Sitting of 24 October 1973

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

  ASHDOWN FOREST BILL [Lords]
  Order read for resuming adjourned debate on Question [23rd October.],
  That the Promoters of the Ashdown Forest Bill [Lords] shall have leave to suspend further proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further Proceedings not later than the day before the close of the present Session and that all Fees due on the Bill up to that date be paid.
  That, if the Bill is brought from the Lords in the next Session, the Agent for the Bill shall deposit in the Private Bill Office a declaration, signed by him, stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the present Session.
  That, as soon as a certificate by one of the Clerks in the Private Bill Office that a declaration as mentioned above has been deposited has been laid upon the Table of the House. the Bill shall be read the first and second time (and shall be recorded in the Journal of this House as having been so read) and shall be committed to the Chairman of Ways and Means, who shall make only such Amendments thereto as have been made by the Committee in the present Session, and shall report the Bill as amended to the House forthwith, and the Bill, so amended, shall be ordered to lie upon the Table.
  That no further Fees shall be charged in respect of any Proceedings on the Bill in respect of which Fees have already been incurred during the present Session.
  That these Orders shall be Standing Orders of the House.
  Hon. Members: Object.
  Mr. Speaker: What day?
  The Chairman of Ways and Means: No day.

ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Oil-related Developments (Employment)
    Mr. Douglasasked the Secretary of State for Scotland if he will make a statement on the research projects sponsored by his Department into the job creation in Scotland arising from oil-related developments.
    The Secretary of State for Scotland (Mr. Gordon Campbell): The Department of Political Economy at Aberdeen University is carrying out a study on my behalf into the economic impact of North Sea oil developments, including the effects on employment. Interim results will be available as the work proceeds. In addition, studies of the impact of individual projects are commissioned as necessary.
    Mr. Douglas: I thank the Secretary of State for that information, but does he not agree that, in addition to the information he obtains from these studies, the substantial document published by the Scottish Council (Development and Industry) is an indictment of the Government's policy? Is not the Minister aware that it underlines what many of us on this side have been saying about the niggardly attitude of the Government towards oil development—in particular. that the Government should have established a petroleum supply industries board based in Scotland? Does he not agree that the Government should now appoint a Minister of Cabinet rank having full responsibility for energy matters?
    Mr. Campbell: I do not accept that the document issued by the Scottish Council is any such indictment. I have been in close consultation with the Scottish Council since oil developments started two years ago, and we are broadly in agreement on the way in which this can best be carried out to the benefit of Scotland.
    Mr. MacArthur: While my right lion. Friend is considering this matter, will he find an opportunity to make clear that the Labour Party's policy of nationalisation of North Sea oil would bring oil development to a sudden end?
    Mr. Campbell: I have found very few informed people—this applies I believe, to the hon. Member for East Stirlingshire (Mr. Douglas) himself—who are in favour of the Labour Party's official policy on this subject.
    Mr. Lambie: Is the Secretary of State aware that the report published today by the Scottish Council (Development and Industry) calls for an immediate decision on the Hunterston project? When will he give permission for those developments to start?
    Mr. Campbell: The hon. Gentleman ought to know that I have taken the planning decisions. The other decisions, which do not fall to me, will have to be taken after a great deal of consultation between the parties concerned, to ensure that this valuable site is used for the best combination of uses for Scotland as a whole.

    Area Health Boards
    Dr. Dickson Mabonasked the Secretary of State for Scotland how many representations he has received, and from whom, complaining of the unrepresentative nature of his appointments to the area health boards in Scotland.
    The Under-Secretary of State for Health and Education, Scottish Office (Mr. Hector Monro): My right hon. Friend has received general representations on this from 13 hon. Members, 16 health service authorities, 19 local authorities and five trade unions. On the question of representation of nurses on health boards, he has had letters from 46 hon. Members and three nursing organisations.
    Dr. Mabon: Will the Minister tell us how many appointments are still to be made? Will he not agree that of the remaining appointments a significant number should be given to nurses, women, trade unionists, Co-operators and people on the Labour and Liberal sides of political life in Scotland, who are sadly—indeed shockingly—under-represented in the present 209 appointments?
    Mr. Monro: From the Adjournment debate the hon. Gentleman and I had the other night, I thought that perhaps he had realised that we shall bear in mind the points he put when we are
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    considering the other appointments, which should number between 50 and 60.
    Mr. James Hamiltonasked the Secretary of State for Scotland to what boards the seven nurses have been appointed; if he intends to appoint more; and if he will make a statement.
    Mr. Monro: My right hon. Friend has appointed persons with nursing experience to the Borders, Forth Valley, Highland, Lothians and Orkney Health Boards. In completing the membership of health boards, he hopes to be able to make further appointments of this kind.
    Mr. Hamilton: Will the Minister recognise that the nine appointments are totally unacceptable to the nurses themselves? The Government talk about participation and communication, but nurses who are employed in the National Health Service have been denied the right to participate on hospital boards. The nurses told me, when the Minister made his announcement during the Adjournment debate last week, that he was talking rubbish and that what he said was totally unacceptable to them.
    Mr. Monro: The hon. Gentleman attended the Adjournment debate, for which I was grateful, and he heard in detail the reasons for my right hon. Friend's decision. I indicated during the debate that the views expressed then would be taken into consideration, and we shall certainly consider the position regarding further appointments of people with nursing experience.
    Mr. Wolrige-Gordon: Will my hon. Friend understand that there is considerable feeling on this matter among nurses in all parts of the country? I hope that he can do a great deal more to meet the point made by the hon. Member for Bothwell (Mr. James Hamilton) about appointing more nurses to health boards.
    Mr. Monro: From letters which hon. Members have forwarded to my right hon. Friend and myself, I am aware of the strength of feeling. I hope hon. Members will appreciate that on each area health board there is a chief area nursing officer, who is there to represent the case of the nurses. The boards

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    will pay close attention to the views of the area nursing committees.
    Mr. Ross: Will the Minister take it from me that this is a serious point? The nurses are very much up in arms about being ignored. It is not satisfactory to say that someone with nursing experience will be appointed, because that someone may not be in touch with the feeling in hospitals at the present time. There were nurses on regional hospital boards, and it is essential that they should be appointed to the area health boards. The Minister has had more than three months to think about this, and we are still waiting for his decision.
    Mr. Monro: The right hon. Gentleman is wrong. My right hon. Friend has made his decision and has informed hon. Members and the nursing profession. My right hon. Friend and I have the highest regard for the nursing profession and all the work it does for the hospitals and the health service in Scotland, but the hon. Gentleman must appreciate the important position of line management in the health service in the future under the area health boards. It would be inappropriate to have nurses employed by the boards involved in decisions which affect the chief area nursing officer.

    Government Departments (Dispersal)
    Mr. John Smithasked the Secretary of State for Scotland if he will cause the Scottish Development Department to make a study of which areas in Scotland would be suitable for the location of dispersed Government Departments.
    Mr. Gordon Campbell: A study has already been carried out by the Government Departments concerned.
    Mr. Smith: The Secretary of State will be aware of the magnificent campaign which has been run by local authorities in the West of Scotland, supported by many hon. Members at least from this side of the House, to counteract the Hardman Report. Will he tell us what backing he is giving to the local authorities and others, and what the Scottish Office aims to get for Scotland in respect of Civil Service jobs? Will he tell us, too, how the Scottish Office proposes to achieve this aim?
    Mr. Campbell: In the first place, I am concerned with the interests of Scotland as a whole. I congratulate those who have put so forcefully the facts concerning particular areas. I shall ensure in the considerations taking place within the Government that all those facts are brought to the fore.
    Mr. Ross: Does not the Secretary of State realise that, in respect of Hardman, only one area in Scotland was considered? If the right hon. Gentleman followed the debate last week, was it not clear to him that there are about 5,000 jobs available that will not go to Milton Keynes as originally planned by Hardman? What is the Secretary of State doing to ensure that those jobs come to Scotland? Is he not aware that, if he needs any help in this respect, he will be given such help by every Scottish Member of Parliament?
    Mr. Campbell: My hon. Friends the Ministers at the Scottish Office and I listened to every minute of that debate and a Scottish Minister was in the Chamber throughout it. As a result, we recognise that we have the full support of Scottish hon. Members in the matter of dispersal as it affects Scotland. As regards Glasgow, that area was chosen as an outstandingly good location to be mentioned, but that does not exclude other areas of Scotland which can offer good locations for dispersal.

    Fuel and Power (Technical Advisers)
    Mr. Eadieasked the Secretary of State for Scotland what is now the full complement of technical staff he has to advise him in all the aspects of fuel and power.
    Mr. Gordon Campbell: Within the Scottish Office the number is nine. In addition, I can call upon expert advice from the Department of Trade and Industry and other sources available to the Government.
    Mr. Eadie: This Question is prompted by the fact that in answering Questions the Minister does not seem to be aware whether pits in Scotland will stay open or when they will close. Can he inform the House whether he has been advised by his technical staff in relation to future coal production and new sinkings in Scotland?
    Mr. Campbell: As the hon. Gentleman knows, responsibility for the coal industry rests with another member of the Government, but I am kept closely informed. Besides the technical advice, there is also advice available to me from other Departments and from the inspectorates which give advice to all Ministers.
    Mr. Eadie: The right hon. Gentleman is not getting it then.
    Mr. Alexander Wilson: In view of the world shortage of fuel—it is accepted even by this Government that there is a shortage—will the hon. Gentleman agree to set up a Scottish fuel energy authority? In view of the fact that I and some of my colleagues have raised this matter continually, especially on the Coal Bill, does not the Minister think that it is about time to do something about it?
    Mr. Campbell: The hon. Member has raised a different question about setting up a new authority for dealing with Scottish coal. He said "fuel authority" but clearly his purpose was the consideration of coal. Coal is an important industry in Scotland, and that is recognised by my right hon. Friend and myself.
    Mr. Ross: Would the Secretary of State break down the responsibilities of his nine advisers? Is there anyone advising him technically on coal?
    Mr. Campbell: I cannot do so without notice. The question was about fuel policy as a whole and the House will agree that the point about fuel policy is that one should consider various kinds of fuel and their inter-relationship.

    Council Housing
    Mr. Ewingasked the Secretary of State for Scotland how many local authority houses were completed by Scottish local authorities in the first three quarters of 1973 and what were the completion figures for the first three quarters of 1972, 1971, 1970, 1969 and 1968.
    The Under-Secretary of State for Development, Scottish Office (Mr. George Younger): The rounded figures for the first three quarters in each year, beginning with 1973 and ending with 1968, are 10,500, 12,500, 16,000, 21,000, 19,000 and 18,000.
    Mr. Ewing: The Minister should hang his head in shame in acknowledgment of his responsibility for these disgraceful figures. Will he do the decent thing and now resign before he drives the people of Scotland into living in tents?
    Mr. Younger: I think that the hon. Gentleman's views bear no relation to the facts. Every local authority in Scotland with a need for houses receives every encouragement, both financially and otherwise, from me to provide them. The number of houses under construction is increasing and the amount of improvement going on may be indicated by the fact that during the first nine months of this year no fewer than 64,000 houses were approved for improvement. That means better homes for all those people.
    Mr. James Hamilton: Will the hon. Gentleman concede that the record of the previous Government is far better than the record of the present Government? Will he recognise that included in the houses that have been built and in the starts he has announced are houses costing £60,000 and £70,000? Will he also recognise that, because of the Housing (Financial Provisions) (Scotland) Act, local authorities are not getting the same incentive to build the houses which are urgently required for the people in these areas?
    Mr. Younger: On the contrary, under the Housing (Financial Provisions) (Scotland) Act 1972 local authorities receive a far better incentive to build new houses. They all realise that, and this is why they are gearing their programmes to meet it. With regard to the records of respective Governments, I should like to point out that it is necessary for an intelligent Government to make their housing policy to fit the needs of the people who will live in the houses.
    Mr. Hamilton: At £60,000 a house?
    Mr. Younger: That is why it is necessary now to build the sort of houses that people are prepared to live in and to build them where people want them. In so far as I make any criticism of the previous Government's housing policy, it is that there were some areas in which they failed to do that, and the results are now apparent.
    Mr. Wolrige-Gordon: To complete the picture, will my hon. Friend consider giving the figures for private house building?
    Mr. Younger: The figures for private house building this year are most encouraging. More than 9,000 houses were built for private owners in the first nine months of 1973, which was no fewer than 1,000 more than in the same period in any previous year.
    Mr. Ross: Do I understand the situation aright that the figures for this year are exactly half what they were for 1970? I thought that the figure was 10.500, against 21,000 for that year. May we not put what the Government have achieved in a nutshell—put up rents and not houses?
    Mr. Younger: The figure quoted by the right hon. Gentleman is correct—that is, the comparison between the two years—but what he must realise, as a person who has had responsibility for housing, is that it is no use simply producing any houses anywhere, because the result is, and always has been, that people refuse to live in them if they are not the sort of houses they want.
    Mr. Ewing: In view of the unsatisfactory nature of that reply, I give notice that I shall raise the matter on the Adjournment.

    Congested Districts (Scotland) Act 1897 (Review)
    Mr. Maclennanasked the Secretary of State for Scotland if he has completed his review of the working of the Congested Districts (Scotland) Act 1897. and of the possibility of altering the criteria whereunder croft roads are eligible for grant assistance.
    Mr. Younger: Before my right hon. Friend can complete his review, he needs to have the views of the seven county councils involved. Not all of them have yet replied to his requests.
    Mr. Maclennan: That is a disappointing reply. Will the Minister bear in mind that since the Act was passed the conditions of crofting have greatly changed, in particular the tendency towards the amalgamation of crofts? Crofters living and working more than one unit make archaic and out of date the provision
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    requiring that a road leads to more than one inhabited croft. Will the Minister also bear in mind that in some crofting areas, particularly in Caithness and Shetland, there are smallholdings exactly similar to crofts which are not so defined? A small amendment to the law is required to make them similarly eligible. Will the hon. Gentleman take those points into close consideration when he produces his final report?
    Mr. Younger: Yes, I shall certainly take careful note of what the hon. Gentleman said. I shall also do my best to see, when we have the replies from the county councils concerned, that the review is completed as quickly as is possible, following the consultations that may be necessary.
    Mr. Strang: Is the Minister aware that the sharp escalation in building costs has made crofters' housing grants quite unrealistic and that, as a result, in recent months a number of crofters have been forced to withdraw their applications for grants? As we urgently need additional housing in these areas, here is an economic way of providing it. Will the Minister look urgently at this matter?
    Mr. Younger: Certainly, I agree to look urgently at that matter. I was not aware that there had been withdrawals in recent months.

    House Building Programme
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a statement on the progress of the house building programme; and what is the estimated number of completions in the current calendar year.
    Mr. Younger: At the end of September nearly 45,000 houses were under construction, the highest number since the end of 1970. In addition, some 23,000 public sector houses were approved awaiting start; and over 22,000 houses were completed by all agencies. The private sector continued to expand; completions in the first nine months of 1973 were higher than for the comparable period in any previous year.
    Progress for the remainder of the year depends on many factors, but we expect house building to benefit from the temporary standstill on some other work.
    Mr. Hamilton: Does the hon. Gentleman think that the total number of completions in 1973 will be greater than the average of more than 41,000 in the last four years of the Labour Government? Will he give an assurance that there will be a total completion figure of 40,000 this year, and does he recognise that the figure of 72,000 in the public sector was about 20 per cent. less than during the last year of the Labour Government? Part of the reason for that is the completely unrealistic nature of the cost yardstick. That is what is preventing many local authorities from getting on with building the houses that are so urgently needed. When will the Minister make a statement about them?
    Mr. Younger: I have at least learned one thing from the previous Labour Government, and that is that it is totally unproductive to make forecasts because under that Government, at any rate, they turned out to be merely words and paper, and not houses.
    My answer to the hon. Gentleman's main question is that the right housing policy for a Government to pursue is that which best suits the needs of the people who want to live in the houses. The reason why we are putting extra concentration on matters such as house improvement and getting a better standard of houses is precisely that that is what people in Scotland want, and we are giving it to them.
    Mr. Bruce-Gardyne: Can my hon. Friend tell the House, in order to get these matters into perspective, how many of the houses built under the régime of the previous administration are now standing vacant because they were built in the wrong place, at the wrong time, and were of the wrong type?
    Mr. Younger: I shall deal with that in detail when I answer a later Question. I should hesitate to make a blanket criticism of houses built under the previous administration, but there is a certain amount of truth in what my hon. Friend says. There is no longer any point in a Government simply building any type of house anywhere, because if they do people will not be prepared to live in them.
    Mr. Ross: Surely the Question to which we shall come later deals with the over-
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    all position of unlet and empty houses. Surely the hon. Gentleman can answer right away the question put to him by his hon. Friend. Are any of the houses which were built during the last six years lying empty and unlet because people do not want to live in them?
    Mr. Younger: The right hon. Gentleman will not need to be a very perceptive viewer of the scene to understand that if people have the choice between new houses and older houses, they will normally take the chance of living in the new ones.
    Mr. Ross: Why does not the hon. Gentleman answer his hon. Friend's question?
    Mr. Younger: I do not know whether it is in order, Mr. Speaker, for the Kilmarnock male voice choir to be entertaining us this afternoon. All I am trying to point out is that one can only pass judgment on the houses built for the needs of the people in a particular area if local authorities are absolutely free and have every encouragement to build every house for which there is a need.

    Salmon
    Lieut.-Colonel Colin Mitchellasked the Secretary of State for Scotland how the commercial salmon catch for the period from 12th February to 25th August 1973 on the coast and estuaries of Aberdeen, Kincardine and Forfar compares with those in the last 20 years; whether he will consider increasing the present statutory weekly close time in order to conserve river stocks; and if he will make a statement.
    Mr. Monro: Although figures for 1973 are not yet available, there are indications that the netting catch will be higher than the relatively low figures of recent years. There is no evidence of any need to increase the weekly close time in the interests of conservation. Any alteration would, of course, require legislation.
    Lieut.-Colonel Mitchell: I thank my hon. Friend for that answer, but has not the time arrived for major changes in the salmon laws? The figures are alarming—over 4,000 spring fish netted off the Aberdeen coast before the end of March.
    Mr. Monro: It would be wrong to come to any conclusions until the full figures are available towards the end of this year. When these are available, my hon. Friend will look at the matter carefully.

    Empty Council Houses
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland what is his latest estimate of the number of council houses standing vacant and unlet; and if he will identify the localities where this problem is currently most acute.
    Mr. Younger: At the end of February this year, some 5,500 out of a total of more than 800,000 houses owned by local authorities had remained unlet for more than eight weeks. The authorities which reported the most serious problems in this respect were Edinburgh, Dundee, Paisley and West Lothian.
    Mr. Bruce-Gardyne: I thank my hon. Friend for that information. He will be aware that my right hon. Friend told me last week that he did not propose to institute an independent inquiry into this matter. Will he look at this again? Is it not a scandal when the ratepayers of areas such as Dundee are expected to bear on their rates the burden of vacant houses in the proportion of almost one for every 10 citizens? Are they not entitled to know how this situation arose, the responsibility of successive local administrations with loyalty to the Labour Party, and the responsibility of the last Government in this matter?
    Mr. Younger: I agree that in the areas where this problem exists it is serious. As my hon. Friend probably knows, the corporation in Dundee has a large modernisation programme, including environmental improvements, to make some of the less popular housing areas more attractive. I understand that a housing division is to be set up under a director of housing, and the aim will be to improve public relations, to speed up inspection, repair and reletting, and to improve estate management. This sort of measure is the only way to try to make what are unattractive houses to some tenants more attractive so that tenants will be prepared to live in them.
    Mr. John Robertson: The hon. Gentleman is well aware that a special team from the Home Office is investigating the problem of Ferguslie Park, in Paisley,
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    where houses built before the last war were quite unsuitable for the tenants. Will he agree that the techniques of the then Government created a ghetto in housing management, so much so that the only solution to the problem of the Ferguslie Park housing scheme is to knock it down and start again?
    Mr. Younger: I should not like to pronounce upon the policies of any Government or local authority at the time those houses were built. I appreciate the hon. Gentleman's view about what the best solution would be, and he may well be right. I am concerned with finding the best way of dealing with houses that are clearly unattractive for people to live in. There are various ways of dealing with the matter. In some cases the houses can be improved, in other cases they have to be knocked down. There is no doubt about that. But local authorities with these problems will get every encouragement and help from me in trying to solve them in the best way possible for their areas.
    Mr. Hugh D. Brown: Will the Minister consider setting up a high-powered committee to examine the underlying reasons why houses are empty and not accept the glib and superficial conclusions that some of his hon. Friends draw from them? There are deep-rooted social problems that make certain areas unattractive as well as the physical lack of attractions. Will he therefore consider setting up a high-powered committee rather than making political capital out of the situation?
    Mr. Younger: I certainly do not rule out any solution or consideration of this matter. We are in close touch with the authorities involved. As I have indicated, there are four main authorities involved, and I should like to get the fullest results from our discussions and co-operation with them to see what the best methods are. These may not necessarily be the same in every place, but I would not rule out the possibility of an inquiry at any time it if should prove to be helpful.

    Regional Development (Co-ordination)
    Mr. David Steelasked the Secretary of State for Scotland if he is satisfied with the co-ordination of those departments within the Scottish Office dealing

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    with different aspects of regional development.
    Mr. Gordon Campbell: There is very close co-ordination between these departments.
    Mr. Steel: Will the Secretary of State look at this question again? Is he aware that several recent public spending decisions on education, sports facilities, housing and hospitals in my constituency lead me to the conclusion that the Government's commitment, which I accept, for economic development in the area is not being translated into practice by the departments concerned?
    Mr. Campbell: I will, of course, be very glad to look into any examples which the hon. Gentleman can pass to me. But I think that, particularly now with the Scottish Economic Planning Board, the planning machinery started in the early 1960s has been adjusted and improved over the years.
    Mr. John Smith: Is the Secretary of State aware that still no decision has been made on the future of the regional employment premium and that Scotland is in danger of losing £100 million as a result of the Government's proposal to withdraw it? Can he assure the House that he is fighting to retain the regional employment premium for Scotland?
    Mr. Campbell: That is a completely different question which has been dealt with on previous occasions.
    Mr. Ross: We have heard about various cuts. I think we have had two lots announced to us, some of which will apply to Scotland. May we be given a pledge that no project vital to Scotland's development will be cut or postponed?
    Mr. Campbell: Yes.

    EEC Regional Policy
    Mr. Sillarsasked the Secretary of State for Scotland if, on his recent visit to the EEC Commission, he discussed the subject of regional policy and if he will make a statement on his view of the regional policy document submitted to the Council of Ministers by the Commission.
    Mr. Gordon Campbell: As I told the hon. Gentleman on 22nd October, I had discussions on this subject in Brussels with the Commissioner for Regional Development, whom I also saw in Scot-
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    land last weekend, and others concerned. In the Government's view, the report on regional problems which the Commission published earlier this year and their subsequent proposals for the regional development fund provide a useful basis for discussion.—[Vol. 861, c. 434–5.]
    Mr. Sillars: Is the Secretary of State pretending that Scotland would be a net beneficiary because of the implementation of the EEC regional fund proposal? Given the small size of the fund and the spread over that part of Western Europe in which it must be employed, and given that the right hon. Gentleman will abolish the regional employment premium, is it not the case that the Scottish economy will finish with a net deficit?
    Mr. Campbell: I do not accept that. The fund is still under discussion within the Community. When I was in Brussels I had the opportunity of discussing these matters with George Thomson and Sr. Ruggiero, the Director for Regional Development, and others at an early stage in the development of thinking within the Community.
    Mr. Brewis: Is not my right hon. Friend very satisfied with the extent of Scotland which will be covered by the FEOGA fund?
    Mr. Campbell: Yes. So far, the proposals are satisfactory for Scotland.
    Mr. Eadie: The right hon. Gentleman may be aware that my hon. Friend the Member for Paisley (Mr. John Robertson) and I went to Brussels and met the regional commissioner to discuss regional policy in Scotland. Since the percentages have been worked out for the disbursement of regional funds, can the right hon. Gentleman say whether, if Scotland does not receive a satisfactory percentage, he will be prepared to take the line that the Irish are prepared to take and, if necessary, veto any proposals that would mitigate against the best interests of Scotland?
    Mr. Campbell: I am very glad to think that the hon. Gentleman and his hon. Friend went to Brussels to discuss these matters. I am surprised that they and their colleagues have not gone to Strasbourg to discuss them. The hon. Member mentioned percentages, but all these matters are at an early stage of

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    discussion, which is an important stage for a Scottish voice to be heard.
    Mr. Bruce-Gardyne: Does not my right hon. Friend agree that one of the problems concerned with regional development resources of the EEC is that, until now, the Community has placed greater emphasis in its regional policies on the encouragement of projects with long-term commercial viability and less emphasis than we have had under successive Governments on resuscitation schemes? Can he assure us that we shall be at least as much swayed by their principles in this matter as we hope they may be by ours?
    Mr. Campbell: My hon. Friend has put one of the important points which need to be discussed between us as new members of the Community and the Six—the older members of the Community—which had already been having preliminary thoughts on this important subject.
    Mr. Maclennan: Is the Secretary of State aware that there is some concern in Scotland that the Government may use funds provided from Brussels as a substitute for funds provided by the central Government for regional development, that this would would be unacceptable and that any funds that may be forthcoming from the regional development fund ought to be in addition to funds made available by the Government?
    Mr. Campbell: As I said, all these matters are under discussion. I have twice had an opportunity of speaking to the regional commissioner concerned who is well known to the House and who has been in the last few days on a visit to Scotland.

    Rents
    Mr. MacArthurasked the Secretary of State for Scotland how many local authority tenants in the cities are now paying no rent or a reduced rent as a result of the Housing (Financial Provisions) (Scotland) Act 1972.
    Mr. Younger: Information submitted to me by the four cities in August indicated that about 100,000 tenants—38 per cent. of the total—were expected to receive rent assistance by way of rebate
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    and supplementary benefit in the period to November 1973.
    Mr. MacArthur: Will my hon. Friend circularise these encouraging figures to Labour Members and invite them to eat their words? Has he any information about the number of private tenants who are receiving rent allowances for the first time?
    Mr. Younger: As my hon. Friend knows, I cannot be accused of failing to try to explain to hon. Gentlemen opposite the benefits of the rent rebate scheme to many families throughout Scotland. They appear unable to comprehend, though I have done my best. Rent allowances have been of immense benefit to many people who hitherto received no help whatsoever. For instance, 4,200 families in Glasgow and 3,700 families in Edinburgh, most of whom, though not all, previously received no assistance, are now in receipt of rent allowances.
    Mr. William Hamilton: Can the hon. Gentleman say how many of those who are paying no rent in Glasgow are in the Cathcart constituency? The hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) has gone to Hong Kong to do a television programme on corruption in the police, and is therefore not here to ask that question.
    Mr. Younger: My hon. Friend the Member for Glasgow, Cathcart (Mr. Edward Taylor) works harder for his constituents than possibly any other Member of the House. On the housing front in particular, he has been doing tremendous work in bringing home to his constituents all the benefits of the rent allowances and rent rebate schemes. I have no doubt that many of them are most grateful for all he does.
    Mr. John Smith: How can the Minister claim that people in the private sector have benefited from the Government's housing policy? Is it not the case that the Government promised to bring owner-occupation within the range of many more people than hitherto, whereas the result of three years of Tory policy is to be seen in the highest ever prices for houses in Scotland and the highest-ever mortgage rates and in the fact that it is becoming increasingly difficult for anyone to buy a house in Scotland?
    Mr. Younger: If the hon. Gentleman's remarks were to be taken at their face value, one would assume that nobody was buying houses. In fact, many Scots are buying houses. Record numbers of houses are being built for private owners. They are all being bought, and there are many more owner-occupiers now in Scotland than there were in 1970, which is exactly what we aimed to provide.

    Musselburgh Bypass
    Mr. Strangasked the Secretary of State for Scotland if he will take action to expedite progress on the Musselburgh bypass.
    Mr. Younger: Plans for the Mussel-burgh bypass are well advanced, but before they can be finalised the future pattern of roads in the south-east of Edinburgh needs to be established. This is a matter for Edinburgh Corporation.
    Mr. Strang: While thanking the Minister for that answer and the full reply which I received last night to my letters on this subject, may I stress to him that there is a great deal of hardship and resentment in Musselburgh because this bypass is long overdue? Can the hon. Gentleman give an assurance that, as soon as we have a decision from Edinburgh on the alignment of the outer city bypass, he will ensure that his officials attach the highest priority to progressing this road?
    Mr. Younger: I am glad to assure the hon. Gentleman that we in the Scottish Office are concerned about congestion in Musselburgh. Although some parking restrictions have been imposed, they can have only a minimal effect on what is an unfortunate situation. I also give the assurance that we shall do all we can to co-operate with Edinburgh and the other authorities concerned in getting decisions made, and that when they are made we shall press on hard and fast to obtain progress.

  FOREIGN AND COMMONWEALTH AFFAIRS

    Rhodesia
    Mr. Juddasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement
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    on the position being adopted by the British representative to the United Nations on Rhodesia.
    The Minister of State for Foreign and Commonwealth Affairs (Lord Balniel): The British representative is expected to speak during the current debate on Southern Rhodesia in the Fourth Committee of the General Assembly. He will outline Her Majesty's Government's policy, which is well known.
    Mr. Judd: Will the Minister confirm that the Government have no intention of passing responsibility for the situation in Rhodesia to the United Nations and that they see this as remaining essentially a British responsibility? In following the recent Commonwealth Prime Ministers' Conference, where a collective view was expressed by Commonwealth leaders on the need to work for the liberation of the majority of people in Southern Africa, will our representative at the United Nations get together with Commonwealth representatives to work out ways in which sanctions can be made more effective against Rhodesia?
    Lord Balniel: I confirm the first part of the hon. Gentleman's comment. On the political side, we believe that what is necessary is that the parties concerned at this stage should get together and make an agreement themselves without outside interference. On the latter part of the hon. Gentleman's question, there is constant consultation at the United Nations and between the Commonwealth countries on this kind of subject.
    Mr. Soref: Would not my right hon. Friend agree that, in the light of the aggression in the Middle East and the increasing and continued racial persecution in Uganda and other black African countries, persecution against Rhodesia should cease?
    Lord Balniel: I think that our problems in Rhodesia are big enough in securing the British Government's policy objectives without introducing extraneous affairs which would complicate the matter still further.
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs what representations have been made by Her Majesty's Government to the United Nations sanctions commission

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    concerning breaches of mandatory sanctions against Rhodesia emanating from EEC countries; and if he will make a statement.
    Lord Balniel: Her Majesty's Government have named members of the Community—among other countries—in Notes to the United Nations sanctions committee. Details must remain confidential until they are published by the committee. Copies of the committee's reports are in the Library of the House.
    Mr. Marten: If the Government have laid this information before the United Nations, what have they done also at the Council of Ministers, where we were told that, by entry into the Common Market, we should greatly increase our influence in these matters? Will my right hon. Friend agree that our influence is decreasing and that our voice is becoming muted on such matters as the French nuclear explosions, international sugar deals, and so on? Can he explain why we are not taking more action against our partners in the Council of Ministers on this important matter?
    Mr. Speaker: Order. The Question relates to Rhodesia, does it not?
    Mr. Marten: Yes, Sir.
    Lord Balniel: Yes, the Question relates to sanctions, and we believe that this matter is primarily the responsibility of individual Governments and the United Nations sanctions supervisory committee. EEC member countries are well aware of our views on this subject.
    Mr. Callaghan: Is it not one of the objects of the EEC to try to co-ordinate foreign policy as far as possible? If that be so, may I make a direct request to the Minister to ask the Foreign Secretary to place upon the agenda of the next meeting of Foreign Ministers of the EEC a discussion on the observance of sanctions as laid down by the United Nations, since it is openly asserted that, among other countries, Holland, West Germany, France and Italy have all been engaged in trade with Rhodesia?
    Lord Balniel: I shall certainly call the right hon. Gentleman's views to the attention of my right hon. Friend the Foreign Secretary. If it appears that there is anything to be gained by discussing
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    Rhodesia in that forum, we shall seek to do so. But it is highly debatable whether this will advance the cause which we both have at heart.
    Mr. Bruce-Gardyne: Does my right hon. Friend agree that the question asked by my hon. Friend the Member for Banbury (Mr. Marten) was highly misleading and that it is quite wrong to suggest that members of the European Community are the only countries that do not observe sanctions?
    Mr. Marten: I did not suggest that.
    Mr. Bruce-Gardyne: There is no country in the whole wide world apart from us that takes a blind bit of notice of sanctions.
    Lord Balniel: It is true that many countries fail to observe the sanctions. It is for that reason that we make information available to the United Nations sanctions supervisory committee. It is for the individual Governments concerned and the committee to consider what action to take.
    Mr. Maclennan: Are we not on sufficiently good terms with our new partners in the EEC to raise a matter which is of great importance to us and to the international community in which they themselves can be considerably helpful? As one who has visited Rhodesia within the last six months and seen breaches of sanctions by members of the EEC, I find the Minister's attitude incomprehensible.
    Lord Balniel: We are on very good terms with the members of the EEC. There have recently been indications that our EEC partners are trying to improve their sanctions control.
    Mr. Marten: In view of the unsatisfactory nature of the reply, I shall seek an opportunity to raise the matter on the Adjournment.

    Liberation Movements
    Mr. Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs what action was taken by the British delegation at the United Nations when UNESCO decided to finance jointly with Sweden the revolutionary movement MPLA which operates against an ally of Her Majesty, Portgual;

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    whether he will publish the subscriptions of the United Nations and its agencies to so-called liberation movements; and what is the policy of Her Majesty's Government towards these bodies, in view of the British taxpayers' money contributed to them and their abuse of the United Nations Charter.
    Lord Balniel: We have repeatedly made clear our opposition to the provision of assistance by United Nations bodies to movements which practise violence for political ends. However, we maintain our traditional support for aid to refugees given through their host Governments. We know of no instance of the United Nations or the specialised agencies giving funds direct to MPLA or any other liberation movement.
    Mr. Biggs-Davison: If I give evidence to my right hon. Friend, will he consider it very carefully, because many of us find it repugnant that the United Nations flag should fly in Parliament Square at a time when it is common knowledge that the world organisation is being misused and our contributions are being misused against our interests and our allies? A peace organisation is being misused for making war and is assisting the making of war.
    Lord Balniel: Again, I shall consider any evidence which my hon. Friend may care to produce, but UNESCO does not give funds direct to the MPLA or any other liberation movement, to my knowledge.
    Mr. Judd: Does not the Minister agree that, in the preoccupation with liberation movements, we should not overlook the institutionalised violence of the Government of South Africa and of the régime in Rhodesia? In the light of the Commonwealth Prime Ministers' Conference, where we did not dissent from the collective view expressed in the communiqué, would not the Minister agree that the British Government have a responsibility to provide for and assist liberation movements in Southern Africa?
    Lord Balniel: That is very far from the Question on the Order Paper. If the hon. Gentleman wishes to raise that point, I suggest that he puts a Question down.

    Right of Individual Petition
    Mr. Willeyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the right of individual petition under the European Human Rights Convention.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Royle): Britain has accepted the right of individual petition under Article 25 of the convention. In common with most other States which have accepted this right, we have done so for a specific period. Our present declaration expires on 13th January 1974. We are currently considering the question of further renewal.
    Mr. Willey: I thank the Minister for his reply, but is he aware that it is important to establish this right? I recognise the difficulties, but does not the right hon. Gentleman agree that the matter is urgent and that the British Government should take a favourable decision shortly?
    Mr. Royle: I am grateful to the right hon. Gentleman for his remarks. The matter is important, and our decision will be taken before 13th January, when our present declaration expires.
    Mr. David Steel: Will the Minister confirm that the matter is under review? Will he bear in mind that there is a widespread view in the country that nothing would be more damaging to our reputation than to rescind our adherence to this convention simply because of an embarrassing judgment of the court against this country?
    Mr. Royle: I do not think that our actions have been out of line with those of others. Belgium has renewed for, i believe, two years, and we renewed last time for two years. We shall give the subject careful consideration and take a decision in good time.
    Sir Elwyn Jones: As the convention enables, perhaps for the first time in human history, an individual petitioner to have the right and opportunity in approriate cases of bringing his grievance before an international tribunal, would it not be an extremely retrograde step for the United Kingdom Government to deny that right in respect of complaints of

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    actions by the United Kingdom Government, of whatever political colour?
    Mr. Royle: All these matters will be closely considered before we reach our decision at the end of the year.

    Crown Agents
    Mr. George Cunninghamasked the Secretary of State for Foreign and Commonwealth Affairs if he is yet ready to announce his decisions on those matters raised by the Stevenson Report on the Crown Agents which he wished to consider further.
    The Minister for Overseas Development (Mr. Richard Wood): I expect to make a statement within the next few weeks.
    Mr. Cunningham: Will the Minister confirm that, in addition to putting £1 million into Vehicle and General, massive moneys into English and continental properties and huge investments in property in Australia, it has now come to light that Crown Agents' money has gone, through the First National Finance Corporation, into the now notorious property empire of John Chalk and Timothy Gwyn-Jones? As the Minister is responsible for appointing the Crown Agents, and as those agents are using money which they have raised in their own right on the market as well as money deposited with them by overseas Governments, what will the Minister do to allay the justifiable concern about the disreputable purposes to which this money is being applied?
    Mr. Wood: I have no reason whatever to doubt the integrity of the Crown Agents.
    Mr. William Hamilton: Oh! The evidence is there.
    Mr. Wood: I have seen the report to which the hon. Gentleman has drawn my attention, and I suggest that he awaits my statement, which I am sure he will find interesting.

    Human Rights (European Countries)
    Sir T. Beamishasked the Secretary of State for Foreign and Commonwealth Affairs if he will use his influence to ensure that any proposals made by the European Community at the Conference on Security and Co-operation regarding the Declaration on Human Rights, especially freedom of information and
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    free movement of persons, apply equally to the countries of Eastern and Central Europe as to the USSR.
    Mr. Anthony Royle: As the House knows, we believe that the conference could not succeed if no progress were made on freer movement of people and information. The proposals which we and our Community partners have put forward in this field would apply equally to all the participants.
    Sir T. Beamish: I thank my hon. Friend for that reassuring reply, but will he assure the House that the British Government are setting a good example in this respect and that more stringent conditions are not being applied to those who seek asylum from the formerly independent countries of East and Central Europe than are applied to Soviet citizens? Is not my hon. Friend aware that there has been a good deal of anxiety about this matter recently?
    Mr. Royle: I can give my hon. and gallant Friend that assurance.
    Mr. Biggs-Davison: Is it correct that the USSR and other countries of the Eastern bloc have ceased to jam the overseas services of the BBC which, if it is the case, is very welcome?
    Mr. Royle: I cannot be certain of giving my hon. Friend the correct reply, but I believe that that is so. I believe that jamming has ceased, but it may be that Bulgaria is still doing so.

    Spain (Harrier Aircraft Sale)
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the sale of Harrier aircraft to Spain.
    Mr. Anthony Royle: The Spanish Government have placed an order with the United States Government for eight Harrier aircraft to the United States Marine Corps AV8A specification. Her Majesty's Government have agreed to the provision of the necessary aircraft under an extension of the existing intergovernmental arrangement for the supply of AV8A Harriers to the United States Marine Corps.
    Mr. Allaun: Will the Government warn General Franco that he may never

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    get the Harriers? Will he be told that the Labour Party Executive has decided that, as it would aid a repressive régime, the next Labour Government would discontinue this contract if the supply had not been completed? It will not be completed because it does not start for two years—and it also involves spares.
    Mr. Royle: I have no doubt that this contract will be completed. We seek to maintain correct and businesslike relations with many countries whose policies may arouse criticism in this country. I am sure the hon. Gentleman realises that we should export very little if we were to boycott all countries whose internal policies were different from our own.
    Mr. Selwyn Gummer: Will my hon. Friend explain in what particular this deal differs from the arrangements with Yugoslavia entered into by the last Labour Government for the equipping of its air force?
    Mr. Royle: I think we all know that when Labour Ministers were in office they established the post of defence salesman, and he did a very good job.
    Mr. Richard: Is the hon. Gentleman aware that one of the things that we on this side of the House object to so much about this deal is that the Government did not have the courage and guts to come to the House of Commons and tell us about it openly? It was done through the back door via the United States of America. If, as the Government have told us repeatedly in the last few weeks, it is possible to insert into contracts for the sale of arms provisions that they shall not be used in certain countries in the Middle East, why is it not possible also to insert in the contract for the sale of Harriers to the United States of America that they should not be resold to a Fascist Government like that of Spain?
    Mr. Royle: On the first point, the answer is that I could not tell Parliament because the House was not sitting when the deal was completed. The hon. and learned Gentleman, quite rightly, is interested in the mechanics of the arrangement. We were not approached by the Spanish Government over this deal at all. We were, however, fully consulted by the United States Government. We agreed to a sale, through the United States, be-
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    cause the Spaniards wanted it that way. It is for them to say why they prefer to buy Harriers from the United States rather than direct from us.
    Sir F. Bennett: While regretting an increase of Spanish military strength, in the context of Gibraltar, may I ask whether the Minister can clarify in the minds of some of us the thoughts of those on the benches opposite who, having only a few days ago urged that the sanctity of arms contracts once made had to be observed, have now given an open warning that they propose deliberately to disregard the sanctity of contract in future?
    Mr. Royle: I do not think there is any need for me to add anything to what my hon. Friend has said.
    Mr. Callaghan: Did it occur to the Minister that perhaps the Spaniards did not want to approach us direct for this sale because any Government with their eyes open might have asked that these planes should not be used against Gibraltar? In view of the increasing pressure on Gibraltar that is being sustained by the Franco Government, may I ask whether the Government have had any conversations with the United States about the resale of these planes or direct with the Spanish Government about their use?
    Mr. Royle: I think the right hon. Gentleman will appreciate that it is relevant that the Spaniards wanted the aircraft to United States Marine Corps specifications. The Spaniards have had a close defence relationship with the Americans for a long time and it is natural that they should want to look to them for help.
    So far as Gibraltar is concerned—the right hon. Gentleman made an important point—I would underline that our willingness to permit this sale could not be taken in any way to indicate any weakening of our resolve to stand by the people of Gibraltar in the face of Spanish restrictions. These are two completely different issues.
    Mr. Hugh Jenkins: On a point of order, Mr. Speaker. My hon. Friend the Member for Salford, East (Mr. Frank Allaun), like others of us, did not vote for the sanctity of the arms contract the other day.

    Icelandic Fisheries
    Mr. James Johnsonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement regarding the latest situation in the Icelandic fisheries limits dispute.
    Mr. Anthony Royle: The proposals which my right hon. Friend the Prime Minister and the Prime Minister of Iceland worked out during their meetings on 15th and 16th October provide for an interim agreement which would last for two years and which would be consistent with a catch by British fishermen of around 130,000 tons of fish a year in the disputed area. This represents a substantial sacrifice by our industry. I am glad to note that the Icelandic Prime Minister has given the proposals his own full support.
    Mr. Johnson: This should never have been made a party issue in this House. Does the hon. Gentleman agree that all sections of the industry—skippers, unions and all the others—have leaned over backwards to make concessions to get down to this tonnage figure? Therefore, can he assure us that at the London talks there will be genuine bargaining on both sides and that our fleet will be enabled to make this catch in the light of the "boxes", in the light of the times of the year and in the light of the size of the vessels, if and when we get this agreement settled?
    Mr. Royle: I am quite satisfied that that will happen, and I confirm the hon. Gentleman's remarks. He and many of his colleagues on both sides of the House representing fishing ports have been immensely helpful during all the discussions over the last few months. As he knows, the industry has been consulted at all stages of the Downing Street talks and the proposals that emerged from them were made with the industry's concurrence. It is not for me to comment on Iceland's internal political affairs, but there seems to be a good chance that the Icelandic Government as a whole will accept these proposals, and a decision could be taken very soon.
    Mr. Crosland: The Minister talked correctly about the industry's concurrence, but does he realise that that concurrence, expressed through official
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    channels, coincides with a great deal of anxiety in the fishing ports among skippers, crews and the general public? If this agreement is, as I hope, accepted by the Icelandic Government and as a consequence of it there is severe hardship and unemployment in the ports of Grimsby and Hull, will the Government stand ready to compensate those places for this agreement to which we have reluctantly assented in the general national interest?
    Mr. Royle: I agree with much of what the right hon. Gentleman said in the earlier part of his question. The degree of restriction on total fishing off Iceland which we are prepared to accept as part of the package has the full agreement of the British fishing industry as I have already said. In our view it is unlikely to have much, if any, effect on levels of employment as other areas will be available to ships not fishing off Iceland. But, of course, I shall take into account the point made by the right hon. Gentleman.
    Mr. Scott-Hopkins: I think everybody will breathe a sigh of relief if this agreement is made between our two countries. Can my hon. Friend say what progress is being made towards the Conference on the Law of the Sea next year? Will it be held and, if so, where? Secondly, can he say what is the position as regards fishing off the Norwegian-Greenland coasts, particularly in relation to the Russians and the Japanese who seem to be invading every area within the Northern Hemisphere?
    Mr. Royle: Preparations for the Conference on the Law of the Sea are well under way, although no final decision has yet been taken on where it will be held. I should like notice of the question about Norway.

OIL SUPPLIES
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Walker): During recent months we have increased our stocks of oil. We now have stocks of 79 days on forward consumption basis and there are in addition some 30 days supply on the ocean. We are now in a position to meet requirements for some months ahead if there were an emergency.

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As to future supplies, there have been some losses through the pipelines to the Mediterranean; and the Arab States announced last week their intention to make cumulative cuts in their oil production. It would appear that there will be some variations between countries as to the extent and the manner in which such cuts will be applied and the future impact is uncertain. The effect of these various restrictions on United Kingdom oil supplies is so far slight.
On prices the OPEC countries have announced a steep and immediate increase in oil costs equivalent to 2p a gallon in breach of agreements. The Government are discussing these increases with other consumer nations.
Given the uncertainties overall, the Government consider that it would be prudent that certain measures should be taken. It is naturally a time when we must ask the public to do everything in their power to avoid any wastage not only of oil but also of our total energy resources. I would ask that motorists should endeavour to cut down on petrol consumption and to use public transport to a greater extent where that is available. I would also hope that industrial and commercial users of energy would carefully examine any areas where they can make useful savings.
I would ask domestic users to make all the savings that are possible in their homes, particularly with regard to heating appliances.
In urging economy at home we clearly cannot permit exports to be uncontrolled. The Government will therefore take such powers as appropriate to control the export of oil and oil products beyond the Community.
The Government do not consider it necessary to introduce a rationing scheme. In case we do ever need such a scheme, contingency plans have been brought to a state of readiness. There will of course be full prior consultations with industry, the oil companies and the motoring organisations should the Government decide that the implementation of these schemes is necessary. We shall, if required, bring before the House an enabling Bill that will grant us the powers to introduce these controls.
Long before the recent announcements on the cost and supply of Middle East
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oil, the Government have been pursuing policies to develop our alternative energy supplies swiftly.
We shall continue to do everything possible to speed up the development of our oil and gas resources in the North Sea and we have asked the oil companies concerned to inform us of any delays that occur in developing their projects, and any matters that hamper them from proceeding as fast as possible with new schemes.
The Coal Industry Act has had an important impact in arresting the decline in our coal production that had been allowed to take place in previous years, and we are in the course of discussing with the National Coal Board its long-range plans for further development of the industry.
We have reorganised the nuclear power industry and we shall be making important decisions as to the development of nuclear power stations during the next few months.
I will keep the House informed of further developments.
Mr. Benn: The House is very well aware of the reasons that led to the statement being made. I should like to ask the Secretary of State some questions. First, will the 2p a gallon increase which he mentioned be applied across the board as a flat rate to all users of oil? Secondly, do the Government intend to take charge of the negotiations with the supplying countries, in view of the obviously political nature of these arrangements, which can no longer be regarded as commercial deals to be left in the hands of the oil companies?
Thirdly, although the whole House will obviously support the appeal for economy and sensible contingency plans, is the Secretary of State aware that public transport, particularly in London where there are also staff shortages, is in no condition to take on board the additional burden of car users who might be induced to shift from one to the other? Will he look at this problem in conjunction with the Secretary of State for the Environment? Will he also watch to see that the oil companies do not discriminate against independent distributors and independent garages—as has happened in America—and the firms which rely upon them?

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while welcoming the decision on exports so far as they go, why are exports of oil to the Community to be allowed to continue and what powers does the Commission have over the disposition of our own oil reserves, in view of the fact that we must now protect our own oil?
May I also ask, in view of the long-term nature of the problem, what steps the Government are taking to implement the recommendations of the Select Committee on Public Accounts published earlier this year, calling for a stiffening of the terms of licences for North Sea oil to protect our national interest by a bigger take for the Government and the taxpayer, and greater public participation?
As regards coal, can the Secretary of State tell the House whether he would be ready to play a very much larger part in bringing about a re-examination of the policy pursued by the CEGB on different types of firing of power stations, in view of the relative changes in the prices of the fuels?
On nuclear power, will he give an absolutely categorical assurance that there will be no purchase of American reactors for the nuclear power programme at home until the House has had a chance to debate the whole issue in the light of the Select Committee's report?
Finally, I hope that the Secretary of State will keep Parliament and the public fully informed, and will understand if we feel it necessary to ask for a major debate on these very important matters.
Mr. Walker: I agree that it is necessary to keep Parliament fully informed on developments, which can change very rapidly. As regards the price increase, I do not think there is any need to consider the detailed application and what will happen, because at the moment we have large stocks of oil in the country which have been brought in at previous prices, and the full nature of the price increase and the manner in which it will be applied to different types of fuels is not yet clear.
As regards the Government's position in any negotiations, I agree with the right hon. Gentleman that, given a unilateral breach of agreements affecting vital national interests, Governments will inevitably have to play a major and continuing part in negotiations in this sphere.
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I recognise that in many parts of the country there are problems of public transport, and that is why I am pleased that in past years this Government have injected so much more capital into public transport than was previously done.
As to the Community position, there is no problem about exports. The Community is in agreement on the general nature of exports outside the Community. There is an interchange of oil products constantly taking place which is very much to this country's advantage, and for many reasons it would be absurd to stop that.
The future take from North Sea oil is a matter which the Government have under consideration. It is, in fact, for the Chancellor of the Exchequer, and appropriate announcements will be made.
I must point out that after the very big drop in coal production which took place—50 million tons in the six years of the last Government—we have reviewed the situation and have changed the trend.
I was asked about CEGB policies. In the current year it is consuming 67 million to 69 million tons of coal. It has a capacity to burn 75 million tons a year if it were available. The National Coal Board has said that it estimates the availability of coal for the CEGB by the early 1980s to be about 65 million to 75 million tons. By that time the CEGB's capacity to burn coal will be about 90 million tons, without the additional coal-fired station for which a design programme has been authorised.
Mr. Skeet: Can my right hon. Friend say whether supplies from Iran, Kuwait and Nigeria are continuing to the United Kingdom without the 5–10 per cent. cuts? Will he also say what will be the future position if the war is terminated in the Middle East? Shall we have a continuation of the cuts?
Mr. Walker: It is only the Arab States which have announced cuts. The other members of OPEC have not announced cuts. One presumes that there will not be cuts in supplies from those sources. It is difficult to make an interpretation of the statement from the Arab States. The statement referred to action to be directed particularly against those countries which had supported Israel. It is

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not clear exactly at what time after the termination of the war they would change their policy. This is a matter on which the Government are in contact with overseas Governments.
Mr. Pardoe: Would the right hon. Gentleman not accept that his statement shows the foolishness of successive Governments who decimated public transport, not only railways but rural bus services in particular? Would he accept that in places where public transport still exists. such as London, the Government might think of introducing for an experimental period in an emergency free transport in off-peak periods?
Will he also bear in mind in planning petrol rationing that in rural areas the motor car is not a luxury but a necessity? A formula of 50, 100 or 200 miles a month is unworkable in Cornwall.
Mr. Walker: The present Government have stopped the policy of railway closures which was in operation previously, as the hon. Gentleman will be aware. Not only that, but they have injected substantial amounts into the railway system on an unparalleled scale. To take the London Transport system, there have been massive injections into the Underground in the form of rolling stock on a scale in excess of anything done by previous Governments.
Full consultations on any petrol rationing scheme will take place in respect of the details of the scheme, and obviously the problems of rural areas will be taken into account.
Mr. Geoffrey Lloyd: Is my right hon. Friend aware that the size of the stocks which he has announced is impressive and, indeed, compares favourably even with those which we built up against the outbreak of war in 1939? Is he aware that the care and forethought involved in arranging for these satisfactory stocks deserves the appreciation of the House and the country?
Mr. Walker: I am grateful to my right hon. Friend. I only hope that, unlike his duties in the past, I do not have to introduce petrol rationing.
Dr. David Owen: How can the right hon. Gentleman justify the recent decision to have oil-fired power stations? Will he consider the whole question of the Gov-
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ernment's national energy supply and change the decision on oil-fired power stations? The cost implications on which that decision has been based must now have been totally altered, and the supply situation is likely to get worse.
Mr. Walker: I must repeat these basic facts. In the current year the CEGB is consuming between 67 million and 69 million tons of coal. It has the capacity to burn 75 million tons. The National Coal Board states that by the early 1980s it expects to be able to provide coal to the CEGB in the range of 65 million to 75 million tons. At that time the capacity, without the new station for which I have agreed that design contracts should be placed, will be about 90 million tons. There is considerable capacity along the lines which the hon. Gentleman suggests.
Mr. Maude: Following what the hon. Member for Cornwall, North (Mr. Pardoe) said, will my right hon. Friend bear in mind that if the worst comes to the worst and a petrol rationing scheme has to be introduced, the situation in rural areas is now totally different from that when the last petrol rationing scheme was introduced? Whatever the situation in London, rural bus services are now virtually non-existent in parts of the country. Since the distances are longer and there is a higher dependence on the private motor car in all income groups, if rural areas are not given special concessions a high proportion of the rural population will not get to work at all.
Mr. Walker: Yes, I agree with my hon. Friend that considerable changes have taken place in the pattern of transport in rural areas, and consultations will take place before the scheme is introduced.
Mr. Eadie: Would not the right hon. Gentleman agree that the Government should take out insurance cover on behalf of the people of, the country and show an example? Will he give an assurance that he will examine the question of oil-fired power stations in prospect? Secondly, will he reverse his decision to convert two coal-fired power stations to oil? Is he aware that the National Union of Mineworkers objects to the statement which has been made

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that it was consulted about this? It was consulted, but it opposed the suggestion.
Mr. Walker: As to the two stations which the hon. Gentleman is talking about, there were particular difficulties in the supply of coal. I repeat that the capacity within the system could take more coal if it were available.
With regard to the review of future projects, I have already announced a decision whereby we shall have greater flexibility to decide in favour of coal if it can be developed. As the hon. Gentleman knows, with his knowledge of the industry, there was a rundown—I repeat, 50 million tons a year during the lifetime of the last Government. He knows the difficulties of opening new mines and sinking new pits in the time scale involved.
Miss Quennell: If the worst comes to the worst, will my right hon. Friend bear in mind that not only will people living in rural areas be seriously handicapped but that handicapped persons depending upon invalid cars and similar vehicles will require special consideration because they will be absolutely stuck?
Mr. Walker: I accept the valid point made by my hon. Friend.
Mr. Dell: Does the Minister's reference to the development of alternative resources mean that he contemplates a fifth round of licensing in the North Sea, and, if so, on what terms? Does he realise that the licensing terms are for him and not for the Chancellor of the Exchequer? When does he intend to reply to the part of the Report of the Public Accounts Committee dealing with licensing terms?
Mr. Walker: We shall soon be replying to the Public Accounts Committee on this point. I cannot give an exact date when we shall do so. Transport plays a role in any taxation policies, of course. For that reason, my right hon. Friend the Chancellor of the Exchequer is involved in any licensing arrangements.
Regarding any future rounds of licensing, we have announced that we are reviewing the terms. I am not contemplating any immediate rounds of licensing for reasons of wanting more speedily to develop resources available at present. Before any future terms of licensing were made I would announce the terms which
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we had in mind for future licensing arrangements.
Mr. Tapsell: Would my right hon. Friend agree that it would make a contribution to fuel conservation if we abandoned our system of flat-rate vehicle licensing and charged a much higher licence for those people with large and expensive motor cars which consume much more petrol?
Mr. Walker: I will convey that suggestion to the Chancellor of the Exchequer.
Mr. Arthur Lewis: Would the right hon. Gentleman, in appealing for the conservation of fuel, consider appealing to road hauliers to get a lot of their haulage back on to the railways and, if necessary, give a subsidy for that purpose?
May I ask about the EEC? Did the right hon. Gentleman say that we could, if we wished, ban exports and that there is nothing in the Rome Treaty to prevent us from doing so? Can we do this unilaterally?
Mr. Walker: I said that there was no need to do so because there is agreement on the overall policy between the Community countries on fuel exports. There is agreement across the boundaries of the various countries. As for the hon. Gentleman's other suggestion, there have been considerable developments in terms of trains and one of the long-term hopes is that rail travel will be developed to link up our rail system with that of the Continent.
But I remind the hon. Gentleman that virtually every rail journey demands two lorry journeys.
Mr. Scott-Hopkins: Now that there is agreement on the export policy of the Community, is not it time that the Community of Nine got together to agree on an importing policy and put forward a common front when negotiating with the Arab producing countries?
Mr. Walker: Talks are due to begin tomorrow in Paris between the OECD countries. In talks between consumer countries it is important to join with the major consuming countries such as the United States and Japan. Important talks will be taking place tomorrow on that

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topic. I welcome the Minister's views on the future round of licences. Ought not he now to review all the Ministerial framework and structures related to getting maximum benefits to British industry from the present North Sea explorations? Will the right hon. Gentleman consult the Chancellor of the Exchequer to review the basic position in the light of the new price structure which has been brought about by the OPEC countries' new terms for oil?
Mr. Walker: That will be a matter for the Chancellor of the Exchequer.
I very much agree that it is vital to ensure that the organisation of Government is perfect in getting the maximum pace of development in the North Sea.
Mr. Idris Owen: Is my right hon. Friend aware that not far from the House, at Earls Court, there is currently an exhibition of the products of the motor industry. Manufacturers from all over the world are displaying their products and are proudly announcing in many cases that they have cars with speeds in excess of 150 miles an hour, which involves maximum fuel consumption. Is it not desirable to launch massive research and development projects to create motor engines which will do more than 50 miles to the gallon rather than those which will do more than 150 miles an hour?
Mr. Walker: I am in favour of that suggestion. Much research is already taking place in these spheres. My hon. Friend is right in drawing the public's attention to the higher fuel use which results from higher speed.
Mr. Pavitt: In view of the wish of 8 million people in London for public transport, has the Minister studied a statement last week by Sir Richard Way about the problems of London Transport? In making any contingency plans for conserving fuel, will the right hon. Gentleman make immediate representations to the Prime Minister to exclude London Transport from the provisions of stage 3?
Mr. Walker: Stage 3 is vital to the national economy. It would be wrong to begin making exceptions to it.
Mr. Laurance Reed: Did not the Government accept the recommendation of
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OECD that there should be fuel reserves to last 90 days? Why, therefore, are there reserves to last only 79 days?
Mr. Walker: On the basis of the OECD formula we already have reserves to last 90 days. The figure which I gave was for forward consumption whereas the OECD's is a comparison with past consumption. The target of the OECD was set for 1975 but we have more than achieved this already.
Mr. David Stoddart: Is the right hon. Gentleman aware that the appeal which he has just made for people to travel by public transport will be treated with derision by the travelling public? In spite of the right hon. Gentleman's answer to my hon. Friend the Member for Willesden, West (Mr. Pavitt) does he realise that stage 2 and stage 3 will have a disastrous effect on recruiting? Will the right hon. Gentleman have a further word with the Prime Minister about this matter? Secondly, will the right hon. Gentleman approach !he Central Electricity Generating Board and ask it to consider at this stage, in the interests of preserving oil in the short term, the possibility of indulging in a lot more out-of-merit running of coal-fired stations which could make an immediate saving in oil stocks?
Mr. Walker: I will take up the hon. Gentleman's latter point. Dealing with his first point, I remind him that if it is treated with derision it may be due to the fast cutting back of the public transport system. But in the case of a Government who introduced bus grants and capital investment allowances for trains and who massively extended the public transport system, it should not be so treated.
Mr. Stoddart: On a point of order. Mr. Speaker. The second point was very important, and the right hon. Gentleman did not deal with it. I referred to the possibility of out-of-merit running of power stations burning coal.
Mr. Walker: I said that that was a matter which would be taken into account.
Mr. Crouch: Reverting to my right hon. Friend's answer to my hon. Friend the Member for Derbyshire, West (Mr Scott-Hopkins), does my right hon

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Friend accept that the oil crisis, unfortunately, is not likely to be a nine-day wonder? Does not my right hon. Friend feel that there is a real danger of Britain being squeezed out in the Middle East oil auction between Japan and the United States? Does not that emphasise the importance of our getting together in Europe so that we speak with a European demand and a stronger voice?
Mr. Walker: There has been a meeting of European energy Ministers and, as I said earlier, important talks will be taking place tomorrow in the OECD. I agree that it is vital to get the major consuming countries to collaborate in the problems facing them.
Mr. Benn: Does the right hon. Gentleman recognise from the matters which have been raised in supplementary questions that there is a wide desire in the House for a proper debate on the many issues involved, whether they be individual fuels, the transport side or the international implications? Are the Government prepared to make time available for such debate? Alternatively, will the enabling Bill to permit rationing come forward early enough to make the Second Reading of that measure the opportunity for a wide-ranging energy debate?
Mr. Walker: The enabling Bill is prepared, but it will be introduced only if matters make it necessary to take such enabling powers. I recognise the anxieties on both sides of the House, and I am sure that my right hon. Friend the Leader of the House will have noted the widespread interest in the topic. No doubt there can be discussions through the usual channels.

