Sitting of 7 May 1975

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

    Roads and Speed Limits
    Mr. Madelasked the Secretary of State for the Environment what plans he has to alter the responsibilities between county and district authorities in relation to roads and speed limits; and if he will make a statement.
    The Under-Secretary of State for the Environment (Mr. Neil Carmichael): My right hon. Friend has no such plans. He considers that it is more appropriate for county authorities to undertake the broad responsibilities involved in determining speed limits.
    Mr. Madel: As the district councils are considerably larger, both in population and in acreage, than the councils they replaced on 1st April last year, and as they tend to be in closer touch with local opinion than the larger county councils, will the hon. Gentleman consider transferring powers over roads, and especially speed limits, to district councils as a better means of meeting local requirements?
    Mr. Carmichael: The hon. Member will realise that a county can delegate powers to districts for unclassified roads. The districts, on the other hand, can put forward the views held locally to the county authorities. However, I believe that for the overall transport strategy, which includes roads, speed limits and traffic management generally, which is the responsibility of the county, responsibility for speed limits should be left with the county.

  Housing Improvement Finance
  Mr. Stephen Rossasked the Secretary of State for the Environment how many representations he has received from local authorities concerned at the reduction in loan sanction for the improvement of local authority dwellings under Section 105 of the Housing Act 1974; and if he has anything to add to his statement of 14th March.
  The Secretary of State for the Environment (Mr. Anthony Crosland): I discussed this and related matters with the local authority associations on Monday 5th May. As already announced, I propose to reallocate funds from other housing programmes to provide some additional help under Section 105 for certain authorities facing severe problems in 1975–76. I also proposed a joint study group under the chairmanship of my hon. Friend the Minister for Housing and Construction to assess needs and priorities for the municipalisation and improvement programmes in subsequent years.
  Mr. Ross: I thank the Minister for that comment. I am sure we are all grateful to hear that he has had a change of mind on this matter. Can he tell us exactly how many authorities have made representations to him to date—a point I raised in my Question—and can he say whether authorities such as the Medina Borough Council in my constituency in the Isle of Wight will be looked at again for a higher allocation?
  Mr. Crosland: An exceptionally large number of authorities made representations to us. This was one of the things that caused me to change our policy on this matter. The hon. Gentleman's authority has been in touch with the Department, as he knows. I cannot give any categorical pledges this afternoon, but that is one of the authorities that we know has serious problems.
  Mr. Michael McNair-Wilson: Can the Secretary of State say whether he has been able to look favourably upon the submission made by Newbury District Council in view of the omission from its housing department's bid for assistance for modernising houses?
  Mr. Crosland: That is being given particular attention at the moment. The

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  position of all the authorities which have been in touch either with the Department or with our regional offices and which have shown that they have specially difficult problems will be looked at sympathetically again.
  Mr. George Rodgers: Will my right hon. Friend clarify the position concerning local authorities which have acquired private property in order to effect improvements and modifications and which find that because these have come under the heading of "local authority property" they no longer qualify for aid under the changed system?
  Mr. Crosland: One of the major objects of the switch of resources that I have announced is to ensure that no property that has been taken over by a local authority should, because of shortage of money, fail to be improved.
  Mr. Rossi: Does the Secretary of State agree that notwithstanding the partial restoration of the cuts—because that is all it is—improvement grants are still running at about £250,000 per annum less this year than they were this time last year? Is not that a most alarming situation for our housing stock? Does he not think that it is madness to spend so much money on municipalisation while our housing stock is running down in this fashion without any real help from the Government?
  Mr. Crosland: No, Sir. The question relates to local authority improvement. Although we have not fully restored the position as it would otherwise have been, nevertheless the fact is that this year in real terms the amount of money spent on local authority improvements will have gone up from something like £50 million a year five years ago to £300 million a year. Therefore, we are talking about a much larger programme. As far as municipalisation is concerned, particularly in parts of London, I disagree with the hon. Gentleman. Given the high proportion of unfit housing in the private rented sector and given the danger of loss of rented property from that sector, this programme still remains a very high priority.

  Mortgage Interest Rates
  Mr. Adleyasked the Secretary of State for the Environment if, in view of the fall in bank interest rates, he will
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  arrange to meet the Building Societies Association to discuss a reduction in mortgage rates with it.
  Mr. Crosland: My Department maintains close and continuing contact with the building societies on a wide range of topics, including interest rates. At the present time we attach particular importance to stabilisation of mortgage funds. The appropriate level of mortgage interest rates has to be judged both in terms of that objective and in relation to other interest rates generally.
  Mr. Adley: I thank the right hon. Gentleman for that reply. However, does not he think that the reduction in interest rates coupled with the large inflows of funds to the societies means that some positive steps could be taken either by the societies or by the Government, or both? In view of the simultaneous rise in mortgage rates which people with local authority mortgages are having to pay, if the right hon. Gentleman cannot get the building societies to help him to reduce rates will be discuss with them a posssible reallocation of the sums of public money available, so that money could be made available to local authorities for a reduction in interest rates for people who have local authority mortgages?
  Mr. Crosland: On the latter part of that question, following the discussion about Section 105—indeed, the previous Question—I shall be asking the building societies tomorrow to enter into discussions with local authorities to try to make good the shortfall in local authority lending involved in the switch of £100 million. On the first part of the question, the real difficulty is that if the societies were to reduce the mortgage rate below 11 per cent. they would certainly have to reduce the investment rate below 7 per cent., to which they have in any case reduced it. We think that if they were to reduce their investment rate below that figure of 7 per cent. we should begin to jeopardise the flow of mortgage money this year. We are not prepared to do that.
  Mr. Jim Marshall: May I draw my right hon. Friend's attention to the plight of those who have a mortgage from a local authority? It is a matter of real urgency. In my local authority, from 1st June these people are likely to be faced

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  with a 13½ per cent. interest rate, which is some 2 per cent. higher than—
  Mr. Speaker: Order. The hon. Member must put this matter in interrogative form.
  Mr. Marshall: Is my right hon. Friend aware of this matter and will he take immediate steps to remove this discrepancy?
  Mr. Crosland: I am aware of this problem. There are altogether some 50 authorities charging a mortgage rate higher than 11 per cent. I should dearly like to do something immediately for those authorities in that situation. I fear however, that I have not found the answer to this problem. I am not in a position to give an additional subsidy to local authorities in order to cover this point, and the sort of loan we gave to building societies last year, which is now very nearly repaid, would not assist. Sadly, I cannot pretend that I have yet found the answer to this problem.
  Mr. Rossi: Does not the Secretary of State agree that what militates against the lowering of the building societies' lending rate is not their borrowing rate, which is highly competitive today with bank deposit rates, but the effect that the Budget has had on the composite rate of tax payable by building societies, which has risen considerably, preventing building societies from lowering their lending rate? Should not that be the area in which the Government give assistance?
  Mr. Crosland: I am surprised to find the hon. Gentleman advocating a further Government subsidy. The fact is that the two successive increases over the last 12 months in the composite rate have been covered, as far as the building societies are concerned, by the reduction in their borrowing rate to 7 per cent., which has restored the margin upon which they were operating a year ago. I am afraid the problem is not as simple as the hon. Gentleman suggests.

  Council Rents
  Mr. Hurdasked the Secretary of State for the Environment what will be the average increase in council rents as a result of the cut of £65 million in housing subsidies announced in the Budget.
  The Minister for Housing and Construction (Mr. Reginald Freeson): This will be a matter for detailed discussions between the Government and the local authority associations. £65 million saving at 1974 survey prices spread over the country's 5½ million council dwellings would average £13 per dwelling per year; but rate fund contributions to housing revenue accounts and other factors vary so enormously that such a figure is not meaningful. Apart from this, rent increases will need to meet rising costs.
  Mr. Hurd: Now that the Secretary of State is at last committed to achieving more realistic council rents, will the Minister explain why he prefers to do this by exhortation and manipulating the rate support grant rather than an open and above-board system of fair rents?
  Mr. Freeson: I do not quite follow the hon. Gentleman's point. However, the matter falls to be discussed in much detail, as I have indicated, with the local authorities and with the local authority associations.

  European Community Membership
  Mr. Banksasked the Secretary of State for the Environment what assessment he has made of the consequences of Great Britain's withdrawal from the EEC on matters within the responsibility of his Department.
  Mr. Crosland: Withdrawal would affect my Department's diverse interests in different ways. But I doubt that the consequences would on balance be very great one way or the other. The main arguments for and against withdrawal rest on the broad considerations set out in the Government's White Paper on Renegotiation.
  Mr. Banks: Is the Secretary of State aware that valuable research work is being undertaken on water pollution alone as a result of EEC grants to the tune of some £250,000? What is his assessment of the cost to taxpayers of continuing this sort of research programme if Britain were to withdraw from the EEC?
  Mr. Crosland: I have had the pleasure of attending a meeting of the Council of Environment Ministers in the EEC, which I found interesting and productive, and I thought that much of the work

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  going on was useful. If, however, the hon. Gentleman is suggesting that this is one of the major arguments pro or anti withdrawal, I cannot honestly pretend that this is so.

  Planning Permission
  Mr. Hannamasked the Secretary of State for the Environment if he is satisfied that adequate protection exists for individuals affected by "deemed" planning permissions given to local authorities by those same councils.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): Yes, Sir.
  Mr. Hannam: Is the Minister aware that the present procedures seem to allow district councils to grant themselves planning permissions, whereas if an application is a private one it may result in an appeal being made to the Secretary of State? Is he aware that in my constituency some 20,000 people and most local organisations have found themselves deprived of the right to express their feelings because of the present policy not to allow district councils to be challenged on granting themselves planning permission?
  Mr. OakesI am aware of the petition which has been presented, but local planning authorities have powers to make plans and carry out developments in their areas. In this we are following the policy set by our Conservative predecessors in 1973.

  Urban Deprivation
  Mrs. Bainasked the Secretary of State for the Environment if he will make a statement on the report "Census Indicators of Urban Deprivation", prepared by his Department.
  Mr. Freeson: This useful research was carried out by professional staff of my Department, working with the Home Office and the Scottish Office. I am considering ways by which the report may be used effectively in decision-making in housing and related fields. A copy has been placed in the Library.
  Mrs. Bain: Does the Minister accept that pious hopes of future consideration will be totally unacceptable to the people
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  of west-central Scotland? Does he realise that of the 121 worst districts in Great Britain suffering from multiple deprivation no fewer than 115 are in Clydeside? These areas have the worst unemployment record in the whole of Great Britain. Does the Minister accept that nothing that the present Government have in mind regarding future planning will be meaningful to the people of Scotland and that the real solution lies in their hands by having a meaningful Assembly which will control the economic resources of Scotland?
  Mr. Freeson: It is not for me, as Minister for Housing and Construction, to comment on future devolutionary plans which will be put before the House. But I would certainly accept that the study which has been made shows quite clearly that Clydeside—though this does not fall within my responsibility as Minister for Housing and Construction—is among the worst areas in the country. There are quite a number of other areas which fall directly within my responsibility in London. There is no question of pious hopes or pious declarations. This information will be used as the basis of decision-making.
  Mr. Dalyell: Is not the truth that Clydeside can benefit from the central research that is being done?
  Mr. Freeson: That is correct. To have undertaken this research under central sponsorship has been of value to Scotland for future policy decision-making.
  Mr. Alexander Fletcher: Did the report indicate whether the deprivation was due to lack of funds, or is it not the case that it is due to mismanagement on Clydeside mainly by Labour-controlled authorities over many years?
  Mr. Freeson: It did not go into the question of causes. I suggest that before hon. Members put questions of that kind they should examine the report, which is available. They will then see that it is, if anything, a descriptive and not an analytical report in the sense being suggested in the question. Concerning decision-making for the future, this is in hand, and the questions about the Scottish situation had better be addressed to the Secretary of State for Scotland.

  Construction Industry Liaison Group
  Mr. Michael Lathamasked the Secretary of State for the Environment whether he will make a statement on the first meeting of his) Construction Industry Liaison Group on 24th April.
  Mr. Freeson: The Construction Industry Liaison Group had a wide-ranging discussion which included the prospects for the construction industry, the programming of public sector construction work, the publication of information about public sector programmes and the group's future programme of work.
  Mr. Latham: Did the Minister put any proposals to the group to deal with the projected fall in construction output this year of 7·5 per cent. following the actual fall last year of 7·9 per cent.?
  Mr. Freeson: I did not put specific proposals before the group. That was not the object of the meeting.
  Mr. Welsh: In what way did the Scottish Office participate in this liaison group meeting? In view of the previous Question, does the Minister agree that a Scottish construction liaison group is absolutely vital if Scotland's housing problems are to be solved?
  Mr. Freeson: The Scottish Office was not involved. It was a construction industry group meeting, which I chaired. No other Ministers were involved directly. Matters of devolution are not for me. They will have to be taken into account when decisions are made in the House.
  Mr. Dalyell: Is it not true that knowledge about the construction industry crosses national and international boundaries and cannot be seen only in Scottish and English terms?
  Mr. Freeson: I accept that this is a particular characteristic of the construction industry, probably more so than in other sectors of the country's economic activities. It would raise serious questions and queries if we proceeded along lines of establishing or trying to establish a separate organisation when the industry is nationally based across the United Kingdom.

  Ports (Nationalisation)
  Mr. Alexander Fletcherasked the Secretary of State for the Environment what is the estimated cost of the Government's proposals to extend nationalisation of the ports industry.
  Mr. Crosland: As the total cost will depend on the Government's firm proposals for legislation, it is too soon to say.
  Mr. Fletcher: Does the Secretary of State accept that we on the Opposition benches understand his reluctance to reveal the extent of this totally unnecessary expenditure? Will he say what provision has been made in the public expenditure estimates to cover the Government's policies in this respect? Does he appreciate that the final cost will be greatly increased by the extension of the dock labour scheme to non-scheme ports?
  Mr. Crosland: I am not reluctant. The expenditure is not unnecessary. We shall be able to display the cost to the House when our consultations are completed and when we present our firm legislative proposals to the House.
  Mr. Alan Lee Williams: Has my right hon. Friend been able to assess the amount of subsidy that the continental ports are given through either their national Governments or their local authorities?
  Mr. Crosland: I have no precise figures with me, but my hon. Friend is right in his implication that in many of those countries very large central or local government subsidies are paid to the ports.
  Mr. Fox: Is the right hon. Gentleman aware that there can be no justification for the extension of nationalisation on the grounds of the performance of the ports? The only outcome of this proposal is bound to be increased costs to the shipper, the customer and the taxpayer. If the Government proceed with this legislation it will be seen simply as a further sop to the trade unions against the national interest.
  Mr. Crosland: I can accept none of the considerations put forward by the hon. Member. I believe that it is greatly

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  in the interests of the national economy that we should have an organisation of the port industry which, unlike the present set up, makes it possible to take a strategic view of investment in that industry.

  Home Loss Grants
  Mr. Andrew F. Bennettasked the Secretary of State for the Environment if he will propose amending the law relating to the six months' rule for home loss grants.
  Mr. Oakes: I have no such plans.
  Mr. Bennett: Is my hon. Friend aware that many of my constituents are particularly unhappy about the working of the Act and the rule and that the local authority associations are pressing for a change in the rule? If my hon. Friend cannot actually change the law at this stage, will he ensure that all local authorities inform all who are likely to be entitled to this grant that they must apply within six months?
  Mr. Oakes: It is difficult to establish the validity of a claim if it is made long after the circumstances of the displacement. I know that my hon. Friend put to the Department a case in which sanction was not given. However, we have already sanctioned 636 payments out of 908 applications.
  Mr. Blenkinsop: Does my hon. Friend agree that it is worth while considering whether in some cases family hardship might not be a better basis for considering claims than this rather arbitrary six months' rule which is imposed under former legislation?
  Mr. Oakes: Family hardship is taken into account, but the main factor is the reason why a person did not apply within the six months. The figures show that we as a Department interpret this rule most generously.

  Liverpool (Refuse Tips)
  Mr. Loydenasked the Secretary of State for the Environment if he is satisfied that the dangers to health created by the accumulation of refuse in Liverpool have now been removed.
  The Minister of State, Department of the Environment (Mr. Denis Howell): This is, of course, a matter for the city
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  council, but I understand that the sites which were considered a health hazard have now been cleared.
  Mr. Loyden: Does my hon. Friend accept that the concern which was expressed at the time of the dispute in respect of the health hazards presented by these tips still exists? Will he also accept that in much of Liverpool, particularly my constituency, there still are large refuse dumps which are a legacy of the dispute? Will he bring to the attention of the medical officer of health the fact that that officer is responsible for considering public health matters now as he did during the dispute?
  Mr. Howell: I think that the medical officer of health and the city council appreciate their continuing responsibility. There were three out of 39 tips, including one in my hon. Friend's constituency, which were thought to be a hazard to health. They were cleared, as the remainder will be cleared within the next six weeks, and special bonus arrangements have been made. They are being continually monitored and treated, but they are not thought to present any danger to public health. I shall see that my hon. Friend's remarks are conveyed to the appropriate authorities.

  Environmental Research (European Community Grants)
  Mr. Rathboneasked the Secretary of State for the Environment what environmental research grants from EECs sources would be jeopardised by United Kingdom withdrawal from the Community.
  Mr. Denis Howell: The EEC is contributing half the cost of United Kingdom work under the First Environment Programme—1974–75—valued at about £800,000, most of which is being done by British universities. Nearly all the United Kingdom contracts are already signed, and none stipulates continued British membership of the Community as a condition for completion of EEC payments.
  Mr. Rathbone: I welcome some of the figures which the Minister has given. Is he aware, however, that when the Government are being forced to reduce expenditure on so many fronts, grants from European Community become more

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  imporant than ever before? Is he also aware that it is only through our continued membership of the EEC that we shall be able to influence not only our own environment but the environment of Europe which increasingly impinges upon the environment of our island?
  Mr. Howell: I am well aware that the European Ministers take conservation and research into these matters very seriously. As a long-standing supporter of Europe, I know that to be the case. But I do not think that friends of our continued membership in Europe are necessarily doing us a great service by taking up all these small matters when great national issues have to be debated in the referendum campaign.

  Council Housing (One-Parent Families)
  Sir David Rentonasked the Secretary of State for the Environment in view of the fact that some housing authorities are declining to allocate council houses to one parent families, if he will give guidance to the authorities on this matter.
  Mr. Freeson: I would deplore such a policy and would willingly investigate specific cases reported to me. Much guidance has been given to local authorities about responding to special needs. In consultation with my right hon. Friend the Secretary of State for Social Services, I am considering the question of further advice on one-parent families as part of the follow-up to the Finer Report.
  Sir D. Renton: I thank the Minister for that helpful answer. Is he aware that the cases of women with children who have been deserted by their husbands are perhaps the most difficult but are the cases in which local authorities sometimes do not give enough help. We welcome the Minister's intention to help local authorities in the art of compassion.
  Mr. Freeson: I certainly accept that there are difficulties surrounding certain points schemes and certain systems of allocation which perhaps unintentionally, and because of their history, result in single-parent families being treated less fairly than families which have both parents still resident with the children.
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  This will fall to be dealt with generally as part of the examination of housing management matters to which we shall pay particular and increasing attention in the course of this year. Meanwhile I shall be glad to take up particular cases, and if the general policies as distinct from individual applications being refused, to which the hon. and learned Gentleman has referred are being pursued we shall do our best to persuade authorities to act otherwise.
  Mrs. Hayman: Is my hon. Friend aware that the news of the possibility of a circular to local authorities on the recommendations on housing of the Finer Report will be very welcome? However, does he agreed that there are problems for one-parent families not only in the local authority housing sector but in private housing too? Will he undertake not to neglect the building societies in his discussions on the Finer Report? Will he have discussions with them about their attitudes towards particularly the question of their foreclosing of mortgages without informing wives?
  Mr. Freeson: All these matters and others which are relevant will certainly fall to be discussed and pursued in the wake of the Finer Committee's report. As for other aspects, we shall be considering during the course of this year ways in which social ownership and control and direct municipalisation can be be pursued. We shall seek hopefully to assist one-parent families and to meet other special needs in the course of this examination and other consultation.
  Mrs. Bain: Will the Minister undertake to consult the Scottish Office on this matter? There have been recent examples of one-parent families in Scotland being severely exploited by private landlords in that they have had to pay exorbitant rents for slum accommodation which is totally unsuitable for raising a family.
  Mr. Freeson: I undertake to keep in contact with the Scottish Office, as I continually do, on matters that are of common interest to the United Kingdom and Scotland. I am delighted to hear that we are not recommended to break all ties between Scotland and the rest of the United Kingdom.

  Housing Estates (Community Facilities)
  Mr. Steenasked the Secretary of State for the Environment if he will propose minimum community facilities which local authorities are required to provide per 1,000 residents when building council housing estates in urban areas.
  Mr. Freeson: No, not in such generalised terms. But I attach much importance to community facilities being planned and programmed as fully as possible within available resources. These cover, among other things, play space, public open space and educational, welfare and social provisions which are the responsibility of several national and local government departments. Various initiatives are now in hand by the Government to achieve greater co-ordination.
  Mr. Steen: Will the Minister issue aesthetic guidelines to local authorities to encourage them to eliminate drabness, monotony and soullessness when building new council estates and so give hope to new generations of council tenants who will be forced to live in these awful housing estates?
  Mr. Freeson: A great deal of design material goes out from the Department and will continue to do so. It is becoming increasingly fashionable for many levels of society to denigrate the 5½ million council dwellings, the vast majority of which have far better facilities than have dwellings in the private rented sector.
  Mr. Charles Morrison: Is the Minister satisfied about the exchange of information concerning community facilities between local authorities, especially between authorities with the best record for the provision of these facilities and authorities with the worst record?
  Mr. Freeson: I am not satisfied generally with the collation of information centrally and its outflow for the purpose of monitoring a great variety of initiatives, not only in this connection but in relation to other matters of housing and environment. I hope that we shall improve on this during the course of the coming months and years.
  Mr. Loyden: When my hon. Friend examines the question of community facilities in council estates, will he consider the cost that is borne by the housing
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  revenue account? Does he not agree that these facilities are often provided for rate payers through the rates? Will he make sure that the burden does not necessarily fall on the housing revenue account?
  Mr. Freeson: That question needs to be taken into account when we are considering the costs and the incomes of housing revenue accounts. I should be reluctant to draw too fine a line for local authorities to pursue. It is necessary to get as much integration of provision as is possible within the resources, and local authorities will find that difficult if too fine a line is drawn. When considering finances it is important to identify closely the facilities that are specifically housing and those that are non-housing although they may be provided as part of housing estates.
  Mr. Raison: Is the Minister aware that the low standard of many privately rented dwelings to which he referred is overwhelmingly due to the penal policy pursued over the years by the Labour Party towards landlords?
  Mr. Freeson: It that is the considered view of the Opposition spokesman on environmental matters, I shall be interested to know why the Conservative Party has declared openly that it does not intend to revert to the 1957 Rent Act and why it did not vote against the Rent Act 1974.

  Rate Support Grant
  Mr. Cryerasked the Secretary of State for the Environment if he is satisfied that the rate support grant for 1975–76 is sufficient to ensure that existing provisions are maintained.
  Mr. Oakes: Yes, Sir.
  Mr. Cryer: Is my hon. Friend aware that the Conservative-controlled Bradford Metropolitan District Council is making savage cuts in social and education services, to the extent that many schools will not be able to replace teachers, and that both teachers and parents are gravely concerned? Will he give urgent consideration to replacing the block rate support grant system by a percentage grant system in 1976–77 to ensure that Conservative-controlled local authorities carry out their responsibilities properly?
  Mr. Oakes: First, I remind my hon. Friend that the Government massively increased the rate support grant to £5,430 million. Secondly, as to the position in Bradford, the figures which were given to local authorities did not envisage cuts in particular services but envisaged the maintenance of the existing level of services. It is for my right hon. Friend the Secretary of State for Education and Science to answer for the education service, not for me. Thirdly, my hon. Friend referred to percentage grants for next year. We are governed by the 1974 Act under which block grants are given to local authorities, but we are always reviewing the financial position and I have no doubt that it will be reviewed again as a result of the Layfield Report.
  Mr. Winterton: Is the hon. Gentleman aware that the rate support grant was totally inadequate for Cheshire and that, in spite of a no-growth situation and a cut in some services, rates in the county have increased by over 50 per cent. and up to 65 per cent. and 70 per cent.? Will he reintroduce the special domestic rate relief and phase it out over two or three years to ensure that the rate burden for the ratepayers over that period is acceptable?
  Mr. Oakes: The hon. Gentleman should remember that Cheshire is my authority as well as his and it could benefit considerably. Cheshire approved the rate support grant and expressed satisfaction on many points that were raised with the Government. The hon. Gentleman referred to the reintroduction of relief. That would be a grossly unfair way of dealing with the problem, just as it was grossly unfair when it was brought in by the Conservative Government.
  Mr. Tomlinson: Does not my hon. Friend agree that it would be irresponsible further to increase central Government expenditure on local government services, particularly as one-third of the increase in the public sector borrowing requirement is attributable to increases in local authority expenditure? Is it not simply another exercise in hypocrisy by Opposition Members to call for further increases in public expenditure while at the same time criticising the level of the public sector borrowing requirement?
  Mr. Oakes: I entirely agree with my hon. Friend. I could not have expressed it better.
  Mr. Peter Walker: In view of the Governments recent decision that local government income shall benefit from higher rents for council houses, will the Minister assure the House that no council house tenant in any one year will have to bear an increase of more than 50p, as advocated by that wicked Tory Act?
  Mr. Oakes: The Question relates to the rate support grant. Housing subsidies are fixed separately from the rate support grant and are at such a level that local authorities should not have to raise rents unreasonably.

  A74, Scotland
  Mr. Dempseyasked the Secretary of State for the Environment if he will study the road hazards resulting from the movement of traffic from the motorway M6 in England into the A74 highway into Scotland, with a view to taking effective action in order to minimise road accidents; and if he will make a statement.
  Mr. Carmichael: The five miles of the A74 which lie in England have been completely realigned since 1969 and have since shown a low and diminishing accident record. If my hon. Friend is concerned about a particular problem south of the border, I shall be glad to consider it.
  Mr. Dempsey: Is my hon. Friend aware that on the Scottish part of the border that stretch of highway has earned the notorious title of Scotland's killer road? Does he agree that that is due to the mounting toll of accidents, fatal and otherwise, that have occurred over the past few years in that part of the country? May I therefore ask my hon. Friend whether he is satisfied that everything possible is being done to warn northbound motorists when they leave the motorway and enter the trunk road, as ignorance of that fact is believed to be the cause of many of the tragic accidents which occur?
  Mr. Carmichael: My hon. Friend will realise that I use this road quite frequently myself. I can assure him that

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  it is properly signposted on entering Scotland. In fact, I make a point of looking for the signposting which tells me that I am back in Scotland. I think my hon. Friend will be aware that far too many roads in various parts of the country are called killer roads because of the way that the Press likes to sensationalise. I could name about six in England and certainly three in Scotland.
  Mr. Monro: Will the Minister accept from one who lives very near to the merger between the M6 and the A74 that there is a problem in distinguishing the signs, which change from blue to green, and that many commercial vehicles continue to use the road at motorway speeds? If the Minister can do anything further—and perhaps in consultation with the police in Cumbria—I shall be very grateful.
  Mr. Carmichael: I noticed that the hon. Gentleman took part in the questions which were put to my hon. Friend the Minister of State, Scottish Office a fortnight ago. Of course, as the hon. Gentleman will know, matters concerning Scottish roads are for my right hon. Friend the Secretary of State for Scotland. However, I shall draw my right hon. Friend's attention to the point that has been made. I think the hon. Gentleman will also agree that all the way up the A74 there are conspicuous notices warning the drivers of heavy vehicles to keep to regulation speeds.
  Mr. Alexander Wilson: Is my hon. Friend aware that in the main the A74 runs through my constituency of Hamilton and the constituency of the Minister of Overseas Development, my right hon. Friend the Member for Lanark (Mrs. Hart)? Will he take into account all the pleas that we have both made over the years to previous administrations, and now to this one, that the A74 should be considered as a priority job and that it should be brought up to motorway standards?
  Mr. Carmichael: I am sure my hon. Friend realises that this is a matter for my right hon. Friend the Secretary of State. I shall draw his attention to the points that have been raised today.
  Mr. Crawford: When the Minister discusses this matter with his right hon. Friend the Secretary of State for Scot-
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  land, will he ensure that the A74 is upgraded to a three-lane motorway as it is a most vital artery in Scotland's economy?
  Mr. Carmichael: The decisions to be made on the standard of the road and what should be done with the road are matters for my right hon. Friend, but I shall draw his attention to the points that have been raised by the hon. Gentleman and other hon. Members.

  Ellesmere Port Motorway
  Mr. Peter Morrisonasked the Secretary of State for the Environment when he will announce his decision on the Ellesmere Port Motorway Southern Section (Little Stanney to Hoole Village Motorway Extension) which was the subject of a public inquiry in January 1974.
  Mr. Carmichael: As indicated in the Written Answer I gave on 11th December—[Vol. 883, c. 160]—a decision will be given as soon as possible; but my right hon. Friend is not yet ready to set a date for an announcement.
  Mr. Morrison: Will the Minister say why there has been such a long delay over this matter? Is he aware that any further delay will make life very difficult, if not impossible, for some of my constituents?
  Mr. Carmichael: The hon. Gentleman will realise that the inspector's report was received only last September by the regional office. This is a very complicated inquiry involving not just the M531 but the junction with the M56. My right hon. Friend hopes to make a decision very soon. I cannot give an actual date but I can assure the House that a decision will be made very soon.
  Mr. Bates: Will my hon. Friend tell the House how much this new piece of motorway will cost? Does he accept that my constituents in Ellesmere Port would much rather see the money spent on new housing in Ellesmere Port than on this piece of motorway? If the Secretary of State decides to give the go-ahead for the motorway, will he ensure that there is proper control over the contractors so that the constituents of the hon. Member for the City of Chester (Mr. Morrison) do not have to suffer the delay, distress and danger which my constituents

  1421
  have suffered and are suffering, and about which I have written to my hon. Friend?
  Mr. Carmichael: I have my hon. Friend's letter and I shall be replying to it. The question whether the best way to spend money is on motorways or on housing is a matter for the Government in their general overall policy. I can assure my hon. Friend that a motorway project is undertaken only when it is fully expected to give a good return for the capital investment involved.

  Motorways (Hull)
  Mr. Wallasked the Secretary of State for the Environment if he will make a statement on the progress of the M18 and M62 and the date of completion as far as the city of Kingston upon Hull.
  Mr. Carmichael: Except for the Ouse bridge, I expect the M62 east of the Al to be completed in the latter part of this year; the Ouse bridge should he completed in the spring of 1976. Proposals for the final section of the M18 from Wadworth to Armthorpe were published in January and a public inquiry is likely in the autumn. Thereafter, progress will depend on the satisfactory completion of the statutory procedures and the availability of funds.
  Mr. Wall: Is the Minister aware that there is considerable concern about the slippage which is implicit in his answer? There is also concern about the date of completion of the Humber Bridge. The slippage should give time for the Minister to consider the essential feeder roads such as the Beverley South-West Bypass and the northern approach to the bridge. Will the hon. Gentleman undertake to do that? It is really rather essential.
  Mr. Carmichael: I am aware of the slippage, which was caused partly by the late delivery of steel, partly by the fuel crisis and partly by the three-day working week. I shall give serious consideration to the point that has been raised by the hon. Gentleman. I hope that in the very near future Humberside will at long last have a good road network.
  Mr. James Johnson: Is my hon. Friend aware that the biggest single factor inhibiting the advance, future happiness and prosperity of Hull is the lack of
  1422
  decent motorways out to the west to the Al? If the Secretary of State can expedite the completion of this programme he will not only deserve but will be given the freedom of the city of Kingston upon Hull.
  Mr. Carmichael: I am sure that that is a temptation to which my right hon. Friend is almost certain to fall. My hon. Friend will realise that the Humberside roads have been a sore problem for a very long time. If my hon. Friend cares to write to me I shall be able to give him a list of the final decisions which have been made on these roads. The list is too long to recite to the House now. Most of the roads will be finished by February or the spring of next year. I think that we shall have a very good network for North Humberside.

  Motorway Programme (Yorkshire)
  Mr. Hooleyasked the Secretary of State for the Environment what reappraisal has been made of the motorway construction programme in Yorkshire in the light of the current economic situation.
  Mr. Carmichael: The latest cuts in public spending may cause some delay in the road programme as a whole, but our basic road strategy for the Yorkshire area remains unchanged.
  Mr. Hooley: Is my hon. Friend aware that he can take the M18 and the M62 right across the North Sea for all I care? Does he agree that the present economic crisis is a splendid opportunity to expunge, cancel and totally obliterate any proposal to push a motorway through the Peak District National Park?
  Mr. Carmichael: I am very well aware of my hon. Friend's attitude to motorways from private conversations and from an Adjournment debate. I took part in an Adjournment debate on taking a road through the Peak District National Park. My hon. Friend will realise that no decision could possibly be taken on the proposed motorway through the national park until a thorough examination had taken place. The final decision would depend on the outcome of all the statutory proceedings and the availability of funds.
  Mr. Fry: Will the Minister point out to his hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) that an effective road system is essential if we are to compete efficiently with continental countries, which have spent much more time and money in building up a series of communications to their ports? If we are to survive the present economic climate we shall need more expenditure on effective roads. That would be sensible expenditure for the future rather than some of the wasteful expenditure in which the Government are now indulging.
  Mr. Carmichael: I would disagree with the suggestion that the Government are wasteful of money. I agree, however, that roads are an important part of our industrial infrastructure. As regards the particular road mentioned by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley). as I said in the Adjournment debate, if nothing is done about the existing route through the Peak District National Park there will be more and more congestion which will make the park less acceptable to more and more people.
  Dr. Edmund Marshall: Will my hon. Friend confirm that the delayed construction of the M18 between Armthorpe and Hatfield will now begin in 1975?
  Mr. Carmichael: I think my hon. Friend will realise that I take a great interest in the matter which he has raised, but for the moment it is a matter that has slipped my memory.

  Local Authorities (Duties)
  Mr. Sainsburyasked the Secretary of State for the Environment what plans he has to review the duties imposed on local authorities by central Government.
  Mr. Crosland: These are constantly under review.
  Mr. Sainsbury: Will the right hon. Gentleman accept that many local authorities feel that through their rate demands they have to take the blame for the Government's extreme policies? Will he undertake to get his Department to ensure that no local authority will have to incur any expenditure which has to fall upon ratepayers as a result of any of the provisions of the Community Land Bill?
  Mr. Crosland: We have debated the Community Land Bill many times and I
  1424
  have made it clear again and again that the ownership by local authorities of development land will turn out to be the best investment that local authorities could make.
  Mr. Arthur Jones: Will the Secretary of State add to the reply given by the Under-Secretary to an earlier Question? May I invite him to say whether in the maintenance of local government services a considerable supplementary rate support grant will be required for 1975–76? Furthermore, what progress has been made with the local authority consultative council?
  Mr. Crosland: There will not be an additional rate support grant for 1975–76 other than the normal increase orders. On the question of the consultative council, I am meeting the local authority associations next Monday to discuss procedures, terms of reference and the rest. On the general point, whenever complaints come from Conservative Members I have to remind them that this year the central Government are paying 66½ per cent. of local government expenditure, a far higher figure than was ever paid by a Tory Government.
  Mr. Stephen Ross: Will the right hon. Gentleman accept that there is an urgent need to do something about local government planning structures, particularly as to the division between counties and districts? It would be helpful if we could hear his views on that subject.
  Mr. Crosland: That question should be addressed to the right hon. Member for Worcester (Mr. Walker), because this is one of the many prices we are paying for the Tories' two-tier system which the then Labour Opposition bitterly fought and opposed.
  Mr. Evelyn King: In view of the growing anger in Dorset, and no doubt elsewhere, at the level of rates, will the right hon. Gentleman give the House an absolute guarantee that, whatever the effects of the Community Land Bill, he will not within the next year impose any burden on local authorities which is labour-intensive and rate-raising in quality?
  Mr. Crosland: I have already told the local authority associations—and we shall tell them again on Monday—that I am determined to get rid of a system which

  1425
  has existed under many past Governments and which has meant that on the one hand Ministers have called for the utmost economy in Government spending and yet on the other hand that they have issued circulars encouraging authorities to spend more money.
  Mr. Raison: Will the right hon. Gentleman accept that soaring costs in local government are largely the responsibility of the central Government in their total failure to control public sector wages?
  Mr. Crosland: The soaring costs of local government are due basically to two things. They are due first to the continued growth in the demand—not from the Government but from the public—for better and better social services and secondly to the incredibly wasteful reorganisation imposed on them by the Conservative Government.

  Transport Policy
  Mr. Leslie Huckfieldasked the Secretary of State for the Environment whether he will publish a White Paper on transport policy.
  Mr. Crosland: I have no immediate plans to do so.
  Mr. Huckfield: Is my right hon. Friend aware that one of the biggest difficulties facing the railway industry, public transport undertakings and the car industry is that they do not know their future rôle because we do not appear to have an overall transport policy? Will he accept that the only sensible, rational and, indeed, economic transport policy should be one based on the fact that each mode of transport should operate on a charging policy based on the economic, social and environmental costs which they all impose on the community? Is it not about time that we had a White Paper which roughly took that view?
  Mr. Crosland: I agree that we want as integrated a transport policy as we can have. I cannot accept that we do not have a transport policy at the moment, although I accept the view that matters in the transport world are changing rapidly. Indeed, we already have the help of the Socialist Commentary Study Group. There is an on-going study of various measures in the Department on
  1426
  all aspects of transport policy. The only reason why I do not hold myself to a White Paper is that until the on-going studies are completed it is not sensible to publish the results in a single document but rather in a number of separate documents.
  Mr. Fox: The right hon. Gentleman must be aware that we have pressed the Government for a White Paper for some time. He must be aware that the present wasteful piecemeal system must be brought to a halt, and the sooner the better.
  Mr. Crosland: We had a number of years of Conservative Government with out any suggestion of their putting forward an integrated transpor0t policy. I do not dissent from the need for continuing studies in a rapidly changing situation. My only worry is whether to commit myself to a single White Paper. I prefer to see the results of the ongoing studies and then to consider, in the light of those, the most suitable method of publication.

  Domestic Rate Increases
  Dr. Edmund Marshallasked the Secretary of State for the Environment what is the largest percentage increase in the final domestic rate demand anywhere in England between 1974–75 and 1975–76.
  Mr. Oakes: The largest percentage increase in domestic rate poundage in England is 75 per cent. for the London borough of Waltham Forest.
  Dr. Marshall: Is the Minister aware that the general rate in the former Thorne rural district, now part of the Doncaster metropolitan borough, has increased by up to 80·1 per cent. between last year and this year after more than doubling in the previous year? Does he not think that such extreme cases require special consideration by the central Government.
  Mr. Oakes: I am afraid that I do not have the figures for a particular former rural district, but for Booth Ferry as a whole the average increase is 56 per cent. I would remind my hon. Friend that the average cash payment per household in that area is £51 in a year against £147 in Waltham Forest.
  Mr. Speed: Does the Minister agree that since 60 per cent. of expenditure by

  1427
  local authorities comprises wages and salaries, unless pay claims in the public sector are moderated next year's rate increases will make this year's increases look like the acme of moderation?
  Mr. Oakes: The Government, and certainly my right hon. Friend, have constantly endeavoured to tell the House that that is precisely what we are trying to do—namely, to get moderation in pay claims. I should like to hear what the Opposition's policy is in regard to wage claims.
  Mr. Arthur Lewis: Will the Minister give some facts and figures to show to what extent the higher rates are due to the fact that the people did not give their full-hearted consent and, therefore, certainly did not endorse the ludicrous so-called reorganisation of local government instituted by the Conservative Government?
  Mr. Oakes: Some of the increases are due to local government reorganisation, but the main factor is inflation, from which local authorities suffer as much as anybody else.
  Mr. Peter Walker: In view of fact that the London borough of Waltham Forest was not brought under local government reorganisation by the Conservative Government—
  Mr. Arthur Lewis: Yes, it was.
  Mr. Walker:—how does the Minister account for the fact that the largest rate increase took place there?
  Mr. Oakes: That was carried out by a previous Tory Government. The right hon. Gentleman is well aware that last year London escaped many of the increases which the rest of the country had to bear. I find it astonishing that he should ask such a question in view of the fact that he was responsible for the reorganisation of local government.

  Local Government (Additional Services)
  Mr. Nelsonasked the Secretary of State for the Environment if he will give an estimate of the cost to public expenditure of the additional services to be introduced by local government to which he has recently referred.
  Mr. Oakes: I do not know what services the hon. Member has in mind, but I do not expect local authorities to undertake any new duties under existing legislation except by reallocation of existing resources.
  Mr. Nelson: How does the Minister reconcile successive Government circulars calling on local authorities to spend more with the need for overall economy? How, for example, does he reconcile the circular on housing, which calls on local authorities to provide conversions and new mobile and extendable homes, with the Government's intention to tighten advances for improvement grants?
  Mr. Oakes: Those circulars ask for restraint. Housing is dealt with separately, as I said in reply to a previous Question. In the December circular we made it clear to local authorities that, as my right hon. Friend has just told the House, the Government would restrain requests to local authorities and ask them to restrain their expenditure, in contradistinction to what happened under the previous Conservative Government.

  QUESTIONS TO MINISTERS
  Mr. Raison: On a point of order, Mr. Speaker. Is not it a gross abuse of Question Time and thoroughly unfair to the English Members that so much time should have to be spent on Scottish Questions which have nothing to do with the Department of the Environment?
  Mr. Speaker: That is not a matter for the Chair. It is for Ministers to decide which Questions they answer and how they answer them. Whether the hon. Member was right in his premise, I am not at all certain.

  HOUSING (SHORTHOLD TENANCIES)
  3.33 p.m.
  Sir Brandon Rhys Williams: I beg to move,
  That leave be given to bring in a Bill to make further provision for the letting of residential properties on fixed terms, and for purposes connected therewith.
  I think that everyone who is interested in finding accommodation for himself, or who owns accommodation which is potentially lettable, will be interested in the problems of the relationship between landlord and tenant. It is proper to declare my personal interest before proceeding to ask the permission of the House to introduce a Bill dealing with this subject.
  Many people are aware of the problems of homelessness and overcrowding, yet they feel a sense of despair at the relatively slow rate of new building. I believe that a solution to the problem could be found much more readily if we studied the use to which we are putting existing property, especially in our inner cities but also throughout the country.
  This is a special constituency interest of mine in Kensington, but I am sure that the problem of shortage of suitable accommodation is not solely an inner London problem. On census night there were 628,000 empty properties in England, of which some 100,000 were in Greater London. I recognise that not all of those could have been occupied simply through a change in the law; but I think that we need to take into account that there are also large numbers of potentially lettable premises which are underoccupied at present, where families have contracted in size and there are spare rooms or spare floors in houses, premises above shops, and other lettable rooms which are vacant perhaps for months or even years at a time.
  Much of the apprehension which landlords feel in putting these properties on the market arises from the provisions affecting security of tenure. I do not want to make a partisan speech because I think that hon. Members on both sides are concerned to find a solution to the problem. However, I think that ignorance of the law is one of the difficulties
  1430
  which landlords lace and which makes them disinclined to let their houses, flats or potentially convertible spare premises. If we are to find a solution, we must attend to the real conditions and not only try to live in an ideal world. I believe that if we aim at partial solutions of the housing problem we can achieve something useful and achieve it quickly.
  The suggestion I should like to embody in my Bill is that we should create a new form of tenure. I employ the word "short-hold", which is not my own invention, because I think that it conveys what I mean—namely, that for a period of from one to five years, or perhaps even for a longer period, the landlord and tenant should come to a clear arrangement whereby both parties know exactly where they stand. I think that that is all-important. During the period of the tenancy the tenant should be virtually equal to a freeholder. He should know exactly where he is and have absolute security. But at the end of the period, agreed in advance between the parties, the tenancy should come to an end. There should be no doubt about that. Should the landlord wish to let the premises again, I suggest that, as in the case of a shop, he should be required to offer first refusal to the sitting tenant.
  Obviously safeguards will be required. We cannot simply invent a new form of tenure and leave it to the parties to work out the conditions. Therefore I suggest that an arrangement of this kind should be permitted only where planning permission for the premises in question has been obtained in advance. The local authority would then be able to satisfy itself that the premises were suitable for letting, that they had the necessary amenities, and that the public health regulations had been complied with.
  A fair rent should also be agreed in advance so that there should be no question of breaking the present structure of protection where rents are concerned. Obviously the system would not apply to anyone protected under existing legislation. This is purely a new arrangement for the future.
  I think that it would be desirable for the premises eligible for this type of tenancy to be separately assessable for rates. In that way we could be certain

  1431
  that they would be properly self-contained. I believe that it would also be desirable, so as to encourage the supply of accommodation of this kind, that such property should be eligible for improvement grants. However, that is a Committee point which I hope that hon. Members will have the opportunity of studying in due course.
  I do not want to weary the House by going deeply into points which are merely elaborations of my proposal, but I hope that I have said enough to make known my intention. I do not believe that hon. Members, if they study the proposal closely, will think it controversial and I hope that I may have the leave of the House to introduce the Bill.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Kenneth Baker, Mr. Hugh Dykes, Mr. Geoffrey Finsberg, Mr. David Knox, Mr. Michael Shersby, Mr. John Stanley, Mr. Cyril D. Townsend, Mr. Christopher Tugendhat and Sir Brandon Rhys Williams.

  HOUSING (SHORTHOLD TENANCIES)
  Sir Brandon Rhys Williams accordingly presented a Bill to make further provision for the letting of residential properties on fixed terms, and for purposes connected therewith: and the same was read the First time; and ordered to be read a Second time upon Friday 16th May and to be printed. [Bill 157.]
ORDERS OF THE DAY

  DEFENCE
  Order read for resuming adjourned debate on Question [6th May],
  That this House, recognising the need both to provide adequately for the nation's security and to ensure that the level of public expenditure is contained within available resources, welcomes the Statement on the Defence Estimates 1975 (Command Paper No. 5976); notes the circumstances in which further financial savings have since become necessary; and endorses the Government's determination to maintain efficient and well-equipped armed forces for the security of the United Kingdom.—[Mr. Mason.]
  Question again proposed.
  Mr. Speaker: I have selected the amendment standing in the name of the hon. Member for Edinburgh, Central (Mr. Cook) and his hon. Friends.
  3.38 p.m.
  Mr. William Whitelaw: In defence matters I start from the fundamental belief that it is the prime duty of Government to protect their citizens. That is by its very nature a duty which can be fulfilled only by leadership and a refusal to sacrifice long-term objectives in order to satisfy essentially short-term and frequently short-sighted pressures.
  Nor is that duty confined to the Government of the day. Members of Parliament have a special responsibility in the way in which we approach these defence debates. Our individual contributions will match the vital importance of the subject to our peaceful future only if we recognise the real difficulties and dangers involved in the decisions which have to be taken. They will affect our future lives, and any basic mistake now is frequently irreversible. Very large sums of public money are involved. It is extremely hard to assess whether real value for money is being obtained, especially when research and development of highly sophisticated weapons are involved.
  Nor can anyone dismiss easily the inevitable pressures to divert resources for social projects where money is badly needed, where the benefits are immediately apparent and, perhaps unfortunately, the prospects of short-term political popularity are infinitely greater. Equally, it is no use trying to pretend

  1433
  that the need to defend ourselves can be pushed into the background and forgotten. Certainly if we in this House are to provide leadership, we cannot afford to pander to such feelings of indifference, probably all too prevalent in the country, until something goes wrong.
  I wish that I felt content about our performance as a House on this score. In saying that, I am not referring to those who always advocate more cuts in defence. Certainly they are not indifferent. They are clear and consistent even if in my judgment they are seriously misguided. Either they do not believe in the threats and dangers which we should have to face, or they are prepared to take grave risks by ignoring them.
  Today, that point of view is represented by those Government supporters who have signed the amendment. Frankly, I have never been able to understand how they believe that they are promoting the prospects of peace in this way. Apparently they believe strongly in détente, yet they seem to think that it is compatible with this view to undermine the NATO strategy of balanced force levels.
  At a time when we are told that the Warsaw Pact countries are increasing their forces and the Soviet Union is expanding hers, they want to cut down ours. I wonder what purpose they believe the Soviet Union has in mind. In this regard, I prefer the robust common sense of the hon. Member for Hammersmith, North (Mr. Tomney) to the somewhat woolly observations of the hon. Member for Ealing, Southall (Mr. Bidwell) and his hon. Friends who have signed the amendment. Do they really assume that the Soviet Union and the Warsaw Pact countries have no intention of spreading their influence and undermining the free world if they can easily get away with it? Are they prepared to accept such a situation? Above all, are they determined to ignore all past experience and fly in the face of history? If so, surely a short consideration of what happened in the 1930s might have some effect.
  Many of those who, like the late Lord Attlee, played a most distinguished rôle in the 1939–45 war, had within a year or two to eat the words that they had uttered on defence in 1935. Many of the strong advocates of unilateral disarmament in
  1434
  the early 1930s became not only strong supporters of increased defence expenditure by 1936 but even criticis of our lack of preparedness when war broke out in 1939. Yet the harsh truth, even the irony, is that the defence decisions taken when they were opposing increased defence expenditure made shortages of equipment and comparative weakness inevitable at the start of the war. As one who joined the Army in 1939, I do not want to feel in any way responsible in the future for some of the shortages that we endured then. I believe that that is the basic case which the constant critics of defence expenditure in the Labour Party have to answer.
  Fortunately, the Secretary of State for Defence came out firmly against this line in his speech yesterday, and I applaud him for it. But, alas, he did not follow through the logic of his own argument He gave an eloquent outline of the defence commitments in which he believed. He reinforced the need for our continuing commitment to NATO, as outlined in paragraphs 20, 21 and 22 of his White Paper, as did the Under-Secretary of State for Defence for the Royal Navy in his speech last night. But then, instead of matching the commitments with the resources required to fulfil them, the Secretary of State fell back on the argument that all our defence capabilities and commitments must be met within the resources allocated by the Government to defence. So, in forming their judgment on the balance between commitments and resources, the statement in paragraph 9 of the White Paper—
  "Clear strategic priorities were established at the outset; but no arbitrary financial limit was set, which would have prejudiced the outcome of the analysis"—
  is not true.
  Apparently, therefore, whatever may be the requirements of British foreign policy in the furtherance of British interests in the world, the defence resources necessary to meet them have to be found within a predetermined target. To put it bluntly, the Secretary of State for Industry can play fast and loose with vast sums of the taxpayers' money while the Secretary of State for Defence is closely restricted in protecting Britain's vital interests in order unsuccessfully to placate the Labour Party's Left wing.

  1435
  This attitude is also confirmed by the announcement by the Chancellor of the Exchequer in his Budget statement of additional cuts of £110 million which, I may say, destroyed at a stroke the whole basis of the Government's White Paper. I felt rather sorry for the Secretary of State when he tried to justify this yesterday. For all I know, he may have fought hard with his colleagues against the additional cuts. He may even have succeeded in preventing more drastic and dangerous economies. But he has now to answer for them, and he was far from convincing.
  I apologise for making these comments about the Secretary of State in his absence. I realise that he has to be at the Eurogroup meeting which he is chairing. But, equally, I am sure that he would not expect me to desist from my comments on that score.
  It may be that, for the Secretary of State, some good can come out of this evil. I do not imagine that he will ever again fall into the constitutional error that he made on 3rd December 1974 when he claimed the support of the Chiefs of Staff for policies for which he as a Minister must bear full responsibility. If, having agreed the Defence White Paper after, I suspect, considerable agonised discussion, the Chiefs of Staff then supported the further economies made by the Chancellor of the Exchequer, their collective military judgment would need to be called seriously into question. From what know of them, it would be most unfair even to contemplate such a possibility.
  I want now to consider the balance between commitments and resources on what must be the only prudent basis. First, I shall consider the requirements of protecting Britain's interests in the world. Then I shall examine whether, on that basis, the resources allocated under this White Paper are likely to meet the necessary commitments.
  In the debate yesterday, it was accepted widely, except perhaps by the hon. Member for Ealing, Southall and his hon. Friends, that the NATO strategy must be continued and that in coming to this view one had to take account of the growing strength of the Warsaw Pact and Soviet forces. My hon. Friend the Member for Beckenham (Mr. Goodhart) referred wisely to the dangers to NATO's strength
  1436
  in Europe inherent in the present morale and confidence crisis in the United States of America. No one can doubt that in the aftermath of Vietnam, strong voices will be raised there questioning all the foreign commitments of the United States.
  My hon. Friend the Member for Ayr (Mr. Younger) and my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) referred very properly to British interests and the interests of the whole NATO Alliance in protecting the flanks. All the evidence shows that my right hon. Friend the Member for Brighton, Pavilion was wise to call attention to the Soviet strategists as "soft underbelly men".
  Here, recent events must require us to reconsider our basic commitments. Two vital NATO allies, Greece and Turkey, are deeply involved in the continuing Cyprus controversy. He would be a brave man who predicted an early solution to the problems of divided communities wherever they are found in the world. We have, too, the obvious difficulties which may arise in the near future in Yugoslavia. At the other end of the Mediterranean, the position of Portugal, another NATO ally, must give cause for concern, especially in view of her control of vital bases. On the northern flank there are obvious dangers and here, too, we have our vital oil interests in which, one might say, the Russians seem recently to have taken at least a passing interest.
  Journeying more generally through the world as a whole, one sees that Britain has a vital interest in the Middle East where the danger of conflict is ever possible and we depend for our existence on the freedom of the seas. Above all, we and our allies cannot stand aside and witness the steady erosion of the strength and influence of the free world.
  Against the background of even that short summary of Britain's vital interests, let us now consider the resources allocated. I accept at once that a judgment has to be made on the word "vital". There is, of course, a danger in referring to all interests as vital, but, against that, I do not think I could be accused of over stating the commitment. Some might claim quite the reverse. Nor is it any part of my case that we should never make, or attempt to make, cuts in defence spending. There must be a continuing search for economies so as to get real

  1437
  value for money out of the large sums involved.
  In this connection, at a moment when the old arguments about "teeth" and "tail" have been resurrected, can some reality be put into paragraph 71 on the organisation of the Ministry of Defence? The Defence External Affairs Sub-Committee of the Select Committee on Expenditure, under the chairmanship of my hon. and gallant Friend the Member for Eye (Sir H. Harrison), whose decision to retire at the end of this Parliament many hon. Members in all parts of the House will regret, has made some very important recommendations on greater integration.
  We were promised greater integration when the Ministry of Defence was set up. It is true that the Secretaries of State and First Lord of the Admiralty were abolished, but has there been much further integration, and has it continued? The Select Committee has said that this aspect must be pursued very strongly and I am sure that it will be, by all concerned. As I intend to refer gratefully to them later, I will risk offending both of my old friends the Commander-in-Chief BAOR and the General Officer Commanding Northern Ireland by suggesting that a careful examination should be made of their headquarters, too.
  When one comes to the real cuts in resources proposed in the White Paper, these seem to involve, against the background of those clear commitments, very considerable risks, to put it mildly. On the central front of NATO, the area most favoured by the Government, our tactical mobility seems to be undermined by the reduction in helicopters and the totally untried abolition of brigade head quarters. I am not saying that this will not work. I know that I have a prejudice, for in my Army career nobody ever thought to put me higher than brigade headquarters. I was put there, but no higher, and therefore I am not prepared to believe that a brigade headquarters is actually in the tail of a formation. I do not accept that. I believe that brigade headquarters, particularly in mobile forces, is very much in the "teeth ", and therefore I hope that at least very careful examination will be made of this, would question whether it might not restrict our mobility and to that extent
  1438
  might prove in practice to have been a mistake.
  It is on the flanks that we are obviously causing our allies greatest concern. Whether it is in the Mediterranean or on the northern flank, our naval power and our amphibious capability is vital to the whole alliance, and yet it is to be substantially reduced. Surely, the same criticism can be made against our whole strategy over world sea routes. My right hon. Friend the Member for Taunton (Mr. du Cann) made a strong case for Britain preserving her long maritime traditions instead of allowing them steadily to be eroded. There is much truth in that.
  More generally, if we are to protect Britain's vital interests with smaller forces, we surely need reserves and some plans for mobility. I doubt whether we really have any uncommitted reserves; and as far as mobility is concerned, most of the proposals in the White Paper reduce it. As a result, we seem to have no real contingency plan for that most inevitable of all events, the unforeseen emergency.
  Originally, our commitment of forces in Northern Ireland was unforeseen; nor even when the troops were first commited could the size of the commitment or its time-scale have been accurately forecast. I have always taken care not to make public comments on the Northern Ireland position since I left 18 months ago, particularly because I hate the idea of ghosts from the past haunting their successors. But in all the circumstances it would be impossible for me, who asked so much of our forces, not to join in the well-deserved tribute to their achievement in most difficult and trying conditions. Perhaps that comes all the more from me who has every reason to know how difficult and trying they were. In particular, I welcome the opportunity to express publicly my especial debt of gratitude to the two generals, Sir Harry Tuzo and Sir Frank King, who gave effect to many difficult decisions of mine with unswerving loyalty.
  Paragraph 37, Chapter 2, of the White Paper outlines the basis of our commitment to Northern Ireland. Frankly, I believe that our forces will have to remain there in some strength for a considerable time to come. I remain convinced from all the experience I have had that there

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  would be a real risk of substantial bloodshed if our forces were to be precipitately or prematurely withdrawn. Such a situation would underline the failure of the United Kingdom to protect its own citizens within its own territory, and this, in turn, would, in my judgment, have grave moral and political implications.
  But, at the same time, those of us who will constantly stand up for the right of all the Northern Irish people to have the protection of United Kingdom troops so long as it is the wish of a majority to remain part of the United Kingdom, do need some help from them. It is wrong militarily and bad from every point of view to continue to use soldiers in a purely police role. It is, therefore, very urgent that the Northern Irish political leaders should reach agreement on their future policing arrangements, and that once such agreement is reached the police force should be given wholehearted support and so enabled to carry out its duties throughout the community in sufficient strength. I hope that those leaders will consider that it is, in the long run, of enormous importance to Northern Ireland. It is also of importance to our forces and their training. Equally, it is of very great importance to the case of those of us who believe that our forces have to continue to perform that particularly unpleasant duty.
  I return to the overall balance of the Defence White Paper. It must be our duty as an Opposition to sound a clear warning against the passive and complacent attitude on defence into which our country is falling. One of the tragic features of this complacency is that we seem incapable of learning from past experience. Surely now, when we are faced with grave dangers all over the world, it cannot be wise to lower our guard. It cannot make sense, as some of my hon. Friends have said, to produce a White Paper which depresses our friends and allies and delights our enemies. Of course, the Secretary of State for Defence and many of his colleagues do not want to take this course but they are driven to it by their Left-wing supporters. In so far as they stand against them, one must admire their determination but, alas, they are forced to compromise against their better judgment.
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  What better example is there of this compromise than the motion which has been tabled? Let us remember that normally such a motion simply asks for approval of the Defence White Paper. Why does it not do so on this occasion? The old compromise is, of course, the answer. We start with,
  "That this House, recognising the need both to provide adequately for the nation's security"
  —that—is one side—
  "and to ensure that the level of public expenditure is contained within available resources."
  —that is the other side of it. There is the basic contradiction. On the basis of that contradiction we "welcome" the statement on the Defence Estimates. The motion continues,
  "notes the circumstances in which further financial savings have since become necessary"
  —thereby admitting that the whole basis of the White Paper, which we are supposed to have welcomed, has been destroyed. On the basis of that conflict of assertions we are supposed to endorse
  "the Government's determination to maintain efficient and well-equipped armed forces for the security of the United Kingdom."
  As the original basis has been destroyed, what on earth can be the basis on which we can be expected to endorse any determination? If the determination was there, we would not be asked to do the other things.
  There is the basic contradiction. The motion is a nonsense and, like the confusions of the Defence White Paper, it can easily be a dangerous nonsense. It is for this reason that I hope that my right hon. and hon. Friends will stand up to protect Britain's vital interests in the world and reject this White Paper.
  4.3 p.m.
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. Brynmor John): It would be proper for me to express the regret of my right hon. Friend the Secretary of State that, owing to the fact that he is chairing the Euro-group at its first annual meeting outside Brussels, he cannot be present today. The right hon. Member for Penrith and the Border (Mr. Whitelaw) was good enough to say that he knew of this and understood the reasons why my right hon. Friend was not present. I hope that the House as a whole will understand.
  After my right hon. Friend's comprehensive account of the Government's plans

  1441
  for defence over the next 10 years I want to examine some of the interrelated strands which make up this or any other defence policy. The two main strands which have entered into the debate are basically economics and foreign polio, Defence is, clearly, about both but it does not only comprise both. It is something more than that. Apart from a few dissenting voices on the Opposition back benches at an early stage in the debate, I thought that it had been accepted on all sides that defence cannot now be considered in isolation from the economic health of the country as a whole.
  After the speeches of the hon. Member for Ayr (Mr. Younger) and the right hon. Member for Penrith and the Border I am not so sure whether that understanding can be so assumed. I will, however, return to that point a little later. It is certainly true that the problems involve more than a cursory study of the latest economic trends. I must confess, therefore, that, given the complexity of the problem, I find it difficult to understand those who automatically describe all expenditure on defence as wasteful and seem to suppose that if only we spent enough money on hospitals and comprehensive schools the defence of the country would look after itself.
  I would be the first to argue in favour of devoting as much of our scarce resources as possible to these valuable social programmes. But the fact remains that the freedom of a democratic society such as ours cannot be secured without the assurance of a realistic defence policy. I see no evidence to suppose that even the most civilised and humane society would, just because of its humanity and civilisation, enjoy complete immunity from external threat.
  We must be clear what purpose a viable defence policy serves, because it is only by defining it that we are able to appreciate the value of the Armed Forces. In a nutshell I would say that expenditure on the three Services provides for defence against external forces and influences which, in the absence of any recognisable opposition, might be inclined to undermine our democratic way of life—a way of life which we would all join in agreeing we would not willingly forsake without a struggle.
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  The question of what is the right level of expenditure on defence is one to which answers will inevitably differ. As my hon. Friend the Member for Edinburgh, Central (Mr. Cook) said yesterday, and I agree, we should approach the problem without impugning the sincerity of those who place a different emphasis upon this. We can all agree that too little expenditure on defence is dangerous. I have dealt with that. We can also agree that too high a level of defence expenditure could seriously threaten the advances which we hope to make in other sections of our society, so undermining the very society we seek to defend. The rational answer between the two extremes involves consideration of many complex factors, far more complex than the right hon. Gentleman opposite would have us believe.
  The Government are, therefore, in the unfortunate, althouglt not unexpected, position of being attacked or criticised by some hon. Members for making excessive cuts in the defence programme while at the same time other hon. Members criticise them for not having gone far enough. Much will depend on one's point of view, and disagreement is not entirely unexpected. But, looked at objectively, it is not possible for both positions to be true. I suggest that neither criticism is tenable and that the middle course which the Government have steered is the only one, given present circumstances, which will stand up. [Interruption.] We all enjoy the sedentary speeches of the hon. Member for Woking (Mr. Onslow). We look forward to hearing him speak from a more conventional position later.
  Mr. Cranley Onslow: Will the hon. Gentleman tell the House what it is that gives him the right to claim objectivity in this?
  Mr. John: I am saying that objectively one cannot at the same time have too little and too much defence expenditure. I am not claiming objectivity. As I have said, it would certainly add a note of realism, notably absent from the contributions of Tory Members, if they were to recognise that for those of us who are not pacifist in approach there is a duty to explain publicly, regardless of whether we think the cuts too heavy or too light, what alternative levels of defence expenditure we would propose

  1443
  and what kind of defence provision we would substitute for what the Government now propose.
  Rear-Admiral Morgan-Giles (Win. chester)rose—
  Mr. John: No. I will not give way at the moment.
  Mr. Carol Mather (Esher)rose—
  Mr. John: No. I will not give way now. I must develop this point.
  The Chancellor has said, and I do not believe that the Opposition dissent, that we face a serious economic position. If the Opposition acknowledge this, they cannot possibly be allowed to get away with proposals for defence which, so far as I can understand them, are apparently framed with a total disregard for the present economic situation. Of course, they might argue, in the classic words of the man who was asked the way to Dublin, that they would not have started from here at all. But we are in this position. Some in the Conservative Party, although they are not the spokesmen of the party in the House at the moment, do recognise that there are constraints upon defence expenditure imposed by economic realities.
  Mr. Mather: In his earlier remarks was the hon. Gentleman saying that the Government had no policy of their own and that they were being forced first in one direction by the Left wing of the Labour Party and then in another direction by the Tories? Is it not the duty of the Government to make up their own mind about their responsibilities towards the defence of our citizens?
  Mr. John: The hon. Gentleman's intervention is so irrelevant and meaningless that it does not call for an answer. Tint is the direct opposite of what I was saying, and he knows it. As I have said—
  Rear-Admiral Morgan-Giles rose—
  Mr. John: Lord Carrington has conceded in another place, and more recently in the Press, that expenditure on defence must be related to our overall economic position. When he was Secretary of State for Defence, the noble Lord said in another place:
  "all of us, wherever we sit in the House, have to recognise that the size of the Defence budget must be limited by the very proper calls on our resources by other Departments."
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  —[Official Report, House of Lords, 22nd February 1972; Vol. 328, c. 400–1.]
  Similarly, one of my predecessors, the Under-Secretary of State for Defence for the Royal Air Force in the Conservative administration, said on 19th March 1973:
  "we accept that that programme must not impose an unacceptable economic burden on the country".
  There was no mention there of totting up all our requirements and footing the bill, as the hon. Member for Ayr seemed to suggest yesterday.
  Mr. Julian Amery rose—
  Mr. John: I should be grateful if I could be allowed to develop this point. I shall then give way to the right hon. Gentleman if he wishes.
  The former Under-Secretary said in the same debate:
  "it is not our intention to allow the defence budget to expand out of hand in the late 1970s".—[Official Report, 19th March 1973; Vol. 853, c. 50.]
  Those statements dispose of all the argument by hon. Members, including Opposition official spokesmen, that defence is only a matter of totting up every conceivable threat in the world and footing the bill for it.
  Mr. Amery: The hon. Gentleman asked what additional expenditure the Conservatives would wish to see. All that we are asking for is the reinstatement of the cuts in certain overseas expenditure, which represents a little over half of the cuts that the Government are trying to impose. The sum involved is about £150 million to £200 million a year. Against the background of a £9 billion borrowing requirement and vast expenditure at home on desirable but not perhaps necessary things, those cuts do not seem to be essential.
  Mr. John: I am interested to hear the right hon. Gentleman say so. If all that he is saying is that we must restore the overseas cuts, I find it difficult to understand some of the criticism of the flank strategy and the suggestions that thereby our contribution to the NATO alliance is being weakened.
  As I have said, the more intelligent and realistic members of the Opposition, who seem to be singularly absent from the Chamber this afternoon, put a gloss on the argument by saying that, whilst economic arguments cannot be ignored,

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  they disagree with the low priority given to defence by the Government. However, such reasoning is far too slick. I am bound to ask the Opposition what higher priorities they would give to defence. Where would they put defence in relation to the other spending Departments, for example? Would they put it above the social security programmes?
  Mr. Patrick Cormack: Yes.
  Mr. John: Would they put it above education?
  Mr. Cormack: Yes.
  Mr. John: I am very interested to note their priorities. It reveals a fundamental cleavage between the parties, because we believe that, as an essential contributiion towards defence, we should have a decent, humane society. That is what the hon. Gentleman is putting in jeopardy by his foolish remarks.
  Mr. Cormack rose—
  Mr. John: The right hon. Member for Brighton, Pavilion (Mr. Amery) has been good enough to answer part of the question, but I now ask whether the Conservatives would restore all the programmes which we inherited from them when we came into power. If that is not their plan, how much of the expenditure that we have cut from the programme would they restore? Precisely which parts of the programme would they revive? If they do not answer, they stand branded as hypocrits for on the one hand saying that they are most concerned about these cuts whilst at the same time, if by some misfortune they ever got back into Government, meekly accepting everything and going on from there.
  There is some criticism from some of my hon. Friends, with which I must deal. They suggest that the substantial cuts which we propose in the programme which we inherited are not cuts at all. I must point out to them that when in Opposition we often criticised the Conservative Government for making reductions in programmed expenditure in some of their social programmes. One example was their cut in the increase in the domestic element of the rate support grant from 5p to about 3p in 1972. The proposal was to reduce an increase—not to spend less—and yet we rightly criticised
  1446
  them for having made a cut. If that was a cut when we were in Opposition, what we are doing is no less a cut now when we are in Government.
  To put it another way, if we had taken no action over defence when we came into office, the planned levels of defence expenditure over the period of the review would have been £4,700 million higher than we now propose. If this £4,700 million does not represent a cut, as a Welshman I must say that the English language is even more mysterious than many of the Welsh think it to be.
  As an example of the call that I hear for greater cuts, we are criticised by some hon. Members for retaining a few of cur large spending equipment programmes, such as the anti-submarine cruiser, the MRCA and the like. The fact that a programme is large does not mean that it is wasteful. These arguments for cutting out larger projects bear a surprisingly close resemblance to the Tories' own economic strategy, which always seeks, in public expenditure economies, to cut out large projects such as hospitals and schools. Therefore, the relevant question to be asked is not whether the project is a large one, but, rather, whether it fits in with the new concept of defence that we have and whether it gives value for the money which we spend upon it.
  I shall take this opportunity to deal with one of the large projects: namely, the MRCA. This is a project which is already of major importance to the British and European industries. Some 17,000 workers are now involved in its manufacture of whom some 7,500 work in Britain—4,000 for BAC in Lancashire and 2,000 for Rolls-Royce in Bristol, as well as a number of suppliers throughout the country. It is estimated that by 1981 at least 25,000 people could be employed on this project in the United Kingdom.
  In cost terms—and I believe that the cost of this project has been particularly well managed—the MRCA currently accounts for 10 per cent. of the total United Kingdom aerospace industry work load. That figure will rise substantially when the programme is established. It has also to be remembered that the only realistic alternative to the MRCA would be foreign purchase, with all the foreign exchange penalties which that would impose upon this country.

