a thought, and one to which we must always pay attention when we are thinking in terms of transport.
We—that is the public—must make up our minds as to what we want our railways and bus services to do. At present they are struggling to reconcile two mutually contradictory objectives; namely, to provide a service for the public and to pay their way, and they are doing neither satisfactorily. I must admit to favouring the imposition of some form of commercial discipline on our railways and bus managers; but the problem is, and it must be, how to reconcile a monetary discipline with the provision of a social service. The 1968 Act went some way towards this, but the real solution of the necessary capital investment problem has still to be solved. The answer must depend to some extent on a cost benefit analysis, which would evaluate the effects of road building and road use on the environment as well as social costs as a whole.
On the question of the investment of capital, it must always be remembered that the railways are the high productivity form of transport. This is because they are potentially the cheapest mass producer of transport facilities, but only if highly mechanised. Here I support what the noble Lord, Lord Grimston of Westbury, and others have said: there must be a lot of research here. We know the difficulties that that will cause, among them staff problems. Nevertheless, I

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think that the future necessitates a great deal of research on this aspect. I do not know whether there are any really reliable estimates of the cost to the nation of road congestion. One sees figures from time to time, and I believe that the Road Research Laboratory has produced an estimate which shows a staggering figure; the saving of a portion of this amount, if applied to our public transport system, would relieve that congestion with advantage all round. I am bound to admit to a fear that the pressures of land for housing may cause Governments to bring too much pressure on to the Railways Board to sell off railway owned land which might he required for future railway development, particularly as local authorities under the pressure of road congestion tend to ban cars and lorries from town centres. Many noble Lords have in fact referred to this fact.
My Lords, I am a railwayman, but not a fanatical one blind to the advantages of the use of the internal combustion engine in a freely moving vehicle. We cannot go back to the horse and buggy and railway era such as we had in the last century. People who have experienced the advantages of the greater mobility brought to us by the car, or who expect to enjoy its advantages, would not stand for too great a restriction on its use; neither can we contemplate forcing all freight back on to the railways. The greater flexibility of road transport is a decided advantage for it brings transportation nearer to the ideal of one integrated movement from origin to destination, with consequent speed and the minimum of breakages. Freight liner development is bringing the railways nearer to this ideal, and more and more research and capital must be devoted to its improvement and expansion. The essential requirement of a highly industrialised society such as ours is to be able to compete successfully against other highly industrialised countries, and for this purpose transport, which enters into practically every cost in an important way, must be an ever present consideration.
I doubt very much whether manufacturers and others have any particular desire to own and run their own transport if specialist undertakings could meet their requirements of relative cheapness,
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freedom from breakages and speed in transport from source to delivery. If railways cannot provide just that, more heavy lorries will find their way on to the roads with increasing demands for more stepping up of a road building programme, demands which, in the context of our economic relationship with the rest of the world, it is difficult to refuse. I recognise the Government's difficulties in this respect, and indeed those of every Government. By the way, I thought that the figures of what would be the result of increasing freight traffic by 50 per cent. tonnage transferred to the railways from the roads which were given by the noble Lord, Lord Sandford, were perhaps a trifle loaded. He said, I think, that if you transferred to the railways an additional 50 per cent. of freight traffic it would only take 2 per cent. off the roads. The really important figures in this connection surely are ton miles; in which case, if you added 50 per cent. to the ton miles carried by the railways, you would take 14 per cent. of the ton miles off the roads. This would be an important figure, certainly much bigger and more important than the figure of 2 per cent. mentioned by the noble Lord, Lord Sandford.
Perhaps as a railway trade unionist, I should comment that railwaymen must not dodge their responsibility for providing a reliable service and by their actions drive more and more people to cars, and here I support the plea made by the noble Lord, Lord Sandford. The car, to which we are likely to drive more people, is something which gives people the feeling of being masters of their own movement, despite the fact that so much time in cars in towns is spent fuming with the vehicle at rest in modern traffic conditions. But I must add that railwaymen who have seen their numbers reduced from 455,000 in 1962 to 200,000 in 1971, with their productivity increased in terms of passenger and freight movement, cannot be expected to stand on one side and see others streaking ahead on wages with differentials being widened between their industry and others, because the railways provide a service and not a product the labour and production costs of which are easily passed on to the consumer. That, of course, is very much at the heart of the problem we were discussing in this House on Monday last.

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My Lords, reference has been made to the publication by the Sunday Times of the so-called official plan which would reduce the 11,600 miles of railway network to 6,700 miles. I accept completely the assurance that that plan was merely a hypothetical statement of a possibility and not a probability, but the publication of that certainly had the worthwhile effect of arousing public opinion. On the possible further contraction of the railway network and particularly in connection with branch lines in Wales which I know, as does the noble Lord, Lord Swansea, I welcome the undertaking given by the Minister of State, Welsh Office, that he could expect the same number of grants for unremunerative lines in Wales to be made in 1973 as in 1972 and that a Cambrian coastal line will be kept open for the whole of 1973. This will at least give an opportunity for further consideration of the whole position in Wales, as indeed it will in England, because I believe the same conditions will apply.
The only specific questions which I wish to put to the Minister who is to reply to the debate are these: what is the present position in relation to the Graham Rees Study and the pattern of communication throughout Wales and the future needs of Wales, and the relationship of that Study to the wide-ranging review of the long-term prospects of British railways which the Minister for Transport Industries said in July last had been put in hand? Who is conducting that wide-ranging review, and when can we expect to get a report on the range of courses open to the country?
I have one more specific question on a topic mentioned by the noble Earl, Lord Amherst. On Friday last the Minister for Transport Industries said in a Written Answer that he hoped to publish a Green Paper later this month on the proposal for a Channel Tunnel and those interested would I am sure like to know whether the body conducting the wide-ranging review of long-term prospects for transport in this country is to give special attention to the development of the railways so as to converge on the tunnel from all parts of Britain and not only from London. If use is going to be made of such a tunnel, we do not want everything to be channelled towards it through London, with all its consequent difficulties.
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My Lords, I most certainly support those noble Lords, including my noble friend Lord Popplewell, who seek a national plan, rendering to the road that which is suitable to the road and to the rail that which is suitable to the rail—and that is the root of the whole problem. How can we, in fact, achieve that? I also support wholeheartedly the noble Earl, Lord Baldwin, with his deep knowledge. I respect the fact that he was once a director of the railway on which I was working, the Great Western Railway. I am glad that I never had to appear before him for any reason, for any dereliction of duty or failure, though I imagine he would have been as kindly as we know him here, if that had in fact happened. But the fact is that he was my boss at one time.
EARL BALDWIN OF BEWDLEY: My Lords, I must say that the noble Lord would have liked it if he had done, because we had some very happy relations with people who appeared before us. It was in the pensions committee and the appointments committee, in particular, where we saw people. We were the most human railway of them all.
LORD CHAMPION: My Lords, I suppose that I can only say "Amen" to that. That really sums up the feeling that we all had about that railway of ours. What the noble Earl said was that he hoped there would be a little less parsimony by the Government in their consideration of the necessary capital for our railways. I think I can sum up what this debate has been all about, by saying that the essential requirements of the country in terms of transport are the maximum efficiency, tempered by respect for the people and their environment.
8.21 p.m.
LORD MOWBRAY AND STOURTON: My Lords, at this hour, after some 19 noble Lords have given the House their views—and what a wealth of information and thought-provoking challenges we have had !—your Lordships will not want me to answer every point in detail, always assuming that I could do so. I should like to thank the noble Lord, Lord Champion, for his sympathy in my efforts, and what I shall do is lightly to pick up a few of the threads from the tangled web of transportation, and gently look at

