Sitting of 22 June 1976

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

  BRITISH TRANSPORT DOCKS BILL
  Order for Third Reading read.
  Queen's Consent, on behalf of the Crown, signified.
  Read the Third time and passed.

  FOYLE AND LONDONDERRY COLLEGE BILL [Lords]
    HOVE BOROUGH COUNCIL BILL [Lords]
    Read a Second time and committed.
  CROMARTY PETROLEUM ORDER CONFIRMATION
  Mr Millan presented a Bill to confirm a Provisional Order under Section 8 of the Private Legislation Procedure (Scotland) Act 1936, relating to Cromarty Petroleum; and the same was read the First time; and ordered to be read a Second time upon Wednesday 30th June and to be printed. [Bill 167.]
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Industrial Disputes
    Mr Terry Walkerasked the Secretary of State for Employment how many workers were involved in industrial disputes in the first four months of 1976 compared with the first four months of 1975.
    Mr. Cryerasked the Secretary of State for Employment how many working days were lost because of industrial disputes in the first four months of 1976 compared with the first four months of 1975.
    Mr. Flanneryasked the Secretary of State for Employment how many stoppages of work because of industrial dispute occurred in the first four months of 1976 compared with the first four months of 1975.
    Mr. Woodallasked the Secretary of State for Employment how many stoppages of work because of industrial dispute occurred in the first four months of 1976 compared with the first four months of 1975.
    The Secretary of State for Employment (Mr. Albert Booth): Provisional estimates show that 625 stoppages due to disputes began in the period January to April 1976 compared with 905 in the same period in 1975, that 249,800 workers were involved in all stoppages in progress in this period compared with 349,500 in the same period in 1975, and that 1,188,000 working days were lost compared with 2.106,000 in the same period in 1975.
    Mr. Walker: Will my right hon. Friend appreciate that those figures are encouraging? Can he tell us how these figures compare with some of our industrial competitors?
    Mr. Booth: International comparisons are difficult and can sometimes be misleading, but the general tendency in industrial countries is that they have an increasing number of days lost due to disputes, and our figures are considerably better than those of the United States of America, Canada, Australia and Italy.
    Mr. Cryer: Does my right hon. Friend agree that these figures represent a success for the policy of conciliation rather than confrontation? This takes us back to the level of stoppages in 1967 before successive Governments produced legalistic nonsense for binding the trade union movement. Does he also agree that, in order to retain the good will and support of the trade union movement, urgent action must be taken over the level of unemployment, including urgent consideration of matters like selective import controls, particularly in areas such as the textile industry, and more investment by the National Enterprise Board to create jobs?
    Mr. Booth: I would say to my hon. Friend that certainly the number of days lost in this period are lower than at any time since 1968. As to the cause, I would agree with him to the extent that a very large measure of it is due to attempts at conciliation by the work of the Advisory, Conciliation and Arbitration Service. I would also say that it is partly due to pursuing industrial relations policies as well as our policy of consensus and co-operation rather than of confrontation and legal intervention. However, part of the overall relationship with the trade union movement must involve the other factors that my hon. Friend has raised. I would agree that they are most important.
    Mr. Madel: Can the Secretary of State say whether the Advisory, Conciliation and Arbitration Service is doing an industry-by-industry survey to see whether disputes procedures should be improved? There are many manufacturing industries in which improvements really ought to be made so that the procedure is used before there is a stoppage.
    Mr. Booth: It is certainly within the scope of ACAS to look at procedures used for the conciliation of disputes within industry, and its general remit is to urge people to use their own procedures before coming to ACAS. My Department has recently published a record of the outcome of our inquiry into the level of strikes in this country, and on examining that I might take up the point raised by the hon. Gentleman in respect of ACAS to see whether there is a rôle for an industry-by-industry examination.
    Mr. Flannery: Does my right hon. Friend accept that the answer he gave initially was very encouraging? Does he further agree that unemployment is a new and terrible discipline which is now descending upon a vast number of working people? Far more time and production is lost by unemployment than by all the strikes put together. Would my right hon. Friend accept that it really is time that something was done to prevent more and more massive unemployment from taking place?
    Mr. Booth: Of course, one can enormously exaggerate the loss of production which results from strikes. Certainly much more production is lost by unemployment and much more is lost by industrial disease and injury as well. We have to tackle this question of unemployment irrespective of the industrial relations implications. Although there are improvements, some of the things which lead to unemployment can also lead to industrial disputes, and all of us would wish to see a reduction in industrial disputes as well as a great reduction in unemployment.
    Mr. McCrindle: Is it not essential that the Secretary of State should compare the figures he has given this afternoon alongside the figures for unemployment during the same period? Does he not think that as unemployment rises strikes tend to fall? Can he tell the House what moral he draws from that?
    Mr. Booth: I have certainly tried to make this comparison of the correlation between disputes and unemployment in respect of other periods of high unemployment, but there is no evidence of a comparable fall in industrial disputes. I have come to the conclusion that many things which have caused disputes are similar to the causes of unemployment, like strikes against attempts to bring about massive lay-offs and closures. I cannot accept that the number of disputes is in any way connected with the high level of unemployment.
    Mr. Woodall: Does my right hon. Friend agree that these are most encouraging figures? Does he not think, however, that they are not just a flash in the pan but more of a long-term industrial strategy worked out between the Government and the unions?
    Mr. Booth: I certainly do. They are not a flash in the pan even statistically, because the comparisons that we were making were with 1975, which was a year of low industrial dispute figures, particularly in the period of the year considered. As my hon. Friend has said, this owes much to the developing relationship which has improved industrial relations generally and made for greater national discussion of policies among the TUC, the Government and employers.
    Mr. Hayhoe: Would the Secretary of State agree that all who have helped to achieve this improvement in industrial relations—this substantial reduction in the number of strikes—deserve our commendation and congratulations? By "all" I mean both sides of industry and the Advisory, Conciliation and Arbitration Service. Would he repudiate the over-simpliste interpretation which tends to praise trade unions when the number of strikes comes down but is not prepared to blame trade unions when the number of strikes goes up? Will he have another look at the correlation between the numbers of unemployed and the numbers of strikes, because my reading of numbers in the past is that there is some correlation?
    Mr. Booth: I have given my views on the question of correlation, which I stand by, but this is not a matter for praise or blame of trade unions. I am ready to acknowledge that employers as well as unions were prepared to refer matters to ACAS in advance of ACAS being established as an independent statutory body. However, in the particular areas in which special responsibilities have been laid on ACAS there were some references by unions, some jointly by unions and employers and some by employers alone. But it is fair to say in defence of the general view of some of my hon. Friends as to the rôle of the trade unions that more came forward from the unions alone than from the other two sources put together.

    Redundancy Payments
    Sir J. Langford-Holtasked the Secretary of State for Employment when the weekly wage of £80 was fixed as the maximum to be taken into account for assessing redundancy payments; and what that figure would now represent if calculated at current prices.
    The Under-Secretary of State for Employment (Mr. John Golding): The limit of £80 was fixed by Order made on 31st July 1974 and became effective for dismissals occurring on or after 28th August 1974. It is estimated that approximately £112 would have been required in April 1976 to purchase goods valued at £80 in August 1974.
    Sir J. Langford-Holt: As presumably at the time that this level was fixed it was deemed to be fair and therefore, by implication, it is not fair today, why has no review taken place? When will a review take place?
    Mr. Golding: A review will take place during 1977 under the Employment Protection Act. The original figure was such as to include all but the top 3 per cent. of those receiving pay, excluding overtime. The present £80 does that except for the top 10 per cent. We believe that the time is not yet ripe for a review.

    Textile Workers (Unemployment)
    Mr. Maddenasked the Secretary of State for Employment what is the latest total of unemployed people in West Yorkshire whose last employment was in the textile industry.
    The Under-Secretary of State for Employment (Mr. John Grant): At 13th May the total was 4,569.
    Mr. Madden: Does my hon. Friend agree that, for the most part, this tragic toll of unemployed men and women are victims of unfair competition by foreign textile industries? Would he further agree that there is little point in applying sticking plaster to an industry which is bleeding to death? Will he therefore make representations to the Secretary of State for Industry asking for urgent and extensive import controls to be introduced? Secondly, will he take specific measures to assist the textile industries, which are suffering from additional problems of decline, since ways of boosting employment are urgently needed in these areas, which are suffering very badly?
    Mr. Grant: My hon. Friend knows that the present coverage of import restraints for the textile industry as a whole has never been wider. I think he also knows the Government's views about the

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    difficulties of widespread and non-selective controls and the fears of retaliation. However, I shall certainly draw his remarks to the attention of my right hon. Friend, the Secretary of State for Industry. I think that my hon. Friend is to meet the Minister of State at that Department in the near future to discuss these matters.
    Mr. Viggers: Has the Minister made an estimate for national unemployment in the coming months and years? If so, will he share it with the House and the country?
    Mr. Grant: I do not think that that arises on this Question.
    Mr. Noble: Does my hon. Friend accept that the situation in the cotton and allied fibres industry in the North-West is at least as bad as that in West Yorkshire and that in industries employing a large number of women the unemployment figures tend to be understated? Will he take note of the point made by my hon. Friend the Member for Sowerby (Mr. Madden) about import controls, particularly the point that, although we have wide and all-embracing controls, they are so high that they make no damned difference?
    Mr. Grant: I certainly share my hon. Friend's anxiety about the North-West, but I have already answered the question about import controls. Despite what my hon. Friend says, I should not have thought it was true to say that they are having no effect at all. I think that they are having a substantial effect.
    Mr. Joseph Dean: Is my hon. Friend aware that all the people involved in the industry—employers and unions—believe that the present import controls, although they have been extended, still fall far short of being adequate to deal with the problem and that when they are imposed they are far too little and far too late to be effective? The stuff is already here before action is taken.
    Mr. Grant: I cannot add to what I have said, except to repeat that I will certainly draw my right hon. Friend's attention to what has been said today.

    Training Board Levies (Small Businesses)
    Mr. David Mitchellasked the Secretary of State for Employment whether he will ensure that exemption for small businesses from training board levies moves in line with the movement of wages in those industries in which the exemption is based upon the total of wages paid annually.
    Mr. Golding: I am informed by the Manpower Services Commission that this factor is always taken into account where the exemption level for small businesses is based on the total of emoluments paid. It is not, however, the only factor influencing the level of exemption.
    Mr. Mitchell: Is the hon. Gentleman aware that between 1974 and 1975 levy exemption was raised by 17·3 per cent. but that in the same period wages rose by 25·5 per cent., so that there is a substantial lag? Will he draw that factor to the attention of the Manpower Services Commission? Secondly, what are the other factors to which he has referred?
    Mr. Golding: I will draw the attention of the Commission to the facts that the hon. Gentleman draws to our notice. The other factors include the extent of the training needs in the particular industries, the ability of the training boards to provide service to small businesses and the cost effectiveness of providing a service to small firms.
    Mr. Dalyell: Does not the ability to provide services vary vastly from one area to another? Could the less good areas be brought up to the standard of the best?
    Mr. Golding: We hope to achieve a uniform standard throughout the United Kingdom, but certainly this is a matter which the Manpower Services Commission and the training boards will take into account.
    Mr. Hayhoe: Does the hon. Gentleman appreciate that small businesses have been clobbered in a variety of ways by actions of the present Government and that some easement in this area would be very helpful?
    Mr. Golding: The Government leaves it to the industrial training boards and the Manpower Services Commission to work out the needs of particular industries. That policy will continue.

    School Leavers
    Mr. Bulmerasked the Secretary of State for Employment what plans he has to improve job prospects for school leavers during 1976.
    Mr. Golding: The Government have already taken a large number of measures, including the job creation programme, the recruitment subsidy for school leavers, additional resources for training, Community Industry and the careers service to deal with unemployment among school leavers and other young people. These measures are under review, especially in the light of yesterday's debate on youth unemployment.
    Mr. Bulmer: Will the Minister confirm that this country is currently short of certain vital industrial skills and is likely to remain so? Will he consider publishing a list of those skills with a view to allowing employers who took on and trained school leavers to approve standards to recover the cost of that training in full?
    Mr. Golding: This question will be discussed in the consultative document, which, as my right hon. Friend the Secretary of State announced yesterday, will be published shortly for consultation.
    Mr. George Grant: When my hon. Friend reviews job prospects for school leavers, will he ask the Home Secretary why many police authorities have discontinued police cadet training? Would he agree that the money spent on police cadet training is money well spent? It is good training for a good job and is in the best interests of the nation.
    Mr. Golding: I will draw this matter to the attention of my right hon. Friend the Home Secretary.
    Mr. Peter Walker: In view of the high level of unemployment in the West Midlands, particularly among school leavers, why are the Government trying to stop firms from going to the West Midlands?
    Mr. Golding: My understanding is that the Government have relaxed the industrial development certificate provisions
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    and that this relaxation has been most helpful in the West Midlands.
    Mr. Litterick: Is my hon. Friend in a position to respond to the question which I put to the Secretary of State last night? Will he undertake to set in train discussions between his own Department and the Department of Education and Science, or between the Training Services Agency and the local education authorities, so that TSA resources can be put at the disposal of local education authorities to enable them to provide vocational courses for young people? If this were done, it would also take up the slack in the employment of teachers.
    Mr. Golding: Before I came into the Chamber this afternoon I had the pleasure of reading in Hansard my hon. Friend's remarks of last night. I also noted the categorical assurances given by my right hon. Friend the Secretary of State. This is a matter which is being studied.
    Mr. David Hunt: Although the Government survived last night's vote, we heard this morning that 122,905 school leavers are unemployed. There are many hon. Members on all sides of the House who are not prepared to sit back and watch young people's hopes and ambitions being frustrated. What are the Government going to do?
    Mr. Golding: We dealt with this matter very fully in the debate yesterday. We gave categorical assurances that the Government would deal with the problem as urgently as possible.
    Hon. Members: When?
    Mr. Hayhoe: Does the Minister accept that today's figures are very alarming? Seasonally-adjusted figures for the number of vacancies notified, which cover young people and others, indicate a very serious trend. Will the Government look at these figures with a greater sense of urgency and a greater sense of concern?
    Mr. Golding: There could be no greater concern than that which is felt on this Bench at the figures published this morning. One of the additional problems is the fact that the school leaving date was brought forward and employers have not yet adjusted to this in their recruitment measures.
    Mr. Peter Morrisonasked the Secretary of State for Employment how many jobs are at present available which would be suitable for school leavers.
    Mr. Golding: 27,719 unfilled vacancies were held by careers offices on 4th June. These include many which would be suitable for school leavers, but it is expected that some employers will not notify vacancies specifically for school leavers until later this summer.
    Mr. Morrison: Is the Minister aware that that answer—and, indeed, all the others he has given this afternoon—will give absolutely no hope to the unemployed school leavers? Is he further aware that the best way to help them would be to abandon the Price Code, thus allowing employers to take on school leavers while at the same time seeing a return on their investment?
    Mr. Golding: I think that it will be some encouragement—although the situation is still bad—that the number of unfilled vacancies has increased from 24,476 in April to 27,719 in June. The Government believe that a wide range of measures is needed, such as have been pursued in the past 12 months, to deal with this pressing problem.
    Mr. Pavitt: Will my right hon. Friend have discussions with the Secretary of State for Social Services as a matter of urgency with a view to looking at the training and employment of school leavers in the professions supplementary to medicine? Is my hon. Friend aware that there is a grave shortage of speech therapists, physiotherapists and many other categories, and that we could do with a full long-term programme in order to fill those vacancies?
    Mr. Golding: The Government will certainly look at the point made by my hon. Friend.

    Health and Safety (Further Education Institutions)
    Mrs. Wiseasked the Secretary of State for Employment if he will introduce legislation to extend the provisions of the Health and Safety at Work etc. Act 1974 to students in schools, universities and other institutions of further and higher education.
    Mr. John Grant: I am advised by the Chairman of the Health and Safety Commission that schools, universities and other institutions of further and higher education are already covered by the Health and Safety at Work etc. Act. The interests of students are taken into account by provisions of the Act intended to protect the health and safety of other people who may be affected by the activities of an undertaking.
    Mrs. Wise: Does my hon. Friend accept that it is not really satisfactory to cover the interests of students indirectly? It would be much fairer if the Act was extended to cover students directly. It is an anomalous situation that young people of the same age, who are handling the same substances and the same equipment, can be covered directly or indirectly according to whether they are technicians or students. Will my hon. Friend consider this matter, and discuss it with the National Union of Teachers and the National Union of students?
    Mr. Grant: I take the point. The Health and Safety Commission has directed the Health and Safety Executive to study the conditions of work in schools, colleges and universities. We should await the report before making any preliminary judgments.

    Retraining (Rural Areas)
    Mr. Hicksasked the Secretary of State for Employment whether he is satisfied that the opportunities for retraining of persons resident in rural areas are sufficiently adaptable to take account of the inherent geographical problems and specific job requirements in country districts.
    The Minister of State, Department of Employment (Mr. Harold Walker): I am informed by the Manpower Services Commission that the Training Opportunities Scheme—TOPS—offers a wide scope of training to people in rural areas through the variety of its courses, the adaptability of its training to local needs, and its network of training establishments.
    Training is available in skillcentres, colleges of further education and employers' establishments. TOPS facilities

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    have been greatly expanded and expansion is continuing. In addition, the Council for Small Industries in Rural Areas has embarked on an expansion programme designed to increase the range and scope of training which it provides in traditional rural crafts and other occupations.
    Mr. Hicks: I am grateful to the Minister. Has he considered the concept of a mobile training and retraining unit, particularly in rural areas, offering a limited number of courses based on existing facilities such as local authority or educational workshops? This could be an extension of the evening-class concept in certain trades, crafts and skills.
    Mr. Walker: I have not considered this matter, but it seems to be a useful and constructive suggestion. However, I see all sorts of difficulties in the way of it. Nevertheless, I shall draw it to the attention of the Training Services Agency.
    Mr. Kenneth Lewis: Will the Minister accept that there are great difficulties for young people living in rural areas? They want to travel to the towns and cities to get jobs, but the bus services in rural areas do not allow them to go to distant places. Will the hon. Gentleman draw this to the attention of his right hon. Friend, or will he at least arrange for a subsidy for these young people's travelling expenses?
    Mr. Walker: It is true that there are difficulties in rural areas where the population is too scattered to provide skill-centres, and there is a difficulty in travelling to the nearest town in which there is a college of further education. Lodging allowances and travelling allowances are available under the scheme to help these people, but I believe that there is some difficulty in the fact that adequate information is not always generally available.

    Unemployed Persons
    Mr. Stonehouseasked the Secretary of State for Employment what is the number of unemployed and the percentage rate in the West Midlands and in England, Scotland, Wales and Northern Ireland, respectively, at the latest available date; and how he expects the situation to develop in each of these areas.
    Mr. Booth: On 10th June 1976 the total number unemployed and the percentage rate of unemployment in the West Midlands was 127,148–5·6 per cent.; in England, 1,060,721–5·4 per cent.; in Scotland, 144,134–6·7 per cent.; in Wales, 73,796–7·2 per cent.; and in Northern Ireland 53,954–10·4 per cent.
    I would expect falls in the current high levels of unemployment accompanying our recovery from the present economic recession to vary on an industrial rather than a geographical basis.
    Mr. Stonehouse: Are not these the worst figures since before the war? For all their talk, the Government have failed. To what extent has the protection of jobs in Wales and Scotland worsened the employment position in England?
    Mr. Booth: These are extremely bad figures; there is no denying that. I take the view that the development area policies of successive Governments have resulted in unemployment in Wales and Scotland in relation to other parts of the country being lower at this time than during any other slump. The recent measures that we introduced to alleviate unemployment were not confined to the development areas in recognition of the fact that there was an inordinately high level in other places.
    Mr. Robinson: Referring to the point made earlier by the right hon. Member for Worcester (Mr. Walker), with unemployment in the West Midlands being above the national average, as it has been for some time, may I ask whether we may have a categorical assurance from my right hon. Friend that relaxation of industrial development certificate policy in the West Midlands will continue as industrial recovery gets under way and that firms which want to expand in the West Midlands will be able to do so?
    Mr. Booth: I appreciate the way in which my hon. Friend has pursued this matter with me both from his constituency and in the House. I have looked into it most carefully. It is not the case, however, that jobs in the West Midlands are being hampered by the IDC policy. The situation is being helped now by greater flexibility. I am sorry to say that the causes of high unemployment in the West Midlands are to be found elsewhere and in areas which are possibly

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    more difficult to deal with than the IDC policy.
    Mr. Henderson: Does the right hon. Gentleman agree that it is unfortunate that the figures should be produced on the day on which he has to answer Questions on the subject? The figure for Scotland, which is quite appalling, will be inflated in 10 days' time by 65,000 school leavers, who, if they do not obtain jobs, will increase our rate to about 10 per cent. Will the right hon. Gentleman answer the question which the Secretary of State for Scotland ducked in his reply to the debate last night? Will he tell those school leavers just what chance they have of getting a job in present circumstances?
    Mr. Booth: On the timing of Questions, obviously I would have preferred a little longer to study the figures. I have, however, examined the position in Scotland against the current figures, and I have found that our manpower measures as of now are producing only about 18,000 jobs in Scotland. There is obviously a long way to go yet on the take-up of these measures.
    As to the specific problem of school leavers, we anticipate that there must be a substantial increase in these projections of the number of unemployed school leavers in Scotland, and therefore we must do our utmost to see that we achieve this year what we achieved last year by special measures—a dramatic reduction in the number of unemployed school leavers.
    Mr. Heffer: The IDC policy as such is not responsible for the level of unemployment in the West Midlands or anywhere else. The responsibility lies with the fact that our policies do not match up to the immediate needs of the situation. Will my right hon. Friend indicate to the House what measures the Government intend to take rather than give platitudes in dealing with this crisis?
    Mr. Booth: I agree with the first part of my hon. Friend's analysis of the situation. In light of the figures I have announced, one is justified in saying that the measures taken to deal with the problem are not sufficient. Nevertheless, the West Midlands area has benefited not only from the Job Creation Scheme, the temporary employment subsidy and the
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    school leavers' recruitment subsidy, for which I am responsible to this House, but from measures taken by the Secretary of State for Industry to support the machine tool industry and the vehicle building industry. I contend, therefore, that against the worst economic recession the country has known since the 1930s we must go on to seek to develop more effective measures and a more effective policy. It is not the case, however, that we have not attempted to deal with the unemployment problem outside development areas.
    Mr. Alexander Fletcher: Does the right hon. Gentleman appreciate that the Government's devolution proposals will increase competition for scarce jobs between one part of Britain and another? Will he explain how those proposals and policies will improve job prospects throughout the United Kingdom?
    Mr. Booth: I must concede that I have been unable to make such an effective appreciation of the devolution proposals. However, I cannot on the evidence before me see how the proposals can aid the overall employment situation or the situation in individual countries within the United Kingdom to which they apply. They will, of course, raise the problem of how far individual national agencies dealing with economic measures can work effectively as opposed to a system in which some of the measures and policies are worked out in a co-ordinated manner on a United Kingdom basis.
    Mr. Alan Lee Williams: Will my right hon. Friend indicate how the figures compare with those of France and Germany?
    Mr. Booth: I cannot give the exact figures, but on the last comparison which I made the situation in those countries was comparable to ours, although in the case of France our position was slightly better.
    Mr. Anthony Grant: Is the right hon. Gentleman aware that there is no evidence that under any Government, when an industrial development certificate is refused for a relatively small firm, the firm is likely to expand in a development area? Is he aware that it simply does not expand? Therefore, while I welcome the more flexible policy that the Secretary of State announced, I should

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    like to know why on earth the Government tightened the policy when they came to office.
    Mr. Booth: I agree to the extent that one cannot conduct an IDC policy in isolation and one cannot expect that when a firm is refused an IDC for one location it will automatically move to another area which is aided. The decision to tighten up was taken in conjunction with other measures of special help to development areas. One of the actions we have taken, recognising the problem now, is to permit the replacement of factories which have fallen out of use in some of those areas, including the West Midlands, and we believe that this can be of much more assistance than the IDC policy.
    Mr. Prior: Is the right hon. Gentleman aware that the whole House will regard these figures as extremely grave? Is he aware that, whereas the figures in other countries are now improving, our figures are getting worse? Does that not reinforce the need for a change in economic policy, although not the change indicated by the Secretary of State? Does he accept that the best way to get industry moving and to reduce the unemployment figures will be to change economic policy so that the Government are seen to be supporting private industry and private investment, in which case the country could feel confidence enough to invest, which it is not doing now? Is he aware that when we get the investment we shall get the jobs?
    Mr. Booth: Since the Government are advocating a change of industrial strategy and economic policy I must, of course, agree with the right hon. Gentleman that there is a need for change. As for the comparisons with other countries, it is true that they are improving their position. Some of them have a great deal of room for improvement compared with Britain. In Belgium, for example, the seasonally-adjusted figure is 8·6 per cent. In Canada it is 7·4 per cent. and in the United States it is 7·3 per cent. I agree that the French figure has fallen, but against these considerations is the fact that there was a substantial increase in Government expenditure here to deal with the problems, particularly of employment. We believe that to be justified and we
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    believe that it has held our figures at a lower level than those in many comparable industrial countries through a year of deep economic depression.

    Training Opportunities
    Mr. Watkinsonasked the Secretary of State for Employment what further plans he has for expanding training opportunities in industry.
    Mr. Harold Walker: In February my right hon. Friend the Chancellor of the Exchequer announced that an extra £55 million would be made available this year to provide additional training. I am informed by the Manpower Services Commission that financial support for up to 35,000 training places for new entrants in 1976–77—including over 26,000 extra places—has already been offered to industrial training boards. The MSC and the Government jointly will shortly be publishing a consultative document putting forward, without commitment, a possible scheme of collective funding for initial training in transferable skills in selected occupations.
    Mr. Watkinson: I thank my hon. Friend for that reply. Does he accept that it is now an observable fact that in each succeeding business cycle the level of unemployment increases? Therefore, is it not now necessary to place industrial training in the absolute forefront of our industrial life? Will my hon. Friend observe the success which the Swedes have had in maintaining a low level of unemployment through industrial training, and will he seriously consider imposing a substantial general training levy on all firms?
    Mr. Walker: My hon. Friend was correct in his opening reference to a discernible tendency towards higher unemployment. I think he recognises that the Government have indicated their commitment to an expansion of training by the significant extra sums of money they have made available for the purpose and the large increase in the number of skillcentre places available, in addition to the extra that we have provided for industry itself. Certainly there is a benefit in looking, as we have done, at the range of labour market policies which have been used in Sweden. The Swedes have applied not merely training but a whole range of policies.
    Mr. Marten: In country towns which have industry but which are often quite a long way from retraining facilities, should we not encourage local authorities, local business men and local education interests to get together with industry to "do their own thing" much more in retraining unemployed people?
    Mr. Walker: The hon. Gentleman will know that in respect of local government itself there is a local government training board run by the local authorities. I think that the arrangements that the Government have through the Manpower Services Commission and the Training Services Agency are sufficiently flexible to allow them to take into account the need of particular localities and the views and contribution that individual employers and authorities can make. But certainly what the hon. Gentleman has said deserves reflection.
    Mr. Bryan Davies: Bearing in mind the deplorable record of British industry with regard to day release, what steps is my hon. Friend taking to ensure that, as the profitability of manufacturing industry increases, the record of day release of trainees will also improve?
    Mr. Walker: Certainly, I think we would welcome any increase in facilities for day release, but my hon. Friend will realise that this is primarily a matter for my right hon. Friend the Secretary of State for Education and Science.

    Trade Union Membership (Closed Shop)
    Mr. Gowasked the Secretary of State for Employment how many employees have been dismissed for refusing to join a trade union since 1st January 1976; and whether he is satisfied with the operation of the Trade Union and Labour Relations Act so far as the closed shop is involved.
    Mr. Harold Walker: The information requested in the first part of the Question is not available. The answer to the second part of the Question is "Yes".
    Mr. Gow: But does not the Minister think that he ought to obtain that information? Ought not the Government to take steps to protect the livelihood of those individuals, many of whom have given a lifetime of service to an industry
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    and who are now being dismissed for no other reason than that they wish to exercise their right of free conscience?
    Mr. Walker: The Government have no power to obtain the information that the hon. Member seeks. I am not sure whether the hon. Gentleman suggests that the Government should take that power.
    Even the hon. Gentleman's own Government in 1971 had to throw away their attempts at a complete outlawing of the closed shop and to recognise that there was a place for it in some industries. Our position in these matters is one of strict neutrality, leaving it to people in industry to handle these matters for themselves.
    Mr. Ioan Evans: Will my hon. Friend agree that in the history of the growth of the trade union movement there have been many thousands of trade unionists who have lost their jobs for daring to join a trade union? Will he also agree that it should now be the task of the House and of people on all sides to encourage all working people to join their appropriate union?
    Mr. Walker: My hon. Friend is quite right in saying that there has been a long record of victimisation and blacklisting of people for their trade union activities. I hope that the House will join my hon. Friend in encouraging members of trade unions.
    Mr. Hayhoe: Will the Minister join with decent people in condemning the sacking of those who have served a lifetime in an industry and not been members of a trade union? Is it not intolerable that the closed shop should be used in this way to sack that sort of person?
    Mr. Walker: I think that the hon. Gentleman and the House ought first to appreciate that what the Government have done is to restore the legal position to what it was in 1970, before the Conservative Government introduced their disastrous Industrial Relations Act, with all the evil consequences and damage which flowed from that.
    There is now a tribunal to which recourse is available for those who may feel that they have been unjustly dismissed. There is specific exemption in the 1974 Act for those who have genuine religious objections to membership of a trade

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    union. If there have been unfair dismissals, the proper recourse of the people concerned is to the tribunal.
    Mr. Gow: I beg to give notice that I shall seek leave to raise the matter on the Adjournment at the earliest possible moment.

  WESSEX
  Mr Adleyasked the Prime Minister if he will pay an official visit to Wessex.
  The Prime Minister (Mr. James Callaghan): I have at present no plans to do so.
  Mr. Adley: Will the Prime Minister tell the people of Wessex and the House what he would say if he were Leader of the Opposition coming to Prime Minister's Question Time on the day when the Government announce unemployment figures in excess of 1,300,000?
  The Prime Minister: I would say to the people of Wessex what I would say to the rest of the country, namely, that the figures are unacceptably high, that they are the consequence of economic policies which allowed our monetary system to get out of control, that it is important that we should overcome inflation, and that we should use all possible opportunities through training for our young people to get these figures down as low as possible. If I were Leader of the Opposition, I would go on to say that I therefore give full support to the efforts of the trade unions in their attempt to introduce an incomes policy.
  Mr. Bryan Davies: Will my right hon. Friend agree that one of the last people to make regular official visits to Wessex was King Arthur, head of the workers' co-operative of Knights of the Round Table? Was it not his function in life to bring light to dark areas of Conservative England?
  The Prime Minister: Yes, Sir, and I think that another frequent visitor was King Alfred. He burnt the cakes, and I am sure that the Leader of the Opposition would never do that.
  Mr. Prior: What has happened since October 1974, when unemployment was said by the Government to be coming under control, to lead to the devastating
  1356
  and intolerable figures that the Government have announced today?
  The Prime Minister: I think that what has happened is that in September 1973 the increase in the money supply had reached the never before achieved level of 28·5 per cent. under the M3 system. That was inevitably bound to lead to inflation of an unprecedented character. It has done so, and we have now started as a country, I am glad to say, to correct the errors of the last Administration.
  Mr. Prior: Will the Prime Minister answer my question, which referred to October 1974?
  The Prime Minister: I am giving an answer to the right hon. Gentleman, but I cannot give him an understanding.
  Mr. Ward: Has my right hon. Friend seen the Conservative publication Free Nation for 11th June, which puts forward immediate and enormous public expenditure cuts of over £16,000 million? Would my right hon. Friend like to say what effect such cuts would have on our unemployment situation?
  The Prime Minister: The cutting of public expenditure now would, of course, lead to additional unemployment. I have made this clear time after time, and I have spoken of the dilemma that will face the country in 1977 and 1978, when it is expected that investment will increase very considerably, thanks to returning confidence. The latest forecast is that companies hope and expect to increase their private investment in new plant and machinery by 15 per cent. If that is so, it will have certain consequences for Government policy.
  Mr. Norman Lamont: If the Prime Minister meets the people of Wessex, what does he think they will think of a Chancellor of the Exchequer who persuades the trade unions against the child benefit scheme on the ground that the Cabinet is against it, and then the very next day persuades the Cabinet against it on the ground that the TUC is against it? Is not this, even by the Chancellor of the Exchequer's standards, an extraordinarily low piece of double-dealing?
  The Prime Minister: Personal attacks of this nature are becoming characteristic of the Opposition. The way in which

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  the discussions on this matter have been held and the approaches made involve no criticism of my right hon. Friend or anybody else. The Government have taken their decision after perfectly sensible and fair discussion.

  ECONOMIC POLICY (PRIME MINISTER'S SPEECH)
  Mr. Ashleyasked the Prime Minister if he will place in the Library a copy of his public speech on economic policy to the General and Municipal Workers' Union in Bournemouth on Monday 7th June.
  Mr. Wyn Robertsasked the Prime Minister if he will place in the Library a copy of the public speech on economic policy to the General and Municipal Workers' Union in Bournemouth on 7th June 1976.
  The Prime Minister: I did so the same day.
  Mr. Ashley: Does my right hon. Friend recall that in his speech to my union's annual conference, a speech that won a standing ovation, he rejected demands for the decimation of the public expenditure programme, but also rejected demands for increased public expenditure without regard to the cost involved? Is he aware that he will be warmly supported in walking this economic tightrope, but that if the Government are prepared to economise on the child benefit scheme—one of the great weapons against family poverty—they will be making a serious mistake that they will long live to regret?
  The Prime Minister: The Government have introduced a new benefit for children of £1 per week with an additional 50p premium for single-parent families. That is the beginning of the introduction of the scheme and we shall go on to fulfil it in due course. However, as the total scheme at the rates proposed would have cost more than £300 million next year, it would not have been possible to introduce it.
  Mr. Roberts: Can the Prime Minister say what could happen over the next six months to make unnecessary an extension of the £3 billion standby credit
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  arrangement, further borrowing from the International Monetary Fund, increases in taxation, or cuts in public expenditure?
  The Prime Minister: No, Sir.
  Mr. Atkinson: Is not my right hon. Friend in danger of being misunderstood in the argument which he used at Bournemouth and in reply to his first Question today? He says that the Government cannot reflate the economy until the rate of inflation has been reduced. Does that not suggest that the Government are using unemployment as an economic regulator? Could he not put the record straight by advising local authorities and others involved in public expenditure that they must not cut back at the expense of jobs?
  The Prime Minister: We have asked local authorities to keep in line with the figures they agreed before the beginning of the year. That is not unreasonable. I trust that they will do it.
  Mrs. Thatcher: As the Bournemouth speech was largely on economic policy, will not the Prime Minister agree that confidentiality within the Government is vital for the conduct of economic policy? Since the right hon. Gentleman made his statement about an isolated leak last week, the Parliamentary Secretary to the Privy Council Office has issued a statement, on his ministerial responsibility, saying that there have been premeditated leaks over a wide range of Cabinet business in the past 18 months. Does that speech represent the view of the Government?
  The Prime Minister: I read my hon. Friend's speech with very great interest. Probably the only mistake he made was to talk about the last 18 months, because I am afraid that this has been going on for rather a long time. I have a list here. I do not think I shall read it, but those who live in glass houses should not throw stones—otherwise they might find trouble.
  Mrs. Thatcher: The Prime Minister is trying to throw off this matter very lightly. Is he not aware that many people read that speech not merely with interest but with the greatest possible alarm? Is he aware that if it represents the true course of events, there can be no confidentiality of Cabinet proceedings and no confidence in the country about the conduct of defence, security or economic matters?

  1359
  Does he not think that he should completely repudiate that speech?
  The Prime Minister: I am aware of the seriousness of this matter. As I said last week, we should be very careful about the way in which we conduct our affairs in relation to briefings. I am especially concerned about the actual reproduction of Cabinet minutes, but it is no good the right hon. Lady adopting this "holier than thou" attitude. Perhaps I should refer her to the investigations into leaks on defence matters on 14th January, 3rd May, 23rd May and 12th November 1971, 19th March and 19th April 1972 and into the leak about the purchase of American missiles on 24th July 1973, every one of which was concerned with leaks by the Ministry of Defence. Anybody can throw stones. The point is that the Government and Ministers should take defence, foreign affairs and other issues very seriously in order to ensure that these leaks do not take place. But I cannot have one side of the House hurling accusations at the other.
  Mr. Heath: Does not the Prime Minister agree that what he has just said shows that the last Conservative Government took this matter seriously? Can he tell us when the minutes of a Cabinet meeting were last published in public just a short time after the meeting took place?
  The Prime Minister: This has never happened to my knowledge.
  Mr. Whitehead: As it was under the Administration of the right hon. Member for Sidcup (Mr. Heath) that, in the words of Mr. Harold Macmillan, the Think-Tank first started to leak, can my right hon. Friend say how many major leaks there were under the last Conservative Administration?
  The Prime Minister: There were 37 leaks and 30 inquiries into them. As far as I can see, we are just about par for the course at present and it is about time the situation was improved.
  Mr. MacGregor: Will the Prime Minister confirm what he appears to have told the TUC and Labour Party Liaison Committee yesterday—that further public expenditure cuts cannot be ruled out, bearing in mind his remark about two buckets dipping into the pool of
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  savings? Does he agree with the statement by the Governor of the Bank of England that if the borrowing requirement is to be reduced, there should be a presumption against further increases in taxation and therefore in favour of spending cuts as soon as possible?
  The Prime Minister: I have made my position on this matter quite clear at every Question Time. I have nothing to add to it.
  Mr. Whitelaw: The Prime Minister has referred to track records, but will he not address himself to the point raised by my right hon. Friend the Member for Sidcup (Mr. Heath) and confirm that this is the first time Cabinet minutes have been directly leaked? Is this not a very serious matter and does it not follow that the hon. Member for Rugby (Mr. Price), who is one of the right hon. Gentleman's own Ministers, has indicated a very serious difference between the current situation and what has happened under any previous Government?
  The Prime Minister: The right hon. Gentleman should keep himself up to date. I set up an inquiry into this matter last Thursday because of the gravity with which I regarded it. I suggest that we should wait until the result of that inquiry is known. I hope that it will have better results than some of the inquiries which took place under the Administration of which the right hon. Gentleman was a member.
  I surely made my position quite clear to anybody who was here on Thursday. It is utterly reprehensible that the minutes of Cabinet meetings, which are distributed to a limited number of people, should be reproduced accurately in public. People may not like the rules, but they should seek to change them and not break them because they do not like them.

  QUESTIONS TO MINISTERS
  Mr. Marten: On a point of order, Mr. Speaker. There were 37 Questions down to the Prime Minister today, and we reached No. 2. Important as the last Question was, it developed into a debate which shut out the other questioners. May we get on with our Question Time?
  Mr. Speaker: May I say that I am rather surprised by the source of the

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  point of order? The hon. Member for Banbury (Mr. Marten) is not lacking in jumping up during Prime Minister's Questions. If the House is feeling strongly on a matter, it is difficult for me to decide when the moment has come to cut off the questions. This afternoon it seemed to me that there was a rising interest in Question No. 2.

  AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL (PROCEED INGS)
  The Prime Minister (Mr. James Callaghan): With permission, Mr. Speaker, I will make a statement.
  The House will recall that on 27th May we voted on the procedure motion on the Aircraft and Shipbuilding Industries Bill. The first vote was decided by Mr. Speaker's casting vote and on the second the Government had a majority of one. It was subsequently alleged that the Government's majority had been achieved by questionable means, and since then there has been a sense of grievance, resulting in the breakdown of communications through the usual channels.
  It is not in the interests of the House that matters should remain in this state. The business of the House is being disrupted and the Members themselves are being put to considerable inconvenience and even, in some cases, distress.
  The right hon. Lady the Leader of the Opposition and I met informally last week to consider how best to deal with this. We recognised that there was a sense of grievance about the vote on 27th May. We thought it right, therefore, to ask our Chief Whips privately to carry out together an informal inquiry on their own into what had happened and to let us have a common account for our private consideration. This they have done, and the right hon. Lady and I have considered it together.
  The agreed result of their inquiry makes clear that there was undoubtedly misunderstanding about the pairing and voting arrangements on 27th May and that the normal courtesy of consultation about changes in pairing was not observed as it should have been.
  In the light of this, I do not believe that matters should be left as they are and I propose, after consultation with the Leader of the House and the Chief
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  Whip, that it would be in the best interests of the House if the Government were to provide the opportunity for the issues on which the votes were taken on 27th May to be considered again and the matter put to the vote in an appropriate way. The Leader of the Opposition has already, with her colleagues, tabled a motion to refer the Shipbuilding and Aircraft Industries Bill to a Select Committee, and if the House were to debate that motion this would provide the opportunity for the House to vote again on the matter. Accordingly, the Leader of the House will be announcing in his Business Statement on Thursday that a debate will be arranged on the right hon. Lady's motion.
  I hope that an arrangement of this kind will commend itself to the House, that the two Chief Whips will meet to discuss how to avoid a recurrence of the events of 27th May, and that we can resume the orderly arrangements of our affairs through the usual channels.
  Mrs. Thatcher: I thank the Prime Minister for making this statement. I am grateful to him for acknowledging that there was a grievance, and that it was well-founded, by providing what I hope will be a full day to debate the motion about setting up a Select Committee to consider petitions.
  Secondly, as the right hon. Gentleman has stressed that the normal courtesy of consultation about changes in pairing was not observed as it should have been, may I say that as a certain name has been mentioned I should like to make it quite clear that the inquiry found no personal blame attached to the hon. Member for Stalybridge and Hyde (Mr. Pendry)?
  Thirdly, as the right hon. Gentleman has recognised that an assurance is needed so that there can be a basis of trust in future, I agree that our two Chief Whips should get together to see how best they can obtain mutual assurance about the conduct of pairing matters in future. When they have obtained that mutual assurance between them and their respective offices, I hope that the way will be open to resume business as usual.
  Finally, I stress that on this side we believe that business, whether by Government or Opposition, must be conducted on the basis of the rules of the House, which are clearly understood, and the normal, understood customs and conventions about pairing.
  The Prime Minister: I agree that the right hon. Lady's complaint was well-founded. Indeed, I indicated to her on the first occasion we met that I knew that there was a genuine sense of grievance. As regards the timing of the debate, I think that is a matter for discussion between the two Chief Whips. The question whether it is a full day's debate is something that they can discuss. If the Opposition want a full day, I hope that the Chief Whip will not resist—[HON. MEMBERS: "Tomorrow."] I believe that there is some business set down for tomorrow.
  I thank the right hon. Lady for the generosity of what she said about my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry). I welcome what she said. I did not wish to make any personal references. I fully accept that we should now try to put this matter behind us. The Government have made a proposal which I fully understand will in some ways be regarded cynically. Nevertheless, it is my desire that the present situation should not continue to affect relationships between both sides of the House because the House cannot continue unless the present situation changes.
  Mr. Grimond: Is the Prime Minister aware that the last thing I want to do is to detract in any way from the sweetness and light that has suddenly broken out this afternoon? However, will he bear in mind when arranging the business of the House that there are eight parties in the House—not two or even three, but eight—and that they are concerned with the running of the House?
  Further, I ask him to remember that the main issue in the debate which led to the trouble was not so much the Bill in question as whether the rules of the House should be altered, without consultation, to the detriment of those in the House and outside. It is that matter which many of us feel is extremely important. Will a discussion of that be in order in the forthcoming debate?
  The Prime Minister: It is not for me to say what will be in order in the debate. That is a matter for you, Mr. Speaker. The motion put down by the right hon. Lady is very broad, and I imagine that hon. Members will be able to go very wide on it. It calls for reference to a Select Committee.
  Mr. Arthur Bottomley: Is my right hon. Friend aware that all believers in parliamentary democracy will welcome his statement and its reception by the Leader of the Opposition, and feel that he and the right hon. Lady are to be commended on their wisdom and statesmanship? May I remind my right hon. Friend that on one occasion when the House was having difficulties a time ago, when we were both in Parliament, a Member of the then Opposition shared with us the view that this should not happen? It reminded us that in 1906 the feeling in the House was such that Government and Opposition Members did not even speak to each other. Let us hope that that never happens here. May parliamentary democracy be sustained.
  The Prime Minister: I thank my right hon. Friend for what he has said. Like him, I have lived through many stormy days in this House. I think none of us will ever forget the period of Suez, for example. However, I do not think that relations between hon. Members on this occasion have been anything like what they were on some previous occasions that I can recall. Perhaps the wisdom and sanity of Back Benchers has enabled us to produce a result that, I hope, will be acceptable.
  Several Hon. Members rose—
  Mr. Speaker: Order. I hope the House will take my advice and say that in the best interests of the House we should leave the matter there for the time being.
  Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. There is one aspect which I think should properly be raised as a point of order as it concerns the Chair. In the disputed vote on the night of Thursday 27th May, Mr. Speaker, who does not have discretion in these matters—he is governed by precedent in the way in which he votes—would have been bound to vote with Opposition Members on that occasion. If the Question is put in such a way in the debate to which the Prime Minister has referred that Mr. Speaker is bound to vote the other way, because the motion is procedurally an amendment to a Government motion, that would not give the House the same opportunity as it had that night.
  Therefore, I ask that the Prime Minister should declare that, if there is a tie, it would be the view of the Government

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  that Mr. Speaker ought properly to vote—[HON. MEMBERS: "No."]—yes—with the same effect as his vote would have had if it had been cast according to precedent that night, otherwise the objective of the Prime Minister and of my right hon. Friend of restoring the situation that prevailed that night will be frustrated.
  Mr. Speaker: The House knows that Mr. Speaker is always guided by precedent and that, in casting his vote, he does not consider which side of the House is affected, although he notices it. Since both the right hon. Lady and the Prime Minister have made their statements, I hope that we may leave the matter there for this afternoon. I understand that the usual channels are to meet. They will no doubt take note of what the hon. Gentleman has brought to the attention of the House in his point of order.
  Mr. Adley: On a point of order, Mr. Speaker—
  Mr. Faulds: On a point of order, Mr. Speaker—
  Mr. Speaker: Mr. Adley, on a point of order first.
  Mr. Adley: Following the point of order raised by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), would it not also be reasonable to suggest that the numbers of hon. Members eligible to take part in that Division should be the same as the numbers who took part before? In other words, as the constituencies of Rotherham and Thurrock were vacant on that previous occasion, should there be new Members of Parliament for those constituencies on the future date they should not be allowed to participate in the vote.
  Mr. Speaker: Order. I hope that hon. Members will not try to pursue the argument through points of order. If I tried to stop anyone elected to this House from voting, I think that I should be the first Speaker in history to do so.
  Mr. Faulds: On another point of order, Mr. Speaker. With due deference, I think it is unfortunate that you have cut off the opportunity of the House welcoming the Leader of the Opposition's exculpation of my hon. Friend the Member for Stalybridge and Hyde (Mr.
  1366
  Pendry) and welcoming the Prime Minister's typical forthrightness and decency on this issue.
  Mr. Speaker: Order. I felt that I had the approval of the House.

EUROPEAN COMMUNITY (NEW ZEALAND BUTTER SUPPLIES)
3.43 p.m.
The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): With permission, Mr. Speaker, I should like to make a statement about the agreement reached in the Council of Ministers (Agriculture) in Luxembourg yesterday about imports of butter from New Zealand. The Council agreed on arrangements which carry out fully and satisfactorily the understanding secured at the European Council in Dublin last year.
Under these arrangements, the quantities which may be imported from New Zealand in 1978, 1979 and 1980 are 125,000, 120,000 and 115,000 tonnes respectively. These are firm and fixed quantities.
Within these fixed quantities, there are arrangements under which some butter may be diverted, if necessary, from the fresh market into food manufacture. This will apply only to imports in excess of 25 per cent. of our butter market in the preceding year. It will not affect New Zealand's total entitlement or her financial return.
Finally, the Council made a statement confirming that Protocol 18 remains the basis for continuing imports of New Zealand butter after 1980. The Commission will make a report in 1978, and this will serve as a basis for further decisions on these continuing arrangements.
I kept in close touch with the New Zealand authorities during these negotiations. New Zealand fully agrees that the settlement reached takes account of their essential interests both up to 1980 and afterwards.
Mr. Pym: The House will be glad that this important matter has been resolved. Does the last sentence of the statement, which refers to the settlement taking account of New Zealand's essential interests, mean that New Zealand regards this as a fair and satisfactory arrangement?

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I should like to ask the right hon. Gentleman three other questions. First, if the whole of this quantity comes to the United Kingdom and it exceeds 25 per cent. of consumption in the previous year, who will pay for the decrease in the price of butter diverted into manufacturing? The right hon. Gentleman said that it would not affect New Zealand's financial return. Somebody will have to pay the bill. Who will that person or body be?
Secondly, will the Minister be more explicit about what he believes will be the impact and effect on the United Kingdom butter market, which is now in a state of revival?
Lastly, does not this agreement mean that it is even more vital now than it was before to get on top of the ever-increasing surplus of dairy products in the Community? Will he assure the House that he will not again agree to a hare-brained scheme that demonstrably fails to achieve the required objectives?
Mr. Peart: I am surprised that the right hon. Gentleman should be contentious about this matter. The Community has always recognised a continuing commitment to find room for New Zealand's imports into its market. The Community is pledged to agree this autumn on measures designed to bring the milk products market into better balance and to rectify the surplus situation. I cannot go beyond that. I think that this is a very good deal for New Zealand. Indeed, the Deputy Prime Minister of New Zealand made a magnificent statement on this matter. He said that the agreement protects New Zealand's interests, and added:
"I am particularly grateful for the understanding and support received from the British Government and the EEC Commission. Now that the outcome is known the dairy industry will be able to plan ahead with greater confidence."
On manufacturing, the Deputy Prime Minister of New Zealand said that in the lengthy negotiations New Zealand had been at paints to stress the need to preserve cif returns and the need to be able to market the diverted butter. This will not cost us what I think the right hon. Gentleman implied. Naturally New Zealand will have access to our markets in the way that it always has had. This is a very good deal for New Zealand.
Sir G. de Freitas: Does my right hon. Friend believe that this settlement bears out the belief of those of us who thought that New Zealand would get a perfectly fair deal from the Community as a result o the British Government's representations?
Mr. Peart: Yes, I accept that. Indeed, the Deputy Prime Minister of New Zealand publicly stated:
"The package was the result of very tough negotiations and what had finally been agreed took account of New Zealand's essential interests."
He then went on to talk about access after 1980:
"None the less, a statement read into the Council Minutes"—
[Interruption.] I do not know why hon. Members laugh; this is a major statement affecting New Zealand—
"makes it clear that the Commission will submit a further report to the Council before 31st December 1978, and this, taken with the decision made by the Heads of Government at Dublin, assures the ongoing nature of the arrangement beyond 1980."
New Zealand has praised this deal, and I am very proud of it.
Mr. John Davies: Does the right hon. Gentleman recognise that the satisfactory settlement which he reached is fully in conformity with the terms negotiated at the time of accession—and that anything that has been said since then to imply that the terms of accession did not provide for just such an arrangement totally falsifies the reality of the situation?
Mr. Peart: I accept that the agreement was based on Protocol 18. The Government and I played a major part in achieving that. I am grateful for the right hon. Gentleman's support.
Mr. Jay: I understood the Minister to say that imports of New Zealand butter would occur on a declining scale from 1978 to 1980, from a figure which was already much below that of five years ago. Will the Minister assure us that the Government do not accept the presumption that the decline will continue after 1980?
Mr. Peart: My right hon. Friend is wrong, as he sometimes is, on this matter. The quantity that I negotiated was fully consistent with the Dublin declaration and is more than New Zealand has recently

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sent. It means that the average entitlement for 1978 to 1980–120,000 tonnes—is higher than the average sendings in 1974 and 1975, which was less than 119,000 tonnes. Indeed the degressivity is less than that originally proposed by the Commission. I hope that my right hon. Friend will not nit-pick and that he will welcome this deal.
Mr. Geraint Howells: I am sure that the New Zealand Government were pleased to accept the present arrangements. But I wonder what were the views of the British producers. If home milk production continues to rise at the present rate for the next five years, does the Minister think that we shall take up the quota of New Zealand butter that was agreed yesterday? If so, what effect will that have on our dairy industries? We are all aware that the New Zealand butter imported into Britain has been subsidised during the past few years from EEC funds. Will that policy be continued until 1980?
Mr. Peart: The hon. Gentleman represents an important dairying area in Cardiganshire. He will know that we had a moral obligation to help New Zealand. That was stated by both Governments. After all, New Zealand came to our aid voluntarily in a crisis. New Zealanders regard themselves as British in the best sense. That is not sentiment. I believe that we fulfilled that moral obligation under the terms of the Dublin Summit agreement. I do not worry. I think that we can accommodate this market and at the same time have a flourishing dairy industry in our own country.
Mr. Mark Hughes: I congratulate the Minister on this agreement. However, does it not make a reform of the Community dairy industry more essential than ever? The accession of this quantity of butter from New Zealand puts enormous pressure on the Dutch, the Danes and the other producers in the Community and must force the Community to mend its ways of dealing with dairy products.
Mr. Peart: I am not sure what my hon. Friend is trying to argue. The dairy industries of the countries he mentioned are efficient in many ways. The Com-
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munity agrees with us that there should be a link with New Zealand—we have achieved that—despite the fact that it has problems with its own dairy industry. Therefore it was not easy for the Commission to make that decision. The Commission felt that it must honour the Dublin agreement. I am proud to say that it did so. Commissioner Lardinois played an important part in that.
Mr. Marten: The Minister said that some imports of butter may be diverted into food manufacture. Does that mean that if the British people want to eat more than 25 per cent. of New Zealand fresh butter they will not be allowed to do so? The Minister did not answer the question asked by my right hon. Friend the Member for Cambridgeshire (Mr. Pym) about cost. The Minister said that ongoing arrangements would be assured. To which assurances did he refer?
Mr. Peart: I referred to the assurances contained in my statement, which have been approved by the New Zealand Government.
There will be no diversion into manufacture unless imports of New Zealand butter under the special arrangements are more than 25 per cent. of the United Kingdom market for butter for direct consumption in the preceeding year. If imports of New Zealand butter amount to more than 25 per cent. of the United Kingdom market for direct consumption in the preceeding year, butter may if necessary be diverted into food manufacture—for example, cakes and biscuits. This is a sensible arrangement which was approved by New Zealand.
Several Hon. Members rose—
Mr. Speaker: If the House will cooperate with me and ask brief questions, I hope to call everyone who has stood so far. However, I hope that hon. Members will ask single questions, as there is a great deal of other business.
Mr. Spearing: Does my right hon. Friend remember saying that the Dublin agreement on special arrangements would not deprive New Zealand of the outlets which were essential to it after 1977? Have the New Zealand authorities confirmed that the quotas which my right hon. Friend announced will not deprive them of those outlets? How do we know

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that the amounts sent out will be up to those figures?
Mr. Peart: I cannot say exactly. The Deputy Prime Minister of New Zealand has confirmed that we agreed.
Mr. Moate: Will the Minister be more helpful about the post-1980 situation? Does he expect the principle of degressivity to continue to apply thereafter? Is there a longer-term assurance?
Mr. Peart: I mentioned the proposal for a review in 1978 to determine access after 1980. The New Zealand Deputy Prime Minister said:
"It is clear that the arrangements will continue after 1980. The Council of Ministers were not prepared to admit the inclusion in the Council regulation of an article making explicit provision for a review in 1978.… None the less a statement read into the Council minutes makes it clear that the Commission will submit a further report to the Council before 31st December 1978, and this, taken with the decision made by Heads of Government at Dublin, assures the ongoing nature of the arrangement beyond 1980."
We have confirmed that. It was approved by New Zealand. [Interruption.] Hon. Members may mutter. I cannot be more New Zealand than New Zealand. I have defended New Zealand's interests. That was agreed.
Mr. Hooley: Will my right hon. Friend say what will be the effect of this agreement on the consumer? Will he confirm that the intervention stocks of butter by the end of this year will be 400,000 tonnes?
Mr. Peart: I cannot confirm that. Nor can I give precise figures.
Mr. Raphael Tuck: Do the Government assume that New Zealand will produce 500,000 tonnes of butter less every year until finally it produces nothing at all?
Mr. Peart: Mr hon. Friend is being facetious. I have the impression that some hon. Members wish that I had not succeeded.
Mr. Corbett: I accept that my right hon. Friend has done his best within the straightjacket within which he must live. Will he not take on board the point made by my hon. Friend the Member for Durham (Mr. Hughes) that the agreement underlines the urgent necessity for the
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Community to put its own dairy industry in order?
Mr. Peart: I do not wear a straitjacket. I was freely able to negotiate with New Zealand and with my colleagues in the Community. Hon Members are showing that they do not wish to have a successful deal with New Zealand. We achieved a successful deal, which was approved by the Government of New Zealand.
Mr. Gould: Does the Minister accept that it is difficult to base any argument on the amounts of butter supplied by New Zealand to this market over the past year or two, as the New Zealanders have been subject to considerable pressures by the Commission—in terms of prices and the future arrangements on which they depend—not to supply the quotas to which they are entitled?
Mr. Peart: I agree with my hon. Friend the Member for Southampton, Test (Mr. Gould). He is a New Zealander and, in view of his background, he knows the difficulties. The tonnage agreement which I obtained is a good one. The continuing access provision was approved by New Zealand and the New Zealanders responsible for this matter. I am proud of the agreement. It shows that we have been able to accomplish what we set out to achieve.
Mr. Ioan Evans: Although the Minister has maintained the interests of New Zealand, has he considered the essential interests of the housewives of this country? Surely we should seek to scrap the EEC common agricultural agreement, which works against the interests of the housewife. In view of the build-up of the surpluses and the price rises, something must be done to change the scheme.
Mr. Peart: I am rather surprised at that question. My hon. Friend the Member for Aberdare (Mr. Evans) must have supported me on previous occasions when I was critical of negotiations. Certainly the present arrangement is not incompatible with the needs of our consumers. If my hon. Friend is saying that I should not have obtained this access, I understand his argument, but I still believe that it was right to obtain access for New Zealand butter to this market. We gave a pledge on that matter

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as a party, and I am sure that my hon. Friend was party to that pledge. I gave a pledge to the Dublin Summit, and I shall not go back on it.
Mr. W. E. Garrett: I am sure that it has not escaped your attention, Mr. Speaker, that when we are discussing agricultural matters, I am always among the last to be called.
Mr. Speaker: I always keep the best until last.
Mr. Garrett: I know my right hon. Friend's loyalty to and love of New Zealand, and I accept his assurance. I know that he seeks to obtain the best possible deal he can for New Zealand. Therefore, I hope that the agreement is more successful than some of the rotten agreements we have made in the last few months. Is my right hon. Friend aware that the farming correspondent of the Observer, Mr. Murray, correctly anticipated the situation by stating the precise terms of the agreement that was read out this afternoon? Was that intelligent anticipation, or was it a leak?
Mr. Peart: My hon. Friend, who has read the Dublin agreement, will know the aims of the British Government. Therefore, there is nothing new in the situation, and indeed the matter was endorsed by the House of Commons. I know Mr. Murray as a distinguished journalist and a sensible man. There are no leaks involved in this matter. I have just returned from Luxembourg, where we had long discussions late into the night. I was glad to achieve what I did achieve. I was grateful for my hon. Friend's earlier remarks.
Mr. Pym: The figures of tonnages were mentioned in the course of the debates on the European Community on Thursday of last week. I think that that is the answer to the hon. Member for Wallsend (Mr. Garrett).
Mr. Peart: I am grateful for that reinforcement of what I said. That is what we want to endorse in relation to the Dublin Summit.

INDUSTRIAL COMMON OWNERSHIP BILL
Mr. Peyton: On a point of order, Mr. Speaker. May I ask for your help on a
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Private Member's Bill entitled the Industrial Common Ownership Bill? The Bill was introduced into the House in December last year and was given an unopposed Second Reading as a Private Member's Bill in March. It is about to go into Committee tomorrow.
At the last moment—that is to say, last night—the Government proceeded in a slightly strange fashion. They tabled amendments to remove seven out of eight of the Bill's clauses and to amend the Long Title of the Bill. I am sure that it will be agreed that that is a slightly odd approach, even in these rather bizarre days. It means that if this kind of procedure is to be continued, the necessity for a Second Reading debate which normally takes place on Government measures will be bypassed. Furthermore, it will mean that Private Members' Bills, which are still a residual privilege of private Members, will be badly abused.
I hope, Mr. Speaker, that you will be able to give the House some guidance in order to safeguard the rights of the House, which seem in this case to be in danger of being badly abused.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Further to that point of order, Mr. Speaker. In view of the remarks made by the right hon. Member for Yeovil (Mr. Peyton), I wish to make some further inquiries about this matter, and I hope to report to the House upon it. I do not know the details of the matter, but I shall examine the situation before we proceed.
Mr. Peyton: I appreciate the right hon. Gentleman's reaction. Am I to understand that the Bill will not be proceeded with until the right hon. Gentleman has had a chance to examine the matter?
Mr. Foot: I imagine that before we deal with the matter, I shall be required to make a statement. Since I have no knowledge of the matters under consideration, I shall immediately examine the situation, communicate with the right hon. Gentleman and make a statement to the House.
Mr. Newens: Has the right hon. Member for Yeovil (Mr. Peyton) informed my hon. Friend the Member for Consett (Mr. Watkins) of the fact that he sought to raise this matter today? I understand that

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the Bill is scheduled to go into Committee tomorrow morning. If that is the case, surely the right hon. Member should have informed my hon. Friend that he intended to raise this point on the Bill. Would that not have been the courteous thing to do?
Mr. Peyton: Further to that point of order, Mr. Speaker. I do not seek to override the rights of the hon. Member for Consett (Mr. Watkins). Indeed, I am seeking to defend him against the intrusions of the Government.
Mr. Foot: Further to that point of order, Mr. Speaker. I should like to get in touch with my hon. Friend the Member for Consett (Mr. Watkins) so that I may understand the situation. I did not make any statement about holding up the Bill, but in view of what has been said I should like to go into the matter and to communicate with the right hon. Member for Yeovil or with the House. I shall examine the matter and get in touch with my hon. Friend the Member for Consett.
Mr. Peyton: Further to that point of order, Mr. Speaker. I hope that the right hon. Gentleman will make the position clear before any further proceedings are pursued in relation to the Bill. I hope that he will make the matter clear to me and not just to the Committee concerned.
Mr. Foot: I fully understand the right hon. Gentleman's point. I am seeking to safeguard the position. I must consult my hon. Friend to see what is his attitude. If it is satisfactory to my hon. Friend that these amendments should be made, obviously that is a matter to be taken into account. But I cannot judge the matter until I have had a chance to discuss the situation.
Mr. Peyton: I am sorry to pursue the matter, but I must tell the right hon. Gentleman that he is being a little less
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than forthcoming on the Bill in question. The Opposition gave the Bill a Second Reading as a Private Member's Bill, and indeed as a non-controversial affair. The Opposition now find the Government coming in on all four feet, and it appears that their attitude has undergone a severe change.
Mr. Foot: I do not withdraw anything I have said. I shall look at the matter urgently. I must take account of my hon. Friend's views and I must weigh that matter. I am sure that the right hon. Gentleman will accept that I have approached the matter in a proper way.
Mr. Speaker: If I may intervene in a point of order, may I say that it would depend on the Chairman of Committees as to which amendments are selected. He may turn down all the Government amendments—in which case he would, of course, make history. It is my concern to protect the rights of this House. I have taken note of the point of order raised by the right hon. Member for Yeovil (Mr. Peyton) and I think we may leave the matter there. We must move on because we have still not dealt with the Ten Minutes Rule Bill.
Mr. Bowden: There is an important point of principle at stake, Mr. Speaker. If this House gives an unopposed Second Reading to a Bill, it is totally wrong and contrary to precedent that it should be altered by any amendment proposed by the Government at any stage.
Mr. Speaker: That is the same point as that to which I have just referred. I am conscious that I am guardian of the rights of the House, but we shall look carefully at the matter raised by the right hon. Member for Yeovil when the Bill comes back to the House. The Bill is now about to go into Committee and will be the responsibility of the Chairman concerned.