  1447
  As to its operational capabilities, NATO has from the outset recognised the unique advantages of the MRCA project, the concept of which conforms fully to its requirement for standardisation of equipment between nations. NATO has been involved in the management of the project for over six years, and during this time I believe that the growing Soviet military presence has been anticipated in drawing up the plans of this aircraft and its characteristics. It has been designed to operate in a number of different rôles. It has been designed to have an offensive air support rôle in which it will be capable of carrying out deep interdiction sorties at any time of day or night and in any weather. It will be complemented by other close-support and short-range interdiction aircraft in daylight and closer to the battlefield. At sea it will be able to attack enemy ships using standoff weapons. We are also now at the project definition stage of the air defence variant which we plan to operate as a replacement for the Phantom for the air defence of the United Kingdom and of naval forces at sea. In this latter rôle, the aircraft will be able to operate at very substantial ranges from our shores.
  The MRCA will eventually form about 50 per cent of the Royal Air Force's front-line force and will replace no fewer than four different types of aircraft in the current inventory. I need hardly stress the benefits that this will bring in terms of economies in spare parts and servicing, quite apart from the benefits of collaboration and standardisation in NATO air forces which it will also confer.
  I should like now to deal with the point raised yesterday by my hon. Friends the Members for Edinburgh, Central and Birmingham, Selly Oak (Mr. Litterick), on the controversy which now seems to rage about whether missiles are an alternative to manned aircraft. My hon. Friends argued that in the 1980s surface-to-air missiles will be able to replace the interceptor aircraft, and that the missiles might make it impossible for our own strike and reconnaissance aircraft to operate effectively. However, to accept those views is to over-simplify a complex situation. The manned interceptor has the virtue of range. It can interrogate intruders in peace to see whether their
  1448
  intentions are hostile, and can deny them freedom to operate at will in our airspace. It can keep the battle away from our shores in war. The defensive surface-to-air missile can do none of those things.
  Mr. Tam Dalyell: Before he leaves the MRCA, will my hon. Friend explain why it is not appearing as scheduled at the Paris air show from 2nd June to 8th June? Is it to do with trouble with the low-pressure oil system or the allegedly defective blades? There has been unfavourable comment in the American Press. Perhaps my hon. Friend will clear it up.
  Mr. John: I was not leaving the MRCA—
  Mr. Dalyell: Sorry, I thought that my hon. Friend was.
  Mr. John: I was not trying to score a point or to deny my hon. Friend the opportunity to put his question. No trouble has caused the MRCA not to appear at the Paris air show. Its development programme is so tightly scheduled that it is believed that it would be an unwarranted interference with that programme to make such an appearance.
  I was developing the point about missiles as against manned fighters. The argument rests on over-easy conclusions drawn from the last Middle Eastern war. The lessons of the Yom Kippur war are by no means all in favour of surface-to-air missiles as opposed to the manned aircraft. I believe that the manned aircraft has a rôle in the future. It has the additional virtue that it can retaliate in offensive operations in response to aggression. Therefore, although the RAF is aware of the threat posed by Russian SAM and AA defences, we believe that by the MRCA being given the ability to penetrate enemy territory at very low level and at high speed it will be able to operate effectively.
  There are considerable limitations to the effectiveness of low-level optical SAM systems, which can be affected by night conditions, visibility, weather or the ability of aircraft to take evasive manoeuvres, while radar systems can be electronically jammed. Moreover, no field commander is likely to be in a position to protect fully with SAMs all his sensitive targets, such as bridges, airfields and the like. Therefore, I believe that these

  1449
  manned aircraft are desirable and necessary.
  If any further proof were needed, all the main nations in Europe, including the Soviet Union, which is fully aware of the state of the art of SAM missiles, are still developing aircraft and associated weapon systems.
  Mr. Neville Trotter: Will the Minister say something about the air defence of the Navy? It is all very well talking about the MRCA. What is to happen to the surface ships when they are operating outside the range of the MRCA? Is not the naval Harrier essential for the very reasons that the hon. Gentleman mentioned?
  Mr. John: Perhaps the hon. Gentleman will be patient. My hon. Friend the Minister of State intends to deal with that matter when he winds up the debate.
  The MRCA is only one of the major equipments now in the pipeline. There are others which are entering service or are at the development stage.
  I return to my main theme, which is the question of levels of defence expenditure. If I thought that the efforts we devote to defence in any way deflected us from the wider goal of détente, there might be more acceptance of the criticisms. But it is just not so. In the conference on security and co-operation in Europe and the negotiations over mutual and balanced force reductions, Britain is playing its full part, and is fortunately still able to involve itself in the discussions from a position of relative strength.
  The progress in those talks is slow. There is a long way to go before a real break through can be claimed, but I would far rather see the participants in those negotiations getting down to painstakingly detailed work than issue generalised declarations that are so easy to make but just as easy to break.
  This is the basis for my belief that the Government have the package of defence spending about right. We have made the cuts in such a way as to have no detrimental effect upon civilian employment in those areas which are least able to bear redundancies. As an example of this care, I would mention our proposals for the RAF to vacate 12 stations which resulted from our defence review
  1450
  decisions. Only one of them is situated in a development area. In recognition of the care we have taken over the choice of stations, not one hon. Member has taken up the invitation that I extended to hon. Members whose constituencies were affected by station closures to make representations to me if they saw fit.
  Mr. Cormack: If what the Minister said is true, it is a scandalous and irrelevant statement. The defence of this country should be absolutely paramount in the Government's consideration, and the displacement of particular stations totally irrelevant. This illustrates the fatuity of the Government's proposals in every respect.
  Mr. John: I despair of the hon. Gentleman's ability to follow even the simplest argument. I was speaking about the effect of station closures upon employment.
  While no representations have yet been made, we still hope that some of the stations will have an alternative defence use. In the meantime, we are continuing our discussions with the trade unions and staff sides. But the deadline for formal representations from hon. Members has now passed, and although I am still prepared to hear any objections, I shall shortly be finalising the RAF's deployment proposals.
  I should like to take the opportunity to announce, as a further example of the Government's efforts to minimise the loss of jobs in areas of high unemployment, that we have found an alternative use for the vacant RAF station at Ouston, Northumberland, which is in a special development area. Provided the necessary planning permission can be obtained to build about 200 married quarters there, the intention is to make it the location of an infantry battalion by mid-1978. This will create directly up to 50 civilian jobs, and I believe that the presence of 600 to 700 Service men will provide a useful stimulus to the local economy.
  The hon. Member for Ayr asked yesterday, and the right hon. Gentleman asked this afternoon where the priorities lay. There is no doubt that the central area of Europe, the United Kingdom itself, the Channel and the Eastern Atlantic are the areas which are vital to our defence—of much greater importance to us than

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  any others. There are arguments about the threats to the flanks of NATO, but it should never be forgotten that we were the only European NATO Power which performed a significant rôle in all areas of interest to our allies. I remind the hon. Member for Ayr that, whatever his opinion may be about the threats in the various areas, there can be no doubt that, as a glance at the disposition of Warsaw Pact forces would show him, the central region is the most vital land area for NATO.
  Let us consider what is happening in other areas. Forces are being run down somewhat in Cyprus. I hope that that will contribute to a substantial reduction in the proportion of married Servicemen who are out there on nine-month unaccompanied tours, with all that that means in terms of turbulence and family upheaval.
  I join the right hon. Member for Penrith and The Border in paying tribute to the security forces in Northern Ireland. Their campaign against terrorism in the last year met with considerable success. I believe that it greatly undermined the strength of the terrorist organisations, in parallel with the Government's political initiatives in that area. I believe that it led to a situation in the Province which allowed the withdrawal of three major units. I should also add a tribute to the extremely valuable contribution which the Ulster Defence Regiment played in that campaign.
  The rôle which the forces are fulfilling in Northern Ireland is sadly by now all too familiar, but there are two further areas where their presence is somewhat of a new concept. The first is in the surveillance and protection of North Sea oil rigs, a point with which my hon. Friend the Under-Secretary of State for the Navy dealt in his winding-up speech last night. The second is the anti-terrorist measures that need to be practised from time to time at such particularly vulnerable targets as Heathrow Airport.
  In the past, the operations at Heathrow have for the most part involved armed soldiers and wheeled reconnaissance vehicles, although on one occasion it was necessary to deploy a new tracked vehicle for these duties. This new tracked vehicle, known as Scorpion, forms part of the
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  Army's re-equipment programme, which is aimed at developing a new generation of tracked armoured reconnaissance vehicles. The Scorpion is the first of these and has already replaced the old wheeled armoured cars in the Army's armoured reconnaissance regiments.
  However, hon. Members may be interested to know that one of the consequences of the limited number of wheeled armoured vehicles now stationed in Britain is that it may at times be necessary to use the tracked Scorpion vehicle at Heathrow in the event of further police requests for Army assistance to counter terrorist threats. The introduction of tracked vehicles marks no escalation in the campaign against terrorism but is merely the result of one of the Army's re-equipment measures.
  A further area where the activities of the forces impinges upon the general public is, of course, low flying. This matter was mentioned by the hon. Member for Stroud (Mr. Kershaw) yesterday. I have already mentioned it in connection with the MRCA, but it is not a new problem. I think that the general philosophy of low flying is by now generally understood and agreed in this House. Whilst the general philosophy is known, the exact geography of low flying areas and the routes linking them has not been published.
  In keeping with our general wish in defence matters to make available the maximum information compatible with national security, we have been reviewing this decision afresh. Our studies are not yet complete, but they have paid particular attention to aircraft safety.
  I know very well the concern that is felt over the collision at Downham Market between a Phanton and a Piper Pawnee crop spraying aircraft. I can make no comment on this accident at this time because we still await the report of the Chief Inspector of Accidents. However, it is fair to point out that in the last 15 years there have been only five collisions betwen civil and military aircraft, and, of those, only the accident at Downham Market occurred in the United Kingdom military low flying system.
  Both my colleagues and I, as well as the Services themselves, regard the problem of flying accidents as of the

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  highest concern. I think we can say that one accident is one too many. At the same time, we must recognise that if pilots are to be properly trained to make effective use of sophisticated aircraft, there must necessarily be some risk of accidents. We have to strive for a proper balance between adequate training and safety.
  As part of the process, I have been considering with my colleagues the desirability of publishing, on a regular basis, flying accident statistics for the Services. This would be in line with the Government's general policy of releasing more information to Parliament and to the general public. We have therefore decided to publish annually the accident rates for the three Services, together with accident costs. The figures for 1974 are being made available in a Written Answer this afternoon.
  Mr. Anthony Kershaw: On low flying, perhaps at a later date, not this afternoon, the hon. Gentleman will be able to tell us something about the position in Germany.
  Regarding the publishing of accident statistics, I hope that they will be hedged round with all the qualifications which those statistics ought to have.
  Mr. John: If the hon. Gentleman will study the way in which the Written Answer is framed, he will see that there is no over-simplification. Those caveats are entered there. I will consider in more detail the point regarding the German low flying system.
  Mr. Roderick MacFarquhar (Belper)rose—
  Mr. Deputy Speaker (Mr. George Thomas): Order. I point out to the House that too many interruptions will only make it harder to get other speakers in.
  Mr. MacFarquhar: In re-examining the whole question of low flying, will my hon. Friend make sure that it is carried out over those sections of the country where the population is at its lowest, because in some figures which he gave me last year it seemed clear that that was not necessarily the guideline which the Department was following?
  Mr. John: That is not so. In fact, low flying areas in the overwhelming majority of cases cover those areas where the population is most sparse. If my hon. Friend will write to me about specific examples, I will consider them.
  Regarding the effect of the defence review on personnel, I am encouraged by the way in which the latest recruiting figures have borne up. In the year ending 31st March 1975, the number of men and women recruited to all three Services totalled 35,000. Although this figure cannot be meaningfully compared with the previous year's total of 25,800, because of the raising of the school leaving age, I think that it suggests that we are doing very well in comparison with the 1972–73 figure of 39,000. The numbers of recruits already coming forward to fill the current year's manpower requirement support the view that the defence review has not had the effect on Service recruiting which the Jeremiahs would have expected.
  I have spoken at some length about the justification for the Government's plans for defence expenditure and have picked out certain points of policy which I believe are particularly worthy of mention. In conclusion, I should like to place the expenditure on defence in the context of other public expenditure programmes. In the financial year 1975–76, the last Public Expenditure White Paper shows that over four times as much is planned to be spent on the social services as on defence.
  Mr. Cormack: That is shameful.
  Mr. John: In the same year, we plan to spend about 2 per cent. less in real terms on defence than we did in 1969–70.
  Mr. Cormack: Absolutely disgraceful.
  Mr. John: I believe that, contrary to the views expressed in the sedentary interruptions by the hon. Member for Staffordshire, South-West (Mr. Cormack), that is a proper recognition of the fact that the quality of our society is an important contribution to our defence. By freeing £4,700 million in over nine years, in this Defence White Paper, we shall help to improve the quality of that society.
  The second and no less important point is the size and quality of the forces that we maintain. We believe that, under

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  our proposals, these forces can maintain a strong and effective defence. I believe that to place undue weight on social programmes while disregarding military considerations or on military considerations without reference to social considerations could distort the overall balance that we are trying to achieve. It is in the belief that we have got the balance about right in this White Paper that I invite the House at the end of this debate to support the Government's view on the defence Estimates.
  4.39 p.m.
  Mr. Peter Walker: The Under-Secretary of State has understandably said a great deal about the importance of creating a good quality of life. We differ from his interpretation not on the objective but because we are frightened that our quality of life will be jeopardised if we fail in the defence of our country. He threw out questions about where we would make cuts instead, whether we would cut education or social security rather than defence. When the answer from this side was, "Yes" there was glee among Labour Members at the prospect of making good party propaganda.
  The argument, which was heard before the last war and is heard now, that one can afford to cut defence in the same way as one cuts other things, is likely to prove totally disastrous. I was alarmed that the Secretary of State should yesterday have argued with some pride that the 3 per cent. cuts announced in the Budget—on top of those in the defence White Paper—were exactly the same as were suffered in the civil sector. Therefore, he said, there was no discrimination against defence. He was right—but we believe that there should be discrimination in favour of defence. That is fundamental and basic.
  In the last few weeks, in two major debates, on the economic situation and now on the military situation, in both of which our country is in great danger, the Government have taken the line of accurate and truthful analysis backed up with a totally weak policy. In the economic crisis, they said that wage inflation was the desperate problem and then did nothing to solve it. They concluded that unless something was done—by others—we
  1456
  should be in the hands of our creditors. In the defence debate, they argue strongly that the build-up of Soviet military might is dangerous to us, and their conclusion is a reduction in defence expenditure. It is true that if we ignore the economic crisis we shall end up in the hands of our creditors. If we adopt the same policy of inaction in the military sphere, we shall end up in the hands of our enemies. That should be the basis of this debate.
  Most hon. Members like the Under-Secretary and admire the diligence with which he carries out his ministerial duties, but the speech that he has just made was totally inadequate for a major defence debate. If defence is treated in that way, we must expect the public to show little interest. I desperately wish that the reality of the situation could be brought home by the Government or the Opposition or both.
  The argument which seems to please the Left is that we are cutting defence by an average of £300 million a year over the next three years—a total of £1,000 million with the Budget cuts. If this year the pay of the Services is increased in line with general wage increases of 30 per cent., the cost over the same three years will be exactly double the amount of the defence cuts. That is the absurdity of the Government's position. They make cuts in important equipment and international commitments while at the same time their own economic policies will cost twice as much as those cuts will save.
  Mr. Emlyn Hooson: I am listening with interest to the right hon. Gentleman's argument, but would it not have been strengthened—or has he changed his position?—had he not himself prejudiced defence expenditure by the enormous expenditure that he incurred on his so-called local government and water reform? This is one of the things on which he now turns his back.
  Mr. Walker: That is a typical Liberal intervention. If the hon. and learned Gentleman wishes to debate that, I am willing to do so, but that is a totally different subject. The Government have made it clear that the two major factors in increased local government expenditure are new commitments of Government policy and the enormous wage inflation which has taken place.

  1457
  I wish that pages 26 and 27 of the White Paper could be made compulsory reading for everyone in the country. The Government describe there the way in which the Western world is coming more and more under the potential military dominance of the Soviet Union. They optimistically say that there is now nuclear parity between the groups. If there were parity when the White Paper was published, it is virtually certain that within a year or two there will be a nuclear disparity in favour of the Soviet Union.
  The Soviet Union is putting much greater effort into improving its nuclear power and position world-wide than any nation or group of nations in the West. Indeed, I would judge that it has already obtained nuclear superiority. The Russians now have 120 nuclear submarines, with new ones being launched at a rate of more than one a month. That gives them a far greater ocean-wide and international capacity with every month that passes. In Central Europe they have more than twice as many tanks, divisions and aircraft.
  The White Paper then says that the disparity on the northern flank is even greater in favour of the Soviet Union. We all know that every month for the last 12 months the position of the West on the southern flank of NATO has weakened. Events in Portugal, in Cyprus, in Greece and Turkey, together with the ever-increasing naval supremacy of the Russians in that part of the world, have substantially improved their position. It is astonishing, when the Government recognise all these facts, that they should say that we should go ahead not just with the cuts in the White Paper but with a further £100 million-worth of cuts.
  All this is somewhat concealed from the public by the hopes of détente. Of course everyone hopes that détente will succeed. Everyone would want a Soviet Union which wanted peace and was friendly and well-disposed. The weakness of the democracies is that every time a democratic leader says that he is optimistic about détente, everybody shares his optimism because it is truly the hope of that democratically-elected leader. Every time that a totalitarian leader talks about détente, none of us can judge the purpose for which he is saying it.
  1458
  The sinister fact is that the last five years, in which there has been most talk about détente, are the five years in which the Soviet Union has improved its military strength in every sphere more than it has done in any similar period in history. The Russians now have a superiority which is not justified for defence or for any other reason except for the potential of what they can now do with it.
  The difference between President Nixon going to Moscow for talks with Mr. Brezhnev and Neville Chamberlain going to Munich for talks with Hitler is that at least when Neville Chamberlain came back to Britain we continued to rearm as fast as we could. In the period of Moscow talking about détente, the West—fortunately not yet the United States, although it is under pressure to do so, but certainly in this country—has taken the view that we can afford in this atmosphere to reduce our activities. That is incredible.
  I was the one member of the last Conservative administration to negotiate at some length with the Soviet Union. I went to Moscow to negotiate the trade agreements. I took advantage of a few days there to meet as many Soviet leaders as I could, to talk objectively with them and to find out what they were thinking. Having seen the lack of individual freedom and freedom of the Press in Russia, the lack of representative government, the country run by a small self-perpetuating caucus, having heard of the political trials and the anti-semitic influences such as we used to associate with Fascism, I do not believe that that caucus can be trusted by the West or that the West can disarm in the way in which Britain is now giving a lead.
  Mr. Alan Lee Williams: Your remarks are most interesting. I agree with much of your underlying thesis.
  Mr. Deputy Speaker (Mr. George Thomas): The hon. Gentleman means "his".
  Mr. Williams: I apologise, Mr. Deputy Speaker. Yes, I do mean "his".
  Would the right hon. Gentleman consider that SALT I and SALT II are a sham?
  Mr. Walker: I consider that in both SALT I and SALT II the basic negotiating position of the Soviet Union has

  1459
  been that where there are disparities in their favour, they endeavour to keep and freeze those disparities, and if disparities run against them they endeavour to dispose of them and to obtain parity.
  All of the negotiations of the Soviet Union on disarmament are on the basis of an end result of improving and increasing their strength.
  Mr. Dalyell: I am reluctant to interrupt the flow of the right hon. Gentleman, but both he and the Front Bench have said that there is great danger in the changing situation in Portugal. Some of us who have had talks with the Portuguese Armed Forces, in particular Admiral Coutinho, have received absolutely categorical assurances from the Left and from Portugal that that country will not provide bases for the Soviet Union.
  Mr. Walker: I only hope that the hon. Gentleman's conversations will prove to be correct. I think that he will agree that in Portugal there is a substantial Communist Party, which is very active, and that there is a situation of considerable disruption and disorder. Whatever else may be said about Portugal as part of the NATO Alliance, there must be considerable uncertainty about its contribution to NATO.
  I conclude from this current situation that Britain's real position should be almost diametrically opposed to the position in which the Government have put us. There is a desperate need to obtain a new and better unity of the West and to get a better European approach to defence. There is a desperate need to see that France comes, in some way, into part of the NATO Alliance. This can be done only by Britain being in a position to say to her European allies that the Community as a Community should have a voice in NATO. We should be partners in NATO with the United States. There would then be two balanced, equal partners trying to work out a sensible policy for the defence of the West.
  We should be strengthening our friends in the United States to enable them to continue their rôle of safeguarding the security of the West. We cannot do any of this when we pursue a policy of being the major nation in Europe
  1460
  but making a lower contribution to the defence of the Western world.
  It is because I believe that this is the beginning of a disastrous trend that I welcome the robust manner in which my hon. Friend the Member for Ayr (Mr. Younger) and my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw) treated the debate and stated the categoric difference between the Opposition and the Government.
  The real condemnation of the White Paper is shown by the words of the Soviet Union when that country said that the White Paper was a step in the right direction. It is—for the Soviet Union.
  4.56 p.m.
  Mr. Stanley Newens: I beg to move to leave out from House ' to the end of the Question and to add instead thereof:
  'declines to approve the statement on the Defence Estimates 1975 (Command Paper No. 5976) on the grounds that in the present critical economic circumstances it proposes an increase in arms expenditure in real terms over future years; that it commits Great Britain for the next 10 years to spend a higher proportion of the gross national product on defence than any of our major European allies; that it fails to propose significant reductions in major weapon projects; that it still leaves Great Britain to maintain unjustifiable commitments east of Suez; and that it fails to make adequate provision for a smooth transfer of the real resources and skilled manpower which would be released by more far-reaching cuts to alternative forms of employment, above all those which will directly assist economic growth and exports'.
  The right hon. Member for Worcester (Mr. Walker) will forgive me if I do not follow his arguments. My purpose today is to move the amendment to the Government's motion. As hon. Members will see, it stands on the Order Paper in the name of my hon. Friend the Member for Edinburgh, Central (Mr. Cook) and some 40 other hon. Members. I should like to express the gratitude of my hon. Friends to you, Mr. Deputy Speaker, for calling this amendment and enabling a point of view which is widely held in the House at least to be expressed.
  The amendment outlines a policy which has been argued from the benches below the Gangway on numerous occasions, most recently on 17th December, that the proposed cuts in defence expenditure are

  1461
  inadequate and fall short of the commitment made in the Labour Party's election manifesto to make savings of several hundreds of millions of pounds, and that the cuts made relate to the programme of escalating expenditure which was agreed by the previous Conservative Government and are not, as we have pointed out on numerous occasions, absolute cuts.
  My hon. Friends and I have no brief for the Opposition attacks on the Government case. The Opposition advocate cuts in Government expenditure, but then scream when the Government make them in the sphere of defence. The hon. Member for Staffordshire, South-West (Mr. Cormack) and some of his hon. Friends, for example, indicated their support for cuts in the social services in preference to defence. I hope that their views are made clear to the electorate at large.
  The argument that has been advanced by the Secretary of State and by hon. Gentlemen opposite on innumerable occasions—it was advanced today by the right hon. Member for Penrith and The Border (Mr. Whitelaw)—in favour of increasing defence expenditure is based, above all, on the contention that the Warsaw Pact and the Soviet conventional forces are stronger than the NATO forces ranged against them in Europe. I accept that that point of view is factually correct. Then my right hon. Friend and Conservative spokesmen ask "Why do the Russians want this conventional superiority?", hinting darkly at aggressive intentions which they have refused to define, despite being pressed on this on numerous occasions. The answer I shall give, which is not the only answer, is that I believe that the Russian view corresponds to the flexible response argument which is put forward often in the West. That argument is—the Russians argue—that there is a need in crisis to be able to rely on conventional superiority rather than to have recourse to nuclear weapons in which the West, I would maintain, still has overwhelming superiority.
  The Secretary of State spoke of nuclear parity. My hon. Friend the Member for Hornchurch (Mr. Williams), who is very well informed on these matters, referred to parity in various other respects. I accept that this is a complex matter which involves comparing a multiplicity
  1462
  of factors, for example, the number of inter-continental ballistic missiles, the number of submarine launched ballistic missiles, and the range, the accuracy and the effectiveness of these weapons.
  However, the best information that I am able to glean indicates that at this stage there is still overwhelming United States superiority in the number of warheads deployed. The Stockholm International Peace Research Institute Handbook, 1974, quotes the official United States comparative estimate of the total warheads of missiles and planes as follows: United States, 7,940 and the USSR, 2,600. This is certainly not nuclear parity. I am aware that all sorts of research and development is taking place, but I do not think that any right hon. or hon. Gentlemen can contest the fact that at present there is overwhelming nuclear superiority on the side of the United States. Therefore, the Russians can argue the need for conventional superiority to offset their nuclear inferiority.
  I want to make it perfectly clear that I do not wish to argue that case. I deplore the increased expenditure by the Russians on defence and on armaments just as much as I deplore it by the United States and by Britain. I also wish to attack these classical arguments which are used by both sides for the arms race, from which mankind as a whole must escape. The argument in Britain for increasing defence expenditure rests on the existence of alleged threats from Soviet aggression. I should like to quote from a noted military expert. Brigadier Frank Kitson, in his book "Low Intensity Operations" says,
  "Britain's conventional war capability is justified by reference to the threat of a Russian invasion of Western Europe which has not been imminent for at least a decade."
  Hon. Gentlemen will not need to be reminded that Brigadier Kitson is not a member of the Tribune Group. He argues that the main threat is within, in effect, from potential urban guerillas.
  While I wish to dissociate myself from the distasteful conclusions to which that gentleman comes, I want to point out the truth as I see it. The real weakness of Great Britain rests in its economic weakness. The cuts in living standards arising from heavy defence expenditure supported by the Tories and even by the present Government will do far more

  1463
  to undermine the possibility of peaceful social change than anything we on these benches are proposing.
  Mr. Onslow: Perhaps I may take the hon. Gentleman back a little in his argument. He has said that experts foresee no Russian threat to this country. Will he tell us what crisis the Russians foresee which makes it so important to them that they maintain their doctrine of flexible response?
  Mr. Newens: It is not my purpose to argue the Russians case, or that of anyone else, for increasing military expenditure, because I am opposed to that. But there are obviously strong forces within the Soviet Union which are deeply influenced by experiences dating back to the Russian Revolution, in which on many occasions there have been foreign troops on Russian soil. I do not accept this argument, but that is the reason for it.
  I return to my theme. I believe that the danger of economic weakness certainly cannot be offset by an abundance or super-abundance of military hardware. One of the lessons of Vietnam is that one cannot win superiority or a war by military equipment alone. The question of the morale and the motivation of the soldiers and the civilian population involved is vital. I make no apology for taking the view that the Vietnamese had the best case—as, for example, did the 13 States of the United States of America 200 years ago, when they were seeking to get rid of British influence and British military presence in their country.
  I consider that today our defence budget is far too heavy and that our weakness at present arises to a not inconsiderable extent because we have sustained a burden of defence expenditure over many years heavier than that of our major European allies and other Powers. The result has been to starve our industries of the vital funds they require for investment, of which we are so short at present. It is in this particular context that the cuts that my right hon. Friend is proposing are totally inadequate.
  Mr. Amery: If I follow the hon. Gentleman's argument aright, he is saying that the morale element is even more
  1464
  important than the material element, and that it is not so much equipment that matters as the spirit and outlook of the people. What are he and his hon. Friends in the Tribune Group doing to mobilise the case against the danger of Soviet subversion and aggression and really to get this country on its feet to face the problem?
  Mr. Newens: I would take the right hon. Gentleman's view seriously, but I cannot do that now as to do so would incur the displeasure of Mr. Deputy Speaker. However, we believe that by moving into a Socialist society in Britain we shall get the support of the people for a proper defence of the industries and the means of production and distribution, which they themselves will then own—which is not the case at present.
  I would certainly wish for further cuts in defence expenditure in Europe, by Britain and if necessary unilateral cuts, as cuts by international agreement, as everyone knows, are being held up. We know of the difficulties that have been encountered in the CSCE, and the difficulties over MBFR. We know about the difficulties over SALT I and II and the fact that expenditure on defence has continued to rise as a result of these. Therefore, I argue for unilateral cuts.
  However, whatever one says about the situation in Europe, there can be no excuse whatsoever for our continued commitment east of Suez, such as it is, and in particular in the Gulf area. Hon. Members must ask themselves a serious question. We claim to stand for democracy and for the advance of peoples in the underdeveloped areas of the world. How, then, can we possible justify the secondment of British troops to the forces of the Sultan of Oman to suppress a national liberation movement? This is surely appalling. It shows that in certain quarters our establishment does not care a fig for democracy. It is important that that is changed.
  Some of my hon. Friends have voiced fears about the effects on employment of further cuts. In doing this they have demonstrated that one of the contributory causes of the arms race has nothing to do with the defence argument at all. It is an argument which is put forward on behalf of those who are involved in the defence industries. We know that

  1465
  over the course of years the pressure of those involved in the defence industries has been extremely damaging. Philip Noel-Baker, who was a distinguished Member of this House, has pointed that out. President Eisenhower referred to it when he spoke of the "military-industrial complex".
  I do not in any way blame workers who fight for their jobs. They have a right to do so. But I do not accept the argument that in order to provide workers with jobs we should keep defence industries going or keep up the defence complement when that is not justified on completely different grounds. I believe that it is, accordingly, the Government's duty to provide alternative employment opportunities. This is entirely possible at present, when there is a crying need to re-equip British industry to provide the investment capital and the goods that we so desperately need in order to put our country on a sounder economic basis than it is at present.
  The amendment draws the attention of the House to the failure of the White Paper to make adequate provisions for this. Those of us who have signed it are not necessarily pacifists and are certainly not arguing any pro-Soviet case. I believe in a strong conventional army, but not one that is based overseas because that is out of dale. Hon Members who still think of Britain having troops overseas and who talk in terms of the 1930s are living in the past and have proved themselves quite incapable of coming up to the present and understanding the way in which the youth of the world, including the youth of America and Britain, is thinking today. As time passes their ideas will become more and more antiquated and obsolete.
  Therefore, I would say this. Britain cannot afford her present arms expenditure, as has been proved and demonstrated by the fact that since the Secretary of State for Defence made his original announcement, a further cut of £110 million has been made, and more cuts will come. Secondly, mankind must disarm instead of wasting the precious resources of our world, the fossil fuels and all the rest, on this ridiculous and mad process. The main threat to peace arises from poverty and the deprivation of two-thirds of mankind, and no amount of military hardware will convince them otherwise.
  1466
  That is the lesson of Vietnam and it is the lesson that in due course the Americans, if they make the same mistake in the Middle East and the Indian Ocean, will be taught again.
  My hon. Friends and I feel very strongly on this issue and we shall certainly go into the Lobby tonight in support of the amendment to make our feelings clear not only to the House but to the world at large. We believe that there must be more cuts in defence in order that we can channel public expenditure into those vital areas which are essential to provide for a decent community in this day and age.
  5.10 p.m.
  Mr. Emlyn Hooson: The hon. Member for Harlow (Mr. Newens) said that the Russian attitude towards military force and armaments was conditioned by the fact that the Russians had had foreign troops on their soil. I presume that the hon. Member was referring to the period between 1919 and 1920—
  Mr. Newens: And the Second World War.
  Mr. Hooson: The House would be more impressed by the hon. Member's argument but for the fact that there are today so many Soviet troops on land which is foreign to them. I refer particularly to Czechoslovakia and Hungary, and so on. I have a great deal of sympathy with many of the sentiments expressed by the hon. Member, but he is being excessively naive about this subject.
  The reason the Soviet Union has a large number of troops is not that it intends to invade Western Europe, but that it intends to use them for political purposes. The Czechs had become more prosperous but when they engaged in their particular form of fighting for freedom, the Soviet Union interfered brutally. It was able to do so because it knew perfectly well that NATO dare not interfere because Soviet conventional forces were too great. In the same way the Soviet Union would interfere with West Germany or some other country under the NATO umbrella if it thought it would get away with it. That, I believe, is the explanation for Russia's large conventional force. It is or hopes to be able

  1467
  to exert a political influence on events in Western Europe.
  We should be foolish in the extreme, whatever our views and whatever distaste we may feel about defence expenditure, if we ignored the fact that Soviet rulers are believers in and products of revolution. They believe in revolutionary action, not democratic action, and this fact governs their attitude towards movements in other parts of the world.
  Mr. John Lee (Birmingham, Hands-worth): I have a great deal of sympathy with the sentiments being expressed by the hon. and learned Gentleman. However, was not the reason for the Russian invasion of Czechoslovakia tied up with the failure of our nuclear bluff which had already been called in 1956 over Hungary? On that occasion the Russians behaved even more brutally, but we were playing gunboats at Suez.
  Mr. Hooson: That is a trite remark. The West was faced with the prospect of intervening and possibly causing a world war both at the time of Hungary and Czechoslovakia.
  Mr. Russell Kerr: What about Suez?
  Mr. Hooson: I shall not give any defence of Suez. The hon. Member is asking the wrong man. However, I cannot help reflecting that the present Lord Chancellor wrote in 1939 a book published by the Left Book Club and entitled "The Attack from Within" in which he forecast that this country would be attacked from within by the then Fascists and Mosleyites, as he thought. Alas, before the Left Book Club could issue the book we were attacked by the enemy without, which only shows how the most discerning minds can sometimes misunderstand a situation.
  Reference has been made to Portugal being one of the weaknesses in the Western defence link. The weakness of Portugal does not come from the enemy without so much as the enemy within. It is that which undermines her as an ally. Those of us who are concerned with preserving freedom and a particular way of life in the West, who want it to be able to evolve in the way which many Labour Members favour, peacefully and
  1468
  without being forced, and by its own choice, must have regard both to the enemy within, and to the enemy without who can influence the procedures and methods of what might otherwise be the political enemy within.
  Sir John Rodgers: It is true that the enemy within, the Communists, in Portugal have weakened that country as a NATO ally, but surely it is also true that Russia is pouring in millions every month to sustain the Communist cause there.
  Mr. Hooson: Yes, but I do not see this as a purely black and white matter. I think there have been in the Western world many enemies of democracy who are not Communists. They are on the other side of the spectrum. We have to be careful of both sides.
  My recollection of defence debates—and I have not taken part in one for some time, although I used to be my party's defence spokesman—is that there are two very definite pressure groups within the House. One group wants total and frantic cuts in defence expenditure but resiles somewhat at times such as that which followed the Czechoslovakia crisis, but then, when a more peaceful period comes along, becomes more vocal. On the other hand there are those who want to increase defence expenditure and who are against any cuts. I remember Conservative Members vehemently opposing any cut in our east of Suez presence and who were all for maintaining what they regarded as every vital British interest in any part of the world.
  The true path any Government must follow is getting correct balance in defence policy. The question today is whether the Government have achieved the right balance.
  I am glad that the amendment has been selected. It is right that this matter should be debated. It is right that the country should be able to consider the arguments for and against drastic defence cuts. It is so very easy to become lulled into a state of defencelessness in the West, particularly in a relatively peaceful period when we are going through a time of many economic troubles. It is so easy to drop one's guard and one has only to do it at a vital moment for it to be fatal

  1469
  No one should suggest that defence policy in this country can be conducted regardless of the social and economic needs of the country. Anybody who says anything to the contrary is talking through the back of his head. Whatever the Conservatives may say in Opposition, when in power they have very often reduced defence expenditure. The truth is that the right hon. Member for Worcester (Mr. Walker), for example, as Minister responsible for local government, vastly increased public expenditure in his Department. It has nearly doubled in the last three or four years since his so-called reforms. The right hon. Member for Leeds, North-East (Sir K. Joseph) was doing the same thing with the National Health Serivce. Such moves prejudiced defence expenditure. Anyone who suggests that a Conservative Government consider defence sacrosanct is talking nonsense and flying in the face of historical experience.
  I could not possiby vote for the Tribune Group amendment, although it is right that it should be discussed. I do not think it is sensible, for example, to consider the British contribution to defence in relation to our gross national product. For example, per capita we spend less on defence than do Western Germany, the Netherlands, Norway, the United States and certainly the Soviet Union. We must not take the percentage of gross national product as sacrosanct. The real question is: what are our vital interests? The defence of the West is vital, and NATO is essential to that defence. The involvement of the United States in the defence of Europe, whatever may be the vicissitudes of United States foreign policy at present, is essential to the continuation of democracy in the West.
  It is also important that the defence of Europe is based not only against the enemy without but also against the enemy within. The fact that our defence contribution is distorted because we have so many troops in Northern Ireland emphasises that the most vulnerable part of the United Kingdom is Northern Ireland because of the enemy within. Our vital interests are to get a much more coherent defence policy in Western Europe, not as a separate entity, but as part of NATO.
  The United Kingdom would do well to insist on its allies making a greater con-
  1470
  ventional contribution to the defence of Central Europe. The United Kingdom, with its naval tradition, should be much more concerned about the northern flank of NATO to the defence of which we could make a much greater contribution. Tied up with this is the essential defence of our North Sea oil resources. The greatest contribution which we could make to the defence of the Western world lies in the Royal Navy. A coherent policy—
  Mr. Roy Hughes: I appreciate that the hon. and learned Gentleman is a recent convert to the Common Market, but how does he reconcile France's attitude to the NATO Alliance? In Holland the Dutch Labour Party, which is the principal cornerstone of the Dutch coalition Government, within the last fortnight passed a resolution to the effect that Holland should come out of NATO. How does the hon. and learned Gentleman reconcile that factor? When he talks about a balance, is he not talking about the allocation of resources and what we can afford? Is not the real crisis in Britain an economic one, not a military one? The threat—
  Mr. Deputy Speaker: Order. The hon. Member for Newport (Mr. Hughes) is advancing a case. Mr. Hooson.
  Mr. Hooson: I should not have minded if the hon. Gentleman had advanced a good case. Under succesive Governments—and the present Government are no different from their predecessors—this country has indulged in policies requiring massive, wasteful expenditure. I am no expert on Dutch affairs but most people in Western Europe have relaxed their guard because they have not been under immediate threat. This is a dangerous time, and it is right to keep a correct balance.
  The Under-Secretary of State dealt summarily with the lessons to be learnt from the Middle East wars. It stands out a mile that the land-to-air missiles were extremely effective in the Middle East, and that the anti-tank guns and the mobile anti-tank weapons used by the infantry were extremely effective against tanks. That experience may change the whole Western defence posture.
  It is important to remember that NATO is a defensive alliance. We are

  1471
  concerned not with attacking anyone but with providing ourselves with an efficient and effective defence. We need a much more coherent policy throughout Western Europe, and that applies whether we are in or out of the Common Market.
  My judgment is that the Conservative Opposition are wrong in opposing the Government in this issue. I, and my party, would spend the money somewhat differently from the way the Government are spending it, but the Government have about the right balance. If a Conservative Government were in power now they would introduce much the same kind of budget. The budget is on the right lines at present, and that is why I shall support the Government and vote against the amendment.
  5.26 p.m.
  Mr. Michael Stewart: First, may I say a word or two about the attitude of the Opposition in this debate? All decisions by all Governments about how much to spend on defence must be a balance of military and economic considerations. The Opposition's argument is that we must take the military requirement as an absolute, tot up what is necessary and then embark on a programme. If we do that we may find ourselves committed to a programme that our industries cannot bear and the programme will founder of its own impracticability. Nor can we start at the other end and say that our national wealth is so much and decide, whatever may be the foreign situation and the defence needs, that we shall spend a certain proportion of that amount on defence. That will not work either. There has to be—and that is why it is difficult—a linking of the two coordinates.
  I hope that the Government have the balance right, but I know from long experience that whenever a Labour Government strike the balance, the Conservative Opposition say that they should have spent more, and they usually suggest that that "more" should be financed by cuts in the social services, that is to say, at the expense of our fellow citizens who are less well off. When I hear from the Conservative benches a plea for more expenditure on defence coupled with a recognition that it will have to be financed by higher income tax on above-average in-
  1472
  comes, I shall take their remarks seriously.
  Although my hon. Friend the Member for Harlow (Mr. Newens) moved his amendment only today, some of my hon. Friends who put their names to it made speeches yesterday to which I listened with great attention and which I have since read. My hon. Friend the Member for Edinburgh, Central (Mr. Cook) objected to our having sophisticated weapons and did not like the development of facilities at Diego Garcia. My hon. Friend the Member for Ealing, Southall (Mr. Bidwell) objected to our having nuclear submarines. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) objected to our having tanks and manned aircraft and deplored our membership of NATO. Today, my hon. Friend the Member for Harlow objected to our having troops in Europe.
  A plausible case could be made out for each one of those propositions by itself because, so complicated is the subject of defence, one can always put forward some sort of case for preferring this weapon to that or one strategy to the other. But if we want the country defended at all, what we cannot possibly do is embrace all that is implied by the supporters of the amendment. That would mean a policy of no nuclear weapons, no sophisticated weapons, no simple weapons, no bases and no allies. If that is what one wants, the logical thing is to say plainly that one does not believe in providing defence for the country. That is what some—not all—of the signatories to the amendment say. They urge that the arguments put forward that this country needs defence are a phobia.
  Let us look at what the defence is supposed to be for.
  Mr. Newens: I hope that my right hon. Friend will forgive me for making it clear that many of the my hon. Friends who have signed the amendment do not take the point of view that Britain should have no defence at all. That is not their point of view.
  Mr. Stewart: I am quite sure that that is not their point of view. It seems that this is a case where a man believes something and we must give him credit even if his belief is not reasonable. If my hon. Friends do not mean that Britain should have no defence they should listen to what

  1473
  they are each saying. Let them add up all the arguments that are advanced to the amendment. If those arguments do not mean that this country should have no defence it seems that they are a non-sense.
  Let us return to the question of what is supposed to be the object of having defence. Is the idea that we should have defence due to a phobia about the Warsaw Pact? My hon. Friend the Member for Birmingham, Selly Oak drew attention to the many conflicts that have occurred in various parts of the world since the war. He remarked, correctly, that nearly all of them occurred on the territory of poor and developing countries. Another interesting fact is that in a considerable number of conflicts one of the belligerents has been Communist. All of them except two have been fought on the territory of non-Communist countries. The two exceptions are Hungary and Czechoslovakia, where the invader was another Communist country. That reminds me of Mr. Lee Kuan Yew's comment on the situation in South-East Asia—namely, that if Communist countries in Asia will leave their neighbours alone, we can have peace. That is not the remark of a man with a phobia but a common sense deduction from looking at what has happened in the world.
  Let us consider what has happened in Europe. Let us consider the Western neighbours of the Soviet Union, those countries that have a common frontier with the Soviet Union. All of them except two are in a position where they either have to show extreme deference to the wishes of the Soviet Union or remain in absolute subjection to the Soviet Union. That is the position of all the Soviet Union's Western neighbours except Norway and Turkey, which are members of NATO.
  It is not a phobia or a fetish worship to believe, in the light of the circumstances that I have described, that membership of NATO is of considerable importance in preserving the freedom of this country. My hon. Friend the Member for Ealing, Southall, in the course of an altercation with the hon. Member for Staffordshire, South-West (Mr. Cormack), said that Mr. Dubcek, in what he wants to do, is much nearer to the Tribune Group than the Conservative Party. I am sure that is so.
  1474
  I would also say with some confidence that what Mr. Dubcek wants to do is probably what most people in Czechoslovakia want to do. The trouble is that he is not in a position to do it. In fact, he is not allowed to do it. That is not due to any wicked machinations on the part of the West, it is due to what the Soviet Union considers is its strategic safety. A country that behaves like that is, shall we say, an uneasy neighbour.
  My hon. Friend the Member for Ealing, Southall went on to say that some of his hon. Friends have written a letter to The Times deploring the recent treatment of Mr. Dubcek. That is a very right and proper thing to do, but a letter to The Times is not a weapon, sophisticated or otherwise, with which we can protect the freedom of statesmen and the liberties of nations.
  Mr. Lee: I accept many of the sentiments that my right hon. Friend is expressing, but in what possible way is NATO assisting to alleviate the suffering Mr. Dubcek or rescuing the unfortunate Czechs from the oppression which he rightly condemns?
  Mr. Stewart: I think that my hon. Friend has missed the whole point of the argument. Czechoslovakia is not a member of NATO. I am contrasting what happened to countries in Europe that were not members of NATO with the preservation of the liberty of those that are members. It is not necessary to look back so many years. I hope that we do not live, as we are told the rulers of Russia live, in the atmosphere and emotions of 60 years ago. We do not have to look back over so many years to remember that West Berlin would have gone the way of Czechoslovakia and Hungary if there had not been the strength of the West to prevent that happening.
  If anyone asks, therefore, what is the object of defence, it is to preserve ourselves and our NATO allies from the unhappy position in which so many countries in Eastern Europe find themselves and to hold on to our freedom until détente can be secured and genuine agreed and mutual balanced disarmament obtained.
  I have made some criticisms of the policies and actions of the Soviet Government but I do not believe that that

  1475
  is inconsistent with wanting genuine détente. Because we are trying to achieve détente, I do not expect the Soviet Government to refrain from criticism of British Governments and British political parties. Indeed, they show no sign of doing so. The essence of détente is that despite profound differences of ideology we are seeking for a way in which we can live at peace side by side with each other. We shall not be able to do that by ignoring some of the starkest lessons that the history of recent years has spelt out for us. To assert that there is no potential danger against which we must be defended is to go against all the evidence.
  It is also against the evidence to say that there is no possibility of détente and of mutual and balanced force reductions. Any sensible and humane person must want the Government to seek those goals as zealously as possible. However, the one way in which we shall not achieve those aims is by providing the Warsaw Pact with massive reductions on this side before it has even begun to think of reductions on its side. That is why we say in our manifesto that we want NATO, the alliance of which we are loyal members, to be used both for defence and détente, and that if it is not effective in defence terms it will not be any use for détente.
  I hope that the Government will continue to ensure that our defences and those of our allies are adequate both for the immediate purpose of defence and to make détente and agreed disarmament more likely.
  5.37 p.m.
  Sir John Rodgers: Like my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw), who opened the debate today for the Opposition, I thought it was generally agreed in the House that there were three main functions of any Government of whatever political persuasion. First, I thought it was agreed that a Government should conduct their foreign affairs in such a way as to have the ability to defend the country from outside aggression or threats of aggression. Secondly, I thought it was agreed that it was a Government's function to look after the material well-being of all the people they represent. Thirdly, I thought it was a
  1476
  Government's function to maintain law and order. A good many of my right. hon. and hon. Friends and many people outside the House believe that the Government have not been very successful in any of the three major targets at which a Government should aim.
  Yesterday's debate and many of the speeches that have been made today have underlined the mistake that many of us feel has been made by the cuts that have taken place in our defence expenditure. The cuts have come at a time when the Warsaw Pact countries are increasing their expenditure on tanks and sophisticated weapons of all sorts, including submarines and aircraft. Moreover, they are increasing the size of their standing armies.
  This comes at a time when the position of Western and free world countries has been greatly weakened and threatened. Let us consider the situation in Portugal and the tragic happenings in Vietnam, with the possible emergence of a new Indo-Chinese Communist bloc which will embrace not just Vietnam but Laos, Cambodia, perhaps Korea, and perhaps even Thailand. The Communists will have a standing army which will be the second largest in the world.
  Mention has been made of Portugal by many hon. Members. Although one must commend the Portugese people for their sense in choosing for their consultative assembly a moderate, centre-Socialist party, nevertheless, the real power is not in that assembly but in the army, which is Communist dominated. The army has the power and it will have it for the next three to five years. The only reason for Dr. Soares being allowed to stand with his Socialist Party was that he was forced to sign a piece of paper which stated that whatever the results of the election, it would be the Communist military group that would have the power for the next three to five years.
  There are problems all the way round the world. There is the problem between Greece and Turkey, both NATO countries and both, unfortunately, at loggerheads. We see the dangers in the Middle East. Therefore, this is not time for anybody who cares about the free world to have an easy conscience when he sees the massive cuts in defence which have been announced by the Government. A figure

  1477
  of £1,000 million is a pretty massive reduction, and a further reduction of £100 million has recently been announced.
  I agree with the right hon. Member for Fulham (Mr. Stewart) on the criterion of how much we should spend on defence. I do think the matter should be decided not as a percentage of gross national product but by comparing defence expenditure with what a potential aggressor or enemy is spending. The only criterion is whether that expenditure matches. It is no good saying "We are spending more in terms of percentage of GNP than are other NATO countries and should reduce our figure". That is no argument. Anybody who adopts it is living in cloud cuckoo-land when seeking to look at budget figures for the defence of the United Kingdom.
  I wish to deal not with whether the budget is the right size or with whether the Secretary of State for Defence has made his cuts in the right direction. I wish to deal with a narrower problem—namely, with the question of what a collective European defence system will involve. My argument is based on the assumption that we shall win the referendum and still be part of Europe and not cast into economic and political isolation, which is what some Labour Members want.
  As the EEC begins to grow in power and strength, there will be enormous pressure exerted by the United States of America for the European countries to play a much larger part in their own defence of Europe. That pressure will come from Congress—indeed, it has been expressed in the past and it will mount. There will be more insistence that American troops should be brought back and that we in Europe should be capable of taking charge of the conventional defence of Europe, leaving the United States to hold the nuclear umbrella for us. These pressures will grow, but if Europe is to undertake the entire conventional defence task, greater emphasis and thought should be given to the organisation that could bring about a Western European defence organisation.
  I am sure that no Labour Member, not even the Secretary of State for Defence, could be satisfied with the progress made in the last 10 years in the
  1478
  rationalisation or standardisation of arms procurement. That progress has been lamentable. If there were a proper system of standardisation of weapons among all the European countries—with some countries producing tanks, others aircraft and so on—there would be great savings in money and greater efficiency. I hope that the Minister will give us the Government's view on the necessity for greater rationalisation and standardisation in the supply of arms.
  Mr. J. Enoch Powell: I wonder which arm the hon. Gentleman would wish this country not to produce. Is it his view that in such an arrangement we should not produce the aircraft?
  Sir John Rodgers: I am not sufficiently expert in this subject to give a judgment on that matter. That would have to come about through discussions among all the allies in the North Atlantic Alliance. It would not be necessary for one country to provide all the aircraft. Various countries might produce the parts and there could be a consortium to provide standard aircraft. I am saying that there is an enormous opening for the standardisation of weapons which could lead to greater efficiency and savings.
  A recent admirable article written by Lord Gladwyn deals with the sort of organisation which we should be seeking in Western Europe to bring about a common defence policy. Both the General Affairs Committee of the Assembly of Western European Union and the Political Committee of the European Parliament recently drafted resolutions on defence in Western Europe within the framework of the North Atlantic Alliance. The WEU discussed this matter at its last plenary session, but a proposal on this topic was turned down on a vote. The proposal will be resubmitted and debated at the next plenary session.
  I am not a member of the European Parliament and I do not know how far the EEC proposal has progressed. At present the Brussels Treaty, under which WEU is set up, is the only juridical basis for a truly European defence policy, but the modified Brussels Treaty is binding on only seven out of nine nations. Denmark and Ireland are excluded, and it appears unlikely that they would want to sign such an agreement. Despite this, the

  1479
  European Parliament shows signs of believing that one of the next stages in its progress is to bring about a unified European foreign policy. To this end the European Parliament is being greatly urged on this matter by the Americans, who want to see Europe speaking with one voice on various problems affecting North America and ourselves.
  The European Parliament has recently suggested that the European Community must also be the body responsible for a common defence policy. I should like to comment on that suggestion, and I hope that the Minister will give his views tonight. We appreciate that two Common Market countries are not members of the modified Brussels Treaty or of the WEU, and we must also consider the problem of Turkey and Greece, both of which are members of NATO. When the Heads of State and Foreign Secretaries discuss European security, I hope that Her Majesty's Government will support the maintenance of the WEU so that it can take effective action. The European Parliament already has a rudimentary system of political co-operation under the D'Avignon procedure for discussing foreign affairs, but I hope that it will not try to run before it can walk. It will take a long time to achieve anything like a unified foreign policy. I hope that the European Parliament will not be greedy and try to horn in on fields already covered by, for example, WEU. The modified Brussels Treaty can be signed by other outside members. Greece and Turkey could become members of WEU, but could not become members of a defence organisation under the European Parliament. We should bear that in mind. Although WEU represents only seven countries, the same would be true of the European Parliament if it decided to go ahead with my proposal.
  If there is to be a rational European organisation for joint defence it would be sensible to resuscitate the standing armaments procurement committee with in WEU. There is a great advantage in that France is a member of WEU even though she is not a member of NATO. Therefore her co-operation would be ensured. Furthermore, other countries could always subscribe to the Brussels Treaty. The establishment in WEU of the standing armaments pro-
  1480
  curement committee should be done in such a way that it did not weaken our NATO position or the position of the EEC countries.
  The Government must recognise that instead of forming yet another defence organisation in Europe, the EEC should be asked to use WEU as its defence arm, especially in the production of convential weapons, leaving it to the United States to provide us with the nuclear shield and possibly a greater part of the air and sea defences.
  If WEU is to be revivified and strengthened, this question arises: why has the Council of Ministers been so long in filling the vacant post of the Secretary General, which has now been vacant for well over a year? Why is the Council of Ministers meeting much less frequently? When it does meet, why are the Ministers represented by their professional substitutes? Why are the Ministers not there in person? I should like the Minister to say what is the Government's attitude towards WEU and what steps his Department is taking to rationalise and standardise production, using the relevant WEU committee?
  We agree that we should make progress in developing a European system within the framework of the North Atlantic Alliance. Perhaps a decision has been reached on that matter. I do not know. Perhaps the Government have already decided what is to be the future of WEU. In WEU there is a knowledgeable team of experts linked to a general assembly of parliamentarians which could be used as an arm of the EEC, without the European Parliament trying to spawn yet another organisation in Europe. We have too many of such organisations already. Those organisations should be rationalised, just as armaments should be rationalised.
  Although I am a Vice-President of WEU and a United Kingdom delegate, I am not speaking on behalf of WEU. I am speaking personally. I have not consulted WEU on this matter. However, I should like to hear about the policy of the Ministry of Defence with regard to the future of WEU.
  5.54 p.m.
  Mr. John Lee (Birmingham, Hands-worth): The hon. Member for Sevenoaks (Sir J. Rodgers) will forgive me if I do

  1481
  not comment on his speech. Defence is inevitably a wide-ranging subject and I should like to address my attention to a part of the world different from that which he mentioned and to which much of the debate has so far been directed.
  A number of sharply contrasting views are held with regard to the events in Vietnam. Some hon. Members thought that it would be inevitable and right that, although we may not like the manner or the way in which those events occurred, the Opposition should have deplored them throughout. It has, however, produced a situation in the Far East which is different from anything that has happened since the end of the Second World War. For the first time since 1945 there is no military conflict of international significance in progress in any part of the Far East. In certain instances there may be local brush fire situations. There are certainly points of danger and low flash points. However, there is no war of any significance now.
  That leads me to urge upon the House that the time has come for a total reappraisal of our attitude towards the Chinese. The hon. Member for Haltemprice (Mr. Wall) and other members of the Opposition have challenged those who signed the amendment to state their defence policy and the attitude that they take. The hon. and learned Member for Montgomery (Mr. Hooson) had the grace to admit that he did not regard all of us as fellow travellers. He conceded that many of us need not be pacifists. I claim to be in neither of those categories. I hope that by the end of my speech I shall have made a contribution making that clear. Whether that view is shared by my hon. Friends I do not know.
  Whatever may be said about the domino theory and the possibility that other countries may go the same way as Vietnam, it is of paramount importance that we do everything in our power to come to terms with the Chinese and that we do so in a way that makes it clear to the world, and to the Chinese and Russians especially, that, of the two major Communist Powers, we favour the Chinese. I make that argument on the old-fashioned balance of power concept.
  Yesterday my hon. Friend the Member for Loughborough (Mr. Cronin) spoke of the undoubted strength of the Russian
  1482
  military forces in the west. He commented that those forces were very strong and that the Russians would be in a position to move many military divisions from the east to the west if they wanted to do so—but not if we play our cards properly. If we show to the Chinese that we are their friends we shall be able to exploit the situation which exists between those two countries.
  We should not forget that the longest land frontier in the world is that which runs from the Pamirs to Vladivostok. That boundary between Russia and China is ill defined. It is the subject of dispute. Certain parts of it have been the subject of military collisions, not the least of these was the incident at the Ussuri River some time ago. Moreover, the Russians, in true imperialist style, have claimed that where there are river frontiers dividing the two countries they are delimited on the Chinese side of the river and not along the centre of the river, which is the normal accepted practice in international law.
  I accept the argument advanced by hon. Members on both sides that the Russian military forces are a source of great concern. One of the principal reasons why I signed the amendment is that I do not believe that it is physically possible for this country to make a military contribution of any significance in relation to the balance of power in the west. I believe that that is realised on both sides of the House. I believe that our bluff was called in 1956. It was again called in 1968.
  Here I take issue with my right hon. Friend. I think that our views on the Communism of Eastern Europe do not vary greatly. However, we may differ in the spectrum of party opinion on certain matters I do not think that we can say that the people of Western Europe are entitled to freedom just because they belong to NATO, and that the peoples of Eastern Europe are not entitled to it because they are not members of NATO. That seems to me to be an example of double standards.
  Mr. Michael Stewart: The question is not that they are not entitled to freedom. All mankind is entitled to freedom. However, their chances of obtaining it are much greater if they belong to NATO.
  Mr. Lee: I cannot accept that argument. I cannot think that NATO has

  1483
  made a significant difference to the situation for many years.
  I now refer to the situation in the Far East. I pray in aid the situation which existed 20 years ago. The last time that this country was engaged in a major military conflict was in Korea. We went in there as signatories of the United Nations, and on military grounds we were justified in doing so. I have always defended our part in that, and I believe that it was right in strict moral terms and in terms of our international obligations to do so. It can be said that that was about the last major instance where we were able to wage a successful military campaign.
  The one qualification which I have with regard to that situation is that it may be thought that an unfortunate side wind of the Korean intervention, right though it may have been, was to postpone for some years the inevitable division between the Russians and the Chinese. Whatever may be said, and stripped of its ideological verbiage, the fact is that the Russians and the Chinese, in the words of Damon Runyon, like each other not well. So long as the international situation was tense, and so long as it could be represented, however distorted, that we were engaged in a war against a Communist Power, as we were in Korea, the fissures between them would not be opened up.
  In my view, the more that we do to make our peace with the Chinese, and the more that we can make it clear to them that we regard them as the more favoured of the two, the more we shall do to assist in the security of Western Europe, more than any spending that we may propose on any of the weapons referred to in the White Paper.
  Looking at the White Paper, I agree with my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) that there is a Kiplingesque character about paragraph 4. We still decide to spread ourselves thin across the world. The position of the military garrison in Hong Kong is ludicrous, and I agree with my hon. Friend the Member for Harlow (Mr. Newens) that the intervention in Oman is morally indefensible. However, there are certain places where it is reasonable for us to continue a military presence and, in the present economic situation, the least that the Government should do is to insist
  1484
  that the countries in which those garrisons are stationed pay an economic price for their presence. It is not unreasonable. They are nearly all independent. The last remaining colonial territories are on the verge of independence, Hong Kong being sui generis. I have referred to it already and said that the military presence there was unnecessary.
  Sir John Rodgers: Is the hon. Gentleman aware that British Honduras, which is still a colony, has been offered its independence and refuses to accept unless we give an assurance to keep our military presence there?
  Mr. Lee: That may be so, in which case it must pay for it. We cannot go soldiering on in different places in the world. We can no longer hope to do so, even if our economic situation becomes very much better than it is now.
  Mr. Kershaw: The hon. Gentleman has been speaking about Belize. It is not that its people need us there to protect them, but that Guatemala could not juridically accept the independence of Belize. Therefore, it would be no good its asking for our forces to stay there after independence.
  Mr. Lee: I have dealt with that by saying that if it wants us to stay there, it must pay for it.
  Mr. James Wellbeloved: My hon. Friend speaks as a member of the Tribune Group. Is it now the official policy of the Tribune Group that a British Labour Government should hire out mercenaries as part of their policy?
  Mr. Lee: Whether or not it is the official policy of the Tribune Group I should have thought that my hon. Friend and I alike were concerned with the economic consequences of the burden that we bear. The case put forward by the Secretary of State, which, in my view, does not go far enough, is that because of economic exigencies we have had to cut down our military commitments in various parts of the world, and I think that my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) will share that view.
  There is one aspect of the Defence White Paper which is extraordinary for its omissions. I look in vain through its

  1485
  118 pages and its index for references to international terrorism. This is a situation in which we have a contribution to make. There is something extraordinary about defence discussions in this House that we spend so much of our time discussing the wars that we might fight and in which we know that we should be annihilated but so little of our time discussing the wars in which all nations are concerned against hijacking, hostage taking and terrorism. I agreed with the hon. Member for Ayr (Mr. Younger) yesterday when he passed strictures on the cutting down of helicopters and the absence of any coherent defence of North Sea rigs. That is a fair point to make against the White Paper, and I join Opposition Members in taking that view.
  My hon. Friend the Member for Harlow referred to Brigadier Kitson, who is one of the few people to have devoted any hard thought to these problems. Whatever view we may take about the right of countries to erupt into revolution—and there are many cases where democratic change is denied to people—the indiscriminate and wanton slaughter of the innocent in the course of terrorist activities to be found in so many parts of the world compels far more attention than it is getting. That is one of the many matters about which I hope to hear more from my hon. Friend the Minister of State later tonight.
  The gravamen of my objection to the White Paper is that it is economically expensive beyond anything that we can afford. As long as we maintain a nuclear weapon, we are a sitting duck target—the unsinkable but expendable fixed aircraft carrier—for anyone to attack.
  I do not expect that I shall get much change out of the Government on many of the matters that I have raised, but I hope that my hon. Friend the Minister of State will make some reference to terrorism when he winds up the debate.
  6.9 p.m.
  Mr. J. Enoch Powell: Whether surprisingly or not in view of the position that he occupies in the political spectrum, the hon. Member for Birmingham, Handsworth (Mr. Lee) did a salutary service in a defence debate in reminding us that the balance of power, sometimes in Europe and sometimes in
  1486
  the world at large, often has done more for our defence and even for our existence than our own direct military efforts. It was worth while that that should be put on the record in this debate; but I want to hark back to the first speech in it from the Opposition Benches, which was made by the hon. Member for Ayr (Mr. Younger). Anyone who listened to the speech by the hon. Member, even if before he previously entertained any notion that percentage of gross national product was a valid measure of military effort or a logical means of fixing the appropriate defence potential and preparations of a country, could not have entertained that opinion when the hon. Gentleman sat down. He absolutely pulverised the notion that there was any meaning in the comparison of percentage of gross national product spent by various nations on defence; nor did he leave any more vestiges of the idea that even if there were some validity in the comparison, there was a kind of rule of thumb which would enable us to read off the appropriate percentage, either this year or five years ahead, and settle upon that as the right quantum of this country's defence effort.
  The hon. Member complained, correctly, that this was an entirely arbitrary yardstick for defence expenditure. Instead of that, he said, we ought to deduce our defence expenditure from this country's defence commitments; and that is a proposition which has been repeated over and over again from this side of the House. So I listened with almost breathless eagerness to hear the hon. Gentleman deduce from this country's defence commitments what the size of its armaments and the magnitude of its defence budget ought to be. There came no answer to that question. Nor has any effort been made in the whole of this debate by those who have said that our commitments should determine our defence effort, to show even in principle how the sum could be worked out.
  The right hon. Member for Brighton, Pavilion (Mr. Amery), who had strongly stressed this general principle, collapsed and said in an answer to an intervention from the opposite side of the House that all he was arguing for was half the present proposed cuts. We have been reminded from the Opposition side off the House, as, indeed, the Defence White

  1487
  Paper reminds us, of the great superiority of the land forces of the Warsaw Pact in Europe and of the terrifying superiority of the Soviet naval forces in those waters which, above all, are vital to the safety of the United Kingdom. I have waited in vain until this moment for someone either from the Front Bench or the back benches to call, for instance, for a one-navy standard, or to draw any deduction from the fact that the safety of the North Atlantic is our prime commitment and that the Soviet forces are in great superiority there. Yet, if there is any deduction to be drawn, it must be that there should be a vast increase in our defence expenditure.
  The right hon. Member for Worcester (Mr. Walker) made a very eloquent speech. He contrasted the threat as stated in the Defence White Paper with the proposals of the Government. But what was his own proposal? I listened most carefully, thinking perhaps that he would end by saying that we must build one-for-one with the Soviet in nuclear submarines. His only proposal was that we should do everything we could to ensure that the United States remained in Europe, and try to get our NATO allies to spend a bit more.
  Though I might seem to be critical, I am not really blaming right hon. and hon. Gentlemen on the Opposition side of the House for having failed to implement their proposition that defence expenditure ought to be deducted from commitments—for the simple reason that it is not possible to do it.
  Mr. Amery: I am grateful to the right hon. Gentleman for giving way. I do not know whether he heard what I said yesterday, or has had time to read it. I sought to argue a proposition with which I would not expect to carry him with me, that if we were able to maintain the commitments that we have today, as our economy improved and as Europe grew more united there would come into being a force which would be able—though I do not agree with a one-to-one standard—to make a greater contribution to Western defence than it is possible to conceive at the present time.
  Mr. Powell: That is all very well. The right hon. Gentleman is opposing the arbitrary reduction of total defence
  1488
  expenditure from the arbitrary figure at which it was left by the cuts of the previous Conservative administration to the arbitrary figure now in the Defence Estimates. But it is impossible to pretend that in doing so he is shaping our expenditure and our effort to our commitments or is deducing one from the other.
  I repeat, I do not blame the right hon. Gentleman, because it is simply impossible to do it. There are no known circumstances in which a quantum of military effort can be deduced from the strength of the opponent forces or from the potential military situations in which our preparations are designed to protect us. This is something which constantly eludes all military appreciations, and for this simple reason: whether we like it or not, the total sum which any country spends on defence is arbitrary, it is an arbitrary accommodation with all the other things on which that nation has to spend money.
  When, earlier in this debate, the challenge was thrown out: where do right hon. and hon. Members in the Conservative Party put the priority, do they put it with defence or do they put it with the social services?—there was an answering roar of "Defence!" But they do not—of course not. They, too, in practice and in theory, strike a balance, though it might be slightly different from that which would be struck opposite, as between this and all the other commitments of a nation. So, from the point of view of defence, the total sum made available is always arbitrary, and it will still be arbitrary whether at any particular time it is higher or lower.
  Because it is arbitrary from the point of view of defence, however—as, indeed, the sum spent on the health service is arbitrary from the point of view of the health needs of a nation, and so on—it does not follow that our defence preparations within that total, whatever it is, ought to be irrational. It is perfectly possible, and indeed it is, so far as may be, our duty to ensure, that within whatever sum we are spending, whatever the arbitrary figure—and it will not vary very much from one administration to another—that sum is applied as rationally as may be; and that the content and organisation of the forces is appropriate to the military situation and the defend requirements of this country.