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them in the light of noble Lords' speeches. We are all in the debt of the noble Lord, Lord Popplewell, as we so often are on these occasions, not only for having raised the subject but for having covered such a wide field in his speech. If I may criticise the debate in just one respect I feel that, whereas in so many debates we label people "Government" or "Opposition", there has been a slight tendency to-day to label people "railway" or "road", and we have had some notable protagonists on both sides. Equally, we have had some very statesmanlike speeches and the last one, with its well-balanced views, was one of the finest I have heard on the subject.
I hope that I shall not have to repeat the points made by my noble friend Lord Sandford. Although certain noble Lords did not like the facts and figures presented by him, if they will carefully read the report of his speech they will find in it a lot of impartial facts which do not weigh down the scales on one side or the other. The noble Lord, Lord Popplewell, began by saying that, like so many other noble Lords, he had been upset by the closure of run-down branch lines. That is indeed a matter which has caused much sadness on the railways, and I do not suppose any Minister has enjoyed giving his consent. But, as a matter of fact, when the noble Lord's Party were in government some 2,680 miles were closed down, and since we came to power two-and-a-half years ago only 300 miles have been closed down. As the noble Lord, Lord Champion, and my noble friend Lord Sandford said, my right honourable friend in another place has given the assurance that grant-aid for certain lines will continue this year, and that is an important point.
The noble Lord, Lord Popplewell, and my noble friends Lord Gainford, Lord Rankeillour and Lord Swansea spoke very feelingly about Scottish and Welsh railways. It so happens that I still have in my head an Answer that I gave last week to my noble friend Lord Kinnoull—who regrets that he was not able to stay to make his speech—about a Light Railway Order in the case of the Central Wales line, to which my noble friend Lord Swansea referred. We have said that the light railway can continue for another year, as it is recognised that it is socially necessary.
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It is actually costing £464,000 a year to run, and the takings are only £45,000 but because it is serving a social purpose it will continue. That is an example of what we are doing. I could not agree more with the noble Lord, Lord Popplewell, when he said that to look separately at each form of service is bad. Each Department and each board has been expressing its feelings, and we shall have the policy review which many noble Lords have asked about. We do not yet have the policy review, but we have an outline and the officials are still battling with the main document. But in due course it will come before the Minister, and when he has given it more weighty consideration it will be put before Parliament and debated.
The parking problem was mentioned by the noble Lord, Lord Popplewell, who pointed out that the centres of the towns are becoming blocked, which is not good either for the people in the towns who have essential work to do, or for those trying to get in and out. Only the other day, I made the point that 700 people coming into London by car travel in 500 cars. If those same people came in by bus they would need 14 buses, and they could all come in on Lord Popplewell's train. Trains for commuter services are very important and have a useful place in the economy. The noble Lord, Lord Popplewell, mentioned new development industry roads, and went on to say that his little village of Sherburn-in-Elmet, which I know well, has had its railway station closed. The only business connection I had with Sherburn-in-Elmet was that, when I was a farmer, I used to send many pigs to the bacon factory there each week. Had I relied upon the railways I should have had a very busy time taking my pigs by lorry to my local station, having them shunted to York and then put on to another train. It would not have been as convenient or as quick as a lorry. That is a small matter, but it illustrates the point of the noble Lord that in order to he efficient you must look at what people need.
LORD POPPLEWELL: My Lords, the point about Sherburn-in-Elmet is not so much the bacon factory. I agree that it is important, but there is also the question of the gypsum.
LORD MOWBRAY AND STOURTON: Yes, my Lords. I take the noble Lord's point on that. Our roads carry the highest density of traffic in Europe, but it is fair to say that there has been some slight exaggeration about hidden subsidies on roads. The fact is that in motor fuel tax, in licensing duty and in purchase tax on new cars we take a good £2,000 million a year, against the £1,000 million which goes out in all expenses on roads. Of course, that does not take into account all the indirect taxes, which also come into this question of the roads; so I think one must bear that in mind. As regards the railways, the annual grant which the Government are now giving to the railways is, as has been said, about £140 million a year. This, of course, is on top of our having written off £3,000 million over the last 10 years.
Perhaps I may here deal with one other point. There has been a great deal of confusion about percentages. I do not think they are vital to the argument, because the country needs both systems: we must have cars and we need railways. But as to the figures of metric tons carried by road and rail, just in tonnage my information is that approximately 90 per cent. is carried by road and 10 per cent. by rail. If you break it down into metric tons per kilometre, you then get about 78 per cent. being carried by road and about 22 per cent. by rail. I think that gives it approximately. So it is roughly double when you do it on the mileage basis.
The noble Lord, Lord Kings Norton, took us right out of our depth and into the future. His was a speech which was way beyond my personal knowledge. We were also taken into the future by my noble friend Lord Redesdale. Perhaps I might say a word about what our ideas are on this business of the future by way of faster travel. We have all been attracted by the idea. The noble Lord, Lord Champion, is perhaps a little bit fearsome of it, as even I am occasionally when I go on these trains and they rock from side to side. But when these speeds are achieved by new technology which has been developed in this country we are even more pleased. But the case for new and faster surface transport systems depends in this country to-day basically on the inter-city passenger transport. That is where the main use is at the moment. The Department of the Environment and the
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Department of Trade and Industry have both carried out a study of the growth of the market overall, and how it is likely to be divided between the various modes—rail, road and conventional and short takeoff and landing aircraft.
This study took specific account of tracked hovercraft, as well as of new types of conventional trains being developed by the Railways Board. We decided there is no market in the foreseeable future for the tracked hovercraft development because the cost, we estimate, would amount to £4 million over the next three years, and it would have involved extending the test track to three miles and testing the motor at speeds of up to 200 miles an hour. Even with this amount of expenditure, the production part of development would not have been reached by that time. In the interval, the Board's high-speed diesel train will be developed and we think a maximum speed of 125 miles per hour by the end of the 1970s will be achieved with the Advanced Passenger train. The Railways Board plan to introduce this advanced passenger train on electrified routes first at this maximum speed of 125 miles an hour and then later at 155 miles an hour. The Railways Board's proposals for this high-speed transport would therefore envisage successive cuts in journey times on the major inter-city routes over the next 10 or 15 years.
These studies of the market for intercity travel showed that a tracked hovercraft system in this country would not be economically viable before 1985, whereas the diesel high speed ones would. Furthermore, I am advised that there was no specific overseas interest in the British air cushion vehicle which had been shown, and it was on these grounds that we decided, therefore, not to go ahead with that major expenditure.
LORD KINGS NORTON: My Lords, may I interrupt the noble Lord there? The noble Lord was referring to the air cushion vehicle. I specifically spoke about a vehicle which was supported by electro-magnetic forces.
LORD MOWBRAY AND STOURTON: Yes, my Lords, I am coming on to that. It is possible that in the very late 1980s and in the 1990s there might be a customer requirement for a system requiring new infrastructure, such as we have been