PROFESSIONS SUPPLEMENTARY TO MEDICINE ACT 1960 (AMENDMENT)
4.9 p.m.
Mr. John Corrie: I beg to move,
That leave be given to bring in a Bill to amend the Professions Supplementary to Medicine Act 1960 to include chiropody.
I want to ensure that in future the public will know that everybody who practises chiropody has a qualification recognised by statute. This is not the position today.
It may seem strange that a "Foot" Bill should emanate from the Conservative Benches, particularly in these difficult days, but this Bill would be an important step forward in chiropody.
The Bill has crossed the floor of the House because the hon. Member for Ealing, Southall (Mr. Bidwell) first raised the issue in the Chamber on 21st October 1969. It has all-party support today and I hope that it will not be opposed. It is also opportune that Age Concern—that body which does so much for our elders—has brought out a report this week entitled "Step on It". It is a report on the chiropody services which strongly supports the provisions in my Bill.
Under the heading "Discussion points", Age Concern states that chiropody should become a closed profession so that only those with State qualifications can set up as practising chiropodists. That would facilitate the use of less highly skilled but competent aides to assist in the National Health Service chiropody service who would provide the guarantees that members of the profession are anxious to secure for the protection of their own status and, more important, the safety of their patients.
Chiropody is important to people of all ages, not just to the elderly. At present chiropodists are registered under the Professions Supplementary to Medicine Act along with physiotherapists, radiographers and members of other supplementary professions. Chiropodists differ from other professions that are registered in two important ways. First, chiropodists' patients come directly to them and are not normally referred by the medical profession. Secondly, a large percentage of chiropodists are in private practice.
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To be employed within the National Health Service chiropodists must be State registered but there is no restriction about private practice and, therefore, no real standard or qualification. Anyone can buy a pair of scissors, a nail file and, I hope, a bottle of disinfectant and, with a short correspondence course at best, put up a plate and become a chiropodist.
My Bill would make it compulsory for those in private practice to be registered or enrolled by the Chiropodist Board. Why should there be dual standards for the public and private sector? Why should those who are entitled to treatment within the National Health Service receive treatment by the fully trained and qualified while those who are not entitled to treatment within the National Health Service have to resort to someone without any form of training at all? Only a minority of the population receives National Health Service treatment in chiropody.
Because the Secretary of State accepts responsibility only for priority groups of patients—the elderly, the handicapped and pregnant women—almost all the working population have to seek private treatment. They have no choice. Should they not be protected from less qualified treatment? Should they not be given a guarantee that the chiropodist that they attend has a recognised professional qualification? A limited service is provided for school children by the National Health Service and I am pleased to say that most of that work is done in Scotland.
In order to become State registered, a chiropodist has to take a three-year course of training which includes life science, relevant medical subjects and detailed anatomy of the lower limbs. The course also ensures thorough clinical training and practice. Examinations are held every year. At the end of the course examinations are conducted by independent examiners in each subject.
It is important to remember that chiropodists do not only cut nails and treat corns but are also responsible for a comprehensive foot care service for all ages from the young to the old. Since their patients are not referred to them by medically qualified men, the chiropodist is often the first person to see diseases with symptoms occurring in the feet which require medical investigation. He has to decide whether it falls within his

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province to treat that patient or to refer his patient elsewhere. That is one of the most important parts of his work. How can an unqualified practitioner in private practice hope to be able to send on a patient with such a problem if he cannot recognise the problem in the first place? How many people today suffer health problems because their unqualified chiropodist does not recognise that there is a complication somewhere else in the body?
My Bill would enrol any practitioner who has practised chiropody as his principal means of livelihood for five years out of the preceding seven years. That could probably be reduced in Committee. No more administration would be necessary, since the enrolment of practitioners would be by the existing Council for the Professions Supplementary to Medicine. Such enrolled chiropodists might then become eligible for employment in the National Health Service and help to overcome the present shortage of chiropodal manpower in the service. It would make little immediate difference to the profession but it would result in a better trained profession in the future because it would end the situation in which anyone can practice. It would mean that a chiropodist was the same wherever he worked, inside or outside the National Health Service. They would all be recognised as qualified professional people.
Care of the feet as part of medical practice is as old as medicine itself. Chiropody as a separate art began during the eighteenth and nineteenth centuries and, with the passing of the Professions Supplementary to Medicine Act in 1960, reached full professional status.
A large proportion of the population suffer from some kind of foot trouble—and that is not mean to be a pun. Those people are not as efficient as they should
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be either at work or at play. Most of the conditions that cause their disability can be treated by chiropodists. They cannot all be cured but they can be improved and made symptom free. Money spent on improving the facilities and organisation of the chiropodal service would produce handsome returns in terms of the well being and efficiency of the population. Many feet are ruined by badly fitting, poorly made shoes from abroad. Fashion is the chiropodists' worst enemy.
I accept that there is little chance of the Bill reaching the statute book this Session but it is a serious matter which would have far-reaching consequences for both people in the profession and the general public. I give notice that I shall seek to reintroduce it at an early stage in the next Parliament—irrespective of which party is in power. I would like to see only those on a register or roll established and maintained by the Chiropodist Board using the title "chiropodist" or practising chiropody. I hope that the House will support me.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Corrie, Mrs. Lynda Chalker, Mr. Andrew Bowden, Mr. Robert Cooke, Mr. Roger Moate, Mr. Ernest G. Perry, Mr. George Thompson, Mr. Peter Emery, Mr. Malcolm Rifkind and Mr. David Penhaligon.

PROFESSIONS SUPPLEMENTARY TO MEDICINE ACT 1960 (AMENDMENT)
  PROFESSIONS SUPPLEMENTARY TO MEDICINE ACT 1960 (AMENDMENT)
  Mr. John Corrie accordingly presented a Bill to amend the Professions Supplementary to Medicine Act 1960 to include chiropody: and the same was read the First time; and ordered to be read a Second time upon Friday 16th July and to be printed. [Bill 172.]

DEVELOPMENT LAND TAX [MONEY]
Queen's Recommendation having been signified—
4.19 p.m.
The Minister of State, Treasury (Mr. Denzil Davies): I beg to move,
That, for the purposes of any Act of the present Session to impose a new tax on the realisation of the development value of land, it is expedient to authorise the issue out of the Consolidated Fund of any sums required to enable the Commissioners of Inland Revenue in certain cases to make to a body by whom an interest in land is acquired a payment in respect of the tax paid on an earlier disposal affecting that land.
The resolution is needed because of the Government's proposal to include in the Development Land Tax Bill two new clauses which are numbered New Clause 2 and New Clause 3 on the Order Paper, which will in certain circumstances result in a body which is to acquire an interest in land net of development land tax obtaining a benefit which goes beyond receiving the development land tax paid by the vendor in respect of a particular acquisition.
New Clause 2 deals with the case in which an authority's intention of acquiring from the owner an interest in land for development is frustrated by his subsequently selling the land to a third party. That sale could very well cream off any development value, and if the authority later acquired the land from the new owner it would be likely to have to bear the full market cost, because little if any development land tax would be payable. As compensation, the tax paid on the first sale is to be paid over to the local authority.
A similar situation is dealt with in New Clause 3, giving an authority which acquires land developed in contravention of planning permission the benefit of any development land tax paid to the Revenue on the start of the development project.
The implementation of each of the new clauses could involve the Inland Revenue in making payments to the acquiring authority not out of current tax receipts but out of the Consolidated Fund.
The two new clauses do not affect any rights or any sales. They merely mean
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the paying over to the local authority of a certain sum which the private individual has paid in tax to the DLT office in the two very limited circumstances which I have described. After a notice has been received by an owner of an intention by the local authority to buy his land, if he then sells the land to another private owner the DLT will be paid in the first instance to the Inland Revenue. If the resolution and the new clauses are accepted, the Inland Revenue will be given the power to pay over that money to the local authority.
We are not concerned with extensions of powers in relation to the payment of money to local authorities. The resolution is merely one which will have to be implemented if the House accepts New Clauses 2 and 3.
4.22 p.m.
Mr. Graham Page: The Money Resolution appears on the Order Paper because the Government failed to think out fully the peculiar procedure which now appears in Clause 39 and Schedule 7. We saw in Committee how the Government had failed to think the matter out when drafting the Bill, for a completely new Schedule 7 was presented to us. Then, at the very last moment before Report—I think only on Friday—we saw on the Notice Paper two new clauses supplementing the procedure for payment net of tax, the procedure whereby local authorities can estimate the tax and pocket it for themselves out of the money they pay when acquiring property.
We objected to this procedure as a whole. There are amendments today saying that the first thing to do in such a procedure is to have the tax assessed by the Inland Revenue and not estimated by the local authority. We object to an extension of the procedure.
We shall have an opportunity to debate New Clauses 2 and 3 on their merits. At this stage I merely want to protest at the extension of the principle to the situation in which the local authority acquiring property may have been a little late in doing so, with the result that there may have been a previous process which means that it is unable to deduct all the tax which it might otherwise have been able to deduct. Exempt bodies are not only local authorities. There are the other bodies mentioned in Clause 11. I presume that the resolution gives power

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to the Board of Inland Revenue to pay over the tax on those occasions to such bodies as the Commission for the New Towns, the Highlands and Islands Development Board, the Lee Valley Regional Park Authority, the Letchworth Garden City Corporation, the North-Eastern Housing Association, the Scottish Development Agency, the Scottish Special Housing Association and the Welsh Development Agency.
It is extraordinary that, instead of accounting to the Exchequer for the tax which it collects, the board will be directed by means of this resolution and the new clauses to pay the tax over to the acquiring authority, whether that is a local authority or one of the bodies in the list in Clause 11. The procedure will be of the utmost inconvenience to those buying and selling property. As it applies to Clause 2, it means that a sword of Damocles will hang over the heads of owners of properties for five years.
I object to the principle that the total tax collected by the board will not go into the Exchequer but will be paid direct to those public authorities, the so-called exempt bodies. Nowhere in the Bill is there a right for those exempt bodies to have the whole benefit of the tax paid. Nowhere in the Bill is the whole benefit of the tax given to local authorities or any other authority providing community services. It is a tax which should go to the Exchequer and be dealt with the normal way, just like any other tax. We object to the extension of the peculiar procedure of purchasing net of tax—that is, an exempt body taking the tax from the purchase money that it pays.
4.27 p.m.
Mr. Nicholas Ridley: I have not given the Bill the study which many of my hon. Friends have given it. I am sure that the Minister of State will find occasion to remind me of that. The Bill is so important, however, that it is right for me to seek to acquire a little knowledge of it and make such criticisms as appear to me to be relevant.
Mr. Nick Budgen: I know that my hon. Friend has tried for a few days to understand some of the complexities of the Bill. Not many of our fellow citizens can apply
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my hon. Friend's expertise and intelligence in considering detailed tax legislation. It must be with a sense of profound sadness that we contemplate the fact that so many people who have to try to understand the Bill will probably end up making mistakes and perhaps being ruined by their failure to understand this abortion of legislation.
Mr. Ridley: My hon. Friend is absolutely right. It would be better if we had not embarked upon such legislation. It is interesting to reflect on why we ever get into such a position. It would have been much more valuable if the Cabinet minutes dealing with the decision to go ahead with the Bill had been leaked. At least we should have had a glimmer of understanding of why we must be considering it at all.
I turn to the Money Resolution. It is odd that the Minister did not tell us what sums were likely to have to be repaid. I do not even know the likely yield of the tax. We must now debate that by reference to the repayments that might be made under the resolution, which makes the tax less valuable as a revenue earner. Therefore, I as least, am in the position of considering how much we can afford to disburse out of a tax whose yield I do not know.
That is an unsatisfactory position in which to be when we are considering a Money Resolution. After all, the point of a Money Resolution is to enable the House to control the expenditure of the Government. It is now becoming common for which this Government not to include in Money Resolutions the amount of money that is involved. That is a pity. I can understand that probably the amount will not be very much, because what the Minister has outlined to us is really an anti-forestalling procedure. It is designed to prevent people escaping from the mere serving of a local authority notice upon them.
I find pretty obnoxious the suggestion contained in the Bill that by serving a notice on a would-be, or perhaps non-would-be, seller of land a local authority can, so to speak, sterilise all further transactions in that land and acquire it for the value less the tax, keeping the tax, as it were, for itself. This raises a whole series of detailed questions to which I should like the Minister to reply. For instance, if a certain value attaches to

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the land, both base value and market value, at the time the notice is served, obviously it is from those two values that the amount of tax is to be calculated.
Suppose, however, that through the transaction of selling the land to a third person the base value or the market value is found to be different, upon which set of figures is repayment to be made by the Treasury? Does the Minister follow me? I should like to know whether repayment will be made on the basis of the figures worked out by the local authority when serving the notice or on the basis of the actual figures when the third party transaction is made. If those two figures are different, is it not rather unfair that, the original owner having paid a given amount of tax, on the eventual transfer to the local authority the tax may be found to be something different? The amount may be very much less, and perhaps the original owner paid a lot more than he should have paid. What provision is there in the legislation for dealing with that situation? Clearly, that is a question which should be answered.
Again, suppose that a certain amount of time elapses and it happens that market values change, as the base values could change too, after a certain period. Is the amount of tax already paid by the Treasury to the local authority to take account of the changed values after a certain passage of time, or is it to be strictly confined to the original value when the tax was first levied?
If the two amounts of tax in the computation turn out to be different, is it the intention of the Government that the higher or lower value should be taken, or is the original owner of the land to be recompensed if he is found to have paid too much tax? These are all likely probabilities to occur. We know the speed at which the bureaucratic machine moves, and the time that will be taken in all these calculations and transactions is endless. Therefore, there seems to me to be a great deal of doubt about it all.
All this arises out of the extraordinary way in which the relevant part of the Bill is drafted. Surely, if it is desired to give back to local authorities the tax on sales to them, it would be much easier if the Treasury in all instances collected the tax and then paid it back in such circum-
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stances as seemed appropriate to the Government. I have grave objection to the whole idea that local authorities should not have to pay what other citizens pay. The whole basis stinks of prejudice. I would mention the word "hybridisation", but I am sure that it would be wrong to mention that delicate subject to Labour Members because they do not like that word.
Mr. Tim Sainsbury: On that thought, I wonder whether my hon. Friend has considered the implications of Clause 11 and the authorities to which my right hon. Friend the Member for Crosby (Mr. Page) has referred. The Lee Valley Regional Park Authority is involved in this and it may be that other park authorities are not. It might indeed be appropriate to refer to hybridisation if other park authorities are to be involved.
Mr. Deputy Speaker (Mr. Oscar Murton): Before the hon. Gentleman continues his speech, I must draw the attention of the House to the fact that we must keep within the confines of the Money Resolution.
Mr. Ridley: I thought I had done so, Mr. Deputy Speaker, with considerable care hitherto. I do not know whether your rebuke was directed towards my hon. Friend the Member for Hove (Mr. Sainsbury) or myself. The Lee Valley Regional Park Authority is just such a body as might receive sums under the Money Resolution repayment, and I should have thought it would be difficult to discuss whether sums should be paid to these bodies without being able to mention them and their suitability for having any such sums paid to them. In my opinion, the Lee Valley Regional Park Authority is a most unsuitable body to have these sums repaid to it. I can think of much more worthy bodies than that authority which should be exempt.
The hybridity point could well have been raised, as it can be on New Clause 1, as to why industry should be treated differently from commerce, but I say that in parenthesis to avoid incurring a further rebuke from you, Mr. Deputy Speaker. I ask the Minister of State, therefore, to justify the Money Resolution, because it is very far from clear what will be the rights of local authorities in the less straightforward cases

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with which this legislation will abound. There are bound to be many disputed, contentious and difficult cases.
The question of valuation is hard enough, particularly when they are deemed values, as the base value most certainly is. There will be many cases where the tax paid by the original seller is different from the tax as computed at the time the local authority eventually gets the land. We want a considerable dissertation from the Government as to how those cases are to be dealt with. I have referred to only two of them, but clearly we cannot contemplate going ahead with this complicated procedure unless we understand exactly how it is to work, if it is to work at all.
4.40 p.m.
Mr. Michael Latham: In the discussion of the Community Land Bill on the Floor of the House—and I am very glad to see the right hon. Gentleman the Minister for Planning and Local Government present—I said that the danger with Report stages and discussion of Lords amendments such as we had all night on the Community Land Bill was that those who were involved in the Committee proceedings reached a stage of talking to themselves and forgetting the wider issues having lived so closely with the Bill. It was for that reason that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) opened his remarks with his usual percipience by bringing us back to the essential point of the amount of revenue to be made available to local authorities under the procedure already in the Bill, which is now being widened by this Money Resolution to take in the provisions of New Clauses 2 and 3.
I understand from those discussions that we sometimes have privately that I am likely to be able to speak on New Clause 3 and I do not want to anticipate that, but there are a few questions which need to be answered. The first, which seems to be absolutely basic, is what kind of revenue we are discussing. That is essential to any intelligent understanding of the subsequent clauses.
New Clause 3 is concerned basically with a way of getting round the enforcement procedure under the Town and Country Planning Act as it stands. It would be helpful if the Minister of State
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would say how much revenue the Treasury expects to be in a position to disburse to local authorities from the provisions of New Clauses 2 and 3.
If he is about to say that he cannot do that, perhaps I can give him a slight hint. Can he say what is the current number of enforcement notices which have been served and how many of them have been approved? They are exactly the cases in which New Clause 3 will be involved, where illegal development has taken place and the local authority has sought to stop it. New Clause 3 says that not only shall the illegal development not take place, but that the local authority will claw back any added betterment which may have accrued.
Presumably this will help to swell the coffers of local authorities for the purposes of further land acquisition. As those hon. Members who recall the Community Land Bill will be aware, under Section 44(2) the Secretary of State, with the approval of the Treasury, sticks his hand into any surpluses local authorities may have accrued. If a local authority has made some money on land acquisition and subsequent disposal, or by buying land net of development land tax, that money goes into a big pool which is laughingly called the Community Land Surplus Account. If there is any surplus at the end, under the provisions which the Secretary of State has outlined in various circulars 30 per cent. will be left with the authority concerned and 70 per cent. will go to the Government, who will keep 40 per cent. and redistribute the other 30 per cent. to those local authorities which have been incapable of making any profits or which have wasted them. So Robin Hood will redistribute the money appropriately. The 30 per cent. is available, therefore, for further land acquisition by local authorities.
When we discuss New Clause 15 I for one will seek to point out that in Leicestershire this year for land acquisition for the whole county there is likely to be £450,000 allocated under the community land scheme, of which the Hinckley and Bosworth Borough Council wants £1 million. The revenues likely to be available are so trivial and the amount of money available, therefore, to bring land on to the market so negligible that difficulties for builders in future years in having an adequate flow of land

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to finance the building programme will be insuperable.
As I say, when we come to New Clause 15 we shall be able to deal with that matter further, and that will be a particularly appropriate time for the Minister for Planning and Local Government to be present, because one of his arguments when we considered the Community Land Bill was that in the first two or three years builders would have enough land and that, at the end of that period, local authorities would be dishing out land to them in accordance with the acquisitions which had already been made. In view of the public resources which will be available—and they are likely to be negligible—the Government's hope that there should be a steady flow of land is likely to be completely nullified by events.
When the Financial Secretary put this Money Resolution on the Order Paper, presumably he had in mind a figure that would swell the coffers, go into the 30 per cent., and get Leicestershire's £450,000 this year up to, say £451,000 with which it could buy another chicken run to help more building in the county. We need to know that figure.
I emphasise that it is wrong for the House to consider and, if necessary, approve Money Resolutions without specific figures being given of forward projections. That is what the purpose of this House is all about. I hope that the Minister of State will be able to give figures of the expected yield and the information for which I asked him about the enforcement notices.
4.45 p.m.
Mr. Tim Sainsbury: At the outset of our discussions on this Bill I have to declare an interest in the subject matter since I am a director and a substantial shareholder of companies whose land might be affected by various aspects of the Bill, and, as one who is involved with a significant retailing organisation, I ought perhaps—
Mr. Michael Latham: I am afraid that I forgot to declare my own interest as a director of a house-building company.
Mr. Sainsbury: I am glad that I had the inadvertent opportunity to remind my hon. Friend the Member for Melton (Mr. Latham) about that. I had not quite finished my declaration of my own inter-
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ests, however. I was about to add that I also have an interest as a farmer whose land, I hope, will never be affected by any of the Bill's provisions.
When he moved the Money Resolution, the Minister said that we were concerned with a resolution relating to two new clauses which arrived before us at a late stage in the lengthy process of our consideration of the Bill. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) talked about "embarking" on our discussion. We appear, rather, to have been pulled up in order to give the Minister an opportunity to jump on board at the last minute with the Money Resolution and the two new clauses.
Mr. Ridley: Perhaps it is more akin to a journey on the Trans-Siberian Railway and that I have just joined at Omsk.
Mr. Sainsbury: I hope that my hon. Friend will not leave us at Novosibirsk.
Mr right hon. Friend the Member for Crosby (Mr. Page) said that New Cause 2 had been put on the Notice Paper on Friday. My recollection is that it was a "starred" new clause which was put on the Notice Paper yesterday. Therefore, amendments to it are now almost inevitably "starred" amendments and have not so far found favour in the eyes of your selection, Mr. Deputy Speaker. Incidentally, amendment (c) has been incorrectly printed. It should read
"leave out 'five' and insert 'one'."
In any event, in view of the late arrival of the new clause to which that amendment relates, I hope that we shall have an opportunity to consider it.
I support the objections which have been advanced. As other hon. Members have said, this is a very unsatisfactory state of affairs. It is unsatisfactory to the taxpayer. What is more, judging by the terms of the Money Resolution, it must also be rather unsatisfactory to local authorities and other bodies which might at some time receive sums via the Consolidated Fund from the Commissioners of Inland Revenue. I hope that the Minister will be able to say how long the moneys are to be outstanding. When will the local authorities and other bodies which are the eventual recipients get them?

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I am sure that the Minister of State is aware from his work in other areas of the very unsatisfactory nature of some company accounts at present. All the provisions of deferred taxation gradually accumulate in a company's accounts and in many cases represent enormous and unreal figures. Here, too, we have sums of money which presumably can accumulate over a period. There is nothing which says that these disbursements have to be made at any particular time.
The economists are familiar with the need to look closely at the velocity of money, and that important factor in the equation has been highlighted again recently. Perhaps we shall have to have a new determinant for the velocity of the movement of tax payments if they are moving in and out of the Consolidated Fund and on to the Lea Valley Regional Park Authority and other local authorities.
Therefore, I support my right hon. Friend in his objection and protest about this matter. I hope that the Minister will say something about how long these sums might be outstanding. It is not only a question of how much money can be outstanding at any one time, but for how long it will remain unaccounted for and how it will be identified.
What provisions is the Minister proposing to make to identify those sums in the Consolidated Fund so that we know that they are owed to somewhere else? How is he proposing that local authorities should identify in their accounts the sums to which they may be entitled in due course and how will they know how much they should expect to receive? In some cases the sums could be quite significant.
All this highlights the very unsatisfactory nature of the proceedings necessary under the Bill to enable local authorities and other bodies to acquire land net of tax. At this early stage in our proceedings I hate to disagree with my hon. Friend the Member for Cirencester and Tewkesbury, but I find merit in the proposal that local authorities should be allowed to buy land net of tax when it is for their own purposes. I am not saying that that is so when the land is bought merely in order to pass it on later. However, I can find little merit in the proceedings by which it is pro-
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posed that we should enable this to be brought about. We expect to hear rather more from the Minister in justification of the Money Resolution as a first part of our proceedings.
4.52 p.m.
Mr. Nicholas Fairbairn: I find myself in something of a difficulty, because, while the new clauses are so abstruse as to be incomprehensible, the Money Resolution is so loose as to be meaningless. It is the combination of those two quite improper characteristics of legislation which seems to characterise all modern tax legislation, which spews forh in such abundance from the Government.
The fact that the Government found it necessary to put down so loose a Money Resolution and two such complex new clauses at the end of last week at this stage in this complicated Bill is an indication that no one on their Front Bench understands the proper implications of their legislation. Whatever explanations may be given by Ministers, it seems that the Money Resolution means anything or nothing, because it says—and we should read the terms:
"That, for the purposes of any Act of the present Session to impose a new tax on the realisation of the development value of land".
If we have another supplementary Budget this year and the development of land is taxed, this resolution will apply to an Act which no one has yet even framed.
That is a particularly improper form of legislation. If the Chancellor decides suddenly tomorrow that we need to sell to our creditors not only the Dorchester but the Palace of Westminster and that the land shall be used for another purpose, and if he decides to tax it, no doubt that would be covered by this Money Resolution. It seems quite improper that a Money Resolution should not refer specifically to the Act that it is intended to cover.
The only possible explanation of or justification for those words is that the Government still do not understand their incomprehensible, abstruse and idiotic statute and might in this Session have to introduce another with different clauses and regulations and get it to do what they want it to do and not what they imagine it will do. If that is true, let them say

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so. Either the resolution should apply to this statute and none other, or the Government should say that they have it in mind to introduce other measures to which it is intended to apply.
Mr. Sainsbury: Would my hon. and learned Friend consider it possible that the total absence from the Chamber of any Labour Members other than those on the Government Front Bench reflects the fact that they are all diligently studying the provisions of the lately introduced new clauses?
Mr. Fairbairn: I hope that they and their legal experts are studying them. I hope that they understand them.
What was absolutely clear—with the greatest of respect to the Minister, whose diligence and application throughout the Committee stage cannot be faulted—was that all present, including the Minister, did not know what was meant. No one on the Benches behind the Minister knew what was meant. If anyone thought that he knew what something meant, that was not what anyone else thought it meant.
We start with Alice in Wonderland. No doubt the development of Wonderland would be subject to this tax. Certainly it should be. It is the only thing that is properly introduced by it.
The Money Resolution goes on:
"it is expedient to authorise the issue out of the Consolidated Fund of any sums required to enable the Commissioners of Inland Revenue in certain cases to make to a body by whom an interest in land is acquired a payment in respect of the tax paid on an earlier disposal affecting that land".
Why should "any sums" be required? Why is it "any" sums? Why is it not "the sum"? Is the Treasury to be authorised to pay out of the Consolidated Fund any sums required to enable the Commissioners to make payments in certain cases? The cases are not specified.
We can have all sorts of explanations from the Government, but if they wish to ensure that the cases are purely those arising under New Clauses 2 and 3, let them specify the sort of cases they intend to cover. If it is intended, however, that the vast errors which regularly occur in Treasury calculations should be made up, let us hear that that is the purpose. If it is the intention to introduce further
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statutes with other provisions, let us hear about that.
Then we go on to this concept:
"by whom an interest in land is acquired a payment in respect of the tax paid on an earlier disposal affecting that land".
What is a payment in respect of the tax payment? Is it equal to the tax paid, or is it more or less than the tax paid? Is it with interest? If the present rate of inflation continues, as it inevitably will under the present Government, and if the tax paid is to be the same sum as that originally paid, it will have to be inflation-proofed upwards. Is that the intention?
What is the meaning of these words? Do they imply that the payment is with or without interest? If the local authority has to borrow the money in order to fulfil its obligations until the money is paid over, however many years later, will the interest thereon be paid? These are the sorts of specific matters which so vague and irresponsible a Money Resolution leaves unanswered.
This matter merits particular interest in Scotland, where there are very big developments and changes in the use of land, very big sums which are paid for the development of land, and very big turnovers. If the Government's assessment is right and the oil around Scotland will be exhausted in 20 years' time, it will be interesting to know whether local authorities in Shetland, Aberdeen, Fife and other places will have received their money before the oil runs out. Here are vast sums of money, all of which are to be removed intact in order to be spent by a spendthrift Government. It is right that local authorities should know exactly the position in which they are likely to find themselves.
The characteristics of this Money Resolution, if anything, compound the frightfulness of the Bill. I make no criticism whatsoever of the Minister, because he is the unfortunate man who has to pretend that this many-legged rogue monster is an intelligent and domesticated beast. However, it does no credit to Parliament, democracy or anything else to have a pair of new clauses such as those proposed. If the 630 Members of Parliament were to write their opinion on the new clauses, or if those who are legally qualified were to give opinion as

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to what the new clauses meant, there would be a different answer in every opinion. To have them backed up by so vague and sloppy a Money Resolution is a disgrace to the legislative process.
5.0 p.m.
Mr. Michael Spicer: I had not intended to intervene in this short debate, but my hon. Friend's have raised so many fundamental issues that I am prompted to underline one. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has made the point that we cannot have a Money Resolution of whose outcome we have no idea. We have absolutely no concept of what kind of moneys we are discussing. It is a very new form of Money Resolution that we are contemplating unless the Minister can give us some kind of answer about that.
It is not because I have doubts about the Minister's ability in that respect. Those of us who sat on the Committee had considerable regard for his abilities. but I share the view of my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) that the resolution is so complex that even the Minister often seemed to be at a loss. That may explain why he seemed in Committee to accept so many of our amendments and why we do not find them reflected in the Bill as re-printed—or maybe it was just the lateness of the hour.
If the Minister is trying to meet us, particularly my hon. Friend the Member for Cirencester and Tewkesbury, we must have some idea of what the yields will be. This is fundamental. Here for the first time we are considering a tax on hypothetical values. That will make it extremely difficult for the Minister to produce any kind of yield estimate. We are not trying to work out the kinds of sales which are contemplated and, by putting a figure for inflation against those sales, thereby coming up with an estimate of yield. We are not talking about a tax on anything real. What we are talking about is often a tax on nothing, a tax on some kind of hypothetical valuation.
The point that we are raising about yield goes to the very root, certainly of my objection, of the opposition to the entire tax. Here we have a tax on a
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hypothetical value which will make it extremely difficult for the Minister to give any kind of estimate of what kind of moneys we are talking about.
Mr. Michael Latham: Is my hon. Friend aware that under New Clause 3, which the Minister will be moving, the gain is not only hypothetical but also illegal?
Mr. Spicer: That is an extremely interesting point. I have just had a message passed to me by my hon. and learned Friend the Member for Kinross and West Perthshire pointing out that the Scottish National Party is not here. Perhaps it is also studying the details of the Money Resolution.
I do not want to labour this point because we shall come back to it, but it is fundamental to any discussion of this Money Resolution that we should have an estimate of the yield. This is not only appalling but an appalling piece of legislation.
Mr. Stephen Ross: The hon. Gentleman says it is appalling, but would he not agree that there should be a tax on land transactions and that this is a rather better piece of legislation than his own Government brought in, namely, the development gains tax? It has particular advantages, particularly in the opinion of professional circles.
Mr. Spicer: That needs the kind of response which one's own spokesman should make. I can only give the hon. Gentleman my own personal view and I absolutely dispute his view. A tax on gains is a tax on something real. This is a tax on a hypothetical value.
Mr. Sainsbury: My hon. Friend seemed to accept the accusation of the hon. Member for Isle of Wight (Mr. Ross) that the development gains tax was legislation passed by his Government. He can personally disclaim all responsibility because he was not an hon. Member at the time concerned. I remind his that although the legislation was envisaged in the December 1973 Finance Act introduced by Mr. Barber, now Lord Barber, the legislation was in fact enacted by the present Government's predecessors and the process of consultation which would have been undertaken and which would have substantially amended the Bill in respect of observations which had been

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made by the professional associations to which both the hon. Member for Isle of Wight and myself have the honour to belong would have greatly changed it had we been responsible for the legislation which the hon. Member for Isle of Wight has just criticised.
Mr. Spicer: I accept that absolutely.
Mr. Ridley: Before we have too much razzamatazz on this subject, may I point out that I was a member of the Standing Committee which considered the development gains tax legislation and one of the 10 per cent. of the rivals for the Liberal leadership—the hon. Member for Cornwall, North (Mr. Pardoe)—was also on the Committee and he found considerable fault all the way through with the concept of development gains tax?
Mr. Spicer: I am sure that all that is extremely helpful.
The only point I want to make in response to the hon. Member for Isle of Wight is that the concept of a development gains tax is infinitely preferable because it is a tax on something genuine—on a gain. It is a tax on something which we can identify. In this case we have a tax on something which is totally hypothetical. Once we start to introduce a tax which is based upon some hypothetical valuation, it is often subject to personal and subjective interpretations. One is then faced with the problem of trying to provide some kind of estimate of the tax yield. There are countless problems once we get into the business of taxing hypothetical valuations which no doubt, we shall be discussing later tonight.
However, the one point to which I wish to draw attention that once we have a hypothetical tax, it will be difficult to respond to the probings particularly of my hon. Friend the Member for Cirencester and Tewkesbury who asked, quite rightly, for some kind of estimate. If we cannot have an estimate of the sort of money we are talking about, I for one find this Money Resolution objectionable.
Mr. Fairbairn: Mr. Speaker, I should earlier have declared an interest, which I omitted to do. I am the owner of some 500 acres of land which may be subject to this Bill. Like my hon. Friend the Member for Brighton and Hove I trust that it will never be developed.
Mr. Sainsbury: My constituency is Hove.
Mr. Fairbairn: I meant my hon. Friend the Member for Hove (Mr. Sainsbury). I apologise for enlarging his interests. I trust my land will never be subject to an interest, but, under the provisions of the Bill, even if it is never developed I may have to pay tax on the loss of amenity which a neighbour creates over my land.
Mr. Denzil Davies: Perhaps I may deal first with the main point made by the right hon. Member for Crosby (Mr. Page), who rightly chastised us for putting down the two new clauses and the Money Resolution at such a late stage. I accept what he said. If we had thought of it, we would have put them down earlier, but we did not think of it. We put them down at the first moment we could, but it was late and I apologise. At least the House should give us thanks for enabling hon. Members opposite to raise all these issues again. They have this opportunity at the beginning of the Report stage on a sunny afternoon.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) showed a clear grasp of the Bill although he has not read the Cabinet minutes and was not on the Standing Committee. I wish that he had been on the Committee, since he could have assisted us no end.
Mr. Ridley: Why do we not accept the suggestion of the hon. Member for Rugby (Mr. Price) and hold all Cabinet meetings at Hyde Park Corner? Then we could all know what was going on.
Mr. Davies: On a day like this, that is a very attractive idea. Perhaps we could also hold the Report stage of the Bill there.
The hon. Member asked what amount of tax would be paid over to the local authority. It is the amount which would have been payable if the original acquisition had taken place. In other words, three parties are involved. Mr. A has a piece of land and the local authority intimates an intention to acquire it. Mr. A disposes of it to Mr. B at full market value, so when the local authority acquires the land from Mr. B, there is a high base value and the local authority can deduct no tax because there is none to be deducted.

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The intention behind both new clauses is basically the same—that the tax which would have been payable by Mr. A—not the tax deducted by the local authority: that might have been different—had the sale gone through to the local authority, presumably with a lower base value, will be paid over to the local authority in the circumstances provided for in New Clause 2. But there is no question of having to pay over more if the values increase between the two sales.
We are concerned with the first potential sale or acquisition and the amount of tax which would have been payable on that acquisition. That is the fixed amount of tax which would be paid back to the local authority if the Money Resolution and the new clauses were accepted.
The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) reminded us in Committee that he owns 500 acres of burgage property in Scotland. He said that the Money Resolution was drafted vaguely and that we would not know what would be paid out. But the Treasury cannot pay money to anybody in pursuance of the resolution. The resolution merely gives a cloak of authority to statutory authority. If the new clauses are not passed, the Treasury could not pay any money out under the resolution. The ability to pay the money is circumscribed by the two new clauses. Thus, the hon. and learned Gentleman's criticisms of the Money Resolution are not entirely valid because we are not paying money out as a result of the resolution.
In fact, we are not paying money to private bodies. The money is still within the private sector. Again, we are not concerned with the kind of Money Resolution which we sometimes see after Orders late at night when money may be paid out to a private oil company and a Money Resolution is needed to reinforce the Order. We are concerned with money which would otherwise have gone to the Revenue and is then recirculated to the local authorities in the limited number of cases dealt with in the two new clauses.
I was asked how much money would be paid from the Revenue to the local authorities. I cannot give the answer to that, but it would be a very small
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amount, because we are concerned with a very limited area in which there might be forestalling—it would be rare: in most cases, it would just not happen—and where development might start without authorisation under New Clause 3. The amount of money paid out would be very small, especially bearing in mind the fact that the two new clauses would to some extent deter owners of land from operating in the way in which they would otherwise operate.
I am sorry to disappoint hon. Members but I cannot give a figure, therefore, of how much money would be likely to be paid out, but it is likely to be very small. We are in some difficulty because we are debating the Money Resolution first and will then have to debate the new clauses afterwards. But perhaps the details of the new clauses and the way in which the money is paid will depend on the specific details of the new clauses themselves. The House can reject the new clauses, in which case the Money Resolution falls. The resolution will give procedural effect to the new clauses if they are passed.
The hon. Member for Hove (Mr. Sainsbury) and, more strongly, the hon. Member for the Isle of Wight (Mr. Ross) agreed that it was a good thing for local authorities to acquire land net of tax. The new clauses and the Money Resolution ensure that this shall happen within this legislation. In fact, they are to put that into effect and to prevent the forestalling of that—which purpose some hon. Members approve in a limited number of cases—by sales made between individuals, possibly in order to prevent the local authority from acquiring the land.
Mr. Graham Page: Of course, it is not only to deal with forestalling. Any private transaction can take place quite properly and legally while a compulsory purchase order is hanging over the owner's head. These clauses do not prevent that. This is nothing to do with the owner, whether he sells or not. It is now only between the board and the local authorities.
Mr. Davies: Indeed, but if the owner has entered into an unconditional contract to sell the land, even if the local authority issues a notice, New Clause 2 will not operate. It will operate only where a local authority has intimated by

1401
notice that it wants to buy the land and then the owner enters into a contract to dispose of it to another person. But I agree that, at the end of the day, this is a matter between the board and the local authorities. It has nothing to do do with the rights of individuals and private owners and the sales will go through in exactly the same way.
I hope that the House will accept at least that the Money Resolution fortifies the two new clauses, which we shall no doubt debate later.
Mr. Ridley: I am grateful to the Minister for having given—
Mr. Deputy Speaker: Order. I do not know whether the hon. Gentleman is making an intervention, but he has already spoken once on the Money Resolution.
Mr. Ridley: But we are not yet on the Report stage. Is it not in order for me to seek to comment further on the issues before us?
Mr. Deputy Speaker: No, that is not so. One may interrogate by way of an intervention, but one may not make another speech on a Money Resolution.
Mr. Ridley: In that case, may I ask the Minister, before he sits down, what happens if the land is sold when a compulsory purchase order is pending and it is sold quickly to three or four different people, each of whom buys it and sells it on to the next in such a way that at no stage does development land tax arise because there are always the exemptions to take? In that case, the Treasury will repay to the local authority the tax which would have been paid if the local authority had been able to acquire the land in the first instance.
But in fact no tax will be paid to the Treasury. This seems to be an admirable way for local authorities to milk the Treasury. I can see that it would be possible to ensure that there were six or seven private owners all ready to acquire the land and pass it on quickly, thereby entitling the local authority to large sums of tax from the Revenue without any development land tax being paid. As a well-known stopper of loopholes, I am sure that the Minister will be grateful for that point.
Mr. Davies: I am grateful. I am even more sorry now that the hon. Gentle
1402
man was not on the Committee. If no tax is to be paid to the Revenue on the first sale—he postulated a sale from one to the next of three or four sellers—there will be no tax to be paid back to the local authority. This provision applies only in a situation where there is tax payable on the first sale, which is paid to the Revenue, but which would have been paid to the local authority if the authority had acquired the land from the first person, Mr. A. There is no question of milking the Revenue.
Mr. Fairbairn: Would the Minister make that absolutely clear? Surely the position would be that if the tax had been payable to the local authority, the Treasury must repay it to the local authority.
Mr. Davies: The tax will be payable either way. If the local authority buys Mr. A's land and tax is payable, that tax will be paid to the local authority. If Mr. A sells to Mr. B, the same amount of tax will be payable because the computation will be the same. But that tax would go to the Revenue, because Mr. A will have sold to a private person instead of to a local authority. All New Clause 2 provides is that the tax would be recycled back to the local authority. If Mr. A sold to Mr. B, there would be no question of any more tax being paid or of any different tax being payable.
Mr. Ridley: But if Mr. A does not sell to a local authority but sells to Mr. B instead, who then sells to Mr. C, who then sells to Mr. D, so that at no stage does a tax liability arise, the local authority can justly claim back from the Revenue the tax which would have been paid if Mr. A had sold to the local authority in the first place.
Mr. Davies: If Mr. A sold to a local authority and the tax payable was £20,000, for example, the tax would be exactly the same if he sold to Mr. B instead. There is no difference as far as assessing the tax is concerned. In these circumstances the local authority would get the benefit of the £20,000. If no tax is payable on that sale, no money would go to anybody, either the Revenue or the local authority.
Question put and agreed to.
Resolved,
That, for the purposes of any Act of the present Session to impose a new tax on the

1403
realisation of the development value of land, it is expedient to authorise the issue out of the Consolidated Fund of any sums required to enable the Commissioners of Inland Revenue in certain cases to make to a body by whom an interest in land is acquired a payment in respect of the tax paid on an earlier disposal affecting that land.

DEVELOPMENT LAND TAX [MONEY]
  New Clause 1

    DEVELOPMENT FOR INDUSTRIAL USE
    '(1) Subject to section 20 below if, in a case where realised development accrues to the chargeable person on the deemed disposal of an interest in land (in this section referred to as "the relevant interest"),—

    (a) the chargeable person carries on a trade, and

    5

    (b) the project of material development, the beginning of which is the occasion of the deemed disposal, relates to a building or other land to be used, in whole or in part, for the industrial purposes of that trade,

    10

    then, subject to the following provisions of this section, liability for development land tax on such proportion of that realised development value as is properly attributable to property to be used for the industrial purposes of a trade carried on by the chargeable person shall be deferred until the occasion of the first subsequent disposal of the relevant interest which is neither—

    (i) a deemed disposal; nor

    15

    (ii) a disposal to which either section 20(1) below or subsection (1) or subsection (4) of section 22 below applies; nor

    (iii) a disposal which forms part of a sale and lease-back transaction.

    (2) For the purposes of this section, a building or other land constitutes property used for the industrial purposes of a trade carried on by any person if and to the extent that—

    20

    (a) it is used in the course of such a trade for the carrying on of any process for or incidental to any of the purposes specified in paragraph (a) of Class E in paragraph 7 of Schedule 4 to this Act or for or incidental to the generation of electricity, or

    25

    (b) it is used, otherwise than as a dwelling-house, for the welfare of workers employed in such a trade,

    and any reference to property to be used for such purposes shall be construed accordingly.

    (3) For the purposes of this section, premises which—

    30

    (a) are used or designed for use for providing services or facilities ancillary to the use of other premises which, in accordance with subsection (2) above, constitute property used for the industrial purposes of a trade, and

    (b) are or are to be comprised in the same building or the same curtilage as those other premises,

    shall themselves be treated as falling within paragraph (a) or paragraph (b) of subsection (2) above.

    35

    (4) In any case where it appears to the Board or, on an appeal, to the Commissioners concerned that a project of material development falling within paragraph (b) of subsection (1) above relates exclusively to property to be used for the industrial purposes of a trade carried on by the chargeable person, the proportion of realised development value referred to in that subsection shall be 100 per cent., but, in any other case—

    40

    (a) the proportion properly attributable to the property to be used for the industrial purposes of such a trade, and

    (b) the method of apportionment adopted,

    shall be such as appears to the Board or, on an appeal, to the Commissioners concerned to be just and reasonable.

    45

    (5) Subject to subsection (6) and section 20 below, if—

    50

    (a) the whole or any part of a building or other land to which a project of material development falling within subsection (1)(b) above relates ceases at any time, otherwise than on the occasion of a disposal of the relevant interest, to constitute property used by the chargeable person referred to in subsection (1)(a) above for the industrial purposes of a trade for the time being carried on by him, and

    (b) at that time or at a subsequent time either that person ceases to carry on any trade at all or a non-qualifying use is established for the building or other land or part thereof to which paragraph (a) above applies,

    55

    the relevant interest or, if paragraph (a) above applies to part only of the building or other land, so much of the relevant interest as subsists in that part shall be treated for the purposes only of subsection (1) above and section 27 below as having been disposed of at the time when the condition in paragraph (b) above is fulfilled.

    (6) Subject to section 20 below, for the purposes of subsection (5) above, a non-qualifying use is established for any building or other land or part thereof if, for at least half

ORDERS OF THE DAY

  DEVELOPMENT LAND TAX BILL
  As amended (in the Standing Committee), considered.

  60

  of any continuous period of twenty-four months, it is used in such circumstances that it does not constitute property used for the industrial purposes of a trade carried on by the chargeable person; and accordingly the non-qualifying use shall be taken to be established at the expiry of the 365th day in that period on which the building or other land or part thereof is so used.

  65

  (7) For the purposes of this section a disposal of the relevant interest (in the following provisions of this section referred to as "the primary disposal") forms part of a sale and lease-back transaction if—

  70

  (a) it is either a disposal of the whole of the relevant interest or a part disposal of that interest which falls within paragraph (b) of subsection (1) of section 3 above; and

  75

  (b) it forms part of a transaction whereby, at or immediately after the time at which the relevant interest or, in the case of a part disposal, the granted interest is acquired as a result of the primary disposal, the person by whom that interest is so acquired grants a lease to the person who was the chargeable person in relation to the primary disposal; and

  (c) the lease subsists in the whole or any part of the land in which the relevant interest or, as the case may be, the granted interest subsists.

  80

  (8) If, after the primary disposal, there is a disposal of the lease referred to in paragraph (c) of subsection (7) above, subsection (5) above shall have effect as if, at the time of that disposal, the conditions in paragraphs (a) and (b) of that subsection were fulfilled with respect to so much of any building or other land as is the subject matter of the lease.

  85

  (9) If, in a case where the primary disposal is such a part disposal as is referred to in subsection (7)(a) above, there is a subsequent disposal of the interest which is the retained interest in relation to that part disposal, subsection (1) above and section 27 below shall apply as if in place of, but to the like effect as, that subsequent disposal there were a part disposal of the relevant interest.

  90

  (10) For the purposes of subsections (1) and (5)(a) above, a disposal shall be treated as a disposal of the relevant interest if it is a disposal of an interest in land of which the relevant interest is a part for the purposes of Part I of Schedule 2 to this Act.'.

  —[Mr. Denzil Davies.]

  Brought up, and read the First time.
  5.23 p.m.
  The Minister of State, Treasury (Mr. Denzil Davies): I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Oscar Murton): With New Clause 1 we are to take Government Amendments Nos. 55 and 63 to 68 inclusive.
  Mr. Davies: I shall explain to the House why this new clause has been put on the Order Paper at this stage. Hon. Members opposite succeeded in convincing the Standing Committee that Clause 19, which gives deferment from development land tax for industrial use, should be extended to cover commercial use, with the exception of offices. I said in Committee that the Government would consider their reaction to this and that I had some sympathy with the arguments. I did not give a commitment that we should seek to change the position on Report, and, having considered this matter in detail, we have decided that we do not want to extend the deferral of the tax to cover commercial use at all. That is why this new clause and the consequential amendments appear on the Order Paper.
  We are debating a new clause which is basically similar to the original Clause
  1406
  19 before it was amended in Committee. There are some differences, because there were difficulties in drafting the original Clause 19, and in the new clause we have put right some of these anomalies. However, in substance it is the same as the original Clause 19.
  I see that hon. Gentlemen opposite have put down an amendment to extend deferral even further to include all commercial developments, even offices. We debated this matter at length in Committee.
  Originally it was not intended that there should be any deferral for even industrial use. The Government felt that it was not right to give exemptions of any kind. But representations were made to us that this might inhibit the development of factories and industrial land because many industrialists own land which they may wish to use to expand their factories.
  As a result of representations, and because of the appalling state of British manufacturing industry and the problems of the last 25 years, the Government felt that they would not want to do anything that some people might think would deter industrial development. In the light of this, we gave a limited exemption.
  But once that kind of exemption has been given, there are demands for extending it, and these demands led to the

  1407
  amendments from Opposition Members in Committee. But I cannot accept the amendments, because our exemption was a specific one to help industry, and we draw a distinction between industrial and commercial development. This distinction can be drawn in the light of the present state of British manufacturing industry compared with the fairly thriving state of commercial development.
  There is no shortage of commercial development and no lack of profit in this area. One has to contrast that with industrial development, which has lagged far behind in this country ever since the war, and even before.
  Mr. Robert Adley: Is the Minister saying that he can help manufacturing industry by hampering and hindering commerce?
  Mr. Davies: We are not helping manufacturing industry by hindering commerce, because we are not concerned here with the same kind of development. We are concerned with industrial development, which in most cases is different from commercial development. We are concerned with factories, as opposed to hotels and offices. In 95 per cent. of cases they are mutually exclusive. The fact that we give this exemption to industrial development and not to a shopping precinct does not mean that we are penalising one for the other, because the two cases are quite different.
  I do not accept that we are hampering one to help the other. We are giving an additional incentive to industry and to industrial development. We have to try to improve the base of our manufacturing industry, and we are merely giving it an additional incentive to try to bring it up to the level of commercial development which has been thriving.
  5.30 p.m.
  Mr. Andrew Bowden: Does the Minister accept that towns like mine depend very largely upon the tourist trade? We are in the process of building a large new conference centre in Brighton which will attract a good number of international exhibitions. It will earn a great deal of money for this country. Does not the Minister accept that we need to encourage rather than penalise the hotel and catering industry?
  Mr. Davies: No one has suggested that
  1408
  that industry should be penalised in any way. It is not being penalised. That kind of development has been very profitable. One has only to travel around Britain to see how commercial development has been thriving while industrial development has suffered from a lack of funds and investment. We are trying to assist industry by not including in the Bill a provision which might be thought to impede industrial development.
  Mr. Michael Spicer: How can the Minister argue that to impose a lax and then to remove it for one section is actually to assist that sector? How can he argue that when he maintains that the tax on another sector is not penalising it? I do not follow what he is saying.
  Mr. Davies: I do not think we ate penalising it, because many cases are mutually exclusive. There are different developments and different operations. We are dealing with hotel, office and commercial developments on the one hand and with factories on the other hand. We are not penalising commercial development. We are giving an advantage to industrial development in the form of the deferral of the tax. We are not saying that industrial development shall not pay the tax. We are saying only that it will be deferred from the commencement of the development where an industrialist develops land for his own use.
  Mr. Adley: Will the Minister deal with the case where a hotel buys land intending to extend upon it at a future date and thus create more jobs? What is the position in those circumstances?
  Mr. Davies: If the act of extending on to the land throws up a development or betterment profit, the tax will be payable at that point. Commercial development for own use does not enjoy the deferral, but industrial development for own use does enjoy it. If an industrialist sells the land, or if other factors are taken into account and trigger oil the tax, he pays the tax.
  By giving exemption to industrial own use, we are to some extent creating a distortion and an unfairness, because the developer who develops on a new site not for his own use may pay the tax. That creates a discrimination

  1409
  between the normal property developer and the industrialist who develops on his own land.
  I appreciate that there are arguments on both sides. Conservative Members cannot see the importance of distinguishing between industrial and commercial development. If industry had thrived as much as commerce in the last quarter of a century, it would not have been necessary to include this exemption, but because it has not been thriving we must give every opportunity to enable it to do so. The clause would overthrow Clause 19 as amended in Committee.
  Mr. Tim Sainsbury: I recall rather unhappy comment on one occasion on the performance of the football team which my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) and I support. It was "I am glad to say that, having started the season badly, it has got a great deal worse." I hope that the Report stage of the Bill will not follow a similar course. We certainly seem to have started badly for a number of reasons, not least that it seemed that the Minister, doing his best, did not really have his heart in the new clause or in turning back the amendments to the original Clause 19 as accepted in Committee.
  My objection is not only to what the Government are proposing but to the method. It is strange that we should be presented with a clause very similar to the original unamended Clause 19 instead of being presented with the appropriate amendments to correct the drafting defects. I am surprised that the Minister should feel it necessary to try to remove the amendments made in Committee. Our objection goes even further than to what is being done and how. It should extend, I believe, to those who are doing it.
  I intend no criticism of the Minister when I say that it is strange that when a matter of considerable importance to the retail and the hotel and catering trades is discussed the sponsoring Department for those industries is not represented in the debate. The new clause is not entirely the same as Clause 19 and the Minister has not told us much about some of the changes. I hope that he will explain one or two of them when he winds up.
  1410
  I do not think that the change in subsection (2)(a) from "that" to "such a" is one we need to spend too long on.
  I am interested to see the words at the end of that paragraph which refer to property which is
  "for or incidental to the generation of electricity".
  Those words are completely superfluous if the generation of electricity is a process incidental to the industrial process. The implication of putting in these words is that the generation of electricity for resale is included in this category. I should be grateful if the Minister would say something on that.
  I also ask the Minister to look at the words in subsection (5)(a) and (b) which have been changed since we were dealing with Clause 19. The last line of paragraph (a) includes the words "for the time being", and the second line of paragraph (b) includes the words "at all". I hope I am correct in assuming that those words have been added in response to what was said in the commendably short debate in Committee, when I moved Amendment No. 355, and the Minister gave us an undertaking that he would bring forward an amendment on Report to meet the point I had in mind. I hope I am correct in assuming that those words have been put in to meet that point.
  The main point is this discrimination—I think that is the right word—against commerce in all its guises. Perhaps in this House we tend to exaggerate the diligence and care with which the public attend to the details of our proceedings, and, indeed, the attention they pay to the precise words spoken, particularly those spoken from the Treasury Bench. In legislation as complex as this, even if close attention is paid to it, I should be slightly surprised if everyone were able to comprehend entirely the meaning of it. I think we would all agree that what is important here is the impression that is given. That will be of importance in relation to the confidence and the morale of the interests concerned.
  I have the very strong impression, from what the Minister has said, that an old discrimination, which seems to be ingrained in the Socialist approach to many aspects of life, is coming out again. The phrase "ordinary working people" is frequently used in such a manner that it

  1411
  seems to exclude from that category such people as managers, designers, salesmen—indeed, presumably Members of Parliament. But perhaps that is a bit of special pleading. We find that there is, in the Socialist image of the world, an idea that ordinary working people can only work in a factory, and that there is something mysteriously virtuous in being on the shop floor. If someone gets promotion and is sent out to sell, perhaps overseas, the product that is manufactured, he ceases, it would appear, to be an ordinary worker. It would appear that he loses status by going to work in an office.
  I find it a very strange and disturbing approach that retailers, people who work in the vitally important catering and hotel trade, and in offices, seem to lack respect in Socialist eyes.
  I thought I detected a lack of enthusiasm from the Minister when he moved the clause. Perhaps he was responding to pressures from elsewhere, but I know not. I hope that we shall hear at length, for example, of the views of the very important and long-established co-operative movement on this particular point.
  I hope that the Minister will be able to do a little better on the rest of the new clauses. He seemed to be arguing that industry is a total disaster area, and that there is such an all-embracing lack of success in industry that anything which might in any way inhibit development in industry should be avoided. If we were to see a sudden conversion to this idea and it were very effectively pursued through the different aspects of the Government's legislation, I am sure that it would be very welcome. If the Government would reflect whether the Dock Work Regulation Bill might in any way inhibit industrial development and, having so reflected, if they were to withdraw that absurd and unwanted piece of legislation—unwanted even by many on their own side—they might be doing something useful and helpful for industry.
  5.45 p.m.
  Here the Government seem to have detected a genuine obstacle which would indeed deter the industrialist from development. The industrialist is not usually an expert in property matters. An industrialist may have some land on
  1412
  which he hopes to carry out an extension. He may know what the land cost him initially or it may have been bought as part of a much larger parcel, in which case he may not have a separate price for it. Suppose he wishes to carry out an extension and calls in his experts, who then say that, were it not for New Clause 1, he would be liable for development land tax. The industrialist will then say "Thank you very much for New Clause 1", in exactly the same way as the retailer, the hotelier, or any other commercial developer, might say it. Even then the industrialist will only get deferral.
  The Minister, probably by a slip of the tongue, referred at one moment to exemption. We are concerned with referral, not exemption.
  This brings me back to a point I mentioned in the short debate on the Money Resolution—that the build up of all these deferrals in company accounts is a thoroughly undesirable matter. If we are to have deferrals of this nature we ought to look at the question of having them expunged from the record after a stated time. If inflation continues to gallop along in the way in which it has been the tax payable after 10 years will be very insignificant. Even so, the accumulation of deferred liability for tax in company accounts, and particularly in the case of smaller companies, is a thoroughly undesirable feature, and something we should endeavour to avoid.
  The Minister has advanced the argument that we need New Clause 1 instead of amended Clause 19 because of the difficult state of industry. He contrasted it with a world of booming prosperity, as far as I could see, in commerce. I do not know how closely the Minister studies the reports of the Price Commission on the state of the retailing trade, or whether he believes what he reads, but he will not find quite such glowing prosperity indicated there. There has been a reported downturn of 25 per cent. in the amount of new construction orders for retailing. There does not seem to be too much evidence of booming prosperity there.
  I wonder if the Minister has read of some of the difficulties experienced by the hotel trade at the present time. A number of bankruptcies have been reported, and developments have been stopped or deferred. The prosperity is not as wide

  1413
  spread as he suspects. Not every hotel has a bid for it in terms of millions of pounds from the Middle East.
  I wish to make it absolutely clear that we are in no way criticising the relief for industry. We welcome it, and think that it is very valuable. We are glad that the Government have recognised, in this piece of legislation at least, if not in others, that they should try to avoid inhibiting industrial investment. Our complaint is about the thoroughly artificial division between industry and all other activities in which people are employed and producing earnings in this country.
  I have already declared my self-evident interest in retailing. I hope the Minister is aware of the report on industrial strategies in the distributive trade prepared under the auspices of the National Economic Development Office by a working party under the chairmanship of Mr. W. T. Welch, a very distinguished executive of the co-operative movement. The report said:
  "The rôle of the distributive trades is to provide a convenient way in which the public may obtain the goods they want, thus meeting their constantly changing requirements, in such a manner as to make a profit on the resources employed. In carrying out this role, distribution adds about £8½ billion to the gross domestice product, employs over 2½ million people, and is an important tourist attraction."
  I do not believe that a single industry can begin to approach those figures. They are an indication of the importance of retailing to this country. The report went on:
  "Any degree of inefficiency in the distribution system would impair efficiency in manufacturing and weaken the competitive strength of our production system as a whole."
  Later, it displayed a rare foresight of what was to happen on the Government side when it said:
  "There were doubts whether this was fully appreciated by those on both sides of industry and government who are influential in the formulation of policy and public opinion, with the result that a number of measures taken to influence economic development have seriously increased the difficulties under which the distributive trades are having to operate, particularly during the current recession."
  I hoped the Minister would have studied this report and agreed with the working party that fiscal equality between distribution and manufacturing is logical and fair.
  1414
  I referred earlier to the importance of the impressions we give in the House. A certain impression was given by the Chancellor of the Exchequer when he wrote to the Chairman of the Retail Consortium on 4th December last year saying:
  "I accept the view that in principle commercial buildings should receive capital allowances. The difficulty—which I fear is a very serious one, particularly at the present time—is the cost. I think you will understand that we could not give the allowances to buildings used in the retail trade without also giving them to commercial buildings generally."
  We are not concerned here with the cost. That is not a factor presented by the Minister in support of his case. I fail to understand why, as the Chancellor wrote seven months ago saying that he accepted the principle of capital allowance, they cannot appear here now.
  The Retail Consortium speaks for practically everybody in retailing. It includes the Co-operative Union, the Mail Order Traders' Association of Great Britain, the Multiple Food and Drink Retailers' Association, the Multiple Shops Federation, the National Chamber of Trade, the Retail Alliance, the Retail Distributors Association and the Scottish Retail Federation. Its reaction to the Chancellor's letter was:
  "It is particularly regrettable therefore, that in spite of past statements and agreements in principle, far from rectifying some of the inequities, this new legislation is to add further fiscal discrimination between manufacturing industry and retail distribution."
  I do not think industry would regard the Minister's explanation of the new clause as adequate. It is clear that retailing organisations, like industrialists, very often have land which is available for extension and which they may have owned for some time. It is also clear that, at present and for some time to come, there will be far fewer large-scale redevelopment projects. We have rightly taken a new view about some of the massive programmes of destruction and rebuilding we have seen in the past, and much greater emphasis is now being paid to renovation, enlargement and improvements in the functional efficiency of existing buildings. By attempting to refuse this concession to retailing, the Minister is giving discouragement in a vital area of the economy at exactly the wrong moment.

  1415
  I hope the importance of tourism to the economy is recognised by the Government. I am sure there are those on this side who, from positions of great knowledge of the industry, will describe that importance much more ably than I can. I was impressed by a document "Tourism in Britain—The Broad Perspective" issued in January this year, the same date as the NEDO publication to which I referred earlier. The document on tourism carried the same authority, by reason of its authorship, as did the other document. It was a joint report by the British Tourist Authority, the English Tourist Board, the Scottish Tourist Board and the Wales Tourist Board. I hope the last name at least will strike a chord in the Minister's heart and perhaps enable him to soften in his attitude on this matter.
  One of the most salient points in the report is that Britain was comparatively late in recognising the economic advantages of developing tourism. The Labour Government of 1966 to 1970 introduced for the development of hotels encouragements which were particularly unfortunate because they concentrated mainly on London and at the top end of the market. It is clear that far more of the money and encouragement should have gone to provincial hotels and the middle and lower end of the market.
  I hope the Minister will read the report. It is clear that there are problems for those in the hotel and catering trade in meeting the requirements to enable us to continue to respond to the considerable opportunities in the growing international tourist trade so that the nation can derive substantial benefits from it. The report says:
  "One of the biggest weaknesses in tourism in Britain is the difficulty of containing costs to cope with inflation and so to remain competitive. Increased operating costs threaten the viability of recent investments and the high cost of capital has inhibited new investment of the conventional kind."
  That is a direct reference to the difficulties the industry is having in carrying out investments.
  The report says later that there are certain imbalances in the supply of hotels. There is a surplus of higher-priced accommodation, but the forecast growth in demand is mainly for lower-priced hotels. This situation poses long-
  1416
  term problems for hotels, because it is not considered profitable to build and operate conventional hotels for lower-priced accommodation, especially in London.
  This is a critical time for the industry. It has considerable opportunities in the international growth in tourism from which we have been able to derive fairly substantial benefits and from which more may be obtained. The Minister is putting an obstacle in the way of the industry.
  The British Hotels, Restaurants and Caterers Association wrote recently to the Under-Secretary of State for Trade. It stated:
  "This amendment is of immense importance to the tourist industry, of which the hotel and catering industry is the largest single sector, because without it the Bill's provisions for the charging of development land tax on a single 'deemed disposal' could seriously inhibit the development of tourist amenities and facilities, such as the extension or enlargement of hotels and restaurants."
  It could not have made the matter clearer, but the Minister seems to be turning a totally blind eye to that aspect.
  The industry, like the retailing industry, could feel that its representations, importance and needs have been totally under-estimated by the Minister. Judging by the current attendance on the Government Benches and the absence of ministerial support for the industries to which I have referred, it is apparent that the Government have little feeling for retailing or the tourist trade.
  6.0 p.m.
  The Minister has advanced no rational argument for a need to introduce a fresh degree of fiscal discrimination against commerce. Anyhow, there is the difficulty of drawing the line between industrial and commercial operations. I do not need to go right through all the arguments about SET, but the example of warehousing is worth mentioning. Under SET a warehouse operation, if attached to industrial operation, drew a premium. If it was an independent, freestanding operation it was neutral. If it was attached to a retailing operation it had to pay a surcharge. The identical operation under SET could be subject to three different tax treatments. Warehousing, like retailing, is an integral part of the complete industrial process.

  1417
  To try to draw these arbitrary and artificial lines and to discriminate against commerce, which is what the Minister is proposing, is not only difficult but damaging. There is no third party involved. We are not concerned with a tax loophole. I am glad that the Minister has not advanced that claim as an argument to support the clause.
  There seems to be a total contradiction between the Minister's approach and what the Chancellor wrote in his letter of 4th December. The Minister, through the devious method of introducing a new clause instead of submitting amendments to Clause 19, is totally under-estimating and under-valuing the importance of commerce to the economy. He has misrepresented a very valuable development, especially in retailing and in the hotel and catering trades.
  It is for those reasons that I hope my right hon. and hon. Friends will join me in opposing the clause and seeking to retain Clause 19 as it was amended in Committee.
  Mr. Adley: First, Mr. Speaker, I seek your guidance. I ask whether it is admissible and whether it is your intention that with New Clause 1 we take the amendments which have been selected in a group—namely, the folowing:
  Government Amendments Nos. 55 and 63 to 68.
  The following amendments to the proposed New Clause 1:

  (a) in line 7, after 'industrial', insert 'or commercial'.