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  To do that it is necessary to have a theoretical, I will dare to say philosophical, framework of British defence preparations which we have never really had since the war. The deep, far-reaching review which the Government have conducted of defence expenditure was not concerned with establishing that structure. It was concerned with studying one area or another and deciding where there would be less loss, less friction, if there were a diminution of expenditure here or there. If the Opposition were opposing to the arbitrary decisions of the Government a rational structure of thought and of policy for this country, then I would advise my right hon. and hon. Friends to join them in denouncing this Defence White Paper. But I can hardly myself denounce, or advise others to denounce, a White Paper to which, in this debate, nothing has been opposed which derives from any analytical or rational view of British defence.
  The reason why this theoretical structure, within which alone defence preparations can be rationally built up, has been lacking since the war is that we have never yet found firm ground on which to base it. Perhaps in years gone by this was hardly surprising; for in the earlier part of the 30 years since the end of the Second World War we still had to cope with the inheritance of armed forces which were in part an imperial police and in part the basis for the ultimate defence of these islands. However, as the imperial rôle has fallen away, there has unfortunately been no disposition to replace that analysis with one which will bear examination.
  Of course we have got past the so called nuclear trip-wire. But we have only moved from there into "flexible response". The hon. Member for Beckenham (Mr. Goodhart) set out the theory of flexible response very accurately in one sentence from his speech yesterday, when he said that
  "conventional forces must be kept at a level strong enough to delay the moment, in the face of a major attack, when the alliance is faced with the choice of surrender or use of nuclear weapons."—[Official Report, 6th May, 1975; Vol. 891, c. 1333.]
  It is clear from the White Paper, at page 8, paragraph 23—althogh it is more delicately expressed—that that is still the policy of Her Majesty's Government. The White Paper says:
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  "Adequate defence calls for … conventional forces manifestly capable of standing any initial attack and backed by tactical and strategic nuclear forces, which in Europe and the Atlantic only the NATO Alliance can provide."
  Let me return to the alternative which, in the lucid description of the hon. Member for Beckenham, this theory of the defence of this country, of the sort of war which our defence forces exist to fight, presents. It is to delay the moment when we are faced with the choice of surrender or the use of nuclear weapons. The choice of surrender or suicide! I do not like that sort of choice. I do not want to have a choice between surrender and putting the pistol to my head.
  In reality that is not what would happen. In reality we should not commit suicide. In reality we should go on fighting for as long as we could—as we have done in the past, with allies or without. The purpose of British forces in peace is to be the basis of those forces which will enable us to survive the crisis of such a war for our existence. My hon. and gallant Friend the Member for Haltemprice (Mr. Wall) reminded the House yesterday that now both the Soviet Union and the United States have settled for the view that if there is a naval war it will be a long war. And that is the rational expectation.
  It is to produce the critical force of the critical type at the critical moment in such a war that all our preparations and all our thinking for years ahead are aimed. It is, as it were, an argument backwards from that crucial requirement which alone can rationally determine our defence preparations now. Our forces in peace, if we view them rationally, and not as the arbitrary residuum of the forces that we used to have, modified here and there, cut first in one place and then in another, are to be the basis on which, before war and during war, we shall build the force by which we survive and eventually win.
  I said just now "before war", because the process of expansion may be expected to occupy a period before hostilities commence as well as after they have commenced. More than once in this debate attention has been drawn to the paradox that the nations of Western Europe seem to be living under the Soviet Vesuvius with remarkable indifference to the forces which overhang them. It may well be inquired "How comes it that not

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  only the British, well known for being somewhat isolationist, somewhat slow to take measures of defence, but the people who are right up against this menace, are certainly not spending at a higher rate to defend themselves?"
  There is only one answer to that. It is that, grave though the threat may be in statistical terms, those peoples do not regard it as imminent. But of course opinion changes. In the 1930s—even in the 1930s—there came a moment when opinion in Government and in the public changed. At such a time it will not be a question of 5 per cent. or 10 per cent. or 15 per cent. of GNP. Even 25 per cent. will not be enough of our national resources to spend upon defence. It is to sustain that expansion when the threat is seen to approach—and do not let us imagine we shall expand before it is seen—and the expansion that must follow after hostilities begin that the British forces have to be constructed. Only a construction of British forces which is so conceived, will be sufficiently resilient and flexible for the minor variations, which economic and political considerations will impose upon the relative expenditures on defence and other things, to leave the structure as a whole virtually undamaged.
  I offer certain major propositions about such a structure of British forces—the only rationally based structure.
  The first is that, compared with those we have now, the maritime element—air and sea—would be relatively much greater. That is because in that element the danger emerges more rapidly, while the rate of expansion, being largely governed by complex industrial considerations, is slower. I would say that in considering the general pattern of our defence preparations, we have to look first to the balance between maritime and land preparations.
  Then, in looking at maritime preparations as such, we have to take into account three considerations above all. The first is that we can never know with what generation of weapons we shall have to fight. Therefore, we must at all times have sufficient of the current generation of weapons for the training, the tactics, even the strategy, appropriate to that generation to thoroughly absorbed and practised by our forces. They are
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  at such a time as this not for operations but basically for training—I almost reverted to a previous existence and said TEWT—with a view to future expansion.
  Secondly, we must always have in view the industrial capacity which will need to be available if and when the time comes when we have to crystallise upon a particular generation as that with which we are going to fight a war. Thirdly, and turning now not exclusively but preponderantly to our land forces, I think we view these forces, perhaps still under the influence of imperial policing, too much in the light of a standing army which will go into action as it is, or which will be sent to some far-flung area of the globe to "do its stuff" there, and too little as the cadre upon at which at some unforeseeable future point that great army which Britain has never failed to produce when it was needed will be raised and trained.
  The army which this country needs is not the conscript army of the nations of the Continent but the cadre army where, in every rank, men are ready to occupy two or three ranks above; an army—and this applies to a lesser extent to the other forces—which is an elite, in the sense that a cadre is an elite.
  There is here an element which I believe certainly this Government are neglecting to the national disadvantage: if these are the forces which Britain requires, there is within those forces a scope for voluntary effort which we have not begun to tap. If our Army is not a regular force which will march away, with a few details added, and either be obliterated or win, if it is the cadre for a future army, there is every reason why as much as possible of that cadre, and as large a cadre as possible, should be civilian.
  One of the quaint moments of this debate was when the hon. Member for Ealing, Southall (Mr. Bidwell) recalled from the depths of his consciousness and with approval something I had said years before in a defence debate about "a citizen army". It is nice to make contact somehow, sometimes. The hon. Gentleman was not mistaken. I do believe that we have a resource in this country—and if the Government are looking for economy that is the place to look for it, abouve all in the organisation of our land

  1493
  forces—upon which the nation is waiting for the Government to draw and on which one Government after another have been ill-advised in drawing insufficiently. The old approach has been totally inadequate to what ought to be the rôle of voluntary effort, of the citizen volunteer, in all our forces and perhaps, above all, our Army.
  Those are very much outline indications of the way in which I conceive rational deductions would be drawn—deductions of which the consequences would not be altered much by these or other budgetary cuts—as to the sort of defence forces which this country should have in peace time.
  Lastly, I mention a word which always, rightly, features in defence debates, and that is "morale". Certainly the House has a duty to preserve the morale of the Services. Certainly it is true that if the Services have the feeling that from year to year and from half year to half year arbitrary decisions are made which affect not only their livelihood but the meaningfulness of what they thought they were doing, then indeed their morale will be damaged.
  However, the morale of a military force can be based only on the knowledge and conviction of the rational defensibility of what it exists to do, of the relationship of what it does in peace to the supreme crisis of war for which it exists. If our Armed Forces understand that their shape, their size, their armaments and their organisation are intelligently related to that, then their morale will not be damaged when future Governments, like this or any other Government, have to adjust this element of national expenditure so that it finds its place with all the rest.
  6.34 p.m.
  Sir Geoffrey de Freitas: The right hon. Member for Down, South (Mr. Powell) began by referring to the balance of power and to many of the advantages which our defence has derived from it from time to time. It is the crux of my argument that we must have a balance of power between the Warsaw Pact and NATO if we are to achieve détente.
  I am sorry that my hon. Friend the Member for Birmingham, Handsworth
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  (Mr. Lee) has left the Chamber, because I wish to refer to his comments about the long frontier between China and Russia. In 1970 our branch of the Inter-Parliamentary Union was surprised to receive an invitation from the People's Republic of Mongolia to send a parliamentary delegation. Naturally we were carefully briefed before we went and we were told of some problems about food. We were told not to eat this and not to eat that. When I asked the Foreign Office, on behalf of my colleagues, what on earth we could eat, I was told to have a jolly good meal before we went.
  We went to Mongolia, but why were we invited? We had an extraordinarily interesting week there, and good food. We thought about it a great deal, and came to the conclusion that the Russians wanted us to realise that the country we were visiting was an enormous country, straddling the border, and they were not ruling out the possibility of a Chinese attack by land. Mongolia, with a population of I million, was being pointed out to us as the possible—to use a shorthand form—"plucky little Belgium". We could think of no other reason why we were invited.
  Like other hon. Members I have always believed that NATO is the most important international organisation that there is. However, in asking young people to agree with me about this I always try to use arguments which are relevant to the present time. I have had an experience with the South-East Asia Treaty Organisation which shows how difficult it is to adjust the arguments of those who have created an institution to the conditions that prevail later.
  In 1947, as a junior Minister, I was sent to Saigon to get the British forces out of the few remaining allied establishments. The French had returned and they wanted the accommodation. There was insurgency, and it was possible to get from the airport to Saigon only during the day, because the insurgents held the road at night.
  The French General told us that everything would be back to normal peacetime conditions if only he had another 10,000 men. Ten years later, in 1957, in the same room in the Palace, President Diem told me that everything would be back to normal peacetime conditions if

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  only he had another 10,000 men. I shall leave it to the institutes of strategy to find out what went wrong in the military judgments on the military problems of a kind which did not exist.
  It is the preconceived political problems which concern me, because there is a lesson for NATO. Vietnam was never covered by SEATO, but the American involvement was in the spirit of SEATO. The Americans saw themselves as saving the countries of South-East Asia from the Communists. They believed that Communism had enslaved parts of Europe, and they thought that it would enslave this part of South-East Asia. They tried to sell that to the local people, but the local people would not take that view.
  As late as 1957, when I spoke to leaders in South-East Asia about all their problems, not one of them referred to Communism as the real threat. The soldiers were even more positive. Other hon. Members have referred to letters in The Times. I wrote a letter to The Times in 1957, which I ended by saying:
  "More than one of the soldiers answered my question 'How would you strengthen SEATO?' by saying 'Get Russia to join it'".
  As late as 1957 they did not see Communism as the threat—China, yes, the French, possibly, but not Communism. Their thinking had absolutely nothing in common with those who had created SEATO. There had been a complete lack of communication between those who created SEATO—the Americans—and those in the field.
  The lesson for NATO is this: it was set up in 1949 to stop what was thought to be an imminent take-over of the Western democracies by Russian forces. It was set up to counter an immediate military threat. Most people today are a good deal younger than those of us who knew NATO when it was set up. It is no use talking to people today, especially young people, in those terms. They think they know very well that there is no immediate threat from Russia. I agree. The threat is not one of military attack. It is completely different, a threat to the détente under which we want to live. We want to live and let live with the Russians. Our policy of détente with
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  Russia is based on NATO's being in balance of power with the Warsaw Pact.
  While the defences of the West are not increasing, the Russians are increasing theirs. As the years pass they will inevitably become less interested in détente, except at their dictation, like their detente with Finland. Finland exists as a country. It is a fine country, right on the edge of Russia, which tolerates her as an independent country so long as she does nothing that runs counter to Russian policy. That must not be the future of the countries of Western Europe. Yet as things are going, that could be our fate.
  There was discussion earlier about the number of inter-continental ballistic missiles on each side. I prefer the figures quoted yesterday, from the Institute of Strategic Studies, showing that the Russians have 50 per cent. more inter-continental ballistic missiles than the United States. Therefore, the argument that so many of my hon. Friends use, that it is because of the imbalance of nuclear weapons that the Russians have built up their conventional forces, is not well founded. We must show the younger generation that Russia is building up her forces and each year becomes stronger on land, in the sea and in the air. We cannot ignore this. Our principal ally, the United States, has fewer men under arms than at any time since 1949.
  The White Paper shows that on NATO's central front the Warsaw Pact has five and a half fighting units to NATO's four, nearly three times as many tanks, twice as many field guns and more than twice as many tactical aircraft. In the Eastern Atlantic there is a considerable disparity between the NATO forces and those of the Russian fleet.
  It is our duty to restate clearly that NATO is the only defence we have for our system of government, that a strong NATO in balance with the Warsaw Pact is the only basis for a true détente. Where can we state these facts, especially if we are to get the young people interested? Obviously, we can do it here. I am doing it now. We hope that the Press, television and radio will report what we say. But above all, I ask hon. Members who attend other assemblies and conferences not to lose the opportunity to restate the

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  truth about NATO. This applies particularly to hon. Members who attend the North Atlantic Assembly.
  We must not forget that the people in a democracy shape our policies, but in peacetime it is difficult to get them interested in defence. This is one of the reasons why the North Atlantic Assembly is a profoundly important body.
  One factor has been raised by so many hon. Members that I must mention it. There is only one point in which the general public appear to be particularly interested—the balance of effort, through taxes or whatever it may be, between what their own Governments do. The German Minister of Defence wrote last year:
  "At present, of the NATO forces in Europe, the West European nations contribute 90 per cent. of the ground forces, 80 per cent. of the naval forces and 75 per cent. of the air forces."
  Many American Congressmen and Canadian Members of Parliament were surprised at that. Of course it is correct, but it is not the whole story. The Minister himself pointed out the United States' nuclear strength. In this House we know that to be true.
  The strength and disposition of our Armed Forces used to be a matter of domestic interest only. That is no longer the case. What our allies are doing is important. It is important that there should be a place—the North Atlantic Assembly—to discuss these matters, which are of common concern to all of us in the NATO countries.
  A few months ago I put down an Early Day Motion, supported by 112 hon. Members, which congratulated the Government because we believed that they were right to recognise the economic situation of Britain today, while maintaining a considerable contribution to NATO. In the discussion earlier today many hon. Members criticised what the Government have done. I believe that the Government have achieved a great deal. Of course there has been the further cut of 3 per cent. in defence spending since I put down the Motion. I have given a great deal of attention to the Government's explanation, and I reluctantly accept it. Although we do not have great power today, we still have a great deal of influence in the alliance.
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  I warn the Government that if there is any more nibbling at defence expenditure other people may be tempted to go much further. These nibblings might become real cuts, and within a few years we would face the danger of the Finlandisation of Western European countries. That is not the détente that I seek. The détente that I seek is based on a balance of power between the Warsaw Pact and NATO countries.
  6.47 p.m.
  Colonel Sir Harwood Harrison: The members of the Sub-Committee on Defence of the Select Committee on Expenditure will be grateful to the Secretary of State for saying, in opening the debate, that he found the suggestions in our reports useful and valid in framing the White Paper. Perhaps I may be so bold as to say that other hon. Members have also found our reports helpful. That is why so many have been trying to catch your eye, Mr. Speaker—a very different situation from debates on defence six or seven years ago.
  In our preliminary report on the defence review proposals, my sub-committee came to the conclusion that although the Secretary of State had made cuts in those areas least vital to the national interest there had been some significant losses of capability which impaired the Services' ability to react speedily and effectively to unforeseen events.
  In the coming weeks my sub-committee will be examining the White Paper in detail. We have already drawn up a programme of meetings to cover the main aspects of defence policy, and shall be looking at some of the major procurement projects in each service. We shall not be looking at the Defence Department, because the Secretary of State has set up his own procedure to see whether the tail there is becoming too big, and whether more can go to the teeth.
  One study which we shall take up is that of the naval dockyards. It is remarkable that as the Fleet has declined the number of dockyards in the United Kingdom has remained constant. We shall take a hard look at the work load and planning for the four dockyards to ensure that if any are being kept open for employment reasons rather than defence needs the cost can be discounted from the basic defence budget.

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  In January, when I happened to be on holiday in Gibraltar, the admiral kindly showed me around the dockyard, as I had been there before. He gave a fine record of how they were repairing our ships, keeping to time, and turning them out. That is another source that we can always use.
  In April we visited our forces in West Germany and Berlin. During the visit we saw and heard some of the effects of the defence review and some of the problems facing us there. The programme for the Committee was excellently drawn up. We saw all aspects of the fighting ability of the Services.
  The first thing that we learned, sadly from the RAF and the Army, was that the Soviet threat was considerably greater than when we visited West Germany in 1971. The relative strengths of NATO and the Warsaw Pact forces have changed, gradually, to the greater advantage of the Warsaw Pact. We can no longer assume that Warsaw Pact forces are inferior in terms of morale, cohesion and training, as was the case previously. We have therefore been impressed by the need to support and improve our forces in Europe and to do all that we can to support NATO's efforts. The end of the Vietnam war underlines the importance of maintaining the mutual confidence of Europe and the United States in NATO.
  The strategy of BAOR is heavily reliant on the capacity for reinforcement. We asked some very searching questions about contingency plans for getting reinforcements to Germany if—we hope it will be unnecessary—mobilisation were to take place. Although we were reassured that United Kingdom units and Territorial Army formed units would reach Germany on time, I have some lingering doubts about the accuracy and up-to-date nature of the list of ex-Regular Reservists and whether they will get there exactly when expected.
  The procurement plans for two weapon systems, which have been cut or spread over a longer period by this Defence White Paper, will have particular implications for the situation in Germany. In the cuts announced there has been a reduction in the orders for helicopters for the Army Air Corps.
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  Some time ago we paid a visit to Middle Wallop and saw how the helicopters and the missiles on them could be used. We were very impressed. I think that the flexibility of our commanders will be decreased if they cannot deploy them as anti-tank missiles or to transport infantry carrying similar missiles to knock out tanks advancing in a breakthrough situation. After all, as someone said, we are planning for a defensive war. These helicopters would constitute a mobile defensive artillery of considerable power. If we had had them in 1940, how we could have used them during the German breakthrough.
  Cuts in the numbers of helicopters will not directly affect the strength of BAOR, but in our strategy of flexible response we must plan for a war of some duration. With fewer reserve helicopters the capacity for reinforcement has definitely been cut.
  In passing, I will say that the two Franco-German anti-tank weapon systems, MILAN and HOT, are being urgently sought by the Army. I have never known senior officers to be so insistent about the need for a weapon as they have been about the MILAN. In addition to its proven effectiveness as an anti-tank guided weapon, it will allow our tanks to be redeployed to the best of their potential instead of being assigned to a defensive rôle, as sometimes happens at present. We hope that orders will be placed for these weapons, but urge that efforts should be made to gain reciprocal orders for some of our systems, such as Rapier. We heard good reports of the Rapier system.
  The second weapons system which I want to mention is the MRCA. This aircraft, which we say flying at Warton, is an impressive technical achievement. Its procurement is now to be phased back. We have already warned—I underline this today—that this may eventually lead to added costs and should not be allowed to weaken the resolve to give our forces the weapons, like MRCA, that they know they desperately need.
  I should like to emphasise the new form of training of combat groups at battalion and regimental level, and even lower levels. If these men of different arms are to fight together in future, they must have maximum training in this new idea. The

  1501
  men of other arms must know their commanders and have confidence in them.
  I should like to touch on two other problems which we discussed during our visit to Germany. The forces are still increasing the level of their stores to meet the revised strategy of flexible response which replaced tripwire. This build up of stocks takes place against a background of lack of standardisation of weapons and stores between NATO countries.
  We were encouraged to learn that NATO air forces are trying to create as much inter-operability of airfields as possible. However, there is a basic difficulty when there are so many aicraft types and ancillary stores which reduce the potential of the allied forces by a substantial measure. If we could at least achieve some standardisation of bomb types, drop tanks, ECM pods, and the like, we would go some way towards enabling our aircraft to land and be turned round at all NATO airfields.
  We all thought that morale amongst our soldiers and Air Force personnel was very high. They are very professional troops. Basically, all married men seemed contented and happy, whatever their rank. Many of them, after a few months out there, can buy their own cars and move around. It was the single man who did not appear to like Germany so much. The reason for this is our bad exchange rate of the pound for the mark. I know that they get a special rate, but the average soldier says that he cannot afford to take out a girl in Germany.
  Another practical problem which we encountered concerned the difficulties besetting the Chieftain tank. The tank's engine and some other parts have not performed as expected. This, together with a lack of spares, has forced considerably reduced mileages for the tanks and has created a general disquiet about the Chieftain. We are gratified to know that the tank, which is so admirable in many respects, particularly its weapons, has much better prospects for the future. We shall watch the progress of the improved engine with interest, and trust that the spares situation will be improved. I was informed by many who drove the tanks that they were all right when drivers had a lot of experience, but that a new reservist driver could not expect to
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  drive the tank immediately. Also, not enough petrol was issued last year for the carrying out of exercises. I believe that the situation has improved this year.
  I should like to mention a visit which, as a member of WEU, I made recently to Greece and Turkey. That part of the world has already been mentioned in the debate. In Cyprus a sad situation has developed between Turkey and Greece. Greece has opted out of NATO for the moment. She has done that before, so we hope that she will come back. This has meant no joint exercises and no training commanders in command. Many of our staff officers, of all nations, out there admitted that they were not fully stretched or occupied. On the subject of Portugal, I shall only say that we hope that that difficult situation will be resolved.
  I stress again, in conclusion, the importance of the British commitment to NATO, and I welcome the wholehearted statement of this commitment by the Secretary of State. However, I must warn the House that further cuts in defence spending can only weaken our contribution. We might make economies in the dockyards, as I suggested, to enable us to spend a little more somewhere else. We would do this, however, at some peril. The mere fact of our presence in the Mediterranean was gratifying to Greece and Turkey, and they are now worried whether it will be there in the future.
  We have a great reputation. Do not let us throw it away or else we may, in a small way, be unable to fulfil commitments.
  7.01 p.m.
  Miss Jo Richardson: I was interested, as I am sure were other hon. Members, in the description by the hon. and gallant Member for Eye (Sir H. Harrison) of the work of the Defence Sub-Committee of the Select Committee on Expenditure. Since I support the amendment, I could wish that his Committee had gone even further in recommending cuts.
  reasons why the world is sorry about the tragedy in Cyprus as a result of those difficulties.
  I was appalled that the hon. and gallant Gentleman's only reaction to the difficulties between Greece and Turkey was that they left our NATO forces unstretched. I can think of many other

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  The right hon. Member for Penrith and The Border (Mr. Whitelaw), in referring to the amendment reiterated the 40-year-old myth that the Labour Party's action in criticising, albeit unsuccessfully, the 1935 Defence Estimates, and the general attitude of that time to armaments, were the cause of the early failures in 1939. In fact, the period 1935–39 was one of rapid and unprecedented annual increases in defence spending. The money was spent by a Tory Government to provide large profits to capitalist firms which failed miserably to provide manufactured goods of the quality and in the quantity that the people thought they were getting—in a period which we thought to be one of rearmament.
  Much has been said in this debate—I was not here yesterday but I have read the Official Report closely—about détente. The Secretary of State said that he could not foresee massive immediate further cuts in our defence spending without
  "putting the whole of NATO strategy in jeopardy, destroying the cohesion of the alliance"
  and then this telling remark, which appears also in the White Paper—
  "and ruining our hopes for achieving a true and lasting détente".—[Official Report, 6th May 1975; Vol. 891, c. 1229.]
  What neither my right hon. Friend nor anyone else has spelled out, at least to my knowledge, is when this détente is supposed to come about, when he expects that the hopes for a true and lasting détente will be achieved. Certainly, judging from the level of expenditure over the next 10 years, my right hon. Friend cannot foresee détente in that period. Otherwise, presumably, he would have started, albeit modestly, over the next two or three years scaling down our expenditure so that in 10 years we could see a greater cut. Such a cut would be one which would bring us down to an expenditure of 4½ per cent. of the GNP by 1984–85—which would still be in excess of the proportion spent by our allies.
  The Defence White Paper is a policy of despair. Détente means different things to different people. To the right hon. Member for Penrith and The Border it means strength of forces. To me détente means a relaxation of tension
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  which will enable us all to live in some kind of peace. Our overall defence spending at the level of the next 10 years outlined in the White Paper cannot possibly be held to contribute to a relaxation of tension. Any increase in arms spending brings about more tension. A reduction in arms spending is the only way to relax tensions and build up confidence.
  I have read the White Paper carefully and I do not regard it as containing any real discussion about the policies pursued by NATO, whether they have weaknesses, as I believe, or strengths, as other hon. Members may consider. It is a collective form of defence, which means that decisions are made collectively. This obviously imposes severe restraints on any Government's freedom of action. This applies to all Governments. The Dutch, for example, have recently run into severe trouble because they have wanted to reduce military spending. The White Paper reasserts our reliance on NATO as the linchpin of our security, yet there is no real discussion of NATO's policies, of whether they are good or bad.
  If there is to be any point in a review the object should surely be to see how the economy can be helped—we keep hearing about the bad state of our economy at the moment—and how détente can be improved. The discussion of détente never seems to get beyond the level of lip-service, and never considers in depth the military implications of pursuing political détente. All that is stated, at least for the present, is the importance of the rather sterile Vienna talks on force reductions.
  If it is the aim of the review to aid the economy and achieve true and lasting détente we must think seriously about military planning and the effect of unemployment. The Departments of Industry and Employment should have been involved in the discussions which led to the White Paper. Perhaps the Minister will tell me that they were involved.
  Even if the framework within which the Government have worked out their defence policy is accepted—I do not accept it—one thing which sticks out like a sore thumb is Polaris. The Government, on a number of occasions in reply to Questions, have stated their intention not to develop a new generation of nuclear weapons. The Secretary of

  1505
  State's comments indicate that this means that there will be no new submarines, that the present missiles will not be replaced by Poseidon missiles and that they will not be MIRV-ed.
  The original estimate of the life of the Polaris submarines was that they would begin to "die" by the mid-1980s. Many experts thought that that was an overestimate. Even if it were to come to an end by the mid-1980s and if we were to have a new generation of it, we should have to start by making a decision about it now. Therefore, apparently the Government have decided that some time in the far future, perhaps 10 years ahead, they will have no strategic nuclear force. If that is the case, would it not be sensible for us to start phasing out Polaris, to save the money, to start retraining people so that they can take up other employments and to use this as a gesture to prevent further nuclear proliferation?
  However, the Secretary of State has said that these Polaris submarines could last well into the 1990s. A number of neutral observers who are also experts consider that if these submarines continue to be used for as far ahead as the 1990s there could be a risk to the safety of the vessels by that time, whatever improvements may have been made to them since they were launched.
  The Government maintain that they have no intention of developing a new generation of nuclear weapons because the present one will last long enough, although many experts believe that the existing generation of submarines will be unsafe by the mid-1980s. If the Government were to change their mind and launch into a new generation, this would have wide implications and repercussions in the country, and particularly throughout the Labour Party. It would mean that the equipment procurement budgets over the next 10 years would be unable to stand the added burden of new submarines at a cost which, at present prices, might make £180 million per boat look like a modest estimate.
  So far no hon. Member has gone in any depth into the question of the employment implications of disbanding the Polaris force. Aberdeen University has carried out a study into what would happen if the Polaris force began to be
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  disbanded. It is worth spending a couple of minutes telling the House what that study found. The people who carried it out were more than conscious that the disbandment of this force would cause anxiety and a fear by the local people of its effect on employment.
  They found that it would probably result in the Clyde submarine base operating at only 30 per cent. capacity, the reduced capacity remaining to cater for non-nuclear weapon submarines. About 3,100 Service men are based at Clyde submarine base. About 2,000 of them would be affected by a disbandment of nuclear submarines. Few, if any of these Service men are local people. Therefore, they would either be posted elsewhere or be made redundant, in which case they would return to their home areas. The number of civilians who work at CSB is 2,800. About 1,500 of them are local people and about 1,300 went to the area specifically to work for CSB. Of the 2,800, approximately 2,020 are employed on Polaris. Half of them are local people and half are people who have gone there specially. Nuclear disarmament in that area would remove all those jobs. Most of the "foreigners", if I can, in deference to the Scots, call them that, would presumably leave, although I would hope that, in the event of further employment coming to the area, some of the technical and skilled senior administrative people might be persuaded to remain.
  In the area there are also between 1,500 and 2,100 jobs which are dependent on CSB. This indirect employment would also be affected, about proportionately, by people leaving the area because of nuclear disarmament. Thus between 1,000 and 1,400 jobs would be affected.
  A breakdown has been made of the jobs and skills used at present at CSB. It has been found that they correspond fairly closely to a breakdown within the general category of electrical engineering. Therefore, with the retraining of a small proportion of the workers such an industry could move smoothly—if it were planned properly—into the area and find a ready. made work force. Ideally, there would also be enough jobs and adequate training facilities to take up those workers whose indirect employment had suffered. Therefore, we could reckon that if the

  1507
  Government plan properly into the future, it would be possible to absorb the people who were left behind and who had not originally been "foreigners" and moved into the area.
  Other possible alternative industries which could move into the area are being looked at. The fear of losing jobs is an understandable one. If the Government do not look ahead now and plan for the change over of some industries from defence production to what I might call peace-time production we shall never achieve it, and we shall, indeed, have unemployment, which none of us wants. The White Paper does not indicate that the Government are planning to retrain and replace defence industries by industries which would be more helpful to our exports and the nation in general.
  Mr. Michael Mates: It is admirable that the hon. Lady has looked into those 1,000 people on Clydeside in such detail. The White Paper cuts already provide for 60,000 more to be unemployed and it is her group who suggest that this is not nearly enough. Does she want to see that figure rise to 80,000 or 100,000? How can anyone plan for that scale of unemployment which the hon. Lady says is not enough?
  Mr. Speaker: Order. The hon. Member must address the Chair. Also, I hope that the hon. Lady will not be drawn by the hon. Gentleman, because about 11 hon. Members wish to speak before the debate finishes.
  Miss Richardson: Thank you, Mr. Speaker.
  If we are ever to get out of the realm of spending such a high proportion of our gross national product on defence, at some stage we have to start planning. The Government have already made some cuts. We should like to see these cuts go further, but we want the Government to plan for them and not to say "This year, next year, or next week we shall cut out this". We want them to say that they will do so in 1976, 1977 and so on. This is the only way to do it.
  Much has been made of the level of defence spending by the Warsaw Pact countries, particularly the Soviet Union.
  1508
  We absolutely deplore the level of spending in those countries. It is totally wasteful and ridiculous that they should also be spending this kind of money in wasting their resources. I believe that the reason that they are doing so is that they are still frightened of what the West might do. Oh, yes, they are not quite the idiots we may think they are. It is time that one side made a gesture and said that we really do genuinely believe in détente and in making a gesture towards relaxing tensions. I should like to see this country being the one to do it.
  7.20 p.m.
  Mr. Joseph Godber: It the hon. Member for Barking (Miss Richardson) will forgive me I shall not follow her in her argument, except to say that I fear that I totally disagree with it. The reason why I do not follow her is that I wish to be very brief, as I know the number of others who wish to speak.
  It is over 10 years since I took part in a defence debate in this House. I do so on this occasion because I am so disturbed by the Government's policy. The White Paper, which is very clear in many respects and which warns us so very fully of the dangers of the build-up of the Warsaw Pact countries, draws exactly the wrong conclusions from the facts it so clearly states. We have had again and again the story of the size of the Warsaw Pact forces, and the reason for this, to which the hon. Lady referred as she finished her speech, is very different from the reasons she produced.
  Paragraph 20, on page 8 of the White Paper, contains the most disturbing words in this regard. It says:
  "In parallel with their stated commitment to détente the Warsaw Pact countries maintain forces on the mainland of Europe which are increasing in strength and capability, and appear far larger than could be necessary for defensive purposes."
  So not only are they substantially larger; they are increasing at the present time.
  That is why the conclusions that the Government have drawn in their White Paper are so harmful from the point of view of this country. Paragraph 24 brings it out quite clearly. It says:
  "The Government is fully committed to preserving the credibility of NATO's strategy and … is determined to maintain an effective British contribution."

  1509
  It goes on to say:
  "Some reduction in our current NATO contribution is inevitable."
  That is where I utterly depart from the Government in their conclusion. It seems that they are making the very dangerous assumption that we can, without any harm to Britain and to our position in the West, reduce our forces further. That is why it is so totally unrealistic of those who have put forward the amendment today to claim that this is the right thing for Britain, because they automatically assume that we shall continue in a period of peace for an unlimited time, when there is nothing whatever to guarantee that peace if NATO is not in a credible defence posture.
  When looking at the position in regard to the Warsaw Pact countries and NATO, the first thing to realise is just what the attitude of the Warsaw Pact countries is. Here I would mention that I have spent more time, perhaps, in negotiating and arguing with the Warsaw Pact countries than anyone else in the House, because I spent almost two years in Geneva, at the Disarmament Conference, trying to find a basis of agreement with them. I assure the hon. Member for Barking that they are extremely tough negotiators and that they will negotiate only from strength. That is the difference between the posture which some Government Members adopt and the posture which I believe we should adopt, which is that by all means let us make détente effective, and by all means let us try to bring about a reduction in arms; but do not let us do it unilaterally, because the Warsaw Pact countries will merely stand back and smile while we make the reductions and then refuse themselves to make the reductions which are needed.
  That is the whole essence of what appears in Chapter II of the White Paper, in the reference to seeking to make détente effective, and the attempts to bring about, first, the CSCE and the discussions there, but, above all, the MBFR talks, which have been the effort of both the previous Conservative Government and the present Government to make progress with. The whole basis of this is that we must try to achieve an understanding of mutual and balanced reductions, but not unilateral reductions. That is the problem, and that is why it is so unwise for this country to start with
  1510
  reductions on its own. It may be that our economic difficulties are very great, but I should have thought that the previous Conservative Government had pared our defences quite as much as they should have been pared, and that this is a further and dangerous cut which is being made in both the White Paper and the subsequent announcement by the Chancellor of the Exchequer in his Budget speech.
  If MBFR is to have any chance of success, the NATO countries together must be resolved not to make reductions without comparable reductions being made on the other side. One of the most unfortunate things is that the United Kingdom is setting an example to some of her colleagues in NATO, when it is known how much some of them would like to make substantial reductions. This is the core of the damage and danger which is likely to occur if they proceed in this way. It is also quite clear from the White Paper that our NATO colleagues were indeed unhappy about the reductions when they were told about them. That is quite understandable.
  But the one essential aspect of all this is the attitude of the United States, because the United States is a very predominant factor. It is not just their immediate numbers on the Continent of Europe, although this is very important in itself; it is their ability to back up and sustain NATO in the event of conflict. That is the key to the situation of NATO vis-à-vis the Warsaw Pact countries. It is the knowledge in the minds of the Warsaw Pact countries that the United States is willing to sustain NATO to the full.
  In my view, this is where one comes up against another factor which has emerged since the White Paper was printed—the reverses which have happened to the United States in the Far East. They may have no direct bearing on what happens in regard to military strength in Europe, but they have a great deal lf bearing on attitudes in the United States itself, and of the President and Congress. I do not think that either the present President or the administration would willingly in any way reduce the effectiveness of the contribution to NATO, but one cannot ignore the strength of Congress today, as opposed to that of the administration. We must be fully aware of the

  1511
  dangers we run. That is why, in a European grouping, it is so important that the full effectiveness of the European grouping should be there, so that whatever the United States does, we are in a position more and more to contribute to our own defence.
  This might lead one on to the folly of those who seek to withdraw from the Common Market, but that would take one into an entirely different matter, which I shall not develop.
  However, Europe, on its own, must play a very important part. It is very unfortunate when a country such as Britain, which has always given a lead in such matters, should give a wrong lead, as it is seeking to do at present, in regard to our defences over the coming years. One should not underestimate the damage this can do in the councils of NATO, in the attitude of other NATO members. If we allow our contribution to be whittled away, other NATO countries could well argue in the same sense. I would far rather see that we maintain at the very minimum the forces we had planned under the previous Conservative Government, and, if it were possible, I would far rather see them increased rather than reduced as a direct result of what is happening in other parts of the world.
  Other hon. Members have touched on the Middle East and the problems there resulting from the difficulties that have confronted Dr. Kissinger, and the failure of his mission, and the dangers that arise directly as a result of the last conflict between the American and Soviet arms in the Middle East. It became absolutely clear at that time that the advance in the techniques of the Soviet Union's ground-to-air missiles had made a big difference in that area.
  We cannot be happy in a period in which we have seen this increasing strength of the Warsaw Pact countries, and the Soviet Union in particular. All that we ask is that the Soviet Union and its allies should show convincingly in the MBFR discussions that they really mean business by offering firm cuts, to which we can respond, rather than having unilateral cuts either by ourselves or by any of our allies in the West. We can make MBFR or détente make sense only if we act in unison and from a position
  1512
  of strength, in order to negotiate with those who are strong also, because they will only respect strength. Therefore, there is a fundamental weakness in the approach of this White Paper.
  There is much more that I could say, but I promised to be brief. This is the salient issue. This is where the Government, while not going as far as some of their hon. Friends would wish, have still gone further than is safe for the defence of the country. That is why I oppose what they are doing.
  7.30 p.m.
  Mr. Colin Jackson: I shall keep my remarks as brief as possible because a number of other hon. Members wish to take part in the debate. Perhaps I might declare an interest in the subject in the sense that I have had the privilege and honour of lecturing members of the Armed Forces all around the world in the last 25 years. I remember the hon. Member for Peters-field (Mr. Mates) being at one of my lectures in Germany about 15 years ago, and we can see what good that has done him.
  I have listened to the debate all day and it seems to me that one expression has been far too monotonous in its repetition—that is "détente in Europe". It is understandable, perhaps, that we in Britain look at the world from Dover, but the right hon. Member for Down, South (Mr. Powell) made an interesting comment when he said that very often defence and international armaments changed just as much because of switches in foreign policy as because of switches in battalions or aircraft.
  I think that in our discussion of the Soviet position and the position of the Warsaw Pact we have often been unnecessarily gloomy. We have to realise that the Soviet Union has to maintain defence on two widely-separated fronts. I believe that there is an 11-hour time difference between Brest Litovsk and Vladivostok. If we were looking from a satellite this afternoon we should see Soviet troops moving eastwards towards China. We are aware that the Chinese view is favourable to Europe simply because of China's fear of the Soviet Union.
  If we look at the total gross wealth of Western Europe and North America it makes Khrushchev's remark of some

  1513
  years back "We will bury you", appear frustrated. The gap between the GNP of the West and the Soviet Union has widened in our favour. By all means, therefore, let us be alarmed and concerned and take protective measures about increasing numbers of Soviet submarines and so on, but do not let us get the subject out of perspective.
  I would also plead that we do not altogether forget the rôle of the British Armed Forces outside Europe. For example, Gibraltar, highly important with Spain in a very unsettled period in its history, could spin off in either direction. Gibraltar is as important to the Mediterannean Arab lands as it is to the United Kingdom. For the foreseeable future, very firm vigilance should be exercised there by the Mediterranean people, especially since the Suez Canal will be opening on referendum day. I do not think that there is any connection between the two events.
  Turning to Cyprus, I shall be grateful if the Minister will give us up-to-date information about the position of our Service men in Episcopi and Dhekelia. I know that they have had considerable accommodation problems, having had to withdraw from accommodation in Limasol and so on. Can he say when that situation is likely to improve?
  It is very important that the United Kingdom should remain in a UN rôle in Cyprus, not only because of the large number of lives saved by British Forces but because we have to consider that, hopefully, through a Geneva Conference or other means, there will be an improvement in relations between the Arab States and Israel. If that takes place there must be a major UN Services presence in the area, a logistic base, for example. Episcopi and Dhekelia are idealy suited to that, serving as a home base for UN Forces interposing themselves between the Israelis and the Arabs. It has also been suggested that in a new peace settlement in the Middle East aerial surveillance would be an additional advantage, and quite clearly Cyprus is a useful base for that purpose.
  I should like to comment about the island of Masirah, which has been mentioned in many speeches in the debate. It is not my favourite holiday place, but
  1514
  I have known it reasonably well for a number of years. In my view Masirah still has an important rôle to play in the security of that area. I should not like to take too great an issue with some of my hon. Friends about what is happening in the area, but their version of the Oman story is not coincidental with mine.
  The Dhofaris occupy a peculiar and special part of the Oman, but there is no doubt that they are being supplied by the Russians and the Chinese, and my friends in Aden greatly regret the presence of these two Powers who are having their own private war in the area. It is fair to say that the present ruler has brought education, medicine and social services to the Oman on a very large scale. It is fair to say that the incursions from Dhofar have moved outside the area of the Dhofaris into Central Oman. Before we knew where we were they would have been in the Gulf, and where would our friends of all kinds in the Gulf have stood then? What would have been the position of our oil supplies? There would have been a panic move in by both the Russians and the Americans. We should therefore not wipe the island of Masirah lightly aside. In the long run I should like it to be another UN base. I do not want the Americans there. There are too many places in the world where they and the Russians with their private wars upset the lives of ordinary decent people. I hope, therefore, that as the debate inevitably returns to the question of détente the House will not forget some of these other important topics. The position of our Armed Forces has not been stressed sufficiently so far because the debate has been busy with the mechanics of the White Paper, but we should acknowledge, without any chauvinism, that we undoubtedly have the finest Armed Forces in the world. They have done more for this country on less money in more difficult circumstances than any other force could have done. One has only to consider the French and the Americans to see that we stand out pretty well in comparison.
  7.38 p.m.
  Mr. Alan Clark: I listened with great interest to the hon. Member for Brighouse and Spenborough (Mr. Jackson) and I hope that he will excuse me if I do not develop the theme he initiated. I noted that he drew atten-

  1515
  tion to the increasing disparity between the GNP of the West and that of the Soviet Union. He might have enlarged his argument by relating this disparity to the enormous proportion of the GNP which the Soviet Union devotes to military expenditure.
  This is the third major debate on defence that I have attended since coming to the House last year. I feel that my hon. Friends and the public might well be excused for asking what purpose these debates serve. The schizophrenic character of the Secretary of State was dealt with in detail by my hon. Friend the Member for Ayr (Mr. Younger) yesterday. I am delighted that I had to wait until now to speak because I now have the privilege of addressing the Secretary of State, who has returned to the House after being away on other important matters, as we understand. His schizophrenic character has resulted in the fact that Dr. Jekyll agrees that the defences of the country are run down to a dangerous degree, but Mr. Hyde remains utterly intractable on the question of remedying this situation.
  As the right hon. Member for Fulham (Mr. Stewart) said, we have to achieve a compromise in expenditure and security. We have to synthesise these two requirements. Many of my hon. Friends and I would rate the demands of security much higher than would Government supporters. There comes a point when the final insistent requirement of national security can no longer be reduced or jeopardised. There is a unanimity of opinion on the Opposition benches that that point has now been reached.
  In considering expenditure, the House should face the truth of one basic strategic principle, which is that the Sandys doctrine—the doctrine of virtual instant nuclear retaliation—is now dead. It lasted approximately 20 years, it may be said to have peaked in the 1962 Cuban missile crisis, to have waned at the time of the Czechoslovak invasion and now, finally—as my hon. Friend the Member for St. Albans (Mr. Goodhew) said yesterday—to have been extinguished by recent experiences in the Far East. Consequently, we are faced with the principle of inflicting unacceptable losses on an aggressor—not in terms of superiority, but deterring him sufficiently
  1516
  with unacceptable losses. That principle has to be applied at a conventional level, using the conventional high explosive, but all other advanced technologies.
  If I may express the superiority of Soviet hardware over our own, I will put it in combat terms. The defences of the United Kingdom are so far below danger level that the Royal Air Force has a combat expectancy of about two days, or possibly as little as six hours, or three sorties per aircraft. That estimate is based on the experience of the Yom Kippur war.
  On the first occasion on which I spoke in a defence debate I said that there was not one ship in the Royal Navy that was capable of a surface engagement. I am glad to say that because of the refits which have taken place in the Devonport yard there are now two ships in the Royal Navy which are capable of a surface engagement. In terms of its capability of defending the trade routes and running materials into this country, the Royal Navy has a combat expectancy of about 10 days. If drawn into major combat, for example defending oil rigs, its expectancy could be as little as 48 hours, particularly if the air cover is worn down on the prediction I made when discussing the Royal Air Force.
  In terms of combat effectiveness, the Army is probably the best situated, but, being in the centre, where limited conventional threats are least likely to develop, this is unfortunately the sector in which such readiness is least necessary.
  The history of the House and of the country shows that hon. Members who make assertions of that kind are seldom believed, and if they are believed those assertions are never welcomed, but we owe it to those who sent us here to make these assertions. I know that these views are largely repudiated by Government supporters. On Monday, in the debate on hospital beds, the hon. Member for Fife, Central (Mr. Hamilton) compared defence and health budgets. I am sorry that he is not here, because I always enjoy paying him a compliment. He made the interesting and valid point that defence and health are the right of every citizen of the country and cannot be contracted out of, but, equally. hon. Members should reflect that although we once had a two-ocean Navy deliberately built to

  1517
  a standard of superiority over the combined forces of the next two Powers, we had virtually no health service, and the country is today no less rich in terms of assets and resources than it was in 1913.
  Rear-Admiral Morgan-Giles: And no more healthy.
  Mr. Clark: As my hon. and gallant Friend says, we are no more healthy. The priorities are totally different. Although many of us would not rate the discrepancy on the priorities as high as do the Government and their supporters, nevertheless we accept that the mood, demands and nature of civilisation have all altered, so that this disparity is antique.
  We recall that in the current fiscal year we have budgeted £3,150 million on the health service alone, and the total for all the social services is a staggering £7 billion, compared with a figure of approximately £1 billion for the Royal Navy, although it is hard to isolate the figures. If the Royal Navy completely disappears and loses its effectiveness. there will not be a health service and we shall be back where we were in 1913, with one significant difference—we shall be occupied by a foreign Power.
  None the less, it is possible to provide a defence, barely effective but possibly adequate to threaten the capability of inflicting unacceptable loss at conventional level even within the restricted terms which the Government impose. But it requires certain major alterations of emphasis and policy.
  First, there is the question of simplicity in design, on which my right hon. Friend the Member for Taunton (Mr. du Cann) elaborated most persuasively yesterday. One major change of attitude which I recommend to the Secretary of State is to recognise that Service requirements for defence equipment and the prosperity of the industry supplying it are an integral whole. The Secretary of State talks frequently of redeploying resources into exports. That is a high-sounding phrase, but our resources are already in exports, if only the potential can he properly utilised.
  In our armaments industry, in aerospace, radar technologies, marine architecture and armour, we have the capacity
  1518
  greatly to increase our overseas earnings and at the same time to increase the cost effectiveness of our military hardware. At present there is apparently no Department with responsibility—and certainly none with authority—to handle this subject at the highest level. There is a necessity for a Department which is specially concerned with researching foreign requirements, liaising with our Service chiefs, pressing sales, giving delivery guarantees, arranging credits and, in particular, arranging for diplomatic protection and behind-the-scenes pressures to resist the commercial intrigues of our competitors and even, I am sorry to say, of our allies.
  I know that one of the reasons why the Secretary of State has not been able to attend the debate is that he has been at the Eurogroup. There is much talk of co-operation between the allies on weapon design, development and contracting. But, as the right hon. Gentleman would admit, there is a lot of cutthroat intrigue and in-fighting on weapons development and contracts. I feel that the United Kingdom does not do everything it might in pressing its own case, nurturing its own contractors, using diplomatic pressure to ensure at least that our weapons get a fair trial and, in particular, giving the lead so that others may follow and co-operate with us rather than standing aside and perhaps lamely joining in with some project at a late stage of development.
  Mr. Geoffrey Pattie: Does my hon. Friend not agree that although the Secretary of State may say that he has an organisation called Defence Sales, that organisation needs to be reorganised and revitalised, because it is not up to the job?
  Mr. Clark: I agree with my hon. Friend. That is the point I am trying to develop. I say this with no wish to cast aspersions on the personnel involved, but the Defence Sales organisation has neither the status nor the instant access to influence that is necessary in dealing with projects and sums of this kind.
  Parallel with that one would hope for a certain discretion on the part of members of Her Majesty's Government in expressing opinions on who is and who is not eligible for the supply of arms.

  1519
  The present Prime Minister, when in Opposition, went on record as saying that any arms contract the Labour Party disapproved of would be repudiated if the Labour Party achieved office. That was well calculated to create an atmosphere of uncertainty and to open the door to our competitors.
  Some political decisions are virtually unaccountable. For example, the Shah of Iran has expressed the desire to purchase nuclear submarines. That has been discouraged, but pending a decision the Shah has expressed a wish to Vickers to purchase conventional submarines for operation in the Gulf. I understand that that request is also being obstructed by the Government.
  If the effectiveness of our resources, at every level from drawing board to shop floor, in the armaments industry could be properly developed and encouraged there would be a tremendous advantage to be gained in terms of our balance of payments and investment within the United Kingdom. By increasing volume unit costs we would be cutting the Service budget and making foreign orders more attractive.
  In the present situation many promising projects are stultified by the Government. There is discouragement at inception and then, several years later, the Services suddenly wake up and realise that they have to have certain items of equipment. We then buy the nearest foreign equivalent. The Exocet ship-to-ship missile is an obvious example. That situation is likely to be repeated in requirements for short-range ground missiles for the Army. At present, arms sales in terms of Government reponsibility are almost in a lacuna. Highly important British weapons of proved effectiveness have had inferior foreign equipment preferred to them. I am thinking of Rapier and Roland—Roland being preferred on account of political pressures. Jaguar has not even been entered in evaluation tests. The Sub-Martel was strangled at birth, and American equipment—namely, Harpoon—was substituted.
  I accept that the Secretary of State for Industry has no responsibility for these matters. I do not think that he would Savour it if he had. It is understandable
  1520
  that the Secretary of State for Defence appears to have his hands full in pacifying Service chiefs and working out the curious convolutions that are required of him to keep his expenditure within the new formula. However, I urge the right hon. Gentleman and the Prime Minister, who ultimately has responsibility, seriously to consider assigning these responsibilities and giving them the status and power to effect a substantial transformation both in our balance of payments and in the cost-effectiveness of our military equipment.
  7.53 p.m.
  Mr. R. E. Bean: I was interested to hear the hon. and gallant Member for Eye (Sir H. Harrison), who was Chairman of the Defence Expenditure Committee, saying that the Committee would be reviewing the conduct of work of the four dockyards in view of the Royal Navy's declining fleet. As the Member of Parliament representing Rochester and Chatham a dockyard community, I accept that such a review is necessary, but I hope that it will not once again raise the fear of closures.
  My hon. Friend the Member for Barking (Miss Richardson) referred to unemployment as being one of the problems of cutting down defence expenditure. In my constituency approximately 11 per cent. of the 90,000 work force is dependent on defence. My right hon. Friend the Prime Minister assured the electorate in the last election that the future of the dockyards was safe. Indeed, he said that they were national assets that must be preserved for the use of the country. I accept that, but we must ensure that the dockyards are efficient and competitive in every sense of the word.
  The Defence Estimates pay tribute to the work that has been done in Chatham dockyard on nuclear refuelling and refitting. This is pioneering work that will have its effect in future uses in the civilian world. It is many years since Chatham pioneered the use of glass-reinforced plastics for use in shipbuilding. We must not run down the dockyards but extend their activities.
  The dockyards have been allowed to decline over the years. I am familiar only with Chatham dockyard. It is fairly easy to see that it is based on Victorian

  1521
  buildings and Victorian machinery. Much of the machinery dates from before the First World War. I was told that the ship plate-rolling machine dates from 1913 and that the punching and shearing machinery dates from 1914. The newest dockyard crane dates from the last war—namely 1944. The dockyard is rundown and is ineffectual in coping with modern needs and modern technology. We need to revitalise the dockyards in view of their great expertise.
  What is needed in Chatham is new construction work. Such work would raise morale, raise technological knowledge and increase trading opportunities. That is necessary if we are to have our ships maintained for many years. I welcome the review but I hope that it will recognise the opportunities and will not attempt to restrict output.
  There is an excellent opportunity in Chatham dockyard in terms of North Sea oil. The Manpower Services Commission has reported on the exploiting of North Sea oil. We know that the programme is already two years behind schedule. One of the drawbacks is that we are short of skilled manpower in the shipbuilding industry. In fact, by 1976 we shall be 16,000 men short. Given that situation the dockyards could be of great help, and particularly Chatham.
  There is plenty of space at Chatham. As a casual observer I would say that there are 50 acres of redundant land in Chatham dockyard that could easily be put to use on the North Sea oil project. The Government should look to the dockyards in terms not merely of Royal Navy use but of Royal Navy plus civilian use. In that way not only would we gain efficiency from having efficient refittings, but we would be able to get the North Sea oil ashore.
  I shall support the Government tonight. I think that they have the correct balance. They are providing a viable defence force bearing in mind our economic capacity. I was interested to hear hon. Member saying that they feel that Russia will not attack us and that détente is a reality. I accept that. It should be realised that Russia is still dominated by the fear of a war. We must recall that Russia lost 20 million souls during the last war. However, as a young schoolboy I remember the Berlin airlift and the tensions in
  1522
  Europe. Having a defence force has eased the situation. I am prepared to accept the burden of continuing defence expenditure as I feel that it is up to the politicians to relieve tension in the world.
  7.59 p.m.
  Rear-Admiral Morgan-Giles: I hope that the hon. Member for Rochester and Chatham (Mr. Bean) will forgive me if I do not follow him into the ramifications of his constituency, which I know very well and of which I have fond memories.
  To be fair to the Secretary of State—and I am sorry that he has had to leave the Chamber—I think he realises the extent of the threat that we have been discussing, the shortcomings of NATO and the absolute inadequacy of our national defence preparations. The Chiefs of Staff have done a good job on him and he is learning the facts of life. I am very sorry that he is not in the Chamber at this moment to hear me say so. Obviously the Secretary of State for Defence has been unable to carry his point in Cabinet. It must be a curious Cabinet, split from top to bottom on many subjects beside defence.
  The Government seem to be terrified of the motley crew of associated Left-wingers, Marxists, flat-earthers, sincere pacifists and charming agnostics who signed the Labour amendment. To buy off that lot, the Government seem to be willing to put the whole of Britain's security at risk. That is my chief accusation against them. The Under-Secretary of State for Defence for the Royal Navy shakes his head, but that is my accusation. Meanwhile, the Prime Minister sits on the fence in Jamaica where, typically, he is simultaneously quoting Kipling and saying that the great British Raj has fallen so low that it cannot afford to keep 600 men in British Honduras.
  The White Paper makes a most valid point in Chapter II, paragraph 8. It says that the increasing capabilities of the Soviet forces
  "must be measured not only in terms of military potential but also as a possible means of reinforcing political pressure without recourse to overt hostilities."
  Mr. Adlai Stevenson made the same point years ago when he said that Communism had never been the free choice of any country anywhere in the world.

  1523
  That brings to mind recent events in Vietnam. I was both stunned and amazed that no single word of sympathy or regret has been uttered by Her Majesty's Government. Even though we never lifted a finger to help the United States in South Vietnam, which is a matter of personal regret to me, I believe that Her Majesty's Government should in common decency, now pay tribute to the efforts which the United States made to resist aggression and should admit that the Americans were morally right in what they were trying to do. It was not the GIs who fell down on the job. The 55,000 United States Servicemen who died so far from home are proof of that point.
  Mr. Bob Cryer: Does not the hon. and gallant Gentleman recall that in 1954 General Eisenhower—who, as far as anybody can recall, was not in the hands of the Communists or receiving "red gold"—said that the reason why free elections were not held in Vietnam was that the people would have voted to a man for Ho-Chi-Minh. That was the reason why America introduced the most bloody and horrific aggression the world has ever seen.
  Mr. Deputy Speaker (Sir Myer Galpern): Order. There are still a large number of Members who are anxious to take part in the debate—and indeed the hon. Member for Keighley (Mr. Cryer) is trying to catch my eye. Therefore, interventions are not helpful.
  Rear-Admiral Morgan-Giles: In that case I shall reply only briefly by saying that what I most remember about General Eisenhower was his clear elucidation of the domino theory, which seems now to have been proved to the hilt.
  In a debate in another place last Wednesday, Lord Home of the Hirsel, in a debate on the security problems in the free world, said:
  "No one would deny the citizen of the Soviet Union the right to his own political philosophy and his chosen way of life, but in the last 30 years the trouble has been that Communism has been for export, and that behind the export drive is a doctrine of unending ideological conflict and confrontation, of ultimate victory over all the rest of the philosophies, whether the persons like it or not, while according to the Communist doctrine any means is justifiable to attain the end. This, my Lords, is called co-existence. Such a definition as I have given—namely, the continuation
  1524
  and intensification of the ideological conflict, the ultimate victory over all the rest, and the means as justifying the end—was given over Moscow Radio as lately as October 1974 as official Russian policy."—[Official Report, House of Lords, 30th April, 1975; Vol. 359, c. 1254.]
  The threat of which we are speaking is world wide and not just limited to an arbitrarily-defined NATO area. The threat is not only one of military action in conditions of overt war. The Soviets are doing so nicely, according to their own viewpoint, that they have no need to resort to open war. Open war is the least likely contingency. For these reasons, I do not want to see our defence effort concentrated so exclusively in central Europe, nor do I want NATO to bury its head—to use the Secretary of State's phrase yesterday—like an ostrich with the sand trickling into its ears.
  While NATO is in this posture, the West watches powerless while the countries of South-East Asia rush to ingratiate themselves with the new Soviet-inspired power in Vietnam. Yet this is the very moment when Her Majesty's Government decided to withdraw the last vestiges of our power and influence and peace-keeping capacity from Singapore. It is almost as though the Government had a death-wish over this matter.
  I wish to ask one or two questions of the Minister and to point to one or two outstanding omissions from the White Paper. I wish first to raise the question of military intelligence. As a one-time naval intelligence chief in the Far East, I realise the sensitivity of these problems and do not wish to embarrass the Government by asking them awkward questions. But surely it is essential for the Government—any Government—to know what is happening and to have warning of intentions. Those intentions are more important than capabilities, and we should be able to warn our allies of the Communist threat world wide. Therefore, proper military intelligence is essential in the prevention of war. Often when people discuss defence matters, both in the House and outside, they tend to escalate the scenario into one of declared war. Our object must be the prevention of war.
  What happens short of declared war? In this matter intelligence is of prime importance. I wish to ask the Minister how our intelligence organisation can be continued in places from which we are

  1525
  withdrawing. I know, and I hope that the Minister knows, how intelligence is organised. I hope that he will assure the House that heed is being taken of this point and that the arrangements are adequate.
  Secondly, I wish to ask why the Government choose the central front in NATO as being the most important and supreme priority. It is almost as though in the eyes of the Government the outside world does not exist. The northern flank has been referred to by many who have spoken on both sides of the House, with a direct relevance to North Sea oil. The Mediterranean, Cyprus, Greece and Turkey have been referred to, but I have not heard anybody refer to Yugoslavia. Marshal Tito has carried out a tremendous job in his country since I first joined his partisans in 1943. What a wonderful thing it is that a Balkan dictator has been able to keep his head on his shoulders for such a long time. However, he is not eternal, and the prospects in Yugoslavia when Tito leaves the scene give cause for great concern.
  It is vital for us as a NATO power to be in a position to help free countries anywhere in the Mediterranean, and to be seen to be able to do so. The present time is not the right moment in history for the British to walk off the scene in the Mediterranean area. NATO is a much wider concept than the flat plains of Germany.
  I suggest to the Government that what is best for Britain is a very much greater concentration of maritime strategy. I hope the House will acquit me of speaking as the single Service voice in this debate. It is due to the fact that I spent some time in the Royal Air Force in the war that I have such a funny face. It is easy to scoff at me and at people who speak as I do about our wanting British forces to police the world, but we must recognise the fact that it is at sea where the Soviet threat is growing fastest. For example, they are producing one new nuclear submarine per month. That figure was given earlier—and nuclear submarines are not defensive weapons.
  There is a threat, which is extremely strong and growing fast, on the Atlantic route. Recent events in Portugal, probably since the White Paper went to the
  1526
  printer, have completely altered the situation as regards the possibility of United States reinforcements for NATO crossing the Atlantic in time of emergency. The threat cannot be defined as stopping at an arbitrary latitude in the defined NATO area. We must consider the Cape route, the Indian Ocean and the approaches to South-East Asia.
  Will the Government please be less obsessive about the land aspect of NATO? Will they be a little more maritime minded? Will they keep all the Nimrods? Nimrods comprise the essential means of knowing what is happening on the oceans of the world, to stop wars, and to stop small incidents developing into big incidents. Will the Government cut the frigate programme as defined in the White Paper? I can at least congratulate the Secretary of State on preserving the through-deck cruiser. I know that the through-deck cruiser is primarily an anti-submarine ship.
  I should like the Secretary of State to go ahead with the maritime Harrier. He has been urged to do so, not only for military reasons. All naval officers know that organic air power is essential if we are to control the seas. The Minister responsible for the Navy is grinning. If he had ever been bombed at sea with no aircraft of his own in sight he would realise the military importance of air power. There are export potentialities for the maritime Harrier. It is unthinkable that we should not go ahead with its development.
  My right hon. Friend the Member for Taunton (Mr. du Cann) made an interesting plea to the Government about the offshore tapestry. I hope that the Minister has taken note of that point. It is at sea that Britain can make the best and most effective contribution to the strength of the Western Alliance.
  I do not think that sufficient allowance has been made in the White Paper for planning for the unforeseen. Almost all of the 50 and more operations in which British forces were engaged were unexpected and unforeseen. The great success of the amphibious force rescuing British people in Cyprus is the most recent example.
  Either the country must be defended or left undefended. Our forces are already cut to the bone. No more cuts can be

  1527
  accepted. The Secretary of State and the Prime Minister know that. They should have the guts to say so.
  8.15 p.m.
  Mr. Neville Sandelson: The House always listens with the utmost respect to the hon. Member for Winchester (Rear-Admiral Morgan-Giles). I have no pretentions to being either a professional strategist or a logistics expert. The hon. Gentleman will therefore forgive me if I do not comment on his speech, except to say that I listened with considerable interest to his reference to Soviet nuclear submarine power and the menace that that poses around our coasts. I am sure that those remarks will have been taken to heart by many right hon. and hon. Members.
  I wish to refer to some remarks made by my hon. Friend the Member for Barking (Miss Richardson). I am sorry that she is not in the Chamber, as she is one of the principal signatories to the somewhat bizarre amendment. She said that she deplored the build-up of the Warsaw Pact military power and the vast scale of its expenditure. No one will contradict her. She said that she felt that the scale of that expenditure came about because of the Soviet fear of the West. Neither Prague nor Budapest were in the West when the Soviet Union ruthlessly repressed the peoples in Czechoslovakia and Hungary and obliterated their freedoms. However, West Berlin is still, if somewhat tenuously, in the West, as is Amsterdam, Brussels, Paris and London. We do not wish, any more than do the peoples of those countries, to follow the fate of some of the peoples in Eastern Europe. The Russians are not frightened of us, but the West may have some reason to be frightened of the Soviet Union and her Warsaw Pact military might.
  Many hon. Members must have asked themselves the question which I have posed to myself over the past two days. How much is too much? How little is too little? The burden is on those who complain that the Government are spending too much, or not enough, to give concrete and specific instances of either overspending or defence deficiencies. This debate has been revealing if only because of the lack of convincing
  1528
  argument against the Estimates either from the Opposition or from those who have put their names to the amendment.
  Listening to the hon. Member for Ayr (Mr. Younger), who spoke yesterday for the Opposition, it seemed that the sky was the limit and that no economic imperatives or considerations would inhibit defence expenditure from the point of view of the Conservative Party. That approach seems as nonsensical to some Government supporters as does the attitude of some of my hon. Friends, whose speeches have revealed an obvious aversion to Labour Party policy. I think that the amendment is a pretty thin disguise and camouflage for a fundamental disagreement with the Labour Party's policy on defence. If I am right about that I wish that some of my hon. Friends would come clean and admit their dissent openly. The House would respect them if they did that rather than engage, as they appear to be doing, in a type of sniping exercise.
  Labour Party policy cannot be repeated too often. It was set out in our two manifestos of last year. I am a great stickler for what is set out in those manifestos. I remind hon. Members of the clear language in which Labour policy is stated. In February the Labour Party spoke about progressively reducing the burden of Britain's defence. It also stated that we would achieve savings on defence expenditure of several hundred millions of pounds per annum over a period. That is precisely what these Estimates set out to do.
  In this debate I have not heard any serious critical analysis using an honest yardstick—whatever comparative statistical approach is applied—which comes anywhere near demonstrating that the Government are failing in their declared objectives along the lines of Labour policy. I sympathise, although I cannot agree, with the criticisms of some of my hon. Friends about defence expenditure generally. The amendment is an emotional spasm for some of them and an ideological spasm for a few others. I wish that they would declare themselves. Nevertheless, there is no Government supporter who does not feel an abhorrence at the vast outpouring of our limited, and largely borrowed, resources on defence expenditure at a time when

  1529
  grave economic weakness is wreaking such damage on those social policies to which my hon. Friends and I subscribe. In recent weeks, massive cuts in grants to local authorities for housing modernising programmes alone have appalled many of my constituents whose houses were in a tumbledown condition.
  Financial crisis is presenting a grave threat to our social services. Hospital and school administrators, teachers, including, now, university teachers, are all crying out, with justice, for more money and for higher salaries, simply to maintain existing standards. For that reason, we abhor every penny spent on military hardware and weaponry of any kind, unless it is necessary and justified.
  In October, the Labour Party declared that its policy was one of détente and support for NATO. We said that the ultimate objective of the movement towards a satisfactory relationship in Europe must be the mutual and concurrent phasing out of both NATO and the Warsaw Pact.
  I believe that the Government are pursuing, with much greater effect and success than their Conservative predecessors, foreign policies which are aimed at genuine détente, at agreements for mutual arms reductions, and international security arrangements generally. But we know the facts about the enormous buildup of military strength, and it is a continuing build-up both in conventional and nuclear striking power in the Warsaw Pact countries. We must ask ourselves why they are doing that and why they are spending such a vast amount of money in that direction.
  Defence expenditure is not a matter to be decided in limbo. Unless defence is to be effective and our contribution to the NATO structure made an effective one, why spend anything at all? We are not looking for token defences or token contributions to NATO. We believe that NATO is vital to the defence of our country and of the people whom we represent. I ask right hon. and hon. Members to remember that the nation was deceived and let down by Governments and politicians in the 1930s. We dare not and must not repeat those errors.
  To the Opposition, I say that the sky is not the limit. We are not at war. I hope that we are nowhere near the brink
  1530
  of it. There would be little point in having expensive military armoury in Europe if by doing so we were to precipitate economic collapse at home. If that were to happen, the enemy would quickly be in at the back door. The Opposition are adopting a fractious attitude to my right hon. Friend's Estimates. If they really believe that these cuts go too far, they should tell the country how much they would want to spend on defence rather than try to play a political game over this issue.
  Since all but essential European commitments have been abandoned, or shortly will be given up, I cannot see where further cuts can be made without endangering our NATO rôle and our NATO relationships. It is possible that savings may be made in further collaboration and standardisation in weaponry with our European partners. As we know, standardisation of equipment allows flexibility in operational rôles, in terms of the use of airfields, ammunition, anti-tank missiles, and so on. There is a strong case for providing the British Army of the Rhine with Milan, but we must try to get agreement with the French and the Germans that, in return, they will place orders for British weapons systems in order to safeguard our own industry and employment in our constituencies.
  I have vital constituency interests at stake in this connection. My constituents working on defence projects are numerous, highly skilled and very concerned about their jobs and the retention of defence contracts in a situation which they know cannot permit the abandonment of defence and defence manufacture.
  In NATO, we already rely heavily on the strength of our partners, especially the German forces. Most of our partners are better equipped than are our own forces. Even with the switch in our defence rôle and commitment to NATO and the central European arena, our contribution is barely adequate, faced, as NATO is, with the massive build-up of men and weapons in the Warsaw Pact countries.
  As my right hon. Friend the Member for Kettering (Sir G. de Freitas) said just now, the word "détente" means, roughly, "live and let live". I prefer to put it in this way: it means holding on to the

  1531
  present situation. However, it certainly does not mean retreat to a position of weakness.
  Without a strong and resolute NATO structure, there would be no détente, no discussions on arms reductions, and no conference tables for our foreign Secretary or his colleagues to sit at later this year.
  Aneurin Bevan, as Labour's Shadow Foreign Secretary, a year or two before his death, pleaded with his own friends at a Labour conference in a debate on unilateral disarmament not to send him naked to the conference table. I ask all my hon. Friends to be realistic about these issues, to support our Foreign Secretary by giving him at least a minimum of power to his elbow in the policies for peace that he is pursuing, and to vote with our Government tonight. That is what the vast mass of our Labour voters expect of us.
  Mr. Deputy Speaker (Sir Myer Galpern): The last two speakers, between them, took 28 minutes. We have a balance of six hon. Members who still wish to take part in the debate. If subsequent speakers take as long as the last two did, only two and a half hon. Members will be able to speak before the Opposition spokesman replies. However, we can accommodate all those who still wish to speak if each of them takes only six minutes.
  8.27 p.m.
  Mr. Antony Buck: First, I would like to say how much I agree with much that the hon. Member for Hayes and Harlington (Mr. Sandelson) had to say. Towards the end of my speech I may have words to utter on the content of his remarks.
  I vastly welcome the opportunity of making what I hope will be a short contribution to this debate, first as a Member who has the honour of representing a garrison town in Parliament and secondly as a former Minister for the Royal Navy. I would be grateful if we could have, perhaps at once but, it not, at a later stage, an indication when we are to have the various debates which will be forthcoming in due course on the Service Estimates, because I hereby warn the Government that I have a considerable number of constituency points which I
  1532
  propose to save for that occasion and also a considerable number of "Navy" points which I shall seek to raise in due course. I hope that we shall have tonight an indication when these debates are to take place.
  I shall raise at the outset one matter relative to my constituency. It is the only specifically constituency point that I shall make. It relates to the military hospital at Colchester. I say to the Minister who is to reply that I regard it as having been an exercise in tactlessness and stupidity that in the White Paper the Government should have announced that the hospital at Colchester
  "… can be closed, once alternative arrangements have been completed to provide cover for the Servicemen and their families in the area."
  This hospital in Colchester does a magnificent job not only for Service personnel but for many of my constituents who are civilians, who have given to them the opportunity of admirable treatment there.
  I asked a Question on this subject the other day but the Under-Secretary of State for Defence for the Army in effect gave a nil reply. This decision, reversing a decision which we on this side made when in Government—when I extracted a guarantee from my Army colleagues down the corridor that this hospital would remain open for 10 years. The decision to close it, made without local consultation or any consultation at all, when provision is made for Service personnel and which makes no mention at all of providing for civil personnel in my constituency who benefit from the existence of this hospital and receive splendid service from the Royal Army Medical Corps, is a wrong one. This closure will also have a profound effect on the career structure of the RAMC. I hope that something will be said by the Minister who concludes the debate this evening on this matter, which affects those in my constituency, Service men and civilians alike.
  I turn to the broader aspects of the defence review. The hon. Member for Hayes and Harlington seems to think that his Government have now got it absolutely right. My recollection is that he thought the same when the White Paper was first produced. I would remind him that he cannot have it both ways. In