EEC MINISTERIAL MEETINGS
The Chancellor of the Duchy of Lancaster (Mr. John Davies): With your permission, Mr. Speaker, and that of the House, I wish to make a statement about the main matters considered in the Council of the European Communities since I last reported to the House on 25th July. There have been six meetings—the Foreign Ministers twice, the Agriculture Ministers twice, the Economic Ministers and Finance Ministers once each.
The Economic Ministers met in Tokyo on 11th and 12th September in prepara-
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tion for the GATT Ministerial meeting which successfully launched the multilaterial trade negotiations.
The Foreign Ministers met on 20th September and 15th October. They considered the question of the Community's participation in negotiations for a new International Sugar Agreement; relations between the Community and the Council for Mutual Economic Assistance; the Commission's proposals for an industrial and technological policy programme; measures to improve working relations between the Council of Ministers and the European Parliament; the mandate for a new association agreement between the Community and certain developing countries in Africa, the Caribbean and the Pacific; and a report on progress with the proposals for a Regional Development Fund.
The Finance Ministers met on 21st September to discuss the Communities' Budget for 1974, which is now being considered by the European Parliament. It amounts to 5,026 million units of account, slightly lower than the revised budget for 1973.
The United Kingdom contribution will be about £206 million gross; and approximately £90 million net which is of the same order as the forecast in last year's Public Expenditure White Paper (Cmnd. 5178).
The Finance Ministers agreed that as soon as the amount of money to be allocated to the Regional Development Fund had been decided, funds would be made immediately available.
At the meeting of the Agriculture Ministers on 24th-25th September, my right hon. Friend raised the subject of animal welfare and the Commission undertook to carry out an urgent study of these problems. They also had a preliminary discussion on the Commission's proposals for the future Community sugar régime.
At their meeting on 22nd-23rd October, the Agriculture Ministers held a detailed discussion on the Commission's draft directive on aids for mountainous and less-favoured agricultural areas, including the criteria for assistance, the measures to be applied and the level of FEOGA contribution. They also considered the possibility of extending some form of assistance for dairy cows in these

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areas; and invited the Commission to put forward proposals for further consideration.
The Council will seek to reach firm conclusions on these matters at its next meeting in November.
Mr. Shore: When the right hon. Gentleman last reported to the House it was to announce acceptance by the Government of an additional £30 million contribution to the Budget of the EEC for this year. Will he confirm now that there is no proposal or intention to put the additional sum of money to the House in the form of a motion or resolution? Is it simply that this additional sum is to flow under Article 2(3) from the British people straight to the Commission without further opportunity for parliamentary intercession?
Turning to the matters covered by the six separate Council meetings, I note that the Minister of Agriculture, Fisheries and Food was quoted as saying yesterday that he had had a dull and frustrating day. The Chancellor of the Duchy must have had a dull and frustrating two months.
Is it not the case that no agreement has been reached, and is not the real message to come out of this report on many of the most important matters which should have been agreed in the past two months that there has been no agreement on the International Sugar Agreement and the EEC taking part in it, with the result that the Geneva talks have collapsed and that there will be no International Sugar Agreement at the end of the day?
Am I right in suspecting that no agreement has been reached, because of substantial opposition from a familiar quarter, on hill farming subsidies in the EEC? Is it not the case that no agreement has been reached on the negotiating mandate between the Community and the associables and associates, again because of the reluctance to waive the requirement for reciprocal preferences to the EEC by the developing countries which have a chance of being associated with it?
The right hon. Gentleman made reference to the Regional Development Fund. Is it the case that this Fund is no longer
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linked to the starting of the second stage of economic and monetary union? If it is linked to the second stage, does the right hon. Gentleman agree with the view of Chancellor Brandt that there is no chance of that second stage now starting on 1st January 1974 and is not that, amongst others, one of the main reasons for the proposed visit of President Pompidou to Britain?
Finally, will the right hon. Gentleman accept that we are disappointed that no serious discussion has taken place with the EEC and elsewhere of oil supplies and the effect of the Middle East war? Can the right hon. Gentleman say what action the Government propose or are taking in the EEC in view of the embargo being applied to Holland by Iraq and Algeria on oil supplies?
Mr. Davies: On the first question affecting the Budget, I was not entirely sure what the right hon. Gentleman meant. I think that he wished me to tell him that no Supplementary Estimate would be laid before the House in order to cater for the £30 million, and that is the case. His remark might have inferred that there was an increase in the present Budget. That is not the case.
On the question of lack of agreement, he was entirely wrong in what he said about the International Sugar Agreement. The failure of those meeting in Geneva in October had nothing to do with the presence or the absence of the Community. The collapse was a matter for regret. However, it is still the Community's firm intention to abide clearly by the undertaking that it gave in Santiago last year when it said that it was its firm purpose to seek means of becoming a member of that agreement. It will live up to that.
I do not think that the right hon. Gentleman's references were either accurate or apposite. On the question of hill farming, I regret as much as he that this matter has not been finalised. It is not due to start anyway until next year, but it is important to get the terms right, because the terms critically affect British farmers. My right hon. Friend has been working hard in the last day or two to ensure that their interests are protected.
The right hon. Gentleman referred in his rather disparaging remarks about the

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lack of agreement to the associates' and associates' meetings. Again he is off beam. The truth is that one of the remarkable things about the two meetings which took place at ministerial level with these countries has been that understanding between the Community and them has been good. The 40 or more countries concerned have been able to come forward on two occasions with a united point of view, talking clearly to the Community and being responded to by the Community. It is right for the work to be carried out by the Community in an exploratory sense.
The right lion. Gentleman gives the impression that if he had his way what he would like to happen would be the Community laying down the law. That is not the purpose of the Community. Its purpose is to try to find out what these countries wish and to try to meet it.
In all three references on the lack of agreement, the right hon. Gentleman seems not to have taken the point.
On the Regional Development Fund, the position is slightly different from that which he gave us to understand. First, the RDF is to be set up on 1st January. The provision of its resources from the Communty's own resources is linked to the institution of the second phase of EMU. The constitution of the fund was set out by the Summit, to take place on 1st January 1974. It is to that objective that the Community is working. The right hon. Gentleman should make some distinction between these two figures which are distinguished in the Summit provisions.
I agree with him that the provision of adequate resources for the Regional Development Fund by the time it is set up is critical. For this reason, as the right hon. Gentleman will have observed, great care was taken to ensure that in the budgetary discussion provision was made so that as soon as the Fund was agreed it would be possible for it to start to be operative, otherwise there might have been a hiatus, which no parties would wish to see happen. The provisions in the Budget have successfully overcome that risk.
The right hon. Gentleman is aware that there has been a material degree of discussion among the nine members of the Community on the subject of the
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Middle East war and oil supplies and that they produced a joint statement from their meetings in Copenhagen. It is the Community's intention at an early stage to seek to have a meeting of Ministers concerned with energy matters, particularly to look at these and other issues of oil supplies.
Mr. Farr: Would my right hon. Friend say something about the CAP? In his statement, he did not mention this subject, on which anxiety has been expressed on both sides of the House many times this year, particularly about the workings of the CAP and the desirability of having if not major at least minor alterations made to it.
Mr. Davies: The present situation is that the Commission is to produce very shortly indeed—and I mean very shortly—its report on the amendments which it considers appropriate to the common agricultural policy. As soon as we have those, clearly we shall be working on them with great urgency. They are not yet in hand, but they are expected to be very shortly.
Mr. David Steel: Are we to understand that there has been absolutely no discussion during the summer on the development of the political and democratic structures of the EEC? When will the British Government take an initiative in this matter?
Mr. Davies: I am of course reporting on the meetings of the Council of the Communities. These are not concerned with political co-operation—[An HON. MEMBER: "Yes."] No. Political cooperation takes place outside the Council meetings of the Communities. It is a separate form of meeting which is not part of the Community activity and is not within the framework of the Treaty of Rome. It is a separate but related part of the actions of the nine member countries and takes place on a separate basis. So, in reporting on the Council meetings, I should not properly report on that. However, I will answer the hon. Member's question.
There have been active discussions throughout the summer on political cooperation. As for taking an initiative, the present state of discussion between the Nine and the United States, in view of an eventual visit by President Nixon,

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owes a great deal to the initiatives taken by the British participants, as would be generally recognised throughout the Communities. The present state of play in these discussions is rather satisfactory and is moving ahead, I think, much more effectively than any of us could have imagined before the Summer Recess.
Mr. Biffen: In view of the spasmodic and recurring problems of butter surpluses in the Community, is it not nonsensical that there should be any suggestions that the farming aids for mountainous areas should be extended to include dairy cattle? Can my right hon. Friend confirm that his right hon. Friend the Minister of Agriculture originally suggested that such aids should not include dairy cattle? If the Commission suggests that they should, this will be to the detriment of British agriculture and to the corresponding advantage of the farmers of the Republic of Ireland and of France.
Mr. Davies: As I am sure my hon. Friend knows, the Minister of Agriculture has been diligently seeking means of avoiding the CAP giving rise to continuing butter surpluses. However, in so far as dairy farming takes place in these hill and mountainous areas, it is much more concerned with cheese production than it is with butter. Therefore, the inconveniences in terms of surpluses are not of the kind that perhaps my hon. Friend fears.
Mr. Jay: Can the right hon. Gentleman tell us of any benefits that this country has secured from all these discussions?
Mr. Davies: Yes. I would not wish to go on at too great length, but one perhaps which would particularly concern the right hon. Gentleman with his past great experience in Government, is that we are launched on an effective international negotiation to regulate world trading conditions. I say to the right hon. Gentleman that, but for our membership and but for our presence, that negotiation would by no means be launched in the way it is.
Mr. Hicks: On the question of the mountain and bill farming draft directive, can my right hon. Friend confirm that there was agreement on all the
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original facets and content of the directive and that the disagreement was in reference to additional factors which were raised at the meeting yesterday?
Mr. Davies: No, I am afraid that that is not correct. The hill farming provisional directive is a very complex one which provides not only for the setting of criteria but for the delimitation of areas and for the finalisation of the level of grant to be accorded. None of these things has yet been finalised, so my hon. Friend is wrong to believe that the dairy cattle issue was the only one outstanding.
Mr. McBride: Would the right hon. Gentleman clarify his remarks about the cow subsidies? Will this policy of the Community bear any relation to the policy of the then six members of the Community which resulted in £100 subsidy being given for every cow slaughtered and which was a direct result of the raids on our cattle markets, particularly at Banbury, which raised the price of beef to the prohibitively high levels below which the Minister of Agriculture, who is sitting beside him, has said that prices will not fall? How can he say that this will benefit the pensioners and other low wage-earners in this country?
Mr. Davies: I do not know that, at least this afternoon, I have said anything about a cow subsidy benefiting the pensioners. However, leaving that aside, the matters to which the hon. Gentleman refers are absolutely undecided and are far from being conclusive. I therefore doubt whether the points raised by him are apposite.
Dame Irene Ward: With regard to regional development policy, when the decision has been taken about how much money will be available and it has been paid over to the regions, will the regions be able to spend it entirely as they like without any decisions by the Council? Will there be a variety of decisions according to what the regions themselves want? May I add that I am jolly glad that my right hon. Friend is gay and confident? Let him go on being so.
Mr. Davies: On the question of the allocation of regional development funds, it is probably true to say that this Government, more than any other, have ensured

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that the decisions taken at regional level about regional support have been accentuated and made much more real. I am sure that everybody in the regions regards that as being the case. This will continue. To some extent work, both in developing projects and putting them forward for consideration for national aid, and eventually for Community aid, too, will still be at regional level. The criteria which govern the allocation of funds from the Regional Development Fund will of course be agreed at the level of the Council of Ministers.
Mr. Heffer: That is a very gay answer.
Mr. Deakins: Since the amount of regional aid in the Community next year has yet to be decided, presumably it is not included in the 1974 Budget of 5,000 million units of account. If it is not so included, how is it to be paid for and what is likely to be this country's share?
Mr. Davies: Until the further discussions have taken place this year I cannot answer the latter part of the question. It would be simply guesswork. On the former part of the question, this issue was very much in the minds of those attending the Council of Ministers dealing with the Budget. Accordingly, the reference in the Budget to the Regional Development Fund is with a view to ensuring that, just as soon as funds are agreed for it, it can automatically operate. Hon. Members will be aware of the problems which otherwise might arise in terms of the time-lag in any reference to the Parliament Economic and Social Committee. It was in order to overcome that time-lag that the provisions were made in the Budget in the form I have stated.
Mr. Hugh Fraser: I am sure that my right hon. Friend will be aware that there is total dissatisfaction throughout the House that we cannot have a proper debate about the £30 million which seems to have been wasted by the Community on subsidising butter to Russia. That could have been a chance for a debate on agricultural and financial policy generally in the Community, and I am sorry that it has been lost.
On the great triumph that my right hon. Friend reports of advantages in the GATT negotiations, perhaps he could make it clearer what the strength of the British
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representation will be during these negotiations, especially since our policy seems to diverge completely from that of France and most of the other Europeans as regards trade with the third world. I hope that he can confirm that there will be proper British representation in these all-important negotiations in Geneva.
Mr. Davies: My right hon. Friend will be aware of the fact that a very small proportion of third world countries is involved in the GATT multilateral discussions. My right hon. Friend's last point is not one which is concerned with the points that I made in my statement. On the question of the extent of the British representation, this will evidently not be very great, because representation will take place at the level of the Council of Ministers and it will give rise to a Community policy which will be defended effectively by the Community.
Mr. Marks: How much notice do Ministers receive of the agenda of these ministerial meetings? Is the Minister aware that in some countries Ministers consult their Parliaments before the meetings take place? Could not we do that in Britain?
Mr. Davies: The opportunity for matters to be raised here well before meetings take place is very much available. There are placed in the Vote Office documents arising from the Commission which foreshadow the discussions in the Council. Indeed, many of the questions are raised in the House long before the relevant debates take place in the Council. Hon. Members should not be concerned on that score. There is every opportunity to probe into these matters before the Council deals with them.
Mr. Marten: On the question of the International Sugar Agreement breakdown, will my right hon. Friend place in the Library a transcript of what was said by the British delegates at the meetings, because historically we played a great part in the negotiations? On the question of the relationship between the Council of Ministers and the European Assembly, will my right hon. Friend be very cautious in expressing a view in the Council of Ministers until this House has debated the report of Sir John

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Foster's Committee, which we hope to receive soon?
Lastly, did my right hon. Friend take up with the Council of Ministers the question of Britain's counter-inflation policy and the intention of the Government to place an 8 per cent, tax on imported lamb on 1st January, which is very counter to the counter-inflation policy?
Mr. Davies: On the first question, my right hon. Friend the Minister of Agriculture is present and heard my hon. Friend's question. My right hon. Friend would be more able to respond to it than I am. But the International Sugar Agreement is not a matter which is, so to speak, within the Community's activities as yet. However, my right hon. Friend heard what my hon. Friend said.
The relationships between the Council of Ministers and the European Parliament are quite separate from the whole relationship which the Select Committee has been studying in this House. There is a Parliament and a Council of Ministers. In relation to their present work there is a need for a better and an easier relationship, and that has been a matter of study. The question of the Select Committee brings new factors to bear upon the relationship with this House, which will be most diligently considered.
I was asked about lamb. As I am sure my hon. Friend knows, there is no lamb régime within the common agricultural policy.
Mr. Elystan Morgan: Does the Chancellor of the Duohy recollect that on 8th July 1971 the then Minister of Agriculture gave a written undertaking to the President of the National Farmers Union that the current level of assistance to hill farmers would be maintained? Will the right hon. Gentleman now give the House an undertaking that, irrespective of any inhibitions and despite any frustrations placed in our path by our distinguished partners in the EEC, that undertaking will not to the slightest degree be dishonoured?
Mr. Davies: I have absolutely no reason to suppose that the undertakings which were given at that time will not be respected fully.
Several Hon. Members Several Hon. Members rose—
Mi. Speaker: Order. Nearly 40 right hon. and hon. Members wish to speak in the next debate, so I think we must move on.

SUGAR
Mr. Speaker: Before calling upon the right hon. Member for Stepney (Mr. Shore) to move the motion relating to United Kingdom imports of cane sugar, I would inform the House that I have not selected the amendment to the motion.
4.24 p.m.
Mr. Peter Shore: I beg to move,
That this House, recalling the dependence of developing Commonwealth countries, both on the sale of cane sugar to the United Kingdom and on orderly marketing through the International Sugar Agreement, accepting the need for the EEC to curtail its own production of beet and to join a new International Sugar Agreement as a major net importer of sugar and, noting the interests of those employed in the sugar refineries on the Clyde, the Mersey and the Thames in the maintenance of a viable refining industry in the United Kingdom, calls upon Her Majesty's Government to reaffirm and honour its undertakings to the Commonwealth sugar producers to import 1·4 million tons of cane sugar when the present Commonwealth Sugar Agreement ends and to insist upon major accompanying changes in the sugar policies of the EEC.
Subject to the Minister's confirmation, I gather that the motion is almost in his name, too. This is a very welcome development. The more we can get the Government's agreement on major matters which are of importance to the whole of the country in relation to dealings with the European Communities, the better it will be. Therefore, I shall not, as it were, make any triumphant noises. That would be quites inappropriate at present. I simply welcome that fact and say that this motion about sugar should take its place with previous motions which the House has passed, for example, on juggernauts, live animals and vehicle licensing. It is part of a series—I hope a continuing series—of matters upon which the House will assert itself and insist upon policies and changes within the EEC which are consistent with the interests of our people and our Commonwealth friends.
As the motion makes clear, the focus of the debate is the future of cane sugar

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exports to the United Kingdom. But, as the House will be aware, the issue here is very important. It is not only important in itself; it is symbolic of the whole relationship between the advanced countries of Western Europe and the developing countries in the third world. It is the relationship between half of a continent where the per capita income is well over £1,000 a year and poor countries, in the Caribbean, the South Pacific, the Indian Ocean and, indeed, India, where the per capita income is very often below £100 a year. It is a relationship between a prosperous area in Western Europe, where some 6 million "guest workers", as they are called, are employed because the labour resources of Western Europe fall far short of the extent of its economic development, and areas outside Europe where unemployment is so chronic that in the West Indies it runs at between 20 per cent. and 25 per cent. and in other areas it is too large even to be measured.
The debate is about whose interests—Europe's or the third world's—shall have primacy in our future sugar policy. That is the heart of the matter that we are discussing. The debate is also about employment in Britain, particularly in the cane refineries on the Clyde, the Mersey and the Thames. Many thousands of jobs are at stake. Nearly half of them are in areas of high unemployment in the development areas, and much of the rest in the area of East London along the Thames which has suffered in recent years certainly the greatest collapse of employment to be seen anywhere in the South-East region.
It is not the owners of Mr. Cube that we are concerned about when we talk about the cane refining industry. When we put his sugar into our coffee and tea, we learned long ago to stir it with an exceptionally long spoon. But what we are concerned with are Mr. Cube's employees, and they have a serious interest. It is one thing for the men and women of this country in the 1970s to face the prospect of job loss because their industries have ceased to be competitive and redundancies are unavoidable. That happens all too often. But it is another thing for the miseries of unemployment to be inflicted not because our sugar refining industry is less efficient than that of its competitors but precisely because it is more efficient and can be rendered
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less so only by the bizarre arrangements of the CAP. That is the truth of the matter.
Lastly, the debate is about the categoric pledges given by the Government to Commonwealth sugar producers just over two years ago and embodied in the Lancaster House communiqué of June 1971 and about our ability to honour them in the period ahead. I have no doubt that it is the wish of the House and of the Government, too, to honour those pledges. But the question that we have to bear very much in mind is our ability to do so, and to do it effectively and in a way which in the end will not cancel out—I shall return to this matter later—the very advantages which that commitment to take 1·4 million tons confers. While we accept that negotiations within the EEC and between the EEC and sugar exporting countries are not yet over, the course of the talks so far, as the right hon. Gentleman today made all too depressingly clear, has justifiably given rise to serious worries about their eventual outcome.
The House will recall that the proposals put forward by the Brussels Commission this July contained amongst other things the acceptance of 1·4 million tons of imported cane sugar, the recommendation that the EEC should join the new International Sugar Agreement as a substantial net importer of sugar, that beet sugar production be cut back within the EEC and that a new system of allocating quotas be agreed for beet producers.
If we accept the framework of the CAP—I shall return to that matter later—there is sense in the general direction of the proposals which I have mentioned. However, the House will recall that when the Minister of Agriculture, Fisheries and Food last faced the House on 18th July, I expressed one major reservation—namely, the size of the export quota which the Commission recommends for the EEC as part of the price for joining the new International Sugar Agreement—if such an agreement exists. The House will recall that the figure was no less than 800,000 tons. That is far too much.
Only six years ago the EEC of the Six was a net importer of sugar, as had been West European countries historically for most of this century. In 1968 the full protectionism of the CAP came into

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effect and imported sugar has been steadily squeezed out ever since. So much so, that in 1971 the Europe of the Six exported nearly 1 million tons of beet sugar. Last year it exported 1·4 million tons. That is an interesting and significant figure. The estimates for this year are that exports will be higher still. The acreage coming under beet producion is growing all the time. Inevitably beet sugar exports of such magnitude, except in exceptional circumstances such as those which have applied this year, which I willingly acknowledge, cut into the markets which would otherwise be available to cane sugar producers.
While I maintain that the Commission's proposal for exports is too high, I accept that some of the other features of the package which it put forward are acceptable. However, the Commission, as we know, only proposes in the EEC. It is for the Council of Ministers to dispose by unanimous agreement. The reaction of Continental Governments, and principally the reactions of France, to the Commission's package, was extremely hostile.
I shall not bother the House by quoting extensively from M. Chirac, but he used such wording as "ridiculous proposals". He challenged the Commission as being incompetent. He even raised the matter whether the Commissioner concerned should not remember his national loyalties. That created something of a fuss.
That was not all. With the ISA negotiations coming to a critical point in September it was essential that the EEC should agree both to the proposition of membership of the ISA and about the quanties of sugar which it was prepared to import. The Commission was denied a negotiating position. It was denied a mandate by the French Government. Consequently, the Commission sat only as observers throughout the critical sessions in September and during the beginning of this month.
I do not accept that it made no difference to the future of the ISA agreement whether or not the Commission was muzzled. That would be an absurdity, if true. The result is that no new ISA has been negotiated. There is a danger that when the present ISA expires on 31st December there will be a free market in world sugar trade. Only the short
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sighted will derive comfort from the fact that sugar prices of today are nearly at record levels. I am aware of the FAO report which looked forward to a period of longer-term stringency in the sugar market. Against that, it is the judgment of virtually all those who are experienced in the sugar trade that long before this decade is out, and probably well within the next two years, supply will outstrip demand, with devastating effects on price levels. I remind the House in that context that the price of sugar was as low as £15 a ton as recently as 1967.
Our next concern is related to the fact that the EEC will be prepared to take 1·4 million tons of cane sugar from the developing countries in the years ahead without insisting on large and growing offset exports of beet only if a policy decision is made to cut back the production of beet sugar in Europe. That is where the surpluses are generated and where continuing pressure against imported cane will develop.
We face the bitter opposition of some Community Governments and the powerful interests of European sugar beet growers. I shall refer to an interview which was given by M. Henri Cayre, the President of the Confederation of European Beet Growers, in Paris on 25th June of this year. He said:
"It is absolutely essential that the negotiators representing the Commonwealth developing countries at the forthcoming negotiations have a clear view of the basic facts about the economics of European sugar. European producers will never be able to agree to reducing the area under cultivation. European expansion has been made necessary by the existence of a world shortage which has been going on for the last three years and which looks likely to continue. The European producers are guaranteeing European self-sufficiency in sugar and have every intention of going on doing so. They would like Europe to help the developing countries, but backed by the whole of European agriculture, and with the help of COPA in particular, they will fight to see Community Preference safeguarded. They cannot therefore agree to the introduction of Commonwealth sugar unless they have an assurance that the whole of Community consumption will be guaranteed to European producers, and the cost of the necessary reexport of Commonwealth sugar be borne by the European Development Aid Budget."
There is no lack of clarity in the view put forward in that statement.
Next, in the list of genuine anxieties which are shared by all those who have studied the problem, I must refer to the serious pressure mounted against our

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sugar refining industry—namely, the attempt to impose upon it refining margins so low that it will be forced into loss making and collapse.
Those who followed the sugar negotiations two years ago will have some idea of the problem we would face to get a reasonable deal for our Commonwealth exporters and to get some sense into the European sugar régime. However, it never occurred to anyone, including the Government, that sustained efforts would be made greatly to disadvantage the British refining industry by attacking its margins even before the current Commonwealth Sugar Agreement was due to expire. We all know that if the Government had not introduced last June its so-called subsidy, which as the right hon. Gentleman knows, is a tax rebate, and if the Commission's ruling against it had not itself been quite unusually overturned by the unanimous vote of the Council of Ministers, the British refining industry would now be in jeopardy.
On 30th June 1974 we shall again be dependent upon the unanimous vote of the Council of Ministers if our cane refineries are to continue to be financially viable. The Minister knows very well that his chances of getting a long agreement in the Council of Ministers on the refining margins will be slim unless he satisfies the European beet growers and the Governments which support them that their demands for a growing market for beet sugar will be met. That is the kind of bargaining which he must inevitably face.
It is against that background that it is inevitable that we should feel great concern about the future of Commonwealth sugar exports and our own cane refining industry. Those anxieties are greatly reinforced by our recollection of the basic flaw in the original arrangement agreed to in the Treaty of Accession.
It will be recalled that the Lancaster House communique which embodies the undertakings given by the Government to the Commonwealth countries was never entered into the Treaty of Accession. It forms no part of it either as an annex or a protocol. Instead, in Protocol 22 there is only the now famous but un-specific assurance that the Community will "have at heart" the interests of Commonwealth sugar producers. There is no mention there of quantities, prices or periods of time. Beyond that, there is just
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a mention in Protocol 17—and it is not a helpful one—that Britain will be allowed to continue to import Commonwealth sugar until February 1975.
These matters were debated on 27th June 1972 on an Opposition amendment which sought explicitly to safeguard our sugar supplies by exempting imported cane sugar from the provisions of Clause 7 of the European Communities Bill. That amendment was defeated by only eight votes. Had the Liberal Party decided on a different line I have no doubt that the amendment would have been carried. I do not know whether the Liberal Party tonight will divide the House against the motion but logically, in accordance with the position it took then, it presumably will, because we are seeking to insert into the Resolutions of the House that which we failed to write into the Bill. That vote in 1972 reflected the great unease in the House arising from the inability of the Chancellor of the Duchy of Lancaster to fill the void that had opened up between the Government's unilateral declaration to the Commonwealth countries and what the Community was prepared to accept.
We inevitably face our present anxieties not from the basis of a firm and secure Community agreement to) import 1·4 million tons of cane but from the much less substantial commitment embodied in the words of Protocol 22. Let no one doubt that there is real anxiety about this matter. Only two days ago Mr. Percival Patterson, the Jamaican Trade and Industry Minister, said in London that the European Community had failed to translate its promises into reality. It was clearly understood that the original six-member Community had given a guarantee. He went on to say:
"One of the things that concerns us is that it has been strongly suggested by the French that the question of the quantity is in doubt. It causes us anxiety to hear that this is still open to question."
I am not speaking simply from a British point of view. This matter is very much in the thinking and concern of the Commonwealth sugar producers.
That is why we thought it necessary in the motion to reassure Commonwealth countries and to make plain to the EEC that the Government have behind them the whole-hearted support of the House—except perhaps for the Liberals—in

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insisting that the Lancaster House commitment of June 1971 be fully honoured.
While it would be a considerable relief to have clearly stated the Community agreement to take 1·4 million tons of cane sugar, we should be naive if we did not look closely at the whole context of the EEC sugar policy in which imported cane will be placed. To put it bluntly, it is not much good taking 1·4 million tons of Commonwealth cane sugar through the front door of Europe if 1·4 million tons of protected European beet sugar goes out through the back door on to the world market. That is the situation that we are in today, not the situation of the future. The quantity that the enlarged Community takes in today will be exported by it in the form of subsidised beet sugar.
Western Europe as a whole has already ceased to be an importer of sugar from the developing countries. If this simply reflected the superior natural advantage of Western Europe in sugar production then, however reluctantly, we would have to face the facts. But that is not so. Western Europe has become first self-sufficient and now a major exporter not because it enjoys any natural advantage in growing sugar, not because the real price of sugar is lower in Western Europe than it is elsewhere, but simply because it enjoys the total protection of the CAP and its many devices.
For the moment the conflict of interest between cane and beet sugar producers is constrained because sugar is in short supply and the price gap between the two has substantially closed, but the conflict of interest remains and it will re-open before long. If cane producers are to have a chance, it will then be essential for the European beet growers to cut back their production. That is what the Commission has recommended, but we have a long way to go before that recommendation is accepted and turned into the real policy of the Community via the Council of Ministers.
It is this, amongst other things, that has made it impossible for the EEC to join the negotiations for a new International Sugar Agreement. If the EEC does not join it, as it failed to join its predecessor in 1968, no limit will be placed on beet sugar exports or on the
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price at which it can be sold. This means that surplus European beet will compete with cane sugar in third markets. But, because surplus beet earns an export rebate largely but not exclusively from the budget of the CAP, Community sugar will be able to be sold at the lowest price while its producers will receive a guaranteed income based upon the European price for protected sugar.
If anyone has any doubt about the magnitude of the sums involved, they should look at the guarantee section of FEOGA and see the items listed there year by year for the export restitution payments on exported sugar. Taking the last three years, they are running at the rate of well over £50 million a year. That is what it costs to subsidise the sugar. This could play havoc with world markets.
The poorer developing countries of the Commonwealth sell not only to Britain but to the rest of the world as members of the International Sugar Agreement. At least one-third of their earnings come from ISA sales. Their prosperity could be equally destroyed if their world markets were undermined by Community sugar exports as it would have been if they had been denied substantial access to the United Kingdom. The danger is all the more real because if the Australian producers are cut off from the British market, they are bound to add their considerable export tonnage to the world supply, again with a depressing effect on world prices.
The surest way of undermining the Commonwealth sugar producers is to destroy the cane refining industry in the United Kingdom. The interests of the Commonwealth producers and the workers in our great refineries are indeed at one on this matter. If our refineries are closed either through lack of sufficient sugar supplies or through an unrealistic pressure on their refining margins, the cane sugar producers in the Commonwealth will have lost their only secure industrial base in Western Europe
I want to ask the Minister one or two questions on this point. There has been much talk about reorganisation of the cane sugar and beet sugar industries in Britain, but I have seen no clear proposals on this. I do not intend to offer a judgment about the form any change should take, but I want to put to the

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Minister this basic question: whatever may be the merits of reorganisation—and we have not yet seen any precise proposal—surely what matters is the supply of sugar for the cane refineries. No doubt proposals for reorganisation have in mind the possibility by reorganisation of increasing the supply of sugar for the cane refineries.
But if the supply to the cane refineries is the essence of the matter, can the right hon. Gentleman give us assurances on three points? First, is he doing everything in his power to ensure that any rundown of Australian sugar will be spread out over the longest possible period? Secondly, has he raised at Brussels—if not, will he do so—the question of accompanying any rundown of Australian cane to Britain by an increase of Commonwealth developing countries' cane to take its place? Thirdly, will he ensure that the beet sugar quota that has been refined in the cane industry in recent years will continue to be available to it so that it is not faced with a cut-off of supplies which would undermine employment and the economic viability of the cane industry?
Mr. Eric S. Heffer: Is my right hon. Friend aware that some of us are not happy with the figure of 1·4 million tons, because that figure means a loss of jobs? If 1·4 million tons goes to the whole of the EEC, it will mean another 15 per cent. loss, leading to a further reduction of jobs in this country. Some of us believe that it should be at least 1·7 million tons, or even higher, in order to maintain the present level of employment for our workers on Merseyside, in London and on the Clyde.
Mr. Shore: I am grateful to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) for bringing out the point with greater clarity because it needs to be made clear. The 1·4 million tons is simply the base that has to be the necessary foundation. Beyond that, I am asking the Minister to consider, with his colleagues in Brussels, the whole question of importing more cane sugar from the developing Commonwealth countries to take the place of any gradual rundown of the 300,000 tons of Australian sugar. Beyond that, we should continue with the beet quota so that, in this period of inevitable uncertainty, no
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sudden pressures develop upon our cane sugar industry.
Sir John Tilney: Would the right hon. Gentleman not also agree that it is vital that the refineries make a profit for otherwise they will not be there for the colonial sugar?
Mr. Shore: I had hoped that I had made that plain in what I said earlier about the cane refinery margin. It is essential that this should be a viable margin, based upon the real costs of refining cane, and not, as it were, a kind of by-product of beet factories processing beet and doing some refining as well. That I wholly accept and endorse.
Finally our motion refers to
"…major accompanying changes in the sugar policies of the EEC.''
We are right to stress the importance of these words and of such changes. Unless the EEC sugar policies change radically, there can be no continuing secure market for cane sugar producers in the developing world.
The real enemy is the common agricultural policy. I am not concerned with that policy where its protective mechanisms are used to keep our competitive agricultural produce from countries which are themselves prosperous, although I have never been able to understand why Britain should be compelled to buy dearer European food when cheaper North American and Australasian produce is available.
But whatever may be said about the CAP in general, there surely can be no question at all that where it competes with the interests of poor producers in the countries of the third world its protectionism cannot be tolerated. On what basis of sense or morality can anyone justify growing, behind high protectionist walls in Europe, sugar and rice which are grown far more cheaply in developing countries? How can anyone justify that such protection be carried to the point where not only is Europe self-sufficient but vast surpluses are created which are dumped at subsidised prices in markets which might otherwise go to poorer people?
I am glad that it is the wish of the House to endorse and accept this motion. To insist on the 1·4 million tons is the

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first and necessary step, but we must also see that the benefits are not allowed to be offset by existing policies for European sugar. In supporting the motion we are insisting on a change in the CAP itself. Sugar was the last commodity to come within its ambit. We must see to it that it is the first from which the CAP's present protection is withdrawn.
4.57 p.m.
The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber): I do not think anyone can complain about the way in which the right hon. Member for Stepney (Mr. Shore) has moved the motion. The Government will have no difficulty in agreeing with a great deal of what he has said, and it is useful that the House should have the opportunity of considering all these matters together.
I make one point which I hope the right hon. Gentleman will not take as being too critical. In the whole of his speech, he did not refer to one aspect which we should not lose sight of, namely, that we have not only cane sugar refiners and workers in this country but our own domestic beet sugar production and the workers concerned with that.
Mr. William Ross: The right hon. Gentleman means in England.
Mr. Godber: Very well. I take the point made by the right hon. Member for Kilmarnock (Mr. Ross), and I understand it. Over the years, under successive Governments, of different colours, it has been the policy to restrain deliberately the production of beet sugar in this country to ensure the continued opportunities for cane sugar. We should not take for granted the self-sacrifices that British farmers and workers have concurred in to make way for the substantial import of sugar over the years.
This debate is concerned with two distinct issues: first, the future arrangements for Commonwealth sugar; and second, the future of the British sugar industry. They are, of course, linked, but they are far from identical. On both, I believe that the best answer to the right hon. Gentleman is to put the facts before the House, and I want to put them as clearly as I can this afternoon. There are a great many facts, but I shall seek to be as brief as I can.
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I shall deal first with the future arrangements for Commonwealth sugar. The House will recall the assurance which was negotiated by my right hon. and learned Friend the then Chancellor of the Duchy of Lancaster, which was later referred to in Protocol 22 of the Act of Accession. At the Lancaster House Conference in June 1971, we, and the Governments of the Commonwealth countries concerned, agreed together to regard this undertaking by the Community as—I quote the words of the communiqué:
"…a firm assurance of a secure and continuing market in the enlarged Community on fair terms for the quantities of sugar covered by the Commonwealth Sugar Agreement in respect of all its existing developing member countries "—
that is to say, the 1·4 million tons to which the right hon. Gentleman has referred.
We told the Community that this was our interpretation. This pledge has been repeated on many occasions since then, and certainly at the Lancaster House Conference, at which I had the honour of taking the chair, in March of this year. These are the pledges we have given, and we stand by them. They have now to be translated into Community regulations, to take effect when the Commonwealth Sugar Agreement expires at the end of next year.
In July this year the Commission presented to the Council a memorandum on the Community's future sugar policy. I emphasise that it was a memorandum and not a definite proposal, and in it the Commission expressly confirmed the commitment to take 1·4 million tons of sugar from the developing countries. The Council of Ministers has discussed the memorandum and I have most strongly supported that proposal. Throughout our discussions I have asserted the need for the Community to undertake to import 1·4 million tons from the developing Commonwealth at a fair and remunerative price.
The question of price has not been touched on to any extent, although it was mentioned in an intervention. The question of price is essential, and the proposals by the Commission have still to be agreed with the developing countries. For some they present no problems, because in some countries the Government controls the sugar industry, in others it

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is separate from the Government. Therefore, the developing countries need carefully to consider this aspect, which is very complicated. I will not bore the House with it this afternoon, unless it is its wish that I should do so.
Mr. Alfred Morris: The right hon. Gentleman has referred to the EEC Commission's proposals. As he knows, M. Jacques Chirac has described the proposals as ridiculous. In plain words, how does the right hon. Gentleman respond to that remark?
Mr. Godber: I responded to that remark at the time and said that we had to ensure that the 1·4 million tons was accepted. I have reaffirmed that since. At the meeting of the Council of Ministers in September when this was discussed I reaffirmed that figure, which was supported all round the table. Our French colleague did not seek to reject it. He said that he thought it was excessive but did not seek to reject it. We shall, I am sure, reach a satisfactory conclusion based on that.
Sir Elwyn Jones: Do the commitment and the pledge mean that the 1·4 million tons should come, not into the EEC, but into this country? This is the concern of the sugar refiners in this country.
Mr. Godber: If the right hon. and learned Gentleman will wait, I intend to go in some detail into the various aspects of this matter and will try to explain the position to him. Briefly—I will come back to this matter in the course of my speech—the position is that it will have to be imported into the Community. This is the arrangement.
But the proposal in the Commission's memorandum, to which I have referred, is that 85 per cent. to 90 per cent, of it shall be dealt with by the port refiners. The port refiners are almost exclusively the refiners in this country, so it is not a complete commitment that it will come to this country, but if the refiners here wish it to come, and if the Commonwealth countries wish it to come—and this is a very important aspect—then I believe it will come. But it is for the Commonwealth countries to decide. They could, if they wished, have it refined elsewhere. They are the owners of the sugar, and it
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is they who must decide. It is not we in Britain who can decide this point.
While there are a great many details still to be resolved in regard to the 1·4 million tons proposal, all the other countries, apart from France, have already accepted it. This is part of wider proposals in the context of the whole question of the future sugar regime and, obviously, we must consider all these factors together.
I am satisfied that the commitment will be achieved. We have fought for this throughout the years of negotiation and I am confident that we shall achieve it. I do not normally make statements of that kind unless I feel very sure indeed. The House can take it from me that I should not do so now if I were not certain that we should achieve it.
Mr. Shore: Is the right hon. Gentleman equally confident that he will achieve a situation in which that 1·4 million tons is not offset by an export of 1·4 million tons of beet sugar?
Mr. Godber: If only the right hon. Gentleman will wait and let me develop my speech in my own way, I am coming to all these points in due course, but I must take it in sequence, as he himself sought to do.
The right hon. Gentleman specifically referred to the anxieties of Mr. Patterson of Jamaica. There were talks last week on the Protocol 22 negotiations by the Commonwealth developing countries. I have not seen Mr. Patterson in the last few days but I saw the Prime Minister of Fiji during the weekend. He had come on from those same discussions and told me that he was entirely satisfied with the way things were going, though he thought they were going rather slowly. But he did not feel in any way nervous about them and was fully satisfied with the United Kingdom Government's attitude. He told me I could say that to the House if I was questioned on the matter today.
The assurances I have mentioned did not, of course, relate to Australian sugar. We recognised from the outset that it would be impossible to negotiate long-term arrangements for Australia after the Commonwealth Sugar Agreement expired. The Labour Government came to exactly the same conclusion when they applied for membership of the Community. The only difference between us is that—to

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judge by the speech given by the then Foreign Secretary, now Lord George-Brown, in 1967—it appeared at that time that they envisaged an abrupt termination of Australia's exports while we believe they should be phased out. That is the difference, if any, between us.
It was with this particularly in mind that we negotiated Protocol 16 of the Treaty of Accession, which provides for the Community to take short-term action to avoid problems which might otherwise arise for third countries from the immediate adoption of the Common Agricultural Policy by the new member States. Resting on these provisions, Australia herself has now proposed a phasing-out over three years, and I have publicly supported them in this request.
These proposals go far wider of course, than the quantity of sugar which the Community will import in the future. They deal with the manner in which it should be purchased and how it should be allocated between users when it has been imported. They also cover the future arrangements for internal production from sugar beet, which should take over when the present régime—that is, the régime for sugar beet—expires after the 1974 crop.
I regard this, and I must say so frankly to the House, as the least satisfactory part of the Commission's memorandum. Briefly, it proposes that the present rather rigid quota arrangements for beet sugar production should be continued and intensified—and, moreover, that they should be continued in a manner which I regard as discriminating against the United Kingdom.
The beet sugar industry here, which has been so severely restricted over the years to make room for Commonwealth sugar, ought, in my view, to be given fair opportunity for expansion to take account of the phasing-out of Australian sugar and to give it some comparability with the industries of other member States. How this should be done—by quota arrangement or by more open arrangement which would favour the most efficient producers—will be a matter for negotiation, and I foresee long debates on this issue in Brussels. Meanwhile, I have left my Community partners in no doubt about the British Government's views.
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Another part of the Commission's memorandum deals with the attitude that the Community should adopt to a new International Sugar Agreement, if and when one is negotiated. We had, of course, hoped that the recent conference in Geneva would have done so, but unfortunately it broke down on 13th October without any agreement having been reached on any provisions to regulate the international sugar market. The stumbling block was that the main exporters and importers—countries such as Cuba, Australia, Canada and Japan—could not agree among themselves.
The Community had nothing to do with the breakdown—I must emphasise that in the light of what the right hon. Gentleman said. He said that the Community took no part, and that is true. But whether the Community took part or not, the breakdown was there and the breakdown took place because the main importing and exporting countries were unwilling to contemplate the price levels that the other side in each case had put forward.
Mr. Neil Marten: Is it not true that in the past, when Britain has played its part in these negotiations, our very skill and knowledge of this industry and our worldwide connections have played a great part in bringing about an international agreement? This time we did not have an independent voice. We had no mandate from the Council of Ministers, so we were done.
Mr. Godber: That is perfectly true as far as it goes. In fact, the situation never reached a position where we could have done the sort of thing which my hon. Friend has said we were able to do in the past. The simple fact is—and people must recognise this—that the world price of sugar is high at present and that producing countries are perhaps overconfident and are unwilling to settle on the type of price that the consuming countries were willing to pay. It is not a case of the Community's absence.
Mr. Nigel Spearing Mr. Nigel Spearing (Acton)
rose—
Mr. Godber: No. I have given way a great deal, and I must get on with my speech. I have been very patient and have given way at least five times.

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Meanwhile, we have a new agreement of a purely administrative nature, the main purpose of which is to prepare for the subsequent negotiation of a proper agreement, possibly in 1975. I hope that the Community will join the new agreement—certainly we shall work towards that—and take part in this preparatory work. My right hon. Friend said this afternoon that that was the intention, and I confirm that that is so.
That brings me to the second issue which we are debating to-day—namely, the future of our own sugar industry. I shall deal first with the refining margin for our cane sugar refiners. The major port refiner has put out a great deal of publicity about this over the past week. I regard that publicity as misguided. It is based on a misconception, which I find very hard to understand, about the Government's attitude towards future negotiations, and it seems calculated to generate an atmosphere of crisis where no such crisis exists.
This is an important matter, and I think that I can best deal with it by setting the full facts before the House. I should add that the managing director of that company has since—indeed, since I prepared this speech—explained to me that he believes that there is a misconception, and I therefore hope that I can clarify the matter by what I tell the House to-day.
In January, after long and hard negotiations, the Community decided on an entry price for Commonwealth raw sugar which left a margin to cover the cost of refining which was little larger than the margin allowed to the beet sugar industries on the Continent. I could understand why other member countries took the view that a margin adequate for refining one kind of sugar should also be adequate for refining another. But that view was, nevertheless, mistaken. The cost of refining raw sugar in a port refinery is substantially higher than the cost of refining that raw sugar in a beet factory, where the fixed costs are covered by the production of refined sugar from beet by continuous process.
I therefore told the Council of Ministers in January that measures would have to be taken to ensure that the sugar which this country is committed to take during the remaining period of the Com-
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monwealth Sugar Agreement could be refined and marketed. Spokesmen, both for the Commission and for other member States, claimed that there would be a premium over the intervention price which would make up the shortfall to our refiners. I told them that I doubted whether that was so—I could not prove it at the time—but I said that if it did not happen, then, if we accepted the figure that was given, the United Kingdom reserved the right to make up the refining margin to the previous level by a national subvention.
Subsequently, in March, I told the Council that we should be making these supplementary payments to our refiners because events had proved me to be right. These payments, which have continued since then—and which I reported to the House at the time—bring the refining margin up to £17 a ton—the level which I considered necessary to enable the Government to honour their commitments under the Commonwealth Sugar Agreement.
In July, the European Commission told me that it thought that arrangement was incompatible with the Treaty of Rome, and that it would come before the European Court. I immediately raised the issue in the Council of Ministers. I explained the importance of this subvention to the honouring of our Commonwealth commitments, and the Council immediately and unanimously decided to authorise its continuance until the end of June 1974, that is, for the full period for which the prices of both raw and white sugar in the United Kingdom for the 1973–74 season had been fixed. It is impossible to go beyond that, because the refining margin is related to those prices, and those prices are fixed on an annual basis. That is why it is fixed up to that time.
That is the history of the refining margin so far. It is a history of utter determination on the part of the Government to ensure that the margin should be large enough to enable us to fulfil our obligations to Commonwealth producers. There is absolutely nothing in that history to justify our fear or suspicion of the Government's intentions for the future, and, frankly, I do not understand the tenor of much of what I have read in the Press during the last few days.
Mr. Heffer: Will the right hon. Gentleman explain whether, after June 1974, the intention of his colleagues in the EEC is to allow us to continue the arrangement that has been made? I ask that because they have pointed out that it is against the Treaty of Rome?
Mr. Godber: That intervention makes me sorry that I gave way, because I am coming directly to that point. It is difficult when Members seek to anticipate what I am going to say. I am sure that the hon. Member is seeking to help me, but I should like to get on with my speech if I may.
It may, I suppose, be said that the margin is not yet secure for the period after June 1974. I shall answer that as I have answered for the present position, by setting out the facts. The Commission's proposals for the importation of sugar from developing countries in and after 1975 suggest that 85 per cent, to 90 per cent. of that sugar should be reserved for the port refineries, and that the margin allowed for refining this sugar in those refineries should be higher than the normal refining margin to allow for the fact that refining costs are higher.
There will undoubtedly be lengthy negotiations before all the details are finally settled, but it is a major step forward that the Commission have now, and for the first time, recognised the need for a special refining margin related to the costs of port refining. I intend to do everything in my power to ensure that that special margin is fully adequate.
That leaves the period—to which the hon. Member referred—between July 1974 and the start of the new arrangments for sugar from the developing countries—that is, the eight months between 1st July 1974 and the end of February 1975. Protocol 17 of the Act of Accession specifically authorises this country to continue imports of sugar under the Agreement until the end of February 1975.
I have already made it clear that the Government are determined to ensure that they can fulfil their commitments under that Agreement. Given that the Council of Ministers has recognised the justification for the present subvention, and given that the Commission has appreciated the need for a special refining margin under the arrangements that begin in 1975, I
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find it inconceivable that we shall not be able to secure adequate arrangements for this short intervening period. But, at the time when I asked for authority for this special subvention to continue, I pointed out that discussions for the reorganisation of our sugar industry were proceeding, and that the outcome of those discussions could affect the position thereafter. I told the Council that in good faith, because discussions between the three companies were proceeding constructively at that time.
That in turn brings me to the question of the reorganisation of the refining industry. In recent years, the port refiners have refined nearly 2 million tons of sugar for sale in this country: about 1·4 million tons from Commonwealth developing countries, 335,000 tons from Australia, and about 250,000 tons of raw beet sugar supplied by the British Sugar Corporation. In addition, about 250,000 tons are imported for refining and reexport. This is a trade which is in no way affected by our accession to the Community and can continue.
One might suppose, from what some people have been saying, that the problems which the industry is now facing result entirely from our accession to the Community. That is far from being the case: the main problems already existed quite independently of our accession. First, there was still some spare refining capacity resulting from a decline in exports from their level in the 1950s. Second, the position of Australia, as the only developed country benefiting from the Commonwealth Sugar Agreement, had become increasingly anomalous and would certainly not have continued indefinitely. This is certainly the case and was recognised, as I reminded the House a little while ago, by the Labour Government.
Mr. Douglas Jay: The Minister quoted statements made at the time of the application to join the Community, but would he not agree that if there had been no question of joining the Community there would have been no question of phasing out the Australian supplies?
Mr. Godber: I do not agree with the right hon. Gentleman and I will tell him why I do not agree. As I said a moment

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ago, it has become increasingly anomalous that Australia as a developed country was getting the full benefit—and it is no good the right hon. Gentleman shaking his head, it does not change the position a bit. Australian Queensland sugar is getting the advantage of the special terms designed to help developing countries. Under successive Governments this had been acknowledged—and the Australians have always recognised this fact—that they have been getting the advantage of special terms designed to help the developing countries. This has been said on many occasions in the past. The Australians have never denied it. They have had this advantage over the years because their costs of production are much lower than those of the developing Commonwealth countries. This is the point. Therefore Australia is producing and exporting a large quantity of sugar at this time. In any case Australia would probably wish to refine it herself. She is refining large quantities of sugar at present.
Mr. Shore Mr. Shore rose—
Mr. Godber: I cannot keep on giving way. I have given way a great number of times. I cannot continue to give way. I have explained the position precisely and it is perfectly well known by all those in the sugar industry. It could be totally wrong to assume that that quantity would continue "indefinitely". That was the word I used and that is the word by which I stand.
Lastly, as the Public Accounts Committee—including several hon. Gentlemen opposite—had pointed out, it was clearly wasteful and unecomonic to transport raw beet sugar from a beet factory to a port refinery and refine it there. It is far more economic to refine it as part of a continuous process at the beet factory. Right hon. Gentlemen opposite who served as Ministers of Agriculture must have known very well that these problems existed and that a solution to them would have to be found. That must have been the case before this Government came to power.
What is the position, then, on the future level of raw sugar supplies? The maximum quantity of raw sugar from the developing Commonwealth countries that could be available is 1·4 million
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tons. The Australian quota I would hope, as I have said, to see phased out gradually; but in time it must end. Because the production of unrefined raw beet sugar is so uneconomic, the British Sugar Corporation have started to convert their remaining raw factories to white sugar production. And in time we must expect all sugar beet to be fully refined in the factories.
For the present, however, I want to see the remaining production of raw beet sugar continue to go to the port refineries.
I am glad to say that, following discussions with me, the British Sugar Corporation has put proposals to the major port refiner that are intended to allow the whole of the coming season's production of raw beet sugar—around 150,000 tons—to be refined in port refineries. I hope it will be possible for the Corporation and the refiners to agree on terms for this, so as to keep up the refineries' throughput for the coming season.
But that must be a matter of negotiation between them as the basis of this sale. But eventually raw beet sugar will no longer be available and the problem would have had to be faced whether or not we had joined the Community. The effect of this and of the ending of the Australian quota is that at best the port refining industry will be able to look only to the 1·4 million tons available from Commonwealth developing countries, instead of the total of nearly 2 million tons they have refined in the past. This inevitably means that the refining capacity in this country will have to be reduced to match the reduced supply of raw sugar. I have never concealed this from the industry or from the many hon. Members who have written to me about it; and I believe the industry has long and fully recognised it itself.
The right hon. Gentleman asked me specifically about the possibility of expanding the importation of Commonwealth sugar. Those who understand the industry will know that certainly some of the Commonwealth countries have difficulty in maintaining their existing allocations. Some of them may be able to supply more, but not in the generality. They have not asked for this, and I believe that in sustaining

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their existing quotas this is the only reasonable basis on which they can work.
The essential question for us all—the Government and the industry alike—is how the sugar industry can best organise itself to cope with this inevitable contraction in port refining capacity.
Mr. Edmund Dell: It is not inevitable.
Mr. Godber: It is inevitable on the facts that I have given. However much hon. Members may not like to face up to them, these are the facts.
Mr. Spearing Mr. Spearing rose—
Mi. Godber: No, I will not give way. I have given way quite sufficiently.
The Government for their part have done their utmost to encourage the three companies—the British Sugar Corporation, Tate and Lyle and Manbre and Garton—to agree on a reorganisation of the industry which would equip it to face the future with confidence.
In my view, the requirements of the future point strongly to an industry with interests in both beet and cane sugar. I believe the port refiners share that view. A link between beet and cane sugar production would allow greater economy and flexibility in refining and distribution, and would thus equip the industry in this country to meet the competition it must expect from sugar industries in other member countries—industries which themselves have a competitive strength based on beet sugar.
Equally important reorganisation which linked beet and cane interests would make it easier to plan and implement—in an orderly way that took full account of the interests of the workers in the port refineries—the reduction in port refining capacity which, however much we regret it, we all recognise as necessary and unavoidable.
The talks between the companies have been long and complicated. That was inevitable. This is a complex matter. But on 8th August the three companies put their signatures to a document which set out an agreed basis for negotiation. I put it no higher than that—it was a basis for negotiation.
That basis depended to some extent on an indication of the Government's wil-
1300
lingness to help, and on 22nd August we gave the three companies an indication that we would be prepared to consider sympathetically proposals designed to facilitate agreement between them. The companies were asked to work out the magnitudes of the sums likely to be involved for them and for the Government, and this, I understand, they have independently been doing. All this represented—and I hope still represents—real progress towards an agreed solution of an intractable problem.
I was therefore extremely surprised to learn that one of the companies concerned should have put out statements which seem to me to ignore—and so by implication to reject—the whole prospect of early agreement on reorganisation. I can only express the sincere hope that those statements do not in fact bear that implication. I hope that it will still be possible for the three companies to reach early agreement, and I look to them to try their hardest to do so.
If instead the larger port refiners were to decide to go it alone, I believe—and this is my personal view—they would be turning their backs on their own best interests and on the best interests of their workers. I must point out, however, that they have not indicated to the Government that they no longer wish to go ahead on the basis of the memorandum of 8th August. Indeed, this morning Mr. John Lyle called on me, and, after saying that his preferred solution was a two-company one, he reaffirmed that nevertheless his company wished to continue discussions on the basis of that memorandum. That is the position reached so far in negotiation.
At this stage I must comment on the extraordinary advertisement that appeared in the Press yesterday. That advertisement was, I am sure, seen by all hon. Members. It says:
"Your sugar is at risk "
and goes on to say that
"As a direct result of Britain's entry into the EEC, you will pay three times as much for your sugar within two years."
Mr. Arthur Lewis: The Government said that prices would not go up.
Mr. Godber: That premise is totally wrong and therefore, not surprisingly, the conclusions are equally wrong.
Mr. Lewis: I cannot believe it. I do not believe it.
Mr. Godber: The whole advertisement is grotesquely misleading, and perhaps the hon. Gentleman will—
Mr. Lewis: The Government tell lies.
Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. The hon. Member for West Ham, North (Mr. Arthur Lewis) must not bawl across the Floor of the House each time he is annoyed.
Mr. Godber: If the hon. Gentleman will contain himself, I shall tell him what the truth of the situation is. He might be glad to learn.
Mr. Lewis: I do not believe it. Will the right hon. Gentleman give way?
Mr. Godber: I shall not give way.
Mr. Deputy Speaker: Order. The right hon. Gentleman is not giving way.
Mr. Godber: I am seeking to give the House the truth of this matter, and the hon. Gentleman's interventions—
Mr. Lewis: The Government tell lies.
Mr. Godber: The hon. Gentleman's interventions do not help in this regard. It seems he does not want to hear the truth, but the rest of the House does.
Mr. Lewis: Lying Government.
Mr. Godber: The advertisement claims that the price is going up three times as much within two years. The truth is that we have agreed during the next four years to raise our price to the full Community price level.
Mr. Lewis: Nineteen per cent.
Mr. Godber: The present difference is £18 a ton, equivalent to just under one penny a pound. Over the first two years of transition, the rise due to entry into the Community is £7·40 a ton, equivalent to one-third of a penny a pound.
That is the true situation and the whole of this advertisement is wrong, and is based on one of the wildest distortions of fact ever put before the British public. [Laughter.] I am surprised that hon. Members think that amusing. It is totally incorrect. The figures have been set out and are beyond dispute. I think hon.
1302
Members who laugh at it merely seek to cover their own confusion. I do not know whether they inserted the advertisement. In any case, the advertisement is wholly wrong and I repudiate it here. The most charitable conclusion I can draw is that those who inserted the advertisement had themselves been totally misled. I suggest that they now have a duty to insert a fresh advertisement which tells the truth, and the truth is what I have given the House.
Mr. Heffer: The right hon. Gentleman had better do that.
Mr. Godber: I have told the House the truth. This is a serious matter, and I am surprised that hon. Members should seek to encourage those who mislead the public in this way.
Mr. Stephen Hastings: My right hon. Friend has made a great point of attacking this advertisement, for reasons which I entirely comprehend, but he is, surely, not asking the House to accept that this was put out by a clear intention of the management of Tate and Lyle, because that might be the implication.
Mr. Godber: I did not say that. I have not suggested that for one moment. I have taken the advertisement on the basis that it is there. I have repudiated the alleged fact in it, and whoever put it out is totally misconceived in what he is doing.
I turn now from publicity with which I totally disagree to something which I read in The Times recently with which I did agree, namely, Lord Campbell's letter to The Times which appeared last week. I observe that Lord Campbell, who has done so much for Commonwealth sugar over the years and whose views we all respect, said that the
"Commonwealth producers must not be at the mercy of their competitors."
I agree with that sentiment. It is essential to have an efficient and viable refining industry in this country ready to take, and committed to take, the Commonwealth raw cane sugar available to it.
My own view, however, is that that purpose could best be served by having an integrated refining industry which has both port cane refineries and inland beet factories at its disposal. However, no

1303
suggestion of compulsion by the Government to achieve this or any other solution has ever been put forward. If the present companies do not wish to merge, that is for them to decide. But if they wish to retain their present position and status, the cane refining companies will have to face up individually to the problems of surplus capacity to which I have referred.
I repeat again, to make it absolutely clear, "If it is their wish". There has never been any suggestion of compulsion to amalgamate. All three parties to these discussions are free agents, answerable to their directors, to their workers and to their shareholders alike, and it is for them to decide.
Sir Elwyn Jones: Will the right hon. Gentleman indicate to the House what consideration the Government have given to the serious social implications for the port refining areas and their populations, bearing in mind that, unfortunately, they are already areas of unemployment? Has this aspect been considered, and what will be done about it?
Mr. Godber: The right hon. and learned Gentleman is right to call attention to that aspect. It is one of the factors which we have had very much in mind in the discussions about reorganisation. What we want is the best solution which does the minimum harm, but the proposals must come from the companies themselves. The Government have sought to help, and will seek to help, in the final solution of the problems, but it is for the companies themselves to say what they want and that is what I want them to do.
It will be obvious from what I have said that the motion reflects to a very great degree the Government's attitude and intentions. Therefore, I am not asking my hon. Friends to oppose it. To avoid any misunderstanding, I should like to make quite clear the basis upon which I say that. First and foremost, I accept the reference to our undertaking to import 1·4 million tons of Commonwealth cane sugar. It is, of course, true that that undertaking now has to be a Community undertaking, but it was first given to this House by my right hon. Friend the then Chancellor of the Duchy, and I accept that it is this Government's duty to ensure its fulfilment. I
1304
have no doubt that it will be fulfilled by the Community.
So far as the International Sugar Agreement is concerned, as a result of the lack of agreement in Geneva between the principal exporting and importing countries, that agreement is at present in abeyance. I hope that a new International Sugar Agreement will be established, although that is unlikely before 1975 at the earliest. If and when it is established, it will be the objective of this Government to secure the full and active participation of the European Community in a manner which will be consistent with our attitude to the continuing importation of Commonwealth sugar at a level of 1·4 million tons a year.
There was a reference to beet sugar production and a reference to
"… major accompanying changes in the sugar policies of the EEC",
I interpret those as both being references to beet sugar production in the Community as a whole.
I must make absolutely clear that in accepting the motion I am not giving any undertaking to cut back on beet sugar growing in the United Kingdom. It is not expansion of beet sugar growing in the United Kingdom that has caused our present problems. On the contrary, this country has for many years kept back beet production to ensure continued entry for Commonwealth sugar. With the phasing out of the Australian quota, growers in this country are entitled to look as a minimum for the major share in that quantity. Therefore, I make clear that I do not interpret the acceptance of the motion as in any way limiting the Government's right to look after the rights and to protect the legitimate interests of our own farmers, as well as our own workers on the farms and our own workers in the beet sugar factories.
The quotas for beet production in the Community will be a matter of much argument in the coming months. No one can say what the ultimate outcome will be, but it will be our objective to secure a satisfactory balance between production and consumption against the background of the continuing importation of Commonwealth sugar on the basis that I have set out. So far as the workers in the industry are concerned, it will certainly be the intention of the Government to

1305
give such help and advice as they can in resolving the problems that at present exist.
But, equally, the Government look to the managements of the three major refining firms to work out together the most sensible long-term future for the refining of sugar in the United Kingdom in the interests of all those involved in the industry, from producer to consumer. There may be differences of view on the method of implementation, but I believe that the broad objectives of both sides of the House on this matter are the same.
I have tried this afternoon to set out the facts on the whole complex of issues affecting the future, first of developing countries who are members of the Commonwealth Sugar Agreement and, secondly, of the sugar industry in this country. I have tried to set forward the facts and have tried to offset the misunderstandings which have arisen. The Government's aims are to ensure—as I am confident we can—a future market at an acceptable price for 1·4 million tons of sugar from the Commonwealth developing countries; and to secure the best and most sensible outcome of the discussions that have been going on for many months now on the future pattern of the refining industry in this country.
A satisfactory and sensible outcome is necessary in the interests of the sugar producers, both in the Commonwealth and here at home, in the interests of the refining companies and their workers, and in the interests of the consuming public as well.
5.42 p.m.
Mr. Frederick Lee: Some of the right hon. Gentleman's utterances may have been misleading, but the latter part of his speech made it abundantly clear that there will be large-scale redundancies in the areas of the six refineries of sugar cane, so I believe that this is a serious economic problem.
Although the Government have accepted the Opposition's motion, I am not at all sure that we both mean the same thing. Naturally, those of us who have refineries in our constituencies look, first of all, at the effect upon our own constituencies. I have in my constituency the Sankey Sugar Works at Newton-le-Willows, which refines some 170,000 tons
1306
per annum and employs some 600 people. Those works are on the very edge of the Merseyside development area. It is ironic that it has never had any assistance from development area funds, owing to the fact that it is a mile or so on the wrong side of the dividing line, but it has had to compete with the giant Tate and Lyle which gets all the advantages of development area policy because it is inside the Merseyside development area. While we are not in any way worried about efficiency and believe we have shown how efficient we can be, it seems on the facts given to us by the right hon. Gentleman that there is cause for grave apprenhension and that we are faced with the probability of redundancies.
If I have a criticism of the motion, it is that it over-emphasises the 1·4 million tons. The right hon. Gentleman explained that if the French agree—as he hopes they eventually will—we may get 80 per cent, or so of the 1·4 million tons, in contrast to approximately 2 million tons per annum upon which we base our industry. Therefore, there appears to many of us to be a fearful degree of redundancy involved. Although we take the right hon. Gentleman's word that he thinks the French will be defeated, we have no proof as yet that that will happen. The motion finishes, after referring to the 1·4 million tons of cane when the present Commonwealth Sugar Agreement ends,
"… and to insist upon major accompanying changes in the sugar policies of the E.E.C."
The right hon. Gentleman has told us how he wants to protect the sugar beet industry of this country, but we are not concerned only about that. Unless he interprets those last words in the way in which I interpret them, there will be a continuing expansion in the production of sugar beet in EEC countries other than Britain. Therefore so far as the developing areas of the Commonwealth are concerned, there can be no hope of getting a guarantee even of 1·4 million tons.
I should like to quote from this fine publication which the World Development Movement has sent to us:
"First and foremost in an effort to show that the enlarged Community can (and therefore should) be self-sufficient in sugar, production has expanded astronomically. Overall beet acreages expanded by 5½ per cent, between 1970–71 and 1972–73; in France alone the figure was 13 per cent. Coupled with favourable conditions this led in 1971–72 to a 17 per

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cent. increase in overall Community production leading to a surplus of 4·4 million tons. At the same time the Community's internal requirements are actually falling."
This publication goes on to say:
"Furthermore, the French have declared their intentions of increasing beet production by at least 600,000 tons by 1975."
I hope that the Minister will tell us precisely how he interprets the last few words of this motion. The question is not what happens to the British beet industry. The question is whether we are going to connive at the vast increases in the production of sugar beet which will continue certainly throughout France and probably throughout the whole of the EEC countries. That is the kind of thing to which the House should address itself.
In other days one had some responsibility for the developing countries. I signed agreements with Barbados and Mauritius. Although great blocks of money have been expended in trying to grow secondary foodstuffs in those areas, the success we have achieved has been very limited. The dependence upon sugar is almost 100 per cent. The irony of it all now is that whilst the nations of Western Europe are telling us that they intend to go on expanding the acreage necessary for the production of beet sugar, we are all moaning about the vast increases in the prices of beef and cereals throughout the world.
The developing nations from whom we take the sugar cane cannot possibly begin to solve that problem. But we can. A great deal of the acreage which we are discussing, if put under cereals and if used for the production of beef cattle, could materially affect world prices of those commodities to the advantage of nations like ourselves. Therefore, it seems to me that in the planning of food production this is lunacy at its worst.
As the producers of sugar cane face this crisis—and the crisis is growing as sugar beet production in Western Europe increases—we shall probably be asked to increase aid to those areas instead of taking sugar cane which benefits us, while on the other hand we are also asked to pay increased prices for beef and cereals in order that we can subsidise wealthy French farmers who have got about the strongest lobby within the EEC and who
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intend to continue expanding the production of beet sugar.
It seems to me that from now on the battle will not be confined to the question of the beet sugar production of this nation. We would be failing in our duty if we did not pursue within the EEC the problem of getting a marked reduction in sugar beet production.
I was saying that no matter what happens now, on the facts and figures produced by the Minister we in the refinery areas of Britain now face pretty heavy redundancies. Some of us are in areas which, although not within development areas, depend heavily for labour from the development areas. Indeed, I should have thought that a large percentage of the people who work in the refinery in Newton-le-Willows come from St. Helen's and Widnes which are inside a development area.
I think it is a defeatist attitude to submit to a position in which we accept a vast reduction in the imports of our sugar cane, knowing that that is bound to mean a correspondingly large problem of unemployment in certain areas of Britain, whilst we accept without a struggle the increases in sugar beet production within the nations of the EEC.
I was told that once we were inside the Community we would be able to influence decisions which were taken in the Community. If this is an example of the sort of influence that we are wielding I begin to wonder where it will all finish up. There is a certain amount of honour at stake for Governments of this country. When we negotiated so-called political independence for these nations we all knew that for long they would be dependent economically upon us. When I negotiated associate membership for the Caribbean States I knew that they were bound to depend for economic sustenance on us for a long time. Thank heaven there is no substitute for growing bananas in the EEC. If there were, they would probably try that as well.
Therefore, it is encumbent upon us, whether we hold ministerial office or not, to honour agreements not only in the letter but in the spirit in which they were conducted. I am certain that those nations would never have accepted the constitutions which we created for them