  (b) in line 10, after 'industrial', insert 'or commercial'.

  (c) in line 21, leave out paragraph (a) of'.

  (d) in line 37, after 'industrial', insert 'or commercial'.

  (e) in line 40, at end insert 'or commercial'.

  (f) in line 50, after 'industrial', insert 'or commercial'.

  Amendment No. 56, in Clause 19, page 29, line 37, leave out 'other than for offices'.
  Amendment No. 57, in page 29, line 42, leave out 'other than for offices'.
  Amendment No. 58, in page 30, line 11, leave out 'paragraph (a) of'.
  Amendment No. 59, in page 30, leave out lines 22 to 24.
  Amendment No. 60, in page 30, line 37, leave out 'other than for offices'.
  Amendment No. 61, in page 31, line 5, leave out 'other than for offices'.
  Amendment (g) to the proposed New Clause 1, in line 90, at end insert—
  '(11) For the purpose of subsection (1) there is no first subsequent disposal by reason only of the receipt of a sum under a policy of insurance against the risk of any kind of damage to, or loss of a building'.
  Amendment No. 62, in Clause 19, page 32, line 13, at end insert—
  '(11) For the purpose of subsection (1) there is no first subsequent disposal by reason only of the receipt of a sum under a policy of insurance against the risk of any kind of damage to, or loss of a building'.
  I think that that was the intention, Mr. Speaker, but I should be grateful for your confirmation.
  Mr. Speaker: That is not exactly as I put the grouping before the House, but if it is for the convenience of the House I think it would be a good thing to take the amendments together. They cannot be proposed at this stage, but they may be discussed together.
  Mr. Adley: I am grateful, Mr. Speaker.
  First, I declare an interest, as I did some few hours ago, as European Marketing Director of Commonwealth Holiday Inns of Canada Ltd. and a member, unfortunately unpaid, of the National Executive of the British Hotels Restaurants and Caterers Association, to which my hon. Friend the Member for Hove (Mr. Sainsbury) has recently referred. Unfortunately, I am merely an executive of that company, but I have a reasonable day-to-day working knowledge of what goes on. Perhaps it might be possible at some stage in our proceedings to find some way of declaring statutorily that one has an interest in certain matters when one raises them in the House for debate. If such a declaration is not made, one is in danger of being accused of advertising!
  The Development Land Tax Bill spent a long time in Committee. I have done my best to plough through as much of it as I can. First, I congratulate my hon.

  1419
  Friend the Member for Hove on the way in which he moved his amendment during the nineteenth sitting, which has resulted in the Government bringing forth the new clause. I have read most carefully what he said—column 1020—and I have also read what the Minister said. The hon. Gentleman stated:
  "the Government are not seeking to be beastly to nasty commerce and good to industry."—[Official Report, Standing Committee J, 6th May 1976; c. 1030.]
  That may be the spoken intention of the Government, but I am bound to say that it is not the impression that we have gathered during the past two years as we have faced motion after motion, Bill after Bill, and Order after Order from the Government, every one of which seems to have had the declared motive of sanctifying industry and damning commerce.
  I hope that it is not immodest in this debate to quote one sentence in an Adjournment debate which I had on 12th December 1972, which, I think, is completely relevant to our proceedings. On that occasion I said:
  "I have always believed that hotel buildings should be regarded as industrial buldings for tax purposes".—[Official Report, 12th December 1972; Vol. 848, c. 405.]
  That point has been made by many of my hon. Friends over a period of years. I am bound to say that the Conservative Government were not much more receptive to it than the present Government, but the present Government have added to their lack of enthusiasm for service industries a positive discrimination against them, as well as hostility towards invisibles. That is a very serious charge to make against any Government, but I do not make it lightly.
  I am bound to repeat to the Minister the proposition that I put to him when he opened the debate—namely, that one has the impression that he is seeeking to help manufacturing industry by kicking commerce and trade where it hurts most. I remind him of the current position that invisibles occupy in our balance of payments. For the first quarter of 1976 the current balance was minus £60 million while the invisible balance was plus £410 million. For April and May the projections for current balance in total were minus £133 million and minus £212 million while the projections for invisibles were plus £130 million and plus £130 million respectively.
  1420
  If the hon. Gentleman studies the foreign currency earnings from travel and tourism, he will find that they play an important role. Whereas for 1975 we had a current balance deficit on net earnings of minus £1,702 million, the foreign currency earnings on travel and tourism showed a surplus of £273 million. The Minister will never achieve economic success if he seeks to promote the interests of manufacturing industry by damaging those industries—and they are not too many, I am sorry to say—where we have a success story on our hands.
  The Minister has referred to the development of land which is in the use of organisations owning it. That is what we are discussing. I was horrified to listen to what the Minister said about an hotel which deliberately buys a piece of land and seeks to develop it in two or three phases. I should advise him that it is a common occurrence for hotels to provide themselves initially with facilities for 100 or 150 rooms with the intention of continuing development by adding another 100 or 150 rooms later. What the Minister said in answer to my intervention was a deterrent to those who are seeking to build, operate and develop their hotels.
  My hon. Friend the Member for Hove put this matter politely. I shall put it more bluntly: the Government are job snobs. They believe that a job in coal mining is a plus job and that a job in an hotel as a receptionist is a minus job.
  The company with which I am connected recently opened an hotel in Newcastle on Tyne, with the benefit of Government assistance as it is in a development area. If the Minister visited that hotel, he would find that many people had been employed at that hotel from the day that it opened. The hon. Gentleman will know that these people would have great difficulty in finding alternative employment in the North-East. I plead with him to do what he can to change his attitude—if it is not his attitude, it is certainly the attitude of most of his right hon. and hon. Friends—to jobs in service industries and to stop regarding them as being only half-jobs.
  The need for a healthy tourist and hotel industry is directly related to the success or otherwise of our overall balance of payments position. The

  1421
  Minister is seeking to remove the slight chink of light that had been shone upon the hotel industry by the amendment that was carried in Committee.
  The Minister should be aware that the industry is suffering grievously from legislation passed not only by this Government, but by their predecessors. The Fire Precautions Act is hitting very hard, small hotels of the type referred to by my hon. Friend the Member for Hove. The health requirements and regulations are being used viciously and unscrupulously in a few places where the environmental health officers should not be looking whilst other more vulnerable places seem to be ignored. The industrial tribunals, in their activities following the Employment Protection Act, seem to be hammering at the service industries as well. Hotels have been particularly hard hit by massive rate increases. The process does not stop.
  At one o'clock this morning we had a ridiculous Order placed before and passed by this House—the Government Whips were on—which insisted that restaurants could serve wine only in carafes in sizes that the Government stated were acceptable, and, if the sizes were not acceptable, the Government were not going to allow carafe wines to be sold. That was another ridiculous and wholly unnecessary Order.
  My hon. Friend the Member for Hove referred to the absence from the debate of any Ministers from the sponsoring Department for tourism—the Department of Trade. In fairness to the Minister, I must say that is not a unique position. That was sometimes the situation under the Conservative Government. I hope that the hon. Gentleman will accept that I am not making a partisan comment.
  The tourist industry is sick and tired of being treated not only as a Cinderella industry—ignored at every opportunity by Ministers who are supposed to be responsible for it—but of seeming to find itself the butt of all the nastiest and most pernicious legislation that the Government can bring forward. I suspect that this has a great deal to do with the lack of trade union muscle able to be mustered by those working in the hotel and catering industry.
  My hon. Friend the Member for Hove touched on this matter. It is a sad fact
  1422
  that by no means all of the 800,000 people who work in the hotels and catering industry, many of whom are self-employed, are members of the British Hotels Restaurants and Caterers Association. I hope that if and when the day comes that those people are properly represented, the Government will take more notice of their representations than they seem to be taking of points made by Conservative and other Opposition Members.
  6.15 p.m.
  The Treasury is at least consistent in the way in which it seeks to deny to hotels their legitimate rights as an industry employing people and providing jobs. I saw my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) enter the Chamber just now. I recall that when he was at the Treasury 20 Conservative Back-Benchers went to see him to extract a promise of assistance to the small hotels and boarding houses which were being severely affected by the Fire Precautions Act. Out of that was born the Fire Precautions (Loans) Act. The same industry will be adversely affected if the Minister succeeds tonight in removing the amendment that was carried in Committeee.
  I should like to draw the attention of the House to another matter which shows that the hotel industry is not receiving parity of tax treatment with manufacturing industry and demonstrates that this country is very much the odd man out with the EEC. I asked the Chancellor of the Exchequer to list
  "for all nine EEC countries, whether or not the structure of an hotel is allowable for tax purposes, as a charge against depreciation; and what is the rate in each country."
  The Minister replied giving the percentage rate of depreciation as follows:

  "Belgium

  …

  Yes

  3·0

  Denmark

  …

  Yes

  1·0

  France

  …

  Yes

  2·8

  Germany

  …

  Yes

  2·0

  Ireland

  …

  Yes

  10·0

  Italy

  …

  Yes

  3·5

  Luxembourg

  …

  Yes

  2·2

  Netherlands

  …

  Yes

  5·0

  United Kingdom

  …

  No.

  —[Official Report, 14th April 1976; Vol. 909, c. 609.]
  That is only one of numerous examples that I could quote of the discrimination that is being suffered by the British hotel and catering industry. I certainly hope

  1423
  that the Minister, even at this late hour, will recognise the importance of the industry to our economy and that it is in every way entitled to be given parity of treatment with manufacturing industry on the proposition that a job in an hotel is as important to the person doing it as is a job in a coal mine.
  Mr. Norman Miscampbell: It is inevitable that in discussing the new clause the hotels industry and its problems will be canvassed. Before turning to the Minister's arguments, it is worth noticing that there are two quite different groups of hotels. There are those which obviously come to mind—the London hotels, the Stratford hotels and the great Scottish hotels in areas of tourist attraction—which earn a high proportion of foreign currency. Indeed, the occupancy of their rooms may be as much as 70 per cent. or 80 per cent. by people who pay in foreign currency. I should have thought that the argument for allowing the clause to include them was overwhelming.
  The other group consists of hotels of the type to be found in the area represented by my hon. Friend the Member for Blackpool, South (Mr. Blaker) and myself. I think that between us we represent the greatest conglomeration of small to medium-sized hotels in the country, if not in the world. Although they earn a proportion of foreign currency, clearly, from the conferences which take place in Blackpool and the people who holiday there, it is not so obvious that they contribute so markedly to the national economy. Yet they do. The choice of whether to go to a hotel of the type found in my constituency or to a hotel on the Costa Brava is a fine point. The cost may be a little more to go abroad. But there is no doubt that the great tourist centres for English people contribute negatively by attracting people who take their holidays in England and do not spend foreign currency.
  I now turn to the Minister's argument, which I first read in the report of the Committee's debate on clause 19. At that time I was struck by the oddity of the clause, just as I was struck with its oddity when it was again propounded this afternoon. The argument is perfectly tenable if the Minister seeks to impose a tax whose purpose purely and
  1424
  simply is the raising of revenue. It is possible to say that there are some people who cannot bear the tax and that they must be exempted from it. If it is sought to impose a tax not simply to raise revenue but to extend Socialist doctrine, it is a strange argument to say "Having decided to do this, we shall exempt industry as it is too weak to bear the tax, but we shall not defer the tax for the others." It is not within the Minister's power to say "It is no disadvantage to the others. It is a disadvantage to my constituents. I do not wish to harp on parochial matters, but this proposal is clearly to the disadvantage of the town which I represent. This is an odd way of raising taxation.
  I differ profoundly from the Minister's view of what has happened to commercial enterprise as distinct from industrial enterprise in the past 10 or 15 years. The experience of my constituency has not been that commercial enterprise has found the going easy. It may be true that, south of a line from Birmingham to the Wash, office and hotel development and new shops and precincts, have gone on apace. But as a generality nothing could be further from the truth north of that line.
  Only one major new hotel has been built in Blackpool—and that is always teetering on the verge of going on or not. Only one major hotel has been built in Blackpool since the war. We had to give up the prospect of a comprehensive downtown development. There has been no noticeable increase in shopping or office facilities. However, such development as has occurred will be hit hardest by this Bill. There has been a revolution in that existing hotels have been developed. Hotel owners have built on the land already available to them by adding rooms and carrying out improvements. I use the word "revolution" deliberately. The town's hotel industry has changed immeasurably for the better over the past 15 years. Rooms and accommodation have been improved. The numbers of rooms have been increased. The facilities available have changed out of all recognition. However, it is just that kind of development, which has taken place on a considerable scale, that will attract the tax. As a result, damage will be done to the town and the industry.

  1425
  I wonder why it is necessary to inhibit that kind of enterprise. We wonder how that will help our country or assist in building the kind of society which the Government say they wish to see in this country—a profitable and prosperous society in which people may have decent jobs.
  It is not only hotels that we require. Perhaps the most crying need is for office development. Hon. Members representing other constituencies in the Fylde area are present. They will know that Blackpool and the Fylde area produce young people who are well trained, not necessarily in industrial skills, and who seek to follow in the steps of their fathers in office jobs, often in the great Civil Service Departments which are in Blackpool.
  Mr. Denzil Davies: The hon. Member for Hove (Mr. Sainsbury) excluded offices from his clause, which is now Clause 19. The hon. and learned Gentleman obviously does not agree with his hon. Friend concerning office development.
  Mr. Miscampbell: I appreciate that. The same argument and the same intervention took place in Committee.
  As I understand it, we are dealing with all the group of amendments. I am making a general rather than specific point. I should not support anyone who sought to remove offices from the scope of the clause. This point has a validity and a general application that goes further than merely this debate. It applies to many areas, especially Fylde.
  In the Fylde, a large number of young people are coming forward who would like to work in that area. They seek predominantly the kinds of office jobs which have always existed in that area. However, there is not the increase in commercial activity or office building that will provide those jobs. Young people are leaving school and are finding that unemployment runs into double figures in the area.
  I hope that the clause will not be accepted and that we shall revert to the position which I hoped had been established by the Committee when it considered the matter a few weeks ago. That position was welcomed, correctly, by our local Press and industry in Blackpool.
  1426
  I do not believe that the Minister has unguarded moments. He is frank and straightforward in dealing with these matters. He said that in considering the clause he could see that there were arguments on either side. I am glad of that. When he considers the matter clearly, I am sure he will feel that the imposition of this tax upon our productive wealth—it deals not with matters such as the pure development of land for housing but with industry and commerce—will do nothing to help our country or its economy.
  Mr. Bowden: I was not a member of the Standing Committee. However, I read the report of the Committee's debate on Clause 19 and the amendments.
  The House has great sympathy with the Minister, who is presenting his case without believing it to be the right one. I suspect that he struggled hard and long to persuade his colleagues that the amendments passed in Committee should be accepted but that tragically he lost. Therefore, he has the difficult task of persuading the House to reverse the decisions that were made in Committee.
  As the debate on the clause proceeds, the weight of evidence for not accepting it, and for maintaining the present position in the Bill, becomes increasingly strong. We may see the weight gathering on the Minister's shoulders almost minute by minute as he sags lower and lower into his seat, reluctantly knowing that sooner or later he must yet again justify his case. I say this with great respect, because clearly he won the admiration of all members of the Committee for his straightforwardness. He is playing on a difficult wicket. I am sure that he would much rather be at Lords, even if there are only a few minutes to go before close of play, than have to reply to this debate in an hour or so's time.
  I shall be unashamedly parochial in the context of the speeches made by some of my right hon. and hon. Friends who represent towns such as Blackpool and Bournemouth, all of which come within the top three or four, with Brighton and Hove top of the league.
  6.30 p.m.
  We in Brighton have in the last few years taken a number of major decisions involving the investment of a large

  1427
  amount of ratepayers' money. We are in process of building a great conference centre in Brighton which will be visited by the vast majority of hon. Members in the next few years when the respective party conferences are held in Brighton.
  Mr. Miscampbell: And in Blackpool.
  Mr. Bowden: With great respect to my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell), we shall be delighted to have a change from Blackpool because we feel that we should alternate between one or two of the major seaside towns.
  That project will involve a large investment by the people of Brighton. The decision was taken with great courage by Brighton Corporation, because the total cost will be well in excess of £8 million. The conference centre will attract a large number of international conferences. Already the publicity officer of Brighton has been contacted by organisations in Canada, most of the European countries and even the United States of America which wish to hold conferences in the new building. It will earn for this country many millions of pounds of overseas currency in the years ahead. Therefore, it is absolutely tragic that the present Government should bring forward a Bill of this type, because it can only be detrimental to the efficiency and effectiveness of the tourist and catering industry throughout the country.
  Brighton has been seeking to build up an off-season as well as an on-season industry. In the past, the area has often been forced to put people out of work during the off-season because there has not been a sufficient number of visitors in the town to justify keeping on catering and hotel workers in the town. The building of the conference centre will mean that conferences will be held in Brighton all the year round. It will provide employment and will minimise the effects of "on" and "off" seasons.
  However, the Bill can only harm the developments that will be needed to run in conjunction with the new conference centre. The great new marina that is being built in Brighton will provide additional facilities that will benefit the hotel and catering industry. However, the Government, instead of encouraging the industry, are seeking to clobber it, and
  1428
  their efforts will discourage the industry from expanding and providing new jobs. This can only have a pernicious effect on the future of the industry.
  In the last 10 years the hotel and catering industry has suffered a large amount of additional legislation. Indeed, it has reached a point at which the burden is almost unreasonable. A director of a leading firm of caterers in Brighton—his organisation also covers Hove—recently wrote to me saying that he had to spend so much of his time in dealing with legislation that he found it difficult to cope with the problems of running his business. The fact that he is so bogged down by a mass of Government legislation, controls, restrictions and all the rest has meant that a disproportionate amount of his time is spent in dealing with that burden alone. That surely is a gross misuse of manpower.
  It may be said "Why does not the company use professional advisers and experts to undertake that work?" Those services are extremely costly. There comes a time when the smaller companies cannot go on using the services of highly qualified and expensive professionals to deal with forms and the complex situation that faces business. This Bill is yet another step in that direction and will put yet another burden on industry.
  It amazed me that the Minister, in presenting his case, appeared to act as though industry and commerce had nothing to do with each other—in other words, that it did not matter whether the Government were tougher on one because they were relieving the other. Surely the hon. Gentleman knows that the effective operation of our economy depends on industry and commerce running together as two effective efficient units rather than on division. There must be a partnership in which one industry actively supports and encourages the other. One cannot penalise one without affecting the other.
  Mr. Adley: Does my hon. Friend feel that if Mr. Jack Jones were chairman of the British Hotels Restaurants and Caterers Association the story might be different?
  Mr. Bowden: I do not know whether Mr. Jack Jones could be persuaded to advise the association. My hon. Friend

  1429
  the Member for Christchurch and Lymington (Mr. Adley), who is on the executive committee of that association body in an unpaid position, might be in a position to offer Mr. Jack Jones such a job, but I shall leave him to raise the matter at the association's next meeting.
  In recent months there has been a great cry from the Labour Benches about the lack of investment by industry, but for years the Labour Government and their supporters have been placing burdens on industry and bleeding it white. This has resulted in a situation in which industry has been unable to make sufficient profits and, therefore, has not been able to achieve the amount of investment in new equipment, buildings and development that it would wish. Labour Members cannot have it both ways. They cannot take money out of industry and commerce through taxation and at the same time stalk the country demanding more and more investment.
  Even at this late hour in terms of the Bill, I ask the Minister to think again and to withdraw the clause. If he does, he will do a great service to the hotel and catering industry.
  Mr. Walter Clegg: I wish to support the argument advanced by my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) and especially the case put forward by my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell), many of whose arguments apply to Fleetwood and Cleveleys.
  I wish to look at this matter in the context of the unemployment figures published today. I refer especially to the unemployment among school leavers. In the Fylde, as in other areas around our coasts, many of the school leavers are looking forward to working in the service industries, which are basic industries on which we all depend. Near my constituency is a famous technical college that trains people for catering and hotel work. Graduates from that college will be looking for jobs in the near future.
  The Minister said that there was a difference between manufacturing industry and commerce. That is a difficult distinction to understand. I believe that the two are linked because one is the customer of the other. We must face the situation that we now have over 1 million
  1430
  unemployed workers and the largest number of unemployed school leavers ever in this country. The new clause proposed by the Government will put yet another obstacle in the way of commerce and of the hotel and tourist industries.
  The Minister's arguments are totally false. If obstacles are put in the way of the development of the service industries, custom will be removed from the manufacturing industries. Hotel expansion involves the construction industry, which is going through hard times, the steel, potteries and many other industries.
  Mr. Michael Latham: Is my hon. Friend aware that in an answer today the Government said that 206,000 construction workers were unemployed compared with 113,000 in March 1974? The figure has almost doubled.
  Mr. Clegg: That makes my point. The inhibition of development in the service industries will lead to more unemployment, not less.
  There is a good case for exempting the service industries, because they are inseparable and would give a boost to industry generally. We are told that we need a surge in manufacturing industry but how can that be created if the orders are not there? The expansion of hotels and commercial buildings of all kinds would provide an incentive for investment in industry.
  Fleetwood, in my constituency, has experienced the trauma of the Icelandic dispute and people are being laid off. There is little land left on which to develop manufacturing industry. In the rest of the constituency there are large green-belt areas containing little land for the development of manufacturing industry. But there are areas on the coast and inland where the service industries such as hotels and restaurants could be developed. If they are to be inhibited, my constituency will suffer in a particular way. Several of my hon. Friends wish to speak, so I shall not argue the case further. But what I least understand about the Government proposal is that it will increase unemployment. After today's figures, the Government have every reason to withdraw the clause.
  Mr. Michael Spicer: I want to look briefly at the Minister's argument in defence of his indefensible position.

  1431
  Some of his asides led me to suppose that he also thinks that his position is indefensible. The Minister based his argument on the assumption that there are two sectors or identities in society. He assumed that in the economy there is something called the industrial sector, which is good because it is bad and not doing well and, therefore, should receive the support of a regime which supports bad things, usually with public money or through nationalisation.
  Mr. Sainsbury: Is that not the support of lame ducks?
  6.45 p.m.
  Mr. Spicer: That is what it is all about.
  We apparently have a sector called industry which is to be treated in a special way. We also have another sector or identity called commerce which, because it is good, is bad, and because it is doing well is something to be discriminated against. I do not want to spend too long on that argument but I want to look carefully at whether one might hypothesise that those two sectors, as my hon. Friend the Member for Brighton, Kemp-town (Mr. Bowden) indicated, are more interlinked than would be supposed from this discriminatory legislation.
  My hon. Friend the Member for Hove (Mr. Sainsbury) has already considered the possibility that far from thriving, commerce—in the retail trade, for instance—might be doing badly. It could be argued that a fundamental reason for the most depressed areas being depressed is precisely that they have a poor services sector.
  I am familiar with the North-East because I fought there as a candidate over 10 years. I would argue that the reason the North-East is depressed and that business will not invest is that of the poor services sector. In most parts of the region there is poor provision of hotels, shops and other services. A link exists between the poverty of the services and the commercial aspects of the region—which the Minister believes to be thriving and, therefore, not to be helped—and the manufacturing industry which is depressed. Services are crucial and are totally missed in the premise which, apparently, underlies the Bill.
  1432
  I support my hon. Friend the Member for Hove in saying that it is not true that the commercial services sector is particularly thriving. It may be thriving in London to some extent, but it is not in the rest of the country. We depend on the total balance of goods and services in those areas which are a particular problem and about which the Government are correctly concerned. They determine the poor performance which the Minister has said exists in industry. In those areas commerce and the service sectors are not doing well. Because of that manufacturing industries in those areas lack that investment which we all try to encourage. A major reason why people do not invest in the North-East, why management is difficult to attract, and why brighter people, having been educated there, leave is that the qualitative and commercial side of life is lacking.
  The argument that there is a distinction between those two sectors and that the commercial sector is thriving is fallacious. Since that is the argument on which this particularly absurd piece of legislation is based we have to reject it and ask the Minister to produce something better.
  Mr. Nick Budgen: I wish to declare two interests. First, I have an interest as one who owns a small amount of land which either has or may attract planning permission. Secondly, I declare interest as a barrister, although I do not specialise in this area of law. Ironically, my profession will be amongst those sections of the community that most benefit from the legislation, which is both oppressive and complex.
  The balance of argument today and in Committee has been, on this side of the House, not only in terms of those who have spoken but because we have won the argument against the Minister, who lacks no eloquence or intellectual ability. He knows, as we do, that his position is nonsensical. All of us on this side of the House have acquired a great deal of respect, admiration and affection for him. The sad thing is that his position is typical of that of the social democrats in the Labour Party in that he is prepared to go along with proposals that he knows to be nonsense.
  The proposal before us is to distort the economy in favour of manufacturing

  1433
  industry. I have nothing against manufacturing industry. Many of my constituents are directly engaged in it, and my family has been engaged in it for generations. My proposition is advanced on the basis not that there is anything good or bad about manufacturing industry but that it is wrong for the State to attempt to distort the economy in favour of any one section. Here we see the traditional prejudice of the Labour Party in favour of manufacturing industry to the detriment of all other sectors of the economy.
  Even the most intelligent and farsighted politician or economist can never predict how the economy will more over the next two years, and certainly not over the next decade or two. Who would have thought 20 years ago that today we should have our own supply of North Sea gas and oil—
  Mr. Stephen Ross: Who would have thought that Wolves would be in the Second Division?
  Mr. Budgen: Indeed. Perhaps even the Labour Party of 20 years ago recognised that the City of London was already contributing a great deal by invisible earnings to meeting the problem we then had, with fixed exchange rates, of trying to run a surplus on our balance of payments.
  Why have the present Government, like all previous Labour Governments, an extraordinary fixation with manufacturing industry? We hear so often about the boredom and the repetitious work on the assembly line at British Leyland, for instance. We hear how people become so fed up that they organise some form of trade union activity. If I were working on the assembly lines of British Leyland I should be bored, and I should be even more Bolshy than I am here. If I had the privilege of being elected, I should be a trade union leader and should do my best to disrupt the work as the only way to try to relieve the tedium.
  It is not enough for the Government to say that the citizens of today are to be locked into that way of life. The Government want to lock those citizens' children and grandchildren into manufacturing industry. They want to fossilise and distort the economy so that that way of life can continue for ever. Is it what
  1434
  the people want? Why are we increasingly educating more and more people in various forms of higher education, in a way which rightly gives them expectations of a more varied and exciting way of life, and yet telling them "You cannot go into commerce or the hotel industry. We shall distort the economy so that you must go into manufacturing industry and continue in a way of life which your father has rightly regarded as less attractive than the new ways of life which a free economy would evolve for you."?
  Let us look at the extraordinary attitude of the intellectuals of the Labour Party. They are for ever talking about the need to give more and more aid to the Third World countries, yet at the same time they propose import controls and distortions of the economy in favour of domestic manufacturing industry. They do not seem to realise that, as any advanced country proceeds, the wages in it are bound to be relatively higher than in the developing countries. As a result, the advantage will tend to flow towards the developing countries, as they turn to manufacturing industry and in some instances inevitably undercut the manufacturing industry of the developed and advanced country.
  We are told that we must distort our economy to lock our citizens into a form of employment which many of them have demonstrated by their own activities they do not enjoy and do not wish to continue. This proposal is as good an example as any we have seen, even by comparision with SET, for example.
  The result of the proposal will be that when a firm, such as commercial distributors, wishes to take over premises being used inefficiently by manufacturing industry, in respect of which there is a deferred liability to DLT, it will say "We can't take them over because if we do there will be a triggering of liability to DLT." We shall see yet another way in which the profitable and expanding use of resources is distorted by Government intervention.
  It is all part of the wider problem that people are being prevented from living as they wish. There is nothing more democratic, nothing fairer, than the market response to the millions and millions of preferences of free people. When those free people express a preference

  1435
  for some form of commercial activity, they give that preferred commercial activity the profits to buy space and take people into employment. The Government are distorting those preferences by saying "You cannot take over manufacturing industry. We shall stick an extra tax on premises which were previously used by manufacturing industry, so that to take them over you will have to pay a whacking great lot of tax." In that way, the Government express their preferences over those of the consumer and the ordinary citizen.
  My hon. Friends have asked why it is being done. I suppose that partly it is the heavy price we are all paying for the unique and extraordinary relationship between the Government and the trade union movement. Even the most cursory analysis of the trade union movement reveals that, although it directly represents only half the work force, it tends to represent that part which is engaged in manufacturing industry. Therefore, it is believed that to distort the economy in favour of manufacturing industry will enable the Government to ingratiate themselves with their lords and masters in the trade union movement.
  7.0 p.m.
  My hon. Friend the Member for Christchurch and Lymington (Mr. Adley) suggested that the proposal was motivated by job snobbery. I wish that it were, because snobbery is a trivial and stupid enough emotion. I suggest that it is something worse than that. This proposal is motivated by the desire of a Labour Administration to go in for a bit of social and political engineering, because, just as they believe and hope that if they keep people in council houses they will tend to vote Labour, so they believe that if they keep people in manufacturing industry they will also vote Labour. The Government believe that if a man is taken out of a factory and put into an office or warehouse, he may change his attitude and, as those in the Labour Party would say, betray ordinary working people. So we are continuing to pay the price for retaining this present Government in power. We are paying it in loss of job opportunities for the future, in loss of profit and in further distortion of our economy.
  1436
  Finally, may I take up a point made by my hon. Friend the Member for Hove (Mr. Sainsbury) on the danger of large liabilities for tax being deferred and held over the heads of companies. Today, unhappily, we see more and more interference by Government in all forms of commercial activity. We see it not only in a general way but also, do we not, in the most detailed way, for instance in the Price Code? One of the dangers of having these deferred liabilities for tax is that a Government of any complexion when they are trying to lean upon a particular industry, or even a particular firm, may threaten it with triggering off liability for tax, a liability which individual firms and individual industries may know they have absolutely no chance of paying off.
  When one thinks, for instance, of the machinations that are centring on the Price Code at the present time, which will no doubt continue to be a part of our way of life until we break out of that extraordinary arrangement, is there not a real danger that future Governments may say to individual industries "If you do not agree to our particular ideas about the Price Code, we give you due warning that we will trigger off the liability for taxation under DLT."? If we believe in freedom, we are giving to this Government and to successive Governments a very dangerous weapon when we allow them to hold above the heads of many of our great industries this postponed liability to DLT.
  Mr. Nicholas Ridley: My hon. Friends have well deployed the case that there is here severe discrimination in favour of manufacturing industry and against commercial activities of a different nature. It has always been a part of the Labour Party prejudice that unless one wears a boiler suit one is not an ordinary working person. I must say I admire the eloquence of my hon. Friend the Member for Worcestershire, South (Mr. Spicer) and my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) and I shall not seek to explore too deeply the ground which they so ably opened up, except to say that this really is shades of SET. Lord Kaldor walks again. I have always wondered why a Hungarian should share this particular dislike of modern activity and wish to stick in the past, but there is

  1437
  one flaw which always gets people into trouble when they seek to persecute more modern activities than hitting pieces of iron with a hammer.
  There is something called the co-operative movement which cannot by any stretch of the imagination be classified as an industrial activity. So just as with SET we find with this Bill that the co-operative movement is singled out for excessive taxation just because it is not a manufacturing industry. In Committee, if I understand it right, some hon. Gentlemen who have an interest in the co-operative movement found it expedient to be absent from the Committee Room when a vote was taken on this point. I congratulate them. I even suspect that one of them may be in the Chamber now, but I do not know. I would not wish to drag out of any hon. Gentleman interests which he has not declared in a standing position; but if that be so, surely they would be right to do so now, because discrimination in all its forms is odious.
  The point I wish to explore is: what is manufacturing industry? How do we define which are sheep and which are goats? It was the same point which gave rise to endless discussion on SET. If I remember rightly there was something called "standard industrial classification" which gave glorious meat to the Opposition and which, understand ably, has not been produced again on this occasion; but there is something very nearly as good. That is Schedule 4 paragraph 7, Class E (a), which is referred to in the new clause, under which those activities regarded as industrial purposes of any trade are defined as:
  "(a) the carrying on of any process for or incidental to any of the following purposes, namely—
  (i) the making of any article or of any part of any article, or the production of any substance;"—
  such as candyfloss—
  (ii) the altering, repairing, ornamenting, finishing, cleaning, washing, freezing, packing or canning, or adapting for sale, of breaking up or demolishing of any article".
  I want to tell my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell) and my hon. Friends the Members for Blackpool, South (Mr. Blaker) and Brighton, Kemptown (Mr Bowden), who complained that the con-
  1438
  ference industry is outwith the scope of this relief that demolition of any article can take place at a party conference without any DLT at all, so they can get out of it in that way.
  What of "washing any article"? I happen to have a kitchen where three weary times a day my housekeeper washes up dishes, so she is regularly washing articles in my house. Does that let me off? I should have thought probably it did, but I am reminded of the story of a Lord Wimborne of one or two successions ago who had a house adjacent to the Ritz Hotel in Piccadilly. One day the Ritz Hotel wrote to him saying "We are considering extending our hotel. If you ever thought of selling your house we should be most grateful if you would let us know so that we can put in the first offer". That Lord Wimborne wrote back saying "Thank you very much for your kind letter. I am not thinking of selling my house at present, but I am thinking of extending it. If you are ever thinking of selling your hotel I should be grateful if you would let me know because I should like to put in the first bid." Here, of course, such transactions would be hit by DLT. The Ritz Hotel is regularly cleaning, washing and freezing. What else do they do in the laundries and kitchens of that hotel? They are continually cleaning, washing and freezing—
  Mr. Michael Spicer: And breaking up things.
  Mr. Ridley: My hon. Friend anticipates my words. I am sure that that Lord Wimborne, too, was continually breaking articles, so one has only to have someone breaking up old champagne bottles to be breaking up articles as in trade.
  So what is the definition of "industry"? There is no definition of "industry". There is no rigid distinction between those who engage in a meaningful activity in the community and those who do not. For example, those who are engaged in computer programming are not allowed to defer development land tax if they extend their computer programming premises. Consultants, the City of London, banking and insurance, all bogy men to Government supporters—if only there were a few of them present—are the people who are earning our living. They are the people who have been slightly alleviating the enormous imports

  1439
  of industrial machinery by their invisible exports. So, says the Minister, they are the ones who can take the clobbering, and it is industry which must be allowed to go scot free.
  What is the yield of the relief that we are giving to industry by this new clause, and what would it be if we gave the relief to commerce, too? I do not know, but I think that those questions should be answered, because I suspect that the cost of extending this relief to commerce is just a small amount of money, and probably much less than the cost of giving it to industry. Before we make the prejudicial discrimination based on that ancient prejudice of the Labour Party for no other reason than doctrinaire hate, as advised by Lord Kaldor, we should know what it would cost.
  I have news for the Minister, because the matter can be taken forward. I go back to the new clause and I quote from subsection 1(b):
  "the deemed disposal, relates to a building or other land to be used, in whole or in part, for the industrial purposes of that trade".
  What does "in part" mean? It does not say "as to half", or "as to a quarter". It just says "in part". So, all that Lord Wimborne has to do is to have one man engaged in trade somewhere beyond the green baize door. It could be a lady knitting sweaters, or someone making pottery, quietly stuffed away. Lord Wimborne would say "Oh, yes. My house is used in part for purposes connected with the trade of pottery", and he gets through.
  There is no possibility of determining which part of which enterprise is engaged in trade and which part is engaged in industry. There is no way that we can discriminate without throwing up all these problems of demarcation, the extent to which it is industrial and the extent to which it is commercial.
  Then there are the difficult questions of large companies which have part commercial and part industrial activities. This piece of discrimination will give rise to endless confusion, doubt, litigation and so on.
  I see the point which the Government make, of course, that to impose any further burden on industry might be a mistake, especially when it is one which
  1440
  in a sense is gratuitous and not connected to a company's activities as a manufacturer. If it is fortunate in getting a big gain on the development of some site it should be relieved of paying tax on that. I think that we can accept that point of view, but if it is true of industry, that this is not a proper subject for taxation, how much more true is it of commerce, and, if it is true of commerce—hotels, banking, insurance and so on—how much more true is it of anyone else?
  By this new clause the Government have said to the world at large "Our tax is so bad, so pointless, so arbitrary and so discriminating that we cannot allow it to apply in cases where we think that it matters", the supposition being that in no other case does it matter, but the evidence is that this is a bad Bill introducing a bad tax, and the fact that the Government seek to exempt industry will give away the story that the Government do not have confidence in their own tax.
  Let the Government heed what has been said by my hon. Friends who represent areas of tourism, hotels, and many of the other activities which are alleged to be commercial and not industrial. Let them for once do something about it. Let them accept the amendments at least extending the relief to commerce. Because the way that the Government go on legislating their prejudices and hates is what is driving this country under—this discrimination, and this desire to make come true, in the form of legislation, all the ancient dogma, of the bad industrial periods long before the Government's present supporters were born, which they have had handed down to them by their fathers and grandfathers, and which is now legend. It is too late to start legislating these prejudices. It would be better if they came into the real world and realised that it is not just manufacturing industry which earns this country a living but many diverse activities which do not involve overalls but which keep large numbers of British manufacturing industries going by the contributions which they make to the balance of payments and to the nation's revenues.
  7.15 p.m.
  Mr. Michael Latham: After the heady wine and brilliance of the oratory of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), the House

  1441
  must now return to the dull cloudy sediment of mine, because I want to ask a number of detailed questions of the Minister and to do so simply because we are in the last detailed stage of the Bill.
  There is no discussion of the Bill in the House of Lords. This is a taxing Bill. We have to get it right now, and we have to get it right tonight because the Government have introduced a clause now which was not discussed in Committee. The detailed job which should have been done in Committee cannot be done now, and certainly it cannot be done in the House of Lords. For that reason, I have some questions to put to the Minister before I go on to make one or two general observations.
  The first matter that occurs to me on reading the clause is its remarkable similarity to Clause 19 as it was previously drafted. Reading through the very few changes in New Clause 1 from the wording in Clause 19, the dark theory in my mind is that perhaps the Government thought that they had better discuss the clause earlier on and try to reverse the Committee's amendment when they had some of their troops around rather than in the watches of the night when the House came to consider the amendments put forward to Clause 19. If that is not the intention, there is no reason why the Government should have wasted the paper required to print New Clause 1 when 95 per cent. of it is identical to wording currently in the Bill.
  I come now to one or two points on the new clause. I am not allowed, of course, to refer to amendments which are not selected, but I can refer to the words of the clause. Looking at line 22 of the clause, I see that there are new words there:
  "or for or incidental to the generation of electricity".
  These are additions to the list currently contained in page 107 of the Bill under Class E, to which my hon. Friend the Member for Cirencester and Tewkesbury referred so amusingly.
  I do not need to read that list, because my hon. Friend went through most of it, but I cannot understand why, suddenly, the generation of electricity has been put into the Bill. It has nothing to do with the remainder of the clause or with the list under Class E. Why include elec-
  1442
  tricity? Why not gas, coal or nuclear power? There is a great energy conference taking place today. Why have we discriminated in this clause in favour of one form of energy without listing all the others? What is the reason why those words have been inserted although they were not in the previous clause? The Minister made no attempt to explain that.
  Next, looking at lines 51 and 52 we see the words "any trade at all". They replace the previous words in the Bill, which were "that trade". What is the reason for that change? "That trade" was quite specific and what it meant was clear. The phrase "any trade at all" is a very wide, catch-all phrase. There must be some reason why the draftsmen have changed those words. What was it? Perhaps the Minister will be able to get guidance from his officials—although I do not know how he will physically be able to do so as I notice that his Parliamentary Private Secretary has left the Chamber. Perhaps these messages come by telepathy.
  In line 84 we have a new qualification, the addition of "(a)". As previously drafted, the clause talked about "subsection (7) above". Now it is related solely to "subsection (7)(a) above". What is the purpose of that restriction? In the original clause we see that certain things were specified in subsection (7) which will now apparently no longer be the case for the purpose of subsection (7)(a) here. Why has that restriction been made?
  When new clauses are brought forward on Report, given that there is no detailed consideration in the House of Lords, we must get matters on record and get them right. That is what Parliament is here for. We shall expect an explanation from the Minister on these detailed points.
  I turn from the particular to the slightly more general. I want to express my serious concern about the fact that the Minister made no attempt to carry out the undertakings—semi-undertakings, I concede—that he gave to the Standing Committee on 11th May. I want to quote in full what he said so that the House may see it fairly. He said:
  "Perhaps I could say something about the Opposition amendment which was carried last week. Since the Committee decided in that way, we are looking again, hut without prejudice, at the arguments put. We are looking at them with an open mind to see whether

  1443
  it is possible to give some expression to the will of the Committee. But I want to make it quite clear that it is not a commitment: we have not changed our mind. However, in all fairness to the Committee, since it decided in the way it did, we should look at the argument again."—[Official Report, Standing Committee J, 11th May 1976; c. 1046–47.]
  Having given that undertaking and having, presumably, looked at the matter again, the Minister came to the conclusion that he should not actually make any change, so I cannot see how he looked at it "with an open mind". The Committee had made a particular decision and had particularly changed the wording. At that stage the Minister could have said "I disagree with the decisions of the Committee. When the Bill goes to the Floor of the House, I shall ask my right hon. and hon. Friends to try to restore the original position." We should not have liked it, but the Minister could have done that. He did not do that. He raised our hopes. He said that he would look at it with an open mind, but he then reconsidered the matter and has come forward with the same clause. He says "What does it matter? That is what the House is for—to decide these things."
  It matters, however, to people outside the House, who are saying "The Minister raised our hopes and we made all sorts of decisions as a result of his hint, but now he comes forward with the same clause." To do this makes an absolute farce of the semi-undertaking that he gave.
  Anyone who has studied the Committee's proceedings carefully will feel that the Minister has not done anything to help us in regard to his undertakings. When he was considering the amendment moved in Committee by my hon. Friend the Member for Hove (Mr. Sainsbury), he took exception to its wording because he said that the word "commercial"—which is the purpose of our Amendment (a)—was not sufficiently specific and clear to enable him to accept it in its form. He said that the word "commercial"
  "has no meaning so far as I am aware, in any fiscal legislation."
  That is all very well, but if the Minister took the view that the wording was imprecise he should not have given the impression, which he did, that the word-
  1444
  ing was what he was quarrelling with rather than the principle. He said:
  "If the hon. Gentleman is now saying that he wants the exclusion of retail shops and hotels, that is another argument, and I suggest It would be another amendment. We are being asked to incorporate an amendment to add 'commercial'. I think I am making a fair point."
  The Minister went on to say,
  "One could not possibly argue on the one hand that 'trade' is too wide and 'commercial' is not."—[Official Report, Standing Committee J, 6th May 1976; c. 1034–5.]
  Again, therefore, at that point the Committee was given reason to believe that the Minister was dissatisfied with the wording of the original amendment but was not wholly out of sympathy with its spirit. It is all the more disappointing, therefore, that we have the same wording as before.
  Finally, I want to express some degree of concern about the way in which we have to proceed on these very technical Government new clauses. As I have said, this is a taxing Bill and, therefore, the other place has no part in the matter. It cannot amend the Bill, so we must get the Bill right here. If Ministers are to bring forward major new clauses of this type and those which are to follow, which must be discussed in the House on Report, they should give far more notice than they have on this occasion so that those directly concerned with these matters are able to let hon. Members, on both sides of the House, have their full comments. What we are doing cannot be said in any way to be a satisfactory procedure, because we are changing irrevocably in this Session the law of the land and we are introducing a major new tax. No one listening to our deliberations, despite the great efforts being made on all sides in relation to this matter, could say that these proceedings were basically satisfactory as regards putting legislation on the statute book.
  Mr. Stephen Ross: I am delighted to follow the speech of the hon. Member for Melton (Mr. Latham). He was good enough to say some kind things about me on Second Reading. Hon. Members on both sides of the House recognise his knowledge of the subject. He has certainly put some very sound points to the Minister. We look forward to hearing the answers.

  1445
  I shall not speak for long. I wanted to hear the arguments about the new clause. I did not serve on the Committee. To begin with, I felt that the Government had something on their side in that they were giving whatever relaxation there was to be to industry. I think that everyone must agree that it is to the industrial side and to our exports that we must give assistance. On the retailing side, and certainly in the distributive trade and hotel industry, there has been a great deal of activity in recent years. Even the hon. Member for Hove (Mr. Sainsbury) would have to accept that. There have been varied developments and new ideas over the last few years.
  Nevertheless, a case has been made. I think that my grandmother, long since dead, would find it amusing. She was a great Tory, if ever there was one. When my father told her that he was going into trade, she was horrified. Yet speaker after speaker on this side has spoken in defence of commerce, such is the change in 50 years.
  Many hon. Members have spoken on behalf of holiday areas. My constituency, the Isle of Wight, is certainly such an area. Unemployment figures on the island are down from nearly 9 per cent. in January to 5·4 per cent., according to figures issued today. I welcome that drop. I am delighted about it, but I know the real reason for it. That is the tourist industry. It is the holiday season which has taken up a lot of the slack.
  In the island some advantage was taken of the grants made available to hotels by the previous Labour Government, but they were nothing like enough. A great deal more will have to be done if we are to continue to attract tourists to the island. Therefore, it is of great importance to the hotel and the tourist industry generally that it should not be dissuaded from moving forward and from carrying out the necessary improvements which must be made.
  I should declare an interest. I live next door to an empty pub in the centre of Newport. I understand that the brewery is about to reopen it and convert it into a small hotel. I was supporting the licensing legislation the other day, but I am not so sure I should have done, for if the pub is to be reopened juke boxes may be put in and music may well go on
  1446
  till midnight. If the new clause is not amended, I shall be in great difficulty, because if I want to sell my house to the brewery, it will have to pay the tax immediately and will not be able to defer it. So the likelihood is that it will not buy.
  Warehousing connected with industry is excluded, but general warehousing should also get this deferment.
  I feel that the Government ought to reconsider their position because I think that the argument which has been put from this side of the House, despite a great deal of the flourish which has gone with it, does come from a sound base. I would hope that the Government, even at this late hour, will relent, and agree that the new clause should include commerce as stated in the main amendment.
  7.30 p.m.
  Mr. Nicholas Fairbairn: I do not know whether language has any meaning, but if it does the commitment which the Minister gave in Committee was that the Government would look again at our proposals with an open mind. It is quite clear from the proposition in the new clause that they looked again at our propositions with a closed mind.
  In the definition clause there is no definition of "industrial purposes". As I understand it, that is the purpose of the new clause—that we should discover what industry is all about. I do not know how the Government intend to limit their new clause to "industrial purposes", but it is simple to look up the meaning of the word "industry". It means:
  "… diligence or habitual employment in useful work".
  I should have thought that there were very few people employed in any activity who could not be said—so long as they are employed—to be habitually employed in useful work. During the debate in Committee we constantly asked the Government what the reason was for making this distinction and why it was necessary to restrict the preference to industrial activity.
  I represent a constituency in which there is almost total employment but almost no industrial activity. I represent a constituency in which it is very likely, since it has a large area of land, that

  1447
  there will be constant dealings and transactions which will be caught by this tax. I have to ask myself upon what possible basis the Government think it right, wise, or principled, to exclude every person whom I represent from these generous provisions.
  The argument, so far as I recall, that the Minister used in Committee was that if we started making definitions and categories, it became too difficult for all of us to draw the distinction between factories on the one hand and commercial developments on the other. He went on to say:
  "I make these points again, in all sincerity, merely to show the difficulty once one gets away from the tight industrial manufacturing classification."—[Official Report, Standing Committee J, 6th May 1976; c. 1036.]
  I do not know what the Minister meant by "tight industrial classification". What is it? It is so tight that there is no activity which one cannot say may or may not fall within it. Let us look at the tightness of the industrial classification. If a person sells cups, he is not within the tightness of the industrial classification, but if he puts a little painting on the cup before he sells it, he comes within the tightness of the industrial classification.
  If a person receives white heather in his shop and sells it, that is not an industrial classification, but if he puts a nice piece of ribbon on it and the words "A Wee Present Frae Bonnie Scotland", presumably it comes within the tightness of the industrial classification.
  The whole proposition is humbug and bogus. There is no end to the obvious exceptions and distinctions and qualifications that one could make. So tight indeed is "tight industrial classification" that it requires a clause of 1,750 words in order to make the Government's tight purposes clear.
  Mr. Denzil Davies: I hate to interrupt the hon. and learned Gentleman in the full flow of his oratory, but Schedule 4(7) sets out fairly coarsely the classification that we have in mind when we talk about industrial purposes.
  Mr. Fairbairn: I appreciate that in Schedule 4(7) there is an attempt to describe what is called "a tight industrial classification" but that will not do. The classes of purposes mentioned are:
  1448
  "Use as a dwelling-house or for the purpose of any activities which are wholly or mainly carried on otherwise than for profit, except use for a purpose falling within Class B, C or E:"
  That does not strike me as being tight, clear, or all that simple. To whom does it apply? Does it apply to any of the industrial activities, or manufacturing activities, or activities in which something is changed into something else? The:
  "Use as an office or retail shop:"
  is excluded. So is the:
  "Use as a hotel, boarding house or guesthouse, or as premises licensed for the sale of intoxicating liquors for consumption on the premises:"
  I am glad that at least the Labour Party understands that drinking is not an industrial activity. So is the:
  'Use for the purpose of any activities wholly or mainly carried on for profit except—
  (a) use as a dwelling-house or for the purposes of agriculture or forestry:"
  Why is it that all these activities are looked upon as anti-social? Why should forestry and agriculture be exempted from a Government who talk of "Food from your own resources"?
  Mr. Budgen: They tend to vote Tory.
  Mr. Fairbairn: Yes, indeed. It is only the activities of which the trade unions may have a grasping control which are allowed to have an exemption. I can find no other category or classification. The Minister is a distinguished lawyer and I look forward to his telling us of the tightness of his category of industrial activity.
  Mr. Sainsbury: Perhaps my hon. and learned Friend will cast his eyes a little further down and consider what might be done with his white heather under Class E(a)(ii) which states:
  "the altering, repairing, ornamenting, finishing cleaning, washing, freezing, packing or canning, or adapting for sale, or breaking up or demolishing of any article;"
  Mr. Fairbairn: Of course, as my hon. Friend the Member for Hove (Mr. Sainsbury) will appreciate, this is a constant activity in Scotland. Needless to say, there are no members of the Scottish National Party present, because there is no industrial activity in Scotland,

  1449
  apparently, and they are not interested. We are constantly
  "altering, repairing, ornamenting, finishing cleaning, washing, freezing, packing or canning, or adapting for sale, or breaking up or demolishing"
  white heather. It is one of the main interests in Scotland. It would be marvellous for that activity to be exempted, particularly the breaking up of white heather. I invite the Minister to come to my constituency and break up white heather. It is one of the most rewarding and creative industrial activities there is.
  When their own legislation is stuck back down their throats and they pretend that this is a tight definition, the Government are naked in the face of their own hypocrisy. They did not look at it again with an open mind. They did not look at it with any mind at all. They just said to themselves "We are against commerce. We do not like people to indulge in commercial activity. We do not like self-employed people. We do not like small businesses. We like big organised industry. We will give them the preferences, and the exemptions, and we will ensure that those who earn their living, and most of the living for this country, are those against whom the distinction is made."
  If the Minister can tell me tonight one single basis upon which this asinine and long distinction which he uses to describe the word "tight" other than doctrinaire prejudice, I shall be delighted to hear it. I shall be delighted to hear from his lips as counsel the opinion that I should write of what is an industrial activity. I shall be delighted if he can tell me how it can be so tightly drawn in a clause that requires 1,750 words to specify it and in a schedule that gives as disparate a group of activities as altering, repairing, ornamenting, finishing, cleaning, washing, freezing, packing, canning, adapting for sale, breaking up and demolishing.
  There is no ejusdem generis about that clause. The Government have decided to exclude commerce. They have never liked any of the activities of those who engage in commerce, although they have always relied on the profits made by those people to indulge in their own various schemes. Their pretence tonight that there is any principle behind New Clause 1 is one
  1450
  of the major hypocrisies to which the House has had the misfortune to listen.
  Mr. Graham Page: My hon. Friends have deployed fully and effectively the arguments against the discrimination shown in the new clause in favour of industrial activity and against commercial activity. I am grateful for the support of the hon. Member for the Isle of Wight (Mr. Ross), but it is surprising that there has been no word from the Government Benches about the new clause, not even in justification of it, other than from the Minister himself. I cannot think that hon. Members who are sponsored by the co-operative movement can be happy about the discrimination against retail shops shown by the clause. They do not come here to support those who sponsor them.
  Although the debate has been deployed on general principles of discrimination between industry and commerce, I should like to come down to the narrow point of the clause itself. From the point of view of development land tax arising out of a deemed disposal, there can be no distinction between industrial and commercial undertakings. We are not dealing with a gain from selling or disposing of a property. This is one of the fictitious gains in the Bill—the ficitious gain of developing property, what we have come to understand from Clause 2 as "deemed disposal".
  Under this new clause we are dealing not even with a deemed disposal, which is a development of property for the purpose of disposing of it eventually, but with a development of property for use by an industrial concern—we would include commercial concern—already operating. It is not a question which bears upon the speculative developer.
  The Minister said that if the clause were extended to commence, we should be discriminating against the speculative developer. There is a distinction between the person who develops on his own land to extend his own business and improve his service to the public, and the speculative developer who is not building custom-built property but wishes to make his profit on the disposal of the property.
  Therefore, the benefit being given here to industry is not really a benefit at all. It is a relief from tax which those con-

  1451
  cerned might otherwise, under this disastrous Bill, be called upon to pay for having the enterprise to develop their own premises and businesses. What distinction can there be between the industrialist who develops his own premises and extends his business and the commercial man who does the same?
  The Minister made the distinction by saying "We want to help industry because of the appalling state of manufacturing industry." That was an exaggeration. He then compared that state with the thriving state of commercial development. Does he realise that there has been practically no office development in the last three years? He is thinking of the time some years ago when there was a boom in that type of property development.
  7.45 p.m.
  There is no real distinction between the industrialist and the owner of the retail shop. In each case we are talking about a man who owns a concern already, who is developing and extending his own property and business—a man, for example, who moves into a new and expanding estate in the suburbs and starts up a corner shop but has enough foresight to know that that estate will develop and he will in due course be able to turn his business into a supermarket. This tax will prevent him from making that development.
  I want to direct the Minister's attention to the particular case of the wholesale warehouse, whether it is treated as a business on its own or as part of the industrial premises. The effect of Amendment (c) which would leave out the words "paragraph (a) of", is to include the whole of Class E on page 107 as an industrial process. It would include warehouses for industrial premises.
  If an industry extends its premises by building warehouses, as the Bill stands it will be called upon to pay the tax immediately on a deemed disposal. The amendment would bring into the relief the warehouses of the industrialist who extended his premises to build a warehouse. Beyond that, however, is there really any distinction between the factory and the warehouse, even when it is not connected with any particular factory? The wholesale warehouse serves a useful purpose for industry. In fact, industry
  1452
  could not do without it. If it is expanded, however, it will not get relief in the payment of this tax.
  The case for hotels and restaurants has been effectively argued today, and I support everything that my hon. Friends have said about the damage this will do to hoteliers who wish to extend their premises and give greater services to their clientele. Although the enterprising people in commerce of this sort will be deterred by this tax, there has, strangely, crept into the new clause a reference to the generation of electricity. That is an industry which will get the relief of not having to pay the tax at once if it develops its own property. How that crept in, I do not know. Why electricity? Why not gas or hydraulic power? I should be only too happy to extend this relief further. Why stop at electricity?
  The other amendments deal with the addition of the word "commercial". Amendment (g) deals with premises which have been expanded and which then suffer destruction, for example by fire, and the owner receives the insurance. In the normal way that would be an actual disposal. He would be receiving money for disposal, albeit a disastrous disposal, of his property. Obviously, in this case the fact that he has been relieved from the tax should not trigger off a liability. In other words, if an industry has expanded its premises which are subsequently burned down, and up to that stage the tax has been deferred, the tax liability should not be triggered off and the deferment ended simply because the owner received insurance money. I do not see why the Minister should not accept our Amendment (g).
  Mr. Sainsbury: This is another case on which the Minister in Committee undertook to look at the matter. I assume that he looked at it, and he should be in a position now to say something definitive about it.
  Mr. Page: Yes, that is so. We had an assurance that the Minister would look at this. I think it was an assurance which was given with some confidence that we were on to a correct point.
  There is a little complication about the voting on the new clause, because the Minister has done it in a rather peculiar way. He is putting in an existing clause

  1453
  as a new clause. This leaves us in difficulty. If he intends to relieve people—in this case industry—from the tax, we are in favour of that, but, of course, we would rather have Clause 19 as it appears in the Bill at the moment. If I ask my hon. Friends to divide, it is not because we do not like the relief that is being given to industry. It is because we prefer Clause 19 as it is, because it gives greater relief. I do not want there to be any misunderstanding about that. I assume that when we reach Amendment (a), which would add commerce to the new clause, we may have a Division on it.
  We feel that the new clause does not carry out the undertaking that we hoped the Minister was giving in Committee. Neither has he put forward any new arguments for refusing the amendment to the clause that we won in Committee.
  Mr. Denzil Davies: We have had another very full debate. We had thought that the Opposition would welcome discussing the new clause at this stage because at least that enables the debate to take place in the hours of daylight. But the real reason it has been introduced now is purely procedural. If we had arrived at Clause 19 there would have been consequential drafting amendments and there would have been difficulty about putting down those amendments. I assure hon. Members that there is no device or ploy here. It is unfortunate, but there is no other procedural way of going about it.
  I accept entirely what the right hon. Member for Crosby (Mr. Page) said about voting on New Clause 1. I accept that he and his colleagues would not be voting against relief for industry, because voting in that way is part of the procedural way of getting rid of Clause 19. The Government want to vote on Amendment (a) as well.
  Mr. Graham Page: On consideration of the Minister's answer, I think it would be sufficient to divide just on Amendment (a) and save a lot of time.
  Mr. Davies: Yes, I accept that, beccause it is Amendment (a) which is substantive.
  The hon. Member for Hove (Mr. Sainsbury) asked about the differences in the new clause from the original Clause 19. Apart from restoring the restriction
  1454
  of relief to industry, the new clause contains other changes made in Clause 19 in Committee. These include the provision that sale and lease back transactions should not trigger off the deferred tax. They also meet an undertaking given in Committee that the deferred tax would not be triggered off if the owner of an industrial property wished to use that property for a different trade.
  They also provide for the development of the generation of electricity to qualify for relief. This remedies an anomaly by which the development of other energies is exempt from tax because the processes in use fall into Class E. At the moment electricity generation does not fall into this category. This change brings electricity into line with other fuels.
  The hon. Member for Melton (Mr. Latham) discussed subsection (a), which is slightly different from the corresponding provision in Clause 19. This is purely drafting. It refers back to subsection (7)(a) and not to subsection (7), because subsection (7)(a) describes the disposal. This drafting change does not alter the substance in any way.
  I thought that the hon. Member for Melton was rather nit-picking, but I think that hon. Members recognise that I made a clear statement in Committee that I was not giving a commitment to reverse what the Committee decided. I said that the Government would look at it with an open mind. This we have done, and just because we have come to a different conclusion from that which the hon. Member would have liked does not mean that we did not look at it in good faith.
  As far as Amendment (a) is concerned, "commerce" is not a term which means much in fiscal legislation. If the House accepted the amendment, we should have to look at the word "commerce" and perhaps change it to "trade".
  I have been asked why this new clause was put down so late. Hon. Members have complained that no one could make representations because of this lateness. But most people would not order their affairs on the basis of something that happened in Committee before the Report stage of a Bill. I informed hon. Gentlemen some time ago that we should be seeking to reverse Clause 19. I did so

  1455
  by this rather strange procedural way of a new clause.
  The hon. Member for Kinross and West Perthshire (Mr. Fairbairn) invited me to write his opinions. I would if I could have his fee. The wording goes back to town and country planning legislation, and is also contained in the development gains legislation for which his party was responsible.
  8.0 p.m.
  Mr. Fairbairn: Will the Minister confirm that in subsection (2)(b) of the new clause the wording is used otherwise and that
  "a dwelling-house, for the welfare of workers employed in such a trade"
  could cover a miners' welfare institute?
  Mr. Davies: I expect that it would, but the phrase "industrial purposes" is well known in planning and fiscal legislation.
  Mr. Graham Page: Since the Minister has not mentioned Amendments (c) and (g), I presume that he is prepared to accept them.
  Mr. Davies: I am not prepared to accept Amendment (c), which deals with warehouses. Of course, if they are warehouses within the curtilage of industrial premises, they would be covered, but if they are not within it, they would not be. To draw a distinction between "industrial" and "commercial" and then to bring in warehouses would present difficulties, because it would be impossible to maintain the distinction.
  Amendment (g) deals with the situation where compensation or insurance moneys are received for the destruction of a property. The amendment argues that that should not rank as a part disposal. The hon. Member for Hove said that I gave an undertaking to the Committee on this point. I undertook not to bring forward an amendment but merely to look at the matter.
  The Bill already contains sufficient protection. The receipt of insurance moneys ranks as a part disposal, but the amount of tax triggered is determined by the board or, on appeal, the commissioners who decide what is just and reasonable. The commissioners therefore decide how much tax should be
  1456
  triggered, and in most cases they would say that it was not reasonable for there to be any triggering of liability.
  Mr. Adley: May I take up the point about what is just and reasonable? Will the Minister say something for future reference for inspectors who are faced with the problem? Is it just and reasonable for a hotelier who built a hotel two years ago intending to develop it over 10 years, and in five years' time provides kitchen development, to find that the development does not qualify for relief even though it was in the original plan?
  Mr. Davies: I am not sure whether the hon. Member is directing his mind to the amendment. I think that he is going further. The general or special commissioners will decide what is just and reasonable. If during the operation of the tax it appears that hardship is created, I give the assurance that we shall look at the matter to see whether we can provide for that situation. Nevertheless, I should have thought that the common sense of the commissioners would be a sufficient safeguard.
  I return to my general argument. In principle there is no case for a deferment, no case for a distinction between industrial and commercial. But, because of the poor state of industrial development and because commercial development has been thriving, we do not want anyone to suggest that we might have impeded industrial development by our proposals. They do not do that, but we cannot take any risk with manufacturing industry, and that is the reason for the deferment.
  I accept that there is a gulf between the two sides about the importance that should be attached to a distinction between industry and commerce, or perhaps between the provision of goods and services. I know that my arguments will not commend themselves to the Opposition, but I urge my hon. Friends to support the clause.
  Mr. Sainsbury: On a point of order, Mr. Deputy Speaker. Are we to have a debate on Amendments (a) to (f) and Amendments Nos. 56 to 61? We have not discussed these amendments. The arguments were directed to the first group on the selection list.
  Mr. Deputy Speaker (Mr. Bryan Godman Irvine): The hon. Member must have been out of the Chamber when Mr. Speaker explained this matter. I was under the impression that he had announced that with the first group of amendments there would also be taken the second and third groups. They have therefore been debated.
  Mr. Sainsbury: It was my impression that Mr. Speaker said that it was in order to refer to the points covered by the second group, but not that we were actually debating them.
  Mr. Deputy Speaker: Mr. Speaker indicated to me when I took the Chair from him that those amendments were being debated.
  Mr. Sainsbury: I was the first Back Bencher to speak in this debate and what Mr. Speaker said was said after I had spoken. I have therefore not had the opportunity to make the remarks I wanted to make on Amendment (c).
  Question put and agreed to.
  Clause read a Second time.
  Amendment proposed: (a) in line 7, after "industrial", insert "or commercial".—[Mr. Graham Page.]
  Question put, That the amendment be made:—
  The House divided: Ayes 269, Noes 285.

  Division No. 190.]

  AYES

  8.10 p.m.