  1533
  an earlier debate it was stated that the Defence White Paper, when it came out, was right. Elaborate processes had been gone through. A terrible error was made by the Secretary of State in suggesting that the Chiefs of Staff had gone along with what he said. It was a terrible, grave, constitutional error and I am glad to say it has not been repeated.
  Now we are considering a White Paper in the light of a further cut of £110 million. Hon. Gentlemen opposite constantly castigated us for making relatively small cuts, thus not getting a long-term viable programme on defence, a criticism which had some validity. But now hon. Gentlemen opposite are doing the same thing. We had a long-drawn-out review and a decision was arrived at, and within a few weeks we have another £110 million lopped off defence. What a devastating effect this must have on the morale of those who wish to have a career in the Services. The cuts were not right then. I believe that the Government went too far in defence cuts as originally announced in the White Paper. But with the additional £110 million it is quite clear that the cuts go too far.
  Schizophrenia is a dangerous disease when found in a person. My hon. Friend the Member for Ayr (Mr. Younger) the other day described the Secretary of State as being like Dr. Jekyll and Mr. Hyde. The schizophrenia which is afflicting the Government is certainly made very apparent from the White Paper now before us. In that paper, splendidly prepared by the Departments with all the skill and expertise with which some of us are familiar, Chapter II sets out the menace confronting the country. There is set out what we as a nation, and as part of NATO, have to deal with in terms of the balance of power throughout the world.
  Perhaps we can pause for a moment to look at one or two of the highlights in that part of the White Paper. The right hon. Member for Down, South (Mr. Powell), whom I am glad to see in his place, in his most interesting contribution to the debate, indicated, as I understood him—and I will read his speech with care tomorrow—thatestimates must always be arbitrary. I see the right hon. Gentleman nod in agree
  1534
  ment. They are always arbitrary, he said, making the point that they should not be irrational.
  In his interesting speech he went on to say that in this sphere we have not found firm ground. I am sorry that we did not find firm ground in the period when he was shadow Secretary of State for Defence. I remember hearing him speak on this issue in the past. It is difficult to get to the firm ground in this sphere. I hope the right hon. Gentleman will co-operate with some of us who are interested in defence in trying to do a fundamental analysis such as the Government have singularly failed to do in their Defence White Paper.
  The right hon. Gentleman is right, as are other speakers, in indicating that this has not been a fundamental review. There has been a party conference commitment to bring spending down approximately to that of our NATO allies. There is no suggestion in the White Paper that the arbitrary figures must be wrong. I hope that those on this side of the House who are sympathetic to an analysis of this kind will do what hon. Gentlemen opposite have failed to do—and with the help of the splendid analysis of the menace set out in Chapter II.
  Let us consider what is said in relation to manpower. It is said that there are 30 per cent. to 40 per cent. more in the fighting units in the Warsaw Pact countries, excluding those in Russia, than in those of the West. That is the problem. What is the Government's response to this? Is it to go to Lancaster House with the Secretary of State—as Chairman, I am glad to say, of the Eurogroup—and say, "We have this terrible disparity from the manpower point of view. Despite our great economic difficulties, we do not intend to reduce our manpower."
  In fact, the Government's response to this manpower disparity of 30 per cent. to 40 per cent. in NATO countries, is to make manpower cuts of 15,000 men in the Army and to cut out one Royal Marine Commando. It does not make sense. I do not suggest that the Secretary of State went to Lancaster House today naked. I would not like to see him streaking down Pall Mall. But he went severely cut about by the tribute which has been exacted from him by the

  1535
  Tribune Group; by the sacrifices which he has had to make because of the pressures of Labour hon. Gentlemen below the Gangway.
  The right hon. Gentleman had to go to Lancaster House saying that we are making unilateral cuts—because there are no corresponding cuts by the Warsaw Pact countries. That is the Government's response to the manpower disparity—a further cut in our manpower. I would imagine that the right hon. Member for Down, South would be worried by that because although we hope that the continuing commitment in Northern Ireland can be cut down, while this process of the scaling-down of forces goes on there must be an effect on the number of tours of duty served by units for the next year or so. That is disturbing.
  I come to Chapter II of the White Paper and to the naval threat, which is so severe. Since the Cuban crisis of 1961 there has been a massive build-up of Soviet vessels with the mighty Admiral Gorshkov, Commander-in-Chief of the Russian Fleet, making sure that never again will the Russians have to undergo the humiliation of turning ships back from whence they came at the behest of the American Government.
  What is the Government's response? It is a cut in the naval building programme. Does that make sense? The Government's response is wholly lunatic. They have set out in Chapter II the tremendous problems confronting the NATO Alliance. Their response is to say, "We shall cut unilaterally". What a terrible effect this is likely to have on the MBFR talks. The diagnosis is that some exercise is needed. But the doctor says to the patient, "Every time you feel like exercise I want you to lie down until the feeling wears off." That is an appropriate simile.
  The Government have analysed the problem in Chapter II and have then said to the nation, "You can safely ignore these problems. Despite what confronts us we can make unilateral cuts." It is a dangerous policy in view of the menace from abroad and also because of the increased menace internally. We have seen what has happened in Glasgow and elsewhere. In the last resort we have
  1536
  had to call on the Armed Forces to assist us in the maintenance of law and order.
  This is no time for us to be cutting down on trained manpower, on men who are dedicated to the preservation of law and order and to the preservation of our society as we know it. It is no time for such cuts as were announced in the White Paper and it is certainly no time for the further cuts that have been made.
  Several hon. Members rose—
  Mr. Deputy Speaker: Order. I am sorry that the hon. and learned Member for Colchester (Mr. Buck) was not able to respond fully to my appeal and spoke for 15 minutes instead of six. There have been two casualties already. I will not make any further appeals to hon. Members. I leave it to them.
  8.40 p.m.
  Mr. George Reid: I hope that the hon. and learned Member for Colchester (Mr. Buck) will forgive me if I do not take up his detailed points. As a Scottish Nationalist determined to return to a sovereign Scots Parliament, I am naturally concerned with defence as it affects my own country.
  Given the time limit which you have suggested, Mr. Deputy Speaker, I shall make just a few points quickly. Scotland overlooks what is still the most strategic stretch of water in the world—the Greenland, Iceland and Faroes Gap. It commands that gap and covers the Northern approaches to both America and Russia. Our waters are a forward deployment area of the Soviet Northern Fleet, based at Murmansk. Scotland is currently hoaching—to use the Scottish word—with military hardware. The discovery of significant offshore oil and gas, and the probability of mineral deposits, in what would be a war zone for NATO and Warsaw Pact forces, add to our concern. Should the Law of the Sea Conference decide on a 200-nautical-miles exclusive zone, the demands on our forces will be significantly increased.
  It seems certain that over the next decade Scotland will see a substantial rise in defence activity rather than a decline. Within the last three months we have seen Soviet trawlers nosing around Amoco's 478 platform. These

  1537
  platforms are relatively open to military attack from the air by a single sneak bomber and from the sea by frogmen or direct torpedo attack. They are also subject to sabotage and terrorist activities, as are the land pipelines and other shore installations. Undoubtedly the new tropospheric scatter system of communication to the northern platforms, with their dovetailed shore stations, will also arouse Warsaw Pact interest and suspicion.
  I should like to make two quick comments to the Minister. First, the provision for surveillance and interdiction in the offshore area is clearly beyond the means of the United Kingdom or Scotland alone. To that extent I welcome the February decision of the NATO Council to accept responsibility for the defence of the platforms in the North Sea in the event of a threat from a foreign Power.
  Secondly, I wonder, despite the winding up speech by the Under-Secretary last night, whether the present proposals for the defence and security of the installations announced by the Minister in February are sufficient.
  My party regards it as completely unrealistic that each platform should have a defence capability of its own. Who is co-ordinating the various activities of NATO, the Ministry of Defence, the Department of Energy, the Offshore Supplies Office, and the local police in this area?
  Does the Minister suggest that the construction of five new ships, similar to those operated by the fisheries protection squadron, is sufficient? Does he not agree that what is currently being provided is a minimum response, no more than a patrol surveillance exercise, when a force is needed which can react at speed and have the best possible communications system? That implies the provision of helicopter-carrying frigates.
  Members of the Scottish Assembly are certain to take more than a passing interest in such defence matters regardless of any strictures on them by the House. Apart from Scotland's strategic position and the 20,000 defence personnel stationed there, there is the matter of nuclear bases. My hon. Friends and I and Labour Members are opposed to the siting of nuclear bases in Scotland. The Government can speak for themselves. However, let me add one rider. While the nuclear members of NATO may not value Scotland's
  1538
  defence contribution to NATO quite so highly if nuclear facilities, including over-flight and transit facilities, are withdrawn, our position at the base of the northern gap gives us a powerful negotiating hand. Norway and Denmark have a non-nuclear relationship with NATO, and it is likely that this precedent will allow Scotland to make similar provisions for herself after independence.
  I turn to the Scottish dimension, and the dilemma of any nationalist participating in a debate of this type While we are fully conscious of the need for collective Western defence, our concern is naturally more with the defence profile of countries of comparable population and GNP such as Finland, Norway, Denmark, Austria and New Zealand. An independent Scotland has three defence options—home defence on the Southern Irish model, armed neutrality similar to Finland and Austria, or an alliance partnership, such as that of Norway and Denmark.
  Given Scotland's strategic position, the home defence model—spending only a minimal amount of our GNP is impractical. Armed neutrality would be both costly and inimical to our political traditions. My party is firmly committed to alliance partner status. Our Chairman has confirmed the almost certain adherence of an independent Scotland to NATO.
  Given more time, I could have taken the House through the costings of an independent Scots defence budget. That has been done at considerable length. The thinking of my party, despite the giggles from certain Conservative Members, is based on six basic assumptions. First, an independent Scotland will participate in the Western alliance. Secondly, Scotland will be a non-nuclear Power, and no nuclear weapons will be stored on or allowed into Scottish territory. Thirdly, Scottish territory, including air and sea space, will be open to access by alliance partners, but no alliance partner will be permitted to engage in military operations from Scottish territory without the consent of the Scottish Government. Fourthly, the Scottish defence capability will be largely defensive and not offensive. Fifthly, Scotland will be a member of such international organisations as UNO, and will

  1539
  make available such military units as that body requests for peacekeeping operations. Sixthly, Scotland will be a member of the Commonwealth, and will have close defence links with England and pursue a good-neighbour policy with all countries of the British Isles.
  The White Paper covers the next nine years. My hon. Friends and I confidently expect that within that period Scotland will regain her independence. While we wish the Minister every success in general in the meantime, our aims and objectives are so totally different from his and those of the hon. Member for Edinburgh, Central (Mr. Cook) that the SNP will have no possible course but to abstain from voting tonight.
  8.47 p.m.
  Mr. Roderick MacFarquhar: In deference to other possible speakers I shall cut short what I have to say and not take up the points raised by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid). As I dealt with the far-flung pretensions of the latter-day Palmerstons on the Opposition benches in our last defence debate, I shall confine myself to the opinions of some of my hon. Friends who have criticised my right hon. Friend the Secretary of State for not cutting defence enough, and have tabled an amendment accordingly.
  We must first settle the aims of our defence policy within the context of our foreign policy, as my right hon. Friend has tried to do. The main focus of our defence is Europe. My right hon. Friend has spelled out his perceptions of the threat there in some detail. My hon. Friends have failed to spell out their perceptions. Does my hon. Friend the Member for Edinburgh. Central (Mr. Cook) regard the Soviet Union as a poor
  "Wee, sleekit, cow'rin', tim'rous beastie",
  crouched behind its massive defences, fearing a NATO onslaught? That is the picture that he and my hon. Friend the Member for Ealing, Southall (Mr. Bidwell) seem to be painting. Do my hon. Friends think that immediate, unilateral cuts of £1,000 million from the defence budget, in advance of any MBFR agreements, will melt Soviet fears and suspicions and usher in a new era of international good will? Do they regard the
  1540
  effective withdrawal of Britain from NATO, which cuts of that extent would mean, as desirable? Do they regard NATO as obsolete? If so, do they contemplate with equanimity the dismantling of the alliance in advance of the dismantling of the Warsaw Pact?
  I ask them to consider those possibilities carefully. The kind of cuts that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Litterick) wants could, as the Second Report of the Expenditure Committee makes clear, make nonsense of British participation in NATO. I believe that virtual British withdrawal from NATO could lead to American withdrawal from Europe.
  I should like to develop that point. My hon. Friend the Member for Hornchurch (Mr. Williams) spoke yesterday of the new disenchantment in Washington. I noticed a report in The Guardian today that congressional leaders and senators are making reassuring noises to the effect that withdrawal from South-East Asia does not mean withdrawal from Europe. I am sure that those noises are sincere. But I am less sure, in the perspective of American history, that they can be taken as sound evidence of America's likely behaviour in her third century of existence. From the very founding of the republic the Americans have been isolationist by instinct. George Washington's valedictory address, which I would quote if there were time, contained the famous definition of American isolationism which has been followed virtually ever since. America was dragged into the First World War with reluctance. Most of the country had wanted to remain neutral. Even the most recent immigrants from Europe wanted to keep out of the European struggle, because it was precisely that kind of entanglement that they had gone to America to escape.
  After the First World War, America refused to join the League of Nations, feeling again that it was getting too entangled with tricky European politicians. In World War II, whatever Roosevelt's views, only after his country had been attacked by Japan was he able to lead America into the war.
  I suggest that that proves that America's post-World War II involvement with Europe, through Marshall Aid, NATO, and in various other ways, is

  1541
  not, as we have become accustomed to thinking, the norm of American diplomacy, but is rather a totally exceptional 30 years in the 200 years' sweep of American history.
  Some people comfort themselves, in the wake of Vietnam, with the thought that America would never withdraw from Europe in the same way. In fact, as I have tried to show, Americans have traditionally been isolationists. A recent United States poll revealed that only one American in three would be prepared to fight for the defence of Western Europe.
  Certainly we should not believe that America's economic investment in Western Europe is too valuable to be abandoned. In 1973, the net US investment position vis-à-vis Western Europe was minus $45 billion. The excess of US private direct investment in Western Europe over European investment in the United States in 1973 was only $25 billion, and the net capital inflow into the United States from Western Europe was $12 billion.
  In the same year, according to Senator Mike Mansfield—the leading advocate of major United States troop reductions in Europe—the overall cost of the United States NATO commitment was $17 billion to $18 billion, the direct operating cost of the manpower of United States forces in Europe was $4 billion, and the net balance of payments drain was $1·5 billion.
  Clearly, from those figures, if America were to contemplate withdrawing from Western Europe, the difference between the savings on defence expenditure and the loss of economic investments would not be so large that a country with a GNP of over $1,000 billion would be deterred by that prospect alone.
  I am not trying to suggest that America will suddenly abandon all its allies overseas. I am saying that, in the aftermath of the Vietnam débâcle and in the shadow of Dr. Kissinger's failures in the Middle East, there is bound to be an agonising, if partially subconscious, reappraisal by Americans of their rôle in the world.
  In that atmosphere, the voices of those senators who have long been arguing for troop reductions in Europe could seem persuasive, and I am sure that there will
  1542
  be such reductions. But the crucial point is that an effective abandonment by Britain of her NATO commitment, which my right hon. Friend the Secretary of State has specifically and, I believe, successfully, tried to avoid, could be decisive in changing American troop reductions into a total troop withdrawal and an adoption of a policy of fortress America.
  It may be that some of my hon. Friends will welcome that. If so, they should say so and elaborate their alternative foreign and defence policies. Would they advocate greatly increased British defence efforts to make up for the American departure? I think not. But if my hon. Friends are advocating policies which, as I have argued, could lead to the dissolution of NATO unconnected with any similar dissolution of the Warsaw Pact, they should remember that that is not what the Labour Government stands for, that that is not what the Labour Party stands for, and I believe that that is not what the great majority of the British people would want them to do.
  8.54 p.m.
  Mr. Cyril D. Townsend: The hon. Member for Belper (Mr. MacFarquhar) must excuse me if I do not follow all his arguments.
  We are being asked to support the cutting of the very lean of our defence forces—the fat was trimmed years ago, as any serving soldier, sailor or airman will tell us—at a most turbulent time in world history.
  For as long as I have been alive, the Communists have been fighting in Vietnam. The fortitude of their fighting men excites our admiration just as much as the conquest of a free and independent State by force of arms must trouble liberal thinking men around the bowl of the Atlantic.
  In the Eastern Mediterranean, Greece and Turkey are eyeball to eyeball over Cyprus, and nearer home our oldest ally sinks inexorably into a tyranny of the Left. Why these cuts now, and when the MBFR conference is deadlocked?
  The White Paper says:
  "… resources must be released for investment and improving the balance of payments."
  Perhaps the Secretary of State was nearer the truth when, at his party adoption meeting in his constituency last September he said that Labour would prune "several

  1543
  hundred million pounds" from the Armed Forces to help pay for social services. Much of the money saved would be
  "… transferred to house building, hospitals and schools and man-power will be freed for more productive work"
  Whatever the reasons—clearly, that most foolish call for a cut of "at least £1,000 million" at the 1973 Labour Party conference is a good starting point—we, as a leading European nation, are turning away from the strategy of flexible response towards the earlier use of tactical nuclear weapons.
  It is this basic, undeniable fact which sends shudders through the most hard-boiled, battle-experienced veteran of BAOR, if not through the frail frames of such hon. Members as the hon. Member for Salford, East (Mr. Allaun). The Tribune Group preach the gospel of "butter, not guns", which is easier than to tell the people the reality of the Tribune defence policy. The reality is instructing General Harry Tuzo, currently Commander-in-Chief of BAOR, to use nuclear mines and tactical weapons in the first few hours of an all-out assault on the central front to compensate for his lack of conventional forces. Labour's Left has as its proper slogan, "Let us lower the nuclear threshold and save money." That is a strange ending to all those Aldermaston marches.
  While we lead the way in reducing our defence forces without equivalent loss of commitments, Russia maintains two years conscription, is arming grossly in excess of her defence needs and has been carrying out a large number of underground nuclear explosions. Soon, Soviet military power will exceed that of the United States. A study of the Warsaw Pact's annual exercises strongly suggests offensive intentions. Constant rehearsing of the river crossing battle, with snorkel tanks and highly expensive and elaborate bridging equipment, by shock armies, points to a possible campaign in West Germany rather than the defence of a river line in East Germany.
  We all want to believe that they, like us, want détente. But my generation must not make the same mistake as did my
  1544
  father's generation. We all want to believe—Tribune speakers have said this many times—that they are arming against China and not the West. Unfortunately an expert look at the types and complexity of their weapon systems does not lead to such a conclusion. It is very hard for the honest observer to see any sea change in their outlook towards the West.
  Certainly, they have never renounced their ideological aims. The mass of their population is totally ignorant of the outside world, and the actions of their leaders speak louder than their words in the conference halls. The greatest mistake we can make as political leaders in our community is to see the world only as we would like to see it and not as it is.
  I should like briefly to mention some of the problems in BAOR that I saw on a recent visit. Stocks of ammunition, vehicles and electronic spares are dangerously low. It is a tragedy that the British alone of the NATO allies are not carrying out training above brigade group level—in stark contrast to the position only a few years ago. Substantial reductions in the activity of fighting and non-fighting vehicles have been imposed. Scorpion vehicles are restricted to 600 to 1,000 miles. It is not difficult to imagine the feelings of their recently qualified crews.
  I should like to turn to the North Sea, where the Government have announced measures which are totally inadequate to meet the dangers. A month ago a group of Soviet naval vessels, including a submarine, took up positions near some of Britain's oil rigs. My complaint is that the Government are over-relying on North Sea oil while at the same time under-defending it. Their proposals for the defence of these vital and vulnerable installations are simply not good enough.
  The Government are going through that peculiar Whitehall exercise of waiting for the horse to bolt so that public opinion may be rallied around attempts to close the stable door. Why wait till some terrorist group does something nasty to individuals or equipment on an oil rig? Many independent defence experts have severely criticised the Government's plans as being an inadequate and minimum response.

  1545
  I should like to quote what Professor John Erikson, Director of Defence Studies at Edinburgh University has said:
  "… the force should be able to react instantly at speed and have the best possible communications. The idea of bringing an oceangoing tug into service suggests the Government are reacting as they did to the fishery troubles off Iceland and are taking this no further than a patrol and a surveillance exercise. This offers no precise defence of individual rigs or platforms."
  Last February "Navy International" put forward a number of important suggestions. Of course, there are technical problems as well as financial ones. However, faced with the strategic and economic importance of North Sea oil and gas, I urge the Government as strongly as I can to think again. At the very least naval helicopters must operate in the area, and without delay.
  The House is considering the third round of defence cuts in recent months. I expect round four in the Chancellor's post-referendum emergency package. As Sir Frank Roberts pointed out in his excellent letter to The Times on Monday, written on behalf of the Council of the British Atlantic Committee:
  "the degree of Britain's support for NATO could be of crucial importance to United States opinion at this time."
  I greatly fear that Britain's new cuts will set off a snowball reaction within the Western Alliance. Our allies have reason to say that we do not propose to pull our weight in future. We have superb, highly professional and well-armed regular forces, but their overall size is very small and is now to be made smaller. A short while ago Alexander Solzhenitsyn said:
  "It is not your liberty I am criticising but the way you surrender that liberty step by step. Totalitarianism is born from a weak will and ill-prepared democracy."
  9.3 p.m.
  Mr. Cranley Onslow: A large number of important points have been raised during this long overdue two-day debate. I am conscious that I cannot hope to touch on them all, and I hope that the House will acquit me of discourtesy if time forces me to leave many of them without mention. I am also conscious that many hon. Members who sought to speak in the debate found that the time and the opportunity did not arise. There is some consolation for
  1546
  them and for the House in that we shall soon be able to return to defence matters in the coming debates on the Service Estimates.
  I have served notice on the business managers that we shall want these debates soon, that we shall want the responsible Ministers to attend, and that we shall, in all probability, want to vote on all the Estimates. Therefore, it is no use the Government trying to slip them in on the Monday after the referendum.
  I want to give one more warning. We shall want to deal thoroughly with the many points of important detail which have arisen on the Army Estimates, including the abolition of the brigade headquarters, a point which my hon. Friend the Member for Beckenham (Mr. Good-hart) foresaw in his admirably witty speech yesterday and which I want to touch on tonight. I want to argue the case that there should be some experiment before an irrevocable decision is taken. I want to stress, together with the points made by my right hon. Friend the Member for Penrith and The Border (Mr. White-law) and other hon. Members, that if the reform is introduced it may have a damaging effect on the selection of the best men for the highest commands in the Army.
  On the Air Force Estimates, we must look carefully at the question of the RAF's remaining transport capability and at the need which this must create for reserves. This is a point which many hon. Members have stressed. We must look at the effect of the helicopter cutbacks. We must certainly look at the question of the resettlement of redundant personnel, most of whom, I fear, are at present disposed to emigrate, and at the rehousing of those who are still willing to stay here and give Britain a chance.
  I would give notice to the Under-Secretary of State for Defence for the Royal Air Force who spoke from his brief when he opened the debate, that we shall not require him to read it all again.
  Many points on the labour side will need to be probed in detail, as my hon. and learned Friend the Member for Colchester (Mr. Buck) has stressed. It should be noted that in the defence review it is the Navy that has taken the brunt of cancellation of new capital spending.

  1547
  I hope that when the right hon. Gentleman the Member for Down, South (Mr. Powell) deals with the Navy Estimates, he will be willing to come out from behind the smokescreen which he put down today and will be able to decide then whether he is willing to advise his hon. Friends to take part in the vote.
  Mr. Powell: Is it too much to hope that on that occasion the Opposition will indicate whether they think the level of British forces should be increased in any of the three areas?
  Mr. Onslow: I hope that on that occasion the right hon. Gentleman will not take 26 minutes to say very little.
  On defence sales we shall clearly need a separate day's debate. My hon. Friend the Member for Plymouth, Sutton (Mr. Clark) has stressed the importance of improving and strengthening the sales organisation, and others have touched upon the vital matter of standardisation. It is also clear that we shall soon need a separate debate on the difficult question of the defence of the North Sea, on which there are many on both sides of the House who are anxious about the relevance and effectiveness of the Government's policies.
  One or two topics have received curiously little mention from Ministers in the debate. One is the question of the EEC. I am glad that in his opening speech the Secretary of State found a good deal to say about Eurogroup. I particularly welcomed his remarks on the part that France might play, although I think that he should have gone slightly further and accepted that if France is to come back into Eurogroup there must be not only a greater industrial co-operation but also a greater political co-operation that goes with that decision. However, I must say to the Secretary of State that I find it very difficult to agree with the remark he made in the debate on 16th December last year, when he said, in praise of his own cuts,
  "I believe that this retrenchment enhances our ability to concentrate upon our defence priorities particularly our rôle as a European Power irrespective of whether we stay within the EEC."—[Official Report, 16th December 1974 ; Vol. 883, c. 1163.]
  1548
  I find it very odd indeed that the Secretary of State should be prepared to say that our membership of the EEC has no bearing on Europe's capability of defending itself. It may be necessary for internal reasons for him to play down this subject, but he must not expect us to hide from the nation our belief that Europe's cohesion in defence is inseparable from its willingness to combine in political and economic matters as well.
  Another matter which the Secretary of State left in such uncertainty is that of offset costs. I was not any more able to understand what he meant in his reference yesterday to "host-nation" support, as reported as at col. 1235 of the Official Report, than I was to understand paragraphs 30–32 of Chapter II of the White Paper. My hon. Friend the Member for Beckenham put the question directly last night. He asked the Secretary of State I hope that we shall have an answer tonight from the Minister of State—whether the Government were saying to the Germans that they must pick up the increased bill for BAOR which results from the fall in the value of the pound. The Secretary of State will know, as the House knows, how disturbing the trends are. Recent Questions have brought out the soaring costs across the exchanges and the disappointing level of offset purchases. I hope very much that we can have an explicit answer on this point tonight.
  I turn to the White Paper, on which a fairly effective demolition job was done by my hon. Friend the Member for Ayr (Mr. Younger) yesterday and again today by my right hon. Friend the Member for Penrith and The Border, with my right hon. Friend the Member for Worcester (Mr. Walker) joining in and stamping the wretched thing into the dust. But it had been destroyed before we came to debate it, by the Secretary of State's own £110 million round of further cuts. It is not enough for him to claim, in justification of these cuts, that at least they show no discrimination against defence.
  I see the Under-Secretary of State for Defence for the Royal Navy sitting on the Government Front Bench. May I say to him that when the news of these cuts was announced, I was reminded of a speech that he made in Bournemouth on

  1549
  9th March of this year, speaking, appropriately enough, to the Fire Brigades Union—no doubt while Russian submarines cruised off shore. He said:
  "Short term arbitrary cuts, in themselves by no means simple, are not the answer. The effects of such a policy, if continued, on the morale of the Services and, indeed, on the credibility of our whole defence policy, could not but be serious. We would reach a point where both our Allies and our enemies knew that we no longer took our defence seriously; a case of 'the Emperor's new clothes'."
  The hon. Gentleman said that, perhaps rather imprudently, a mere month or two before yet another £100 million is cut in an arbitrary exercise from the defence budget.
  I should like, therefore, to restate the case against the White Paper. In our belief—and there has been little dissent on this from the Opposition side—the assessment of the threat is basically an inadequate one, almost a superficial one in what is held out to us as a great intellectual analysis. It is true that the order of battle of the Warsaw Pact forces is set out in all its terrifying extent. The grouping is emphasised, but there is no mention of the fact that the comparisons are confined to ready forces only. This comparison is used as a backdrop not to a reluctant realisation that we can ill afford at such a time to cut defence, but to an announcement of greater cuts, almost, than ever before.
  Those who study these matters may recall, ironically, that the last time a Labour Government embarked upon a course of this kind, which was in the 1965 Defence White Paper, they were at least open to claim that the forces of the Warsaw Pact were running down. Now the Government have no such excuse or defence.
  I must ask the Government what they see not merely as the balance but as the threat. Where may it face us? Where could an enemy do us harm by the use of force? That could happen in Europe, obviously, and on the European flanks and approaches, and that much, within narrow limits, the Government recognise.
  Also, anyone studying this matter objectively would agree that an enemy could do us harm with force in an area where our key supplies originate. By definition, he could do us harm along the routes between the location of our key supplies and this country—the open sea.
  1550
  What do the Government see as the strategic priorities? They mention them but they never spell them out clearly in the White Paper. In the areas where we can no longer, for one reason or another, deploy forces of our own, what will the Government do? Will they simply abandon our friends, and make no effort to build up their strength, if not with men, with arms? Do they not see here, in their strategic priorities, a call upon their defence sales programme? They do not, to judge by the White Paper.
  Do the Government take it for granted that the seas will always be open in the face of the expansion of the Russian Fleet further and further eastwards and southwards, as we see it heading all the time, and as my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan-Giles) so wisely stressed. No answer is provided for this question. Instead, there is in the White Paper a wholly bogus approach based upon such assumptions as what we can afford and what our available resources are. This is pure question begging, in which the GNP comparison is merely a distraction.
  The GNP standard has long since been discredited, because hon. Members who take any interest in the matter must know that in reckoning a country's GNP all employment is deemed to be productive. Every Ministry bureaucrat enrolled by the State represents a growth in the GNP. Even the satirical speech writers employed by the Scottish National Party, if it pays them—which I doubt—represent an increase in the GNP. The GNP standard is a non-standard. It is something we should leave to the days of flat-earth economics, out of which, thank goodness we are now gradually beginning to move.
  Mr. Powell: Ho, ho!
  Mr. Onslow: The right hon. Gentleman must speak for himself.
  Mr. Powell: It is you who are joining me.
  Mr. Onslow: The test should be consumption, because the task of any Government must be to allocate the resources they take from their citizens among the various services they feel they must provide on behalf of those citizens. In

  1551
  these circumstances, by any standard, defence must be a priority not merely because, historically, it was in order to defend themselves that men and women combined to form societies, but because defence remains one of the things that the citizen cannot in any circumstances hope to provide for himself.
  When the Secretary of State places great emphasis on collective defence, which he does in his justification of the rundown of our forces, I remind him that in his review there is an essential contradiction of the collective principle of alliance. If there had been earlier and fuller consultation we should have found that our allies would have shown a preference for a greater contribution by us on the flanks rather than in the central area. It is incontrovertible that we are the only member of NATO to believe that the alliance has no flanks.
  The greatest charge that can and must be levelled against the Defence White Paper is that the assumptions of what we can afford and so on, are purely speculative matters of judgment. There is no absolute. The Under-Secretary of State for Defence for the Royal Air Force can prove no absolute right in saying that half way must be about right. We are as entitled to challenge his assumption as he is free to challenge ours. We do so not because we say that the sky is the limit for defence spending. We do not say that. We form a judgment and say that the needs of the country cannot adequately be met within the sum of money that the Labour Government are prepared to allocate to defence. It the Government challenge us and ask where the money will come from, there is no difficulty in providing them with some choices.
  For a start, most hon. Members would recognise that money could be saved if the Secretary of State for Industry could be prevented from rampaging round British industry like a kleptomaniac with a loaded credit card. If hon. Gentlemen are sceptical enough to ask for other examples, I will give them some. The Conservatives would not spend money on the nationalisation of North Sea oil, the nationalisation of the aircraft industry, the nationalisation of the shipbuilding and ship repairing industry. We should not squander £1 million a week on the
  1552
  administration of the Community Land Bill. We should not freeze private funds out of health and education. We should put defence before indiscriminate food subsidies and before indiscriminate housing subsidies. I could go on.
  I am sorry to have to disappoint the right hon. Member for Fulham (Mr Stewart), whose speech was so penetrating, but I do not need to stand at this Box and speak of higher taxation to provide more money for defence. We think that defence is being cut not merely down to the bone but right into the bone, and that the basis of the calculation on which that is being done is bogus. We make no apology, and need make no apology, for refusing to endorse the Socialist priorities which the cuts reflect.
  I am glad that the Minister is to say something about the Harrier, because the situation is confused, especially after a debate in the House of Lords on 24th April in which the Government spokesman said nothing upon which any reliance could be placed, except that it would he an overstatement to say that the Government would do nothing for 18 months. He got most of his dates wrong and most of his facts wrong, and the record needs to be put right now. I press the Minister on this not because we believe that the Harrier should be bought for our Services, because it is a marvellous new toy, like a coloured television set which is to be bought on a spending spree before the VAT man strikes. The test must be: is it needed? Ministers are reluctant to answer that question, but I hope that the hon. Gentleman will he more forthcoming tonight.
  As far as I can make out, without the Harrier, in three years' time the Fleet at sea will have a dangerously reduced reconnaisance capability and, still more, it will have no means, when out of range of land aircraft cover, of dealing with Bear E, the Russian very long-range reconnaissance and missile guidance aircraft. It will be as much at the mercy of enemy missile-firing submarines as HMS "Repulse" and HMS "Prince of Wales" were at the mercy of enemy dive-bombers.
  Let the Government be honest. Of course there are other factors, but they are secondary. The overseas sales factor is important, but it is secondary. The provision of jobs in aircraft factories is

  1553
  important, but it is secondary. The key is not whether we can afford the Harrier but how we can have a credible defence without it. That is the question, and it is time the Minister came to the Dispatch Box to give us a straight answer.
  I turn to the amendment in the name of the other Labour Party, It is, of course, a confused amendment. That we would expect. It is also a cynical amendment, because it is at such pains to hide so much of its meaning. It might have been more honest to say "When it comes to defence we are agin it." Further, it is a callous amendment. That is one of the gravest charges to be brought against it. It is callous in its pretence that alternative jobs are available and that all we need to do is to arrange the smooth transfer of skilled manpower into some waiting employment near their homes and in their range of skills, thereby releasing them from making swords into beating ploughshares. Those who believe that should go and tell it to the workers at Brough and elsewhere. The workers foresee that they will have to pay for the pacifism of the hon. Member for Salford, East (Mr. Allaun) and his hon. Friends with their hopes of future employment. As my hon. Friend the Member for Ayr said yesterday, it is a contemptible amendment.
  Some of my hon. Friends may wonder how they should treat the amendment now that it has been selected for debate. In that context they may have been led, by the speeches of its sponsors in this debate and in others, to feel that the best thing to do is simply to ignore it.
  Those who heard the speech of the hon. Member for Ealing, Southall (Mr. Bidwell) may feel that he has been done to rights this morning by the Daily Telegraph sketch writer. Those who studied the speech of the hon. Member for Salford, East in our previous defence debate will have noted that he said:
  "I do not think that it is possible to defend this country any longer by military means."—[Official Report, 16th December 1974; Vol. 883, c. 1178.]
  Those who heard the hon. Member for Birmingham, Handsworth (Mr. Lee) this afternoon may have been amused by his solution to the problem of Belize, which was to hire independent Government troops to defend itself. Although he did
  1554
  not say this, no doubt he was thinking of lending them the money from the aid budget to pay for it.
  It is difficult to make out the hon. Member for Harlow (Mr. Newens). The one thing that I detected quite clearly in the report of the previous debate was a statement on his part denouncing both the United States and the USSR. No doubt he looks forward to bellowing out the same rousingly impartial denunciation all the way to the salt mines. Sometimes he gets it right but on other occasions he gets it the wrong way round. He told us that the main threat to peace was from poverty. I ask him to consider that the main threat to poverty may arise from peace.
  I am sorry that I missed the speech of the hon. Member for Barking (Miss Richardson). I gather that the hon. Lady was in her usual sparkling form. During our last defence debate she said:
  "Why are we cutting our research and development by only 10 per cent.? We could cut it out altogether and buy what we needed from our partners."—[Official Report, 16th December 1974; Vol. 883, c. 1260.]
  A little later she went on to urge that we should stop following in the steps of the United States and NATO. I am tempted to ask her who she thinks her partners are, but perhaps it would embarrass her too much if I asked her that question.
  Next, there is the young Lenin, the hon. Member for Edinburgh, Central (Mr. Cook). Unfortunately, I do not see him in the Chamber. What has he to say in support of the amendment? In our last defence debate he said:
  "if we insist that we shall remain a leading member of an alliance based on sophisticated weapons systems, no substantial cut in defence expenditure is available to us."—[Official Report, 16th December 1974; Vol. 883, c. 1244.]
  What are we to do if our allies want weapons to defend themselves against the enemy? Are we to leave them to it? Are we simply to walk quietly out of the room? Yesterday the hon. Member for Edinburgh, Central told us:
  "It is folly to imagine that the electorate will tolerate in other forms of public expenditure, other cuts which will be necessary to maintain our present level of defence expenditure."—[Official Report, 6th May 1975; Vol. 891, c. 1277.]

  1555
  If the hon. Member is so confident of the rightness of his judgment, I suggest he reads the Hansard report of today's proceedings. Indeed, let him go to Woolwich—if we ever get round to a by-election there—and try his luck in that area. Perhaps he has already been to Woolwich and has found out the facts. Perhaps he understands that the electorate does not see eye to eye with him on this matter. It is too late to find out now, but let him go, all the same.
  The amendment to which the hon. Gentleman and his hon. Friend the Member for Harlow (Mr. Newens) have spoken remains, despite the conscious or unconscious humour used in their arguments, a contemptible amendment. My advice to the House is that it should be comprehensively rejected. That must mean voting against it. I do not hesitate to ask my right hon. and hon. Friends to do just that. But if anybody believes that the Tribune Group has not yet got beyond a joke, I should like to put the case in the following way: the Secretary of State for Defence yesterday compared the authors of the amendment and those who believed in it to ostriches. If my hon. Friends come with me into the appropriate Lobby tonight when that amendment is called, I believe that they will find they can deal appropriately with the exposed portions of the ostrich's anatomy.
  Mr. Ian Mikardo: What a weird allusion.
  Mr. Onslow: I am sorry; I forgot the hon. Member for Poplar. He has been absent but his spirit, from wherever it may have been, has brooded over our debate.
  Mr. Mikardo: My right hon. Friend the Member for Stepney and Poplar (Mr. Shore) is still absent. I am the hon. Member for Bethnal Green and Bow.
  Mr. Onslow: The hon. Member for Bethnal Green and Bow (Mr. Mikardo) has only just joined us. I am sorry that I insulted him by omitting his name from the decalogue of the Tribune Group. I have no doubt he will go happily into the Division Lobby in support of the amendment in the name of the hon. Member for Edinburgh, Central (Mr. Cook) and others. I shall be happy to vote against him. Where his right hon. Friend the
  1556
  Member for Stepney and Poplar (Mr. Shore) may be I do not know, but I have a slight feeling that it will not be in the same Lobby as the hon. Gentleman.
  I return finally to the Government motion. It is a "grotty" and, indeed, an undignified motion. It is not a straightforward motion, which simply asks the House to approve certain action. It is full of weasel words and clever drafting. It may be that those words exist in the faint hope nursed by the Government that they may still receive some support for their motion and their White Paper from the junior partners in a foundering coalition. I suspect that hon. Members below the Gangway will disappoint them.
  The Tribune Group once boasted that it had 91 members of like persuasion. I wonder how many we shall see in their Lobby tonight—[An HON. MEMBER: "Where did you get that figure from?] That figure was contained in a memorandum which was circulated as a riposte to what was put out by the Secretary of State for Defence in Labour's White Paper.
  The Government will get no support for their motion from us. There are many good reasons why that should be so. I must give the House one final reason why the Opposition will vote against the Government motion. The morale of the Services is vital. We recognise the work which the men and women in uniform do for us, though insufficiently sometimes—and Ministers are among the worst offenders. But we must at least agree that the work which they do for us is invaluable, and that their morale matters. It reflects their terms and conditions of service, but it must reflect something more. It must reflect the morale of society as a whole—for that is where the men and women in uniform come from. That is where they return when they have done their dangerous work on our behalf.
  Because of the way in which the Labour Government are destroying the morale of the nation, bringing our laws into contempt and substituting collective tyranny for individual freedom, and because the Government are leaving the country and society less and less that is worth defending, we condemn them again tonight.
  9.30 p.m.
  The Minister of State for Defence (Mr. William Rodgers): As we reach the closing stages of this debate, I am reminded of the music hall song, which I think was a favourite with Marie Lloyd, who sang that she was always a bridesmaid and never a blushing bride. I recognise the risk of ambivalence in the coining of that phrase, but for the fourth time in a year I find myself following on behind. To change to a safer metaphor, I am a tail ender in the twilight when the best batting is over and I realise that the crowd is anxious to go home.
  I have listened in vain for the powerful arguments I had expected either for the amendment or against the Government motion. We certainly did not have them in the cavalier speech of the hon. Member for Woking (Mr. Onslow) or in favour of the amendment standing in the names of a number of my hon. Friends.
  I have heard many thoughtful speeches, and I have read those which I did not hear. I think that at many stages the debate has been very well argued. I hope that my hon. Friend the Member for Harlow (Mr. Newens) will not become nervous when I say that I thought that he made a singularly powerful speech, even when I did not agree with him.
  I recognised the serious commitment of hon. Members who spoke in the debate ever, that sentiment was not aroused by ever, that sentiment was not expressed by the hon. Member for Woking.
  When the hon. Member for Ayr (Mr. Younger) was in full flood yesterday afternoon I counted 28 of his right hon. and hon. Friends present, which is one out of 10 of all Conservative Members, to support his massive attack. Nor have Government supporters been exactly thick on the ground. As I find substantial agreement with my analysis of this occasion I should like to believe that very soon we shall all tiptoe quietly away without any unnecessary votes. Until that quiet moment comes I must deal with some of the matters raised in the debate.
  First I should like to refer to the further cut of £110 million which has been a proper subject for discussion and to which my right hon. Friend referred yesterday. Nobody will suppose that my right hon. Friend accepted this cut with a song in
  1558
  his heart. He said that this additional saving could not be painless. It was not painless to accept it. But he is not the first Minister in this or any other Government with responsibility for defence or any other spending Department who wished that the Chancellor of the Exchequer of the day should be forced to swallow a little of his own medicine, and my right hon. Friend will not be the last. It is the way of the world to fight hard against cuts but equally to recognise wider and inescapable necessities.
  Very few hon. Members have questioned the Chancellor's decision to make massive reductions in public expenditure. Most have been saddened by what those cuts mean in areas close to their hearts. It is unreal to believe that defence could have escaped even after a major and thoroughgoing review, and especially in deteriorating economic circumstances.
  The Opposition are entitled to make their debating points. In their shoes we would do the same. But let us recognise debating points for what they are. I thought that the right hon. Member for Penrith and The Border (Mr. Whitelaw), with all his experience and more than his usual caution, weighed his words carefully on this matter. A short time ago the hon. Member for Woking lacked such wisdom. In due course he may regret his remarks.
  We have had a number of very wide-ranging contributions to the debate, and they have been very valuable in helping us to see the defence review in its international perspective. We had a speech which was firm, if not occasionally strenuous, from the right hon. Member for Worcester (Mr. Walker) which did not seem to me to be popular at all times with his successor, the hon. Member for Ayr. We had from the hon. and learned Member for Montgomery (Mr. Hooson) a thoughtful speech in which he said that he believed that we had got the balance about right. I welcome his support.
  We had from my right hon. Friend the Member for Fulham (Mr. Stewart) his usual shrewd and broad perspective and analysis, and we had from the right hon. Member for Down, South (Mr. Powell) his usual mixture of perception and perverseness. When the right hon. Gentleman spoke of the inevitability of arbitrariness, I found myself largely in

  1559
  agreement with him. But when he spoke later about an army of citizen volunteers, I wondered, and I felt that I must go away to reflect and to work out what that might really mean.
  My right hon. Friend the Member for Kettering (Sir G. de Freitas) spoke of no Finlandisation. I endorse that remark and many others that he made. The hon. and gallant Member for Eye (Sir H. Harrison) talked of the work of his Select Committee. Like the hon. Member for Ayr, I regret that we shall lose the hon. and gallant Gentleman at the end of this Parliament. The whole House has welcomed the vigilance and hard work of his Select Committee. Although sometimes Ministers in the Defence Department find themselves sorely tried by his persistence and demands and those of his Committee, that is the proper function of his Committee, which this House has welcomed, and we shall all be better for it.
  Then we had the remarks of the right hon. Member for Grantham (Mr. Godber). I regret, though I am not surprised, that he was unable to endorse the White Paper, but he had much to contribute from his own patient experience of disarmament negotiations. I know that those who did not hear his remarks will read them with the greatest interest.
  Finally, from the Government benches, we had from my hon. Friend the Member for Belper (Mr. MacFarquhar) a typically robust and deeply informed speech in which, among other things, he brought together the logic of the arguments of some of those who demand what we regard as excessive cuts in its implications for our commitment to NATO. This is a matter which I should like the House to explore on some future occasion. But, for the Government, I can merely repeat what my right hon. Friend the Secretary of State has said so many times. We are committed fully to NATO, and our defence review makes that plain.
  I hope that time may be found, although these debates on international affairs are not always the most fruitful, to debate some of the other very large issues which have been in our minds today, even when we have not perhaps made them wholly explicit. Certainly the end of the United States rôle in Vietnam and the inevitable crisis of confidence and of pur-
  1560
  pose which the United States faces must give us pause, and nothing that Her Majesty's Government do or which the House would want done must lead the United States to weaken its commitment to Europe, with all the advantages for us that that commitment implies.
  My hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) referred in his other remarks to the need to combat terrorism. I hope that he will understand if I say that, although I agree with him and although the Government have made plain that this is their view also, it will be widely agreed that the less said about the detailed provision that we make, the better on this occasion. But I note my hon. Friend's concern, and he was right to express it in the House.
  My hon. Friend the Member for Brighouse and Spenborough (Mr. Jackson), and my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), at the end of his speech yesterday, paid tribute to the work of the British contingent in the United Nations forces in Cyprus. That contingent now numbers 970 men, and we are happy to endorse the welcome tribute to those involved in what continues to be a difficult task.
  My hon. Friend the Member for Brighouse and Spenborough referred to conditions in the sovereign base areas in Cyprus. I regret that we cannot yet let families live outside them. I do not want to minimise the problems that remain and the inconvenience of those living there, and we shall do all we possibly can to alleviate the situation.
  The hon. Member for Woking, in his closing speech, and the hon. and gallant Member for Winchester (Rear-Admiral Morgan-Giles) earlier referred to the maritime Harrier, which was also discussed yesterday. I fully recognise the interest of the House in this question and the anxiety that it should be settled quickly but I would like to take the House rather quietly through the issues involved on this and other occasions when the Government are obliged to make difficult decisions.
  The right hon. Member for Penrith and The Border this afternoon referred quite explicitly, in a passage with which I could not disagree, to the need to get value for money in all the purchases we make and even the hon. Member for

  1561
  Woking found it right to use cautious words about the way in which Government decisions on equipment should be made. He said that no Government ought to buy equipment—and I believe that he was referring particularly to the maritime Harrier—simply because it is a marvellous new toy. He said the real test is whether a piece of equipment is needed. With those sentiments I do not disagree, and it is fair to say that all who have been involved in Government are aware of the awkward ifs and buts of this kind of decision. I believe that the previous Government were twice on the brink of taking a decision on the maritime Harrier but drew back in view of all the complexities involved.
  What is essential is not that we should deny that it would be a valuable additional capability to the Navy, for we recognise that this would be so, even though it would be only one element in our anti-submarine force. What we have to consider is whether the operational case for the maritime Harrier is of sufficiently high priority to justify its place over and above other projects. In this we have to be very hard headed.
  We have not overlooked the export potential of the maritime Harrier and it may well be that we can justify buying it for ourselves and that there will be a demand from other countries for it, but we cannot take that for granted. The hon. Member for Beckenham (Mr. Good-hart), in his remarks last night, referred to a massive export market for the maritime Harrier. I hope that he is right but, let us ask ourselves quite honestly, what about the existing Harrier? Of course the United States has bought it, but we have not so far been able to attract the support of our European partners in NATO either for V/STOL technology or the Harrier concept of operations. The point I am making is that enthusiasm and salesmanship must not lead us away from hard-headed calculation into wishful thinking about the prospects.
  There has also been some confusion about the maritime Harrier, on the one hand, and other future developments in V/STOL technology on the other. I want to make clear that the current United States proposal to produce an improved version for their own Marine Corps—a so-called advanced Harrier—
  1562
  continues to be studied. The studies for this are being funded jointly by ourselves and the Americans. Hawker-Siddeley Aviation and Rolls Royce are participating fully and also have commercial agreements with their American counterparts to protect their interests.
  The confusion which surrounds the question of defence procurement is well illustrated in the opening sentence of Chapman Pincher's story on Monday of this week in which he said that the Government were planning to spend £100 million on foreign weapons while claiming that they could not afford to spend a lesser sum on the all-British Harrier. In the first place, we are making no such claim. But the foolishness of this glib sentence lies in comparing like with unlike and the implied assumption that it is wrong by definition to buy foreign weapons and right by definition to buy British ones.
  Life is not as simple as that. I and other Ministers wish it were. Of course the ideal solution would arise if we could provide all British weapons which precisely meet the needs of the Services, were the cheapest available and were then adopted as standard by our partners in NATO and sold in large quantities around the world. The reality is quite different. In the first place such an apparently legitimate ambition is shared equally by our major partners in NATO who we would wish to adopt our solution. Second, given the cost of producing sophisticated modern weapons, not even the United States could achieve such a monopoly position.
  Third, for us even to try to do so would be to reverse the policy of successive Governments. Among other things, it makes nonsense of the Eurogroup meeting today which my right hon. Friend chaired. Our aim at all times must be to equip our forces in the best possible way consistent with what we can afford and our obligations to the alliance and to ensure as far as possible a steady and realistic level of employment in our own defence industries.
  I mean by this that we must not try to compete in every area but must be prepared to buy equipment elsewhere on the basis of reciprocity. I welcome what the hon. and gallant Member for Eye said today on this subject. Equally, the hon. Member for Beckenham was fair last

  1563
  night, as was the hon. Member for Sevenoaks (Sir J. Rodgers). They recognised the difficulties in this area. The hon. Member for Haltemprice (Mr. Wall) did so in stressing the need to avoid duplication in NATO. This has been a consistent theme on both sides of the House for many years.
  It would be wrong—and I was glad to hear my hon. Friend the Member for Hayes and Harlington (Mr. Sandelson) say that it would be wrong—to abandon our commitment to a policy of standardisation and reciprocity at the first whiff of gunshot. A large number of our major equipment programmes are already collaborative projects. I would simply ask hon. Members to recognise that the principles I have attempted to spell out will be those which guide us throughout the further decisions we must make.
  As hon. Members know, we shall shortly be making decisions on several new guided weapon systems for the Services. There was a reference to that today by the hon. Member for Plymouth, Sutton (Mr. Clark). In making these decisions, the considerations I have mentioned will be very much in mind. Our first concern must be to provide the Services with the equipment they need for their operational rôle at the right time.
  Second, we shall be concerned to ensure a strong British industry by giving it the maximum possible work. This does not mean that we should turn our backs on equipment, which the Services want and need and which is competitively prived, just because it is not British.
  In view of some of my remarks about the problems of procurement may I say something to cheer up hon. Members I cannot for the moment see the right hon. Member for Taunton (Mr. du Cann)—
  Mr. Edward du Cann: I am here.
  Mr. Rodgers: I am sorry. The lack of perception was mine. He spoke yesterday about small vessels. He will be interested to know that we have just placed an order for the first of a new class of mine counter-measure vessels with Vosper Thorneycroft. The ship will be called "HMS Brecon" and will be built at the firm's Woolston yard near South-
  1564
  ampton. It will be built with a glass reinforced plastic hull, which is a British development. I hope that this new development will interest our partners in NATO and provide the element of reciprocity to which we are all committed.
  I referred earlier to my right hon. Friend the Secretary of State for Defence having taken the chair today at a meeting of Eurogroup Ministers in London. It was this vital meeting arranged some time ago, together with the perfectly proper pressure from the Opposition, which caused us to have the second day of the debate on a day when it was extremely difficult for my right hon. Friend to be present here as well as in the chair at the Eurogroup meeting. On his behalf I am glad to be able to tell the House that the meeting was particularly successful. It provided the Ministers of the Eurogroup countries with a valuable opportunity to review the progress of practical co-operation in the Eurogroup sub-groups and to discuss some of the key issues of allied defence.
  I agree with what the hon. Member for Sevenoaks said about the Western European Union. I do so because a long time ago I was the leader of the United Kingdom delegation to the WEU—[HON. MEMBERS: "Hear, hear."] I thank you for that applause. At the same time the Government take the view, as successive Governments have done, that the Eurogroup is the best forum for standardisation.
  I turn to the difficult problem of the consequences for employment of the defence review, something that was referred to by right hon. and hon. Gentlemen on both sides of the House. Opposition Members yesterday, today and at Question Time have asked about the lack of precision. Some of my hon. Friends below the Gangway nave said that the loss of jobs arising from the cancellation of equipment must not be a reason for withholding decisions that are desirable, as they see it, on other grounds. I understand both of these points of view.
  Mr. Russell Kerr: Statesmanlike.
  Mr. Rodgers: I thank you again. However, the precise consequences both in numbers affected and in timing—
  Mr. Speaker: Order. The hon. Member must not go on thanking me.
  Mr. Rodgers: I thank you, Mr. Speaker, for allowing my hon. Friend to thank me.
  The precise consequences, both in numbers affected and in timing, must depend on decisions taken by management in the light of our decisions. In turn, the consequences of these decisions will depend upon alternative work and a whole series of other factors.
  We have said in the White Paper that the decisions are likely to affect some 10,000 job opportunities. We must hope that the figure will be lower, and there is evidence now that it will be. The point remains—and I particularly emphasise this to my hon. Friends—that massive defence cuts cannot be painless or at least not carry the risk of substantial pain.
  The amendment in the names of my hon. Friend the Member for Edinburgh, Central (Mr. Cook) and others criticises the White Paper because, amongst other things, it fails to make adequate provision for a smooth transfer of real resources and skilled manpower which more far-reaching cuts would involve. This was referred to today by my hon. Friend the Member for Harlow and, in passing, by my hon. Friend the Member for Barking (Miss Richardson). I have to ask them, at a time when unemployment is rising, when there is deep anxiety about the prospect of losing 20,000 jobs in the steel industry, and when Ministers are receiving anxious trade union representations from Hawker Siddeley and others, how welcome will the suggestion be that there can be a smooth transfer to other work for the many skilled men and women who will lose their job opportunities should these measures go further?
  I call to mind Hawker Siddeley, BAC, Rolls-Royce, Yarrows, Vickers, Swan Hunter and Ferranti. They are all defence contractors and they all employ skilled manpower. I should not like to name the men who would become redundant tomorrow as a result of further cuts, and to tell them where their immediate employment prospects lie.
  I agree with my hon. Friend the Member for Harlow that this must not be an excuse for not going further. But I ask
  1566
  from him and his hon. Friends on this at least a sense of realism and proportion, and certainly a respect for the vast amount of consultation needed with the trade unions and the men concerned before this sort of proposal could reasonably be implemented. It needs more than a phrase in an amendment to a motion in the House of Commons to ensure the smooth transfer that my hon. Friends would like to see.
  I recently received representations from the work force and management of Hawker Siddeley Aviation. I think that I was able to make some helpful suggestions. We were able to modify our proposals in some small part, but beyond that we cannot go without failing to save the considerable sums to which we are committed.
  I said at the beginning of my speech that this was the fourth time in the past year that I had been called upon to wind up a defence debate. In preparation for this evening I took the precaution of reading what I said on other occasions. I was agreeably surprised. There were fewer foolishnesses than I had feared—we are all foolish from time to time—and there was much consistency. Unlike some of my elders and betters, I am unaccustomed to quoting my speeches, and cannot readily recall the date upon which I made them. But on 13th May last year, in the first of our four major debates, I said:
  "Unless defence spending is related to what the nation believes it can afford, the real threat to our values and to our political system will result from social stress and legitimate expectations denied. … freedom in an open society does not survive simply by virtue of its merit. I would certainly not be party to a steady erosion in Britain's capacity to fight—and, in the first instance, to deter—on the assumption that we have no enemies or potential enemies to fear."—[Official Report, 13th May 1974; Vol. 873, c. 1018.]
  Almost a year later I am happy to rest on that. The defence of Britain is the defence of values, including the freedom of speech and the freedom of association for which the House has fought and will continue to cherish. But we must also be concerned about the threat to those values from economic decline and social neglect. The enlargement of freedom and of the vision that goes with it must be sustained by more than guns and armies.
  Question put, That the Amendment be made:—
  The House divided: Ayes 57, Noes 489.

  Division No. 199]

  AYES

  [9.59 p.m.

  Atkinson, Norman

  Hughes, Roy (Newport)

  Selby, Harry

  Bennett, Andrew (Stockport N)

  Jeger, Mrs Lena

  Short, Mrs Renée (Wolv NE)

  Bidwell, Sydney

  Kelley, Richard

  Sillars, James

  Buchan, Norman

  Kilroy-Silk, Robert

  Silverman, Julius

  Callaghan, Jim (Middleton & P)

  Kinnock, Neil

  Skinner, Dennis

  Canavan, Dennis

  Lamble, David

  Snape, Peter

  Clemitson, Ivor

  Lamond, James

  Swain, Thomas

  Colquhoun, Mrs Maureen

  Lee, John

  Thomas, Dafydd (Merioneth)

  Cook, Robin F. (Edin C)

  Litterick, Tom

  Thomas, Ron (Bristol NW)

  Corbett, Robin

  Loyden, Eddie

  Thorne, Stan (Preston South)

  Cryer, Bob

  Madden, Max

  Tierney, Sydney

  Davies, Bryan (Enfield N)

  Maynard, Miss Joan

  Walker, Terry (Kingswood)

  Edge, Geoff

  Newens, Stanley

  Wigley, Dafydd

  Evans, Gwynfor (Carmarthen)

  Parry, Robert

  Wise, Mrs Audrey

  Evans, loan (Aberdare)

  Price, C. (Lewisham W)

  Woof, Robert

  Fernyhough, Rt Hon E.

  Richardson Miss Jo

  Flannery, Martin

  Roberts, Gwilym (Cannock)

  TELLERS FOR THE AYES

  Fletcher, Ted (Darlington)

  Robertson, John (Paisley)

  Mr. Russell Kerr and

  Garrett, John (Norwich S)

  Rodgers, George (Chorley)

  Mr. Ian Mikardo.

  Hatton, Frank

  Rooker, J. W.

  Hoyle, Doug (Nelson)

  Sedgemore, Brian

  NOES

  Adley, Robert

  Bulmer, Esmond

  Dormand, J. D.

  Aitken, Jonathan

  Burden, F. A.

  Douglas-Hamilton, Lord James

  Alison, Michael

  Butler, Adam (Bosworth)

  Douglas-Mann, Bruce

  Amery, Rt Hon Julian

  Campbell, Ian

  Drayson, Burnaby

  Anderson, Donald

  Cant, R. B.

  du Cann, Rt Hon Edward

  Archer, Peter

  Carlisle, Mark

  Duffy, A. E. P.

  Armstrong, Ernest

  Carmichael, Nell

  Dunlop, John

  Arnold, Tom

  Carr, Rt Hon Robert

  Dunn, James A.

  Ashley, Jack

  Carter, Ray

  Dunnett, Jack

  Ashton, Joe

  Cartwright, John

  Dunwoody, Mrs Gwyneth

  Atkins, Rt Hon H. (Spelthorne)

  Castle, Rt Hon Barbara

  Dykes, Hugh

  Awdry, Daniel

  Channon, Paul

  Eadie, Alex

  Bagler, Gordon A. T.

  Churchill, W. S.

  Eden, Rt Hon Sir John

  Baker, Kenneth

  Clark, Alan (Plymouth, Sutton)

  Edwards, Nicholas (Pembroke)

  Banks, Robert

  Clark, William (Croydon S)

  Ellis, John (Brigg & Scun)

  Barnett, Guy (Greenwich)

  Clarke, Kenneth (Rushcliffe)

  Ellis, Tom (Wrexham)

  Barnett, Rt Hon Joel (Heywood)

  Clegg, Walter

  English, Michael

  Bates, Alf

  Cockcroft, John

  Ennals, David

  Bean, R. E.

  Cocks, Michael (Bristol S)

  Evans, Fred (Caerphilly)

  Beith, A. J.

  Cohen, Stanley

  Evans, John (Newton)

  Bell, Ronald

  Coleman, Donald

  Ewing, Harry (Stirling)

  Benn, Rt Hon Anthony Wedgwood

  Concannon, J. D.

  Eyre, Reginald

  Bennett, Sir Frederic (Torbay)

  Conlon, Bernard

  Fairbairn, Nicholas

  Bennett, Dr Reginald (Fareham)

  Cooke, Robert (Bristol W)

  Fairgrieve, Russell

  Benyon, W.

  Cope, John

  Farr, John

  Berry, Hon Anthony

  Cormack, Patrick

  Faulds, Andrew

  Biffen, Jonn

  Corrie, John

  Fell, Anthony

  Biggs-Davison, John

  Costain, A. P.

  Finsberg, Geoffrey

  Bishop, E. S.

  Cox, Thomas (Tooting)

  Fisher, Sir Nigel

  Blaker, Peter

  Craig, Rt Hon W. (Belfast E)

  Fitch, Alan (Wigan)

  Blenkinsop, Arthur

  Craigen, J. M. (Maryhill)

  Fletcher, Alex (Edinburgh N)

  Boardman, H.

  Crawshaw, Richard

  Fletcher-Cooke, Charles

  Body, Richard

  Critchley, Julian

  Fookes, Miss Janet

  Booth, Albert

  Ford, Ben

  Boscawen, Hon Robert

  Cronin, John

  Forrester, John

  Bottomley, Rt Hon Arthur

  Crosland, Rt Hon Anthony

  Fowler, Gerald (The Wrekin)

  Bowden, A (Brighton, Kemptown)

  Crouch, David

  Fowler, Norman (Sutton C'f'd)

  Boyden, James (Bich Auck)

  Crowder, F. P.

  Fox, Marcus

  Boyson, Dr Rhodes (Brent)

  Cunningham, G. (Islington S)

  Fraser, John (Lambeth, N'w'd)

  Bradford, Rev Robert

  Cunningham, Dr J. (Whiteh)

  Freeson, Reginald

  Braine, Sir Bernard

  Dalyell, Tam

  Fry, Peter

  Bray, Dr Jeremy

  Davidson, Arthur

  Galbraith, Hon T. G. D.

  Brittan, Leon

  Davies, Denzil (Llanelli)

  Gardiner, George (Reigate)

  Brotherton, Michael

  Davies, Ifor (Gower)

  Garrett, W. E. (Wallsend)

  Broughton, Sir Alfred

  Davis, Clinton (Hackney C)

  George, Bruce

  Brown, Sir Edward (Bath)

  Deakins, Eric

  Gilbert, Dr. John

  Brown, Hugh D. (Provan)

  Dean, Joseph (Leeds West)

  Gilmour, Rt Hon Ian (Chesham)

  Brown, Robert C. (Newcastle W)

  Dean, Paul (N Somerset)

  Gilmour, Sir John (East Fife)

  Brown, Ronald (Hackney S)

  de Freitas, Rt Hon Sir Geoffrey

  Ginsburg, David

  Bryan, Sir Paul

  Delargy, Hugh

  Godber, Rt Hon Joseph

  Buchanan, Richard

  Dell, Rt Hon Edmund

  Golding, John

  Buchanan-Smith, Alick

  Dempsey, James

  Goodhart, Philip

  Buck, Antony

  Dodsworth, Geoffrey

  Goodhew, Victor

  Budgen, Nick

  Doig, Peter

  Goodlad, Alastair

  Gorst, John

  Lamborn, Harry

  Oakes, Gordon

  Gould, Bryan

  Lamont, Norman

  O'Halloran, Michael

  Gourlay, Harry

  Lane, David

  O'Malley, Rt Hon Brian

  Gow, Ian (Eastbourne)

  Langford-Holt, Sir John

  Onslow, Cranley

  Gower, Sir Raymond (Barry)

  Latham, Michael (Melton)

  Oppenheim, Mrs Sally

  Graham, Ted

  Lawrence, Ivan

  Orbach, Maurice

  Grant, Anthony (Harrow C)

  Lawson, Nigel

  Orme, Rt Hon Stanley

  Grant, George (Morpeth)

  Leadbitter, Ted

  Osborn, John

  Grant, John (Islington C)

  Le Merchant, Spencer

  Owen, Dr David

  Gray, Hamish

  Lester, Jim (Beeston)

  Padley, Walter

  Grieve, Percy

  Lever, Rt Hon Harold

  Page, John (Harrow West)

  Griffiths, Eldon

  Lewis, Arthur (Newham N)

  Page, Rt Hon R. Graham (Crosby)

  Grimond, Rt Hon J.

  Lewis, Kenneth (Rutland)

  Paisley, Rev Ian

  Grist, Ian

  Lipton, Marcus

  Palmer, Arthur

  Grylls, Michael

  Lloyd, Ian

  Pardoe, John

  Hall, Sir John

  Loveridge, John

  Park, George

  Hall-Davis, A. G. F.

  Luard, Evan

  Parker, John

  Hamilton, Michael (Salisbury)

  Luce, Richard

  Parkinson, Cecil

  Hamilton, W. W. (Central File)

  Lyon, Alexander (York)

  Pattle, Geoffrey

  Hampson, Dr Keith

  Lyons, Edward (Bradford W)

  Pavitt, Laurie

  Hannam, John

  Mabon, Dr J. Dickson

  Peart, Rt Hon Fred

  Hardy, Peter

  McAdden, Sir Stephen

  Pendry, Tom

  Harper, Joseph

  McCrindle, Robert

  Percival, Ian

  Harrison, Walter (Wakefield)

  McCusker, H.

  Perry, Ernest

  Hart, Rt Hon Judith

  McElhone, Frank

  Peyton, Rt Hon John

  Harvie Anderson, Rt Hon Miss

  Macfarlane, Neil

  Phipps, Dr Colin

  Hastings, Stephen

  MacFarquhar, Roderick

  Pink, R. Bonner

  Hattersley, Rt Hon Roy

  MacGregor, John

  Powell, Rt Hon J. Enoch

  Havers, Sir Michael

  McGuire, Michael (Ince)

  Prentice, Rt Hon Reg

  Hawkins, Paul

  Mackenzie, Gregor

  Price, William (Rugby)

  Hayhoe, Barney

  Mackintosh, John P.

  Prior, Rt Hon James

  Hayman, Mrs Helene

  Maclennan, Robert

  Radice, Giles

  Healey, Rt Hon Denis

  Macmillan, Rt Hon M. (Farnham)

  Raison, Timothy

  Heath, Rt Hon Edward

  McMillan, Tom (Glasgow C)

  Rathbone, Tim

  Heseltine, Michael

  McNair-Wilson, M. (Newbury)

  Rees, Rt Hon Merlyn (Leeds S)

  Hicks, Robert

  McNair-Wilson, P. (New Forest)

  Rees, Peter (Dover & Deal)

  Higgins, Terence L.

  McNamara, Kevin

  Rees-Davies, W. R.

  Holland, Philip

  Madel, David

  Renton, Rt Hon Sir D. (Hunts)

  Hooley, Frank

  Magee, Bryan

  Renton, Tim (Mid-Sussex)

  Hooson, Emlyn

  Mahon, Simon

  Rhys Williams, Sir Brandon

  Horam, John

  Mallalieu, J. P. W.

  Ridley, Hon Nicholas

  Hordern, Peter

  Marshall, Dr Edmund (Goole)

  Ridsdale, Julian

  Howe, Rt Hon Sir Geoffrey

  Marshall, Jim (Leicester S)

  Rifkind, Malcolm

  Howell, David (Guildford)

  Marshall, Michael (Arundel)

  Rippon, Rt Hon Geoffrey

  Howell, Denis (B'ham, Sm H)

  Marten, Neil

  Roberts, Albert (Normanton)

  Howell, Ralph (North Norfolk)

  Mason, Rt Hon Roy

  Roberts, Michael (Cardiff NW)

  Howells, Geraint (Cardigan)

  Mates, Michael

  Roberts, Wyn (Conway)

  Huckfield, Les

  Mather, Carol

  Rodgers, Sir John (Sevenoaks)

  Hughes, Rt Hon C. (Anglesey)

  Maude, Angus

  Rodgers, William (Stockton)

  Hughes, Mark (Durham)

  Maudling, Rt Hon Reginald

  Roper, John

  Hughes, Robert (Aberdeen N)

  Maxwell-Hyslop, Robin

  Rose, Paul B.