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discussing. The Government's present policy is to continue with the development of those elements of the project where further research can be justified at the present time, including the linear induction motor and magnetic suspension and guidance systems, about which the noble Lord, Lord Kings Norton, has so eloquently spoken. We are supporting that; and the research is being done by Hawker Siddeley to the tune of some £600,000 over the next four to six years. We are also supporting research into magnetic suspension at a rate of £150,000 each year for the next two years.
LORD KINGS NORTON: My Lords, may I ask the noble Lord whether he is aware that there are a number of Japanese gentlemen in the country at the moment examining what is going on at Imperial College?
LORD MOWBRAY AND STOURTON: Yes, my Lords, I am aware of that.
LORD DAVIES OF LEEK: My Lords, I have not taken part in this debate, but I came in especially to hear the answer to that question (not that I am technically informed on it) and I am rather chagrined to think that we are losing the spirit of adventure. Surely it is worth putting a few millions in at this period to see whether there is anything in it. It would be money well spent, I think, and the public would welcome it.
LORD MOWBRAY AND STOURTON: My Lords, I have no doubt that if my right honourable friend is advised that more money is needed to be put into this research he will consider it, and I am told that that is what he is doing at the moment.
We then had a strong speech from the noble Lord, Lord Burntwood, who took us to task. He drew attention to the fact that Germany and France both subsidise their railways to a much greater extent than we do. One must not forget, my Lords, that earlier, before the road programme got going, we carried out a heavy investment programme on the railways in the first years after the war; so that has been built in already. I should like to point out also that the rail services in France and Germany are much greater than they are in Britain. In France they are, I should think, about twice our size, and in Western Germany
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about half as big again. I do not make any particular point about that—
LORD POPPLEWELL: But it is a rather important point, my Lords. I am sure the noble Lord does not want to mislead anyone, but in actual fact immediately after the war years we did not invest in the railways. We had run down the railways during the war years anticipating that they would have money put into them after the war, but it just did not happen. It was not until some years after the war that we commenced to do anything at all with our railways. We should not get a wrong impression.
LORD MOWBRAY AND STOURTON: My Lords, the war seems so long ago that I was using the term "after the war" rather loosely. We had an investment programme in the railways, if I remember rightly, of £1,660 million. I agree that it was not immediately after the war. At any rate, as to the subsidies abroad, everyone in this debate has been assuming that if you put money into a railway then ipso facto it becomes somethinp much better. What we have to ask ourselves is: are all these countries necessarily doing what is best for the transport system of that country? We have yet to find out. We have had speeches from several noble Lords, particularly from the noble Earl, Lord Baldwin of Bewdley, pointing out that if it did not serve the purposes it was wanted to serve, no amount of money poured into it was going to be of much avail. So I think we should wait patiently to see what is going to come out of the policy review.
We were told by the noble Lord, Lord Burntwood, that rail-users were not educated in subsidies. From that, I took it that he means that if they were more educated they would probably pressurise their political friends and opponents to subsidise the railways more. As I say, I do not regard that as a particularly valid point. We are subsidising the railways at the moment. We are keeping uneconomic lines going, and we are keeping all options open. Then we come to my noble friend Lord Teviot, who wanted to increase capital expenditure. This, again, is the same problem. I will write to him about the Lewes-Uckfield line, if I may. I do not think the House will want to hear about that now, but I have the answer for him. We are actually investing in new

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railway schemes as well as supporting the day-to-day running. I would mention the £50 million that we have contributed to the Tyneside scheme which is going to cost £65 million. Fifty million pounds has been produced by the Government in the last two years.
The study of behaviour of drivers, bus, train or lorry, is a matter which is continually being studied by many bodies; and alterations in the law and agreements with the unions concerned are continually being made. He mentioned that diesel charges for buses were more expensive than for diesel trains. I would point out to my noble friend and to the House that on stage services, out of every 22½p, 12½p is reimbursed. The noble Earl, Lord Amherst, made a wise speech. He regretted not being able to remain here to the end. He put his finger on what is a singularly hopeful matter, about people wishing to see freight put on trains. He asked about the Channel Tunnel. The noble Lord, Lord Champion, also asked about that, as did the noble Lord, Lord Gainford. I can say something about this proposal. As your Lordships know, we are awaiting a decision shortly which I am not able to anticipate but which has to be made this summer. At that time the details will be set out in the Green Paper which is to be published shortly and which I think your Lordships will find fascinating reading.
Supposing the Tunnel is built, it would give British Rail and the National Freight Corporation a tremendous opportunity to develop freight services between centres in Britain and on the Continent. As the noble Earl, Lord Amherst, said, not just between London, Dover and Paris, but from Manchester to Paris, Glasgow to Milan, over these longer routes of which so few are available in this country, rail freighting has a much greater economic advantage. Both full trains and liner type container services should be attractive to the customer, to whom the Channel Tunnel should offer greater security, frequency and reliability at lower cost. The provision of direct rail services from these regional centres to the Continent will give industries in the regions better access to their markets and reduce any disadvantages of remoteness. We should all benefit if substantial volumes of freight were transferred
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all over the country and in particular from congested roads in the London area and the South-East as a whole to the purpose-built rail systems and then the Undergrounds this side of the coastal towns. There is a real possibility of British Rail beating the juggernauts at their own game. This is a distinct possibility if we go ahead with the Tunnel in the near future. When it is built this will happen.
There were, I think, questions asked about routing and building of rail link roads. I have no doubt that British Rail will be able to route lines so that they do not go through the centre of London. The Tunnel will also be served by the M.20 and the M.25 Motorways which would keep motorists from going through London. There is a distinct and exciting possibility that the Tunnel will give railway enthusiasts a real economic jump ahead in their freight traffic.
The noble Earl, Lord Amherst, also wished the railways to be taken out of the straitjacket a bit more. We all sympathise with this view. I hope that the Policy Review will prove productive on that matter. The noble Lord, Lord Crawshaw, drew attention to this green and pleasant land being cut to ribbons. We must have a little common sense here. We have already 200,000 miles of roads and we have 11½ thousand miles of railway. To talk about the great road programme that we have undertaken by the 1980s to have three and a half thousand miles of good motor and trunk routes, when of these three and a half thousand miles, there are to be involved only—
LORD TEVIOT: My Lords, I know that my noble friend is doing us very proud and passed me by two or three minutes ago but he has not yet come to the traffic lights. One point I mentioned was a catalyst for the railways. What I wanted was to point out about the Brighton railway which is a line of proven strength and profitable. I should like it to he strengthened more because if not it will become weak and withered like the other lines he has spoken about. He spoke about the 12½ per cent. subsidy to the stage services. This is only bringing fuel tax back to 10 per cent. on road transport where the railways pay 1 per cent. That concession is merely