  Adley, Robert

  du Cann, Rt Hon Edward

  Hordern, Peter

  Aitken, Jonathan

  Dunlop, John

  Howe, Rt Hon Sir Geoffrey

  Alison, Michael

  Durant, Tony

  Howell, David (Guildford)

  Arnold, Tom

  Edwards, Nicholas (Pembroke)

  Howell, Ralph (North Norfolk)

  Atkins, Rt Hon H. (Spelthorne)

  Elliott, Sir William

  Howells, Geraint (Cardigan)

  Awdry, Daniel

  Emery, Peter

  Hunt, David (Wirral)

  Baker, Kenneth

  Evans, Gwynfor (Carmarthen)

  Hunt, John

  Banks, Robert

  Eyre, Reginald

  Hutchison, Michael Clark

  Bell, Ronald

  Fairbairn, Nicholas

  Irving, Charles (Cheltenham)

  Bennett, Dr Reginald (Fareham)

  Fairgrieve, Russell

  James, David

  Berry, Hon Anthony

  Fart, John

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

  Biffen, John

  Fell, Anthony

  Jessel, Toby

  Biggs-Davison, John

  Fisher, Sir Nigel

  Johnson Smith, G. (E Grinstead)

  Blaker, Peter

  Fletcher, Alex (Edinburgh N)

  Jones, Arthur (Daventry)

  Body, Richard

  Fletcher-Cooke, Charles

  Jopling, Michael

  Boscawen, Hon Robert

  Fookes, Miss Janet

  Joseph, Rt Hon Sir Keith

  Bottomley, Peter

  Forman, Nigel

  Kaberry, Sir Donald

  Bowden, A. (Brighton, Kemptown)

  Fowler, Norman (Sutton C'f'd)

  Kershaw, Anthony

  Boyson, Dr Rhodes (Brent)

  Fox, Marcus

  Kimball, Marcus

  Bradford, Rev Robert

  Fraser, Rt Hon H. (Stafford & St)

  King, Evelyn (South Dorset)

  Braine, Sir Bernard

  Fry, Peter

  King, Tom (Bridgwater)

  Brittan, Leon

  Galbraith, Hon. T. G. D.

  Kitson, Sir Timothy

  Brocklebank-Fowler, C.

  Gardiner, George (Reigate)

  Knight, Mrs Jill

  Brotherton, Michael

  Gardner, Edward (S Fylde)

  Knox, David

  Brown, Sir Edward (Bath)

  Gilmour, Rt Hon Ian (Chesham)

  Lamont, Norman

  Bryan, Sir Paul

  Gilmour, Sir John (East Fife)

  Lane, David

  Buchanan-Smith, Alick

  Glyn, Dr Alan

  Langford-Holt, Sir John

  Buck, Antony

  Godber, Rt Hon Joseph

  Latham, Michael (Melton)

  Budgen, Nick

  Goodhart, Philip

  Lawrence, Ivan

  Bulmer, Esmond

  Goodhew, Victor

  Lawson, Nigel

  Burden, F. A.

  Goodlad, Alastair

  Le Merchant, Spencer

  Butler, Adam (Bosworth)

  Gorst, John

  Lloyd, Ian

  Carlisle, Mark

  Gow, Ian (Eastbourne)

  Luce, Richard

  Chalker, Mrs Lynda

  Gower, Sir Raymond (Barry)

  McAdden, Sir Stephen

  Channon, Paul

  Grant, Anthony (Harrow C)

  MacCormick, Iain

  Churchill, W. S.

  Gray, Hamish

  McCrindle, Robert

  Clark, Alan (Plymouth, Sutton)

  Grieve, Percy

  Macfarlane, Neil

  Clark, William (Croydon S)

  Griffiths, Eldon

  MacGregor, John

  Clarke, Kenneth (Rushcliffe)

  Grist, Ian

  Macmillan, Rt Hon M. (Farnham)

  Clegg, Walter

  Grylls, Michael

  McNair-Wilson, M. (Newbury)

  Cockcroft, John

  Hall, Sir John

  McNair-Wilson, P. (New Forest)

  Cooke, Robert (Bristol W)

  Hall-Davis, A. G. F.

  Madel, David

  Cope, John

  Hamilton, Michael (Salisbury)

  Marshall, Michael (Arundal)

  Cordle, John H.

  Hampson, Dr Keith

  Marten, Neil

  Cormack, Patrick

  Hannam, John

  Mates, Michael

  Corrie, John

  Harvie Anderson, Rt Hon Miss

  Mather, Carol

  Crawford, Douglas

  Havers, Sir Michael

  Mawby, Ray

  Critchley, Julian

  Hawkins, Paul

  Maxwell-Hyslop, Robin

  Crouch, David

  Hayhoe, Barney

  Mayhew, Patrick

  Crowder, F. P.

  Henderson, Douglas

  Meyer, Sir Anthony

  Davies, Rt Hon J. (Knutsford)

  Heseltine, Michael

  Miller, Hal (Bromsgrove)

  Dean, Paul (N Somerset)

  Hicks, Robert

  Mills, Peter

  Dodsworth, Geoffrey

  Higgins, Terence L.

  Miscampbell, Norman

  Douglas-Hamilton, Lord James

  Holland, Philip

  Mitchell, David (Basingstoke)

  Drayson, Burnaby

  Hooson, Emlyn

  Moate, Roger

  Monro, Hector

  Renton, Tim (Mid-Sussex)

  Stewart, Ian (Hitchin)

  Montgomery, Fergus

  Rhys Williams, Sir Brandon

  Stokes, John

  Moore, John (Croydon C)

  Ridley, Hon Nicholas

  Stradling Thomas, J.

  More, Jasper (Ludlow)

  Ridsdale, Julian

  Tapsell, Peter

  Morgan, Geraint

  Rifkind, Malcolm

  Taylor, R. (Croydon NW)

  Morgan-Giles, Rear-Admiral

  Rippon, Rt. Hon Geoffrey

  Taylor, Teddy (Cathcart)

  Morris, Michael (Northampton S)

  Roberts, Michael (Cardiff NW)

  Tebbit, Norman

  Morrison, Hon Peter (Chester)

  Roberts, Wyn (Conway)

  Temple-Morris, Peter

  Mudd, David

  Rodgers, Sir John (Sevenoaks)

  Thomas, Rt Hon P. (Hendon S)

  Neave, Airey

  Ross, Stephen (Isle of Wight)

  Thompson, George

  Nelson, Anthony

  Rossi, Hugh (Hornsey)

  Townsend, Cyril D.

  Neubert, Michael

  Rost, Peter (SE Derbyshire)

  Trotter, Neville

  Newton, Tony

  Royle, Sir Anthony

  Tugendhat, Christopher

  Normanton, Tom

  Sainsbury, Tim

  van Straubenzee, W. R.

  Nott, John

  St. John-Stevas, Norman

  Vaughan, Dr Gerard

  Onslow, Cranley

  Scott, Nicholas

  Viggers, Peter

  Oppenheim, Mrs Sally

  Shaw, Giles (Pudsey)

  Wakeham, John

  Page, John (Harrow West)

  Shelton, William (Streatham)

  Walder, David (Clitheroe)

  Page, Rt Hon R. Graham (Crosby)

  Shepherd, Colin

  Walker, Rt Hon P. (Worcester)

  Parkinson, Cecil

  Shersby, Michael

  Wall, Patrick

  Pattie, Geoffrey

  Silvester, Fred

  Walters, Dennis

  Penhaligon, David

  Sims, Roger

  Warren, Kenneth

  Percival, Ian

  Sinclair, Sir George

  Watt, Hamish

  Peyton, Rt Hon John

  Skeet, T. H. H.

  Weatherill, Bernard

  Pink, R. Bonner

  Smith, Cyril (Rochdale)

  Wells, John

  Powell, Rt Hon J. Enoch

  Smith, Dudley (Warwick)

  Welsh, Andrew

  Price, David (Eastleigh)

  Speed, Keith

  Whitelaw, Rt Hon William

  Prior, Rt Hon James

  Spence, John

  Wiggin, Jerry

  Pym, Rt Hon Francis

  Spicer, Jim (W Dorset)

  Winterton, Nicholas

  Raison, Timothy

  Spicer, Michael (S Worcester)

  Wood, Rt Hon Richard

  Rathbone, Tim

  Sproat, Iain

  Young, Sir G. (Ealing, Acton)

  Rawlinson, Rt Hon Sir Peter

  Stainton, Keith

  Younger, Hon George

  Rees, Peter (Dover & Deal)

  Stanbrook, Ivor

  Rees-Davies, W. R.

  Stanley, John

  TELLERS FOR THE AYES:

  Reid, George

  Steen, Anthony (Wavertree)

  Mr. W. Benyon and

  Renton, Rt Hon Sir D. (Hunts)

  Stewart, Donald (Western Isles)

  Mr. Jim Lester.

  NOES

  Abse, Leo

  Concannon, J. D.

  Garrett, John (Norwich S)

  Allaun, Frank

  Cook, Robin F. (Edin C)

  Garrett, W. E. (Wallsend)

  Anderson, Donald

  Corbett, Robin

  George, Bruce

  Archer, Peter

  Cox, Thomas (Tooting)

  Gilbert, Dr John

  Armstrong, Ernest

  Craigen, J. M. (Maryhill)

  Ginsburg, David

  Ashley, Jack

  Cryer, Bob

  Golding, John

  Ashton, Joe

  Cunningham, G. (Islington S)

  Gould, Bryan

  Atkins, Ronald (Preston N)

  Cunningham, Dr J. (Whiteh)

  Gourlay, Harry

  Atkinson, Norman

  Dalyell, Tam

  Grant, George (Morpeth)

  Bagier, Gordon A. T.

  Davidson, Arthur

  Grant, John (Islington C)

  Barnett, Guy (Greenwich)

  Davies, Bryan (Enfield N)

  Grocott, Bruce

  Barnett, Rt Hon Joel (Heywood)

  Davies, Denzil (Llanelli)

  Hamilton, James (Bothwell)

  Bates, Alf

  Davies, Ifor (Gower)

  Hardy, Peter

  Bean, R. E.

  Davis, Clinton (Hackney C)

  Harper, Joseph

  Benn, Rt Hon Anthony Wedgwood

  Deakins, Eric

  Harrison, Walter (Wakefield)

  Bennett, Andrew (Stockport N)

  Dean, Joseph (Leeds West)

  Hart, Rt Hon Judith

  Bidwell, Sydney

  de Freitas, Rt Hon Sir Geoffrey

  Hattersley, Rt Hon Roy

  Bishop, E. S.

  Dell, Rt Hon Edmund

  Hatton, Frank

  Blenkinsop, Arthur

  Dempsey, James

  Hayman, Mrs Helene

  Boardman, H.

  Doig, Peter

  Heffer, Eric S.

  Booth, Rt Hon Albert

  Dormand, J. D.

  Hooley, Frank

  Boothroyd, Miss Betty

  Douglas-Mann, Bruce

  Horam, John

  Bottomley, Rt Hon Arthur

  Duffy, A. E. P.

  Howell, Rt Hon Denis

  Boyden, James (Bish Auck)

  Dunn, James A.

  Hoyle, Doug (Nelson)

  Bradley, Tom

  Dunnett, Jack

  Huckfield, Les

  Bray, Dr Jeremy

  Dunwoody, Mrs Gwyneth

  Hughes, Mark (Durham)

  Brown, Hugh D. (Provan)

  Eadie, Alex

  Hughes, Robert (Aberdeen N)

  Brown, Robert C. (Newcastle W)

  Edge, Geoff

  Hughes, Roy (Newport)

  Brown, Ronald (Hackney S)

  Edwards, Robert (Wolv SE)

  Hunter, Adam

  Buchan, Norman

  Ellis, John (Brigg & Scun)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Buchanan, Richard

  Ellis, Tom (Wrexham)

  Irving, Rt Hon S. (Dartford)

  Butler, Mrs Joyce (Wood Green)

  English, Michael

  Jackson, Colin (Brighouse)

  Callaghan, Jim (Middleton & P)

  Ennals, David

  Jackson, Miss Margaret (Lincoln)

  Campbell, Ian

  Evans, Fred (Caerphilly)

  Janner, Greville

  Canavan, Dennis

  Evans, Ioan (Aberdare)

  Jay, Rt Hon Douglas

  Cant, R. B.

  Ewing, Harry (Stirling)

  Jeger, Mrs Lena

  Carmichael, Neil

  Fernyhough, Rt Hon E.

  Jenkins, Hugh (Putney)

  Carter, Ray

  Fitt, Gerard (Belfast W)

  John, Brynmor

  Carter-Jones, Lewis

  Flannery, Martin

  Johnson, James (Hull West)

  Cartwright, John

  Fletcher, Raymond (Ilkeston)

  Johnson, Walter (Derby S)

  Castle, Rt Hon Barbara

  Fletcher, Ted (Darlington)

  Jones, Barry (East Flint)

  Clemitson, Ivor

  Ford, Ben

  Jones, Dan (Burnley)

  Cocks, Michael (Bristol S)

  Forrester, John

  Judd, Frank

  Cohen, Stanley

  Fowler, Gerald (The Wrekin)

  Kaufman, Gerald

  Coleman, Donald

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

  Kelley, Richard

  Colquhoun, Ms Maureen

  Freeson, Reginald

  Kerr, Russell

  1460

  1461

  Kilroy-Silk, Robert

  Mulley, Rt Hon Frederick

  Smith, John (N Lanarkshire)

  Kinnock, Neil

  Murray, Rt Hon Ronald King

  Snape, Peter

  Lambie, David

  Newens, Stanley

  Spearing, Nigel

  Lamborn, Harry

  Noble, Mike

  Stallard, A. W.

  Lamond, James

  Oakes, Gordon

  Stewart, Rt Hon M. (Fulham)

  Latham, Arthur (Paddington)

  Ogden, Eric

  Stoddart, David

  Leadbitter, Ted

  O'Halloran, Michael

  Strang, Gavin

  Lee, John

  Orbach, Maurice

  Strauss, Rt Hon G, R.

  Lestor, Miss Joan (Eton & Slough)

  Orme, Rt Hon Stanley

  Summerskill, Hon Dr Shirley

  Lever, Rt Hon Harold

  Ovenden, John

  Swain, Thomas

  Lewis, Arthur (Newham N)

  Owen, Dr David

  Thomas, Jeffrey (Abertillery)

  Lewis, Ron (Carlisle)

  Padley, Walter

  Thomas, Mike (Newcastle E)

  Lipton, Marcus

  Palmer, Arthur

  Thomas, Ron (Bristol NW)

  Litterick, Tom

  Park, George

  Thorne, Stan (Preston South)

  Lomas, Kenneth

  Parker, John

  Tierney, Sydney

  Loyden, Eddie

  Parry, Robert

  Tomlinson, John

  Luard, Evan

  Pavitt, Laurie

  Tomney, Frank

  Lyons, Edward (Bradford W)

  Peart, Rt Hon Fred

  Torney, Tom

  Mabon, Dr J. Dickson

  Pendry, Tom

  Tuck, Raphael

  McCartney, Hugh

  Perry, Ernest

  Urwin, T. W.

  McElhone, Frank

  Phipps, Dr Colin

  Varley, Rt Hon Eric G.

  MacFarquhar, Roderick

  Prentice, Rt Hon Reg

  Wainwright, Edwin (Dearne V)

  McGuire, Michael (Ince)

  Price, C. (Lewisham W)

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

  Mackenzie, Gregor

  Price, William (Rugby)

  Walker, Harold (Doncaster)

  Mackintosh, John P.

  Radice Giles

  Walker, Terry (Kingswood)

  Maclennan, Robert

  Rees Rt Hon Merlyn (Leeds S)

  Ward, Michael

  McMillan, Tom (Glasgow C)

  Richardson, Miss Jo

  Watkins, David

  McNamara, Kevin

  Roberts, Albert (Normanton)

  Watkinson, John

  Madden, Max

  Roberts, Gwilym (Cannock)

  Weetch, Ken

  Magee, Bryan

  Robertson, John (Paisley)

  Weitzman, David

  Mahon, Simon

  Robinson, Geoffrey

  Wellbeloved, James

  Mallalieu, J. P. W

  Roderick, Caerwyn

  White, Frank R. (Bury)

  Marks, Kenneth

  Rodgers, George (Chorley)

  White, James (Pollok)

  Marquand, David

  Rodgers, William (Stockton)

  Whitehead, Phillip

  Marshall, Dr Edmund (Goole)

  Rooker, J. W.

  Whitlock, William

  Willey, Rt Hon Frederick

  Marshall, Jim (Leicester S)

  Ross, Rt. Hon W. (Kilmarnock)

  Williams, Alan (Swansea W)

  Mason, Rt Hon Roy

  Rowlands, Ted

  Williams, Alan Lee (Hornch'ch)

  Maynard, Miss Joan

  Sandelson, Neville

  Williams, Rt Hon Shirley (Hertford)

  Meacher, Michael

  Sedgemore, Brian

  Williams, Sir Thomas

  Mellish, Rt Hon Robert

  Selby, Harry

  Wilson, Alexander (Hamilton)

  Mendelson, John

  Shaw, Arnold (Ilford South)

  Wilson, William (Coventry SE)

  Mikardo, Ian

  Sheldon, Robert (Ashton-u-Lyne)

  Wise, Mrs Audrey

  Millan, Bruce

  Shore, Rt Hon Peter

  Woodall, Alec

  Miller, Mrs Millie (Ilford N)

  Short, Rt Hon E. (Newcastle C)

  Woof, Robert

  Mitchell, R. C. (Soton, Itchen)

  Silkin, Rt Hon John (Deptford)

  Wrigglesworth, Ian

  Moonman, Eric

  Silkin, Rt Hon S. C. (Dulwich)

  Young, David (Bolton E)

  Morris, Alfred (Wythenshawe)

  Sillars, James

  Morris, Charles R. (Openshaw)

  Silverman, Julius

  TELLERS FOR THE NOES:

  Morris, Rt Hon J.(Aberavon)

  Skinner, Dennis

  Mr. Ted Graham and

  Moyle, Roland

  Small, William

  Mr. James Tinn.

  Question accordingly negatived.
  Clause added to the Bill.

New Clause 2

  PRIVATE DISPOSAL PRIOR TO MATERIAL DISPOSAL AND AFTER EITHER NOTICE OF INTENTION TO ACQUIRE OR GRANT OF SUSPENDED PLANNING PERMISSION
  '(1) This section applies where, on a material disposal, a body (in this section referred to as "the acquiring authority") acquire an interest in any land (in this subsection referred to as "the acquired land") and within the period of five years ending on the date of the material disposal,—

  (a) an indication was given, as mentioned in subsection (3) below, of an intention to take into public ownership land which is or includes the whole or any part of the acquired land; or

  (b) planning permission was granted with respect to land which is or includes the whole or any part of the acquired land and that permission was suspended under section
  1462
  21 of the Community Land Act 1975 (suspension of planning permission for development which, at the time of the permission, is designated under section 18 of that Act);

  and in the following provisions of this section so much of the acquired land as is land to which that indication or planning permission relates is referred to as "the designated land".
  (2) If on a disposal (in this section referred to as "the private disposal") occurring after the giving of the indication or grant of the planning permission referred to in paragraph (a) or paragraph (b) of subsection (1) above but before the date of the material disposal the chargeable person has become liable for an amount of development land tax (in this section referred to as "the previous tax") and the private disposal—

  (a) was a disposal of an interest in the designated land or any part of it (with or without other land), and

  (b) was neither a deemed disposal nor a material disposal,

  the acquiring authority shall be entitled in accordance with subsections (5) and (6) below to receive an amount (in this section referred to as "the relevant amount") in respect of the previous tax.
  (3) For the purposes of this section, any indication of an intention to take any land into public ownership is given when—

  (a) a compulsory purchase order is made authorising the acquisition of that land by the acquiring authority or by another body on behalf of the acquiring authority; or

  (b) a notice stating that the acquiring authority intend to acquire that land is served under paragraph 4 or paragraph 5 of Schedule 7 to the Community Land Act 1975 (notices relating to land affected by planning permission to which section 19 or section 20 of that Act applies); or

  (c) a counter-notice stating that the acquiring authority propose to purchase that land is served under section 23(7) of the Community Land Act 1975 (disposal notification areas: response to a notice of a proposal to dispose of a material interest);

  but if, in a case falling within paragraph (b) above, the acquiring authority have, before the date of the material disposal, served notice under paragraph 6 of Schedule 7 to the Community Land Act that they have decided not to acquire any land, they shall be presumed for the purposes of this section never to have given an indication of their intention to take that land into public ownership.
  (4) In any case where—

  (a) the interest which was acquired on the private disposal does not extend beyond the designated land, and

  (b) on the material disposal the acquiring authority acquire the interest referred to in paragraph (a) above or an interest of which that interest is a part for the purposes of Part I of Schedule 2 to this Act,

  the relevant amount shall be equal to the whole of the previous tax; and in any other case the relevant amount shall be equal to such proportion (which may be the whole) of the previous tax as appears to the Board to be just and reasonable.
  (5) If, immediately before the material disposal referred to in subsection (1) above, any part of the previous tax remains to be paid then, up to the relevant amount, any amount paid after that disposal in respect of that tax shall be payable by the Board to the acquiring authority; and subsection (7) of section 39 above shall apply to any amount payable by the Board by virtue of this subsection as it applies to any amount payable by them by virtue of subsection (6) of that section.
  (6) In any case where—

  (a) at the time of the material disposal the whole of the previous tax has been paid, or

  (b) the relevant amount exceeds the part of the previous tax which, immediately before the material disposal referred to in subsection (1) above, remains to be paid,

  the Board shall pay to the acquiring authority a sum equal to the relevant amount or, as the case may require, to the excess; and any sum required to be paid by the Board by virtue of this subsection shall be charged on and issued out of the Consolidated Fund.
  (7) The reference in subsection (2)(b) above to the development land tax for which a person became liable on the private disposal includes a reference to any interest payable on that tax under section 86A of the Taxes Management Act 1970.
  (8) In this section "material disposal" has the same meaning as in section 39 above.
  (9) In the application of this section to Northern Ireland—

  (a) subsection (1) above shall have effect with the omission of paragraph (b); and

  (b) in subsection (3), for paragraphs (a) to (c) and the concluding words there shall be substituted the words "in pursuance of any enactment there is published either a notice of an application for a vesting order relating to that land or a notice of intention to make such an order".—[Mr. Denzil Davies.]

  Brought up, and read the First time.
  Mr. Denzil Davies: I beg to move, That the clause be read a Second Time.
  This clause was touched upon earlier during the debate on the Money Resolution. I explained that its purpose was to cover the case in which a local authority had given notice of intention to acquire land, as set out in subsection (3) of the new clause, and the owner then sold to a private individual, with the result that when the local authority bought from the purchaser there would be no benefit to it because there would be a high base value and no development land tax could be deducted.
  There might be a few such forestalling cases. We do not think there will be many. It is an artificial situation. Under the new clause, the Inland Revenue will be able to reimburse the local authority the tax which would have been payable if it had bought from the original owner. The Money Resolution will enable the Inland Revenue to pay money to local authorities rather than into the Consolidated Fund. This will not operate where there has been no conditional contract to sell the land.
  Subsection (3) sets out the various conditions of intention which have to be fulfilled before local authorities can benefit from the new clause. Those conditions are the making of a compulsory purchase order, the issue of a notice of intended acquisition under the Community Land Act 1975, or the service of a counter-notice under the Act.
  If an authority intends to purchase land after the owner has given notice of

  1465
  intention to dispose of a material interest in the land in a disposal notification area, it will be fairly closely circumscribed. It is not merely a question of a council indicating in an off-hand way that it intends to buy land. There have to be definite indications as set out in subsection 3. If that happens and the owner sells before there is a conditional contract, the new clause will operate and tax will be payable to the Revenue.
  This will apply to only the very few transactions where there is an attempt to prevent local authorities getting tax which they would otherwise have received.
  Mr. Graham Page: This new clause did not appear on the Order Paper until a very late stage, and there will be no further opportunity to get it right. We have had very little time to consider it since it first appeared on Friday or Monday. It is constitutionally very important because it introduces the concept of alotting certain taxes for certain purposes. We seem to be going back to the 1920s and the road tax. There are strong objections to this principle.
  We know what is intended on the apportionment of development land tax between local authorities and the Exchequer, but here we have local authorities and the Board of Inland Revenue jumping the gun on the division of taxes between the Exchequer and local authorities. If a transaction takes place directly between the owner of land and an exempted body, that body can estimate the current use value of the land and from that it can apply a formula and refrain from paying to the vendor the full purchase price by pocketing a certain sum for itself.
  We object to the principle of allocating revenue for a particular purpose without the Board of Inland Revenue going to the Exchequer for it and instead of the Exchequer allotting money as the Government see fit to assist local authorities.
  The procedure under Clause 39 of the Bill, together with the administrative action outlined in Schedule 7, results in the tax being deducted from the purchase money when a local authority or other exempted body purchases a property and is called upon to pay the purchase price. The tax will then be based upon the
  1466
  development value, which is the difference between the cost of buying the land originally and the consideration for the sale.
  If the sale to the local authority takes place shortly after the land has been purchased by the vendor, there will be little development in value upon which the tax can be assessed. In those circumstances, it has been thought—I guess at the last moment—that the local authority might be deprived of pocketing the development tax and might have to share the general pool of tax collected by the Exchequer. Frankly, I do not see why not in those circumstances.
  8.30 p.m.
  If we apply the proposals in New Clause 2, we get to such a complicated state of calculation that it is not worthwhile. I think that the Minister indicated in the debate on the Money Resolution that there would not be many cases of this sort. Is it worth while to undergo all the complications of the new clause so as to pick up a little bit of tax to hand over to the exempt body—the local authority or one of the other public bodies listed in Clause 12?
  The complications of the new clause are frightening. If an owner of land sells his land to a private person—in other words, if there is an ordinary conveyance between vendor and purchaser—and the property is subject to some indication from a local authority, or other exempt body, that it wishes to buy the land, and the indication has been made as long ago as five years before, any tax paid by the vendor based on the development value at the time of that sale and purchase will be handed over to the local authority by the Board of Inland Revenue.
  It is necessary to study the clause to see what is meant by an indication within the past five years of an intention by a local authority or other public body to acquire the property. If a compulsory purchase order is made in relation to the property, the authority will have given an indication that it intends or wishes to acquire the property. I presume that it is a compulsory purchase order which has or has not been confirmed. It may merely have been made by the local authority and not confirmed by the Secretary of State at the time of the sale and purchase between the private individuals.

  1467
  There are two other indications which relate especially to the Community Land Act. The notice stating that the acquiring authority intends to acquire—as specified in Schedule 7 to the Community Land Act—and the counter-notice under the disposal notification arise from a procedure under the Act to which, I recollect, my right hon. and hon. Friends objected strongly when they were considering that measure.
  I am sure that the Minister will have noted the misprint in subsection (3)(c) as printed, where reference was made to a
  "counter-notice station that the acquiring authority propose to purchase".
  Obviously it should be a counter-notice "stating". I know that a number of my amendments contain misprints, but the misprint to which I have drawn attention shows, I believe, the haste with which the new clause was put on the Notice Paper and the lack of opportunity that my hon. Friends have had to study it carefully. We managed to put down a few starred amendments, but because they were starred they were not selected. To have to study a clause which, at a late stage, brings in an entirely new procedure based on an entirely new principle is unfair not only to the Opposition but to those who have to put the procedure into practice.
  I appreciate what the Minister said in the debate on the Money Resolution—namely, that this procedure will not affect transactions between private individuals and that it will affect only claims by local authorities or other exempt bodies to payment of the tax from the Board of Inland Revenue. Nevertheless, local authorities and their officials will have to consider the application of the clause. It may be that, without an opportunity for us to have expert advice from outside, errors will occur in the clause and will cause great trouble. It is not for nothing that we normally have the procedure of Second Reading, Standing Committee. Report and Third Reading in both Houses when dealing with technical matters of this kind. We have that procedure to try to get our legislation right and not to have to resort to litigation to understand what it means.
  It has been difficult for us to study the clause with the care with which it should
  1468
  be studied. It changes our whole principle of taxation. Tax having been collected by the Inland Revenue, we from this House, by means of the clause, will be instructing the Board of Inland Revenue to pay out that money to these exempt bodies. Not only local authorities, but other exempt bodies which carry out particular functions in the service of the public, are concerned.
  The Minister said that the new clause did not apply to unconditional contracts for sale. I am not quite sure what he intended by that phrase. It may be that I have not read the clause thoroughly enough line by line, but I do not find that mentioned in the clause. I do not know at what date or time within the five years, or whatever it may be, the unconditional contract for sale can be entered into to avoid the effect of the clause. If the Minister would explain that matter further in reply, we might at least hope to understand the clause a little better.
  The clause arises from the process of embarking on the extraordinary procedure of net-of-tax purchase by public bodies. That is a procedure whereby the vendor will not be properly assessed by the Inland Revenue for the amount of tax for which he is liable. That is what we would like done—that the tax be paid to the Board of Inland Revenue, that the board accounts for it to the Exchequer and that so much of that money as the Government may decide should be paid to the local authorities. I have no objection to local authorities having the proceeds of the tax. In fact, I should like to see it go into their hands rather than be disbursed in other ways. But the distribution of that money should not be haphazard—a bit acquired by deduction from purchase money due and owing from local authorities and a bit given back to them when they are too slow to act when there is a transaction between private individuals. That is not the way in which to keep a check on local authority expenditure.
  This subject has recently been much debated in Parliament. How on earth shall we be able to make an estimate or forecast of the revenue and expenditure of local authorities when side payments will be made to local authorities when they purchase property, and when they may say "Someone jumped the gun and sold his property when we indicated

  1469
  that we wanted it. Therefore we must have the tax which arises from that sale."? This is a thoroughly bad clause. The procedure of net-of-tax purchase by local authorities is thoroughly bad.
  Mr. Fairbairn: I am in a difficulty over the clause. Incomprehensible and lengthy as it is, I assumed that it meant what it said. I have been trying to work out, with some difficulty, and with reference to the Community Land Act 1975, what is a counter notice station. It did not occur to me that it meant anything else. I did not hear the correct words that my right hon. Friend the Member for Crosby (Mr. Page) used when he said what he assumed it meant. I assumed that the expression "counter-notice station" was a term of art, which even those who did not have the benefit or boredom of having discussed the Community Land Act in Committee would comprehend.
  Under this Bill it is intended to give back to the community the wealth that the community creates. There are always members of the community at large who listen to debates in the House. If they read the reports of the debates, I should like to ask them whether they understood what the clause was about. I doubt whether members of the Government understand it. They may have had more chance to do so if they were present. I doubt whether members of the Liberal Party understand it. They might also have had more chance if they were present. I doubt whether any Members of the Scottish National Party understand or bother to understand what it is about. After all, it affects Scotland, and those Members represent the public interest when it comes to tax.
  We start with an extremely dangerous and wide proposition. The clause reads:
  "(1) This section applies where, on a material disposal, a body (in this section referred to as "the acquiring authority)"—
  I should have thought that it might have said merely "the acquiring authority"—
  "acquire an interest in any land".
  I think "an interest" is an extremely dangerous expression.
  We may obtain an interest in any land as a result of the slightest act. It need be only the smallest right or the smallest servitude. It may be anything. It may
  1470
  be the right to walk one yard or the right to place one post. This clause covers "an interest". The right to put up a signpost on the land would be sufficient. There would then follow the procedure of compulsory purchase of the place in which we put the post. That would be sufficient to make the section immediately operative.
  8.45 p.m.
  We must consider the width of this incomprehensible section. I refer to the words:
  "within the period of five years ending on the date of the material disposal—".
  If such act is done within five years, the land is caught.
  Then we have the concept of the indication of an
  "intention to take into public ownership land which is or includes the whole or any part of the acquired land".
  It is important to look then at subsection (3)(b) to understand that an indication has to be given only of an intent to take land into public ownership. In other words, if a local authority wants to obtain the benefit of this tax, all it needs to do for the purpose of this provision is to give an indication that it intends to take into public ownership the whole of my constituency.
  We then see the words in subsection (3):
  "any indication of an intention to take any land into public ownership is given when a compulsory purchase order is made authorising acquisition of that land.…"
  In other words, a local authority does not need to acquire it or have it confirmed. It can require it, forget it, or tear up the application.
  Under the saving clause, paragraph (a) is not covered, but only paragraph (b):
  " … if, in a case falling within paragraph (b) above, the acquiring authority have, before the date of the material disposal served notice … that they have decided not to acquire any land",
  it would then be known that that did not apply to paragraphs (a) and (c).
  All the local authority needs to do to obtain this facility is to give notice of an intention to acquire, even though it never intends to carry it out, but it will be able to obtain the benefit if there is any sale of that land between private persons.

  1471
  The provision goes on to refer to a private disposal of an interest in the designated land or any part of it. That covers anything. It covers rights of way, the granting of rights to pick fruit, and indeed any right. Thus, a local authority, if it wishes to acquire land, can say merely that it wants to acquire land, whether it really requires to do so or not, and any transfer of interest in that land from one individual to another would be caught under the provision.
  That is a wide and absurd provision and was surely never intended by the Government when they hurriedly framed this clause—a clause that even contains a number of substantial misprints that misled me if not others. I find the clause almost incomprehensible but, when one is driven to try to discover a meaning in these terms of art, with all the misprints, the task becomes even more difficult.
  What happens under subsection (3) if the local authority acquires any interest or acquires under compulsory purchase, or under any other of the bases, and then sells again? Supposing the local authority acquires land and then sells to a private individual, or acquires it and sells to a statutory authority; what happens then? Can it use that procedure merely to obtain tax from central Government funds? It seems to me that it can. There is no provision that the local authority can first cancel any intention to acquire and, secondly, when it has acquired immediately resell property or the interest or an option to any other authority, private or public, and then merely claim the tax.
  We then come to the grand injustice of this noble situation whereby the Treasury is said to be going to give to the local authority what it so clearly deserves. The clause says:
  "… the relevant amount shall be equal to the whole of the previous tax; and in any other case the relevant amount shall be equal to such proportion (which may be the whole) of the previous tax as appears to the Board to be just and reasonable."
  I do not know whether that is intended to mean anything. The definition of a "reasonable man" in English law is the man on the top of the Clapham omnibus. The definition of a "reasonable man" in Scottish law is not limited. We are all reasonable men in Scotland. Those of
  1472
  us who are unreasonable are absent as usual—the Members of the Scottish National Party, many of whom, oddly enough are Englishmen but not Welshmen, I hasten to add to the Minister.
  That the board should decide what proportion is "just and reasonable" is inequitable and reverts to the Money Resolution. Upon what basis will it do so? Will it be upon the amount originally claimed, or upon the amount that it was originally worth? It goes back five years. If the tax five years ago was £100, it would now be worth £50. What is "just and reasonable"? What are the guidelines and what is the basis on which this grandiloquent gesture is to be made?
  Subsection (5) reads:
  "If, immediately before the material disposal referred to in subsection (1) above, any part of the previous tax remains to be paid then, up to the relevant amount, any paid after that disposal in respect of that tax shall be payable by the Board to the acquiring authority; and subsection (7) of section 39 above shall apply to any amount payable by the Board by virtue of this subsection as it applies to any amount payable by them by virtue of subsection (6) of that section."
  That is a lovely subsection. I do not know what is means and I do not know whether the Minister knows what it means. Why include such a subsection at all? I shall be more than comforted if the Minister understands more than one line in 10 of the new clause.
  Subsection (6), to which subsection (5) applies under reservation of Clause 39(7), says:
  "the relevant amount exceeds the part of the previous tax"—
  "previous tax" is not defined—
  "which, immediately before the material disposal referred to in subsection (1) above, remains to be paid, the Board shall pay to the acquiring authority a sum equal to the relevant amount or, as the case may require,"
  That is a lovely piece of tight definition behind which the Minister sheltered on the previous debate. What is the meaning of
  "a sum equal to the relevant amount or, as the case may require"?
  Does it mean anything? Does it mean that the board will give what it wants, that it will apportion a sum and say "That is your bit, little boy" and explain that that is the "relevant amount" and must be accepted?

  1473
  The drafting is extremely sloppy and complicated. It is duplistic in its meaning, meaningless in its intention, and I am disturbed that a new clause of such complexity and so loosely drafted should be forced upon the House, which has no other remedy at this stage in the proceedings.
  Mr. Sainsbury: I strongly support my right hon. Friend the Member for Crosby (Mr. Page) and my hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) in what they have said about the appearance of a new clause at such a late stage. I have spent a fair number of hours in the past few months contemplating the various aspects of the Bill and I suppose, not being a lawyer or an accountant, that I can claim some basic knowledge of the objectives and methods in the Bill. I had to read the clause several times before I began to think that perhaps I had some understanding not only of what it was about, but how it was meant to carry out its intention.
  One of the disadvantages of the clause appearing so late was that we had to hurry to put down amendments to it as we saw it. My first sight of it was yesterday, when I hastened to table an amendment, which, like the counter-notice "station" instead of "stating" in the clause was misprinted. That amendment is Amendment (c), which should be to leave out "five" instead of to leave out "give". The amendment, which is starred has not been selected.
  My hon. Friend the Member for Melton (Mr. Latham) will no doubt seek to say something about the provision in the clause to which his amendments refer. All these matters are relevant. We must get the clause right now, because there is no other chance.
  The Minister said that the clause would apply on only a few occasions. If he had turned over the page and seen all the other bits, he might have decided that it was better to withdraw it. It is extraordinary that we must have such a lengthy and complicated clause to deal with a matter that will arise on only a few occasions and that affects only local authorities and the Board of Inland Revenue.
  1474
  Under the clause, if a local authority or other acquiring authority has given notice some time in the past five years of its intention to acquire a bit of land, and if before it acts on that intention the owner disposes of it to a third party, with the result that development land tax is paid to the Inland Revenue, the local authority will be entitled on acquiring the land to claim from the DLT office at Middlesbrough the tax that it would have been able to claim if it had bought the land from the original owner at the price paid by the third party. If that will happen only on a number of occasions, and if it involves only the transfer of money from the Inland Revenue to local authorities, one doubts not only the merits of so long and complicated a clause but the merits of incurring the cost of preparing it.
  We have already heard of some of the apparent weaknesses in the drafting of the clause. No fewer than six times we find in it the dreaded words "in this section" or "in this subsection". In line 1 we read:
  "This section applies where, on a material disposal, a body (in this section referred to as the acquiring authority')."
  My hon. and learned Friend inquired with admirable restraint why we could not have the words "an acquiring authority" instead of
  "a body (in this section referred to as the acquiring authority')".
  Anyone who has the good fortune, or the misfortune, to while away an occasional hour studying the Bill in full will find numerous other examples of this kind of phraseology.
  Mr. Deputy Speaker (Sir Myer Galpern): I shall reserve that special pleasure for the Summer Recess.
  9.0 p.m.
  Mr. Sainsbury: Thank you, Mr. Deputy Speaker, and I wish you a very happy recess. But this clause cannot be allowed to wait. In subsection (1) we find the words:
  "a body (in this section referred to as 'the acquiring authority')"
  and in the very next line are the words:
  "referred to as the acquired land".
  Why have the reference to acquiring an interest in any land? Why cannot we speak of acquiring an interest in the relevant land? Why must we have these

  1475
  special definitions applying only within this new clause?
  Mr. Fairbairn: It is perfectly possible to acquire an interest in land without acquiring any land. Therefore, it is quite impossible to describe acquiring an interest in any land as "acquiring land".
  Mr. Sainsbury: I am grateful to my hon. and learned Friend for that important explanation about the nature of interest in land. It is a substantial matter to which I shall return. We have something referred to as "designated land" and then in subsection (2) there are the words:
  "if on a disposal (in this section referred to as the private disposal')".
  At the end of the same subsection are the words:
  "an amount of development land tax (in this section referred to as the previous tax')".
  Later are the words:
  "an amount (in this section referred to as 'the relevant amount')".
  This goes on all the time. We need a bibliography or lexicon for every clause saying:
  "In this section the following terms shall have the following meaning".
  It seems to me that very often the meanings are of a rather special nature.
  My hon. and learned Friend the Member for Kinross and West Perthshire raised an important point which I must admit had not occurred to me in my first several readings of this new clause when he referred to acquiring an interest in any land. As he rightly pointed out, an interest can be a small matter, for example, wayleave permitting the posting of a sign, which was the example he cited. The acquisition of this kind of wayleave is common. In my constituency in one area there are many scheduled and listed buildings. The lighting system is somewhat old-fashioned necessitating the fixing of lights to the actual wall of the buildings because the streets are rather narrow. So the local authority acquires wayleave for signs and street lights for many of them. It is quite usual and in the normal course of events for the authority to wish on occasion to change the rights and acquire fresh interests.
  1476
  I am sure that the Minister will reply to the point that my hon. and learned Friend has made. I ask him also to look at the conflict between subsections (1) and (3), because it seems to me that the natural way in which to read subsection (3), which speaks of taking any land into public ownership and refers to a notice stating that the acquiring authority intends to acquire that land, is not entirely compatible with the wording in subsection (1) where we have the phrase:
  "an interest in any land".
  Again, in subsection (3) we have a reference to the actual acquisition of land whereas in subsection (1) we have a reference to the acquisition of any interest in land. There seems to be considerable conflict between these two parts of the clause.
  Mr. Fairbairn: The Bill is so badly drafted that one of the idiotic descriptions in parenthesis that my hon. Friend describes equates the acquisition of land with the acquisition of an interest in land.
  Mr. Sainsbury: I am grateful to my hon. and learned Friend for that comment but I was not sure whether that acquisition—if I may use that word—would apply in this subsection and right the way through. If that is so, we run into another problem, because a local authority cannot issue a compulsory purchase order to acquire a wayleave or leasehold interest. My right hon. Friend the Member for Crosby is the leading authority in the House on these matters, but my impression is that it is not possible to issue a compulsory purchase order to acquire a leasehold interest. The land is either acquired or it is not. A leasehold interest, which would be an interest in land, cannot be acquired.
  These arguments emphasise that we have a clause which not only came in late, but may have come in untidily when we had no opportunity to discuss it. But I ask the Minister whether it is worth all the complications that will be involved. There will be a great many occasions when local authorities, acquiring authorities or bodies in this section referred to as acquiring authorities, will acquire land which has changed hands in the last few years where there is,

  1477
  therefore, a high base value and where the authority will not benefit from the net of tax acquisition. It will have to acquire it at a reasonably high figure, and there will be no kick-back of tax to it from the DLT office, because there will not have been a previous notice.
  Mr. Denzil Davies: I am sure that it is irregular to intervene at this stage in the hon. Gentleman's speech. However, I have been considering what has been said in this debate. Bearing in mind that the new clause was tabled very late—and I accept that it has been difficult for the Opposition to consider it properly or to put down amendments—I have it in mind, with the permission of the House, to withdraw the clause and to reintroduce it in next year's Finance Bill when it can be debated as part of that Bill in Committee and on the Floor of the House. I also give notice of the fact that it will be reintroduced in next year's Finance Bill so that, if there are any collusive deals meantime, no doubt poeple who enter into them will take that factor into account.
  The clause is necessary, but I accept that it is unsatisfactory that the Opposition have had no opportunity to consider it properly or to table amendments. It is also unsatisfactory when the Opposition put down new clauses on Report, when it is equally difficult for the Government to amend them. But, in view of that, I am minded, with the leave of the House, not to press the clause now, but to reintroduce it in next year's Finance Bill. I propose to take similar action with regard to New Clause 3, which in part follows on from New Clause 2. They will be brought back in next year's Finance Bill, when the House will have more opportunity to consider them and to seek to amend them. But I make it clear to those who wish to enter into certain transactions that we shall be reintroducing them in next year's Finance Bill, and no doubt they will take account of that before entering into collusive transactions.
  Mr. Sainsbury: I am sure that my right hon. and hon. Friends will welcome what the Minister of State said. I wish that I could pass to him the remainder of my note. The last words in my notes are "Withdraw: reintroduce next Finance
  1478
  Bill." That was the suggestion that I intended to make to the hon. Gentleman.
  Mr. Fairbairn: I hope that before my hon. Friend finishes reading his notes he will stress to the Minister that at the end of them are the words "and next time get it right.".
  Mr. Sainsbury: I trust that that implication was written into what we have said already.
  This is a matter of transferring tax back to acquiring authorities. The Minister referred to forestalling provisions, as though there were individuals who would go around trying to do things to their advantage. In New Clause 2 we are talking not of individuals doing things for their advantage, but of individuals carrying out transactions that could perhaps be to the disadvantage of an acquiring authority in due course.
  Will the Minister consider whether the amount of administrative time and organisation and the number of extra employees who will be required in the DLT office will make this worth while, particularly in view of the length of time involved? If local authorities dilly dally for five years before making the acquisition, that shows that they do not deserve the DLT back.
  Mr. Deputy Speaker: Does the House wish to pursue this matter?
  Mr. Michael Latham: I do, Mr. Deputy Speaker.
  First, the Minister has not formally withdrawn the new clause.
  Mr. Deputy Speaker: I am waiting to give the Minister an opportunity to do that. If the debate has been concluded, he will formally do so.
  Mr. Latham: With great respect, Mr. Deputy Speaker, the Minister has given a threat that he will introduce retrospective legislation in next year's Finance Bill. He specifically said that people should bear in mind what he said if they are to undertake colusive deals between now and then. That is a state of affairs that needs further exploration before the House leaves the matter. The Minister's announcement of his decision to withdraw the new clause has made the considerable discussion in the House today a complete waste of time, including

  1479
  all the discussion on the Money Resolution.
  Mr. Denzil Davies: I thought that that was what the hon. Gentleman wanted.
  Mr. Latham: I do not know why the non. Gentleman should think that I wanted that at all. If he will wait a moment until I have developed my argument, he may be surprised.
  Line 29 of the new clause refers to a compulsory purchase order being made. We are now told that there is to be legislation in the next Finance Bill that will catch deals done between now and then. It will necessarily, therefore, have retrospective effect, and it will also catch the cases where there has been a sale subsequent to the making of a compulsory purchase order which might not subsequently be confirmed.
  If that is to be the case, that is a most unusual use of ministerial power. The whole point of the Town and Country Planning Acts—
  Mr. Denzil Davies: It is not a question of the use of ministerial power. After considering some of the points that have been made, we have decided that the new clause will be reintroduced in next year's Finance Bill. It will then be open to hon. Members to debate it on Second Reading, in Committee and on the Floor of the House, and to consider all those points.
  I thought that I was being helpful to Opposition Members, who quite fairly and correctly, said that the new clause should not have been tabled as a new clause on Report. The hon. Member for Melton (Mr. Latham) himself made the point in a previous debate. He said that it was very unfair to the Opposition that the Government had put down these new clauses on Report as there was then no chance to amend them. I am meeting very valid argument made by the Opposition. If Labour Members were in opposition, we should no doubt make the same valid argument. I am meeting it and withdrawing the new clause, but I am saying that it is necessary to reintroduce it in next year's Finance Bill, which will give ample opportunity to discuss all the matters that hon. Members have been raising.
  1480
  I concede that it is unfair to discuss these matters now as the new clause was put down at a rather late stage. I am sorry that the hon. Member for Melton is being rather churlish in not accepting that I have met a fair point made by the Opposition.
  Mr. Latham: I am not disputing the Minister's right to withdraw the new clause if he so wishes. All I am querying is the wording that he has used. This is putting people who choose to undertake collusive deals between now and next year's Finance Bill under notice. I do not knew what he means by that. What will happen to people who sell buildings between now and then? Will they be retrospectively taxed?
  Mr. Denzil Davies: The hon. Gentleman has misunderstood the new clause. It does not tax any individual. It merely enables the Inland Revenue to pay money to the local authority. The new clause does not affect private interests in any way. I made that clear in the debate on the Money Resolution. Any private deal or sales entered into would not be affected. We are concerned only with the machinery of whether the tax should stay in the Consolidated Fund or go to the local authority. It does not affect private interests, and any reintroduction in next year's Finance Bill would again not affect any private interests.
  9.15 p.m.
  Mr. Graham Page: I thank the Minister for reconsidering this. The arguments we deployed earlier on the Money Resolution and later in this debate seem to have convinced the Government that this new clause ought not to have been introduced at this stage. The one thing which worried me when the Minister introduced the new clause was that he used the phrase "if there are no collusive transactions". If the clause is introduced next Session on the same basis as this new clause and, indeed, New Clause 3, there can be no question about collusive transactions between individuals. If those transactions occur, they will give rise to dealings between the Board of Inland Revenue and the local authority, but individuals can continue to make contracts as they please because it is only when they have paid over the tax to the board that the board accounts to the

  1481
  local authority instead of to the Exchequer.
  I hope the hon. Gentleman will agree that there will be nothing retrospective that will affect individuals. It may be retrospective in respect of the board and the local authority, but not in respect of an individual's transactions. I do not want to labour the point.
  Mr. Deputy Speaker: Order. I take it the right hon. Gentleman is finishing his remarks.
  Mr. Page: I am just finishing, Mr. Deputy Speaker. I am grateful to the Minister. I think we should accept what he has said, and I am sure that my right hon. and hon. Friends will do so.
  Mr. Denzil Davies: I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 4

  CHARITIES: DISPOSAL OF LAND ACQUIRED AFTER 12TH SEPTEMBER 1974
  '(1) If the consideration which is received by a charity for the disposal of an interest in land which:—

  (a) was held by the charity on 12th September 1974; or

  (b) was held by another charity on that date and has at no time between that date and the time of the disposal been held otherwise than by a charity

  is applied by the charity in acquiring a new interest in land which is to be used wholly or mainly for the purpose of the charity then the interest so acquired shall be treated for all the purposes of this Act as held by a charity on the 12th September 1974.
  (2) On the disposal by a charity of an interest in land to which the preceding subsection does not apply and where

  (a) during the whole of the period of seven years immediately preceding the date of disposal the interest has been owned by a charity (but not necessarily the same charity throughout) and

  (b) the land (as distinct from the rents and profits thereof) has not been held otherwise than wholly or mainly for charitable purposes

  than in determining the amount of any realised development value for the purposes of this Act there shall be deducted so much of the net proceeds of the disposal as is represented by the difference between:

  (i) the relevant base value at the date of disposal of that interest and

  1482

  (ii) its value on that date on the assumption that planning permission would be granted for any development by virtue of which the use of the land would be made to correspond with the use which prevails in the case of contiguous or adjacent land'.—(Mr. Wakeham.)

  Brought up, and read the First time.
  Mr. John Wakeham: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take New Clause 8 (Reduced rate of tax for charities).
  Mr. Wakeham: I have moved this new clause because I was impressed by arguments put to me that charities had not been treated fairly under the Bill. Whatever the merits or demerits of the Bill, it seemed to me that in Standing Committee hon. Members wanted to be fair to charities, and I thought it right to give the House an opportunity to put the matter right. I do this not to score any political point, but because the new clause is moderate and limited and would attract support from all parties in the House.
  Its objects are twofold. The first is to to secure roll-over relief for churches and charities for changes only in their operational land. The second is to avoid the concessions that the Government rightly gave under the Community Land Act from being eroded by the development land tax.
  I make no secret of the fact that I prefer charities to be exempted from tax which, by and large, has been the case from time immemorial, although some people would say from the time of Henry VIII. I come from the constituency that produced Anne Boleyn. If it was Henry VIII who last taxed charities, I rest my case on that. Nevertheless, I have put down some amendments to Clause 25 to cover that point.
  My purpose in New Clause 4 is much more limited than a general exemption. It is specific and particular. If the argument is that there is an abuse by charities of any of the provisions of the Bill, the way to deal with that is by revising the legislation dealing with charities rather than by including them in the Bill.
  Subsection (1) of the new clause introduces a roll-over provision to ensure that operational land—that is, land used by

  1483
  the charity for its own purposes and not held for investment and income—should be treated as White Paper day land and thus developed or sold without liability to development land tax. Churches and charities need to replace their operational land for all sorts of very good reasons—changes in population, the needs of a community, compulsory purchase, road development schemes, and so on. It seems wrong that replacement land acquired after 12th September 1974 should lose the benefits of the land that has been replaced.
  There was a great deal of discussion in the Standing Committee, of which I was not a member, of the treatment of charities. From the record of those proceedings it seems that too little weight was given to four points. First, although it is true that since White Paper day land may be sold at market value and the base value for DLT purposes of any land bought will be higher, which in turn means that when the replaced land comes to be sold, any DLT will be correspondingly less, the benefits of this wil wear off as sale follows sale. The number of changes that churches and charities need to make over a period of years is perhaps more than the Committee considered.
  Mr. David Mitchell: On the point about the position of church or charity land that will be redeveloped and needs to be available on an on-going basis to finance the purchase of further land, one knows how important it is in the case of churches to be able to move out of dying city centres and into expanding and new towns, such as I represent. They must have finance to do so and much of it comes from the sale of older property. But does my hon. Friend not recognise that the same is true of a multitude of businesses, particularly small businesses, which have an enormous contribution to make to the economy and which will be desperately damaged by the Bill as it stands?
  Mr. Wakeham: That is a valid point and I would support any proposals to assist small businesses in this way. But my argument at the moment relates to charities.
  This is a case in which common sense and reason might prevail. Although there
  1484
  are not many Government supporters listening to my arguments, at least two Ministers are present, and I hope that my arguments will receive favourable consideration. Although my hon. Friend's comment is valuable, it widens the argument and if I adopted it I might not get the support for which I am hoping.
  My second observation is that where a church or charity has to give up land which is to be developed for its charitable work, it seems wrong, just at the time when it needs all the cash available, that a substantial part of its resources should be taken away in taxation. That is analogous to my hon. Friend's point.
  The third comment, touched on in Committee, is that this tax, so far as it affects charities, brings a new problem to those who administer them. For the first time they have to concern themselves with the intricacies of tax planning as well as all the other problems of running and administering their charities.
  As a chartered accountant I am prepared to declare an interest in this matter, as charities will have to seek professional advice to deal with problems arising from development land tax. I do not think that this additional burden should be put on charities at the present time.
  The fourth topic I want to raise, which was given too little consideration in Committee, is that the purpose of the Bill is to give benefit to the Community from the gains from land. Surely charities do just that. By leaving development gains in charities, surely we are achieving the broad objective of the Bill.
  Subsection (2) of my new clause makes sure that the concessions announced on 15th July last year and in part of the Community Land Act are not eroded. These concessions mean that with land held by a charity for seven years compensation would be based on the value of that land on the assumption that planning permission would be granted and not on the current use value, which is often very low. This is particularly the case when considering the position of city churches that move out to the suburbs. As matters stand now, for land acquired after White Paper day this concession can be wiped out by development land tax.
  The Government would argue that this concession does not come in to effect

  1485
  until the second appointed day and by that time the taxation provision may be very different. But they recognise that there may be a problem here. They would argue that they would want to deal with it then and not now.
  My new clause would put the matter right now and clear up the present doubts and uncertainties. It would enable charities to plan their affairs some years ahead knowing that they will not have a concession given on the one hand and taken away on the other by development land tax.
  My new clause is moderate and reasonable. It ensures that any benefits arising from the tax concessions go directly to the charities and therefore to the community. As such, it should commend itself to all parts of the House, and I hope, to the Government.
  Mr. Sainsbury: I should start by declaring another interest—I am a trustee of a number of charities including one in particular which is a fairly substantial holder of interests in land, some of which, in my opinion, are becoming near to being ripe for development. This will present problems to those entrusted with the care of the charity's affairs.
  I mention that particular one because it is an example of the fact that whereas obviously a very large number of charities do not have any property at all, or do not have property remotely covered by the provisions of the Bill, there are a number, including some substantial ones with a wide scale of operations, which hold a large proportion of their assets in the form of property. This is not surprising, because often the property was acquired by way of endowments, often from the founder of the charity.
  That is what happened in the case of the charity I mentioned. The founder owned a farm in what is now a suburb of London. Unfortunately, the founder was not sufficiently far-sighted to ensure that his farm occupied the best pitch in the shopping centre, but he did not do badly and the charity has benefited substantially over the years. Like other charities, it received property in the form of endowments. Perhaps that is why so many charities treat property as their most important source of funds with which to carry out their activities.
  1486
  9.30 p.m.
  The other point to be borne in mind is that charities are perpetual bodies. The trustees for the time being of any charity must be conscious at all times of their responsibility to pass on the assets of the charity to their successors over the generations. They do not envisage that they come into being to carry out a specific function and that when that is done the charity will be wound up. That happens, but only rarely. Far more frequently the charity will expect to continue in its appointed rôle for as far forward as the mind can conceive, and the trustees will think of their assets in that context. This is an important factor to bear in mind when discussing these related matters of charities.
  In the Committee the Minister went some way to recognising, if somewhat grudgingly, that the proposals in the Bill presented a problem to charities. He said:
  "I noticed that the hon. Gentleman said 'Long-term—50, 60 years, 100 years'."
  He continued:
  "It is a long-term problem … if there is one, but I do not think that in the long term there will be a problem because people in just these circumstances will have taken into account legal obligations and liabilities".—[Official Report, Standing Committee J, 29th April 1976; c. 764.]
  I think that the liabilities he had in mind at that point were taxation liabilities.
  It seems to be generally accepted that we go back to the time of Henry VIII for tax exemption for charities. We have a long and well-established tradition of such exemptions. I do not wish to raise the argument, which has been raised occasionally in other places and also when we were discussing the Community Land Bill, as to whether all charities are as charitable and deserving as one another.
  There is the problem of definition of charities. It is accepted that they do an important and worthwhile job in the community. It is at times of financial stringency when the local authorities are having to scrutinise all aspects of their expenditure on, among other things, personal social services that the charitable bodies have a particularly important rôle to play. They go some way to filling gaps in the provision of services. One of which I am particularly conscious in

  1487
  my constituency, where there are many elderly people, is that of sheltered accommodation. Whatever we may like to think about the way charities manage their affairs, I should have thought it would be fair to say of them, as of other bodies, that it is dangerous to introduce artificial distortions.
  One of the matters which was of considerable concern to those of us who served in the Committee stage of the Bill was the extent to which the introduction of taxation of charities—for the first time since the reign of Henry VIII, or for the first time ever—would result in distortion of the way in which they manage their affairs. It is only in this one respect of the development land tax that it is proposed that charities should be subject to taxation.
  The Minister, during our fairly lengthy discussion on this matter in Committee, did not suggest in any way that other forms of taxation should be levied, and I have not heard the suggestion put forward from the Government side. Suppose that we have this tax on charities. A charity which holds property may for some reason decide to sell some land. One very likely reason for this is that the local authority wishes to acquire some of its land for a road-widening scheme. The charity may therefore dispose of some of the land which it held on 12th September 1974, and which it may have held for many hundreds of years.
  The nature of the charity is immaterial. Having disposed of the land, however, it is very likely, in my experience, that the trustees of that charity would wish to reinvest the proceeds in property in order to produce income for their charitable purposes. Traditionally, and for the reasons I have already referred to, charities may well wish to continue to hold a substantial proportion of their assets in the form of property.
  Having acquired other property, as the Bill stands—and without the benefit of this ingenious clause—those charities will then be holding an asset on which they might become liable to tax many years ahead when development or redevelopment is appropriate for that particular asset. They will, of course, be entitled to the same exemptions as everybody else with regard to development land tax, and these will themselves have a distorting
  1488
  effect since they will tend to make owners of property try to avoid any form of redevelopment which would make them liable for development land tax. This will therefore tend to make people concentrate on redevelopment which is within the exemption limits, irrespective of whether that is the appropriate form of redevelopment or the best form of economic use of the particular site.
  That is a distortion which charities will share with everybody else, but the grave distortion that the clause will avoid is that of having one assets of a charity subject to taxation in these circgumstances whereas all the other assets would not be liable to tax. This will be a grave distortion and a matter of difficulty to the trustees. It will be an increasing distortion. Over the years, more and more of the property of charities will be property which they did not hold on 12th September 1974.
  I find particular merit in the clause, and I am convinced that unless we can adopt a formula such as this—a particularly ingenious and satisfactory one—charities will in due course be increasingly damaged by the provisions of the Bill. I hope that the Minister will accept the new clause and continue the historic, traditional and valuable exemption from taxes given to charities in response to the work which they and nobody else can do in the community.
  Mr. Douglas Crawford: I support the new clause. I apologise for my absence earlier. I was in the Standing Committee considering the Finance Bill upstairs.
  During proceedings on the Community Land Bill, I made a statement of interest to the effect that my father was a minister in the Church of Scotland.
  The hon. Member for Hove (Mr. Sainsbury) said that Henry VIII was the first person to tax charities in England.
  Mr. Sainsbury: I think it was suggested that Henry VIII was the last person to tax charities.
  Mr. Crawford: I apologise to the hon. Member. I was about to point out that charities and charitable institutions had been the foundation of many great educational establishments in Scotland.