  Hunter, Adam

  Mayhew, Patrick

  Ross, Stephen (Isle of Wight)

  Hurd, Douglas

  Meacher, Michael

  Ross, Rt Hon W. (Kilmarnock)

  Hutchison, Michael Clark

  Mellish, Rt Hon Robert

  Ross, William (Londonderry)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Meyer, Sir Anthony

  Rossi, Hugh (Hornsey)

  Irvine, Bryant Godman (Rye)

  Millan, Bruce

  Rost, Peter (SE Derbyshire)

  Irving, Charles (Cheltenham)

  Miller, Hal (Bromsgrove)

  Rowlands, Ted

  Irving, Rt Hon S. (Dartford)

  Miller, Dr M. S. (E Kilbride)

  Royle, Sir Anthony

  Jackson, Colin (Brighouse)

  Miller, Mrs Millie (Ilford N)

  Ryman, John

  Jackson, Miss Margaret (Lincoin)

  Mills, Peter

  Sainsbury, Tim

  James, David

  Miscampbell, Norman

  St. John-Stevas, Norman

  Janner, Greville

  Mitchell, David (Basingstoke)

  Sandelson, Neville

  Jay, Rt Hon Douglas

  Mitchell, R. C. (Soton, Itchen)

  Scott, Nicholas

  Jenkin, Rt Hon P. (Wanst'd&W'df'd)

  Molyneaux, James

  Scott-Hopkins, James

  Jenkins, Hugh (Putney)

  Monro, Hector

  Shaw, Arnold (Ilford South)

  Jessel, Toby

  Montgomery, Fergus

  Shaw, Giles (Pudsey)

  John, Brynmor

  Moonman, Eric

  Shaw, Michael (Scarborough)

  Johnson, James (Hull West)

  Moore, John (Croydon C)

  Sheldon, Robert (Ashton-u-Lyne)

  Johnson, Walter (Derby S)

  Morgan, Geraint

  Shelton, William (Streatham)

  Johnson Smith, G. (E Grinstead)

  Morgan-Giles, Rear-Admiral

  Shepherd, Colin

  Jones, Alec (Rhondda)

  Morris, Alfred (Wythenshawe)

  Shersby, Michael

  Jones, Arthur (Daventry)

  Morris, Charles R. (Openshaw)

  Shore, Rt Hon Peter

  Jones, Barry (East Flint)

  Morris, Rt Hon J. (Aberavon)

  Short, Rt Hon E. (Newcastle C)

  Jones, Dan (Burnley)

  Morris, Michael (Northampton S)

  Silkin, Rt Hon John (Deptford)

  Jopling, Michael

  Morrison, Charles (Devizes)

  Silkin, Rt Hon S. C. (Dulwich)

  Judd, Frank

  Morrison, Hon Peter (Chester)

  Silvester, Fred

  Kaberry, Sir Donald

  Moyle, Roland

  Sims, Roger

  Kaufman, Gerald

  Murray, Rt Hon Ronald King

  Sinclair, Sir George

  Kellett-Bowman, Mrs Elaine

  Neave, Airey

  Skeet, T. H. H.

  Kershaw, Anthony

  Nelson, Anthony

  Small, William

  Kimball, Marcus

  Neubert, Michael

  Smith, Cyril (Rochda'e)

  King, Evelyn (South Dorset)

  Newton, Tony

  Smith, Dudley (Warwick)

  King, Tom (Bridgwater)

  Noble, Mike

  Smith, John (N Lanarkshire)

  Knight, Mrs Jill

  Normanton, Tom

  Spearing, Nigel

  Knox, David

  Nott, John

  Speed, Keith

  1570

  1571

  Spence, John

  Thomas, Jeffrey (Abertillery)

  Weetch, Ken

  Spicer, Jim (W Dorset)

  Thomas, Mike (Newcastle E)

  Weitzman, David

  Spicer, Michael (S Worcester)

  Thomas, Rt Hon P. (Hendon S)

  Wellbeloved, James

  Spriggs, Leslie

  Thorpe, Rt Hon Jeremy (N Devon)

  Wells, John

  Sproat, Iain

  Tomlinson, John

  White, James (Pollok)

  Stainton, Keith

  Tomney, Frank

  Whitehead, Phillip

  Stallard, A. W.

  Townsend, Cyril D.

  Whitelaw, Rt Hon William

  Stanbrook, Ivor

  Trotter, Neville

  Whitlock, William

  Stanley, John

  Tugendhat, Christopher

  Wiggin, Jerry

  Steel, David (Roxburgh)

  Urwin, T. W.

  Willey, Rt Hon Frederick

  Steen, Anthony (Wavertree)

  van Straubenzee, W. R.

  Williams, Alan (Swansea W)

  Stewart, Ian (Hitchin)

  Vaughan, Dr Gerard

  Williams, Alan Lee (Hornch'ch)

  Stewart, Rt Hon M (Fulham)

  Viggers, Peter

  Williams, Rt Hon Shirley (Hertford)

  Stoddart, David

  Wainwright, Edwin (Dearne V)

  Williams, W. T. (Warrington)

  Stokes, John

  Wakeham, John

  Wilson, Alexander (Hamilton)

  Stott, Roger

  Walden, Brian (B'ham, L'dyw'd)

  Winterton, Nicholas

  Stradling Thomas, J.

  Walker, Harold (Doncaster)

  Wood, Rt Hon Richard

  Strang, Gavin

  Walker, Rt Hon P. (Worcester)

  Woodall, Alec

  Strauss, Rt Hon G. R.

  Walker-Smith, Rt Hon Sir Derek

  Wrigglesworth, Ian

  Summerskill, Hon Dr Shirley

  Wall, Patrick

  Young, Sir G. (Ealing, Acton)

  Tapsell, Peter

  Walters, Dennis

  Younger, Hon George

  Taylor, Mrs Ann (Bolton W)

  Ward, Michael

  Taylor, R. (Croydon NW)

  Warren, Kenneth

  TELLERS FOR THE NOES:

  Tebbit, Norman

  Watkins, David

  Miss Betty Boothroyd and

  Temple-Morris, Peter

  Watkinson, John

  Mr. James Hamilton.

  Thatcher, Rt Hon Margaret

  Weatherill, Bernard

  Question accordingly negatived.

  Main Question put:—

  The House divided: Ayes 291, Noes 251.

  Division No. 200.]

  AYES

  [10.19 p.m.

  Anderson, Donald

  Craigen, J. M. (Maryhill)

  George, Bruce

  Archer, Peter

  Crawshaw, Richard

  Gilbert, Dr. John

  Armstrong, Ernest

  Cronin, John

  Ginsburg, David

  Ashley, Jack

  Crosland, Rt Hon Anthony

  Golding, John

  Ashton, Joe

  Cryer, Bob

  Gould, Bryan

  Atkins, Ronald (Preston N)

  Cunningham, G. (Islington S)

  Gourley, Harry

  Atkinson, Norman

  Cunningham, Dr J. (Whiteh)

  Graham, Ted

  Bagier, Gordon A. T.

  Dalyell, Tam

  Grant, George (Morpeth)

  Barnett, Guy (Greenwich)

  Davidson, Arthur

  Grant, John (Islington C)

  Barnett, Rt Hon Joel (Heywood)

  Davies, Bryan (Enfield N)

  Grimond, Rt Hon J.

  Bates, Alf

  Davies, Denzil (Llanelli)

  Grocott, Bruce

  Bean, R. E.

  Davies, Ifor (Gower)

  Hamilton, James (Bothwell)

  Beith, A. J.

  Davis, Clinton (Hackney C)

  Hamilton, W. W. (Central Fife)

  Benn, Rt Hon Anthony Wedgwood

  Deakins, Eric

  Hardy, Peter

  Bennett, Andrew (Stockport N)

  Dean, Joseph (Leeds West)

  Harper, Joseph

  Bidwell, Sydney

  de Freitas, Rt Hon Sir Geoffrey

  Harrison, Walter (Wakefield)

  Bishop, E. S.

  Delargy, Hugh

  Hart, Rt Hon Judith

  Bienkinsop, Arthur

  Dell, Rt Hon Edmund

  Hattersley, Rt Hon Roy

  Boardman, H.

  Dempsey, James

  Hatton, Frank

  Booth, Albert

  Doig, Peter

  Hayman, Mrs Helene

  Boothroyd, Miss Betty

  Dormand, J. D.

  Healey, Rt Hon Denis

  Bottomley, Rt Hon Arthur

  Douglas-Mann, Bruce

  Hooley, Frank

  Boyden, James (Bish Auck)

  Duffy, A. E. P.

  Hooson, Emlyn

  Bray, Dr Jeremy

  Dunn, James A.

  Horam, John

  Broughton, Sir Alfred

  Dunnett, Jack

  Howell, Denis (B'ham, Sm H)

  Brown, Hugh D. (Proven)

  Dunwoody, Mrs Gwyneth

  Howells, Geraint (Cardigan)

  Brown, Robert C. (Newcastle W)

  Eadie, Alex

  Hoyle, Doug (Nelson)

  Brown, Ronald (Hackney S)

  Edge, Geoff

  Huckfield, Les

  Buchan, Norman

  Edwards, Robert (Wolv SE)

  Hughes, Rt Hon C. (Anglesey)

  Buchanan, Richard

  Ellis, Tom (Wrexham)

  Hughes, Mark (Durham)

  Butler, Mrs Joyce (Wood Green)

  English, Michael

  Hughes, Robert (Aberdeen N)

  Callaghan, Jim (Middleton & P)

  Ennals, David

  Hughes, Roy (Newport)

  Campbell, Ian

  Evans, Fred (Caerphilly)

  Hunter, Adam

  Canavan, Dennis

  Evans, Ioan (Aberdare)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Cant, R. B.

  Evans, John (Newton)

  Irving, Rt Hon S. (Dartford)

  Carmichael, Neil

  Ewing, Harry (Stirling)

  Jackson, Colin (Brighouse)

  Carter, Ray

  Faulds, Andrew

  Janner, Greville

  Cartwright, John

  Fernyhough, Rt Hon E.

  Jay, Rt Hon Douglas

  Castle, Rt Hon Barbara

  Fitch, Alan (Wigan)

  Jenkins, Hugh (Putney)

  Clemitson, Ivor

  Flannery, Martin

  John, Brynmor

  Cocks, Michael (Bristol S)

  Fletcher, Raymond (Ilkeston)

  Johnson, James (Hull West)

  Cohen, Stanley

  Fletcher, Ted (Darlington)

  Johnson, Walter (Derby S)

  Coleman, Donald

  Ford, Ben

  Jones, Alec (Rhondda)

  Colquhoun, Mrs Maureen

  Forrester, John

  Jones, Barry (East Flint)

  Concannon, J. D.

  Fowler, Gerald (The Wrekin)

  Jones, Dan (Burnley)

  Conlan, Bernard

  Fraser, John (Lambeth, N'w'd)

  Judd, Frank

  Cook, Robin F. (Edin C)

  Freeson, Reginald

  Kaufman, Gerald

  Corbett, Robin

  Garrett, John (Norwich S)

  Kelley, Richard

  Cox, Thomas (Tooting)

  Garrett, W. E. (Wallsend)

  Kerr, Russell

  1572

  1573

  Kilroy-Silk, Robert

  Orme, Rt Hon Stanley

  Spriggs, Leslie

  Kinnock, Neil

  Owen, Dr David

  Stallard, A. W.

  Lamble, David

  Padley, Walter

  Steel, David (Roxburgh)

  Lamborn, Harry

  Palmer, Arthur

  Stewart, Rt Hon M. (Fulham)

  Lamond, James

  Park, George

  Stoddart, David

  Leadbitter, Ted

  Parker, John

  Stott, Roger

  Lee, John

  Parry, Robert

  Strang, Gavin

  Lever, Rt Hon Harold

  Pavitt, Laurie

  Strauss, Rt Hon G. R.

  Lewis, Arthur (Newham N)

  Peart, Rt Hon Fred

  Summerskill, Hon Dr Shirley

  Lipton, Marcus

  Pendry, Tom

  Swain, Thomas

  Litterick, Tom

  Perry, Ernest

  Taylor, Mrs Ann (Bolton W)

  Loyden, Eddie

  Phipps, Dr Colin

  Thomas, Jeffrey (Abertillery)

  Luard, Evan

  Prentice, Rt Hon Reg

  Thomas, Mike (Newcastle E)

  Lyon, Alexander (York)

  Prescott, John

  Thomas, Ron (Bristol NW)

  Lyons, Edward (Bradford W)

  Price, C. (Lewisham W)

  Thorne, Stan (Preston South)

  Mabon, Dr J. Dickson

  Price, William (Rugby)

  Thorpe, Rt Hon Jeremy (N Devon)

  McElhone, Frank

  Radice, Giles

  Tierney, Sydney

  MacFarquhar, Roderick

  Rees, Rt Hon Merlyn (Leeds S)

  Tomlinson, John

  McGuire, Michael (Ince)

  Richardson, Miss Jo

  Tomney, Frank

  Mackenzie, Gregor

  Roberts, Albert (Normanton)

  Torney, Tom

  Mackintosh, John P.

  Roberts, Gwilym (Cannock)

  Urwin, T. W.

  Maclennan, Robert

  Robertson, John (Paisley)

  Wainwright, Edwin (Dearne V)

  McNamara, Kevin

  Roderick, Caerwyn

  Walden, Brian (D'ham, L'dyw'd)

  Madden, Max

  Rodgers, George (Chorley)

  Walker, Harold (Doncaster)

  Magee, Bryan

  Rodgers, William (Stockton)

  Walker, Terry (Kingswood)

  Mahon, Simon

  Rooker, J. W.

  Ward, Michael

  Mallalieu, J. P. W.

  Roper, John

  Watkins, David

  Marshall, Dr Edmund (Goole)

  Rose, Paul B

  Watkinson, John

  Marshall, Jim (Leicester S)

  Ross, Stephen (Isle of Wight)

  Weetch, Ken

  Mason, Rt Hon Roy

  Ross, Rt Hon W. (Kilmarnock)

  Weitzman, David

  Maynard, Miss Joan

  Rowlands, Ted

  Wellbeloved, James

  Meacher, Michael

  Ryman, John

  White, James (Pollok)

  Mellish, Rt Hon Robert

  Sandelson, Neville

  Whitehead, Phillip

  Mendelson, John

  Sedgemore, Brian

  Whitlock, William

  Millan, Bruce

  Selby, Harry

  Willey, Rt Hon Frederick

  Miller, Dr M. S. (E Kilbride)

  Shaw, Arnold (Ilford South)

  Williams, Alan (Swansea W)

  Miller, Mrs Millie (Ilford N)

  Sheldon, Robert (Ashton-u-Lyne)

  Williams, Alan Lee (Hornch'ch)

  Mitchell, R. C. (Soton, Itchen)

  Shore, Rt Hon Peter

  Williams, Rt Hon Shirley (Hertford)

  Moorman, Eric

  Short, Rt Hon E. (Newcastle C)

  Williams, W. T. (Warrington)

  Morris, Alfred (Wythenshawe)

  Short, Mrs Renée (Wolv NE)

  Wilson, Alexander (Hamilton)

  Morris, Charles R. (Openshaw)

  Silkin, Rt Hon John (Deptford)

  Wise, Mrs Audrey

  Morris, Rt Hon J. (Aberavon)

  Silkin, Rt Hon S. C. (Dulwich)

  Woodall, Alec

  Moyle, Roland

  Sillars, James

  Woof, Robert

  Murray, Rt Hon Ronald King

  Silverman, Julius

  Wrigglesworth, Ian

  Newens, Stanley

  Skinner, Dennis

  Noble, Mike

  Small, William

  TELLERS FOR THE AYES:

  Oakes, Gordon

  Smith, Cyril (Rochdale)

  Miss Margaret Jackson and

  O'Halloran, Michael

  Smith, John (N Lanarkshire)

  Mr. John Ellis.

  O'Malley, Rt Hon Brian

  Snape, Peter

  Orbach, Maurice

  Spearing, Nigel

  NOES

  Adley, Robert

  Carlisle, Mark

  Fisher, Sir Nigel

  Aitken, Jonathan

  Carr, Rt Hon Robert

  Fletcher, Alex (Edinburgh N)

  Alison, Michael

  Channon, Paul

  Fletcher-Cooke, Charles

  Amery, Rt Hon Julian

  Churchill, W. S.

  Fookes, Miss Janet

  Arnold, Tom

  Clark, Alan (Plymouth, Sutton)

  Fowler, Norman (Sutton C'f'd)

  Atkins, Rt Hon H. (Spelthorne)

  Clark, William (Croydon S)

  Fox, Marcus

  Awdry, Daniel

  Clarke, Kenneth (Rushcliffe)

  Fry, Peter

  Baker, Kenneth

  Clegg, Walter

  Galbraith, Hon T. G. D.

  Banks, Robert

  Cockcroft, John

  Gardner, Edward (S Fyide)

  Bell, Ronald

  Cooke, Robert (Bristol W)

  Gilmour, Rt Hon Ian (Chesham)

  Bennett, Sir Frederic (Torbay)

  Cope, John

  Gilmour, Sir John (East Fife)

  Bennett, Dr Reginald (Fareham)

  Cormack, Patrick

  Godber, Rt Hon Joseph

  Benyon, W.

  Corrie, John

  Goodhart, Philip

  Berry, Hon Anthony

  Costain, A. P.

  Goodhew, Victor

  Biffen, John

  Critchley, Julian

  Goodlad, Alastair

  Biggs-Davison, John

  Crouch, David

  Gored, John

  Blaker, Peter

  Crowder, F. P.

  Gow, Ian (Eastbourne)

  Body, Richard

  Dean, Paul (N Somerset)

  Gower, Sir Raymond (Barry)

  Boscawen, Hon Robert

  Dodsworth, Geoffrey

  Grant, Anthony (Harrow C)

  Bowden, A. (Brighton, Kemptown)

  Douglas-Hamilton, Lord James

  Gray, Hamish

  Boyson, Dr Rhodes (Brent)

  Drayson, Burnaby

  Grieve, Percy

  Braine, Sir Bernard

  du Cann, Rt Hon Edward

  Griffiths, Eldon

  Brittan, Leon

  Dykes, Hugh

  Grist, Ian

  Brotherton, Michael

  Eden, Rt Hon Sir John

  Grylls, Michael

  Brown, Sir Edward (Bath)

  Edwards, Nicholas (Pembroke)

  Hall, Sir John

  Bryan, Sir Paul

  Eyre, Reginald

  Hall-Davis, A. G. F.

  Buchanan-Smith, Alick

  Fairbairn, Nicholas

  Hamilton, Michael (Salisbury)

  Buck, Antony

  Fairgrieve, Russell

  Hampson, Dr Keith

  Budgen, Nick

  Farr, John

  Hannam, John

  Bulmer, Esmond

  Fell, Anthony

  Harrison, Col Sir Harwood (Eye)

  Burden, F. A.

  Finsberg, Geoffrey

  Harvie Anderson, Rt Hon Miss

  1574

  1575

  Hastings, Stephen

  Maude, Angus

  Scott, Nicholas

  Havers, Sir Michael

  Maudling, Rt Hon Reginald

  Scott-Hopkins, James

  Hawkins, Paul

  Mawby, Ray

  Shaw, Giles (Pudsey)

  Hayhoe, Barney

  Maxwell-Hyslop, Robin

  Shaw, Michael (Scarborough)

  Heath, Rt Hon Edwaro

  Mayhew, Patrick

  Shelton, William (Streatham)

  Heseltine, Michael

  Meyer, Sir Anthony

  Shepherd, Colin

  Hicks, Robert

  Miller, Hal (Bromsgrove)

  Shersby, Michael

  Higgins, Terence L

  Mills, Peter

  Silvester, Fred

  Holland, Philip

  Miscampbell, Norman

  Sims, Roger

  Hordern, Peter

  Mitchell, David (Basingstoke)

  Sinclair, Sir George

  Howe, Rt Hon Sir Geoffrey

  Monro, Hector

  Skeet, T. H. H.

  Howell, David (Guildford)

  Montgomery, Fergus

  Smith, Dudley (Warwick)

  Howell, Ralph (North Norfolk)

  Moore, John (Croydon C)

  Speed, Keith

  Hurd, Douglas

  Morgan, Geraint

  Spence, John

  Hutchison, Michael Clark

  Morgan-Giles, Rear-Admiral

  Spicer, Jim (W Dorset)

  Irvine, Bryant Godman (Rye)

  Morris, Michael (Northampton S)

  Spicer, Michael (S Worcester)

  Irving, Charles (Cheltenham)

  Morrison, Charles (Devizes)

  Sproat, Iain

  James, David

  Morrison, Hon Peter (Chester)

  Stainton, Keith

  Jenkin, Rt Hon P. (Wanst'd&W'df'd)

  Neave, Alrey

  Stanbrook, Ivor

  Jessel, Toby

  Nelson, Anthony

  Stanley, John

  Johnson Smith, G. (E Grinstead)

  Neubert, Michael

  Steen, Anthony (Wavertree)

  Jones, Arthur (Daventry)

  Newton, Tony

  Stewart, Ian (Hitchin)

  Jopling, Michael

  Normanton, Tom

  Stokes, John

  Kaberry, Sir Donald

  Nott, John

  Stradling Thomas, J.

  Kellett-Bowman, Mrs Elaine

  Onslow, Cranley

  Tapsell, Peter

  Kershaw, Anthony

  Oppenheim, Mrs Sally

  Taylor, R. (Croydon NW)

  Kimball, Marcus

  Osborn, John

  Tebbit, Norman

  King, Evelyn (South Dorset)

  Page, John (Harrow West)

  Temple-Morris, Peter

  King, Tom (Bridgwater)

  Page, Rt Hon R. Graham (Crosby)

  Thatcher, Rt Hon Margaret

  Knight, Mrs Jill

  Parkinson, Cecil

  Thomas, Rt Hon P. (Hendon S)

  Knox, David

  Pattie, Geoffrey

  Townsend, Cyril D.

  Lamont, Norman

  Percival, Ian

  Trotter, Neville

  Lane, David

  Peyton, Rt Hon John

  Tugendhat, Christopher

  Langford-Holt, Sir John

  Pink, R. Bonner

  van Straubenzee, W. R.

  Latham, Michael (Melton)

  Prior, Rt Hon James

  Vaughan, Dr Gerard

  Lawrence, Ivan

  Raison, Timothy

  Viggers, Peter

  Lawson, Nigel

  Rathbone, Tim

  Wakeham, John

  Le Merchant, Spencer

  Rees, Peter (Dover & Deal)

  Walker, Rt Hon P. (Worcester)

  Lester, Jim (Beeston)

  Rees-Davies, W. R.

  Walker-Smith, Rt Hon Sir Derek

  Lewis, Kenneth (Rutland)

  Renton, Rt Hon Sir D. (Hunts)

  Wall, Patrick

  Lloyd, Ian

  Renton, Tim (Mid-Sussex)

  Walters, Dennis

  Loveridge, John

  Rhys Williams, Sir Brandon

  Warren, Kenneth

  McAdden, Sir Stephen

  Ridley, Hon Nicholas

  Weatherill, Bernard

  McCrindle, Robert

  Ridsdale, Julian

  Wells, John

  Macfarlane, Neil

  Rifkind, Malcolm

  Whitelaw, Rt Hon William

  MacGregor, John

  Rippon, Rt Hon Geoffrey

  Wiggin, Jerry

  Macmillan, Rt Hon M. (Farnham)

  Roberts, Michael (Cardiff NW)

  Winterton, Nicholas

  McNair-Wilson, M. (Newbury)

  Roberts, Wyn (Conway)

  Wood, Rt Hon Richard

  McNair-Wilson, P. (New Forest)

  Rodgers, Sir John (Sevenoaks)

  Young, Sir G. (Ealing, Aclon)

  Madel, David

  Rossi, Hugh (Hornsey)

  Younger, Hon George

  Marshall, Michael (Arundel)

  Rost, Peter (SE Derbyshire)

  Marten, Neil

  Royle, Sir Anthony

  TELLERS FOR THE NOES:

  Mates, Michael

  Sainsbury, Tim

  Mr. Adam Butler an

  Mather, Carol

  St. John-Stevas, Norman

  Mr. Richard Luce.

  Question accordingly agreed to.
  Resolved,
  That this House, recognising the need both to provide adequately for the nation's security and to ensure that the level of public expenditure is contained within available resources,
  1576
  welcomes the statement on the Defence Estimates 1975 (Command Paper No. 5976); notes the circumstances in which further financial savings have since become necessary; and endorses the Government's determination to maintain efficient and well-equipped armed forces for the security of the United Kingdom.

BUSINESS OF THE HOUSE
Ordered,
That the consideration of Lords Amendments to the Referendum Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. Pendry.]

REFERENDUM [MONEY](No. 2)
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to provide for the holding of a referendum on the United Kingdom's membership of the European Economic Community, it is expedient to authorise the payment out of moneys provided by Parliament of the remuneration of the Chief Counting Officer appointed under that Act.—[Mr. Mellish.]

REFERENDUM BILL
Lords Amendments considered.
Clause 2

  CONDUCT OF REFERENDUM
  Lords Amendment: No. 1, in page 3, leave out lines 16 to 26 and insert—
  "(3) A separate count shall be conducted of the votes cast at the referendum in each of the areas specified in subsection (4A) below, but the votes cast (in accordance with any provisions made in pursuance of section 1(5) of this Act) outside the United Kingdom shall be counted with those cast in Greater London.
  (4) The Secretary of State shall appoint a person (in this Act referred to as the Chief Counting Officer) who shall, for each of the areas specified in subsection (4A) below, appoint a person (in this Act referred to as a counting officer) to conduct the counting of votes cast in that area in accordance with any directions given to him by the Chief Counting Officer; and the councils of districts and London boroughs shall place the services of their officers at the disposal of the counting officers.
  (4A) The areas referred to in subsections (3) and (4) of this section are—"
  10.31 p.m.
  The Minister of State, Privy Council Office (Mr. Gerry Fowler): I beg to move, That this House doth agree with the Lords in the said amendment:
  1578
  I think that I can be very brief. On Report on 21st April my right hon. Friend the Leader of the House said:
  "I undertake to ensure that an amendment is tabled in another place which will provide for the counting to be done in counties, so that there is a county count and a county declaration of results."—[Official Report, 24th April 1975; Vol. 890, c. 1817.]
  That is precisely the purport of the amendment that was carried in another place, which I recommend to the House. Some of the later Lords amendments are consequential upon this amendment and provide, for example, that a counting officer shall now be designated the Chief Counting Officer.
  Mr. Robert Adley: I do not wish to speak against the amendment. I simply wish to seek clarification on one or two small points. Will the Minister explain why the reference in the amendment is to "districts" and "officers of districts" when the purport of the amendment is to have the votes on a county basis? I can see no reference to the councils of the counties, the officers and servants of the counties or the county councils being eligible to participate in the count.
  In Amendment No. 1 in subsection (4), in the sixth line, there is reference to the
  "councils of districts and London boroughs …".
  That does not seem to tally with the references, in the Bill and in the other amendments, to counties. Have the Government taken note of the fact that there are 59 parliamentary constituencies in England and Wales that are in more than one county? What, if any, special thought has the Minister given to the way in which the returning officers of parliamentary constituencies will decide how the count in various parts of the constituencies is to be split up? I refer the Minister to the Official Report of 16th April, column 121, where the 59 constituencies are listed. My constituency figures in that list. The Minister will see, for instance, that the Goole constituency is now in four administrative counties. Who will decide, if it is necessary to decide, which officers of which local authorities will do the work? Is this why only district officers have been mentioned and not county officers?

  1579
  Finally, I welcome the fact that the amendment refers to the
  "votes cast (in accordance with any provisions made in pursuance of section 1(5) of this Act) outside the United Kingdom shall be counted with those cast in Greater London."
  This is a minor milestone which at another time we may find a useful precedent. I am grateful to the Government for enshrining this piece of history in our legislation for the first time.
  Mr. Gerry Fowler: With the leave of the House, may I say that I welcome the hon. Gentleman's congratulations. However, his other points are based on a misunderstanding of the situation. Clause 2(1)(a) provides that the people who will discharge the functions of returning officers in the referendum are those who discharge those functions
  "at elections of councillors of districts or of the Greater London Council. .".
  Therefore, although I take the point that there are parliamentary constituencies which spill over district and county boundaries, we have provided in the Bill, in its original form, that it shall be the returning officers in the districts who will conduct these proceedings. There is no problem in that respect.
  The purpose of the amendments is to ensure that officers in the counties and districts will assist the counting staff. We take it for granted that the servants of the returning officers for the county—that is to say, the men who will be the counting officers in the counties—will assist in the referendum.
  Mr. John Peyton: I do not wish to detain the House for long, but I wish to express our thanks to the Government for having met the point put to them by the Opposition. I think it has proved to be a sensible point. I must remind the Government of how much they are indebted to the Opposition for the exceedingly reasonable, restrained and sensible way in which they received a Bill which was based on a rather unwelcome dodge and device adopted by the Prime Minister in a moment of difficulty for himself. We regret that he was forced to take this action. We regret even more that we were forced to help him, but we believe that it was in the national interest.
  Mr. Roderick MacFarquhar: I wish to thank the Minister for fulfilling his undertaking on an earlier occasion by introducing these amendments in another place. Has my hon. Friend had an opportunity to consider the suggestion that to obviate problems in any change from national to local counts, there should be two or three recounts immediately prior to the announcement of the figures?
  Mr. Gerry Fowler: Again with the leave of the House, the answer is that the matter has been considered, but we believe that it is up to the chief counting officer to give advice on the question whether in any county a recount should be conducted immediately after the first count.
  Question put and agreed to.
  Remaining Lords Amendments agreed to [one with Special Entry].

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

HOWLEY GRANGE ESTATE, HALESOWEN
10.40 p.m.
Mr. John Stokes: I am grateful to have this opportunity of ventilating on the Floor of the House a most extraordinary example of official delay and unwillingness to help in a case where, clearly, the public authorities have responsibility.
Over the past 15 years or so, owners of houses and nearby council house tenants in the Howley Grange district of Lapal, Halesowen, have been concerned about damp inside their homes, and their permanently waterlogged gardens. The privately-owned houses were built between 1934 and 1936 and for some years the houseowners were able to enjoy their homes and gardens, grow their own vegetables and generally make the most of their environment in this pleasant part of Halesowen. There were several springs flowing through the surrounding fields where children could play, but the streams were not a nuisance because they were free and had an outlet.

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After the last war Halesowen council built a housing estate, roads were made up—and then the trouble started. The brooks which were previously in evidence disappeared when houses were built where they used to flow. Gardens began to be flooded, killing trees and shrubs and making cultivation impossible. Householders say they cannot dig their gardens now as they dig up sludge which is foul-smelling. On the advice of the Holesowen council, residents dug deep trenches in their gardens, but these merely filled with water which went stagnant. Several householders have, at consider-about damp inside their homes, and their land—but to no avail.
Then came the construction of the M5 motorway, when the problem really got out of hand as the damp began to penetrate into the houses, ruining the plastering and making it necessary to renew floor boards. I have photographs available showing 12 in. of water underneath the floorboards of one home. Two residents have set up electric pumps in their front gardens. Householders are concerned that these conditions are detrimental to health, many of them having lived there since the houses were built and being now elderly.
Residents in the area are convinced that the motorway, which cuts through the surrounding land near their homes, is forming a dam to the springs and diverting the water back on to their property. Representatives of the Department of the Environment inspected the motorway and reported that it was quite adequately drained. It has never been claimed that the actual motorway was flooded, but householders wonder where the surplus water is drained to, as the immediately surrounding fields are very bog-like. This is illustrated by the fact that Dudley council has recently offered an eight-acre field as a public playing field near the side of the motorway, but it is too waterlogged to be used for most of the year.
The history of this sorry story over the past two and a half years is as follows: in January 1973 residents in the Howley Grange area approached the Lapal District Residents' Association for help with the problem of their damp houses and waterlogged gardens. The association has been most energetic in taking
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up with the local councils and with me as its Member of Parliament a matter which has become extremely burdensome to it. In 1973 and 1974 the residents' association repeatedly approached the then Halesowen Borough Council, which was fully aware of the problem and had in fact, over the years, advised residents to lay land drains and dig trenches. This the householders did, often at considerable expense, but the trenches quickly filled with water and became stagnant, and drainage pipes had little effect.
In October 1973, Halesowen Borough Council, in conjunction with the Worcestershire County Council, had boreholes taken in the affected area. These proved that water entered very fast at 3 ft. below ground level, indicating that water was still attempting to flow along natural courses. After several more consultations with Halesowen council, it became apparent that the intention was to leave the solution of the problem to the new Dudley Metropolitan Council. It was at this stage that I was asked to help.
I approached the Department of the Environment, which inspected the nearby motorway and reported that drainage was adequate. The Department stated
"… there is no sign that the system has ever been overloaded or indeed worked to anywhere near its full capacity".
This completely missed the point that it was the existence of the motorway and its banks which caused the water to flow back on to the surrounding land—the motorway acting as a dam.
In March, the Department of the Environment referred the matter to the Ministry of Agriculture, pointing out its responsibility for land drainage. It was stated that the local authority had permissive powers under Section 34 of the Land Drainage Act 1961 to undertake works to prevent flooding. The letter from the Ministry, dated 25th March 1974, said:
"If this Council wants to exercise their powers we would be prepared to consider paying a grant towards the cost of a scheme provided it was technically and economically sound."
The matter was referred again to the Ministry of Agriculture and to Dudley council. In July, the council met representatives from the Ministry of Agriculture on the site. Dudley council informed me that the Ministry criteria

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could not be met and that it proposed to take no further action. It also refused further representations from the residents' association. I then agreed to take a deputation to the Ministry of Agriculture. This unfortunately was refused. Dudley council has given no support. Incidentally, its contention that only the gardens are flooded and not the houses is not correct.
I feel that for this situation to have been tolerated for so long is a disgrace. I am well known as a strong opponent of overspending either by central or local government, but this case, I believe, should have priority over less essential capital projects. It is incredible that in 1975, when men have been to the moon and when Governments spend millions of pounds on non-essential matters, these householders should have to live in such disagreeable conditions. I appeal to the Minister to intervene with Dudley council to put a scheme in hand to relieve my constituents of an intolerable nuisance.
10.50 p.m.
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): The hon. Member for Halesowen and Stourbridge (Mr. Stokes) has given us a full history of this unfortunate state of affairs, as he sees it. I must say at the outset that although I certainly have every sympathy with the problems and anxieties of the residents in this area this is not the sort of problem in which the Government can or should intervene directly.
We shall do what we can to assist the local authority, but basically this is a local matter, for which a local solution must be found. We have said that we shall consider an application for grant but so far we do not have one to consider.
Before dealing with the question of grant I must say something about the technical problems with which we are involved. I have had a report from one of our local engineers. He has visited the area twice, once in July last year and again in January of this year, accompanied by one of the council's officers. The report confirms that the gardens suffer from waterlogging and that this also affects some houses below floor level.
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The difficulty is that surface and spring water cannot drain away because of an impervious layer near the surface. Such natural drainage as existed has been impeded by development which has taken place since the war. A technical solution to intercept soil water might he possible but would require careful investigation. The built-up nature of the area would make the location and construction of interception drains difficult and the work would inevitably be expensive.
We have powers to pay grants towards the cost of drainage improvement works carried out by councils or drainage authorities. We cannot pay grants to individuals. We are prepared to consider any land drainage scheme for grant aid provided the proposed works are economically and technically sound. To qualify on economic grounds we would need to be sure that the potential benefits, generally assessed in terms of damage to property were commensurate with the cost.
The hon. Member would no doubt agree that this is the right test to apply where resources are limited so that the grant available goes to the places where it is needed most. In his discussions with officials of the council our regional engineer has explained that on an engineering basis the cost of remedial work seems likely to be high in relation to the benefits.
What I have said is rather different from a categoric statement, either oral or in writing, from the Ministry that the criteria could not be met, which was the phrase used by the hon. Gentleman.
The regional engineer went on to suggest that if the council decided to go ahead with a scheme it would be well advised to seek advice from a firm of consultants who specialise in soil water problems. He might have added that in assessing the potential benefit of remedial work we are ready to take into account evidence about intangible benefits such as the risks to public health, which were not apparent from his inspection of the site. For our part, we remain ready to give sympathetic consideration to an application for grant aid if the council wish to put one to us.
The Dudley Metropolitan Borough Council has adequate powers under the

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Land Drainage Acts to deal with flooding problems. These include the maintenance and improvement of existing drainage works and the construction of new works. The hon. Member will be aware that these powers are permissive. The Government cannot issue directives to the council, nor would they wish to do so. The decision whether to carry out drainage work therefore rests with the council and it is not for the Government to defend the decision we understand it has taken in the light of its detailed knowledge of local conditions.
The hon. Member has suggested that the construction of the M5 has been a contributory factor, to put it at its most modest. As he acknowledged, the advice which the Department of the Environment has given us is that it could find no evidence that the construction of the M5 had adversely affected conditions. It is not always easy to foresee the effects on drainage of building in a particular area.
It is for the council to decide how it will exercise its permissive powers. It must make its decisions in the light of its assessment of local resources and priorities. This is the type of problem with which many hon. Members are familiar. I could cite a number of cases in my constituency where the decision to carry out certain expenditure or to embark on a local project is for the local authority. If the hon. Gentleman, as a constituency
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Member, wants action on the matter, he must first persuade his local councillors—his local authority—that it is so important that it demands a high priority in their overall expenditure plans.
There are enormous demands on local authorities. I know that the situation in England and Wales is somewhat different from that in Scotland, where, next week, we are to begin the reformed set-up. We have had all the upheaval of the transition. There is enormous electoral pressure on any local authority, whether Labour-controlled or Conservative-controlled, to keep the rates down.
It is not for me to comment on the priorities that a local council should have, but it is only fair to express our sympathy with and understanding for local authorities because of the difficult decisions they must make. We are prepared to consider any application for grant for the purposes of alleviating the flooding, but until we receive an application there is no action that we can usefully take.
Mr. Stokes: I am most grateful to the Minister for what he has said. I shall take his advice and pursue the matter further with the Dudley council.
Question put and agreed to.
Adjourned accordingly at two minutes to Eleven o'clock.

  COMMONWEALTH PRIME MINISTERS (SPEECHES)
  COMMONWEALTH PRIME MINISTERS (SPEECHES)
  HOUSE OF LORDS (SCOTTISH APPEALS)
  HOUSE OF LORDS (SCOTTISH APPEALS)
  REFERENDUM
  REFERENDUM
  LEGISLATION (PREPARATION)
  LEGISLATION (PREPARATION)
CIVIL SERVICE
  Public Sector Personnel
  Public Sector Personnel
HOME DEPARTMENT
  Rape
  Rape
ENVIRONMENT
  Municipalisation
  Municipalisation
  Community Land Bill
  Community Land Bill
  Building Construction (High Alumina Cement)
  Building Construction (High Alumina Cement)
  Bricks
  Bricks
  Lorry Routes
  Lorry Routes
  Property Services Agency (Energy Conservation Projects)
  Property Services Agency (Energy Conservation Projects)
  Local Authority Employees
  Local Authority Employees
  Dobry Report
  Dobry Report
  Transport Subsidies
  Transport Subsidies
  Motor Insurance
  Motor Insurance
  Rural Transport
  Rural Transport
  Council Housing Costs
  Council Housing Costs
  Disused Motor Vehicles
  Disused Motor Vehicles
  Mortgage Interest Rate
  Mortgage Interest Rate
  Local Government Expenditure
  Local Government Expenditure
  Local Authority Employees (Council Membership)
  Local Authority Employees (Council Membership)
  Housing (Disabled Persons)
  Housing (Disabled Persons)
  Housing (Cyprus Residents)
  Housing (Cyprus Residents)
  Council Rents
  Council Rents
  Student Accommodation
  Student Accommodation
  Horse Racing
  Horse Racing
  Railways (Train Operators)
  Railways (Train Operators)
  Japanese Seaweed
  Japanese Seaweed
  Rented Accommodation (Repossession)
  Rented Accommodation (Repossession)
  Housing Improvement Finance
  Housing Improvement Finance
  Lewisham (Property Acquisition)
  Lewisham (Property Acquisition)
  Housing Associations
  Housing Associations
  Refuse Collection (Paper Sacks)
  Refuse Collection (Paper Sacks)
  Rating (Charities)
  Rating (Charities)
  Prospect Road, Hythe
  Prospect Road, Hythe
  Historic Buildings
  Historic Buildings
  Car Rallies
  Car Rallies
  Car Rallies
  Car Rallies
  Playgrounds
  Playgrounds
  Planning Applications
  Planning Applications
  Public Transport
  Public Transport
  Goods Traffic
  Goods Traffic
  Waterways (Capital Improvements)
  Waterways (Capital Improvements)
  M18
  M18
  New Towns (Rented Housing)
  New Towns (Rented Housing)
AGRICULTURE FISHERIES AND FOOD
  Cereals
  Cereals
  Eggs
  Eggs
  Farm Tenancies (Security)
  Farm Tenancies (Security)
SCOTLAND
  Community Development
  Community Development
  British Steel Corporation
  British Steel Corporation
  Refuse Collection (Paper Sacks)
  Refuse Collection (Paper Sacks)
DEFENCE
  Forces Personnel (Civilian Employment Rating)
  Forces Personnel (Civilian Employment Rating)
  Expenditure
  Expenditure
  Flying Accidents
  Flying Accidents
  Hong Kong
  Hong Kong
  Atomic Bombs
  Atomic Bombs
EDUCATION AND SCIENCE
  Teachers
  Teachers
  Student Grants
  Student Grants
WALES
  Sports and Athletics Teams
  Sports and Athletics Teams
EMPLOYMENT
  Wages
  Wages
NATIONAL FINANCE
  Personal Incomes
  Personal Incomes
  Value Added Tax
  Value Added Tax
  Building Societies
  Building Societies
  TRIBUNALS AND COURTS (CLERKS)
  TRIBUNALS AND COURTS (CLERKS)
SOCIAL SERVICES
  Agoraphobia
  Agoraphobia
  X-rays
  X-rays
  Abortion
  Abortion
  Self-employed Persons
  Self-employed Persons
  National Insurance Contributions
  National Insurance Contributions
  Wheelchairs
  Wheelchairs
  Queen Elizabeth Medical Centre, Site, Birmingham
  Queen Elizabeth Medical Centre, Site, Birmingham
  Invalid Vehicles
  Invalid Vehicles
ENERGY
  Burmah Oil Co. Ltd.
  Burmah Oil Co. Ltd.
FOREIGN AND COMMONWEALTH AFFAIRS
  Diplomatic Missions (Newspaper Supplies)
  Diplomatic Missions (Newspaper Supplies)
  European Community Countries (Company Ownership)
  European Community Countries (Company Ownership)
PRICES AND CONSUMER PROTECTION
  Food Prices (Constituent Costs)
  Food Prices (Constituent Costs)
  Second Mortgages
  Second Mortgages
TRADE
  Development of Tourism Act
  Development of Tourism Act
  Boats
  Boats
  Dangerous Chemicals (Carriage by Sea)
  Dangerous Chemicals (Carriage by Sea)
  British Overseas Trade Board
  British Overseas Trade Board

Preamble
The House met at half past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Derby):
The LORD CHANCELLOR on the Woolsack.

THE LORD BISHOP OF CHELMSFORD
Albert John, Lord Bishop of Chelmsford—Was (in the usual manner) introduced between the Lord Bishop of London and the Lord Bishop of Derby.

NATIONALISATION AND COMPENSATION
2.36 p.m.
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will give an assurance that aircraft companies that come within the Government's plans for nationalisation will be guaranteed full compensation for any further investment made during the interim period in addition to the broad compensation terms already announced relating to a 1972 share price formula.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, companies will be able to make new investments from internally generated sources without affecting compensation; where new securities have been issued or new loans made to finance the new investment, these will be brought into account at their full value in settling compensation, or repaid in full as appropriate.
The Earl of KINNOULL: My Lords, while thanking the Minister for that assurance, may I ask whether he is aware that, outside this interim period, there is deep concern in the country that under the present Bill for the nationalisation of
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the aircraft and shipbuilding companies Parliament will be asked to pass a new form of arbitrary compensation outside the normal principles of valuation of the companies? Can the noble Lord give any assurance that the Government have not totally shut their minds to receiving deputations on the form of compensation that will finally take place?
Lord BESWICK: My Lords, I do not accept that there is to be arbitrary compensation, unless the use of the word "arbitrary" is a variation of the word "arbitration". We have said that, where necessary, there will be arbitration, and it is not an unknown system that is intended to be applied. The system is quite well-known to the Inland Revenue authorities. So far as the representations are concerned if the noble Earl would care to write to me and tell me his exact fears I will endeavour to answer him.
Earl FERRERS: My Lords, if capital from outside is to be fully compensated—that which is introduced since The arrangements were made—will the interest on that capital also be allowable for compensation?
Lord BESWICK: My Lords, I should like to take advice on that point. It will be treated as an addition to the assets since 28th February 1974 and compensation will be paid in full. As to the interest, I will consider that point and let the noble Earl know.
Lord TREFGARNE: My Lords, is it intended to pay compensation in cash or will there be some form of bonds or other securities?
Lord BESWICK: My Lords, it will be in some form of bonds.

RAF PILOT TRAINING
Lord TREFGARNE: My Lords, I bee 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 arrangements have been made for the training of RAF pilots by civilian training schools, how many pilots are involved, and why the training could not be carried out by the Central Flying School.
Lord WINTERBOTTOM: My Lords, no arrangements have been made for the initial training of RAF pilots by civilian training schools. The Defence Review has reduced the numbers of multi-engined aircraft and the training of new pilots in that role has been temporarily suspended. A small residual requirement for the refresher training of experienced pilots who return to flying after a tour of duty on the ground remains and a one-year contract for this task has recently been let to the College of Air Training, Hamble. About 70 pilots are expected to undergo refresher training under this contract.
The RAF Central Flying School is responsible for the training of flying instructors, the preparation of flying training procedures and the monitoring of training standards. It does not provide for the type of training now being carried out for the RAF at Hamble. Maintenance of a special training organisation for this small task within the RAF would not be economic.
Lord TREFGARNE: My Lords, while thanking the noble Lord for that reply, may I ask whether he is satisfied as to the wisdom of this new move? Would it not have been wiser to extend the capacity of the Central Flying School, which would not have cost very much, thus retaining this multi-engine advance training capability within the Service?
Lord WINTERBOTTOM: No, my Lords. As noble Lords will know, we are in a period of financial stringency. This is one of the many economies the RAF is making in order to maintain its efficiency without overspending.
Lord TREFGARNE: My Lords, while accepting that there is a need for economic restraint at this time, may I ask whether it is a fact that the Central Flying School could earn a great deal of foreign currency of its own by training the pilots of overseas air forces? Would that not have been possible in this case?
Lord WINTERBOTTOM: My Lords, that is another question.

TEXTILE INDUSTRIES: LICENSING
2.41 p.m.
Lord BARNBY: 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, with regard to the Statement by the Minister on 23rd April (Lords Hansard, col. 984) in the debate on the textile industries, they are now able to announce a decision on extended surveillance licensing.
Lord BESWICK: My Lords, we are still considering the request made by the British Textile Confederation for the extension of import surveillance arrangements to textile made-ups, knitwear and clothing.
Lord BARNBY: My Lords, while I am grateful for the information that the matter is still under consideration, may I say that that reply is disappointing, particularly because that suggestion would have lessened the difficulty of the situation. Is the noble Lord aware of the peril in which this industry finds itself? This industry contributes much to exports, and is a fine example of good industrial relations. Is the noble Lord also aware of the pressure of imports, which must increase unemployment and the likelihood of several firms closing? Further, is he aware that was made more difficult by the settlement last week of a 30 per cent. increase in rates of pay? It will interest Members of this House to know that this is the first industry to settle for equal pay for women. Can the noble Lord perhaps now suggest that the request recently pressed in both Houses of Parliament, that there should be a 20 per cent. cut across the board in all imports, is something that can be announced?
Lord BESWICK: My Lords, I am aware of the peril, and the Government are, too. Certain things have been done, as the noble Lord, Lord Barnby, will be kind enough to acknowledge, and much detail on this was given in the debate that we had a week ago. The question of the 20 per cent. cut is a complex problem. There is really no point in making

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a cut if the result is that through compensation and retaliatory action we are worse off. These matters have to be considered very carefully. That is, in part, the reason why no decision has been taken about the surveillance arrangements.
Lord RHODES: My Lords, would my noble friend not agree that escape clauses exist in the Treaty of Rome, in the GATT and in the Multi-Fibre Agreement, to take care of such emergencies as this?
Lord BESWICK: My Lords, we have taken advantage of some of these escape clauses. Once again I refer to the details discussed in our debate last week. I am now talking about this area. I am saying that there are very real dangers of compensation liabilities and possible retaliatory action. That is the reason why a decision has taken rather longer than we would have hoped.
Lord HALE: My Lords, has the attention of the noble Lord been drawn to the statement attributed to M. Chirac that France is now actively seeking protection for the French textile industry? Has he been in touch over this matter? Further, can the noble Lord say whether the treaty with Israel which, we are told, is to be signed in the next few days, and which makes provision for delaying the application of licences in favour of Italy, takes any account of the effects on the textile industry? Will the noble Lord bear that in mind in the current negotiations with the three countries of the Maghreb, and with Portugal, all of which we welcome as extensions of the Market and favourable to British trade generally, but which raise this question?
Lord BESWICK: My Lords, I cannot answer the question about the possible consequences of the treaty with Israel, but I will look into this and let my noble friend know, or perhaps he would prefer to put down another Question. As to the first part of his question about possible action by France, this is a possibility. Again, we have to consider whether it would be wise to trigger off a whole range of restrictions which would have the effect of reducing world trade, with particularly damaging consequences to us as an exporting nation.
Lord HALE: My Lords, would my noble friend remember that according to
304
Le Monde this morning, the treaty with Israel is likely to be signed by 15th May? Putting down a Question is somewhat difficult in the circumstances. Would my noble friend not look into the matter and let the House know something?
Lord BESWICK: My Lords, certainly I will look into the matter straight away. I am afraid I do not have before me the implications or the consequences of that particular treaty.
Lord BARNBY: My Lords, while I am interpreting the reply of the Minister as sympathetic, may I ask him whether he realises that there has been much talk about the possibility of retaliation. If a 20 per cent. reduction were made selective, it would be difficult to administer. But if it were made comprehensive it would not be, and I repeat that it would not be a vehicle for retaliation under Article XII of the GATT.
Lord BESWICK: My Lords, that is a view which the noble Lord, Lord Barnby, expresses; it is a view which the British Textile Confederation also expresses, but it is not the view of others. There are indications, for example in Turkey at the moment, which suggest there would be very serious retaliation.
Lord BARNBY: My Lords, lastly, in view of the peril facing the industry, can it be hoped from the noble Lord's assurance that this matter has been under consideration, that a decision will be come to swiftly in order to avoid the danger?
Lord BESWICK: My Lords, I can give an undertaking that this matter is being treated with urgency.

CONCILIATION AND ARBITRATION SERVICE
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the possibility of industrial disputes arising out of wages claims, they will introduce legislation following the failure of negotiation between the contending parties to make it compulsory to refer a dispute to the Conciliation and Arbitration Board.
Lord JACQUES: My Lords, the view of the Government is that industrial disputes are best resolved by voluntary means. The Advisory, Conciliation and Arbitration Service, an independent body set up by the Government with the approval of both sides of industry, is available to help those in dispute to resolve their differences.
Lord SHINWELL: My Lords, in view of the fact that disputes are not being settled by voluntary means—except in the case of some disputes—and as the Social Contract can hardly be regarded as any more than a partial success, would he not agree that some new device is required in order to avoid so many unofficial disputes?
Lord JACQUES: My Lords, the independent Service was created in September of that year. Therefore, it is a very young infant. Since its inauguration, the number of disputes referred to it for conciliation has doubled as compared with the number when the Service was within a Government Department. The number is now 200. Similarly, the number of arbitration hearings has doubled. It is 25. These are monthly figures. In addition, the Service is giving advice to an average of 500 firms per month on personnel matters. The view of the Government is that, if there were Ministerial or legislative intervention, it would tend to undermine the independence of the Service and would make it more difficult for the Service to win and retain the confidence of both sides of the industry. This is a young infant; please give it a chance.
Lord SHINWELL: My Lords, may I ask how the independence of this device, which according to my noble friend's answer has been largely successful, could be vitiated by having the force of law? Is the noble Lord aware that in Australia this device has been in operation for many long years, and as a result very few disputes have occurred? The device has been extraordinarily successful. Why not adopt it in this country?
Lord JACQUES: My Lords, we are trying the voluntary method. We are trying an independent service, and we are having some measure of success. Do not let us change every 24 hours. That is about the worst thing we could do.
Lord POPPLEWELL: My Lords, can my noble friend say whether any further discussion has taken place with a view to trying to establish national agreements wherever possible instead of so many slop-floor settlements which create unofficial trouble? Would my noble friend make it quite clear that compulsory arbitration would be repugnant to the whole of the trade union movement, and it is much better to follow the line of trying to get this voluntary type of settlement, utilising, I would suggest, all the power of the Government to try to restore national settlements again instead of shop-floor settlements.
Lord JACQUES: My Lords, so far as the first question is concerned, I think there is great sympathy for national agreements, by the Government, the Service and, indeed, the trade unions and the employers. But it is not merely politics which is the art of the possible; industrial relations are also the art of the possible. The shop stewards are there and they have the backing, and we must face up to life as it is. So far as the second part of my noble friend's question is concerned, I thank him for putting it.
Lord SHINWELL: My Lords, is my noble friend aware that I am not asking for compulsion to be adopted in order that the decision in a dispute referred to the Conciliation and Arbitration Board must be accepted by either party but merely for the dispute to be referred to such a body? And when he said, in a somewhat excited fashion—I could not understand why—that we must not change every 24 hours, is he aware that I am not asking him to change every 24 hours, but we should change when it becomes necessary?
Lord JACQUES: My Lords, I am fully aware that my noble friend seeks compulsory conciliation and arbitration, but not compulsory acceptance of the decision of the arbitrators. I personally have a great deal of sympathy with his point of view, but I have stated firmly the attitude of the Government That is what he asked for.
Lord BLYTON: My Lords, is the Minister aware that the TUC will not under any consideration accept compulsory arbitration? Their faith in arbitration was shattered years ago when the

307
arbitrators, under the Conservative Government, were told that they could not make any award not within the norm that Government had laid down, regardless of the merits of the case. The new conciliation machinery that has now been set up ought to be given a chance, to see how it works and to try to create in working people some faith in arbitration, which was shattered some years ago by the Opposition.
Lord JACQUES: My Lords, I thank my noble friend for his question.
Lord CARRINGTON: My Lords, may I ask the noble Lord whether his answer to the last question but one means that each individual Minister can have his own views, not only on the Common Market but also on industrial relations?
Lord JACQUES: My Lords, if the noble Lord means that I have to stand here and be a robot, I do not accept it, but I will accept conciliation and arbitration.
Lord ROCHESTER: My Lords, is the noble Lord aware that we on these Benches welcome any move, however limited, in the direction of a statutory incomes policy? Would he not agree that, if the findings of conciliators and arbitrators merely amount to splitting the difference between the parties to a wages dispute, they are not necessarily in the interest of the nation as a whole?
Lord JACQUES: My Lords, I think there is a great deal of truth in that. We all know from practice that that often happens, but I still have a great deal of faith in conciliation and arbitration.
Lord HAMNETT: My Lords, is the Minister aware that, on the last occasion on which compulsory arbitration was imposed, the Statute was subsequently withdrawn in SRO 1305 of 1950, and that the Cabinet of that time viewed the withdrawal by the Minister of Labour with an air of relief? Is it also not true that, frequently in these connections, we remember nothing and forget everything?
Lord JACQUES: My Lords, I agree with my noble friend.

BROOKWOOD CEMETERY BILL [H.L.]
Read 2a, and referred to the Examiners.

ECONOMIC AND INDUSTRIAL PROBLEMS
2.57 p.m.
Viscount WATKINSON Viscount WATKINSON rose to call attention to the need for a united approach to the nation's economic and industrial problems; and to move for Papers. The noble Viscount said: My Lords, I beg to move the Motion which stands in my name on the Order Paper. Six months ago I had the honour to initiate an economic debate in your Lordships' House in which I ventured to call attention to what I described as "Operation Industrial Survival". I said that I did not believe that Britain would survive unless we could recover some part of the unity and comradeship with which our nation has faced difficulties in the past. My Lords, it seems appropriate today to examine whether we have made progress towards this more united approach to our industrial and economic problems, though it is plain enough to all of us that the economic situation in which we find ourselves has grown much worse in this six months period. It gives me no particular pleasure to record today that my forecast six months ago of 1 million unemployed has almost been reached, or to forecast today that I believe the nation will be moving on to its second million by the end of the year unless we change our ways; and I say "our ways" because if our nation prices itself out of business it will be entirely our own fault. We can no longer blame the Arabs or anyone else. It is our doing, and ours alone.
I do not want to burden your Lordships' House with a lot of statistics, but a recent OECD forecast for consumer prices says that the British rate of price increases to the end of 1975 is now nearly double that of our main industrial competitors, and, of course, as we all know—the Chancellor said it himself—this alarming increase is almost entirely due to our own increased wage costs. So we are insisting on paying ourselves more than we are earning at a time when we are all living "on tick" and borrowing more each month from our foreign creditors, and all this to support an economic rake's progress that really is very often due to our own selfish actions and our somewhat misjudged policies.
Surely, my Lords, if any situation has ever demanded a national effort to recover our economic sense of proportion it is the situation that we face now. If this is so, then it behoves all of us who realise the truth (and at least most of us do in this House) to try to help and not hinder by what we say. So I do not intend to deal with personalities as such or to make personal attacks, least of all on noble Lords opposite. But one cannot do one's duty as one sees it unless one expresses one's sincere beliefs on what are right and wrong policies at this time.
To avoid any charge, I hope, of one-sidedness, let me start with the Chancellor of the Exchequer and commend him very sincerely for his courage. I and many other businessmen do not agree with his policy on capital transfer tax, 25 per cent. VAT and many other matters, but we congratulate him on trying to tell the country the truth at this time. The truth is that if trade unions or individuals go on demanding a 30 per cent. increase in wages on top of an already ruinous 20 per cent. rate of existing inflation, we shall drive ourselves into massive unemployment and bankruptcy, and no one will rescue us. So let us at least give Mr. Healey credit for speaking out, however late in the day it may be. But one must wish that he did not appear to be playing such a lone hand in his own Government; and, of course, he has yet to repair the serious error of imagining that you can succeed with a wages contract without involving employers, professional men, the City and everyone else. Will he put this error right? If he and the Government are willing to do so then for example, the CBI could make some sensible and practical suggestions, but we have not been asked.
I do not support this Government or their policies, nor do most businessmen. But it should be said that, through the CBI and other bodies, we should certainly be prepared to work with them in the national interest at this critical time if we believed they were trying to pull the whole nation together to surmount our problems. There is a useful precedent close to my heart in the one-time British National Export Council, invented by Mr. Heath and strongly supported by Mr. Wilson as Prime Minister in his day. Here unity was achieved between trade
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unionists, the nationalised industries, businessmen, all those concerned for a national purpose. It would not be a bad idea if people remembered that kind of precedent.
I have to go on and be blunt about why at least some Members of the Government—I hope through inadvertence—are making willing co-operation unlikely, if not impossible, from many businesmen. First, there is the attitude of the Secretary of State for Employment, which, to many of us, appears to be almost entirely trade union orientated. As noble Lords know, I once had the privilege of serving in the old Ministry of Labour. In those days its watchword was to be impartial and to foster genuine collective bargaining. Today, we feel the bargaining takes place only with the unions; employers' representatives are largely ignored. This is certainly true of the Employment Protection Bill and the Trade Union and Labour Relations Bill. I would only quote here from a recent letter to The Times from the Director General of the CBI, Mr. Campbell Adamson, referring to the Employment Protection Bill:
"This will undermine the established basis of collective bargaining and pay determination by ignoring considerations of the level of effort and output associated with particular pay levels, and make 'parity' the legitimate argument of pay claims"—
a situation, of course, which we are now seeing exactly on the whole labour front.
I give one other short quotation from the CBI Bulletin of April 1975. It refers to the Bill with which I have been dealing, but it could equally apply to the Industry Bill. I quote:
"Despite all the representations to Ministers and intensive discussions with evil servants, the proposals have remained virtually unchanged and it has not so far proved possible to persuade the Government to inject even a modicum of fairness. Even where the logic of the situation has proved so strong that some small change has had to be made, the TUC has demanded and achieved further concessions".
May I make it plain that I am not, nor is the CBI, attacking the trade unions for getting from a willing Government what they can as an advance payment against the Social Contract. What I am saying is that the Government should deal fairly with the employers as well as the trade unions. Whether or not your Lordships agree with the two quotations

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which I have given, I maintain they reflect an attitude of mind on the part of the employers of which any Government might be wise to take account at this time.
Now I must turn to the Secretary of State for Industry. Many of us in your Lordships' House who are old political hands from the other place, have at least some comprehension of the game which the Secretary of State is playing, with some skill, I imagine. But that is not a comment by me. To the average businessman, what he is doing is quite incomprehensible and extremely frightening and discouraging. I know it will no doubt be said that the Secretary of State is unfairly represented in the media. Let me give one example, therefore, which is based, I hope, on the record rather than the report. The Secretary of State, wearing his Party hat, put his name to a Document called A Ten-Year Industrial Strategy. I quote:
"Investment funds in the private sector will have to be guided in accordance with national priorities".
Then, under the bold heading "Benn stands by his funds-for-industry plan", and presumably wearing his Secretary of State's hat, he is reported by the Financial Times of Tuesday 29th April, as saying to a trade union conference in Edinburgh:
"We need to develop progressively an economic and industrial strategy that will allow working people through their savings to have an influence on the strength and vitality of our industry and our economy".
Meantime, in the same report, the Prime Minister is recorded as informing the Insurance and Life Officers Association that the original document
"does not in any way represent Government thinking".
Jolly good! Also, I understand one of the Secretary of State's own junior Ministers gave much the same kind of reassurance at the Committee stage of the Industry Bill. Mr. Lever is then reported in the Daily Telegraph on Friday, 2nd May, as saying:
"Avant garde theorists may think they are lunging at finance capitalists but it is the small saver who will get the black eye".
How very true. This argument still continues. I do not comment on it as an argument. It is not for me to enter into this kind of politics. But it is my duty
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to say as firmly as I can that this kind of double talk, as businessmen see it, is totally destroying any feeling of confidence between businessmen and their main sponsoring Department of State. That is a fact which troubles me very much.
One could quote many other examples, such as the Secretary of State's public comments on British Leyland. Many businessmen, including myself, believe that the Ryder Report does not provide the right long-term solution for the British motor car industry. They therefore naturally take exception to the Secretary of State's Statement that there is
"a Ryder Report to be written on almost every major engineering company".
Again, my Lords, let me make it plain—and I hope that the noble Lord, Lord Beswick, will accept this from me—that I am not attacking the Secretary of State personally. He is a man of great skill and political ability—and good luck to him in his own sphere. I am not dealing with that aspect. It is still a free country and if the current rules of collective Cabinet responsibility permit this kind of thing, there is no comment I wish to make. But it is my job to point to the hard fact, as I see it, that if the Secretary of State and his Ministry want willing co-operation from the private sector of industry, then he must stop attacking the businessmen who run free enterprise, and who still provide most of our exports—only over 90 per cent.!—and nearly all the financial sinews of the State; because, if they continue to feel as beleaguered as they feel now, then they, too, may be driven to developing industrial muscle power and with it, however reluctantly, confrontation and non-co-operation.
To be fair, the Secretary of State has always made it plain in meetings which I have attended with him—quite a number now—that his wish is to get co-operation from all sides on whatever proposals he makes. Therefore, I say with sincerity that it may be of value to make it plain that, perhaps inadvertently, many of his present actions are not likely to achieve his own stated ends. How tragic this position would be at a time when the nation needs the highest degree of teamwork and unity from us all.
I very much hope that the Chancellor of the Exchequer, with all other Ministers, will try to give a lead towards this unity.