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had they known that we would connive at a vast increase in beet sugar production.
5.53 p.m.
Sir Robin Turton: I am sure that nobody in the House has any doubt about the honourable way in which my right hon. Friend the Minister of Agriculture, Food and Fisheries has spoken for the interests of Commonwealth producers and British beet farmers in the negotiations. However, I regret very much the remarks which he made about the Queensland farmers. If the Commonwealth Sugar Agreement had been allowed to continue, remembering that but for the EEC negotiations it was for an indefinite duration, there is no doubt that the Queensland farmers would have been kept in as members of the Commonwealth.
If one recalls the history of the Commonwealth Sugar Agreement, one will be aware that the Australians have been extremely helpful in reducing their negotiated price quotas to help the poorer developing countries, regarding their membership of the Agreement as a partnership. My right hon. Friend's words this afternoon will be misconstrued in Australia, and I hope very much that in due course he will correct that impression.
Mr. Godber: I very much hope that my words will not be misconstrued. They were not in the slightest degree intended as being hostile to the Australian producers. I was dealing with the position as I saw it and I was reminding the House that the Commonwealth Sugar Agreement was specifically directed towards helping the developing Commonwealth. Australia has known for some years that there will be some degree of anachronism. I do not think they would wish to take advantage of the Commonwealth sugar price. That was the point I was seeking to make. I am supporting them, and I will continue to support them, to the hilt in finding a satisfactory solution on the phasing out. I am in close touch with them.
Sir Robin Turton: That shows the unwisdom of giving way. I had hoped that my right hon. Friend would make
1310
a recantation, whereas he has overemphasised the point.
The main problem is that, unfortunately, with all our honourable intentions we have in recent months been outsmarted by the French beet sugar lobby. The first time this happened was in the course of the negotiations when the present Minister for the Environment complacently agreed to Protocol 17 of the Treaty of Accession, which has been referred to with pride by my right hon. Friend. The Protocol contains, in paragraph 3, the following phrase:
"The price at which the sugar in question is marketed in the United Kingdom "—
that is, the cane sugar price—
"shall be fixed at a level such as to allow the quantities in question effectively to be marketed without prejudicing the marketing of Community sugar."
In other words, we have to adjust the efficient, relatively cheap refined cane sugar so as to ensure that the beet sugar gets the same price. As a result we pay, under Protocol 17—and this has not yet been mentioned in the debate—a levy which would amount, under the arrangements of the EEC, to £11·10 a ton on all sugar. Therefore, but for Protocol 17 the British housewife would be getting the sugar in the shops cheaper by £11·10 per ton.
Mr. Godber: That is not very much.
Sir R. Turton: The Minister says that it is not very much, but it would bring prices down.
This is one of the ways in which the French beet sugar lobby has outsmarted us. My next point concerns the refining margins for cane sugar. The Minister went gallantly to Brussels saying we must have a refining margin of £17 per ton, but he was defeated. He returned with a refining margin of £11·50 per ton and the difference has to be made up by the subvention. This means that whereas we pay £11·10 in levy the British Government reduce that by £5·50 a ton subvention. This is an extremely unhappy state of affairs. It is no good crying about the past. We must look to how we are to present our arguments in the Commission in the future.
I turn now to the essential matter of the cost of production. To produce one ton of white sugar from cane costs £42

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while from beet the cost is £53 per ton. This figure refers to beet in the United Kingdom while for beet in the EEC the cost is £64·49 per ton. That is the differential price on production.
What we are considering today is the most efficient and the cheapest method of production. This is the essential livelihood of many developing countries, involving the whole of their economy. Unfortunately, under present arrangements in the Community there is no proper cane refining margin. This efficient sugar is not being treated favourably and this state of affairs cannot be allowed to continue. It is no good talking as my right hon. Friend does about integration of the industry. That is merely a device by which the losses on the refining of cane are balanced by the gains on the refining of beet. That will help no one.
My right hon. Friend gave us the hope that he intended to attack this problem when we got to the definitive régime in 1975. It seems to me that we must get into this early in order to persuade the European Community to give the £17 per ton margin for which my right hon. Friend argued and on which he was defeated earlier this year.
Before the conclusion of this debate, I hope that we shall be given a little more information about what happens to the cane sugar that is refined by France and what is the refining margin for that cane sugar. This is a quite separate position. The cane sugar refined by France comes from metropolitan France d'outre-mer and is regarded therefore as being in a privileged position so that it does not have to pay any levy. But what is the refining margin on it? The figures which I have been given show that the refining margin on French cane sugar from Departments d'outre-mer amounts to something in the region of £22 a ton. Taking into account the fact that as most of it is processed into lump sugar, it receives the special £5·70 for the lump sugar premium, it is important that the British Government should bring out those facts so that we know exactly where we stand.
If we are to honour the assurances that we gave the developing countries about the 1·4 million tons it is necessary to see that the refining margin for that cane sugar is maintained at a reasonable
1312
level. Therefore my first request to the Government is for an assurance today that so long as Protocol 17 is in existence, which is until the end of February 1975, they will continue the subvention of £5·50 per long ton to the refiners so that cane sugar may continue to be refined.
My second request is that after that when we get into the new sugar régime in the Community, my right hon. Friend will battle to secure that cane sugar should not be put at a disadvantage against the French beet sugar lobby which at present is winning all the time.
During the recess, I spent some time attending the Commonwealth Parliamentary Conference here at Westminster. Delegates came from the whole of the Commonwealth saying, "Sugar is our life blood. We look to the British Government and we trust them to see that their undertakings are carried out." Probably the most touching plea came at the end of the one day's debate from the delegate from Western Samoa. He explained that sugar was one of his country's primary products. He said:
"From our point of view, on the other side of the world, this is a strange mésalliance. However, we know that it is in Britain's interests to foster this new union, and it is up to us, who are all pragmatists, to support Britain in her entry, knowing full well that she will not desert us."
We must not desert our sugar producing partners in the Commonwealth. I ask the Government to negotiate, determined to defeat the French sugar beet lobby in the months to come.
6.5 p.m.
Mr. David Steel: I agree wholeheartedly with the closing sentences of the right hon. Member for Thirsk and Malton (Sir Robin Turton), and I believe that it is appropriate that the Government should have decided not to resist the terms of the motion tabled by the Opposition because it is right and proper and, I hope, helpful for this House to be unanimous on this matter in advance of the coming negotiations.
I want to take issue, however, with the right hon. Member for Stepney (Mr. Shore). I consider this debate to be very much a secondhand one. The real debate on these issues is taking place in Europe

1313
and not here. The right hon. Gentleman is happy to quote M. Chirac and to ask the Minister what he said to him. But that is to acknowledge that the real discussion is being held in the Council of Ministers with the subsidiary discussion in the European Parliament.
The gravest anxiety of my right hon. and hon. Friends who, with one exception, supported Britain's entry into the EEC about the pattern since we went in is that not nearly enough priority is placed in the Community upon the need to develop democratic institutions more effectively to debate these issues. That was the point of my earlier question to the Chancellor of the Duchy of Lancaster. It is not good enough to discuss EEC affairs in little ad hoc debates or in five-minute statements from the Chancellor of the Duchy about a miscellaneous shopping list of reports. It does not do the subject credit, and I hope that the Government will take the initiative in elevating in importance the need to develop democratic discussions in the EEC so that we may have proper debates where it matters rather than in this House in this secondhand fashion.
During Business Questions last Thursday it was interesting to hear the Leader of the Opposition asking for assurances about a debate before Europe's regional policy consolidated itself. On the very same day the European Parliament was debating the identical subject without the benefit of representation from the British Labour Party. That attitude does not make sense if we are trying to influence the future policy of the Community.
I pay credit to the hon. Member for Saffron Walden (Mr. Kirk), who as leader of the United Kingdom delegation in the European Parliament is one of the few people in British political life putting forward concrete suggestions to try to get to grips with the Council of Ministers and to improve the ability of the European Parliament to check what the Council is up to.
That is not to say, however, that this is not an important debate. The Liberal Party has always taken the view that the EEC is not what the pessimists have held it up to be, a rich man's club only interested in the welfare of its member States and uninterested in the affairs of
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the world. We have tended to take the optimist's view that its role should be to use its economic power and potential to assist the development of less fortunate parts of the world. That is a crucial and important principle by which we have always stood in our party conference resolutions and in our support for Britain's joining the Common Market. Therefore when we discuss the specific topic of the Community's attitude to sugar it is very much a test case. That is why it is so important.
The continued flow of aid which the EEC has given to the under-developed countries is important. But far more important could be the influence that the Community has to keep up the price and quantity levels of imports from primary producing countries. That should be a prime objective in the policy of the EEC. I welcome the assurance that the Minister gave at the end of his speech about accepting the motion tonight—that it is not part of the Government's intention to make any further cut-back in the growth of sugar beet in this country.
However, we must make it clear that, in this country in recent years, we have never had any consumer interest in growing sugar beet. It has been an agricultural interest and it is in the interests of that industry that a certain quantity should be grown partly because of its value as a rotation crop. That has not been the attitude of some of our EEC partners. Where we must try to get to grips with them is to convince them that it is wrong for them to regard the production of sugar beet in the conditions of the world today as a means of making money and to act as a net exporter of the product, in view of putting the livelihood of so many territories, Commonwealth and non-Commonwealth, at risk. In this case, the interests of our sugar-refining workers and of vital employment on the Clyde, Merseyside and the South-East coincide with our proper interest for the welfare of the under-developed world.
It is important that we remember the precise words used by the then Chancellor of the Duchy of Lancaster during negotiations for entry to the EEC when he told the House that the Six, as they then were, had accepted "a specific and moral commitment". These are strong words. Much fun has been made of the phrase

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used in the French translation. I remember the right hon. Member for Stepney (Mr. Shore) who is, as usual, paying no attention now, making much fun of it. But in terms of the commitment that we were all given to understand and which, more important, the sugar producers accepted in discussions, that agreement must be held to now. That is why the backing of the House is so important.
The right hon. Member for Stepney suggested that the amendment that the Labour Party moved during the European Communities Bill was the same as this motion. It was nothing of the kind. It was an amendment that we as a party found totally unacceptable. It sought to inflict on the Communities the Commonwealth Sugar Agreement as it stood in 1971. While we may continue to disagree about that, what I objected to about his statement was that it was the fault of the Liberal Party because the amendment was defeated by only eight votes. I am well aware that in the present state of political nervousness, an outbreak of the plague would be likely to be blamed on the Liberal Party. He must not accept these glib research documents from Transport House without checking the arithmetic. If he looks at the Division list in HANSARD, he will find that if every hon. Member of the Liberal Party had voted against the amendment it would still have been defeated. Let us have no more of that canard in the debate. The critical point for the Community in this Sugar Agreement is that it is a test case for the whole of the Community's attitude towards the whole of the under-developed world. It is in that spirit that our party wants to support the Government in their negotiations.
6.14 p.m.
Sir Douglas Dodds-Parker: I entirely support the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) in his point at the end to which I shall refer again. I am glad that, as he said, the whole of the House can support the motion, because it is important at this time that we should do so.
I am glad that the right hon. Member for Stepney (Mr. Shore) has shown some resistance to the usual temptations to use a constructive debate for merely bashing the Community. Spending a certain
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amount of time as I do in Europe, I find it tragic that that great party opposite which did so much in the 25 years after the war to help build up Europe, should be so often narking against anything to do with European co-operation.
I support my right hon. Friend the Minister of Agriculture, who made an excellent speech. He is in the middle of a difficult negotiation. He said there is nothing in the motion which the Government is not trying to achieve by negotiation. I share his confidence that he will be able to do so. I believe that this is a subject of the greatest importance, to both producers and consumers, to the production of beet and cane from developing countries and to employment, both overseas and in this country. It can be resolved without using it as yet another way of attacking the Community. That does not mean, of course, that there is not plenty of room for negotiation within the Community, and that is what my right hon. Friend is trying to do.
In the years after the war, I had the honour of being Chairman of the then British Empire Producers' Organisation. In 1948, my Australian deputy started talking about an agreement between the four main sugar-producing areas—Australia, South Africa, Mauritius and the West Indies. Having roughed out the heads of agreement—it took quite a lot of massaging to get that lot to agree, I can assure the House—we took the proposal to two Members of the then Government, who I am glad are still with us—the right hon. Members for Leyton (Mr. Gordon Walker) and Middlesbrough East (Mr. Bottomley) who then, with other departments, turned it into the Commonwealth Sugar Agreement in 1951. We thought then that it might last five, possibly 10, years. None of us believed that, nearly a quarter of a century later, it would be a standard that had stood the test of time.
At that time, I had had the privilege of representing for 15 years an agricultural area with a small but important beet crop. I know and respect the beet sugar argument very well, from both the agricultural and the economic point of view. Sugar has therefore played an important part in my life. I am delighted that last week I had the privilege of being invited to become the rapporteur for sugar at the European Parliament. I took this as a

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tribute not to myself but to the fact that my country—I regret the absence of those hon. Members opposite who might have been there to help—was a member of the development committee of the Parliament. We had our first meeting yesterday in Brussels in committee.
In the circumstances, it would be wrong for me to anticipate any recommendations of the report that I might be presenting until I have further discussed it and agreed its contents with the other members of the committee. But I can say that there is great good will. I am sometimes astonished at the implication which is given in this House, particularly from the Front Bench opposite, that there are a lot of continentals trying to do this country down. I can assure those hon. Members and some of my hon. Friends below the Gangway that the atmosphere on this issue was one of great good will between parliamentarians and the representatives of the Commission who were present.
I hope that I will not embarrass him by mentioning his name, but I think that our discussion was very much helped by the presence of the noble Lord, Lord Campbell. It pleased me in particular because he was one of the West Indies representatives in the late 1940s when we first achieved the Commonwealth Sugar Agreement. He made an excellent and well-reasoned exposition of the Commonwealth case and everyone was delighted that he had troubled to come to Brussels to put it before the committee. One point that pleased members of the development committee was Lord Campbell's personal record with regard to improvements in the social and economic conditions in the cane sugar-producing areas.
I am therefore confident that, with general good will, we can reach agreement between the Council of Ministers, which of course takes the final decision, and the Commission and the beet and cane producers, including the refining interests, but it will take some time, of course.
I was very much encouraged by the details which my right hon. Friend gave today, particularly about the 335,000 tons of Australian sugar. I regret that it will not be coming from Australia any more but, from talking to the Australians I know, they realise that, as a wealthy developed country, they cannot expect to
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be given the benefits that are given to the developing countries.
In the meantime, if those hon. Members who have not done so would study Memorandum No. 73/1177 of 12th July from the Commission, they would see clearly the lines on which the Commission seeks to resolve this complicated problem. I will say no more than that, but I am sure that my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) has studied it with the care that he always gives to problems affecting Commonwealth production. It gives an excellent analysis of the problem and puts forward certain suggestions which are receiving widespread support.
Sir Robin Turton: Does it give the actual cane refining margin?
Sir D. Dodds-Parker: Not in detail at the moment, no, but these are the areas—[Laughter.] That is a typical instance, with respect, of how the good faith of the Commission is called into question in an intervention. I am sorry that my right hon. Friend should have done that, because it is not characteristic of his usual constructive outlook. But I can assure him that every effort is being made by those concerned, including my right hon. Friend, to work on that sort of detail.
Mr. John Roper: Does the hon. Gentleman not agree that it is made clear in paragraphs 24 and 25 of the memorandum that the Commission would accept that there would be a higher refining margin for cane sugar and particularly for that cane sugar refined in port refineries?
Sir D. Dodds-Parker: Sufficient detail is given to show the general attitude of the Commission to this problem. I am in a difficult position, because I cannot anticipate anything that I may say in a report. But I take the point and I hope that the hon. Gentleman will find, that, when this is finally resolved, it will come out satisfactorily.
Beyond this, I believe that, just as the Commonwealth Sugar Agreement of 1951 proved the forerunner of the International Sugar Agreement of the late 1950s, so we have a chance now to produce a European sugar agreement which could set standards for the next international sugar agreement which obviously must come. At present, prices are high. They

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were high in the late 1940s, in the time of the Paley Report. We are going through such a process today, but the natural resilience of the free enterprise system all over the world overcame that shortage and I believe that it will do the same today. I believe that we will see a fall in price; when that happens, there will be more inclination among certain countries to reach an international agreement.
The hon. Member for Roxburgh, Selkirk and Peebles said that this matter was a test of the Community's good will towards the developing countries. There are eight items of primary production in which the Community wants to give stable export earnings, of which sugar is the first. If we all work together and achieve a satisfactory outcome for sugar in the terms set out in what might be called this commodity agreement, we can then move on, possibly not on exactly the same lines, to the seven other commodities listed. It is to this "trade rather than aid" approach that the developing countries are looking forward.
I hope that, with our colleagues in the Community, we can work towards a decision on these lines which will benefit these countries as well as giving us a stable and reasonable price. Unfortunately, these negotiations, like so many others, are not between like and like but are basically between the economic and agricultural benefits of beet and the political and moral side of importing cane. If this country, which has been accepting the political and moral responsibility of importing about 65 per cent, of its sugar in the form of cane and restricting its domestic beet production, asked the Community to import about 15 per cent, of cane sugar and take the rest from beet production, it would give a good lead to the rest of the world and benefit all producers and consumers as well. I wish my right hon. Friend the best of fortune in negotiating an agreement on those lines.
6.25 p.m.
Mr. Frank Marsden: It is inevitable that a debate of this kind should be filled with statistics and figures. But for me the debate is about jobs; not jobs for the boys, but the livelihood of many people on Mersey-side and elsewhere.
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On Merseyside at present we have 49,000 people who are unemployed, around the great refinery of Tate and Lyle. That is why the anger is slowly but surely building up. I am sorry that the Minister has left the Chamber. I have heard him described as an honourable man. I am sure that he is. But I was a little angry on 26th September when a delegation met the Minister and asked a specific question about reorganisation. I think that I can say, with modesty, that I have a fairly good memory. On that occasion the delegation was told, concerning the reorganisation, that the firms were doing a minuet and hoped to have it finalised by the end of the year. There was no mention of the meeting on 8th August of heads of the sugar refining industry. The Minister would have known of that meeting. Why did the Minister not tell the Members of Parliament on that delegation that such a meeting had taken place and that an agreement had been signed? Why did he remain silent? The Minister need not have told us, but I thought that he would have done and should have done. Perhaps that was a sin of omission.
Like many hon. Members on both sides of the House, I feel that we are simply not in the picture about many issues. There have been rumours and counter-rumours, and sometimes even lies, over the many issues involved. We have one story from the Minister but a different story from Tate and Lyle. I warn the workers' action committees not to be so involved with management at a time when it may be necessary to fight management. The workers are being used by Tate and Lyle to put pressure on the Minister so that the company can cut back and do precisely what is wishes. Tate and Lyle is now saying, a little late in the day, that redundancies are inevitable. The seeds of all this were sown in the past. The sugar workers of Liverpool think that the Government and Tate and Lyle are selling them down the river. Tate and Lyle will do what is in the best interests of its shareholders. As a good company, why should it not do that? But such action may not be in the best interests of the working people of Liverpool.
It has already been said that 1·4 million tons of imported cane sugar means redundancies. The workers of the cane sugar refining industry in Liverpool are in this desperate situation

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simply because the Tory Party decided, without their consent, to throw in Britain's lot with Europe. In the early days when the Labour Party was in power, the workers were being told that entry into the EEC would mean that the industry would be given boundless opportunity, but such has not been the case. The result has been the opposite. Our entry into Europe has meant that the fate of workers in Liverpool is in the balance, whether that be through reorganisation of the industry, rationalisation, or cut-backs in production. The workers of Liverpool fear for their jobs. They fear for the closure of the great Liverpool refinery. That is how far their fears go.
I should like to remind the House of what would be the result of the closure of such a refinery. Tate and Lyle is situated about one mile from the banks of the Mersey. There would be a permanent loss of about 4,000 jobs. This total of 4,000 is made up of over 2,000 jobs in the refinery itself and 2,000 divided among engineering, transport, shipping, technology and commerce and the work that takes place on the periphery of all great refineries.
The refinery uses 100,000 tons of coal at a cost of £750,000. The National Coal Board would not be pleased to lose such a customer. It uses 250,000 gallons of gas oil and 35 million cubic feet of town gas. The Mersey Docks and Harbour Board, which itself has financial worries, is sick at the thought of one day losing a customer that pays dock dues to the tune of £841,000 per annum.
On Merseyside—I can use this expression without offence—we run like hell to stand still. My constituency would not recover from such a blow, if it should happen that this great refinery closed. This is a real fear. It could easily happen in 1975. We cannot allow it to happen. In any home in my constituency one will find that if no member of the family works at Tate and Lyle's someone once did work there. They depend on Tate and Lyle a great deal for their standard of life.
It would take Merseyside a very long time to recover from such a blow. The workers have no wish to indulge in an aggressive public attack on the Government, but they feel that more pressure
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must be applied in Brussels. They feel that not enough pressure is being applied in Brussels and they want much more on the question of sugar. They are demanding more. The Government must find a fair and acceptable solution to this problem.
We have had some statistics in the debate and I hope that hon. Members will not mind a few statistics from me. The best cane sugar could leave the factory gates at £5.60 per ton cheaper than the best beet sugar, but for the EEC levy. The cane sugar refining industry is being strangled through no fault of its own. Surely the Tory Party must consider that a crime when the cane sugar refining industry fulfils all the ideals of true blue capitalism insofar as it makes a profit and is efficient.
There is also talk and rumour that m the future we in this country will eventually move to beet refining exclusively. The consequences of such action would be dearer sugar. I am informed by the Tate and Lyle workers action committee that it has discovered that it would cost £13 per ton more to bring best beet sugar from France than to fetch cane sugar from Mauritius. We cannot obtain from beet sugar the various syrups that are obtainable from cane. We would have no golden syrup or treacle. Many of our special brewing sugars would be lost. On a lighter note, we could not produce brown ale.
Exclusively beet sugar refining would bring wholesale redundancies in British cane refineries. The Liverpool social case is massive. When we saw the Minister on 26th September we asked him a question. It may have been ambiguous, but this was the way it was phrased. We asked whether he envisaged any subsidies, in any form whatsoever, to be used by Her Majesty's Government to keep the cane refinery going on Merseyside in the interests of providing work in the area. The Minister could have replied in 20 different ways, but he said that he thought that the present redundancy payments scheme was quite adequate. That reply is not good enough for the workers of Liverpool. More pressure must be applied in Brussels and the Government must find a fair and acceptable solution. The workers of Tate and Lyle and of Manbre and Garton appeal to the Government.
6.34 p.m.
Mr. Tim Fortescue: It is very pleasant to make my first speech in this Parliament and my maiden speech from the Government side of the House on an occasion when I am able to congratulate the Government on their great wisdom in accepting this impeccable motion from the Opposition, and to know that the very wise body of men in the Government Whip's Office have not lost their cunning.
There is only one matter which I should like to put to my right hon. Friend the Minister of Agriculture, Fisheries and Food before he goes to Brussels to argue the case with the unanimous support of the House. We are urging him to do what I am sure he would have done in any case. I remind him that cane sugar is a far more economic way of growing sugar than the growing of the sugar beet. Cane sugar produces up to 50 per cent, more than beet sugar from each acre of land. It is not in the interests of the world, with the present world food shortage which will continue as long as the standard of living continues to rise, to produce beet sugar rather than cane sugar. I hope that in any discussions and negotiations which my right hon. Friend has he will bear that basic fact in mind, quite apart from the accusations of EEC horse trading.
The proposed reorganisation of the refining and processing industry has been referred to by many hon. Members but it has not yet been examined under a strong light. The result of the campaign which has been waged by the various interests in the sugar industry during the last few days, which seems to have continued for a long time, is that many people have learnt with a considerable degree of surprise that not only does the British Sugar Corporation have a monopoly of the processing of beet sugar but the Government have a 36 per cent, interest in the British Sugar Corporation.
That is a controlling interest, because none of the other shareholders holds any significant proportion of the shares. The Government appoints the chairman and either two or three non-executive directors. The corporation is a Government-controlled body. I ask myself, and I should ask my right hon. Friend if he were here, how it is that after three years
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of Conservative Government we have a monopoly position in the processing of beet sugar and a Government interest in a capacity which not even the Opposition Front Bench would call one of the commanding heights of the economy. [HON. MEMBERS: "Oh!"] I think not. Nevertheless, that position is allowed to continue. I was rather alarmed recently by an answer which my right hon. Friend—I am delighted to see that he has re-entered the Chamber—gave to my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton). He was asked whether he would countenance a monopoly position for the whole of the British refining and beet sugar processing industry. My right hon. Friend replied, as far as I can remember, that there was a near-monopoly position. He seemed to imply that that was not a matter which he regretted very much. He seemed to be prepared to accept a greater degree of monopoly in this sphere.
I am opposed to monopolies in any shape or form. I know that there are Opposition hon. Members who accept monopolies provided that they are good nationalised industries. They accept monopolies provided that they are monopolies of labour and not of capital or market. However, many Government Members and, I believe, many Opposition Members do not like monopolies and their implications. There will shortly be introduced strict anti-monopoly legislation. It seems strange that we should continue with a position in which the British Sugar Corporation has a monopoly of the processing of beet sugar.
We have heard today that the industry will be reorganised. Can we have an assurance that the fact that the Government have a large and a controlling interest in the processing of beet sugar will be examined carefully?
Many interests have been mentioned as being significant in the future of the sugar industry, including the interest of the growers in the Caribbean and in the developing Commonwealth. The interest of the housewife and the profits of Tate and Lyle have been mentioned as being much in need of protection. But one group of people who are particularly affected by the reorganisation of the sugar industry has not been mentioned. I must declare an interest, as I have recently been appointed the Secretary-General of

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a new body called the Food and Drink Industry Council. The function of the council is to speak on behalf of the trade associations in the food and drink industry. I hope that I shall be able to represent them in Whitehall and in Brussels. Of course, I shall not be able to represent them in the House because here I represent my constituents and no one else.
The large buyers of sugar in Britain are mainly the big food companies, although the drug companies are buying more and more. The interests of the big food companies who buy refined sugar in large quantities must be seen to be protected when the future of the refining industry is discussed. If there is to be a monopoly of refining and processing, and if one body is to have complete control of that activity, it is clear that those who buy large quantities of sugar will be in a much weaker position vis-à-vis the suppliers of sugar than at present. I should not like it to be thought that it is only the producers and processers who have an interest. There must also be considered the users of sugar.
The hon. Member for Liverpool, Scotland (Mr. Marsden) dealt eloquently with the question of possible redundancies in Liverpool and Merseyside. I hope that in the reorganisation of the sugar refining and processing industry to which my right hon. Friend has referred, which he has implied is now very much in the hands of the three companies concerned, it will be possible to take into account, when the companies' proposals are considered, that of the three large centres of sugar refining two are in areas of high unemployment whereas the other centre is in the South-East of England where the employment situation is much better.
If redundancies are inevitable, as my right hon. Friend seems to have indicated they are, I hope that it will be possible for him and the companies concerned to take into account the social factor.
Sir Elwyn Jones: I have the privilege of representing the constituency which includes the Tate and Lyle refinery in Silvertown. Is the hon. Gentleman aware that that is an area where a large bulk of the industry has gone away? It is an area where there are many empty factory spaces and where worry about unemployment is serious.
Mr. Fortescue: I am well aware that the right hon. and learned Gentleman is as conscientious in protecting the interests of his constituents as any hon. Member. What he has said is undoubtedly true. I am sure that he would not have said it if it were not true. There is, however, in the South East of England a far healthier employment situation than in Merseyside or on the Clyde. If there is to be any choice between where the sugar refining capacity should be closed. I hope that the social aspects of the unemployment situation on the two rivers of the North-West will be considered perhaps in preference to the river in the South-East.
6.43 p.m.
Dr. J. Dickson Mabon: I do not know for how long the hon. Member for Liverpool, Garston (Mr. Fortescue) has served in the Whips' Office. He has described his speech as his maiden speech. It was Sir Winston Churchill who once said of a similar kind of speech that it was not a maiden speech but a hussy of a speech.
Nobody can be so naive as to believe what the hon. Gentleman has said about the monopoly of the British Sugar Corporation. Surely, after all these years in the Whips' Office, and in view of the appointment which he has told the House he has undertaken, he knows better. Since 1956 it has been on the statute book that the BSC had a monopoly. In addition, we have known that that was confirmed when Britain entered the EEC on 1st January 1973. It has been reaffirmed by the fact that the Government have given to the BSC a continuing monopoly. There is nothing new or horrific about that.
Mr. Fortescue: The hon. Gentleman must not misunderstand me. I was not talking about Members of this House. This information has surprised many people in my constituency and many people throughout the country. I was not talking about hon. Members.
Dr. Dickson Mabon: My constituents and certainly my sugar workers are under no misunderstanding, and have not been for a long time, about the nature of the British Sugar Corporation. We have had experience of this situation with the beet factory in Cupar. The Minister of State for Agriculture, Fisheries and Food

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knows about that too. That is a peculiarly painful political point for him to discuss and I shall not press it now.
Many people are aware of this, but it is only when pamphlets such as the Aims of Industry Economic Study No. 1 on Sugar are published that for the various companies' own reasons they go over the history of sugar and begin to argue how they should take part in the present organisation of the industry and what should happen to the British Sugar Corporation. I am in favour of open discussion about this and I only regret that there has been closed discussion so far. I agree that this debate did not start out as a discussion on this particular important matter but rather on the argument about the 1·4 million tons. I am glad that the Minister has accepted our motion on behalf of the Government. Had there been any resistance on his part we should certainly have taken the motion to a Division.
I remind the Minister that he is placing his head right on the political block. He must get agreement on the terms in the near future. Nobody in the industry will talk about reorganisation or anything else unless the 1·4 million tons is written into an absolute guarantee. Until then we are all talking to the wind. Until then we can never be sure of the plans for the future.
My right hon. Friend the Member for Stepney (Mr. Shore) was right to mention the January decision this year on the refining margins. When I first came to the House in 1955 the right hon. Member for Thirsk and Malton (Sir Robin Turton) was Minister of Health. I disagreed with him then and I have continued consistently so to do for 18 years on every major issue, including this one about the EEC. Tonight, however, his speech was admirable. He asked two questions which I hope the Minister for Overseas Development—although they are not directly his departmental responsibility—will reply. I hope that he will not dodge them or pass them back to the Minister of Agriculture because they are the kernel of the debate. If we get the 1·4 million tons it follows that we must get guarantees on the refining margins. I cannot improve on the way in which the right hon. Member for Thirsk and Malton put his questions and I should like a reply to them tonight.
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The hon. Member for Cheltenham (Sir D. Dodds-Parker) spoke about the work done by his Committee in the European Parliament. I hope that the refining margins will be stated definitely in his report not in words but in figures. The right hon. Member for Thirsk and Malton asked for an assurance from the Minister that the £5·50 would continue after 30th June 1974. I agree with that or, may I emphasise, with whatever figure is required to produce a fair, competitive, remunerative margin for those who are refining cane sugar. I am anxious that that should be done because it is the burden of the misunderstanding between Tate and Lyle and the Minister of Agriculture.
About 10 days ago we witnessed the sudden outbreak in the newspapers of the expression of concern by Tate and Lyle about the position of its workers—not just at one refinery, but all workers, 6,000 men and women—and the many families represented in that number. My hon. Friend the Member for Liverpool, Scotland (Mr. Marsden) touched on what has been happening in the last 10 days. There has been growing in the industry a tremendous sense of insecurity. Many men and women genuinely believe that their jobs are almost immediately under threat. It is unfortunate that this misunderstanding should have arisen and I should like it to be cleared up as quickly as possible.
It was perhaps inevitable that these discussions with the three companies should have been in private, but I should like them now to be made more in public. I realise that future negotiations cannot be conducted completely in public but I should like to be made public what has happened so far. Cannot the memorandum of 8th August be published? It is a short document containing the heads of agreement on which future discussions will proceed.
The men who work in the industry are just as entitled to know what is likely to be the outcome of the discussion as are the management and the shareholders. I am the last to begrudge shareholders their rights and the first to support the rights of those who have served many long years in the industry. Many workers are men in their late forties and early fifties. For them redundancy is not just redundancy: it is the end of the employment road for many of those working in East London, Liverpool and Greenock.

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deal more about these negotiations although nothing has been officially published. An example of the kind of irritation we could well do without was provided by the hon. Member for Mid-Bedfordshire (Mr. Hastings). He interrupted the Minister when he was reading out the Tate & Lyle advertisement and tried to imply that the management had nothing to do with it. It is beyond belief that an advertisement of that character could have been drawn up by the workers' action committee without consultation with the management. It deals with far too complex a matter for it to have been written by an action committee. And what about financial support? This kind of irritation should cease. We should try to get all managements and all workers' committees to work together to reach a solution for the future of the whole industry.
I refer deliberately to "the whole industry". We cannot pretend that we have a cane sugar refining industry completely independent of beet. If beet sugar were suddenly cut off there would be redundancy this winter in some port refineries. If the Minister had not made his announcement about the 150,000 tons of beet that would have been so. It is untrue to say that the cane refining industry either as it is now or as reformed will not be dependent to some extent on beet. That being so, the question arises whether we are to have a mixed beet/cane industry and whether the monopoly of the British Sugar Corporation in beet is to continue, and we may as well discuss this in public. What is the House of Commons for but for discussion of that kind? Why should it be left to managements and Ministers privately to resolve these matters? I ask for the publication of the memorandum of 8th August so that we can see what are the heads of agreement. I understand that the memorandum says that the parties will genuinely see whether one industry for cane and beet can be formed.
That is not a monopoly. A British company operating in a market of 200 million people is not in a monopoly position. It would be so if it were the sole company for the nine countries, but it is clearly not a monopoly in that context. I do not accept that the strictures
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relevant to a national economy are relevant to an economy as large as that represented by the EEC. Let us dismiss that ideological point and go on to the question whether it is better to have one company or two in the United Kingdom dealing with cane and beet.
A company that dealt overwhelmingly with cane and only partly with beet, as would Tate and Lyle in its new proposals, would have to come to the Government time and again to argue the case for refining margins for cane. If Tate and Lyle acquired some refineries from the British Sugar Corporation it would still be an overwhelmingly cane-based company which would be obliged from time to time to come to the Government on the question of refining margins. I agree that if there were only one company, it would be in a similar position but not so open to the financial vagaries of the market and to the vagaries of the market in Commonwealth sugar. There is no guarantee that those who produce the sugar will necessarily always sell it to us even if we get the 1·4 million tons minimum.
Let us, therefore, have this discussion about whether there should be one company or two for the future. But in the meantime the Government could do a lot of good by discussing this matter with the workers' representatives, with those who made up a committee yesterday—three people from each of the six refineries drawn not just from certain parts of the refinery but from all including the staff, elected by the members, one officer from each national union, one representative of the dockers from Clydeside and Merseyside, the Londoners already having theirs. They should be received by the Minister and a frank discussion should take place on what is proposed for the industry. That would do more to assuage the present difficulties and go a long way to meeting people's genuine concern about their future.
My right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones) has suggested to the Minister of Agriculture that he should receive that deputation on 22nd November. I should like him to assent to that tonight, or to agree to meet us shortly after or before that date as is convenient to him. In

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the Opposition's view, that meeting is vital for those demonstrating here today and last week, so that the workers may know what is happening.
It seems to me, from what I understand of matters as they have gone so far, to be quite possible for a plan to be devised—particularly under the so-called heads of agreement for a one-company solution—whereby redundancy could be dealt with by natural wastage. It would mean arguing vigorously for a longer period for the Australian phase-out. Why should it be three years? Why not five years? Why should we argue about three years when we know we may only get two years? We should ask for five or even seven years. On the different stages of agreement the dates are very close within the next two years and it is possible that the situation could change and therefore the actual phasing-out should be longer.
It is in everyone's interests in the United Kingdom that we look after the welfare of the refining industry as a whole, not separate parts, and take a better organised industry into the Community without any preventable social anguish.
6.57 p.m.
Sir George Sinclair: I am delighted at the evidence we have had in the House today of all-party support for the Minister in the tough task he is facing in Europe.
The strong thrust of the sugar beet industry in this country and elsewhere in Europe is now a basic factor in European farming. We in this country have to come to terms with it, for it is likely to continue. At recent prices, sugar beet has very few economic rivals as a break crop for the areas, especially East Anglia, which grow cereals on a large scale. The recent additional investment of £11 million in the beet sugar refining capacity of this country indicates the expansion of production, though this has been, and still is, controlled to keep a balance between cane and beet sugar.
But elsewhere in Europe things are quite different. The expansion of sugar beet is faster, has been uncontrolled, and has had the full support of each individual Government and of the EEC.
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It is against that difficult background that we are today demanding that our Government shall secure agreement in Europe to our continuing to honour our undertaking to developing countries of the Commonwealth to take into our market 1·4 million tons of their cane sugar. We are calling upon the Government to hold to their course in the face of two powerful and legitimate interests—the farming lobbies of this country and of Europe. We realise that, in this, the Minister has a tough task, but he has behind him the all-party support of this House. That is clear from the debate as well as from the motions before the House including Early Day Motion No. 437, which I have sponsored jointly with my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn), who was unfortunately detained by other duties in this House when the debate opened.
I hope that our fellow members of the EEC will accept that the undertaking Her Majesty's Government gave to commonwealth developing countries and to this House over sugar was a basic element in our support for Britain's application to join the EEC. I hope that the Council of Ministers of the EEC will soon confirm the proposal of the commission that Britain's undertaking shall be accepted and that the implication also shall be accepted about the refining margins we shall need to provide for cane sugar refining in this country.
To ensure a market in this county for 1·4 million tons of cane sugar is long as the developing countries need our markets means that we must retain in the United Kingdom a capacity to refine that sugar. Whatever rearrangement of our refining capacity is agreed upon, I hope that it will ensure that the refining of cane sugar is not allowed to become mainly dependent on refineries tied entirely to the interest of the beet sugar industry.
When the Minister is talking to his colleagues in Europe I hope that he will make it clear that this obligation to developing countries is a basic one which we can by no means sidestep by some substitute, for example, by providing development aid or technical assistance. Any sudden change in the market for cane sugar in this country would completely upset the economy and social structure

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of many small developing countries that are largely dependent on cane sugar, and if we, and if Europe, which is giving some signs of looking outward to the progress and prosperity of the developing countries, genuinely wish to help, we must provide this outlet for their trade. Trade is far better than aid as an economic relationship between developed and developing countries. In addition, Europe should I believe seek to help them with research to discover better ways of making use both of the products and of the waste of their cane sugar industry and of the land which at the moment is taken up with the industry. This research should aim to help them to meet the changing needs of world markets. But that help must be a supplement; for them it can be no substitute for having a market in this country with a decent return for their producers.
7.4 p.m.
Mr. Ian Mikardo: I am grateful to the hon. Member for Dorking (Sir G. Sinclair) for his speech, not only because he said much that was of value but also because he enables me to shorten my own speech by having made one point better than I could have made it myself.
My right hon. Friend the Member for Stepney (Mr. Shore) covered the ground of the problem we are considering so well and comprehensively that there is little one needs to add to it, but I am bound to make an observation on part of the Minister's speech.
In many respects it was one of the best speeches I have ever heard the right hon. Gentleman make, but I also thought it marred by the outburst of indignation—whether spontaneous or synthetic, I have no way of knowing—about an advertisement which appeared in some newspapers yesterday saying that the price of our sugar will go up I do not know how many times over the next few years.
I did not see the advertisement. I had not heard of it until the right hon. Gentleman mentioned it. I do not know what is in it. I have no means of knowing whether the forecast made in it is correct. But one thing I know with absolute certainty is that if there is any body of people who have no right to challenge other people's forecasts in future trends in
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prices it is the members of Her Majesty's present Government.
In the prophesying of future price movements, right hon. Members on the Government side have carried all the reliability, credibility and authority of the prophet of Baal. They have been wrong over and over again. Any pretensions such as those expressed today by the right hon. Gentleman—unlike the author of that advertisement—to being able to forecast the future trends of prices of sugar or anything else with any degree of accuracy can be blown up, to coin a phrase, "at a stroke".
I did not think that the Minister came best out of that part of the argument. He revealed this in a passage at the end of his speech which he read carefully and in verbatim style—I do not say that critically, because it was right that he should be careful—in which he made clear that although he has some grounds for being confident about maintaining the undertaking given in respect of the intermediate position, for the longer term, beyond 1975, he is doing no more than flying on a wing and a prayer. If hon. Members will examine that passage tomorrow, they will see how careful the right hon. Gentleman was not to say that he had any certainty at all about the situation after 1975.
The pressures which have been put on the Minister up to now will increase in direct proportion to the enormous escalation of beet sugar production on the Continent. My right hon. Friend the Member for Stepney gave the figures of the increase. The hon. Member for Dorking called it an "uncontrolled escalation". The right hon. Member for Thirsk and Malton (Sir Robin Turton), in a most impressive speech, talked of it as being evidence of the way in which we have always been—and look like always being—out-smarted by the French sugar beet lobby. With every extra 100,000 tons of beet produced in France—and a ¼ million and ½ million, and beyond that—the ability of the right hon. Gentleman to carry the banner which he is now striving valiantly to carry will be lessened all the time, although I do not doubt his good intentions.
Unlike the right hon. Gentleman, I do not often make prophecies. I am always conscious of the dictum of George Eliot

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that prophecy is the most gratuitous form of error. But I have a feeling in my bones that within the next few years we shall have in the European Economic Community a sugar mountain to parallel the butter mountain which we have had up to now, and it will not surprise me if, in a few years' time, we find the top lopped off that mountain, in the way that the top was lopped off the butter mountain, by a sale to the Soviet Union at a price less than half that which our constituents have to pay.
My constituents in Poplar pay their taxes to subsidise the sales of butter—as, I believe, they will subsidise the sale of sugar in a few years' time—so that Soviet housewives may buy it at less than half the price their own wives have to pay. That is good! That is brilliant! One has to have a Government of businessmen to organise something like that. Ordinary common-or-garden people would never be clever enough for that.
I want to make one other point in order to reinforce a remark made by my right hon. Friend the Member for Stepney. I do not think that we should take a defeatist attitude in this matter. I think that the right hon. Gentleman has given up a part of the fight even before it starts. He talks about his 1·4 million tons, which, as we know, can be 85 per cent, of 1·4, which is a little less than 1·2. He is prepared to take it at that and forget all the rest, knowing perfectly well that that involves a large-scale loss of employment in three sensitive areas. It is wrong to be defeatist and take that line, and not try to do something about it.
The right hon. Gentleman was not quite as defeatist as the hon. Member for Liverpool, Garston (Mr. Fortescue), who thought that large-scale redundancy would not be so bad as long as it was in another parish and not his own. He did not mind a mess being made of the operation, as long as the messy stuff was dropped on another doorstep and not his. That was defeatist—but the right hon. Gentleman was defeatist, too.
To reiterate something said by my right hon. Friend, we certainly should have a shot—my hon. Friend the Member for Greenock (Dr. Dickson Mabon) said so, too—at approaching the Australian Government to see whether we could have a longer period than three years in which
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to phase out the Australian quota. We may not get it. They may not want it. All right, too bad, but we should try. After all, there is a better Government in Australia now than there was at the time when the three-year period was fixed, and we really ought to try. They care a great deal about the plight of underdeveloped countries, and if they saw this as an indirect help to the exports from the other Commonwealth countries—which is what it would be—they might be willing to take a certain view on the matter.
Secondly, we ought to see whether, as that arrangement is phased out—one hopes more slowly—we could get at least a part if not the whole of the quota which is disappearing added to the quota of other Commonwealth producers. Again, it might not work. The right hon. Gentleman said that some of the present Commonwealth producers are having difficulty in fulfilling their present quotas, and I am sure he is right. It may be that they could not cope with the addition, but why do not we try? Why do we adopt this hopeless, defeatist attitude? I was glad to hear the remarks on that subject made by the right hon. Member for Thirsk and Malton and he was right.
I do not want to say too much about the reorganisation of the industry as I do not like discussing a subject when I am in the dark about it, and we are all in the dark, except the right hon. Gentleman. I agree with my hon. Friend the Member for Greenock that a little light should be thrown on the subject. The fact is that the port refineries are factories with good plant and equipment and a stable and efficient labour force which is producing extremely well. It would be a great loss, not only to them but nationally, if that were broken up.
The right hon. Gentleman said it was natural that in the beet processing plants they should add the white ends, and so on, and carry right through. From the point of view of the Beet Sugar Corporation, there is everything to be said for that. Considering the matter only in the tactical terms of a single enterprise, that is right and nobody can query it. But considering it in strategic terms of the industry and the national interest, I wonder whether anybody is

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doing a cost-benefit analysis on the whole operation, because of what avail is it to install new equipment at considerable expense in the beet plants in order to put out of production very good existing equipment in the port refineries? What avails it to put the beet plants in a situation where they must canvass to get more labour so that they can put out of work people who have been working in the port refineries for a long time?
If an overall cost-benefit analysis were done with, on the one side, the tactical advantages of processing the beet in the beet factories, and, on the other side, the waste of resources through rendering good plant idle, the money paid in redundancy payments to redundant workers, the money then paid year after year in unemployment benefit and, in some cases, supplementary benefit, what would be the result?
Has anybody done what a former Member of this House called "the total sum" on this operation? I do not believe the British Sugar Corporation has done it. I do not believe that Tate and Lyle or the right hon. Gentleman or his Department have done it, and it is about time somebody did it. Otherwise the reorganisation will be carried out on the basis, not of the objective evaluation of criteria in the overall interest—and it is clear from the Minister's comments that this is how the negotiations between the three companies have gone—but of a Petticoat Lane haggle between the three organisations, each trying separately to get the best it can out of the final operation.
I share the view of those who have said that it is a good thing that the House is speaking with one voice today, but that does not mean that I am altogether happy with what the Minister said or with the situation, because I am not. I hope that the Minister will accept the support he has had today, not as something to lull him into complacency, but as an earnest that we want him to use it as a springboard to do much more and much better than he has done so far and appears likely to do from now on.
7.19 p.m.
Mr. John Farr: I, too, am delighted that the House is united behind this motion, originally tabled by the Labour Party. Unlike the hon. Mem-
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ber for Poplar (Mr. Mikardo), I do not think there is any chance of the Minister or the Government reclining behind the motion and doing very little.
The motion is a masterpiece. It is full of detail and calls upon the Government to take action in various ways. Unanimous acceptance of it by both major parties—there is no representative of the Liberals here now—indicates that the Government intend energetically to pursue what is said in it.
It is important that the motion refers in its opening words to the dependence of developing Commonwealth countries on the sale of their cane sugar to the United Kingdom and on orderly marketing through the Commonwealth Sugar Agreement. I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on his speech, but he seemed to imply that it was merely an obligation accepted by this country that we stand by the Commonwealth sugar producers and ensure that the terms of the agreement concluded a couple of years ago in Brussels would be maintained. He did not pay full recognition to the fact that we in this country are greatly in debt to the Commonwealth Sugar Agreement. For many years it has served British housewives well. It has enabled them to have first-class cane sugar at very competitive prices. It has also given the people in the Commonwealth who produce a chance of earning a decent livelihood.
It has not all been "give" on our side. There were times, for instance, in the Cuba crisis, when the world price of sugar was doubled, yet we still got it from the Commonwealth at the agreed price. Even today, the Commonwealth Sugar Agreement price is substantially below that at which we purchase from the rest of the world. It has been a good bargain for our housewives.
They key to the motion lies in its reference to
"the need for the EEC to curtail its own production of beet and to join a new International Sugar Agreement as a major net importer ".
My hon. Friend the Member for Cheltenham (Sir D. Dodds-Parker) referred to some of our colleagues and friends in the Community and chided some of his hon. and right hon. Friends below the Gangway—as he termed it—

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for suspecting the purposes of those Community colleagues. What is one to do when faced with statements of the type made by the French Minister for Agriculture which deride the value and purpose of the undertaking expressed in the motion and call upon the French sugar beet grower to expand his production further.
When such uncontradicted statements are made by French Ministers, it is right and natural for hon. Members on both sides to call the Minister's attention to them and to warn him of a possibly dangerous situation developing.
The hon. Member for Poplar did not think that the motion was all that energetic. In fact, it is emphatic in what it says about the need for recognising the importance of continued employment for refinery workers on the Clyde, in London and in Liverpool.
In addition to the tens of thousands in this country who are dependent upon the Commonwealth Sugar Agreement for employment, there are millions in the Commonwealth, on a lower standard of living, dependent upon its effective working. There are no wealthy sugar barons in the Commonwealth countries I have visited. In Mauritius, for example, there are thousands of small farmers in a country bursting at the seams where they can grow no other crop but cane sugar because of climatic conditions and because world markets do not exist for any other crop. In Fiji, the Indians and Fijians who, have 15 or 20 acres of land alloted to a family, can eke out a reasonable standard of life thanks to the Commonwealth Sugar Agreement. Jamaica, with its present 20 per cent, unemployment, has 17 per cent, of its populace dependent upon the Commonwealth cane sugar crop. We must not forget the livelihood of countless thousands of families in the under-developed world as well as that of the men on the Clyde, the Mersey and the Thames.
The motion hits at the heart of the problem. It calls upon the Government to
"… honour its undertakings to the Commonwealth sugar importers to import 1·4 million tons of cane sugar…".
As hon. Members on both sides have made quite clear, it is a valueless undertaking if the financial climate does not
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exist to make it possible. It is no use my right hon. Friend pointing out that we have this undertaking if, at the same time, it is physically and financially impossible for our port refiners, because of the financial barriers that have been raised, to work profitably within the EEC. I join the hon. Member for Poplar in saying to my right hon. Friend, "This is where you must be firm; it is no use having an undertaking for 1·4 million tons if it is financially impossible to refine and handle it. You also, in our negotiations to join the EEC gained an undertaking to the effect that the 1·4 million tons would come in on fair terms. It is written into the undertaking and you are charged by this House to secure fair terms so that our port refiners have a chance of handling cane sugar on an equitable basis."
We are discussing a motion which concludes that we must
"…insist upon major accompanying changes in the sugar policies of the EEC."
I have to attend agricultural meetings in Europe from time to time and I am depressed by the inward-looking views of many of the deputies and delegates of other countries. They are not concerned with limiting sugar beet production in Europe. They are not the slightest bit interested in doing so. When one refers them, either formally in debate of privately in conversation, to the undertaking to under-developed nations of the Commonwealth, one is told quite frequently that it is not of great importance and nothing must stand in the way of the onward march of the European sugar beet industry. Indeed, when we have tried to secure a debate on the CAP and our sugar industry, we have been told that these matters may be discussed but that there is no question of any major variation being made to them.
I conclude with a point which is not included in the motion, but which has been discussed in the House. What sort of industry do we want for the handling of cane and beet sugar after reorganisation has taken place? As has been pointed out by my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue), there will doubtless be big changes, but I believe that a two-company structure is what we need. It is not for this Government to establish one large sugar monopoly in this country. The sort of

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solution my right hon. Friend should be searching for is one that will provide us with two large companies, each with a presence, set-up after the reorganisation,
I should like to see that achieved possibly by the British Sugar Corporation selling back to Tate and Lyle some of the sugar beet areas that were formerly Tate and Lyle's and perhaps at the same time creating a cane capacity by taking over Manbre and Garton. An alternative would be for Tate and Lyle to establish its beet interest by taking some of the beet factories of the BSC.
We want a two-company, say a double-presence, set-up after the reorganisation, and I believe it to be best for the customer that there should be some competition. Certainly it would be better for the beet producer in this country if he did not have to supply produce to one monopolistic giant all the time, which has to be done today in the British Sugar Corporation.
Finally, I should like to echo the words of a number of right hon. and hon. Members. We ask that the Australian cane quota be phased out over as long a period as possible. I understand that there is a chance that it may be phased out over two or three years. That period should be as long as possible. I hope that my right hon. Friend the Minister of Agriculture will bend his undoubted energies towards securing that aim, as well as securing recognition in Europe that, if we are to have a viable cane industry in this country, it is essential that we maintain our 1·4 million tons as a minimum for cane sugar imports.
7.31 p.m.
Mr. Alfred Morris: All of us agree that this is an important debate. My right hon. Friend the Member for Stepney (Mr. Shore) made an extremely powerful case in support of the motion. In contrast, the Minister, who had a more difficult task, made a much less convincing speech. We have read in the Press with what anguish the Government faced the prospect of this debate. The newspapers explained the Government's decision to accept the motion in terms of discretion being the better part of valour. The Press recognised that, for the Government, a most embarrassing parliamentary defeat was the alternative to accepting it.
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The simple truth is that the Minister of Agriculture, Fisheries and Food had, so to speak, no bankable assurance that large numbers of his hon. and right hon. Friends would be available in the Lobbies. I honour those who speak their minds and are prepared to put their votes where their sentiments lie. Such people clearly include the right hon. Member for Thirsk and Malton (Sir Robin Turton), the hon. Member for Banbury (Mr. Marten), the hon. Member for Holland with Boston (Mr. Body), and the hon. Member for Harborough (Mr. Farr). Those hon. Members have exerted a very strong influence on Parliament's consideration of every aspect of the problem of Commonwealth sugar.
Unfortunate as it may seem, the question now is not whether the Government accept the motion but whether M. Jacques Chirac, the French Minister of Agriculture, accepts it. There is another important question. If M. Chirac says what we all expect him to say about the purposes of the motion, how will British Ministers deal with his inexorable determination to frustrate those purposes? The right hon. Gentleman did not address himself to either of these questions. He parried, more than answered, the question I put to him in the course of his speech.
At meetings of Foreign Ministers and Agriculture Ministers in July and September, the Council failed to agree on the EEC Commission's proposals. The views of individual member Governments have not been published, but from Press reports it appears that French Ministers supported none of the proposals.
The French Minister, M. Chirac, is said to have described the proposals as "ridiculous" and to have declared that the suggestion to make the Community a net importer of 600,000 tons "… showed total incompetence."
How does the right hon. Gentleman propose to deal with M. Chirac's contempt for his negotiating position? I should like the House to recall a ministerial statement made to us on 17th May 1971 by the right hon. and learned Member for Hexham (Mr. Rippon). He said:
"When there has been so much discussion about it in the Community, there can be no question of their saying that they did not

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understand what they were doing, because we underlined it in the most firm way."
He went on:
"… if we do not get safeguards for the interests of the developing countries, then we could exercise a veto. It must be remembered that we are very large consumers of sugar."— [OFFICIAL REPORT, 17th May 1971; Vol. 817, c. 896.]
That was a statement from the right hon. and learned Member for Hexham in earlier parliamentary exchanges on the EEC's attitude to Commonwealth sugar.
I ask the right hon. Gentleman who will reply to the debate whether it is still our position that we shall exercise a veto, if necessary, to overcome the opposition of M. Chirac. The British people are entitled to know. The right hon. Gentleman will agree, because he is much respected throughout the Commonwealth, that the poorer developing countries of the Commonwealth also are entitled to know whether the Government will, if necessary, use the veto as envisaged by the right hon. and learned Member for Hexham in May 1971. I am grateful to the hon. Member for Banbury for reminding me of the unequivocal statement made to the House by the right hon. and learned Gentleman on that occasion.
There is, of course, very little of the spirit of internationalism in M. Chirac's attitude. M. Chirac's concern is with French national interests. He is unashamedly concerned with the interests of his own country. Our case, which has been put eloquently from both sides of the House in this debate, is that there are higher goals for internationalists than aiding and abetting rich and strong countries in order further to impoverish and humiliate poorer countries.
We must stop trying to pacify the bully-boy of the Council of Ministers. Bully-boys are not interested in the right hon. and learned Gentleman's polite generalities, nor are they concerned very much with the good will that was expressed by the hon. Member for Cheltenham (Sir D. Dodds-Parker). Instead of cowering before M. Chirac, the right hon. Gentleman must now speak up for the people of Britain and of the Commonwealth as a whole. The right hon. Gentleman, like his right hon. and learned Friend the Chancellor of the Duchy of Lancaster, comes back from
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every battle proclaiming spectacular victory when everyone knows he has been defeated.
As the House knows, I profoundly regret Australia's exclusion from our market. I have said so in one debate after another in the House. I believe that the vast majority of the British people, given the choice, will infinitely prefer taking cane sugar from Queensland than sugar beet from M. Chirac's friends in France.
At the September meeting of the International Sugar Conference, the Council of Ministers—largely, it is understood on French insistence—refused a negotiating mandate to Community representatives in Geneva, in spite of the EEC's declaration at UNCTAD 3 in Santiago last year that it would play a meaningful part in the negotiations. This has more to do with hypocrisy than with internationalism. It may well now be asked whether the opting out of the world's largest trading bloc and its largest sugar producer may have made an important contribution to the very sad failure of the Geneva Conference.
The main sufferers from the failure of the Conference are likely to be the smaller developing countries, both importers and exporters, and among the exporters those smaller Commonwealth Sugar Agreement countries—such as Mauritius and Fiji—which must supply a substantial proportion of their sugar to the world market in addition to fulfilling their CSA and American quotas.
A particular feature of the economies of a number of these and other developing countries is that their sugar export markets were developed to further the economic interests of the metropolitan powers in days gone by, and their domestic markets for sugar remain small. It would be scandalous if the crucially important market provided for these important developing countries by the CSA were now to be in any way reduced.
It is now being hinted that certain CSA countries might find it very hard to meet their commitment to the enlarged Community because of difficulties in supply, and that therefore the overall quantity of 1·4 million tons might be reduced. The answer to this is twofold. First, in the 22 years of the Agreement no CSA member has failed to meet its contractual commitment, except where

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some reduction in that commitment has been mutually agreed. Secondly, although there are new industry quotas under the Agreement, the supply commitment is also joint and arrangements exist for the redistribution of shortfalls in the event of some unfortunate occurence making this necessary.
There are many other hon. and right hon. Gentlemen who wish to participate in the debate. Thus I shall now conclude. In doing so, I recall what Dr. Eric Williams said, speaking as Prime Minister of Trinidad and Tobago, when he referred to the "Wars of the Two Sugars". As Lord Campbell of Eskan, who was referred to earlier in the debate, said in his letter to The Times:
"Beet industries are struggling to get richer. Cane industries, and the peoples dependent upon them, are fighting for survival."
I know whose side we should be on in this contest.
The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) saw this question as a test of the EEC's sincerity. I much agree. It is a clear test of sincerity and, clearly, M. Chirac has already failed the test. For our part, it is our bounden duty in this House to keep our word and to be seen to act honourably to those who are dependent on our word in the developing countries of the Commonwealth.
7.43 p.m.
Mr. Michael Shersby: As we have seen over the past few hours, this debate has been concerned not only with the interests of the Commonwealth countries but also with the problems facing our own sugar industry right here in Britain. It is a debate about the future of the British cane refineries, and the way in which they will be able to operate when the existing Commonwealth Sugar Agreement comes to an end, and about the future prospects for British beet sugar production in this country. I think that that, also, should be recognised.
There have been one or two hard things said about beet sugar, and I should not like this debate to be continued without saying a word or two about that very efficient operation which is conducted in our country—an operation of which our farmers are very proud, an operation of which we as consumers have a right to
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be proud, and an operation which we as a country must safeguard in the future.
But in order to get these matters into perspective, it is necessary to understand what it is that the Commonwealth sugar producers need to ensure their future, and how that need should be accommodated in the proposals of the EEC Commission about future sugar policy on imports of sugar from the developing countries, to which my right hon. Friend referred this afternoon.
The Commonwealth needs four basic assurances, and I shall tell the House quite shortly what they are. They are quantity, price, duration and outlet. It is those four points which are covered by the existing Commonwealth Sugar Agreement, and I believe that any new agreement resulting from the Commission's proposals must also cover them. Acceptance of these points implies, first, that there must be a proper mechanism for importing the Commonwealth sugar which we have been talking about this afternoon; and, secondly, there must be a refining industry with the capacity ready and willing to take that sugar.
We have heard today from a number of hon. Members about the concern which has been expressed by the major United Kingdom port refiners, about what will happen when this sugar comes into the Community, and about whether they will be able to refine it on a profitable basis. We have also heard about the concern that is being expressed by the many thousands of refinery workers who have demonstrated outside the House today, and who have attended all three party political conferences.
Why has all this happened? It has happened because we do not yet have a detailed final agreement on the future place of the UK sugar refining industry in the new sugar régime which will come into force on 1st July 1975. It has also happened because the refiners do not know whether the existing Treasury subvention of £5·50 per ton will be continued after 30th June next year until the new sugar régime comes into operation.
However, I listened with great interest to what my right hon. Friend said and I have a deep confidence that, at the end of the day, he will be successful in negotiating some satisfactory transitional

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arrangements on the question of the subvention. We know that he is a skilful, determined and straightforward negotiator, and that he is well aware of the problems facing the refiners while the uncertainty continues to exist.
Then there is the question—perhaps the vital question—of his being able to negotiate an adequate refining margin for the refiners in the new régime. Because the major outlet for Commonwealth sugar is inextricably tied up with the existence of a viable refining industry, a proper refining margin or price structure is essential for them in the new régime. The reason for this is that there is no satisfactory price structure for cane sugar in the Community at the present time. This situation arises because, as we have heard today, most of its sugar is derived from beet, whereas in this country two-thirds of our sugar comes from cane.
The United Kingdom have said—and none of us has any reason to query it—that they need a margin of at least £17 per ton in order to be able to accept and refine Commonwealth sugar on an economic basis—that is, about £15 per ton for refining costs and £2, or slightly less, in terms of profit. In other words, they need a continuation of the existing margin, if they are to be able to continue refining Commonwealth cane sugar on a profitable basis.
We know from what we have heard today from my right hon. Friend that these two questions, of continuing the subvention and negotiating an adequate margin, are among the most difficult problems which he is facing at the present time. I hope very much that the acceptance by the House of this motion tonight, without a Division, will reinforce him in the discussions which he will be having in Brussels, and that they will lead to the success of the negotiations on those two vital points.
That brings me to the question of a possible reorganisation of the sugar industry, which has been so widely discussed both in the Press and in the House tonight. Because of my interest in sugar, both beet and cane—it is well known and I have declared it before in this House—I do not propose to comment on this aspect of the matter except to say that I believe that reorganisation, or unification as it is sometimes called, alone is not
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necessarily a substitute for a proper refining margin which surely is essential if Commonwealth sugar is to be sold anywhere in the Community.
We know from what has been said in the House today that these discussions on a unified industry have been in progress for some time—in fact, for nearly two years. The purpose of those discussions has been to consider options which would be equitable from the viewpoint of the sugar companies and in the national interest.
Whether the solution is the establishment of a unified industry or the kind of company structure which has been proposed by the major United Kingdom port refiner is not for me to say. Whatever structure is agreed, it must be the best that is compatible with a highly efficient and thoroughly competitive United Kingdom sugar industry. I am sure that my right hon. Friend will have these thoughts in mind as the matter progresses.
I want now to turn to the question of employment in the sugar refineries in this country. It is perhaps one of the most important questions which we are considering this evening. I talked to the sugar workers in the Lobby this afternoon and I asked them to give me a clear and firm answer on the question of their advertisement in one of the national newspapers this week. I asked them whether that advertisement was inspired by the management of Tate and Lyle or whether it had been prepared and paid for by them. The clear answer that I recieved was that that advertisement had been drafted by the Tate and Lyle Action Committee with the help of some of their friends, and that space had been purchased for that advertisement to appear in a national newspaper. I understand that the funds for that advertisement were the funds of the Tate and Lyle Action Committee, and no one else's. We should bear that in mind in considering that aspect of the debate.
Thinking of employment, we know that in the final analysis imports from the Commonwealth will drop from 1·7 million tons to 1·4 million tons or thereabouts when the Australian quota is finally phased out. I use the words "phased out" advisedly because I join with other hon. Members in expressing the sincere hope that that quota will be phased out gradually over as long a

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period as possible. However, it is inevitable that there will be a reduction in refining capacity which in turn must mean some redundancies.
The important point to bear in mind is surely that this will involve the disruption of the lives of men and women and that such redundancies must, therefore, be arranged in an orderly and compassionate manner over a period of time taking account of natural wastage wherever possible. Control over the future of their own employees now rests with the refiners. I feel certain that they are as anxious as hon. Members to retain a large measure of control over the future of the employees, many of whom have worked in the sugar refineries all their lives, as have their families before them.
I want to express my support for the Commission's proposals which, if accepted by the Council of Ministers, will, I believe, assure the future of the United Kingdom sugar industry and that of the developing countries of the Commonwealth. There is no doubt in my mind that the Commission regards these problems as urgent. They are problems related to deadlines, and this is well described in the introduction to the EEC Memorandum which says:
"Because of the deadlines set out beneath the Community must define its future sugar policy as regards its international position vis-à-vis the International Sugar Agreement, its obligations towards developing countries—which are set out inter alia in Protocol No. 22 to the Act of Accession—and its internal arrangements applicable from the 1975–76 marketing year as soon as possible."
I end my speech on those words, "as soon as possible". These matters are urgent. Deadlines are ahead of us, and I am sure that my right hon. Friend will have those deadlines in mind in the difficult negotiations which lie ahead of him, in which he will have the support of every Member of this House.
7.55 p.m.
Mr. Robert C. Brown: I have no constituency interest in this debate. My interest is first as a humanitarian, believing that it is essential that the peoples of the under-developed world have the right to survive and can only survive if the peoples of the developed world permit them to do so, and, secondly, as a sponsored member of the Municipal and General Workers' Union
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with 11,000 members' jobs involved in sugar refining and the ancillary processes. Clearly I am speaking personally on their behalf.
I do not want to say much about the commitment, but it is as well to remind the House that the right hon. and learned Gentleman the Secretary of State for the Environment told the House on 17th May 1971 and, later, the Commonwealth sugar producers on 2nd and 3rd June at the Lancaster House Conference, that he had secured what he called a moral and specific commitment for the import of 1·4 million tons of Commonwealth cane sugar. Although that commitment has been accepted by the EEC Commission in an advisory document, the Minister himself has conceded that it has not yet been accepted by the Council of Ministers.
As my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morirs) said, it has been quite strenuously repudiated by the French Minister, Mr. Chirac. The Minister's commitment of 1·4 million tons, to which he referred this afternoon—and I would not impugn his integrity or his honesty—cannot be back-tracked. Any backtracking on this commitment reflects not only on the honour of the Minister who negotiated in Brussels, the Prime Minister and the present Minister of Agriculture, but also on the honour of the Government and, indeed, of the House.
If the commitment means anything, it means that the EEC ought to be thinking of the future of the under-developed countries not for three years but at least for a decade. There is no possibility of any of the under-developed countries which at present rely entirely on cane sugar diversifying their industries in less than a decade. In the autumn of 1971 I visited Barbados and, being concerned about the specific and moral commitment of which we have heard so much, I met the sugar producers there. They have complete and utter faith in the British Government. In fact, there was no question in the minds of the sugar producers of Barbados that their future was assured—and not for three years but for many years ahead.
Regarding the expansion of beet, particularly in relation to those members of my union who are employed in the industry, there have been many

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rumours that the Government are about to do a shabby deal with the French to get out of their difficulty. It has been suggested in some quarters that a deal can be done by which the 1·4 million tons is allowed into the Commonwealth while, at the same time, sugar beet production in the EEC is rapidly expanded and French farmers can therefore be guaranteed increased profits. This deal would work against the interest of the Commonwealth sugar producers—there can be no doubt about that. There is already over-production of sugar in the EEC and this over-production is increasing. It has already more than taken up the gap which may eventually occur when Queensland cane is phased out. If over-production continues there will be either a build up of a sugar mountain in the EEC or a dumping of the excess on the world market. If the excess were dumped on the world market it would compete with the free market cane sugar from the developing countries and would inevitably damage the trading prospects of those countries.
Many Commonwealth countries, particularly Fiji, depend heavily on their non-European free market sugar trade. The present world shortage of sugar is unlikely to last more than a couple of years. If we make a shabby deal, pledging the EEC to further over-production of sugar beet, we shall kill off completely the sugar industries of Mauritius and Fiji at source by dumping cheap sugar into their traditional markets.
The EEC has been referred to more often than not as a rich man's club, but I do not take that view. I do not want to be proved wrong in the future. I believe that the issue that we are discussing today is the linchpin of the test of morality of the EEC not on one issue alone but on two. The first is the sincerity and the will of the EEC to assist the third world to survive. The second is the will or lack of will of the EEC to give the development areas of the EEC, including the area that I represent, the right to an improved future and a fair deal. Those are the two issues on which the complete morality of the EEC is in question.
Many of the Minister's statements in the past few weeks, and certainly his speech today, suggest that a necessary part
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of any adjustment to the EEC is the reorganisation of the sugar industry in the United Kingdom. Some sugar workers in my union have detected the suggestion that in the future cane refining should not be regarded as an industry on its own but should become subservient to beet. Some of the main refineries would have to close if that were the case and any cane sugar which could not be refined in a much-reduced cane industry would have to be refined out of season by the refiners. That is a wrong-headed policy. The cane refining industry is efficient and produces low cost sugar in Britain because it has been recognised as an industry entirely distinct from beet.
The cane refineries are located at ports to minimise the transport costs with imported cane. They are organised to operate at a steady pace throughout the year. Their overheads and their pricing arrangements are adjusted to all-season work. They have a stable and continuously employed work force, and this is a state of affairs that we want to ensure in the future. Beet refineries operate entirely differently. They are located in beet growing areas and their operation is directed to a short period of frantic activity after the beet has been harvested.
Importing cane sugar into British ports and then transporting it miles across country to be refined among the beet fields is a very expensive policy, even if enormous juggernaut lorries are used, which I do not believe would please anyone. The efficient and socially responsible way to refine cane sugar is in cane refineries. Even the EEC Commission's proposals recognise this important fact.
The second and technical argument arises from the details of the EEC commission's proposals. My union has done a great deal of work analysing the proposals. Under them a cane refinery can be classified as a port refinery or a beet refinery. The profit and pricing margin arrangements are different in the two cases. This means that a combined refining operation with both beet and cane refineries would have to decide which classification to select. Under the Minister's amalgamation proposals the industry presumably would be classified as beet-based. The financial structure and margin allowed for beet is entirely unsuitable for a cane refiner. Following

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amalgamation under these rules, all cane refineries would immediately become uneconomic and have to close down. My union fears that the Minister may have overlooked this point.
There is no doubt that the most satisfactory and stable arrangement is to match the commitment to import cane with a commitment to refine the cane in purpose-built refineries. This is the arrangement that the Commonwealth sugar producers would obviously prefer, because they certainly do not want to live perpetually in total dependence on the beet industry, which is their competitor. The commitment to import cane sugar means nothing if the refining industry is killed off.
I hope that nothing I have said recently indicates that I am a front man for Tate and Lyle. Neither my union—the General and Municipal Workers—nor any of its individual members collectively employed by Tate and Lyle, is a front man, or organisation for that company. The interest of my union and its membership is in continuing employment for their brother workers in the third world and not, selfishly, for their own jobs in the United Kingdom.
It has been apparent for many months that jobs in sugar refining were at stake, mainly in our developing areas. Yet we have not heard a peep from Tate and Lyle about the threat to employment in sugar refining.
Mr. Hastings: Perhaps I misheard the hon. Member. I thought he said that he had heard nothing from Tate and Lyle about the dangers to its employees as a result of these measures.
Mr. Brown: The hon. Gentleman seems to be apologising for Tate and Lyle, and seeking to excuse any interest that it might have had in a certain advertisement to which the Minister rightly referred this afternoon. For many months the jobs of members of my union and the jobs of sugar-producing workers in the Commonwealth have been at risk. The pass was sold in 1971. One does not need to be brilliant to realise that these jobs have been at stake for many months. As I was saying, we did not hear a peep out of Tate and Lyle about the threat to employment—I do not think that I am being unfair to Tate and Lyle when I say this—until the threat to
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the company's continuation as an independent undertaking was posed by the negotiations that the Minister seems to be forcing on the industry. Then, and only then, did we have the reincarnation of Mr. Cube—
Mr. William Clark: No, No.
Mr. Brown: Yes.
Mr. Clark: I have no interest in Tate and Lyle, but surely the hon. Gentleman must agree that if and when Tate and Lyle thinks that its business will disappear, it should start negotiating. There is no point in raising fears of what might happen prematurely. As soon as Tate and Lyle realised that the whole of the cane sugar refining industry was at risk, it immediately informed the employees—and that is what it is all about.
Mr. Brown: The hon. Gentleman clearly has not been following what I have been saying. I am trying to spell it out. It was only when the independence of the company was threatened that Mr. Cube was reincarnated and the letter-boxes of hon. Members were bombarded with 2 lb bags of refined sugar from Tate and Lyle—sugar with a picture of Mr. Cube, complete with his sword and shield to prove that he was not a ghost but a reincarnation of the 1949 Mr. Cube.
I felt outraged by this attempt to attract my support. It is often said that every man has his price. I do not concede that, but even if it were true, a 2 lb bag of damned Tate and Lyle sugar is not my price. I see this as a serious insult to hon. Members. However, some good has come from it, because many old-age pensioners have received sweeteners from hon. Members. I certainly would not have shed any tears if Tate and Lyle and the rest had come under public ownership at the time of the last Mr. Cube campaign.
I thought that the Minister treated very lightly the extension of cane imports. If we are sincere in our desire to safeguard the interests of developing countries, we must allow for the extension of their trade in sugar. The 1·4 million tons has to be regarded as a minimum commitment. The phasing-out of the Australian quota of 335,000 tons gives a great opportunity.