  1489
  I echo the plea of the hon. Member for Hove for common sense. It is important to ensure that the operational land of churches should be free from taxation as long as it remains operational in the proper sense of the word. The church must be able to move its work for the community freely wherever the need arises.
  I reiterate the plea in the letter from the Churches Main Committee which has, no doubt, been received by a number of hon. Members. It states:
  "given the fact that there already are exemptions in the Bill, including protection for land which the Churches happen to own on 12th September 1974, we cannot believe that this further small exemption for land acquired after that date would do serious damage to the land scheme".
  The Minister should be aware that having to pay deferred tax at that stage will inevitably eat into reserves which churches need to restart work elsewhere. A development by a church or charity is a development for its own use. Even if it does not directly serve the operational needs of the church, the resulting capital or income is an important part of the financing of an operational development and the cost of maintaining it. A constantly recurring example quoted by the Churches Main Committee is that of the redevelopment of a church site with the church building a community centre, shops, offices and so on. The income from the latter is an essential part of the financing of the former. In no circumstances can the realised value of church land be used for anything other than charitable purposes.
  My constituents, like those of most other hon. Members, are very concerned about this matter. I hope that the Minister will accept the new clause.
  Mr. Stephen Ross: When I first saw the new clause on the Notice Paper, I felt that it had a great deal of merit. I apologise to the hon. Member for Maldon (Mr. Wakeham) for missing part of his speech. Unfortunately, I was occupied elsewhere in the building. I very much support the new clause because it goes to the root of the problem.
  We argued the case for charities on the Community Land Bill, but we got very little for them apart from a 10-year exemption. Now, everybody is concerned about what will happen when that 10-
  1490
  year period is up. So far, the Government have not brought forward any proposals to meet the calamity which will affect charities at that time.
  I have suggested on a number of occasions that if the Government stand absolutely firm and insist that charities must meet their obligations in the same way as others after the 10 years have expired, at least some sort of compensatory fund should be set up to enable them to be compensated in the same way as landowners and others were compensated under the Town and Country Planning Act 1947. However, that suggestion has fallen on deaf ears. Therefore, we look to a clause such as the one now before us to try to get over the problem, and I think that it overcomes it. It is ingenious and sensibly drawn. Clearly, someone has spent a great deal of time drafting it. I hope that we shall not be told that there is some illegality about the drafting. It makes sense to me, and I think that it deserves the support of all our Members.
  9.45 p.m.
  As I understand the clause, charities will be able to reinvest the money. That is what nearly all charities do. I have acted for quite a number of them in my time, and I draw the Minister's attention to the activities of the Haig Homes on the Isle of Wight. This charity has done a great deal of good in my area. It has been selling off land for development purposes, and the money has been reinvested to provide money for further homes for the incapacitated. It has been used to provide a lot of old folk's homes as well. When I was canvassing round them only a short while ago, I thought what a credit they were. That sort of thing will not be able to be done again if the law stays as it is.
  Goodness knows what will replace the charities and the rôle they play in our society if our economic situation does not improve radically. We already have enough trouble trying to deal with social security and social service problems. We fear that cuts are coming. No doubt there will be cut-backs—indeed, there have been some already. If the charities have to cut back because they are unable to raise the necessary finance, what is to be put in their place? We are entitled to hear from the Government

  1491
  what they intend to do about these bodies.
  The second part of the new clause seems to be fair and realistic in its approach. I hope that it means that only a restricted amount of taxation would be applied to land which a charitable body might have purchased on the open market and held on to for at least seven years. Surely that is long enough to enable anyone to accept that there was no degree of speculation.
  As I read the clause, if a charity sells it is liable to taxation. I hope that I have understood correctly and that the taxation would be limited to relating the development value of the land as sold to adjacent land of a similar type—in other words, a limited liability. Nevertheless, in that event charities would be facing their responsibilities. I had hoped that we should find it possible to release them altogether, but perhaps that is just not possible. We have had many arguments about that point. The second part of the clause accepts that the charities will have to pay their taxation in the same way as the rest of us if they have bought land which has not been in charitable ownership, or has not been reinvested from land asssets which they have already sold.
  I believe that the clause should be accepted by the Government. If it is not, we are entitled to know what they will do to help the many charitable bodies which play such an important rôle in our lives.
  Mr. Clegg: I support what my hon. Friend the Member for Maldon (Mr. Wakeham) said in introducing the clause and what has been said by other hon. Friends. Almost from the time I first set foot in the House I have found the Labour Party's attitude to charities ambivalent.
  The first new tax I heard introduced when I became a Member was selective employment tax. In the first draft of that tax to be put before the House there was no exemption for charities. It was not until there was an outcry against it that such an exemption was made. My colleagues who suffered in Committee on the Community Land Bill will know that the Government had to be forced by the outcry from the churches and other
  1492
  bodies to modify their original proposal. I believe that this modest clause should be accepted.
  My hon. Friends and others have drawn attention to the work that is done by charities. I do not think we need stress that overmuch. Labour Members like certain charities but dislike others. I believe that behind this time limit that they have put on exemptions for charities is their dislike of educational charities.
  Mr. Jasper More: My hon. Friend referred to hon. Gentlemen opposite. I suppose by that he means one Minister, two rather bored looking Whips and one elderly, respected Member—the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman)—who clearly has not come in to listen to the debate.
  Mr. Clegg: I am grateful to my hon. Friend for his intervention. I think that most hon. Members opposite have come in because this is the coolest place in the Palace of Westminster. I am sure that they have not come in to listen to the sparkling speeches being made by Opposition Members and the deafening silence from the Government side.
  During the late night watches on the Community Land Bill we found that there had been no forward thinking by the Government about charities before preparing that legislation. We had to probe and probe again to discover what their intention was. We got some very strange replies at 5 o'clock in the morning. They said that some charities would not be affected. They did not know which those charities were. They could not define them. Yet this Government pride themselves on planning.
  We are talking about the long-term future of charities. The new clause will go some way towards reassuring charities by giving them a longer-term future and—what hon. Gentlemen opposite are always saying—time to plan in the long term as well as in the short term. For those and other reasons advanced by my hon. Friends I fully support the new clause.
  Mr John Cope: I rise to support the new clause so ably moved by my hon. Friend the Member for Maldon (Mr. Wakeham) and to congratulate him on the way in which

  1493
  it is drawn, which should commend it to the House and to the Government. This is not what might be called a blunderbuss paving clause. It is precisely and carefully worded so as to appeal, in the right spirit, to hon. Members on both sides of the House and to the Government in particular.
  I want to refer specifically to the position of churches. My constituency includes part of two dioceses of the Church of England. The diocesan authorities in both dioceses have approached me about this tax and how it will apply to them. I have been in otuch with Treasury Ministers, and they have set out at length their opinions as to why the tax should remain as it is proposed in the Bill. I do not find the letters from either the Minister of State or his colleagues very satisfactory.
  The principal argument advanced by the Minister of State in correspondence, which has been advanced in other places as well, is that to give full exemption to charities would be contrary to the principle that, as an integral part of the Government's land scheme, development land tax is to pave the way towards transactions at current use value, that develoyment land tax is therefore different in nature from other taxes, and that it does not follow that institutions at present exempt from tax should be exempt under the new arrangements.
  I do not think that development land tax is different in nature from other taxes. The rules are different, but that is the position with any tax. That is true comparing income tax with corporation tax, just as it is comparing capital gains tax with development land tax.
  The purpose of the Bill is simple. It is to tax gains made on the development and sale of land. In many respects it is similar to the capital gain tax, except that its rules are drawn up to apply specificaly to land. It has the full special rules that apply to development. It is not different in its nature from any other tax. On the contrary it is similar to the capital gains tax.
  My hon. Friend the Member for North Fylde (Mr. Clegg) made an interesting point when he mentioned something which I had forgotten, although I remembered it when he mentioned it. The selective employment tax as originally
  1494
  drafted was intended to apply to charities on much the same arguments as are advanced for the development land tax. In the former case, as a result of the outcry and the fuss made by charities and Members of Parliament, the Labour Government very properly decided to continue the exemption started by King Henry VIII. In his letter the Minister of State argued that the tax was an integral part of the Government's land scheme. However, the Government changed their mind about their attitude to charities in the Community Land Act.
  The development land tax is intended to pave the way towards transactions at current use value. Income tax is intended to pave the way towards income being received net of tax. That is the purpose of income tax. We may use similar arguments about any tax. This tax is intended to extract from those who would otherwise have it a proportion of a gain.
  I cannot sec that there is any difference between a charity that buys and sells shares and one that buys and sells land. Later in his letter the Minister of State admitted that there might be problems of finance in the long term for churches, although he referred especially to voluntary schools. The extract reads:
  "we do not think the legislation will harm the voluntary schools in the short or medium term. There may be problems of finance in the long term."
  The Government have accepted part of our case already. In Clauses 24 and 25 they accept that the position of a charity is different from that of other people. They accept that charities are in a different situation. In one sense we do not argue that charities are different from other organisations. We argue that they are wholly different, or only different in part, but we ask that when this tax is introduced, they should therefore continue the arrangement that has obtained for so long for other taxes.
  I read an extract from the letter of the Minister of State, answering points in a letter addressed to me by the Bishop of Bristol. That letter was not exclusive to me. Similar letters went from the bishop to other Members of Parliament, including the Second Church Estates Commissioner. I am not sure where he is at the moment, but I am assured that he is in Committee considering the

  1495
  Finance Bill. The hon. Member who so informs me has come from that Committee to take part in this debate.
  10.0 p.m.
  Mr. Peter Morrison: Does my hon. Friend agree that the Second Church Estates Commissioner should be here when we are discussing this important new clause?
  Mr. Deputy Speaker: Order. We cannot produce the Second Church Estates Commissioner here.
  Mr. Cope: I appreciate that you, Mr. Deputy Speaker, cannot produce him here. He is not yours to produce, any more than he is the creature of the rest of us to produce. It is entirely for him to decide whether to be here.
  I tabled some Questions on this matter to the Second Church Estates Commissioner. In a Written Answer on 19th May I was told:
  "The potential cost to the Church is thus not only a matter of money but also of loss of mobility and effectiveness in its organisation."—[Official Report, 19th May 1976: Vol. 911, c. 582.]
  Mr. Crawford: It is a little unfair that the Second Church Estates Commissioner has been criticised for not being present, because I know from personal experience how difficult it is to be in two places in this building at the same time. I think that Opposition Members are being a little hard on the Second Church Estates Commissioner.
  Mr. Cope: I was quoting the Second Church Estates Commissioner with approval. I entirely agree with what the hon. Gentleman said in that Answer, and I thought that the House wanted to be reminded of it.
  The Bishop of Bristol also reminded me in his letter in April that it was envisaged by Parliament, when the Education Acts were enacted from 1944 onwards,
  "that the funds required by the churches to sustain their participation in the national maintained schools system would be derived mainly from the sale of land and buildings no longer required for educational purposes."
  A good deal of land and a number of those buildings will have been held for a number of years, and in some instances for many generations, and will not be
  1496
  affected by the Bill because they will have been held already on White Paper day. It is a great restriction on their ability to manage that land if the tax is to apply as proposed in the Bill as it stands.
  The bishop also said in his letter to me—and this was said in full knowledge of the Bill as it stands—
  "The application of development land tax to the proceeds from a growing proportion of such sales will inevitably in the long term stifle and frustrate the efforts of the churches to make what they and Parliament have hitherto seen as their proper contribution to the schools system of the country."
  We all know that there are those in this House who do not wish the contributions of the churches to the school system to be as great as it is. There has been some controversy over this matter in the last day or two, and I shall not embarrass anybody by going into that subject, but it is surely important that the churches should make a contribution to the educational system, not least by means of the church schools.
  The bishop continued at another stage in the letter to say that it appeared to him that the Bill failed to recognise that the financial resources of charities were deployed in the interests of the community at large. It raises the whole question of who best can look after the resources in the interests of the community. Are we saying that money can be looked after in the best interests of the community only when it is in the hands of a local authority or the Government?
  Charities in general and churches in particular have a great part to play and a contribution to make in our national life in that respect. To introduce the tax and to apply it to charities across the board would be a backward step. But the Government have not done that. They have introduced special arrangements which, to a certain extent, recognise the special position of charities. I urge them to accept the new clause and follow through the logic of their arguments.
  Mr. Michael Spicer: One must ask why the Government are unlikely to accept the new clause. As my hon. Friend the Member for Gloucestershire, South (Mr. Cope) has said, they have already gone some way. I am sure the Minister will argue that it is as far as they can go. One must therefore ask why they will not

  1497
  go the whole way and why they have introduced a new tax on charities. One must ask why Socialists do not like charities, because that goes to the root of the matter.
  If the Minister follows the line he took in Committee, I suspect he will use arguments which are basically Socialist. One understands those arguments even if one does not agree with them. He will say that charities do not represent the entire community, whereas the Bill does. He will argue that the sum of the whole is in some way greater than its parts.
  That is a Socialist view and one with which we totally disagree. We believe that the sum is equal to the parts and that if the parts are bad, the sum will be bad. Somehow, in the tradition of Rousseau, the Government's philosophy is that there is something greater than the individual parts of society. But if one does not have charities which are thriving, all the benefits that charities bring to the whole will be damaged. Socialists dispute that. That is why one of the arguments that the Minister will use is that charities, being only a single part of society, do not benefit society as much as his Bill, which will benefit everyone.
  There are two reasons why Socialists do not like charities. The first is that in some way they believe that charities in many of their forms—such as charitable housing associations—are a threat to State institutions. In Committee, the only real contribution from the Government Back Benches—and there were only about three such speeches—was an intervention by the hon. Member for Woolwich, East (Mr. Cartwright) in our debate on charities. He was inflamed by a speech by my hon. Friend the Member for Hove (Mr. Sainsbury), who claimed that in his constituency certain housing trusts were beneficial. The hon. Member for Woolwich, East said that that was a reflection upon the provision of housing by local authorities. Socialists believe that many charities are a threat to publicly-provided benefits. That is a fundamental reason why I suspect the Minister will not accept the clause.
  The second and perhaps related reason is that the trade union movement believes
  1498
  that many charities form a threat to its wage bargaining position—for example, in the work undertaken by the WRVS.
  Mr. George Cunningham: How?
  Mr. Spicer: It happens where charities' benefits are provided by voluntary labour. I think of the mini-buses driven by voluntary drivers from villages to the towns, carrying pensioners to collect their pensions, as happens in my constituency and many others. That is seen as a threat by workers in the nationalised bus industry. It is of concern to the charities in question that they should not be seen overtly to threaten the trade unions involved. There are other examples that I shall be happy to give the hon. Gentleman if he wishes to pursue the matter.
  For those reasons I can understand why Socialists, at the bottom of their hearts, do not like charities. They prefer to see benefits provided by the State, preferably operating from the centre. That is part of the Socialist ethic, and there is no need for Labour Members to be apologetic about it. That is what Socialism largely stands for—the provision from the centre by the State of all benefits. Charities constitute a threat to that Socialist objective.
  Mr. George Cunningham: No.
  Mr. Spicer: It is no historic accident that a Socialist Government for the first time have introduced a tax on charities. The Minister may well argue that he has given way here and there on specific aspects of the tax, but at the end of the day charities are to be taxed for the first time. That is the thin end of the wedge, the beginning of a new fiscal concept.
  I entirely agree with my hon. Friend the Member for Gloucestershire, South that it is not a unique tax. I suspect that in the long term it will be developed, if Socialist Governments persist, and that it will be welcomed by the mass of those who believe in Socialism, because it is their objective ultimately to prohibit private initiative of that sort. That is what Socialism is all about.
  So I enthusiastically welcome the new clause. I hope I have not over

  1499
  caricatured the arguments. I see no reason why the Minister should be afraid of those arguments. I am sure that he believes in them because they are what
  1500
  his party firmly believes. That is why I fear that we shall not win over the Government in this matter, for on this issue of charities there is a difference of principle between us.
  10.15 p.m.
  Mr. Peter Morrison: I rise to support and congratulate my hon. Friend the Member for Maldon (Mr. Wakeham) on moving New Clause 4. It was certainly interesting to listen to my hon. Friend the Member for Worcestershire, South (Mr. Spicer), who pointed out that the Socialist Party cannot abide charity. Labour Members laugh and object, but we know that at the end of the day they believe that the central Government and the State are better able to do what charities do, despite the fact that a great many people are voluntarily giving their time to charities to help others who are in real need. This is the very reason why the Government have decided to proceed with this provision on charities. They want to do what they can to undermine charities.
  My hon. Friend the Member for North Fylde (Mr. Clegg) said that the Government were somewhat ambivalent towards charities. He was certainly being rather charitable towards the Socialist Party. I do not believe that the Government are remotely ambivalent, but my hon. Friend may have a point, because I recall to the House what was said by the right hon. Member for Huyton (Sir H. Wilson) when speaking at the annual general meeting of the National Council of Social Service. I quote:
  "Voluntary organisations have the ability to provide a form of service which the State is ill-fitted to provide, however dedicated its administrators".
  Yet Labour Members support their right hon. Friend. If they really meant to do so, why are they not coming into the Lobby with my hon. Friends and myself tonight backing this new clause? The reason is that in their heart of hearts they do not want to back charities. They do not want to feel in their hearts, as I and my hon. Friends certainly believe, that voluntary organisations have done and are doing better than the State can do.
  As regards churches, my hon. Friend the Member for Worcestershire, South developed the arguments very cogently. In my constituency there is a contracting city centre, to the extent that many people are moving from the city centre to outlying suburban areas. If DLT had been
  1502
  in existence over the last 100 years, the situation of the churches in my constituency, as they sell off land in the city centre to build new churches in new council or owner-occupied estates outside the city centre, would be decidedly more difficult than it is. Such places are utterly essential to the community.
  I have absolutely no doubt that my hon. Friend the Member for Maldon is right in putting forward the new clause. If hon. Members opposite really believe in voluntary organisations and want charities to go on doing what they have been doing, not only over the past decade but in past centuries, the least they can do is to abstain rather than vote against my hon. Friend's new clause.
  Mr. Esmond Bulmer: I support the new clause, and I wish to speak particularly for the Church of England and to explain my reasons for concern.
  Any hon. Member who has had anything to do with the finances of the Church in these times of inflation will understand all too well what havoc inflation has played, especially with the upkeep of buildings and with trying to keep pace with paying proper wages and salaries. These financial pressures mean that a great deal of reorganisation will be forced upon the Church, which in turn will mean a number of buildings having to be relinquished and a great number of new buildings being erected to meet the changing needs of society.
  Equally, many of our ancient churches and the buildings connected with them are a valuable part of our heritage, and the funds that the Church can still obtain from its other developments go towards their upkeep. I should like to see all the Church's funds exempted from this tax. However, at least let us have what the new clause proposes should be held.
  At present we also have a substantial cut-back in public services. There is a great deal that the Church can do to provide a safety net, and in my constituency and in the constituencies of others of my hon. Friends there is a great deal that the Church is doing. It depends, however, upon voluntary subscriptions. In many ways, it is uniquely successful in drawing on voluntary funds in a way that

  1503
  the State has not succeeded in doing. For all these reasons, I support the position of the Church as being a privileged one.
  If the Minister visited my constituency and travelled up the new ring road, he would find on his left-hand side first the parish church, then the Methodist church and then the Trades and Labour Club. If he went back into the history of the town, he would discover that the land was owned by the Church of England and that the Church had recognised the needs of the Methodist church and of the Trades and Labour Club.
  I do not believe that the Government wish to put any obstacles in the way of the development or the building of the local Trades and Labour Club or in the case of my constituency, that they will do anything other than welcome the flexibility shown by the Church of England. Under the terms of the Bill, however, that flexibility could be destroyed. In the future, those concerned might have to say to people requesting the release of church land: "In the interests of the Church, we think that we may need it and, therefore, we cannot release it for your purposes."
  For that reason, I echo what my hon. Friends have said, and I say finally to the Government that we have an established Church which receives no help from the State. The State might at least allow it to hold what it owns.
  Mr. Patrick Cormack: The Minister of State is a Welshman. I hope that his Welsh heart has been moved by what has been said and that he will remember what his compatriots owe to the free church, especially in Wales. He must realise that for this Government to strike a blow at the very heritage which has put him on the Treasury Bench would be a sad, sorry and disgusting spectacle.
  When we consider the enormous contribution to social advance which has been made by modern charities in recent years and upon which the Labour Party draws in more ways than one, it is difficult to understand why this attack has been mounted. I have in mind a body like the Child Poverty Action Group, though perhaps I should not at the moment. Let us consider instead Shelter and other similar bodies. All these are
  1504
  charities. They have contributed as much as any hon. Member in any part of the House and as much as any Government towards social advance and thinking. But it is at bodies like that that the Government are striking a blow if they do not accede to the Opposition's request.
  I cannot think that any man of sensibility, any man with a sense of history and perspective, could possibly refuse in any churlish spirit the moving arguments made so eloquently by my hon. Friends. However, I fear that my hon. Friend the Member for Worcestershire, South (Mr. Spicer) possibly put his finger on the point—although I hope I am wrong—when he talked about Socialism and charities. There is within the Socialist Party an unfortunate tendency towards uniformity—that all social good must be engineered and bestowed by the State, that everything that is to be for the benefit of the people must be engineered by some mammoth organisation, and that that must be the State. That is the argument of the more extreme Socialists.
  I cannot think that the Minister is unable to comprehend the force of our arguments. I cannot think that with his Welsh background he is unable to appreciate the strength that is in diversity. However, in justice to my hon. Friend the Member for Worcestershire, South as much as anything else, we must follow this point through.
  It would seem that there are far too many in the Socialist Party today, and far too many on the Labour Benches, who feel as my hon. Friend said they feel and who regard anything which challenges State provision as being wrong. Whether it be in the provision of independent education or the provision of private medicine, the existence of charities doing very often better than what the State does causes such people to feel guilty, and therefore they oppose.
  I was particularly glad to hear that ringing quotation from the right hon. Member for Huyton (Sir H. Wilson), who is at this moment, I understand, at Buckingham Palace. I trust that he is not submitting another charitable list while he is there.
  Mr. Fairbairn: Considering that the right hon. Member for Huyton (Sir H. Wilson) was in America yesterday on the

  1505
  benefit of private funds, charitable funds subscribed to the Arts Council, it is surprising that he got back so quickly.
  Mr. Cormack: The right hon. Gentleman was in America as a trustee of the D'Oyly Carte Opera Company. In what more fitting capacity could he go to America, or anywhere else?
  However, let us not digress on the manifold attributes of the latter-day Pooh-Bah. Let us say that when that quotation from the right hon. Member for Huyton rang through this Chamber a few moments ago one saw true appreciation of the enormous virtues and values of charitable institutions. He saw—after all, if he saw it, it must have been fairly apparent—that charities can contribute so much more than the monolithic apparatus of the State. [Interruption.] I wish that my hon. Friend the Member for Burton (Mr. Lawrence) would switch off the alarm in his wristwatch, because there is no inhibition on the time we are taking in debating this extremely important measure.
  Mr. Ivan Lawrence: I apologise if my hon. Friend thought that I was signalling to the effect that his speech was going on for too long. I use the alarm to indicate to myself when my own speeches are going on too long. I listen with the greatest pleasure to my hon. Friend. I hope he will continue for many more hours.
  Mr. Cormack: I am greatly encouraged. I merely hope that that signal has not aborted my hon. Friend's speech, because if that has signalled the end of the speech that he was due to make we shall all be very sorry.
  Mr. George Cunningham: Get on with it.
  Mr. Cormack: I am most grateful to my hon. Friend—and, indeed, to the hon. Member for Islington, South and Finsbury (Mr. Cunningham), who has displayed considerable perspicacity since his entry into Parliament. He knows in his heart the tremendous contribution that charities must have made towards the welfare of his constituents. He must have constituents who have benefited from such magnificent organisations as the Spastics Society, the Save the Children Fund, Help the Aged, and Age Concern. Knowing
  1506
  him, as I do, for a charitable man, I am sure that he has himself subscribed to their efforts and endeavours on more than one occasion. He may even hold office in one of those organisations. If he does, knowing him as I do for his independence of spirit and mind, and even for his voting power on occasion, I cannot imagine that he will support an attack on charities.
  10.30 p.m.
  That is what we are talking about tonight. We are talking about an attack upon those who give of their time, talents and money to ensure that a little extra degree of individual concern is expressed to those who need that concern, and to ensure that there is proper care within our society. There cannot be true caring where there is total impersonality. There must be a degree of individual involvement, and it is in our charities that we see this.
  I was glad that my hon. Friend the Member for Kidderminster (Mr. Bulmer) referred to the Church, because what we are witnessing today—I choose my words with extreme caution and absolute care—is an attack on charities such as has not been witnessed in this country since the dissolution of the monastries. I cannot really imagine that the Chancellor of the Exchequer wishes to pose as the poor man's Henry VIII.
  Mr. Jasper More: I hate to interrupt my hon. Friend but I do so purely on a point of accuracy. There was an attack on charities in 1863 by none other than Mr. Gladstone, who decided that all charities must pay income tax. That almost created a revolution in the country. I am glad to see the hon. Member for the Isle of Wight (Mr. Ross) enter the Chamber. Mr. Gladstone eventually saw the light on the road to Damascus and recanted of his sins and laid down as a precept that never again must charities be subject to any form of taxation. That is what makes it so disgraceful that the present Government should have brought in legislation of this kind. I hope that my hon. Friend has not lost the thread of his admirable speech.
  Mr. Cormack: How could I with such a splendid, stimulating and entirely pertinent intervention? Indeed, to remind us of Mr. Gladstone in the presence of one of his intellectual successors is a great service to the House.

  1507
  I merely hope that the Chancellor of the Exchequer, when he is advised of my hon. Friend's intervention, will seek not to emulate Mr. Gladstone but will go one better and expunge from the Bill the vindictive clause which will bring in very little to the national coffers but which means so much to those who, from Bury St. Edmunds to South Worcestershire and Burton-on-Trent, and from Land's End to John O'Groats and London, work day in and day out to serve their fellow men.
  I think of the women in the WRVS. I think of those who slave to operate our lifeboats. It is not only the churches, although they are a cause dear and close to my own heart. Throughout the length and breadth of the country there are charities too innumerable to mention.
  I am glad to see the hon. Member for Edmonton (Mr. Graham) present when I am talking about charities. The hon. Gentleman, who is a dear friend of mine, will surely know that tomorrow the National Art-Collections Fund has its annual general meeting. That is a cause which is particularly dear to his heart. It is a charity which has perhaps done as much as any other to serve the national heritage. Why should bodies like that, which have operated with great sensitivity and total objectivity, and which up to now have been singled out by this Government for favourbale tax treatment, be attacked by this particular measure?
  Mr. David Weitzman: Will the hon. Gentleman please be charitable to all of us and stop his silly meanderings?
  Mr. Cormack: I do not think, Mr. Deputy Speaker, that I need seek your protection from interventions of that kind. I can see from the eager faces around me that my hon. Friends are entirely with me and welcome a dissertation on the value of charities. If the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) has not the charity to listen, let him have the charity to go outside and buy a friend a drink.
  Mr. George Cunningham: I am sorry to introduce a serious note into this vaudeville act, but the hon. Member knows, as do most hon. Members who have spoken in the last 20 minutes while I have been listening, that in private conversation
  1508
  none of them would make the kind of exaggerated charges that they are making in their speeches. The hon. Member himself would not in private conversation make the kind of charges that he is now making.
  Since he is one of the hon. Members, in any part of the House, who cares about the House and the respect in which it is held outside, I suggest to the hon. Member that by exaggerating the case and suggesting that all the virtue is on one side and all the villainy on the other he does no good to the House of Commons, to the case he is making or to charities. Therefore, can we get to the real merits of the marginal case for the proposition, which is a real one, which can be made, and to the marginal case against it, and stop this vaudeville act?
  Mr. Cormack rose—
  Mr. Fairbairn: On a point of order, Mr. Deputy Speaker.
  Mr. George Cunningham: Talk about vaudeville!
  Mr. Fairbairn: Is it proper for an hon. Member to impugn the motives not only of those who have spoken but of those who have yet to speak?
  Mr. Deputy Speaker (Mr. Oscar Murton): The latter part of that point of order is purely hypothetical. On the former part, I do not think that the hon. Member's motives were impugned. The exchange was part of the cut and thrust of debate.
  Mr. Cunningham: If this place is ever abolished, this is why it will happen.
  Mr. Cormack: If anyone is guilty of exaggeration at the moment, it is the hon. Member for Islington, South and Finsbury in the violent nature of his interjections. At no stage in my membership of this House, and certainly not this evening, have I suggested that a monopoly of wisdom and virtue lies on one side. Indeed, in my opening remarks I referred to the invaluable contribution of certain charities which are particularly close to the hearts of Labour Members. I have never suggested, and will never suggest, that the monopoly of virtue lies on one side. Indeed, I was appealing to the good sense, sensitivity and sense of history of Labour Members when I talked about the contributions to social advance and

  1509
  reform which have been made by charitable individuals who would never in the course of history have allied themselves with my party.
  Of course, this is not a one-sided argument. That is why I hope that the Minister will do what he has done before tonight and say that he accepts the argument and that the Government will think again about this process. Whether the wording of the new clause is entirely apposite I do not know. The Government have the resources and the facilities to tell us that.
  What the Government can and should accept, and what in charity and good sense they must accept, is the force of the argument of those throughout the country, many of them not members of the Conservative Party—the bishops have been quoted: the Bench of Bishops at the moment is not particularly blue in its complexion—who are concerned to moderate the terrible effects of this measure upon the things they hold dear.
  My hon. Friend quoted from a letter from the Bishop of Bristol, who talked in moving terms about the contribution made to our educational system by the voluntary schools. In effect, he asked why all these resources should be given to the State or to local authorities as if they, and only they, knew best how to regulate the education of our children. The voluntary schools contribute enormously to the diversity of the education system and give it depth and wealth. These are not private or independent schools patronised only by the affluent and giving education only to the wealthy. They are ordinary schools which add an extra ingredient to our education.
  When the bishop says that the future of those schools will be in total jeopardy if this measure is passed, he is not speaking in a partisan way as a politician of either the Left or the Right. He speaks as a man who knows and who cares deeply. If this House cannot listen to his argument, it is all the poorer.
  Although, of course, in the cut and thrust of debate it is perfectly permissable for me or the Minister to exaggerate and score party points, at the end of the day this argument is far more important than any party or any individual. These institutions which contribute more than any others to the wealth and diversity
  1510
  of our society are being attacked. It is for the Minister to answer that attack. If he can convince us—which I doubt—we will listen.
  Mr. Michael Spicer: Would my hon. Friend agree that, contrary to what the hon. Member for Islington, South and Finsbury (Mr. Cunningham) implied, we were saying that it is the ethics and value estimates honourably held by Labour Members which have led them to believe that we should work towards a situation where all benefits are State-controlled and State-operated?
  Mr. Cormack: Indeed, that is the point which my hon. Friend made and which I took up earlier. In developing the point I said—and I believe it—that most hon. Gentlemen opposite do not fall into the extreme category of those who truly believe that the State can, shall and must provide. I know from personal knowledge that many of them support charities. Many of them, like the right hon. Member for Huyton, believe that charities have a continuing and valuable—indeed invaluable—rôle in our social structure.
  Tonight the Minister is mounting an attack on individuality and voluntary effort, which are among the things that have made our society one of the richest in the world. If we believe in this country, in its value judgment and in the development it has made to social progress throughout the globe, we should say with one voice that we will not allow this measure to pass.
  Mr. John Stokes: I rise to support all my colleagues tonight who have appealed to the Government to give some respite to churches and charities from the rigours of this disagreeable and anti-social Bill. One of the glories of England has been its voluntary spirit, which I hope it supported on all sides of the House. The Bill intends to kill that spirit, and in time everyone and everything in this ancient country will have to be beholden to the State.
  If the new clause is not passed, we shall be, in effect, passing judgment on our ancestors and all those who lived and died before us and whose tombs we see in the glorious parish churches of our countryside. We must be able to hand on something infinitely precious to our heirs and successors. [Interruption.] I am

  1511
  interested that Labour Members laugh at our parish churches and their great memorials. That surely is to their everlasting shame.
  We see in the opposition to the clause—I address my comment particularly to the Minister, who is a clever young man from Wales—the spite and envy which characterises part of the Labour Party. That part of it hates anything and everything which is not State-supported or State-dominated. The fact that only four Labour Back Benchers are present indicates the interest of the Labour Party in this matter. To kill the clause will be another death blow to freedom. It will be a denial and a betrayal of the great past of this country.
  10.45 p.m.
  Mr. Lawrence: I canont match the oratory of the two previous speakers and I am, therefore, tempted to take my text from I Corinthians XII, which reads
  "Charity is to be preferred before all other gifts."
  If there is one matter to which the Government should address themselves tonight, it is not purely the matter of charities, but the question of actually being charitable towards the institutions of which my hon. Friends have spoken. Charity is to be preferred also before all gifts from the Welfare State. The text goes on to say "Charity never falleth away", but what the Government intend to do by the Bill is to make sure that charities fall away. Then, the only institution which could come to the assistance of the religious organisations or the needy in our society would be the Welfare State, to which we as taxpayers are finding it increasingly difficult to contribute more of our money.
  The clause seeks to prevent harm being done to charities under the Bill. The Government have made some concessions to charities, but it seems to be almost an element of spite to deny charities the full benefits of exemption. I do not understand the Government's attitude. After all, the scope of the Welfare State is obviously limited, and never more so than at this time when the Government are having to borrow £12,000 million to make up the difference between what is raised in taxation and what the Welfare State demands.
  1512
  We cannot go on spending and spending. The Government will never be in a position to make up for the work which the charities do and which they may not be able to do if the Bill is enacted without the sort of change we now envisage. The charities want only to be left alone to look after themselves. They do not want the State to help or hinder them. After all, what the charities do is for the good of all of us in helping the weak in our society.
  Some of the effects of the Bill may well be disastrous to the charities and more generally harmful. Let me give an example. They will not want to give up land which they owned on 12th September 1974 because the Bill favours those which had land before that date and charges for DLT those which have land after that date. Will that be good for the land market?
  What we need to do least at the present time, in view of the housing shortage and the land starvation which there must be under this régime, is to dry up the sources of our land. Or is the land to be taken away from the churches or from the charitable institutions in due course, perhaps in 10 years' time when the effects of the Community Land Act come to be implemented?
  How can the charitable organisations adapt themselves to the new needs of a changing society if they are discouraged from selling their land? Suppose that they wish to sell land in an area where people are moving out and want to acquire land in an area where the population is growing, so that money can be gained from the ownership of land in, say, busy shopping centres to be put to good charitable uses. Under the Bill, they will have to pay development land tax and they will thus be deterred from undertaking that purchase and sale of land.
  In these times, the rate of inflation is almost unbearable to all sections of society, and it reflects itself in the costs and expenses of charities. In this time of all times, it is important that the charities should be able to protect their income where large proportions of it are available from the purchase and the sale of land which is less susceptible to inflationary pressures than other commodities are.

  1513
  I should like to give a second example of the effect that the Bill will have. Suppose that land which is purchased after 12th September 1974 becomes unsuitable in some way to the charity which bought it because it is no longer large enough for the purpose for which it was intended, or that has in some shape or form a defect which no longer makes it acceptable to the charity. Is that land to be sold subject to tax liability while any new land that the charity has to buy is to be acquired at market value, at inflated rates? Is this the sort of effect that the Government seriously mean to have upon charities at the present time?
  I have only to quote one sentence from the Churches Main Committee on this point:
  "The result over the long term must therefore tend to ossify the work of the Churches and charities and make them less responsible to new needs."
  I accept that Labour Members—many of whom subscribe to and many of whom, when they are away from this place, work for charities—appreciate more than many other people the need for the charities to remain financially viable. If that is the sort of observation which can legitimately be made by the Churches Main Committee, surely it must cause the Government to think again about this part of their legislation.
  Land ownership and the freedom to buy and sell land for a profit are the only protection that the churches and other charities have against inflation. When the charities have gone—because they can no longer afford to maintain the services which they have provided over the years, since they will no longer have any resources and can no longer sell their land in order to bring in money—will the Government then be able to look after the interests of the religious denominations, the sick, the old and the needy in our society who do not at present depend to any substantial degree upon the Welfare State? Will the Government be able to increase their borrowing requirement to subsidise the charities and to take them under State control? Will the present or any Government ever be able to make up for the work done by so many of these wonderful organisations?
  Why does the Labour Party allow itself so repeatedly to be seen as the enemy of
  1514
  the churches and to be the organisation which undermines that part of the fabric of our society? I know that there are sincere and deep supporters of religions on the Labour side of the House. Why do they allow the Government to be seen to be the organisation of the attack on the traditions of the churches and their work? Why do the Government, who as Labour Party representatives have always boasted of their concern for the old, the needy and the sick, allow themselves to be put in a position where we can say that they are being, in effect, the enemy of all the good work that these organisations do?
  Why does the Labour Party allow itself to be put in the position of being the enemy of all private enterprise even when it is devoted to social ideals? Why does it allow itself to be put in a position where we can say that it behaves as if it hated the sight of charities and other organisations set up only for social welfare? Why? What is to be gained? Is this the attitude which the trade unions want? Are they asking Labour Members to undermine the financial viability of charities, churches and other social organisations? I doubt it. Are Labour Party candidate selection committees asking them to do this? I doubt it. Is it thought that people in the country who put the Labour Party in power want them to undermine all these institutions in this way? For goodness sake, I ask Labour Members to think again.
  If money is no longer available for charities from taxation, it has to come, if need be, from the sale of some of their land assets. I remind the Government and their supporters, because it seems to be slipping from the recollection, that individuals can no longer afford to give as high a proportion of their income to charity as they used to do.
  If one looks down the list of countries which trade with us—Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Sweden, the United States, Canada and Japan—one finds that in only one other country do people start paying income tax at a lower threshold than we do, and that is Sweden. If one looks down the list of those countries and asks at what rate income tax is first paid, one finds that no other country starts paying at 35 per cent and that Sweden starts paying at 7 per cent. If

  1515
  one looks down the list to see the maximum rate of income tax, one finds that no other country has a maximum rate at anything like the 83 per cent. which we pay.
  When one bears these factors in mind—and if they have frequently to be rammed down the throats of Labour Members, we must do that—it must be obvious to the Government that charities will no longer be able to receive the sort of income from working people that they have had in the past. Therefore, when we have had a brilliantly devised new clause like this one, reasonable in all its requirements and, as far as I can see, excellently drafted, I hope that hon Members will look at their attitude afresh.
  I started by referring to Corinthians and I return to it.
  "And now there remain faith, hope and charity, these three: but the greatest of these is charity."
  I am afraid that the Government have given me little reason for faith in any of the policies they have introduced. I live in hope that perhaps they may change some where they impinge on the needy and weak of whom they so frequently claim to be the champions. Charity, however, is something that the Government could easily give by accepting the new clause. In the name of charity and charities, I beseech them to accept the clause.
  11 p.m.
  Mr. John Page: Under your dignified and benign chairmanship, Mr. Deputy Speaker, it has become the fashion tonight that a text should be given before one starts one's speech.
  I wish to take as my text a quotation from the Official Report:
  "I do not regard it as my responsibility, nor do I want to undertake the task, to judge between the relative social merits of any of these charities. Therefore, it is a case of all in or all out, as far as I can see, with all the implications that flow from that"—[Official Report, 25th May 1966; Vol. 729, c. 655.]
  That was part of a speech made by the present Prime Minister when he was Chancellor of the Exchequer, shortly before his translation to Home Secretary. He had been making the important point that all charities should be treated in the same way for tax purposes.
  1516
  I wish to draw attention to the position of voluntary and charitable housing associations, whose business includes the buying and selling of land and the building and converting of houses and flats. All my hon. Friends who have taken part in the debate have spoken with the authority of a deep knowledge of the subject. I speak in an inquiring manner to attempt to clarify the position of housing associations in relation to the new clause.
  For the past 25 years, I have been on the committee of a housing association in the East End of London which provides homes of a quality which is both necessary and demanded by those who live in the properties. We shall be making decisions on the purchase of plots of land in the East End which could be used for development.
  I understand that property held by that organisation, which is registered as a charity, could be sold without liability to the new tax if the land was held before 12th September 1974. But what about land purchased by charitable housing associations after that date?
  Suppose that we had bought an old vicarage or a parish hall in Bethnal Green after that date with the intention of building flatlets on part of it and selling the rest at a profit for shops or a garage in order to pay for the development. That is almost a specific example. To my knowledge it has happened on at least three occasions to a smallish London voluntary housing association during the past 10 years. It will obviously happen in future.
  In the larger cities especially, where new developments need to be undertaken by voluntary organisations because they cannot possibly be effective from the point of view of a profit-making company, is it the fact that the associations will be charged the new tax on any land that is sold, whereas a trade union might buy a Reynolds or a Picasso, sell it a few years later and not have to pay capital gains tax on the £100,000 or so that it might make out of the sale? If the Minister tells me that I am wrong in the analogy I have given about the Picasso, I hope he will excuse me and not let that spoil the rest of my argument, which is especially serious.

  1517
  That leads me back to the quotation from the present Prime Minister in 1966 that a charity is a charity is a charity. I suggest that, merely because by its very nature, a charity does not have to deal in land, it should not be treated differently and less advantageously than a charity that can dabble in land or any other investment that it wishes to make. On that basis, I hope that charity, mercy and equity will be considered by the Minister and that he will accept the new clause, which is marginal in its effect on Government policy but of major importance to a small but valuable group of organisations in our community.
  Mr. Russell Fairgrieve: I add my voice to those who are asking for the acceptance of the clause, and particulary to those who reside in Scotland, where for many years and many generations we have had a succession of charities doing great work. Some of them have been mentioned already, but I shall refer to some again.
  The Society for the Prevention of Cruelty to Children and the Society for the Prevention of Cruelty to Animals have done wonderful work in Scotland throughout the years. We have the women's rural institutes and the charitable work for the lifeboats, especially on our Scottish coasts, where there are possibly more calls upon that valuable and charitable service than in other parts of the United Kingdom. We have the work for the crippled and the aged and the work of Shelter, one of our housing associations. We have meals on wheels and, notwithstanding the churches, we have the special Scottish housing associations.
  In the Bill all charities are being attacked. Throughout the year, and particularly at certain times of the year, we get more and more moving appeals from the charities explaining the severe difficulties they are up against because of falling income. When we read these letters—hon. Members on both sides of the Chamber receive them—and when we give to charities, we are giving out of taxed income. That is not always taken into account. Why do Members, on both sides of the House do this? It is because of a continual distrust of the State. They feel that they wish to take an individual interest in something because the State might not be so concerned because of its monolithic outlook.
  1518
  What happens? If people show enterprise, it is frowned upon. If they show initiative in choosing one charity and not another, that is against the precept of a Socialist State.
  Mr. George Cunningham: Rubbish.
  Mr. Fairgrieve: Choice must be taken away. The men in Whitehall, the Government, know best. We are killing the interest that individuals take in charities by being prepared to join charitable boards and to give of their time and money. Again, we are seeing the usual thing that we see continually from this Government—Socialism in action: distrust of the people and the wish to bring some monolithic answer to all our problems.
  Mr. George Cunningham: Am I right in recalling that until quite recently the Conservative Party in the House of Commons relied exclusively upon the voluntary financial contributions made by people to provide for research and that kind of thing, but that it has now decided that it is prepared to accept £150,000 of public money out of the taxpayers' pockets for doing the job that had previously been done by voluntary contributions? If I am right in recalling that, does it not show that the Conservative Party also sees the need for State intervention for useful purposes alongside the operation of voluntary contributions?
  Mr. Fairgrieve: I do not see the relevance of that intervention. But as the hon. Gentleman has made interventions in each of my last three speeches in the House, I assume that he must have some interest in them.
  However, that brings out something we know—that is, that while Labour Members continue to concern themselves only with the distribution of wealth, not being in the least bit interested in its creation, they will run into the type of problems into which the Bill is running. Regrettably, this is again further evidence of Socialism in action. We are seeing here the hard, cruel bureaucratic face of Socialism.
  Mr. George Cunningham: £150,000.
  Mr. Eldon Griffiths (Bury St. Edmunds): Unlike some of my hon. Friends, I do not believe that the Labour Party wants to grind the faces of the

  1519
  charities any more than it wanted to bring about a vast increase in unemployment or the cutting back by local authorities all over the country of help for spastic children or for the elderly. I do not for one moment believe that hon. Gentlemen opposite wanted to produce those results. Their difficulty is that their Government, their philosophy and their logic push them into this kind of trap and they do not know how to get out of it.
  The new clause gives many Labour Members an opportunity, without putting their Government at risk, of putting their consciences first and of doing something that they know to be right. Indeed, I suspect that one reason why the Government Benches are so empty is that many hon. Gentlemen know full well that what they will be voting for tonight is indefensible. Nevertheless, they will do it because they have got hooked by their Government and they do not know how to get off the hook.
  The tragedy of Socialism is that so often it starts with the best of intentions and the highest of ideals, but when it comes to practise what it preaches it gets caught up in political theories and legalistic structures. Week after week hon. Gentlemen opposite find themselves plodding through the Division Lobby supporting policies with which, as human beings, they fundamentally do not agree. Tonight they have an opportunity to show themselves to be men.
  11.15 p.m.
  I make this plea at the beginning because when I first came to the House, perhaps before I had grown disillusioned. I listened to a debate on the distribution to the Jewish victims of the concentration camps of money provided by the Government of the Federal Republic of Germany. My right hon. Friend who is now Lord Home, the man whom I most admire. had the unenviable task of asking his party to do what many of its members believed to be wrong. I had been here for so short a time in the early 1960s that I voted the way that I believed. The following morning I was invited to see the then Government Chief Whip. I was advised that that was not the way in which new by-election victors were supposed to operate in the
  1520
  House of Commons. But as a consequence of the fact that I, the most junior Member of Parliament at that time, and a number of my hon. Friends—some of whom are now on the Front Bench—voted in accordance with our consciences, the Government changed their mind. They altered the clause. We achieved what we knew to be right.
  Members of the Labour Party—I wish that there were more of them present—know that they would stop the Minister cold on this clause. They know that just a handful of them need only say to their Chief Whip that the Parliamentary Labour Party—the friends of the poor and the homeless—will not accept this attack on charities. The Government Chief Whip would have no alternative but to explain to the Treasury Bench that it would be wise for the Minister of State, when he replies, to make the usual noises that Governments make about sticking to a principle but then to concede the point. Hon. Gentlemen opposite know that if they wished they could tonight preserve those charities which most of them, I suspect, in their constituencies and local newspapers maintain that they support. If they do not do so they will lack courage, they will be total humbugs.
  Mr. George Cunningham: The hon. Gentleman says that if Labour Members did not take a certain line they would be humbugs or would lack courage. There is a third possibility—namely, that we disagree with the arguments advanced by the Opposition. The hon. Gentleman well knows that there have been occasions when Labour Members have rebelled and forced their Front Bench to do this nr that. Therefore, will the hon. Gentleman refrain from exaggerating his case?
  Mr. Griffiths: Perhaps the hon. Gentleman had not observed that I had not come to my case. I was dealing with the tactical position in which hon. Gentlemen find themselves. However, at the invitation of the hon. Gentleman I come to my case.
  The Government's objections to the new clause arise from a point of philosophy. They stem from the view of Ministers, if not of the whole of the Labour Party, that in matters of charity, as indeed in everything else, it is the State that should be mainly responsible. The Opposition take the view that the

  1521
  State unquestionably has a rôle to play in aiding the poor and homeless but that many activities are better undertaken by individuals—and even better by voluntary bodies. That is the essential difference in our philosophy.
  Mr. George Cunningham: In that case, why did the Conservative Party take £150,000 of taxpayers' money? Why did they do that if they believe that these matters are better covered by voluntary contributions?
  Mr. Griffiths: One could almost say that it was stuffed down our throats by the Labour Party, but that would not be correct. If the hon. Gentleman wishes to make a contribution to the debate, why does he not have the guts to stand up and be called by the Chair?
  Mr. George Cunningham: It does not need any guts.
  Mr. Griffiths: The Minister might be interested in this context to hear about an occasion of which I can speak from my own experience. When the Conservative Government were in power, we had the difficult task of accepting into this country a large number of Ugandan Asians. That was one of the most difficult decisions for any Government to have to take. At that time it fell to me, among others, to organise a large number of reception camps throughout the country for 25,000 Ugandan Asians who arrived here in a most desperate plight. It fell to the Government to make the main arrangements and to the local authorities to undertake much of the work. I want the Minister to accept that although the Government took he lead, it was the voluntary bodies that carried out much of the job.
  In camp after camp that I visited, I found that it was the Churches, the women of the WRVS, the Red Cross, the women's institutes, Age Concern, the YMCA and others who did the job and who counted. Although the State and the local authorities provided the backing, it was the voluntary people of our country who rallied round and undertook the job in the hour of need.
  Those are the very people who will be struck at by this mean and nasty Bill. They are the people who would be helped by the new clause. The willingness of our people to serve voluntarily
  1522
  is one of our greatest national assets. If the day should come—and it may be upon us soon—when those who serve become disillusioned and feel that the State system is stacked against them and that the State will do it all, our nation will be very much the poorer. The Minister should think long and hard before he destroys the ability and the willingness of that group of people, of all parties and of all religious persuasions, to respond to need in a charitable way.
  There is also the other side of the coin. It is not only people who work for the charities, the salt of our population, those who are assisted by the charities, whom the Bill will damage. I am thinking, for example, of the people who are helped by the Salvation Army. These unfortunates are very often the ones we do not like to think about—the incontinent wayfarers and the impoverished tramps who are to be found in hostels in various parts of London. Then there are also the spastics, who above all people deserve our help, and the mentally and physically handicapped. The sort of help that no State can give is something called kindness, those little unremembered acts of kindness and love performed by individuals. The hon. Member for Manchester, Wythenshawe (Mr. Morris), who is the Under-Secretary of State for Health and Social Security with responsibility for the disabled and who is now in the Chamber, will be the first to agree because he has done much for the handicapped.
  I underline my argument with an illustration. I have occasionally gone round wiht the meals-on-wheels organisation, which is sometimes is said to have a "Mum's Army" imagine. But as one travels round with the women taking meals to the elderly, the incontinent, the housebound and the handicapped, one cannot but be touched by what they do. I remember an elderly woman in her eighties, who was twisted, poor and nearly blind. She told me what a difference there was between the days when the council delivered her meals and those when they were brought to her by the women who had got together on a voluntary basis. I make no attack on the council. But those who work for councils generally regard their work as a job. They get round the houses as quickly as they can. By contrast, the volunteer provides the personal touch, the piece of fish that has been cooked a little longer, the individual

  1523
  contact which can and does come from the volunteer, but only rarely from employees.
  The Minister should be careful that, in addition to damaging the spirit of those who serve and work for our charities, he does not take away from the people who receive benefit from charity those little touches of kindness that only the volunteer can give.
  I turn now to other areas that are to be damaged. I used to have some responsibility for sport. Again and again I found that public funds for swimming pools or a stadium or any of the many other needs of healthy and active youth could not be made available even though the Government, in which I had the responsibility in real terms, provided perhaps eight times that which is being provided now. But since local Government and the State could not encompass the sporting needs of our youngsters we encouraged, as a matter of policy, the voluntary, private, charitable bodies to come to the aid of sport.
  An illustration is the Sobell Sports Centre in Islington, set up by a man who grew up as a poor boy in the East End of London, did well and made his millions. He wanted to put back into the pot more than he had taken out, and the sports centre is the result. It is a charity arising from the action of a man who might well have invested in land. Across the whole range of sport and recreation, the voluntary bodies and charities provide that for which the State does not have the resources.
  Mr. George Cunningham: I am sorry to intervene again, but it is necessary to say that the future of that institution has had to be the subject of intervention by the local council because the other sources of funds were not sufficient to keep it going. That is not, therefore, a good illustration of the argument by the hon. Member for Bury St. Edmunds (Mr. Griffiths).
  11.30 p.m.
  Mr. Griffiths: I am sorry that the hon. Member for Islington, South and Finsbury (Mr. Cunningham) does not appreciate the inflation which his Government have set loose. The £1 million originally provided in the trust of the Sobell Sports Centre came from a charity.
  1524
  Much of that money may well have been invested in land. If the Bill goes through without the new clause, the hon. Member can say goodbye to any more bequests of that kind.
  Charities and voluntary bodies have also made a massive contribution to the environment. I remember presenting, on behalf of the United Kingdom, at the United Nations Conference on the Environment in Stockholm a book which displayed the English countryside as an example not of State planning but of that combination of public and private activity that has made our landscape one of the treasures of the world.
  A great deal of our cultural landscape arises from the charitable foundations that have ornamented our history. I think of some of the parks and houses, and above all of many of our parish churches, which are among England's glories. The ability of church after church to maintain its tower and gardens and its beauty could be severely damaged by this nasty Bill.
  I turn to a point raised by my hon. Friend the Member for Worcestershire, South (Mr. Spicer) in his admirable speech. He asked the basic question whether charity was incompatible with Socialism. I said at the beginning of my speech that I did not believe that Labour Members personally wanted to put through this squalid Bill. My hon. Friend put his finger on the point. The problem for Socialists about charity is its diversity. Charity is something that proceeds not from one place but from many. It is the activity of tens of thousands of diverse organisations and individuals, all helping different people and taking different attitudes. The philosophy behind the Bill is not diversity but monopoly. That is a fundamental reason why my hon. Friend the Member for City of Chester (Mr. Morrison) is right in discovering an incompatibility between the Socialist Party and charity.
  Charity also means independence, the independence of people from total reliance upon the State. That, too, is incompatible with a fundamental tenet of Socialism. Charity also means self-help, which the Labour Party also finds deeply offensive.
  Our new clause would give Labour Members the opportunity to stop the

  1525
  Government in their tracks without bringing them down. They owe their consciences and their constituents the courage to do so. If the clause is accepted it will not save all the charities in Britain, because they are already the victims of inflation, but it will enable the survival of the spirit of charity, the willingness of hundreds of thousands of our fellow citizens to work for others for nothing but the joy. The clause would also help the environment and sport, but above all it would help the weakest and poorest members of our community, those for whom the Labour Party maintains that it has the deepest compassion.
  I commend this well-drafted clause. If the Minister accepts it he will not put the Government at risk. He will be accepting what a majority of hon. Members on both sides of the House believe, deep down, that the Bill is wrong on this point. If he has the courage to recognise that, he will not damage his career. He will demonstrate that he is a man of sensitivity and compassion, and he will do something right for his country.
  Mr. Fairbairn: Following upon that lucid and impassioned speech, I hope that I shall not offend against the principle which the hon. Member for Islington, South and Finsbury (Mr. Cunningham), a Scotsman sitting for a very English seat—
  Mr. Cormack: A very Irish seat.
  Mr. Fairbairn:—has so freqeuntly passed upon us that we should not exaggerate our case. For a Scotsman who sits for an English seat, he shows all the meanness that a Scotsman out of his own country can show.
  However, it is important to realise that what we are debating is two clauses—and a relief of them—which merely have the effect that they will suddenly cut off from charities a source of their income. That is what has to be realised. Suddenly there is to be a change.
  I should have thought that the proper definition of a charity was essentially an organisation which merely raises its funds and spends them on the purposes for which it exists, without profit. It does it for the very quintessence of its own intentions, be it the Salvation Army, the
  1526
  local church or anything else. It is interested in fulfilling its obligations. It is not interested in the terrible thing of profits—which Labour Members find so offensive, but so necessary, and which they spend so constantly.
  Mr. Cormack: They spend other people's profits.
  Mr. Fairbairn: It matters not whose profits they spend. The never make them. They lose them. However, I should have thought that it could be generally agreed among us that a charity, whatever it is, is an organisation which raises funds and spends them on a purpose which all of us would agree is good, whether it be the prevention of cruelty to animals or to children, the salvation of refugees, for spastics or for whatever reason, or for the worship of whatever deity one person or another holds to be worshipful.
  Accepting that the purpose of Clauses 24 and 25—without amendment effected—is to deny to those organisations a major source and a major derivation not only of the income they will have in the future but which they had planned in the past, it means simply that if a church is to move, as churches frequently will have to move, from the centre of a town to the periphery, that will be all right provided it is church for church. However, if the church says "We are a congregation that can no longer afford to keep a church or to have a church in such and such a suburb", and if it therefore says "We happen to own the corner of Oxford Street or the corner of Langham Place"—where there is a church—" and we shall erect on that something that will give us the income which will enable us to preach in the parish of Islington" that will be forbidden.
  That is the scandal of this legislation. We are forbidding to the charities the right to use their best way to get the largest income in order to do the work we all believe they should be doing. That has never before been the law of this country. I do not believe that it is the Labour Party's intention that it should be the law.
  As the Minister will know—and there is no more compassionate man—I do not believe that he is in sympathy with that concept. This is a had Bill which

  1527
  has been drafted by innumerable different Departments. I do not believe that the people who are advising the Minister understand what the separate clauses mean. I believe that logic—that terrible thing of blocking up loopholes; logic, the art of going wrong with confidence, which has constantly been the guiding light of this Government and their Ministers—compels them to ensure that nobody will get out of the filthy trap they have laid for us all. Therefore, it would be evil if the charities were to be exempt.
  It would be offensive, would it not, if the Church of England, the RSPCA or the Salvation Army were to let part of their premises to a shop or for development in order to fulfil their financial commitments to the people in whose service they were in operation? That would be offensive, and the Government would have to take away from those wretched organisations the power to serve those in whose interests they were in being.
  The Minister told us of his views, and they were very touching. But they were totally irrelevant. He told us during Committee that the Government were not discriminating against charities in this legislation. He added:
  "I do not think I need to say more. We have dealt fairly with charities. I cannot accept this extension because it would create a two-tier market."
  Therefore, it would be horrid if those naughty charities were to be treated differently from the industries which are partly exempted and commerce which is not. That is a two-tier market, but it does not matter there.
  The Minister added in Committee:
  "Charities would be free to invest in land at no taxation liability".—[Official Report, Standing Committee J, 12th May 1976; c. 1139.]
  Would it not be awful if those who are doing their best to serve their community out of their resources, and making no profit for its own sake, were actually to be exempted from the beloved concept of tax? That is what this is all about.
  The Government need not enter into the concept that unless everyone is taxed there is unfairness. These are organisations which provide, at one-hundredth the cost, the same services as the Gov-
  1528
  ernment could provide. If the Government seriously believe that their proposals will do good either to the Inland Revenue or to the community, they are mistaken. They are embarking again on a bad road, for a bad reason, and I regret to say that, even worse, those hon. Members who support them, who pretend sympathy for those who are weak, poor and feeble, will vote with the Government in order to keep their own beastly consciences.
  Mr. Graham Page: These two new clauses deal with charities which need land, and rely on the value of that land, for carrying out their charitable services. That perhaps does not cover all charities, but it is extraordinary how many it covers. Ordinary charities, such as the Salvation Army or the YMCA, not only the churches and the colleges but many of the far more modest charities, rely on the ownership of property and the enhancement of the value of that property in order to carry out their charitable work.
  That is recognised in the Bill. It is recognised by giving to charities certain relief, a narrow relief, in respect of land held by charities on White Paper day, 12th September 1974. The relief would be on land which charities hold and wish to develop for their own purposes. They would not then be charged on the deemed disposal. In a very narrow way, therefore, the Government have recognised that there should be some small relief for charities.
  11.45 p.m.
  The new clause would provide charities with relief from the tax on a roll-over basis. It would not give them complete relief but it would give them some reasonable relief for using the charitable money on which they depend to carry out their services, to roll it over into new enterprises or the improvement of their assets, so that they can perform their functions the better.
  My hon. Friends have perhaps not noticed that we are discussing at the same time New Clause 8, which would simply provide that DLT in this respect should be 10 per cent. and not 80 per cent. I freely admit that this was a device to get another debate on charities on Report after we had had a full debate

  1529
  on them in Committee. I should have preferred a simple clause to say that charities should not pay the tax at all.
  How on earth did the Government get the idea of charging charities with this tax? It is a miserable tax anyway, but what will be gained by charging charities? All that will be achieved is a break with the tradition which Parliament has observed for centuries of recognising that charities do a great service and of not taxing them.
  The whole basis of the tax is that the money should be taken from those who make a profit out of land and given back to those who provide a service for the community. Are not the Churches and colleges and other charities at least as important in the service they render to the community as the Highlands and Islands Development Board, the Letchworth Garden City Development Corporation and the Scottish Special Housing Association? Do they not deserve the complete relief which is given to those bodies among others?
  Although I support the roll-over clause completely, I should prefer charities to be completely free of the tax. This is the first time that such a tax has been imposed on charities. They have been free of development gains tax and capital gains tax. They have never been viewed as a source of income for the Exchequer. How did the Government identify the need to tax charities by this means?
  I think the Government will find that their supporters are utterly ashamed of the fact that they ever brought in this tax against charities. I hope that even at this late moment the Government will see sense and not only accept New Clause 4 but also say that, on second thoughts. they will relieve charities altogether of development land tax.
  Mr. Denzil Davies: It would be trite to say that we have had a far-reaching debate. Opposition Members, with characteristic understatement, have deployed their case subtly, giving large numbers of cases in which charities will be affected, from meals on wheels to the Child Poverty Action Group. They have claimed that charities which make a profit out of land development will be destroyed completely by the legislation. That is the general tenor of the speeches we have
  1530
  heard tonight. Perhaps I can bring the debate down to its lower level by saying that the Opposition have spoiled their case by overstating it and exaggerating it. The hon. Member for Staffordshire, South-West (Mr. Cormack) was a prime example of this.
  Mr. Cormack: Will not the Minister admit that in the future it is perfectly possible that people who are charitably disposed might give land to charities? Does he not realise that this is one way in which a person who wishes to leave a bequest to a charity can do so?
  Mr. Davies: If a gift of land is made to a charity, it is not affected by this legislation.
  There are a minority of charities—the churches and perhaps one or two others—which own land with development value. But they are a minority—an important minority, but nevertheless a minority. Most charities, including the ones which have been mentioned tonight, such as meals on wheels, the Child Poverty Action Group, the Save the Children Fund and Oxfam, are not so fortunate as to own prime sites in the middle of cities which they want to sell and make a development profit.
  We are concerned mainly with churches which want to move their operations and activities from the inner city into the suburbs. To meet that particular problem we introduced various deferments and exemptions to the legislation. The first such exemption is on land owned by a charity on 12th September 1974. That is completely exempt from the effects of the legislation. This covers 98 per cent. of land owned by charities.
  If a church, for example, in an inner city area disposes of land which it acquired before 12th September 1974 in order to follow the population into the suburbs because of decay in the inner city, and if it makes a development profit, which is reinvested in new land in the suburbs to build a new church, that case is completely exempt. There is no tax in respect of that land. I concede entirely that if. in 10, 15, or 20 years' time, when the suburbs have decayed, or have themselves become inner cities, the church wants to move again and once more it makes a development profit, that particular sale will be taxed.

  1531
  As the Bishop of Bristol said, however, this is a long-term problem. All the representations we have had from the churches have recognised that fact.
  Mr. Fairbairn: I think that the Minister is overlooking the fact that, just as trade unions and other organisations have done, charities may have invested in land in order to obtain an income and capital improvement. It has nothing to do with the fact that a church or cathedral happens to have to move. This is a matter of investment. If the ministers move their investment, how are they to keep their land?
  Mr. Davies: If the land was owned by the charity before 12th September 1974, there is no problem. If it was acquired after that date, a betterment profit would be taxed. I would not have thought that that was entirely a bad thing.
  Mr. Stephen Ross: The Minister is saying that if the land is owned by the charity before the relevant date it will not be taxed. Under the Community Land Act, charities have about 10 years' exemption. After that, they are liable to have their land acquired by the local authority. That means that the asset will not remain with them after 10 years.
  Mr. Davies: The tax is transitional in the sense that once the appointed day has been set under the Community Land Act we enter a different regime. Under these provisions, however, and in the short and medium term, I submit to the House that there is no problem. In the long term there might be a problem, although charities would take into account the change in legislation to conform with the present arrangements.
  The other point that has been made concerned the village church or school. Where a charity develops land for its own use to rebuild the school or church—and "own use" is narrowly defined in the legislation, so that we are concerned with operational land and not land for investment—there is no question of any tax being imposed. Hon. Members have exaggerated when they have tried to suggest that village schools or churches will be destroyed under the Bill. That is complete and utter nonsense.
  1532
  Finally, we must come to the main point. The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) said that when a charity makes a profit it has done something good but that we are proposing to tax it. We are concerned with a betterment profit in the sense that it arises because of the granting of planning permission. It is not a profit which arises as a result of a prudent investment. It arises as a result perhaps of a lucky investment in the sense that the body concerned happens to own land which falls on one side of a line and that enables it to receive planning permission. This is not a matter of the charity working hard to make a profit. The profit is purely fortuitous and arises through the action of the local authority, not through the prudence of the charity.
  Mr. Fairbairn: I was careful to say that the definition of a charity was that it did not make a profit. If it makes an investment with the intention of increasing its funds, it is not making a profit but is merely enlarging its capacity to do its duty.
  Mr. Davies: That is another definition of profit. I would not have thought it was worth getting involved in semantic arguments of that kind. If a charity buys land for £5,000 and by some act of a local authority that land becomes worth £100,000, the £95,000 gain looks to me very much like some kind of profit. My point is that it is not wrong for the charity to make that profit but that it is not the result of prudent investment. It is the result of community action and local government action and has nothing to do with the charity at all.
  12 midnight.
  Mr. Ridley: When a charity has a premium bond win or organises a church raffle which brings in some money—both of which gains are fortuitous and not the result of hard work—are the Government proposing to tax those?
  Mr. Davies: Hon. Gentlemen should not argue from the particular to the general in every case. I was not saying that because a gain was fortuitous it would necessarily be taxed. The point is that we are not depriving a charity of its hard-won profit or gain. We are merely saying that here is a gain arising largely

  1533
  as a result of community action and that most of that gain should be returned to the community, not to the State, through the local authority.
  Mr. Kenneth Lewis: The Chancellor of the Exchequer, under capital transfer tax, has allowed charities to receive gifts from people of up to £50,000 so that charities may continue to exist. In some cases land may be donated to a charity. Is not the Minister contradicting what his own Chancellor of the Exchequer is doing by taking away, with this development land tax, what the Chancellor of the Exchequer is trying to concede?
  Mr. Davies: No. It shows again that we are very sympathetic to the needs of charities and that we recognise that people make gifts of land to charities. My right hon. Friend has recognised it in the Resolution giving the appropriate exemption. The gift will not be subject to development land tax. We are concerned only with a situation where a gain or profit is made by the charity as a result of the granting by a local authority of planning permission.
  Mr. Nicholas Winterton: Where will the money go if it does not go back to the community? Will not money which goes back to the community through a charity be much more effective in every possible way than money which goes through the Government and costs so much to administer?
  Mr. Davies: We are talking about elected local authorities, many of them controlled by the Conservative Party, with worthy councillors. Sometimes the money will be used more effectively and sometimes not. I accept that entirely. I am sorry that hon. Gentlemen have so little sympathy and regard for local authorities and would not wish to see these gains returned to the community.
  I do not want to pursue the argument. There is a great gulf between this side of the House and Opposition Members. Hon. Gentlemen have spoilt their case by exaggerating it. They have done their case great injustice. I have accepted that in the length term there may well be a problem. I accepted that in Committee. No doubt these matters will be looked at again, but at the moment there is no problem.
  Charities are fully protected. We have given them a substantial concession, and in most cases the legislation will not affect charities at all. We are concerned with an important minority of charities which will not be affected in the immediate future, and we believe that at the end of the day the right way to deal with the problem is as we propose and that the right people to have the betterment profit are the community.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes, 271; Noes, 276.

  Division No. 191.]

  AYES

  [12.5 a.m

  Adley, Robert

  Bulmer, Esmond

  Dunlop, John

  Aitken, Jonathan

  Burden, F. A.

  Durant, Tony

  Alison, Michael

  Butler, Adam (Bosworth)

  Dykes, Hugh

  Arnold, Tom

  Carlisle, Mark

  Edwards, Nicholas (Pembroke)

  Atkins, Rt Hon H. (Spelthorne)

  Carson, John

  Elliott, Sir William

  Baker, Kenneth

  Chalker, Mrs Lynda

  Emery, Peter

  Banks, Robert

  Channon, Paul

  Ewing, Mrs Winifred (Moray)

  Bell, Ronald

  Churchill, W. S.

  Eyre, Reginald

  Bennett, Dr Reginald (Fareham)

  Clark, Alan (Plymouth, Sutton)

  Fairbairn, Nicholas

  Benyon, W.

  Clark, William (Croydon S)

  Fairgrieve, Russell

  Berry, Hon Anthony

  Clarke, Kenneth (Rushcliffe)

  Farr, John

  Biffen, John

  Clegg, Walter

  Fell, Anthony

  Biggs-Davison, John

  Cockcroft, John

  Fisher, Sir Nigel

  Blaker, Peter

  Cooke, Robert (Bristol W)

  Fletcher, Alex (Edinburgh N)

  Body, Richard

  Cope, John

  Fletcher-Cooke, Charles

  Boscawen, Hon Robert

  Cordle, John H.