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a paper thing and does not mean anything at all.
LORD MOWBRAY AND STOURTON: My Lords, I take the noble Lord's point. About the Brighton matters, I thought I answered that question when I said that I would write to him. When the noble Lord intervened I was saying that out of the three and a half thousand miles of motor and trunk roads we are completing by the 1980s, it will involve over the coming decade only a further 1,000 miles of road. When we talk, as Lord Crawshaw did, about cutting the country to ribbons, we are only adding to about 200,000 miles 1,000 miles more. Added to that is the fact that we have these roads as well landscaped as possible. While they are being built it is a misery for about two years, but when they are landscaped—and, as my noble friend said, we have several civic awards for good design—they serve a purpose. I would say to my noble friend, Lord Crawshaw, that he need not worry too much about that.
About the disabled and elderly people I think I will not weary your Lordships with the details but will write to the noble Lord on the points he raised. The points about the disabled do not differ very much from what was said in the relevant debate in this House. He gave the reports on procedure and how far we were going. He was pleased with taxes and various things, I will write to him.
The noble Lord, Lord Somers, like many others, favoured spending more money on the railways. The goods yards are outdated. He was a hit hard on British Rail. He spoke about the goods yards and stations as though they were Victorian slums. I think that British Rail have done a good job. There are new stations going up in many places. I have seen goods yards in Yorkshire, London, Lancashire and Scotland. I think he was over-yolking the pudding when he described the goings on. I could not agree more with one thing he said. If you make the railways more comfortable, of course this is going to help to attract passengers. Roll-on and roll-off is a point that British Rail are aware of. There is no objection to their going ahead with this. If they can get the business, it is theirs.
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The noble Lord, Lord Redesdale, made his usual charming speech. He raised the point of dangerous chemicals and this is one we had from the noble Lord, Lord Popplewell, only last week. I have a Question to deal with next week, so we will be hearing more about that. It is sad to see them on the roads if they have an accident. It would be equally sad to see an accident in which a train was involved. The Government are watching out for these problems. My noble friend Lady Young dealt with this point the other day and I do not think that I need to say more about it. I was glad that he drew attention to the British Railways £5 million research and development budget. He said it was successful and useful, and I would endorse that.
We had the slightly nostalgic speech, containing a note of pathos, from the noble Earl, Lord Baldwin of Bewdley, who introduced us to the redoubtable "Aunt Aggie". Like the noble Lord, Lord Champion, I shall think about her for many weeks to come. Her advice of, "A penny fare for all" would have been splendid if it had been practicable. Anyway, my Lords, the Great Western Railway went on happily, I hear. The noble Earl, speaking as a manufacturer dealing with freighters, felt that the railway enthusiasts were rather putting the cart before the horse. You have to find people willing to take the horse and cart, even if you cover the cart with gold and have it drawn by a racehorse. The noble Lord, Lord Lucas of Chilworth, spoke for the "Road Lobby" as vigorously as one might expect. I do not think I need to answer him, as he mostly made statements. We know that State lorries are unpopular, but they are essential. Local authorities can divert them from the roads as soon as by-passes are available and take them away from centres of population. My right honourable friend will give his consent where that is suitable.
The noble Baroness, Lady Gaitskell, discussed Mr. Marsh's analysis. He is a very enthusiastic backer of his own views and I pay tribute to him and his Board for the way they are handling the present unpleasant situation in which they find themselves. As a Member of Her Majesty's Government, I do not think that I can be expected to comment on the views which Mr. Marsh is trying to

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put before the public. We shall consider them, and the views of the Board, in the Policy Review.
The noble Lord, Lord Gainford, took us back to George Stephenson. We have gone in this debate to the far future and also we have gone back in history. The noble Lord made an interesting point about cargo airships. I was aware of this. As he told us, there has been a resurgence of interest in this matter. Three groups are working on the question of large rigid airships for cargo carrying. The attitude of the Department of Trade and Industry towards airships has been neutral. The research and development element was thought to be small compared with the construction cost, and the intention of the firms involved has been to build for their own use rather than for sale. But we are interested, and we have assisted with technical advice as part of our general support for the aviation industry. We are in close touch with the companies working on this matter. My honourable friend the Under-Secretary made a statement about this last May.
I must apologise to the noble Viscount, Lord Mountgarret, because I was out of the Chamber when he made his speech, but I have a note of his remarks. I do not know whether British Waterways would approve of his idea of filling in the canals. I think they may have views about the environmental pleasure which the canals give to many people, either for fishing or boating. The noble Lord, Lord Wise, wished for more containers to be used and spoke about East Anglia and Norfolk. He made a speech which I might describe, without punning, as worthy of his name. I cannot promise that there will be any priority for Norfolk, but no doubt my right honourable friend in another place, and the Department, and also the local county council will note his remarks.
My noble friend Lord Grimston of Westbury came back to the Sunday Times, which in the Department has been known in the past as "the paper of science fiction". Like the rest of us, he will have to wait for the full Policy Review. The noble Lord, Lord Swansea, made a charming speech about Wales which would have done Lord Davies of Leek's heart good. I dealt with the points raised by the noble Lord in my
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reply about the Central Wales Railway. Internal communications in Wales have always been bad because of the mountainous terrain and we have to make the best of conditions.
The noble Lord, Lord Champion, spoke about "spaghetti junctions" and the dangers on roads in general. We must remember that, despite the fact of a few horrible accidents in fogs, the accident rate on the M. roads is lower than on other roads in the country. I think it is hard to pick on "spaghetti junctions" because not so many accidents occur there. The noble Lord also discussed juggernaut lorries. I do not think I want to go deeply into that matter. We are fighting the E.E.C. intention to increase axle weights and also to stop lorry weights going up to 40 tons. But the axle weights do the most damage to the environment. As was said by the noble Lord, Lord Teviot, we have passed various Acts of Parliament and Regulations recently which are now beginning to "bite". Lord Champion's point about many of these vehicles being in bad condition and overweight will be dealt with under that legislation. More inspections are being made; there are more people at the ports and we are getting to know more about the tricks that have been played in the past. We have not had legislation before which would enable us to deal with them.
The noble Lord, Lord Champion, referred to the Research Laboratory, and I think that some of their suggestions about savings are very interesting. The Government are looking at this. I think that the noble Lord really put the subject of the debate in a nutshell when he said that we must make up our minds what service we want. We have to reconcile a monetary discipline with the provision of a social service. I do not think that anyone could have described the nub of this debate in a better way. I do not need to say more than that, because that is what the Policy Review is all about.
The noble Lord also asked about Professor Graham Rees who has been making a wide-ranging study on the pattern of public transport in Wales which was commissioned by the Welsh Council; and the Secretary of State for Wales contributed some money towards the study. Although we are expecting reports during this year and next year, I think the noble