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Several hon. Members have mentioned increasing the phasing-out time. If it were increased from three to ten years, the Commonwealth countries would have the chance to extend their production and take up the slack.
We have had no guarantees about any undertakings that the Minister will get from the Council of Ministers but, even if he delivers the goods and we get the guarantee of 1·4 million tons, what will this mean? He has told us that the 11,000 workers in the industry about whom I am talking can expect at best 85 per cent. to 90 per cent. If we get the best, 90 per cent, of the 1·4 million tons of refining, that means 1·26 million tons. That is a shortfall of 750,000 tons. This must mean considerable redundancy.
Mr. Godber: It is important to get this matter straight. The 85 per cent. to 90 per cent., to which the hon. Gentleman has rightly referred, is an undertaking which the Commission propose to write into the regulation when it is produced in regard to a minimum requirement. It is not a maximum, it is a minimum. If the port refiners are able to attract the full amount here because of the good service that they give to the Commonwealth countries, there is nothing to prevent them getting the full 100 per cent.
Mr. Brown: I am glad to have the Minister's assurance on that. Even then, it still leaves a considerable shortfall and there must be considerable redundancy. One is entitled to ask what steps the Government intend to take to provide alternative employment in Greenock and Liverpool, where there is already heavy unemployment. I hope that we shall get much more than the assurance we have already had and that the Minister will be prepared to stand up to the French "bovver boy". If the French act as they are acting today, as the "bovver boy" of Europe, and win the day on this issue, Europe will become the "bovver boy" of the third world. I am sure that no one in the House would wish that to happen.
8.16 p.m.
Mr. Christopher Brocklebank-Fowler: I am grateful to have caught your eye, Mr. Deputy Speaker, because I believe that I am the first speaker in the debate who represents one
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of the major sugar beet constituencies. Speaking at this late stage in the debate, when so many of the arguments have been deployed with great eloquence, I cannot help being reminded of Pitt the Elder speaking in this place in 1759. A contemporary report recorded him as beginning a speech on sugar in the following manner:
"He said, 'Sugar, Mr. Speaker',—and then, observing a smile to pervade the audience, he paused looked fiercely around, and with a loud voice, rising in its notes and swelling into vehement anger, he is said to have pronounced again the word 'Sugar!' three times, and having thus quelled the house and extinguished every appearance of levity or laughter, turned round and disdainfully asked, 'Who will laugh at sugar now?'."
Certainly this afternoon we have heard the very complex aspects of the total sugar scenario. There is one aspect, however, which has not yet been considered fully in the debate. That is that there is an increasing world consumption of sugar. We often talk about sugar as though the production of sugar is rising and the consumption is static. That is not so in world terms. In the United Kingdom, because of our relatively high standard of living, we have a fairly static level of consumption of sugar now, and nearly two-thirds of that is imported, principally, at present, from the Commonwealth, and a major part of that is the Australian quota. I think that it would be right, in a way, to start with the removal of the Australian quota in considering what ought to be done to reorganise the British sugar industry now.
The removal of the Australian quota and of world free sugars will account for the loss to the port refining industry in this country of about 410,000 tons by 1978. As has been rightly said by hon. Members on both sides of the House representing constituencies in which the port refineries are situated, that may contribute towards unemployment in those areas.
Mr. Heffer: It will.
Mr. Brocklebank-Fowler: The answer is not as was suggested—if I understood him correctly—by the right hon. Member for Stepney (Mr. Shore), when he said that we must cut European sugar production. I hope he will have the courage to come to my part of the country and explain to the agricultural community in East Anglia precisely what he means

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when he speaks of the future of the sugar beet industry. Does he mean that we should cut the growing of sugar beet in the Community, or that we should cut the growing of sugar beet in Britain?
Mr. Heffer: Will the hon. Gentleman come to Liverpool and tell the cane sugar workers who now work for Tate and Lyle that they will be unemployed? Will he explain that to them? Will he advance that argument to those workers? No one is suggesting anything other than the status quo.
Mr. Brocklebank-Fowler: The hon. Member for Liverpool, Walton (Mr. Heffer), who has not done the House the courtesy of sitting here, as I have, for nearly five hours—
Mr. Heffer: I have been out of the House for one and a half hours.
Mr. Brocklebank-Fowler: —should listen to Members who wish to make a speech before he begins to attack them. It is none of my purpose to cast aspersions on the right of employment of those who work in the sugar industry and in the port refineries. On the contrary, I believe that in the new circumstances we have to reform the sugar industry in Britain from the point of view of the beet producers and to accommodate the loss of the Australian quota. I envisage that there should be within a reformed industry no major change in employment prospects in the port refineries. There may be some change and it may be possible to accommodate that change over a number of years by sensible employment practices.
It is for the hon. Member for Liverpool, Walton to represent his constituents and it is my business to represent mine. I am telling the House that much employment in Norfolk is occasioned by the growth of sugar beet. I was inviting the right hon. Member for Stepney to make clear whether, when he said that there should be a cut in the growth of sugar in Europe, he meant that there should be a cut in the United Kingdom. I was inviting him to tell us whether that was what he said earlier and, if it was, to come to my part of the country and explain to my constituents why that should he so.
Mr. Shore: I accept the hon. Gentleman's invitation. I was insisting that the present import of cane sugar, which now equals 1·7 million tons, should con-
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tinue. That does not in itself imply any cut in the existing beet sugar. A great expansion of beet sugar, as the hon. Gentleman well knows, has taken place on the continent of Europe as a result of highly protected CAP mechanisms.
Mr. Brocklebank-Fowler: I am grateful to the right hon. Gentleman. It is part of my case that there should be a substantial increase in the production of sugar from beet in Britain, and the fullest accommodation of the 1·4 million tons from the Commonwealth at the same time, without there being conflicting interests.
I hope that when my right hon. Friend continues the negotiations he will seek to replace in its entirety the Australian quota that currently comes into the United Kingdom by an increasing tonnage of cane sugar from the Commonwealth and an increased domestic acreage, to enable beet growing in Britain to contribute as at present to the efficiency of agriculture in a modern system in the eastern part of the country.
Mr. Spearing: Does not the hon. Gentleman agree that there is an inherent difficulty in the balance he suggests because the EEC sugar arrangement has an inbuilt mechanism to produce a surplus and will go on producing a larger and larger surplus? Therefore, the European beet growers will be in competition with East Anglian growers anyway, and they might both have to be subsidised by FEOGA payments.
Mr. Brocklebank-Fowler: I do not believe that the Community has yet reached its final perfect state. I am a supporter of our being in EEC and I simply want my right hon. Friend to fight in the continuing negotiations in the Community for the two aspects of this policy, which I think are in Britain's interest.
First, we should be able to accommodate the 1·4 million tons, and I hope that in the future we shall be allowed, by agreement with the others as part of the relationship between Europe and the developing world, to import more. Secondly, we must ensure that Britain gets her share of the additional sugar beet that is grown in Europe as a result of the lapsing of the Australian quota over a period of three years. If my right hon. Friend goes into battle with vigour,

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as I am sure he will, changes can be made in the existing situation.
The most important aspect to come out of the debate is the current state of uncertainty of the sugar refining industry in Britain. I was much in agreement with what the hon. Member for Greenock (Dr. Dickson Mabon) said about discussion taking place in public. I suggest to the House that because the consumption of sugar in Britain is of such vital importance to our Commonwealth producers, our domestic beet producers and the consumer, it might be a suitable subject for consideration by a Select Committee. I invite my right hon. Friend to consider whether a Select Committee should take evidence on the present situation of the refining industry in Britain and perhaps make recommendations to the House.
8.28 p.m.
Mr. John Roper: Unlike many hon. Members who have spoken from the Opposition benches I have no constituency interest in sugar and will therefore speak briefly. I have, however, a continuing interest in the commitment given by the former Chancellor of the Duchy of Lancaster at Lancaster House. To me, it was one of the important parts of the negotiation, believing as I do that membership is in the long-term interests of Britain only if we are prepared to accept our responsibilities to the third world on a continuing basis. I also have a considerable interest as a consumer and on behalf of my constituents who are consumers of sugar and are anxious to see a rational structure for the sugar processing industry.
I am delighted that there is agreement across the House on the motion. The only difference that arises between the two sides is in the degree of optimism about what is possible in the Council of Ministers at the end of next month, when it considers the matter again. The commitment on cane sugar given by the Chancellor of the Duchy to the Commonwealth countries, which has been taken up by the Commission in the consultative document issued in July of this year, is of great importance. The Commission has accepted it and it is up to the Council of Ministers to do the same. Here, we rely upon the activities of the Minister.
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The Minister referred to the 350,000 tons of Australian sugar which is to be phased out. It was put to him that this should be replaced by sugar from other Commonwealth countries. He pointed to the difficulty of doing this because of the shortage of supply in some Caribbean countries. I accept that for some of the Caribbean producers it is not possible, but I would have thought that for producers in Mauritius and Fiji there would be considerable possibilities for increasing their exports to this country. Therefore, I hope that the right hon. Gentleman will re-examine that aspect of the matter in order to ensure that a significant part of the 350,000 tons is taken up by producers in less-developed countries who have surplus capacity, which they are selling on the world market at the moment.
The second question we have to consider about the 1·4 million tons of Commonwealth supplies is the price at which it is to be sold on the British market. This is as important for the less-developed countries as is the quantity that they will get. As I understand it, according to the Commission's consultative document what has been offered is, that they will be able to sell at the world price as long as the world price is not higher than the lowest beet price in the Community. I think I am right in that. That, of course, may mean a higher cost to this country; it may mean we shall pay rather more for our sugar. Here my interest in the third world and my interest in the British consumer conflict to some extent, but in any case I think that it is probable that the Commonwealth sugar agreement price would almost certainly have risen when that agreement came to be renegotiated if we had not entered the Market; it would have had to have risen towards the world price. Therefore some of the comparisons we have seen between the present Commonwealth Agreement price negotiated two or three years ago, and the beet sugar prices are somewhat unrealistic. The new CSA price, if there had been one, would have been a higher price. The cane price would be bound to rise even if we left the EEC and were able to negotiate a new Commonwealth sugar agreement.

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I come to the question of sugar processing and refining. This raises a whole host of other issues which are sometimes unfortunately confused with the question of the third world, not always to the third world's advantage. I am sorry that the Minister has not found it possible to publish the report of the independent consultants, which I think he received last year and which surveyed the whole of the problem of the industry. British entry into the European Community and the reports of the Public Accounts Committee in recent years have forced us to look again at the structure of the processing industry in this country and brought to light the extraordinary extent to which Tate and Lyle have been feather-bedded by successive Governments. The Public Accounts Committee's evidence of last Session was, unfortunately, heavily sidelined, and so we do not know how much it costs the British taxpayers and consumers to permit Tate and Lyle to go on refining 250,000 tons of beet sugar. Question No. 663, on 7th February 1972, suggests that it may have cost the taxpayers and consumers as much as £1½ million a year for Tate and Lyle to process the 250,000 tons of raw beet sugar, or about £7 a ton more.
Similarly although it has been known for many years that there has been off-season capacity in the British Sugar Corporation's sugar beet factories where raw sugar could be processed at lower cost, according to some of the evidence, than at the port refiners this has not come into the open. We need to know what would be the position in a unified sugar undertaking. We need to have figures. The unifying of the cane and beet industries means even more of the cane sugar could be refined in the sugar beet factories off season. There is certainly a section in the Commission's consultative document which suggests that that might be the case, but to have this information the House would need to know the relative costs between the two processes.
Now we are forced for the first time to consider the industry as a whole on a rational basis. It becomes abundantly clear, as the Minister himself made clear, that the ideal solution would be a single enterprise. I believe that if there is to be a single enterprise monopoly, this is an obvious candidate, as it was seen to be by my party in previous years, for
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public ownership. I think that my right hon. Friend the Member for Lanark (Mrs. Hart) would find it a useful candidate for her National Enterprise Board. This would be a strong case for public ownership. Mr. Cube can threaten and bribe, but he has had it far too easy for far too long, and I hope that no hon. Member will fall for his more misleading information.
As my hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Robert C. Brown) mentioned, there is one problem concerning the unified industry which I hope the right hon. Gentleman will be able to say something about when he replies. The Commission at paragraphs 24 and 25 of its proposals referring to the additional refining margin for cane sugar, says that
"A repayment would be made to the sugar refining industry so that the white sugar produced could compete on the internal market without affecting the marketing of Community-producer sugar."
It goes on
"Because of the difference between refining costs in 'specialised'"—
that is, port—
"refineries and in 'sideline' refineries,"—
that is, sugar beet refineries out of season—
"the repayment referred to above must vary with the type of undertaking refining the sugar."
What is not clear from those paragraphs as drafted is whether "undertaking" refers to one refinery or one factory, or whether, if we had a unified sugar corporation in this country, that would be a single undertaking.
That point, to which my hon. Friend the Member for Newcastle-upon-Tyne, West referred, clearly must be clarified, because if the port refineries were to lose an additional premium margin they would be in a serious situation. One interpretation of the Commission's document would give that meaning.
There are always serious problems in any rationalisation of the sugar industry. This could create problems of employment in either the existing port refineries or in the areas of the sugar beet factories. In the interests of the consumer in this country, it is time that the whole problem is studied on a rational basis. Perhaps the Community should consider whether. as in the case of the coal and steel

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industry, when there is a need for restructuring an industry, special help could be given to areas where there has to be employment pattern changes.
I have tried to make two points. We must ensure, first, that our imports from the Commonwealth are continued and, if possible, increased to take up the 350,000 tons of Australian sugar which is being phased out, and, secondly, that we are able to create in this country a rationally-structured publicly-owned sugar processing industry which could serve the consumer more effectively.
8.38 p.m.
Mr. Stephen Hastings: I must first declare an interest. I have been connected with Tate and Lyle for some five years, first as a director of one of its subsidiary companies and latterly as a consultant. Certainly this does not make me an expert on sugar, but it is an identity of interest which is perfectly clear.
I listened with care to the speech of the hon. Member for Farnworth (Mr. Roper). If I may say so with respect, it was an able speech and I enjoyed listening to it. I agreed with many of the things he said, but I thought it was a pity that he spoiled it, from my point of view, with a quite unnecessary attack on one member of the trio in the sugar industry.
It was entirely unjust for the hon. Gentleman to talk about the cane refiners as being "feather-bedded". I shall return to that theme in a moment. Nor do I not suppose that his remarks about public ownership, if there were a unified industry, will have been lost on my right hon. Friend, or indeed on anybody on this side of the House. But if that is the solution, then it seems this industry would immediately become a candidate for their voracious and fatuous Marxist appetite. That is exactly what the hon. Gentleman has just described.
I agree that this has been a good day for the House of Commons. The speeches have been mainly concerned with a problem which all of us realise is deep, real and immediate and concerns numbers of people in this country and in many parts of the world.
There is one impression which the hon. Member for Farnworth gave in his
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speech and to which I should like to address myself, namely, the question of the subvention to the cane refiners. A false impression of the position has been given in some newspapers. When it comes to efficiency or feather-bedding, I think the other side of the case runs as follows.
What is this subvention. The cost of raw cane sugar plus the refining margin is less than the cost of raw beet sugar by £5·60 per ton in this country and less by £23 a ton in the EEC of the Six. Therefore, in order to bring the price up to the beet white sugar a levy is paid by the refiners to the Exchequer. Because no margin has yet been negotiated in EEC—for reasons made perfectly clear by my right hon. Friend—an even larger levy is now paid to the Exchequer and this is repaid to some decree to the refiners as the so-called margin subvention. So far from this costing the taxpayer or the consumer money, the refiners are contributing substantially to the Exchequer and to the cost of British entry to the EEC.
There is another factor which should be taken into consideration by the House. The exports achieved by the cane refiners, which amount to 300,000 tons of refined sugar a year; the earnings to this country, which are not unimportant, of the terminal market and Britain's role in invisibles as well—banking, insurance, shipping, and the very considerable futures market—are all factors which are at risk within the context of this debate.
As we have been reminded by my right hon. Friend, the subvention finishes at the end of June. There will be a gap then of eight months, which will have to be covered before the margin can come into operation. I understand my right hon. Friend's difficulties. He cannot guarantee the subvention, which is subject to negotiation. But he went as far as to say, I think, that it was inconceivable that he would fail to get an adequate subvention. On the other hand, the way in which the threatened companies have worked together, both work people and management, perhaps on separate courses but with the same general objectives, has been not unimpressive.
Although it is difficult for the Minister to produce any guarantee, it is equally difficult, if not more difficult, for the

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companies to be able to plan ahead with any certainty beyond next June. How can they buy or sell sugar after the end of June. If redundancies have to be faced—the Minister has made it clear that that is what they must face—then they must be adequately, carefully and humanely phased and arranged and, with the general uncertainty after June, this makes this task extremely difficult.
Indeed, it becomes more difficult as day follows day. I am entitled, I think, to ask my right hon. Friend to give the reason for the delay over these negotiations. Is there likely to be a delay over these negotiations to cover the eight months? Why can they not start next week, for instance, and, if not, then how soon does he anticipate that discussions can begin? The planning considerations for the industry are very grave.
Mr. Godber: My hon. Friend might like me to reply to him at once. I recognise fully the fairness of the point he has made. I tried to explain earlier, but it is a very complicated subject.
The so-called subvention depends upon the prices which are fixed on an annual basis, and have been regularly fixed on an annual basis in regard to raw sugar and white sugar. The subvention is the gap between the Community margin and the requirement for this country. Until the raw sugar and white sugar figures are fixed for that ensuing period, we cannot fix the margin. It has never been the custom to fix it long in advance. I have tried to give the best indication I can but, with the best will in the world, this matter cannot be considered until the early months of next year. That is the inescapable situation.
Mr. Hastings: I comprehend that point, and I am grateful to my right hon. Friend. He accepts that, from the point of view of the future of the company and all those engaged in it, an early degree of certainty on this matter is of the greatest importance.
I think it was agreed between the refiners and my right hon. Friend that £17 a ton was the figure which we should seek to establish as an adequate margin from the beginning of February 1975. I believe—and I should be interested in my right hon. Friend's comments on this—that during negotiations within the EEC a figure of £16 a ton was agreed at a certain
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point, but that that then lapsed to £11·50. I am not sure what the story is, but it would be interesting to know whether that happened and, if so, why. If it is true that my right hon. Friend's team got as far as £16, it is not too depressing. A figure of £17 is, after all, only £1 more, so perhaps we can hope to reach the figure agreed when the negotiations start again.
That leads me to my final point, which relates to the reorganisation of the industry. Here I confess that I do not understand the Government's position. My right hon. Friend seems to be saying that it would be easier to negotiate an adequate margin in the industry if both beet and cane were unified and the burden in some way shared.
That is a nice, symmetrical hypothesis, but it seems to me to be glaringly a hypothesis. It may seem more convenient to negotiate from a unified basis of that kind, but I confess to the gravest doubts about whether it will strengthen the negotiating position in reality. Apart from considerations of competition and choice, concerning which points have been made during the debate and will not be lost on my right hon. Friend, I believe that it will be far less easy to negotiate an adequate margin with a unified industry, rather than with a dual industry in this country.
The Commission's proposal for a separate cane industry in Europe would fall if that happened and there would be no cane industry in the EEC. Cane raws would inevitably be hawked around to beet refineries in Europe. The status of cane would begin to diminish and might well disappear altogether.
Beet, as we have been reminded, is in gross surplus in Europe. It is quite possible in those circumstances, with no cane industry in Europe, that cane would be represented as that surplus. It would be grossly unfair but it could happen. The margin would thus be more, not less, difficult to establish.
Let us imagine that the worst possible case happens. I do not expect that it will, but nevertheless such a computation must be in the minds of those who earn their living in this industry. If there were no margin for cane here, what would be the position? I understand that in this country the unified industry would

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make about £13 million a year profit on beet, and would lose about the same figure on cane. There is no magical connection between the two figures, but that is the best sum that can be done.
Here, then, is a company which produces two forms of product, making £13 million a year on one and losing £13 million a year on the other. Is that a company in which anyone in the House today would wish to invest? Do we believe that it is a company which any responsible manager, given a long period of time, could continue to run in such a manner, with one of the products losing and the other gaining an equivalent amount? Surely, there would be immense and mounting pressure to phase out cane in those circumstances.
I am not suggesting that my right hon. Friend will fail to negotiate an adequate margin, but that kind of threat is inherent in a unified industry, and I earnestly hope that he will resist it. My right hon. Friend and his colleagues have a heavy responsibility and a difficult task. This debate has made that crystal clear. I do not envy him his job in the negotiations, but I believe he has the qualities to succeed. A great deal is at stake. A Europe the rules of which involve the collapse of the living of all those who work in the cane sugar industry in this country and across the world is a Europe which has got the rules wrong. I earnestly hope that my right hon. Friend and the Government will change them if that proves to be the case.
8.50 p.m.
Mr. Denzil Davies: Unlike the hon. Member for Mid-Bedfordshire (Mr. Hastings), I have no interest, either financial or constituency, in the subject matter of this debate, but I share the interest of most hon. Members in people living in the less-developed parts of the world and also in citizens of this country employed in the cane-producing and refining industry.
A few years ago, this debate would not have been necessary. There would have been no dispute between the Labour and Conservative parties. The Government could and would have fulfilled their obligations to those millions of poor people who are so dependent upon the production of cane sugar for their very existence. At the same time, the Gov-
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ernment could have safeguarded the jobs of thousands of our fellow citizens engaged in the sugar refining industry. As a country, we would have been in the happy, and all too rare, position of being able to help our own people and at the same time directly benefiting those living in the poorer parts of the world.
Unfortunately, as a result of the humiliating treaty that we signed in Brussels, we are no longer in that position; we are no longer master in our own house. We cannot do rightful justice to both these groups in the future. Instead of preserving, in those negotiations, our power as a sovereign nation to import as much sugar as we want from these poorer countries, the Government ignominiously signed away our rights by agreeing to Protocol 17 of the Treaty of Accession.
The very language of the Protocol is humiliating to this country. It commences by saying, "The United Kingdom is authorised"—a sovereign nation is authorised to import certain quantities of sugar from Commonwealth countries until 1975. Only until 1975 are we allowed in this respect to behave like an independent nation. After that, nobody can give any guarantees; no Minister can give the House a promise in good faith because he has no power to fulfil such a promise or undertaking.
There was no need to create these difficulties for ourselves. There was no need to create the uncertainties which now lie upon the cane producers of the world and the sugar refiners in this country. If we had entered the negotiations as equals instead of suppliants, it should have been possible to secure a proper derogation from the Treaty of Rome to enable us to fulfil our obligations in this important area.
If the Government have bankable assurances and can give undertakings, then surely, those undertakings could have been written into the Treaty of Accession and this debate would not have been necessary. But in the headlong pursuit of the European "Holy Grail", the poor sugar workers of the Caribbean were merely embarrassing appendages in the negotiations.
After the Government have shown so little resolution in negotiating the terms of entry in this regard, one might have

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hoped that their crusading zeal for Europeanism would have waned slightly when they came to discuss and negotiate the refining margin that would be allowed to the refiners. It is a complicated matter, but the Government gave in again. Instead of pressing for the figure of £17 a ton, they accepted a figure that was much less. For the second time in the negotiations, the Government gave in and refused to stand up for British and Commonwealth interests.
The question of the margin is very important, because the European beet sugar lobby knows very well that if it can make cane refining uneconomic, if it can disrupt the cane refining industry in this country, it will be able to reduce the amount of sugar we are able to take from Commonwealth countries. The Government must know this. The Minister of Agriculture knows it. But today it appears that placating and kow-towing to the French seems to be one of the major principles of British foreign policy.
Now, the Common Market lobby in this country and the Government are attempting to conceal the inadequacy of their negotiating so far, to conceal their failures and weaknesses, by blaming it all upon the rapacious and greedy French beet sugar farmers. They are the ones who will cause all the problems—those rapacious farmers who have the audacity to stand up for their own interests, and that villain of the piece the French Minister of Agriculture who, it seems to me, is only doing what he is paid to do by the people whom he represents in his own country. They will be the scapegoats now. If we fail to secure the right terms, it will be the fault of the French and of the Continental farmers.
We should make clear in this debate that if, in consequence of the poor terms which the Government have negotiated so far, there are redundancies among British sugar refining workers, and the Commonwealth sugar industry suffers, the responsibility will not lie with the French. The responsibility will not lie with Continental farmers. The responsibility will lie with the British Government, and those who have consistently supported the terms negotiated by the British Government through the Lobbies of this House. Having blessed these terms with their votes, those hon. Members cannot now come to the House and call for
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sympathy and weep crocodile tears over the consequences of their own action.
For the future, we can only hope that the Government will be more resolute. We accept the good faith of the Minister. We accept that he is an honest, straight-forward negotiator. We accept all that entirely. But unless the Government are prepared as a matter of policy to abjure their past policy of appeasement, it seems to me that we shall fail again.
There is little ground for optimism, because we now have nine Ministers in the Council of Ministers, and our Minister is only one. He cannot even use the veto. Even if the Prime Minister allowed him to use the veto, he could not do so. What is the point of vetoing the proposals? He wants to accept, and he wants the other Ministers to accept the proposals of the Commission. Therefore, the veto is no use to us in these circumstances even if we had the courage—which I do not believe we should have—to use it.
The best we can hope for, once again, is a shabby compromise, which, no doubt, will be dressed up at the Dispatch Box as a major diplomatic victory. Until we have a Government who are not in hock to the French, which this Government appear to be at the moment, those who produce cane sugar and those who refine it can have little confidence in the future of their industry.
8.59 p.m.
Mr. James Scott-Hopkins: I am sorry that the hon. Member for Llanelly (Mr. Denzil Davies) made such an intemperate speech right at the end of this debate. It is not very helpful to the refiners or the farmers of sugar beet in this country, or to my right hon. Friend in his negotiations in the coming weeks and months. Nevertheless, it is the hon. Member's prerogative to try to re-open the Second Reading debate on entry into Europe if he so wishes. I do not think that it has helped anyone.
The debate has shown the complexities and problems which face not only my right hon. Friend in his negotiations in Brussels but the industry here and in Europe. It has centred on three main questions—first, whether we can agree that the 1·4 million long tons coming in from the Commonwealth as cane sugar will continue to be imported, and

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whether my right hon. Friend will continue to secure the 1·4 million tons coming into this country in accordance with the undertaking given in the negotiations originally, which has been repeated.
The hon. Member for Llanelly was depressing about this. He did not think my right hon. Friend the Minister of Agriculture, Fisheries and Food could do that. He thought that he was rather a bad negotiator. I disagree. He is an extremely good negotiator.
Mr. Denzil Davies: I did not say that the right hon. Gentleman was a bad negotiator. I said that he was a very good negotiator, but that the Government's performance up till now does not inspire confidence in the future, and the right hon. Gentleman is in a very difficult and weak position—which the Government have put him in.
Mr. Scott-Hopkins: That is where I disagree with the hon. Gentleman. The results of my right hon. Friend's negotiations on agricultural matters with the Council of Ministers in Brussels have, in many cases, been extremely successful and we in this country have achieved great advantages which would not have been obtained if he had not managed to conduct the negotiations in that way. I have absolutely no doubt that the undertaking which was given to us by the Community before we entered, and which has since been repeated, will be adhered to by the Council of Ministers when they discuss this matter and come to a final decision in November or December. So that, although other aspects have to be looked at, our imports of cane sugar will be assured.
There have been suggestions from all sides of the House that the 330,000 tons of cane sugar coming from Australia should be redistributed, with a large part going to the other Commonwealth producers and the remainder of it coming to the farmers of this country. I think my right hon. Friend has made it quite clear to the House, that it is not easy to get an extra allocation of cane sugar from the developing countries of the Commonwealth, and this House should not try to encumber him with this obligation in his negotiations with the Council of Ministers. The key point here is that if we can ensure that the 1·4 million tons
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comes into this country, that will be a very adequate guarantee to the producers in those developing countries.
The second question has centred around the beet producers, not only in this country but in Europe. There seems to be a complete lack of understanding of the position of my right hon. Friend when he goes to the Council of Ministers, and of the position of others of us who also go to meetings of the Community. It is not true to say that the Community is in surplus in beet sugar production. At the moment it is in balance, and roughly 9·8 million tons is consumed—the figure varying from 8·9 million tons to 10·1 million tons between the years 1968–69 and 1971–72—and 9·8 million tons of beet sugar produced. What the Commission has suggested is that there should be a restriction on the production of beet sugar in the Community. My right hon. Friend made the valid point, which I am quite certain he intends to stick to, that in this country we have always restricted sugar beet farmers from expanding their acreage, so we cannot be asked to restrict further in the years ahead.
The European farmers have not up to now restricted their production to the same extent as we have. They have a different system of quotas—quota A, quota B and quota C. In the proposals—and I am surprised my right hon. Friend did not support them more than he did in his speech—from the Commission to the Council of Ministers there is a very severe restriction on European sugar beet production. This is going to take some swallowing from the French and other European sugar beet producers. They are not being asked to hold their level of production; they are being asked to restrict it. The proposal is that sugar beet production should be encouraged in those countries and areas where conditions are right, and discouraged in countries like Italy where climatic and soil conditions are not right.
There is a decided policy of restriction and reduction in production of sugar beet in the Community. My right hon. Friend is right in saying that we should not come into that category. For years we have restricted our production to allow the import of sugar cane from the Commonwealth. We should support those proposals. If we in this House are all moving in the same direction, it will help

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a great deal in the Council of Ministers and it will also help the Commission in getting their proposals through.
The third and last question concerns the necessity to have an adequate refining margin. My right hon. Friend said today that need for an adequate refining margin has been accepted in principle by the Commission and, indeed, by most members of the Community. There is at the moment only one stumbling block, but in principle it has been accepted that there must be a reasonable refining margin, particularly for port refiners, to allow them to exist. There is no point in allowing 1·4 million tons of cane sugar to come into the country if it is impossible to refine it. I am sure that my right hon. Friend will be able to secure an adequate margin so that the port refiners will be able to continue their operations not only for the eight months from June 1974 to February 1975 but thereafter.
I join with my hon. Friends in hoping that the negotiations which must take place between the British Sugar Corporation, Tate and Lyle and others, will be as open as commercially possible and will be concluded as speedily as possible. I do not look forward to one monolithic sugar refiner in this country. I hope there will be competition. I hope there will be two companies and that they will be concerned with both cane and beet sugar refining.
I hope that as a result of this debate the Commission will feel that it has the support of this House in putting forward its proposals with a view to getting an equitable solution to this difficult problem.
9.10 p.m.
Mrs. Judith Hart: This has been an extremely interesting debate with some constructive speeches from both sides of the House. Some of the issues involved are complex and detailed. We often find in this Chamber that matters which are essentially questions of principle are translated into complicated and minute particulars.
My first task is to take from the strands and facets of the debate the issues which are accepted by the Government and the Opposition as being of major concern. There are four such issues and they are inter-linked. One cannot separate these issues and say that each is an entity on its own. First, there is the concern expressed by many hon. Members, in moving terms, for the developing coun-
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tries which rely for their livelihood and future on producing and selling cane sugar. Secondly, there is the concern for our own sugar industry in Britain, and its workers, who depend for their living on the processing and refining of cane sugar from the developing countries. We are concerned for the 10,000 jobs, on Merseyside, in Scotland and in London, which are involved in this industry. Thirdly, there is anxiety that there should be a total guarantee of the access of 1·4 million tons of Commonwealth sugar into the countries of the EEC Fourthly—and this point has not been brought out fully—there is concern that there should be negotiated international arrangements to ensure that the sugar goes in the right way and at the right price and is not re-exported, and that the price of sugar in the free market is not artificially depressed by any action of the EEC. Low prices in the free market for sugar can cancel the benefits of whatever guaranteed markets have been arranged for the rest of the sugar. One cannot divorce a free market from a controlled market, nor quantity from price. Both are inter-related.
I cannot regard the speech of the right hon. Gentleman the Minister for Agriculture, Fisheries and Food as going even half way to meeting our anxieties. The Government accepted our motion but to many of us it seemed that the Minister's qualifications were too numerous and ran too deep. It is clear that the Opposition motion was accepted on rather cool calculations of what might happen to a vote in this House if it were not accepted. However the motion has been accepted.
Those of us who served on the Select Committee for Overseas Development and had occasion to question the Deputy Secretary of the Ministry of Agriculture, Fisheries and Food have grave doubts about whether the Ministry is staffed to meet some of the concerns that we have on behalf of the developing countries. We established in questioning the evidence to the Select Committee that the Ministry has no one of principal level or above who is concerned primarily with putting forward the needs of the developing countries within the discussions and briefings held in the Ministry in relation to the Common Market. We did not feel that that was at all good and we had some strong words to say, in appropriate par-

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liamentary language, in the Select Committee's Report. We have the impression from the Minister and from other right hon. and hon. Members opposite, with the exception of the Minister for Overseas Development, that they are not sufficiently geared to the nature of the problems of developing countries.
After all, what is it that we are discussing? Let me take four brief examples. I take Mauritius, with a 90 per cent. dependence on cane sugar for its export earnings. I take Fiji. The Minister told us that over the weekend he had met the Prime Minister of Fiji. Fiji has a third of its work force dependent on cane sugar. I take British Honduras and Swaziland. The largest employer and the largest export is cane sugar. Then I take India, which we tend to forget about in this context. India has 250,000 work people dependent on cane sugar. Then I take Guyana, Trinidad and Jamaica where sugar again is the largest employer. We must understand that it is not just the harvesting of sugar but some of the developing industrial complexes growing up round the harvesting of sugar which are threatened.
It has been argued, although no one has given much emphasis to it in today's debate, that what the cane sugar monocultures need to do is to diversify and to build up other industries so that they are not so dependent. But everyone in this House recognises that many of them are desperate to diversify but can do so only on top of sugar and not out of sugar. Only with sugar can they get the export earnings that they need for the investment to diversify.
We have to remember that the workers in cane sugar in the small pathetically dependent developing countries are amongst the 70 per cent. of the world's poor who are trying to scrape a living from the land. If the land fails, we see situations like the famine in West Africa and like the present devastating famine in Ethiopa from which we are only just learning about.
Let us look at the issues created. We come now to what British policies should be. We have to match what the right hon. Gentleman has said against what these policies should be. Let me give the right hon. Gentleman one text for what he should be ensuring in Brussels:
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"… sugar is a major commodity in the common agricultural policy … The real significance of both Protocol 22 and Lancaster House is that the enlargement of the Community must bring about a change in this policy"
—that is to say, the common agricultural policy.
"It is not sufficient that association treaties should simply guarantee access for quantities of sugar. They must also provide that the full quota must be bought and imported into the Community … If this is not done the sugar could be bought raw from the country of origin and dumped on the world market in competition with that county's free market sales."
The source of the text is the Conservative Commonwealth and Overseas Council. I am certain that the right hon. Gentleman is familiar with it. The second one, briefly and beautifully succinct, is:
"Britain should oppose proposals which would make the Community a net exporter of sugar. Such a position could only be achieved at the expense of the developing nations … Britain should in general support the growth of cane sugar production and oppose unlimited expansion of beet sugar production by the rich nations of Europe."
a beautiful text, and ideally suited to the right hon. Gentleman. It is from Aims of Industry. We have, too, the Select Committee on Overseas Development. I do not know how that rates compared with the Aims of Industry and the Conservative Overseas Council in terms of advice, but it has many strong things to say.
Let us look at the proposals for a change in the common agricultural policy, a problem in which one recognises that the Minister in his negotiations is, on the one hand, negotiating about 1·4 million tons of cane sugar and, on the other, negotiating within the context of the CAP for some desirable change in the level of beet production in Europe. The problem is that he has to mesh these two together and come out with the right answer. But he will not get the right answer on either of them unless he gets it on both.
We know well—and hon. Members have reminded us in the House tonight, as did the Minister—that there has been in the past a strict limitation on homegrown sugar beet to make room for Commonwealth sugar. We take that as our base. What, of course, the European Commission proposed in its April memorandum did not go very far

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in its suggestions for limitation of sugar beet production in Europe.
The facts show that world consumption of sugar, both beet and cane, has been increasing at the rate of nearly 200,000 tons a year. It has been increasing by 3 per cent. within the Six—not the Nine. But the acreage put to beet within Europe has made it possible for that production not only to meet the increase in sugar consumption in Europe but to go beyond it and from time to time to put the Community in the position of a net exporter.
This is at the heart of the matter. We have to understand the equation—with world consumption of sugar increasing, with EEC consumption increasing by 3 per cent. a year, if that increase were to be met by cane sugar or if a higher proportion of EEC consumption were to be met by cane sugar, if we took the 1·4 million tons as a base from which to move up and not down, the developing countries would be happy and there would be no question of the Minister saying, as he said today, shocking many of us, that he was now assuming a contraction in the sugar refining industry in Britain.
It does not make sense and the Minister must insist with his colleagues—in the same way as in the past the French have insisted often enough with their colleagues in Europe—that sensible things are done. There is no need for any reduction in the cane refining capacity in Britain, provided that beet sugar production in Europe is not permitted to meet increased consumption within Europe. So we cannot accept it when the Minister tells us that almost his starting point is that there will have to be some reduction.
Instead, it seems to me—I fear that this is what he has in his mind, not as what he wants but as what he is likely to get in the negotiation—that he is thinking of success in getting agreement on the 1·4 milion tons, so that he can say, "It is all right. I have fulfilled the Lancaster House declaration and the commitments," but without any guarantee—he carefully did not mention any of this in his speech—that out of that 1·4 million tons, there will not be a considerable re-export from Europe, pushing down the market price, with European-produced beet sugar meeting the European needs and with the inevitable contraction in our refining industry.
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If that is what is in the right hon. Gentleman's mind as what he may have to accept, then it is clear from what has been said on both sides today that that would not be enough for us. The message is that he must fight very hard on this and that we must win.
Mr. Godber: I would not wish any wrong impression to go out from the House. That is certainly not my intention. I look to see most of the 1·4 million tons coming into this country. Without any doubt, it will fulfil the useful position that it has had in the past. The question of surpluses in the Community as a whole is something that we shall have to hammer out in relation to the position. But I make it clear that my intention is not what the right hon. Lady thought that it might be.
Mrs. Hart: Let me make myself clear. I do not for one moment think that that is the right hon. Gentleman's intention. However, it may be his fear of what the outcome could be. What the right hon. Gentleman must understand—from what he has just said he seems not to comprehend this—is that there is incompatibility between 1·4 million tons coming in and being sold within the market and a continued expansion in beet sugar production in Europe. The two are not compatible. That is my starting point. One has to see these links. In order to win on one the right hon. Gentleman must win on both.
I am sure that his intention is to do this, but one noticed some of the omissions from his speech today and that, perhaps, there is this doubt in his mind whether he can fully succeed in this dual objective. What the House is saying today is that the right hon. Gentleman has not succeeded and must fight to the point where success is total and guaranteed.
I turn to another point which has not been mentioned today but which will clearly figure largely in the discussions of the Commission's memorandum in the Council of Ministers. That is the proposal for compensatory finance. Again, the Select Committee had things to say about that, but I shall merely outline that we know that the Commission proposed, in its April memorandum, that

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developing countries which export primary products to the Community should not suffer reduced earnings on those exports either because of a fall in world prices or because of smaller exports to the Community. Seven products have been identified, of which sugar is one.
The memorandum indicated that the Community production of beet sugar would not really be curtailed and that the Community would take part in a new International Sugar Agreement ultimately as a net importer but only in conditions in which world sugar prices remain reasonably stable. If they rose the Community would be free to regard itself as a net exporter. Broadly, that is what the memorandum said.
The memorandum also said that the Community should guarantee by means of non-refundable loans the stability of earnings for sugar by the developing countries and that the loans should equal the difference between a reference level and the actual level of earnings. I shall not go into the complications of the reference level.
Even that has not been accepted and presumably it is still very much under discussion. But the proposal for compensatory finance does not meet the needs of the developing countries, either in respect of sugar or in respect of the other commodities which have been identified, because money does not mean jobs. The only thing that means employment is being able to sell what one can produce. It is guaranteed access to the market alone that can make certain that the developing countries do not suffer.
The Minister said—he argued this very strongly—that the fact that the Commission had no part to play in the discussions in Geneva on the International Sugar Agreement, and the fact that Britain as a result of membership of the Community had no part to play directly in those discussions, did not make any difference and that the talks would have broken down anyway. We cannot accept that, either. I think it was the right hon. Member for Thirsk and Malton (Sir Robin Turton) who said that we had always been able to play a very strong role in helping these negotiations to succeed. Had we been there, or had we
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been able to persuade the Community to be there, it would have made a difference.
As it is, the developing countries which produce sugar are now in an absolutely critical state. They have not got an international sugar agreement. They have not yet got a guarantee of 1·4 million tons into the Community. They do not know what will happen to the beet surplus in Europe.
All that is left for any of the sugar-producing countries is the link between Cuba and the Soviet Union, for their sugar, and the link between the United States and certain other countries for theirs. Without either the understanding that they need within the Community and without the International Sugar Agreement, it is now crisis for them. It may not yet be crisis for the Community or for Britain, but it is crisis for them. It is just as much a crisis for them as that which is facing workers in the sugar refining industry in Britain if these matters are not resolved satisfactorily during the next few months.
We must not under-rate the real seriousness of that. We can get a glimpse of the state of confusion and irresolution which is prevailing inside the Council of Ministers and a flavour of the problems which the Minister has met in his negotiations when we consider the Commission's position and the "declaration" that the Commission observers were to have issued had the International Sugar Agreement talks succeeded instead of breaking down. The Agence Europe Daily Bulletin of 15th October says:
"as is generally known, the imminent signing of the new Agreement"
—this is when it was thought that the talks were going to succeed—
"has led the permanent representative of the Nine to hastily draw up"
—that is not my split infinitive—
"a declaration which was to be made by their spokesman …"
The declaration reads:
"The Community having as yet been unable to bring to fruition its work on the future sugar policy and not having been represented at the negotiations on the Agreement, has reversed its standpoint in its entirety with respect to this Agreement."
Could there be a greater indication of the total lack of policy within the Community and within the Council of Ministers? That

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brings home to us the real problems which have faced the Minister. We have every sympathy with the Minister for the problems with which he is contending in these negotiations.
The Minister must ensure that the 1·4 million tons is brought and used within Europe. He must ensure that there is no re-export of cane sugar from the Commonwealth to depress world prices. The Minister must work and must succeed in getting a limitation imposed on beet sugar production in Europe. I suggest to him that it would be wise to stabilise production in Britain rather than to increase it. There should be no need for cut-back of beet sugar production in Britain.
There are different views whether European beet sugar merely needs to be held at its present level or reduced. I think it is likely, if we want to meet the needs of the developing countries, that it must be reduced. The Minister must not at this stage make the assumption which he has been making too easily that the future of the British cane refining industry is in danger. We must leave it to him to fight for a little longer before we talk about redundancies and before we are prepared to look at their social consequences. We rely on him to fight to defend any contraction of the British refining industry.
We must ask the Minister to work as hard as he can to ensure that along with the completion of the policy making of Commonwealth sugar there is a constructive approach to the international sugar agreement and the reconvening of talks at the earliest possible moment.
The Select Committee on Overseas Development decided to concentrate its attention, as the hon. Member for King's Lynn (Mr. Brocklebank-Fowler) and I know very well because we both served on the Committee, upon the effects on the developing countries of British entry is to the EEC. The Committee's report was published at the beginning of September. Referring to a stabilisation scheme, the report says:
"But such a scheme … would be no substitute for enlarged market access and would be a mere palliative for the denial of such access."
The report continues:
"The intent of the Community about the priorities and needs of the developing countries is inevitably called into question. It is,
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above all, on providing greater access to markets for the Third World, even where this conflicts with those tenets of the CAP and the CET which have until now been at the heart of Community policy, that the outcome of present negotiations will be judged."
The Chancellor of the Duchy of Lancaster, the Minister of Agriculture, Fisheries and Food and the Minister for Overseas Development are well aware that we are not merely talking about the test of British success in the negotiations but the test of what the European Community is all about in its relations with the world outside.
9.35 p.m.
The Minister for Overseas Development (Mr. Richard Wood): The opening speech of my right hon. Friend the Minister of Agriculture and the whole of our subsequent debate have concentrated on two main aspects of this complicated matter. The first is the future of the Commonwealth producers to whom we not only have important obligations but have given solemn undertakings which my right hon. Friend made perfectly clear we are determined to fulfil. The second, which has occupied a great deal of our debate, is the future of the sugar refining industry in Britain.
I will deal first with our undertakings to the developing countries of the Commonwealth whose economies are heavily dependent on the production of sugar and which I will discuss in the broader context of their proper relationship both with Britain and the European Community. I will then speak on the problems as well as, I believe, the opportunities which face our refining industry at home immediately and in the years to come.
This is neither the place nor the time to rehearse the arguments, which convinced me in the 1960s and remain to me as convincing today, why Britain should join the European Community. That is not what the debate is about, but I believe it is relevant to the motion that I should discuss the relationship between the European Community, which we have now joined, and the developing countries.
I continue to believe that the European Community, especially after its enlargement, is a group of nations with immense potential, economic, political and in other ways, and that its potential is greater still in its latent power to bring greater

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unity to the world. No one will deny that unity is now more than ever the world's greatest need. I am convinced that it cannot realise that potential unless and until—as the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) said—it is prepared to look outwards and build constructively on its hitherto divided connections with different parts of the developing world. For instance, in Africa past rivalries have divided a continent which now longs for, and seems to be working effectively for, a greater unity.
The negotiations to which my right hon. Friend the Chancellor of the Duchy has referred which have now been opened in Brussels for a new association between a large number of nations in Africa, the Caribbean and in the Indian and Pacific Oceans give me grounds for hope, however long may be the road to a successful conclusion. In the meetings which I have attended I have been struck by the view expressed today by my hon. Friend the Member for Cheltenham (Sir D. Dodds-Parker) that trade rather than aid is the wish of the developing countries. My hon. Friend the Member for Dorking (Sir G. Sinclair) emphasised the same conviction when he said that the outlet for trade is by far the best outlet for the developing countries.
Sugar—and in particular the arrangements to replace the Commonwealth Sugar Agreement when it expires at the end of next year—has always seemed to me to be a measuring rod of the sincerity of our concern for the interests of the developing world—not that it touches the interests of some developing countries at all and it affects only marginally the interests of several others which will play in future an increasingly important part in the history of the world. None the less, it remained—and still remains—one of the surest present tests of the will of an important group of the richer nations to work for the greater prosperity of the developing world and, by doing so, to achieve as well their own greater prosperity. If we had not been willing to give and not resolved to honour undertakings to a number of nations whose economies depend predominantly on the growth and sale of this single product I believe that we should have been guilty of a lack of interest in and concern for
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the problems and aspirations of the whole developing world, because the problems of the sugar-producing countries are themselves a measure of the problems of all the developing countries. None of them is rich and some of them are desperately poor. They depend to an alarming extent on the sale of their primary produce and many of the sugar-producing countries depend virtually on the sale of that one product, as the right hon. Lady has reminded us. Their employment prospects are not encouraging and even if population increases could be immediately and miraculously arrested, the problem of job creation in those countries would still be appallingly difficult. Again, in the sugar-producing countries the bulk of the employment prospects for doing this lie in one industry alone.
The right hon. Lady spoke about the possibilities of diversification. They, I agree entirely with her, offer little immediate hope. None of those countries is like ours at the beginning of the nineteenth century—on the verge of an industrial revolution. Agriculture is long going to remain the basis of their economies, and even within agriculture the scope for immediate diversification is small. Many of us have seen, in our visits both to countries mainly dependent on sugar and to many others, hopeful prospects of eventual escape to a more widely spread economy, but in all of them it will still be a slow process. Meanwhile their needs must be met. It may be possible to diminish their relative but not their absolute dependence on sugar.
If one looks, for instance, at the dependence on sugar of the four countries most heavily involved one sees that sugar exports from St. Kitts, in the Caribbean, are 93 per cent. of the total exports; in Mauritius over 90 per cent.; in Barbados and Fiji, over half of their exports. Mauritius has two-fifths of her whole employment in sugar. Barbados over one-third. Of these four, Mauritius and Fiji are fairly low-cost producers and they sell much of their output on the world market, but the others produce at a higher cost and largely depend on their bilateral arrangements under the CSA.
A solution which has been often proposed, perhaps chiefly by those with

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rather little knowledge of the climatic and agricultural conditions of the countries concerned, is that they should diversify quickly into other crops. The suggestion has usually been couched in general terms. There have been few constructive ideas about the type of crop which would be economically viable and would offer as much employment as sugar. In the longer run the growth of the economies of all these countries is bound to lessen relatively their dependence on sugar, but to suggest that it can be immediately and rapidly replaced is to under-estimate the time needed to carry out a major reorientation of those economies, and to propose that industry should replace sugar as the source of employment is also to underestimate the massive investment that would be required.
Production of CSA quotas creates about 150,000 jobs. If one estimates the capital cost of creating a new job in industry at around £2,000 it would perhaps require an investment of £300 million, a sum nearly the size of the whole aid programme, to provide alternative employment. This is the measure of what I regard as an alternative unacceptable either to the developing countries, if only because this vast reorganisation would take years, or, for a number of other reasons, to the Government.
In the light of all this, not only do I believe it was right for us to give those countries the undertakings we did; I am convinced that we had no alternative. After what my right hon. Friend and I have already said, I hope that there is no need for me to re-emphasise the Government's firm determination to fulfil the assurances we have given.
Mr. Heffer: We are all assuming, of course, that the EEC Commission's proposals will be accepted, and the whole assumption of the right hon. Gentleman's speech is on this basis. But supposing the Council of Ministers, particularly the French, say, "No, we are not prepared to agree" and veto the proposal of the EEC Commission. What will then be the attitude of the British Government?
Mr. Wood: I must answer the right hon. Gentleman by saying that I have no intention whatsoever of admitting any possibility of our not achieving our objective in this case. I believe that not
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only have we given undertakings but that they have been taken note of by the whole Community, which realises as well as we do the force and determination behind our desire to achieve our objective.
Sir Elwyn Jones: Does that mean that if the necessity arose Her Majesty's Government would exercise the veto power?
Mr. Wood: I do not think that that is a very helpful addition to our debate. It seems to be an undesirable element to introduce into what will be difficult and delicate negotiations. Clearly, extreme courses are open to us, as they are open to all our partners, but the right hon. and learned Gentleman will agree that it is unwise, so soon after marriage, when one is getting to know one's wife better, to solve any small difficulties that arise by threatening divorce.
Mr. Heffer: This was a shotgun marriage.
Mr. Wood: Like other hon. Members, I should have felt much happier if final agreements had been reached, and I understand perfectly well the anxiety expressed by Jamaica's Minister for Trade and Industry earlier this week. But the arrangements for cane sugar produced in the Commonwealth, important as they are, are only one part of the Community's sugar policy, and I remain confident of success even though the negotiations for future arrangements are likely to be a long process.
The right hon. Member for Lanark (Mrs. Hart) has already outlined the factors which made some reorganisation of the United Kingdon industry desirable—she used strong words—even without the impact of our accession to the European Community. Many hon. Members have expressed anxieties with great feeling about the effect that these changes may have—will have—on employment in the port refineries.
I should like to make perfectly clear to the right hon. Gentleman the Member for Newton (Mr. Frederick Lee) and others that I entirely share these anxieties. But I repeat that changes would have forced reorganisation on the refining industry quite independently of any connection between Great Britain and the European Economic Community.

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I felt during several of the speeches this afternoon that certain hon. Members had been seized by a degree of pessimism which was not justified. The Australian imports are likely to continue for some time to come. Also, as I have tried to make clear, we intend to secure the importation of 1·4 million tons from the CSA countries—a large proportion of which would be refined here, as my right hon. Friend said. In addition there is no reason why the 250,000 tons or so which are at present imported for refining and re-export should not continue to be available for refining.
Therefore, although there will be a reduction, the tonnage that is likely to remain for the port refineries does not look like being disastrously or immediately diminished. The industry, therefore, has time to reorganise, no doubt with active help from my right hon. Friend in so far as he is able to give it, as many of our industries have had to do in the past, without having to suffer—perhaps here I shall have the agreement of a number of hon. Gentlemen opposite—anything like the human dislocation which has, for instance, been the lot of the coal industry during the last decade.
Mr. Shore: The crucial factor in the picture which the right hon. Gentleman has described is the Australian supplies. He said that he hoped it would be some time before they were phased out. He has heard the debate. Can he give any more assurance about the length of time which, at present, the Government have in mind, and whether there is anything he can do, first, to prolong that length of time, and second, to encourage alternative cane sugar production from developing Commonwealth countries?
Mr. Wood: I think that I must not give way again or I shall never reach Australia, which is a little further down my pile of notes. I shall come to it shortly and take note of the point made.
My right hon. Friend is engaged in talks with the sugar companies and, as he pointed out, the talks are intended to ensure that the necessary reductions in refining capacity, of which we cannot yet forecast precisely the extent or location, take place in a rational and orderly way, with proper regard for the interests of the work force and the needs of the development areas.
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I come now to some of the points which have been raised, which will include the point raised by the right hon. Member for Stepney (Mr. Shore). My right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) mentioned the level of the refining margin in France and suggested that we should have no difficulty in negotiating a proper margin for refiners here because the French margin was already very high.
This comparison is extremely difficult to make, because the two industries are very different. The three French refineries are very small and together produce only a small proportion of the total French output. Moreover, at least 90 per cent. of the production of these refineries consists of special types of sugar, mostly cubes. Our refineries, on the other hand, at present produce about 75 per cent. of the total United Kingdom consumption, and over 90 per cent. of it is in the form of ordinary granulated sugar. Therefore, the position is that, in so far as they are producing ordinary granulated sugar, the French refineries receive a margin which would certainly not be sufficient for our refineries. In fact, the French get their margin from the production of the special sugars, and these can be marketed at a premium which is substantially greater than the extra costs of producing them.
It is, therefore, extremely difficult, as my right hon. Friend will understand, to calculate exactly what the French refiners would need if they were producing ordinary sugar throughout. I doubt that it is a figure as high as the £22 per ton mentioned by my right hon. Friend, but I think it is at least as high as the £17 per ton which our own refiners need, and it is probably higher.
The hon. Member for Greenock (Dr. Dickson Mabon) wanted my right hon. Friend to publish the memorandum of 8th August—these are rather cryptic descriptions but we all know what we mean. I understand from my right hon. Friend that this would be difficult. I can understand why the hon. Member, with his concern for the interests of workers in the refining industry at Greenock, should take this view.
But clearly a negotiation of this kind between three independent companies cannot be conducted in the full blaze of

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publicity, and certainly the Government have no right to publish a document which sets out for their information, in confidence, the stage which these negotiations had reached in August. I assure the hon. Member, first, that the Government have every intention that only a reorganisation in the national interest should be carried through and, secondly, that the interests of the workers in all the refineries will be fully taken into account. The hon. Member also mentioned that he would like to see my right hon. Friend next month. I believe my right hon. Friend is planning to receive him.
The right hon. Member for Stepney will be pleased to hear that I now come to the question of Australian sugar. This will probably be the last point that I will be able to deal with. I cannot hold out any hope that Australian exports to this country can be phased out over a period longer than three years.
Mr. Shore Mr. Shore Why?
Mr. Wood: The provision in the Treaty of Accession, on which the request hangs, is Protocol 16 and this applies during the transitional period, which goes up to the end of 1978.
Mr. Mabon: It is five years.
Mr. Wood: But Australia is in a fundamentally different position from that of the developing countries. The developing countries are heavily dependent on sugar exports for their foreign exchange earnings and employment. Their guaranteed outlet under the CSA represents a high proportion of their total export. Neither of these facts is true for Australia and one cannot argue for special treatment on the basis of need. One can argue only on the basis that what they have enjoyed so far should not be cut off overnight. From this point of view three years is a reasonable time. It is a time which has been mentioned by the Australian Government. Moreover, far from the CSA outlet being of benefit to Australia, it necessitates its selling its sugar at substantially below the world market price.
In a typically forthright speech, the right hon. Member for Newton used an unfortunate phrase. I shall have to check
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tomorrow but I think that roughly he said that we were conniving with the beet producers against the interests of the Commonwealth sugar producers. It was an unworthy remark which vitiated the rest of his speech, particularly on land, to which I paid great attention, although I did not entirely agree with him.
The problems we have been discussing tonight would be with us whether or not we joined the European Economic Community. They would take a different form if we were not members. We should be renegotiating a continuance of the Commonwealth Sugar Agreement. We should be morally bound to find a market for the sugar produced by the developing countries as we are morally bound as a member of the Community, and we shall succeed.
Similarly, the problems of the sugar refining industry would have to be solved if we were outside the European Community, as they must be solved now that we are a member of it. Therefore, neither our problems nor our opportunities are, in my view, altered by our membership of the Community. I hope that the unanimous acceptance of this motion tonight will add strength to the determination of my right hon. Friend, who was described by the hon. Member for Poplar (Mr. Mikardo), with singular inappropriateness, as defeatist. It will give him strength to carry on the struggle both on behalf of the developing countries and towards a sensible reorganisation of the refining industry.
Question put and agreed to.
Resolved,
That this House, recalling the dependence of developing Commonwealth countries, both on the sale of cane sugar to the UK and on orderly marketing through the International Sugar Agreement, accepting the need for the EEC to curtail its own production of beet and to join a new International Sugar Agreement as a major net importer of sugar and, noting the interests of those employed in the sugar refineries on the Clyde, the Mersey and the Thames in the maintenance of a viable refining industry in the UK, calls upon Her Majesty's Government to reaffirm and honour its undertakings to the Commonwealth sugar producers to import 1·4 million tons of cane sugar when the present Commonwealth Sugar Agreement ends and to insist upon major accompanying changes in the sugar policies of the EEC.