  Fookes, Miss Janet

  Bottomley, Peter

  Cormack, Patrick

  Forman, Nigel

  Bowden, A. (Brighton, Kemptown)

  Corrie, John

  Fox, Marcus

  Boyson, Dr Rhodes (Brent)

  Crawford, Douglas

  Fraser, Rt Hon H. (Stafford & St)

  Bradford, Rev Robert

  Critchley, Julian

  Fry, Peter

  Braine, Sir Bernard

  Crouch, David

  Galbraith, Hon. T. G. D.

  Brittan, Leon

  Crowder, F. P.

  Gardiner, George (Reigate)

  Brocklebank-Fowler, C.

  Davies, Rt Hon J. (Knutsford)

  Gardner, Edward (S Fylde)

  Brotherton, Michael

  Dean, Paul (N Somerset)

  Gilmour, Rt Hon Ian (Chesham)

  Bryan, Sir Paul

  Dodsworth, Geoffrey

  Gilmour, Sir John (East Fife)

  Buchanan-Smith, Alick

  Douglas-Hamilton, Lord James

  Glyn, Dr Alan

  Buck, Antony

  Drayson, Burnaby

  Godber, Rt Hon Joseph

  Budgen, Nick

  du Cann, Rt Hon Edward

  Goodhart, Philip

  Goodhew, Victor

  Macmillan, Rt Hon M. (Farnham)

  Rossi, Hugh (Hornsey)

  Goodlad, Alastair

  McNair-Wilson, M. (Newbury)

  Rost, Peter (SE Derbyshire)

  Gow, Ian (Eastbourne)

  McNair-Wilson, P. (New Forest)

  Royle, Sir Anthony

  Gower, Sir Raymond (Barry)

  Madel, David

  Sainsbury, Tim

  Grant, Anthony (Harrow C)

  Marshall, Michael (Arundel)

  St. John-Stevas, Norman

  Gray, Hamish

  Marten, Neil

  Scott, Nicholas

  Griffiths, Eldon

  Mates, Michael

  Scott-Hopkins, James

  Grist, Ian

  Mather, Carol

  Shaw, Giles (Pudsey)

  Grylls, Michael

  Mawby, Ray

  Shelton, William (Streatham)

  Hall, Sir John

  Maxwell-Hyslop, Robin

  Shepherd, Colin

  Hall-Davis, A. G. F.

  Mayhew, Patrick

  Shersby, Michael

  Hamilton, Michael (Salisbury)

  Meyer, Sir Anthony

  Silvester, Fred

  Hampson, Dr Keith

  Miller, Hal (Bromsgrove)

  Sims, Roger

  Hannam, John

  Mills, Peter

  Sinclair, Sir George

  Harvie Anderson, Rt Hon Miss

  Miscampbell, Norman

  Skeet, T. H. H.

  Hastings, Stephen

  Mitchell, David (Basingstoke)

  Smith, Cyril (Rochdale)

  Havers, Sir Michael

  Moate, Roger

  Smith, Dudley (Warwick)

  Hawkins, Paul

  Molyneaux, James

  Speed, Keith

  Hayhoe, Barney

  Monro, Hector

  Spence, John

  Heseltine, Michael

  Montgomery, Fergus

  Spicer, Jim (W Dorset)

  Hicks, Robert

  Moore, John (Croydon C)

  Spicer, Michael (S Worcester)

  Higgins, Terence L.

  More, Jasper (Ludlow)

  Sproat, Iain

  Holland, Philip

  Morgan, Geraint

  Stainton, Keith

  Hooson, Emlyn

  Morgan-Giles, Rear-Admiral

  Stanbrook, Ivor

  Hordern, Peter

  Morris, Michael (Northampton S)

  Stanley, John

  Howe, Rt Hon Sir Geoffrey

  Morrison, Hon Peter (Chester)

  Steen, Anthony (Waver tree)

  Howell, David (Guildford)

  Mudd, David

  Stewart, Donald (Western Isles)

  Howell, Ralph (North Norfolk)

  Neave, Airey

  Stewart, Ian (Hitchin)

  Hunt, David (Wirral)

  Nelson, Anthony

  Stokes, John

  Hunt, John

  Neubert, Michael

  Stradling Thomas, J.

  Hutchison, Michael Clark

  Newton, Tony

  Tapsell, Peter

  Irving, Charles (Cheltenham)

  Normanton, Tom

  Taylor, R. (Croydon NW)

  James, David

  Nott, John

  Taylor, Teddy (Cathcart)

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

  Onslow, Cranley

  Tebbit, Norman

  Jessel, Toby

  Oppenheim, Mrs Sally

  Temple-Morris, Peter

  Johnson Smith, G. (E Grinstead)

  Page, John (Harrow West)

  Thomas, Rt Hon P. (Hendon S)

  Jones, Arthur (Daventry)

  Page, Rt Hon R. Graham (Crosby)

  Thompson, George

  Jopling, Michael

  Parkinson, Cecil

  Townsend, Cyril D.

  Joseph, Rt Hon Sir Keith

  Pattie, Geoffrey

  Trotter, Neville

  Kaberry, Sir Donald

  Penhaligon, David

  Tugendhat, Christopher

  Kershaw, Anthony

  Percival, Ian

  van Straubenzee, W. R.

  Kimball, Marcus

  Peyton, Rt Hon John

  Vaughan, Dr Gerard

  King, Evelyn (South Dorset)

  Pink, R. Bonner

  Viggers, Peter

  King, Tom (Bridgwater)

  Powell, Rt Hon J. Enoch

  Wakeham, John

  Kitson, Sir Timothy

  Price, David (Eastleigh)

  Walder, David (Clitheroe)

  Knight, Mrs Jill

  Prior, Rt Hon James

  Walker, Rt Hon P. (Worcester)

  Knox, David

  Pym, Rt Hon Francis

  Wall, Patrick

  Lamont, Norman

  Raison, Timothy

  Walters, Dennis

  Lane, David

  Rathbone, Tim

  Warren, Kenneth

  Langford-Holt, Sir John

  Rawlinson, Rt Hon Sir Peter

  Weatherill, Bernard

  Latham, Michael (Melton)

  Rees, Peter (Dover & Deal)

  Wells, John

  Lawrence, Ivan

  Rees-Davies, W. R.

  Welsh, Andrew

  Lawson, Nigel

  Reid, George

  Whitelaw, Rt Hon William

  Lester, Jim (Beeston)

  Renton Rt Hon Sir D. (Hunts)

  Wiggin, Jerry

  Lewis, Kenneth (Rutland)

  Renton Tim (Mid-Sussex)

  Wilson, Gordon (Dundee E)

  Lloyd, Ian

  Rhys Williams Sir Brandon

  Winterton, Nicholas

  Loveridge, John

  Ridley, Hon Nicholas

  Wood, Rt Hon Richard

  Luce, Richard

  Ridsdale, Julian

  Young, Sir G. (Ealing, Acton)

  McAdden, Sir Stephen

  Rifkind, Malcolm

  Younger, Hon George

  MacCormick, Iain

  Rippon, Rt. Hon Geoffrey

  McCrindle, Robert

  Roberts, Wyn (Conway)

  TELLERS FOR THE AYES:

  McCusker, H.

  Rodgers, Sir John (Sevenoaks)

  Mr. Spencer Le Marchant and

  Macfarlane, Neil

  Ross, Stephen (Isle of Wight)

  Mr. Michael Roberts.

  MacGregor, John

  Ross, William (Londonderry)

  NOES

  Abse, Leo

  Blenkinsop, Arthur

  Carmichael, Neil

  Allaun, Frank

  Boardman, H.

  Carter, Ray

  Anderson, Donald

  Booth, Rt Hon Albert

  Carter-Jones, Lewis

  Archer, Peter

  Boothroyd, Miss Betty

  Cartwright, John

  Armstrong, Ernest

  Bottomley, Rt Hon Arthur

  Castle, Rt Hon Barbara

  Ashley, Jack

  Boyden, James (Bish Auck)

  Clemitson, Ivor

  Ashton, Joe

  Bradley, Tom

  Cocks, Michael (Bristol S)

  Atkins, Ronald (Preston N)

  Bray, Dr Jeremy

  Cohen, Stanley

  Atkinson, Norman

  Brown, Hugh D. (Provan)

  Coleman, Donald

  Bagier, Gordon A. T.

  Brown, Robert C. (Newcastle W)

  Colquhoun, Ms Maureen

  Barnett, Guy (Greenwich)

  Brown, Ronald (Hackney S)

  Concannon, J. D.

  Barnett, Rt Hon Joel (Heywood)

  Buchan, Norman

  Cook, Robin F. (Edin C)

  Bates, Alf

  Buchanan, Richard

  Corbett, Robin

  Bean, R. E.

  Butler, Mrs Joyce (Wood Green)

  Cox, Thomas (Tooting)

  Benn, Rt Hon Anthony Wedgwood

  Callaghan, Jim (Middleton & P)

  Craigen, J. M. (Maryhill)

  Bennett, Andrew (Stockport N)

  Campbell, Ian

  Cryer, Bob

  Bidwell, Sydney

  Canavan, Dennis

  Cunningham, G. (Islington S)

  Bishop, E. S.

  Cant, R. B.

  Cunningham, Dr J. (Whiteh)

  Dalyell, Tam

  Kaufman, Gerald

  Rees, Rt Hon Merlyn (Leeds S)

  Davidson, Arthur

  Kelley, Richard

  Richardson, Miss Jo

  Davies, Bryan (Enfield N)

  Kerr, Russell

  Robert, Albert (Normanton)

  Davies, Denzil (Llanelli)

  Kilroy-Silk, Robert

  Roberts, Gwilym (Cannock)

  Davies, Ifor (Gower)

  Kinnock, Neil

  Robertson, John (Paisley)

  Davis, Clinton (Hackney C)

  Lambie, David

  Robinson, Geoffrey

  Deakins, Eric

  Lamborn, Harry

  Roderick, Caerwyn

  Dean, Joseph (Leeds West)

  Lamond, James

  Rodgers, George (Chorley)

  de Freitas, Rt Hon Sir Geoffrey

  Latham, Arthur (Paddington)

  Rodgers, William (Stockton)

  Dell, Rt Hon Edmund

  Leadbitter, Ted

  Rooker, J. W.

  Dempsey, James

  Lee, John

  Ross, Rt. Hon W. (Kilmarnock)

  Dormand, J. D.

  Lestor, Miss Joan (Eton & Slough)

  Rowlands, Ted

  Douglas-Mann, Bruce

  Lever, Rt Hon Harold

  Sandelson, Neville

  Duffy, A. E. P.

  Lewis, Arthur (Newham N)

  Sedgemore, Brian

  Dunn, James A.

  Lewis, Ron (Carlisle)

  Selby, Harry

  Dunnett, Jack

  Lipton, Marcus

  Shaw, Arnold (Ilford South)

  Dunwoody, Mrs Gwyneth

  Litterick, Tom

  Sheldon, Robert (Ashton-u-Lyne)

  Eadie, Alex

  Lomas, Kenneth

  Shore, Rt Hon Peter

  Edge, Geoff

  Loyden, Eddie

  Short, Rt Hon E. (Newcastle C)

  Edwards, Robert (Wolv SE)

  Luard, Evan

  Short, Mrs Renée (Wolv NE)

  Ellis, John (Brigg & Scun)

  Lyons, Edward (Bradford W)

  Silkin, Rt Hon John (Deptford)

  Ellis, Tom (Wrexham)

  Mabon, Dr J. Dickson

  Silkin, Rt Hon S. C. (Dulwich)

  English, Michael

  McCartney, Hugh

  Sillars, James

  Ennals, David

  McElhone, Frank

  Silverman, Julius

  Evans, Ioan (Aberdare)

  MacFarquhar, Roderick

  Skinner, Dennis

  Ewing, Harry (Stirling)

  McGuire, Michael (Ince)

  Small, William

  Faulds, Andrew

  Mackenzie, Gregor

  Smith, John (N Lanarkshire)

  Fernyhough, Rt Hon E.

  Mackintosh, John P.

  Snape, Peter

  Fitt, Gerard (Belfast W)

  Maclennan, Robert

  Spearing, Nigel

  Flannery, Martin

  McMillan, Tom (Glasgow C)

  Stewart, Rt Hon M. (Fulham)

  Fletcher, Raymond (Ilkeston)

  McNamara, Kevin

  Stoddart, David

  Fletcher, Ted (Darlington)

  Madden, Max

  Strang, Gavin

  Ford, Ben

  Magee, Bryan

  Strauss, Rt Hon G. R.

  Forrester, John

  Mahon, Simon

  Summerskill, Hon Dr Shirley

  Fowler, Gerald (The Wrekin)

  Marks, Kenneth

  Swain, Thomas

  Freeson, Reginald

  Marquand, David

  Thomas, Jeffrey (Abertillery)

  Garrett, John (Norwich S)

  Marshall, Dr Edmund (Goole)

  Thomas, Mike (Newcastle E)

  Garrett, W. E. (Wallsend)

  Marshall, Jim (Leicester S)

  Thomas, Ron (Bristol NW)

  George, Bruce

  Mason, Rt Hon Roy

  Thorne, Stan (Preston South)

  Gilbert, Dr John

  Maynard, Miss Joan

  Tierney, Sydney

  Ginsburg, David

  Meacher, Michael

  Tinn, James

  Golding, John

  Mellish, Rt Hon Robert

  Tomlinson, John

  Gould, Bryan

  Mendelson, John

  Tomney, Frank

  Gourlay, Harry

  Mikardo, Ian

  Torney, Tom

  Graham, Ted

  Millan, Bruce

  Tuck, Raphael

  Grant, George (Morpeth)

  Miller, Mrs Millie (Ilford N)

  Urwin, T. W.

  Grant, John (Islington C)

  Mitchell, R. C. (Soton, lichen)

  Varley, Rt Hon Eric G.

  Grocott, Bruce

  Moonman, Eric

  Wainwright, Edwin (Dearne V)

  Hardy, Peter

  Morris, Alfred (Wythenshawe)

  Walker, Harold (Doncaster)

  Harrison, Walter (Wakefield)

  Morris, Charles R. (Openshaw)

  Walker, Terry (Kingswood)

  Hart, Rt Hon Judith

  Morris, Rt Hon J.(Aberavon)

  Ward, Michael

  Hattersley, Rt Hon Roy

  Moyle, Roland

  Watkins, David

  Hatton, Frank

  Mulley, Rt Hon Frederick

  Watkinson, John

  Hayman, Mrs Helene

  Murray, Rt Hon Ronald King

  Weetch, Ken

  Heffer, Eric S.

  Murry, Rt Hon Ronald King

  Weitzman, David

  Hooley, Frank

  Newens, Stanley

  Wellbeloved, James

  Howell, Rt Hon Denis

  Noble, Mike

  White, James (Pollok)

  Hoyle, Doug (Nelson)

  Oakes, Gordon

  Whitehead, Phillip

  Huckfield, Les

  Ogden, Eric

  Whitlock, William

  Hughes, Mark (Durham)

  O'Halloran, Michael

  Willey, Rt Hon Frederick

  Hughes, Robert (Aberdeen N)

  Orbach, Maurice

  Williams, Alan (Swansea W)

  Hughes, Roy (Newport)

  Orme, Rt Hon Stanley

  Williams, Alan Lee (Hornch'ch)

  Hunter, Adam

  Ovenden, John

  Willams, Rt Hon Shirley (Hertford)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Owen, Dr David

  Williams, Sir Thomas

  Irving, Rt Hon S. (Dartford)

  Padley, Walter

  Wilson, Alexander (Hamilton)

  Jackson, Colin (Brighouse)

  Palmer, Arthur

  Wilson, William (Coventry SE)

  Jackson, Miss Margaret (Lincoln)

  Park, George

  Wise, Mrs Audrey

  Janner, Greville

  Parry, Robert

  Woodall, Alec

  Jay, Rt Hon Douglas

  Pavitt, Laurie

  Woof, Robert

  Jeger, Mrs Lena

  Peart, Rt Hon Fred

  Wrigglesworth, Ian

  Jenkins, Hugh (Putney)

  Pendry, Tom

  Young, David (Bolton E)

  John, Brynmor

  Phipps, Dr Colin

  Johnson, James (Hull West)

  Prentice, Rt Hon Reg

  TELLERS FOR THE NOES:

  Johnson, Walter (Derby S)

  Price, C. (Lewisham W)

  Mr. Joseph Harper and

  Jones, Dan (Burnley)

  Price, William (Rugby)

  Mr. James Hamiluon.

  Judd, Frank

  Radice, Giles

  Question accordingly negatived.

New Clause 5

  TRANSFER OF BUSINESS TO A COMPANY
  '(1) Where a person who is not a company transfers to a company a business as a going concern, together with the whole assets of the business, or together with the whole of those assets other than cash, and the business is so transferred wholly or partly in exchange for shares issued by the company to the person transferring the business, the disposal of any interest in land comprised in such assets shall be treated for the purposes of this Act as a disposal (and acquisition) for which no consideration is given.
  (2) Subsection (1) does not apply—

  (a) to a disposal to a non-resident company, or

  (b) to a disposal to a body which is exempt from development land tax by virtue of section 11 above,

  but a disposal shall not be regarded as one
  to which that subsection does not apply by reason only that it is in fact a disposal for which no consideration is given.'—[Mr. Ian Stewart.]
  Brought up, and read the First time.
  12.15 a.m.
  Mr. Ian Stewart: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: It would be for the convenience of the House to discuss at the same time New Clause 10 [Transfer of business to a Company.] and Government Amendment No. 222.
  Mr. Stewart: In Committee we tabled two new clauses relating to the transfer of a business to a company. After the wide ranging debate that we have just had on the broader issues raised by the Bill, we come back firmly to the nuts and bolts.
  I should explain briefly the reason for tabling these new clauses and why it has rightly been suggested that Government Amendment No. 222 should be considered at the same time.
  One of the points that we made in Committee was that there was no provision in the Bill, as it stood, to protect the position where a business was transferred from personal ownership to a company. There are good precedents—notably capital gains tax—for enabling an unincorporated business to be transferred into company form without it acting as a trigger for capital taxation such
  1540
  as capital gains tax. We felt at that time that it would be right for the Bill to include a similar provision for development land tax.
  Therefore, we tabled two new clauses in Committee—New Clauses Nos. 4 and 5. New Clauses 5 and 10 substantially reproduce those new clauses, although with some alterations in response to criticisms which had been made about the drafting and technicalities of the new clauses.
  I think that the general argument is accepted on both sides of the House, that the incorporation of businesses is to be encouraged when that point in their development is reached. That happens every day of the week, in all kinds of businesses and trades. It is helpful not only to the Revenue but to the taxpayer, because it enables him to formalise his affairs within the structure of a company. At the same time it creates a body that is more readily accountable to the Revenue and perhaps more regular in its returns, and so on, because of the statutory requirements that apply to companies.
  We also pointed out that no funds would be available if a business were transferred to a company in exchange for shares. Therefore, there would be no receipt of moneys out of which the development land tax could at that time be paid.
  Furthermore, in such a transaction the same basic ownership of the property persists in the original partnership or ownership in personal hands both before and after the incorporation takes place, provided that the shares are held by the original owner of the business.
  We tabled these new clauses in the hope that they would encourage the Government to come forward with their own proposals, if they were unable to accept ours in detail, which would allow such a provision to be incorporated within the Bill. We had to table the new clauses at this stage because, until a very late date, we were not given sight of the amendment which is now Government Amendment No. 222.
  I do not wish to say much more at this stage, beyond welcoming the fact that the Government have now tabled an amendment that goes a good way to meeting the points that we made in Committee. It does not go quite as far as

  1541
  we suggested or, indeed, would like or think appropriate in these circumstances. We think that some questions need to be asked about it. However, before going further, and in the hope that I may have permission to come back to the Minister with some questions after what he may say on Amendment No. 222, I think it would be better for the hon. Gentleman to introduce and speak to that amendment.
  Mr. Denzil Davies: Similar clauses to New Clauses Nos. 5 and 10 were moved in Committee, as the hon. Member for Hitchin (Mr. Stewart) recognised. The intention behind the clauses is to provide relief where an individual or a partnership transfers to a company a business which includes an interest in land for which the individual or the partnership receives shares. This is an attempt to defer the charge to development land tax which would arise under the Bill as presented to the House on Second Reading and in Committee.
  We recognised in Committee that there was a problem. Unfortunately, it is not possible to meet either New Clause 5 or New Clause 10. The hon. Gentleman said that there were good precedents for capital gains tax. There are. But unfortunately they are not good precedents for development land tax. I should have been delighted to accept New Clause 10. The draftsmen have wrestled with this problem for some time. I explained in Committee why it was not possible to follow a capital gains tax provision for development land tax. The development land tax is a tax on the disposal of land, not shares. If land is transferred or transmuted into shares there would—in the absence of special provisions—be no tax charge on development land tax if the shares were disposed of. That is the problem.
  The Government have brought forward Amendment No. 222, which I concede does not go the whole way, as hon. Gentlemen and the Government would have wished. However, it proved impossible to find any other way in which to solve this problem other than that provided in Amendment No. 222.
  The amendment gives relief where, as part of the transfer of the business to a company, a person disposes of an interest in land to the company and receives shares as part of the consideration. The
  1542
  payment of some or all of the DLT accruing from the disposal of shares, is deferred until either the shares comprised in the consideration or the interest in the land itself are sold, or until the expiration of eight years from the date of incorporation if later. Therefore that is a deferral of tax, and not a complete exemption. It is the deferral until the shares are sold that triggers off the tax charge, or until the expiry of the period of eight years if that is a shorter period. If there has not been a disposal within eight years the tax charge is triggered off. That is the only way in which it can be done. Otherwise, we should have to trace the interests in the shares. That would present considerable complications.
  However, I give this assurance—as indeed was the case with the 1965 capital gains tax legislation: the matter was again considered in the light of the way in which the tax operated, and no doubt we shall have to keep this under review. At the moment this is the best effort that we may make. It goes 75 per cent. of the way to meeting the wishes of the Opposition. We shall keep the matter under review and see whether we may improve on it. If there are problems, we shall solve them.
  There is one other problem. We have no wish to charge tax where there is a mere transfer from an individual to a company. But this is the best that we can do for the moment. I hope that hon. Gentlemen will accept that there has been an effort to meet at least 75 per cent. of the points they have raised.
  Mr. Ian Stewart: With the leave of the House. I shall make a few comments.
  I welcome the statement of the Minister of State. The amendment that he introduced goes a considerable way to meeting the essence of the points which we raised.
  I imagine that the clause will apply equally to a partnership or an individual.
  Mr. Denzil Davies indicated assent.
  Mr. Stewart: Guidance sub-paragraphs are included for the assistance of the board in deciding what is just and reasonable. I imagine it is intended that these notes of guidance on apportionment should be pretty strictly followed in every case and that although it is not

  1543
  possible to impose technically the exact provisions within the paragraph the board would normally make judgments only about the matters which are mentioned.
  Will the provisions for the eight-year deferment interact with the deferral provisions under Clauses 19 and 27? I refer to Clause 19. I suppose that technically I should refer to New Clause 1. I have no doubt that it will be renumbered Clause 19 when the Bill is reprinted. Does the eight-year limit override or interrupt deferral under Clauses 19 and 27? What exactly is the technical position?
  12.30 a.m.
  An immediate reaction is that it would have been better if, at the expiry of the eight years, the chargeable person had been able to pay by instalments. That would have been an extension of the arrangement, which would have been greatly to the benefit of companies that did not have the money to pay the tax at the time.
  However, a period of eight years is a long time. The Minister has fairly said that further consideration can be given to these provisions. Therefore, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.
  Mr. Denzil Davies: We have had a long and interesting debate on a number of fundamental points in this legislation. We have discussed charities and various other matters that go to the root of the legislation. Therefore, I beg to move,
  That further consideration of the Bill, as amended, be now adjourned.
  Mr. Graham Page: I am a little surprised that the Minister should imply that we have made enough progress on the Bill, after we have dealt with five clauses, only two of which the Government have withdrawn. I am not surprised at the Minister asking that we should adjourn further consideration of the Bill at this stage, when the Government have succeeded in taxing charities by a majority of only five votes. If that is the best vote they can muster, perhaps it would be better if we were to continue these debates tomorrow.
  Question put and agreed to.
  Bill, as amended (in the Standing Committee), to be further considered this day.

  INDUSTRIAL COMMON OWNERSHIP [MONEY]
  Queen's recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session to further the development of enterprises owned and controlled by people working in them, it is expedient to authorise—

  (1) the payment by the Secretary of State out of moneys provided by Parliament of grants, up to an aggregate of £150,000, for the purpose of assisting a body to provide advice about the organisation of co-operative enterprises and common ownership enterprises;

  (2) the payment by the Secretary of State of grants and the making by him of loans to a body out of such moneys for the purpose of assisting the body to make loans to co-operative enterprises and common ownership enterprises in cases where the aggregate amount of the grants made and of the loans for the time being outstanding does not exceed £250,000; and

  (3) the payment into the Consolidated Fund of any sum required to be paid into that Fund by the Act aforesaid.—[Mr. Les Huckfield.]

  12.33 a.m.
  Mr. John Peyton: I do not wish to speak for long at this stage, but I hope that the Minister will be able to explain the Government's position. As far as I understand the position, the Minister simply rose to his feet and moved the motion. He has given no explanation of the Government's position. That is quite unacceptable to the Opposition.
  Perhaps I may rehearse the position. So far as I am aware, as I said to the right hon. Gentleman the Leader of the House this afternoon, this Bill is a Private Member's Bill which was introduced into the House in December and given a Second Reading in March. Only yesterday arrangements were made for it to be shuffled into an unusual Committee for a Private Member's Bill. At the same time, amendments were tabled to leave out seven out of eight clauses and to amend the Long Title. In other words, the

  1545
  whole of these proceedings are being conducted for the purpose of bypassing the need for a Second Reading because the Bill is virtually certain to be rewritten in Standing Committee.
  It is true that this apparently innocuous measure was given an unopposed Second Reading by the House in March, but the Government have a rather high-handed way of conducting business these days—[Interruption.] The Parliamentary Secretary to the Treasury is following the tradition set by his predecessor, the right hon. Member for Bermondsey (Mr. Mellish) in making verbal interjections from a seated position. [Interruption.] I do not need advice as to what is or is not in order. I am addressing myself to the question of the Money Resolution which has been proposed by the Government in an effort to make respectable their rather hurried proceedings on this Bill tomorrow morning.
  It is strange that the Government should be proposing amendments to a Bill which has been, at least, in the guise of a Private Member's Bill. The Minister has not seen fit to offer the House the slightest explanation of the Money Resolution. If he wishes to intervene I shall be glad to give way—or am I to conclude that the Government have no intention of offering an explanation?
  The position is extraordinary. If the Government maintain their position it is unlikely that the Standing Committee on the Bill will make the rapid progress that an innocent measure could be expected to make.
  The Parliamentary Secretary to the Treasury (Mr. Michael Cocks): Threats.
  Mr. Peyton: The Patronage Secretary addresses me on the subject of threats. An accusation of making threats comes ill from him. [Interruption.] The House will be in difficulty. I am certainly not going to be pushed out of the way by a total refusal by any Minister to explain the Government's position. The Government have conducted themselves in a rather informal manner. They seek to rewrite a Private Member's Bill, thus bypassing the need for a Second Reading. They ask the House to accept a Money Resolution without offering the slightest explanation. I find that wholly unacceptable.
  1546
  The Minister is not making life easier for himself or anyone else. I hope that he will now see fit to offer some explanation. I ask him that out of courtesy to the House, not just to myself. I hope that the Minister, who has not been on the Front Bench long, will deem it his duty to offer an explanation of the Government's position. I am waiting for him to do that.
  I raised the matter this afternoon and the Leader of the House at first indicated that he would make a statement on the subject. He then modified that position, but he said that the Government's position would be made clear to the Opposition before proceeding. The Minister's presence, saying nothing, falsifies and undermines the position of the Leader of the House.
  Mr. Eric S. Heffer: On a point of order, Mr. Deputy Speaker. Is the right hon. Gentleman on a point of order or is he making a speech? May we know precisely what is happening?
  Mr. Deputy Speaker (Mr. Oscar Murton): The right hon. Gentleman is putting his points in connection with the Money Resolution, and he is perfectly in order to do so.
  Mr. Peyton: I am very much obliged, Mr. Deputy Speaker, for your guidance and assistance—not that I particularly need assistance in this case.
  The Government, true to their recent standard of conduct, are once more offering a blatant insult to the House. They are not giving even the bones of an explanation of their intentions with regard to the Bill. All that we know is that they have virtually rewritten the Bill.
  If the Minister is taking advice from his Secretary of State, I very much welcome that, because he needs it. It would be courteous of him to offer an explanation of the Government's intentions. That would be of assistance to the House, the hon. Gentleman and the Government. But I gather that it is not his intention to give an explanation. Therefore, my hon. Friends and I shall be left in doubt about the Government's intentions, and those doubts will lead us to rather unfavourable conclusions, in which case the Minister cannot expect to make the same progress with the Bill as he might have expected.

  1547
  I shall sit down now, because I am sure that my hon. Friends will be glad to endorse my judgment on the hon. Gentleman and the Government for an almost deliberate lack of courtesy to the House and total failure by them to explain their intentions. We have had a certain amount of that sort of conduct in recent weeks. The Patronage Secretary, who is so good with his monosyllabic advice to others, might take some of it himself and learn that it is the Government's business to offer some explanation to the House. I am glad to note that the Secretary of State appears to think that that is not altogether an outlandish request.
  I very much hope that the Under-Secretary, who has not been long in his office, will now offer an explanation of the Government's position.
  12.43 a.m.
  The Under-Secretary of State for Industry (Mr. Les Huckfield): I intended no discourtesy to the right hon. Gentleman. I spent a considerable time in the House this afternoon explaining to him the exact purpose of the Money Resolution.
  I intended no discourtesy to the House. In fact, I should prefer to reply to the various points that I am sure hon. Members on both sides of the House wish to make in what I hope will be a short debate.
  The amendments that are proposed would leave the Bill substantially unchanged in its content. I say that to the right hon. Gentleman specifically, because it was a Bill—[Interruption.] I say that because I am sure that the right hon. Gentleman will be aware that on 12th March, on the Floor of the House, his party gave assent to the broad principles of the Bill. I am sure that he will also recognise that the particular bits of this measure to which his party objected on that day have been taken out. Therefore, we have a Bill which has been basically approved by the right hon. Gentleman's party. We have a situation that I have already tried to explain to the right hon. Gentleman this afternoon.
  I hope that we can now proceed as fast as possible. I intended no discourtesy at all. I am fully prepared to reply to the various points that may arise in what I hope will be a short debate.
  Mr. Peyton: What the hon. Gentleman really must not conclude is that a private conversation in the Corridor amounts to an explanation to the House of the Government's position on any Bill. We are on common ground that the Bill had a Second Reading, but the Government are now attempting to rewrite it. All I have been asking for is an explanation of the Government's position. The hon. Gentleman has just begun to give one, and for that I am grateful.
  Mr. David Watkins rose—
  Mr. Norman Tebbit rose—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Tebbit.
  Mr. David Watkins: On a point of order, Mr. Deputy Speaker. We are slightly unclear about which hon. Member you called to speak.
  Mr. Deputy Speaker: I called the hon. Member for Chingford (Mr. Tebbit).
  Mr. Ioan Evans: On a point of order, Mr. Deputy Speaker. As we are discussing a Private Member's Bill put forward by my hon. Friend the Member for Consett (Mr. Watkins), perhaps we should hear what he has to say. I understand that he has met the Government and that the Bill has had a Second Reading and has been accepted by the whole House. Amendments have been put forward by the Government after discussions with the Opposition because the Opposition wished that some amendments be made. The Bill is to be considered in Committee tomorrow. May we have an explanation from my hon. Friend the Member for Consett, whose Bill this is? It is not a Government Bill.
  Mr. Deputy Speaker: I have called the hon. Member for Chingford (Mr. Tebbit). We shall see who catches my eye next.
  Mr. Tebbit: One thing is certain. Tonight we are not discussing a Private Member's Bill but what is on the Order Paper, which is a Money Resolution. That resolution was moved in an extraordinarily incompetent and half-hearted style by a Minister of the Crown. Even if we were discussing the substance of the Bill, we would no longer be discussing a

  1549
  Private Member's Bill that was introduced into this House last December and which had its Second Reading on 12th March this year, because the Government propose to delete seven clauses of this eight-clause Bill, to change the Long Title, and to amend Clause 8, which is the Short Title.
  Mr. Deputy Speaker: I do not think that those matters appear in the Money Resolution.
  Mr. Graham Page: On a point of order, Mr. Deputy Speaker. The Money Resolution says
  "That, for the purposes of any Act of the present Session".
  We want to know what the Act is.
  Mr. Tebbit: What is certain is that we cannot refer only to the money without referring to that on which it is proposed that the money will be spent. The point I seek to make is that the Bill that was given a Second Reading is no longer the Bill with which the Government wish to proceed. The Government are proposing to proceed with a Bill of their own. The Minister said, as his excuse for behaving as he did, that he had had a conversation with my right hon. Friend the Member for Yeovil (Mr. Peyton) in the Corridor this afternoon.
  As a way of asking Parliament to approve public expenditure that surely must rate as something even more extraordinary than the manner in which Ministers, or civil servants, when they are dissatisfied with a decision in the Cabinet, now proceed to publish the Cabinet papers. We surely should get back—
  Mr. Deputy Speaker: Order. No reference to Cabinet papers is to be found in the Money Resolution.
  Mr. Tebbit: The Minister advances, as his case for the Money Resolution, the private conversation that he had with my right hon. Friend the Member for Yeovil (Mr. Peyton) in the corridor outside. Whatever we say about the way other business is transacted, that way of con ducting financial business in this House is something we have not seen before and which we want to hear a lot less of in future.
  Reference has been made to the fact that the Opposition did not oppose the Second reading of the Bill to which this
  1550
  Money Resolution is said to relate. That is correct, but I say again that that was not the Bill that the Government are now proposing should go through Committee tomorrow. It is a very different matter.
  Mr. Ivor Clemitson: The hon. Gentleman says that if the amendments that the Government put forward are passed in Committee it will be an entirely different Bill. Will he say in what important point of substance it will be a different Bill?
  Mr. Deputy Speaker: Order. I hope the hon. Gentleman will do nothing of the sort, but will address himself to the Money Resolution.
  Mr. Tebbit: The hon. Gentleman does ago, when I read a book—[Interruption]—called "Australia, the Land Evolution Forgot". I can well understand now what that book was getting at.
  We have had enough of those hominids who cannot get up on their legs, making guttural noises late at night, and it is about time one in particular was quiet. No doubt if that hon. Member wants to make a speech at some time he will try to do so, but in the meantime—
  Mr. Russell Kerr: I am trying to help the hot. Gentleman.
  Mr. Tebbit: The hon. Gentleman can help me by going back down under, to where he came from.
  Mr. Deputy Speaker: Will the hon. Gentleman help the Chair by dealing with the Money Resolution?
  Mr. Tebbit: I shall be happy to do so, Mr. Deputy Speaker, when I can make myself heard above the uproar from the hon. Member for Feltham and Heston (Mr. Kerr). When I say that it would be a good thing if he went back down under, I do not mean Australia, I mean the place where he became rather excited earlier this evening.
  If I may continue, the then Minister of the day, referring to this Money Resolution, which he said might be produced, commented:
  "If the Bill is given a Second Reading, the Government will be prepared to put down a Money Resolution before the Bill is taken in Committee."

  1551
  They could not have done it much later and still been before the Committee stage. The Minister added:
  "In this Money Resolution the Government will make their intentions clear on the sums they are prepared to make available."—[Official Report, 12th March 1976; Vol. 907, c. 870.]
  In that a sum is named in the resolution, I suppose that that has been done, but in that we have heard no case from the Minister about why that sum has been selected and what it is supposed to cover, we are entitled to hear a little more explanation. [Interruption.] If the hon. Member wants to know the answer to that question, it is a matter for the Chair who is called and not for me.
  Mr. Ioan Evans: My hon. Friend's point is that this debate will last only for 45 minutes and that if the hon. Member does not resume his seat and allow my hon. Friend the Member for Consett (Mr. Watkins) to speak, my hon. Friend will not be able to speak.
  Mr. Tebbit: If the hon. Gentleman could restrain his hon. Friends from their constant nattering and sedentary interventions he might get the Money Resolution through more quickly. A little more of the normal courtesy—[Interruption.] There you are, Mr. Deputy Speaker—there they go again. As soon as one tries to meet a request for brevity by saying that it is difficult to be brief under constant barracking, barracking starts again. So it becomes less and less likely that the hon. Member will have time—[Interruption.] The barracking used only to come from below the Gangway, but tonight it comes from what purport to be some of Her Majesty's Ministers as well. I do not know whether they think that they are helping their hon. Friend to get to the point at which he can make his speech, but if they do they are as wrong in that as they are in most other things they do. [Interruption.] There is another one at it now.
  Considering the reluctance with which the Minister who was supposed to be introducing the resolution got to his feet, it is remarkable how eager other Ministers are to keep opening their mouths and shouting from a sedentary position. If they want to join in why do they not stand up and make a speech?
  1552
  After all, the resolution not only affects the Bill; it is a matter of public expenditure. Recently, Ministers have been saying a good deal about the need to contain public expenditure. We have heard a great deal about the Prime Minister's resolution not to let the borrowing requirement get out of hand. Now we are confronted with another Money Resolution, further public expenditure, and no explanation at all.
  Nothing in the Bill requires the expenditure of taxpayers' money. The Bill could be enacted and aid could be given by reforming the legislation relating to common-owned businesses without any public expenditure being required. We are not told why the Government need public expenditure for this purpose. Indeed, it was not until this morning that we saw what the Government propose to do with the Bill at all.
  The essential thing about this expenditure is that it will not only increase the borrowing requirement and of itself be inflationary; it is also likely to be discriminatory as between one sector of industry and another. In those circumstances it seems to me that it would be very unwise for us calmly to give our assent tonight to another slice of public expenditure.
  We hope that the Minister will ask leave of the House to speak again, which, with due consideration, we may grant to him—although some of my hon. Friends may not want to hear him again, in view of his poor showing the first time. Perhaps it would be better if the Secretary of State replied to the debate. We hope to hear more justification for this sum of money. It might not be much—we are accustomed to the Secretary of State doing a 90-minute act for £20 million or so, and this sum is very much smaller than that.
  There are now eight Ministers in the Chamber. When did we last have eight Ministers and the Chief Patronage Secretary in a 45-minute debate?
  Mr. Kenneth Lomas: May we have it quite clearly understood whether there will be a vote or not? Tedious repetition and boring comments are not doing the House any good. If the Opposition have decided to vote against this Money Resolution,

  1553
  will they say so now, so that we can go home?
  Mr. Deputy Speaker: Order. This debate must finish at 1.18 am and there are still a number of hon. Gentlemen who wish to catch my eye.
  Mr. Tebbit: We shall get on with the debate much better when we manage to restrain hon. Members on the Government Front Bench—
  Mr. Tom Litterick: Get your hand out of your pocket, you slovenly article.
  Mr. Tebbit:—and when we restrain hon. Members on the Front Bench below the Gangway.
  Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. Of course I accept that the conduct of the House is in your hands, but the hon. Member for Chingford (Mr. Tebbit) is totally out of order, and he continues to be so. Will you assert your authority?
  Mr. Deputy Speaker: I have done my best to draw hon. Members' attention to the fact that the discussion on this matter must stop at 1.18 a.m.
  Mr. Peyton: On a point of order, Mr. Deputy Speaker. I hope that you will address some guidance to the Government side of the House, particularly to those hon. Members below the Gangway.
  Mr. Tebbit: At 1.18 a.m., as you reminded us, Mr. Deputy Speaker, the debate on this matter will end. I hope that we shall be able to hear something from other hon. Members before then. Whether other hon. Members get the opportunity to speak will depend partly on the conduct of hon. Members opposite, and so far their conduct has not been very impressive. [Interruption.] So far we have had from the Minister no explanation of the purpose for which this money would be used. All he said was that the money would be used in a discriminating way between one sector of industry and another. The Minister has given us no reasons why this money is needed for the Bill—to which this House has given a Second Reading—to be able to be operated. It is not needed. There is no case, in my view, for further public expenditure of this nature—
  Mr. Bob Cryer: He has said all that before.
  Mr. Tebbit: There we go again, Mr. Deputy Speaker—
  Mr. Neville Sandelson: Get on with it, you buffoon. You are bringing the House into disrepute.
  Mr. Tebbit: The hon. Gentleman does himself no good by shouting from a sedentary position that something will bring the House into disrepute. It is difficult to get on with a speech when, contrary to all the customs of the House, one is subject to constant barracking.
  The Minister has made no case to show why this sum of money should be required and why he cannot do what he wants for less. Is he satisfied that if, as the Government propose, a body is to be set up to distribute money on a non-commercial basis, he has enough money to act in that way? After all, if the money is to be distributed on a non-commercial basis there can be few limits on the amount it is possible to spend in that manner. I hope therefore that he will tell us why this sum is necessary,
  How much of the money will be expended on what one would broadly call administration expenses? How much will be spent in actually carrying out the purposes of the Bill, which is the making of grants and loans. If the Minister cannot say—if he has come to the House not prepared to answer any of the questions put to him but merely hopes to slip the Money Resolution through late at night on the sly, on the basis of a conversation in a corridor with my right hon. Friend the Member for Yeovil—he and his hon. Friends should be discouraged from thinking that they can get away with that sort of conduct in future.
  1.8 a.m.
  Mr. David Watkins: The level of the debate so far has not been particularly high, and there has been a great deal of repetition about some points. I hope that by comparison I might apply myself directly to the Money Resolution and seek to deal with one or two of the points raised.
  First, I urge the House to approve the resolution. I remind it again that the Bill received an unopposed Second Reading on Friday 12th March after a full debate.

  1555
  During the debate my hon. Friend the Member for Glasgow, Kelvingrove (Mr. Carmichael), who was then Under-Secretary of State for Industry, stated that if the Bill received a Second Reading the Government would table a Money Resolution before the Committee stage began. He also said specifically that the amount the Government would allow for in the resolution would be less than what was originally proposed in the Bill. That fact is reflected in the resolution. I proposed in the Bill expenditure of £1,060,000 spread over four years. The resolution proposes an expenditure of £400,000 spread over five years. The amount now proposed is entirely in line with the suggestion made by the Government spokesman at that time. It is substantially less than half that proposed in the original Bill, and is spread over a longer period.
  I submit that the facts recorded in the Second Reading debate rather make nonsense of some of the allegations made so far by hon. Members opposite. I know that the right hon. Member for Yeovil (Mr. Peyton) has felt that the Government have taken over the Bill and altered it completely, but I refute that suggestion. The Bill has certainly been redrafted—and with my agreement, as the sponsor of it—but it has not been altered in substance, except in the reduction in expenditure which will be proposed in amendments to come before the Committee when it meets. It is for that reason that the Money Resolution is proposed.
  Mr. Patrick Mayhew: The hon. Gentleman says that it has not been altered in substance, but does not New Clause 1 stipulate that the body, now to be called the relevant body, which is to receive either the grants or the loans, is to be a body on which one or more trade unionists are represented? Is not that a completely different body from that proposed by the Bill, and is not that very substantial? It cuts out any number of bodies the sole purpose of which may be to encourage common ownership but which may not wish to have a trade union represented on them.
  Mr. Watkins: I do not accept that. The body is not different. What has emerged is the hon. and learned Gentleman's suspicion of trade unionists. He has made a quite irrelevant intervention to express his prejudices in that direc-
  1556
  tion. I do not accept that as a valuable point. I do not accept that it is any substantial alteration at all, or that the Bill is in substance at all altered from that which was given its Second Reading on 12th March, except for the reduction in expenditure and the deletion of two clauses dealing with conversions into common ownership, which are proposed to be deleted because they are covered in two clauses added on to the current Finance Bill.
  There is no lack of precedent for major alterations of this sort to Private Members' Bills. I shall not weary the House with a large number of them, but shall mention one, because I was involved in it. In 1968 I was lucky in the Ballot and was able to pilot through the House the Bill that became the Employer's Liability (Compulsory Insurance) Act 1969. That was also legislation in what was then an unprecedented field. That Bill was similarly redrafted by the Government, in consultation with myself. Indeed, it was much more radically altered than this Bill. It became law and has been in operation successfully now for a number of years.
  Mr. Tebbit rose—
  Mr. Watkins: The hon. Gentleman has already spoken at very great length and has left me very little time. This remains the same Bill. To those who say that it is altered in substance, I can only say, first, that their memories have dimmed and, secondly, that they have not read the new proposed amendments, which are identical in substance. The money is less than half that which has already been agreed in principle by the House, and I hope the House will agree to the Money Resolution.
  1.15 a.m.
  Mr. Les Huckfield: I hope that the hon. Member for Chingford (Mr. Tebbit) feels pleased with himself, because he has prevented a great many of his hon. Friends from speaking, particularly by the way in which he carried on. I cannot understand his position, because he is complaining that the Bill has been changed. I hope he has gone through the Bill, as I have. All that the Government propose to do is to transfer to the Finance Bill, which is already in Committee, precisely those clauses to which the hon. Gentleman objected on Second

  1557
  Reading. In other words, as my hon. Friend has rightly said, this is substantially the same Bill as that which was introduced on 12th March and which the hon. Gentleman approved of on that date. I hope that the hon. Member for Chingford will stop making these bitter personal attacks, and read his own speech of 12th March.
  As my hon. Friend says, the Money Resolution enables my right hon. Friend to make provision for grants of up to £30,000 a year for five years, to meet the administrative expenses of the advisers, which my hon. Friend mentioned. It also enables grants or loans of up to £50,000 a year for five years for on-lending by the recognised body to common ownership and co-operative enterprises. Grants to enterprises by the body are not provided for.
  We went into this in great detail on 12th March, when the hon. Member for Chingford made great sport with the fact that he was delighted at surprising my hon. Friends by agreeing to the Bill. Having gone through that great performance, in which he tried to impress every Labour Member, he has turned round 180 degrees. From what we can see and from the amendments turned down—
  It being three-quarters of an hour after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).
  Question agreed to.
  Resolved,
  That, for the purposes of any Act of the present Session to further the development of enterprises owned and controlled by people working in them, it is expedient to authorise—

  (1) the payment by the Secretary of State out of moneys provided by Parliament of grants, up to an aggregate of £150,000, for the purpose of assisting a body to provide advice about the organisation of co-operative enterprises and common ownership enterprises;

  (2) the payment by the Secretary of State of grants and the making by him of loans to a body out of such moneys for the purpose of assisting the body to make loans to co-operative enterprises and common ownership enterprises in cases where the aggregate amount of the grants made and of the loans for the time being outstanding does not exceed £250.000; and

  (3) the payment into the Consolidated Fund of any sum required to be paid into that Fund by the Act aforesaid.

  REDHILL (FORENSIC PSYCHIATRIC UNIT)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Snape.]
  1.17 a.m.
  Mr. George Gardiner: The Matter I raise in this Adjournment debate is the current proposal by the South-West Thames Regional Health Authority to build a regional forensic psychiatric unit in Redhill, immediately adjacent to the Royal Earlswood Hospital, which is the home of some 650 mentally handicapped people, including around 80 children.
  This proposal is the end product of a process that began with the Butler Report, which urged the creation of these units for patients who present severely disruptive behaviours, who suffer from psychopathic or severe personality disorders, some of whom may be offenders, but all of whom need to be kept in conditions of substantial—though not high—security.
  In this debate I do not wish to question that such units are necessary. Neither do I intend to take issue with the guidelines offered to regional health authorities by the Department, nor even with the criteria adopted by the working party set up to find a suitable site within the South-West Thames Region. My purpose is purely to sound an alarm to the Minister that a site is being proposed that will cause damage and distress unforeseen by the working party, in order that work can start to find an alternative before more valuable time is lost.
  The working party began by considering nine possible hospital sites. These were narrowed to two meriting serious feasibility study, and from these the Earlswood Hospital site was its final choice. Its decision was announced on 14th April, and a mere six weeks allocated for so-called local consultation. After protests, this was extended to 10 weeks, expiring later today. Since then members of the working party and its chairman have put in many hours attending local meetings and hearing objections.
  But they have been engaged in a process not of meaningful consultation but of explanation. I and others have asked for details of other sites considered,

  1559
  and the reasons for preferring Earlswood. We have been refused. But how can we have meaningful consultation when only one option is offered to us. Throughout this, so that we can make proper comparisons, I have urged that we should take a broad community view, but how can we possibly do this without knowing all the options available? I hope that the Minister will offer guidance that in future local consultation should start at the short list stage, and not when a working party's mind is already made up. Small wonder there have been local complaints that the working party is merely "going through the motions", and that we are being presented with a fait accompli.
  I hope that tonight the Minister will be able to assure us that this is still an open question, that his mind is not closed, and that full account will be taken of all the objections lodged by residents, medical opinion, and the East Surrey Community Health Council.
  I recognise that no site proposed for such a security unit, designed to accommodate criminal elements among others, will ever be greeted with enthusiasm by local residents. I have no intention of saying "Yes, there should be a security unit, but not on our doorstep". However, the fact that there will always be objections from local residents does not mean that in some instances they may not have a very valid point.
  Already in the tight area to the south and east of Redhill there is a security unit within the Philanthropic School run by Wandsworth Borough Council for juvenile delinquents.
  Within the Earlswood Hospital there is a locked ward, though, having visited it, I must say nearly all its occupants are in such a condition that they would have difficulty in getting more than 500 yards from it. Then, just to the east, there is the Rainer Foundation Home for problem teenagers.
  Is this not enough for any one community to cope with? The generosity of local people has already been shown by their friendship and understanding of the mentally handicapped patients of the Royal Earlswood. But there is a grave danger in pushing them too far.
  1560
  Furthermore, the working party's proposal appears to have been drawn up with no knowledge of the fact that a new middle school has been built and recently opened within a few hundred yards of the proposed site. Its catchment area includes a large housing estate nearby—and the school and estate are linked by a footpath running right past this site. Is no thought to be given to the fears of mothers and children who have to use that path perhaps four times daily?
  The revised report of the Department of Health and Social Security working party on security in NHS hospitals included the statement:
  "It is important that an overbold decision leading to the establishment of a unit in an urban setting close to a reluctant community should not result in a situation where in the long term it proves impossible to admit to the unit the full range of patients for whom it should cater."
  I submit that we have just such an "overbold decision" here, and it would be wise for the authorities to recognise the fact.
  I now turn to another group of objections which must weigh very heavily on the Minister's mind—those from the patients of the Royal Earlswood Hospital, their relatives, the staff, voluntary workers and the Friends of the Hospital. I speak with some feeling, for, since entering this House, I have followed closely the marvellous work undertaken at this hospital, as did my right hon. and learned Friend the Member for East Surrey (Sir G. Howe) who represented Reigate before me. Indeed, both his wife and mine are now closely involved with the Friends of Earlswood Hospital.
  Since its foundation in the last century this hospital has followed a progressive "open door" policy. Its mentally handicapped patients, many of whom live there throughout their lives, are free to wander through the grounds, and indeed are a familiar sight on shopping expeditions and walks into Redhill. There is splendid community involvement—but, as one letter to me observed:
  "it has taken many years of hard, heart-aching work to persuade the public to accept our children."
  Of course, many of these patients effectively remain children throughout their lives.

  1561
  There is a mountain of evidence that these patients, and the understanding they get from the community, will suffer enormously if a unit including psychopaths and convicted criminals is made part of their home and hospital complex—for inevitably the community will come to see the two institutions as one.
  I submit that it is a monstrous injustice to these unfortunate and defenceless people to graft a forensic psychiatric unit on to a hospital catering solely for the mentally handicapped. There is strong medical opinion that for these and other administrative reasons the psychiatric unit would be more properly located with a psychiatric hospital. Remember, too, that the Earlswood Hospital contains some 80 children, who receive their lessons in its classrooms.
  I have received so many submissions on this point from those who work with the mentally handicapped, from their families, from doctors, from the local branch of the Confederation of Health Service Employees, and, indeed from fellow Members, including my right hon. and learned Friend the Member for Surrey, East that I shall read the Minister but one letter from Mr. George Lee, Secretary-General of the National Society for Mentally Handicapped Children. He writes:
  "Parent members of this Society in the district, especially those whose children, of whatever age, are cared for in the Royal Earlswood Hospital, are acutely distressed at the effects such a proposal will have on life in the Hospital, and on the image of the mentally handicapped.
  I am writing therefore, to associate the National Society unequivocally with the local concern and to express the hope that you might be able to ensure that the responsible authorities have given the most careful consideration to the anxieties which have been aroused and also to possible alternatives."
  But, alas, neither the area health authority nor anyone else can consider the possible alternatives, because this information is kept from them.
  However, despite the lack of information, I must tell the Minister that the East Surrey Community Health Council has adopted a most responsible approach to this matter. It has studied the Royal Earlswood proposal, and the working party's arguments for it. At the same time, it has accepted the need for a forensic psychiatric unit, and has no objection to one being located in its own district.
  1562
  It is quite willing to have one on its doorstep. That is quite a brave position for such a council to take up, but it has also looked at other hospitals in the district, including a psychiatric hospital, and has concluded that this psychiatric hospital matches the working party's own site criteria far better than the hospital for the mentally handicapped that it has chosen.
  I do not know whether its alternative is the best, but if a psychiatric hospital can be found within its own district—and within my own constituency—that measures up to the criteria, I am sure there are several others that might profitably be examined too.
  All these objections are due to be considered by the Surrey Area Health Authority later today, before reporting to the regional authority in time for its meeting on 14th July. Of course, I cannot anticipate either decision.
  My purpose tonight is simply to alert the Minister to the fact that a great deal of information and evidence has come forward since the proposal was made known which cannot possibly have been taken into account by the working party since its procedures barred it from undertaking meaningful consultations at the formative stage.
  I recognise that the Secretary of State is anxious to see that these forensic psychiatric units are built, and that time is an important factor. But the very worst outcome would be for the regional authority, or indeed him himself, to feel stampeded by shortage of time into making a bad decision. May I urge him to use his influence with the regional authority to persuade it to open consideration of other sites now, before more valuable time is lost, for I warn him that if he accepts this proposal, presented without any meaningful prior consultation, it will generate untold bitterness not only among local residents, doctors and NHS staff, but among the most defenceless members of our society—namely, the mentally handicapped.
  1.30 a.m.
  Sir Geoffrey Howe: I am grateful to my hon. Friend the Member for Reigate (Mr. Gardiner) and to the Minister for allowing me a few minutes to intervene in this important debate.

  1563
  I wish to underline the points made by my hon. Friend on what is inevitably a difficult issue. No more than he would I, on behalf of my constituents, suggest that such an institution should be established other than in our part of the country. This is an important part of the social service network. It is, therefore, difficult to decide where such a unit should go.
  I recognise that the working party has given careful consideration to the issues that arise. I ask the Minister and the authorities that operate beneath him in this matter to recognise that this proposal, rightly or wrongly, has given rise to a great deal of concern over a wide area spreading into my constituency. For example, residents' associations as far afield as South Nutfield and Nutfield have objected to it. The Purley and Caterham Districts Society for Mentally Handicapped Children has also objected to it. These people, with an enlightened view of the community's needs in these matters, feel a genuine sense of anxiety, which is supported by the Friends of the Royal Earlswood—an organisation which is concerned for the welfare of patients of this kind.
  I suggest that the siting of an institution of this kind can be acceptable only if the process by which the decision is arrived at commands the confidence of the community.
  Mr. Turner, the working party chairman, said at the meeting a few days ago that the community's understanding is vital. It is quite clear that a meeting of that kind, attended by 400 people of whom only two supported the working party's recommendation, has not succeeded in achieving that kind of community understanding.
  The Surrey Mirror and County Post has been reporting these matters fairly and will play a part in helping to secure understanding, but what is missing, as my hon. Friend pointed out, is the feeling that a genuine process of consultation has taken place.
  It is difficult to believe that in this case, any more than in the cases of Stan-stead and Maplin, for example, the consultation has been genuine if the people being consulted are not allowed sight of the alternatives and of the reasons that
  1564
  led people away from those alternatives, however well the working party may have considered them. That point was made in another place by my hon. Friend's predecessor, Lord Reigate.
  If people are not given an insight into the alternatives and the reasons for the final decision, they will believe that the process has been conducted on the footing of the old bad rule for judges "Do not trouble me with the evidence. My mind is already made up". There is bound to be a feeling that the community has not been troubled with the evidence because it would add to the difficulty of arriving at a fully consultative decision.
  I urge the Minister to consider that point sympathetically. It is important not only to get the right decision but for the community to be taken along with the rightness of that decision.
  1.33 a.m.
  The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I welcome the opportunity of giving the hon. Member for Reigate (Mr. Gardiner) and his right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) some background to the Department's policy that regional security units—which will be specially funded—should be built throughout the country, to explain more about the type of patient likely to be accommodated in these units, and to say something about the South-West Thames Regional Health Authority's proposals, and the reasons behind its working party's suggestion that the unit should be built at Redhill.
  Since its inception the National Health Service has had the responsibility of providing facilities to treat all types of patients with mental disorder, the only exception being those comparatively few who require to be treated in conditions of maximum security in the special hospitals. The Mental Health Act 1959 did not change this fundamental responsibility.
  In recent years there has been a growing problem as more and more psychiatric hospitals have become entirely "open-door", but have often not made alternative provision for those continuously difficult and behaviourally disturbed patients who were formerly contained in locked wards. We certainly do

  1565
  not wish to see a reversal of the trend towards more open care and treatment of the great majority of patients in hospitals for the mentally disordered. However, places need to be available in each region for patients requiring treatment with varying degrees of supervision.
  The Department of Health and Social Security established a departmental working party in 1971 to consider the present and future need for security and to make recommendations. This working party and the Interim Report of the Butler Committee on Mentally Abnormal Offenders both emphasised the urgent need for special units to be provided for patients requiring a degree of security. Since then we have been pressing health authorities to meet this need by establishing regional units. The initial aim is to provide 1,000 places in England by 1980, either by adapting existing buildings or by constructing new purpose-built premises. Because of the urgency and importance attached to the establishment of regional security units we decided to make special financial allocations to regions to meet the capital costs once proposals have been agreed.
  This is the background to the policy. I think there are few people who would argue with the proposition that facilities where staff can more adequately manage difficult patients are urgently needed: this provision would take pressure off the more open facilities in our psychiatric hospitals and reduce the growing demand for patients to be admitted to the special hospitals—that is patients who really do not require the maximum security which they provide.
  I should also like to say something about the type of patient who would be cared for in regional security units, as I fear that there may be some continuing misunderstanding about this.
  Such patients present severely disruptive behaviour; they may be mentally ill or mentally handicapped or may suffer from psychopathic or severe personality disorder either alone or in conjunction with mental illness or mental handicap. It is these for whom regional security units are intended. However, it is not intended that regional security units should take all patients who cause difficulties in local psychiatric hospitals or
  1566
  units either by their behaviour or by occasional absconding, but only those who present such problems as to make their continuing local management impracticable in the facilities available.
  I should also stress that regional security units will not be expected to cater for patients who are rightful candidates for special hospitals. They should, however, be able to cater for the type of patient who has in the past been inappropriately admitted to a special hospital because no "open" hospital was willing to accept him, even though his need for treatment was not in doubt. They will also be expected to accept some mentally abnormal offenders who have sometimes had to be given penal sentences just because they were considered to require more security than was available in the local hospital.
  The other point I should especially stress is that the units will form an integral part of the psychiatric services of a region. We must be careful not to isolate them and the patients in them from the rest of the service. We need a flexible service with patients moving in and out of security as the need for close supervision arises and recedes. We hope, too, that the units will develop as centres of expertise in dealing with difficult patients and that they will be able to play an active part as a source of advice and training for the staff of the other psychiatric services in the region.
  The South-West Thames Regional Health Authority's proposals have come in for some adverse publicity, and have been a matter of considerable concern to the hon. Gentleman's constituents and others—a concern which he so graphically described this morning.
  Before going on to explain how the regional health authority came to propose the Royal Earlswood site and how the matter now stands, I should like to emphasise that we are talking about a proposal on which the regional health authority and the area health authority are consulting—not a firm decision or recommendation to my right hon. Friend. My right hon. Friend has not received such a recommendation. I therefore do not propose tonight to debate the merits of this proposal, which is still a matter for local consideration, but only to explain the steps by which the present

  1567
  position was reached, and what are the next steps.
  In response to my right hon. Friend's request, to which I referred a few moments ago, the South-West Thames Regional Health Authority set up a multi-disciplinary working party, chaired by a member of the authority. This working party drew up detailed proposals for a regional unit and also considered a number of possible sites, coming to the conclusion that land at the Royal Earlswood Hospital would be the most suitable of those available.
  Obviously, there is a considerable element of judgment in any such choice, and, equally obviously, different people judge differently. The working party did, however, go into the matter very thoroughly. It selected, and included in its report, a number of criteria by which potential sites should be judged. These included geographical location in the region, the availability of suitable Crown land, the presence of good road and rail communications, the adequacy of supporting facilities on site, which could both service the unit and reduce costs, and the possibility of providing unobtrusive security at the perimeter of the unit which would be properly effective for the containment of patients requiring security. This last point is, of course, a most important one and I should like to enlarge on it a little.
  It is not the intention that these units should be as secure as the special hospitals, as the patients will not constitute a comparable risk to the community. While not inhibiting patient rehabilitation, they must be sufficiently secure to enable staff to provide care and treatment without being continuously worried about custodial problems, and they must provide a degree of protection against patients wandering abroad which is acceptable in practice to the surrounding community and to the relatives of patients in the neighbouring hospital. I understand that the proposals seek to provide that. It is not envisaged that the patients of this or any other security unit would go outside the unit grounds unless escorted.
  There are other criteria, too. The Butler Report recommended, and the regional health authority accepts, that it
  1568
  is best to place units of this type near centres of population where they can form an integral part of a comprehensive health service. The hon. Gentleman will remember that nearly a year ago he spoke in this Chamber on the need for expansion of health facilities in East Surrey. All being well, this health district will now benefit from the first phase of a brand new hospital, probably based on the Department's "nucleus" design, which it is also proposed to build on the Royal Earlswood site. This was one of the factors which the working party took into account. In addition, there is a need to provide adequately for staff, in terms of accommodation and of nearby educational, shopping and recreational facilities.
  I understand that the proposals fur siting the unit were designed to avoid ill effects on the Royal Earlswood Hospital. The unit would take up only five to eight of the 155 acres which constitute the present Royal Earlswood site, with the new general hospital taking up a maximum of another 10 acres at the other end of the site. It would have a separate access, in addition to the security arrangements which are one of its essential features.
  The regional health authority accepted its working party's recommendation as a basis for consultation. It has consulted very widely other health and social service authorities, the Community Health Council, residents' associations, the Friends of the Royal Earlswood Hospital and at least 10 other organisations with which meetings have been held to explain and discuss the proposals. Among the discussions which have been held, I understand that the chairman of the working party has considered with the Director of Social Services for Surrey the increased demands which may be made on his department, both in the unit and in helping to resettle patients who are discharged. I think the House will agree that this represents very comprehensive consultation into which the regional health authority has put an unusual amount of effort. I see no evidence that the timetable has in any way prevented or inhibited the expression of views.
  The hon. Gentleman said that there is a particular site in the same health district which many of those who opposed the present choice feel would be more

  1569
  suitable. I welcome indications that the local approach is not merely negative but has a constructive side, too. I think I should say that the site the hon. Gentleman has in mind was considered by the working party, which thought it less suitable than Royal Earlswood. Nevertheless, I am sure that the regional health authority will be very ready to look at it again if it carries the support of the local interests and is more acceptable to the local community, and if it commends itself to the area health authority.
  As I said earlier the matter still rests with the Surrey Area Health Authority and the South-West Thames Regional Health Authority. The area health authority meets today and will consider what recommendation to make to the regional health authority. In reaching its decision it will take fully into account the views expressed during consultations, including the anxieties, which I know are very real, of those who have children in the Royal Earlswood Hospital and those who feel that the unit would adversely affect the hospital's present work. I hope that the area health authority will consider the proposal which has been put forward for an alternative site. It will have to take into account possible local reaction to that site as well, and also
  1570
  the likely difficulty of finding any site which will not raise objections of one kind or another.
  The regional health authority will consider the area health authority's recommendation at its meeting next month. It will have a very difficult decision, as will my right hon. Friend should it be necessary for the matter to come to him. I assure the hon. Gentleman that it will not be taken lightly. But, wherever it is eventually decided to site the unit, at the Royal Earlswood or elsewhere, I hope that all concerned will bend their efforts to making it a success and not allow the legitimate concerns of our present debates to cloud its future.
  Finally, I know that the health authorities are deeply aware of the loyalty and devotion of the staff, and of the value of the voluntary effort and local good will which have given the Royal Earlswood Hospital such a good name over the years. I should like to recognise those contributions tonight, and to express the confident hope that whatever happens there will be no diminution of the staff and voluntary effort which is so vital to the continued excellence of the hospital.
  Question put and agreed to.
  Adjourned accordingly at thirteen minutes to Two o'clock.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Manchester.
The Lord Brocket The Lord Brocket—Sat first in Parliament after the death of his grandfather.