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Lord will agree that the Government must be free to act as is necessary in the interval. We cannot be committed to holding up decisions until Professor Rees has finished his work, although we shall take into account anything which is reported in the interval.
My Lords, we have had a long and interesting debate—I apologise to your Lordships for having spoken for so long—and have covered a considerable number of the aspects of transport which impinge so greatly on our daily life. We have gone from Aunt Aggie's advice to the Great Western Railway chairman and memories of George Stephenson, and the noble Lord, Lord Kings Norton, looked at the 1980s. We have reviewed the difficult and complex problems which arise from the dramatic growth of road transport, both by the individual in his use of the private motor car for social and business purposes, and by the industrialist for the movement of goods. As we have seen, this has created great problems for the long-established public transport system provided not only by the railways but by bus operators throughout the country. But it is the railways in particular which have felt the full force of competition, as shown by the substantial financial losses they have incurred since the mid 1950s, despite massive capital investment in modernisation programmes and considerable assistance on revenue account, which amounted in all to assistance by the rest of the community of over £3,000 million.
What we now have to do, as the noble Lord, Lord Champion, said, is to assess the sort of transport system we need for the 1980s, after taking account of social and environmental factors as well as economic issues. Given good will on all sides, I am sure that between us we shall evolve a transport system which meets as fully as possible the needs of the community throughout the length and breadth of the land.
9.2 p.m.
LORD POPPLEWELL: My Lords, there is little for me to say, but I should like to express gratification at the nonpolitical line that has been developed in this important debate. It has been most interesting to see the unity from all sides of the House in expressing the view that something must be done to deal with the difficult position on our roads
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and to get traffic back on to the rails. I hope the Secretary of State will read carefully what has been said here to-day, and will ensure that, in the policy review which we understand is now taking place, the rules of the game will be changed a little and easement given to the financial control: in other words, the Railways Board must be taken out of the straitjacket and allowed not just to keep the traffic they have, and certainly not to have that traffic reduced, but to go ahead and get traffic back on to the system. I should like to thank all noble Lords who have taken part in the debate, and I sincerely trust that some good will come from our deliberations this afternoon. My Lords, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

COMMON AGRICULTURAL POLICY (PROTECTION OF COMMUNITY ARRANGEMENTS) REGULATIONS 1973
9.3 p.m.
EARL FERRERS EARL FERRERS rose to move, That the Draft Common Agricultural Policy (Protection of Community Arrangements) Regulations 1973, laid before the House on February 20, be approved. The noble Earl said: My Lords, in view of the fact that there is yet another debate to follow, I hope I shall be interpreting your Lordships' wishes correctly, without implying any discourtesy, if I make my remarks upon these two Orders as brief as possible. The purpose of the two Instruments which are before your Lordships' House to-day is to give the Intervention Board for Agricultural Produce adequate powers to enable it to protect the large sums of money which it will be disbursing in carrying out the E.E.C. system of agricultural support. I must apologise to your Lordships for the necessity we have been under to make a No. 2 Order. The original Order was defective through some minor errors in the Schedule. These errors would have been unlikely to have had any marked effect on the powers of the Intervention Board, but it seemed right that they should be corrected immediately they had been discovered.
My Lords, the powers which these Instruments will give the Intervention

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Board to protect the commodity arrangements are generally on the same lines as those which the Agricultural Departments have used for the past 25 years or so in order to protect the guaranteed payments under the system of support which we have previously enjoyed. Basically, all that the Instruments do is to require people who are engaged in trade in the commodities which are specified in the two Instruments—and these are the products for which there is some system of E.E.C. support—to keep and retain records, and to produce them, on the request of an authorised officer of the Intervention Board or of the Agricultural Departments. They will also provide similar powers in respect of levies, although these do not form a very prominent part of the E.E.C. support system.
Measures must be taken to ensure that there is no fraud and to promote the smooth running of the whole apparatus. We used to take similar action to protect the money spent on our guarantee payments in Orders which will be familiar to your Lordships, such as the Cereals (Protection of Guarantees) Order and the Fatstock (Protection of Guarantees) Order. These Orders which are before your Lordships to-day are similarly named, such as the Common Agricultural Policy (Protection of Community Arrangements) Order, and they have similar protecting functions to ensure the correct expenditure of public money. I trust that with that brief explanation your Lordships will approve them. I beg to move.
Moved, That the Draft Common Agricultural Policy (Protection of Community Arrangements) Regulations 1973, laid before the House on February 20, be approved.—(Earl Ferrers.)
On Question, Motion agreed to.

COMMON AGRICULTURAL POLICY (AGRICULTURAL PRODUCE) (PROTECTION OF COMMUNITY ARRANGEMENTS) (No. 2) ORDER 1973
EARL FERRERS: My Lords, I beg to move.
Moved, That the Common Agricultural Policy (Agricultural Produce) (Protection
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of Community Arrangements) (No. 2) Order 1973, be approved.—(Earl Ferrrers.)
On Question, Motion agreed to.

AIR FARES ON NORTH ATLANTIC ROUTES
9.7 p.m.
BARONESS BURTON OF COVENTRY BARONESS BURTON OF COVENTRY rose to ask Her Majesty's Government when and how they intend to correct the fiasco of the North Atlantic fare structure in the interests of both British travellers and British airlines; and what support they are receiving from other European countries. The noble Baroness said: My Lords, I am sure all of us who have waited for so long will be indebted to the noble Earl, Lord Ferrers, for the speed with which he moved those two Orders. This Unstarred Question is non-Party—indeed, I hope it is all-Party and none. It was essential that we put it down for to-day, both in the interests of British travellers and of British airlines. I happen to be the catalyst. As the House knows, I have been pursuing this matter of air fares on the North Atlantic route for some time. Perhaps I might add that it is not a route that I have been able to use myself, although I hope to do so, in common with many others, should we succeed in bringing down the fares.
Each of us speaking to-night—and many others in your Lordships' House—has been caused anxiety by replies we have received from Ministers. On Thursday last, March 1, I asked the noble Lord, Lord Drumalbyn, if there was any reason why, if the American airlines cannot fill their planes, we should not be allowed to fill ours. The only reason he could give me was the Bermuda Agreement, whereupon the noble Lord, Lord Reigate, asked if we had given notice to cancel it. The answer was, No. My Lords, that is not good enough. I think our airlines have been treated disgracefully. The passengers, the travelling public, have been ignored. I put the passengers second, because if the airlines do not flourish the passengers cannot expect cheap fares.
It seems to me incredible that if Pan Am cannot pay its way our own airlines should be prevented from paying theirs—