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However, this is a problem for the Prime Minister. A number of industrialists, including myself, who have seen him recently, have done their best to impress on him the seriousness of the adverse reaction among directors and managers across industry to what is sincerely believed to be the irrelevance of violent political dogma to the critical situation of the nation. We do not challenge the right of this Government to pursue the broad policy on which they won their narrow electoral majority, but we have the right to say, "It is not what you do; it is the way that you do it that makes it increasingly unlikely that you will get our full co-operation at a time when you need it". I hope that this time the Government will listen, and I apologise to noble Lords for saying, perhaps in rather more peremptory terms, much the same as I said six months ago.
To conclude on as constructive a note as I can, what could be done to move towards unity rather than towards a sharper divergence? Here I suppose we have first to get this divisive device of a referendum behind us. If the vote is to leave the Community, then it is my belief that national unity and sense of purpose will be impossible to achieve in a regressive, inward-looking Britain that has ignored its standards and rejected all its obligations, as I see them, from a trading point of view. But if the vote is a firm "Yes" to remain, as one must pray that it will be, then this could be a watershed—a time when, with the great issue of our generation firmly and finally decided, the British people could be led to a regained sense of purpose and unity. So what could be done on the economic and industrial front to achieve this end, because we should be getting on with it now and not waiting for the referendum?
First, a more balanced judgment must be brought to some of the more controversial and divisive measures now before Parliament and the country, particularly the Industry Bill. We must all seek, and genuinely seek, to try to move the industrial and economic debate on to more neutral ground. Businessmen should not only be consulted—we have no complaint about Ministers not consulting us, because they have done this very fairly—but their views should be carefully listened to and acted on by the Departments of Industry, Employment and others. I believe that
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here the Prime Minister could help a great deal by stopping the confusions and contradictions of differing Ministerial interpretations of policy, perhaps sincerely held—I do not know. I am talking from the point of view of a businessman who does not understand this game which some of us so much enjoy and which, to be frank, I so much enjoyed when I was in another place. I am not speaking for politicians. I am trying to speak for chaps in West Bromwich and elsewhere who do not understand this kind of politics, anyway.
It would help where Acts leave a wide discretion to Ministers, as in the Industry Bill, if there were a precise legislative code of practice understandable by all and binding on Ministers—and not only the present ones. Because, again, I must make it plain that it is not a question of saying that any particular Minister is right or wrong; if he lays down an Act of Parliament it is binding for all time until it is repealed, and if it is full of anomalies and wide open to interpretation as one goes along it is not surprising that businessmen should throw up their hands and say, "We don't understand" and then retire into their own little businesses and just try to save themselves. I believe that the Prime Minister alone can recreate the spirit of collaboration which, it is only fair to say, he achieved in the export effort through the British National Export Council and, no doubt, through other things. I hope that he will seek to do this in the national interest, for the need is great and urgent.
I hope that the CBI and the TUC are not waiting for the politicians to do it all for them. I am delighted to be able to say today, perhaps on a more hopeful note, that the informal discussions between the CBI and TUC, which have never really been broken off, are now beginning to make progress again. We are, I believe coming to a joint view; for example, on how important developments in the National Economic Development Council should be pushed forward. I make no apology to noble Lords for saying again that I believe—and I think that the CBI believes as well, but let me make it plain that I am certainly speaking not for the CBI today but for myself—that there is now a wide belief in industry that the NEDC and the EDCs could be restructured to form the framework for

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a national plan for industrial recovery and development that would engage the interest of the nation as a whole; one based, I believe, on a reasonably united approach by the CBI and the TUC on, at least broad principles.
These proposals would, of course, need the support of the Government, and particularly the Chancellor, and I hope his recent statements give some assurance that this will be forthcoming. I quote from the 1962 Neddy terms of reference:
"To consider together what are the obstacles to quicker growth … to seek agreement upon ways of improving economic performance, competitive power and efficiency."
Is not this what we need to do at this time, and is not this perhaps the only neutral ground left on which we could do it—a new basis for the unity of purpose which we need? The Government, in their consideration of this matter, should take very careful account not just of what I have said—that does not matter—but of what industry is saying, and both sides of industry to boot.
I hope the Government will also take very careful account of the TUC proposal that Neddy should have—I quote their words—an "overview" of the National Enterprise Board and other Government agencies. An assurance on this matter by the Prime Minister would at least calm a few fears in industry, because they understand the NEDC, they trust it, they know that it is a fair forum for debate by employers as well as the nationalised industries, the trade unions, the City, independent members, the lot. I do not apologise for saying again that I believe that this is the framework on which one could create,
"… a united approach to the nation's economic and industrial problems."
It is there and the Government need only to have the will to refurbish it, to use it properly and to do it now.
It is very significant that at this morning's meeting of the NEDC one of the more important pieces of business was the discussion of the joint proposal put forward by the CBI and the TUC to enlarge, improve and restructure Neddy. If the noble Lord, Lord Beswick, can tell us more about this I shall be very glad to hear it, because I believe it is very much in the national interest that
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we should do this, and do it now, because I am not seeking to make matters worse. I am trying very hard to see whether there is now some reasonably neutral ground where all Ministers and all those who oppose them, as I do and as my noble friends certainly do, could at least for the moment perhaps put the sharper, harder and tougher controversies not aside, but just a little out of the way while we try to get our nation back into some sort of solvency.
If we do not, I wonder how long it will be before our overseas creditors are really willing to go on being paid as they are paid now. I wonder how long the IMF and the other international bodies will be willing to go on lending us money without doing as they have done before; that is, demand a presence in Her Majesty's Treasury, and if that is not a cession of sovereignty I do not know what is. I do not want to labour this point, because I think we all know it. The sad thing is that the country does not know. So many people in our country still think, "If this is inflation, if this is politicians' talk of crisis, my wages are well ahead of the game. I've got a major settlement through my union and I'll get another one if I need it, so why should I worry?" As long as that feeling is there, and as long as we cannot do something about it in a voluntary society, we are going to ruin ourselves, and soon.
My Lords, I have tried to make my case for national unity, on the industrial front at least, as plainly as I can and without being more controversial than I must. I believe that many in industry, and perhaps some outside it, share these views and I hope that the Government will try to take heed of them before it is too late. My Lords, I beg to move for Papers.
3.19 p.m.
Lord BESWICK: My Lords, I am sure that the House will accept this Motion. There is no difference between us about the need for national unity. The question is on what basis that essential unity is to be achieved. Few will argue, either, that in recent years there has not been an apparent shift towards disunity. Indeed, one of the paradoxes of modern life is that the increasing industrial integration and technological developments which have made each of

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us so much more dependent on the rest of us have at the same time made it so much easier for small groups to do damage to a whole society.
So I for one welcome the opportunity which the noble Viscount has given us to stand back and look at what is happening in broader terms than is convenient on a narrower Motion or a particular piece of legislation. If we accept that the trend is towards disunity, the questions for debate are: what are the causes, how do we check the trend, and how do we move to the finer and more satisfying sense of mutual understanding which is an essential ingredient of a productive economy and a harmonious society?
Having said that, I am quite certain that there is nothing at all between myself and the noble Viscount. It would be possible to look at these questions only in the short term. I could make out a case, entirely convincing to a Labour Party audience, and not, indeed, far short of the truth, that the current move towards strife and towards disunity, really started, or got under way, in the days of the last Conservative Administration. Certainly that terrible combination of the Industrial Relations Act, on the one hand and unlimited credit and scope for the speculator on the other, caused both economic and social havoc for which we are still paying. We should not completely forget how well-meaning, patriotic Ministers in that Administration, who inherited a balanced budget and a surplus on overseas trading, brought the nation to the most bitter and imminently totally damaging industrial stoppage. Not since 1926 had we seen such industrial danger as we saw at that time—and then our resources were so much greater.
Moreover, it is fair to say—and I am glad to say that the noble Viscount was fair on this point—bearing in mind certain regressive features of the Budget of the noble Lord, Lord Barber, that no one can reasonably criticise the present Chancellor for lack of political courage or for lack of understanding of industry's problems. The new relief on stocks will be worth £1,300 million this financial year, and there will be positive gains from dropping of the ACT surcharge, the extension of the Price Code provisions on
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investment, the special aid for exporters in respect of preshipment finance facilities, and so on. All that, I submit—and I believe I have agreement there—indicates that there is some feeling on the part of the Government for the problems of industry.
But I do not press this Party argument and I do not want to look at this Motion on the short-term considerations. I believe we should be identifying deeper causes and longer-term solutions to the problems that the noble Viscount has put before us. If we are to understand the basic problems, we cannot disregard the enormous changes that have taken place in our own life-span. I have said before in this House that we need to remind ourselves of these changes that are taking place and of the differing standards and values which those changes have entailed. As I listened to the noble Viscount and saw what a receptive audience he had in this House, I thought of the audiences I have had on the shop floor, of the discussions I have had with trade union leaders and of the hopes, aspirations and demands which they now have, as against 10 or 20 years ago. I fear that we sometimes forget the changes that have taken place in other parts of the country.
This point was put with especial force by some words which the Bishop of Stepney quoted in The Times newspaper. He said,
"We have not merely extended the scope and scale of change, we have radically altered its pace. We have in our time revolutionised the tempo of our daily life; we have released a stream of change so accelerated that it influences our sense of time and affects the very way we feel."
That is perfectly true, my Lords. So far, in industry, the main impetus behind changes has been the improvement of material standards and, in particular, a bigger wage packet. Much has been achieved in pay, pensions and holidays. I discussed some time ago, with the executives of the Marcel Dassault aircraft firm, the claim that their company had led the way on the Continent in paid holiday entitlement. One week, two, three, four, and I am not sure that in some cases they were not giving five weeks paid holiday a year.
It is not easy to recall that, not so long ago, a paid holiday of any length for an industrial worker was almost

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unknown. In the North, last month, a company was telling me of the claims being made for a guaranteed working week. The claims would be met, yet I recall when, not so long ago, the men in that factory would turn up and would be sent home because, for that day, no work was available. Off they went, there was no guarantee at all, even for a day, let alone a week or a year. We can all recall that casual labour, in effect, was then the rule and not the exception.
My Lords, there is an impetus behind that demand for material improvement that is difficult to stop. The pressure is, in the integrated society in which we live, almost irresistible. We are not now considering pressure groups only of manual workers. I read that university dons are threatening to withhold examination papers. I heard on the radio yesterday morning that farmers had smashed a consignment of French eggs with crowbars. The other day, fishermen were blockading British ports; and, while I find it difficult to keep abreast of the higher medical activities, I believe that the consulants have only just ended a go-slow, or a work-to-rule.
All this is an outward and visible sign of the fact that individual, and narrow, immediate interests loom larger than longer-term social wellbeing. The question is, how do we deal with this situation; how do we curb this insistent pressure for material gain? Seductive as is the prospect to some of weakening the power of the militant by increasing the threat of unemployment, there is no real evidence that insecurity leads to better industrial relations. I do not believe that national greatness will be achieved by instant redundancies. How are we then to contain this demand, organised in large groups and small, for protection and improvement of material standards?
Some hope, I suggest, is to be found in these words:
"We need both efficient, publicly-owned industries, and a vigorous, alert, responsible and profitable private sector, working together with the Government in a framework which brings together the interests of all concerned: those who work in industry, whether in management or on the shop floor, those who own its assets, and those who use its products and depend upon its success."
I doubt whether the noble Viscount, whom I know to be an eminently
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reasonable and enlightened man, would fault one of those words, and yet they are the words of my right honourable friend the Secretary of State in the White Paper he presented to Parliament on British Industry.
How are these intentions to be implemented? How are the words to be made flesh, if I may so phrase it?—in the first place, by increasing investment in productive industry. The noble Viscount should not confuse policy with research papers put before a political Party. He quoted from some very interesting papers put out by the Secretary of State in his capacity as a national executive of the Labour Party.
Viscount WATKINSON: My Lords, I made it plain that he was wearing his Party hat, but I would add that businessmen do not understand the difference.
Lord BESWICK: My Lords, possibly between us we can help them to understand. Some things that are said in research offices one year are ten years hence quite acceptable. But do not let us think that everything that is being considered today in the ivory towers of research departments is necessarily for boardroom consideration the next day.
I was saying, my Lords, that there should be increasing investment, and I think that this would be agreed by all. In some cases, it is said in the Industry Bill, that the nation itself would hold the investment, with voluntary agreement. There is some argument about that, but I wonder whether the criticism is not overdone. How can it be divisive if all of us in common own part, or the whole, of an enterprise? If once it is recognised that this is a part—and an inevitable part—of the changes that have been taking place in the world, could this not be a unifying factor? After all, owning things in common is part of very successful union. Of course, one can accept that the role of the publicly-owned concern—its relationship with Whitehall—is a matter for development. Every chance is taken by the Press to magnify—or in some cases to invent—the difficulties. But there are problems here, and these are problems which might very well be discussed in this House in a proper way, in a constructive fashion. But although there are these problems, I will not accept

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that it is a matter which should operate against the unity which the noble Viscount and I are seeking.
What else is there in the Industry Bill, apart from the NEB? It also seeks to encourage what has come to be called "industrial democracy"—the right to have some say, to make some contribution to the efficient operation of the company in which a worker (and I include all those who work, in whatever capacity) earns his living. This extension of democracy in a free society is surely the way forward. If the energy of organised labour can be channelled from the limited aim of extra money in the pay packet,—probably worthless paper money—to constructive co-operation then there lies the hope for the future. I know there are industrialists in this House who welcome and encourage this development. Some have results to show already. I know—I have discussed it with them. But I always say that these men are entitled to have that as a right, and not just because some people are a little more advanced than others. There is much more to be done in this field.
My Lords, this kind of social and economic progress cannot be guaranteed by Act of Parliament—we are dealing with human beings. But the Bill will encourage natural growth—"organic growth" is the phrase I have used else. where—and we should welcome it. We should see it as an alternative to confrontation. We should see it as a way to a greater satisfaction in industrial life. And we should see it as another move towards the unity of purpose we are all seeking.
There is another provision in the Industry Bill, that much maligned measure towards which my right honourable friend has made such an immense contribution. That is the provision for planning agreements. Here again I know there are doubts, honest doubts—for example, about the extent of disclosure of information to workers. Let us discuss these doubts. The agreements will be voluntary. They are intended to bring together all three sides—management, workforce and Government—in common commitment to planning for important sectors of the economy. No compulsion is involved at all. What a minor tragedy for our country, when so much more can be achieved
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in a free society by voluntary collaboration of this kind, that the proposed system has been caught up in such a cloud of misrepresentation.
The noble Viscount said that the CBI had made representations to the Minister. May I say, in all fairness to the noble Viscount: ask the President of the CBI how many times he has accepted an invitation from the Secretary of State to discuss this matter?
Viscount WATKINSON: My Lords, the noble Lord should perhaps know that I spent nearly two hours with the Secretary of State at one point, leading a CBI deputation. The noble Lord, Lord Plow-den, took one the other day. We have seen the Prime Minister twice. There were very long sessions and the Prime Minister kindly allowed them to run on as long as we wished, with the Secretary of State present. We will go and talk to him again on any point. The only thing we would like to see is some results.
Lord BESWICK: My Lords, I know what the noble Viscount has done and I applaud it. I have a note to that effect and I hope very much that he will do much more. But since he was talking about the lack of response, I must say that the President of his organisation has, to my knowledge, never yet accepted an invitation to go to see the Secretary of State. I am saying that much could be done to dissipate the uncertainty if there were a greater freedom of exchange.
My Lords, the possible contents of a planning agreement will shortly be put before the CBI and the TUC as a basis for discussion. I know that the noble Viscount will do all he can to ensure constructive discussion, and I for my part, in so far as I have influence—and I work most days on something approaching this—will do all I can to ensure that what is said will receive a sympathetic and understanding hearing.
I may be told that we are dealing with a harsher real world than my high hopes allow for, and that this new approach to economic planning and industrial organisation is far too optimistic. I do not believe this negative and pessimistic view of the future is justified, and I shall say why. First, because despite some obvious indications to the contrary, I believe it is beginning to sink

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in, as the noble Viscount said, that disaster faces us all if we each, as an individual or a group, try to look after ourselves at the expense of others. I say it is "beginning to sink in". More persuasion is needed. I hope that this discussion will help. There may well be cases, or a case, where harsher discipline is inevitable. Alternatives have to be spelled out. A lot of the political heat has to be extracted from the situation. But I think we can make progress.
There is another facet behind all this which gives me cause for hope. More and more people are beginning to see, and must be helped to see more clearly, that the problems which face us are not transient troubles. We have issues to face in the Western World which involve much more than a cyclical trade depression. Words which impressed me, and which express this thought most clearly, were used by a United Nations director just before last Christmas. He said:
"After 200 years of industrial expansion, Western countries have reached an historic crunch point. Western, especially American, industrial society must now adapt itself to new priorities of moral, cultural and spiritual growths—or it will collapse."
That is the challenge—no less than that. I believe we can meet that challenge. I believe we have the men in British industry who can, and who wish, to meet that challenge—given the right lead and the right atmosphere.
My Lords, if we are to create that right atmosphere, then we should all do well to try a little harder, as the noble Viscount himself has done, to see the better side of the other man's activities—and there usually is a better side. I have heard a good deal of criticism about my right honourable friend the Secretary of State. He was made an honorary member of the Boilermakers Society the other day—a union which itself is not immune from criticism. I looked at a copy of the original rules of that Society. This is what was said:
"Brothers of every grade high or low, rich or poor, unto you are these words addressed: the foundataion of our order is brotherly love, let it continue, so shall unity flourish and the attacks of prejudice and wickedness shall not prevail against it."
What allies the noble Viscount has for his Motion!
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Finally, I shall make, if the House will permit, one further quotation. It is from an American journal, which last week stated:
"Shortly after World War I, an official American observer of the European scene noted that Britain was the staunchest and strongest member of the Western European industrial community, although with the least actual and provable reason for it. Britain's economy was in dire trouble in those days, yet because of the stability of British political institutions and the sturdiness of the British spirit, Britain was in fact the strongest ally and the one on which Washington then based its planning for the economic revival of Western Europe. It is now some 30 years after the Second World War and the condition again is serious. It will test the capacity of those British institutions, political stability and sturdiness of spirit to see it through."
My Lords, it is my view, and I hope it is the view of this House, that for the second time in 60 years stability and sturdiness will not be found wanting.
3.41 p.m.
Lord ROCHESTER: My Lords, I should like first, if I may, to thank the noble Viscount, Lord Watkinson, for having introduced this debate and particularly for the terms in which he framed his Motion, calling, as it does, for an approach to our industrial and economic problems that is a united one. It is now nearly 18 months since the noble Lord, Lord Diamond, in a somewhat similar debate in a critical situation under a Conservative Government, suggested that representatives of the three political Parties should meet on a Privy Councillor basis to see whether, by compromise and some sacrifice of Party advantage and philosophy, agreement could be reached on what might first be recommended to Parliament and then to the nation. This suggestion received a welcome from all parts of the House. I recall that it was followed up later by questions addressed to the Government on similar lines by a number of noble Lords, including the noble Lords, Lord Orr-Ewing and Lord Gore-Booth. Nothing came of the initiative of the noble Lord, Lord Diamond, and it was, of course, followed by the three-day week, a coal strike, two General Elections, and by the formation eventually of a majority Labour Government.
Since then things have become worse, and we now have a borrowing requirement of £9,000 million in the current

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financial year, the prospect of unemployment higher than any we have experienced since before the war, and raging wage and price inflation. I noted that in his speech the noble Viscount did not, any more than did the noble Lord, Lord Diamond, before him, call for a Coalition Government. At the present time that is certainly not practical politics, and speaking from these Benches I have not the slightest authority for suggesting such a Government. I recall, however, that in our economic debate six months ago the noble Viscount, Lord Amory, gave it as his opinion that our situation would continue to deteriorate until the political Parties reached at least a measure of agreement on how inflation could be cured. I do not know whether, in the judgment of the noble Viscount, Lord Amory—for which I have the greatest respect—it follows that a Coalition Government will eventually prove necessary if our problems are to be resolved. However, I agree with him that if inflation is to be conquered, then the policies to be pursued must have the support of all Parties. We on these Benches feel that a united approach would be greatly facilitated by the introduction of some form of proportional representation in our electoral system, and we are much encouraged by the wide support which this idea received recently, and not least in your Lordships' House as the recent debate on the subject demonstrated.
What, then, are the policies that might be expected to command widespread support within the three Parties? May I, first, suggest what in my view they are not? They are not those extreme policies of nationalisation, for example, of the aircraft and shipbuilding and ship repair industries, which, because it can be claimed that they were in the Labour Party Manifesto at the last Election, are said to have a mandate from the people of this country for their execution. In fact, the great majority of those who voted in the last Election may claim that they were opposed to such policies. They are irrelevant to the solution of our industrial and economic problems, and are potentially damaging to the health of our economy, if only because of the expenditure to which their implementation would give rise. Experience shows that they would produce no adequate return on
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capital investment, no improvement in labour relations, and no increase in productivity, and they should therefore be dropped.
More positively, my Lords, in trying to identify those policies on which perhaps we could go forward together, I should like, as did the noble Viscount, Lord Watkinson, to compliment the Government on the fact that they are now, as we see it, facing in the right direction and taking the first tentative steps to reduce our borrowing requirements by increasing taxation on non-essential items of expenditure and by reducing subsidies on the products of nationalised industries and on food. For our part, we feel that it would be better to eliminate food subsidies altogether and instead to increase family allowances, particularly by bringing forward the time at which payment could be made in respect of the first child. As I see it, these steps are in the right direction but they do not go nearly far enough.
As a nation, we are still living on credit to a much greater extent than we should, and devoting far too much of our slender national resources to consumption and not nearly enough to encouraging capital investment and the exports on which our future depends. We have also noted with interest that in reply to a Question in another place last week, the Chancellor acknowledged that there was a strong case for considering, possibly this time in conjunction with the CBI, whether, before the next wage round, there should be found some means of ensuring that the guidelines in the Social Contract were more rigidly adhered to. We do not know exactly what that form of words portends, but if it amounts to a hint that some statutory incomes policy might be introduced on the lines, advocated by the Liberal Party, of a surcharge on national insurance contributions in cases where wages are increased beyond a certain norm, then we agree wholeheartedly with the Government. Do not so many recent industrial disputes and wages settlements show the urgent need for such a statutory pay policy? Without one, will not one group continue to take industrial action to preserve, or establish, what it thinks should be its position relative to some other group? Are not the

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alternatives to such a policy either uncontrolled inflation or intolerable unemployment, and maybe a combination of both?
I recognise that this issue cannot well be resolved until after the referendum on 5th June, and we must hope fervently that the British people will vote decisively in favour of our staying in Europe; for then some of the divisions within the Labour Party will be resolved and the current round of wages negotiations will be nearly over It may be said that even then the country will not be ready for such a policy. In that case, I think that the decision may well be taken by our foreign creditors, and we really will have to learn the hard way by having heavy unemployment, bankruptcies and the rest of it. The prospects then for the poorer sections of the community who have no power to defend themselves, and even the outlook for our democratic way of life, will be grim indeed. It may also be argued that it is all too difficult, and that if a statutory wages policy is introduced which certain powerful trade unions do not like, it may not be possible for Parliament to make that policy stick. We reject that argument; for it is to say that it is not Parliament which is sovereign but the trade unions. In our view that is a reason for all Parties in Parliament to support a law which seeks to protect the weak against the monopolistic power of the strong.
I have said that I believe that we should devote more of our resources to industrial investment; and the Secretary of State is constantly saying the same thing. But we must guard against the dangers of unprofitable investment and unproductive employment, of simply putting more and more taxpayers' money into industries which, in comparison with those of some of our foreign competitors, are heavily overmanned and in which productivity is getting relatively worse and worse. I know that in some quarters profit is still rather a dirty word; but in my view there is nothing wrong with profits as such, it is what happens to profits that matters. As Francis Cairn-cross, in a rather discerning article in the Guardian a little time ago, wrote:
"It is surely more convincing to argue that if companies were more profitable they would invest more, than to argue that if companies invest more they would be more profitable."
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Is not one of our great problems the need to find some means of uniting in order to create more wealth rather than spending so much of our time squabbling over how such wealth as we have should be distributed?
My Lords, in saying these things I hope you will not accuse me of advocating unemployment; for I am not doing that. It is simply that, as I see it, our problems will not be solved by preserving jobs for the sake of preserving jobs. They will be solved by creating new jobs and then training people for those jobs. At this point I should like to congratulate the Government once more on such financial provision as they have been able to make for this training, but also to say that we think it should be a lot more. My noble friend Lady Seear will be saying a little more on this subject of training later on. I hope to revert to one small aspect of it in a moment.
A particular reason why there is need for agreed policies in the industrial field is that, as those of your Lordships who have experience of industry will know, the time span over which industry has to plan ahead nowadays is very much longer than the expectation of life of a single Government. In terms of national planning, is it not really rather crazy that policies introduced by the Government of the day are so often so completely unacceptable to the Opposition that they are reversed within only a few years and that it is industry which is then left to pick up the pieces? Take questions like nationalisation, like trade union legislation, like taxation and pension policies—and I am sure that your Lordships can think of many more of the same kind! Is it not time that, through consultation in the National Economic Development Council, as the noble Viscount, Lord Watkinson, suggested, or perhaps, better still—in addition, at any rate—through the Parties in Parliament, the Government should put the economic facts on the table and agreement should be sought as to how we can cure at least this overriding problem of inflation? How, otherwise, can industry plan for five or ten years ahead, as it needs to, and at a time when inflation is in any event playing havoc with investment decisions? For my part, I believe that international competition, from which we cannot exclude ourselves, will dictate that the decisions to be

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taken in British industry, whether nationalised or not, in the end will have to be based primarily on long-term commercial considerations and not on short-term political ones. Some of them will be unpalatable and even hurtful; and that, it seems to me, is a further reason for agreement on them.
Finally, I should like to say a few words on the subject of people. I have learned from experience that good industrial relations cannot just be imposed from outside, by legislation; for example, through provisions such as those in the Industry Bill relating to the disclosure of information, to which the noble Lord, Lord Beswick, was referring earlier. They come only slowly and painfully, they come through leadership, through hard work and training—and especially the training of managers, of supervisors and of shop stewards. I suggest that it is significant that the purpose of this training is often, in the words of the Motion debated this afternoon, to make "a united approach to … industrial problems."
My Lords, I hope you will not think it impertinent of me to confess that I sometimes wonder whether we as politicians could not do with a bit of training of that kind for ourselves. In conclusion, may I simply say that we welcome very much the initiative which the noble Viscount, Lord Watkinson, has taken in introducing his Motion this afternoon and we give it our full support.
4.0 p.m.
Lord CAMPBELL of CROY: My Lords, my noble friend Lord Watkinson has, for the second time within six months, greatly assisted your Lordships' House by furnishing a lucid picture of the nation's economic problems. We are indebted to him for initiating this debate in which he has made clear the gravity of the situation and proposed a united approach to tackle it. His words are always received with great attention and respect, coming from someone, active and prominent in British industry, who has, with vision, done much to promote better relations between management and unions. For my part, I welcome the initiative which he has announced to us this afternoon by the CBI and the TUC in proposing a stronger role for the National Economic Development Coun-
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cil. The Council is a meeting place for both these bodies together with others concerned with the national economy, including Ministers. The machinery is there and the meeting taking place today could well start a period of closer understanding and co-operation.
Surely there must be two principal aims of such meetings: first and paramount, curbing and reducing inflation; secondly, charting the main points of a programme to take us out of the path of national insolvency. When the Government, the CBI and TUC are discussing action needed in the national interest with representatives of the City, the nationalised industries and others, agreements reached, perhaps under the aegis of NEDC, could be of the greatest consequence; for example, if certain courses of action or principles are endorsed by the whole Council and their acceptance urged on the country. I accept, though, that those present at NEDC meetings do not represent all employers or all employees; nor are individual companies or unions bound to follow guidance from these particular groupings of leaders. But I know of no more representative or influential bodies holding meetings for these purposes; and the effort to work towards national solutions in this way should surely be supported by all of us.
Here, I must make a delicate reference to an old acquaintance, thought by some to be in the later stages of terminal illness and by others to be already deceased. I am alluding of course to the Social Contract. The main weakness of that contract, besides its ambiguity, was that there were only two parties to the guidelines, the Labour Party and the TUC. I shall not pursue now that shadowy and shapeless phantom; rather will I point out that in addition to the members of the NEDC, there is another important estate of the realm to be kept in the picture about any future compact; that is the public. I refer to the public in their roles as consumers, taxpayers, pensioners and in other roles. The success of any policies in solving these national problems will largely depend on the degree of support which they achieve with the public. Indeed, even a deliberate drop in standards of living will be accepted I believe, if necessary, if the reasons for the policies adopted are understood and if they are being carried out, and have been seen to

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be carried out, fairly. If it is perceived as essential, as it was in wartime, I am sure the country as a whole will respond, despite the expectations which have been aroused in recent years of continuous material improvement.
It is not easy to alert the country to the acute sense of danger, because people are becoming used to living in a prolonged state of crisis, with pundits from time to time warning of the disaster round the corner. The daily round for most people seems to continue much the same as before. There is no overwhelmingly obvious threat to Britain's way of life, no rivetingly visible sense of imminent penury or the nation's activities coming to a halt. It seems that even hyperinflation, though worrying and perplexing to many, can be lived with—a false impression, my Lords, but nevertheless one that could become widespread during the next few months.
But what are the public to think if life goes on without much change, except an induced rush to buy colour televisions, or other inessential goods, before a closing date? Will the precipice be seen by everyone before we find ourselves going over it? Two years ago an annual rate of inflation of 20 per cent. would have been contemplated with horror by almost everyone in the country. I suppose the only exceptions would be a comparatively small number of Communists and others working for the collapse of our system and the end of private property and individual responsibilities. Now that rate of inflation is here and, despite the clearly stated aim of the Budget to reduce that rate of inflation—an aim which is clearly supported by all sides—the question is: Will wage claims be moderated, or will there simply be an attempt to increase those claims in order to offset the effects of the Budget? That is a key question now for the country.
A united effort will be needed to get the warning messages through. I share the view of my noble friend Lord Watkinson, that to be sucessful in turning the tide joint action is needed. I doubt whether one person, or a single body, or the Government on their own could wield enough influence today, unless disaster is already overtaking us. In assessing the magnitude of the task I
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would point out what happened in the 1930s. Sometimes we are told that our situation is so grave today that a Churchillian type of leadership is needed. But Sir Winston, who inspired efforts and sacrifices on a great scale when we had our backs to the wall, when he was continually warning of those same perils was not listened to in the 1930s, speaking in the country and in Parliament. The situation of 1940 and 1941, in its stark reality, evoked from the country as a whole attitudes entirely different from the torpor unfortunately existing so widely in the pre-war 1930s. I suggest we should be helped were there to be an obvious wall against which to square our backs, but it has not conveniently materialised.
In the event, we should ask: what is likely to be the first tangible sign for the public that a painful day of reckoning is dawning? My noble friend Lord Watkinson pointed out this could be when other countries, or international bodies, refuse to go on lending us money or when they stipulate stringent conditions. This might in turn cause a sweeping reduction in expenditure of different kinds or of goods and services available. Another clear sign could be the onset of high unemployment. I hope that will not have to be experienced in order to register our state of crisis. I sincerely hope neither of these events will be necessary and that this kind of reckoning can be obviated in good time.
When members of the publilc who discern the real nature of our economic situation ask what they should do to help, the answer is usually a prosaic one. Broadly, it is: "Work harder and be prepared to accept a reduced standard of living for a time". That kind of message may well be necessary. It will be acceptable to most of the country if it is endorsed by the country's principal leaders.
Besides the urgent task of defeating inflation, there is the wider operation of economic regeneration leading the country out of a state of insolvency. Here companies and unions have a crucial part to play, both embodying British industry. A large proportion of our industrial output and exports comes from private industry. Indeed, the talents of the entrepreneur are needed and should be encouraged and spread. Also the flexibility and enterprise which private

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industry can provide should be encouraged and spread. Business is won for Britain when opportunities can be seized at short notice. The health of industry largely governs the health of our economy. In other words, it is what makes the country tick, and I suggest it is short-sighted to cripple industry with penalising taxation and so remove the sources of new investment; or to hamstring industry by the Government trying to control and direct all its main operations.
It is common ground to most of us on both sides of your Lordships' House that we need the efforts of private industry, besides the nationalised industries in the tough haul back to economic health, especially in business abroad, not only from the point of view of exports, but also because we still have the valuable expertise which enables us to design and to help other countries in the building of plant on their own territory. I must remark here that certain recent Government proposals, most of them emanating from the Secretary of State for Industry, are not likely to conduce to a united approach. My noble friend has already drawn attention to this. There has been a rash of new public bodies proposed, with the apparent aim of collectivisation and public ownership of most, if not all, industrial activity. And when this is accompanied by the symbolism implicit in marching in May Day rallies and also addressing them, these proposals understandably cause disquiet.
Let us look at some of the bodies which have been proposed. Besides the National Enterprise Board, there are the Scottish and Welsh Development Agencies, and a new oil corporation which is to take a 51 per cent. participation, not just in offshore oil but in a whole range of other things, including petrol stations on land. Then there are the two new proposed corporations in respect of aerospace and shipbuilding. Apart from the merits or demerits one may see in these proposals, I doubt whether, as a country, we can afford to go in for this kind of action at this stage. Certainly, as my noble friend has pointed out, these proposals cause anxiety and perplexity among many businessmen. In addition they could cause unnecessary antagonism in the City, in business and
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private industry, and so seriously damage the chances of the kind of united approach which my noble friend has suggested, and which I believe the House as a whole supports.
Let us look more closely at what could happen. When such bodies are set up, either the Government would be seeking to control them closely—as seems to be envisaged in some of the proposals—or else to create more of the equivocal relationships such as the one already unhappily subsisting with the Steel Corporation. That relationship has been characterised during the last two weeks by a bizarre exchange of letters, apparently growing steadily more distant in terms, though geographically separated only by a few hundred yards and delivered by hand. Then there is the suggested way of dealing with British Leyland. A serious situation has developed, and governmental help is clearly needed. But surely it must be conditional upon a new structure of management and agreements to avoid over-manning and other clearly avoidable inefficiency. Otherwise, there is a risk that the whole attitude of those working in industry will be that Government money is always there for rescue purposes and that there is a bottomless purse.
The real test of leadership is surely in the opposite sense. It should be to enlist a full day's work, or even more, from those needed in industry, and acceptance of retraining or redeployment from those who ought to move to other industries. It is even more difficult at this time for such leadership, because this is a time of rising unemployment. We all want to see new jobs for those displaced, but they must be useful and worth-while jobs which will last. It is no service to the nation to indulge in leadership of the facile populist kind, giving the impression that there will be no redundancies, little or no modernisation and that everyone has a right to stay in his present job for ever. If that road had been followed we should still be manufacturing steam locomotives and penny-farthing bicycles. The only way of selling these products would be by directing the railways and the public to use them, and surely there are the seeds of destruction.
Lord BESWICK: If the noble Lord will allow me to say so, he is doing exactly what I suggested we should avoid doing—creating troubles where there are no troubles. Will he say who has said that everyone should stay in the same job for ever?
Lord CAMPBELL of CROY: My Lords, I can assure the noble Lord that there are people in the country who have been—
A noble Lord: Who?
Lord CAMPBELL of CROY: Some of them are Communists and some are near-Communists—
A noble Lord: Who?
Lord CAMPBELL of CROY:—who have been giving the impression that the main object is simply to hang on to the jobs they have. I do not think that this is what Ministers in the present Government want. I believe there is a danger that leading May Day rallies and behaviour of that kind could give the impression of support for those views. If the noble Lord, Lord Beswick, does not appreciate that danger, I can only tell him that I do. I believe there is a real danger that, without meaning to, certain actions and the expression of certain policies can look as though they are giving support to what is put forward by only a very small minority, but a minority who have unfortunately got themselves into positions of influence.
There is a lot to be done as regards worker participation, and I am now coming to a subject which the noble Lord, Lord Beswick, dealt with in his speech. I certainly agree with the principle he expressed. Some companies have made considerable headway in this direction and I am sure that encouragement should be given to further work upon this. But I suggest that, for the moment, there should be no attempt at a blueprint which would be uniformly applied to all firms. It will probably be found that different systems suit different circumstances.
My noble friend Lord Watkinson referred to our membership of the European Economic Community. I agree with him in that I cannot accept any suggestion that leaving it would improve our economic situation or increase our prospects of recovery. I also agree with the article by
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Mr. Andrew Shonfield in The Times on Monday, in which he said that while the United Kingdom was needed as one of the Big Three for balance in the EEC, the eight other members concerned were prepared to help us in our recovery.
There are some gleams of light ahead, and I draw attention to the gleam of oil. Offshore oil can in due course ease the massive burden on the balance of payments. Although the programme is going more slowly than was foreseen two years, or even one year, ago, it still seems that we shall reach self-sufficiency in 1980 or 1981. But it will not solve all our problems. We must avoid the danger of thinking that such a boon, when it comes, will also solve all our other problems, because it will not.
The most challenging task calling for British statesmanship in this decade is in this field, the subject of the debate raised by my noble friend. It is in three parts: first, the removal of divisions in industry; secondly, helping all who are working in or for British industry to identify themselves with British industry; and, thirdly, creating the conditions for British industry to excel both at home and abroad.
4.19 p.m.
Lord BRIGINSHAW: My Lords, perhaps we might look again at the Motion. It is simple, and calls attention to the need for a united approach to solving the nation's economic problems. I thought that the noble Lord, Lord Rochester, was taking us into exceedingly shallow waters that did not justify the simplicity and intent of the Motion, for which I should like to express my appreciation to the noble Viscount, Lord Watkinson.
First, may I say that I cannot believe that in the political field the EEC "innocent abroad" is a simple businessman—I just cannot accept that. I thought the noble Lord, Lord Campbell, avoided the shallowness of the general possibilities existing here today and, but for one or two things I would not agree with, certainly was conscious of the importance of the Motion. I thought that the noble Lord, Lord Beswick, from this side argued cogently the detail of the necessary reply to the noble Viscount, Lord Watkinson. He struck the central note that ought to have our attention this afternoon when he said that the issue is: On what basis can we find national unity? It seems to me

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that perhaps this takes us wider than the intent of the mover of the Motion, but the value of the opportunity this afternoon is to take the discussion wider than some of the details that have already been before us.
May I say that I have been a conscious advocate of a form of national unity for the past 25 years. I never thought it could succeed if the old, failed and discredited policies and strategies were to be continued. Contrary to the noble Lord, Lord Rochester, I suggest that a radical and fundamental reappraisal was necessary for success. What I understood him to be saying was that we ought to begin to "pussyfoot" on certain imperatives and necessities, so far as the country and industry are concerned. On the contrary, a radical and fundamental reappraisal was necessary for success. In my view, until we realise this fact we shall not find solutions to our problems. They will become chronic. I might say that they are getting into the borderline of being chronic in many senses. National unity based on the old class dominance is doomed from the beginning.
This theme is not likely to be popular among those entrenched in the past, hoping that a basically Maginot Line philosophy will preserve the status quo. There is no such possibility. We either go forward or inevitably we slip back. Nature refuses a standstill. It seems to me that this is one of the points of our situation. We have to reach down into the coalmines or to the railways, into the factories and offices of our administrations, into our professions, motivating all concerned with a new message for struggle and hope. We need to support those who realise this and try to help them, and not for Party political purposes to hinder them.
On 21st April in another debate in this House, I raised the issue of national unity. I said that whatever our views on the Common Market—and my own I made plain—I thought we could agree that our energy resources are immense. I thought that the noble Lord, Lord Campbell of Croy, referred to this matter a moment ago in another way. I went on to say, as I think will be recalled, that we have the management and the workmen; we have great industrial experience and know-how; the inventive genius of our
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people is second to none. I am happy that here I am following the words of the noble Lord, Lord Campbell. I went on to suggest that if we really stand up and present ourselves strongly as we should, then other countries will defer to us. This rejects the notion that the possibility of our having some financial storm immediately is present. On the basis of our resources and collateral, energy and all the other factors, this suggestion is perhaps overdoing it. We need to do more and to do better. That unity, I suggest, can be based only on the mass of our people. This is the key to what I want to try to say here today.
We have politically to motivate and activate them. Perhaps all of us suffer too much from being watchers—we watch sporting events. We are standing watching the great "they"—this is perhaps an important point for our people—trying to solve the problems of Britain. Our people must participate. Better a positive radicalism than a nation of political eunuchs and "don't knows". The Press, television and radio could play a more positive role in this connection. Some newspapers have tried to raise the social and political consciousness of our people; others have adulterated and trivialised life to a major degree.
I was speaking in another context on 21st April. I do not propose to try to re-open that debate at this time, but other speakers have mentioned the Common Market. A "Yes" vote could be the turning point that would make us face all the necessary factors—it has been contended that such a vote would bring that situation about. The Motion for Papers by the noble Viscount, Lord Watkinson, and the simple phraseology of his request is too important for such a ploy as to rehash a debate we have had here on a number of occasions. He has unfortunately, in my view, trodden the well-worn path which is a repetition of a political dogma, and I wanted to see whether there was a path by which we could get away from this. I called for a united approach then; he calls for a united approach now to the nation's economic and industrial problems.
In preparing some notes I expected the noble Viscount to deal with his call objectively, and I think this has been done this afternoon, particularly with

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regard to the reformation of NEDC. Here, I think that a paragraph of a statement in The Times is worth looking at:
"After several months of secret meetings the Confederation of British Industry and the Trades Union Congress have drawn up a joint paper which says that the NEDC has turned into a talking shop. It proposes a radical revision of the Council's working arrangements."
A number of other factors were reported in The Times on that occasion which would indicate that it is not plain sailing, because the TUC and the CBI, as components of the Council, are largely persuasive organisations, and therefore they need the context to which I am drawing attention. Nevertheless, I submit it is a positive factor that we have some grounds for cautious optimism.
May I say at the outset how much I appreciate the mature level of the presentation of today's debate—I have indicated that already. It is so different—if I may say so without scoring Party political points—from the presentation from the Opposition Front Benches in the other House. The industrial immaturity of the Leader of the Opposition in another place will, in my view, widen every aspect of the divisive overtones lingering from the previous period and will simply appall overseas observers. At least Ted Heath knew something about industry, even if he bodged the handling of industrial relations with the trade unions. May I at this stage say that, because the 10 million affiliates of the TUC are human beings—it was mentioned that we are dealing with a human problem—they neither claim to be nor are they, individually or collectively, the acme of perfection. They suffer badly from history in this country. Their organisational structure is less than perfect. It is the outcome of the historical circumstances of Britain's having been the first industrialised country in the world. Most of our present-day institutions have this connotation. Our problems are those of a great nation in considerable immediate difficulty. The Government of the day are, in my view, manfully trying to deal with the quite chronic situation. Britain is not a small shop on a street corner. Therefore, no selfish petit bourgeois solutions will suffice. An adult and
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mature approach is necessary. Let us be done with the "nit picking" from the Opposition. Let us unite behind the major efforts of the Government of the day.
May I repeat the intentions of the Government's Industry Bill. They are the establishment of a National Enterprise Board; the Employment Protection Act; the establishment of a British National Oil Corporation; the Trade Union and Labour Relations Bill and the Aircraft and Shipbuilding Industry Bill. Both in the long term and in the short term, the situation is that there is no other immediate path than that of a mixed economy. What would the Opposition do if they were in Government tomorrow? The commercial collapse of companies with household names is the result of a half-cock operation of the market forces. Would they do what the noble Lord, Lord Barber, and his colleagues did in the previous Administration—let it rip? That would ensure the absolute ruin of this country. As it was, they were responsible for sowing the wind of inflation which provides the present dangerous inflationary whirlwind. Would they do better?
Our world and our country have been changing. Capitalism cannot live in the old way. If it is to live, it has to interpret what a mixed economy now means. I heard Sir Don Ryder say the other day—no doubt your Lordships read what he said—that we have to change, because we have not been doing too well during the past 25 years. It is extraordinary that hereditary Lords on the other side got the message before so many of their financial and industrial confrères. I read last week of the co-operative established by noble Lords with landed estates.
May I return to my direct theme. We can solve the problems of the United Kingdom only in Britain. I declare an interest in the Advisory Conciliation and Arbitration Service. I am a member of the Board, together with other TUC men, those from the CBI and independents. This Service has had an extremely successful beginning. Its successes get very little publicity. A solved industrial dispute means nothing to our mass media. It seems that they thrive on confrontation. What is important is the large

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number of industrial disputes which never develop to the point of a stoppage as a result of the painstaking work of the officers of the Service in London and up and down the country. I think they would tell you that the political context is better than it was. This affects the industrial climate and allows for some successes in conciliation and arbitration.
My view is that our major problem is a political one. How do we generate motivation at all levels in our nation? We are suffering from a malaise because the essence of our politics from our dominant establishment has been one of defeatism. The reasoning comes from a strategy which is based on the defence of the status quo. That is why I complimented noble Lords on the property co-operative. They, at least, are moving with the times. I am suggesting that the strategy is wrong. Every sum we do within that misconceived strategy, whether we get it numerically right or wrong, turns out all wrong in the total context.
The question is whether we are operating merely or wholly for a defence of capitalism or whether we are willing to have a single interpretation of the national interest involving all of us in a mixed economy for some time to come. If so, we need radical political changes to do this. We need new conceptions of Britain's role in the world. We shall invest and work to make Britain strong in a new way. On this we could find unity. The conceptions would reject simple reshuffling of the political cards to produce a hybrid national Administration which would be "knackered", if I may use the term in your Lordships' House, from the beginning because of the contradictory policies of the components of such an Administration. Political acumen applied to producing a national plan to which most could subscribe would produce an essentially political plan of a far-reaching character.
Short of this, Britain's interests are best served at this time by expressing our desire for national unity behind the Government of the day in dealing with the formidable tasks before them. I think that the details which have been set out by the noble Lord, Lord Beswick, justify the call for national unity behind the Government of the day.
4.37 p.m.
Lord HAMPTON: My Lords, I ask your indulgence as I speak in your Lordships' House for the first time. It is no empty request when I recall the great variety and great depth of experience of so many of its Members. By tradition, one should be non-controversial, and the subject which the noble Viscount, Lord Watkinson, has raised seems to me to be well suited to such a basis of approach. I have no desire to be provocative. If what I say appears to be obvious, I regret I still believe that it needs saying again and perhaps again.
I will at least start by mentioning something which I am certain your Lordships cannot know. When my great-grandfather died it was found in his Will that he had attempted to order the family's affairs for the next 1,500 years. Certainly this was not wise and legally it was nonsense; and before long it was fortunately set aside. But still he was no fool and, fortunately circumstanced as he was, he felt able to look forward to years which he assumed, with Victorian optimism, would be tranquil and secure, with a steady development of general wellbeing for all, to somewhere around the end of the 34th century.
The point I wish to make is that today few people dare look forward beyond that great psychological barrier—the end of this century. Many of us feel unable to look further ahead than the next few years. I am certainly not seeking to look back with favour to Victorian times. I remember London even just before this last war with beggars on the streets and children in rags, and sometimes without shoes. Thank God that we have that no more! However, I seek to re-emphasise what is obvious to many—that today we as a nation lack a sense of purpose, of confidence and of determination to work together for the good of all.
It saddens me to hear it said that the people want this or do not want that when this refers only to one section of the community. We are all one people, and it is vital that we should accept that and be glad. Inevitably there will be differences of opinion and differences of approach, but so long as we can take consideration of other people's feelings we shall not fail. United we can stand

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and be great and content, but divided the outlook is black.
I attempt to follow Christian principles. I believe that it is better to try, even though one may fail, than not to try at all. I believe that at this moment we as a nation are too prone to two sins—envy and greed. It is clearly wrong to expect an excessive share of limited resources and it is dangerously evil, although all too understandable, to attempt to pull down those who are happy in better fortune than oneself, unless, of course, it is certain that this really will help those who need and deserve it.
Referring back to the words of the noble Viscount who opened this debate, I would suggest that we not only need to call attention to the necessity for a united approach, we still unfortunately need to call attention to the basic fact of the nation's economic and industrial problems. A lot of people are still entirely unconcerned. After all, as has often been said, if inflation goes up by 25 per cent. and you get a pay increase of 30 per cent., there seems nothing to worry about. I recall the eloquent words of the noble Lord, Lord George-Brown, a little time back, when he referred to his taxi driver's comment,
"What's all the worry about? I've never had it so good."
Two questions arise out of this driver's remark. First, will those who hold such views still be able to say this in five years' time? Secondly, do they realise, and if so do they care, that a great many British people—and I repeat people—are today increasingly filled with frustration, and now even bitterness?
Today I believe we are living in a state of euphoria at times—a state of false well-being—but one sad effect of inflation that is often mentioned was brought home to me personally and markedly the other day. Each member of my family has a few small savings; gifts from their grandfather, Christmas presents, and so on, that they decided they would like to put aside for the future. They asked me tentatively whether these savings were safely invested. I found it difficult to know what to say, for the truthful and sad answer is, of course, that their money is losing value quite rapidly and the logical approach must really be to get the best value
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possible now and let the future look after itself. I need hardly tell your Lordships that inflation feeds inflation and, unless more people are helped to understand its dangers, everyone is likely to suffer.
But I do not wish to be written off as a pessimist. I have great faith in the British people if they can only unite as one people and forget unworthy divisions and disputes. This century has seen much progress and development of general well-being, but we should do well to retain some humility as we face up to the very real problems that confront us now as much as ever. And, personally, I consider ugliness to be one of the cankers of our time. Deprive men—or women—of beauty in their surroundings and, I think, without perhaps realising it, they will be lacking something that is essential to their full contentment and peace of mind. I forget who it was who said that:
"…ugliness is one sign of a wrong attitude to life."
A friend of mine said the other day that we must trust in God, but there is the saying that I believe to be entirely relevant at this time that,
"God helps those that help themselves."
I believe today there is a great potential of charity and understanding to be tapped, not least among some of those who do not even profess the Christian faith. What we need is a great reawakening of idealism based on a sense of common purpose and that the Heads of Government, whatever Party may be in power, should be prepared to give us a truly courageous and inspiring lead in the difficult days that unfortunately and inevitably lie ahead. My Lords, I thank you.
4.44 p.m.
Lord ROBBINS: My Lords, I am sure that the murmurs of approbation which greeted the noble Lord as he resumed his seat expressed the feelings which his sentiments inspired in us all. We admired his sincerity, we admired his lucidity and we admired the way in which he observed the rule that, in making a maiden speech, one does not provoke violent controversy. I am sure I express the feelings of all noble Lords when I say that we hope we shall hear him often on future occasions.
Several Noble Lords: Hear, hear!
Lord ROBBINS: My Lords, I think we owe a deep debt of gratitude to the noble Viscount, Lord Watkinson, for tabling this Motion, and for tabling it in such simple and straightforward terms. Also, he is to be congratulated on the timeliness of his Motion. The shadows are deepening more rapidly than many of us think. I venture to say that never in the last quarter of a century have we been more in need of a spirit of national unity in confronting the terrible problems which beset us.
But, my Lords, I do not think that unity is likely to come unless there is created a spirit of common understanding, and I venture to suggest that that common understanding is still remote. It may be that in the coming months—it may be even in the coming weeks—the intensification of the dangers which beset us may produce a sudden fusing of communal emotion which will prepare us to take the drastic steps which I am sure will be necessary. But at the moment that is not our state of mind. At the moment those of us who peer into the future with dread can do nothing but try to explain, patiently and without arousing more controversy than is necessary, what the problems are and why the situation is so grave.
There is no need for me to expatiate on the fact of inflation. If one has talked about these things in the past, as I am afraid I often have, one eventually acquires a fear of becoming a bore, and certainly there is no satisfaction for any political economist, who happens to have been right, to be able at this moment to say, "I told you so". The fact is that the perils which four years ago were perhaps the size of a man's hand on the horizon have now grown into dense thunderclouds which threaten the stability of our entire society.
At the present time inflation in this country is probably running at a rate of 25 per cent. per annum. I do not know how the crisis which that kind of thing engenders will come, but I do know that it cannot go on in a society as complex, as differentiated as our own, without eventually destroying it. I remember a speech in which the noble Lord, Lord Platt, expressed the view that perhaps we were living through the crisis of capitalism. With deep respect I would venture to put a gloss on that utterance. I would
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urge that no economist in his senses would argue that either capitalism or a mixed society can sustain the degree of instability in the value of money which has now arrived and which at present shows no sign of diminishing.
But, my Lords, I ask myself, how many of us realise this? As the noble Lord whose maiden speech we have just listened to with such pleasure has reminded us, there are many people who are suffering from the decline in the value of money. There are many people who, whether they have been aware of it in the past or not, now know that the value of their savings has catastrophically diminished. There are many people whose minimum sensibilia as regards the spending of small sums of money has tremendously diminished as a result of the decline in the value of money and the rise in the general level of prices. Needless to say, it is not only private individuals who suffer. The whole of our complex of cultural institutions, circumscribed as they are in the investment of their money—they were circumscribed in the past, and they are still—almost without exception are in deep financial difficulties which, if prolonged, will certainly lead to the folding up of some of the institutions of that kind, which we most value.
But there are, and I say this without blaming anyone, a large number of people still who do not realise this. Last year the cost of living figures rose by something under 20 per cent. In the same period the average level of earnings rose by something a little over 29 per cent. In the course of this vicissitude, unemployment has begun to increase, and those who are affected must be grievously aware that not all is right with the economy. Even so, on the published figures, more than 90 per cent. of the working population are still in employment and for many of them, given the relationship between prices and earnings which I have already indicated, the word "crisis" means nothing. It has become a "non" word. In a sense it might be said that the economists who began to urge danger when the rate of increase in general price level was, let us say, 3 per cent., were crying "wolf" prematurely. The wolf took some time to appear, but he is showing his fangs now.

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One of the main difficulties of our position, and one of the main difficulties in creating the degree of unity called for by the noble Viscount, Lord Watkinson, and the noble Lord, Lord Beswick, and other speakers, is that the majority of the population are still living in an atmosphere of almost complete unreality.
My Lords, how has this been sustained? Quite obviously not by spectacular increases in productivity, or in the aggregate volume of production. Far from it. Nor can it be said that it has been sustained by extensive transfers from one class of the community to others, although clearly there has been some support in that direction. Obviously the main reason why living beyond our means, which we are doing on the average, has not yet hit us, has not yet made itself obvious to the majority of the population, is that we have been fortunate enough to have our standard of life sustained and, in certain cases, advanced, by massive borrowing abroad. Last year we borrowed nearly £4 billion. I would be very interested to hear, when the Government Front Bench sums up, whether precise figures can be given as to the rate at which we are borrowing now.
If our standard of life is to be maintained in the short period, a volume of borrowing which most of us would have thought to be quite impossible in the past has to be sustained. All of us in this Chamber can agree that we are surely in a position of intense peril. It is trite to say that the rest of the world does not owe us a living, that eventually there are no free lunches for us internationally. We say it so often that large numbers of the population think that there must be some catch in it, and that there is some mysterious mechanism operating—our prestige in the past, our sacrifices made in the war, and so on—which will make it all right in the end. I say in all seriousness, and conscious of the danger of saying it, that it only needs a few more settlements of rates of pay 30 per cent. above the level of last year for the sedate and conscientious advisers of the foreign lenders, the advisers of foreign banks, the advisers of the sheiks and of the multinational companies, to tell those to whom they have a conscientious responsibility the truth, that London is not a
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good place in which to keep money, let alone into which to pump more.
My Lords, I do not claim to be a prophet. I do not know when the crack will come, if it comes. There are still some shots in the locker. For instance, we still have some drawing rights unexhausted in the IMF—a circumstance already mentioned in the debate. But let us be under no illlusion; if we fall back on the drawing rights in the IMF, we shall not get much support unless there is quite a radical change of direction in the general conduct of policy. Of course, it is conceivable that what is said in the debate this afternoon may induce our few readers of the House of Lords Hansard and of the small summaries which we get in the quality newspapers to change their minds. But it is certain that our present position is one of immediate danger, and I do not believe that anything that has yet been done will reverse this.
What are we to do? Let me address my remarks first of all to the extraordinary position—because it is an extraordinary position—which is so intensely perilous. If we were a closed community, if we had not these external obligations, we should probably be a much poorer community. The various long-term tendencies leading to an almost zero rate of increase may drag on for years and years without an obvious catastrophe. But we are an especially open community. Our obvious need as regards our external relations, and our obvious need in order to rapidly diminish this dependence on foreign borrowings, with all the perils that that involves, is to increase exports and to diminish imports. That will be the only thing that will save us from the siege economy if the borrowing slows down or dries up.
Now, my Lords, exactly that change in the ratio of the constituents of our foreign trade is what is frustrated by the present rate of inflation. When you are inflating so much faster than your competitors, and you are trying with greater or less success—less just recently—to sustain a fixed rate of exchange, then inflation ipso facto encourages imports and embarrasses exports. Any gain which our competitive position may have enjoyed from earlier depreciation evaporates as the inflation goes on.

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Well, what about a further fall in the rate? What about something deliberately engineered or allowed to happen? Incidentally, such a fall is absolutely inevitable if present tendencies continue. A fall in the rate of exchange will do no good if the inflation goes on. But worse than that, my Lords, it is arguable—many economists would argue—that if the rate of inflation were moderated, if the rate of inflation were, let us say, brought down to the rate of our chief industrial competitors, some further depreciation may help us more speedily to re-establish our balance in the international balance of payments. You might see in those circumstances, on the assumption that inflation were moderated to that extent, the sort of surplus which emerged when eventually Mr. Roy Jenkins took the advice of the IMF and put the brakes on. But it takes time, even in such model circumstances, for the volume of exports to be increased and the volume of imports to be diminished.
This is the great danger: with the present guidelines relatively ineffective, as they are—I am choosing the least offensively toned description that I can think of—a rise in the price of imports, due to a fall in the rate of exchange, would immediately give rise to further increases in rates of pay. In a situation in which, after the last Budget, an immediate cry went up for compensatory increases to offset the attempts which the Chancellor of the Exchequer has made to mop up a certain amount of purchasing power, to facilitate his borrowing operations, that frame of mind, that set of tendencies, can only give rise to greater and greater inflation. I have said this once before, and I think when I said it most of your Lordships thought I was making a joke. It is not so much of a joke now. Hyper-inflation always ends in crisis. Ultimately, hyper-inflation can only end in the substitution of a new money. The danger is much worse than when I said that 18 months or so ago.
So what other recourse have we? Men of good will on both sides of the House—I listened with the deepest respect to the noble Lord, Lord Beswick, and the noble Viscount, Lord Watkinson—pin many hopes on an increase of production springing from better industrial relations and so on; make industry more efficient. Heaven forbid! that I should say any-
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thing to deprecate these truly admirable sentiments, these truly admirable principles, principles which we must pursue if, in the end, the economy of this country is to be healthy. Heaven forbid! that I should say anything disparaging of an increase in production, especially in a situation in which in various directions—which have been indicated by various noble Lords, Lord Campbell of Croy and the noble Viscount, Lord Watkinson—it can be argued that policy is likely to make some inefficiency worse.
But I appeal to you, my Lords, to preserve a sense of proportion in these matters. What is the most that we can hope for in the short period as regards an increase of production? Supposing there were to be a change of heart, on waking up tomorrow, on the part of the majority of the population, and that we were to be united by the same sense of purpose as inspired us in 1940–41. It is extremely difficult for me to believe that there could be such a discontinuous increase in the volume of production as to offset a rate of inflation of 25 per cent. What was the rate of increase of production last year? Was it 1 per cent., 1½ per cent.—something like that? Supposing men of goodwill raised it 7 or 8 per cent. We should still be in a frightful deficit in the volume of production vis-à-vis the volume of financial expenditure. So I say, by all means let us work for better relations, more efficient management, less pushing around of nationalised industry, realistic planning, and so on and so forth. But given all that, I would even then say to your Lordships that the present rate of inflation would still leave us in a position of utmost gravity.
So I come back to the point from which I started. The only immediate remedy which will save us from our immediate dangers is to moderate and eventually stop the rate of inflation by direct measures, by control of the money supply, by control of expenditure. I do not know what your Lordships thought of the Chancellor's Budget, inspired, doubtless, by some perception of the dangers which confront us, but I must confess that it did not reassure me. The Chancellor confessed that his expectations last year of the volume of borrowing greatly underestimated the borrowing that he had to do.

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When I look at the increases, the pay settlements which are taking place in nationalised industry, I wonder whether the same fate may not befall him in the current financial year. Although I know that this is an unpopular and, maybe to some noble Lords, a philistine thing to say, frankly the danger is greatest in the nationalised industries. The moderate settlements on the whole are those which are taking place in the private sector, in areas where people have seen some glint of the red light. If there has been such a conception in the conduct of the nationalised industries, I must say that it is not evident in action.
I have some miniscule contact with certain Government subsidised institutions. I value those contacts with the excellent people who work in such institutions. But I suggest to your Lordships that, if a squadron of archangels were to arrive, it would be extremely difficult to persuade such people that the Government will not step in at the last moment. They will say: "We are awfully sorry for you, old chap; we know you have your headaches". They might even admit that we are not in it for profit. "We know you have had crises in the past," they will go on, "but in the end you will not be let down." But, recalling what I described in an earlier debate as the myth of the widow's cruse, we will not in this way get our economy in equilibrium.
Finally, what about incomes policy? Your Lordships will recollect that often in our debates I have expressed some scepticism of statutory regulation of incomes. I have expressed absolute scepticism of the experiment which was tried under the Conservative Government of statutory regulation of incomes policy combined with high pressure inflationary demand. But, in present circumstances—and I shall end on this note—I can see an argument for some kind of pause, either voluntary or imposed. Why? Not because by itself a pause, a freeze, call it what you will, would halt the existing results of deficit financing and inflation. No; the reason is a different one. If inflation is being tackled properly, by financial means, money supply or control of the budget, then it must to some extent lead to more unemployment. The only way in which the increase in unemployment can be alleviated, at a time when
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inflation is being thoroughly tackled, would be in a situation where the various bodies concerned were not putting forward claims which could not be met under the astringent financial policy that I suggest.
I believe that these are not problems of next year or the year after; they are problems which arise here and now. I think we shall be confronted within the next few months with the most difficult problems that any Party has faced since the war. With the remainder of your Lordships I pray that we shall have enough clarity of mind and determination of will to tackle the very difficult obstacles which will have to be overcome. But it will be a very near thing!
5.16 p.m.
Lord BALFOUR of INCHRYE: My Lords, from these Benches I wish to echo the congratulations of the noble Lord, Lord Robbins, on the maiden speech of the noble Lord, Lord Hampton. He delivered it with sincerity, clarity and brevity. What more can anyone ask of a maiden speech? I am sure that your Lordships look forward to further contributions from the noble Lord.
I am much indebted, as are other noble Lords, to the noble Viscount, Lord Watkinson, for introducing this Motion today. I am particularly glad to be allowed to follow the noble Lord, Lord Robbins, who concentrated the main part of his speech upon an aspect which has hardly been touched on, except briefly in a few speeches. We are sliding down the slope into an economic abyss where social and political results may be such that none of us can foresee the final impact, unless we look back to the history of Germany in 1921 and Austria in 1923.
It is, I submit, a sombre situation that we face today. One can summarise it. Unemployment is rising to economically and socially unacceptable levels; wage demands are out of phase with the economic facts of life, backed as they are by union muscle; we have heard the Social Contract described by some trade union leaders as a scrap of paper; we are suffering from crippling taxation. More and more, the militants are capturing the machinery of administration and control of the trade unions—not the leaders; it is the faceless men on the shop floor who are now obtaining the power.

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We are witnessing politics of envy and greed. The printing presses are hard at work printing more and more, which is worth less and less. I think that that is not an unfair summary. I believe that union power in this country today can, if it so wills, break any Government of any Party and, in so doing, probably break the country.
We are not a country of extremes. I wonder whether this is really what the people want. Throughout the speeches we have heard today, there has been a call for a revival of national unity. I agree, but I believe that this revival must come from within. It must be what I would term a spiritual revival in this country. I do not necesarily mean spiritual in the religious sense, although personally I would not mind seeing that. I mean a revival of national pride and effort when each will look at the other, not in suspicion but as comrades in a common cause. I very much doubt whether any of the three Parties could inspire and lead such a national rallying within the time that is left to us, because we are in dire peril.
Even as we debate this afternoon, the pound is going steadily down and as the noble Lord, Lord Robbins, said, there may come a time when those who have trusted the City of London and sterling will no longer do so. I think we are now too divided as a nation to hope for any one Party being the focal point of such a national revival as is essential. I cannot see the national support necessary for the drastic and sacrificial measures which are essential if we are to curb the drop down into the economic abyss through inflation. I cannot see the necessary support being given to any one Party.
I see that the Leader of my Party, Mrs. Thatcher, is reported in the Press as saying that there may be an Election soon. I hope there will not be, because it would be a disaster if our Party were suddenly landed with the present situation which we could not handle, as we would not have sufficient power or good will in the country to do so. Equally, it would be a disaster if the Labour Party were to continue in Office indefinitely. We are going to need drastic and sacrificial measures and when I say that, I really mean sacrificial. I am appalled at
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the proposals which have been put forward and sanctioned in the last year or 18 months for heavy increases in salaries at what I call the top levels, whether they be civil servants or industrialists.
I listened on the BBC last night to a member of the Institute of Directors comparing the levels of managerial salaries in this country with those in Europe. We are far behind and that should not be the position. I should like to see our managerial salaries brought up to that required level, but having done so I would at once ask for a sacrifice from those who are obtaining the largest salaries in the country. Equally, I should like to see the salaries of senior civil servants—and I hasten to add that I do not grudge them their salaries—brought to the right level, but then at once ask for a sacrifice from them; and, equally, from the top brass in the Services. I am sure that the men with great responsibility in the Army, Navy and Air Force deserve all they get in higher salaries, but as soon as they have been granted let us please ask for a sacrifice from them equal to the sacrifice for which we are having to ask from the lower paid in the country.
The needs of the hour are such that they have gone beyond Party Government and Party strife. For the first time in 30 years as a member of the Conservative Party I turn towards a National Administration formed for one purpose only; that is, to save the people of this country from the terrible results of uncontrolled inflation. The noble Lord, Lord Shinwell, the noble Lord, Lord Tranmire, and myself are, I think, the only three Members of your Lordships' House who were in the other place during the 1931 crisis.
Baroness WARD of NORTH TYNESIDE: I was there, my Lords.
Lord BALFOUR of INCHRYE: The noble Baroness came in 1931, my Lords, and the crisis was before then. I am referring to the 1929, 1930 and 1931 Parliaments. It was during those years that the crisis was upon us. A National Government was formed, and it is interesting to remember that the cause of the crisis was considered terrible—a Budget deficit of £160 million. Think of the Budget deficits of today, my Lords. That was a clumsy

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Coalition Government and, although it went on for far too long, it nevertheless fulfilled what I would call its overnight purpose of saving the pound from being ravaged by the rest of the world, by America and Europe. Mr. Churchill's Coalition Government of 1940 had but one purpose, and that can be described in a word—victory. When that purpose had been achieved, the Coalition Government broke up. As we know, Mr. Churchill did not wish that to happen, though personally I think it was right that it did, and I do not blame the Labour Party; in fact, I think they were right to come out of the Coalition and revert to Party politics.
Nevertheless, those two Coalition Governments had a single purpose and I believe that our need now is for what I would label a government of national recovery for that one purpose—to save us from the imminent dangers of inflation. When that purpose is over, let us return at once to Party warfare and Party strife, and while that government of national recovery is fulfilling its single purpose there will be no need for anyone belonging to any one political Party to surrender or alter his or her beliefs or views. All that one would ask is for a postponement of their fulfilment until the single purpose has been achieved.
For this government of national recovery personalities and positions must be subordinate to the greater purpose. I do not care who leads it, present Party leaders or others, so long as they are men and women big enough not to think of themselves but to accept responsibility without thought of personal position in order to fulfil the needs of the moment. Like other noble Lords, I think that we are the greatest people in the world, but we are in real danger and there are few chances yet for us to take before it is too late. And because, like other noble Lords, I love my country, I have spoken out tonight in favour of what I advocate.
5.29 p.m.
Lord WALSTON: My Lords, this House has a mass of wisdom and knowledge and there are many noble Lords to whom we can never listen enough. There are many who we always enjoy listening to. Despite that, it is always good to hear a new voice among us, and it was particularly good to listen to the noble Lord, Lord Hampton, speaking so refresh-
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ingly and with such deep feeling and good sense. I am glad that I am the first from these Benches to congratulate him, and I share the wish already expressed that we will not have to wait long before we hear him again.
My noble friend Lord Beswick suggested that the present troubles from which the country is suffering—and nobody would dare deny their gravity; I go along with everything that was said by the noble Lords, Lord Robbins and Lord Balfour of Inchrye, and others, about the dangers which are upon us at the present time—do not all arise from things which are happening today and which happened in the immediate past. He suggested in a very reasonable manner—as one would expect—that certain actions of the previous Government must bear their share of blame.
I would go further. In my view, the cause of our present troubles, while exacerbated by the present wage inflation—which must at all costs be stopped—must be looked for much further back than the beginning of this or the previous Government. It goes back at least 25 years to the period after the last war. Since that time, we have, as a country, spent far too little on research and on development. Comparisons with the United States, with Germany and with Japan—and I shall not weary your Lordships with figures—bear this out. It is well known to all your Lordships. However, it is not only that: management during that period has been far too easygoing and has shown far too little aggressiveness in its job in every respect. To give one example which is, again, well-known, the Land Rover was introduced some 20 to 25 years ago. It was an immediate success. For years, all of us who wanted a Land Rover, whether we lived in this country or formed part of the export market, have had to wait two or three years before we could take delivery. Why is that? Why did the management of that concern, which is now part of British Leyland, at the time when it had the world at its feet, not make bigger investments to produce more of this manifestly magnificent motor car? Why did it not do everything in its power to ensure that the equipment it had to produce these vehicles was used 24 hours a day, 7 days a week? It is that type of slackness in management which must

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bear a large part of the responsibility for the troubles we are in today.
My Lords, the same criticism must apply to the attitude of management to wage demands in the past. In the days when everything could be sold and there was plenty of money about, it was very much easier to give way to wage demands and not to try to recoup the higher wages by increased efficiency or productivity but simply to pass the cost on to the consumer. That is very much what management has been doing for many years. I suggest to your Lordships that one of the reasons for this poor management has been something which has been developing in this country over many years. That is the difference in the relative rewards which accrue to those who are engaged in productive industries and those who are engaged in other industries, whether as merchants, bankers, retailers, property speculators, or whoever it may be. The latter are the people who, over the years, have acquired the greatest rewards. They have increased their standard of living most, while those who have been engaged in producing the wealth of the country have lagged behind. It is therefore only natural that the most ambitious and the most able young men looking for jobs in which they can achieve success and material rewards have tended to enter these professions rather than the manufacturing industries. I do not for a moment denigrate the importance of invisible earnings; they are of enormous value to us. The City of London and all its ramifications are of enormous value. But invisible earnings cannot be a substitute for the production of real wealth.
I believe that it is a combination of all these factors which has led to the pervading malaise which one finds throughout our industry today. Of course there are subversive elements to be found but, in spite of the eloquent pleadings and the painstaking research of my noble friend Lord Chalfont, those subversive elements cannot flourish unless the ground is fertile. It is to that fertile ground that we must turn our attention rather than to the subversive elements themselves. I must suggest to your Lordships that it is very unwise to exaggerate the importance of those elements. I do not believe that there are very strong subversive elements among
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the stable lads at Newmarket, the trawler men or the hospital consultants. Yet, as my noble friend Lord Beswick rightly pointed out, all these have in their own ways taken industrial action of a type analogous to that of workers who go on strike.
I believe that what is happening is that capitalism as we have known it is falling down without any help from the Marxists. We are suffering not only from demands for higher wages which the country cannot possibly afford, but also from a strike of capital. The investor is withholding his capital. We know full well that this is because he cannot get the returns he thinks reasonable. But I do not see any difference between withholding capital unless one gets the interest rate one desires and withholding labour unless one gets the wages one desires.
That is what we are suffering from and, in order to overcome it, it is no use saying how wrong it is of these people, how bad it is and that something must be done. We must accept the facts and give thought to how to overcome them. What we now need is for the best practical brains to give thought not, as so many do at the present time, to how to circumvent present restrictions or how the old order can be re-established, but rather to how the old system can be replaced to the greatest advantage of the country as a whole. It is no good for those on the Right to harp on the good old days of free enterprise and the profit motive. Conditions are not right for that now, however successful it may have been in the past. Equally, it is no good for the Left to harp on nationalisation and State control. The examples we have had so far are not an altogether unqualified success, and one must face the fact that the majority of the country, including many workers, is not wholeheartedly in favour of such actions. What we must have is new ideas and new thinking.
In spite of the groans and despondency which we hear all around and in which we indulge ourselves, the picture is not universally gloomy. In the past years there have been striking examples of great successes in technical advances, in the export field and in the vital aspects of the national economy. A very large proportion of those successes is to be found among the smallest industries and the modern industries, such as electronics.