ORDERS OF THE DAY
  GOVERNMENT TRADING FUNDS BILL
  Lords amendments considered.
  GOVERNMENT TRADING FUNDS BILL
    Clause 1

      ESTABLISHMENT OF TRADING FUNDS FOR CERTAIN SERVICES OF THE CROWN
      Lords Amendment: No. 1, in page 1, leave out line 20.
      9.59 p.m.
      The Minister of State, Treasury (Mr. John Nott): I beg to move, That this House doth agree with the Lords in the said amendment.
      Mr. Speaker: If the House agrees, it might be convenient to take with this the other two Lords amendments:
      No. 2, in page 2, line 13, at end insert:
      "(4) Where, in accordance with subsection (1) above, the responsible Minister proposes to direct that any of the operations of a service falling within subsection (3)(f) above shall be financed by means of a trading fund he shall, if he considers that those operations consist substantially of the provision of goods and services in the United Kingdom otherwise than to government departments, consult such persons as appear to him to be appropriate."
      No. 3, in Clause 6, page 6, line 8, at end insert:
      "(4) Where by virtue of subsection (4) of section 1 above a Minister has held consultations in relation to proposals for the financing of any operations of a service by means of a trading fund, he shall, before laying, in accordance with subsection (2) above, a draft instrument containing the Order giving effect to those proposals, lay a report of the results of those consultations, and of his conclusions, before Parliament."
      Mr. Nigel Spearing: On a point of order, Mr. Speaker. It will be within your knowledge that I presented a manuscript amendment to the last of the Lords amendments.
      Mr. Speaker: Order. I can help the hon. Member. That amendment was not selected.
      Mr. Nott: As the House knows, the Bill is concerned with the methods of financing certain services within Government. It is not directly concerned with the policy framework within which they operate. The Bill would not of itself
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      require any change in the policy of a particular organisation to which it was applied. Conversely, it is possible for the Government to change the policy—
      It being Ten o'clock, further consideration of Lords amendments stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That the consideration of Lords Amendments to the Government Trading Funds Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. John Stradling Thomas.]

GOVERNMENT TRADING FUNDS BDLL
Lords amendments further considered.
Mr. Nott: As I was saying, conversely, it is possible for the Government to change the policy of such organisations if they so wish without applying the Bill to them. Nevertheless, as hon. Members will be aware, when the Bill was considered in this House on Report, and in the other place, concern was expressed about the effect on the organisations of the change in the way in which they were financed, and their being held to account for the management of their assets. This concern was particularly directed to the case of the Ordnance Survey, the policy on which the House will be considering later tonight on the Adjournment.
The Government, therefore, thought it right to accept the spirit of the amendments tabled in the name of my noble Friend Lord Balerao and the noble Lord Lord Shackleton. The first amendment deletes the Ordnance Survey from the list of organisations named in the Bill. I should make clear, as Lord Shackle-ton did when orginally moving the amendment in another place, that this does not rule out a trading fund for the Ordnance Survey. It means only that, if the Government decided that a trading fund was right for the Ordnance Survey, it would have to be introduced by virtue of Clause 1(3)(g) of the Bill and in that case the requirements for consultation would have to go on as spelled out in the second and third amendments.
The second amendment provides for consultation when a Minister proposes to transfer a trading operation falling within

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Clause 1(3)(g) to trading fund finance, if that operation consists substantially of the provision of goods and services in the United Kingdom otherwise than to Government Departments. This would clearly apply to the Ordnance Survey if the Government should decide in a few years' time that trading fund financing was appropriate for it. But the requirement to consult does not apply to a trading activity which is primarily within Government, or one where the outside interest is in supplies overseas.
The third amendment complements the second amendment to Clause 1, providing for the laying of the results of consultations before both Houses. This means that, although the affirmative resolution is properly a matter for the House of Commons alone—the order deals with changes in the method of financing, and that is why it would apply only to this House—the other House will have an opportunity to debate the consultative document before the order is made, if it so wishes, because, say, the report of the consultation shows that the proposal raises wider non-financial issues about the nature of the service.
It was implicit in the argument for these amendments that a switch to trading fund finance could have wider non-financial implications which might emerge during the process of consultation. It would be reasonable for the other House to debate any such wider implications of the Government's proposals, although it would leave to the Commons alone the central financial points, dealt with in the draft affirmative order.
I hope the House will feel that these amendments are acceptable, since they were tabled in the Lords by the Government with the intention of meeting the concern about consultation which had been expressed.
Mr. Robert Sheldon: As you, Mr. Speaker, will know, this has been a troubled Bill mainly because of factors outside the control of the hon. Gentleman, beginning with the lack of publication of certain proceedings, for which amends were subsequently made.
But since the Bill was first published, interest has centred around the working of the Ordnance Survey. We know that
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the Ordnance Survey has had certain net losses amounting to over £5 million in 1969–70, rising to over £6 million in 1971–72. Although these may be book losses, there is a very important element of subsidy here for those people whom we all wish to encourage in one way or another in the pursuit of their activities, whether scientific activities or whether as ramblers or people from the Youth Hostels Association. A large range of people make great use of the Ordnance Survey maps in a way which hardly any other country in the world does, and this fact has probably contributed a great deal to our love of the outdoor life, the benefit of which is very difficult to measure.
Although under any system which the Government may introduce, this element of subsidy can obviously still remain, nevertheless there is an obvious danger that when a new system is introduced so that the element of subsidy becomes more apparent—that means that it is paid by one body to another body rather than within the same Department—the element of subsidy comes under rather more rigorous questioning than it does at present.
It may be that faced with a situation like this, a Government Department, being very pressed at some stage for certain economies, would find it very difficult to refuse such economies of a kind that would seriously impede the availability of maps to people who derive benefit from them. Even though no decision would be made now, it may be that devising a scheme for the Ordnance Survey to become part of a Government trading fund would almost pre-empt such a decision because of the way in which our economic control operates.
Therefore, we on this side of the House will certainly want considerable safeguards before we let this matter pass. We fully welcome the removal of the Ordnance Survey from the list of those candidates for inclusion. At the same time we allow the Government to put into a Government trading fund
"any other service managed by a Minister of the Crown",
which could include the Ordnance Survey.
I understand from the debates which took place in another place that there is to be a review of the working of the

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Ordnance Survey and of the Government's policies relating to it. May I request confirmation from the Minister that this review will be as wide as he can make it, that it will be as informative to us in this House and to the public generally as can be arranged, that consultations, which I understand have been promised to the Royal Society, will also take place with as many bodies as are interested, and that publication of such discussions will be made available to all interested parties.
At the end of this, there will be a need for a full debate in Parliament setting out fully the Government's intentions concerning the provision of maps and other facilities so that we can be in no doubt about what the change will imply. Until we get specific assurances of this kind we shall be very suspicious about this matter.
Mr. Spearing: I am sure the House is grateful for the array of talent on the Government Front Bench. There is a Minister from the Treasury, there are two Ministers from the Department of the Environment, and there is one hon. Gentleman who is responsible for Her Majesty's Stationery Office which features in this Bill. But for my predeliction for the Ordnance Survey, I would dearly love to debate that in this context.
Not only do we in this House rely upon the publications of Her Majesty's Stationery Office but I fancy that the implications of the Bill for that very important Department of State are probably far greater than hon. Members have yet realised. The Parliamentary Secretary will know that I wish to further sales of these publications although so far he has not acceded to my request for the opening of a Stationery Office branch on the corner of Bridge Street, which would be excellent and in accordance with the principles of the Bill.
The Minister of State has been very frank. He said that the amendment of the other place resulting in the Ordnance Survey not appearing did not matter because at any time by Order in Council the Government could put it back in under Clause 1(3)(g). Such frankness has not been a feature of the way in which this matter has been handled throughout.
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As has been said already, there will be two debates on the Ordnance Survey tonight. I shall confine my remarks in this intervention to matters which are the responsibility of the Treasury. Those matters which are the responsibility of the Department of the Environment I hope to deal with in my Adjournment debate. It was not until yesterday that there was any guarantee that the Lords amendments would be carried. If they had not been my Adjournment debate would have been the only longstop available.
The amendments are more apparent than real in relation to the Ordnance Survey. My hon. Friend the Member for Ashton under Lyne (Mr. Sheldon) referred to the letter sent by the Secretary of State to the Royal Society on 2nd November. Again that so-called concession on the 2½-inch map and the tertiary levelling is more apparent than real. It does not alter the statement of the Secretary of State on 19th February of this year. In its reply the Royal Society admits that it is not competent and not suited to deal with all users of the Ordnance Survey.
The Ordnance Survey has already an organisation of users and holds a users' conference which in November 1972 was cancelled because a review was taking place. It was called only to be told the results of the review. As for the Government's desire for consultation, I cannot feel that their actions so far have lent colour to their sincerity. The statement of 19th February still stands, and I shall return to it later.
The important point is that the statement stemmed from a confidential report. That report has not been made public, although the repercussions on the service, on the employees and on the public at large in terms of its effect on the quality, price and nature of the Ordnance Survey is fundamental. The concessions on the 2½-inch map and the tertiary levelling therefore are only symptoms of an objective review of which we know very little.
I said that I should be asking the Minister of State to reply to questions on one or two matters which were his responsibility because they have been debated in another place. As an example of what I like to think is the unconscious way in which Ministers have not been

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entirely explicit, in the debate in another place the noble Lord, Lord Lauderdale, asked for an assurance that the geological survey would not be affected by this Bill. He was assured that the Institute of Geological Sciences and the Ordnance Survey were things apart. So they are. It just happens that the geological maps are printed on black and white outlines provided by the Ordnance Survey.
So often Government Ministers say something which in itself is a correct statement but then seek to imply something which is not correct. I do not go so far as to say that Ministers have been prepared with such defences or wished them to be put into their hands. But there has been a tendency, not only in this Bill but in others, for that to happen more and more. I believe that it has happened in an even more serious way in respect of one of these amendments.
10.15 p.m.
My noble Friend, Lord Shackleton, who is a Vice-President of the Royal Geographical Society, tabled the amendments in another place which have been translated into Nos. 2 and 3 before us. He moved an amendment calling for a report of the consultations and of the Minister's conclusions in respect of each service to be laid before Parliament, which would be included in the Bill under the terms of Clause 1(3)(g). The noble Lord, Lord Gowrie, said that this was a reasonable request and that the Government favoured such an amendment but that Lord Shackleton's amendment was technically defective. He did not say in what way it was defective and my noble Friend, believing entirely what he had been told, gracefully withdrew his amendment on the assurance that the Government would table their own to take account of the matter.
So they did. That amendment is No. 3, to Clause 6. But there is a great difference, not just in the technical jargon of the Government amendment but in the words themselves, from that suggested by Lord Shackleton. My noble Friend had suggested—the Government, for all practical purposes, accepted the wording—that the Secretary of State
"… shall lay a report of the consultations, and of his conclusions in respect of each service before Parliament".
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But three words have been inserted into the last three lines of Amendment No. 3, which says that the Secretary of State shall lay a report
"… of the results of those consultations, and of his conclusions, before Parliament."
I gave warning to the Department concerned that I should like in writing an explanation of the technical defects of my noble Friend's amendment. I have received no reply to that inquiry.
There is a difference between laying a report of consultations and laying a report "of the results" of the consultations. The report was supposed to be the basis of a debate in the House. How can we debate something when we do not know what actually happened in the consultations or what the views of the applicant bodies were. As the Government amendment stands, we would hear only the results—in other words, the Minister's version. Under my noble Friend's original amendment, we should have been entitled to a summary of the consultations themselves, and, no doubt, in an appendix or actually quoted verbatim, the views of those concerned.
These three words have been inserted on the pretence of a technical defect in the original amendment. I should like the Minister to tell us what those technical defects were and why these three words were inserted. This insertion was not mentioned in another place when these amendments were accepted. All that was mentioned was that the amendment was defective because its wording came from the Maplin Development Bill and was not appropriate.
This is why time and again we have had to press the Government on matters such as this. The Under-Secretary of State for the Environment, the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths), will know what I mean. Essentially it is a matter of good faith. I put it as high as that. The Government have been trying to get away with as much as they can, unless it is noticed.
I noticed this particular technical difference only about half-an-hour before this debate. Earlier today it would have been possible to table a manuscript amendment. The whole of this business came on the Order Paper only today. But for the intervention of myself and one or two of my hon. Friends we should

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have had to debate this matter at 2 a.m. or 3 a.m. today.
It would have been possible to table manuscript amendments until 10 o'clock tonight. I sent to Mr. Speaker an amendment to Lords Amendment No. 3, to delete "the results of" because those were the words written in in another place. But Mr. Speaker, in his wisdom, did not select that amendment. Unfortunately, as far as I know, there was no way in which I could raise this matter or tell Mr. Speaker why I wished to make the amendment. I fancy that if Mr. Speaker reads this debate he will wish that he had accepted it, because that is surely what manuscript amendments are for. That is one of the safeguards of the House.
I hope that the Minister will give an explanation which will avoid the inevitable conclusion of sharp practice on the part of the Government. The Bill is a sharp practice Bill in at least two respects—unless the Minister can prove otherwise. First, there is the King Henry Clause 1(3)(g) which makes the list from which the Ordnance Survey is deleted not a genuine list, because the Government can use it as a decree and can put anything in by Order in Council. Furthermore, unless the Minister has good reason to the contrary, he has deceived my noble Friend by not accepting the original amendment on some technical pretext. We shall hear whether there is a reason. Secondly, the Minister has taken the opportunity to write in three words, which make a very different amendment from that originally accepted.
I await with interest the Minister's reply.
Mr. R. C. Mitchell: As the House will know, hundreds of Ordnance Survey workers happen to live in my constituency in Southampton. Since 19th February of this year many of them have been extremely worried as to their future. It was on 19th February that, in a Written Answer in HANSARD, the Minister enunciated what seemed to be a completely new policy for the future of the Ordnance Survey. The implication of the answer was that the Minister intended to try to turn the Ordnance Survey into virtually a purely commercial under-
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taking—something which it has never been and cannot be.
Pressure from all sorts of sources over the last six months has persuaded the Government at least to modify to some extent the original proposal. The acceptance of the amendment by the noble Lord, Lord Shackleton, to delete the Ordnance Survey from the listed organisations to which the Bill applies will be welcomed as a first step.
As my hon. Friend the Member for Acton (Mr. Spearing) said, and as the Minister said, there is nothing to stop the Minister re-inserting the Ordnance Survey in Clause 1(3)(g) which gives him power to bring in other organisations. The Minister seemed to indicate that he intended to do that.
The whole basis of the argument and of the Minister's original statement in February arose from, I presume, an inter-departmental report—but a report which has remained secret and of which we know nothing, apart from little bits which various Ministers have told us on different occasions. But we do not know what was in that report and upon what basis the Government came to their original decision, announced in February, to change the whole basis of the Ordnance Survey. That is what it amounted to, apart from the technical details of discontinuing certain maps and so on. There was an implication throughout the statement that the whole basis was to be changed.
I hope that the Minister will assure us tonight that he has had second thoughts on this matter and that at least until such time as a full and independent inquiry has been conducted and the results published he will not proceed with the general theme of his original statement in February.
I welcome the amendments that the Government have accepted as a first step, but we need further assurance from the Minister tonight.
Mr. Frank Judd: I join my hon. Friend the Member for Acton (Mr. Spearing) and my hon. Friend the Member for Southampton, Itchen (Mr. R. C. Mitchell) in paying tribute to the noble Lord, Lord Shackleton, for his work in another place and the results of which he has achieved

1401
in terms of amendment of the Bill. I also endorse something else that my hon. Friends said. That is that in effect this is a deceptive Bill; but, like so much of what the present Government do, it is a transparently deceptive Bill. The contradictions between the list of Departments to be covered by the legislation and the permissive clause which follows which enables Ministers to add anything else which seems appropriate is a facade which will not fool many people. While I rejoice that the Ordnance Survey has now been deleted from the list, notwithstanding our misgivings about what could happen in future, its deletion serves only to illustrate the contradictions and inadequacies of this legislation.
If the Ordnance Survey has been regarded as something which cannot be expected to be run commercially and on profitable lines and which must be deleted from the list of Departments in the Bill, presumably the same principles apply to the other Departments. We have heard nothing from the Government about how the principles of a trading fund will operate. For example, the Royal Dockyards employ many thousands of industrial and non-industrial civil servants. We have not heard how they will be given a lease of life which will enable them to run their affairs in a way that would make sense under the general principles of a trading fund.
We have heard no news from the Government about a new opening for the Royal Naval Dockyards in terms of attracting contracts from civil industry. Until we hear much more full thinking from the Government on what they plan for the Departments which are to be covered immediately by the Bill, we are faced with an unsatisfactory situation which must leave a great deal of doubt and misgiving in the minds of countless people directly employed by the Government. For that reason, the House should be left in no doubt about the anxiety and opposition to the Bill which still exists among many people.
Mr. Sydney Chapman: I apologise to the Front Bench spokesmen for not being here when they made their original remarks. I am entitled to say that the business of the House has been so messed about in the last 48 hours that I thought this
1402
matter was to come up late last night. It was only a short time ago that I found it was to come up at some time after the main business of the House.
The hon. Members for Acton (Mr. Spearing), for Portsmouth, West (Mr. Judd) and for Southampton, Itchen (Mr. R. C. Mitchell) put a rather unfair interpretation upon what my right hon. and learned Friend the Secretary of State for the Environment has done. I support Lords Amendment No. 1 that Clause 1(3)(e) should be deleted. The Ordnance Survey is a special institution which has served the country well for many years. It is an institution which cannot be equated in financial terms. One only has to know about the wonderful Ordnance Survey tertiary bench mark system to realise that it would be a sad thing if it were to proceed on purely commercial grounds. That I accept, and I am delighted with Lords Amendment No 1
10.30 p.m.
In fairness to the Secretary of State it must be said that when he had the intention to put the Ordnance Survey Department on a more commercial footing he said at the outset that he was anxious to have the reactions of and to consult the interested parties. Every professional institute in any way concerned with using the Ordnance Survey raised every possible protest against the abolition of the 2½-inch scale map and the tertiary bench mark system. Strong pressure was brought by many local authorities and the local authority associations, and many of the amenity societies also totally opposed the Secretary of State's intention.
It is to the credit of the Secretary of State that, seeing the opposition to what he thought might be the right way for the Ordnance Survey Department to go, he withdrew the idea of abolishing publication of the 2½-inch scale map and undertook to keep the tertiary bench mark system, which is of considerable importance to engineers, architects and surveyors, among others. It is, therefore, unfair to say of the Secretary of State that he did not act in what he thought to be the public interest.
Mr. Spearing: I accept what the hon. Gentleman says, but does not he agree that although these matters have been put right, there might be something else

1403
equally as bad next time round, such as map
availability?
Mr. Chapman: I agree. The hon. Gentleman has the Adjournment debate in which, doubtless, he will expand on that. I am trying to confine my remarks to the Lords amendment. I hope the hon. Gentleman will excuse me if I do not follow his remarks, although I have a great deal of sympathy with him.
It is incumbent on the Government, whether or not the Ordnance Survey Department is run on a completely commercial footing—and I do not think that it should be—to run it on sound commercial principles. The Government have the right to say that many people who benefit from reproducing or reprinting Ordnance Survey maps should pay a much greater contribution towards the cost of the Ordnance Survey than they do at present.
To give one example, it is obligatory on all people who put in town planning applications to submit a location plan to identify the area of land. That is not essential. If a local authority does not know the location of the land to which the application refers it is obviously not up to its job. I do not think that there should be a severe copyright fee for location plans submitted to local planning authorities for planning permission, but it is perfectly right and feasible that people who use tracings of Ordnance Survey maps for site plans should pay a considerably higher fee than they do at present. That is delving into the technicalities of the position, but it would be fair for people in that way to pay more for the services provided by the Ordnance Survey Department and so help to minimise the loss on that aspect of the Department's work.
I am grateful that the Ordnance Survey has been removed from Clause 1(3). Whether or not the Ordnance Survey is removed, paragraph (g) was included in the Bill before it went to the other place. Many of the complaints made of that paragraph, whether valid or invalid, should have been made at the appropriate time and we should not be discussing them now.
Mr. Nott: The hon. Member for Ashton-under-Lyne said that of course there is an element of subsidy in the
1404
existing activities of the Ordnance Survey. He went on to say, correctly, that if the Ordnance Survey were to become a trading fund in future—he appreciates that no decision has been taken and, as I have made clear, none will be taken for several years—the subsidy would be more explicity shown in the accounts than it may be at present. But I think that probably both sides of the House would welcome that. Indeed, there is nothing in the proposals for a trading fund which would prevent a particular map or service or product continuing to be subsidised.
As we made clear, the 2½-inch map, for example, could under a trading fund arrangement, continue to be subsidised by means of Vote finance. But, as the hon. Gentleman said, it would be explicit and everyone would know where the funds were coming from and what they were for. Surely that is a desirable objective favoured by both sides of the House, anxious to ensure that parliamentary accountability is strengthened.
The hon. Gentleman went on to talk about the review. The Government have agreed to publish in the coming months a review document which will show the background to the statement of aims of the Ordnance Survey announced last February, the outcome of the three studies of 2½-inch maps, tertiary levelling and large-scale maps and also details of future consultation arrangements.
This review has been very wide. My right hon. Friend will be answering the Adjournment debate tonight and these matters to a large extent come within the responsibilities of the Department of the Environment. He will no doubt touch on some of the points which concern him more than the Treasury. But certainly the inquiry has been wide ranging.
More than 2,900 bodies have been invited to send in their comments upon the Ordnance Survey and in due course the review will be published. But I make it clear that the consultations referred to in these Lords amendments would precede the introduction of an affirmative order and are quite different from the review to which I think the hon. Member for Ashton-under-Lyne was referring.
Mr. R. C. Mitchell: Why is it that the Government has not yet published the results of the inquiry although, as long ago

1405
as last February, they made a statement of policy based on the results of the inquiry? Why is there this long delay in publication?
Mr. Nott: It is best if I leave matters which are concerned with statements made by the Department of the Environment to my right hon. Friend who is to reply to the Adjournment. But the review is to be published shortly and it will then be before the House. This will give several years before there is any possibility of a decision being made on whether the Ordnance Survey might be a trading fund or not. No one can say that there will not be plenty of time to consider what the review says.
The hon. Member for Acton (Mr. Spearing) said that the Government had not been frank throughout. I am sure he was referring to the question of the Ordnance Survey. I remind him that it was our desire to be thoroughly frank with the House which led us to include the Ordnance Survey in Clause 1(3). I do not quite understand how we could have been franker than to have listed it among the bodies which could one day become a trading fund.
It was not the Government who struck out "Ordnance Survey" but the right hon. and noble Friend of the hon. Member for Acton, who did so in the other place. It is not therefore quite fair for the hon. Gentleman to blame the Government for now allowing it to be brought in by Clause 1(3)(g). As I explained, the 2½ inch map will, if necessary, be financed on the Vote of the Department. I do not wish to cover that ground again.
The other major point raised by the hon. Gentleman concerns the difference between the amendments moved by his noble Friend and those produced by the Government. Had I been given notice that the hon. Member intended to move a manuscript amendment I should have ensured that the parliamentary draftsman was consulted about the meaning of the words "results of". As a layman in these matters, I can say only that I do not think that the actual drafting would make much sense without the words and I can see nothing sinister in them. They say merely that the results of the consultation will be published.
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The best thing I can do is to quote the right hon. and noble Lord Shackleton who moved the amendments. We are accepting virtually the same amendment as he moved. He said:
"I should like to express my appreciation to him"—
meaning Lord Gowrie—
"for the way in which he actually listened to the arguments outside the House—".
Then he went on:
"Although we made it clear that in principle we were not opposed to the Ordnance Survey in due course being financed by trading funds, we were very much opposed to an agreement in principle that it should be so financed until a great deal more investigation had taken place and a report of the consultations was laid before Parliament. The Government's acceptance of my first amendment last week"—
that is the one we are accepting tonight—
"and now their tabling of this amendment"—
he was referring to the Government amendment we are discussing here this evening—
"gives complete satisfaction and meets the objectives that I wish to achieve in the Bill."—[OFFICIAL REPORT. House of Lords. 23rd October 1973: Vol. 345, c. 514–5.]
I appreciate that the hon. Member for Acton wishes to support his noble Friend Lord Shackleton, but Lord Shackleton has expressed himself as being entirely satisfied with what we are doing.
Mr. Spearing: I agree that those are my right hon. and noble Friend's words but after he has read the debate he might not be quite so sure. As for giving the Minister notice, had I noticed the point in time I would gladly have given him notice. Unfortunately I did not notice it in time. Will the Minister tell us why the technical amendment could not be accepted earlier?
Mr. Nott: It is principally for the reason referred to by the hon. Member. The difference in the structure of the amendments was that the original amendment tabled by Lord Shackleton was geared to the belief that the Bill was concerned with a negative resolution procedure whereas the Ordnance Survey can be introduced only by means of the affirmative resolution procedure of this House. Therefore, we have to alter the wording of the amendment to ensure that we have the relevant resolution.

1407
That is the principal reason for the difference between the noble Lord's amendment and the Government amendment. We merely had to get the right resolution.
I turn briefly—and I emphasise that there will be a further debate on this subject later—to the remarks of the hon. Member for Southampton, Itchen (Mr. R. C. Mitchell). I know that he has the Ordnance Survey in his constituency and is concerned about its future but, as I said on Report, the staff would remain civil servants even if the Ordnance Survey were to become a trading fund. In any event, no decision is to be taken on this matter for a good number of years and there will be a great deal of opportunity to discuss these matters in other places. For example, the Comptroller and Auditor General will be auditing the accounts of the Ordnance Survey year by year and he will publish his report; the Public Accounts Committee will consider this matter and there will be plenty of opportunity over the period between now and 1976–77, which is the earliest possible date when we can have a trading fund, for the House to consider the accounts, to discuss the matter in the Public Accounts Committee and to monitor any move towards a different form of accounting as we go along.
In reply to the points made by the hon. Member for Portsmouth, West (Mr. Judd), I cannot be drawn into a debate on the Royal Dockyards since I would be ruled out of order. These are amendments connected specifically with the Ordnance Survey or the organisation of a similar type to the Ordnance Survey.
My hon. Friend the Member for Birmingham, Handsworth (Mr. Sydney Chapman) expressed fears which I fully understand. He said that in the last resort, subject to the need on occasion for the Government to be able to subsidise particular activities by means of vote finance, people should pay a reasonable price for what they purchase. I agree with my hon. Friend. I do not see any reason in equity why the general body of taxpayers should indefinitely subsidise the products of any organisation, especially when those products are bought by people who can well afford to pay a reasonable price for them. I
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see nothing wrong in that and I agree with what he said.
I turn to pricing policy in connection with the Ordnance Survey. There is no difference between what the pricing policy of the Ordnance Survey might be as at present constituted and what it would be under a trading fund. The vast majority of things which the hon. Member for Acton fears could come about as the Ordnance Survey is now constituted. Therefore, a move to a trading fund for the Ordnance Survey would not make the position very different from the present position.
Question put and agreed to.
Subsequent Lords amendments agreed to.

PARLIAMENTARY COMMISSIONER (SALARY)
10.48 p.m.
The Parliamentary Secretary to the Civil Service Department (Mr. Kenneth Baker): I beg to move.
That the yearly rate of the salary payable to the Parliamentary Commissioner under section 2 of the Parliamentary Commissioner Act 1967 be increased from £15,750 to £16,000 and the date from which this resolution is to take effect be 1st April 1973.
Mr. Deputy Speaker (Mr. E. L. Mallalieu): I understand that it will be convenient to take with this order the second order, namely,
That the rate of the salary which may be granted to the Comptroller and Auditor General under section 1 of the Exchequer and Audit Departments Act 1957 be increased from £15,750 to £16,000 per annum and the date from which, under subsection (3) of that section, the person now holding that office is entitled to a salary at the said increased rate be 1st April 1973.
Mr. Baker: Yes, Sir. It would be convenient to discuss the two orders together.
It may be helpful to the House if I explain briefly the purpose of these motions. Both the Comptroller and Auditor General and the Parliamentary Commissioner are in the special position of being Officers of this House. Their salaries are borne on the Consolidated Fund, and can be altered only by resolutions of the House. This is necessary because these two Officers are responsible directly to the House and must

1409
be independent of the Government Department whose work they scrutinise.
The House has always thought it right, however, that these Officers should be paid the same salaries as permanent Heads of Departments. Ever since the post of Comptroller and Auditor General was created in its present form in 1866 the salary has been the same as that for a Permanent Secretary, and when the Parliamentary Commissioner was first appointed in April 1967, his salary, too, was fixed at this level.
The motions before the House are necessary to keep their salaries in step with those paid to Permanent Secretaries, and provide for their salaries to be raised from £15,750 to £16,000 from 1st April 1973. These figures have already been announced and implemented for Permanent Secretaries. This increase follows from the recommendations of the Top Salaries Review Body under the chairmanship of Lord Boyle. That is Command Paper No. 5372.
The Review Body's Second Interim Report on Top Salaries recommends that annual salaries of senior grades in the Higher Civil Service should be increased by £250 per annum with effect from 1st April 1973. I must emphasise that these two officials, like other senior civil servants, have had no increase this year under the freeze or under stage 2. The increases proposed for the Parliamentary Commissioner and the Comptroller and Auditor General amount to about 1·6 per cent. over the period of 15 months since their last increase in January 1972. Over those 15 months, the index of retail prices rose by some 9 per cent. and average earnings rose by 15·6 per cent. I think the House will appreciate that this relatively modest increase of £250, which is the maximum allowed under stage 2, accords with the Government's counter-inflation policy.
I should like to take this opportunity of paying a warm tribute to the present holders of these two offices for their devotion and skill in carrying out the onerous duties which we, the House of Commons, have given to them. Theirs is a vital role. They watch over the activities of Government Departments for us and ensure that the people of this country receive both value for money
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and fair treatment. As the House will recall, the Parliamentary Commissioner took on extra duties without any increase in salary when he took up the additional offices of Health Service Commissioner for England, Wales and Scotland on 1st October
I am sure I can speak for the whole House—and certainly for the right hon. Member for Fulham (Mr. Michael Stewart) and the right hon. Member for Birkenhead (Mr. Dell), who are the Chairmen of the two Select Committees which these two officials serve—in expressing our gratitude to the Parliamentary Commissioner and to the Comptroller and Auditor General for their services I commend the motions to the House.
10.52 p.m.
Mr. Michael Stewart: I wish to take this opportunity of drawing the attention of the House to the work of the Parliamentary Commissioner for Administration, whom I shall hereafter refer to as the Ombudsman both because that is shorter and because it is the title by which he is generally known. I ought to say at once that I raise no objection whatever to the increase in salary proposed in the motion, nor will anything that I say be in any way critical of either the present holder of the office of Ombudsman or his predecessor—indeed, quite the contrary, and I share the view which the hon. Gentleman on the Government Front Bench expressed.
The office of Ombudsman was established about 6½ years ago and, although we once had a debate on one case with which he dealt—the famous Sachsen-hausen case—the House has never debated the work of the Ombudsman as a whole; and, judging from such replies as I have had from the Leader of the House, if I do not snatch this opportunity it is impossible to know when a subsequent opportunity will occur. I think it is true to say that very soon after the Ombudsman was appointed there was an attempt in some quarters to represent the office as being a triviality and a disappointment. That was because the critics had simply not understood what the Ombudsman's job was and what it was not. It is worth while stating what will be plain enough to hon. Members here, but what was not fully

1411
realised by the public at large at the beginning.
The Ombudsman cannot reverse the decisions of courts of law. Nor can he reverse the decisions of independent statutory tribunals on pensions and such things. It is right that he should not be able so to do. If we were to come to the conclusion that courts of law or independent tribunals reached wrong decisions too frequently, our task would be to review the whole structure of the judiciary or the position of the tribunals. It would be no possible remedy to appoint one man to put all this right. I do not think that there are any grounds for believing that our courts of law or our independent statutory tribunals are any more liable to error than any other human institution. On the whole I think they are rather less liable to do so.
Nor, of course, can the Ombudsman alter the law. That means that he cannot remedy every possible injustice, because some injustice may spring from the fact that the law is unsatisfactory. The Ombudsman cannot alter it although on more than one occasion his report on particular cases has obliged Governments to think whether the law in certain respects ought not to be altered. Nor—and this is a little more arguable—can the Ombudsman comment adversely on the decision which a Minister reaches in his discretion in a matter where the statute has given him discretion, provided that in making the decision he has been properly advised and the Department has brought all the relevant facts to his notice. Sometimes this is a rather nice distinction.
Both Ombudsmen have quite properly tried to stretch the authority of their office by promoting the doctrine of what I might call prescriptive maladministration, which means that if the Minister has exercised his discretion and if the result is something that manifestly does not make sense or is not just, we might reasonably presume maladministration somewhere even if we cannot produce the evidence of it. I hope that Ombudsmen will always try to expand this doctrine.
The Ombudsman on the whole has a precisely defined and limited but still useful area of duties. It is to deal with maladministration in Government De-
1412
partments. Maladministration can take various forms. It may take the form of decisions being reached in an ill-considered fashion, without all the relevant facts being brought properly to the attention of the Minister before he makes a decision. Conversely, the Government Department, possibly with the best will in the world, may be so careful to try to consider everything that it engages in intolerable delay which possibly does more harm to the individual citizen than the ill-considered decision might have done.
Again, there may be maladministration when a Government Department gives in good faith, but simply through not being up to date, erroneous information to a citizen as to how he should proceed to safeguard his rights in a certain matter. Or, in some cases, there may be a simple failure to inform citizens of what the present practice and rules of the Departments are. I do not subscribe to the view that the civil servants of this country are unconscientious. They are bound to make errors of judgment from time to time but in my opinion this country is extremely fortunate in the quality of its public servants. They cannot be infallible, and it is for this purpose that the office of Ombudsman was created.
How has it worked? It has been in existence for about 6½ years, and I think I am right in saying that about 600 cases have been referred to successive Ombudsmen each year. What have been the results? In some cases they can be measured in the most tangible form possible, where a Government Department admits that it has fallen short in perfection, and the individual citizen has suffered a loss as a result and what is called an ex gratia payment is made in consequence. These ex gratia payments have varied from £2—any of us might be glad of £2 in these hard times—to £25,000. Particularly interesting is the case of a widow. As a result of the Ombudsman's investigation of her case, it was quite clear that her pension ought to have been back-dated much earlier than the Department had previously done, and this resulted in a capital sum of £3,800 being paid to her.
However, it would be wrong to estimate the value of the Ombudsman's work merely by particular cases. Of more widespread importance is the effect of his

1413
investigations in causing Government Departments to change their rules and practices in a direction more helpful to the ordinary citizen. The recent report of the Ombudsman shows that this has happened in 10 different Departments.
These variations of rules can affect various matters. They can make it easier for somebody in prison to get legal advice than was previously possible. Then there are those citizens who have fallen into income tax arrears through errors of the Inland Revenue. They have genuinely sought to pay what they thought they ought to pay, and then have been told afterwards that they ought to have paid much more, and are faced with arrears. As a result of the Ombudsman's representations, the Inland Revenue has taken a more reasonable view of this, and rather more than 11,000 individuals have benefited from this to the tune of £1,300,000 all told. The consequence has not only been that those people have benefited but that there has been the adoption of a more just and generous rule by the Department.
Also the work of the two Ombudsmen, one after the other, has caused many Government Departments to be more ready to give information, for example in respect of rules about various procedures, how one must apply if one wants this, that or the other. Government Departments are now quicker to tell the public when changes have been made.
I think most of us have had the experience, when we have filled in our income tax returns, of finding that they always seem to be sent to an office far away, to which we could never hope to be able to travel. In fact, if one has any difficulties about one's income tax, even if the department dealing with it is at the other end of the kingdom, one can get it straightened out at the local tax office. Many citizens did not realise that. One of the results of the Ombudsman's work is that this information is now more generally known.
Hon. Members who are patient enough to read the reports both of the Ombudsman himself and of the Select Committee of which I have the honour to be chairman, and to which he reports, will find that these are only examples of a general steady improvement in the quality of public administration in the direction of helping the ordinary citizen.
1414
From time to time, and sometimes by the Press, the Ombudsman has been subject to criticism on the grounds that there was not enough publicity of his work. Both the Ombudsman and our committee have tried to remedy this. From the beginning, when his office was first established, the Ombudsman has published an annual report containing the details of some of the cases with which he has dealt, those which he considered most crucial and important. More recently, in a desire to see that everyone was better informed another step has been taken. The Ombudsman now presents quarterly reports in which every case with which he has dealt is summarised, and the results of consequent action by the Government are given.
It is true that all these cases are reported anonymously, and are mentioned by a letter and a name—for instance, C109. It has sometimes been argued that it would give greater publicity to the office if the names and addresses of the complainants were spelled out. I would venture to take this opportunity to explain why that would not do. When someone asks his Member for Parliament to take a case to the Ombudsman, it may be because the complainant himself has been in prison or in a mental home or because a member of his family has been so situated, or the case may concern his most intimate personal and financial affairs. It would clearly be wrong for his name and address to be published unless he himself wished that to happen.
In some cases, of course, the complainant does wish that to happen. When a farmer keeping bees is provided with advice by a Government Department which results in the production of honey which, although I am told it is entirely good honey, is unfortunately unsaleable because it is colored green, he may well wish to give this the widest possible publicity.
I should like to make it clear that there is nothing to prevent any complainant whose case has gone to the Ombudsman from going to the Press and giving it the widest possible publicity. I do not think that the Ombudsman would object to that. But it is for the complainant and not the Ombudsman to decide. I

1415
spell this out because I think that there has been some misunderstanding.
It is the duty of the Select Committee appointed by this House to examine the chief civil servants of the Government Departments to which an Ombudsman report refers. Our general experience has been that the civil servants in the department are extremely anxious to be helpful. They do not resent the inquiries of the Ombudsman. If they cannot agree with him, they state solid reasons why they cannot, but they are genuinely anxious, if possible, to reach agreement. If there is any way of making redress to a citizen who has suffered injury, they are glad to do it. On those occasions on which a Government Department has been obliged to dig its heels in and stand on one side while the Ombudsman and the Select Committee sit on the other, this has not been owing to the judgment of the civil servants: it has been because they are defending avowed Government policy on certain points.
As a remedy for this, it has been suggested—a solution which I reject—that it should be mandatory on the Department to do what the Ombudsman tells it. I do not think that this would work. This would turn the Ombudsman from a servant of this House into a dictator. Also, if Government Departments believed from the start that if the Ombudsman said, "This is to be done", it would be done, they could not be blamed if they were nothing like as helpful as they are now. They would probably feel that if that were to be the case they were entitled possibly to be legally represented when the Ombudsman inquired into their affairs. Every case would take longer to solve. The very large number of cases which are solved to the gratification of complainants would be terribly slowed down.
It would also be a very bad constitutional principle. If a Government Department says, "We consider that this is the right policy and we are sticking to it", and the Ombudsman and the Select Committee say, "We think that it is the wrong policy and you should change it", only one abiter can decide the matter, and that is this House. It is right for
1416
Government Departments to pay very great respect to the recommendations of the Ombudsman; but he cannot ultimately be a dictator about this.
That brings me to my final point. What ought to happen when the Ombudsman comes to the conclusion that he cannot absolutely state that there has been maladminstration in a particular case but thinks that the result is unjust, and when the Select Committee backs him up but the Government, nevertheless, say, "No, we do not agree"? Can we do anything to deal with that situation?
There are two or three examples. First, the expressed view of the Select Committee—not the unanimous view but the majority view—is that the Ombudsman ought to have jurisdiction over personnel matters within the public services, matters of promotion and so on. Successive Governments have said that this is better dealt with by the existing channels. I must admit that the existing channels, the professional associations, have also taken this view. But, bearing in mind some of the particular cases with which we have had to deal, I am not satisfied that this is right. The Government ought to look at this matter again.
Next there are the cases of individuals who, as a result of departmental error, have paid more income tax than they ought to have paid, which is subsequently repaid to them but without interest. We have argued about this several times. The Government's view seems to be, "We know that there are some cases in which it is undoubtedly both just and humane to pay interest, but we cannot do justice to those few without doing justice to others who may not need it so much; therefore, we will not do it at all." I do not find that to be a convincing argument.
Then there is the further case of people living abroad who are entitled to and are drawing ordinary national insurance retirement pension. There are two odd features about this. If they were drawing pensions from public sources other than the ordinary State retirement pension, they would benefit from successive pension increases. They do not benefit if the ordinary retirement pension is increased unless they happen to live in a country with which we have reciprocal agreements. The Select Committee on the

1417
Parliamentary Commissioner for Administration said recently about this:
"Your Committee are aware that the present practice had been reviewed and accepted by successive Governments and that any increases would have to be borne largely by people resident in this country. But they are of the opinion that it must produce a sense of unfairness that persons who, by their work and contributions here, have qualified for retirement pensions from this country should be denied increases in those pensions because they go and live abroad. This sense of unfairness must be all the greater because those who live in countries with which there are reciprocal agreements do in fact enjoy the increases."
There is an example of how the Ombudsman's investigations and the Select Committee's consideration have established a considerable case in justice and compassion, which I admit successive Governments have not accepted and about which they should think again.
The last example which I shall quote—I mentioned to the Secretary of State for Scotland that I would mention this matter—concerns an activity by the Scottish Development Department in connection with the construction of a new runway at Turnhouse Airport. There has been much argument about the runway, and the question whether the planning decision reached by the Secretary of State was arrived at properly or whether there was maladministration is still under investigation by the Ombudsman.
Despite the fact that he is still investigating the matter, the work on the runway is proceeding briskly. I admit at once, and the Parliamentary Secretary to the Civil Service need not bother to remind me, that under the Act it is laid down clearly that the fact that the Ombudsman is investigating something shall not inhibit a Government Department from going on with what it is doing. I do not argue that what the Scottish Office is doing is illegal. I am merely asking whether it is wise or prudent.
There are 364 days in the year apart from the day on which the Select Committee publishes its report, and on the day the report is published there are received many letters from people all over Britain about problems concerning every conceivable Government Department. One of the letters which I have received as Chairman of the Select Com-
1418
mittee suggests that the British Airports Authority deliberately accelerated the placing of a contract and the commencement of the main work on the extension—
Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. I think that the right hon. Gentleman is leaving the work of the Ombudsman and discussing other matters and criticising the Government.
Mr. Stewart: The point which I am trying to make, Mr. Deputy Speaker, is that the Ombudsman—I include both the distinguished gentlemen who have held the office—has served the country well. I am suggesting that the Ombudsman's work might be even more valuable if the Government paid a little more attention. I am adducing the Turnhouse Airport case briefly as an example of where the Government might have paid a little more attention. If the work in that instance were hurried on in the hope of getting it finished before the Ombudsman completed his report, although I do not dispute that that was legal, I doubt whether it was wise or prudent.
The experience of the last 6½ years proves that the office of Ombudsman is overwhelmingly justified. It has done a great service to many of our citizens. It would be even more useful if the Government had paid a little more attention. Perhaps Governments might do so if we accepted as a focus point in the parliamentary calendar that there must be at least—do not let me be extravagant—half a day every year for discussing the Ombudsman's work. That would enable those people who felt that the Government had not been quite as helpful or respectful as they might have been to say so plainly.
11.19 p.m.
Sir Gilbert Longden: In one of the shortest speeches that has ever been made in the House, I merely wish to associate myself with almost every word that has fallen from the Chairman of the Select Committee of which I have the honour to be a member. I add only that, having had the advantage of speaking to the Swedish and New Zealand Ombudsmen, I feel that one of the best things that we have done is to provide for approaches

1419
to our Parliamentary Commissioner through hon. Members.
11.20 p.m.
Mr. Edmund Dell: I am sure that the House is grateful to my right hon. Friend the Member for Fulham (Mr. Michael Stewart) for speaking at length of the work of the Ombudsman and of the Select Committee on the Parliamentary Commissioner. I agree with what was said by my right hon. Friend, though I should not necessarily agree with the hon. Member for Hertfordshire, South-West (Sir Gilbert Longden) who suggested that all approaches to the Ombudsman should be through Members of Parliament. I think that we have reached the stage when that requirement should be abandoned.
The Public Accounts Committee and the Comptroller and Auditor General on the one hand, and the Ombudsman and the Select Committee on the Parliamentary Commissioner on the other, have in common the fact that we are both engaged in processes of administrative audit which have an administrative impact on government. My right hon. Friend hopes that the impact is not resented by officials. I hope that our work is not resented by them. But this is something which, fortunately, I need not discuss at any length because, unlike the work of the Select Committee on the Parliamentary Commissioner, there are regular debates on the work of the PAC. Indeed, I delight to see that increasingly its work informs debates other than those arising directly from its reports.
As to the work of the Comptroller and Auditor General, I merely mention a new development, which is that he is seconding members of his staff to other Select Committees—junior Select Committees such as that on the nationalised industries and the Expenditure Committee—and I hope that those officials are helping to make the work of those Committees more effective.
The Minister paid tribute to both these officials of the House. I join in the tribute paid to the Comptroller and Auditor General, and I do so in a paternal spirit. The Minister said that this office was established in 1866. The PAC was established in 1861, on a motion of Mr. Gladstone. As is well known, Mr.
1420
Gladstone was interested in candle ends. These days we have large candle ends, such as the Concorde, and therefore we need vigorous and able officials to deal with them. I hope the House will agree that Mr. Gladstone was wise, and I am prepared to say that in the Comptroller and Auditor General we have an official who is adequately carrying out not merely Mr. Gladstone's requirements but also the requirements of modern audit.
11.23 p.m.
Sir Anthony Meyer: I want briefly to support what was said by the right hon. Member for Fulham (Mr. Michael Stewart), who presides with such distinction over the Select Committee which considers the work of the Parliamentary Commissioner. I agree particularly with the closing part of the right hon. Gentleman's speech. It is a pity that we do not have a regular annual debate on the work of the Parliamentary Commissioner.
There was room for two opinions when the office was set up. There were doubts, certainly on the Government benches, about whether the experiment was justified. Those doubts no longer exist. What is beyond doubt is that now that we have the office it has to be made to work, because it has become an essential part of the average citizen's belief in the fairness of the processes of government. I therefore find it disturbing when Government Departments are not prepared to accept the recommendations of the Parliamentary Commissioner.
I listened with care to what the right hon. Gentleman said about making such recommendations mandatory. He convinced me that it would be a mistake to make these recommendations mandatory. It would transfer power to the wrong place.
Nevertheless, I believe that it ought to be made much more awkward and embarrassing for a Government Department to ignore the recommendations of the Parliamentary Commissioner, and I should like there to be some arrangement whereby, if a Department persistently refused to accept a recommendation, the Select Committee would have the right to bring the matter to the Floor of the House so that there could be a brief debate on the subject. As the right hon. Gentleman said, the proper place for the

1421
eventual decision to be taken is the Floor of the House. There just does not seem to be the machinery for transferring disputed decisions from the Select Committee to the Floor itself.
I shall not weary the House with a case which has been bothering me. In fact, the complainant is no longer resident in this country, and I think that he has rather lost interest in it. But I have not lost interest in the principle of it.
I am convinced that this office must be maintained and built up. It represents an important part of the average citizen's belief in the efficacy and fairness of our democratic institutions. From this side of the House, therefore, I support everything that the right hon. Member for Fulham said.
11.26 p.m.
Mr. Peter Hardy: When I came into the Chamber this evening, I had not intended to speak on this item of business, but I must express my agreement with the hon. Member for Flint, West (Sir A. Meyer) when he says that there should be opportunity on the Floor of the House to debate these important matters. I agree also with my right hon. Friend the Member for Fulham (Mr. Michael Stewart), who urged hon. Members to exercise patience and read his fairly long but valuable speech. It is a great pity that we have not had more time so that other hon. Members could join in and make this a long and thoughtful debate.
It is right that the House should consider the work of the two officers whose salaries are now subject to debate. I do not object to the salary increases, although I think it worth mentioning that £5 a week is rather more than the lower-paid workers in many constituencies will receive, and £5 does not go very far in these inflationary times.
However, while it is right to consider these two officers, it is right also that the House should have opportunity to consider the interests and welfare of thousands of our constituents, including those whose interests are referred to in the Prayer which is supposed to be the next item of business. But we have only two minutes left for this debate. It is a pity that the Government thought it right to bring before the House tonight so many
1422
matters, packing in a range of subjects from the Ordnance Survey to the Report of the—
Mr. Deputy Speaker: Order. I am sure that it will interest the hon. Member to know that there are more than two minutes left for the debate.
Mr. Hardy: I am delighted to hear it, Mr. Deputy Speaker and since you give us that assurance, I am happy to sit down.
11.28 p.m.
Dame Irene Ward: I am delighted to endorse the valuable speech made by the right hon. Member for Fulham (Mr. Michael Stewart), the Chairman of the Select Committee on the Parliamentary Commissioner. It has been a great pleasure to me to be a member of that Committee from the beginning, though I feel that I must add that I find it a little funny—one has to have a sense of humour in this place—that the longer one is a member of a Committee the less chance one has of being called to speak. However, I like to think that justice is done, and there it is.
The establishment of the Ombudsman was a splendid idea. The right hon. Gentleman the Chairman of the Committee put many important cases before the House, and I only hope that the Government will take note of what he said. A great deal of work has been done which has helped our citizens, and that is most satisfactory.
I agree that there ought to be regular annual debate. I apologise if my speech is a little muddled. I know that we are taking the two motions together and considering both the Comptroller and Auditor General and the Parliamentary Commissioner, but I think that it would have been easier and more practical if we had dealt with one and then turned to the other. We hardly know—at least, I hardly know—about whom we are talking.
I am delighted to say that we have had a very happy Select Committee. It is an all-party Committee and we have worked in that spirit. This is to the advantage both of the country and, indeed, of the House of Commons. The two Parliamentary Commissioners have done remarkable work and have been delightful men to work with. If the Select

1423
Committee, which is all-party, has supported the Parliamentary Commissioner when we have had problems relating to Government Departments, the full weight of that should be taken into account by the Government Departments.
I want to make one other comment. Although my hon. Friend raised it in general, he did not raise it in detail. One of my constituents was extremely badly treated by the Inland Revenue. Although a recommendation was made that his expenses should be paid, he had to keep on going up to Scotland to attend the East Kilbride Inland Revenue Department, and certainly the Department was at fault. He was not a man of great means. He had to trail up there because the Inland Revenue Department could not get on with the job. The senior civil servant, the head of the Inland Revenue, who came very courteously to talk to the Committee, absolutely refused to meet the expenses of my constituent.
I take that very badly indeed. I hope that, when perhaps one of these days I write my memoirs, I shall be able to get at some of the people who do not do what I think they should do for my constituents. It was most unfair of the Inland Revenue on that occasion. In spite of all the arguments, all the support of the Parliamentary Commissioner and all the support of the Committee, nothing would move the Department. Therefore, there was nothing that could be done. It was impossible to get even a half day's debate in the House on that case.
A great deal of work has been done of which I and all of us who have been on the Committee and worked with the Parliamentary Commissioner are proud. I am delighted, therefore, that we have had this debate. I hope that the Government will take note of what the Chairman of the Select Committee said and act according to the wise advice that he tendered to the Government.
I was rather amused whet the Government representatives said that there were two Chairmen—one from each Committee—sitting in the Chamber. There were quite a lot of us sitting in the Chamber. It is a very good thing that we should always support the Chairmen of these important Committees.
1424
Therefore, I am delighted that we have had this opportunity or speaking on the subject tonight, although I am slightly annoyed in many ways. However, there it is. It has been a useful debate, and it will be more useful if the Government take note of what the Chairman so rightly said.
11.34 p.m.
Mr. Michael Shersby: I listened with great interest to the fascinating speech by the right hon. Member for Fulham (Mr. Michael Stewart) about the work of the Ombudsman. I have been a Member of the House for only 11 months. During that time I have come to learn quickly that the Ombudsman forms an important part of our democratic process.
I have recently been in the process of trying to finalise a case which one of my constituents has been pursuing for something like 13 years with various Members of this House. My constituent, Mr. Smith of Hillingdon, Middlesex, has been pursuing a complicated financial case relating to the funds of the Columbia Gramophone Record Company, and only recently I have had to refer this to the Ombudsman, who has investigated it. Although my constituent has not achieved the satisfaction he had hoped to achieve, he feels that there is a great deal to be said for having the matter looked into by the Ombudsman from a completely independent point of view, and I am sure that he will be satisfied by that.
I agree with the suggestion that the House should have a regular debate on the work of the Ombudsman. Many hon. Members would welcome it, and our constituents would regard it as an opportunity for the House of Commons to review the work of this department which is important to our constituents in making their representations to us.
I welcome the establishment of the new Health Service Commissioner. In this area there are many justifiable causes for complaint, and the establishment of this new section of the Ombudsman's office will be of great advantage both to hon. Members and to our constituents. I hope that we shall again have an opportunity to debate this matter, perhaps at a slightly earlier hour when more hon. Members are present and when members of the public will be able to listen to the debate.
11.37 p.m.
Mr. John Roper: Like the hon. Member for Tynemouth (Dame Irene Ward) I have difficulty in jumping to and fro between the Parliamentary Commissioner and the Comptroller and Auditor General. What I have to say relates to the latter office.
My right hon. Friend the Member for Fulham (Mr. Michael Stewart), who is acting Chairman of the Public Accounts Committee, said that the Comptroller and Auditor General had recently broadened his responsibilities to the extent that he has seconded some of his staff to serve Committees of this House other than the Public Accounts Committee. That is an important precedent. The Comptroller and Auditor General, as part of his repsonsibilities, has provided staff for the Expenditure Committee and the Select Committee on Nationalised Industries.
If there is to be a strengthening of Select Committees it is of great importance that they should have the appropriate staff to back up their work. Since 1861 or 1866 the Comptroller and Auditor General has established a reputation for providing that service to the Public Accounts Committee. If we can find a mechanism whereby he can also aid Committees such as the Expenditure Committee we who serve on the Expenditure Committee will be able to do a more effective job.
Mr. Dell: I question my hon. Friend on a point of accuracy. The officials who have moved to assist the Expenditure Committee and the Select Commttee on Nationalised Industries do not during the period of their secondment fall within the responsibility of the Comptroller and Auditor General.
Mr. Roper: I am grateful to my right hon. Friend for pointing out that secondment removes them from the direct responsibility of the Comptroller and Auditor General. Their value lies in the fact that they come from within his office and have been trained within the structure of that office. The Expenditure Committee may in future be able to share the services of the Comptroller and Auditor General with the Public Accounts Committee and in that way it will be able to perform more adequately the task which the House has set it and in time perhaps become
1426
as successful as was Mr. Gladstone's creation.
11.40 p.m.
Mr. Ernle Money: Like the hon. Member for Rother Valley (Mr. Hardy), I had not intended to speak but I was fascinated by the account given by the right hon. Member for Fulham (Mr. Michael Stewart) of the position of the Parliamentary Commissioner. The whole House owes the right hon. Gentleman a considerable debt of gratitude for his exposition. It would be churlish not to pay tribute also to the great assistance given to individual Members by the Parliamentary Commissioner with unfailing courtesy in very difficult matters.
I hope that perhaps the "grey areas" are perhaps the areas where the reports of the Ombudsman can be given most light. Sometimes there are peculiar traditions which linger in all kinds of Departments. I came up against one only the other day through a case which was taken up by the Parliamentary Commissioner. The Home Office pays compensation for damage done by abscondees from borstal north of the River Deben but not, apparently, when one gets from Hollesley Bay to my constituency. This is the kind of case which is being looked into.
Although one is sorely tempted to follow the enterprising activity of my hon. Friend the Member for Uxbridge (Mr. Shersby) in having, as it were, an Adjournment debate on the cheap. I shall not be lured into these siren approaches, but I agree with the right hon. Member for Fulham that this is the sort of area in which the work of the Parliamentary Commissioner can perhaps be developed very much to the advantage of the House.
Politics apart, I am in the unusual situation of disagreeing with the right hon. Member for Birkenhead (Mr. Dell). I think we would be very unkind to wish on to the Parliamentary Commissioner direct access. I think he is there greatly to help us and we can help him by at any rate putting to him those cases with which he will be able to deal. There is only one of him, although he has a highly efficient staff, and what kind of situation would it be if, for example. he were to receive, as I do, five letters a day from an old lady in my constituency.

1427
all in different coloured ink—all on the same subject?
Mr. Dell: But the Parliamentary Commissioner now has a field of activity in which there is direct access and in which the public are deeply interested.
Mr. Money: I am aware of that and I welcome the extension, as my hon. Friend the Member for Uxbridge did. But it is a limited area and the Parliamentary Commissioner will, in those circumstances, be able to deal directly with the representatives of the hospital boards and other organisations concerned. What I would be doubtful about is whether it would be practicable simply to unleash him as a kind of family solicitor to the nation—which each of us in this House already is, in effect, through performing our proper duties to our constituents.
The House might think seriously now about whether the time is not coming when a further office should be established to deal with the long and contentious question of complaints with regard to local authorities, because every hon. Member knows the difficulties of his own position in establishing matters of this sort with local authorities.
The Minister for Local Government and Development (Mr. Graham Page): We have already announced that in the next Session we shall be presenting to the House legislation for a local ombudsman.
Mr. Money: I am obliged to my right hon. Friend. I think that will be of the greatest assistance to Members of Parliament and to their long-suffering constituents.
11.45 p.m.
Mr. Kenneth Baker: With the leave of the House, may I say that this has been a most interesting debate. On behalf of the two officials I should like to say how grateful they must be for the kind words all hon. Members have used about them. I also say a word of thanks to the Chairmen—and I refer to them only because they were the Chairmen—to my hon. Friend the Member for Tyne-mouth (Dame Irene Ward), and for the valuable work of the members of the Select Committee on the Parliamentary Commissioner and the Public Accounts
1428
Committee. I thank my hon. Friend for the long time she has served on that committee.
The right hon. Member for Fulham (Mr. Michael Stewart) said that there was little time to discuss the work of the Ombudsman. I agree. There have been few debates. The opportunity arises on this annual motion to increase the salaries which is necessary because the Ombudsman and the Comptroller and Auditor General cannot be bundled in with the other senior civil servants whose salaries can be increased without orders being laid before the House but by administrative means.
Last year we either did not have a debate or, if we did, it was about prices and incomes and not about the duties of the Ombudsman. The powers of the Ombudsman are the subject of Adjournment debates from time to time. I have answered one raised by my hon. Friend the Member for Salisbury (Mr. Michael Hamilton) about a particular decision of the Ombudsman, and I know that my hon. Friend the Minister of State, Treasury has answered one from my hon. Friend the Member for Flint, West (Sir A. Meyer) about the case that he mentioned again tonight. There are therefore opportunities for discussing the Ombudsman's duties, but I would not seek to say that there are many opportunities.
I should like to reinforce what several hon. Members have said about the usefulness and effectiveness of the Ombudsman. As an ordinary Member of Parliament I submit quite a lot of cases to the Ombudsman and I manage to get one to stick a year, which is quite a high batting average. I know, from the cases that I have raised both when I represented Acton and in my present constituency, that I have been able to satisfy my constituents that their cases have been gone into by an independent person and that he has been able to give them the degree of surveillance that an ordinary Member of Parliament could not give. He has access to papers, can call civil servants and can go through the files. This is one of the ways in which the Government can respond to the anxieties of the ordinary citizen. I therefore certainly value the services given by the Ombudsman.
Mr. Dell: The Minister has just said, correctly, that the Ombudsman is able to give these cases more detailed attention—with his access to civil servants—than ordinary Members of Parliament can conceivably give. In that case, is it right that Members of Parliament should act as a sieve between the public and the Parliamentary Commissioner?
Mr. Baker: I shall deal with that point in a moment. It was raised earlier by my hon. Friend the Member for Hertfordshire, South-West (Sir Gilbert Longden).
The right hon. Member for Fulham went on to discuss the responsibilities and powers of the Ombudsman, which he described as "restricted but well defined." If those were his words I would agree with them. They are restricted—restricted to maladministration Maladministration, as the right hon. Gentleman knows, arises from many causes. Sometimes it arises through carelessness and sometimes from over-scrupulousness by civil servants, so keen to be fair and impartial and go through every possible process that the very act of being scrupulous fuels or, in some cases, creates the charge of maladministration.
I support entirely what the right hon. Gentleman said about the Civil Service. I assure him that the Civil Service has a very high regard for the Ombudsman, a regard which has been built up within the comparatively short time of four or five years. Civil servants have stood in awe of the Comptroller and Auditor General since 1866; they have a healthy respect for his power. But a new respect has been bred in the Civil Service for the Ombudsman and the way he has gone about things. I entirely endorse the right hon. Gentleman's comment that we are extremely fortunate in the quality of our public servants. The Civil Service is very much aware of the purpose, rôle and effectiveness of the Ombudsman. The reports are taken seriously and rules have been amended, procedures changed and injustices righted. Furthermore, as a result of his reports delays to some extent have been eliminated. I also think that government has become rather more open as a result of the Ombudsman's activities.
The right hon. Gentleman also mentioned publicity. I would welcome any publicity which hon. Members or Select
1430
Committees can give to the Ombudsman's work. Quarterly reports help, but it must be said that it would be very undesirable to publish the names and addresses of the various people who complain and who may be involved in a case that is being examined by the Ombudsman.
The right hon. Friend mentioned, as did my hon. Friend the Member for Flint, West, the power of the Ombudsman. It was asked whether a recommendation of the Ombudsman should be mandatory on Government and whether a Government Department that is criticised or told to mend its ways should accept it as a direction. I was glad that the right hon. Gentleman did not agree with that principle, because it would be bad constitutionally. The responsibility must essentially lie with the Minister, although a Department or Minister would be ill-advised to go clean contrary against a clear recommendation from the Ombudsman. There are few instances where the Department has not accepted the Ombudsman's recommendation. In the few cases where that has happened it is open to an hon. Member, as my hon. Friend the Member for Flint, West has done, to bring the matter to the attention of the House and, if necessary, to bring it again to the attention of the Select Committee and to make a general stir about it. However, it would be bad constitutional principle if the Ombudsman were turned into a dictator and given mandatory powers to make Departments implement his recommendations.
Four specific points were raised by the right hon. Member for Fulham. One concerned the powers of the Ombudsman to examine complaints by civil servants against their employer, which of course is the Government. This has been the subject of two recommendations in Select Committee reports. In its Second Report of the 1969–70 Session, published on 11th February 1970, the Select Committee on the Parliamentary Commissioner for Administration examined this question and concluded that the jurisdiction of the PCA should be extended to cover personnel matters involving Crown servants.
In the White Paper published in May 1971 the Government set out their observations on this subject giving their

1431
reasons why the jurisdiction of the Parliamentary Commissioner should not be extended in this way. The next year the Select Committee again made that recommendation and the Government published a White Paper saying that it had given
"careful consideration to the Select Committee's arguments which are similar to those they expressed previously. The Parliamentary Commissioner was set up to investigate on behalf of Members of Parliament complaints by private citizens that they had suffered from maladministration by a Government department. The Government does not consider it would be consistent with this purpose to extend the jurisdiction of the Parliamentary Commissioner to the relations between the Crown as employer and its employees or between the Crown and other persons with whom it enters into business contracts."
That is still our view.
The right hon. Gentleman raised the question of payment of interest on tax that should be refunded to the taxpayer and also the question of increases to pensioners living abroad. Both these matters featured in the last report of the Select Committee which was published earlier this year. I can tell him that the Government are considering this report and will present their observations on these points in due course. As regards the fourth point, I was not aware that the right hon. Gentleman was going to raise the subject of Turnhouse, but I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Scotland.
My hon. Friend the Member for Hertfordshire, South-West said he was very pleased that direct access to the Ombudsman was denied to the public. This is certainly a matter of personal choice, but I happen to agree with him. I think it is appropriate to direct complaints concerning maladministration in central Government through a Member of Parliament. However, as the House will know, we are experimenting with a variation in the case of the Health Commissioner, where it will be possible for people to complain not through their Members of Parliament but direct to the Ombudsman, who for this purpose is the same person, and I suggest to the House that we should see how that works in the next few months. I believe that he started in business, as it were, in that capacity on 1st October this year.
Mr. J. D. Concannon: When a constituent complains to the Ombudsman in this way, is there a method by which the Ombudsman also reports back direct to the Member of Parliament for that constituency? It would be very unfair if something was going on in his constituency and the Member of Parliament knew nothing about it. I can foresee a constituent coming into one of our clinics with a report from the Ombudsman, and the poor old Member of Parliament would not know what had been going on.
Mr. Baker: I believe that the Health Commissioner has a responsibility to inform the body which is complained against, whether it be an area hospital board or a regional hospital board, and when the Commissioner makes his final report he has to report to the body concerned and to the body senior to it. So that if the complaint is against an area hospital board, he has to make a report to that area hospital board and to the regional hospital board; and if the complaint is against a regional hospital board he has to make a report to that regional hospital board and to the Secretary of State, as the next body, as it were, above that board. I think I am right in saying to the hon. Gentleman, but I will check and perhaps confirm it in writing, that there is no provision in that case for informing the Member of Parliament that something may be happening in his constituency.
Sir Gilbert Longden: If my hon. Friend is going to be good enough to check and let the hon. Gentleman know, I hope that he will let us all know, because the hon. Gentleman has raised a point which is of great interest to all of us.
Mr. Baker: It has been set out in legislation, so perhaps all of us ought to know what the answer is. It does not fall directly to my ministerial responsibility, but I will ensure that an answer is given to all those who want to know.
My hon. Friend the Member for Ipswich (Mr. Money) asked a question about local government and the Ombudsman. I would confirm what my right hon. Friend said. The Government have made clear their intention to introduce a system for the investigation of complaints of maladministration in local government and legislation is now in the

1433
course of preparation. Its purpose will be to provide machinery similar to that embodied in the PCA system, adapted to conform to the different constitutional position of local government, and the lack of a direct relationship with Parliament, similar to that which exists between Parliament and the Executive. As to the detailed proposals on which I suspect my hon. Friend the Member for Ipswich may interrupt me. I must ask the House to await the legislation which the Government intend to put before it. The Government are anxious to introduce their legislative proposals as soon as possible, but the House will not expect me tonight to anticipate the contents of of the Gracious Speech.
Mr. Money: May I say, through my hon. Friend, to my right hon. Friend the Minister, that I hope that when such legislation is introduced it will also cover planning?
Mr. Baker: I shall convey those comments to my right hon. Friend.
Mr. Dell: I hope that the legislation will not allow councillors to act as a sieve.
Mr. Baker: I shall convey that comment to my right hon. Friend. This is open government with a vengeance!
Mr. Deputy Speaker: Not only open government; it is nothing to do with the salary of these gentlemen.
Mr. Baker: I take your point, Mr. Deputy Speaker. I thank my hon. Friend the Member for Tynemouth for her kind words about the Parliamentary Commissioner.
Dame Irene Ward: May I say that I should also have referred to the Clerk to our Committee, who has been a tower of strength?
Mr. Baker: I shall convey those congratulations to the Clerk of the Committee as well. I know very well the Rood work that he does. I am pleased to know that my hon. Friend is writing her memoirs. As she intends only to mention people who did not help her constituents I hope that I do not appear in them.
I have also noted the point raised by several hon. Members about a regular debate. It is not for me to say whether
1434
there should be a regular debate. That is for my right hon. Friend the Leader of the House. I shall convey to him the sentiments that have been expressed.
This has been a useful opportunity to review the work of the Ombudsman and to bring his work a little out of the shadow, because I believe he does a most useful and effective job. One of the growing problems in our society is the alienation of the citizen from the State, whether at central or local level. Anything that can be done to make the State appear more responsive to the needs of the ordinary citizen, which the Ombudsman can do to some extent, is to be welcomed.
Question put and agreed to.
Resolved,
That the yearly rate of the salary payable to the Parliamentary Commissioner under Section 2 of the Parliamentary Commissioner Act 1967 be increased from £15,750 to £16,000 and the date from which this resolution is to take effect be 1st April 1973.
Resolved,
That the rate of the salary which may be granted to the Comptroller and Auditor General under Section 1 of the Exchequer and Audit Departments Act 1957 be increased from £15,750 to £16,000 per annum and the date from which, under subsection (3) of that section, the person now holding that office is entitled to a salary at the said in creased rate he 1st April 1973.—[Mr. Kenneth Baker.]