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and at a profit. Is there any noble Lord who believes—indeed, does the Minister himself believe—that were our own scheduled lines in difficulties and the American ones prospering, the Americans would take any notice of our protests about fares? Of course they would not! Again, last Thursday, in reply to the noble Earl, Lord Onslow, the Minister said, and I quote:
"It is not a question of air fares being dictated."—(OFFICIAL REPORT, 1/3/13; col. 753.]
It seems to me that to say this is not dictation is nonsense. Of course it is. And I see no reason why the Americans should dictate fares originating here. Surely that is a matter for our own Government. The Minister went on to say —and again I quote—
"Air fares have to be agreed between the two parties to the agreement; that is, from where the flight starts and where it ends. They have to be agreed at both ends."
I wonder whether the Minister could answer this question: If the Americans will not agree to our fares, are we proposing to agree to theirs? Presumably this argument cuts both ways. If not, is it any wonder that we always get pushed to the back of the queue?
The House will recall that for many months now I have been endeavouring to explain to the Government that filling 'plane seats, even at reduced prices, is better than having them empty. As this is a non-Party Question, I will not embarrass the Minister by quoting some of his replies. Anyway, this fact is now agreed upon by our own airlines, who say they can do this at a profit.
The House will recall, too, that I have tried to stress the simple and equally obvious fact that cheaper fares on our scheduled airlines by means of APEX would mean that the scheduled airlines could compete with charter flights. Do the Government intend to let down our scheduled airlines on this question? If they do, there is little doubt that the United States airlines will cream off the low-fare traffic. The new advance booking charter (A.B.C.) system, even if agreed to, will not deal with this aspect. May I quote from the air correspondent of The Times (Mr. Arthur Reed), writing on Monday last, March 5:
"Although British airlines—particularly B.O.A.C. and British Caledonian—will be participating in the ABC scheme, they fear the
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majority of the traffic will be carried by United States airlines.
"British carriers do not have the spare aircraft to use for charter flights, while Pan American and Trans World have fleets of jumbo-jets specifically earmarked for this type of traffic. In addition, the American charter lines have dozens of aircraft free now that their commitment to fly servicemen to and from Vietnam is almost ended.
"The British carriers had hoped for a system under which they would have been able to 'top up' passenger loads on their scheduled services by offering cheap advance purchase excursion (Apex) fares to travellers prepared to book 90 days before travel."
I think we should fight on this matter and I think we should demand that the Government fight. It is not the slightest use speaking softly on this point. I think the whole affair is monstrous; and I hope that this House and Parliament and the Government will say, No.
9.13 p.m.
THE EARL OF KINNOULL: My Lords, if I were asked what job I should least enjoy in the House, it would, I think, undoubtedly be to reply from the Despatch Box to the noble Baroness, Lady Burton, on the subject of air fares and IATA agreements. It is a subject so interwoven with complexities and so impregnated with jargon that only a few people —not myself, I fear, but clearly the noble Baroness—have mastered. The consolation to my noble friend is that he is given plenty of practice in the subject by the noble Baroness in her almost lone crusade. This is, I believe, her fifty-third Question on air terminals and fares.
Having said that, I think the House is indebted to the noble Baroness for raising this subject to-night with her usual crispness and clarity. I am sure that a great many others outside the House, particularly the casualties of the APEX scheme who booked and paid deposits only to find now their bookings cancelled, will also be grateful to the noble Baroness for raising the subject. The noble Baroness uses the word "fiasco" in her Question on the Order Paper. It is a somewhat severe word, but I would sadly agree with her that from the consumer's interest the scheme so far has been a fiasco. To be launched only last January by the national carrier, B.O.A.C., at a considerable cost to them—I am told£1½ million—and to draw an immediate response of some 17,000 bookings in four weeks,

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with their deposits, and then to have the scheme abandoned by early March, is frankly a tragic mess. It is a disappointing mess for those who have booked to benefit from this low cost scheme, and a costly mess for B.O.A.C. which, one understands, has now estimated a loss of revenue of some £8 million for this year.
It has been said that B.O.A.C. should have waited until all the ends were tied up before mounting the sales campaign. I believe this to be basically an unfair criticism, for both B.O.A.C. and British Caledonian needed time to mount their sales campaign for the season. The fact that the APEX scheme was eventually scrapped at virtually the last moment was not of their doing. I agree with the noble Baroness, Lady Burton of Coventry, that both British carriers and travellers have had a very raw deal in this matter. Despite the disappointment of people booked on the APEX scheme, one asks oneself what effect will the cancellations have on the two British airlines on the North Atlantic route. The cancellation will clearly force many travellers on to the charter arrangements. As 70 per cent. of the North Atlantic traffic is generated from America, and as the charter capacity of British airlines is already restricted, the benefit will clearly go to the American airlines this season. If this logic is sound, it would seem that the collapse of the APEX scheme is damaging to the British traveller, to the British airliner as to the share of their market, and to the economics of scheduled services across the North Atlantic.
My Lords, what I believe is important to-night, and what I hope my noble friend will clarify, is first what can be done for the unfortunate disappointed bookings that were placed with B.O.A.C.? Will B.O.A.C. be able to do something to help them? Secondly, what is the Government's attitude to pursuing the APEX scheme in the future? It clearly fills a popular demand for those who would travel the North Atlantic route. How close is agreement with America now over the A.B.C. charter scheme? Clearly the time is running out on this scheme as well. Is this scheme also in danger of foundering? It would be a serious setback for B.O.A.C. who, one understands, have sold a capacity of
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100,000 bookings, if this scheme were cancelled as well.
In recent weeks a good deal of criticism has been levelled at the part the Civil Aviation Authority have played over these negotiations. It would be helpful if my noble friend could set the record straight so far as he is able, for I believe much of the criticism has been unjustified For instance, it would be of interest if my noble friend could indicate something of the timing of the negotiations that took place with America. Were the broad principles of APEX, except the precise fare to be charged, agreed in January when B.O.A.C. started advertising? What was the reaction of the American C.A.B. to the fares filed by both the American carriers and the European carriers, and by how much did they differ?
The C.A.A., since its birth in 1971, has, I believe, shown a welcome lead in its attitude to charter and scheduled fares. Its philosophy, that part-charter is in future an essential element of the scheduled services (indeed some may say the survivor of the scheduled services) is wholly realistic. Its attitude that the scheduled fares should be based on true costs is again welcome, though not accepted by all countries. Its approval of the Laker Sky Train concept may have upset some, but it is very much in line with the thinking behind the Civil Aviation Act. Finally, its action to try to put a stop to the many undignified proceedings with certain errant affinity groups that we saw last year is again very welcome. I hope to-night my noble friend will be able to say that, despite the setback this year of APEX, the Government fully support the Civil Aviation Authority, B.O.A.C. and the British Caledonian Company in their efforts to try to reach agreement with the Americans for perhaps next season. APEX clearly offers what British air travellers want—a seat on a scheduled service. It would be a great shame if, because of certain internal problems across the Atlantic, this was never allowed to hatch.
9.21 p.m.
LORD O'NEILL OF THE MAINE: My Lords, I have the greatest pleasure in supporting this debate initiated so wisely by the noble Baroness, Lady Burton of Coventry, even though I do not