INDIAN MEDICAL SERVICES: OFFICERS' PENSIONS
Lord PLATT: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is a fact that an ex-medical officer of the Indian Medical Service receives a pension of only £300–£400 per annum after many years service if he stays in India, but would receive a pension of about £2,500 if he were to come to England; and if so what is the justification for this disparity.
Lord ORAM: My Lords, an ex-medical officer of the Indian Medical Service would not qualify for a higher pension merely by coming to England. It is true that in certain cases Her Majesty's Government pay pension increases to former officers of the Indian Medical Service, and other Indian Services, and that in those cases an original pension of £300 to £400 a year could qualify for enhancement to about £2,500 under British pensions increase legislation; but the increases are not related to, nor limited by, the place of residence of the pensioner.
Lord PLATT: My Lords, I thank the noble Lord for his reply to my Question. Have Her Majesty's Government no control over the pensions paid to former IMS officers remaining in India? If a retired officer living in this country visits India and his pension is immediately reduced, do Her Majesty's Government agree that this is very serious? It prevents experienced English medical officers
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living in this country from joining conferences in India and being of real help.
Lord ORAM: My Lords, I think that the noble Lord is under a misapprehension on this point. The pension is not lost if a person resident in this country goes abroad. The situation is that by a settlement in 1955 between the Governments of India and the United Kingdom, which included a financial settlement, the responsibilities of the respective Governments were then fixed. The noble Lord has kindly let me see the correspondence on which his Question is based. I am afraid that there is a misapprehension in one of the paragraphs of the correspondence, and I will willingly find a more suitable opportunity than Question Time to go more fully into the matter with the noble Lord.

RACE RELATIONS LEGISLATION
2.38 p.m.
Lord BALFOUR of INCHRYE: 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 list those countries which have legislation on race relations broadly similar in purpose to the Race Relations Act in Britain.
Lord WELLS-PESTELL: My Lords, I regret that this information is not readily available and could not be obtained except at disproportionate cost.
Lord BALFOUR of INCHRYE: My Lords, I find it difficult to thank the Minister for that not very comprehensive reply. Nevertheless, I do so. As Her Majesty's Government have rightly rejected and condemned racial discrimination wherever it occurs, particularly in South Africa, are they equally condemning racial discrimination in various Central African countries where it is practised, particularly against white people?
Lord WELLS-PESTELL: If I may say so with the greatest respect, my Lords, I think the noble Lord has departed very substantially from the Question.

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However, as he has pointed out, my right honourable friends the Prime Minister and the Home Secretary have recently affirmed the Government's determination to ensure equality of treatment for all members of our society. I think I can say that the Government are concerned that there should be racial justice and harmony, regardless of the side.
Lord PAGET of NORTHAMPTON: My Lords, could the noble Lord tell us whether Uganda has similar legislation to our own and whether in their experience it is more or less mischievous than it has proved to be here?
Lord WELLS-PESTELL: My Lords, so far as I know, the countries which have similar legislation are Australia, Canada, Bermuda, Belgium, France, Kenya, Norway, New Zealand and the United States of America, but it does not necessarily follow that it is on a par with our own legislation.
Lord DERWENT: My Lords, as the noble Lord started off by saying that he could not give an answer to the Question, why has he now given one?
Lord WELLS-PESTELL: My Lords, the Government have been asked whether they will list those countries which have legislation on racial relations that is broadly similar to our own. I have pointed out that the countries I have mentioned have legislation but that it is not necessarily on broadly similar lines to our own.
Lord PAGET of NORTHAMPTON: My Lords, if Kenya is included in the list which the noble Lord has given, is there any reason why some of the immigrants who have come here because of racial discrimination in Kenya should not be able to go home again?
Lord WELLS-PESTELL: My Lords, I hope that I have answered the Question the noble Lord put down. I do not think that I can deal with matters which are very wide of the Question.
Lord LLOYD: My Lords, with great respect to the noble Lord, I do not think that these matters are wide of the Question. I have some experience of
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Africa, and undoubtedly there is racial discrimination there of the worst type—
Several noble Lords: Question!
Lord LLOYD:—under President Amin. There is racial discrimination in Kenya, and the sooner we realise this and stop patting ourselves on the back and telling everybody else—
Several noble Lords: Question!
Lord LLOYD: Then may I ask the noble Lord whether he approves of Britain's admitting the nationals of countries which practise the most blatant racial discrimination on their own account?
The LORD PRIVY SEAL (Lord Shepherd): My Lords, with complete respect to the noble Lord, the question he has now put goes very wide of the Question on the Order Paper. I believe that, in the light of a report which will shortly come before your Lordships' House, we should seek to keep within the terms of the original Question. It may be that slight latitude can be allowed, but it cannot go quite so far as some noble Lords have tried to take it this afternoon.
Lord BALFOUR of INCHRYE: My Lords, with great respect to the noble Lord the Leader of the House, I do not think I went wide of my Question when I asked my supplementary. If the noble Lord will read it, he will see that it refers to racial discrimination, wherever practised, and I was asking whether, if racial discrimination is practised in other countries, Her Majesty's Government would act in the same way as they do within our own country; and that is contained within the Question.
Lord SHEPHERD: My Lords, if the noble Lord will look at Hansard tomorrow he will see that I referred to the questions; the noble Lord was not the only supplementary questioner. I think his supplemental question was to the Question on the Order Paper—slightly apart, but to it—but not the others.
Lord BALFOUR of INCHRYE: My Lords, I can only say that the weight of words will not bear the burden of my gratitude to the Minister for his replies.
Lord BYERS: My Lords, may I ask the noble Lord the Leader of the House whether it is not correct to say that what we are seeking to avoid is debate at Question Time, and that if we are going to deal with one country after another it is bound to become a debate, which we must avoid if we are to keep order in this House?
Lord SHEPHERD: That is so, my Lords, and there is another factor which the House has always taken into account. It is true that questions are put to Her Majesty's Government, but it is recognised that Ministers are speaking from a narrow brief based on the original Question on the Order Paper. Therefore, when supplementary questions go much wider, particularly as they did today, into the field of foreign and Commonwealth affairs, then not only the Minister, but I believe, the whole House is not well served. Certainly the point made by the noble Lord, Lord Byers, about the need to avoid debate at Question Time, is in my view of supreme importance.
Lord HALE: My Lords, I apologise for pursuing the matter, but to clear up what has been said, I recently visited Kenya as the guest of an Indian member of the population there, accepting his generous hospitality. The complaint of discrimination in Kenya is merely as between tribes, and however important that may be it is hardly a matter for this House. Also, I recently received a visit—
Several noble Lords: Question!
Lord HALE:— from a person who was employed in one of the South African countries at twice the salary paid to the local inhabitants.
Lord SHEPHERD: My Lords, if I may say so to my noble friend, his intervention clearly illustrates the point I was seeking to make earlier. This situation arises when there are muted provocative remarks made in the form of a question, when it is natural that there is a desire on the part of others who hold a different view to enter into the debate. I think this is a matter which we should always avoid. Question Time is for putting questions to the Government of the day, mainly to elucidate information.

EDINBURGH MERCHANT COMPANY ORDER CONFIRMATION BILL
Considered on Report.

EAST KILBRIDE DISTRICT COUNCIL ORDER CONFIRMATION BILL
2.46 p.m.
The Minister of State, Scottish Office (Lord Kirkhill): My Lords, I beg to move that the Bill be now considered on Report.
Moved, That the Bill be now considered on Report—(Lord Kirkhill).
Lord CAMPBELL of CROY: My Lords, before finally allowing this Bill to go we ought to ask the Government for an explanation—a brief explanation, as there is a lot of business before us today—because we had a debate on 2nd March on a similar Bill, the City of Aberdeen District Council Order Confirmation Bill on which the same subject arose. The noble Lord, Lord Kirkhill, agreed that an anomalous situation could arise on that Bill, and now we have another Bill of a similar nature. Moreover, in the debate on 2nd March, the noble Lord, Lord Hughes, at column 950, said that he believed he had persuaded the East Kilbride Council not to take this action until they saw what happened under the Government's proposals, and I presume that the noble Lord, Lord Hughes, was referring to the time when he was a Minister. In fact he was the predecessor of the noble Lord, Lord Kirkhill, and it was in that capacity that he had endeavoured to pursuade the East Kilbride District Council not to proceed with a Bill of this kind.
Like the Aberdeen Bill, this Bill deals with two unrelated subjects. The first is to give powers to local authorities to hold licences for the sale of liquor and to manage licensed premises. The second, which is somewhat improbably linked with this in the same Bill, is the subject of the seizure of stray dogs. I am addressing myself to the first subject, which is the subject of liquor licensing. There is a Scottish Bill before another place on the whole subject of liquor licensing. When we were debating this

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subject in March that Bill had not been published, but it had been announced in Her Majesty's gracious Speech.
The background to that situation was that the Clayson Committee had been established some three years ago to look into the whole question of the liquor licensing law in Scotland, in the same way that the Erroll Committee had been invited to look into the state of the law in England and Wales. That Clayson Committee, which incidentally I set up as Secretary of State for Scotland and which reported to me, w as to be legislated upon and its recommendations were to be considered by the Government.
That Bill has been introduced in another place and it is at the Committee stage there. It is subject to amendment; one major Amendment has already been made in Committee, namely—and some of your Lordships may welcome this—to enable public houses to be open on Sundays. That was a recommendation of the Clayson Committee, but it was not in the Government's Bill. The last Secretary of State for Scotland, Mr. William Ross, decided he would not adopt that recommendation; but that indicates that the recommendation of the Clayson Committee, and the Bill put before Parliament, may not come out predictably. Certainly the differences of opinion that there have been in another place have not followed Party lines.
My Lords, the point about these Order Confirmation Bills is that if individual Scottish local authorities bring them forward, there could be a waste of their ratepayers' money in the expenses involved in private legislation when they are attempting to carry out something which the Government have already stated they are going to carry out in relation to all local authorities in Scotland. That was enshrined in Recommendation 100 in the Clayson Report, and has been carried into the Bill before another place, which will, in due course, come to your Lordships' House. Therefore, unless there has been some change in the situation, or unless the Government have changed their assessment of what is likely to happen in the future, there should be no need for this Bill to be coming forward from East Kilbride District Council.
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In the case of the equivalent Aberdeen Bill there were objectors `o what was proposed. The main proposals in that case, as in the East Kilbride case, were that the district council should itself be able to apply for and hold a licence for selling intoxicating liquor, and should manage the premises where such liquor was sold, and the premises were stated in the Aberdeen Bill, and are stated again in this Bill. Because there were objectors in the Aberdeen case, Parliamentary Commissioners conducted an inquiry and reported, recommending an alteration. That alteration was adopted.
So I would ask the noble Lord the Minister, to whom I have given some notice, whether he can tell us whether there were objectors in the case of the East Kilbride Bill, and whether he can also give us an explanation of why it should be coming forward, and also his latest assessment of the situation concerning liquor licensing in Scotland, considering that at the moment there is going through Parliament a Bill which would give local authorities the powers which East Kilbride are seeking in this Bill. I ask him this particularly in view of the remark made by the previous Minister of State, the noble Lord, Lord Hughes, that he thought he had succeeded in persuading the East Kilbride District Council not to bring forward this private legislation.
2.53 p.m.
Lord KIRKHILL: My Lords, I agree that if we are to discuss this just in passing, we both should be brief and I shall attempt to be just that. The East Kilbride Council desire principally to provide refreshments, which include excisable liquor, at the Civic Theatre and at Olympia in East Kilbride. The Civic Theatre is in the course of construction and will be completed later this year. The Olympia is an existing building which has been in the ownership of the district council for a number of years. Likewise, the council wish to provide or arrange for the provision of excisable liquor at golf courses, bowling premises or ice rinks belonging to the district council.
I can assure the noble Lord, Lord Campbell of Croy, first, that there have been no objections to the promotion of this order. I am unable to confirm or otherwise whether or not the noble Lord,

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Lord Hughes, in his recent intervention in debate on 2nd March, was speaking in his capacity presently as the chairman of East Kilbride Development Corporation, or in his capacity previously as Minister of State, Scottish Office. But in whichever capacity the noble Lord sought to speak on that occasion, it is obvious that he has signally not been able to persuade East Kilbride Development Corporation to withdraw their order.
Lord CAMPBELL of CROY: My Lords, if I may interrupt, I think the noble Lord made a slip of the tongue. It is not the East Kilbride Development Corporation Order; it is the East Kilbride District Council Order. It is the local authority, not the new town.
Lord KIRKHILL: My Lords, I apologise for what was a slip of the tongue, and accept the correction in the spirit that it was given to me. It is undoubtedly true to say that as far as the Local Government (Scotland) Act 1973 is concerned, the repeal of Section 91(6) now seems to be proceeding in the other place, where presently the Bill is in Committee. But as noble Lords will realise, the state of Parliamentary play these days is such that I do not think any local authority can be absolutely certain that, after vigorous debate, legislation will emerge in quite the manner in which it was introduced in discussion.
I think I must clearly say that under the present law, in order to make it possible for a licence to be obtained for local authority premises, it is necessary to promote a provisional order exempting the premises from Section 91(6). There is precedent in the case of the Kings Theatre, Edinburgh, and the case to which the noble Lord, Lord Campbell of Croy, has just referred, the Aberdeen Provisional Order. The fact that my right honourable friend the Secretary of State for Scotland has initiated general legislation in the other place does not alter this position, and it follows, therefore, that there is no improper anticipation of general legislation in the promotion by East Kilbride of the order.
My Lords, I would conclude with this comment: in my opinion, increasingly those who are at play in their leisure hours, whether at the golf course, at the
162
bowling green or at the ice rink, very much want the opportunity of modest refreshment, and this provisional order seeks to achieve just that.
2.58 p.m.
Lord BALERNO: My Lords, may I support my noble friend. Lord Campbell of Croy in this matter. In Scotland, I have served on one of the committees for the reform of the licensing laws. Also, I happened to be a member of the Parliamentary Commission which gave the decision concerning the Kings Theatre in Edinburgh. All the time that I have had any connection with the reform of the licensing laws, it has been the unanimous feeling that the rules and regulations for licensing in Scotland, so far as it was humanly possible, should be uniform throughout the whole country. In the early part of this century we had a whole variety of licensing arrangements, and there was great confusion. There was great confusion to the tourist board among other things. The main aim of the Guest Committee and the Clayson Committee was to have uniformity in these matters. That is why I would be against allowing East Kilbride to do what they are trying to do just now.
The Kings Theatre, Edinburgh, which the noble Lord, Lord Kirkhill, mentioned, was a quite exceptional case. The general feeling is and always has been that the local authority cannot be judge in its own cause. It was with the greatest hesitation that we approached that in this one case. In the Parliamentary inquiry we turned down the application by Edinburgh to sell liquor at other places and at the Commonwealth Games sports places, but we excluded the Kings Theatre, Edinburgh, because that theatre had been given to the City of Edinburgh for use by a private donor to add to the amenities of Edinburgh. It had a licence when it was given, and it was owned by the City of Edinburgh. To have taken away the licence and introduced new arrangements would have been very inconvenient.
So your Lordships accepted our Report, with this one particular exception, which seemed to be only right in common justice. I would beseech your Lordships not to agree to an exception in the case of East Kilbride at the present moment, especially when a Bill is going through

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the other place. We can have another look at this order after that Bill has been through the House and decisions have been made.
Lord SLATER: My Lords, I apologise to the House; because of this defect from which I am suffering, I did not see the noble Lord standing on his feet. My question arises because of the statement that was made by the noble Lord, Lord Campbell of Croy, and what was said by my noble friend from the Government Front Bench in regard to this particular order. It is a matter of Standing Orders. I should like to know from the Leader of the House whether it is in order for us to debate something which is at the moment the property of another place, going through Committee down there. Can it be debated in this Chamber at the same time as it is being discussed by the other place?
Lord CAMPBELL of CROY: My Lords, before the noble Lord sits down, perhaps I could help him, as the Leader of the House is not here. Before this question came up on 2nd March in the case of the Aberdeen Bill, I went into the whole question with the experts, as to whether one could make reference to the other place and proceedings in Committee in the other place. I have again taken the trouble to do that, and I have been told that we are certainly in order and that this is the occasion and the opportunity when we can discuss these matters.
Can I take this opportunity of saying that in the case of Aberdeen there was a special point about His Majesty's Theatre. The noble Lord, Lord Kirkhill, agreed that that was a special case and I also agreed with that; that is why it is somewhat surprising that this case has now come up. The noble Lord, Lord Kirkhill, was Lord Provost of Aberdeen for four years, and, if I may say so, distinguished himself in that role; so he was well aware of the situation in Aberdeen. The East Kilbride Bill, which is very similar, does not have the same particular reasons for coming before us.
Lord KIRKHILL: My Lords, perhaps I might just say that, of course, a Bill emanating from Aberdeen would quite
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obviously always have an excellent reason for its promotion. The fact remains, as I attempted to emphasise, that this is a perfectly competent procedure for the local authority concerned. It is fair to say that the Bill is not yet through the other place. If I might just refer to the point made by my noble friend, speaking for myself, I was following our corporate precedent of 2nd March.
The Earl of SELKIRK: My Lords, may I just ask the noble Lord this question? If the general Statute is passed, does this particular order fall? Or, supposing they are in conflict, which of them takes precedence?
Lord KIRKHILL: My Lords, my understanding is that it would he subsumed by the repeal of Section 91(6) of the Local Government (Scotland) Act 1973, assuming that it passed through all stages in the other place.
On Question, Motion agreed to.

STRATHCLYDE UNIVERSITY AND MACKINTOSH SCHOOL OF ARCHITECTURE ORDER CONFIRMATION BILL
Considered on report.
LOTTERIES AND AMUSEMENTS BILL [H.L.]
Report received.

BRITISH TRANSPORT DOCKS (FELIXSTOWE) BILL
3.4 p.m.
Lord WYNNE-JONES: My Lords, I beg to present this Bill for Second Reading. The British Transport Docks (Felixstowe) Bill was introduced into the other place, I think, in January and passed in May. So it comes before your Lordships' House, and I have been asked to present it to your Lordships. Your Lordships may be a little surprised that I am presenting it. Indeed I was surprised when I was asked whether I would be prepared to present it. The only reason I could see for choosing me was that I had some time ago asked your Lordships to

165
consider a Bill called the Endangered Species Bill for the preservation of endangered species. I suppose that an agreement reached between two parties may be regarded as an endangered species if it is subjected to certain types of action. So I come before you as an innocent in these matters who hopes to persuade your Lordships that this is a Bill which is worth considering, as indeed obviously it must be, having passed through the other place.
I must admit to your Lordships that I have not had the advantage of a campaign manager. I have not been able to entertain any of you in order to present the points of view. So that I am somewhat handicapped. But I must say that my wife gave me a very good lunch, and my young grandson from America was over in order to enjoy this lunch, so I am feeling in a happy mood in presenting this Bill to your Lordships' House.
The Bill arose because in the summer of last year the company, the Felixstowe Dock and Railway Company, found itself in some difficulty. This company had done an excellent job. The company was taken over about 15 years ago, and under the energetic leadership of the chairman of the company it proceeded to take a dock which, I believe, was not quite derelict but was certainly a very small and undeveloped dock, and build it up into what is now undoubtedly a first-class dock. No one who knows anything about it or has read anything about it would for a moment contest that the Felixstowe Dock and Railway Company have done an extremely good job. During the whole of that period they made a good profit.
But they were in some difficulty. So far as I can understand, they had borrowed £4 million from the Government, they had debentures of, I believe, about £3 million and they had a very substantial overdraft, running into millions, at the bank. They wanted to expand further, quite naturally, and the atmosphere was not good for them to carry out this expansion. Therefore, they began to make inquiries in order to find out whether they could get some other body with the competence to do the job to take over the company. The British Transport Docks Board was approached, and they, after discussions which I think took place over a period of two or three months, came to an agreement. The agreement
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was that a certain monetary offer was to be made for the shares by the British Transport Docks Board, and that there would be, furthermore, a definite undertaking on the part of the British Transport Docks Board to keep the company as a separate entity within the British Transport Docks Board. All this was agreed.
The British Transport Docks Board was set up in 1962 by the Transport Act of that year. This Transport Act, which I have with me here, was a Transport Act promoted by the Conservative Government of the day, and it created the British Transport Docks Board. I understand—and indeed in reading the Act it is fairly clear—that there were a certain number of docks which were to he transferred to the British Transport Docks Board—I think 19; perhaps I am not absolutely accurate in the number but it was of that order. These were to be run by the British Transport Docks Board. There were also a number of docks which should he attached to British Railways, and indeed they were, and these are the ones which are concerned directly with traffic between the railway and ferries, and there are a number of them in the country. There were certain other docks which are inland docks, not seaports at all, and these were transferred to the British Waterways Board.
There was not just one uniform pattern but there were three separate ways in which the problem was dealt with, and dealt with, I may remind you, by a Conservative Government. The Act was passed by a Conservative Government. Therefore, the British Transport Docks Board is the creature of the Conservative Government of that day. Because of this, when they wished to purchase the Felixstowe Dock they could not do it by the ordinary simple commercial method. They had to promote a Private Bill, and it is that Private Bill which we are considering now. It was agreed by the Felixstowe Board that they would support the Bill, and that they would give the British Transport Docks Board every help in seeing the Bill through Parliament. So far as I can understand, so long as they still existed they have stuck to that promise of theirs and have given all their help.
The Bill, I believe, was actually presented to Parliament in January, and the Bill,

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when it was presented to Parliament, looked as though it would go through all right. But just about this time, long after the agreement had been reached, the European Ferries came along and made a separate offer to the directors of the Felixstowe Board. I suppose that if one were dealing with ordinary property one would use a word like "gazumping", but this is not quite appropriate in this case. They were told by the Board that the Board could not possibly accept their offer because they had already accepted another offer, and that the other offer, furthermore, had been put to the shareholders at a meeting of shareholders, which I think was held in London, and that this meeting had accepted the offer from the British Transport Docks Board.
The European Ferries then decided to appeal to the shareholders directly, although the directors of the Felixstowe Board had turned them down. They did this, and I think some time late in February they got a majority of the shareholders to accept the new offer. But of course this in no way upset the agreement which had originally been reached and on the strength of which the Bill was being presented to Parliament.
Since that time a mass of propaganda has been put out. I am sure that your Lordships have been subjected to a great deal of it, and have read a great deal of what is going on. But when one starts looking at this carefully one finds that this propaganda, as with a great deal of propaganda, is based upon partial truths, upon half truths, upon fantasies, upon lies, and upon damn lies. There was, for example, a big advertisement only yesterday in the Press—a whole page, which is not an inexpensive operation. This stated that the Bill, if enacted, will
"nationalise Britain's most successful port which was built up by free enterprise."
In the first place this is not a nationalisation Act; it is a straight commercial deal between a Board and a company. It is a successful port; whether it is the most successful port is arguable. It was built up by free enterprise; no one could question that. Then point No. 2 said that it would
"create a virtual State monopoly of East Coast ports."
That just is not true at all, because one
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has the ports at Teesside, one has the ports at Tyneside, and these are not unimportant ports, so that it does not create a monopoly. Then it says that it would
"reduce competition and drive business to Continental ports."
That is what I call fantasy. There is not a whit of evidence for that at all, and it is a highly improbable statement. Then one has statement No. 4 that it would
"act against the wishes of Felixstowe's workforce, shareholders, directors and port users."
If one looks at this one finds that the directors of the Felixstowe Board were sacked, and the present directors are, European Ferries, so it is a little odd to say that the directors of Felixstowe are in support of this. Of course they are, because they are the stooges of European Ferries. They were put in by them.
One sees then the shareholders. Well, the shareholders first of all accepted one offer. Then they were given another offer—which, incidentally, was not a monetary offer but was an offer of shares in European Ferries, which have since fallen in value so the offer is not worth as much as when the shareholders accepted it and it is very doubtful what they would do now. So far as the workforce is concerned, I do not know where this information comes from. I can only say that I have taken the trouble to get in touch with the workforce. I have been on to the union concerned, which is the Transport and General Workers' Union. I have been on to them centrally. I have been on to them at Felixstowe itself. Furthermore, a friend of mine, who has a contact through a councillor at Felixstowe, has made informal inquiries, and there is no doubt at all, whatever anyone chooses to say, that the Felixstowe workforce declared themselves neutral last December, and have continued to declare themselves neutral up until this morning, because the information that got was obtained in the docks this morning and I heard it at 12 o'clock today. Therefore, if someone comes along and says he has evidence that the workforce is opposed to this Bill, I can only say that the evidence that he has is not supported by anyone concerned with the union at Felixstowe.
If there is such a person I should like that person to come forward. I

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have never come across such a person. One has to realise, therefore, that all this propaganda represents the old story of suppressio Teri suggestio falsi. All the way through we are being pushed and it is being suggested to us that things have happened, may happen and will happen for which there is no clear evidence at all.
One might ask why a company like the Felixstowe Dock and Harbour Board, to which the chairman was passionately devoted—andto private enterprise—should have gone to the British Transport Docks Board and asked them to take it over. When one looks at the matter carefully one sees that there is a reason for this. In the first place, as I said, they were short of money in the sense that they could not carry out the developments which in their opinion were essential without having access to more money; they had already borrowed so much that they could not get more. But the second point which it is very important to realise is that this was no amateur board which was prepared simply to make money without worrying about it. They were devoted to the Felixstowe Dock and they wanted to be sure that it would continue to be run effectively. They therefore turned to the body which in their opinion had the expertise, knowledge, skill and background of success to make it worth while.
When one reads all the propaganda one would think that the British Transport Docks Board had none of those qualities; one would think they were an incompetent group of people who did not know how to run docks and who had no money. In fact, it was suggested in the advertisement from which I quoted that it would be a charge on national funds. That is not true because the British Transport Docks Board have the money to do the whole development themselves. We really are living in a world of fantasy if we pay attention to that sort of thing.
I looked a little at what the British Transport Docks Board do—and remember that they own docks all over the country and of a variety of size. They own Southampton Dock but they also own a mass of small docks which are put together as the small docks section of their work. They cope with all these and, when one looks at their figures, does one find that they are incompetent and make a loss,
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or does one find that they have been running successfully?
Having looked at the figures, I find, so far as the tonnage of the docks in this country is concerned—a fairly good measure of how they are operating—that the British Transport Docks Board have approximately 25 per cent. of the tonnage of the country. The Port of London Authority, which is a big authority but which is quite different from the British Transport Docks Board, has 15 per cent.; local authority docks—and there are docks, such as the Bristol Dock, which are run by local authorities—have about 15 per cent.; public trusts (about 9 docks come under public trusts) take about 30 per cent.; and the private companies, of which Felixstowe is one, and a successful one, take about 12 per cent. of the tonnage of the country.
If one looks at growth over the last few years, one finds that so far as the growth of traffic is concerned in terms of the unit load, from 1971 to 1974 Felixstowe expanded by 93 per cent., which is a story of success; they did extremely well and they are to be congratulated. The British Transport Docks Board expanded by 105 per cent. over the same period. Is that failure? If one is success, is the other failure? The arguments that have been used are too silly for anything because they ignore the facts, and I have tried to get at the facts. I take another example to show how the British Transport Docks Board have in the last few years made a substantial improvement in their position. From 1970 to 1975 the percentage of port traffic carried by British Transport docks increased from 20 per cent. to nearly 25 per cent. of the total traffic of the country. Is that a picture of failure? That is not surprising, when one begins to look at it, because it is a well organised body, as I found out; it runs as a central financial body but the major docks have their own boards of directors, their own control and run their own job. It is one of the guarantees in the Bill that Felixstowe will be treated in exactly that way and will be allowed to go ahead developing under its own directorate.
When one examines a little further the operation of the British Transport Docks Board one finds that they are not just a body who have taken financial control of

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a number of docks but that they also have the only research facility in the country, apart from the central facility at Wallingford. Do European Ferries have a research facility? Where would they do their research? And if noble Lords ask what sort of research I am referring to, my answer is that one cannot today run a dock without having the facility for research examination of the hydraulic and hydrodynamic side in order to see what is happening. The British Transport Docks Board are spending about £100,000 a year, directly on their own, on this facility, but they also hire it out to anybody else who wants it and, furthermore, they spend about £250,000 on both research and development.
The reason is now clear why the Felixstowe Board turned to the British Transport Docks Board. They turned to the best people to run it and, because they were the best people to run it—although they did not themselves welcome public enterprise—they felt that it was better in the interest of their dock to have it absorbed into the British Transport Docks Board. We should be mad if we flew in the face of the experience of such people as the directors of the Felixstowe Dock and Railway Company. They knew what they were about. They handed it over to the British Transport Docks Board because they reckoned that they got a good deal and a proper guarantee for the future. I do not want to go into all sorts of legal arguments. Your Lordships know that I am completely innocent of any legal guile and I would not for a moment attempt to argue with anyone on legal matters, so I have kept to what I am competent to deal with—that is, the straight reason in terms of technology as to why this should have been done. I beg to move.
Moved, that the Bill be now read 2a—(Lord Wynne-Jones.)
3.31 p.m.
The Earl of GOWRIE: My Lords, too often, in my view, when we debate economic affairs here does the discussion run along rather abstract lines, remote from the nuts and bolts of daily life and the way in which we in this country earn our living. I believe that today will be an important day in the history of this House
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because we are being given a rare chance to debate a practical, immediate and living instance of the kind of dangers to which; British industry and enterprise are exposed.
What is happening in Felixstowe is a test case of what is happening to our economy; or, rather, of what has happened to bring us to our present troubles. Because this is a Private Bill, in this House alone we are to be given an immediate and practical opportunity to do something about Felixstowe and, by inference, therefore, to do something about our national situation. This makes today's initiating debate one of the two or three most important of the last decade. I believe that the list of speakers bears witness to that importance. We have more than a theoretical or temporary responsibility to get the story of this Bill clear and to get it right and to make sure that, for the Felixstowe Docks themselves if not for the particular Bill, there may be a chance of a happy ending.
The story is a fascinating one. It is straight out of one of the novels of C. P. Snow—or perhaps I should say here the noble Lord, Lord Snow—with a dash of The Brothers added. So far as I know, it has no sex in it, but it has pretty well everything else—power struggles, takeover bids, court actions, debates in Parliament on stage and procedural battles off stage. It has a cast of dons, dockers and Ministers, as well as of entrepreneurs on both sides of the nationalised/free enterprise industrial divide. It is an especially exciting story because we do not yet know the outcome. Indeed, as I said, your Lordships are part of the story and may well determine its ending.
Like all exciting stories, it has moral urgency as well. The noble Lord, Lord Wynne-Jones, and I disagree about the moral or, rather, we draw different conclusions from it. In spite of the clarity with which the noble Lord presented the case of the Bill's proponents, I hope your Lordships will forgive me if I again go over the events underlying the Bill in order to show that differences of emphasis are in fact differences of aim. To summarise the plot so far, as the noble Lord, Lord Wynne-Jones, told us, the story begins with a remarkable, perhaps a great, man, Mr. Gordon Parker, the former chairman of the Felixstowe Dock and Railway Company. Shortly after the

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war, Mr. Parker, who was by profession an exporter of East Anglian grain, became impatient with the service he was getting from the docklands in his region. So he bought a small, silted-up dock which was in decline at Felixstowe. In classic entrepreneurial fashion, he chanced his arm and risked his neck and, to cut short a long story of ingenuity, farsightedness, good public relations and hard work, he turned this virtually defunct single dock into what is arguably the most competitive and successful port in Great Britain.
I shall not slow up the narrative with figures except to say that within five years the Felixstowe Dock and Railway Company (which I shall hereafter refer to as "Felixstowe") was handling nearly half a million tons of cargo a year and had become a public company. Ten years or so later—that is to say, today—the port handles nearly 5 million tons and the volume of shipping traffic has more than doubled. Because of the efficiency of Felixstowe and, above all, because of its excellent and exceptional industrial relations, manufacturing firms sited only a few miles from the Liverpool, the London or the Southampton Docks, have found it worth while to incur the extra haulage costs involved in taking their export wares to Felixstowe.
I need hardly emphasise the effect that this has had on employment in East Anglia and on the public and private sectors of industry in the hinterland of so successful and fast growing an operation. One of those sectors—and I do not quite know whether to call it public or private—happens to be an estate belonging to Trinity College, Cambridge. Trinity qualifies for status as a charity but the college is surely one of our greatest educational institutions—certainly, in the scientific field, our very greatest. The growth of Felixstowe has helped it considerably. I understand that 16 per cent. of its entire revenue derives from its interest in the area. But even a poor and envious Balliol man like myself can appreciate that richer colleges are required to make disposition for poorer ones. Thus the considerable interest which Trinity has in the continued growth and prosperity of Felixstowe is shared by Cambridge University as a whole. I am delighted to see from the list that my noble friend Lord Butler of Saffron
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Walden has joined our debate this afternoon.
One does not need to be a very sophisticated economist to recognise that growth brings problems as well as triumphs to a public company. Likewise, planning blight—if I may use that phrase as being more neutral than the contentious phrase "threat of nationalisation"—damns the flow of investment cash on which an orderly expansion depends. When the last Wilson Government took office, the existing economic crisis (for which I do not blame them) as well as the political commitment to the nationalising or public ownership of docks (for which I do blame them) created cash flow problems for Felixstowe. In this way, it was little different from many other successful companies in this country. Felixstowe's record, however, and the confidence which the company's port user association continued to extend to it, ensured that there was no real crisis. But cherished plans for expansion were, as the noble Lord, Lord Wynne-Jones, has told us, certainly at risk, with all that that involved for the local workforce and community.
Accordingly, when the British Transport Docks Board, the Promoters of the present Bill, sought to acquire Felixstowe, Mr. Gordon Parker agreed. It can be shown that he did not exactly welcome such interest from his biggest single competitor but he certainly agreed that he and his Board of Directors would recommend a sale. I should be quite happy to concede to the noble Lord, Lord Wynne-Jones, though I believe that my noble friend Lord Colville of Culross, who knows much more than I about company law, is less happy, that, had the proposed transaction been conducted under normal City take-over panel or company rules, Felixstowe might very well now be in public ownership. Fortunately or unfortunately, depending on one's point of view, the British Transport Docks Board is constituted under the Transport Acts of 1962 and 1968. This means that it has powers only to run its existing 19 ports. To acquire a further port, it needs, as a public body, additional powers conferred upon it. Because a Private Bill is a Bill of limited application, to avoid the recently familiar problems of hybridity, the British Transport Docks Board needs a Private Bill to complete the deal.

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Here I should perhaps explain to those of your Lordships who are as woefully unfamiliar with Parliamentary procedure as I can be on occasion, that a Private Bill is not the same thing as a Private Member's Bill. It is the vehicle by which an outside interest or individual propels his interest through Parliament. In short, the matter cannot be pursued in Parliament at the behest of Government or individual Member alone. We can see from that, therefore, that the Government could not do it, though we shall be left in no doubt when the noble Baroness, Lady Birk, comes to speak, that the Government are behind the Bill. For myself, I detest the way in which a public and political endeavour such as nationalisation attempts to pass into law by the private road. However, I do not blame the Promoters of the Bill for this. They, unlike the Government, had no alternative.
In the ordinary way, therefore, we should now be debating a Private Bill straightforwardly designed to transfer ownership of Felixstowe to British Transport Docks Board. We on this side of the House would no doubt have been saddened by such a Bill, but in the face of cash shortage we might have had to acquiesce in one. I take the point which the noble Lord made when he said that the British Transport Docks Board, an admirable body in itself, was set up by a Conservative Government. It was set up exactly to deal with hard cases, sore cases, cases quite unlike Felixstowe. As we have heard from the noble Lord, Felixstowe is no ordinary port. It is not in the relative and sad and commonplace decline of most British ports, and when the news of the British Transport Docks Board's deal with the company leaked out at, I believe, a Labour Party conference, the chief user of the port, which was European Ferries with another remarkable and dedicated manager Mr. Keith Wickenden as its chairman, made a better offer for the shares of the company. This was to the great annoyance of BTDB who felt that they had already dealt and were halted only by what they hoped would be a Parliamentary formality over the Bill. To their annoyance the offer was overwhelmingly accepted by the board and shareholders of the Felixstowe Dock and Railway Company. Thus European Ferries now owns Felixstowe,
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or in formal terms it owns 97 per cent. of the shares.
The Promoters of the Bill feel that the Bill should go forward—that is to say, go into law—fundamentally on two grounds. The first is the ground of principle, and this is where the Government and the Promoters of the Bill profess to be as one, though I must say that for my part I find it hard to believe——
Lord GEORGE-BROWN: My Lords, I am sorry to interrupt the noble Earl and I am to intervene in this debate myself later—very much later, I gather. The noble Earl has told us about the reactions of the previous board and the present board. Is he informed that the labour force, the dockers themselves—members of the Transport and General Workers' Union—are 80 per cent. against this Bill proceeding?
The Earl of GOWRIE: My Lords, the noble Lord is pinching my peroration from me. We shall be coming to that point later. I was saying that the Government accept the principle that the present and future wellbeing of Felixstowe would be best served by transferring it from European Ferries, the new owners, to the British Transport Docks Board.
The second argument is over an event, over what actually happened; namely, that the deal between Felixstowe and the Docks Board was, morally speaking, closed. I shall deal with the second issue first because it seems to me to be so patently absurd that I can get it over with quickly. The short answer surely is that you cannot have things both ways. You cannot, as the Promoters of the Bill claim, maintain that you are proceeding along ordinary commercial lines, along the lines of a "freely-negotiated commercial agreement", to quote the words used by the Minister in another place, and then turn round and complain that the laws which bind you as a public body enable an equally legitimate commercial interest to make an equally legitimate counter-bid. If you are claiming this, it is simply your bad luck if the shareholders accept the higher offer.
This is not the first time, nor presumably will it be the last, that a takeover agreed by the Board of the respective concerns leads to a counter-bid which proves more

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successful. Having then made claims for your competitive and commercial character, you are not in my view in the best moral position to run to Nanny in the shape of Parliament to protect you from your failure. At Second Reading in another place the Minister for Transport said—and I am allowed to quote him—that,
"European Ferries was perfectly entitled to make the counter-bid that it has made "
even while he regretted the setback to the original merger agreement because—and again I am quoting his words—
"this merger would fit in very well with our general plans for reorganisation of the ports industry."—[Official Report, Commons, 24/3/76; col. 508.]
My Lords, indeed it would. But would it fit in so well with the continued prosperity of Felixstowe itself, a prosperity underwritten by European Ferries as owners, by the workforce and the local community, and by the interest in such prosperity shared by the nation as a whole at a time of national economic crisis and widespread demands to cut back on public spending?
We therefore, in my contention, come back to the central issue: can a private company, with a proven interest in the prosperity and expansion of a port—which was itself created by just such an interest on the part of a user—run the port at least as well as a public body? And I mean a public body which, for all its brave talk about competition, is effectively seeking to acquire its major competitor; and which for all its brave talk about profitability, is backed by public money and artificially low rates of interest. Even with this money it still cannot compare in profit record with the new owners of the port. I said earlier, "run the port at least as well", because it seems to me that the onus is on the British Transport Docks Board to show that they, and not the new owners of the port, are the better qualified. The onus is on them to submit their record of dock management as against the record of European Ferries; as against the known wishes of the Port Users' Association, who themselves, after all, are competitors of European Ferries; as against the wishes of a great charitable interest in the form of Trinity College; and as against what is known to be the wishes of the dockers themselves. The noble Lord, Lord
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Wynne-Jones, drew doubt on this, though obviously his noble friend the noble Lord, Lord George-Brown, does not agree with him. But this seems to me to be one of the reasons why this Bill should go to a Select Committee so that we can thrash out what are the wishes of the dockers themselves in this issue. I have no doubt myself as to what they are.
It is, as I said, because I believe that the onus is on the Docks Board to do this, that I also think it right that we in this House should refer the Bill to a Select Committee. It will not have escaped the attention of the House that under Private Bill procedure to refuse to give the Bill a Second Reading would in effect kill it dead—and I must say that that is a tempting proposition. I have no hesitation in saying that this is what many people in Felixstowe would like and this is what the present company would like. But we believe on balance that the case for retention of this thriving concern in private hands is so overwhelming that it must be heard. It must not be obscured by the kind of Party political brouhaha which our refusal to give a Bill—passed by the House of Commons—a Second Reading would surely raise. That, in my view, would be playing into the Government's hands on this issue.
For let us make no mistake—this is only nominally a Private Bill. It is backdoor nationalisation with a vengeance. It is no more and no less than a wily attempt to take Felixstowe out of the private sector and force it into the public sector against the known wishes of the management, against the known wishes of the shareholders, against the known wishes of the rival port users, against the known wishes of the local community, and, above all, against the known wishes of the dockers themselves. This attempt is wily because the Government have not the guts to undertake an out and out unhybrid nationalisation of British docklands. They know only too well the odium that would bring down upon their heads. The Government hope that this measure will pass relatively unnoticed; a little local difficulty as it were, unconnected with the wider national interest.
It is up to your Lordships to make enough protest about the measure and to scrutinise it with sufficient care to ensure that the issue will not lie down and go to

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sleep. To substitute a row about the Bill for a row about the political balance of the two Houses—a balance which is not the fault of your Lordships' House—would be to send a smokescreen over as crucial an issue as we have had to deal with in a decade.
I want to close with a brief word about the instruction which I have appended to the Bill, assuming that it is granted a Second Reading and proceeds to Select Committee. In case your Lordships do not happen to have Standing Orders handy, I shall, with your leave, read out the Instruction. It says:
"In the event of the Bill being read a Second Time "—
I am to move
"That it be an instruction to the Committee to whom it is committed that they shall satisfy themselves that the passing of the Bill would not lead to an undesirable reduction in the competitive position of the port of Felixstowe which would be contrary to the public interest."
We on this side of the House simply do not believe that the British Transport Docks Board, by acquiring its major and most successful competitor, would be in a position to continue to reinforce the kind of competition which has driven traffic from other British Transport Docks Board ports to Felixstowe itself. This, in a nutshell, is what has happened, and what has made Felixstowe a success story. Nor do I believe that the British Transport Docks Board could do other than develop Felixstowe within the strategy for its other ports. That might be good for the other ports, but in no way could it be said to be in the best interests of Felixstowe.
When I visited the port only yesterday, the drive, the energy and the activity was positively un-English; or rather, it was like a glimpse into our great commercial past and a signal of hope for our commercial future. A senior shop steward, emphasing the indifference of most of his men to the political implications of the Felixstowe affair, said that all were aware that 25 new men were taken on last week alone, and "Who can beat that?"were his words. We in Parliament, of course, must also attend to the more than local, to the wider issues of principle and practice raised; and if the Committee feel that their remit and my instruction, if your Lordships adopt it, is too narrowly confined to Felixstowe itself, then I want
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to make it perfectly clear that we shall return to the broad issues on Third Reading.
The record of Felixstowe and the record of European Ferries show that where there is verve, imagination and tenacity, where, above all, there is success, British enterprise and British industrial relations can be as good as any in the Western World. At a time when we are ourselves in the virtually outright ownership of our creditors, this kind of example is too important to neglect. In the words of our best writer, if we wish to be "the lords and owners of our faces "once again, this is the kind of example we must follow. I respectfully suggest that our job in this House is to make a start.
3.52 p.m.
Baroness SEEAR: My Lords, if one thing is plain about this situation it is that, while some of the facts are agreed, many of them are very much in dispute. The facts that are agreed between both sides of the House include the undoubted events which took place last November, when it was agreed by the existing board of directors at Felixstowe that they should accept transfer to the British Transport Docks Board. There is no question that that took place. There is also no question that subsequently, when European Ferries came forward, the opportunity to acquire the European Ferries shares in anticipation that European Ferries, instead of the British Transport Docks Board, would in fact take over Felixstowe, was accepted by the great majority of the shareholders. It is also a fact that, while this Private Bill was going through the House of Commons, an Amendment was included which, it is contested, was a material Amendment. That matter is, I understand, now before the courts, and the outcome before the courts must have some effect upon the ultimate outcome of this whole issue.
The matters which are in dispute I shall come to later. Given that the facts which I have stated are beyond dispute, it might well be argued—and I am sure it will be argued in your Lordships' House —that an agreement, once entered into, between Felixstowe and the British Transport Docks Board, should be honoured; that this was an agreement, and an agreement should go forward;

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and that it was perhaps unfortunate that European Ferries did not come forward first but they did not, and this undertaking entered into with the British Transport Docks Board having taken place it should he honoured. But, my Lords, surely it is not as simple as that. It is not just a question that, the agreement having been entered into, there should under no circumstances be any going back on it. In the first place, this transfer requires a Private Bill. This presumably means that there are other interests to be considered besides the immediate interests of Felixstowe and the British Transport Docks Board. It means that Parliament has the opportunity to look at what is going forward, and to express a view. There would be no point in having this procedure if the whole matter was open and shut once the Felixstowe company had agreed to go forward with the British Transport Docks Board.
Moreover, the British Transport Docks Board, if other evidence comes forward, is not required to press its claim legalistically, even if legalistically it were entirely entitled so to do. It is not a case between two parties to a business transaction where one party is going suffer great hardship if the initial under taking is changed for good reason which can be shown. I would argue that what this all turns on is whether or not it can be shown to be in the public interest that Felixstowe should go to the British Transport Docks Board, or whether it should go in the direction of being taken over by European Ferries. There are other considerations, and in our view those considerations should be paramount.
It is here, of course, that we come into the area of conflict of opinion and, indeed, conflict of evidence. Some of us who, like the noble Lord, Lord Wynne-Jones, have had the opportunity to look into the matter (though not, no doubt, certainly not in my case, with the same degree of concentration as that which the noble Lord has given to it) have come up with an opinion very different from the opinion given to us by the noble Lord, Lord Wynne-Jones, based on facts, no doubt selected facts. All facts are selected facts. The facts that the noble Lord, Lord Wynne-Jones, was given were selec-ted facts, and not the whole truth and nothing but the truth. But certainly the facts which were given to us present a
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very different picture from that which was given to us by the noble Lord, Lord Wynne-Jones.
Some of us — and this is well known, of course — were approached by the Felixstowe company and were, I think, not seduced by the tasty niblets with which they presented us last week, when they gave us their side of the story. What certainly came out from the account given by the Felixstowe company was that the shareholders undoubtedly were in favour of the European Ferries' offer; that the dock-users — and this, surely, is of very great importance — were in favour of the European Ferries' approach; and that (and this, of course, is a matter which is in direct conflict with the evidence presented to us by the noble Lord, Lord Wynne-Jones), while the labour force had initially said that it would work under either of the new prospective owners, two shop stewards, both members of the Transport and General Workers' Union, spoke last week very strongly indeed in favour of European Ferries and maintained that it was highly in the interests of Felixstowe and of the people who work in it, that the docks should not go to the British Transport Docks Board but should go to European Ferries. This is in direct conflict with what we have been told by the noble Lord, Lord Wynne-Jones. I have only the evidence which was presented to us; he has the evidence which was presented to him. I am not suggesting that he is trying to mislead the House, and I am sure he is not going to suggest that I am trying to mislead the House. All I can say is that this evidence is in conflict.
Lord WYNNE-JONES: My Lords, I thank the noble Baroness for allowing me to intervene. I wish to say only this. Of course I would not say that she is trying to mislead the House, but between 11 and 12 o'clock this morning I was informed by Mr. Partridge, who is the Dock Officer at Felixstowe of the Transport and General Workers' Union, that there was no question but that the dockers still stuck to their view that they should be neutral in the matter.
Baroness SEEAR: My Lords, I can only say that I was informed by two working shop stewards in the docks that they were in favour of European Ferries. The only

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thing that this proves is that we do not know accurately what the position of the labour force is — and it is a matter of very considerable importance that we should know once we agree, as your Lordships will agree, that it is perfectly proper and right that this matter should be reopened. I think there is no question about the dock users; there is no question about the shareholders; but there is, it seems, some controversy as to the attitude of the labour force. I think it is of some interest in passing that one of the matters which had upset those shop stewards whom we saw was that they had had no prior information about the possibility of Felixstowe going to the British Transport Docks Board, whereas the European Ferries said wisely that they were not prepared to consider going ahead with any take-over unless they understood that the labour force was behind it.
Again this may be false information, but this is what we were told and what was confirmed by the shop stewards. It is, I think, rather extraordinary, in the light of all that we have heard and said in connection not least with the Employment Protection Bill, that the possibility of the transfer to the British Transport Docks Board could have gone forward with such ignorance on the part of the labour force who, they say—and the noble Lord, Lord Wynne-Jones,mentioned this—first learned about it through a leak at the Labour Party Conference. This is a matter of controversy but it is a matter of very great importance which needs to be explored more fully before a Private Bill of this kind should go forward.
Then, on the side of Felixstowe, it is common agreement between us that Felixstowe has been a highly successful dock. Its growth rate is very high indeed. The noble Lord, Lord Wynne-Jones, said that the growth rate of the competing docks under the British Transport Docks Board was every bit as good and even, in percentage terms, better. This is not the information I have. The information I have is that the growth rate of Felixstowe is considerably more favourable than the growth rate at Humber and Southampton which come under the British Transport Docks Board. This can only be a matter of fact which can be sorted out, but the evidence so far is conflicting and it needs to be looked at
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again. The success of Felixstowe whether it compares favourably or otherwise with the British Transport Docks Board ports is beyond question.
One element of that success has been its great skill and speed—and speed is very important—in introducing modern technology. It may or may not be the case, as the noble Lord, Lord Wynne-Jones, pointed out, that Felixstowe has research establishments of its own. In fact, it is certain it has not. But as the noble Lord, Lord Wynne-Jones, knows very well, every unit does not need to have its own research establishment; a good management is capable of taking advantage of other people's research and of buying research facilities elsewhere. Whether it had research facilities available to it or not, it was quick to take advantage of new technical developments and the introduction of containerisation, that most difficult of changes to bring about in all other docks, went through at Felixstowe with a minimum of trouble. This is surely a great credit and speaks highly not only of the efficiency and forward-looking attitude of the Felixstowe management but of their skill in handling their labour relations.
My Lords, it is on the excellence of Felixstowe's labour relations that their claim to remain a small, self-contained, self-governing unit, in part, stands. The noble Lord, Lord Wynne-Jones, said that the British Transport Docks Board was a very competent management and that labour relations in their areas were good. I can only quote to him a Press release of April 1976, not from a private enterprise concern but from the chairman of the British Waterways Board in which the chairman, Sir Frank Price, said:
"I am extremely concerned that a group of men at Hull docks which comes under the British Transport Docks Board acting in an unofficial capacity have been allowed for a long time to jeopardise the livelihood of men employed by my Board who belong to the same trade union."
It goes on:
"I have regularly and consistently pointed out that unless in such a situation management grasps the nettle and by effective control ensures the smooth conduct of the legitimate business, the inevitable would follow. Obviously this group of men have been allowed to feel strong enough to ignore directions by management and advice by their trade union. In this view I am supported by officials of the Transport and General Workers' Union. I am alarmed that these men should have been allowed by default to wield such crude power and to dictate what traffic should or should

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not be allowed to use Hull docks. Furthermore, it is now widely reported that the British Transport Docks Board, their employers, have rented to the men a warehouse constructed with taxpayers' money."
Whether that last point is true or not I do not know but the significant point in that Null situation is that the British Transport Docks Board is the ultimate employer and so far from being able to handle labour relations smoothly, in that particular instance, at any rate, its labour relations are at a nadir. Those are strong arguments at least for looking again, for reopening the issue.
I would make a plea for leaving Felixstowe in the private sector as a small private sector dock on other grounds. The Government confirm again and again their belief in a mixed economy. There are many ways of mixing the economy, as the Government themselves have stated. It has been for some time now the policy of the Labour Party that one way of mixing the economy is for the Government to buy a particular company in the private sector so that there should be competition between the public and private sectors in a given industry. Why not on this occasion recognise that the mixing of the economy can work the other way round?— and that where you have what is largely a public sector industry in the docks world, there is much to be said, surely, for keeping one or two private enterprise docks, so mixing the economy in the docks industry with the larger sector in public control, as is the case, but with some private enterprise docks. Is this not the kind of mixed economy that the Government themselves have favoured? Is this not an outstanding opportunity to practise that kind of mixed economy policy?
My Lords, the case being as confused and as important as it is, we on these Benches would strongly urge that this Bill should not go through as it stands but we would support on this occasion the initiative from the Conservative Front Bench saying that it should go to a Committee so that these much disputed facts of very great importance in a matter of very great importance should be threshed out in much greater detail than has so far been possible.
4.9 p.m.
The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, I think it may be helpful if I intervened at this stage to indicate the Government's view of this Bill. I see from the long list of speakers this afternoon that the noble Lord, Lord Brain, is making his maiden speech and I am sure we are all awaiting to hear with interest what he has to say. I fear that he seems to have jumped into a hornets' nest over this one. The noble Earl, Lord Gowrie, to whom I always listen with interest, saddened me on this occasion, because, although I am very devoted to the theatre and have a great sense of the dramatic, I feel that when he talked about the national situation and the national economy and of this being one of the most important debates that could take place he was rather pushing things a bit far.
As my noble friend Lord Wynne-Jones made clear in his opening speech, this is a Private Bill promoted by the British Transport Docks Board to confirm a commercial agreement between the Docks Board and the Felixstowe Dock and Railway Company. The implication that the noble Earl made, that there was a grabbing Docks Board ready to pick up and twist the neck of Felixstowe, is absolutely untrue. Felixstowe port, as my noble friend pointed out, had been extremely successful but had got into certain managerial difficulties. It was an amicable, freely-arranged agreement. I cannot see anything the matter with that; nor do I see that that is contrary to anyone's ideas of a mixed economy, as the noble Baroness, Lady Seear, appeared to think that it was.
The agreement was for the Docks Board to acquire control of the Felixstowe Company and the port of Felixstowe by acquiring all the shares of the company at a price of 150p per share. It was freely negotiated between the two parties, and was formally approved by a majority of the Felixstowe shareholders last November. There is no pressure over that. Taking this into public ownership in this way is entirely different from the interpretation used in the perjorative manner of the use of the word "nationalisation"by the noble Earl.
The essential purpose of the Bill before us is, as I have said, simply to confirm that agreement. In the ordinary way an acquisition agreement of this kind between two companies would not of course, need Parliamentary approval. But the Docks

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Board, being a public body, operate under the special provisions of the Transport Act 1962; therefore they were compelled to promote this Private Bill before completing their purchase. I emphasise this point, because it is only the delay imposed by the Docks Board having to obtain this Bill which has enabled European Ferries to intervene and to strive strenuously to disrupt the agreement between the Docks Board and the Felixstowe Company. All the arguments of the noble Earl, and any of the other speakers who follow him, cannot alter those basic facts.
The Earl of GOWRIE: My Lords, I am grateful to the noble Baroness for giving way. I think she has misrepresented me. Is she not aware that I quoted the Minister in another place when he said that European Ferries were perfectly entitled to make their bid, just as, in my view, the British Transport Docks Board were?
Baroness BIRK: My Lords, as happened to the noble Earl when he was speaking, I was coming to that point in a moment. In November, after the majority of the Felixstowe shareholders had approved the Docks Board's offer, the Bill was introduced into Parliament. At that point European Ferries still remained dormant. Then in February of this year European Ferries intervened to put in their counter-offer. I do not of course deny their right to put in a counter-bid and my honourable friend the Minister of Transport also took the same view (although the timing was surprisingly timely); and I cannot criticise the majority of the Felixstowe shareholders who decided to accept the European Ferries offer. But the sequence of events makes it crystal clear that European Ferries went into this with their eyes wide open: that they knew that the Felixstowe Company they were acquiring had entered already into a firm agreement with the Docks Board. I know of course that European Ferries are now attempting to challenge the validity of that agreement in the courts, and it would be inappropriate as well as beyond my competence to comment on the legal arguments. But, as a matter of straightforward commercial practice, European Ferries must have known they had to take on the agreements
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and undertakings of the Felixstowe Company if they acquired the company. The noble Earl quoted the Shakespeare sonnet; I should like to quote to him the last line of it:
"Lilies that fester smell far worse than weeds".
I strongly urge the House that the greatest respect ought to be paid to a freely-negotiated commercial agreement. I am sure noble Lords opposite must agree with this basic ethical element of free enterprise, although so far we have seen revealed a rather regrettable dichotomy. After all, they are surely its most fervent supporters and defenders. Therefore we should be very hesitant to reject this Bill primarily at the instance of a Petitioner who could benefit by breaching the agreement. If European Ferries have a case against the agreement, then it can only be a legal case, and this is for them to make in the courts. So far as Parliament is concerned, it is our duty to look with considerable suspicion at attempts by interested parties to undermine the agreement. We must take the agreement as the foundation of the Bill, and then go on to consider whether the results the agreement is intended to achieve are in the public interest.
The central question here is whether it is in the public interest that the British Transport Docks Board should acquire the port of Felixstowe, as provided for in their Bill and in their initial agreement with the former owners of the Felixstowe company; or whether, on the other hand, European Ferries should be left with the control they have recently acquired. It is of course, as the noble Earl pointed out, the Government's general policy that the commercial ports of the country should be brought into public ownership; and in this context it obviously makes sense that Felixstowe should be acquired by the Docks Board now rather than be left in private hands for a year or two before then being taken into public ownership. But we arc not debating nationalisation today and I would not wish to make this the main argument for supporting the Bill. It would he wrong if this debate, which is on a specific issue, were turned into a wide-ranging debate on nationalisation. I am sure that there will be plenty of other opportunities for that.
The Government's support for the Bill rests primarily on our belief that the

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Docks Board would in practice be the better body to control and operate the port of Felixstowe. Here I emphasise the long experience and success of the Docks Board in running their other ports. At present the Docks Board own 19 of the ports of the country—incidentally, this does not constitute a grave and vast monopoly—including Southampton, the South Wales ports, Hull, Lowestoft and Kings Lynn. These ports handle some 24 per cent. of the total sea-borne trade of the country—a proportion which has steadily risen in recent years, but again it by no means constitutes a monopoly.
A great deal has been made of a senior shop steward. I think two were referred to by the noble Baroness, Lady Seear. It reminds me of the legendary trade unionist who is usually brought out in order to illustrate a point which the Tories want to make about trade unions. On other occasions, the views and attitudes of shop stewards are usually heavily frowned upon and criticised. Here they have been carefully nurtured along. Some extraordinary figures have been thrown around by the noble Lord, Lord George-Brown. I suggest that we are very careful not to rely too much on hearsay in this area. If as I hope it will, this Bill gets its Second Reading, this will be sorted out in the Select Committee.
The Board themselves have great financial strength. I must point this out because this is germane to the Bill before us today. For several years they have had regular surpluses, and been able to finance all their capital development from internal resources—which is in itself a healthy recommendation. In particular, they have sufficient reserves to enable them to acquire Felixstowe at the agreed price of £ 5¼ million without borrowing to do so—which is again a sound commercial base. They will have both the financial strength and skill to make further developments at Felixstowe for profitable investment as opportunities arise.
Further, the Board have very skilled and experienced management, and highly creditable labour relations. They have handled the rapid development and changes in the operation of ports over the past decade with great success. All this adds up to our belief that the Docks Board are well qualified to own and operate Felixstowe in the best possible way.
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European Ferries, by comparison, are much more of an unknown quantity. It is true, of course, that they have been a very successful shipping company, and that they have had some limited experience of operating ports with their two ports in Northern Ireland and Scotland. It may be that they would do equally well at Felixstowe. But in view of the agreement and of the record of the Docks Board, I do not think this is sufficient in itself to shake what has already been agreed and also the record, which is known and which I have now expounded, of the Docks Board.
Turning now to the question of competition and the Instruction which the noble Earl, Lord Gowrie, has tabled, of course it is true that the acquisition of Felixstowe by the Docks Board will give them a somewhat larger share of the ports industry of the country and, in a purely numerical and superficial sense, this could no doubt be said to reduce competition in the ports industry. I do not believe, however, that there is really any danger of the Docks Board acquiring a monopoly position. Felixstowe itself will of course continue to have keen and thriving competition from Ipswich, Harwich and Parkeston Quay nearby, and further afield from London, the Medway, and Dover to the South, and from the Tees and the Tyne to the North. Incidentally, all of these are already publicly-owned ports, but this does not dampen their competitive spirit in the least. There is no reason at all to think that the Docks Board would, or could, operate as a monopoly vis-à-vis other ports. Moreover, as the Docks Board Chairman, Sir Humphrey Browne, has emphasised, it is the policy of the Docks Board to encourage as much competition as possible between the individual ports under their care, within an overall framework laid down at the centre. I can quite understand the mirth of noble Lords opposite. If one says that there is no competition or that there should be within a publicly-owned industry, they howl. If one says that there is competition, they then laugh because they do not like to hear something which may be to their disadvantage.
Some of the Petitioners and opponents of the Bill also argue, in a somewhat contrary sense, that the Docks Board may restrict the development of Felixstowe to prevent it competing so vigorously

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with its other ports. On this, I would remind the House that the Docks Board have given repeated assurances that they have every intention of building on the success of Felixstowe and developing its operations in the future. It only makes sense for them to do so, in any case. They formally incorporated these assurances in their original agreement with the Felixstowe Company, and they will be made binding by the operation of Clause 6(2) of the Bill which was amended in another place to strengthen it on this very point. In short, I do not believe there is any substance in the fears of the Petitioners on this point. And, for this reason, I would regard Lord Gowrie's Instruction as unnecessary. However, the Government would not oppose the Instruction if the House feels that it should be made.
The noble Earl, Lord Gowrie, referred to the concern of Trinity College over their investment. The noble Lord, Lord Butler of Saffron Walden, will no doubt refer to that when he speaks. I fully appreciate their concern that their investment in the port should be safeguarded, but the Select Committee will go into this very fully when they hear the Trinity Petition. This certainly should not prevent anyone from giving the Bill a Second Reading.
In conclusion, may I sum up the Government's reasons for supporting the Bill. First and foremost, it is based on a freely negotiated commercial agreement, which ought to be upheld. Secondly, the agreement will secure the future development and prosperity of the port of Felixstowe in the most satisfactory way. Thirdly, it accords with our general objectives for the port's industry. Important points are raised in the Petitions which the Select Committee will need to examine, and will no doubt do so; but nothing that has so far been said or agreed on their behalf would justify us in the extreme step of rejecting at Second Reading a Private Bill that has passed through another place. I was very pleased to hear that the noble Earl had taken that view. I hope that view, which he expressed so cogently, will be taken by other noble Lords and that the House will give the Bill a Second Reading.
4.25 p.m.
Lord BRAIN: My Lords, I seek your indulgence for my maiden speech. I realised when I put my name down to speak that this was a controversial Bill. I hope I shall not get stung on stepping into this hornets' nest, and shall hope to avoid controversial matters. I should like to make four points which I hope will be considered during later stages of this Bill. I know East Anglia well and have lived there for a number of years. I have been most impressed by the expansion of the Ipswich and South Suffolk area, which has developed along with the development of Felixstowe. There is a tremendous infrastructure developing with the port—warehousing, export administration and insurance. I hope this will continue to develop whoever takes over the port management and I also hope that the Committee, if the Bill goes to a Committee, will consider this point seriously in assessing the case for both sides.
The port has expanded successfully and we have already heard comments about the excellent labour relations. The labour force clearly identify themselves with the success of the port: they are not just dockers, but say they are "Felixstowe dockers". On this basis we should give serious consideration to their case. They are used to working closely with management and, indeed, not so long ago a convener of shop stewards was appointed to the board of the company. Admittedly, he resigned his post with the union after that, but that is a sign of the good labour relations which have existed in the past and will, I hope, continue in the future. They are used to settling their disputes, discussing and negotiating at the quayside, in the warehouse and, at most, a mile away from the water. I hope that, whoever takes on the management of the port, it w ill continue to be done there and not at a head office miles away from the water. I do not believe this to be a controversial point and hope it will not be taken as such.
As a result of these excellent labour relations, costs are low. We have heard questions as to whether or not charges will go up. I hope they will not go up, because dock charges are a factor in the cost of our exports and of our imports, and low dock charges are an advantage in both areas. I trust that, whoever takes over the management, the port will remain competitive and charge economic rates

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that are both profitable and also bring in plenty of business.
Another factor in favour of the port of Felixstowe—it may be said, perhaps, that it is the envy of other ports—is the speed at which they can turn round ships. This, again, reduces the costs. I believe they hold the record for turning round a particular container ship and certainly also for a particular car transporter. This is a worldwide record and not just within a particular set of docks. It is to be encouraged, no matter who takes over.
The port is well placed for Holland and Belgium. It has the shortest sea route and is therefore in a good position to provide all facilities, facilities for containers, which then go to Rotterdam for transhipment or to some further Continental point—roll-on, roll-off facilities which are backed up by excellent roads to the South Midlands and other areas of the United Kingdom. We have already heard that these transport facilities have enabled exporters to send goods through Felixstowe from Liverpool and Cardiff. Of course, one must not neglect the fact that through European Ferries, who were a user long before they became involved in the management of the port, there is a very fine passenger service car ferry from Felixstowe to the Continent.
All these aspects make a thriving port. I want to see this port continue to thrive under good management—whoever manages it—and I hope that commercially and industrially, as well as in the field of labour relations, this House will consider all the matters that come before it either now or in a Select Committee, and then, as has already been said, weigh the evidence in the balance and come to a just decision.
4.30 p.m.
Lord BUTLER of SAFFRON WALDEN: My Lords, it is my honour and pleasure to congratulate the noble Lord, Lord Brain, on his maiden speech. It had the merit of being short—which is one of the most remarkable merits of speeches in your Lordships' House—it had the merit of being clear, and it had the merit for a maiden speech of being non-controversial. I am sure we look forward to hearing him on many future occasions, now that he has taken the plunge.
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Those of your Lordships who are acquainted with the Latin tongue, and who may also be versed in Saxon, will know that "felix"and "stow"put together mean "the happy place", and indeed it is a very happy place at present. It is partly for that reason that I am speaking today, and partly because I hope, whatever the result of all our talks may be, that Felixstowe will remain, as the noble Lord, Lord Brain, suggested, a happy place in future. Many of the arguments that I shall bring forward in a short speech will have been used already by the noble Earl, Lord Gowrie, and others. But as there is a very substantial connection between the port of Felixstowe and Trinity College, and as we have put in a Petition, I think it only right that I should make some points in connection with this matter.
Over 40 years ago, we bought an agricultural estate along the border of Harwich harbour. In the last 10 years, about 300 acres of it on the fringe of the port have been used for, or preparatory work has been done for, port-related purposes, in order to back up the outstanding development of the port of which noble Lords have already heard. On those 300 acres, we have spent a substantial amount of our own money. This one college spent £1 million in providing approach roads, roundabouts, underpasses, road lighting, sewage works, drains and every kind of service. Then we invited substantial investors to come in and lease blocks of this land from us and develop it. This they have done by developing huge warehouses which are worth going to look at, because they represent the nearest approach to the development of the most remarkable port in the world, Rotterdam, on the other side of the water. One and a half million square feet of first-class warehousing has been established, with offices, cold stores, special arrangements for lorry drivers and a hotel for them when they arrive and leave. The local authority deserve a word of thanks, because an excellent development plan was dealt with and approved after very swift and thorough public examination.
The long-term ground rents from these developments—and this is where Trinity's interest comes in—provide about one-sixth of the total endowment income of the College. What do we use it on? We use it—I think I can say this without contra

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diction from any noble Lord—on the most up-to-date scientific college in the world. We have not only been at the head of the university examination lists over the last few years, despite our size; we have won 20 Nobel Prizes in the scientific field, compared with the 21 won by France—that is, one college compared with a whole country—and a total of 17 for Belgium, Holland and Italy combined. We support 120 Fellows; we support our research team and 200 students assisting them, and we also support 800 others.
In addition, we have agreed in the last month or two to support a scheme for spreading our money to less well-endowed colleges. This is a university scheme and it will cost Trinity, being the most well-off college, a great deal of money. So that any money we get will be thoroughly redistributed to the other colleges, including, I may say, the not so well-off college of the Chairman of the British Transport Docks Board. So I hope he will be gratified if our prosperity continues. We help to found new colleges, including Darwin, we have partly founded Wolfson College, we have recently established the Cambridge Science Park and we support a variety of other good causes as a charity.
What I want to make quite clear to your Lordships is that there is no question of personal or private gain. The whole of this money is spent on research development and education. I may tell your Lordships that our highest salaries are less than half those of ordinary Cabinet Ministers, while the lowest salaries are much smaller and less than Ministers of State receive. So we are not doing this for our own private gain. We are doing it for the benefit of science and development.
I now come to Trinity and politics. Just because we have taken a part in this matter, owing to our very great interest and because we prefer European Ferries to the British Transport Docks Board, Trinity has been accused of being political. I am advised by my own council to say that we are not taking a political stand on this matter. We agree with the Minister that we are not going to have a debate—at least, I am not going to have a debate—about nationalisation. This is a debate about who owns the port, one body of people or another.
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We believe that the best future owner is European Ferries; the Government believe that the best future owner is the Docks Board. We believe for a variety of reasons, that the Docks Board is not the best owner. One reason is that we believe it has quite enough to do with its 19 other ports. I have no doubt that the chairman and the managing director, whom I have met, are efficient; I also have no doubt that the Board does its job efficiently, but I do not think we want to add any more ports. I think it has quite enough, thank you very much. Nineteen ports will be sufficient for the Board to run, and we should far prefer to have a single port owner, and that is one of the main arguments which I put forward on behalf of my friends and myself. We would take exactly the same view on this Bill if it were a private company attempting to wrest control from European Ferries.
Our reasons for opposing the Bill are as follows. First, there is the attitude of the port users who, I may say, are a singularly distinguished lot. Some of the biggest American container systems are already operating at Felixstowe, and there is a large and responsible body of over 80 shipping companies, agents and the like. They, for their own reasons, overwhelmingly oppose the British Transport Docks Board. Without the good will and support of the port users, we think that Felixstowe will go downhill and all the installations which we have built, or which we have invited others to build—which is the important point—will diminish in value. I shall not go into details as to why the port users oppose the Bill, because that can be done in Select Committee. But in a nutshell I believe that their reasons are: the prospect of higher charges, less good service, more red tape, less consultation and, above all—and here I disgragree with the noble Lord, Lord Wynne-Jones, who introduced the Bill with such clarity—we believe that labour relations will be better if the port is left in its present hands.
I now come to the attitude of the port employees. I do not have the eloquence of the noble Lord, Lord George-Brown—and I am sorry he is worried about the fact that he has been put low down on the list of speakers, but I shall certainly be here to listen to him—and all I can say is that our evidence does not agree with what the noble Lord, Lord Wynne-Jones, believes is the view of the port employees.