PARLIAMENTARY COMMISSIONER (SALARY)
  ADJOURNMENT
  Motion made, and Question proposed. That this House do now adjourn.—[Mr. Rossi.]

ORDNANCE SURVEY
12.3 a.m.
Mr. Nigel Spearing: The Parliamentary Secretary to the Civil Service Department has mentioned the alienation of the public from the State. Adjournment debates are times for dealing with grievances in a way similar to that of the Ombudsman. The alienation in the case of the Ordnance Survey affects many learned societies in this country, not just the general public. This is the second debate on the topic this evening and deals with matters which are the responsibility of the Department of the Environment. My only regret is that my hon. Friend the Member for Rother Valley

1435
(Mr. Hardy) who had hoped to debate a statutory instrument is no longer able to do so.
This, again, is an example of the alienation, because it is difficult enough to get a statutory instrument debated let alone voted on. The procedures of the House in this respect are very much wanting. I am sorry that it has not been possible to have that debate.
The history of the Ordnance Survey is founded on the Army. Any State will want surveys of this sort. As I understand it. the arrangements, certainly up to last February, were that the survey costs were carried by the nation as a whole and the cost of the maps was taken as the cost of publication because the survey as such would be needed in any case. This assumption, which has meant that about one-third of the income of the Ordnance Survey has come from publications, has been entirely upset by the statement of the Secretary of State in answer to a Written Question an 19th February, at column 32. This relatively brief statement has upset the course on which the Ordnance Survey embarked in 1938 as a result of the Davidson Committee recommendations.
That committee heard evidence from over 80 officials bodies before it came to its conclusions. It has been said by the Secretary of State, in a letter, that his statement—a review of the operation of the Ordnance Survey—was subsequent to suggestions in the Fulton Report. I think they may stem from the White Paper of 1970, because the Fulton Report was concerned with non-political matters relating to the internal efficiency and accountability of the Civil Service. I believe this review, from what we know of it, goes well beyond that. It deals with the nature, quality and costs of the operations of the Ordnance Survey, and inevitably the future quality of its services to the public.
This review has been conducted confidentially; its membership has been kept secret and we do not know precisely its objectives or its full recommendations. We do know, however, that virtually no consultation took place on the review. All we have is the statement in answer to a Written Question on 19th February. It is a strangely worded answer. It states that Government decisions
1436
"are aimed at providing a better base than hitherto for fulfilling its"
—that is the Ordnance Survey's—
'national role and meeting its customers' needs with increased effectiveness and efficiency."— [OFFICIAL REPORT, 19th February 1973; Vol. 851, c. 32.]
That meant the cutting off of the 2½ in. map and the tertiary levelling. But that was not in the statement. That came from the Director General later, and the Secretary of State for the Environment did not have the guts to mention that in the snippet of information which we got on 19th February.
The wording of the statement is very curious. It means that the review was
"aimed at providing a better base than hitherto for fulfilling its national role and meeting its customers' needs with increased effectiveness and efficiency."
We are not told what are the objectives of the review, let alone anything else. This is a very strangely worded review indeed, particularly as there was no consultation before it took place.
The consultative conference which should have taken place the previous November was cancelled, and when it was called again later it was to receive the conclusions of the Government and of the Director-General. The 2½ in. map and the tertiary levelling were to be messed around or axed, and now they have been put back. This has been largely due to the many protests by learned societies which ought to be have consulted. For instance, the Royal Institute of British Architects, the Institution of Civil Engineers, the Royal Institution of Chartered Surveyors, the Royal Town Planning Institute, the Royal Geographical Society, the Royal Scottish Geographical Society, the Institute of British Geographers, geologists, geophysicists, university departments of geography and surveying, all have protested.
That is why the Director-General, behind whose skirts the Minister hid, dropped these proposals. We do not know what other proposals may come up as a result of the review. Perhaps certain scales will not be available. Perhaps updating will be held back. We do not know the position about the second edition of the 2½ in. map. The basic situation has remained the same. The review is secret.
In his reply to a letter from the Royal Society, the Minister went out of his way

1437
to state that the new policy remains. He said:
"Under the new policy, this national role will be clearly defined".
He went on to say that, in the public interest, certain services might be continued
"… even though the revenue from sales and other income may not cover costs. In such cases, Exchequer support will, if necessary, continue, and in deciding this, the Government will have regard both to the nature of the requirements of the private sector as well as to those of the public sector."
But it is permissive—it will happen "if necessary". It is the Secretary of State who will judge, presumably on the criteria of the review.
In other words, although the Royal Society is to have a group to look at this in its reply to the Minister the Society said that it could not represent all users, and there is existing machinery which the Minister conveniently bypassed in the initial stages—we are now back to square one. In an organisation which gets only a third of its income from sales, the policy, which the Minister states in his letter of 2nd October, is
"to maximise their receipts within the scope of Government policy, to seek to cover the relevant costs from payments from users.…."
has untold implications. We do not know what they will be. As I said, something could come at any time. The implications are unknown, I suspect even to the Secretary of State. Until the Director-General has looked closely into this, he himself may not be aware of all the repercussions.
No doubt the Minister for Local Government and Development, who I am glad to see here, will say that there will be consultation. But the consultation is in the terms of the secret review. It will not be ab initio consultation about the rôle and services of the Ordnance Survey. It is entirely within the structure of this unknown review, because it is on the results of the perhaps widespread consultation that the Minister will take the next steps. This of course is bad government, in any Government. I would say this if it were one of my right hon. Friends on the Treasury Bench.
I should confess an interest as perhaps the only qualified geographer in the House. Maps are the tools, the stock-in-trade of the geographer. For many years
1438
the Ordnance Survey has been run as a proper national service and it has gained a great reputation throughout the world. But this secret review has changed the face of this situation, irrespective of the Government Trading Funds Bill, the Royal Society letters, or the consultations. Unless and until we get a proper review, we shall not know what is in the mind of the Secretary of State or the basis on which this fine public service will continue. We shall know nothing.
This is very strange, because this Government are committed to open government, as they said in their election manifesto and time and again since. We understand an internal review of a Department being kept confidential, but this is hardly an internal review of efficiency. It strikes at the depths and the details of this fine service, which everyone wishes to see prosper.
Therefore I hope that the Minister will tell us that, if he will not be publishing the report, he will have a proper review, on Davidson lines, which all the learned societies and the general public can feel confident is fair, based on the precepts of the Prime Minister, who, in the election, said:
"I want to see a fresh approach to the taking of decisions. The Government should seek the best advice and listen carefully to it. It should not rush into decisions. It should use up-to-date techniques for assessing the situation. It should be deliberate and thorough."
That was the foreword to the Tory election manifesto, signed by the Prime Minister.
It is clear that in this matter the Government have gone completely contrary to that pledge. Unless and until we have a proper survey, carried out on the lines I have described, they will be in breach of the contract which they then made with the British people.
12.15 a.m.
Mr. Sydney Chapman: I intervene briefly to say, first, how much I welcome the initiative of the hon. Member for Acton (Mr. Spearing) in raising this subject.
The Ordnance Survey Department is an establishment of which this country can be proud. We have the best maps and the most comprehensive system of scales of any country. I recognise that in a narrower sense we touched on the

1439
point of the Ordnance Survey when we considered Lords Amendment No. 1 to the Government Trading Funds Bill two hours ago.
Having said that, I think that the hon. Member for Acton is being a little harsh on the Government. As he said, the Government announced their intention of a review of the operation of the Ordnance Survey in a Written Answer on 19th February. The hon. Member complains bitterly about there being a lack of open government. I look at it, perhaps understandably, from a different viewpoint. The Secretary of State's intention was made clear so that there would be a reaction and to see what that reaction was, from not only the professional institutes which the hon. Member mentioned but also amenity societies, local authorities and, last but certainly not least, Ordnance Survey Department employees.
The whole point is that the Secretary of State has understood the objections and concern of all these interested bodies. I welcome the fact that the 2½ in. scale maps, for example, will be preserved and, perhaps more importantly, the tertiary benchmark system. Therefore, I welcome the development that has taken place. But I see nothing wrong in the object of the Government to see, where possible, that the Ordnance Survey is put on a fairer, economical and more sure-footed commercial basis. and that those interested bodies and individuals—architects, engineers and surveyors, for example—who use the Ordnance Survey for their advantage and benefit should pay the economical fee for the reproduction of the maps.
It is in that spirit that I ask my right hon. Friend the Minister for Local Government and Development one question. Although changes are made to the Ordnance Survey Department—they must he made occasionally—before final decisions are taken will he give the reassurance that there will be consultation with the interested bodies and that he will keep an open mind before necessarily changing that department only for financial considerations?
12.17 a.m.
Mr. R. C. Mitchell: As has been said. the need for
1440
this Adjournment debate arose out of a long answer to a Question tabled by the hon. Member for Southampton, Test (Mr. S. James A. Hill), in whose constituency the Ordnance Survey is situated. I am sorry that the hon. Member is unable to be present for the debate. Since that answer was given I have been innundated with inquiries from not only Ordnance Survey employees but also members of the public who want to know what the statement meant. I am sure that the hon. Member for Southampton. Test will have had the same experience. Perhaps there is a lesson to be learned here, for any Member of Parliament, which I learned rather painfully in the previous Parliament. When one is approached by a Minister or his PPS to table a Question so that he can make a statement, one should, before one tables the Question, make sure that one reads the answer that the Minister proposes to give. One can otherwise be in great difficulty.
I want to refer to one section of that answer, in which the Minister details the aims of the Ordnance Survey. The fourth aim is
"To seek to maximise returns on all products and services subject to any limitations imposed by Government."—
Will the Minister go into some detail as to exactly what that means? Obviously I have no objection—no one has—to the Ordnance Survey getting the best deal possible from its customers. But we must remember that basically the Ordnance Survey has been for a long time, and still is, a service to the community. We in Southampton are very proud of it. One of my predecessors in the House, Mr. Speaker King, had an Adjournment debate about this many years ago in an attempt to ensure that the department came to Southampton, and he was successful. We are pleased that the Ordnance Survey came to Southampton. We are proud of it. It has made its mark and taken its place in the community. Anything that went away from the service element and turned it into a purely commercial undertaking would be something we should all regret.
12.20 a.m.
The Minister for Local Government and Development (Mr. Graham Page): should like to deal with that latter query

1441
at once. The point of paragraph (iv) of my right hon. and learned Friend's answer was that it should not be taken to mean that the Ordnance Survey would become too commercialised. My right hon. and learned Friend says:
"To seek to maximise return on all products and services "—
He concludes by saying:
"subject to any limitations imposed by the Government."—[OFFICIAL REPORT, 19th February 1973; Vol. 851. c. 32.]
One of those limitations would be that the national service which the Ordnance Survey provides should be maintained.
I have no complaint that the hon. Member for Acton (Mr. Spearing) has had two bites at the cherry. I am delighted that I have been given the chance to say some nice things about the Ordnance Survey. I endorse what my hon. Friend the Member for Birmingham. Handsworth (Mr. Sydney Chapman) has said about the services provided by the Ordnance Survey. This is an opportunity to express the high regard in which we hold, and I am sure the House holds, the Ordnance Survey. It has inter national prestige. It maintains high standards as the central national survey and map agency.
The Ordnance Survey will continue to provide a national service in maps and mapping. To serve the public interest it will continue to need a subsidy, but the more it can produce the goods and services which people desire sufficiently to pay an economic price for them, the smaller the subsidy that will be needed. At present the income of the Ordnance Survey is about £4 million a year. It has been in the market as a salesman of its goods for over a century. It earns £4 million in the way I have described, but the Survey costs £11 million, plus about £2 million worth of services which it receives from other Government Departments. At present it must therefore seek from the Exchequer a subsidy of approximately £9 million in money and kind.
I do not think that it is a policy of wholesale commercialisation to say that we want to see whether the Ordnance Survey can earn more. First, we want to consider whether we are spending the money to produce the things which people want or whether we are spending money to produce goods and services which people do not really want.
1442
There is no national body which consults more with its consumers than does the Ordnance Survey. It has four regular annual consultative meetings. It has meetings with the local authority associations, the Government users, the users of large-scale maps and the users of small-scale maps. They are regular meetings to discover what its consumers want and to try to provide what is needed.
In addition, there was the departmental committee which arose out of the recommendation of the Fulton Committee. It is not usual to publish what departmental committees report, but I tell the House that the committee drew attention to the three matters which were later dealt with in the statement from the Director General of the Ordnance Survey—namely, the 2½ in. map series, the levelling services and the large-scale maps.
Mr. Spearing: It was wrong.
Mr. Page: No. It called attention to these as matters which needed investigation, and that is what my right hon. and learned Friend and the Director General of the Ordnance Survey said, that these would be investigated.
The hon. Member for Acton has made much play of the fact that consultative meetings were not called at the regular time that year. The meetings were held back so that they might consider matters which had arisen from that departmental committee. Immediately that material was available, and my right hon. and learned Friend's statement had been made, the consultative meetings were then called and the organisations concerned considered what questionnaires should be sent out, and to whom, in order to carry out the investigation into these three subjects.
On the advice of the consultative meetings, elaborate questionnaires were prepared and sent out to no fewer than 133 Government Departments and organisations of that kind, and 2,292 other bodies. That was certainly full consultation. The questionnaires did not merely ask, "Do you use these maps, and for what purpose?" but also, "If you do use them, are they serving your purpose, and what improvements can be made?". I have summarised the questions, but there were three or four pages of them in each of the three questionnaires that

1443
went out, and I consider that that represented full consultation. I stress that 2,292 bodies were consulted, because earlier this evening, by a slip of the tongue my hon. Friend said the figure was 2,900. It was not quite that, but 2,292 represents a large area of consultation. Sending out the questionnaires had the right effect. I think that every right hon. and hon. Member knows that it did, because we all received a volume of correspondence about the use and the desire for the continued production of the 2½ in. map series, and certainly of the levelling services.
Having received all the representations and the answers to the questionnaires, my right hon. and learned Friend decided that he had sufficient information and sufficient results from the review to make his decision in principle on two of the matters, namely, to continue the 2½ in. map series, fully covering the country, and also the levelling services as before.
The Government have given the undertaking that as soon as possible, in the coming months they will publish a review, which will be open for further discussion, showing the background to the statement of aims of the Ordnance Survey which my right hon. and learned Friend announced last February, and, secondly, the outcome of the three studies—the 2½ in. maps, the tertiary levelling and the large-scale maps. In addition, the Royal Society has undertaken to carry out consultations with professional bodies to consider whether the Ordnance Survey has met their needs, and in what further ways it could meet them.
The hon. Member for Acton complained that these considerations would only cover some of the consumers of the goods and services produced by the Ordnance Survey. Of course it will. It was not intended to do any more than that, but further arrangements for con-
1444
sultation will be set out when the review is published. I assure the House that we want to be completely open in future. I give my hon. Friend the Member for Handsworth the assurance that there will be no changes without full consultation.
I stress again that the Government have agreed to prepare a review document which will explain more fully the reasons behind the statement of aims by my right hon. and learned Friend, which will summarise the results of the recent consultations on the three specific activities under review and give the Government's decisions on them, and which will outline the continuing arrangements for the Ordnance Survey and establish the needs of the users, including consultations with the proper professional bodies.
If at some time in the future it is decided that the accountancy of the Ordnance Survey should change in accordance with the legislation which has been passing through both Houses, there will be, as provided in that legislation, a further form of consultation to consider that aspect.
I stress again that there is a wide area of service provided by the Ordnance Survey which will need support from the taxpayer. We shall try to encourage the Ordnance Survey to provide maps and to carry out surveys for which the public will be so eager that they will pay the economic price. But this cannot possibly cover the sort of national service which we require the Ordnance Survey to continue to provide for the future, as it has in the past, with very high standards and an international reputation—that is, what we recognise as the outstanding service provided by that organisation in the constituency of my hon. Friend the Member for Southampton, Test (Mr. James Hill).
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes to One o'clock.

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

U.N. SEABED COMMITTEE'S REPORT
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached by the United Nations Seabed Committee at their recent meeting in Geneva.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): My Lords, the Committee's task has not been to reach conclusions, but to prepare for the U.N. Conference on the Law of the Sea. It has made good progress.
LORD BROCKWAY: My Lords, is the noble Baroness aware that many of us would like to hear about the "good progress"? Is there any area in international affairs where there is now such utter confusion as the seabed?—yes, my Lords, at this moment even more than the Middle East. It involves fishing, oil, nuclear weapons on the seabed and mineral rights. Are we really to wait until the Conference next year—it may be delayed until 1975—before we have any solution of this confusion?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I am afraid I do not agree with the noble Lord. I should have thought that the conflict in the Middle East in causing much more concern in the world at this time. But there are great difficulties and the Seabed Committee has agreed on a list of issues with which the Conference should deal and has produced a comparative text of draft Articles which represents the major groups of opinion on the most important subjects involved. It is still hoped to
624
have an organisation conference at the end of this year and to start the major negotiating Conference in 1974.
LORD BROCKWAY: My Lords, is it still proposed to hold the Conference in Chile next year? That would seem to me a more suitable place for a conference on the land rather than on the seabed. But may I ask the noble Baroness this question? What is to happen meanwhile to the mining companies which are now beginning, with very heavy investment, to operate in the international waters? What is to be done to confine them?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords. I understand that the Government of Chile has asked that the Conference should not be convened in Santiago, and the First Committee of the United Nations General Assembly has to decide where it should be convened. I think that every effort is being made to make sure that it does start substantially next year. On the other question, the mining companies have the right to explore the seabed under the 1958 Convention.
LORD SEGAL: My Lords, while "rocked in the cradle of the deep", will the Government, so far as the seabed is concerned, resist the temptation to lie down and sleep?
BARONESS TWEEDSMUIR or BELHELVIE: My Lords, I cannot see any possibility of their having time to sleep.
LORD KENNET: My Lords, would the Government consider the possibility of having a Green Paper or a consultation paper of some sort on this subject between now and the time when they have to go up to the U.N. Conference and take up a position? Is it not the case that in this country many interests are involved whose livelihoods are at stake in the future régime of the sea, and many of them have not a clue about what is happening? Could the Government's tentative views be set out for consultation purposes? Would that not clarify the matter a great deal?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I said, draft Articles have been prepared by the Seabed Committee which will be published by the United Nations for the Law

625
of the Sea Conference. We had a full debate in this House on July 11 when we went into the matter pretty clearly. We could not give our detailed negotiating position, for obvious reasons.
LORD KENNET: My Lords, will the Government still bear in mind these two facts? The first is that United Nations publications do not reach the general public in this country very easily, and the second is that what is going to affect our lives is the position the Government take up. If the Government have not entirely made up their minds on this subject, as I suspect they have not, would it not be seemly, democratic and informative for the Government to set out considerations and alternatives for general discussion among those affected?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I take the point that United Nations documents are not on the whole read very easily by the general public. I will give consideration to this matter. But I think that we went quite deeply into the subject on a Motion raised by the noble Lord himself.
LORD BROCKWAY: My Lords, is the noble Baroness aware that I did not mean in the least to suggest that the appalling problem of the Middle East is not urgent? I was thinking of much more long-term considerations, where the seas of the world will become as important as the land of the world.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I would agree on the great importance of the subject, and that is why it has taken so long to prepare for this Conference which has already been postponed for one year.

COST OF LIVING: PRICE AND SERVICE CHARGE INCREASES
2.43 p.m.
LORD LEATHERLAND: 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 will give details of retail price increases since June 18, 1970, in so far as the following items commonly used in ordinary households are
626
concerned: Meat, bacon, eggs, bread, and fifty or so of the main fresh and packed foodstuffs, detergents, soaps, toilet requisites, radio batteries, pots and pans, over-the-counter medicaments, beer, wines and fruit juices; and also of the increased charges for postage, telephones, rents and rates during that period.
EARL FERRERS: My Lords, as the reply contains a table of figures I shall with permission circulate a Statement in the OFFICIAL REPORT.
Following is the statement referred to:
The percentage changes in retail prices between June 16, 1970, and September 18, 1973, of some items commonly used in ordinary households are as follows:—

Item

Percentage Change

Beef

+79

Lamb

+77

Pork

+58

Bacon

+83

Ham

+44

Eggs

+99

Bread

+25

Pork sausages

+44

Beef sausages

+59

Pork luncheon meat (tinned)

+45

Roasting chicken, frozen (3 lb.)

+69

Canned red salmon

+58

Butter

+26

Margarine

+32

Lard

+40

Cheese, cheddar type

+78

Milk

+20

Tea

+9

Coffee, extract, powder

+34

Sugar

+38

Jam, Marmalade

+27

Potatoes, raw, loose

—13

Tomatoes

—18

Cabbage

+55

Cauliflower

+57

Carrots

—6

Onions

—2

Apples, cooking

+28

Apples, dessert

+26

Pears

+39

Oranges

+65

Bananas

+46

Currants

+90

Sultanas

+97

Canned pears

+33

Canned peaches

+40

Canned pineapple

+34

Canned fruit salad

+36

Swqets and chocolates

+6

Food for animals

+23

Soap and detergents

+24

Toilet requisites

+9

Hardware, ironmongery

+25

Medicines and surgical etc. goods

+27

Beer

+18

Sherry

+9

Postage, etc.

+74

Telephones, telegrams, etc.

+34

Rents

+33

Rates and water charges

+40

Radio batteries

Not available

Fruit juices

Not available

LORD LEATHERLAND: My Lords, does the noble Earl mean to say that the list of price increases since this Government came into office is so long that he cannot recite it to this House? Further, may I seek a little detailed information? Is it not a fact that during September price increases amounted to 2·1 per cent., the highest figure for two and a half years? Is it not a fact that since the General Election food price increases have been 40·2 per cent.? Is it not also a fact that during the present month of October there have been further considerable increases? Finally, is it not a fact that last week the Grocer announced that 742 price increases had become current last week—and when I mention the Grocer, I mean the journal of that name and not any individual person.
EARL FERRERS: My Lords, I said that I would circulate the figures in the OFFICIAL REPORT because the noble Lord's Question asked that Her Majesty's Government provide a list of about 50 or more different items, and I thought it would be for the convenience of your Lordships to be able to read it rather than for me to depict all the items. The noble Lord, Lord Leatherland, is entirely correct when he says that the food index since the General Election has gone up by 40·2 per cent. This is of course a matter of grave concern, and is something about which Her Majesty's Government are concerned. But I would draw the attention of the noble Lord to the fact that average earnings of all workers have gone up by 44·8 per cent. and old-age pensions by 55 per cent.
LORD LEATHERLAND: My Lords, is the noble Earl aware that the Tory Party's Manifesto at the last Election promised us a high wage, low cost economy? Does he think that that promise has been fulfilled?
EARL FERRERS: My Lords, the Government are tackling that problem, which is of world-wide repute and concern. I would suggest to the noble Lord that we have had a modicum of success, even though the Government agree that they have not yet had total success.
LORD SHINWELL: My Lords, is the noble Earl aware that average earnings do not help those on the lower scale, the lower paid workers, and that average prices have to be accepted and absorbed by those on the lower scale of wage rates?
EARL FERRERS: My Lords, the noble Lord, Lord Shinwell, is of course correct, and Her Majesty's Government have always recognised this. That is the reason why we have decided to try to help the lower paid people by selective assistance, such as increasing the old-age pension and the family income supplement; and that is why the counter-inflation policy in Phase 2 has deliberately been designed to help the lower paid worker. Also in this connection, the measures taken to allow for rent allowances and rent rebates have again been designed to help those who are less well off.
LORD DERWENT: My Lords, is ours the only country where such rises have occurred?
EARL FERRERS: My Lords, it is quite true that we have experienced rises in world food prices. In the year ending August, 1973, United Kingdom food prices went up by 12·8 per cent.; in the United States by 13·4 per cent.; in Italy, 13·6 per cent.; in Australia, 14 per cent.; in South Africa, 16·5 per cent.; and in Canada, 16·7 per cent. So we are not the worst country in the league table from the point of view of increased food prices.
LORD POPPLEWELL: My Lords, when the noble Earl refers to the increase in world prices, can he inform the House how much the fall in the value of the pound is related to the prices we are having to pay for our imports? Would I be correct in saying that if the value of the pound in July, 1970, stood at 100 per cent., it now stands at 77½ per cent.? Just how does this reflect itself in the increased world prices that we have to pay and to which the noble Earl referred?
EARL FERRERS: My Lords, clearly the alteration in the level of the pound makes a difference so far as the calculations are concerned, but what I was trying to point out was that the increase in prices of food is not restricted to this country, but is common to all countries in the Western World.
LORD BLYTON: My Lords, surely the noble Earl will agree that world prices having nothing to do with the sheer inflationary policy of the Government in increasing rents to working class people under the Rent Bill? Surely this was a matter for the Government and not for outside world prices?
EARL FERRERS: My Lords, that particular question may be a matter for the Government, and that is the reason why the Government took action in allowing for rent rebates and rent allowances under the Bill recently passed by your Lordships.
LORD BESWICK: My Lords, when the noble Earl speaks about a "modicum of success", has he in mind the price of butter to the Russians?
EARL FERRERS: My Lords, I was talking about overall success in dealing with inflation.
THE EARL OF ONSLOW: My Lords, would my noble friend agree that the modicum of success is slightly better than that achieved by the previous Government?
EARL FERRERS: My Lords, there is substantial success. "Modicum" is only an approximate term.
LORD SLATER: My Lords, is the noble Earl aware that the general public are of the opinion that the Board which was set up by the Government to deal with price increases is too ready to give way to manufacturers' applications for increases in certain commodities?
EARL FERRERS: My Lords, I think that that particular question is going slightly wide of the original one, but I would answer the noble Lord with one particular instance. The prices of imported food raw materials used by food manufacturers, since the General Election in June, 1970, to now, have increased by 89 per cent.; that is the imported raw materials for food manufacuring. They have increased by 89 per cent., but the retail prices for manufactured foods have increased by only 26 per cent.
LORD JANNER: My Lords, will the noble Earl explain why, when the Government claimed that they were going to reduce prices and there would not he inflation, they did not explain to the
630
public at that time that if world prices increased our position would be different? Did they not deceive the population of this country? Will he say which other countries put forward an election claim, at the time that elections took place in their countries, that they were going to reduce prices?
EARL FERRERS: My Lords, I would not answer the last part of the noble Lord's question, because that might be a piece of research he may care to do himself. The Government never claimed that there would not be inflation. What they have endeavoured to do is to deal with inflation, and this they have done.
SEVERAL NOBLE LORDS: Oh!
EARL FERRERS: When one considers that over the past 12 months the world price of wheat has increased by 130 per cent., even the noble Lord, Lord Janner, will agree that that is outside the Government's control.
LORD DOUGLASS OF CLEVELAND: My Lords, having regard to the fact that all these questions seem to be directed to the ability of people to live in the atmosphere of inflation, is it not time that a minimum wage was established in this country which would enable all people to live even without security benefits, and that old-age pensions ought to be related to this minimum wage?
EARL FERRERS: My Lords, with respect to the noble Lord, Lord Douglass, that is a different question. But I would assure him that the Government have very firmly in mind the position of those who are less well off and those who are living on fixed incomes, and that is the reason for the action we have taken, which I suggest has met with approval.
LORD DOUGLASS OF CLEVELAND: My Lords, may I follow that up? It is one thing for the Government to have something firmly in mind; it is quite another thing for the people on these low wages to live, and even though it may—
SEVERAL NOBLE LORDS: Question!
LORD DOUGLASS OF CLEVELAND: I am going to put the question but, after all, on the opposite side they qualify questions, do they not, before they argue the case? When I have been negotiating

631
wages I have always had to argue the case before I put the question. I am now arguing the case that certain people in this country are not able to live on the income they have. Hence the question: is it not time that we gave some active consideration to the question of a minimum wage in this country?
EARL FERRERS: My Lords, I would only answer the noble Lord, Lord Douglass, by saying that the food index has gone up by 40·2 per cent. The retail price index has gone up by 30 per cent. But the average earnings of all workers have gone up by 44·8 per cent., and therefore have exceeded the two very important figures which the noble Lord is concerned with.
LORD DOUGLASS OF CLEVELAND: My Lords, I am sorry to pursue this point, but let me ask another question. This time I will ask a question to begin with. Do percentages matter when you consider incomes of thousands of pounds a year and incomes of a few hundred pounds a year in some cases?
EARL FERRERS: My Lords, that is the reason why the Government have produced the family income supplement to help families that are less well off.
LORD DOUGLASS OF CLEVELAND:Let me follow this up, my Lords, if I may.
SEVERAL NOBLE LORDS: Oh!
LORD DOUGLASS OF CLEVELAND: I am entitled to ask questions. I do not often, but I am going to. To have family income supplement is not dealing with this question at all. The question is made evident. What I want to know is when we are going to establish a minimum income, a minimum wage, for people in this country that will at least enable them to eat, if not pay their rents.
THE LORD PRIVY SEAL (LORD WINDLESHAM): My Lords, I feared when I saw this Question on the Order Paper that it would lead to a general debate. This is an example of how, when a Question is put down that covers such an enormously wide range of subject matter, we tend to have a rather disorderly Question Time. The noble Lord
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has asked four supplementary questions. I can assure him that there will be an opportunity to discuss the Government's economic policies during the debate on the Queen's Speech. We look forward to hearing his views then.
LORD BOOTHBY: My Lords, while hesitating to continue the debate, may I ask the noble Earl—and here I have to declare a personal interest—whether the best way of dealing with the whole of this question would not be to raise old-age pensions?
EARL FERRERS: My Lords, that is what the Government have done.
LORD LEATHERLAND: My Lords, I hope I am not to take it that the noble Lord the Leader of the House is rebuking me for putting down this Question. I should like to ask, by way of a finale, this further question. When the noble Earl said that we were having to pay more for our food imports, was he taking into account the fact that one of the reasons for that was the action of the present Government in devaluing the pound?
EARL FERRERS: My Lords, the prices of imported foods are the prices at which the food comes into the country, and this takes into account the point which the noble Lord has expressed.

N.H.S. OFFICERS' SALARIES AND RETIREMENT SCHEMES
2.55 p.m.
LORD REIGATE: My Lords, at long last I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government when they intend to publish the regulations governing the schemes of early retirement and protection of salaries for senior officers and others affected by the reorganisation of the National Health Service.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, as soon as we have completed consultations with staff interests.
LORD REIGATE: My Lords, is my noble friend aware that in some cases

633
appointments are being made this month and the officers concerned do not yet know what are the alternatives facing them?
LORD ABERDARE: Yes, my Lords; I am well aware of this. We have done our best to push ahead with the schemes for early retirement and for the protection of salaries. We have put our proposals in the first instance to the Joint Superannuation Consultative Committee. They have made various comments on these proposals and we are about to come forward with further proposals for their consideration.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, is the noble Lord aware that it places an individual senior officer of the utmost importance to the Health Service in a most invidious position that, at the time when he applies for a position which has been brought about by reorganisation, he does not know what his own individual position is, or indeed that of his colleagues?
LORD ABERDARE: My Lords, there are a very few people who have so far received appointments, and already the general scheme has been widely publicised and the differences are mainly on only three specific parts of the proposals. But if any individual officer who is in any doubt or has difficulty would care to get in touch with my Department, we will advise him to the best of our ability.
LORD REIGATE: But, my Lords, with great respect to my noble friend, that really is a rather odd way of proceeding. Surely it is only right that the officers concerned must wait until they see in print what they are entitled to?
LORD ABERDARE: My Lords, these schemes are designed principally to help those who do not get appointments. Those who do get appointments will have plenty of time to consider their position before they take up their appointment after April 1. As I say, we will give them any help we can in the meantime. But surely it is important that the schemes we have put forward for these very vital matters are agreed with staff interests.
LORD REIGATE: My Lords, is my noble friend further aware that it is not
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just a question of those who do not get appointments, but of those who may elect for early retirement instead of appointments? They are not entitled to claim the provisions for earlier retirement once they have accepted a post, and they may find earlier retirement more attractive.
LORD ABERDARE: My Lords, I can only repeat my offer that if there are such cases, if they will get in touch with my Department we shall be able very largely to help them to make their decision.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, is this not rather prejudicial to any individual officer who may seek to apply to the Ministry, who are in fact going to employ him in the end, for this kind of individual advice? Is the noble Lord really not aware, as his reply appears to indicate, of the very, very low state of morale among these very important senior officers simply because of this really appalling uncertainty about how to choose to proceed at this vital moment in their careers?
LORD ABERDARE: My Lords, I do not accept that at all. We have been very hard pushed because the Bill only reached the Statute Book recently. Since then the Department has been doing its best to produce all the guidance that is necessary. There are difficulties—there are bound to be difficulties with the shortage of time—but I do not think in this particular instance more than a very few people are affected; and we certainly will do our utmost to see they obtain the right advice.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, in view of the very unsatisfactory nature of that reply, and the Minister's apparent unawareness of the state of morale, I think we may have to ask for a further debate on this matter.
LORD REIGATE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the difficult position of senior officers in the National Health Service who may be offered posts in the reorganised National Health Service in view of the

635
fact that the alternative proposals of the early retirement scheme have not yet been published.
LORD ABERDARE: Yes, my Lords, it is most important that we should proceed in agreement with staff interests.
LORD REIGATE: My Lords, can my noble friend say whether the option to choose early retirement will be extended so that officers whose position is uncertain, instead of using the extraordinary and unusual and unsatisfactory course of taking the advice of his Department, may have the alternative option extended after the appointed day?
LORD ABERDARE: My Lords, this was one of the suggestions that was made after consultation with staff interests. We are putting our further proposals to them very shortly and we hope that those proposals will go a considerable way to meeting their criticism.
BARONESS LLEWELYN-DAVIES HASTOE: My Lords, is the noble Lord aware that the chaos we were afraid of in relation to reorganisation of the National Health Service is even worse than noble Lords on all sides of the House thought?
LORD ABERDARE: My Lords, I should have thought that the noble Lady would wish to help us in this matter. The National Health Service is extremely important, reorganisation is extremely important, and we are all doing our best to iron out the wrinkles. I hope that she will be a little more co-operative in helping rather than being too critical of what is a difficult task which is being done in a very short time.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, it is very difficult to co-operate in an unfair situation affecting the most senior members of the National Health Service.
LORD ABERDARE: I do not agree, my Lords, that it is unfair.
BARONESS SUMMERSKILL: My Lords, would the noble Lord not say that the duty of the Opposition is to criticise the Government if they consider they are failing in their duty? It is not the duty
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of the noble Lord to criticise my noble friend for doing her duty.
LORD ABERDARE: No, my Lords, I would not criticise the noble Baroness for doing her duty, but I thought she was going rather wide of the Question and giving out the impression that there was loss of morale in the Sevice in general.
LORD PLATT: My Lords, how can the Department give adequate advice if the proposals for the early retirement scheme are not yet known? If the answer is that they are known, why are they not published?
LORD ABERDARE: My Lords, the proposals were put out for comment on May 31, 1973. They are, in general, known, but in detail they cannot be finalised until they are agreed with those people who represent the staff and service. That is why we cannot publish them.
LORD REIGATE: My Lords, is my noble friend aware that in fact it would be perfectly possible for the Department to issue those regulations? It would not be the first time that the Secretary of State had come to a decision without consultation.
LORD ABERDARE: I completely deny that, my Lords; that is not true. I expect my noble friend has in mind the salary question, but there were very particular reasons for that. My right honourable friend is meticulous in consulting the staff interests.
LORD SEGAL: My Lords, can the noble Lord give an assurance that when these proposals are published they will not result in the too early retirement of any senior officers in the National Health Service?
LORD ABERDARE: My Lords, there are provisions in the proposals which would allow health authorities to object to an early retirement in an exceptional case where it was important for the Service that a particular officer should stay on.
LORD FISKE: My Lords, I do not really sense in the noble Viscount's reply the feeling of urgency which this matter should have. I went through this experience some ten years ago in the reorganisation of the government of

637
London, but what one is talking about is the career decisions that lie before men over the age of 50.
SEVERAL NOBLE LORDS:Question!
LORD FISKE: I am sorry. My question is: is not the corollary to what the noble Viscount has suggested that he should issue instructions that no permanent appointments to the new Health Service should be made until his Department is ready with these new arrangements for the alternative for those who are not re-employed?
LORD ABERDARE: My Lords, in the first place, I regret to say that I am not a Viscount. In the second place, the urgency of the matter is fully realised by all of us in the Department. We are up against a very tight timetable, we are working extremely hard to get agreement with staff interests—which must be the first step, surely—and we expect very shortly to be able to issue these regulations.

GOVERNMENT STATEMENTS
EARL ST. ALDWYN: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend Lord Drumablyn will be making a Statement on supplies of oil. This will be followed by a Statement, to be made by my noble friend Lady Tweedsmuir of Belhelvie, on the recent meeting of the E.E.C. Council of Ministers.
ASHDOWN FOREST BILL [H.L.]
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWLL): My Lords, as no Message has been received from the Commons relating to this Bill, I do not propose to move the Motion standing in my name on the Order Paper.
POWERS OF CRIMINAL COURTS BILL [H.L.]
Returned from the Commons, agreed to.
MAPLIN DEVELOPMENT BILL
Returned from the Commons with the Amendments agreed to.

EUROPEAN PARLIAMENT: DESIGNATION OF MEMBERS
3.6 p.m.
LORD WINDLESHAM LORD WINDLESHAM rose to move, That the Marquess of Lothian he designated a Member of the European Parliament in the place of the Lord Brecon. The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. Its purpose is to propose that my noble friend Lord Lothian should replace the noble Lord, Lord Brecon, as a Member of the European Parliament. In moving the Motion I should like to put on record the appreciation of the Government, and that of the House as a whole, of the great services which the noble Lord, Lard Brecon, has rendered as one of the first group of Members of the European Parliament. For many years now the noble Lord, Lord Brecon, has had a career of wide and varied public service in Wales and in Great Britain as a whole. Now, over an exceptionally demanding period, he has earned our thanks for the time and energy he has given as a member of the British delegation to the European Parliament.
I am sure that most of us in this House are proud of the contribution which the House of Lords has been able to make to the European Parliament in a highly significant phase of its development. Not only have we been able to field a strong and enterprising team of Peers but they have been most ably supported by the Parliament Office. As a result of his recent appointment as Chairman of the Welsh Water Authority, the noble Lord. Lord Brecon, has felt obliged to resign from the European Parliament, and I am very pleased to be able to propose to the House that the noble Marquess, Lord Lothian, should take his place. As the House knows, the noble Marquess has had considerable experience of overseas affairs, both while he was at the Foreign and Commonwealth Office and before. Moreover, in regional terms, what is Wales's loss is Scotland's gain. I am sure that the noble Marquess will be a great addition to the European Parliament and will make a noteworthy contribution to its proceedings.
My Lords, there is one other matter to which I should like to refer in moving this Motion. When the original group of eight Peers were nominated last

639
December as Members of the European Parliament the noble Earl, Lord Jellicoe, who was then the Leader of your Lordships' House, said—and I quote:
"There is the question of the duration of this Order. All I would say is that this .is debatable ground. It is certainly usual in this House for a Motion of this kind to have currency for the Session only. If the House wished to appoint the Members for the duration of the Parliament. I am advise' that this should be stated specifically in the Motion; and it is not so stated. So it is my understanding that this is a Sessional Order, although it is my hope that we shall have—and I think it would be of great pity if we did not have— a large degree of continuity in our delegation to the European Parliament, because we all have to feel our way."—[OFFICIAL REPORT, 20/12/72, Hansard, col. 1111.]
As the noble Earl, Lord Jellicoe, said this was "debatable ground Your Lordships will see from Hansard of December 20 last that my noble friend was speaking "off the cuff" and with "off the cuff advice" from the Table. After Lord Jellicoe's Statement on December 20 last, he asked the Table for a considered opinion. The considered advice tendered by the Clerk of the Parliaments was that the Order designating the Lords Members of the European Parliament was of indefinite duration, though it could be varied or revoked by the House at any time. The Clerk of the Parliaments reached this conclusion because he did not consider that the Order of December 20, 1972, fell within the categories specified by Erskine May as being limited in duration to the current Session; and also because the European Parliament has an existence independent of either House of Parliament in this country.
Since my noble friend Lord Lauderdale was good enough to give me notice of his intention to return again to-day to the question of how Members of the European Parliament are selected and the duration of their term, I have looked into this matter with some care. It is for this reason that I am taking a little longer in moving this Motion that might otherwise be the case. I want to be as frank with the House as the noble Earl, Lord Jellicoe, himself would have wished to be. I find that earlier this year, having received the considered advice of the Clerk, he put on record—and this has been made available to me—his intention
640
to find a suitable opportunity to modify what he said in December. Perhaps I might quote my predecessor's own words from the record he made:
"I shall have to take a suitable opportunity of modifying what I said in the House of Lords on December 20 last, in replying to Lord Lauderdale's Amendment which sought (inter alia) to limit the term of appointment of the Lords designated to the current Session. I said then that it was my understanding that the designation of the Lords Members of the European Parliament was to be regarded as a Sessional Order. I see no difficulty in modifying this, as I warned the House at the time that the question of the term of the appointments was 'debatable ground', and it would not be difficult for me to say that on reconsideration I wished to amend the tentative view that I then expressed."
I am aware that some doubts remain about the best method of selecting Members of both Houses of Parliament to serve as Members of the European Parliament. Indeed my noble friend Lord Lauderdale has put down an Amendment to this Motion to-day, as he did on the previous occasion when, in December, we discussed the nomination of noble Lords to the European Parliament, to draw attention to his preference for a system based on a process of election. An electoral mandate is something that we shall continue to consider in the future, as indeed we are bound to do under the terms of the Articles governing the Institutions of the Community. Article 138(3) states that the Assembly (that is the European Parliament)
"shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all member States."
But, my Lords, important as these considerations are for the future, the broader issues do not really arise on the filling of a casual vacancy. All the present Motion does is to propose that my noble friend Lord Lothian should take the place of my noble friend Lord Brecon, who is standing down for the reasons I have already given. I hope, therefore, that your Lordships will agree that the noble Marquess should make his way to Strasbourg and Luxembourg with our full support and encouragement. I beg to move.
Moved, That the Marquess of Lothian be designated a Member of the European Parliament in the place of the Lord Brecon.—(Lord Windlesham.)
3.15 p.m.
THE EARL OF LAUDERDALE THE EARL OF LAUDERDALE rose to move as an Amendment to the Motion: at end to insert "for the remainder of this Session; and those Lords designated Members of the European Parliament thereafter shall only be so designated after a process of election". The noble Earl said: My Lords, I beg to move the Amendment standing in my name on the Order Paper.
May I say, first of all, that this is in no sense a criticism of the noble Marquess whose personality we all cherish with affection, whose ability we cherish with envy and whose unfailing kindness and courtesy we seek to cherish by emulation. Nor, if the situation had not seemed to compel it, would I personally have wished to make new trouble for a new Leader of the House whose appointment we have hailed with delight. My concern is not mischief but principle.
As the noble Lord, Lord Windlesham, said, the Amendment I now move is the one I moved on December 20 last when the first nominations for Strasbourg were made. May I without rancour recall the background at that time. The Executive in this country had just treated both Houses of Parliament to the unpalatable medicine of a complicated Bill to which not even a comma, let alone the innocent conjunction "that" was allowed to be added or taken away. Unamended the Bill reached us, and unamended it left this place. That Bill set up a new relationship between this country and eight of our neighbours, one different in kind from our relationship with such international organisations as the United Nations, NATO, the Western European Union and the Council of Europe. It conceded to the European Economic Commission direct powers over the everyday life of the citizen against which, save for a rare veto in the Council of Ministers, only the European Parliament was trumpeted as the eventual democratic long-stop.
Just now my noble friend quoted, but selectively, from the Treaty of Rome about methods of appointment to the European Parliament. He did not quote, as I rather hoped he would, another passage from Article 138 which meantime requires Members of the European Par
642
liament to be appointed from national Parliaments, namely:
"by procedures laid down by each Member State".
Other countries have long since laid down their procedures: Belgium, Holland and Luxembourg, by a process amounting to election, pick members from both Houses; Germany does the same from the Bundestag; France and Italy have an open election in both Houses for the choice of delegates. Britain has so far laid down no clear procedure, and I say "laid down no clear procedure" referring to the assignment of Members of this Parliament to the membership of that Parliament. I can only speak for the Party to which I continue, despite occasional stresses, to be loyal; however my noble friend Lord Lothian was selected—and I am sure that had his appointment been put to the vote he would have got in unanimously—there was in fact no overt system of election or choice within our Party. I am glad to see that my noble friend Lord Balfour of Inchrye is now with us on the Front Bench below the gangway, for as he said so pregnantly on December 20 last:
"here we have the Executive…encroaching upon our Legislature and saying who is to be a member of a European Legislature".—[OFFICIAL REPORT, col. 1104.]
He added that it was an "Executive-packed team" that both Houses were sending.
I do not wish to prolong these proceedings unduly and to wear out your Lordships' ever-indulgent patience, but may I just recall that last December I made three essential points. The first was that this was evidently an appointment for an indefinite period. That view has now been contradicted by my noble friend on the Front Bench, and I shall return to it. My second point was that a system of election could very well have been devised without raising the prickly problem of inter-Party relationships. There could have been, and there could now be, and there could be when Parliament reassembles for the new Session, a system of lists for which Members of any Party could put themselves forward, so that we could then vote according to the lists. If one list was blank, so be it, but we could at least have a system of election. In addition, when we debated this matter briefly last December

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my noble friend Lord Balfour of Inchrye cited the example of procedures in the Commonwealth Parliamentary Association, and I would add to that the procedures of the Inter-Parliamentary Union.
For good measure let me now offer a third alternative; namely, that the inter-Party problems could be overcome, and the Whips' patronage dispensed with, if the terms of reference of the Committee of Selection were so altered as to enable that Committee, which is independent of the Whips and represents all sides of the House, to make the selection. My main point was one of principle last time, as it is now, that if Parliament is to send representatives to a new kind of European Parliament, which is to be a sort of longstop in defence of the citizens' rights those representatives should not—repeat "not"—be Government placemen. They should be freely elected by the House or Houses, until some better method is chosen. It might be well if we were to draw upon the wisdom of the great Gibbon, who wrote:
"The principles of a free constitution are irrevocably lost when the legislative power is nominated by the Executive".
It is easy to quote selectively from the debate on December 20 last, partly because it was a little ragged, but with your Lordships' indulgence I have chosen to put in a logical order a number of the things which my noble friend the then Leader of the House said at that time. First, he said it was a sessional appointment. I shall return to that. Then he said:"…this is an important matter, and one that we should not underestimate…it is one which I hope we shall come back to in this House. Perhaps we may do so quite soon." He went on:
"I have taken full note of what has been said by your Lordships…It is an important matter and one to which the Government certainly intend to…address themselves." [Col. 1113.]
He added that he cordially agreed
"that we certainly need to work out in the lifetime of this Parliament (preferably in this coming Session)…"
—that of course referred to the Session which we are now concluding—
"our procedures by which we select, or elect, Members of this House who will be delegates to the European Parliament."
Finally, he showed that his mind was open to a considerable range of alternatives. From that moment until this there has, on this subject, been silence from the Front Bench. Ten months have gone by and we have been told nothing about the procedures which the Government then pledged themselves to consider and which they recognised should be worked out quickly: nothing, that is, until those of us who were forewarned by the Peterborough column of the Daily Telegraph on Monday, looked over our Order Paper yesterday and found only twenty-four hours' warning of this Motion—and that. mark you, my Lords, as if the matter had not been ventilated last December; as if no pledge had been given that this was a Sessional appointment (I shall again come back to that) and as if there had been nothing said then that such questions of selection or election procedures would be further and urgently discussed.
With the very greatest respect, I must submit to your Lordships that this is trivially short notice. There might be some of your Lordships who would even feel that it borders on something not very far removed from a little discourtesy to the House. At any rate. I believe that this short notice is unworthy and I sincerely hope that it was genuinely accidental. Otherwise, why raise matters in this House at all? The power of the Executive has increased, is increasing, and ought to be diminished. This is common ground, except between the Front Benches.
SEVERAL NOBLE LORDS: Shame!
THE EARL OF LAUDERDALE: My Lords, is the Executive now so heavily out of control that when, from courtesy and a desire to assist, one by leave withdraws a critical Amendment, that must henceforth be the end of the matter? Or can we now recover our faith that matters raised on such an occasion do mean something and that the assurances given by the Government do in fact mean what they suggest? Or does it mean that in future when one has tabled a critical Amendment one should be prepared, willy-nilly, to press it in the Division Lobby?
On the question of the Sessional appointment, my noble friend Lord Windlesham has at least saved my noble friend Lord Lothian from a 24 hours'

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appointment, because as things stood until two minutes ago for all we knew this was a Sessional matter and we were going through this rigmarole to appoint him for 24 hours. But should not the House have been told before? We quite appreciate that the noble Lord's predecessor had intended to acquaint the House: how is it that that acquaintance has now to be prised out of the Government only by proposing an Amendment?
The Government have resorted to two arguments on this whole subject. They have said, or tended to say, one way or another, "Oh well, this is how delegations to the NATO Assembly, to W.E.U., to the Council of Europe and so on have been selected in the past, through the exercise of the Whips' selection" I am glad that my noble friend has not attempted to use that argument now. As to the Whips' custom, I would draw his attention to King James VI's words about smoking:
"It is a custom loathsome to the eye, hateful to the nose and harmful to the brain."
Not only is the custom of the Whips hateful in a matter of this sort; it is irrevelant also. For appointments to these other various international bodies in any case are only Sessional whereas we now learn that this is not; they are to bodies which are no more than consultative while we are here speaking about appointment to a Parliament—at any rate a body that claims to be Parliamentary—with a very important role to play, quite different from the other bodies.
Then the Government have tended to say—and did say in the past—that they had been prevented from devising or proposing a proper system of selection because of inter-Party difficulties. But again, as an interim measure, the extension or revision of the terms of reference of the Committee of Selection would have got over that difficulty without any heads being broken.
My Lords, it was Simon Fraser, Lord Lovat, on his way to the scaffold, who replied to the jeering mobs in the City:
"The greater the mischief, the better the sport".
It is not my purpose either to make sport or to raise mischief, beyond a degree that is perhaps healthy to the Whips—for whom we have such a strong personal affection. But I do believe that those
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Peers who sit in this House by virtue, not of merit, not of accomplishment, not of career success but by the accident of birth have a very special duty to perform. It is a duty not unlike that of being picked for jury service. If they have one obligation more than another which is laid upon them by history, it is the guardianship of our constitutional processes. Such indeed was something that stood out in the philosophy of the late noble Marquess, Lord Salisbury, who, as Leader of the Opposition in this House, declared the principle in the 1945 Parliament that at any rate Conservatives would make it their business to ensure that any Party endowed with a temporory majority in the other place should not be enabled to make irrevocable constitutional changes unbacked by the electorate. I do not want to go into the past history of this general controversy now, but there is a matter of principle at stake. It is because of this that I rise reluctantly at this moment humbly to remind your Lordships that the greater the power, the greater the abuse, and that all power is a trust. We are accountable for its exercise. I beg to move.
Amendment moved—
At end to insert:
"for the remainder of this Session; and that those Lords designated members of the European Parliament thereafter shall only be so designated after a process of election."—(The Earl of Lauderdale.)
3.31 p.m.
LORD BESWICK: My Lords, we are witnessing one of the most interesting ironies of this House. On the one hand we have the noble Earl, Lord Lauderdale, the strongest voice on the Benches opposite against the idea of joining the European Economic Community, the one man who put forward great arguments against going into the European Parliament at all, and on the other hand we have the noble Lord the Leader of the House, Lord Windlesham, a great believer in and champion of the European idea, turning down the proposals made in good faith by the noble Earl, Lord Lauderdale, for giving a vestige of respectability to the European gathering. I should have thought that the noble Lord the Leader of the House would have been a little more forthcoming and would have been in a better position to welcome what was said on the Back Benches there. After all, it would be something of a fig

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leaf for this European Parliament, would it not?—the one element of democracy either in this House or that—if we had some process of election for those whom we send there. Irrespective of whether we agree with sending anyone to Strasbourg, I should have thought we ought to learn of these things here and not through the channel of the gossip column of a newspaper. That is not good enough for this House, and I hope that the noble Lord the Leader of the House will have some inquiry made as to why it was able to he learnt in Fleet Street in that way instead of being properly announced in this House.
My Lords, having said that, I wish to make just two other comments. I agreed with a comment made by the noble Lord the Leader of the House when he said that the European Parliament has a position —and I quote, I think, correctly—"entirely independent of either House of Parliament". "Entirely independent"; of course it is entirely independent. I must say I thought some of the phrases he used in his speech were a little over-colourful when he said how proud we were of those who represented us in Stras-bourg, and spoke of the strong and enterprising line they had taken. May I ask whether the noble Lord the Leader of the House, when he comes to reply, can give some indication of what benefits have accrued to the British people as a result of the strong and enterprising line taken by the noble Peers in Strasbourg? Will he also say, when he refers to the resignation of the noble Lord, Lord Brecon, and to the appointment of Lord Lothian, what he meant by there being a loss to Wales but a gain to Scotland? Would he indicate a little more precisely the areas in which Scotland will gain as a result of the representation by Lord Lothian in Strasbourg? I should have thought that in this connection, as was originally announced, we ought to be given a little more information as to what the noble Lord the Leader of the House bases his speech on.
My other point is this. As is well known—it has not been hidden—the Party for which I speak does not send anyone by any process to Strasbourg. Therefore I do not think that we are entitled to say how noble Lords opposite are selected or elected. I think this is a matter which, for the time being, at any rate, has to be
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settled on the Benches opposite. At the same time. I feel that the noble Earl, Lord Lauderdale, put forward a strong case, and it is with great interest that I look forward to hearing what the noble Lord the Leader of the House has to say in reply.
3.38 p.m.
LORD GLADWYN: My Lords, as a Liberal Member of the delegation to the European Parliament and in the presence of the fact that the Labour Party spokesman has just said that he does not really want to intervene in the practicalities of the election of representatives to the European Parliament for the moment, I should like to make a few remarks about the important questions of principle which have emerged, both in the declaration of the noble Lord the Leader of the House and in the statement of the noble Earl, Lord Lauderdale. I was glad to hear that the noble Lord the Leader of the House, on behalf of the Government, maintained that direct elections were a desirable objective and, indeed, forming part of the Treaty of Rome, represent an obligation on us. We must work for that. I believe that it is the intention of the Government to do so. But we must all recognise that in practice it will be a long time before these direct elections on a European scale can in fact be organised. Apart from anything else, at the moment it is very difficult to apply a scheme for the constitution of a House with, say, 500 to 600 people elected from all over Europe in accordance with the same electoral law, probably by proportional representation, which is not accepted by all member States at the moment, and so on, in which naturally the smaller States would have less representation than at present. That is a difficulty that has to be faced and overcome. It will happen.
Equally, we must make more progress than at present with the emergence, so to speak, of the constitution of the European Union which has been laid down as an objective to be achieved as early as 1980. As your Lordships will know, the Parliament, Commission and, indeed, Ministers are bending their minds towards forms of a European constitution involving many more powers for the Parliament. The way in which the new Community will work is now under active consideration in the Parliament. The work is not as appreciated as it might

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be by the noble Lord who has just sat down. Work is indeed being carried on on the whole structure of the democratic community that we are pledged to establish in 1980. But it cannot happen now, and probably will not happen before 1980, or whenever the full constitution is agreed upon and becomes applicable.
In the absence of direct elections in accordance with the Treaty, it is however entirely possible to form a Parliament out of delegations which are nominated by the various Parliaments of the Member States. The system by which these delegations are nominated varies in the various Parliaments at this moment, as the noble Earl, Lord Lauderdale, said. There is no doubt a form of election in some Parliaments among the members of those Parliaments. Our system is not that; it is nomination, as we all know, by the Whips. It has been criticised by some, but at least it has this virtue: that it does provide for adequate representation for the Oppositions. In the case of the Liberal Opposition I fear it is not adequate—indeed, we think it is quite unfair. It would be more suitable, in our view, if the proportions of the Parties in the Delegation reflected the votes cast in a General Election. However, we find it difficult to imagine that we shall be able to persuade the authorities of the justice of our view. I repeat, the present system is inherently unjust. Anyhow, at the moment the delegates are nominated by the Whips, and at any rate the Labour Party, if it cared to join in the work of this Parliament, in this constructive work, which it will not do at the moment, would find itself adequately represented, from the point of view of numbers at least.
There is, however, a case for suggesting that even in our system of nomination there might be within all the Parties concerned an election of the members whom the Party itself desires to represent it in the Parliament of Europe. I cannot see any particular objection to that, although naturally it would have to be laid down in advance how many Peers should in principle form part of the delegation, and out of the total delegation how many should represent the Tory, Liberal and Labour Parties. But, given that, within the Parties themselves, I think there might be a case for free election among
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the members of the Party in Parliament, and I suggest that it might at least be considered by the Whips. It might even give considerable satisfaction to the noble Earl, Lord Lauderdale, who would, if that system were adopted, have every chance of forming part of the delegation.
THE EARL OF LAUDERDALE: My Lords, I appreciate the compliment which I rather sensed the noble Lord was coming to. I would not run.
LORD GLADWYN: My Lords, I am sorry to hear it. When the noble Earl realises what is happening there in a year or two's time he may regret his words. Anyhow, it seems to me that we must at the moment go ahead with some system of nomination to this Parliament of Europe. The only difficulty, and it is a serious one, is that though this system of ours is workable it results in the nomination of very hard-worked Members of Parliament—and indeed, even some Peers may be said to be very hard-worked—so hard-worked indeed that there is a danger of the whole system's breaking down. For unless the Member of Parliament is not intending to fight the next election, in which case he need not spend a great deal of time in his constituency, he will find it increasingly difficult to attend an increasing number of sessions in Strasbourg, Luxembourg and Brussels, committees and so on during the whole course of the year. From the next year he may find it almost beyond his powers. There are to be no fewer than 14 plenary sessions of this Parliament in 1974. There were only 11 last year. The number of committee meetings is going to increase as well. All the Members are supposed to be members of two committees, so your Lordships can work it out. They may have to attend up to 110 to 120 working days outside Parliament. If they are Members of the House of Commons this will be extremely difficult. In fact, I do not think they will be able to carry on. The system really is in some danger of collapse.
Now, if that is so, there is only one other practical solution, it seems to me, and that is to contemplate the direct election of Members to the European Parliament on a national basis of some

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kind. All kinds of schemes have been put forward to this end. One is that all 36 delegates should be directly elected in various constituencies in the United Kingdom, and temporarily designated European Peers of Parliament, perhaps for the period of the sessions in Strasbourg. It is not so extreme as one might think; there is something to be said for it. They would be Members of Parliament; they might even be allowed to go into the Smoking Room of the House of Commons. They would represent directly electorates all over the country and they would therefore form a very good team to send to Strasbourg on a national basis. At any rate the system has the advantage that it would not break down. For they would obviously he able to spend a great part of their time there when they were not in their constituencies. It seems to me logical, perhaps inevitable, that this sort of thing is going to happen in the next few years, and I hope it will.
The final question is whether it is right for the nominated Members of this Parliament to be appointed for only the session, or for the period of the Parliament, or indefinitely. On the assumption that it would in practice be for the period of the Parliament. I appreciate what the noble Lord. Lord Windlesham, said and would associate myself with it. It seems to me only sensible, apart from all the constitutional implications, which are very complicated, that nominated Members of the European Parliament should be appointed for a fairly long period. If they were appointed only for Sessions they would not have any security of tenure; and I assure noble Lords that it takes at least a few months to get into the work and to play an intelligent part in the important committees, monetary and political, and so on. It is impossible to play your part properly unless you have several months' experience, which you would not have if you were appointed for only a session. Therefore, on purely practical grounds, I am certain that it is right to do as the noble Lord, Lord Windlesham, suggested: to nominate our Members of Parliament for an indefinite period on the assumption that it would in fact be for the life of the Parliament.
3.47 p.m.
LORD SHINWELL: My Lords, your Lordships' House has just witnessed a
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most remarkable transformation. From the euphoria which over a long period of years accompanied the speeches which the noble Lord, Lord Gladwyn, indulged in, we now have a speech delivered in the most muted tones.
LORD GLADWYN: Not at all!
LORD SHINWELL: It was one continuous apology: he says this is the very best we can do; he offers no reason at all why it should be regarded as having any quality whatever. It was almost a transmogrification.
LORD GLADWYN: My Lords, I can only suggest that the noble Lord is hardly interpreting what I said in the right way. I said that the Parliament was doing a lot of extremely valuable work. I regretted that the Labour Party was not there to help. I hope it will do better work in the future. That is what I said. I said that years ago and I say it now.
LORD SHINWELL: The noble Lord has not heard the end of it. I really do not want to trouble him unduly. I wanted to indulge in a very few observations, and I give this assurance, as did the noble Earl, Lord Lauderdale, that there is no personal criticism of the noble Marquess, Lord Lothian, for whom I have a high regard, as indeed, if I may say so in parenthesis, I had for his father many years ago, a man of remarkable brilliance. So there is no question of prejudice, or bias or malice. We are concerned with the principle. I really must say I have been astonished at the language used by the noble Lord, Lord Gladwyn, and by the noble Lord the Leader of the House. Both of them have spoken about the "European Parliament". There is no such thing as the European Parliament. There is the European Assembly. There is a delegation from your Lordships' House and from the other place. But there is no European Parliament, there is nothing Parliamentary about it. Nobody will suggest there is anything in the nature of democracy about it. There is not even, as in the case of your Lordships' House (which, as everybody knows, is not entirely democratic in principle or constitution) the hereditary principle, for which there is a great deal to be said. They decide that some people will go over there and that they will talk, and that is indeed all that they are being