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have the expert knowledge displayed by the first two speakers in this debate. Whenever I go to the West Cromwell Road air station I think to myself that but for Lady Burton this would be on the way out, and the unfortunate travellers from the centre of London would have to find their way to Heathrow in some way or another. So this is one of the many reasons why I rise to support the remarks which have been made by the first two speakers in this debate.
Unlike the noble Baroness, Lady Burton, who is such an expert on these affairs, I have had the good fortune during the last twelve years to cross the Atlantic at least twice a year, and I shall be crossing it once again next week. We have at the head of B.O.A.C., both in Canada and in America, two excellent chiefs—both of whom, incidentally, come from Northern Ireland and both of whom are my personal friends. I am sure they are shattered by what has happened.
Make no mistake about it, my Lords, B.O.A.C. was doing extremely well. They had a very good "commercial" on American Radio, with the portly Mr. Robert Morley advising everybody what a wonderful time they would have if they flew by B.O.A.C., and on my last visit to New York, last year, when I was coming back in a cab from mid-town Manhattan to Kennedy the cab-driver said, inevitably, after the first mile or two, "I suppose you would be English?" and I said, "Yes". He said "Would you be flying B.O.A.C.?" I said, "Yes", and he said "Oh, that commercial you have with that fat man saying 'Isn't it fun to go by B.O.A.C.'—it's just wonderful. If I fly the Atlantic next time I go B.O.A.C.". I went on one of the earliest Pan-Am Jumbos, and I have never had such ghastly service. An American business man sitting beside me said, "I will never go American again".
This is the competition which Pan-Am and, to a lesser extent, T.W.A., have been up against and I can quite understand the fear with which they contemplated the low fares which were going to be operated by B.O.A.C., and also of course by British Caledonian, who were coming into the market as well. Like the previous two speakers, I should like to express the hope that the Government will not take this lying down. I said—I think it was last
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week—rather jumping on to many other people's bandwagons, that maybe we could fly to Montreal and Toronto and the passengers could somehow go on to America from there, but I understand that Canada, under American pressure, also feel that they cannot get out of line. Obviously, the suggestion that I made last week is not "on".
May I finally say this. People criticise our national airlines because they are national lines. Are we really to believe that B.O.A.C., as a nationalised organisation, would have gone in for this in the big way that they have unless they had good reason to believe that these new cheap air fares were coming into Operation? Of course they would not. They were showing the same keen commercial enterprise which we should have expected from a private enterprise airline and I do not think that they should be blamed for slightly jumping the gun before all the details were finalised. It is tragic if we have to give in to this American pressure. We should not ignore the fact that Mr. John Connally has recently joined the Board of Pan-Am—the President's recent right hand man—and we in Britain must realise that in America things like this are done. Nobody is a greater admirer than I am of the Americans. We have over thirty American industries in Northern Ireland, and that is why I used to go there twice a year. But they are tough. We have to be tough, too, and I hope that the Government will not take this lying down.
9.26 p.m.
LORD REIGATE: My Lords, too should like to support the noble Baroness in her very remarkable crusade—her series of crusades really, because her first crusade was with regard to the West London Terminal which I think ought to be named the Burton Terminal.
LORD O'NEILL OF THE MAINE: Hear, hear!
LORD REIGATE: We now have what one might call the longer term crusade to reduce the price of crossing the Atlantic—and I hope not only the Atlantic but to other places in which I have a vested interest, namely, the Caribbean. But, above all, I envy her for the way in which she has mastered the appalling complexities of the IATA structure, that awful

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straitjacket which is designed merely to keep a large number of airlines, many of which ought to go bankrupt, in being. There is one airline that now advertises more or less—let us call it Ruritanian Airlines—"Travel Ruritanian: no one else does." T.W.A. lures you across the Atlantic at the same price as any other airline by showing you three seats with only two people in them, and saying, "If you travel this way you may be lucky and have an empty seat next to you." In my experience, which was on Pan Am crossing to America last year, there was hardly anybody in the plane at all. It was an example to me of the actual fatuity of this whole price structure, when the world is filled with people wanting to cross the Atlantic at cheap prices and there were not more than 24 people in an almost empty plane.
I do not entirely agree with my noble friend Lord O'Neill of the Maine about Pan Am. I have flown Pan Am and I flew it again last year and had excellent service. Nor am I an entirely unadulterated enthusiast for B.O.A.C. since I tried to go "Earlybird" to the West Indies this year. Your Lordships will know that that quaintly named thing "Earlybird" is an attractive scheme by which you are supposed to book in advance and go for £99 instead of £170, or whatever the return fare is. You have to book three months in advance. Being cautious I booked five months in advance and found that on my particular day the "Earlybird" was full up. Eventually I had to travel at the higher fare only to find that the plane was not full at all. My wife elicited the information from one of the booking clerks that there are only 10 "Earlybird" seats on a plane which holds about 180 people. They could easily have filled it up had they not been quite so rigid in the application of the rules, and if they had had the purpose in their minds of filling that plane. I must express that slight grouse against B.O.A.C.
But I agree with the noble Baroness (and I hope that her crusade succeeds) in trying to bring IATA to its senses. Some of its members are very sensible. B.O.A.C. want this reduction, but there are a great many who are on the side of the Americans in not seeking a general reduction. What I have against IATA, among other things, is that they always seem to meet
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for so long in such delectable places, Geneva, Montreux, Bermuda, the Bahamas. I can think of several cities where they ought to stay—Reykjavik in the winter—till they have got a little sense in their heads. However, to be less frivolous, the noble Baroness referred to the supplementary question that I put to my noble friend last week when I asked whether we had given notice to scrap the Bermuda Agreement. My noble friend did not only say no; he said that would leave a very open situation. Had the opportunity been given to me to ask a further supplementary, I would have risen to my feet and said "So what!" Surely we want a very open situation. This is what the Americans want to avoid. I hope we shall know whether there is any step we can take to give notice, with our colleagues in Europe who think like us, to terminate that situation until a more satisfactory scheme can be produced.
Lastly, may I ask my noble friend whether his attention has been drawn to a suggestion recently put forward by that great expert on civil aviation, Sir Peter Masefield, a former constituent of mine, that there might be a North Atlantic shuttle service, run jointly between Pan American and B.O.A.C., with an alternative run by T.W.A. and British Caledonian. It has been calculated that this, on a 65 per cent. load basis in a 747, could be achieved for an air fare of £42 across the Atlantic. This is, so far as I am concerned, a new idea, and would be a good way of sweeping away the complexities of the present structure of air fares. I do not know whether the Government have given this thought, whether it has been considered by B.O.A.C. and so on. I think that the House, and indeed the country and all those who would travel by air, owe a deep debt of gratitude to the noble Baroness for her efforts.
9.32 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, one often starts a reply in the House of Lords with the words "at this late hour". I want to say at this late hour that I congratulate the noble Baroness on her perseverance in coming here and bringing this very important subject before your Lordships; I agree entirely with what my noble friends have said