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Also—and your Lordships will forgive me for mentioning this—success is to be found in agriculture. Here, productivity has been increasing by 6 per cent. per annum over the past years. There has been a declining labour force, an increased output, higher wages, and prices which are increasingly competitive with those from overseas. I suggest to your Lordships that it is worth looking at agriculture to see whether we can learn some lessons. It is also worth looking at those small industries which I have already mentioned to see what is the reason for their success.
I suggest there are four main headings which bear a great deal of responsibility for these good results. First, there has been a massive, though still insufficient, investment—mainly from the State—in research and development, resulting in enormous technical improvements in such things as seeds, modern methods of weed and disease control, and machinery. Therefore, the first heading would be research and development. Secondly, one has noticed an increasing co-operation between farmers, especially in buying and selling and in the use of expensive specialised machinery and equipment of different types, as well as services. Co-operation would be the second heading. Third, compared with industry, agriculture is in very small units indeed. Even big farmers rarely employ more than 20 men. So there is always close contact, and usually good understanding, between the farmer—the employer—and the workers. The third point, therefore, would be labour relations.
Fourthly—and this may be a somewhat more controversial point—investment in agriculture is not controlled by those rigid economic criteria which exist in industry. It is very rare for a farmer to make an investment which brings him in 20 per cent. He is usually satisfied if he gets 15 per cent. or even 10 per cent. But there are few financial directors in very few industries today who would countenance an investment of a risky nature—as anything in farming must inevitably be—with a return of less than 25 per cent., and in these days of inflation, probably still more. In other words, the investment which has been so necessary to agriculture has been carried out for reasons other than purely economic ones
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worked out by accountants on a balance sheet. It would take too long to go into the reasons. I just throw this out to your Lordships for further consideration.
I, therefore, suggest to your Lordships that it is worth considering that our future may lie increasingly with small businesses. Perhaps there is something in the saying that "small is beautiful", even in industry. I grant you that some industries, by their very nature, must be large—railways, mining, electricity, heavy industry and things of that kind. Many of these are already Government controlled in one way or another. I am quite sure that this is right, and that the Government must have control of the commanding heights of our industry. But we are far from having found the best possible way of running these industries, and to this we must give more thought. Here we need co-operation from the noble Viscount, Lord Watkinson, and his friends, as well as from my noble friend Lord Briginshaw and his friends. We must have all sides coming in here.
But, above all, we must give increasing thought to the best ways of helping existing small industries and of encouraging new ones. There must be a reversal of the present trend, which is brought about largely by financial and fiscal reasons. whereby small businesses, sooner or later, amalgamate with, or are taken over by, large businesses and there is a gradual disappearance of them. As a start I suggest that there must be more Government help towards basic research for such industries. There must be more help in obtaining capital and more encouragement given to sharing certain types of specialised equipment and services, such as computers, cost-accountancy, and so on. Positive steps must be taken for worker participation, not only in management but also in the eventual profitability of the business as it builds up.
My Lords, I believe that the Government should concentrate their energies and abilities in these directions, instead of giving too much time and thought to controversial legislation, which however desirable, is of no relevance to our present situation. The Government should also impose a complete embargo on all legislation involving fresh expenditure by either Central or local Government. Undoubtedly, this will mean the postponement of many causes close to my heart and to

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the hearts of many of my colleagues on this side of the House. But I believe it is a postponement which must be made in the interests of national solvency. There is no alternative at the present time.
But all this takes time. As the noble Lord, Lord Robbins, so rightly reminded us we have only months, possibly only weeks, and these things take longer than that. What must be done immediately is to alleviate the symptoms of the disease while, at the same time, studying the causes and mounting an attack on those basic causes. There is no question that at present the most disastrous symptom is world inflation. A statutory wages policy has been tried and has failed; exhortation has been tried and has failed. What we must now have is leadership and example; and leadership includes—as my noble friend Lord Briginshaw so rightly said—the involvement of everybody in the country. It must not he confined only to a small group in Parliament, in the CBI, in the TUC, or where-ever it may be. There must be no more talk of a slowing down of advances in our standard of living. There must be no more talk—at least for the moment—of even maintaining our standard of living. Instead, the Government must say, frankly and boldly, that the standard of living of all but the porest will inevitably fall. There will be fewer washing machines; fewer school playing-fields; fewer holidays in Spain—or, even, in Blackpool; fewer cigarettes; fewer drinks; and fewer many other things which we do not like to give up. But we must be told that.
At the same time there must be a complete freeze on wages until total production in the country starts to rise and until we begin to pay off at least some of our debts. With this wage freeze there must be a voluntary cut—I wish it could be compulsory, but I do not believe that to be practical—of 10 per cent. on all salaries of over £10,000 a year and of 5 per cent. on all salaries between £5,000 and £10,000 a year, with a lead to be given by Her Majesty's Ministers, followed by judges, civil servants, industrialists, doctors, and so on, all the way across the board. My Lords, I believe that, even at this late hour, with a fearless exposition of what the true situation is, with a demand for sacrifice, and with
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an example of sacrifice from those at the top, people will respond.
5.49 p.m.
Viscount YOUNGER of LECKIE: My Lords, first, I should like to add my congratulations to the noble Lord, Lord Hampton, on his maiden speech. I thought he appreciated that our present troubles were, at least, troubles of morale, and it is very important to recognise that. I hope that we shall hear him again. I cannot quite make up my mind whether I am like the chaps in West Bromwich—about whom the noble Viscount, Lord Watkinson, spoke—who are in some difficulty in discovering what the politicians are playing at. But I suppose that from these Benches I am at least justified in taking such a line.
I am rather glad that the noble Lord, Lord Walston, has brought the debate on to a level somewhat more suitable for what I propose to talk about, which is the question of industrial relations. The reason why I thought I should speak about them is that if, indeed, we are in a position where we have to despair of political Parties and start the necessary movement for a united approach to our problems, the natural place where we should then look is industry. I feel myself—without very much evidence, I must say—that there is room, even now at this moment, for a considerable rapprochement between the two sides of industry in tackling this problem jointly.
I think many people exressed surprise, even at the time of the Industrial Relations Act, as to how little conflict there appeared to be between the two sides of industry, and I feel sure that it is pertinent to make some protest on those lines. The noble Lord, Lord Robbins, quite rightly said that that will be too small and too slow to be of very much help. But is it not true, my Lords, that when you get into a state of rather low national morale, such as we are in now, anything one can do to stir up the general populace to take an interest in the future of the country and in what is going on is worth doing. We really want something to trigger off this united approach, and we do not seem to be getting it from the politicians.
There is a limit to what can be done on the industrial front, but I was very interested to read in Hansard of 21st

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April, on the first day of the European Community debate, the remarks at the end of the speech of the noble Lord, Lord Houghton of Sowerby—I am sorry he is not here—about industrial relations, which I think are very well worth noting. What he indicated then—I think rightly—is of great importance to our economic problems and to our future productivity and, although results are produced somewhat slowly, I think he felt that there was a great deal that could be done by the two sides of industry getting together. At the same time, the noble Lord mentioned that there are difficulties, to which I should like to refer. Both negotiating bodies, the CBI and the TUC, are still considerably hamstrung by their history and by their brief from their members, and I do not think they can continue in that way. Matters have become too important and I should very much like to see both these bodies convincing their members that they have to give them stronger powers to speak and to undertake action on their behalf. That is one point.
Then there are the difficulties which have been caused by the intrusion of politicians into the detailed running of industries—I am referring not to the nationalised industries, but to industries generally. One might have thought that that would give further incentive for co-operation between the two sides as companions in distress. The TUC had their dose of it for a good many months, or even years, and if the present programme goes through it looks as if the CBI are going to get a dose in the next few months. I think it is fair to point out to both sides that the remedy for that, a way to forestall political intrusion into your affairs, is to put your own house in order. Although much has been done, I do not think either side can claim that it has reached perfection in that respect.
The noble Lord, Lord Walston, took us back some 25 years. I should like to refer to the history of industry and commerce in this country during a rather shorter time, the last 10 to 15 years Around the early 1960s there started this extreme drive for more technical efficiency in industry and, in particular, for more professional management to replace the so-called amateur or perhaps even hereditary managements which preceded
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it. That has gone ahead at a great rate and has generally achieved that object, but it has largely been done by the creation of very large industrial units. That has produced side effects which are no surprise to most of us. They were predictable and predicted, and exactly what was predicted has happened: that as technical efficiency and professional management of these businesses has gone up, in far too many of them (though not all) human and industrial relations have fallen behind.
It is not difficult to see why. The professional manager, sometimes a bird of passage, a "whiz kid" as they are called, has not got those personal qualities which are required to make a success of industrial relations. Your Lordships will probably agree with me that successful industrial relations cannot be bought; they have to be worked for by somebody who has an acute interest in the subject and in the people he is dealing with. There is a conflict there. A great deal more trouble should be taken about the appointment of lower and middle management staff, from foremen upwards, and on the union side from shop stewards upwards. It is very important to get people with suitable personal qualities in these jobs. It does not matter how clever they are technically. That carries with it the more embarrassing duty, that you must be able to force square pegs out of round holes—never mind what the Protection of Employment Act may say. It is not worth while to leave a person so long in a position of authority dealing with personal relations that he creates a sour atmosphere which stays behind him for years. That is one aspect which management will have to cope with if they are going to help.
I would not presume to be so dogmatic on the union side, but if noble Lords read the speech of the noble Lord, Lord Houghton, to which I referred, they will see some suggestions there. I have the feeling that whereas the management side have rather gone off on the wrong lines, or at least have gone too far in one direction and not far enough in another, the trade unions have not moved far or fast enough in modernising their procedures and in making sure that their procedures, which are intended to be democratic, are in fact so. It is quite difficult to put this across to people,

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but unless both sides of industry have confidence in the democratic procedures of each other, we shall never get this agreement and reach the position where pressure can be brought on a Government in their dealings with industry.
I want to say a brief word about industrial relations themselves. Of course they cover many different things; but according to my informants in industry—I have been out of industry myself for ten years—there is a widespread lack of job satisfaction in many of the bigger firms, though not in all of them. That is not only very unhealthy, laying the industry open to all kinds of subversion, but it is also dreadful to think that men and women who spend half their lives in their jobs are not getting job satisfaction from them. That is a task in regard to which both sides of industry can contribute in all sorts of ways; but one must realise that it is a highly personal and subjective thing, for what is job satisfaction to one man may be quite the opposite to another.
The reason I mention that is that the only way, I think, of dealing with job satisfaction is not by machinery and elaborate organisations but by the personal contact and the personal management, again, of lower management. It has been said that, however bad your organisation, if you have first-class people in the key positions it will work; and however bad it is, if you have not got first-class people in key positions it will not work at all. I do not know whether there is anything in this suggestion. I should like to think that the two sides of industry—not in NEDC but before getting in touch with politicians at all—could get together and come to some form of agreement on various lines of policy. In that way they might be successful in triggering off a united approach to the industrial problems of the country such as recommended in the Motion.
6.1 p.m.
Viscount AMORY: My Lords, I have to start with an apology for the fact that immediataely I sit down I must rush off temporarily in order to open a building. Any noble Lord who like me belongs to the ancientry, will know that it is a very widely held opinion that there is no more suitable or innocent employment for
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septuagenarian Peers than opening buildings. I shall come back at the earliest possible moment. The noble Viscount, Lord Younger of Leckie, aimed one or two friendly shafts at politicians. My first instinct was to rush for cover and then I wonder whether, 15 years after retirement from active politics, one still counted as a politician. I will not follow that up. My noble friend Lord Watkinson, in what I am sure the whole House felt was a most excellent speech, spoke with great authority from the standpoint of industry. Now that I have retired completely, it would be in impertinence to follow him in that, but I agreed with everything he said.
The noble Lord, Lord Beswick, as always, gave us a thoughtful speech and I agree with him that insecurity and unemployment are not a good base for unity and co-operation. I admire tremendously the tone and substance of the speech of the noble Lord, Lord Rochester, on a subject of which he has first-hand experience. It was a great pleasure to hear the noble Lord, Lord Hampton, make his maiden speech. I did not know his long-sighted grandfather, but I knew his father well. We shall all look forward to hearing him make more speeches in the same admirable tone as that maiden speech. When my noble friend Lord Balfour of Inchrye spoke of a revival of national pride and effort, I thought he went to the heart of things. I must say that the appeal he made for some measure of political co-operation certainly made an appeal to me.
My Lords, I should like to speak mainly about one aspect of the economic troubles which has already been spoken about by most speakers; that is, our current rate of inflation which the noble Lord, Lord Robbins, said—and surely that is the right figure—is running at between 20 per cent. and 25 per cent. which by any test is a catastrophic rate. At a time when some of those countries who are our main competitors commercially are getting the better of this appalling disease, notably Germany, the US, France and even, I think, Italy, we are allowing our rate to get worse and worse. That can only spell absolute disaster. I say "allowing", because whatever the situation when oil prices and other import prices were rising fast a year or two ago, during the last 12

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months, the causes of our utter failure to cure inflation are wholly within our own control. Because we are exercising no control over the rate of increase in wages and salaries, which are the main components of both our consumption expenditure and our costs, we are consuming 7 per cent. or 8 per cent. more than we are earning, and have been doing so for several years, financing the balance largely by borrowing abroad or printing money.
The Party of noble Lords opposite sometimes affects a rather pained and surprised attitude to industry for not investing more; indeed, we need a much higher rate of investment. But the explanation is only too clear. When so little confidence is felt in the prospect of favourable economic policies, and when the earning of profits is clearly still regarded in some quarters (and some influential quarters) as a discreditable activity, there can be little chance of new investment proving a productive process. Over the past few years, the rate of profits in industry, in real terms, has shrunk catastrophically and inflation and penal taxation have been the cause of that. But some Ministers go on blithely blaming British industrialists for not investing more when the blame lies almost wholly on their own shoulders.
My Lords, I should like to say a few words about the Social Contract. If there is to be no kind of statutory guideline, then I agree that some form of voluntary understanding to which the unions are a party is essential. I have never criticised the principle of the Social Contract; but the tragedy is that this one has proved far too loose a conception. The obligations on the Government have been firm and specific, while those on the unions have been imprecise and unspecific. The Government have fulfilled their side of the bargain at a heavy cost to public funds and at some damage to our economy: the unions, their side of the bargain, I am afraid, less and less. Arguments have taken place and are taking place about whether a particular settlement is inside or outside the terms of the Social Contract. If obviously outside, then those pressing that settlement defend it as a special case to rectify some previous inadequacy or some future fear.
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The threshold agreements of last year have, in some cases, been paid twice over. I think it is well to remember that even if the original terms of the Social Contract had been strictly adhered to, it could at best have made only a limited contribution to the reduction of the rate of inflation; because by permitting compensation in full for the rise in the cost of living it provided a built-in element of continuing inflation. I presume that even Ministers now regard it as a dead duck. Alas!, it represents the only economic policy that Ministers seem to have or at any rate dare advocate.
Whatever criticisms one has to make of union leadership, I do not underestimate their difficulties. I know how immensely difficult it must be for one trade union leader to restrain his people when other Unions are pressing ahead for bigger claims. If I were a trade union leader at the present time I would be feeling very sad. I have known a number of trade union leaders in my time, and most of them were very responsible men and as patriotic as the rest of us. It must be sad for them that, in our present economic predicament, the trade unions over the past 12 months have, at best, made such an ineffective contribution to the mitigation of inflation and, at worst, have seriously aggravated it. Many trade union leaders, and Mr. Len Murray in particular, are still saying that the primary requirement of the Social Contract is the full preservation of the current living standards of their members, whereas the harsh truth is that in the short term that can only be effected at the cost of the rest of the community.
During the past twelve months, when it was vital that we should bring our consumption into line with our earnings—in other words, until we can increase our earnings, reduce our average standards of consumption—wages paid out, as has already been said by several of your Lordships, have actually risen beyond the increase in the cost of living by from between 5 to 8 per cent. I think that the noble Lord, Lord Robbins, referred to the difference, which is between just under 20 per cent. in the rise of the cost of living and 29 per cent. in increases of earnings, or something like that. Our productivity, alas, has probably only risen, if it has risen at all

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in this period, by from between 1½ and 2 per cent. Those who have benefited from the rate of increase to which I have referred will not be likely to recognise inflation for the killer disease which it is. It may well be that to get a guideline system accepted will prove beyond the capacity of any one political Party. But I believe that it will have to come. Only in that way shall we eliminate this dread disease without having to run the economy at a deplorably low level of activity. We are now suffering from wage-increase created unemployment. If only we can get agreement on the acceptance of some system of national guidelines which would indicate the biggest rise that could occur in money incomes without aggravating inflation, then we could move forward to a much higher level of employment, a higher level of production, and a higher standard of living.
May I turn now for a moment to Mr. Healey. My Lords, dog does not eat dog. and I have always noted that former Chancellors of the Exchequer are relatively kindly in animadverting on the performances of their successors. Long may such a humane and benevolent attitude continue! I believe that it will be generally recognised, even by Mr. Healey, that he got his spring 1974 Budget wrong. He began correcting that error in the Budget last autumn, and he has continued to correct it in his recent one. This at any rate reflects credit on him, if I may respectfully say so.
But the picture which his Budget story presents of our economic situation is, indeed, a terrible one: wages rising at the rate of nearer 30 per cent. than 20 per cent.; a very weak balance of payments; and estimated unemployment is rising faster, I fear, than the Chancellor of the Exchequer appeared to forecast at the time of the Budget. There is an estimated deficit of unprecedented and really terrifying size and very little confidence that it will not, as last year, be in practice greatly exceeded. Last year, if I remember correctly, the Chancellor hoped to finish the year with a deficit of about £2,750 million. That is a formidable figure. Actually it turned out to be about £6,000 million. Just imagine the situation if he made a similar miscalculation this year and £9,000
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million were to become £18,000 million! The biggest weakness of his Budget seems the immense deficit to be covered by borrowing of one kind or another; and so far as it is destined to be covered by borrowing abroad, as the noble Lord, Lord Robbins, said, even if the loans are obtainable, how alarming must be the interest charge alone! Next year, I imagine, the most painful crunch is bound to come on the expenditure of central and local government, perhaps particularly the latter, because it has been growing even faster than central Government spending.
Why has local government expenditure risen so fast? It is not mainly because of any general extravagance on the part of local authorities, nor mainly because of the pattern of the local government reform. The chief reason is the additional commitments being continually laid on local authorities by Parliamentary legislation and the rising costs of the social policies of successive Governments. Government expenditure is still being allowed to grow in real terms, but if an actual reduction in real terms becomes necessary, as it may well do, that must involve the curtailing of some of the policies put in hand over the past few years. In passing, surely the continuation in these circumstances of general food subsidies to everyone, regardless of means must be economic nonsense.
As regards Government intervention in industry, and the proposed National Enterprise Board, the finance of one company alone, British Leyland, is a terrible warning of where this policy will lead in financial terms. It has been said that men of a conservative temperament have often noted that "one thing leads to another". I do not know whether that is true, but I prophesy that if the National Enterprise Board gets going, it will find itself with an astonishing rag-bag of miscellaneous assets, most of them unrealisable and all of them calling for more and more capital injection. Mr. Wedgwood Benn's plans will involve a fantastic rate of future borrowing and continuous political pressure.
I hope that we shall not hear any noble Lords advancing the arguments still used by some who should know better, that if we cannot solve our internal

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problems, let sterling float down. It is all too probable that sterling will continue to float down as our current inflation continues; but surely we have learned by now that the relief obtained by depreciating one's currency is of a very temporary nature. It is a way of bringing down our standard of consumption. It relieves some problems, but aggravates many others. If you let your currency go down it means there is a need for more internal discipline and deflation and not less. It is not an easy alternative. I know none of the noble Lords on the Front Bench opposite will think it is so, and I am not criticising them in any way. The depreciation of the currency is no lasting cure for internal inflation and indiscipline, but is the consequences of those maladies.
The noble Lord, Lord Houghton of Sowerby, used some words recently in a debate in this House which my noble friend Lord Alport quoted in a subsequent debate. I mentioned to the noble Lord, Lord Houghton of Sowerby, that I would be quoting him. He said:
"Millions of people will not be coerced, If, however, they reject the disciplines of Parliamentary law, they must find some self-discipline to take its place or we will sink into anarchy or the perils of … dictatorship …".—[Official Report, 15/4/75, col. 307.]
Those were wise words, and most relevant to our present position. Parliament at present seems paralysed and helpless in the face of accelerating inflation.
I should now like to summarise, if I can, in a few sentences the urgent needs, as I see them. First, I believe this present malady has gone beyond the power of any one Party to remedy by itself. What is essential—and this brings me to the speech made by the noble Lord, Lord Balfour of Inchrye—is some form of agreement on a programme of anti-inflationary measures, agreed between the main political Parties: nothing less will do. It is no good agreeing on the end of curing inflation unless one agrees on the means to that end. The second need is that our consumption must be brought down to balance our national earnings, and so balance our books. When we increase our income, so much the better, because that is a much better way of doing it. Thirdly, the money and credit supply must be kept to a level
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something below that required to finance the going rate of inflation. Fourthly, we must provide the resources for a higher rate of investment and a higher rate of return on industrial capital. That higher rate of return on industrial capital must be positively encouraged. Price controls, if retained, must be moderated.
Fifthly, guidelines indicating the rise in wages which can be absorbed without inflationary damage must be laid down in some way under the authority of the Government of the day, and—here is the rub—must be accepted by a consensus of public opinion. That is the way it will work, and it cannot work in any other way. The sixth point is that, as was recommended by my noble friend Lord Watkinson, the case for strengthening the NEDC is very strong indeed. This has always seemed to me—and I can say this since I was not at the Treasury when it was introduced—to be a very good idea. I think the NEDC should be built up by agreement between the CBI, the trade unions and the Government into a more influential and more effective body, with more positive and definite responsibilities. I believe the time is precisely right for that to be done.
Lastly, the present level of public expenditure, as a percentage of the nation's real income, must be strictly contained and any part of it not covered by taxation must be severely curtailed. If such a programme or something like it can be agreed and accepted nationally, as I believe it could be, I am convinced that economic collapse will be warded off and our fortunes will begin to mend. Let us not despair. We in this House are generally glad when we can add our Party strengths together in exploiting common ground. I trust that in this desperately serious economic situation, we shall all individually do our utmost to devise and promote measures which will command all-Party support to defeat this deadly inflation which is at present destroying our nation.
Baroness GAITSKELL: My Lords, before the noble Viscount sits down, may I ask him a very short question? He excused the under-investment of industrialists and employers on the grounds of lack of incentive. But what about the incentive that workers have now—workers in transport, in the mines and everywhere?

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Have we not come to a time when their incentives have to be taken into account?
Viscount AMORY: My Lords, of course I agree with the noble Baroness. If you mention the word "incentive", it must be an incentive which is fair to everyone; I absolutely agree with that. But if I may just hark back to two things I have said, the contrast at the present time is quite severe. Industrial profits, in real terms, have dropped tremendously over the last two or three years, but wages have increased, in real terms, during the same time. So it is the balance which is the important thing.
6.26 p.m.
Lord HOY: My Lords, I intervene in the debate a little earlier than was intended, but I am delighted to follow the noble Viscount, Lord Amory. All I would say to him is this. When he was making his tribute in terms of, "We ex-Chancellors of the Exchequer have to support each other", I could hardly regard his speech as support for the present Chancellor.
Viscount AMORY: My Lords, if I may put that right, I said that I had an inclination to be kindly and benevolent. If I had not, I would have been far more abrasive.
Lord HOY: My Lords, all I can say is that the noble Viscount's kindly benevolence went unnoticed so far as I was concerned. I can think of some Chancellors who should bear a fair amount of the burden for what is happening at the present time. The noble Viscount was in the period of the noble Lords, Lord Thorneycroft and Lord Barber. I would not regard them as being altogether outstanding examples of custodians of Britain's finances. Indeed, I think that the noble Lord, Lord Barber, represented a great catastrophe for the nation. I do not want to take this argument too far, except to say that I think the noble Viscount goes much too far when he seeks to divert criticism from some of his own colleagues on to the present Chancellor. of the Exchequer.
Viscount AMORY: My Lords, I do not think I delivered a blessing on any Chancellor of the Exchequer. I was referring to the last Budget only.
Lord HOY: My Lords, that is true. But Budgets do not come as a result of a few months, as the noble Viscount knows because he was Chancellor long enough, and you cannot simply pin the responsibility for three months on one Chancellor of the Exchequer. He has to accept what he has inherited; and if the noble Viscount does not understand that then he does not. I am sorry if he does not like it, but I have given way twice in two minutes. So all I am saving to the noble Viscount is that if he does not understand that, he does not understand—and I know he does—a little about commerce. I will not make an assessment about finance, because he and I have been in association over finance for a very long time. Noble Lords may not know it, but during the whole of my life I have been associated with Trustee Savings Banks in this country, and to this day I am still the Honorary President of the Trustee Savings Banks Association. I have always believed that if you want to make a great contribution to your economic strength in any country, whether this or any other, you must have savings to safeguard yourself. I am grateful to the noble Viscount for having made his contribution in this respect. All I would say is that when we have these criticisms we should at least remember what has gone before.
I did not intend speaking quite so early, but I want to say one or two things about industry in general, because people are making their opinions known—and we are delighted to have them—as to how we have gone wrong and how we can provide solutions. I was connected with industry for a long time in a minor capacity. It was then my job to look after between 200 and 300 people, and you knew at the end of the year that unless you used the funds economically you would be in difficulty. So we are today facing the problem of production and the labour force. You cannot get what you want with two or three men working to produce what you require. You need an economic market use of the labour force to get what you want. It is only when you have that that you are able to produce economically.
It is very simple to take out one section of the community and say, "If we could only cut away food subsidies and then increase family allowances, we would

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solve this part of our economic problem." That may be all right for some people, but I would remind your Lordships that there are 8 million old-age pensioners, or rather more, in this country. It is not relevant to say to them, "We can step up family allowances", because they are not interested in that aspect. Se although we can subdivide the problem into sections, I would nevertheless say that we cannot separate one section from another. If we are looking for a solution, we must remember that we have to find one of general application. I claim no more than that.
I have been thinking about this in relation to the Social Contract. Criticism has been made of it. It may well be that the Social Contract has not worked as successfully as most people would have wanted. But noble Lords ought to be able to say what they would put in its place. We have tried many other remedies under many other Governments. We have tried legislation. We tried legislation with punishments for trade unions and it has not proved successful. This Government decided that the Social Contract might well be the best way out. If anybody enters into a contract of this kind he must accept the responsibility for it, and that applies to both sides. If noble Lords opposite are saying that the Social Contract does not work, something must be produced to put in its place and this House is entitled to expect that noble Lords will spell out the alternative. We are willing to listen. All of us want to find a solution to the problem. If noble Lords opposite are saying to us on this side of the House that our solution is not working, then at least let them provide an alternative which we can consider and discuss. Unless they are able to do that, they ought to curb their criticism of the Social Contract.
The noble Viscount, Lord Amory, was speaking about the great danger that had been engendered by threshold agreements. Let me remind your Lordships that it was not those of us on this side of the House who introduced threshold agreements; they were introduced by the previous Conservative Government. They may have been right, or entitled to think they were right. But it was this Government that had to face up to the consequences of threshold agreements, and
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we ought not to overlook that fact. When noble Lords criticise what has happened, let it be remembered who was responsible for threshold agreements. They may have been introduced in the best circumstances, but their consequences had a considerable significance for the economic affairs of this country.
This Government have, of course, had to try many things. I am a little perturbed when people seek to criticise this Government for the steps they have taken. I heard a little this afternoon about the motor car industry and what we have done about Leylands. I want a noble Lord opposite to rise and say what he would have done as an alternative to what the Labour Government did.
Lord ORR-EWING: My Lords, perhaps the noble Lord, Lord Hoy, did not read the weekend Press. Mrs. Margaret Thatcher spelled out exactly what steps we felt should have been taken in respect of British Leyland, recognising that some immediate aid was necessary but asking for justification of the other side, so that there was a long-term cure and not an underwritten subsidy for all time.
Lord HOY: My Lords, may I say to the noble Lord, Lord Orr-Ewing, that I read what Mrs. Margaret Thatcher said. It is true to add that she took 10 days to make up her mind about what she wanted to say. It is also true to say that there was not a single Member of the Conservative Party in another place who had any contribution at all to make on the matter. Any noble Lord can rise and say that there was, but I assert that not a single Member from the Conservative Benches in another place had any contribution to make. Until Mrs. Thatcher made her speech, even she could not have provoked that interruption from the noble Lord, Lord Orr-Ewing. If noble Lords opposite have an alternative let them spell it out.
It may be said that we should not have acted as we have done and that we ought to have taken other steps. But the Government decided that from their point of view the step they took was the best way of dealing with the problem. I do not say it is the ultimate solution to any problem, but the noble Lord who interrupted will remember that even when we were faced with the same circumstances

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concerning Rolls-Royce it was his Leader who took the decision that the Government ought to step in to safeguard Rolls-Royce for this country. I do not know whether the noble Lord is now going to argue that that was the wrong step to take. I think it was the correct one to take, and I think that we were right to take it with Leyland as well. If we are going to take this action we must do it collectively. Of course we have to extemporise, my Lords; all Governments have to extemporise. But we want a long-term policy to meet the needs of this country. Everyone wants to do well for the country. Do not let us pretend about that: we all want to do well.
Last night when my noble friend Lord Hughes was introducing some Government measures to improve the prospects of Scotland—and the noble Lord, Lord Campbell of Croy, will not deny this—there was no other Member of his Party sitting on those Benches to welcome them. The measures were to bring whole development areas in Scotland under the Highlands and Islands Development Board. If there had been a complaint about the Board, the Benches opposite would have been packed. But last night we were taking steps, at the behest of my noble friend Lord Hughes, to correct an imbalance in Scotland. We were adding certain areas such as Mull, Arran, Moray and Nairn; and, as I say, there was no other Member of the Party opposite to welcome it. If noble Lords opposite are saying that we must have a collective agreement to do this job, I would agree with them. We are not going to get out of the difficulty by acting on our own. Whatever happens in our economic life will fall on every one of us, and unless we find a solution the outlook is not very bright.
6.38 p.m.
Lord RHYL: My Lords, I have addressed your Lordships' House only once before and that, oddly enough, was on the subject of inflation. It is a subject that has been in the front of my mind for many years. The effect of inflation is so socially divisive. We now see lecturers in universities and medical specialists taking direct action which would have been unthinkable in the past. Matters have gone a good long way since I spoke here four years ago. I think we can say without fear of contradiction that we have
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qualified for the second division of the banana republic league and we are quite well placed. perhaps, to reach the first division. There have been endless suggestions; there has been a great outflowing of good will in this House. The suggestions have been about freezes, statutory policies, or no freezes. Surely the main point to get hold of is this. With a borrowing requirement of £9,000 million—of course, in fact it is much more—no policy can conceivably work. It will simply be overtaken by this flood of money. Any economist would agree on that. Even the Hungarian Mafia, now fully represented in this House, know we cannot do it.
What have the Government done? One of their first steps was the Social Contract. It has been fairly well hacked over. People have not been very kind about it but one could not have been more rude about it than the Chancellor of the Exchequer himself. The point that has always interested me is: Why Rousseau? I heard my noble and learned friend Lord Hailsham of Saint Marylebone a short while ago speculating on "Why Rousseau?". I read Rousseau's Social Contract and his confessions to try to discover the reason. In the edition I read there was a great deal of historical, philosophical argument about what, if anything, Rousseau really meant. But as the House may remember he said that everything depended on the general will. It was not clear how you found out what was the general will or how it worked. I think that noble Lords opposite wanted to cut through this, dilemma. They defined the Social Contract as anything that the most powerful unions wanted and could get away with, and that is how it has been acted upon.
"The Confessions" is a most entertaining work. Noble Lords may remember that Rousseau was in the habit of dumping his bastards on other people's doorsteps. That is the exact effect of defining the Social Contract as what the most powerful unions wanted. The "top" unions have done very well, but the unpleasant results have been dumped on everybody else's doorstep.
First, they had a Social Contract and it has not really been much good. The second thing on which the Chancellor prides himself is that he has kept the money supply in some kind of control. I

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was pleased to see him congratulate himself on that, because I thought that it had always been considered in Left circles as nicer not to talk about the money supply; like ringworm, you do not really want to talk about it. But the Chancellor talked about it. It is perfectly true that he has managed to keep some kind of control over the money supply, but he has done it, first, by colossal borrowing in the London market. In fact, there was a worldwide decrease in short-term rates, and the Government managed to borrow a great deal of money on gilt-edged securities. For the moment that has stopped.
Secondly, there has been really colossal overseas borrowing. What will happen about that? Several noble Lords have given warnings. If the referendum goes the wrong way, we might easily get a very rapid reaction. An article about the referendum in last Friday's Economist was a little "nervy" about the result and it was "nervy" simply because the dominating sentiment of so many people is the old joke in Punch—"He's a foreigner; heave half a brick at him"! For those who cannot look beyond Margate—and there are a great many in the Party opposite—it is a very powerful argument. The Economist urged Mr. Wilson and Mr. Callaghan to go out to the country and sound the clarion call. Romantically enough, it compared them to Achilles and Patroclus sulking in their tents.
If I may return to the question of the overall borrowing requirement, £9,000 million is likely to be far less than the actual borrowing requirement. The Chancellor was hopelessly wrong in his previous estimates of borrowing requirements. When inflation is proceeding at this rate, the real trouble is that it is almost impossible to calculate what will happen. Therefore, the rather simple course of thinking of a number, sometimes halving it and sometimes not has been taken. However, one cannot estimate. Why I am certain that the borrowing requirement will be much greater is that after the Budget was planned and after the Budget speech had been made there have been enormous wage increases in the public sector which cannot have been taken into account in those calculations of the borrowing requirement.
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On top of that, we have the threatened measures of nationalisation. There are two main troubles about nationalisation. The first is that anybody whose firm is nationalised thinks that he cannot be put out of a job, because if the firm goes "bust" they will print the money. Therefore, they act accordingly. That was foreseen originally. But what was not foreseen is how appallingly difficult it is to raise the money for their capital expenditure and their losses. Compensation is a tiny factor. The total compensation paid to the railways has been written off several times since nationalisation.
The real problem is the appalling difficulty of raising the money. It is all very well to talk about people not investing enough, but if the Government are in the market for these colossal sums and bidding up for them, it is rather difficult for institutions to lend money cheaply to business. The money is taken away from them and they are out outbidden by the State. I believe that a combination of colossal overspending and nationalisation will produce the most overwhelming overall borrowing requirements.
The Earl of LONGFORD: My Lords, I hope the noble Lord will forgive me for not having heard his opening remarks, but, of course, when I knew that he was speaking I rushed into the Chamber! Is the noble Lord making a speech in favour of any kind of national unity, or is he against it?
Lord RHYL: My Lords, if I may say so, the noble Earl has asked rather a silly question.
The Earl of LONGFORD: My Lords, is the noble Lord callable of answering it?
Lord RHYL: My Lords, what I said was that we are all in favour of good will. However, the point is that good will cannot work if there is such a large borrowing requirement. If I have got that idea into the mind of the noble Earl, it will make me very happy.
The Earl of LONGFORD: My Lords, will it make the noble Lord unhappy if he knows that he has not got it into my mind?
Lord RHYL: My Lords, it was Dr. Johnson who said,
"I can furnish the noble Lord with an argument but I cannot furnish him with an understanding"!
As so many noble Lords have pointed out, why is it that we have done so much worse than other countries? I think it is because we were not humiliated in the war. If one thinks of all the Continental European countries which had enemy baggage wagons going backwards and forward across them and remembers that at the end of the war they had to pull themselves together and do something about the situation, the position is that we did not feel like that then and do not feel like it now. But we cannot save ourselves without drastic action.
For a start, may I suggest that the bribes which were given by the Government at the last two Elections should be cancelled and that all the inflationary nationalisation projects should be concelled. I fear, though, that they will not do so. But the national will will rise again, though we may have to suffer humiliation first. Pray God that it is not too terrible a humiliation!
6.49 p.m.
Lord SOPER: My Lords, I should like to add my thanks to others who have expressed their gratitude to the noble Viscount, Lord Watkinson, for giving us the opportunity to consider this all-important question which, both naturally and ecclesiastically, makes an irresistible appeal to me and to people of the same cloth as myself. In general terms, it seems to me that the noble Viscount has made an impeccable case for the absolute and peremptory need for the kind of common, united action which alone will be sufficient to meet the hazards and dangers of this present time. If in the consequent debate an apocalyptic element has also been introduced into this argument, not least by the noble Lord, Lord Robbins—and who am I to take objection to that?—there was disquiet in my own mind as I listened to the various speeches, some of them constructive, some on the topic under discussion, others not necessarily so. It is disquiet which comes from a question which I cannot answer merely by saying that we ought to do something, or that there is a need to do something. After all, such a leap of action cannot
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be made out of a morass or a quagmire. It is no good saying to a fellow who is up to his neck in a bog, "What you should do, my friend, is get your friends around you to help you jump out of it". You can only jump out of quicksands when there is a springboard which is sufficiently strong and resilient to enable you to make that leap.
In that respect, may I suggest to your Lordships that the question of unity is a fruit rather than a seed, and that in order to bring it to fruition there are certain necessary prerequisites. Unless they are provided, we are in a Cloud Cuckoo-land of wishful thinking if we imagine there will be any likely response to the very present need for united action to deal with our contemporary problems.
I will venture to introduce the theological—or shall we say the ecclesiastical—prerequisites which the Church has always practised in similar circumstances, because I feel they are entirely relevant to the dicussion on which we have embarked today. The prerequisites of united action in the Christian Church has been bell, book and candle: the bell to sound the warning, the book to prescribe the remedy and the candle to enlighten the hope and faith. It is perhaps easy to see how apposite this kind of prerequisite has been in the tumultuous conditions of warfare, and at the same time to remember how different are the circumstances which now we face, and therefore how dangerous it is to assume that if the bell, book and candle apply to a wartime situation they can necessarily be transferred to the kind of problems that confront us.
In a war there is no doubt that the bell sounds and tolls, and to everyone who hears it, "it tolls for thee". There is an elementary and overwhelming sense of immediate and terrible danger. That is one of the requisites, I believe, of any proper and adequate reaction, and that point has been underlined over and over again in the discussion this afternoon. The book prescribes a remedy which is simple. It is really nothing more than a single page or a single line. There is no difficulty in arriving at a common denominator of activity when you are confronted with one simple alternative: either you are defeated or you are victorious—or you arrive at some suitable

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compromise and arrange some terms of treaty. Above all, the candle of hope and faith inspires those who see its light, to believe that they are together in an otherwise quite darkened room and their only hope is that they may act together in order to follow the light of that candle and to emerge from their troubles.
I make no apology for quoting those three prerequisites of unity and relating them in particular to the problem of war, in order to distinguish between that problem and the one which now confronts us. There is all the world of difference in the sound of a dropping pound and the sound of a dropping bomb. A dropping bomb has an immediate, irrisistible appeal and the warning, which is sufficient in wartime to bring people together, is not sufficient at the present time; and over and over again your Lordships this afternoon and this evening have given testimony to the way in which we are living in a fool's paradise and are yet unaware of the solemn and terrible fate which I believe faces us. I share it, and I make no bones about saying that as chairman of Shelter and as one who has been engaged in voluntary work for the last 50 years I am appalled at the prospect which confronts voluntary services in the community at the moment. Most of them face liquidity problems which are acute, and some of them are very near to total disaster. It will be a dreadful loss if that particular benefaction to the community is wiped out in the contemporary situation.
But I believe there is a worse and totally unacceptable condition which should act as the most sombre of warnings, and it is the prospect of unemployment. You will allow me, my Lords, as a spectator of this evil, to share with you for a moment its soul-destroying—or at least soul impairing—consequences. The man who has nothing to offer, nobody wants and his domestic life becomes almost crippled; and the prospect that nearer 2 million than 1 million may well be in this sorry state in a comparatively short period of time is to me so totally unacceptable as to take precedence over all other considerations in this human tragedy. I believe that this conversation in your Lordships' House today will have done inestimable good, if it has increased the sense of the warning bell
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that we are in face of consequences unprecedented and without parallel and all of a most lamentable condition.
On the second element, the book, I find myself all the more aware of the difference between a war situation and one which is so complex and requires so much programming and in which there is so much division. I would not be unfair to the noble Viscount, but it seemed to me from time to time that he was offering us unity in so far as we were to accept his programme, and a continuation of disunity if we were not prepared so to do. I understand that, but I will give notice to him and to many other people that I am as totally committed to the Socialist answer as being the one requisite and necessary answer as he, equally honestly and sincerely, is committed to another kind of answer. I do not therefore see that there is any prospect that by a continuation of discussion or limitation of perspective we are likely to arrive at a common denominator of agreement which would be as simplistic as that which energises those who partake of warfare. It was in that regard that I was the more grateful for his recognition that the acts of unity must fall within a neutral area, for they cannot finally fall within the area of a total ideology or indeed of a total programme.
Let us look for a moment at that neutral area. I, as always on Wednesdays, come to this House from a louder and larger place called Tower Hill; and it was there again today that I was confronted, as I believe you would be if you ventured into such circumstances, with the utter cynicism of so many people about the Social Contract. That Social Contract is lampooned in the Press and is manifestly riddled with evasion. Yet I believe it, and I believe it because it is the one constructive—neutral, shall we say?—programme which could, by its exercise in a fair context, provide something of the answer to which the noble Viscount has invited us to look.
But there is one pre-eminent requirement which does not as yet appear, however much it may be argued about, to have any purchase upon the minds of ordinary people. It is that an arrangement between a Labour Government and a trade union group does not consist of a contract which can be operated over the

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whole range of industry and commerce; and if the noble Viscount tells us that the CBI and other groups on the other side, so to speak, of the industrial fence have not as yet been invited to come in and take their place in some enlarged contract, surely that is not a sufficient reason in the present emergency to prevent them from making the first advance. Were they so to do—and I should be happy to think that this is already in train, and if it is then let it be trumpeted abroad, for people to hear it—then I believe there could be a renaissance of the Social Contract in the minds of a great many people who would be prepared to see this as a temporary measure whereby at least could be assuaged the acrimonies of political controversy and the abeyance, for a time at least, of the application either of a Socialist programme—as I would believe in—or of a non-Socialist programme as noble Lords on the other side of the House would cherish.
These are practical and I believe recognisable ways within a comparatively neutral field, and I should like to add one comment about the admirable speech of the noble Lord, Lord Rochester. I am quite sure that those who are now proclaiming to what an extent Parliamentary democracy is in decline have a lot of truth on their side. Nothing in my judgment would be more calculated to revive a sense of commitment and belief in that Parliamentary democracy than something done in the role of proportional representation of one kind or another, to relieve us of the unhappy truth that the House of Commons—the other place—is not a truly representative body. It does not in fact represent the commonality of the common people, and it could. The last shred of argument for the retention of the present system has now been dispersed by the application of some form of proportional representation for the people on the other side of St. George's Channel.
My Lords, I believe the Book can at this moment provide a measure of practical advice and agreement. I am warmed to the propositions already made as to voluntary disciplines and, indeed, voluntary cuts by those well-breeched in the interests of those who are not. Not unnaturally, I come to the candle, the candle of hope and faith, the candle that inspires us to see when we live in one
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room, the light which lightens all that is in the house. It gives me the opportunity of saying how grateful I am to have listened to the maiden speech of the noble Lord, Lord Hampton, and how much I agreed with his plea for an application of those moral principles, without which it seems to me there is no reasonable hope of emerging from our present difficulties. I am disgusted when reading of those rushing to buy television sets and washing machines in order to avoid the discipline of doing without them, in order to express that self-interest which is not even enlightened, and which I find so disagreeable as to be totally immoral in a situation such as this. But then, I have little use for those whose claims for wage increases are such as to retain their standard of living, and to make sure it is not in any way eroded by the inflationary process.
I have long since resisted the temptation to think there is a large element of decadence in our country at the moment but I am reluctantly compelled to believe this is true. I do not necessarily blame those who are decadent. I think the Church has a lot to answer for, as has the system, and the emergence of the shackle age and the commodity age—and those wise words to which I listened so attentively from the noble Lord, Lord Beswick, as to the quantitative assessment of life in contradistinction to its qualitative one—these are elements which should not be disregarded.
Therefore, I conclude by saying that I am quite sure that the bell of warning, the bell that tolls, shall be increasingly heard, and if the fear of God is the beginning of wisdom I am not sure the fear of apocalyptic collapse is not an unsuitable alternative. I believe there is an element of opportunity within the framework of that neutral kind of governmental co-operation, which will go far beyond the acerbities of Party conflicts, will cross the boundary lines of Party allegiance, and will give a wider sense of corporate united opportunity. But, above all, I think the hope of unity rests in a revival of the sense of dignity and decency among ordinary people. I believe that that can come only when there is an overall sense that we belong to a community not yet fully realised, but in principle there.

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Most people today, those who belong to the extremities of our political spectrum, do not believe there is any community here at all. Most people within the centre of that spectrum would be only too anxious to respond to it if there were enough sense that the sacrifices required were being required across the board, and did not rest unfairly on one group. This is a matter for governmental action, a matter for individual discipline. It is a project which I believe can light a candle which need not go out, and which can lighten the room permanently.
My Lords, if I may finish, it is no accident in my calendar that this debate has taken place on the eve of Ascension Day. I believe in Ascension, and therefore I cordially welcome the opportunity to share that belief in a debate such as this.
7.5 p.m.
The Earl of LIMERICK: My Lords, I suppose there never has been a time when the words of this Motion are more apposite than today. It is a good thing that the initiative of my noble friend Lord Watkinson has given us a chance to discuss it. I shall seek to follow him in speaking to the terms of his Motion, in speaking of unity, and I shall resist the temptation to treat this as a general economic debate. Indeed, the speeches of the noble Lord, Lord Robbins, and my noble friend Lord Watkinson, have pre-empted any remarks I might have wished to make in that sphere. This debate has given us a chance to hear a most distinguished and thoughtful maiden speech from the noble Lord, Lord Hampton, and I join with others in trusting that we may hear him again.
The noble Lord, Lord Robbins, said, and I believe this hit the nail squarely on the head, that unity demands a spirit of common understanding. The noble Lord, Lord Briginshaw, then urged us to recognise that we are living in a world of social change, and not to cling to old rigidities. Let us take those two propositions as a starting point and see how we can build on them.
It is said that all problems created by man are capable of human solutions. I do not believe that we can any longer be fully confident of this. Some problems at least, of population explosion and
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of technological explosion, are new to mankind, and I believe we have also to consider this utter cynicism occasionally met which has just been referred to by the noble Lord, Lord Soper. We need change, but there is a limit to the rate of change which society can assimilate without disruption, to the rate at which technological generations can be compressed at an increasing rate into human generations. Inflation accelerates change. All through history the really high rates of inflation, the attempts to run away from real problems by failure to insist on honest money, have led to injustice, hardship, jealousy, to the demoralisation of society, and ultimately, to the collapse of government. I believe it would repay study to look at the lessons to be learnt from the occasions when we have had a rate of inflation which goes notably higher than the rate of interest. These are appalling prospects from which all men of good sense in any walk of life must recoil. What can be done to guide us safely away?
The noble Lord, Lord Beswick, asked how we could curb the inexorable pressure for material gain. There are many who are deeply concerned, but there is no standard to which they feel they can rally. Nor is it likely that there will be a rallying point recognised until a large number of people are convinced, through disillusionment with the false god of materialism, that the way to their individual fulfilment and hence to happiness lies in a total lifestyle, and not merely in the weight of the pay packet. A satisfying job, in a decent environment involving the use of skill, must come to be more highly valued than a better paid job involving uncertainty, stress and strain, or an unhappy environment. The process should shift from consumption to preservation, from the pressure to out-do-the Joneses to the recognition that they are the best people to live alongside, and the recognition also that other Joneses in other climates have their own effective claims on the world's limited resources. Where are we to find a spirit of common understanding? I suggest it is something which we must all seek consciously to create and to extend as a vital prelude to unity. We shall not have unity until we find the courage nationally to face some fundamental facts as a prelude to overcoming them.

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Truth is usually unpopular. We shall make no progress until it is widely proclaimed, and generally accepted. What are these truths to which I refer'? I need not develop them, as they have been talked about earlier. First, I think, the truth that we are nationally living beyond our means and cannot long continue to do so. As an obvious measure, the Chancellor, in his Budget speech, told us that our current standard of living is sustained only by an overseas borrowing equivalent to £5 per family per week. Then we must recognise that no country and no individual can go on consuming what has not first been earned or produced. Hire-purchase debts incurred by individuals, and foreign borrowing in another context, for current consumption, are examples in their way of "spend now, pay later". But all debts have to be repaid from future surplus earnings. The wealth, the means of consumption, has first to be created. I note in passing a figure made known recently, that 56 per cent. of our national income is now spent by the public sector; and Professor Friedman, who brought out this figure, commented in passing that not even the Treasury economists could doubt that one.
Then we have to recognise something quite fundamental, that palliatives are not cures. The noble Lord, Lord Beswick, reminded us of some of the things that the Government have recently done, stock valuation measures, abolition of ACT surcharge, pre-shipment finance. To that list I would add cost of escalation, insurance, which amounts in effect to subsidy of our foreign buyers, food subsidies. My point is that these are palliatives and that they would not be needed in a healthy society. They are mere excuses for deferring fundamentally difficult decisions to deal with what are deep and fundamental problems.
Then we must recognise, again as Lord Robbins said, that the world does not owe us a living. We have no national birthright entitling us either to a constantly rising living standard, or, still less, to the job of our choice in the place of our choice. There is a secular trend in the terms of international trade which is moving inexorably against us. So we must accept that our living standards will decline somewhat relative to other industrial countries, and certainly relative to many primary producers; and we must
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cease to regard the weight of the pay packet as the only thing worth striving for. Life in Britain will continue to offer immense advantages if it is not damaged by unproductive strife against the inevitable and poisoned by resultant jealousies.
There are other things we must recognise and proclaim. I have never worked in a factory, but I have visited factories as far afield as Canada and Rumania, and of course many in Britain. I can think of little that can be more boring than some of the jobs I have seen people performing in those factories. This is not directly related to money, but for once I find no difficulty at all in believing what the industrial psychologists say when they point to the frustration factor as sometimes a major element in industrial relations. Here I follow the noble Viscount, Lord Younger of Leckie, in his concern for increasing job satisfaction by more imaginative management. And last, the problem of size, to which the noble Lord, Lord Walston, convincingly referred. Big units tend to become progressively dehumanised, and this alone would persuade me that the current proposals for nationalising our aircraft and shipbuilding industries are at best irrelevant.
My Lords, I want to end by saying a few words about the position of the chambers of commerce. I have previously declared to the House that I am currently the President of the Association of British Chambers of Commerce, commonly known as ABCC. The ABCC has a membership of 50,000 businesses, from the largest to the smallest. In this way it is uniquely representative in its role, spanning both geography and function. It is a town-based organisation and it is more broadly representative than any other in the country. The ABCC never has, it does not, and never should, engage in Party politics. Its 50,000 members ask nothing better than what we are talking about today, a united approach to our severe problems. They want unity to enable them to concentrate on the business of earning the wealth which ultimately is largely disbursed in the public sector for the benefit of all. They want unity because disunity and confrontation are wasteful, are bad for business and are bad for the country.
Here is something that I would urge upon the Government. As long ago as

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March 1974 I suggested, in a debate on the loyal Address, that the chambers of commerce had a useful unifying role. Immediately after the Election last October I wrote to the Prime Minister in the name of the ABCC offering cooperation in any sensible policy aimed at curbing inflation, and especially in improving the process of economic consultation. I had a friendly reply, but one which I must describe as non-responsive. I would point to the increasing frustration that is felt by men of good will in the business community, with the concentration on the incomes policy; that confrontation with the big battalions has been the only serious issue facing the country. It is far from being so. This, let me stress, is not a personal complaint that I am voicing. This is the view—and I was at the meeting this morning—of the National Council of the Association. They regard this as a disappointing response. They want to be consulted and to contribute.
We have talked this afternoon about the NEDC, and it may be that an enlarged or modified NEDC would be the right forum for such a discussion. I do not know; it is not for me to say. What I do say is that we do not wish to stand in the way of any other initiatives. We have never been involved in wage bargaining; this is not our object in making this suggestion of consultation and of movement towards consensus. We are not seeking to compete with the CBI. We are working closely with the CBI—and we announced some new measures in that direction a fortnight ago—in seeking to represent the fears and aspirations of the business community and of the private sector. I should like in public to renew this offer that we should provide a counterpart to the process of consultation and the search for consensus which we are all proclaiming. It has been proclaimed from the Government Front Bench; it has been proclaimed from the Front Bench below me; it has been proclaimed from all over the House. I believe that here there is role which can be undertaken by Government and private citizens alike. Here, my Lords, is a practical step we can take to unity.
7.19 p.m.
The Earl of LONGFORD: My Lords, the noble Earl who has just spoken was
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bringing forward at the end of his speech a proposal which, coming from him in his representative capacity, is obviously one that the Government will wish to take very seriously. Whether they will be able to say anything about it today I know not, but clearly it is an important suggestion. We have had a series of fine speeches, beginning with the two from the Front Benches, and we have moved on through an authoritative address by Lord Robbins and a moving one from Lord Soper. Many years ago I took up the study of economics at New College, Oxford, in the hope of being taught by Lord Robbins, but when he heard I was added to his list of pupils he retired to London, so I was denied those advantages. But at any rate anything he has to say in this House will always be followed with very great fidelity by me. We have also listened to a maiden speech which has been widely praised.
Speaking for myself, however, the two speeches which made, in a sense, the greatest impact on me, because they brought forward the most striking proposals, were those of the noble Lord, Lord Balfour of Inchrye, with his suggestion of what he did not actually call a Coalition Government but was, of course, a Coalition Government under some other name, and the proposal of Lord Walston for a statutory wage freze. I am not saying that either proposal is pernicious or that it will not come about. But I am proceeding today on the assumption that we are continuing in a state of ordinary Party struggle, and in light of the fact that we have not got a statutory wage freeze. Both the noble Lord, Lord Balfour of Inchrye, and the noble Lord, Lord Walston, also dealt with the possibility of obtaining a voluntary incomes policy. I shall have something to say about that later. Finding ourselves where we do, I hope we can try for something rather more fundamental than has been suggested by those speakers who did not favour a coalition. I think that the noble Lord, Lord Balfour of Inchrye, is the only speaker so far to come out fully for a Coalition Government.
In the last few days I have spoken to a high trade union official. I said, "I suppose the trade union movement generally would react suspiciously to a Motion put down in today's terms." I do not cast any reflection on the personal

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status in union circles of the noble Viscount, Lord Watkinson, which I am aware is high. The union official agreed that this was so. He said trade unionists would feel that they had heard this before, and nothing had come of it. Secondly, they had a shrewd suspicion that when this kind of proposal was suggested it really meant a criticism of the trade union movement. It would be their reaction that somebody was trying to criticise them. Many people who make these proposals couple them with a great deal of union criticism.
Last summer I wrote a letter to The Times under the heading "The crisis deepens, what can I do to help?" In response a large number of people came together. We held an interesting conference. Widely representative people spoke from all Party points of view, and at least one shop steward was present. Trade unions did not respond to the invitation, partly because the conference was organised hurriedly. But I hope that the noble Viscount, Lord Watkinson, would agree that any unity which did not carry a large measure of trade union support would be of small value.
I will quote a sentence from Mr. Healey's Budget speech, which makes the point made by the noble Earl, Lord Limerick. Mr. Healey said:
"In 1974 we were spending 5 per cent. more as a nation than we were producing."
This sentence crystallises what is the main point of our whole discussion. Until we rectify that position we shall be no better off; we shall be getting worse off. It can be argued that this matter can be put right by producing more, but, as the noble Lord, Lord Robbins has explained, even if we all work harder and help other people to work harder the situation will still remain serious. Collectively we in this country, in all walks of society, are doing ourselves too well. Mr. Healey pointed out that the general rate of pay increases has been well above the increase in the cost of living, and much further still above the levels of countries which compete with us. In that sense the primary responsibility must be placed on wage increases. But wage earners do not pay themselves, and employers who, in many cases, compete for labour must take their share of the responsibility.
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Mr. Murray, the General Secretary of the TUC, has explained that the was misreported in an Observer interview. He was quoted as saying:
"How do you connect the national economic position with the heartfelt need of a group of workers?"
In other words, how do you convince a particular trade union and its members that excessive demands in the long run damage them rather than help them? That is the problem, and I am not sure there has been much light thrown on that this afternoon. This is where I feel we should take a candid look at the values involved when we are asking workers to restrain from exploiting what appears to them at least to be a favourable situation.
Though it is relevant I will not deal with the steep demands being made by many professional men, such as doctors. We also read that the Concorde pilots want an increase of 100 per cent., from £14,000 to £28,000. So I think we can say that this position is widespread throughout the professional as well as the working classes. But I ask bluntly how we can pass amoral judgment on trade union attempts to make hay while the sun seems to be shining, while at the same time paying chairman of large businesses anything from £35,000 to £60,000 or more a year?
I read in the Daily Telegraph a day or two ago that the highest paid British oil executives receive more than £70,000. We either think that this sum is appropriate in this situation, or that it is too much. The Daily Telegraph will not be suspected of being opposed to large business.
A Noble Lord: Were these figures gross or net?
The Earl of LONGFORD: Gross. The argument of the workers who confront me is that their figures are gross, too. We pay the chairman of a nationalised industry £20,000 a year, and the Chairman of the British Steel Corporation a good deal more. We pay top civil servants nowadays the same kind of salary. When I was Minister for Civil Aviation in 1950, a quarter of a century ago, my Permanent Secretary received £3,500 a year. I received £5,000. Today a Minister would get less than a Permanent Secretary That is what they got in 1950. An ordinary Permanent Secretary

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today receives £19,000 a year. Therefore, we must not talk as though the working class are the only people who have looked after themselves. The cost-of-living figure, which I have verified through one of the Ministries, had admittedly increased by 278 per cent. That is to say, life is nearly four times as expensive as it was in 1950. But the top civil servants receive 5½ times as much as in 1950. So they have come out of it quite well, without being abused by anybody. I am not suggesting that the top civil servants, for whom I have the highest regard, and many of whom sit in this House and play an active part, have been more greedy than others, but we expect from them the highest standards of self-restraint in the public interest.
I am not saying that any one section of the community is behaving more or less selfishly than any other. To quote the words of the song, "Everyone's doing it, doing it, doing it", and if we go on "doing it", between us we shall destroy the nation. That is my message, which is similar to what many speakers have said. But most of the time this afternoon has been spent in assuming that it is the wage earners who are primarily responsible for our economic plight. I am aware that the Royal Commission on the Distribution of Wealth is now sitting under the noble Lord, Lord Diamond, and that their findings are bound to be of the highest relevance, but meanwhile we can at least stop ourselves from going from bad to worse. I was horrified to read in that same Daily Telegraph article on Monday of the Government paying more than £60,000 a year for a chief executive to run the new National Oil Corporation. Indeed another, high-class paper said he might get £80,000. I cannot imagine anyone who calls himself a Socialist at any time agreeing to figures of that kind and I cannot imagine anyone who calls himself, as we all do here, a patriotic British citizen, regarding them as in any way suitable in these days.
What I am suggesting is something that goes deeper than statistics, although statistics illustrate the situation. I am suggestion something that goes closer to the heart of our national morality. On an earlier occasion here not long ago I referred to the national greed, which the last Archbishop of Canterbury and the
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present Archbishop of Canterbury picked out as a distinguishing characteristic at the present time. I argued then that the organised workers, now that they have the chance, are doing only what their social betters have always done; that is, acting according to the theory that economic man best serves the community by fulfilling his own interests. I said then that economic man was and is a greedy man and I cannot help but repeat that phrase. What this country needs is to break through the vicious circle, this evil train of collective selfishness which has come to be accepted—not, I believe, irrevocably—as the natural way of life at all levels of society. Ask anybody whether he or she has had too much, and in almost every case he or she will say, "Not as much as somebody else". That is true, whatever walk of society they move in. This idea of getting all one can for one's members, again in all walks of society, has come to seem a positive duty by those who are employed to look after collective interests.
But where does all this bring us? I suggest that it brings us to the conclusion—and this is drawing near to what the noble Lord, Lord Balfour of Inchrye, said and, in another way, to what was said by the noble Lord, Lord Walston—that if the leading men on all sides of public life are to make any impact on the minds of the rank and file, of the trade unions, they themselves must recognise the need for more austere standards of consumption and be prepared to set an example. Some years ago, when I was Leader of this House, I was planning to give a party here for quite a number of colleagues—some of those present today may even have attended it—and not long before the party we were in one or our periodic crises. It was the summer of 1966 and I asked a distinguished colleague whether he thought that this party which, after all, was not a necessity—it was a pleasant amenity, shall we say?—should be postponed or even cancelled. He looked quite horrified and said, "Things haven't got as bad as that", and I am afraid that I took the easy way out and accepted his guidance and went on with the party. In a sense it is that attitude which still persists and which I am still complaining of today, and the situation now is, of course, much more serious than it was in 1966.

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What we need may be an example of sacrifice in the sense of giving up income or, at least, reducing consumption, or it may involve increased effort, or possibly both. No doubt the one voice that would be listened to beyond all others would be that which came from above politics, but it would be wrong to involve the Throne in any appeal or gesture unless the politicians were in basic agreement first.
Personally, I should like to see the present Cabinet do what Sir Winston Churchill's Cabinet did in 1951 and cut their salaries by, perhaps, 10 per cent. Sir Winston Churchill's Cabinet cut their salaries by 20 per cent., but, at any rate, 10 per cent. would make a very good start. The Cabinet of 1968—I served up to the beginning of 1968—very nearly did so. Without making too many disclosures—although these days people are a good deal more frank than they used to be—I can say that if I had not resigned just before the vote was taken and I had been in a position to cast my vote, I am fairly confident that this cut would have been made. So it is not something that can be regarded as quite absurd, though whenever this kind of thing is suggested someone will always say, "That's just a gimmick". Indeed, any personal example is described as a gimmick. However, that is what I recommend. The noble Lord, Lord Walston, suggested that all those getting more than £10,000 a year should cut their salaries by 10 per cent. I am not ruling out such a possibility, but I think that that would need a lot of preparation and if the Cabinet got off the mark first, that would give a very good lead.
Human nature will not be altered overnight, but somehow we must break this evil chain of habit under which every group asks for everything it hopes to get, and, indeed, a bit more on the theory that it will not get all it asks for. Rather timidly, the Government are beginning to try to involve the ordinary citizen in personal endeavours such as producing more food at home, taking part in the War on Waste or saving fuel. Many proposals of this kind were made at a conference over which I presided last year. But if we really believe, as we surely must, and as all noble Lords who have spoken today seem to believe, that we as a nation are living beyond our means,
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then, until we are clearly producing more, we must consume less. Taxation, of course, has an indispensable part to play, but taxation will fail unless the nation is, broadly speaking, on the same side.
I am assuming, though I will not go further into this today, that for the moment Party politics, the Party struggle, continues. I am assuming that the Opposition will inevitably use strong endeavours and will make legitimate efforts to discredit and, indeed, overthrow the Government. Unless we have a Coalition, this is part of the democratic process. However, I believe that agreement could be reached that for the moment at least conventional standards of consumption should be moderated. In the last resort the Government of the day possess the prime responsibility for precept and example, but the Opposition Parties and the men and women of influence outside the Party business can make a great difference to the success or failure of such a call for sacrifice and for a fresh endeavour among all the citizens of the country.
7.38 p.m.
Lord ORR-EWING: My Lords, it is an honour to speak following the noble Earl Lord Longford, and I shall come later with humility to deal with some of the points he adduced. We do well to remind ourselves at this stage in the debate that we are discussing a united approach to the nation's economic and industrial problems, and we owe a debt of gratitude at this serious moment in the nation's economic position to the noble Viscount, Lord Watkinson, for having initiated this debate, which has had widespread support and attendance almost throughout.
I did not altogether agree with everything the noble Lord, Lord Beswick, said in his opening speech, though I thought he did exceptionally well, bearing in mind the Motion, actually to avoid using the word "inflation" once throughout the whole of his speech. I am sure that this was an oversight, but the psychologists might have had quite a field day working out how it happened. I feel that I shall make up where he lacked, because I am certainly going to talk about inflation and the impact that that has on our investment programme, on the wellbeing of industry and on its competitive position.