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permitted to do. It is just a farce from beginning to end. I am not the only one to say that; the Press say it. There is hardly a Press comment about what has been going on in this European Assembly that has not been sometimes humorous, sometimes sardonic, or sometimes downright critical. It is just a farce. What impact have they made on the Commission? Perhaps the noble Lord the Leader of the House will tell us, in his reply, whether the Commission pay the slightest attention to them.
There was a suggestion some time ago that the Assembly would tell the Commission where they got off, give them the "brush-off", shrug them aside; but everybody knows that the Commission treat them with contempt. The noble Lord, Lord Gladwyn, says they do not. How do the Commission treat them then? Do they do what the European delegations say?
LORD GLADWYN: My Lords, the members of the Commission attend all, or most, of the meetings of the committees. They send very high level experts to the meetings of the political committee. They are invariably there when the plenary meets. They are interrogated. They make suggestions together with the Parliament. They help the Parliament's work and the Parliament helps them. The Parliament has now a great ally in the Commission. You ask any member of the Commission. It is true. The noble Lord does not know what is happening.
LORD SHINWELL: My Lords, the noble Lord should keep his breath to cool his porridge rather than indulge in this sort of thing in the presence of intelligent people. Of course the Commission know what is being said in this so-called "European Parliament" which, as everybody knows, is just an assembly. There is not a single achievement which they can claim, unless it is that they are able to talk. I know that that is sometimes regarded as an achievement.
I want to express sympathy with the noble Marquess, Lord Lothian. He was relegated from an honourable position in the Government on the Front Bench to the Back Bench. Well, it has happened with other people. I had to suffer it myself many years ago, though there was something voluntary about it. I must say that I am full of sympathy for him
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for being sent over there with all the trouble. Your Lordships' House is different from another place. Reading from the newspapers, who know all about it, it appears that those in the other place fly off in the morning from Gatwick or Heathrow, and they are no sooner there than they have to fly back again because the Whips demand their presence h the other place. They go backwards and forwards in a kind of constant shuffle. What a farce this is. Why should we put up with this sort of thing? It is bad enough to enter the Common Market without having this farce accompanying it.
With the greatest respect to the noble Earl, Lord Lauderdale, who made a fine speech (as he always does), indicating remarkable research on his part, one does not need intensive research to understand what is going on. Intuition is enough; instinct is sufficient; common sense or horse sense is enough without intensive research. I repeat that it is just a farce. I should like the noble Lord the Leader of the House, when he replies, not to use the term "European Parliament". There is nothing in the Treaty that provides for a European Parliament of this character. It is an assembly, and no more than that, with no authority whatever, and incapable of making an impact that is worth tuppence worth of gin. Why do we not stop it?
VISCOUNT BARRINGTON: My Lords, before the noble Lord sits down, could he perhaps explain to the House —or at any rate to me—what he means by the expression "a constant shuffle", which seems to me (at first hearing) a contradiction in terms?
LORD SHINWELL: My Lords, T must confess that I am interested in boxing, and I remember Muhamed Ali indulging in a "shuffle", or a "re-shuffle", when boxing. That is where I got the phrase.
VISCOUNT BARRINGTON: My Lords, I was merely questioning the adjective "constant".
3.55 p.m.
LORD BALFOUR OF INCHRYE: My Lords, when moving his Amendment the noble Earl, Lord Lauderdale, quoted some words of mine when we last debated this issue. He reminded your

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Lordships of my objection, which was shared by many noble Lords on all sides of the House, to the Executive having the power to appoint Members of a Legislature. That was my fundamental objection at the time and it still remains so, and I regret to say that since we last debated this issue it has been intensified by two things: one positive, and one negative. The positive is that we are constantly reading of the attempts of the European Assembly, or Parliament, call it which you like, to obtain more power and control over the Commission, more power over the affairs of the E.E.C.
I do not make any criticism of that, but it is a fact that the negative is that since we last debated this matter in your Lordships' House, and while that surge towards greater power is going on all the time in the Assembly, Her Majesty's Government do not seem to have advanced in any way at all as regards proposing some method other than nomination by the Executive of Members to what the noble Lord, Lord Shinwell, called the "pseudo legislative body"—call it what you like, but a body which is aiming to be a legislative body. Her Majesty's Government seem to have done nothing, and I should be very disappointed if, when he replies, my noble friend the Leader of the House cannot give us some indication as to when Her Majesty's Government are going to go to the first stage, that being some alteration of the present system of selection behind the scenes, through the usual chancels, but nothing seen obviously by all Members of your Lordships' House.
The second stage is one envisaged by the noble Lord, Lord Gladwyn, which I think is some long way ahead, some form of direct election. I am not touching on that matter at all. I would only ask for some information from Her Majesty's Government on the progress that they are making, and when they hope to be able to tell us that they have thought enough on the subject to introduce some new system of selection for those who are to be Members of the European Parliament. When I last spoke, in the speech to which the noble Earl was good enough to refer, I quoted the Commonwealth Parliamentary Association system of a form of indirect
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election, as any member of the C.P.A. knows. The Leader of the House, in those days the noble Earl, Lord Jellicoe, said that note was being taken of all suggestions made. He did not deal in his reply with the C.P.A. proposal. I was very willing to hear it knocked down if it was entirely unsound, but I heard nothing except a promise that the Government were thinking very seriously on this matter, and hoped soon to be able to say something. That is months ago, and I think that we are entitled to ask the noble Lord the I eader of the House in his reply to give us some measure of satisfaction on what progress has been made so far, and how soon the Government hope to be able to bring forward a Bill to change from the present under-the-table methods.
BARONESS HYLTON-FOSTER: My Lords, in the absence of our coordinator, the noble Lord, Lord Strang, I should like it to be known that by a method of informal election the Cross-Bench Peers selected a Peer to go to Strasbourg. With due respect to the noble Earl, it would not have been the slightest bit of good to prick people, as for sheriffs, because there are not so many noble Lords who could spare the time—and a lot of time is needed—for this very important job.
4.0 p.m.
LORD BOOTHBY: My Lords, may I add just one word? I am sure that I echo the congratulations and good wishes of all your Lordships on the appointment of the noble Marquess, Lord Lothian, to the European Parliament. We all have the highest possible regard for him, and I have no doubt that he will do well. But as one who sat in the Council of Europe for seven years, in the days when the appointment was made through the Whips' Office, perhaps I may say that the system worked pretty well because the Council of Europe never made any pretence at being a Parliament of any kind. It never had any real power. What it did was to bring the nations of Europe together. To a large extent it brought about the Franco-German rapprochement. The Council of Europe did quite a lot of good work, and I think it might have done a lot of better work if it had been more

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encouraged. But this is an entirely different situation; and I want to point out that this show is not working at the present time. I agree with my noble friend Lord Shinwell that the system is breaking down; and I was very interested to hear my noble friend Lord Gladwyn admit that as it is running at the present time it is in fact breaking down.
The stresses are becoming greater every day. Members of another place who have to go there have to be absent from their constituencies for weeks on end, and that is a situation which cannot be tolerated indefinitely by any constituency. Members of this place are hard-pressed and have to swirl about between Strasbourg and Brussels. That, in itself, is a crazy arrangement—having two centres. It is absolute madness to have Brussels and Strasbourg, with all the enormous expense of transporting the officials and the documents from one place to the other about every three weeks. The whole thing is breaking down, and I beg the noble Lord the Leader of the House to say, when he replies, that the Government will give serious consideration to this aspect. I do not think the other place will be able to stand it for much longer. Most of your Lordships who go there—and I am sure the noble Lord, Lord Gladwyn, will agree with me—are out of pocket, or very nearly out of pocket, as a result of going there. Anyway, it is a "frightful sweat" going there all these times.
I believe there is only one ultimate solution, and that is a system of direct election to this Assembly (and I am prepared to call it an Assembly) by the country, apart altogether from election to another place. There is no election to this House, nor should there be, but I should be delighted to stand as Member of the European Parliament for the North of Scotland any day—and I bet I should be elected. So, my Lords, that is my conclusion: I say "Direct elections; and Boothby for the North of Scotland!"
LORD INGLEWOOD: My Lords, in order to clear up any misunderstanding, may I ask my noble friend to let us know in his reply to this rather unsatisfactory situation exactly what is the period for which the noble Marquess is proposed to be appointed. It was said earlier that this
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was debatable ground. Can my noble friend tell us precisely what this period is, and whether it is the same as the period for which various noble Lords were appointed ten months ago?
4.5 p.m.
LORD WINDLESHAM: My Lords, perhaps I may conclude the debate on the Amendment which has been moved by the noble Earl, Lord Lauderdale. We have of course ranged very wide. We have been talking about the Motion to replace Lord Brecon by Lord Lothian, and the noble Earl, Lord Lauderdale, has again put down his Amendment. We have had a very wide-ranging debate on the European Parliament and on the way in which people should be selected to serve on it; on the tensions on them once they are there and on what the future pattern might be. I do not object to that at all, particularly because I accept entirely that the motivation of my noble friend Lord Lauderdale is the finest one that a Parliamentarian could bring to an initiative of this sort; and that is the vigilance shown by somebody who sits on the Back-Benches or on the Opposition side of the House to see that the Government are not getting away with more than they should. That is his motive, and I applaud it.
I am well aware that the noble Earl, the noble Lord, Lord Shinwell, and the noble Lord, Lord Blyton (who has not spoken to-day), are keeping a very keen eye on the Government in this field. That is one of the functions of Parliament. It may be very uncomfortable for Ministers at times, but it is necessary, acceptable and desirable, and I regard it in that light. The noble Lord, Lord Inglewood (if I may deal at this point with his direct question at the end of the debate), asked what would be the term of office for the noble Marquess, Lord Lothian, and the other Peers who serve in the European Parliament. The answer is that, on the advice given to us by the Clerk of the Parliaments, they would serve for the term of this Parliament. The noble Lord might like to look rather carefully in Hansard at what I said about the Clerk's advice. He will find the reasons spelt out there.
My Lords, may I now deal with one or two of the main points of criticism—and they have been points of criticism, strongly

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expressed sometimes—which have arisen in the debate? The noble Earl, Lord Lauderdale, and the noble Lord, Lord Beswick, made great play of the lack of notice. They spoke of a period of only 24 or 48 hours' notice that the House had of this Motion. The inference was of either discourtesy or sharp practice—at any rate, something which was undesirable. I have checked during the course of the debate, and I find that the Motion was put down last Thursday. It was put down in the middle of last week. It appeared on the Order Paper of Thursday, October 18, which was distributed to all your Lordships; and it has been on the Order Paper since then. The noble Lord, Lord Beswick, made great play of an article in the Daily Telegraph. He was outraged that he had seen this in the Daily Telegraph for the first time. That article appeared on Monday of this week: our Order Paper for Thursday showed the Motion down on the Order Paper.
The main point at issue, I think, is the question of what Parliament—both Houses of Parliament, incidentally—should do—
LORD BESWICK: My Lords, it is not a particularly important point but when the noble Lord refers to the Order Paper of Thursday he means the one dated Thursday which was posted Thursday night and probably reached us Monday morning. Is that it?
LORD WINDLESHAM: My Lords, I think the noble Lord had probably better look at what he said in his first intervention, and his second, to see if it is quite in line with that. Yes, it is the Order Paper for the 18th, which was received by Members, by post, on the 19th. The Daily Telegraph article appeared on Monday. So the inference, I think, that the Government have tried to slip this in at the last moment does not hold water. The noble Lord is a fair-minded man, and he will feel, perhaps, that that was not the strongest argument he would have wished to use had he had time to consider it.
The main point before this House and another place is what we should do now, in this early stage—after all, we joined the enlarged Community as a full member only at the beginning of this year—about Members of Parliament, and
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of your Lordships' House, who serve in the European Parliament. I do not want to take issue with the noble Lord, Lord Shinwell—it is always unproductive to do so—but he did not like the words "European Parliament". He said he would not have them used. I must tell him that the Assembly resolved on March 30, 1962, to change its name to the "European Parliament". My Lords, in this ten-month period, for reasons that I do not intend to go into now, there has been no consensus between the major Parties on whether or not Members of Parliament and Peers should serve at Strasbourg and at Luxembourg. I regret that. It is not a matter that we need to debate between us now, but it is a fact that there is no consensus. In the British Parliamentary system, so much depends on agreement between both sides: the Party in power and the Party out of power, the Independents, the Party on the Liberal Benches, whose interests are taken into account as well; and, in the main, the Government and the Opposition try to move in the same way.
In these circumstances, it seemed to my predecessor—and I would have done exactly the same if I had been in his shoes—and it seemed to the Lord President of the Council in another place that the best thing to do in this interim first stage in the development of the European Parliament—in the new relationship between the British Parliament and the institutions of the Community—was to proceed through the normal Parliamentary processes. I am not saying that the normal Parliamentary processes are the best for all purposes, or are necessarily the most appropriate; but I can claim —and I think the noble Lord, Lord Boothby, and other experienced Parliamentarians will agree with this—that the normal Parliamentary processes are that names are put before the House after a process of consultation. This is how the Select Committees are appointed. They speak with the authority of the House; they are not regarded as placemen of the Whips, and still less as placemen of the Government. This is how, outside Parliament, Members of Parliament and Peers have been appointed to the Council of Europe, to NATO, Parliamentarians to the Western European Union and to the various other bodies to which my noble friend Lord Lauderdale referred.

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It is wrong—and I say this to the noble Lord, Lord Balfour of Inchrye, with some deference—to assume, because the answer is not the one that one would like to see, that nothing has been done. My noble friend Lord Jellicoe said in the debate on December 20 that he would take very careful note of what was said in that debate and that he would discuss it with his colleagues elsewhere. I have studied the records and the papers, because the noble Earl, Lord Lauderdale, was good enough to give me advance notice last night of his intention to raise this matter; I have had the opportunity of looking at the background. I find that my noble friend honoured that obligation. But for the reasons that I have given he came to a conclusion, and he would have reported to the House, either during this debate or during the debate on Lord O'Hagan's Motion, in which he intended to take part, what his conclusions were. They are those that I have said: that in these circumstances it seems to us, the Government representatives in this House and in another place, that the best we can do is to continue with the system. This is not to say, as I tried to imply in my opening remarks, that we rule out any question of an electoral mandate. It is in the Treaty of Rome itself that there should be a move towards direct elections.
The noble Lord, Lord Gladwyn, who speaks with considerable experience as a Member of the European Parliament tells us that he thinks that maybe that ought to be achieved in two stages. He advocated an interim step to achieve some form of electoral membership and lighten the burden on the existing Members.
LORD GLADWYN: My Lords, simply because otherwise the existing system could break down.
LORD WINDLESHAM: My Lords, the noble Lord, Lord Boothby, spoke on these lines. Everyone who is close to the issue —and we must not assume that it is those with the strongest opinions who are closest to the issue—are aware that this is so. Therefore the Government want to consider all these matters. We want to do it on the basis of consensus. We want to do it with the co-operation of the Party opposite, because to set up new constitutional procedures of great significance without the consent of the major Opposition Party would be asking a great deal.
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I should like to repeat again what my noble friend Lord Jellicoe said in December when the same Amendment was discussed at the initiative of the noble Earl, Lord Lauderdale: that the Government are not dismissing this as a matter of no importance. We are aware of the great significance both in terms of the burden on the individuals and in terms of the mandate that the members of the British Parliament carry with them. But I would reject absolutely and completely the allegation that the European Parliament has no part to play, that it is a farce, that it is a charade. That is not so. If one goes into a new institution that is going to last for a very long time on that basis it is a most destructive way of looking at things. It must be our aim, as it is the aim of the noble Lord, Lord Gladwyn, to strengthen the European Parliament, to make it more effective; and that is the course the Government are set on.
4.15 p.m.
THE EARL OF LAUDERDALE: My Lords, if I may I will tender my apology to my noble friend the Leader of the House for the quite sincere belief, but evidently a mistaken one, that this Motion appeared on the Order Paper only yesterday morning instead of last Monday. I feel sure that my noble friend will accept my apology for not having studied the Order Paper closely enough. I should like to thank those who were good enough to join in this short exchange. I was interested to notice that the noble Lord, Lord Gladwyn, now accepts the view that meantime it would be well to have some electoral system within Parliament.
I was rather disturbed at one point made by my noble friend Lord Windlesham who was so courteous in his reply and who has been so careful to deal gently with me to-day. He mentioned the memorandum from his predecessor. According to my recollection, that can have been written only before, or around the time of, the Whitsun Recess. If it has been sitting in the Government in-tray from last Whitsun until now—which, if it was from his predecessor, must have been the case—surely it is not satisfactory that it should have been kept quiet for so long. That is my

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first point. I know that the noble Lord deserves and will have at all times the indulgence of the House when accidents occur; but it does emerge that a different view had been established in the mind of the then Leader of the House and was not disclosed, although it existed before last Whitsun, until now.
Then my noble friend continues to use the argument that unless there is consensus between the major Parties no progress on this matter can be made. He has not commented on the three or four suggestions which were repeated to-day. He has not commented on the suggestion that the terms of reference of the Committee of Selection could well be widened and that the effect of that would be to take this matter out of the problems of a Party consensus. My noble friend has said that the Government have this possibility very much in mind. This is what we were told last December. I should like to feel sure, which at the moment I do not, that we shall hear at some definite time—let us say, by Christmas or by the time Parliament reassembles in January—that the Government have come to a conclusion and that they will declare it to the House. I will gladly give way for a moment if my noble friend can answer just that point.
LORD WINDLESHAM: My Lords, the noble Lord can put down a Question for Oral or Written Answer at any time he wishes posing that exact Question and I shall answer it.
THE EARL OF LAUDERDALE: My Lords, I am not clear whether my noble friend is by implication inviting me not to press my Amendment; but I rather sense from the tone of that reply that he does not mind whether I press my Amendment or not. May I ask him whether he would like me to press my Amendment and clear the matter now by a Division or whether he would prefer that I ask leave of the House to withdraw it?
LORD WINDLESHAM: My Lords, neither the noble Earl nor the House will be astonished to hear that I prefer the latter.
THE EARL OF LAUDERDALE: My Lords, before asking the leave of the House to withdraw—and I should like to
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ask that leave but it is for the House to decide whether or nay—I would say to my noble friend with the greatest respect that, while I am doing my best to accept literally what he has said just now—as I accepted last December what his predecessor said—I am sure he will understand that if this matter arose again and we had once more to go through this rigmarole of a discussion, I cannot be quite so certain that I should feel so agreeable to the idea of seeking leave to withdraw my Amendment. However, with that caveat I beg leave of the House to withdraw the Amendment, and I believe that it would probably be to the interest of the House that that leave should be given if the House so wish it.
Amendment, by leave, withdrawn.
On Question, Motion agreed to.

OIL SUPPLIES
4.20 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, with permission, I will now repeat a Statement made in another place by my right honourable friend the Secretary of State for Trade and Industry.
The Statement is as follows:
"During recent months we have increased our stocks of oil. We now have stocks of 79 days on a forward consumption basis and there are in addition some 30 days supply on the ocean. We are now in a position to meet requirements for some months ahead if there were an emergency.
"As to future supplies, there have been some losses through the pipelines to the Mediterranean; and the Arab States announced last week their intention to make cumulative cuts in their oil production. It would appear that there will be some variations between countries as to the extent and the manner in which such cuts will be applied and the future impact is uncertain. The effect of these various restrictions on United Kingdom oil supplies is so far slight.
"On prices, the OPEC countries have announced a steep and immediate increase in oil costs equivalent to 2p a gallon in breach of agreements. The Government are discussing these increases with other consumer nations.
"Given the uncertainties overall the Government consider that it would

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be prudent that certatin measures should be taken. It is naturally a time when we must ask the public to do everything in their power to avoid any wastage not only of oil but also of our total energy resources. I would ask that motorists should endeavour to cut down on petrol consumption and to use public transport to a greater extent where that is available. I would also hope that industrial and commercial users of energy would carefully examine any areas where they can make useful savings. I would ask domestic users to make all the savings that are possible in their homes, particularly with regard to heating appliances.
"In urging economy at home we clearly cannot permit exports to be uncontrolled. The Government will therefore take such powers as appropriate to control the export of oil and oil products beyond the Community.
"The Government do not consider it necessary to introduce a rationing scheme. In case we do ever need such a scheme, contingency plans have been brought to a state of readiness. There will of course be full prior consultations with industry, the oil companies and the motoring organisations should the Government decide that the implementation of these schemes is necessary. We shall, if required, bring before the House an enabling Bill that will grant us the powers to introduce these controls.
"Long before the recent announcements on the cost and supply of Middle East oil, the Government have been pursuing policies to develop our alternative energy supplies swiftly.
"We will continue to do everything possible to speed up the development of our oil and gas resources in the North Sea and we have asked the oil companies concerned to inform us of any delays that occur in developing their projects, and any matters that hamper them from proceeding as fast as possible with new schemes.
"The Coal Industry Act has had an important impact in arresting the decline in our coal production that had been allowed to take place in previous years, and we are in the course of discussing with the National Coal Board their long-range plans for further development of the industry.
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"We have reorganised the nuclear power industry and we will be making important decisions as to the development of nuclear power stations during the next few months.
"I will keep the House informed of further developments."
My Lords, that is the end of the Statement.
4.24 p.m.
LORD KENNET: My Lords, the House will be grateful to the noble Lord, Lord Drumalbyn, for repeating this Statement which, though it is not long, is certainly broad, and we shall all want time to read it to-morrow. The Statement probably marks the end of the era of profligacy with this valuable and increasingly scarce energy source, which may not be without salutary effect. I wonder whether the noble Lord would answer one or two questions, even so early as this? The Statement speaks of a price increase of 2p a gallon. Is this a flat rate across the board on all petroleum products or will it affect only some, and, if so, which? And above all, who will choose what it will affect?
I think that all noble Lords on this side of the House will wish to endorse the Government's appeal to the public to do everything in their power to avoid wastage, and to use public transport to a greater extent where that is available. Would not the noble Lord agree that the words, "where that is available" are the important part of this sentence? Can the Government soon get a decent prices and incomes policy so that urban transportation authorities will be enabled to keep going at all?—because they are rapidly folding up in many of our big cities. It will be a question of relating the wages of bus drivers to those of car makers.
My Lords, I think we must endorse the hope, indeed the request, that North Sea oil exploitation will proceed as fast as possible. Will the Government not lose sight, in this salutary haste, of the need for sound land use planning. And lastly, on the question of the coal industry and nuclear power, while it obviously becomes more urgent than ever that both these should be developed, will the Government now take charge of energy policy as a matter of urgency; will they determine it and will they enforce it in a way in which they do not at present? And on the question of nuclear energy,

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can the Government undertake that there will be no purchase of American reactors until the matter has been debated in this House? Lastly, my Lords, will the Government now increasingly make direct contact with the Governments of the Arab oil-exporting States instead of leaving the negotiations to the discretion of great multinational corporations?
4.27 p.m.
LORD GLADWYN: My Lords, the noble Lord will correct me if I am wrong, but as I understand it the Arab States are employing what they call cumulative cuts in oil production and doing so to the extent of 5 per cent. per month, and in the case of Saudi Arabia 10 per cent. per month, until such time as Resolution 242 of 1967 is fully implemented, presumably by the Security Council. If that is so, it is evident that unless we get some kind of settlement under Resolution 242 in the reasonably near future, the supplies of oil may be entirely cut off before long. Certainly if the negotiations last 10 months, which is quite possible, there will be no more oil anyhow from Saudi Arabia if this declaration is to be taken seriously. Therefore, would not the Government make serious representations to the Arab States involved to the effect that, at any rate, Her Majesty's Government are in favour of the implementation of Resolution 242? They have constantly declared their intention to put it into effect if they can, and the entire Security Council has come out in favour of that also. Would the Government therefore approach the Arab States in this sense, and represent to them that it is totally unreasonable to effect these cuts progressively, in any case to a country like Japan who has no interest in the dispute at all so far as can be seen, and also to ourselves who, after all, are doing our best to get a settlement within the limits of our possibilities?
LORD JANNER: My Lords, will the noble Lord—
LORD DRUMALBYN: My Lords, if I may I will answer those questions first, which I think would be in accordance with the usual practice. On the question of the size of the price increases, this is simply a calculation of what the increase in the Government "take" by
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Arab States amounts to right across the board, expressed in terms of pence per gallon. It does not mean that there will be a uniform increase for all products; it is a calculation. Secondly, on the question of urban transportation policy, I think that the noble Lord, Lord Kennet, will have ample opportunity to debate that in the debate that we shall he having next week. Thirdly, on the question of North Sea exploration and exploitation (I am not certain which the noble Lord mentioned but I think that they both apply), we shall be going ahead with this as fast as we can and we are very much aware of the need for sound land use planning in this connection.
The noble Lord asked whether the Government will take charge of the energy policy. The noble Lord may not be aware of it, but the Government have firm charge of the energy policy. The various strands of the energy policy are gathered together in the hands of my right honourable friend Mr. Boardman and I think that he is doing all that he can in these matters. So far as the purchase of American reactors is concerned, I am not in a position to give a guarantee to the noble Lord on this point myself, but I shall certainly convey what he has said to my right honourable friend Mr. Boardman.
With regard to the direct contact between Governments and oil exporting States, the British Government are in contact with the oil exporting States. Of course, this is now obviously necessary because what they are doing is affecting everyone; but I think one has to bear in mind at the same time that direct negotiations are a matter for the oil companies, and not least because five of the seven oil companies operating in these countries have strong American interests.
I take note of what the noble Lord, Lord Gladwyn, said. I do not think there is anything between us on this matter. As I said, the Government are in touch with the Arab States concerned with these matters, and I am sure that what they have to say will certainly take account of the particular point he raised.
LORD JANNER: My Lords, I thank the noble Lord for what he has said, but surely it is time we realised, in view of the kind of action that has been taken from time to time by the oil States, that

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energy problems should have been attended to long ago. May I ask the noble Lord whether he will see that our country will not succumb to blackmail (I call it "blackmoil") on the part of the Arab States? We have already seen the results of giving way to threats. If I may give an example, the Grand Mufti, whom we appeased, actually joined Hitler in the course of the war against us. Will the noble Lord keep these things in mind, and see to it that if there is an attempt to blackmail us we shall not succumb to it?
LORD DRUMALBYN: My Lords, the noble Lord talks about the preparation of energy policies. I would remind him that, as his noble friend Lord Kennet has mentioned, this covers the whole sphere of energy. He will be aware that we have been paying great attention, for example, to the development of our coal resources, and, indeed, are going to spend something of the order of £150 million to help coal next year. We have to a large extent stopped the rundown of the mines and the rundown of manpower. On the oil side, one has to bear in mind that at the moment the situation is not clear. We are not in a position to make clear decisions because we do not know what the situation is. The noble Lord asks whether we are going to succumb to blackmail. It is not in the nature of this country to succumb to blackmail, and I can assure him that we shall not do that.
LORD DAVIES OF LEEK: My Lords, while thanking the noble Lord for the Statement, may I ask whether the Government have considered the implications of the policy that has been suggested in this constructive Statement to both Houses of Parliament to-day? First, if we are asking motorists to help by carrying passengers from their homes to their offices or jobs, there should be some discussion with insurance companies to cover contingencies of accidents. This should be looked into. Secondly, without belabouring the point and asking long supplementaries, I want to endorse wholeheartedly the supplementary question of my noble friend on the Front Bench about nuclear reactors. There is a conspiracy of silence about the consequences of using nuclear reactors, and the world must realise that it is not a feasible policy to get either a 40 or 50 per cent. power energy as our knowledge of waste
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materials stands to-day. Therefore, may we be assured of the possibility of a thorough debate in the near future on the energy policy, particularly in relation to nuclear energy, and before we adopt this polluting reactor that it has been suggested in the Press we are to get from America?
LORD DRUMALBYN: My Lords, I am grateful to the noble Lord, Lord Davies of Leek. The point he makes about insurance is one of which we are all aware from past experience. I am sure it will be borne in mind, but I will make sure it is by drawing it to the attention of my right honourable friend. On nuclear reactors, as I said, the Government will be making an announcement in due course. I should have thought, in the light of that announcement, then would be the right time at which to have a debate.
LORD KENNET: My Lords, I wonder whether I may press the noble Lord a little further about energy policy and nuclear reactors together. The noble Lord may remember that about a year ago we had a debate on energy policy, and I think there was a general feeling in the House that it was difficult to know what was true about the costs of different forms of energy, because there was no unified authority whose job it was to find out. We were at the mercy of conflicting claims. The noble Lord spoke eloquently on the way in which Mr. Boardman holds all the threads in his hands, but I have not even now seen any independent unified assessment of the costs of different forms of energy. It is this that we desperately need. May I once again press the noble Lord to go as far as he can in giving an undertaking to this House that there will be no purchase of American civil nuclear reactors until the matter has been debated once again in Parliament?
LORD DRUMALBYN: My Lords, the noble Lord will be aware that to a certain extent the costs of producing nuclear energy must be speculative, because we have not yet got the advanced gas-cooled reactors in operation, compared with the Magnox reactors and so on. However, I am certain that this is a point that is being well looked after at the present time. It would be absurd to attempt to make decisions without a comparison of the estimated cost. It would remain true

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that they are to some extent speculative as we are dealing with such a new field. On the question of not making a decision to buy the light water American reactor before referring the matter to Parliament, as I said, I am not in a position to give a guarantee, but I will ask my right honourable friend about this and I will write to the noble Lord.
LORD BESWICK: My Lords, can the noble Lord clarify one point about the cost to be passed on to the consumer? Will it be the actual increase of cost of the raw material, or will it be the increased cost of the raw material plus, according to the Price Commission formula, the usual profit percentage? Can the Government give an assurance on that point?
LORD DRUMALBYN: My Lords, this is obviously a matter for the Price Commission. I am afraid I cannot answer that question.
LORD BESWICK: My Lords, what is involved here is so important that the Government themselves should accept responsibility in this matter.
LORD DRUMALBYN: My Lords, I am sure the Government will have a look at this matter, but it is governed at present by the law and the rules laid down by which the Price Commission have to operate.
BARONESS GAITSKELL: My Lords, may I ask the noble Lord how he thinks public transport and the Coal Board will manage to help us in this present position, particularly as when we debated both the coal strike and the railways the Government were out to squeeze both these nationalised industries in a really bad way?
LORD DRUMALBYN: My Lords, the noble Baroness will be aware that these matters are under discussion at the present time. So far as road transport is concerned, if, as I hope, there is a response to my right honourable friend's appeal to motorists to use public transport when necessary, this will greatly reduce the number of cars on the road and will therefore make it easier for public transport to be used in this way.
LORD ARCHIBALD: My Lords, may I ask the noble Lord whether he thinks
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that the appeal to motorists to use public transport is likely to be helped by the situation which I find, having anticipated this Bill, and having used public transport not only to-day but on other occasions, that when you go into the tube station there is a notice saying that owing to the shortage of staff there will be fewer trains and passengers will be delayed whatever their destination? And when one knows that the shortage of staff is due to the Government's pay policy, how does the noble Lord reconcile this appeal with the policy the Government are carrying out on transport staff pay?
LORD DRUMALBYN: My Lords, we know the position as to shortages of staff, but one can reconcile this perfectly easily on the basis of the same kind of public spirit that the noble Lord has himself shown.
LORD JANNER: My Lords, while thanking the noble Lord for his Statement with regard to what I call "blackmoil", may I ask him whether, now that we are members of the E.E.C., he will seek ways and means by which the dastardly action on the part of the Arab States in refusing the Netherlands any oil will be considered, to see how that event can be dealt with by the European Community?
LORD DRUMALBYN: My Lords, I think this is a matter for negotiation and that on an occasion like this it would be a mistake to throw around recriminations of this kind. We shall have to negotiate with the Arab States on these matters and I hope we shall find a satisfactory solution in the end.
LORD GARNSWORTHY: My Lords, is the noble Lord aware that members of the public go to catch buses and Green Line coaches, and they just do not run? Where I live, if a Green Line does not run to London it can mean waiting over an hour for the next one. May I ask the noble Lord what the Government are prepared to do to improve the service, so that members of the public may be in a position to respond to his appeal?
LORD DRUMALBYN: My Lords, obviously that question does not arise immediately out of the Statement that I have made, but of course I shall study

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what the noble Lord has said and bring it to the attention of the Minister of Transport.

COUNCIL OF THE EUROPEAN COMMUNITIES
4.42 p.m.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like, by leave of the House, to repeat a Statement being made in another place by my right honourable friend the Chancellor of the Duchy of Lancaster about the main matters considered in the Council of the European Communities since last reported to the House on July 25. The Statement is as follows:
"There have been six meetings—Foreign Ministers (twice), Agriculture Ministers (twice), Economic Ministers and Finance Ministers.
"Economic Ministers met in Tokyo on September 11–12 in preparation for the GATT ministerial meeting which successfully launched the multilateral trade negotiations.
"Foreign Ministers met on September 20 and October 15. They considered: the question of the Community's participation in negotiations for a new International Sugar Agreement; relations between the Community and the Council for Mutual Economic Assistance (COMECON); the Commission's proposals for an industrial and technological policy programme; measures to improve working relations between the Council of Ministers and the European Parliament; the mandate for a new association agreement between the Community and certain developing countries in Africa, the Caribbean and the Pacific; and a report on progress with the proposals for a Regional Development Fund.
"Finance Ministers met on September 21 to discuss the Committee's Budget for 1974, which is now being considered by the European Parliament. It amounts to 5,026 million units of account (mua), slightly lower than the revised budget for 1973. The United Kingdom contribution will be about £206 million gross and £90 million net which is of the same order as the forecast in last year's Public Ex-
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penditure White Paper (Cmnd. 5178). Finance Ministers agreed that as soon as the amount of money to be allocated to the Regional Development Fund had been decided, funds would be made immediately available.
"At the meeting of Agriculture Ministers on September 24–25, my right honourable friend raised the subject of animal welfare and the Commission undertook to carry out an urgent study of these problems. They also had a preliminary discussion on the Commission's proposals for the future Community sugar régime.
"At their meeting on October 22–23 the Agriculture Ministers held a detailed discussion on the Commission's draft directive on aids for mountainous and less favoured agricultural areas, including the criteria for assistance, the measures to be applied and the level of FEOGA contribution. They also considered the possibility of extending some form of assistance for dairy cows in these areas; and invited the Commission to put forward proposals for further consideration. The Council will seek to reach firm conclusions on these matters at its next meeting in November."
My Lords, that is the end of the Statement.
4.45 p.m.
LORD SHEPHERD: My Lords, I feel that I must thank the noble Baroness for repeating this Statement and for fulfilling the undertaking which the Government gave, I think some 12 months ago, that they would keep the House informed on matters which have been dealt with in the Council of Ministers. Prior to the Statements we had a debate, and whether or not the House was satisfied at the end with the explanation of the noble Lord, Lord Windlesham, I believe it would be agreed that there was a sense of unease at the Parliamentary control, both at Strasbourg and I think in this country. We now have this Statement. Unless one had kept in very close touch with one's newspapers, much of this Statement would mean absolutely nothing. I therefore question again the adequacy of our existing Parliamentary arrangements which Parliament uses to have some control, some influence, on ministerial actions at Brussels. There is a Report of my noble friend Lord Maybray-King now before the

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House. It may be that from that Report we shall be able to devise ways and means by which Parliament may exercise control and influence, and particularly we may be able to take these Statements off the Floor of the House and to ask the more pertinent questions which these Statements justify.
I have only two points I wish the noble Baroness to confirm. We have been told that the Foreign Ministers considered
"the question of the Community's participation in negotiations for a new International Sugar Agreement".
Would the noble Baroness confirm that the Ministers could not reach agreement as a consequence of the French attitude; that the Common Market was not able to be present at the Conference on International Sugar, and that the whole field of sugar manufacture, of refining and of growing, is now in complete disarray, and that much of the Government's undertakings cease to be bankable? Would she confirm that it was a consequence of the French action that the E.E.C. could not be present at the meeting?
In regard to the Regional Development Fund, could the noble Baroness give any indication when Parliament will know what funds are likely to be available for regional development in this country? I was pleased to see that some steps have been taken to help in the more mountainous and less favoured agricultural areas, particularly those in Scotland, and I wonder whether the noble Baroness would give us some further information about assistance, particularly to dairy cow operations in that area. We hope that the Government will stand up very firmly in this particular field, because these more backward areas of our country are in need of assistance. It is difficult to go any further with this Statement in the light of the time, but I hope that perhaps by the next time we have a report we may have the machinery for a proper examination of the conduct of the Government at Brussels.
LORD GLADWYN: My Lords, I should like to thank the noble Baroness for keeping us informed to the extent that she has kept us informed, but to note, however, that it is not a very informative Statement, as such. I would
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also ask whether she would not agree that if the Labour Party would like to be further informed as to what is happening behind the scenes and to get all the gossip, which we fortunately have, with regard to progress in all these spheres, they merely have to nominate a delegation to the European Parliament.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like to thank the noble Lord, Lord Shepherd, and the noble Lord, Lord Gladwyn. I agree that the question of Parliamentary control, allied to the Report now issued by the noble Lord, Lord Maybray-King, is one of great importance to this House. I note what the noble Lord, Lord Shepherd, says about a possible arrangement for taking Statements such as these off the Floor of the House. It is true that when we meet together after the Summer Recess, and one wishes to undertake one's obligations of reporting to the House and has to report on six meetings, the Statement is bound to cover a great number of subjects.
On the question of the International Sugar Agreement, it is perfectly true that no agreement has yet been reached, but I would say again that Her Majesty's Government stand firmly by the assurances which were given to the developing sugar-producing members of the Commonwealth Sugar Agreement at the meetings in Lancaster House in June, 1971, and in March, 1973, about the access of their sugar into the enlarged Community after the Commonwealth Sugar Agreement expires at the end of 1974; and despite the fact that we have not yet reached agreement, we are encouraged by the fact that the Commission seemed to agree with our interpretation of the Community's undertaking on sugar. Proposals on sugar which were tabled in July and which are now under consideration include the provision for the import of 1·4 million tons of sugar from developing countries covered by the Protocol 22 of the Treaty of Accession and India. Despite the fact that the noble Lord suspects that the French delegation at the moment are not themselves convinced of the total merits of this proposal, I can say that I am confident that these proposals will eventually be accepted.

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The noble Lord asked about the Regional Development Fund and the decisions on setting up the Fund. The matter of the size of the Fund will be taken later in the autumn by the Council itself. On the question of dairy cows, of course we are not in agreement ourselves on this arrangement. We were hoping that the assistance to the hill areas would be confined to sheep, but there are mountainous areas within the Community where cows are pastured, and some members of the Community feel that assistance should also be applied to them; but no decision has yet been taken. On the point raised by the noble Lord, Lord Gladwyn—who has suddenly fled this House—I can only say that I entirely agree with him that if members of the Labour Party were able to join the Parliamentary Assembly in Europe they would be able, I am sure, to make a great contribution.
LORD SHEPHERD: My Lords, I am really surprised that the noble Baroness can find any connection with one of these "fly-by-night" Peers who make quite outrageous statements and then do not even have the courtesy either to hear the Minister's reply or to hear a possible retort. All I can say, through Hansard, which presumably the noble Lord, Lord Gladwyn, reads, is that we might catch a flea when we have the gracious Speech next week.
LORD BALERNO: My Lords, may I ask my noble friend whether the mountainous regions could possibly also include the island regions? There are more dairy cows and more need for milk in the islands off Scotland than there are perhaps in the Highlands. There are very few Highland dairy herds producing milk, though there are some, but milk for the Highlands can be easily transported, whereas milk for the islands cannot be so easily transported, and the dairy farmers on the islands have to pay exceedingly high freight. That, coming on top of the very high feeding costs at the present time, is almost going to ensure that there will be no dairy cows on the islands off Scotland unless something is done about it.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I will certainly convey the feeling of my noble friend Lord Balerno to my right honourable
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friend concerning the island regions. I have myself, of course, been to the Outer Hebrides and many of the islands off Scotland, and I agree that the freight charges do make the transport of milk from the Mainland which happens now very expensive. I will certainly bear that in mind.
LORD DAVIES OF LEEK: My Lords, may I suggest to the noble Baroness two crisp points? Is she aware that we need not be at either Brussels or Strasbourg, when they move the gipsy caravan of Parliament from place to place, to know what is going on? Some of us who try to follow meticulously and fill up the forms to get the information know that members must be overwhelmed with Statutory Instruments and pieces of paper, and things are passed which neither the Government side nor our side knows about. That ought to be altered. Secondly, regarding agriculture, as somebody who has taken an interest in it over many years may I ask whether we are going to co-ordinate on one important factor: the attack on foot and mouth disease? Are we getting a guarantee from the E.E.C. that the same meticulous care will be given to the eradication of foot and mouth disease as has been given by any Government's policy for agriculture in this country for our animals?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, on the question of whether too many documents are available, may I say that at one time there was a complaint that there were not enough documents. I suggest that this could be the kind of matter to debate when we have an opportunity to discuss the Report of the noble Lord, Lord Maybray-King. On the question of the protective measures on foot and mouth disease, these are, of course, of prime importance to this country, and if we are going to have a unified policy within the European Community this must be one of the arrangements.

PENSIONERS' PAYMENTS AND NATIONAL INSURANCE BILL
4.56 p.m.
LORD ABERDARE: My Lords, I beg to move that this Bill be now read a second time. Your Lordships will I am sure be familiar with the purpose of this Bill,

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which is to enable a special payment of £10 to be made to some 8 million pensioners during the last week of November. Our intention to make this payment was announced by the Prime Minister in connection with Stage 3 of our counter-inflation policy, and of course it follows the example of the similar lump sum payment made this time last year.
As was last year's payment, it must be seen in the context of our anti-inflation policy and as an additional payment in the exceptional circumstances of 1973. It has no part in our long-term strategy for pensions which, as your Lordships are well aware, is based on an annual review designed at least to keep pace with the rise in the cost of living. This annual review has resulted in considerably increased pensions from the beginning of this month, an extra £1·60 for a married couple, an extra £1 for a single person. That is an increase on the former rate of almost 15 per cent. compared with an increase in the cost of living from October, 1972, to September, 1973, of just under 8 per cent. Like the previous increases of 1971 and 1972 this is a considerable real improvement in purchasing power—almost certainly a higher rate than in either of those two years, and possibly higher than in any previous period of 12 months. The lump sum payment therefore has nothing whatever to do with our long-term strategy of increasing pensions to keep them at least in line with the increase in the cost of living, but it has a lot to do with one of our objectives in countering inflation; that is, to improve the position of pensioners. Last year this was generally accepted as a welcome provision and I trust that once again your Lordships will welcome it.
I doubt whether I need to go through the clauses of the Bill in detail, but perhaps I should draw attention to one or two aspects. So far as Clause 1 is concerned, I need only say that the payment is not taxable and will be disregarded for any means test. Clause 2 sets out the various qualifying benefits and Clause 3 the method of payment. Clause 5 concerns the "nitty-gritty", the method of financing most of this payment by increased weekly flaterate contributions from employers, the self-employed and the non-employed. And, of course, these higher contributions will attract the usual Exchequer supple-
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ment. We estimate that these increased contributions, which are due to come into effect on January 21 next, will yield about £14 million in the present financial year and about £90 million in a full year. The yield of these higher contributions and the Exchequer supplement by the autumn of next year will approximately equal the £80 million which these special lump sum payments will cost.
The only other clause to which I would draw attention is Clause 6, which ensures that, as at present, disablement benefit will continue to be awarded in all cases in which pneumoconiosis as defined in the Industrial Injuries Act is diagnosed by a pneumoconiosis medical board. A recent report of the Industrial Injuries Advisory Council has concluded that they can no longer support the view expressed in 1953, that virtually everyone in whom pneumoconiosis is diagnosed ought to have an award of disablement benefit. We have carefully considered the Council's report and have decided that, because of the special nature of pneumoconiosis, it would be wrong to make a change in the present position with regard to the diagnosis and assessment of this disease. I can only say that as one who comes from the coal mining area of South Wales I confidently recommend this clause to your Lordships, and I am sure that it will be welcomed not only by my friends from Wales but also by all those who come from coal mining areas.
In conclusion, may I again express the Government's gratitude to the Post Office staff, to sub-postmasters and to the staff of my own Department on whom will fall the burden of implementing the major provision of this Bill. My Lords, I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Aberdare.)
5.1 p.m.
BARONESS PHILLIPS: My Lords, I thank the Minister for introducing the Bill in his customary straightforward manner. After some of the long speeches that we have had on other matters, we are dealing here with a very important matter in a very practical and commonsense way. Of course on this side of the House, as in all parts of the House, we welcome the payments to the pensioners. I am intrigued to see that we refer now to "lump sum" payments. Perhaps £10 is not as good a lump sum as the sum

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which the chairman of a meat company received recently; but nevertheless it is of course welcome by those who are fortunate enough to collect it; those who come within the somewhat arbitrary lines which have been drawn by the Bill. The Prime Minister mentioned this recently, but I should like to draw attention to the question of who is giving this cash—if it is a gift at all—to the retirement pensioners.
The total cost of the special payments, according to the Preamble, will be £80 million, and the noble Lord has confirmed this. I used to teach mathematics (and I know that I will be told that my calculations are wrong) and I calculate that the increase in the flat rate contributions will yield £90 million in a full year. If we are to have an increase after an annual review, I feel certain that the Government will again come back and ask for an increase in the flat rate contributions to pay for it. I think we can assume that on this occasion, as on any other occasion in connection with Insurance, the employers or employees or some section of the working population, are paying for anything given to the pensioners. This may come from the National Insurance Fund, but I remind your Lordships that this is not a fund which comes by magic; it is a fund to which people are contributing. I am not suggesting that people would not wish to contribute, but it must be clear that this is no magic godmother or godfather gift—this is something which comes from the National Insurance total.
I notice that the administrative cost of implementing the Bill is substantial—about £1 million—but that it will have no effect on manpower. I also notice that the Minister in another place said that there was no need for any pensioner to make a special application; that this sum would be paid at the Post Office as was the case before. I am rather intrigued to know what costs £1 million. If we are not employing any extra staff and there is no special application to be made, one can only assume that it will cost £1 million to print the books. I suggest that there must be an easier and cheaper way of doing this. I do not wish in any way to look a gifthorse in the mouth, and I would not want to rehearse the arguments that there are other people who need this £10 as much as
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those who will be receiving it: the young widows, the younger men or women on invalidity pension. I will not cover that ground again.
There is one clear anomaly which the Government should have looked at from last year; namely, that the spouse of somebody living on retirement pension does not receive this benefit if she is not over 60. I would remind the Government that the actual retirement pension is paid jointly. In our debate on the Social Security Act—as it is now—there was great emphasis placed on the fact that the wife is still described as a dependant. If somebody has retired and is living on retirement pension—or existing on retirement pension—and is receiving a joint pension for himself and his wife, it seems reasonable that whatever her age, if she happens to be 59½, she should equally be given the £10 and should not on this one occasion only be regarded as a single assessment.
I wholeheartedly congratulate the Government on one clause—the Minister will he delighted to know that. I can hand him one accolade, and that is the one on pneumoconiosis. I am delighted that the Government have resisted any suggestion that there should be a change. I remember many years ago resolutions which came to me from the mining areas on a disease which until quite recently was not accepted as one which ranked for any consideration tinder the Industrial Compensation Acts. It was a disease which killed many people but which was never diagnosed as the reason for their deaths.
My Lords, we wish great joy to all those who receive this benefit, and the Government have very sensibly allowed it to be given a little earlier this time. I am happy to see that, unlike a widow, a gentleman who cohabits, provided he is over 65, may also receive £10 for himself and his cohabiting lady.
5.7 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, neither do I want to look a gift horse too much in the mouth, and we should be grateful for small mercies. But this is an occasion when one or two of the inadequacies which are implied by this Bill should be brought out. In fact I find three real inadequacies. First of all, I find the amount inadequate in that

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it is, by my reckoning, which may be a little out, 16 per cent. less than last year which I think is a great pity. If the Government were going to repeat this £10 gift, it should have at least kept pace with the rise in the cost of living over the past year. We all know that one of the reasons why this is not done is that it would draw undue attention to how much the rise in the cost of living has been.
Secondly, I find an inadequacy of extent in this Bill. The noble Baroness, Lady Phillips, touched on this, but there are also a few other categories. I would particularly mention the people on disability pensions and people receiving chronic sickness allowances under this particular age. I do not see why, given that the Government have planned this in plenty of time and not, like last year, had to do it rather suddenly, something should not have been done to help the really poor in those categories, and that the benefit should not just be confined to retirement pensioners.
Thirdly, the main inadequacy is the inadequate way in which we treat our old people. For Mr. Heath or Mr. Barber to play Santa Clause is not enough. I pay tribute to the Conservative Government's decision to have annual reviews of pensions, even though I do not pay tribute to the amount of inflation that has made it absolutely essential that they should do so. The fact remains that our State pensions for the elderly in this country are among the lowest in Europe. In real terms they are probably lower than anywhere except Ireland and Italy in the European Economic Community. Pensions are well below the level of weekly income guaranteed by the Department of Health and Social Security for survival in this country, which is the reason why one-third of all pensioners qualify for supplementary benefits.
I think there are many things that can be done about this. There are many ways of helping the pensioners which we do not sufficiently explore. I was particularly interested in the idea put forward by Des Wilson recently at Hove, that possibly there should be a special rate support grant, for those towns which attract a large number of the elderly in retirement, in order to enable them to produce better facilities for the elderly. But when we get down to the root of it,
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that root is: what is the pension going to be? What is it going to be tied to, and how adequate is it going to be, compared with other people's incomes? I think we have not yet gone far enough. I honour the Government's pledge that they will try to ensure that pensions keep pace with the rise in the cost of living, but it is no use merely keeping pace with the rise in the cost of living if the base from which they start is totally inadequate.
My Party have said that the only real basis for pensions is to tie them to 50 per cent. of average male earnings for a couple and 33⅓ per cent. for a single person. This is expensive, and the cost in a full year would probably be £1,100 million. That is a very great deal of money. We would raise it as a social security tax, with a larger proportion from the employer than at present, as is the custom on the Continent most of the time; and we would make the graduated tax continue as a percentage of income, however big a person's income or salary was, right up the scale. My Lords, £1,100 million is a lot of money: perhaps this country cannot afford it. Perhaps we can afford to pay £800 million on Maplin, £800 million on the Channel Tunnel, £600 million on Concorde but not £1,100 million a year on old age pensioners. Of course I take the point that those three things are "one-off" ventures, but we appear to be having at least one of these "one-off" ventures every year, if not two every year. I shall also be told that these are productive investments.
The question which society as a whole, and Parliament on behalf of society, must eventually decide, and must decide in a different way from the way it has done so far, is what is really the return that we want on our investment in this country? I should have thought it was a comfortable old age, relieved of the distress and real poverty which now exists, and that that was probably the best investment we could ever make. This Bill shows a welcome flexibility from the Government in producing a special bonus at this particular time, and I welcome it. When I first proposed it, four years ago, I was told by the Government that it was impossible, but I am delighted that the Government now find it is possible. But that it should be necessary to pass this "Santa Claus" Bill each year for two years seems to me to

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be a dreadful indictment of the whole pensions scheme and of the priorities that we give to the old in our society.
5.15 p.m.
LORD TAYLOR OF MANSFIELD: My Lords, I apologise to the House for not having put my name on the list of speakers, but I was listening to the news last Saturday morning on the B.B.C. and then to the proceedings of the previous day in Parliament, when a reference was made to an inclusion in one of the clauses of the Bill, which I will mention in a moment. Before coming to that, may I say to the Minister, joining my noble friend Lady Phillips, that we welcome this Bill. We welcome the payment of the Christmas bonus to the retired pensioners. I notice that the Minister was careful to say that it was a payment to pensioners. That is not quite the case: the adjective needs to be put in because so many other pensioners are excluded and it is a payment to retirement pensioners under the National Insurance Act.
There is one thing I should like to say to the Minister on the question of finance. I notice that additional contributions are to be levied on the employers, the self-employed and the non-employed, with a contribution from the Exchequer; and the total of the two figures, as I understand it from the Bill, will be £113 million, or something of that nature. The cost of the bonus, payment, benefit, or whatever you like to call it, is in the neighbourhood of £80 million and I should like the Minister to make an observation on the amount that is to be collected in the way that I have indicated, plus the amount that the Exchequer is going to pay. May I also make this observation: that while the payment is welcome, I do not think we are giving enough attention to the needs, particularly, of the retired pensioners. I should like to see the pension so increased as to bring it up to £10 a week for a single person and at least £16 a week for a married couple, and I hope that when the Government come to make their annual review they will think in more substantial terms than a yearly bonus at Christmas time.
The other thing I want to say is in reference to Clause 6. I must confess that when I heard that programme on the radio, and when I arrived here yesterday
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and received the Bill, I was somewhat surprised to see that the question of the pneumoconiotics was embodied in a Bill of this kind. But when I read what the Minister said in another place last Friday, I perfectly understood the reason. The reason he gave was that the National Industrial Injuries Advisory Council had been examining respiratory diseases for quite a long time and had made a certain recommendation. May I say that, like the Minister, I come from a mining area and I have been wrestling for many years with this question of respiratory diseases. I was astounded to discover that the Minister in another place said last Friday that this clause was included because of a certain recommendation that had been made by the National Industrial Injuries Advisory Council. It was to the effect—and this somewhat alarmed me—that if this clause was not put in this particular Bill, and if the medical people who made the assessments for pneumoconiosis followed the recommendations of the Advisory Council, it would mean that those with very small assessments might lose them and that those who might be assessed in a similar way, so far as size is concerned, might not get any pension at all for the disease of pneumoconiosis. The reason Clause 6 is inserted in the Bill is to preserve the status quo.
I want to express a note of gratitude to the Minister who announced the Government's decision, in contradistinction to the recommendation of the Advisory Council on Industrial Injuries. I see people every week who suffer from this disease. Those of us who have been looking at this problem and grappling with it for many years know not only the physical disablement that it causes, but the mental distress, and I am extremely grateful that at any rate for the moment, until we can perhaps debate, discuss and apply our minds to the Report put out by the Advisory Council on Industrial Injuries, those who are in receipt of pensions because of small assessments (and I will not go into the question of how it works) will have those pensions safeguarded, and those who come up for examination before pneumoconiosis panels will not be jeopardised either.
My Lords, in conclusion may I say that it is unfortunate that this Report was not in our hands some time ago? It was available only yesterday, I believe.

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It is an interesting document. One of the things that disappoints me about the recommendations, or non-recommendations, of the Council is the question of other respiratory diseases than pneumoconiosis. I have for a very long time been of the opinion that what is needed is that both emphysema and chronic bronchitis, like pneumoconiosis, should become prescribed diseases. I am not a doctor, but a very ordinary layman. I know that the doctors argue that the general population can become victims to these two diseases, but I say this: those who work in dusty conditions, particularly coal miners, are not only facing the hazards of the polluted atmosphere, as put forward in evidence by the medical profession, but something plus as well; that is, the dust of the coal mines.
While expressing my gratitude for Clause 6 in this Bill, I hope that the Government will give some attention to the prescription in the not too distant future of emphysema and chronic bronchitis.
5.22 p.m.
VISCOUNT AMORY: My Lords, I rise with extreme diffidence to make two brief observations. I say "diffidence" because I have reached such an advanced age that, so far as I can see, I am likely to be numbered in the category of beneficiaries under this Bill. I have one point to make in regard to what the noble Lord, Lord Taylor, has just said. I am sure we shall all be delighted to see that sufferers from pneumoconiosis are included in this Bill because it is one of those diseases about which I think everyone in the country feels particularly deep sympathy, because so many who suffer from it have given honourable and continuous service over a long period to their industry and to their country.
My second point is in reference to what the noble Lord, Lord Beaumont of Whitley, said. With the tone of his speech we shall be in sympathy, and particularly when he said that his desire, and that of everybody else, was that the elderly should be treated with generosity. That is something that public opinion in this country desires very much. Every Gallup Poll on this matter shows the high priority that people generally wish to be attached to this objective. There-
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fore the noble Lord will forgive me if what I have to say now may at first sound a little harsh, though it is not intended that way. The noble Lord mentioned the £1,100 million as being a very large sum. I thought from the way he mentioned it that he was fully conscious of the difficulty of giving effect to the particular proposal he made, at any rate all at once. My only point was that, apart from being a very large sum, if a sum of that order were to be added to the total expenditure in this country at the present time it would be wildly inflatory. So, if that objective he seeks becomes possible—and I am sure he will agree it would have to become possible—it would have to be done in a way that would not necessarily add a very large sum to the total of consumer expenditure at the time; that is to say, some other priority would have to be left to make room for it. With his aim, if it is regarded as feasible, and one to be achieved, I would not quarrel at all, but I do not believe that it is practical politics at present. In the present circumstances we must be grateful that the Government have found it possible to go as far as they have done, and to make once again this symbolic payment to show their sympathy with the objective.
5.25 p.m.
LORD ABERDARE: My Lords, I am grateful to all those who have spoken in this debate, at least for not opposing the Bill, even if in some cases they gave it a fairly lukewarm welcome. The noble Baroness was kind enough to give it a fairly reasonable welcome to set it on its way, and I am most grateful to her. So far as the method of raising money and where it comes from are concerned, the noble Baroness, no doubt moved by a spirit of non-discrimination between the sexes, referred to there being no magic godfather, whereas we generally refer to a fairy godmother; but in this case, unfortunately there is neither a godmother nor a godfather. The money has to come either from the pocket of the taxpayer or from the pocket of the contributor. In this particular case, however, the bulk of the contribution comes from the employer and not the employee. I am sure the noble Baroness would think that was right in present circumstances.
BARONESS PHILIPS: My Lords, my only point, to have it on the Record, was that it is not the Government who are the godfather, but the contributor.
LORD ABERDARE: The contributor, not the taxpayer; the Government are at the mercy of people whether they be taxpayers or contributors; in this case those people are the employers.
The noble Baroness asked me about the administration cost: mainly cost of the administration by the Post Office in making payments on my Department's behalf. She spoke of an anomaly with the wife getting the payment only if she is herself over 60. I do not think it is really an anomaly; if you are drawing a line, of people over a certain age at a point when they normally retire, that figure is 60 for women. This is the same figure as we relied on last time, and I think it is a justifiable figure.
The noble Lord, Lord Beaumont of Whitley, in an interesting speech, chose to widen the debate somewhat beyond the modest scope of this Bill into rather wider matters of pension policy. I did, I hope, seek in my own speech to make it quite clear that this extra £10 was part of our counter-inflation policy rather than our main pension policy, of which we are proud; since we came into office we have increased the pension by 55 per cent., which is quite a considerable achievement. Also he talked about the limits of the extent of this particular payment. It is difficult to draw a line at a particular point, but it is much easier to draw the line at the point of retirement than to give extra to other well-deserving people below that line. Again, I think we have done a great deal, with the invalidity pension, and helping the chronic sick with the attendance allowance. I do not think we have anything to be ashamed of there. Our pension, the noble Lord said, is lower than elsewhere in Europe. These are very difficult comparisons to make, because in comparing pensions I think one ought also to take into account other forms of social benefit, particularly perhaps the free Health Service, which is not enjoyed by people in other member States of the Community.
My noble friend Lord Amory spoke about doing more and facing up to the cost of the £1,100 million, and my words will merely echo what he said about the difficulty of doing so in present circum-
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stances, though we would all wish to do more for the elderly if we could.
VISCOUNT AMORY: My Lords, if the noble Lord will allow me to emphasise what he has said, the present Government's record in this matter is extremely good relatively. The substantial increase in three years to which he referred is something of which I think the Government can feel very proud.
LORD ABERDARE: My Lords, I am extremely grateful to my noble friend.
With regard to the figures mentioned by the noble Lord, Lord Taylor of Mansfield, he mentioned overall receipts of £113 million. That would be in a full year; but between January, when the contributions first come in, and autumn of next year the contributions will raise about £80 million. So the sum does in fact balance.
I am very grateful to all of your Lordships who have welcomed Clause 6. It was not so much that the Industrial Injuries Advisory Council Report was not available before the Bill came in; it was rather the other way round; that we saw an opportunity of putting this in the Bill quickly in order that we could put the matter right at the earliest possible moment. The Report was published as soon as possible, and, as the noble Lord knows, it was available yesterday. I hope I have answered most of the questions which noble Lords raised.
On Question, Bill read 2ª: Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to the Resolution of October 15), Bill read 3ª, and passed.