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in regard to her initiative. I have been asked to-night to put the record straight by my noble friend Lord Kinnoull, and this is what I will try to do in as short a space of time as I possibly can.
I think all my noble friends have recognised, and so has the noble Baroness (I should like to call her my noble friend, too) that it has very long been the policy of British Governments to encourage airlines to provide cheap air transport, both by way of scheduled services and by charter services. Your Lordships will recall that when the Prime Minister addressed the annual general meeting of the International Air Transport Association last September he said that with the large and growing demand for low cost travel, even over the longest distances, he was sure the future of the industry would depend upon how it responded. He went on to say that scheduled services would no doubt continue to serve the needs of those who require the facility of "on demand" and flexible booking arrangements; but that that was an expensive facility, and already there were many who did not require it and did not see why they should have to pay the added cost. The consequence was obvious: if the scheduled carriers did not provide simple and inexpensive transport those passengers would look elsewhere, and no one could blame them.
In pursuance of this policy the Govment and the Civil Aviation Authority have taken the lead in the development of new charter rules to replace the discriminatory Affinity Group rules which have become outmoded and increasingly disregarded. The entire concept has fallen into disrepute, leading to all sorts of undesirable consequences, such as the cancellation of services at very short notice and the stranding of passengers. Over many months of international negotiations very considerable progress has been made, and the new Advance Booking Charter rules will certainly be in operation in the North Atlantic area on April 1. Under these rules it will not be necessary to join a club in order to qualify for cheap charter travel. It was announced some six weeks ago that these new rules will apply from April 1 on routes between the United Kingdom, on the one hand, and Canada, Mexico, and, my noble friend, Lord Reigate, will be glad to know, the Caribbean area, and the northern part of South America,
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on the other. We wish to see advanced booking charters operating also to the U.S.A. and discussions with the U.S. authorities are at an advanced stage. I cannot go beyond that. The Civil Aviation Authority are also introducing on April 1 a system of licensing of travel organisers. With all these measures cheap and more reliable charter air travel will be made available to the general public on North Atlantic routes from April 1.
I want to make that clear before dealing with scheduled services. The Government and the Civil Aviation Authority are convinced that the scheduled services should be able to offer low fares in order to compete in the potentially vast low-priced market. Apart from offering the public a real choice of services at low prices we believe that in order to maintain the existing frequent and regular flights on a viable basis the scheduled services should be able to fill the significant numbers of empty seats at the less popular times. The British airlines also are convinced of the need of such low fare policies on the North Atlantic routes, and for many months they have given a lead in advocating them in IATA. They have tried to secure agreement to part-charter, advance booking group fares and advanced purchase excursion fares (so called APEX fares) at competitively low levels. Unfortunately, after many months of negotiations in IATA it became clear in December that there was absolutely no prospect of reaching agreement all-round, and the airlines each filed their own fares proposals with the Governments concerned. There followed a series of negotiations between the United Kingdom and the United States Governments. I think I should add that the United States Government, of course, had also to negotiate with the other European Governments who were not of our point of view. Although some limited progress was made, the gulf between the two sides remained wide, and these inter-governmental negotiations also have become deadlocked. The United States Government and their airlines disagree with our view that low fares on scheduled services will be economic. They believe that the only way of offering very cheap air travel is by way of charter service. They seem to hope that, although scheduled services have been getting progressively less competitive with the cheapest end of the air travel market,

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nevertheless sufficient passengers will prefer to travel on scheduled services to enable such services to be maintained at existing levels and to remain viable. That is not our view.
Having failed to reach any agreement with the United States Government, the Government and the Civil Aviation Authority held talks with the European Governments in Paris last week. As a result, we have concluded in the European Civil Aviation Conference that the only sensible course of action was to continue with the existing fares during this summer up to October 31. As I indicated, the members of E.C.A.C. are urging their airlines to implement this conclusion in IATA because it is IATA that enters fares subject to the approval of the Governments concerned. While there have been different viewpoints about new fares among European countries, we have a common view on what needs to be done at the moment: that is to keep the existing fares because there is no option. I must stress that, so far as we are concerned, this outcome is most unsatisfactory, but there is no practicable alternative for this summer. Under the bilateral inter-Governmental Air Services Agreements which regulate the operation of international air services, the Governments at each end of any particular route must be agreed on the level of fares to apply. If agreement is not possible on new fares levels for the North Atlantic, and if discussions were pursued to the point of complete confrontation, there would be a very real danger of services ceasing to operate altogether. Nobody wants that.
In the meantime, there remains the problem of North Atlantic APEX fares on which no agreement has been reached. Passengers have been booked provisionally and have been paying for very cheap travel at APEX fares we hoped to agree on for this summer. They were of course all warned that these fares remained subject to Government approval, and in the event the Governments on the other side of the Atlantic have not approved. The airlines plan to arrange for as many passengers as possible to be carried on charter flights as near to their intended date of travel as possible. Some of these passengers will no doubt still prefer to travel on scheduled services,
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and they will need to travel at one of the excursion fares and to pay rather more than they, and we, had hoped. For those passengers who will not be able to avail themselves of these alternatives, the airlines will arrange the refund of the money paid whether for fares or deposits. There will inevitably be disappointments, and I can only say that the Government, the Civil Aviation Authority, and the airlines share the disappointment.
I have been very glad that in this debate there has not been criticism of either the Civil Aviation Authority for permitting B.O.A.C. to advertise the cheap fares on which they hoped to get agreement in anticipation of that agreement, or of B.O.A.C. or British Caledonian. At the time when they did so, they genuinely believed that there was a fair chance of getting agreement. Had they not done so, and had agreement been reached, they would have been criticised for missing the chance of introducing the new fares on April 1. After all, an airline has to advertise some fare.
The American objection was basically that we were offering, provisionally of course, the lower fares on this occasion. That was their objection. Quite properly, the bookings were made provisionally, and that meant provided agreement was reached. When I was talking of a confrontation and things breaking down altogether, this is what is meant by an open situation. If you are working on a treaty and if you want to maintain your relations, you can only replace the treaty with another treaty.
What conclusion should we draw from these discussions? Some people have suggested that we should not accept the views of others and should revise international agreements if they do not allow our own views to prevail. I must make it plain, however, that, under any conceivable agreement on scheduled air services, between States which are sovereign in aviation matters, both sides must be in agreement on vital features such as tariffs. The lesson I draw from these discussions is not that the views which have been pioneered by the British Civil Aviation Authority and our airlines are wrong. On the contrary, I consider that we must continue our drive to persuade others—including, but not only, the Americans—using all means available to

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us, that changes must be made and that our fundamental objective is right; namely, to secure for the general public the lowest possible fares on scheduled services, commensurate with economic operations. We are not taking this lying down; we shall go on fighting.

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