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Nor did I quite agree with him when he said that it could be argued that public ownership was a "unifying influence." I do not take that view, more particularly because the Government were elected on only 28 per cent. of the electorate's vote, which is a small minority to go right ahead with a full-scale programme from a Manifesto which was so ill supported in the country as a whole. But that is a viewpoint and I hope that perhaps we can come together across the Floor of the House in order to unite on those things which are essential to the wellbeing of our country and perhaps disregard those things which, in this context, are irrelevant.
It has been said many times, but I still repeat it: inflation at this rate literally rots the social fabric of our nation. This is beginning to happen. One sees responsible people who should not stoop, and who, in the old days, would never have stooped, to these tactics, striking, sitting in or demanding wage increases which are totally unrealistic and which I suggest can only further add to our problems. Not only is inflation rotting the social fabric but it is shrinking our export order books. The longer the period of gestation for an export order—that is, the longer the period from the moment the order is obtained to the moment when the goods are delivered overseas—the greater the inflation factor which has to be built into the quoted price.
I should like to draw your Lordships' attention to the sort of thing which is happening. Supposing one has a request to tender for a naval ship for South America. At the present rate of inflation of 20 per cent.—provided it does not go higher than that—one would have to build into one's prices for the normal three-year period between order and delivery a 73 per cent. inflationary factor. One would be competing with the Germans and other nations. Germany is building into its fixed price quotations not 20 per cent. a year but 6 per cent.—one-third of what we have to build in. This is a recipe for the total destruction, not perhaps of orders which have a short time scale, such as motor cars, for which the period between order and delivery is a matter of months, but for such things as factories to be equipped and built overseas, large engineering projects in
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which this country has so much expertise and prowess, and power stations—possibly, in the future, nuclear power stations, which have a period of gestation as long as 7, 9 or even 10 years. We cannot win competitive orders with an inflation rate of this nature. Therefore we must do something about it.
There is only one inevitable consequence if we go on at this rate: our overseas orders will shrink; our ability to pay for our raw materials and our food will go down in proportion and we shall have massive unemployment. The Chancellor has said that and it is nothing new, but I want to come at it from a different viewpoint. I utterly reject the idea that unemployment will somehow solve our problems. That is a monetarist view. I believe it to be totally unrealistic in this day and age. It will lead to the spinning-out of work, to the increase of overheads, to the total reduction of the profit margin, to increased costs, to strikes, disputes, sit-ins and marches. It will lead to every single thing but the productivity which is so essential to our nation if we are to survive.
Therefore, I echo the words which have been said from all parts of the House this afternoon and evening and on previous occasions. I do not believe that the problem of inflation and the results that it will have can possibly be tackled except on an all-Party basis. Today it was suggested—and I hope that we may hear something from the Government about this—that after 15 months of trial—and we all agreed, I believe, that they should be given a fair trial—it was now time to broaden the base of the Social Contract. Some of my friends in an engineering company with which I am concerned were negotiating a 30 per cent. pay claim. That has become the norm now, as noble Lords will know, though it was the exception in February 1974. When they said, "Look, it is only six months since you had your last award, and 30 per cent. is also outside the Social Contract," they were told that that was bloods, impertinence and that the Social Contract had nothing to do with them at all, for it was only a contract between the Labour Party and the trade unions. They were informed that it was absolutely wrong for a management to try to interfere. If that is the feeling at the cutting edge, at the perimeter, at the place where the work is done and the wealth is

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created, surely it is time to broaden the Social Contract. It has been discussed this afternoon, and surely it is time for talks with the CBI and other people too to try to get new guide lines and a broader base to the whole foundation of this concept.
I too want to take up the question of investment in industry. The noble Lord who opened the debate referred to Mr. Wedgwood Benn, who has said in a very divisive way—one cannot pretend that he is trying to unite the country by his policies—that British industry, because it is not investing, is "failing the nation". He must know that that is political poppycock. Every person in the country must know that if a firm had the resources it would be delighted to invest in new materials, machines and methods. Of course it would. I have worked all my life in either the electronic or the light engineering industries, from a graduate apprentice onwards, and I know just how much everyone craves a modern machine. It is easier to set, more accurate, quicker to cut metal, nicer to work with. It is better from every aspect, but one must have the right conditions in which to order it.
There was an excellent article in the Sunday Telegraph this week by Leith McGrandle. The author was quoting Mr. Wedgwood Benn again when he talked of:
"a long period of decline in investment which … explains many of our other problems of inflation, of unemployment, our poor balance of payments performance."
I ask your Lordships to look at the facts. Our fixed gross domestic product capital expenditure since 1951 has gone up percentagewise from 14·9 to 21·8 per cent. in 1972. Let us look at the manufacturing investment, because that is the "fall guy". The criticism is that the wealth created in industry has not been invested. I now quote OECD figures for Europe, which are shown as a percentage of the gross domestic product. Top of the league is the Netherlands with 8·4 per cent.; second is France with 6·9 per cent.; third is Italy with 6·4 per cent.; fourth is Belgium with 5·5 per cent.; fifth is West Germany with 4·9 per cent. and sixth in the United Kingdom with 3·8 per cent. Yes, my Lords, we are not as good as they are, but, if one looks at OECD's figure for the USA, it is 3·1 per cent. So there is another factor which comes into
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these figures; that is, that the older and more mature nations are able to invest less than those which suffered destruction in the war and which are more dynamic at present.
I should add that for our figure, the average over 12 years is 3·8 per cent. of our investment. There are some very wide variations. Our engineering industry has been investing not 3·8 per cent. but 4·7 per cent.—a materially better performance and up with that of a lot of other countries. Our textile industry has a very good record, too, because we introduced a modernisation and rationalisation process in the early 1950s. I also see from a City firm's report which I only received this morning that, whereas last year in this country manufacturing investment was more or less stationary, it was already beginning to fall in Germany and Japan; it was down by 8 per cent. So though we may not have been great in the past, we have not been too bad and at the moment we are—or we were last year—investing as much and holding the position which we had percentagewise.
My Lords, there are other factors—it is not just a question of shortage of cash—which perhaps Mr. Wedgwood Bean and the Government should be looking at and analysing generally. The United Kingdom takes away from industry more of its profits than any of its competitors. We leave less money to invest in the hands of our corporations. In percentage of our gross national product, we take away in corporation tax 3·2 per cent. In France it is 2·5 per cent. In Italy, it is 1·7 per cent. In West Germany it is 1·5 per cent., which is half what we take away. So some of our keenest competitors in Western Europe are taxing their industries much less than we are. Incidentally, those figures come from a Government paper, Economic Trends for October 1974, so I am quoting Government sources.
Secondly, is it not also a factor that we tax our supervisors, our foremen, our executives and our junior and senior managers far more highly, and that we take a much bigger percentage of their salaries than does any other nation in the world? That is my answer to the noble Earl, Lord Longford. We must

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not look only at gross figures. No other nation takes 83 per cent. of pounds above £20,000 a year. It is all very well saying that the manager of a nationalised industry, or the head of a business, is paid £20,000, but on his last pounds he is taxed at 83 per cent. and keeps only 17 per cent. Of course at a lower level more is left. But I am sure that this point has a bearing on the productivity and on the concentration and the dedication of our management. That is a fact, I am afraid. Perhaps we wish it were not so.
Thirdly, what about our labour utilisation? Is it not true—as everyone has said, in all parts of both Houses—that we suffer from a degree of overmanning in this country which must be brought under control? The noble Lord, Lord Briginshaw, spoke earlier. But I do not think that he mentioned the question of overmanning in the printing industry. I should have liked to have heard him on that subject; it would have been most helpful. A few years ago the Daily Mirror made an examination of the steel industry, a capital intensive industry. That examination found that to produce a given amount of steel needed three men in this country, two in West Germany, and one in the United States of America. Is not this one of the factors which is contributing to the lack of investment in our country? If, after a period of examination and investment, we have the money to buy new tools, are we sure that they will be invested on a lower manning basis, or will some unions demand the whole benefits, even if they agree to work those particular machines?
Lastly, under this heading, has any other industrial nation which is in competition with us got the size of Government overheads which productive industry has to carry in this country in the form of social services, in subsidies, and in administration? We have the biggest overheads, as was said earlier by the noble Earl, Lord Limerick. It was calculated that 56 per cent. of our gross national product is taken by the Government and public services. I saw more recently that it has risen to 60 per cent. That is an enormous burden to impose. Are we therefore surprised that people overseas do not look to this country to make their investments? If they are not to put investment here how will we
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remain competitive, unless some action is taken?
Before I summarise my points, I should like to say that there is one place where I should like to see the Government taking action; that is to help in redundancy. We are going to have it in industry; it is coming about now. We want to make this as painless as conceivably possible. It is many years now since we initiated the Industrial Training Act. Ought we not to be expanding this? There is certainly manpower available. Ought we not to be preparing the way for retraining people? It is no longer possible to say to a man: "You may stay in the same town at the same job throughout your career." We have to move, and we must make that move as humanly easy as possible not just for a man but for his family as well, taking into account schools, houses, and everything else which goes with that man.
As we in this House get older we become more arthritic. I cannot help wondering whether Britain is now suffering not only from industrial anarchy in certain areas—which is very disturbing—but also from industrial arthritis. In the sense of the Motion, let us broaden the base of our Social Contract, let us grasp the opportunities that have been offered today, because it is desperately urgent that we have "a united approach" to the nation's industrial problems.
7.55 p.m.
Lord RAGLAN: My Lords, the noble Viscount, Lord Watkinson, has remained here throughout the debate, and I wish to congratulate him on his staying power and on his courtesy towards the other speakers in the debate which he initiated. As on the last occasion, he gave a thoughtful, concerned and, above all, unprovocative speech. On the occasion of the noble Viscount's last debate, I ventured to make a few remarks. One matter to which I drew attention was the difficulty caused to the economy by constant changes in Government policy. I wish to concentrate my remarks this evening on one aspect of this.
The Conservatives have been slating the Labour Government for shifts in policy, but in my view both Parties have been greatly at fault in this respect over the years. There are also highly influential sections of both our main

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political Parties which are doctrinally fiercely opposed to one another and which can be counted upon, when either Party succeeds to power, to try to overturn as much as possible of whatever the other side has done. I suppose that our sporting view of politics as being a series of fierce clashes encourages this.
But of very great significance—yet, in my view, greatly underrated—is the role in the economy of the Departments of the Civil Service. We have possibly the most loyal and most administratively efficient Civil Service in the world. The powers invested in a Minister—especially in a Secretary of State—under our Parliamentary system, combined with the efficiency of the Civil Service, can be a very great blessing. But the other side of the coin is that under uncertain direction, or under frequent changes of Government or of Ministers, this combination of Minister and Department can be devastating to the good working of the economy.
A change of Government, or of Minister, or of Government policy can mean havoc for carefully laid plans. It is said that a week is a long time in politics, but it is an exceedingly short time in setting up a production line, no matter whether the business is private or State owned. What may seem aeons of time, while some battle is being fought out among the factions or personalities in the corridors of power, or while plots are being hatched in the smoking rooms in the House of Commons, is no time at all to someone who is planning a new factory, or thinking of taking a new job or of moving house. I have spoken in agricultural debates on a number of occasions in your Lordships' House, and I have always pleaded for price stability for agricultural produce because, owing to certain conditions in the agricultural industry, the only way of ensuring an even flow of produce to the consumer is to have stable prices for producers, even though those prices are adjustable, in which case they must be predictably adjustable. We have come a long way down that road since 1945, but in my opinion we have not come far enough.
I mention agriculture, because food is so utterly vital to all of us that successive Governments have been forced to recognise that it requires long-term planning. But, all along, agriculture has been
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helped in this respect. Farmers can switch production—marginally, anyway—surprisingly quickly and produce embarrassing shortages and surpluses. But the image of farming—the plodding yokel, the long cycle of nature, and the long-term turnover—helps restrain Governments from interfering too often with bright ideas; and the concept of conditions of long-term stability is a comparatively easy one to get over to them. As my noble friend Lord Walston told your Lordships this afternoon, the result is a successful industry. The conditions in which it can thrive have been fairly widely recognised.
Nevertheless, it is difficult to plan for farming, even with this stability. In the past 18 months I have been discussing with advisers the best policy over the next 10 years for my farm, and we chose to produce what we hope is the commodity least likely to suffer from a change in Government policy. We have had a hiding on the beef; eggs do not pay; the corn market goes up and down like a yo-yo; and so we have gone for milk. This means a very large investment in proportion to the total value of the farm. It is quite a big risk; I hope that we pull it off. Otherwise, I shall not be able to continue coming to your Lordships' House because I shall have time only to cultivate my "veg" patch. But with regard to my private enterprise, I am having to plan 10 years ahead, and I am hoping for the best, which is that Government policy will not change, because I hope they cannot afford to risk not getting enough milk.
My Lords, I am also connected with a public enterprise, building a New Town—but that is another story. People do not eat houses, and there is just enough housing in the country to house everyone in some way; therefore, housing is exposed to the full blast of government by doctrine and by whim. It takes four years to plan and complete a new housing estate. If the land for it has to be acquired, that will take six years, or it will take eight years if it is a big scheme. That is the kind of timescale we work to yet it is time for several Governments to come and go. Indeed during the five years I have been with the New Town there have been three Government policies: first, the emphasis was on

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houses to rent; then, when the Conservatives came in it was on houses for sale, and now again it is upon houses to rent.
As for details of policy, over the last four months in our New Town alone we have had 49 assorted circulars from the Department of the Environment and the Welsh Office and 14 from our New Town association. This is, in addition, to having to digest the land Bill and the Finance Act, large chunks of which seem to be not understandable by many people. The sheer weight of work is colossal and is quite demoralising to the staff. I tremble to think how many circulars of all kinds local authorities have received during the same period. It is not that all the different ideas are senseless—though in my opinion some of them are—it is that there are more ways than one of solving the housing shortage and everybody has a pet theory of how to do it. As soon as he or she gets into power this theory is loyally and efficiently put into operation, the sum of all these people's conflicting collective efforts tends to be numbing and self-cancelling to the very purposes we all wish to achieve.
Apart from the major policy changes which I have mentioned, one gets the impression of constant tinkering or desire to tinker. It is as if the people in charge of this magnificent Government machinery cannot keep their hands off it and, tempted by the machines' very responsiveness, must keep making unsettling adjustments. The Department of the Environment is no different from all the other great Government Departments. So far as the economy generally is concerned, nowhere is this tinkering more in evidence than in taxation policy—if it can be called a policy. I have been told that since 1945 there have been 147 major changes in company taxation. I do not know by what criteria changes are called "major", but I am also informed that, judged by the same criteria, in West Germany there have been about one-third of this number. We now have the prospect of two or perhaps more Budgets a year, with almost every edict being issued without prior consultation with people who are to be affected. It seems to me that none of the edicts is inspired with even a hint of the necessary philosophy that we must try for political and economic stability, if we are to grope our way out of our difficulties.
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We used to laugh at the French for their frequent changes of Government, and observed that it was their civil service which kept things going. It seems to me that we now have a worse system in this country than ever they had, because we can look forward—if that is the right phrase—not only to changes of policy with changes of Government but to reversals of policy within the short life of those Governments. We can look forward with certainty to the fearful and inevitable prospect of these changes being put into effect quickly by a dutiful and competent Civil Service and accepted by an acquiescent and law-abiding people who have no idea what to make of it all.
Frequently in this House—though perhaps not frequently enough—we have heard extolled the virtues of good management. My noble friend Lord Walston referred to it this afternoon. Industry knows that good management is important. The quality of management, in fact, means not only the difference between profit and loss but between existence and non-existence. The crisis at British Leyland is said to be—as I believe and the noble Lord, Lord Stokes, has confirmed—a crisis of management. The financial pages of our newspapers are full of details and pictures of personalities leaving here or taking over there, and speculation as to the difference this might make to the prospects of firms. It is management that counts, and on such criteria one is forced to the conclusion that we are under poor management, and have been most of the time since the War. If this country were a firm which had suffered the same frequency of changes of policies over the years, it would have been "bust" long ago.
I am suggesting that one important part of this has gone wrong. I have given one illustration from my own experience of how with agriculture successive Governments have been forced by circumstances—if helped on their way by traditional sentiment—to create a stable agricultural industry. I have given another illustration of how with housing, when no such discipline is applied, the Department under a succession of Ministers has not made a very good fist of formulating policy. This is partly because their time-scale and the housing timescale relate to different worlds; partly because the discretion left open to Ministers is so wide,

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and partly because the temptation to interfere continually is so strong.
I do not know what the solution is—I am merely putting forward these observations for your Lordships' consideration. They are not only my views; increasingly I find them among many people with whom I talk. Better democratic checks do not seem to be possible. Under our system, the Government control Parliament and, anyway, Members of Parliament cannot be expected to keep in touch with one-tenth of what goes on. The Government are unlikely to reduce their own powers nor will those who have hope of Office. This is an almost paradoxical situation in which the very efficiency, zeal and integrity of our Departmental institutions invites action by people who do not know what they are doing just as easily as by people who do. It leaves us wide open to the mercies of any and every political wind and whim. Before I sit down, I should like to make clear that I am not calling for a Coalition, nor do I fear that a dictatorship is upon us. I am calling your Lordships' attention to a practical political problem which I am sure we have to solve in the interests of our economic stability.
8.10 p.m.
Lord GORE-BOOTH: My Lords, I will not follow the noble Lord's interesting remarks, which do in a way affect me as an ex-civil servant. I will just say to him that he brings out a very important fact which perhaps has not been brought out sufficiently. In addition to the burden the taxation places on industry, it also imposes an appalling staff burden for precisely the reasons which the noble Lord has described. Each time Parliament votes, and civil servants administer, new and complicated taxes, an inordinate amount of man-hours has to be absorbed first in understanding what has been decided and, secondly, if necessary, in revising major parts of financial policy in order to suffer the least damage.
I hope your Lordships have already realised—and I hope that the outside world will realise tomorrow morning, if not tonight—that your Lordships have done a historic thing. The debate, as it has proceeded, has brought from more and more people of authority—and I cite the tremendous speeches by the noble Lord, Lord Robbins, and by the noble
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Viscount, Lord Amory—a conviction that our present situation (and our future situation) cannot be solved by one Party. Perhaps as the debate goes on, one follows it and one does not realise what has happened. What has happened is that this is the considered opinion of well-informed and highly responsible Members of your Lordships' House. It is extremely interesting that this view has come out now, nearly a year and a half after the historic speech by Lord Diamond which was received with some doubt, even hostility. But he arrived at that conclusion then, and it looks prophetic now.
If this is true, if that is the growing opinion in this House, it has another important political consequence. The initiative of the noble Viscount, Lord Watkinson, and these expressions of opinion do, more and more, represent the view of millions and millions—and I am not exaggerating—of people in this country. I do not wish to be rude as a non-politician to political people, but there is a real weariness at this moment with Tweedledum and Tweedledee politics. This is not entirely fair on the politicians because the media love it. If only the media could be weaned away for a moment or two from the personality cult and the admiration of political eccentricity, perhaps there would be a greater rapprochement between Parliament and people on this basic question which we have been discussing.
There is another piece of non-communication which I find baffling but which I commend to our political leaders for thought. It is that I believe inflation has become a sort of worn-out word. One noble Lord raised this point. A great many people regard it as you might regard influenza. It is a sort of thing that effects me a little, or not at all, and what does it mean anyway? I do not know whether somebody better versed in public relations than I can make this more alive. I am sure that many of our fellow citizens do not realise the desperate urgency of our situation as described by the noble Lord, Lord Robbins.
I should like for a moment to dwell on one or two other things which have been falsely said to lead to our present state of morale and financial difficulty, because I think that sometimes they affect

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our thinking, and they ought to be firmly put in their place. The first is that some people blame it all on financial policies between 1945 and early 1960, or even up to 1970. On that I would take one example. It is pretty striking, if you remember, that in the late 1950s not only were we paying the interest on our large foreign debt because we had to, but actually there were years when we were repaying part of the capital. That seems a terrible long way away at the moment when thinking of the £9,000 million that this debt will now amount to.
There is another, and very serious, infectious doctrine which works on a lot of people who, with a little thought and vitality, would think differently. This is what I would call the defeatist theory of the British economy. Its great and charming protagonist is Professor Neild of Cambridge University, who wrote to The Times on 23rd April:
"Since the mid-1950s it has become manifest that British industry has become progressively less able to stand up to competition from the industries of other countries."
The insidious thing about that is the phrase "less able". I find that an infuriating reflection on our industry. I am certain that it is not less able. I said so when the first renegotiation White Paper was produced, and suggested that because we were not going to grow as fast as other countries we should pay less of the budget. This suggestion, propounded by people of great intelligence, that we are no longer in the same league of capability as the French and the Germans and, by extrapolation, the Dutch and the Italians, and this outlook on our economic capability and prospects, has spread wider than one might think by one letter in The Times. I was glad to see that there was a sharp response by various reputable economists and I hope that the noble Viscount, Lord Watkinson, will give Professor Neild a good "Schwepping".
My Lords, if I may come to more modern instances of how we have gone wrong, I must take up what others have said about what has happened since 1970. It would be unfair to Mr. Roy Jenkins and his remarkable performance as Chancellor in 1968–69 to go back further than that. What I think also accentuated this feeling of Tweedledum and Tweedledee
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being politically undesirable is the fact—and the noble Lord, Lord Raglan, nearly started down that road—that Governments from 1970 onwards seem to have taken a kind of vicious delight in the abolition of each other's institutions. The Conservative Party came into Office in 1970 and abolished the British National Export Council, replacing it with something which has not yet materialised to the public. They abolished the Consumer Council. Then the Labour Party came back and abolished the Pay Board. There seems to have been a competition in abolition. The public are bewildered by this and feel that something has happened to politics which ought not to happen.
Also there are two main political developments which I think it is right to allude to here. One is the threshold, and the other is the Social Contract. The noble Lord, Lord Hoy, was right to say that the threshold came into being during a Conservative Government. I remember distinctly having a bump in the pit of my stomach when it was introduced; but to me, an amateur economist, it seems clear that if you have a threshold which corresponds to the rise in the cost of living you get the same inflation at a higher level with a very slight diminution through taxation, but not otherwise.
The problem that has now arisen—and I do not think anybody has yet gone into that in detail; but perhaps I may describe it—is a situation in which people working in industry X think they have the right to more than people in industry Y. The people in industry Y catch up and the people in industry X then say they must have more; and I see no end to that self-generating adjustment unless and until all significant Parties, all recognised leaders in this country, blow a whistle and cry "Halt". I do not see how a leader of any one persuasion can bring that about.
On the Social Contract I should like to say that it seems to me to have had one enduring value. I put it slightly into the past for obvious reasons. It has been the first instance where the trade union movement has said, explicitly, that it has obligations towards somebody other than its members. It may be a limited obligation, but it is an obligation and it is quite a new step in trade union philosophy. Perhaps in future history it may prove of value.

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Coming to the present, just as we came into this period—perhaps I could go to December 1973—of great difficulty, as an immediate reaction to the 1973 Arab-Israeli War and the quintuplication of the price of oil, there was a moment in December 1973 when the people of this country would have done almost anything. It was a great anti-climax and very sad that they were not asked to do anything. If they had accustomed themselves in what seemed to be a very deep moment to do anything they were asked, to ration petrol, to eat less, or be taxed slightly more, at the psychological moment it would have been all right. But they were not asked to do it and the moment passed.
I come back now to the more economic side of the debate. The moment also passed when we might have given birth to an energy policy, and we said so frequently from these Benches, but neither Government produced such a policy. Those failures to do things have also contributed to our present lack of national comprehension and vitality. We now have the present Government—and here I owe the point to the noble Lord, Lord Rochester, but I think it is worth repeating—the Government would find it hard to deny that they are concentrating far too much on who earns what bit of the lesser national cake, instead of turning all their energy, as they must do at this moment, to making the cake bigger. I hope the Government will take this seriously, because the process of concentrating so much on redistribution, whether of wealth or power, wastes time and prevents us from getting on with the important job of recuperating our economic fortunes.
There is one particular difficulty about the united approach to our problems which makes the challenge greater, just as acceptable, but even more daunting. The noble Lord, Lord Robbins, said it was, in effect, embarrassing to be a bore on a particular subject in your Lordships House. But I am now going to be one. This operation has to be carried out in a country where we have to admit that there is a small minority, but a dedicated and powerful minority, who do not wish it to succeed. They wish a different form of politics, a different form of economy, of policy and an economy which I imagine nobody in this
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House accepts. Therefore, the middle, to whom I have referred before, have to be aware of this. They must not be pedantic about it. They must decide that we are not defending capitalism, we are not denying social democracy or socialism; we are trying to find, at a time when the people of our country want it, a middle road which will preserve our democratic institutions and restore our economic fortunes.
As to what we should do now, I must confess myself ready for anything. I find some appeal in the suggestion of the noble Lord, Lord Walston, of a degree of austerity in personal earnings. Economically, it will make little difference; it might create a little unemployment as well as saving a little money, but for its symbolic value it would probably help. But never mind the details at the moment; they will have to be worked out. We must see our urgent task as being to restore our fortunes by as unified an endeavour as we can get. Once again, may I say how grateful we are to the noble Viscount, Lord Watkinson, for giving us the chance to discuss this subject in such depth and with so much real anxiety for our beloved country's future.
8.25 p.m.
Lord SELSDON: My Lords, as is usual in your Lordships' House on subjects of this sort, we have heard many sensible, reasonable and excellent speeches. I often feel, as an "outpatient" to your Lordships' "university", that I have learned much about why we went wrong. However, I am not sure how we are going to correct the situation. I have spoken in your Lordships' House earlier on the divisiveness in our society. I have referred before to the peculiar insect, the atropus pulsatorius—the death watch beetle—and I remember trying to persuade your Lordships that there are three factions involved with a division between all of them—Government, management and the shop floor. One realises that over the past nine months there has been further divisiveness and division, and one feels that the atropus pulsatorius is more like the cockroach, and something of a hermaphrodite, which is multiplying again and again. We see divisions within Government, fratricidal struggles within Parties, divisions among

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civil servants and within industry and management; divisions in the public sector and throughout every walk of life. Almost all of these are, as we have learned, caused by inflation.
We are one of the few nations in the world who have never experienced inflation to its full. We are one of the few nations who do not know at first-hand how destructive inflation can be. We see it start, first of all, with rising prices, something which causes everyone concern. Then it leads on to a feeling of doubt and insecurity. There is the usual demand and cry for leadership, the fear that one's own personal interests are not being looked after by Government. Instead of a feeling of unity, it leads to disunity, to criticisms, even to divisions within familities and households. It destroys societies, many older than our own.
I shall not make what one could call a reasonable, sensible contribution today, for I feel somewhat charged with emotion. For the first time in my life, I feel ashamed of my country and I feel saddened that I can see no way out. Yet we know that the United Kingdom will not sink into a polluted North Sea owned by others. We know there is a moment when the bottom is reached; we know, too, that, in some way of another, Governments can create that moment when we have bottomed and then people start to speak of bottoming out, and the candle referred to by the noble Lord, Lord Soper, the hope, starts to return.
I should not like to go back and try, as an amateur economist, to criticise the economic policies of either of the past two, three or four Administrations. But I should like to emphasise that I do not feel that any Government in the past 10 years has understood the problems of industrial and economic policy. I do not believe, either, that the respected people in the Treasury have fully understood the change which has taken place within the United Kingdom. Most of our earlier policies were based upon a confidence that the United Kingdom could survive on its own. Then people criticised and blamed foreigners for rising prices or the explosion in the price of commodities. Few people realised the effect the outside world had on this country.
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We spoke of the falling or the loss of an Empire. We spoke of our collective responsibility for other countries. Then about a year ago, we realised to the full exactly how weak we had become. Now, for the first time, we are seeing what can come about. All the so-called speculators or, as many would describe them, the rats leaving a sinking ship, are off. People are worried about whether they can survive. Inflation is the quickest way of all to a slow death, and with it comes the political problems. In the past two years, I have visited Western Europe and other parts of the world, and I tend to look on my country from outside. I spend many hours arguing with foreigners that the United Kingdom is not finished, that there is a certain strength of purpose which just has to be motivated by somebody or by some action. We see on the Continent the age-old fear that, if you can destroy the British society and the British democratic system, you have Europe at your feet. The Germans are fearful lest Communism should take over here. These emotionally charged arguments are very serious and very real.
The one thing for which foreign nations have respected us is our political stability. I cannot speak of fighting in the streets or of political revolutions, but already the signs one has seen or read about in other countries are apparent. Maybe the history and stability of our society can stand all this, but without some getting together I feel there can be no real solution. And if there is, as we may expect, an upturn in world trade at some time, our competitive position, as my noble friend Lord Orr-Ewing and others have pointed out, will be very much eroded. It has got worse in the last three months, particularly as regards major contracts made in the Middle East or in the Third World. This question of keeping pace with inflation or quoting in inflationary terms has got home so hard now that in the last few weeks British companies have found when tendering for major projects abroad that they are 15 per cent. or 20 per cent. higher than the Swiss or the Germans, and they cannot hope to gamble on inflation falling.
What I feel could help more than anything is some indication put across to the nation to the effect that prices will

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not necessarily continue to rise at the same rate as they have been rising. You cannot do that in a very short time. The need for austerity is there. Perhaps I might remind your Lordships of the old doctor's saying: "Feed a cold and starve a fever". We had a period of stagnation when the Conservative Government fed the cold rather too much. This lead to a fever, and perhaps the present Government have not starved that fever enough.
The question is not one of increased taxation. I believe it was Bacon who said:
"Neither will it be that a nation or people overlaid with taxation will ever be valiant and martial."
But we have taxation in several forms; and the private individual, because he is becoming used to high taxation, would not expect cuts in personal taxation in a period of austerity. But those on fixed incomes, those who have retired, those who have saved and have done all the things which have made this nation great, are now the weak and under-privileged. They are counting how many years they can afford to live in their house, and wondering whether perhaps they should take out some early insurance policy in the hope that, should they die of despair, their wives would be protected. It is these people who are feeling the pinch; and below them come those who are called by that emotional term "the middle classes".
The middle classes are gradually being wiped out. They are starting to speak; they are starting first of all in the public sector, whether in the universities, the Civil Service or elsewhere. They recognise as a group that they must do something to protect their standard of living. They are, in general, responsible people who do not wish to give up that responsibility. But fear gets into them; they start to talk and they start to worry. They suddenly realise that the nation as a whole is not being austere, and because they did not know the words "wage inflation", for many people it is hard to believe that increased wages in one sector of society can feed inflation to an extent that can destroy our society. They start to worry about this. And at the lower level, where people's wages, because of wage demands, are being inflated and their net take-home pay is rising so that it is more than keeping pace
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with inflation, comes the added danger of the feeling that inflation is good—because people like to feel that they are earning more and more each year.
It is very difficult to think in real terms and there are people now who feel proud that they borrowed hard and bought white goods, washing machines and other things two years ago. They say, "That refrigerator there is worth three times what it was when I bought it." This feeling leads to a further lack of security in management and industry. They ask: "How can people be so stupid as not to realise that by asking for more money in order to protect themselves from the rising prices they feel will come, they are only furthering the ends of those who wish to further inflation and to encourage it." I have this thrust at me all the time when I am abroad. I struggle as hard as I can in my job to bring investment into this country. As I have previously mentioned to your Lordships, we have been fortunate at times in that investment has come in, but those who have invested are always criticising me for having advised them that the United Kingdom could not collapse, or fall apart or that all could not be destroyed.
My Lords, I do not call for a Coalition Government or a Government of national unity; but we have more disunity than at the time of the Election and we have more disunity than we had at the time of the formation of the Social Contract. What is worse, we have now an element which did not exist then—an element of fear, which can lead to panic. That panic, as we know, could destroy our society. Therefore I should like to ask the noble Lord, Lord Beswick, whether, in the short term, the Government might recognise, as other noble Lords have suggested, that some of the policies which they, with their beliefs, believe should be pursued, should perhaps not be pursued at the current time when we can afford so little.
One would like to see cuts made in the public sector. There are many points one could put forward. One would like to put forward some form of co-ordinated plan, but the key lies in explaining this to the nation. We have, I submit, reached a stage where the Government may soon be unable to govern. The Government have already lost the ability to control

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expenditure in this country. I feel that unless something is done on the lines suggested by the noble Viscount, Lord Watkinson, that is, taking a date after the referendum as a date for a rebirth and a new beginning, the country I was brought up to be proud of, and indeed am proud of, may be one that I shall continue to feel ashamed of for the rest my life.
8.37 p.m.
Baroness SEEAR: My Lords, I should like to apologise to the noble Viscount, Lord Watkinson, that unfortunately because of a previous engagement I was unable to hear what I believe to have been a most inspiring opening speech. I should also like, from these Benches, to congratulate a new friend and colleague, the noble Lord, Lord Hampton, on a very impressive maiden speech. The hour is late and the debate has been long and so I shall not detain your Lordships for a long time. I shall resist the temptation to examine the more long-term issues, because, in fact, this debate is not really about long-term issues but about what we can do here and now, in a situation of galloping uncertainty and galloping inflation. Like many other speakers, I do not believe that at the present time the answer is a Coalition or a Government of national unity. I believe that in the long run—and this is all I shall say about the long run—this may come; but it will come on the other side of a change in the electoral system and it will come as a natural consequence of that. Political change being what it is and, in particular, constitutional change being what it is, I fear that it will come far too late to deal with the problems we have been discussing tonight. But it is relevant to these problems because of the point made by the noble Lord, Lord Raglan, and it is one I should like to underline very strongly.
It is the fact that the time scale of the politician and that of the manufacturer are totally out of phase. This is not the fault of the manufacturer, of the economic system or of politics: it just is that they are different. It is this fact which has led to so much uncertainty, as the noble Lord, Lard Raglan, said. One hears on all sides, in discussing this matter with people, that they would put up with almost any system of Government control
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and requirement if there was certainty and stability and they knew where they were. They would accept all manner of what, perhaps, 10 years ago they would have regarded as absurdly doctrinaire requirements, provided they could say, "All right, we accept this: we know that this is how it is going to be for a certain period. It is not going to change." But because of the difficulty of phasing, they are constantly being asked to alter what they do, and it is this that leads to frustration and to a very great sense of loss, uncertainty and economic ineffectiveness. That is one reason for it. This, of course, would be lessened to a very considerable extent if you could have the longer-range plans that Coalition Government, based on proportional representation and following naturally from it, would indeed give you. But that is in the longer run, and it is not the long run that we are talking about tonight.
I will not take your Lordships' time—and it would be very daring of me—to enter into an economic analysis of the present situation. I listened, as we all did, with the greatest interest, and inevitably the greatest anxiety, to the speech of the noble Lord, Lord Robbins, my deeply respected colleague and mentor, and to the warning he gave in clear language with which none of us would quarrel. We would not quarrel with either the way he presented it or the conclusions he put before us. It is on the assumption that, broadly speaking, the House accepts that analysis that I want to turn from a discussion of the basic economic problems and longer-term considerations to what we can do in the here and now. It was the message of Lord Robbins and the message of many speeches here tonight that the sands are running out; that the situation is rapidly becoming worse; that the economic statistics as we read them week by week are statistics of chaos. While there is still in many parts of the country superficially—I believe it to be superficially—a feeling that all is well, money is coming in and, "Why should we worry?" I believe there is also not far from the surface a fear and anxiety which many speakers have mentioned tonight.
What are we going to do in the next—not months, my Lords, but weeks, the minute the 5th June has passed? What are we going to do now to halt this rush

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towards a totally unnecessary economic catastrophe? I underline the words "totally unnecessary". This is not a catastrophe which is being inflicted on us by our enemies or our competitors or our fates. It is a catastrophe we are inflicting upon ourselves and the control of it is indeed within our own hands. We have spoken in this House this evening about what Government should or should not do. What we have learnt over the last years, if we did not know it before—it surely is self-evident—is that in a democracy (this was the lesson we had to learn so painfully in the 1930s) one can do almost anything if one has the great body of public opinion behind one, but practically nothing without that main body of public opinion. This goes for all political Parties. The catastrophe we are facing is before us because we have failed to convince people in this country of what needs to be done.
If politicians have a task it is that of getting across what the situation is and mobilising public opinion behind what needs to be done. It is no use our talking to each other. We have been speaking quite amiably to each other as between the Opposition and the Government Benches this evening, but this helps us not one whit if public opinion as a whole does not shift. So our task is to ensure that public opinion is mobilised behind what we need to do. I am much reminded as I listen to this debate and as I read the newspapers week in and week out, of the situation in the 1930s which most Members of your Lordships' House, as I do myself, will remember well. The storms were gathering in Europe and Britain and the British public refused to see what those evil signs meant—until they were roused to a realisation of the real situation. Once they understood, there was nothing the people could be asked which they were not prepared to do. As I see it, our task is not to debate any longer the steps that ought to be taken in the short run, but to find common ground on which we can fight the common enemy which we have been identifying again and again from all Benches this evening and which we know full well exists.
Of course there are differences between us about the root causes of the situation in which we find ourselves, and of course there are doctrinal differences about
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long-term objectives. But I would argue that there is a body of solid agreement throughout this House—and I believe in all political Parties except for small, extremist fringes—that the problem of inflation must be cured; that unemployment must not be allowed to rise; that we cannot live "on tick" for ever; that we must increase our exports. These are the matters about which there is no disagreement. Surely in the short run, to meet the catastrophe which is coming upon us, it is possible to get this over to the people in this country, so that at last behind Government of any Party there is that basis of public support which at present we so totally lack. Some of us have been going around from one side or the other on the European Market campaigning circus. We have been speaking, on three-Party platforms, to crowded halls. It is possible for politicians to go out into the country and to put the facts plainly to people. If we can do it over Europe, why cannot we do it over inflation? Why cannot we agree a limited programme, so that politicians of all Parties who feel that they can subscribe to it will go out into the country and put it to the people?
There are four things we have to do. First, we have to put over the basic facts. There is not a great deal of difference as to what those basic facts are in the short run, and it is the short run we are speaking about. Secondly, we have to say what at least are the minimum things that must be done in order that we can steer away from disaster. Thirdly, we have to tell people what it is that they themselves can do. I have the strong impression that a great many people would like to be called upon to do something. A few moments ago the noble Lord, Lord Gore-Booth, said that there was a moment in 1973 when people would have responded to a challenge of that kind, and that moment passed. But that moment has not necessarily gone beyond recall. We can do it again now. I believe that if we went up and down the country in three-Party teams, if we could make them—and I believe we can—hold meetings of the kind we are having in connection with Europe, and put forward the facts and a short-term programme of what is needed, especially a programme which demanded action from individual people, things would begin to

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happen—the things we asked people to do. That is important, but what is much more important is that we should begin to get a swelling up of public opinion behind the kind of changes which are needed. And without that growing support of public opinion, based on understanding, no Government can do anything.
Certain things we can ask people to do can be suggested straight away. I think it was the noble Lord, Lord Walston, who suggested there should be cuts in pay. I am not sure that that is a sensible course to suggest at the present time. But what we might suggest is that there should be a special kind of saving to which people could voluntarily contribute—the details could be worked out—and which could be seen to be geared to some way of helping to get Britain out of the situation it is in now. We could be mobilising people to tackle problems of waste and extravagance in their own areas. A great many people are aware of this and would like to find a medium through which they can act against what they see happening and know to be wrong. A programme could be worked out to use people's desire—which it would not be difficult to kindle—to try to get us out of the disgraceful situation about which the noble Lord, Lord Selsdon, has been speaking, with other countries pointing at us and saying how feeble we are in failing to deal with rising prices and how inadequate we are in coping with our problems.
Another point which could be put across to people—and I do not believe it would be too difficult to bring this about—is that the attitude that people are entitled to and must be encouraged to hang on to their job must change. This is a very understandable attitude in the face of rising unemployment, and it is not an attitude lightly to be condemned. However, it is an insulting attitude that men and women should be encouraged to carry on doing jobs which do not really need to be done, rather than that they should be helped and encouraged into jobs which need to be done. I know that your Lordships' House will feel that this subject is rather like King Charles's head, because I am always talking about it. But I want to talk about it again tonight, because it would be a central feature of the kind of campaign which I should like
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to see getting under way in a few weeks' time. Instead of backing the idea that when there is surplus labour because of over-manning people should be encouraged to stay on, we should harness all our resources of training and manpower forecasting to use training as a counter-cyclical device and as a way of restructuring industry.
May I ask noble Lords on the Government Benches this question? It is over a year since the Manpower Services Commission was formed. This Commission was created to deal with exactly the kind of situation which is now upon us. It should be possible for that Commission to be able to say, area by area, where there is surplus manning and the kind of alternative employment that exists in an area, and then to use every resource it can muster to encourage people to move away from the jobs where they are not wanted and, with every encouragement in pay while they are being trained, go into jobs where they are needed. In this way we could use training both as an antidote to unemployment and, even more important, as a way of bringing about the restructuring in industry which we so badly need.
How much restructuring is going on? We know of the problems in the steel industry. What can the Manpower Services Commission tell us about alternative employment in those areas, and about training facilities to prepare people to come out of steel and go into jobs in the export market where they will be needed. There is no money that we can pay to people to retrain them which is too high a price to get them to move. This should be the centrepiece of the reconstruction that we want to take place.
When I was discussing the cost of retraining not so long ago with a trade unionist in Sweden, the reply he gave me was, "Yes, it is expensive, but it is the price which we pay to get our members' support for technological change." If we could get that support so that we do not hang on to the old ways, with all the excessive manpower that that requires, and make people willing to move in new directions, then there is indeed no price we can pay which is too high. Expensive new facilities do not need to be set up by the Training Services Agency. Up and down the country there are training departments which are manned and

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equipped and which are not busy at the moment because people are not taking on labour, but into which people who need retraining could be put at minimum cost. All we need to do is train—
Lord BESWICK: My Lords, will the noble Baroness explain what she means when she says that they can be put there? There are vacancies in every training centre I have asked about, but the people will not go. The money is offered and the incentives are there. What more can we do?
Baroness SEEAR: My Lords, obviously that is a good question. This is part of the campaign which we have to conduct. We must get people to understand the facts. They do not understand them at the present time; they do not know what we mean by over-manning; they do not know what we are trying to do through retraining. We must do this at the grass roots level and I believe that it could be done on a three-Party basis. I know that my Party would back this up to the hilt, and we must get it across to people. When one talks to individuals they say, again and again, "Yes, I see. I did not realise it was like that." We are not getting down to the grass roots level.
Of course, we have to counter decades of propaganda in the other direction, but it is not too difficult. Politicians in all Parties know that in the past it has paid to trust the good sense and honesty of people in this country. I am sure it is unnecessary to appeal to noble Lords on the other side of the House to have that same trust and get ourselves out of this quandary, and to bring about this change in attitude and back it with the various devices which I have been talking about, so that change will spring from the grass roots and bring about the recovery that we all seek.
8.57 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I hardly like to intervene between the genuine attempt to be constructive on the part of the noble Baroness, Lady Seear, and the rather sombre debate in this House—leavened by a most excellent and sincere maiden speech by the noble Lord, Lord Hampton. We have had almost
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universal agreement—in fact, the bell of the noble Lord, Lord Soper, has been ringing pretty continuously throughout this debate—on the immediacy of the danger of inflation, but we seem unable to communicate this fear, which is so widespread among us, to the mass of the people of the country. We have had very impressive contributions from the noble Lord. Lord Robbins, and the noble Viscount, Lord Amory. The problem of communications was alluded to most effectively by the noble Lord, Lord Gore-Booth, and latterly by the noble Baroness, Lady Seear.
In varying degrees we have been expressing agreement that at this time in our country's affairs we cannot afford to indulge in Party political posturing in the face of a crisis, which we have described as a mounting crisis but which many noble Lords have described as a crisis that is already with us; therefore, we cannot be said to be getting into a crisis. We identify a certain disillusionment in the country with the politicians, who will undoubtedly be judged hardly if they fail to rise to the problems which face them at the present time. What the noble Lord, Lord Gore-Booth, called the Tweedledum and Tweedledee actiivties, which are so widely misunderstood by people outside, are quite friendly debating points here.
Also it is true to say that there has been fairly widespread agreement on all sides that a Government of national unity is not likely to happen at this juncture, and that even if it were likely to happen it might not be the proper solution. We must express our gratitude to my noble friend Viscount Watkinson, an ex-senior Minister and a captain of industry, who has performed a real service this afternoon in calling attention to our plight and issuing a clarion call to us to show ourselves statesmen by seeking a common purpose and unity, however difficult we may find its achievement. In spite of the misgivings which have been expressed by the more gloomy of noble Lords, many of us believe that there is in fact a sufficient unity of purpose to enable us, as the noble Viscount, Lord Watkinson, put it, to seek to move the industrial and economic debate on to a more neutral ground. Perhaps the neutral ground is an expansion of the social compact.

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I was somewhat surprised by the rather touching defence made by the noble Lord, Lord Hoy, of what has become known as the "Social Contract". We have talked today about the value of the underlying approach inherent in the social compact, and the possibility of expanding the concept to include those people who should never have been left out in the first place. Certainly on this side of the House it has been regretted that there have been attempts on the part of Members of the Government to suggest that the social compact was something other than what it is. The one thing that it certainly is not is a contract, because a contract implies some sanction against those who break it and there has been pretty general agreement today that sanctions, or force of law, must not be brought into this kind of negotiation. Therefore, our objection to the overplaying of the term ""Social Contract" is the subtle difference that there has been between the "social compact" and "Social Contract". I have never discovered when the two words were changed.
Nevertheless, I should like to suggest that the neutral ground that we are seeking may possibly be based upon the acceptance of some simple, economic realities which are in danger of being submerged in the rising tide of unemployment. There are many ways of expressing this, but I believe we should recognise that the focus of the thinking in an industrial society should be upon the customer and the consumer. The Institute of Marketing defines its role as "the creative function which promotes trade and employment by assessing consumer needs and initiating research and development to meet them"—rather useful activities just at the present time. A book published in 1972 for the British Institute of Management says:
"Business has no meaning unless to sere and satisfy a customer—at a profit".
This point was raised, I think, by the noble Lord, Lord Rochester. The book goes on to remind us of a phrase that the noble Lord, Lord Robbins, said has become something of a truism—"nobody owes us a living". The quality of our livelihood is the issue that we are discussing here. This applies to all sorts of industry and all sorts of activity and, if I may say so, I was particularly pleased to find the noble Lord, Lord Walston, making a
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plea for what is now sometimes called "small is beautiful". That is a point that I have frequently urged on your Lordships over the years, and I was very glad to hear the same sentiments being expressed by my noble friend Lord Limerick.
I happen to go so far as to believe that, for all its many and manifest imperfections, the market place is basically the best and the fairest arbiter for the allocation of resources. Nevertheless, with varying degrees of enthusiasm and differences of emphasis, we have all come to accept that we are going to have to live in a mixed economy. To me, this means finding ways of working in harmony between the State and private enterprise. By no stretch of the imagination could the recent months be described as a vintage year for free enterprise. I think it was the noble Viscount, Lord Younger of Leckie, who used the expression, "They have failed to forestall political intervention by putting their own house in order."
Nevertheless, I think it is also fair to say that part of the blame rests with Government—both Governments. At least a contributory factor has been the failure of Governments to do the essential job of providing the two basics which industry requires—the framework, and the safeguard for industrial and commercial activity upon which our prosperity depends. I do not think I need to explain in detail what I mean by this. But it occurs to me that if you are driving a car over a rough and difficult road and you find you are making very little progress, it is, at least, worth considering whether you should do something to the road rather than tinker with the engine in the motor car.
On the other side of the coin, we are in danger of making disastrous mistakes, I believe, based on two misconceptions: the one misconception I have already referred to, which is the failure to identify the purpose of enterprise as being customer orientated. Enterprises conducted for the narrow benefit of those who work in them will inevitably fail. This is not for a moment to deny the essential contribution that can be made by involving the workers in the direction of the businesses, provided always that they understand the objectives and the obligations that they take on in assuming such

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responsibilities. It is all very well to say—and we can feel entirely with the noble Lord, Lord Soper—that 2 million unemployed is, indeed, a desperate situation, even if we have not personally experienced it. But what we have to be extremely careful of is that we can be seduced by the argument of saving unemployment today, and we have to watch that we are not running into creating a much wider universal unemployment throughout the country in the long run. I have a feeling that this was one of the points that was running through many of the remarks made by the noble Baroness, Lady Seear.
My Lords, the second danger lies in the nature of Government involvement. I am in danger of being provocative, but I do not intend to be so. I am trying to put forward the philosophy of management. The point was made by the noble Lords, Lord Rochester and Lord Raglan, and the noble Baroness, Lady Seear, that the time scale in the thinking of Ministers and Ministries is not appropriate to running industries. This is also true of the training, background and experience of people, of Ministers and Ministries.
The record of the nationalised industries is not reassuring, as was pointed out by the noble Lord, Lord Walston. They show a poor return on capital and, regrettably, they have been the leaders in giving in to the pressures of wage inflation. We have been told this afternoon that the Government-controlled industries—in fact. I think the Government themselves—are now disbursing 60 per cent. of the national income.
Lord RAGLAN: My Lords, if the noble Lord will forgive me for interrupting him, I think he would accept that although at the moment the nationalised industries are not doing very well, if one might put it that way, in granting wage increases, the workers in those industries did much worse than others during the statutory wage freeze, and during the previous Government's Phases 1, 2 and 3.
Lord STRATHCONA and MOUNT ROYAL: My Lords, I think this is entirely possible. But the plain fact, surely, is that we can now see the present wages inflation, and we have argued the point. I am not going to argue in front of the economists here whether wages are the primary cause of inflation, but I
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think everyone would agree that they are a contributory factor. It is fair to say that in recent years it has been the Government's control and influence on these industries which has led the way all down the line. I am sorry to say that. I do not think we are going to gain anything by not facing up to the fact. One talks about the commanding heights of industry; we seem to be talking about something more like the unfathomable depths of bottomless pits when we are talking about many of the industries we have taken over. In the face of this kind of record, the arrogance displayed by those who believe, with no track record whatever, that they can walk in and succeed where all the City institutions and all the captains of industry have failed, seems to me quite breathtaking. I am not wishing them anything but the best of luck, but I do admire their brass! If there was this curious fund of talent, one can only say it has been remarkably well hidden under a bushel all these years.
So, rather than pursue such courses, I urge the Government to heed the noble Viscount, Lord Watkinson, when he refers to the irrelevance of violent political dogma. I appreciate this may be considered contentious, in that concentrating on these kind of cures constitutes a change of policy for the Government. But let us assure this Government that we shall give them our support in the difficult task of curbing the wild, the irresponsible and the Luddites wherever they are found, and in seeking a path of consensus out of our present difficulties. The initiative is theirs. A number of suggestions have been made this evening. Some noble Lords have pointed out that there is even a glimmer of the light of the noble Lord, Lord Soper, a glimmer of oil at the end of the tunnel. But with these bright prospects before us in 1980, I believe it will be a tragedy indeed if we fall into the quick-sands before we get there.
9.13 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, it is now 6 hours and 16 minutes since the noble Viscount, Lord Watkinson, initiated this most acceptable and most helpful debate. If I were to follow my normal practice and try and touch, even in the most light fashion, on what everyone has said, I would break

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all the records for a closing speech. I hasten to assure the noble Viscount who, like myself, has missed only one speech and part of another, that I do not intend to do that, because that would not be the proper treatment to give a debate of this kind. Its value does not lie in the remarks made by the Minister replying to the debate, but the use which the Government will subsequently make of all the contributions which have been made here this afternoon and evening.
Before I go on to the content of the debate generally, I should like to join all those noble Lords who have congratulated the noble Lord, Lord Hampton, on his maiden speech. It is a custom of the House that we say these things. It is the good fortune of the House that we very seldom have to make congratulatory remarks to maiden speakers with our tongues in our cheeks, and we certainly have not had to do this in his case. I join with all those who have congratulated him in expressing the hope that we may hear him regularly and frequently in our debates. I do not know if it is the example which he set (he certainly is here at the end of the debate) but through the mathematics of my noble friend Lord Melchett I am able to inform your Lordships that of the 23 speakers 19 are still present in the House at this time. I think that is perhaps one of the finest compliments that can be paid to the noble Viscount, and to the value of the debate he has initiated.
May I, as my noble friend Lord Beswick said in what I regarded as his most excellent speech, say that I can accept without reservation a very great deal of what the noble Viscount said in putting the Motion before your Lordships. Like him, like the noble Lord, Lord Campbell of Croy, and others, I am glad particularly of any coming together of the CBI and TUC, the prospects of which, or the actual start of which, the noble Viscount referred to. I am particularly glad of that, because if from such contacts there emerges any common view to be held by the CBI and the TUC, obviously this is a view which no Government could afford to ignore. If we are to get any degree of consensus, if it can start in that quarter its accomplishment will come the more quickly and be the more lasting in its effect.
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I cannot, of course, go along totally with the remarks of the noble Viscount, because although he tried very hard indeed to wear the hat of the industrialist, inevitably it slipped at times and we were left with the unadorned head of the politician. When he, for instance, referred to the fact that the views of the CBI must not only be sought, must not only be listened to, but must be acted upon, I got the impression that action was not to be acceptable unless it was action along the lines for which the CBI asked. If the Government and the CBI were the same body that would be very easy to accomplish, but sometimes the CBI's views are followed by action, and from their point of view regrettably followed by action which they do not want. In those cases I would suspect that they would have preferred inaction rather than otherwise.
A number of noble Lords asked for the abandonment of divisive measures and the establishment of neutral ground. If this means that there is to be no change, then obviously, of course, we are to get a situation which might be very acceptable to one Party but not to another. But that was not what all of the noble Lords who called for this had in mind. For example, the noble Earl, Lord Limerick, in his, if I may say so, most acceptable speech, started off by saying, or very early in his remarks said, "Of course there must be change; we must accept change", and then went on to say, "but, of course, the circumstances with which we are faced may limit the amount of change which is possible at the present time". The noble Lord, Lord Rhyl, asked for change in another way altogether. He invited the Government to abandon all ideas of nationalisation and to cancel all the Election promises that have been made. I do not know just exactly which particular ones he had in mind. I am quite certain that the old age pensioners would not be particularly grateful to the Government if we reverted to the pre-Election situation. I am not certain that abandonment of many of the things the Government have done would meet with even a modest consensus.
My noble friend Lord Soper pointed out that, as a Socialist, he could not accept that a neutral ground meant the abandonment of any progress at all towards a socialist system. So we have

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a difficult situation to face if we are to find any degree of neutral ground to occupy. I should like to point out what my noble friend Lord Beswick said in his speech, that we will make no progress in this direction if we do not take fully into account the changes of attitude which have arisen among the masses of people in our country. He referred to the middle and professional classes and what used to be described as the working classes—now, perhaps, a somewhat exclusive body. These changes will not allow us to go back to the kind of solutions that once were possible.
The Government are committed to a mixed economy, notwithstanding the views which are sometimes exaggerated and which are totally erroneously attributed to particular Ministers. But, if there is to be a successful mixed economy it is essential that the private sector should increasingly accept its social responsibilities. It must not be just a good example set by an enlightened minority. There are companies in this country which perhaps set a good example to the nationalised industries, but there are far too many who act only when forced to do so by legislation. If we are to have a successful mixed economy, there must be a willingness by all sections of industry, public and private, to recognise that their responsibility is not merely to shareholders or employees but to the community at large.
Since capitalism started, it has been accepted that to protect the value of money capital was perfectly proper, and that in an age of inflation with high interest rates it was dreadful if the rate of inflation meant that people were lending their money at a negative rate of interest. We still accept that that is a proper argument. But more and more people in industry—the people on the shop floor, the professional people—are saying that there is a corollary to this argument in that their labour capital also has a value which should be preserved. It leads us to the position that if we were to accept the complete concept of a capitalist, profit-earning society the only assets of the community which would have a perpetually declining value are human beings. If we are to have a degree of acceptance of whatever change
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is necessary, we must be able to carry the great mass of the people with us. The noble Viscount, Lord Amory, said that no Government could succeed in policies if they did not have the backing of the consensus of public opinion, a view which was repeated by more than one noble Lord. I noted particularly that my noble friend Lord Raglan and the noble Baroness, Lady Seear, made this point.
Before the debate started, I was disappointed that when there was a reference to the Social Contract having had less than complete success it was greeted by a certain amount of laughter from the Opposition Benches. I believe that that illustrates part of what is wrong with us. The Social Contract, whether it is a compact or a contract, is an agreement to attempt certain things between the trades unions and the Labour Government, or the Labour Party as it was before we became the Government, and it was never expected to be 100 per cent. successful.
I wish there was less emphasis—and it certainly did not come from the noble Viscount in his remarks—in the media on every failure of the Social Contract. It is the old story—bad news is far publication, while good news must find its own way into the people's knowledge. It is a fact that the great majority of the decisions that have been taken can be held to be within the confines of that agreement. It is obvious that it can be very much improved and if, as a result of the coming together of the CBI and TUC, there could be included in their discussions ways and means of widening and strengthening the Social Contract, that would be a very much more worth while contribution to reaching that mutual ground than the criticism of every failure which the Social Contract attracts.
Another subject which was mentioned by many noble Lords is inflation, and it was not surprising that there was total agreement on this issue. In the absence of my noble friend Lord Soper, I can say that inflation is like sin—nobody is prepared publicly to advocate it, but an awful lot of people enjoy the fruits of it. Unfortunately, this is the situation we are now in regarding inflation. The noble Lord, Lord Robbins, said—and I agree with him—that we must not expect the

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process of industrial regeneration to produce a short-term economic miracle. The Government have always envisaged the development of their industrial policies and the establishment of a new co-operative spirit in industry as a process which must inevitably stretch over a period of years.
The noble Lord's view on the dangers of a sinking exchange rate was an echo of that made the other day by the Chancellor of the Exchequer, who stated that he did not wish to see the pound depreciate further. He stressed, as did the noble Lord, Lord Robbins, the inflationary consequences, but there were a number of difficulties in the noble Lord's analysis which I must mention. To begin with, while inflation attacks competitiveness, it is still true—this will come as a surprise to some noble Lords—that we are now more competitive, 9 per cent. more so, than we were in mid-1972, when sterling was floated. Secondly, a major recovery of world trade is expected next year and this could boost our exports and help swing our trade balance more quickly towards equilibrium. Thirdly, the inflationary effects of a depreciating pound do not all come through immediately, except for foodstuffs; the lag before final prices are effected can be spread over several quarters.
I shall say more about the remarks of the noble Lord, Lord Robbins, but at this point I am reminded, by what sounded like a mutter from the noble Lord, Lord Orr-Ewing, that I was appalled at the opening of his speech, not because I disagreed with his remarks, but because for the first time I found myself agreeing with what he said when he spoke about the competitive position of the country as regards long-term contracts. I do not think we can get away from what he said on that, and probably because he was thinking about that he did not particularly appreciate what I said about our competitive position. I could not agree more with what he said about his views as to the effects of unemployment in dealing with the situation. We reverted to our normal position quite quickly, because I agreed with very little that he said thereafter, but those were two complete points of success for him or failure
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for me, whichever way one likes to look at it.
Lord ROBBINS: My Lords, I wonder whether the noble Lord could elucidate a little further as to how he measures our competitive position.
Lord HUGHES: My Lords, I did not measure it at all. It is the information which has been given to me by my technical advisers, who include people who are perhaps not necessarily of the distinction as economists of the noble Lord, Lord Robbins, but who are of the same type.
Lord HOY: They are much more common.
Lord HUGHES: My Lords, to return to what was said by the noble Lord, Lord Orr-Ewing, I believe I am quoting what my noble friend Lord Soper said. The noble Lord brought himself to the verge of apoplexy in error. He exaggerated the weakness of the pound and the speed of the inflationary effort and he under-estimated the strength of our competitive position and the prospect of world recovery. If the noble Lord is in error in that, he is in error, too, in bringing himself to the point of, as I understood it, advocating a crisis pause in incomes. I should not wish in any way—for it would be totally wrong—to minimise the seriousness of our plight. However, we must think very carefully about plunging towards a statutory policy, be it pause or freeze. In my judgment, the recollection of early 1974 still weighs far too heavily in the minds of people overseas. I can think of nothing that would harm us more than a lurch back to that situation.
I should like to refer again to the speech of the noble Earl, Lord Limerick, and to his reference to the Association of British Chambers of Commerce. I am sorry if he thought that his approach to the Prime Minister did not receive as enthusiastic a response as he would have wished. I shall make a point of particularly directing the attention of my right honourable friends the Chancellor of the Exchequer and the Secretary of State for Industry to what the noble Earl has said today. It may be that in these discussions the Government too readily accept that if they

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talk to the CBI they have spoken to everybody on that side, just as if they speak to the TUC they have spoken to everybody on the other side. It might be worth while particularly drawing the attention of my right honourable friends to the remarks of the noble Earl. That I undertake to do. Having said that—
The Earl of LONGFORD: My Lords, if my noble friend is approaching his peroration, as he has indicated, does he propose to say anything about the suggestion which has been made by several noble Lords, of whom I was one—but only one—that there should be some voluntary cut in top salaries of one kind or another?
Lord HUGHES: No, my Lords. What I was about to say as a pre-peroration was that the best response which I could make to the noble Viscount, Lord Watkinson, and the most fitting response I could offer to the way in which your Lordships have taken part in the debate would be to make certain that all my colleagues in Government have their attention drawn to the many suggestions which have been made in the course of the debate. I have no doubt that when that is done they will look to see what my noble friend Lord Longford has said, as well as what other noble Lords on this side have said. They can, of course, be assured that their remarks will be looked at. However, the nature of the debate has been such that we can be quite certain that my colleagues will not be looking at the suggestions from one side of the House only.
My final point is on training. A number of noble Lords spoke about the value of training and my noble friend Lord Beswick intervened to point out that, regrettably, many of the places available were not being taken up. The noble Baroness, Lady Seear, suggested a campaign—a non-Party or an all-Party campaign—to get people to undergo training. One difficulty in this is not necessarily in getting people into the training places, but rather what happens after that. The difficulty is that they are training for jobs which are in other areas. In far too many cases the jobs for which they are training are not in the area in which they live. They are faced with the task of finding a new home where the jobs are waiting, but sometimes there are housing short-
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ages in those areas. My noble friend Lord Beswick during a meeting raised the point of why the places were not taken up. One trade unionist said that it was found that this difficulty was a contributory factor to the break-up of families in cases where a man began training, then went away to get a job in another area, and a year or so later was still unable to find a new home for his family where he was working.
I had an approach not very long ago from an officer in your Lordships' House. He asked me to try to find him employment back in Scotland, because he had been unable to find a home down here. He liked his job, but he saw no prospect of his family being able to join him. This problem will not be solved merely by providing training, and I should like to take up what the noble Baroness has said about this. We must find out the ways in which we can follow up the training to ensure that all the places can be taken up and that more and more people can be trained to fill the vacancies which exist.
My Lords, I would have done the noble Viscount a disservice if I had spoken longer than this. But on behalf of the Government I wish to say that we think it has been a very useful debate and we shall do our best to extract the maximum advantage from it for the people of this country.
Lord LYELL: My Lords, before the noble Lord finally sits down, could he possibly—
Several Noble Lords: Order, Order!
Lord LYELL: My Lords, before the noble Lord finally sits down, would he, perhaps, enlighten me on one aspect of his speech which came quite early on? I think I was quite clear in understanding that he was pointing out that he wished to see private industries show a slightly greater social awareness. Could the noble Lord possibly stress that the Government are seeking to prove, through the nationalised industries, that they, too, have a slightly greater commercial awareness, because some of us have been a little worried by that in recent weeks?
Lord HUGHES: My Lords, it remains the objective of the nationalised industries that, one year with another, they should endeavour to match their incomings to their outgoings. That still remains Government policy. What will not have escaped the attention of the noble Lord, Lord Lyell—he being an accountant—is what the Chancellor had to say about the diminution of subsidies to the nationalised industries, a policy which received a very considerable impetus under the last Government.
9.39 p.m.
Viscount WATKINSON: My Lords, I wish to add my congratulations to those already extended to the noble Lord, Lord Hampton, on his maiden speech, and I shall come back to this in a moment. I am very grateful to noble Lords—so many of whom have been kind enough to stay to the end of the debate—for supporting me. I was nervous about introducing this subject. It is a very difficult one to handle, and one is very anxious these days not to start a debate that creates an unhelpful, rather than a helpful, attitude. I am most grateful—more grateful than I can say—to every noble Lord who has spoken.
I now return to what the noble Lord, Lord Hampton, said. He mentioned something which is not a very new saying. He said that it is better to have tried and failed than never to have tried at all. I am always very upset myself that your Lordships' House does not receive the mention in the media that I believe we so often deserve, because I think that we talk sense. I must not say anything about the other place. But, certainly, I think we talk sense up here, and it is very sad that we do not get the coverage in the media that we deserve, May I say to my two noble friends on the Front Bench here, and to the noble Lords, Lord Hughes and Lord Beswick, who could not have been kinder in response to what I have tried to say, that I think every noble Lord has tonight tried, in his own way, to alert our country to the dangers which we all know we face. We could not have tried harder—let us hope that somebody is listening. Thank you once again for being so kind in what I felt was a difficult debate, but one I think which has turned out so well. My Lords, I beg leave to withdraw the Motion.
Motion, for Papers, by leave, withdrawn.

PLYMOUTH CITY COUNCIL BILL [H.L.]
9.42 p.m.
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I beg to move that the Bill be read a third time.
Moved, That the Bill be now read 3a.—(The Earl of Listowel.)
On Question, Bill read 3a.
Baroness VICKERS Baroness VICKERS moved Amendment No. 1:
After Clause 28, insert the following new clause:
Information as to scale or basis of charge
"(1) The operator of a private hire vehicle which is licensed by the Council under this Act shall keep prominently displayed at all places in the city at which he invites or accepts bookings information as to the scale or basis of the charge for the hire of the vehicle and shall ensure that such information is made available to any person booking the vehicle.
(2) If any person knowingly contravenes the provisions of this section he shall be guilty of an offence."
The noble Baroness said: My Lords, first may I express my gratitude to the noble Earl the Chairman of Committees for kindly agreeing that this debate should be held tonight. After the great debate to which we have just listened this may appear to be rather an anti-climax, but it is very important to the City of Plymouth. I understand, my Lords, that you may be adding to history tonight for allowing this debate, as there has not been one on these lines since 10th July 1900, 75 years ago.
My reason for being anxious to have this Amendment accepted is because of the rather special circumstances appertaining to Plymouth. This city is in the unique position of being a busy commercial and holiday centre and a focal point for military activities. Furthermore, many small railway stations near Plymouth have been closed, and therefore distances for licensed taxi carriages have been greatly extended. The many small firms which have been established—I regret to say almost overnight, especially in the dockyards area—make no attempt to keep within the law. The main purpose of the Bill is to give the city council some

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control over the large number of private hire vehicles which operate in the city and which are believed to exceed 400 in number. These vehicles carry fewer than eight passengers for hire or reward, with the services of a driver provided. There has been a very rapid growth in the number of these vehicles and, apart from the provisions of the law with which the ordinary motorist is obliged to comply, they are not subject to very strict statutory restrictions. In fact I have been informed by the city solicitor that periodically reports are submitted to his office by the police that in many cases they have no MOT certificates or insurance certificates.
There have been many complaints to the council from persons hiring the vehicles of their failure to honour bookings and about fare charges, and complaints by taxi drivers which in my opinion have some justification because of the unfair competition, since the taxi drivers are subject to statutory control. The control of taxis and their drivers, as I am sure your Lordships will know, is contained in the Town Police Clauses Act, 1847, which, by the incorporation of the Public Health Act of 1875, applies to urban areas such as Plymouth. As your Lordships will realise, these Statutes are quite outdated as they really applied to horsedrawn vehicles. This has been recognised in another place by the Government and on 14th April 1975, column 25, in reply to a question Dr. Summerskill answered Mr. Ron Lewis who asked the Secretary of State for the Home Department if he now intended to introduce legislation to bring up to date the law in relation to taxi carriages and to control the activities of private hire operators, and when the promised consultation paper on this matter would be issued for the local authority associations. The answer was:
"I accept that there is demand for legislation on this subject and we are in process"
—I make that remark because it does not seem to have got very far—
"of preparing draft proposals. I cannot at present say when we shall be in a position to circulate the consultation paper to the local authorities association and other interested bodies."
That does not seem to hold out a very great deal of hope.
The Bill also has some provisions to bring the control of taxis up to date.
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It seems to me to be odd when, in the Liverpool Corporation Act of 1972 in Clause 28, we have a similar clause to the one that we wish to have in our Bill where it says:
"No operator of a private hire vehicle which is licensed by the Corporation under this Act shall invite or accept a booking for such vehicle, or control or arrange a journey to be undertaken by such vehicle, without first making available in writing, or giving orally, to the person making the booking information as to the basis of the charge for the hire of the vehicle."
This is what we are asking for. The Lord Chairman in his wisdom did not think the word "orally" was a sufficient safeguard. But it is already in previous legislation. I should also like to quote from the Maxwell Stamp Committee, page 81, paragraph 7.4 which reads:
"It is clear, however, that it is desirable that any potential user of a private hire car should be able to know precisely"
—and this is what we are asking for—
"the basis of charging, before or at the time he books the vehicle, and moreover, that he should be able to find out the method easily and without lengthy questioning, and that the method should be easily comprehensible. Our researches have shown that these conditions are currently by no means universally satisfied. We therefore recommend that each operator should be compelled to declare his basis of charging in his advertising literature and that it should be freely and fully available in writing to passengers and enquirers."
This is supported by another remark in that document on page 131, paragraph 69:
"However, each private car operator should be required to declare in his advertising literature his basis of charging, which should be freely and fully available in writing to passengers or enquirers."
Nothing can be clearer than this Report. I gather that the Bill has been considered with great care by the Home Office and the Lord Chairman of the Council—and I thank them for some improvements to the Bill—but, unfortunately, the Committee struck out two clauses, Clauses 29 and 30, in the original Bill, and in my opinion they made an unfortunate change in Clause 6. The report of the Home Office on this Bill says:
"It provides for licensing of hackney carriages and private hire vehicles and their drivers and the Secretary of State sees no objection in principle to these provisions."
This included the two clauses which have now been eliminated, Clauses 29 and 30. I understand that Clause 29 was

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considered defective by the Unopposed Bill Committee, because it was stated it would be difficult to prove that all the information had not been given. This is very odd, considering it had been agreed for the Liverpool Corporation Bill in Clause 28. It stated there, in regard to the charges:
"… without first making available in writing, or given orally…"
That is all we were asking for and it has now been cut out. Why should it be considered satisfactory for Liverpool and not workable in Plymouth?
So I submit this Amendment. What is now proposed is that a scale or basis of charging should be displayed where bookings are taken, that information should be available and should be available to the person booking the vehicle. It could be done either orally or by providing a leaflet in the vehicle. It does not necessarily have to be given at the time of booking. You just ring up and book and there is no time to discuss the full details. But there should be something that the hirer could have on demand, so that if there were excessive charges he could have a right of appeal. If necessary a hirer can take the driver to court. It would give the opportunity to check if someone felt he was being overcharged. Furthermore, people would be given far more security when they hired a car.
I speak from personal knowledge, having had many complaints over the years when I represented Devonport and I, too, have been charged many times completely different rates for the same journey. All I want to do is protect not only the local residents but the holiday visitors, especially the many men and women of Her Majesty's Services, many of whom are very young indeed, when they come for their training at the naval establishment at Torpoint. I hope it will be agreed that the word "Content" can be given in regard to my Amendment. I beg to move.
9.25 p.m.
Lord MELCHETT: My Lords, I think I should respond briefly to a couple of matters in regard to which the noble Baroness mentioned in particular the Government Department involved. She said, I thought in slightly uncharitable terms, that the Department had plans for
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the future, but they were of such a vague nature they were not to be taken into consideration at all. That seemed to be the implication of what she was saying. The Government hope to circulate the consultation papers fairly soon. Where the only major area of uncertainty arises is in that no Government Department can be certain when Parliamentary time will be available for the introduction of legislation of this sort. While the Government Department concerned may approve of this Bill in principle, it would be unfair to say they approved of every clause in detail. I do not think it would be fair for the noble Baroness to pray in aid Government support for the particular clause she is moving in this Amendment.
9.53 p.m.
The Earl of LISTOWEL: My Lords, I should like to say two things about this Amendment, one with pleasure and one with regret. The first is to welcome very warmly the interest which the noble Baroness has shown in this Bill promoted by Plymouth City Council. As the House will know, she represented the Devonport division of Plymouth for a very long time, from 1955 until she came to this House, and she brings with her long experience and great knowledge of local problems and conditions. I can assure the noble Baroness that the House will always listen with interest and respect to anything she may have to say about the affairs of Plymouth.
The second thing, which I say with much regret, is that I cannot recommend the House to accept the Amendment of the noble Baroness. There are two main reasons why this Amendment is unacceptable. The first is procedural, and I am sorry to have to labour this point but it is of some importance. This Amendment raises a principle of considerable importance to the conduct of the business of the House. The procedure of both Houses of Parliament is designed to relieve the House as a whole of the necessity of hearing argument and evidence about the merits of the detailed provisions of a Private Bill. For some centuries this responsibility has been delegated to Committees and, were it assumed by the House, it would constitute a fundamental and, as I am sure your Lordships will agree, a very time-consuming change in accepted procedure,

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which, even if it were made, would not enable the House to discharge its responsibility, because of course the Promoters of Private Bills cannot appear, evidence from witnesses cannot be heard, and barristers cannot appear on the Floor of the House.
From this premise stems the main objection to the Amendment of the noble Baroness. Its purpose, as I understand it, is essentially to restore with arguable improvements—which the noble Baroness has argued with great skill—the effect of Clause 29 which was in the Bill when it was deposited, and subsequently disallowed by the Unopposed Bills Committee after hearing argument and evidence from the Promoters. It is contrary to the normal practice of the House for Amendments of substance to be moved on Third Reading of a Private Bill, whether or not to nullify Amendments made in Committee. The usual procedure in relation to Third Reading Amendments, which are normally drafting or consequential Amendments, is set out at page 160—I will not weary your Lordships by quoting from it—of the Companion to our Standing Orders. From what I have just said, the House will appreciate the procedural ground on which I am reluctant to recommend acceptance of the noble Baroness's Amendment.
But I am afraid I am no less unhappy about the substance of the Amendment, and this is my second ground for objection. The Bill, as deposited, required an operator of a private hire vehicle to make available to his client information as to the scale or basis of the hire charge, whether asked for or not. The new clause proposed in the Amendment goes further, and requires the operator of the service to keep prominently displayed at all places in the city at which he invites of accepts bookings, information as to his charges, and also to ensure that such information is made available to any person booking the vehicle.
In my view, this imposes on operators of hire cars an obligation that goes beyond what was required in the original clause when the Bill was deposited for public inspection and general information. Such a provision, which places increased obligations on a class of persons affected by the Bill, would normally be open to Petitions of Objection. It is too late, of course, at this stage of the
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Bill to admit such Petitions and, therefore, these persons, if this Amendment was agreed to, would have no opportunity to petition against the Bill. The new clause would also impose an obligation on a private hire vehicle operator to display charges at all places where he makes bookings, and might therefore include places such as the premises of the local tourist office, over which he, the operator, would have no control.
But I have a good deal of sympathy with the noble Baroness's contention—I am not sure whether it was made explicitly tonight, but I am sure it is a contention that is in her mind—that the public interest requires a reasonable degree of control over the operators of private hire vehicles. In consequence of the 1972 Local Government Act, it should be a duty of the central Government to enact, by way of public legislation, those provisions in private Acts which are generally desirable for the country as a whole. I am sure that the control of private hire vehicles is a problem common to a large number of local authorities and, indeed, I have come across it already in more than one of the Private Bills that have come before me this Session. Therefore, this is a matter that should be dealt with by the general law. I was glad to hear from the noble Lord who has just spoken that it is at any rate present in the mind of the Government. The provisions in this Bill relating to hackney carriages and private hire vehicles should be the subject of public legislation at the earliest opportunity, so that the law relating to the operation of these services may be the same for all parts of the country. I am grateful to the noble Baroness for having drawn attention to the need for a change of this nature in the general law.
9.59 p.m.
Baroness VICKERS: My Lords, I am grateful to the noble Earl for, so to speak, "softening the blow", but it is unfortunate from my point of view that the Amendment has been turned down on two different grounds—procedural and substance—and, of course, with that kind of clause we could not submit the same clause again, as the noble Earl will know. But I suppose it may be of some use in the future to other Corporations who are to produce Bills, and if you can get action, as was mentioned just now, which

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is generic to all local authorities, this would also save the time of Parliament and save your Lordships a few headaches, perhaps, in having to make decisions.
I should like to make one further point. It seems to be a very difficult procedure to have to undertake. A Bill such as this, concerning a city council, comes before the House unopposed, and a city is obviously not going to present a Bill and then want somebody to oppose it. So then it goes to the Committee on Unopposed Bills. I do not wish to be ungracious or rude to the noble Earl, but there is only one person on the Committee. This seems to me a very difficult job for the one person on the Committee. He has his advisers and there is no chance in Committee to take a vote on different points, the one person, regrettably, having to decide. I presume that his advisers think one way or the other and try to persuade him, rightly or wrongly. He does not have to take their advice but he takes their opinion.
I should like to put on record—it is perhaps rather bumptious of me to do so, as I am a fairly new Member of the House—that this is not perhaps a very satisfactory way of dealing with some of these Bills. I therefore regret that I am not going to get the word "Content"; and I will now ask for leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
The Earl of LISTOWEL: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Listowel.)
On Question, Bill passed, and sent to the Commons.

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  PREPARATION OF LEGISLATION COMMITTEE REPORT