SOUTHERN RHODESIA (DISTRIBUTION TO CREDITORS) ORDER 1973
5.35 p.m.
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE)THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE) rose to move, That the Southern Rhodesia (Distribution to Creditors) Order 1973, be approved. The noble and learned Lord said: My Lords, I rise to move the Motion standing in my name giving approval to the Southern Rhodesia (Distribution to Creditors) Order 1973. This is a highly technical Order, but I will

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try to describe its effect so far as possible in popular language without misleading the House as to the legal technicalities.
Though the need for making the Order arises solely from the state of affairs created by the illegal Declaration of Independence, none of the political issues associated with that declaration which commonly engage the attention of the House arise in connection with the Order. I therefore make no reference to those issues in my remarks to-day, and I imagine that other speakers will not wish to discuss them either.
The subject matter of the present Order was first raised in the House in a Question put down by my noble friend Lord Napier and Ettrick on February 14 and subsequently referred to by myself in a Statement made on April 18, which at that time seemed to command general support in the House. However, I think perhaps I should remind the House of the circumstances which gave rise to the Order and the previous discussion. These circumstances arise out of the rights of the stockholders of Southern Rhodesian Stock registered in London under the Colonial Stock Acts, the principal Act being the Act of 1877. These Acts provide for the registrar of the colonial stock (in this case the Bank of England) or—and I am quoting—"other agent of the colonial government to meet the redemption payments and interest out of monies of that Government.
Since the unilateral and illegal Declaration of Independence the necessary funds to meet the Southern Rhodesian Stock, the interest and redemption payments to date, have not been provided to the Bank of England by Mr. Smith's Government, and the stockholders in the United Kingdom have remained unpaid. I understand that at least some stockholders outside the United Kingdom have been paid, but of course of that I have no certain or precise knowledge. To the best of my knowledge and belief the amount remaining unpaid and outstanding by way of interest payments and redemption payments is now about £53 million.
This is, of course, not the only obligation in the United Kingdom which the Government of Southern Rhodesia—by which I mean (and I will not repeat it
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throughout) the lawful Government of Southern Rhodesia, which does not at present exist—have failed to meet, and which, when and if lawful authority is restored there, they will have to meet in due course. There are other creditors of the Southern Rhodesian Government who stand in the same situation, notably Her Majesty's Government here, who are owed a good deal of money which they have had to pay out to the International Bank for Reconstruction and Redevelopment to service debts for which the Government of Southern Rhodesia are primarily responsible. That is, they have had to pay the International Bank, as guarantors, and also by direct Exchequer loans, whereby the Government of Southern Rhodesia are in default of repayment. It is impossible to estimate the full amount which may be due to other creditors unless and until this is established either by court proceedings or, if this Order is approved, by proceedings under that Order. I think that the total amount outstanding to Her Majesty's Government is about £37 million.
The Colonial Stock Acts make it absolutely plain beyond a peradventure that Her Majesty's Government here are not liable to make good the loss of the stockholders in respect of their redemption and interest payment. But exceptionally the Acts do envisage a situation in which proceedings could be brought in the British courts in effect against the Colonial Government (in this case the Southern Rhodesian Government), in the case of non-payment. The procedure provided for in the Act of 1877 is known as a Petition of Right, and takes the form of a Petition to the Queen. I see the noble and learned Lord, Lord Gardiner, is in his place, and he will remember that when we first went to the Bar this was a fairly familiar procedure, but I do not suppose that many noble Lords at present in this House know much about it. It became obsolete for every other purpose after the Crown Proceedings Act 1947, and although it was generally believed to have been abolished by a section of the Cyprus Act 1960—I think it is so stated to have been repealed in Halsbury's Statutes—a Mr. Henry Franklin, one of the stockholders concerned, established in the courts last year that this universally held belief was erroneous. Following his success he, and other stockholders, commenced proceedings by way of Petition

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of Right, and in some cases have received judgments establishing the amounts due to them. No doubt other stockholders would be able to do so; that is to say, the list of those who have actually brought proceedings is not complete.
However, as noble Lords will probably know, and all of us who practise in the courts know very well, it is one thing to receive a judgment but, as many judgment creditors find out to their cost, it is altogether another thing to be paid, and these judgments will be absolutely fruitless (that is to say, they will yield nothing), unless it can also be established that there are assets available in this country belonging to the lawful Government of Southern Rhodesia to meet them; in fact, assets in the hands of an agent, to quote the Colonial Stock Act, of the Southern Rhodesian Government, to which Section 20 of the Colonial Stock Act applies. They must be in the hands either of the Registrar (that is, the Bank of England), or some other agent of the legitimate Government.
Whether there are any such assets apart from the sum of £41, is a matter of dispute, and it is a matter of dispute which will ultimately have to be decided by the courts as a question of law. As regards the sum of £41, I do not propose to say anything more about it because it has already gone. The first of the petitioners has taken it under his judgment. In any event, I suppose that the House would think, as I do, that a sum of £41 to distribute between £53 million-worth of creditors under the stock can safely be ignored. At any rate, it has gone and no longer exists. Therefore, whether there are any such assets available to meet these potential or actual judgments is a matter of dispute which ultimately has to be decided by the courts as a question of law. The Bank of England has already commenced proceedings in the commercial court for a declaration that these are not funds available to meet the judgment, and the governor, or whatever the appropriate phrase is, of the Reserve Bank of Southern Rhodesia, has also commenced a similar action for a similar declaration. These questions will have to be decided by the courts as a matter of law.
The question of law depends principally upon the status of the funds of the Reserve Bank of Southern Rhodesia, which has a number of funds frozen in
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this country. The funds are substantial (I think the figure is between £8½ million and £9 million), but they are quite insufficient to meet the claims of the stockholders, which proved to date amount, as I have said, to the best of my knowledge and belief, to £53 million, and still less to meet the other creditors of the lawful Government of Southern Rhodesia, including of course Her Majesty's Government who have had to pay out these sums by way of guarantee and who are also entitled to receive the repayment of the direct loans.
One argument would be that the Reserve Bank of Southern Rhodesia is to be treated as an entity separate from the the lawful Government of Southern Rhodesia, and that its funds are not liable to meet the judgments, and it is not an agent of the Government within the meaning of the Colonial Stock Acts. That is one side of the case, and presumably that will be put by the plaintiffs in the two sets of proceedings I have referred to. On the other hand, it could be argued that some, or all, of the Reserve Bank's Funds are available to meet the judgments on the basis that the Reserve Bank is an agent of the lawful Southern Rhodesia Government. As this question is obviously sub judice between the claimants and the Bank of England and the Reserve Bank, I must not express any opinion whatever as to which of these two alternative views is the right one. It will fall to be decided by the courts.
The consequences of what I am about to say are material. If the Reserve Bank and the Bank of England are right, the consequence will be that the claimants will get nothing, so far as one can tell, until the restoration of lawful authority in Rhodesia, when of course they will have their rights and no doubt there will be assets to meet them. Their judgments until then would remain barren until the restoration of lawful government in Southern Rhodesia. However, since the funds are totally insufficient to meet all the claims even of the stockholders, let alone the other creditors, I am afraid that we cannot simply adopt a supine attitude and do nothing whatever about it until the courts have decided the question. If we did that, as I explained to the House in April on the former occasion to which I referred, the funds would be

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seized on a first-come first-served basis. The early birds would get the whole worm, and the later birds would remain wholly unfed. I do not propose to give the details, but although there are one or two fairly small early birds most of them are the large birds who have both the know-how and the funds to have protected their rights. So the general effect would be that the smaller the claimant the less he would get. This would be quite contrary to every principle of justice and law, and I think that this was accepted by the House on a former occasion.
One alternative to "First come, first served", would have been to stay all civil proceedings in this country in respect of claims against the Southern Rhodesia Government by an Order made, like this, under the Southern Rhodesia Act. Such a course had great merits on the grounds of simplicity, and I think it would have had considerable merits on the grounds of public morality. As I told my noble friend Lord Napier and Ettrick on February 14, it was at one time at any rate being contemplated as the right course by Her Majesty's Government. Even now it may turn out to have been the best course to take. But, rightly or wrongly—and I shall submit rightly—the Government decided against that course; and they decided against that course, which would certainly have been highly controversial, because of arguments of principle which personally I find quite overwhelming. It would have involved all the controversy incurred by the then Government in the Burnnah Oil case (and there have been one or two other cases in recent years where retrospective legislation has been passed to deprive litigants of a right that they had) since it would have taken away ex hypothesi a right of action in the claimants which the courts, rightly or wrongly, had decided to exist, and it would have done so retrospectively after the courts had decided that the remedy was available. On balance, therefore, and on reflection, the Government abandoned the second alternative, and as they had already rejected the "first come, first served" principle, they reached, as the only just and practicable solution, the solution proposed in the present Order.
Now the solution proposed in the present Order is based on existing legal
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principles when a debtor or a fund has insufficient assets available to meet the claims upon it; and, as I have already pointed out, in this case either the fund has no assets or, on the alternative view, the fund does not have anything like enough assets to meet the claims upon it. Of course, if it has no assets no prolem arises: any judgments which may be obtained will be altogether fruitless, even if this Order is not passed. But the Order proceeds on the basis that that view cannot be treated as certain unless and until the courts so decide. We have therefore got to legislate against the possibility that the courts will decide in the opposite way, and we have got to legislate against that possibility while it is still in the future; and in that event we shall be faced with what I submit is the familiar situation, that a fund or a debtor exists upon which there are claims in excess of the total amount of the fund.
Now the answer which we give in the Order, and which I gave when I made my Statement to the House, is, in effect, that the rules of bankruptcy or companies winding up should prevail by analogy. What happens, if I may explain rather simply, is this, as noble Lords will be aware. Suppose somebody gets a judgment against a debtor who cannot pay. If the debtor is an honest man, he will present his petition of bankruptcy and then all the creditors are brought in and they get paid a dividend from the funds which he possesses and which are available to meet the payments. Their right of action is excluded; the right which remains is a right to a dividend in the bankruptcy. The essence of this, which has been the basis of our system of commercial morality for many years—I do not like to think how long—is that all the creditors are then treated equally, except for secured creditors and a few preferential creditors, and a dividend or dividends is declared until the fund is exhausted. I put this forward as the only view which does substantial justice here between all the claimants.
My Lords, at this stage I should like to deal with a criticism which has been levelled on behalf of the stockholders. I do not want to criticise the stockholders in any way. They are people who are entitled to redemption payments from the Southern Rhodesian Government, and who have not received them; they are

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entitled to interest, and they have not received that interest. But, of course, the effect of what they are seeking to do is to get their debts preferred in this country over any other creditors there may be; and, quite apart from legal technicalities, one has to consider whether that is substantial public justice or not. This is the question which has to be considered. The stockholders claim that they alone should share in the fund—that is to say, the fund about which the courts will decide aye or no whether it is available to meet this debt—if the courts declare it to be available. The Order provides that all the creditors let in under the Order should be treated equally. This is the rule in insolvency, with one qualification; namely, that some insolvency debts owed to Her Majesty's Government would have preference over ordinary debts—and Her Majesty's Government claim no such advantage here.
The Acts—that is to say, the Colonial Stock Acts—make no difference in the quality of the debt or right which the stockholders possess and those of other creditors. The Colonial Stock Acts do not make them preferred creditors and do not make them secured creditors. They have no preference over other creditors; they are neither secured nor preferred. They have only the one procedural advantage, which is to bring the proceedings in other words, they have the advantage which can trigger off the insolvency of the fund by obtaining a judgment, and thus establishing that there is an insolvency. It is to be understood that they will naturally seek to obtain an advantage over other creditors. These things are perfectly legitimate in the way of argument; but my submission is that if they were allowed by Parliament to do so it would be an unfair advantage.
The effect, if this were a private affair, would be that the debts which were provable in bankruptcy would include all debts or liabilities, present or future, certain or contingent, to which the debtor is subject at the date of the receiving order or to which he might become subject before his discharge by reason of any obligation incurred before the date of the receiving order, and ordinarily would include foreign creditors. Of course, the only reason why foreign creditors cannot obtain judgment in these courts is that they would normally have to seek a
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judgment in Southern Rhodesia, but for obvious reasons they cannot do that because the only people whom they could sue in Southern Rhodesia would be the illegal Government, and we do not want to encourage that. Equally, the only reason why the Crown could not sue is that, on the hypothesis that the funds are available, the Crown already has the funds in its own hands, and cannot sue itself. It could, however, without passing an Order, transfer the funds from one pocket into another, and so render them not available. In fact, it has not sought to do that. What it has sought to do is to treat itself like any other creditor in a bankruptcy.
Now there are one or two minor matters which I think I ought to establish. It may be the case that other funds alleged to be funds of the Southern Rhodesian Government emerge, but if so they will be dealt with in the same way under the Order. At present, the only funds in question are those of the Reserve Bank held in the Bank of England on its behalf. I am told, as I have said, that these amount to between £8½million and £9 million. Both the Bank of England and the Reserve Bank have brought test proceedings against Mr. Franklin, who is the first of the petitioners, to establish that the funds are not funds of the Southern Rhodesian Government available to meet claims against the Southern Rhodesian Government. That matter, as I have said, is sub judice. If the actions succeed, then the judgments will be fruitless: if they fail, then the assets of £8½ million to £9 million will fall to be distributed under the Order. As I have said, the claims against the assets amount to £53 million, and so far as is known there is in addition between £30 million and £40 million more in respect of other creditors, including Her Majesty's Government—say, about £90 million in all.
My Lords, with this explanation I do not think that I need deal, unless I am asked to do so, with the actual form of the Order. Article 2 has already taken effect to meet the gap between the making of the Order and its coming fully into operation with the approval of Parliament. It has therefore no practical significance for the purpose of the debate. If the Motion fails, the Article will fall with it. If it succeeds and the Secretary

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of State decides to bring the Order into operation, it will be superseded by the Order. The organ selected for administering the funds is the Foreign Compensation Commission, and probably the House will agree that it is the most suitable body for the purpose. It is a judicial body staffed by lawyers. We could not use the Companies Winding-Up Court or the Bankruptcy Court for an operation of this kind, and I think the analogy of a bankruptcy would break down if we tried to do so, because the claims submitted will include, or may include, a number of claims which would not strictly be provable in a bankruptcy. I have done my best to explain this highly technical matter, and I think the best thing to do now is to move formally and to leave the House to discuss the merits of the Motion.
Moved, That the Southern Rhodesia (Distribution to Creditors) Order 1973, be approved.—(The Lord Chancellor.)
6.0 p.m.
LORD SHEPHERD: My Lords, I am sure that the House will be indebted to the noble and learned Lord for his very full explanation of what is a very highly technical Order. Like the noble and learned Lord, I shall not refer to the cause of the Order, the seizure of power in Rhodesia by the Smith régime; but perhaps the noble and learned Lord would confirm that there is nothing within our sanctions policy which would prevent the Government of Rhodesia from paying these stockholders if they so wished.
When the noble and learned Lord (I think on April 18) made the Statement which this Order follows, my noble friend Lord Beswick, speaking at fairly short notice, said that we on this side of the House approved and agreed with the decision taken by the Government. After a good deal of anxious thought we are still of the same view. It seems to us that there are two issues which have to be decided. The first is that if the stockholders are to have the first entitlement to what sums may be available, is it right that it should be on the basis of "first come, first served"? We think that the figures given by the Solicitor General in the House of Commons last week illustrate what the noble and learned Lord has said: that it is not the small individual stockholders who are at the head of the queue. The Solicitor General
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said that there had been some 86 claimants who had entered claims amounting to about £3 million, of which some £2¼ million had come from the banks. I understand that there are a number of pension funds that may be affected, but I think that it would be quite wrong to believe that what we are doing by this Order is prejudicial to the small claimant. In many ways perhaps he will be better off as a consequence of this Order. So I should not have thought that in equity there could be any disagreement with the Government proposals here.
The most controversial aspect, I suppose, is whether the Government on behalf of the taxpayer, since it is the taxpayer's money, should put themselves into the same position as the stockholders for any claim that could be made on the assets of Rhodesia. One can have sympathy with a stockholder but I think that in equity one needs to protect the taxpayer's interest, and I therefore feel, with some reluctance, that the Government have made out a case in this regard.
My Lords, I should not like to sit down without saying one word about Mr. Franklin, whom my honourable friend Sir Elwyn Jones referred to as a modern John Hampden, who created the present difficulties by his success in the courts. This is the second piece of legislation of this type in which I have been involved. The noble and learned Lord referred to the Burmah Oil legislation. In that particular case, of course, the Burmah Oil Company had been clearly warned by at least two Administrations that if they did succeed in the courts certain steps would be taken to see that they did not eventually succeed. They proceeded in the full knowledge of this. However, to the best of my knowledge, Mr. Franklin was not warned as to what would be the consequence of his success in the courts. Undoubtedly he has incurred considerable cost in making his case in the courts. While I can fully appreciate the view of Her Majesty's Government that as they were not party to the recent court cases they had no responsibility in the matter, in equity, since the Government are in fact now making an Order which (shall we say?) will delay any settlement of Mr. Franklin's claim, I should hope that the Government would give very sincere consideration to ways and means by which Mr. Franklin's expenses could be met

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without necessarily creating a precedent. While I personally—and I am sure that this applies also to most Members of this House who have studied this particular case and who have a certain anxiety about this Order—would accept that it is necessary in the public interest, I feel it would make everyone a good deal happier if Mr. Franklin had not to suffer the considerable loss that he obviously will suffer as a consequence of it. With those words I would say to the noble and learned Lord that we on this side of the House give support to this Order.
6.6 p.m.
LORD WADE: My Lords, I share the views which have just been expressed by the noble Lord, Lord Shepherd, with regard to Mr. Franklin. In my view he certainly deserves our sympathy. But I am not in agreement with the noble Lord, Lord Shepherd, on some of his other observations. I think that we shall all agree that this Order does not make particularly easy reading. I shall endeavour not to add to the complexities, but in my view there underlie this Order some issues of principle. At the outset I should mention that I am a holder of a small amount of this stock, not on my own behalf but in the capacity of a trustee. Strictly, therefore, I do not think it is necessary to declare an interest because I have no beneficial interest either directly or indirectly. Nevertheless, it is perhaps worth mentioning briefly the circumstances of this trust. The stock was purchased, on the advice of the trust's brokers, some time before U.D.I. The beneficiaries are as to part charities and as to part an elderly lady who has an interest for life; and ultimately the capital all goes to charity.
In some respects this is typical of other funds where part of the capital is invested in this particular stock. One thing is clear—and on this I know we all agree. The political controversy of U.D.I. does not arise here. It is true that this Order became necessary as a direct consequence of U.D.I. but we are not arguing about the Smith régime—that is irrelevant. The issue is between the Government and the stockholders. I would differ a little from the remarks made as to the type of stockholders. I should have thought that the particular trust I have mentioned was in some
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respects fairly typical. I think that there are probably a number of persons of comparatively small means who are affected. Some of the stock is held by individuals, some by trusts for pension funds, some by trustees for individuals.
THE LORD CHANCELLOR: My Lords, I think that the noble Lord has misunderstood the point that was made. There are a number of quite small beneficiaries in one way or another and I did not mean to suggest anything to the contrary. What the noble Lord, Lord Shepherd, was referring to, and what I had referred to was that if the stockholders were met out of inadequate funds on a "first come, first served" basis we already know, from the order in which people have obtained their judgment, who would come first. In the main they are not small stockholders.
LORD WADE: My Lords, I was quite well aware of that particular point and I was going on to deal with it later. But there have been some references to a large amount being held by banks, and I was going to say that, so far as I can ascertain, these moneys are, or may be, held on behalf of individuals. So again we really cannot distinguish between large holders and small holders. In any case, I am not suggesting that one should not have sympathy for the stockholder because it is a bank. But I should have thought the sympathy should lie with Mr. Franklin and his fellow stockholders.
But much more is involved here than sympathy. It seems to me a question of principle. The whole history of this matter has, I think, shown the Government not in an entirely satisfactory light. I am thinking particularly of what was said, or was not said, when Mr. Franklin started his proceedings. One could take statements point by point of argument, but I would prefer to keep to what I regard as the crucial point. As your Lordships are aware, Mr. Franklin embarked on a long legal battle. The Government put forward such defences as were available to them, but Mr. Franklin did succeed in obtaining the Petition of Right and the court said, "Let right be done." It was following that decision, and following the decision to ascertain what funds were available, that the Government introduced this Order; and I suggest that this Order is intended

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to alter the rules in the middle of the game.
It is interesting to compare this with the Burmah Oil case. The noble and learned Lord the Lord Chancellor was in another place at that time, but I think I am right in saying that he did not regard the War Damage Bill with great enthusiasm—perhaps that is an understatement. Of course, my Lords, this case is not precisely the same as the other; two cases never are precisely the same. But there is a certain similarity; namely, that the rules were altered in the middle of the game, or should, I say, in the middle of the proceedings. In the Burmah Oil case the question was whether the claimant was entitled to compensation. It was fought right up to the House of Lords, and in its judicial capacity the House of Lords decided that the claimant was entitled. The amount still remains to be considered, but the House of Lords decided that on principle the claimant was entitled to compensation; and before any further stage could take place the Government of the day altered the rules so that the claimant could not receive any compensation.
In this case it would seem to me that the question was this: Was the petitioner entitled to proceed with the claim9 The decision of the court was, "Yes". The Petition of Right was granted, and the Government then decided to alter the law under this Order; not by taking away the right altogether from Mr. Franklin and other stockholders, but by diluting the pool by bringing in other creditors—the main one being Her Majesty's Government—and in that way diminishing Mr. Franklin's prospect of recovering what is due to him. I was interested to read a remark of the Solicitor General in another place on October 17 of this year, which was only last week. I am quoting from Hansard, column 368, and he used these words:
"…by accepting now claims by creditors other than stockholders, the pool has to that extent been diluted."
I think that that really is the main issue.
Turning to the Order, and without going into it in any detail, I think that there are two main purposes, apart from the procedural matters such as bringing in the Foreign Compensation Commission. The first is to ensure that the stock-
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holders should take pari passu. As I understand it, all parties are agreed about that. There is really no dispute that the stockholders should take on an equal basis and not "first come, first served". Whether an Order is necessary to bring that about I should not like to say. I am not absolutely certain that it is necessary, but if it is, I should have thought there would be no dispute on that issue. But the second purpose of this Order is to dilute the pool after Mr. Franklin had obtained his Petition of Right, and it seems to me that that is open to very strong objection on grounds of principle. I know it has been suggested that this is justified because the general taxpayers would benefit. While listening to the noble and learned Lord the Lord Chancellor I kept on thinking to myself: why should the justification of helping the general taxpayer be brought in, if it was all so clear on legal principles anyway? I think the argument that it is necessary—
THE LORD CHANCELLOR: My Lords, I think that again the noble Lord, Lord Wade, has misunderstood the point I was putting. The point I was putting was not that the Order was justified on the basis that the general taxpayer was benefited but that the general taxpayer was also a creditor of the lawful Southern Rhodesian Government and therefore just as much entitled to his money as Mr. Franklin is to his.
LORD WADE: My Lords, I do not want to take up a great deal of time by quoting the Solicitor General, but I have in mind some of the remarks made in another place and I was not referring specifically to the noble and learned Lord the Lord Chancellor. It seemed to me that it was put forward as an argument and I suggest that that particular argument should be regarded with great caution. Of course the Government must be concerned with the interests of the taxpayer, but where does this particular argument lead? It seems to me that if it is taken to the logical conclusion, whenever a claim succeeds against the Government or a petitioner succeeds in a claim which will or may affect the possibility of money accruing to the Government, the Government would, on that argument, be entitled to alter the law for the benefit of the taxpayer, and I think that that is a dangerous line of argument.

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The purport of what I am saying is that it tends to undermine the basis of the rule of law. When I turn to the Order itself, my difficulty is that it is not amendable. If it were, it would be a simple matter to attempt to delete a portion by amendment in Committee. That we cannot do, and therefore I should have thought the proper course for those who are unhappy about this would be to ask the Government to take the Order away and bring it back in another form. Failing that, I should have thought that in this case the proper course for those who are uneasy about this Order would be to resist it, and I hope that the majority of your Lordships will be of the same opinion.
6.18 p.m.
LORD GRIDLEY: My Lords, I intervene in this debate only because many people of standing and repute and of varied interests have expressed to me their concern about this Order. I am a completely disinterested party in the sense that I do not own and have never possessed any Rhodesian stock and I have no financial interest in the outcome. Also, my Lords, I am not a lawyer, and on the legal complexities which seem to stem from the Order in Council, naturally, I have had to receive advice. I feel extremely nervous about putting forward some of the advice that I have received because it is completely contrary to what the noble and learned Lord the Lord Chancellor stated in his speech from the Woolsack. I am, as I have said, quoting from advice received and not speaking as a qualified solicitor or lawyer. The advice I have received is that the Order in Council would appear to represent an attempt by the Government to nullify retrospectively that court decision by a Petition of Right that went against them. As regards the rights of an individual, as I think the noble and learned Lord has confirmed—he will correct me if I am wrong—an individual Colonial stockholder can sue in the United Kingdom in respect of Crown debts incurred in Colonial or former Colonial territories: and I am advised that in the case of Mr. Harry Franklin, the procedure for him to do so was in order and covered by Section 20 of the Colonial Stock Act 1877 and the Crown Proceedings Act 1947. It would seem therefore—I say this advisedly and based upon advice,
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and repeating words which I think were stated by the noble Lord, Lord Wade—that in the middle of the game the Order would appear to be an attempt to change the rules.
My Lords, many other points on this issue have been drawn to my attention, and no doubt they will be covered by other noble Lords who will follow me in this debate. It would be utterly tedious for me to mention them all, and I will confine myself to two only. Here, while not questioning anything the noble and learned Lord has said, I would refer to a debate in the other place on October 17 when this Order in Council was debated. My honourable and learned friend the Solicitor General, at column 347 of Hansard, in reply to a question, had this to say regarding Rhodesian funds:
"There is no way in which those sums due to Her Majesty's Government, which are sums due to the taxpayer, can be recovered."
While agreeing that it is possible that there was no legal way, is it not the case that at least some of the Southern Rhodesian funds have already been spent? For example, in 1967, was not £275,000 paid to the German printer of Mr. Smith's Government's bank notes. I do not know, but was not this a payment from Southern Rhodesian Government funds? Again, referring to this debate on October 17, and referring to column 348, my honourable and learned friend the Solicitor General, in reply to a question as to whether he knew what funds were available for distribution, said that he did not know. With respect, I find it difficult to follow that the Government really did not know, for by an Order in Council in 1965 the Government took over the Reserve Bank and appointed Sir Sidney Cain and new directors to run it, charging them to take control of all Southern Rhodesian assets.
The Order in Council would appear to have given the Secretary of State for Foreign and Commonwealth Affairs complete power to instruct the Bank and to control its affairs. Surely, if the Government now do not know, or did not know, what funds were available for distribution, they have the power to secure this information. Since 1967, and since the Second Reserve Bank of Rhodesia Order, Sir Sidney Cain and his fellow directors have ceased their operations. They had called in all the assets, and

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there was no more work for them to do. Sir Henry Hardman is now Governor and Trustee, with no directors.
It is for these reasons that I have anxiety and doubt about the present Order which we are debating, and I have no doubt that some noble Lords will echo some of the sentiments that I have expressed. I am disturbed by the Order in Council.
6.24 p.m.
LORD EBBISHAM: My Lords, I wish to intervene only quite briefly in this debate. At the outset I should perhaps mention that although I have no personal interest in any foreign bond, I am a member of the. Council of Foreign Bondholders. My noble friend Lord Trevelyan, who is the Chairman of the Council, has asked me to express his apologies to your Lordships as he has had to leave for an inescapable engagement. Had he been here, I understand he would have put forward views which are similar to those which I wish to put forward, and doubtless he would have done it much more ably than I shall.
Like other noble Lords who have spoken, I would give a welcome to the effect of the Order, which enables the holders of Rhodesian stock to be treated equally in any distribution of funds that there may be. That is obviously right. But what fills me with dismay is the power which the Government are taking to put their claims on an equal footing with the stockholders. As the noble and learned Lord has made quite clear, if a distribution were made on this basis there would be precious little left for the stockholders. I cannot say that I have been fully persuaded by the arguments of the noble and learned Lord on the Government's rights in this respect. Noble Lords may have seen last week an article in The Times by Mr. Bernard Levin which sets out what I think can only be described as the wriggles and prevarications to which the Government have resorted in this matter. Even now, I understand there is still an unsettled question as to whether a representative Petition of Right can be presented. The Council of Foreign bondholders many months ago presented such a Petition, and I believe the papers are still in the Attorney General's Department, and still unanswered.
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My Lords, whatever the legal position in this matter may be, I am quite persuaded that in the minds of many people the action which the Government are taking regarding their own claims is morally very questionable. I was hoping that the noble and learned Lord on the Woolsack might have been able to say that, even though the Government were taking this action, they would not insist on their claim being made, but I realised as the noble and learned Lord went on with his speech that this was not likely to be said. However, I would ask him to see whether the Government might not even at this stage take second thoughts on this matter, even though the Order may be passed.
6.28 p.m.
LORD FOOT: My Lords, as the noble and learned Lord who sits on the Woolsack began by saying, this is a very complicated matter. But, to my mind, when you have stripped it of some of the technicalities, the issue that confronts the House this evening is a simple one. It is also an important issue, and one which ought to be of particular concern to this House, because I believe it involves constitutional questions of some importance. I do not want to introduce a jarring note into this debate, which has been fairly blandly conducted up to now, but I am bound to say that I believe that a very great wrong is being done under this Order, and I would crave the indulgence of the House to explain why I take that view.
I am hound to say, my Lords, that I am greatly disappointed that both in the other place and here to-night the official Opposition should have given their approval to this Order. We therefore are left on these Liberal Benches with what assistance we might get from the Cross-Benches, and possibly from some noble Lords who sit on the Government Back Benches.
The noble and learned Lord when opening this matter was talking about the alternative courses which the Government considered when Mr. Franklin was successful with his Petition of Right and when he successfully got his judgment. He said, as I understood it, that the Government had then considered whether they might not introduce an Order which would simply stay all proceedings against any funds in the hands

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of agents in this country which might be funds of the Rhodesian Government. He said, "We rejected that course because that would have been to act retrospectively; that would have had all the objections of retrospective legislation." My Lords, I cannot understand—and I still hope that the noble and learned Lord the Lord Chancellor may be able to explain this to me—how anybody can contend that this Order is not a piece of pure retrospective legislation. Because what has happened? Mr. Franklin seeks his remedy by Petition of Right. On that matter he is strongly opposed by the Government, who say that the law is not behind him. He, however, carries the day and is proved to be right and the Government are proved to be wrong. Then, having got his Petition of Right, which enables him to sue in the English courts, he in fact sues and obtains a judgment which says that such-and-such a sum of money shall be paid to him because he is entitled to it as a right.
What does this Order propose to do so far as Mr. Franklin's judgment is concerned? It proposes, not entirely to abrogate the judgment; what it proposes to do is to diminish the judgment by saying to him: "You are not going to be paid and we are going to make arrangements whereby you will not be entitled to the money which the court has said you should have." If the Government had thought that the court was wrong about that, or if the Reserve Bank of Rhodesia or the Bank of England had thought that the court was wrong, they could have taken the matter to appeal. But they have not, because they are not prepared to challenge the finding of the High Court. So under this Order the Government are taking the course of saying: "Though the court has said 'Let right be done' and has specified the right that should be done, let that right be undone and let them substitute for it different rights, rights vested in different people." That is the situation so far as Mr. Franklin's judgment is concerned; the noble and learned Lord will tell me if I misinterpret it.
If only the Government would concede frankly and openly that this Order is in fact retrospective, then we could go on to discuss the real issues in this
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case. I suggest that the real issue is this: are there any circumstances in which retrospective legislation can be justified; and, if there are, is this one of them? Is this a case where retrospection is something which can be tolerated and justified? I suggest that that is the real issue. If one comes to look at the matter in that way, one can see that this Order has one retrospective aspect which is justifiable and one retrospective aspect which is unjustifiable. The first of them is the part of the Order which provides that, instead of Mr. Franklin and those people who have got judgments being allowed to take all, leaving those at the end of the queue with nothing, there shall be a pro rata, pari passu distribution among all the stockholders according to their holdings. When I speak about distribution, I am assuming, as the noble and learned Lord has throughout, that we have to await the outcome of the present proceedings brought by the Bank of England and the Rhodesian Reserve Bank to decide the issue as to whether they are in fact in possession of funds belonging to the Rhodesian Government and they are therefore available for distribution.
On this question, therefore, as to whether all the stockholders should rank equally there is no dispute, no argument; nobody is arguing that at all, and for a very good reason. Because when Mr. Franklin took his proceedings as an individual and established that he was entitled to the Petition of Right and got his judgment, although under our legal processes it was no doubt necessary for him to act as an individual, in reality he was acting as the representative of all stockholders. When he obtained his judgment, what was affirmed was not only the right of Mr. Franklin to the monies that were due to him but the right of all the other stockholders to be paid from the available funds in this country to meet their claims for capital redemption and interest. So nobody is arguing about that. But if the state of the law is in such disorder that there was ever a risk that first come would be first served, and the people at the head of the queue would get all they were entitled to and the people at the end of the queue would get nothing, then there was every justification for introducing an Order of this kind—although it is technically retrospective so

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far at any rate as Mr. Franklin was concerned because it diminishes the amount of money he personally will recover. But that is a pure technicality.
When we turn to the other side of this Order whereby the Government are saying, "We are not only going to ensure an equal and fair distribution between the stockholders who have established their legal right to this money, but going to pass an Order which will put on the same level as the stockholders all the other creditors of the lawful Southern Rhodesian Government, whether it be the British Government themselves or whether it be someone else", they are engaging in an exercise of an entirely different nature; and engaging in retrospective legislation, which I would suggest is wholly objectionable for this reason. At the same time, this Order does two things. First of all, it takes away a legal right vested in the stockholders as has been determined by a British court of law, and it diminishes the amount of monies that might be available to meet the claims of those people who have established a legal claim. We know what the extent of the reduction is. We know that if in this future action which still has to take place it is determined that the funds which are in the hands of the Reserve Bank of Rhodesia are in fact available for distribution, that sum is in the nature of about £9 million. If this Order were not passed, and if we had regard only to the stockholders, there would be £9 million available for distribution among the stockholders, who have total claims of £53 million. If, on the other hand, the other creditors are brought in on an even basis with the stockholders, it means that the amount which the stockholders will receive will not be £9 million but about £5·3 million. That is very significant to the stockholders. It is a reduction of a little less than half of the amount which they might receive, and it will be significant to them.
What, however, will be the benefit to the other creditors if they are allowed to come in and share equally with the stockholders? The noble and learned Lord has told us that the main creditor is Her Majesty's Government, on behalf of the British taxpayer. How much will they get out of this £9 million? If they are to be treated on equal terms with the
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stockholders they will get about £3·7 million, which is absolutely insignificant when one considers the taxpayers as a whole. It matters nothing to the taxpayers, it matters a great deal to the stockholders—but that is a practical point.
The matter of principle, which I suggest is really the issue here, is that the Government should not deprive a person of a right which the court says he has and at the same time confer upon the other creditors a right which they cannot enforce in any English court. The ordinary creditor of the Rhodesian Government has no right of action in respect of his claim in the English courts. The only persons who have such a right of action against Rhodesian funds in this country are the stockholders, under the procedure of the Petition of Right. So what the Government are doing is vesting in the creditors a right which they could not enforce in law and at the same moment taking away from the stockholders a right which the courts say they ought to have. That is what is happening here to-night; that is what the Government are doing, and I suggest that this is a matter that ought to be one of considerable concern to this House.
I do not know Mr. Franklin: I have not met him and would not recognise him if I saw him; I do not know if he is here to-night. But it is a little ironic that this man, who has gone through all this effort, who has successfully defeated the Government on a matter of law, who has established this right on behalf of himself and his fellow stockholders, should have to listen to what is quite clearly a piece of retrospective legislation taking away his right, being proposed by the Lord Chancellor of England. It seems to me that the Motion for the approval of this Order comes singularly ill from the noble and learned Lord who sits on the Woolsack. In recent weeks, and indeed over the years, I have listened many times to the noble Lord, speaking as eloquently as he does about the rule of law, about the importance of obedience to the law, and saying that the people should accept the law whoever they may be—employers, trade unionists or anybody else; that this is the basis of any kind of decent social existence. Only recently, I heard him, at secondhand, speaking at the Tory Party conference—and a very eloquent

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speech it was. It is an irony that it should fall to the lot of the noble and learned Lord to come to this House to seek approval of an Order that will take away or diminish rights which the courts of this land have declared are vested in individuals.
6.44 p.m.
THE LORD CHANCELLOR: My Lords, I will not reply to the personal attack with which the noble and learned Lord, Lord Foot, concluded his remarks because I shall proceed to show both that they prove the wrong thing and that he is entirely misleading the House about the legal position. Quite obviously, if we did not have to legislate at all the law would remain as it is—that is to say, "First come, first served", and everybody who has spoken hitherto, including the noble Lord himself, has recognised that we cannot proceed on that basis. In other words, we have got to change the law, and the question is in what sense we have to change it, and how and on what principle.
The first thing I want to say is this. Assuming that we have to change the law, is it true and to what extent are we taking away anybody's rights? The answer is that we are not taking away anybody's rights. We are arranging, after judgment has been obtained, for the proper distribution of a fund which is insufficient to meet the legal claims that are put upon it. The stockholders have their rights; Mr. Franklin has his rights—he is a stockholder; the Government have their rights as a guarantor because they have to satisfy the claims of the International Bank for Reconstruction and Development, and as guarantor they are entitled to recover, as a matter of law, from the lawful Government of Rhodesia what they have had to pay under the guarantee. The Government have their legal rights as a lender in respect of the balance of their debts which they have lent to the lawful Government of Rhodesia and in respect of which it is in default. It is therefore on exactly the same footing as the stockholders.
I agree with the noble Lord, Lord Wade, that this is a question of principle, but I earnestly ask the noble Lord, Lord Wade, who put his case with great courtesy, if he will allow me to say so, and the noble Lord, Lord Foot: who is right on the question of principle? I put to
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the House that the question of principle must be decided in favour of the principle on which the Order is based because, supposing you have a number of creditors, it is right to prefer one class of creditor to another if he is a secured creditor. That is to say, if he can say, "I have a charge on the assets", he can be in advance of those who have no charges on the assets; but one thing which has not been advanced on behalf of the stockholders is that they are secured creditors. They are not secured creditors.
The second way in which you can advance one class of legal creditors to another is on the ground that they are preferred creditors. It has not been suggested that these people are preferred creditors; they are ordinary creditors; they are not entitled to preference as a matter of law. If the assets available to meet the obligation, which has not been taken away, are insufficient to meet the obligation they are not in law preferred creditors; they are ordinary creditors. How therefore can it on any principle of morality be said that they ought to be given an advantage over other classes of creditors? Now it is said by the noble Lord, Lord Foot, that the other classes of creditors would have had to sue in Southern Rhodesia but not in these courts. Be it so. But I am not satisfied that that is so, because Her Majesty's Government, who are the principal creditor, are entitled to their money in right of Her Majesty's Government, and the only procedural reason why Her Majesty's Government cannot sue is that, on the hypothesis that the assets are available, which is the hypothesis upon which the Order proceeds, they already have the money in their pocket and they are perfectly well entitled, I would have thought, to transfer it from one pocket to another, which as a matter of fact they are not proposing to do.
But be it so; let us assume that the argument of the noble Lord, Lord Foot has a certain amount of validity. The fact is that when an insolvency is created foreign creditors—namely, precisely those who are entitled to sue in foreign courts and not ordinarily entitled to sue in English courts—are allowed to prove in bankruptcy. That is elementary law. If it be as the noble Lord, Lord Foot says, which I do not accept, that all these creditors are entitled to sue only in the

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Rhodesian courts, I would have submitted humbly that the mere fact that you are proceeding on bankruptcy principles means that you have to apply bankruptcy principles, and foreign creditors, who, for these purposes, the creditors would be, would be entitled to rank pari passu with all other creditors, including the stockholders.
LORD FOOT: My Lords, I hesitate to interrupt the noble and learned Lord, but I did not say that these other creditors might be able to sue in Rhodesia. What I said was that the other creditors—and if we may leave aside the British Government for a minute and just consider the other creditors as such, as opposed to the stockholders—have no right of action against Rhodesian funds in this country. That is what distinguishes them from the Rhodesian stockholders who have been found to have a special remedy, and that is the Petition of Right and the judgment under the Petition of Right. It is in that sense that I was saying that the stockholders are, if I may use the words, as it were, in italics, preferred creditors.
THE LORD CHANCELLOR: My Lords, I was trying to explain to the noble Lord why he was wrong. Obviously the petitioners in the Petition of Right have a right of action in this country, and, equally obviously, if we did nothing to change the law those Petitions of Rights would yield judgments, and those judgments would be satisfied on a "first come, first served" basis. That is admittedly not what we are going to do. I am pointing out to the noble Lord that if you apply bankruptcy principles, and the whole philosophy of this Order is that you do, so far as they can be applied equally, you have to admit those without a right of action to sue in the British courts. You have to allow foreign creditors to prove in the bankruptcy.
What I have said to the noble Lord, and what is beyond dispute, is that the words "secured creditor", the words "preferred creditor", have a technical meaning in English law. The noble Lord, Lord Foot, really owes it to the House to admit candidly that the present stockholders do not have that status in English law, either as secured creditors or as preferred creditors. I am sorry to
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speak with a little heat about this because it is a technical matter, and it is quite intelligible that people at first sight would not understand what I admit to be questions of principle underlying this particular argument. But the noble Lord, Lord Foot, saw fit to close his remarks with a peculiarly offensive personal attack on me, and I think I am entitled to rebut it with a certain amount of feeling on my part.
Having said that, I go back, with thanks, to the noble Lord, Lord Shepherd, at the beginning of the debate. I am grateful to the noble Lord, Lord Shepherd, because he agreed that this was a difficult matter. He conceded that his Party had had a certain amount of anxiety about it, which I can say was shared by everybody on behalf of Her Majesty's Government who considered the matter too. We came down on the side that we have, and I was heartened to know that with exactly the same kind of doubts and difficulties the Labour Party came down on precisely the same side, and therefore I should like to thank him. If I may return to the matter of costs at a later point, I will try to do so if the noble Lord reminds me. There is one other point in his speech with which I will deal now. He appeared to be under the impression that Mr. Franklin had not been warned that special action would be taken. He was told on December 22 (at least I think it was he) by a letter written on behalf of the Attorney General:
"Accordingly, steps may be decided upon which may preclude or postpone relief being obtained in the United Kingdom by your client".
That was in connection with the Petition of Right. The phraseology of the letter was appropriate to the action which was then being considered, and which gave rise to the question by the noble Lord, Lord Napier and Ettrick.
LORD SHEPHERD: My Lords, I was only seeking to show the slight difference between the Burmah Oil case, where the Burmah Oil Company was told in specific terms that the Government would take action, whereas in this case there was a degree of doubt.
6.55 p.m.
THE LORD CHANCELLOR: My Lords, I was about to come, in connection with Lord Wade's speech and, subject to the question of costs which the

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noble Lord, Lord Shepherd, asked me to deal with, to the Burmah Oil case. With respect, there is no analogy between that case and this at all. He is right in saying that after careful and considerable argumentation I spoke in the House of Commons in a former Parliament against the decisison of the then Government. But I did so in terms which were quite different from those which the great majority of my own Party would have supported. I had a particular point of view with which I will not trouble the House at this late hour. But it was critical of the then Government.
All I want to establish now is that there is no analogy at all between the Burmah Oil case and the present one. The Burmah Oil case was one in which the Government retrospectively, rightly or wrongly (and that is an argument I will not enter into), decided to deprive a party of his right of action. This is a case in which, the right of action having been established, the question is how you distribute inadequate assets when the right of action has been established, and nobody is going to get a penny of this fund who does not establish a right of action, a debt. The stockholders do it by Petition of Right until the Order is brought fully into operation and thereafter by proving in the "liquidation", if I may call it that. Other creditors will have to prove in the liquidation, too. They are in exactly the same position; none of them is deprived of his right of action, but they are asked to share on an equal footing in what limited assets may be available. The question is whether the stockholders should be given an advantage, which I claim to be an unfair advantage, or whether they should be made to share and share alike with other people with legal rights, even though some of those other people might have had to sue in the Rhodesian courts to get their rights instead of in the courts of this country.
That deals with the point about altering the rules. Of course, all bankruptcy, in one sense, alters the rules. If you get judgment against your neighbour in this country for £1,000 and you find that he can pay, you get judgment for £1,000; and if he does not pay you satisfy it by levying execution on his goods and chattels and you are satisfied in full. If he subsequently goes bankrupt, you are
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all the luckier because you do not have to disgorge if it was an honourble transaction. But if you get judgment against your debtor for £1,000 and he or any one of the other creditors brings a petition of bankruptcy, the bankruptcy relates back to the act of bankruptcy relied upon and you will not get your £1,000. You will have to share in the insolvency. That is exactly what is proposed here. The only sense in which we are altering the rules is that of course bankruptcy and winding up, which are the analogies adopted, do not apply to a lawful Government of either a colonial country or an independent country. The nearest approach that I can find whore the Companies Winding-up Rules did apply was the case of the Russian Bank for Foreign Trade in about 1933. A Czarist Russian Bank was discovered to have a branch with assets in this country long after the Soviet Revolution, and the Companies Winding-up Rules were applied to the assets in this country. This, I should have thought, was a fairly close analogy with what is now being approached here. But except in the sense that we are applying bankruptcy rules, which seems to me to be the right analogy, I completely deny that we are altering the rules while the game is in progress.
Of course the real issue is exactly what was put, I think by my noble friend Lord Ebbisham. The question is whether on a limited fund the stockholders should get the whole fund and share it between them, or whether other creditors should be entitled to share in it, too. This is a question of principle, and I do not deny it. I do not think it is quite as easy a question of principle as the noble Lord, Lord Foot, seemed to think. He has misled himself and, in consequence, misled the House. But the case I have put could not be more shortly stated. The advantage which is claimed for the stockholders could be claimed legitimately only if they were preferred creditors or secured creditors: and they are neither; they are ordinary creditors.
I do not want to delay your Lordships for too long, so perhaps I may deal briefly with the question of costs. I do not want to say anything which is in any way depreciative of Mr. Franklin. This kind of argument goes on much more widely than one would necessarily

719
think. It is perfectly legitimate for stockholders to seek to protect their rights, but he chose to pursue a course of action against which he was warned and which I myself think was wrongheaded. This was because I think he was trying to get an advantage which in equity he should not have got. I can quite understand why he did it and there is no kind of criticism which applies. He was entitled to do it.
He took out an originating summons for a decision as to whether a Petition of Right lay. He was opposed by the Crown and he won. I understand he got an order for costs. That was because he was a successful litigant, and it is not proposed by the Crown that that right to costs should be diminished in any way because the order is against Her Majesty's Government in right of the United Kingdom. So I can see nothing unjust about that. He then went on with a Petition of Right, and whether or not he was entitled to costs on that Petition I do not know. It is a question for the courts to decide. Again I do not see that there is any call for Her Majesty's Government to intervene: either he is entitled to them or he is not. He then sought to interrogate the administrator of these stocks in the Bank of England by way of cross-examination. His application failed and it was in fact held to be a misguided application. I do not think he was entitled to costs there. He undertook proceedings and he failed. Whether there was an order made against him or not I do not know, but at any rate he did not succeed. Finally, there are two sets of proceedings which are pending against him. One is brought by the Bank of England: if he wins he will certainly get his costs, and I understand that the Bank of England has promised to pay his costs even if he loses. There is a similar proceeding by the Reserve Bank, in which case the Reserve Bank will be liable for the costs if he wins, but I do not think any similar undertaking to pay his costs if lie loses has been made by the Reserve Bank.
I think that covers the costs. So far as I am familiar with the situation as it exists at the moment, there will be costs to which he is entitled. They will be greater if he wins. There will be some costs payable to him in any event and
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others that he will not get if he loses. I do not think any special action by Her Majesty's Government is called for. If and so far as—as the noble Lord, Lord Foot, says—he is acting on behalf of persons similarly placed, I should have thought he had a very strong moral claim to be indemnified, at any rate to their share of the amount at stake, by his fellow suppliants. But that is a matter between them and him.
I hope I have said enough to indicate, first, that I am not abrogating the rule of law, contrary to what the noble Lord, Lord Foot, said—and many of the things which the noble Lord said are at any rate open to question. I have suggested that he was plain wrong. Of the speeches to which we have listened from my noble friend Lord Gridley (to whom I must say a word in a moment) and my noble friend Lord Ebbisham I make no complaint at all, but I have tried to answer them, except in one point. May I say, in passing, that I fully understand the difficulties under which my noble friend Lord Gridley was labouring in a highly technical matter, and I do not complain at all that he should have made it very plain in this House that he was relying upon information which he had received from a professional source. The only point I wish to make to him relates to a payment of £275,000 which, to tell the truth, I had never heard of until he raised the matter; but I understand that the Reserve Bank did pay £275,000 to meet the cost of the destruction in Germany of Rhodesian banknotes printed prior to U.D.I. by a German firm. That, of course, was a liability of the Bank. What is in dispute here is whether the funds in the Bank are the liability of the Bank at all, and that is sub judice. That is the best answer I can give the noble Lord at the present time.
Of course I know nothing of the internal affairs of the Reserve Bank and its relationship to the Rhodesian funds. I imagine that there are members of Her Majesty's Government charged with this matter who would know a little more; but broadly speaking—and I am speaking now without prior instruction from those who know better—I think I am right in saying that, on the whole, when Her Majesty's Government appoint people to operate a bank of this kind on behalf of an institution which is no longer operative they would not seek to

721
look into the details of a customer's account. That would explain any defect in the detailed knowledge which my learned friend in the House of Commons may have shown.
I am afraid I cannot take the matter any further, unless there is anything I have not dealt with. Despite what the noble Lord, Lord Foot, said, I ask the House to believe that I have tried to apply my mind honourably to this. I have come to an answer different from his. This is both our misfortunes, but I do not myself think that I have anything to be ashamed of.
LORD WADE: My Lords, may I ask the noble and learned Lord the Lord Chancellor just one point, in case there is any confusion? Would he agree that there is a very great difference between a Petition of Right and a petition in bankruptcy?
Resolved in the Affirmative, and Motion agreed to accordingly.

LEGAL AID (FINANCIAL CONDITIONS) REGULATIONS 1973
7.15 p.m.
THE LORD CHANCELLOR: My Lords, I rise to move that this House approves the Legal Aid (Financial Conditions) Regulations 1973 and the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulation 1973. It was my intention in moving this Motion to include the comparable Scottish Regula
THE LORD CHANCELLOR: Oh yes, my Lords; there is no resemblance at all. A Petition of Right was the old proceeding against the Crown which used to exist before the Crown Proceedings Act to give a suppliant (as he was technically called) the right effectively to enforce a contract between him and the Crown. There is no relationship between that and a petition in bankruptcy. This is not a petition in bankruptcy. The whole point which I am trying to establish is that where there is a fund which is certainly insufficient, and which may be non-existent, you ought to apply bankruptcy principles to it, in which case all unsecured and non-preferred creditors have to be treated alike.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 9.

CONTENTS

Aberdare, L.

Garner, L.

O'Neill of the Maine, L.

Amory, V.

Garnsworthy, L.

Phillips, B.

Auckland, L.

Gowrie, E. [Teller.]

Rankeillour, L.

Balerno, L.

Greenwood of Rossendale, L.

St. Aldwyn, E. [Teller.]

Blyton, L.

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

St. Just, L.

Brecon, L.

Sandys, L.

Brooke of Cumnor, L.

Hall, V.

Shepherd, L.

Brooke of Ystradfellte, B.

Hood, V.

Somers, L.

Clifford of Chudleigh, L.

Hoy, L.

Tenby, V.

Colville of Culross, V.

Inglewood, L.

Terrington, L.

Colwyn, L.

Long, V.

Tweedsmuir, L.

Davies of Leek, L.

Luke, L.

Tweedsmuir of Belhelvie, B.

Denham, L.

Macpherson of Drumochter, L.

Vernon, L.

Digby, L.

Merrivale, L.

Wakefield of Kendal, L.

Dundonald, E.

Monckton of Brenchley, V.

Walston, L.

Falkland, V.

Mowbray and Stourton, L.

Windlesham, L. (L. Privy Seal.)

Ferrers, E.

Northchurch, B.

NOT-CONTENTS

Beaumont of Whitley, L.

Gardiner, L.

Platt, L.

Ebbisham, L.

Gladwyn, L.

Seear, B.

Foot, L. [Teller.]

Gridley, L.

Wade, L. [Teller.]

tions, but for a reason I do not wholly understand they do not yet appear on the Order Paper. However, I hope when they do come forward they will be found to raise no separate question and will not give rise to a separate debate.
The Legal Aid (Financial Conditions) Regulations 1973 are made under the provisions of Sections 2, 3 and 12 of the Legal Aid and Advice Act 1949, as amended by Section 1(1) and (2) of the Legal Aid Act 1960. Under the provisions

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of Section 1(3) of the Legal Aid Act 1960, the Regulations require an Affirmative Resolution of both Houses of Parliament. These Regulations, if passed, will benefit a considerable number of people. In the first place, Regulation 4 of the Financial Conditions Regulations provides transitional provisions for re-assessing contributions in current cases. All those whose "period of computation," which means a 12-months period covered by the assessment of an applicant's resources, have more than one month to run will thus be re-assessed, so that there will be an immediate advantage for those in current cases except where the effect would be minimal. There are 11,300 people with current certificates who will have their contributions reduced. In future, about 41,000 people a year will pay less contribution, and about 7,500 people a year will qualify for legal aid who would now be wholly outside the financial limit.
My Lords, if I may now come to the actual provisions, the Regulations increase the financial limits within which people are eligible for legal aid, both without charge and on payment of a contribution; that is to say, they increase the income limits. The capital limits, which are not altered by these Regulations, have already been increased, in December last year, following recommendations made by the Legal Aid Advisory Committee in their 21st Report, when the amount of disposable capital which cannot be called upon for a contribution towards legal aid was raised from £125 to £250, and the limit of disposable capital above which a person may be refused legal aid was raised from £500 to £1,200. The present income limits are £300 for free legal aid and £950 a year for contributory legal aid. This is the disposable income. In their Interim Report of February 6, 1973, the Advisory Committee made recommendations for increasing the income limits. They proposed that the lower limit should be increased to £400, and the upper limit to £1,250.
My Lords, I am sorry to say that because of the great need for economy in public spending, the Government have not felt able to agree that the Advisory Committee's recommendations should be implemented in full. Instead, it is proposed that three-quarters of the recom-
724
mended increases should be made. The limits provided by the Regulations are, therefore, £375 a year for free legal aid and £1,175 a year for contributory legal aid; the increases are 25 per cent. and 24 per cent. respectively. Although it has not been considered practicable to do all that the Advisory Committee have recommended, the proposed changes will, as I have shown, help a great many people.
As I have said, the financial limits relate to what is called "disposable income"; that is to say, the income which an applicant can be expected to receive during the 12 months from the date of his application after deductions are made in respect of maintenance of dependants, repayment of loans, income tax, expenses of employment, rates, rent and other matters for which provision can reasonably be made. The Supplementary Benefits Commission are responsible for calculating the disposable income of an applicant.
Before 1970 a separate allowance was made for payments such as hire-purchase instalments, insurance premiums and so on, amounting on average to £54. By the 1970 Regulations such payments are set off against a new fixed sum of £104 of income which, by those Regulations, is now to be disregarded. At the time the Regulations were made the effect, therefore, was to allow the average applicant about £50 more than he used to be allowed. This had the same result as if the lower income limit had been raised to about £350 and the upper limit to about £1,000. Since then, the average payments in respect of hire-purchase and so on by applicants for legal aid have risen to something of the order of about £100, and this benefit has, therefore, largely been dissipated. This point has been taken into account in the proposed increase. It is estimated that the cost of meeting the increases will be £916,000 in 1974–75 rising to £1,017,000 in 1977–78.
It has for a long time been unsatisfactory that the income limits have been reviewed only at fairly long intervals. This has led to their being eroded by inflation in the meantime. The Government accept that it is not reasonable for the limits to be dealt with in this way, and it is therefore proposed that they

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should be reviewed annually so that they do not compare unfavourably with supplementary benefits. This is, I believe, a really considerable improvement.
My Lords, I now come to the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations, 1973. These Regulations are made under the Act of 1972 which we discussed not so long ago, and in particular under the provisions of Sections 1 and 11. Under Section 11(2) of the Act the Regulations are subject to an Affirmative Resolution of each House of Parliament. These Regulations increase from £20 to £24·50 a week the maximum income which a person may have if he is to be allowed legal advice and assistance under the 1972 Act. Your Lordships will remember that legal aid, broadly but not wholly speaking, implies representation; legal advice and assistance means what it says, assistance outside the court and legal advice. As my Advisory Committee pointed out, the upper income limit for advice and assistance is now, broadly speaking, the same as the upper limit for legal aid. The former is now £20 a week or £1,040 a year, but allowances of £104 which are given under the Legal Aid Scheme are built into the Advice and Assistance Scheme so as to simplify the process of assessing an applicant's resources, which is done by the solicitor in this case and not by the Supplementary Benefits Commission which act in the legal aid cases. It follows that the present limit compares favourably with the legal aid limit of £950.
To increase the weekly income limit from £20 to £24·50, as I propose, that is to say to £1,274 a year, would, if one takes into account the built-in allowances to which I have referred, give an upper limit of almost exactly the same as the proposed contributory legal aid limit and maintain the relationship between the Legal Aid Scheme and the Legal Advice and Assistance Scheme. I propose also to increase from £11 to £12·50 the limit above which contributions are payable. The Regulations do not alter the capital limit for legal advice and assistance, which was increased from £125 to £250 a year by the earlier regulations which came into operation on April 2, 1973. This was done in order to maintain the relationship to the capital limits under the Legal Aid Scheme.
My Lords, I think I should say that the Regulations before the House, the two sets of Regulations I have described, cannot be read alone. They must be read in conjunction with another set, a third set called the Legal Advice and Assistance (Financial Conditions) (No. 3) Regulations, 1973. We are not debating this third set, as they are subject to the Negative Resolution procedure. This third set of regulations will come into force on January 1 next year, when the Regulations we are debating now will come into force and they will increase from £11 to £12·50 the disposable income above which a person in receipt of advice and assistance is required to pay a contribution, and prescribe an improved scale of contributions to replace those in Schedule 1 of the Act of 1972. The contributions will start at £1 for a person with a disposable income of between £12·50 and £13·50 a week rising in eight stages of £2 to £15 for a person with a disposable income of between £22·50 and £24·50. It is estimated that the cost of meeting these increases will be £79,500 in 1974–75 rising to £111,000 in 1977–78. This is the second and third set of Regulations. It is also estimated that about 8,500 people who would now he liable to pay a contribution will pay no contribution at all, and that about 28,000 will pay less contribution.
My Lords, this is. I think, a relatively modest step, and I hope the House will agree with it. It is intended to benefit as many people as I can, and I am sure that it represents an important improvement to the Scheme that the review will now be annual instead of being at long rests, in order to meet the cost of inflation. I beg to move the first Motion standing in my name.
Moved, That the Legal Aid (Financial Conditions) Regulations 1973, he approved.—(The Lord Chancellor.)
7.27 p.m.
LORD GARDINER: My Lords, the House will be grateful to the noble and learned Lord the Lord Chancellor, for explaining these Regulations to us, and we welcome them, although we regret they are made so late and they are on such a mean basis. For some time now it has been increasingly usual to refer to legal aid as being the Cinderella of the Social Services. It may be that it is because it is the only social service, I

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think, for which the Minister for Social Services is not responsible, but I will not go into that now.
Whatever Government is in power, I think it is fair to say it has always been a question of too little and too late. The reasons are, I think, mainly these. Legal aid—and by that I mean civil legal aid, for which alone the noble and learned Lord is responsible—is, of course, administered by the Law Society. To find out what is happening in this field, therefore, one has to rely on the Annual Report on Legal Aid of the Law Society. Their legal aid year ends on March 31. It usually takes 6 to 9 months to get out their Report, which is not only financial but on how the thing is working. It does not at that stage get published at all, but goes to the noble and learned Lord's Advisory Committee, who take another 6 to 9 months. There is no complaint about this at all. I have been assured by the Law Society that they cannot do their part quicker, and the Advisory Committee are, of course, private citizens doing all this good work in their spare time. The result is that the two Reports are published together, and usually in about July of the year after the year ended March 31; that is to say, about 15 months after the end of the year. Of course, by that time, with an inflationary situation, things are getting out of date.
On this occasion the Advisory Committee, quite unusually considered the position, and the need to alter the income limits and to do it soon, so serious that they presented the noble and learned Lord with a special Interim Report, in which they said:
"We think it urgently necessary to inform your Lordship of our conclusion on income limits. It is important that they should be considered by your Lordship before Part 1 of the Act comes into operation on April 2."
This Report was made in January of this year. It was published in February, and, seeing that, I put down a Question on February 14 and asked the Government whether they accepted all, or some, and if so which, of the recommendations contained in this special Report. The noble and learned Lord said that all the recommendations were still under consideration. I then said, at column 1544:
"While thanking the noble and learned Lord for that Answer, may I ask him whether he is aware that in paragraph 3 of the Report
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the Committee say: "We think it urgently necessary to inform your Lordships of our conclusions on income limits …if your Lordship accepts our recommendations, we regard it as essential that the revised income limits should come into operation at the same time as the introduction of Part I of the Legal Advice and Assistance Act 1972'".
I then added:
"May I ask the noble and learned Lord whether that date is not April 2, and therefore if the recommendation of the Committee is to be accepted, would it not be necessary to bring a Statutory Instrument into force next month?"—
that is to say, March. The noble and learned Lord said:
"I think the answer to the whole of that question is, Yes, my Lords."
March came and went; April came and went; May came and went: June, July, August, September. It is only now, in October, that we get these Orders put forward, implementing, but only partly, the recommendations which the Committee had said it was essential, in their view, should be agreed by April 2.
The first question I ask the noble and learned Lord is why there has been this considerable delay, bearing in mind the fact that in an inflationary situation when income limits are not altered it means that every month there are men who would have been entitled to legal aid last month but will not be entitled to it now because the income limits have not been altered. When this goes on month after month for about eight months, I think that we should know why. Secondly, now that we get the regulations we find that they are all on a cheeseparing basis. There has to be both a limit above which a man cannot get any legal aid at all and there has also to be a bottom limit on which a man with that income, but no more, is entitled to legal aid without making a contribution. The Committee have gone into this very fully, and what they have recommended is that the stoppage for legal aid, the top limit of which was £950, should be increased to £1250. The Government do not do that on the grounds that the noble and learned Lord has told us, of economy; they have cut it down to £1,175. As to the bottom income limit, it was £300, which the Committee said ought to be £400; and they have cut it down to £375. This piece of cheeseparing is put forward on the ground of economy.

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I hope it will not be thought from anything that I have said that I am intending to be in any way critical of the noble and learned Lord on the Woolsack. I have occupied his position and I know what the Treasury is. This is one of the reasons why I have always wondered whether it might not be better (indeed, I remember discussing this with Mr. Crossman when he was Minister of Health and Social Security) that the Minister of Health and Social Security should do this, because he has £5,000 million approved by the Treasury to spend and has considerable discretion as to how he spends it. Unfortunately, the Lord Chancellor has to battle away against the Treasury all by himself. I am not in any sense criticising the noble and learned Lord, but it is unfortunate that his Government should come along with this so late, and even then not carry out the recommendations of this admirable Advisory Committee and be too mean even to do exactly what they recommend. Since January 15, which was the date on which the Advisory Committee made this Report on the cost of living as it then was, how much inflation has there been? One of the hardships of putting these things off month after month is that if, some nine months out of date, you carry out the Committee's Report, by that time you have a further degree of inflation.
I welcome the fact that in future this is to be an annual event. That is an improvement. We welcome the Orders as a whole, but for the reasons which I have ventured to give we regret that they are made late, and that in the case of each of these Orders the recommendation made by the Advisory Committee has been a little cut down on the grounds of economy of a very cheeseparing kind.
7.36 p.m.
THE LORD CHANCELLOR: My Lords, I must thank the noble and learned Lord for the extreme enthusiasm and warmth of the welcome which he has given these Regulations. I do not quite know what to say, because he has so exonerated me from the strength of his strictures that I almost blush from shame. I should like to tell him one figure about which I reciprocate his kind understanding of the difficulties under which I have laboured with a similar understanding about the difficulties under which he may have laboured in the past. I should like
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to tell him one figure which may lead him to modify his strictures on the present Government. When the last Government, of which he was an ornament, left office, they were spending about £9 million on legal aid; we are now spending about £24 million on legal aid. Cinderella or not, she certainly is one of the fastest-growing, percentage-wise, of the social services.
I do not think that I should like to comment on the theory that my right honourable friend the Secretary of State for Health and Social Security would get more than the Lord Chancellor. It is open to question. You can be lost in a crowd much more easily than you can be lost if you are the one petty ewe lamb of a small Ministry. Moreover, looking, as I do, at the correspondence I get from Members of Parliament about the administration of the Scheme, I give every letter that I get, with the Law Society, individual attention, which I think counts for something in dealing with M.P.'s correspondence. I doubt whether they could hope to get anything like that from other masters of the big battalions.
There are a number of questions about legal aid one gets in the course of business which it is possible that the Lord Chancellor's Office, with its considerable expertise, can answer better and more helpfully than a great Civil Service Department. I do not think that one wants to take that too tragically. It may be that a future Government will come to a different conclusion, but at present, being mildly Conservative, I think that I prefer the status quo.
The noble and learned Lord asked what had been the rate of inflation since a date in January. He kindly gave me some notice of this question. I can only tell him what I am told. The retail price index from mid-February to mid-September, which is the latest figure available, has risen from 172·4 to 181·8, an increase of 5½ per cent. I am also told that in arriving at the agreed uprating of the legal aid limits regard has been paid to the increase in the cost of living up to and including the time when the authority for the increase was given. I then inquired what was the time when the authority for the increase was given, and I was rather happy to see that it was October 15, which is only a few days ago.

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It is true that the noble and learned Lord put down a Question and I gave the Answer that he attributed to me. I do not think he would be right to assume that either I or my minions have been altogether idle during that period. What we have achieved—and I think this is of considerable value—is tile annual review, and I think it was worth getting it in the terms in which it has been obtained. Of course, as the noble and learned Lord is well aware, what one gets is a package, and one sometimes has to work for it. I think I have done the best I could in the circumstances for the customers, who are the people in need of legal aid and legal advice and assistance.
I do not think one should despise the obligation of loyalty which a spending Minister, even a modest spending Minister like myself, with a relatively small budget, has to owe to his Treasury colleagues. The Treasury are always given the reputation of being mean, but of course it is not their money they are dispensing; it is other people's money. There is no question of meanness about their own. We are constantly being asked to reduce public expenditure, and here am I coming along with a proposal to increase it by more than £1 million a year. I can quite understand people saying that that is a very small sum when we are spending I do not know how many thousands of millions a year in the Budget; but I think the fact is that you have to practise as you preach, and if one Government Department is told to practise economy with a very large sum, I suppose those who are less lucky and have to practise economy on rather smaller sums have to show a like example.
I certainly am not one who would deprecate in any way the importance of legal aid or the desirability at some stage of considering the whole scope of this social service. The truth is that since 1949 successive Governments have operated a bottom limit which is not much above National Assistance level, and so long as that remains the statutory basis for the thing there are very considerable limits on what can be done to improve matters. This is clearly one of the matters that future Governments must think about, but they must think about it in the context of the national economy
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and of other calls on our purse. The thing about legal aid, apart from criminal legal aid, is, of course, that if you win your action or are successful in your defence to an action for which you get legal aid the unsuccessful litigant pays, and the Fund is to that extent recouped; and, of course, if you recover money as a plaintiff, to the extent that the unsuccessful defendant does not pay the actual money recovered is charged—rather cruelly, but I think justifiably—with the recovery of the costs. So it is not quite as expensive as it would otherwise be; and one has therefore to look at the rather modest limits of income and capital both in the light of deductions in this regard which are made and in the light of these considerations. But since the noble Lord has been so generous in his praise of these new Regulations, I shall not say any more.
On Question, Motion agreed to.

LEGAL ADVICE AND ASSISTANCE (FINANCIAL CONDITIONS) (No. 2) REGULATIONS 1973
7.43 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that these Regulations be agreed to. I have already spoken to them.
Moved, That the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations 1973, he approved.—(The Lord Chancellor.)
On Question, Motion agreed to.

  LAW REFORM
  LAW REFORM
  SMALL FIRMS
  SMALL FIRMS
  BILSBOR ROW HALL AND JUDGES' LODGINGS
  BILSBOR ROW HALL AND JUDGES' LODGINGS
  M.42 MOTORWAY ROUTE
  M.42 MOTORWAY ROUTE
  LANCASHIRE AND CHESHIRE MOTORWAYS
  LANCASHIRE AND CHESHIRE MOTORWAYS
  LEISURE RESOURCES
  LEISURE RESOURCES
  COMMONWEALTH DEVELOPMENT CORPORATION ACTIVITIES
  COMMONWEALTH DEVELOPMENT CORPORATION ACTIVITIES