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We believe that many of the port employees have spoken out strongly for the preservation of the free enterprise ownership of Felixstowe, and against the British Transport Docks Board. I must say, in the light of the numerous and well-documented labour troubles under the British Transport Docks Board—to which reference was made by the noble Baroness, Lady Seear, sitting on the Liberal Benches—that we are very worried about the change of ownership.
Next we come to what I call the single-mindedness principle. Felixstowe has been built up by a dynamic, one port owner, whose skill, energy and resources have been concentrated single-mindedly on this one port. For European Ferries, the present owners, Felixstowe, is their one English port, and their one port with an important Continental and deep sea trade. The Board, on the other hand, have a family of 19 ports, 17 in England. We believe that if Felixstowe is transferred to the Board there will be fierce competition which will, in the end, undoubtedly result in Felixstowe not having so successful a time. As a lifelong Conservative I believe in competition. If, therefore, the ports changed hands at this time, I believe that this would lead to a reduction in competition among British ports.
I am authorised to say that if the Bill goes through all its stages, after what I hope will be the most searching examination by the Select Committee, we would be perfectly ready to work with the Board. We are not trying to play politics. We do not agree, however, that the Board are the best master. We have maintained friendly relations with the Board and, as I have said, they have a good record, but we believe that the intervention by European Ferries made a distinct difference to the whole problem.
The noble Baroness who spoke for the Government said a great deal about the original contract. That is true, but since the Bill was introduced into the Commons the European Ferries bid, which is infinitely better than the Board's bid, has come along. That is why we are taking a slightly different line in the Lords from that which we took in the Commons. When the Bill was introduced in the Commons, European Ferries were not in the picture. Now they are very much in the picture. We think very well of them
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and want to support them, and that is why we have put down a Petition against the Bill.
European Ferries now hold 97 per cent. of the ordinary shares, and the port is absolutely booming under their control. As the noble Lord, Lord Brain, has remarked, the fast turn-round for which Felixstowe is specially noted is remarkable. Virtually everybody who is closely related with European Ferries—the users, the employees—worships European Ferries and wants to get on with them. Users and employees have been fully consulted by European Ferries at every stage of their intervention, and as a bid has been made by European Ferries, we think that it would be a great disadvantage now if a change were made and the port went over to the Board.
To my mind, the outstanding feature of the situation is that all those parties who are intimately concerned with the future of the port of Felixstowe—the users, the employers, Trinity, the major investors—are united against the British Transport Docks Board and in favour of the present owners. Provided that the port remains in the hands of the present owners, the tremendous spirit of co-operation engendered by the united resistance to this unwanted takeover will continue. Therefore I strongly support those who are criticising this Bill and hope that in the Select Committee the full case of all who object will be fairly and squarely put.
4.44 p.m.
Lord GOODMAN: My Lords, at the outset may I compliment the noble Lord, Lord Brain, who made his maiden speech in such modest and engaging terms and who displayed one attribute that so far has been lacking. This was his convincing knowledge, which seems to me to be missing in today's debate. In this matter I speak only for myself. The most persuasive argument that I have heard from the golden tongue of the noble Lord, Lord Butler of Saffron Walden, is that this Bill may do some damage to the finances and resources of Trinity College, Cambridge. It would be horrible to contemplate any such possibility. Speaking as a poor relation—at least as an impending poor relation—I was drooling with envy as I heard of the revenues that were coming in from the dock, and certainly the most cogent and persuasive

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reason for throwing out this Bill would be any likely damage that might be done to those revenues.
It seems to me that this afternoon's debate has turned into a piece of shadow boxing. I spent yesterday afternoon at Lords, rather unprofitably, watching some rather drab cricket with very few runs being scored. I have spent this afternoon here, even more unprofitably, with almost no runs scored, because when the noble Earl, Lord Gowrie, finally came to the point where he said that he was not going to divide the House, on the somewhat specious ground that the case was so evident and obvious that we needed no Division, I could not really believe my ears. If Parliamentary time is to be expended in establishing the obvious, I think that we would all be better to spend the afternoon at Lords, even if there were to be a repetition of the defensive play of yesterday.
I arrived here with one simple view. Important matters are involved in this debate, but with great respect and with all due modesty I am not sure that they have been touched on. The advice I give myself—I would not presume to give anyone else advice—is totally to ignore any fact that has been presented by anybody on either side of the House this afternoon unless it can be established from the documentation.
We were told by the noble Lord who introduced the debate in very simple, clear and persuasive terms, that he was satisfied, from an inquiry made this morning, that the labour force were on his side. This was subsequently amended—I think rather significantly—to a statement that the labour force were neutral, whatever that might mean. We were told by the noble Earl, Lord Gowrie, without any evidence of any kind being provided, that he was absolutely satisfied that the labour force were on his side; and we were told by the noble Baroness who spoke from the Liberal Benches that she was equally convinced that the labour force were on her side.
I do not know on what side the labour force are, and I am not very sure how relevant that is. What I am quite sure about, without any disrespect to any of the speakers concerned and without any
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suggestion that they would deliberately mislead or confuse the House—they have confused the House inadvertently—is that a high degree of confusion enters into this matter when, in the absence of evidence, we arc told about three quite different propositions. I venture to think that I would reach a conclusion only on the facts in the documents, which speak for themselves.
It seems to me that a simple moral issue is involved. I should not presume to say whether these docks would be better run by the British Transport Docks Board or by European Ferries. As an expert on docks, I would come very low indeed on anyone's list, and I venture to think that the noble Lord who introduced the matter would probably be not the first person to be sent for if a question of a technical nature arose relating to the rebuilding of docks. I know the noble Earl, Lord Gowrie, to be an extremely well informed person in relation to literature, culture and matters of that kind, but again I would doubt his qualifications to speak with authority in relation to docks. And I venture to think that despite her outstanding public and domestic virtues, the noble Baroness who spoke from the Liberal Benches would not be sought after with avidity by anyone wanting to build a dock. Hence I greatly doubt the qualifications of anybody to adjudicate on the merits of this matter and, without wishing to offend anybody, I certainly would not be influenced by any of the speeches I have heard here this afternoon.
What influences me is that an agreement was reached at arm's length in circumstances in which, notwithstanding what the noble Lord, Lord Butler of Saffron Walden, has said, had the parties been commercial companies I do not think there would have been any argument but that that agreement should be implemented. The agreement was signed and ratified and remained subject only to Parliamentary confirmation which, in all the circumstances, should readily have been forthcoming, for a reason which has not yet been urged upon your Lordships. That is the situation as I see it in simple, moral terms.
The noble Lord who introduced the matter spoke reproachfully of lobbying. May I say that I have been lobbied very vigorously by both sides. Some very

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agreeable gentlemen from the British Transport Docks Board side came to breakfast with me, and I was most impressed. The chairman of the Board gave every appearance of being quite indistinguishable from the chairman of any public company on the Stock Exchange Register. He appeared to me to be a gentleman of commercial distinction who could well run a company under ordinary private financial auspices. Their set of accounts and report bears the closest possible resemblance to the well prepared documents put out by public companies quoted on the Stock Exchange and might easily qualify for the Financial Times prize for the best presented accounts. Their negotiations were conducted by an eminent firm of merchant bankers. Everything that would commend itself perhaps more to the Opposition side of the House than even the Government side of the House is to be found in their dealings.
This gentleman attended and he persuaded me that on simple moral grounds it would be wrong not to approbate this transaction. For the moment I remain persuaded, but the whole question seems to be irrelevant because nobody is going to divide the House. It is apparently going to a Committee; it will be discussed in some detail. The Government are not, very properly, resisting the Committee and if the Committee can make head or tail of what the Instruction means they will have an Instruction to assist them. And at the end of the day someone will no doubt arrive at some conclusion on the matter which we could have arrived at without the necessity for a protracted debate this afternoon.
But I would urge that if one is considering this from the point of view of the established facts, the established facts are these: that nobody competed against this bid at a time when it was relevant and for quite a long time afterwards. If you are measuring the efficiency of the parties concerned, it is not irrelevant to say, "Were not the Docks Board much more efficient in this matter than their opponents who came on to the scene so very late? "That does not seem to me to be much evidence of efficiency. So if you are looking for that, there is some evidence as to which is the more efficient from the document itself.
Then we have the question that on two separate occasions the eligibility of the
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Docks Board to run this dock was confirmed by the previous owners on two separate occasions: once when they entered into the agreement and as a term of the agreement they said that they would support the Docks Board in seeking the passage of this Bill. That was the first occasion, and, on the second occasion when the bid was made, they again said, "We will continue to support the Docks Board in relation to this matter".
It has been conceded by everyone—and this is another fact which emerges from the documents and not from anything we have been told this afternoon—that the previous owners of the Docks Board were immense authorities, absolute dabs at running docks; that nobody would know better than they knew how docks should be run. We must also assume (I think rightly) that they are people of integrity. They have twice said that in their view these docks will be properly run by the British Transport Docks Board, and there seems to be no reason why we should impugn that view at all. It seems to me to be a highly relevant view of the matter. Now someone has arrived after the agreement has been entered into, when it has been confirmed by both parties, when it creates and imposes obligations on the part of the Docks Board that are already in existence. This is a binding agreement. To tell us that we should not pass the Bill because, belatedly, someone else has come on to the scene, seems to me to be a not very moral proposition. If we are concerned with morality it seems to me that the morality of this situation calls for a ratification of this agreement.
Lord GEORGE-BROWN: My Lords, if my noble friend will allow me to intervene, once again we hear that he has been lobbied by two different boards of directors. There is a third party in this: the people who work there. They were against it in the first place, they are against it now, for reasons which they think good and proper. Did my noble friend—
Several noble Lords: Oh!
Lord GEORGE-BROWN: I do not need guidance, my Lords. Did my noble friend at any point think it moral to ask the third party—the workers—what their view about this was?
Lord GOODMANM: My Lords, I could occupy a great deal of your Lordships' time——
Lord GEORGE-BROWN: Why don't you?
Lord GOODMAN: I will not do so, my Lords, out of mercy; but I could occupy a great deal of your Lordships' time by providing my view as to the relevance of an opinion sought from workers in the circumstances in which we try to obtain these opinions under present day conditions.
If I may divert for a moment, I attended an immense meeting the other day in the East End of London which was designed to procure the notion of what public opinion was on the dockyard scheme that was being introduced. It was a very entertaining meeting. A large number of people spoke. But when I left I knew no more than when I arrived about the general consensus of opinion. I venture to think that people who believe that you can synthesise opinion by asking a few people and arrive at a valid conclusion, are labouring under an enormous misapprehension as to what is the truth in these matters.
Having said that, we come back to the question, and we know that the present aspirant purchasers and the previous owners both approve of this transaction. We know that it was carried out without intervention up to the time when the document had been signed and twice approved by the people concerned—by the directors. This we know, and I venture to state again, that in my view the morality of this transaction is on the side of approbating the transaction. That is my personal view, which may well not be shared by others; but it remains my belief that there are more important considerations even perhaps than the efficiency of this dock in relation to good faith and honourable dealings in public affairs.
I wish to conclude by saying something which sounds a little pompous and a little portentous, but it needs to be said. We are, I hope, going to live in a society under a mixed economy. This is the sort of society that I believe in, and that I believe most people in this House would believe in. I do not think we want a Communist society, and we have to forsake the notion
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of a society in which totally free enterprise can proceed unchecked. If we are to have a society in which there is a partnership between two entities, then those two entities must be able to rely on each other for honourable treatment. It is very important that a nationalised industry should not feel that it is at a disadvantage in relation to another industry, and vice versa. Both should have the same fair treatment.
I am no friend of nationalisation. I believe that almost without exception things are better run privately by people who have a profit motive, who have a concern which does not arise from being an employee of the State. I believe this passionately in relation to private medicine. I believe it in relation to a great many things. But there are areas of national business and concern which must be the subject of nationalisation. If we introduce the sort of consideration which has been urged this afternoon, that every time a nationalised industry makes some move to do something which is within the ordinary pattern of commercial activity we should leap to seek to defeat it on the specious cry that nationalisation is a danger, I think we shall have achieved the very worst position for ourselves in relation to the sort of society that we seek after.
We are seeking a society in which we can live in partnership between nationalised and non-nationalised entities. We are hoping for a society in which there can be a great area of non-nationalised entities; in which people, and particularly the young people, can feel that they may set off in life without the obligation to serve the State. This is what I hope for and what I believe most of the Members of this House will hope for; and I believe that we shall advance that cause by firmly rejecting the suggestion that we ought, whenever there is an opportunity, to defeat some plan or aspiration of a nationalised industry, however dubious may be the morality behind that transaction.
On that note I would urge upon your Lordships that, if we are to have no Division on the Second Reading, we should give the Bill a Second Reading; but let us bear in mind that in this matter the considerations of morality and of policy outweigh very much the considerations of whether or not we shall have a better, a worse, a slightly better, or a slightly

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worse, Docks Board. That is a matter on which I have grave doubts as to whether we can decide, but there is no House anywhere in the world that can decide the moral issue with greater authority or greater certainty than this House of Parliament.
4.59 p.m.
Lord DRUMALBYN: My Lords, I am sure the whole House will greatly welcome the intervention of the noble Lord, Lord Goodman, and we are always ready in this House to consider moral issues. But the much narrower point we have to deal with here—and this seems to be the main issue—is whether this House is prepared to give permission for the British Transport Docks Board to take over control of the Felixstowe Harbour and Docks Company.
The noble Lord said that there was an agreement reached by two parties. But it was a conditional agreement, and both knew that the agreement was conditional on the approval of each House of Parliament. That approval is not normally, and ought not to be, given automatically. The duty of Parliament is to take a much wider view; and on the point of whether or not we are going to debate nationalisation, is it not better in this case to put it in this way, that we are continually being faced with the practical problem of where the line is to be drawn between the public and the private sector?
In this case, we are considering whether it is better for the Board to take over this port, given its experience in other ports, its research facilities, and all the rest, or whether it is better for the port to remain independent—and independence is the issue here— if only as an independent body against whose performance the British Transport Docks Board and all their component parts can test their own performance.
There is a main issue, to which I will come back later, but there is also a procedural one that I would like to ask about; that is, the question whether the Bill has already been altered materially in a manner not acceptable to one of the parties to the conditional agreement. If so, the party concerned is entitled to exercise the option conferred by paragraph 5(2) of the conditional agreement
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to withdraw at any time before the Bill is reported by the Select Committee of this House; in theory, it could withdraw now if it thought so. It seems that an alteration has been made, and the question then is whether that is a material alteration or not. What may appear to be material to one party may not be material to the other. The House needs guidance, if I may ask for it now, as to who decides whether the alteration is material or not. Is this a matter that the Select Committee could and should decide? My noble friend Lord Colville of Culross wags his head, if that is the right phrase, and I hope that he will give the answer. I am not speaking as an expert, but this is something into which it is necessary that the House should probe, something the House should know about before reaching a decision.
If this is a matter for the Select Committee to decide, there is a powerful argument for it to consider the matter before considering anything else. If the Select Committee decides the alteration is material, the aggrieved party should have the right forthwith to withdraw and the Bill plainly falls. There is nothing for the Select Committee to examine in that case. If the Select Committee does not so decide, it is plainly for them to continue with their work and to report to the House. The House can then consider the issue on the merits of the Bill.
My Lords, that does not prevent the House considering the merits now, and that is what it has been doing. But unlike the noble Lord, Lord Goodman, I found the debate fascinating. The rapidity of scoring of runs on both sides has been commendable. However, that would not prevent the House from issuing an Instruction to the Select Committee after the Bill has been given a Second Reading in accordance with the usual practice of the House. The practice is usual but not invariable. Nevertheless, it seems particularly desirable in this case for the Bill to go to a Select Committee. I do not think there has been one single speaker so far who has not thought so. That would enable the Select Committee to consider the question of material alteration which is not a matter on which this House could very conveniently reach a conclusion at this stage.
Looking at the Instruction, I should like to make one or two observations. The

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Felixstowe Dock and Railway Company, as my noble friend Lord Gowrie pointed out in a most notable speech, is a remarkably successful enterprise. Here we are giving the facts. The facts can be substantiated. The cargo it handles is continuing to increase at a time when the cargo handled by the ports controlled by the British Transport Docks Board taken as a whole has declined. The excellent management of the company, its excellent employee relationships without doubt have contributed to this progress, in marked contrast, as has been observed already, to the relations at some at least of the ports of the British Transport Docks Board, and that again is a fact.
Reference has been made to charges. This again can be substantiated. The charges are comparatively low. We are entitled to ask whether this will continue if the company is acquired by the British Transport Docks Board. In this connection, it would be as well to refer to paragraph 2(a) of the conditional agreement which gives an undertaking by the British Transport Docks Board, a covenant and an undertaking, that
"They will not seek to direct the existing traffic from the port of Felixstowe to their other ports, it being understood that all the Board's ports will continue to compete for business, subject to the Board's overall financial policies and objectives;".
It has been suggested that it is the policy of the British Transport Docks Board that all their deep sea traffic (or most of it at any rate) should go to Southampton. At the present time, the United States Lines, the American Export Lines, and other fairly large vessels are using Felixstowe. Will that continue? Does this undertaking cover that matter?
Next, we come to the question of the port users. I would merely say that port user relations with the company have been particularly well fostered and well developed, both at home and abroad. The port users petitioned against the Bill in another place, and are still strongly opposed to acquisition by the British Transport Docks Board. They are by no means committed to continuing to use Felixstowe. It takes two parties to decide on the success of an enterprise, and on whether the facilities offered are sufficient or not. They are not committed to continuing to use Felixstowe should the company pass into the hands of the
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British Transport Docks Board. I am told there are new prospective users who have been in negotiation with the company, but again, they are not committed to carrying on negotiations with the company if it is controlled by the British Transport Docks Board.
What, then, is the value of the assurance that the British Transport Docks Board are prepared to give? In sub-paragraph (d) the Board expressed the intention
"to promote the interests of the Company's port operations and their further development"
and then come the qualifying words:
"on the basis of opportunity;".
What does that mean? It can mean that the Board are not committed to spend any money on the development of Felixstowe except in relation to a priority which the Board themselves determine, and Felixstowe might come quite low on that priority. In any case, the intention of the British Transport Docks Board may be frustrated by Government intervention through directions given by the Secretary of State. So for these two reasons it is very difficult to rely on the assurance absolutely of the Board, however good their intentions.
But, far more important, it is for enterprises to create their own opportunities. Felixstowe has shown itself able to do this, and until the company and the market was thoroughly disheartened by the prospective policies of the present Government, the company was able to raise money to enable it to go on developing. In his splendid maiden speech my noble friend Lord Brain pointed to the fall in handling cargo, particularly the container cargo. The very special experience that it has gained from the start in handling container cargo has put Felixstowe in such a good position. It all started without much experience, showing that experience in the initial stages is by no means essential. The company has built up a lot of experience, and has proved to be remarkably successful.
My Lords, my noble friend Lord Butler of Saffron Walden has spoken of the position of Trinity College, Cambridge. Assurances were sought in another place as to what would happen to the college should the company pass into the hands of the British Transport Docks Board. So far

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as I can see, the only assurance the college has obtained in the course of the proceedings is that neither the Secretary of State for the Environment nor the Minister of Transport has any intention of giving directions to the British Transport Docks Board which could possibly affect Felixstowe. No undertaking, so far as I know, has been given that either of them would withhold his consent to an application from the Board to acquire the land in question.
Secondly, may I repeat what has been said already, that the prosperity of the town of Felixstowe and the surrounding area, and the level of employment there, are very much bound up with the port. The area has benefited greatly, as the noble Lord, Lord Brain, said, from the success of the port in recent years and has participated in its development. Will it continue to do so in the future? No assurances have been given in that regard.
My Lords, the story of the port is a vindication of the best in private enterprise, a vindication of the right to differ from the accepted wisdom and the recognised experts and get on with the job. It is a success story. A generally accepted prescription for action in any enterprise, whether in trade or in war, is "reinforce success". It is for these reasons that I would strongly support my noble friend's Motion to allow the Bill to go to the Select Committee for a most careful examination, and thereafter to come back to this House for fuller consideration on merits.
5.12 p.m.
Lord STOW HILL: My Lords, may I begin my remarks by saying how very helpful I found the maiden speech to which we listened recently from Lord Brain. It told me, in such a very discreet and charming way, such a lot about Felixstowe which seemed to me to be directly relevant to the real question which I think we have to ask ourselves. It seems to me that the real question one has to ask oneself in this debate can be put quite shortly. Leaving out of account those matters which should not determine our judgment, the matter for judgment, surely, is this: we are dealing with a question of public interest. Would the public interest be better served if this most important port of Felixstowe were
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conducted under the terms of the scheduled agreement by the Board, or would it be better served if it were conducted by the company European Ferries?
The decision which is arrived at is one which is not going to be temporary, pro tem in its application. It deals, after all, with a most important source of out natural wealth. It will presumably be operative for years perhaps decades, and I should have thought it was of critical importance that that particular matter of judgment should be answered in the right sense by us in this debate.
May I come back to that in a moment, but before I do so advert to something the noble Lord, Lord Drumalbyn, referred to in the course of his speech. He referred to the proceedings which are being brought under Article 5 of the scheduled agreement, and he put the question to the House as to who had to decide whether or not the change brought about by the Amendment in another place was fundamental within the meaning of Article 5. What happened, apparently, was that an interim injunction was asked for but refused; the case was marked for an early trial, and is to come on on the 12th July.
The answer that I would respectfully offer to the question put by the noble Lord is this: clearly it must be for the court to decide, when those proceedings are heard and when the plea is put forward for an injunction, whether or not an injunction should be granted because the change was or was not, within the meaning of Article 5, a fundamental change. The pendency of those proceedings, and the possibility—I have been told rather an unlikely possibility—that the injunction may be granted, is no reason at all why a Second Reading should not be given to the Bill at present before your Lordships' House, as it would seem that at the moment it is the intention of the House that it will be given.
Having said that, may I indicate what, personally speaking, in trying to form my judgment, I would discard as not really of great importance in answer to the major question which I put. It does not seem to me that it is relevant that European Ferries made their offer at a late stage. The noble Lord, Lord Goodman, felt that that was a matter which was of importance; it affected the general morality of the whole situation.

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I would venture to differ from him. They are perfectly entitled to make the offer. They make it in the knowledge that the Bill may be given a Second Reading or it may not. They take that risk. They run the risk of some loss. That is entirely a matter for them, and it seems to me that that is a circumstance which should not really influence one.
Lord GOODMAN: My Lords, I hesitate to interrupt, but I should like to make it clear that I am not in any way criticising the making of the offer. They were perfectly entitled, of course, to make the offer. There is nothing in the least disreputable in their doing so. What I was saying was that it is for us to consider whether in those circumstances morality requires that we endorse an established transaction.
Lord STOW HILL: My Lords, I am grateful for that explanation, and I quite understand what the noble Lord says. I have made my point, and I do not think it would help to come back to it. What is perfectly clear? It is perfectly clear that we have three parties before the House the Board, the company and European Ferries. All of them have shown themselves highly efficient. My noble friend Lord Wynne-Jones indicated a number of reasons why the Board could be congratulated, I should have thought, on its performance since it was set up by the Act of 1962. The volume of traffic which it handled increased from 20 to 25 per cent. between 1970 and 1975.
I have seen the figures of its earnings on capital employed. They are very satisfactory; they increased year by year, and I will not trouble the House by going into those figures. It last received a Government subvention in 1972. It is financially in a position fully to implement the transaction which we are considering. It operates at 29 ports. I should have thought its reputation was universally accepted as a highly efficient board, and I should have thought for that purpose it was irrelevant to consider whether this is part of the public sector or the private sector. All of us in this House believe in a mixed economy. This is one of the smaller public sectors we are considering. I say at once that my conclusion is that the House should
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not only give the Bill a Second Reading but, I would greatly hope, that the result of the proceedings will be that in the future Felixstowe is managed by the Board.
The second undoubted fact is that the Board which managed the Felixstowe Company was a highly effective and efficient board and is to be congratulated. Unfortunately, it arrived at a situation in which it felt doubtful as to whether it could continue, and had to look elsewhere for support or for future development. The European Ferries company obviously is a most efficient company also. It is go-ahead. It is said against the European Ferries company, so I have read, that it would operate under the disadvantages of a one-port user. As against that, it points to its success at Larne harbour. It is very difficult for a person like me to evaluate an argument of that kind. Indeed, I think it is difficult for a person like me, with very little experience of port management, to intervene in a debate of this kind. When I was at the Bar I was engaged as counsel in very long proceedings relating to dock charges at Hull, and certainly one piece of wisdom I acquired there, which I hope I can turn and will endeavour to turn to use in this debate, was this; the chairman of the tribunal before whom I appeared let me know discreetly that in his opinion my speeches and my cross-examination had been much too long. That will enable me, I hope, to bring my remarks to a fairly speedy conclusion.
Faced, therefore, with the question, do you think the public interest over the coming years would be served better if the Board operates Felixstowe or if European Ferries operate Felixstowe? I answer that question by saying that it would he better if the Board did it. The Board has the experience. It has shown that it is highly capable. It has the resources. It is limited in its approach by Clause 2 of the scheduled agreement. It is not allowed under the scheduled agreement, as has been pointed out, simply to uproot the whole series of arrangements which have been made in building up Felixstowe port by the company. It has to operate it within the scope of Clause 2. I know that the noble Lord, Lord Drumalbyn, felt some uncertainty as to exactly how it would all work out, and I agree with him that there are ambiguities about it. However, broadly speaking, it

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is a fact that the intention of Clause 2 of the scheduled agreement is that the port should, in a broad sense, continue to he run as a separate statutory company on the broad lines that the existing management have developed so very successully. The reference, it seems to me, to diverted traffic rather supports that, but I agree that there is room for ambiguity as to the precise effect of that clause.
Therefore, one has this question: would the Board, with its wide resources and its long experience of running docks, gained by the operation of 29 big docks, be more likely to conduct Felixstowe successfully in the public interest over the coming years, or would this very excellent shipping company, European Ferries—it is a shipping company without that special expertise or knowledge, albeit an excellent shipping company—be likely to run the docks more in the public interest and more effectively than the Board? I can only say that in my opinion, forming the best judgment I can, I would answer that question unhesitatingly by saying that I would sooner, in the circumstances which I have outlined, that the Board ran the docks rather than that European Ferries did. I hope that the outcome of the proceedings will be that in the coming years it is the Board which operates Felixstowe docks.
5.23 p.m.
Lord BELSTEAD: My Lords, as an East Anglian, the noble Lord, Lord Brain, whose maiden speech I very much enjoyed, will know that it is a surprising fact that if you sail down the Suffolk coast, after you leave Lowestoft you will look in vain for a safe harbour. Southwold, the historic port of Dunwich, the old harbour which used to lie at the mouth of the River Alde, the River Deben— all of them have either silted up or disappeared, or else they are guarded by very dangerous river entrances, and none of them is available to general commercial traffic. But then at last you come to Harwich harbour. But even there, although Harwich lies to the South, along the northern shore shallow water and vast stretches of mud have, over the centuries, protected that shore from commercial development. Although Felixstowe dock was established in 1887 along that shore, and provided a safe harbour through two World Wars, after 1945, as has been said, the dock began to silt up again and it was to this that Mr. Gordon Parker came in 1951.
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Any of your Lordships who go to the site today can see the place where the original dock was, and what is called the old dock office, a building of about a dozen rooms. I am told that the administrative demands of the Felixstowe Dock and Railway Company were such in 1951 that Mr. Parker's administrative staff needed just half of that building. Today it is common ground between all your Lordships that Felixstowe is a large and a developing port. The container handling, the modern facilities and machinery, the general level of cargo going through the port, are all agreed, and the spirit which created all of this virtually from nothing continues to this day. It is I believe the fact that since 1951 there has never been a strike at Felixstowe which has been called clearly on the volition of the people who work there. Those are some of the achievements of the port over the last 25 years, and it is of course due to the endeavour of everyone who works there.
It is important to realise that the port of Felixstowe has not existed historically. Access by water has always been difficult, and one of the outstanding jobs at the moment is going to be further dredging. Access by land was absolutely appalling until a few years ago by the existing roads. It is clear from the four Petitions which have been presented, and from the speeches which have been made by the local Members of Parliament in another place who have seen Felixstowe develop, that there is a widely held feeling that this Bill could destroy what has been built up with so much imagination and effort.
In assessing the morality of the point which the noble Lord, Lord Goodman, made that Parliament should endorse a transaction which has been entered into, I thought it was a pity, and I put it no higher than that, that the noble Baroness, Lady Birk, from the Government Front Bench did not at least put a little gloss on her words that it had been last year an amicable, freely arranged agreement. The fact of the matter is that it was when the assertion had been made that this was a willing buyer, willing seller, situation that Mr. Gordon Parker wrote to the Member of Parliament who represents the area, Mr. Stainton, the letter which my honorable friend quoted during the Third Reading debate in another place. It was a letter which made it absolutely clear that it was Government policies, including the policy

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of nationalisation, which made it virtually impossible for Felixstowe to raise further money when it needed to do so last year.
But let me turn away from that and ask the one question which I should like to ask, which is what is the need for this Bill. On 23rd March on the Second Reading of another Private Bill, the Anglian Water Authority Bill, the Lord Chairman of Committees, who is going to he speaking later on in this debate said at column 625:
"The Select Committee will have to consider the need which the Promoters will wish to establish for the provisions of the Bill in the context of the objections which will be raised against it by the Petitioners".
The noble Lord, Lord Stow Hill, very much followed that advice in talking about the public interest.
The fact is that those who are responsible for the Felixstowe Dock and Railway Company, who use it, who provide much of the land, the services, and the finance, believe that there is no need for this Bill. Indeed, they fear that their fundamental interests are going to be threatened by the Bill because they see the single-minded purpose which literally created Felixstowe being lost amidst the cross-currents of the competing interests of the 19 ports which are within the control of the British Transport Docks Board. I refer, of course, to the port users, to Trinity College, to the Felixstowe Dock and Railway Company, and to European Ferries.
It has not been suggested in your Lordships' debate this afternoon, but it was suggested in another place, that in some way European Ferries is not a suitable organisation to run this port. I do not believe that that assertion bears even a moments scrutiny. In 1973 European Ferries acquired the Northern Ireland port of Larne. If I may use an agricultural illustration, when your Lordships recall that it costs £4 a ton more on average to buy a ton of wheat in Belfast than it does across the water in Liverpool, and that in some parts of Northern Ireland the differential is greater, I am sure your Lordships will immediately take the point that the minimum of delay and expense is most necessary in bringing cargoes into and out of Northern Ireland.
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With unemployment running at up to 25 per cent. in parts of Northern Ireland, of course job promotion is an absolute priority over there.
My contention is that European Ferries have shown that they are able to do their bit to meet those particular national needs. Port charges at Larne are lower than those at Felixstowe, which in turn are lower than those at Southampton, to give that as an example. During the last two years, cargo and passenger traffic have increased through Larne and the workforce there shows a healthy 40 per cent. increase. It strikes me that Mr. Wickenden and his company have brought to Larne exactly those qualities of energy, imagination and the ability to get on with other people which Mr. Parker brought to Felixstowe 25 years ago. It is significant that the port users at Felixstowe want one of their number to run the port, and that in essence is what they want. The port users have received an undertaking, which has not been mentioned today, from European Ferries that there will be no discrimination with regard to European Ferries' own undertakings, and this is precisely the same undertaking which has been given to British Rail at Larne, and one finds there that Sealink, the Scottish arm of British Rail and a subsidiary of P. & 0., are going in and out of Larne Harbour with absolute freedom.
It is worth saying that the port users of Felixstowe do not fear competition but, locked into the British Transport Docks Board, they know that whether the Board likes it or not, they would be competitors for resources which are becoming less and less available as financial stringency becomes tighter and tighter in this country. The port users weigh the effect of being one among 20 claimants for scarce resources against the direct access which they enjoy at the moment with the Felixstowe management and they find the scales weighted heavily against the case for this Bill.
There is very little that I can add to what my noble friend Lord Butler of Saffron Walden said on behalf of Trinity College, but it is fair to underline the substantial capital outlay which the College has shouldered and the wide educational benefits which the College is offering, totally outside its own immediate educational responsibilities, from its Felixstowe

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income. Finance raised from industry and commerce is no new feature of the development of universities in this country and at a time when higher education is absolutely crying out for additional resources, long may this remain the case! But here again, when we look at Trinity and the way in which my noble friend put the case, in such a balanced way, we find no confidence in the Bill. Surely we should ask ourselves whether the judgment of those who have been involved in this port since its modern development began should not be heeded very seriously.
I confess that I am at a loss to understand who really is in favour of the Bill, except for the Promoters, of course. What are the benefits which the Promoters genuinely believe that they will bring to Felixstowe, remembering always that the Promoters must establish the need for their own Bill? Is it seriously argued that Felixstowe's commercial prospects would be improved by the Board's control? This of course is the nub of the argument for my noble friend's Instruction and it is the basis of the anxieties of the petitioners. If it is asserted that there is no basis at all for this anxiety, I would draw the attention of your Lordships to the view, expressed very early on in the proceedings in Committee in another place, that the Board was ready to keep in operation those of its ports which ran into difficulties provided they showed what was called a working profit.
I accept absolutely that that is a humane and sensible approach for a Board which has the wide responsibilities of the BTDB, but it can scarcely imbue Felixstowe with much confidence to hear that one of the needs for the Bill relies on the case for the Felixstowe Dock and Railway Company to share the problems of the 19 other ports within the BTDB's control. Is the Board really seeking to argue that its commercial performance is of such a nature that it should be imposed for the good of Felixstowe? Again, in Committee in another place it was given in evidence that over the last year Southampton's port charges had increased by approximately 40 per cent. at a time when the port charges of Felixstowe had been confined to a 15 per cent. increase, and that Southampton's charges had increased six times in the previous 21 months and were in general far higher than Felixstowe's.
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I would ask the noble Lord, Lord Wynne-Jones, who will reply, a simple and straightforward question: would it be the policy of the Board in the future, if this Bill becomes law, to encourage Felixstowe to maintain its differential of charges, if it is able to do so? That is a perfectly straight question which I put to the noble Lord and on the answer depends to some extent the strength of the case for my noble friend's Instruction. Is it really the Board arguing that there is need for the Bill because the people working at Felixstowe demand it? My understanding is that the noble Lord has not in fact been to talk personally to those who are working at Felixstowe. May I say, as somebody who has done so, that it is clear that the Transport and General Workers' Union—the noble Lord, Lord George Brown, will be speaking with very much more experience and knowledge of this issue than I have—have made it clear that what they want is to be allowed to get on and work the port, whoever manages it.
We are a hard-headed lot in Suffolk and it may not surprise Lord Wynne-Jones to hear that he would find if he went to talk to the people who work there a reluctance to believe that the Board would really be laying out in future scarce resources to develop Felixstowe in order to create further competition for Southampton and Immingham. If the noble Lord went to talk to the people working at the port he would find out one other thing as well. He would find doubts expressed as to whether communications between the unions and management would continue to be on the same purely local basis which has worked so well so far. It is not unreasonable to suppose that all who work at Felixstowe look with doubt at the disruptions which have occurred this year at Hull and Southampton and, whatever the reasons may be for those disruptions, those at Felixstowe hope in their hearts that they will be able to retain their independence.
The noble Lord, Lord Goodman, warned during his speech of reaching a decision against the Bill because of a dislike on this side of the House of nationalisation. With respect to the noble Lord, who is not in his place at the moment, I have not heard a great deal of debate on this particular issue this afternoon. However, the argument has been

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put forward in another place that the Government's intention to nationalise the ports should be a decisive factor in favour of the Bill. I find that contention quite extraordinary. Surely, Government policy must be the subject of public legislation, and that a public Bill which has still not seen the light of day is a conclusive argument for private legislation would appear to me to be a contradiction in terms and not conducive to deciding on the merits of this Bill.
My Lords, I end by mentioning three relevant factors. First, compulsory purchase. Must this be brought into the Port of Felixstowe when the alternative is already there with no necessity for CPO? Will the Board continue to develop the Port so that proper use is made of the massive investment which has been put into the local infrastructure in recent years? The road between Ipswich and Felixstowe has been made dual, what is known as the spur road to the dock has been completed, and the relief road, bringing so much traffic from the Midlands to around Ipswich, has reached the public inquiry stage. Will there be a need for these investments under the Board's policies for the port? What are those policies to be?
After listening to my noble friend's speech I am more certain than ever that Clause 2 of the Agreement is so heavily qualified that, with the best of intentions, the Agreement is virtually worthless. Why cannot an Amendment be inserted into Clause 2 adding the words, "on a commercial basis "? The Member of Parliament for the area, Mr. Stainton, pressed the Board hard on this point before the Bill came to your Lordships' House, and received the reply from the Board that that would be impracticable because the Agreement had been sealed by both parties. Yet, Clause 6(2) has subsequently been inserted into the Bill in another place and that has a direct bearing upon the Agreement. If my noble friend's Instruction is passed, I very much hope that the Select Committee will consider the proposal for a reasonable Amendment along these lines to what I consider are totally open-ended undertakings.
At Felixstowe, there is a warning for the future of all of us. If you go there,
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you see huge crates standing on the dock. These are parts for the Chrysler contract for Iran, but the crates do not travel all the way to Iran by sea. They go across the North Sea to the Baltic. There, they are unshipped and they go by train to be delivered in Iran because, commercially, that is the best way for them to be transported. But Felixstowe is making its vital contribution to our trade because it is a port to which people want increasingly to come and through which they want to trade. In the national interest, that position must be not simply maintained but developed. For that reason alone, I support the Instruction which is before the House today.
5.44 p.m.
Lord MERRIVALE: My Lords, the chairman of the British Transport Docks Board in the 1975 Report and Accounts of the Board, says in his statement:
"The negotiations between the directors of the Felixstowe Dock and Railway Company and the Docks Board were carried out entirely on a willing buyer/willing seller basis."
I think it interesting to recall that at the extraordinary meeting of the ordinary stockholders of the company on 21st November 1975, there were 871 votes in favour of the resolution for accepting the Board's offer but that there were 434 votes against the offer. However, the Board said that, in terms of the paid up share capital of the company represented by the votes at the meeting, the majority was 87.95 per cent. However they are viewed, circumstances arc totally different today for, since 17th March last one company, European Ferries Limited, controls the Dock Company with a 97 per cent. holding and that company is certainly not a willing seller—I believe, with considerable justification. If one considers the record of the port of Felixstowe over the years, it has been one of developing success under private ownership.
In fact, Sir Eric Millbourn, a past vice-chairman of the National Ports Council, last year wrote about Mr. Gordon Parker, who has been referred to on a number of occasions this afternoon when, in 1951, he took over the chairmanship of a company which owned, as the noble Earl, Lord Gowrie put it, a small, silted up dock basin with negligible trade and no apparent potential. He wrote:
"…in the intervening time it has reached its present state, providing employment, directly and

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indirectly, for thousands of men is solely due to his energy, drive and inspiration. Those who have assisted arc the first to admit that it was his enthusiasm which linked their efforts."
At this stage perhaps I may take up this question of a linking of efforts. It brings me to industrial relations. Through hard work, co-operation and communication between men and management, the economic performance of Felixstowe dock has developed year by year, as has already been mentioned. As one senior shop steward, Mr. Paddy Ahern, said last week,
"We are one big happy family. We have a spotless record of labour relations."
The Secretary of the Felixstowe branch of the TGWU, Mr. Geordie Landles, also said last week:
"There is no trouble in Felixstowe—no strife—we are a family community."
Another important aspect is that, should a problem arise, it can be dealt with on the spot between the union and the managerial elements and without reference to a distant head office.
I believe that these excellent labour relations are high-lighted by the fact that mechanisation has been very effectively introduced with the full support of the workers and after discussions with them. I believe, too, that the port has earned the reputation of a pace-setter in the industry by being the first to introduce the most modern methods of cargo handling. On the other hand, what do we see in some of the docks which are owned by the British Transport Docks Board? For instance, Hull is an interesting example. I should therefore like to quote an extract from a Press release of 14th April 1976 by Sir Frank Price, chairman of the British Waterways Board. He said:
"I am extremely concerned that a group of men at Hull Docks, acting in an unofficial capacity, have been allowed for such a long time to jeopardise the livelihood of men employed by my Board who belong to the same trade union. The British Waterways Board's endeavours to introduce modern techniques in inland water transport which would enable exporters, including the British Steel Corporation, to be more competitive have been sabotaged by this group of workers."
As the BTDB say in last year's report:
"During the year, the Board's ports were generally free from serious "—
and I emphasise that word—
"industrial disputes; the major exception was at Southampton…there were also stoppages at Newport which were particularly unfortunate in
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view of the efforts being made to attract additional business to the port."
Let us now consider and compare the economic performance of one or two BTDB docks and the port of Felixstowe. Newport has declined constantly since 1971 in inward and outward traffic. It had 5,995,000 tonnes handled in that year and only 2,402,000 tonnes in 1975. While Southampton decreased the tonnage handled in 1971 of 29,930,000 tonnes to 26,410,000 tonnes, Felixstowe increased the amount of cargo handled from 2,388,655 tonnes to 4,225,587 tonnes in 1975—a constant rise. As for Hull, there was only a very slight increase in the years 1972, 1973 and 1974 compared to the figure for 1971. On the other hand, there was a decrease of over 1 million tonnes between 1974 and 1975. Therefore, it would seem that good labour relations are highly important.
Now I turn to charges, which is a matter of considerable interest to users. I shall compare like with like as in the example I am to give they were sister ships which were involved, calling at Southampton and Felixstowe. To call at the former port, Southampton, with a 100 per cent. payload costs 162 per cent. more than at the latter port, Felixstowe. But with a more realistic 50 per cent. pay load, it costs 180 per cent. more at Southampton. There has been reference earlier to the policy of the BTDB in relation to Felixstowe. I understand that first of all they wish to build on the existing success of the port—I stress the words "existing success". But if one turns to page 34 of the BTDB's 1975 report, regarding traffic statistics for cargo from 1971 to 1975 at the 19 various ports they own, I think the overall record would tend to show that Felixstowe's development and expansion would be slowed down in the future.
Regarding competition, even if Mr. Stuart, general manager of the BTDB, did say during the Committee stage in another place that the Docks Board encourage competition between their ports—and I understand that the chairman made the same remark, according, I think, to the noble Baroness, Lady Birk—I cannot help but wonder if this will really apply should they acquire Felixstowe, for this would give them a virtual monopoly, I am not saying over the whole country, but along the East Coast.

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Finally, there are the users, and I think that it is an interesting fact that the chairman of the Felixstowe Port Users' Association, a Mr. Paul Jinks, representing all users' interests—whether exporters from this country or operators abroad—is totally in favour of the port remaining under progressive private ownership. The effectiveness of the port culminating in Felixstowe guaranteeing to unload cargo vessels swiftly and efficiently, combined with low charges, may be responsible for this attitude of the users. In conclusion, my Lords, as I think my noble friend Lord Belstead hinted, for some of the reasons I have given, I feel this Bill to be undesirable and unnecessary.
5.53 p.m.
Lord GEORGE-BROWN: Fellow Peers, having spent so much of my life batting at number two for the Government Party in difficult times, I can only start by expressing my gratitude to the six of my fellow Peers who put their names down to speak after me, because otherwise quite clearly the Government Party had decided that I should be second substitute and should never leave the substitute's Bench. We have had before us a succession of lawyers, academics, capitalists and those who administer the finances of the academic institutions. I am the only one batting, as I say, second substitute—number 13—who needs to declare an interest, and I do so immediately. This is it, which I am holding in my hand. It is a little red card which says that I am a fully paid up member of the Transport and General Workers' Union to which belong all those who work in Felixstowe docks. One of the things which make me realise that I was indeed right to exchange the batting place of number two in the Labour Party for the place of second substitute is how little regard the Government Party now have for the views of those who work in an industry, when the views of those people do not happen to fit in with the views of those who run the Ministries and their bureaucrats who support them.
I have told the noble Lord, Lord Goodman, what I now intend to say, and he said, "By all means "; and he added, "my affection for you will not be diminished thereby". I hold in the most extraordinary degree, and have utter
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repellant fascination for, the contempt which he showed when I intervened about the view of the workers. He said that he had been to a meeting in the East End to find out what the people there thought, and when he came away he did not know any more about what those people thought than when he went there. But I was not talking about going to a mass meeting in the East End, although I must say that, given my background and training, I could have found out what people there felt had I gone to the East End. The problem of the noble Lord, Lord Goodman, is adapting to the East End. But I am talking about something else; I am talking about a group of organised workers, in a reputable trade union, who happen to disagree with their leaders, their national leaders; who happen to disagree with the man in the cloth cap; and 80 per cent. of those workers in the yard at Felixstowe are against it——
Baroness BIRK Baroness BIRK: Where does the noble Lord get that from?
Lord GEORGE-BROWN: From them—and unlike the noble Baroness I am one of them; that makes a lot of difference. And not only are—
Baroness BIRK: My Lords, would the noble Lord give way? The noble Lord says that he is one of them, but I do not think that he is one of the dock workers at Felixstowe. It does not do any good in a debate of this kind to use figures like that which the noble Lord has not yet substantiated. My affection for the noble Lord, like the affection of the noble Lord, Lord Goodman, will not diminish, but I cannot really accept some of the things he says, including what he says about the attitude of the Government. He is really talking absolute nonsense.
Lord GEORGE-BROWN: My Lords, there is a quotation from Alice in Wonderland that matches that; whatever the noble Baroness wishes not to believe is of course absolute nonsense. I repeat that I happen to hold that union card. I happen to be one of them. I happen to have been authorised by them to say what I am now saying. I happen to have been authorised by the chief shop steward to say what I am now saying. I also happen to have been authorised to

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say that the shop stewards' committee, by a lesser majority—but by 60 to 40— is also against the takeover.
Other nationalisation measures, other measures, have been justified by this Government on no better basis than that the trade unions wanted them, even when I would have opposed the trade unions for wanting them. This is a case where the trade union does not want what is proposed, and the only thing the Government can say is that the national leaders want it. I met the shop stewards yesterday. Let the noble Baroness not take part behind that Alice in Wonderland approach. I am speaking on what I know and on what I am authorised to say.
Now, who wants it, in the case of the unions? It is the leaders of the Transport and General Workers' Union; the man who now tells the Government what their policy should be and who gets Ministers to withdraw when they have gone ahead of him. And why? Why are the dockers of Felixstowe, members of the Transport and General Workers' Union, at odds with the leaders of the Transport and General Workers' Union? It is for the same reason that other people in the Transport and General Workers' Union are at odds with their leaders, and for the same reason that the General and Municipal Workers and the non-dock workers in the Transport and General Workers' Union are against the Dock Work Regulation Bill. It is because what they are trying to do is to take work away from Felixstowe. As has been said, at Felixstowe it is cheaper and the turnround of ships is quicker. Foreign ships prefer to queue up outside Felixstowe rather than go to Hull, to Immingham. to Southampton or to London, simply because the costs are lower and the turnround is much quicker.
The British Transport Docks Board's interest is not in Felixstowe. It is to get the facilities in the other ports, which are expensive and under-used, used at the expense of Felixstowe. This is why my fellow members of the Transport and General Workers' Union at Felixstowe, who built up the efficiency of that port, are at odds with their leaders. Listening to some of the speakers on the other side of the House who have taken the same view as myself one would get the impression that the workers do not really have much to do with it. From Lord Goodman one
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gets the impression that they had nothing to do with it. In fact, it is my fellows who have everything to do with it; and they have produced a situation where we have, if not the most, certainly one of the most efficient ports in this country; but because it is so efficient, of course, there are facilities unused in Hull, in Immingham, in Southampton and in London. I ask my fellow Peers really to believe, to understand and to accept that the certain consequence of this Bill will be to make Felixstowe less used and, may be, the others a little hit more used; and each one, therefore, will still be showing a loss.
It also happens to be true that my fellows, members of my union, earn a good deal of money, more money, in Felixstowe than similar workers elsewhere. That is their prize for productivity. But is that not what the Labour Party was supposed to be about? Is that not what we keep preaching to people: gain in productivity performance and you will share in the results? So what is to happen to them if this Bill ends up in anything like the form in which it is now? What will happen to them is that, for having done all that, their earnings will be reduced. But the earnings of others will not be increased. Others who should he redundant will be kept on the roll and they themselves will be kept on the roll and paid for doing less or nothing at all. As an unrepentant Socialist but no longer a Party hack, I say to the Government Benches that what they are doing has nothing whatever to do with what we established the Labour Movement for; and when I hear professors and others giggling at me, for heaven's sake let us understand! It may be that I am one of the last members, one of the ageing members, who not only worked as a manual worker but organised manual workers and organised dockers, and who knows what the job is about. My fellows in Felixstowe are entitled to be taken into account.
I do not argue the syndicalist case, although I have heard it argued from those Benches. I have heard it argued that what the miners say should determine what we do with the coal mines. I have heard the syndicalist argument. I do not myself take it, but what I do say as a long-time trade union official and as a member of my union for 45 years is that my fellows' view should be taken into account, and it is not being so taken into

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account in Felixstowe. They could not be, in any democratic society, more heavily opposed than they are; and, though I cannot pretend to have heard everybody who has spoken today I have heard much of most speeches, no case has been put up which really knocks their case down.
Perhaps the noble Baroness will forgive me for ending with a quotation from a man I think she liked when he was alive, from a man I know she knew and a man whom all the IPC Peers knew, many of whom certainly used to like him—my great friend the late Herbert Morrison. I well remember Herbert Morrison laying down the doctrine in 1945, and I well remember some of the IPC Peers now with us helping to write the document. It was, "The nationalisers must prove their case". That was the doctrine of modern social democracy, although I do not think we had invented that term then—the modern Labour Party. "Let the nationalisers prove their case". "We accept that,"we said in 1945. Let the nationalisers prove their case over Felixstowe. There is no case unless, just because you have something that is working badly and unevenly in 19 other ports, you must now make it work badly and unevenly in this port. As has been said again and again, everybody to do with this port is content with it. Taking it into the British Transport Docks Board cannot do it any good. It cannot do the other 19 ports any good; it can only make sure that 19 are less bad and the 20th is less good than it now is. I myself would rather move to defeat the Bill, but in this modern age of Tory timidity such excesses are no longer committed. I only hope that when this Bill returns from Committee it will be in a different form.
6.9 p.m.
Lord HAYTER: My Lords, I always find after listening to the noble Lord, Lord George-Brown, that my head is nodding and that I agree with every word he has said. I do in this case, because his main point was that the views of his friends should be taken into account, and that, I think, is the burden of my speech. Perhaps I should explain to your Lordships that I am the chairman of a little Neddy
which is called International Freight Movement, and because of that, and
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because little Neddies are always tripartite, we know that we can make no move of any consequence unless we have the Government, the industry and the unions behind us in relation to our work. The work in which we are engaged, of course, has a lot to do with the ports, the airports, the railways and the roads, and with the reorganisation of some of these ports and airports.
The remit of my "little Neddy" is simple; it is to find the best economic national answer to the questions which we have to consider. So I just want to hear both sides. What I have not heard is both sides in this debate today. I think that a Party, like a person, can protest too much. There have been interim injunctions, there have been instructions to the Committee, there have been telegrams to all of us—a very professional job has been done on the public relations side. There has been a great deal of repetition from the people on the other side of the European Ferries supporters. One person after another has said the same thing because they have had the same briefing from the same people; but there have been inconsistencies in their remarks.

At ore moment Felixstowe is a poor, small, efficient company. At the next moment it is an undesirable major competitor. I am quoting the words from the other side. The noble Lord, Lord Butler, said that the Board was already too big because it has 19 ports under its control; but as a humble member of Trinity College, I remember that Trinity itself is the largest college in either Oxford or Cambridge. Size itself is not important if the organisation is good—as it is at Trinity and as I think it is and will continue to be at the British Transport Docks Board. Facts have been presented. Have your Lordships noticed that when a person says, "As a matter of fact…", it usually is not true?
The two things that stand out, which will he agreed and, in fact, have been agreed from side to side, is that this Bill went through all its stages in the other place, was considered in Committee and has come here. I am not prepared—and I do not think any of your Lordships are prepared—to accept what has been said in another place without having the opportunity to look at it; so that I want to have it in Committee and see what we feel about the details of it.

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The second point which is incontrovertible is that in ordinary commerce the deal would have gone through a long time ago. It is the peculiar position of the Docks Board which renders this Bill so necessary. Like the noble Lord, Lord Goodman, I do not like the late intervention that was made. The third point which I can I quote from the document that your Lordships have in front of you, is that the British Transport Docks Board want to present their case in Committee and to answer the many questions in your Lordships' minds. I should imagine that they will not object in any way if the reservations are made in the Motion that is going to be put to the House after this Second Reading has been decided.
I find it interesting to ask myself: what does the European Ferries Board fear? What do the unions fear? What does Trinity College fear? What do the users fear? Why should there be all these efforts to try to stop the normal processes of this House? I believe that they fear the conclusions of the Committee's Report may be—and may be they are right. I feel that the British Transport Docks Board is the right owner of Felixstowe; but I am prepared to wait and see. I hope that this Second Reading will go through and that it will be sent to a Committee in due course.
6.14 p.m.
Lord BARNBY: My Lords, whatever may be the examination of principles and the discussions on collateral problems, the overriding issue is nationalisation. In spite of the persuasive and fluent manner in which the noble Lord, Lord Wynne-Jones, presented his case for this Bill to the House, I am unchanged in my belief that the majority of this House is against the principle of nationalisation. For myself, I wish to intervene to record unqualified opposition to the Bill. It is because I have had good knowledge of this port for some time, that I could not deny myself the opportunity of intervening however briefly; because I believe it is a port which is doing a great job, which is making a great contribution to the marine effort and that any attempt to nationalise it is sheer folly. The progress of this port, developed in a very short time, has been already explained by other speakers. Indeed, anybody inter
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vening at this point in the debate has very little else to say for the ground has been so well covered; but because this has been built up in such a short time, largely by the imagination and determination of one man whom I happen to have known for a long time, I have been in past years to the port, know it well and have been impressed with the rapid development and, more particularly, in the early days of the container traffic which, as I have said, made a contribution to the national picture.
We have had available a wealth of figures, a good presentation of both angles; but more particularly have I been impressed by the speeches of my noble friends Lord Drumalbyn and Lord Gowrie because they have in my mind given convincing reasons to accord with what I, myself, think are the facts. But there are two historic facts. One is that this port has been built up by private enterprise and the other thing is that a contribution to its success has been the surprisingly good industrial relations between management and workers. This has come about by the workers having been recruited largely locally—that is an agricultural area. They have been free from any of the restrictive, traditional methods in the older ports. They have been actuated by loyalty and local enthusiasm so that they have been able to bring about and make possible this continuous development of the port. This it is which seems to me would be the greatest folly to try to interrupt.
Of course, to argue that the relations under the big organisations like the British Transport Docks Board would be just as good, is nonsense. Consider the absurd suggestions that have been made that stations five miles or more inland should be included in dock labour! Again, you see the restrictive practices, in spite of what anybody says, in ports like Hull and Liverpool where the biggest grain silos in Europe have been empty for two years because of difficult industrial relations. This would not have happened at Felixstowe. These restrictive practices in the ports are bringing about some monumental losses to the nation. It is because I pray that this will not be repeated in Felixstowe that I record my disagreement with this Bill and my support for the sense of my noble friend Lord Gowrie in recommending its presentation to a

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Committee and that the Committee will take into full consideration the points so strongly raised by so many other speakers today and particularly that of the public interest. I again repeat my disagreement with the Bill.
6.20 p.m.
Lord HANKEY: My Lords, I should like to start by joining those who have congratulated the noble Lord, Lord Brain, on an excellent speech: short and to the point, and very well structured. I hope we will hear him often in your Lordships' House. I should like to say why I am interested in this subject, because I do not come from Felixstowe and do not know East Anglia very well. I am very much interested in the development of the British economy, which has been going down for years. One of the reasons I am sure is the inefficiencies of our ports. I am sorry to use these words, but I am afraid it really is the case.
It is very important that in this debate we should take account of national considerations in examining this particularly efficient port. Why have these small ports developed so much?—because the British Transport Board Ports have also developed as well as Felixstowe. It is a sad story. The reason is that the inefficiencies of London and the Mersey Ports have been so colossal that the ships tend to go to the other ports. This has brought this tremendous increase. It has been very bad for our country.
The conditions in our big ports have become notorious all over the world. I say this because I travel a good deal and I am always hearing complaints on the subject. For instance, I met a British ship's captain who said he would not bring his ship to our larger ports any longer if he could help it. When I asked him why, he said, "Consider the turnround. The turn-round you get in Hamburg is 48 hours; in Rotterdam it is 36 hours. In London it is two weeks and on the Mersey usually more". At that rate, we cannot hope to compete with foreign ports. A friend of mine heard the same story from a Canadian ship's captain six months earlier, and I have been in touch with Scandinavian ship-owners. They are usually too polite to make a direct complaint, but when you
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get to know them they tell you about this very sadly, because they are good friends of this country. This is a state of affairs that ought to have been dealt with many years ago. Is it not typical of our country, Parliament, Government and political Parties at the present time that here we are talking about taking over an efficient port and nobody has done anything to correct the gross abuses in the others? It is almost incredible that here, which is our country in a major economic crisis, we are doing something which is completely irrelevent and probably more harmful than otherwise.
I mentioned London. I do not think this situation applies to Tilbury. Tilbury is now a very efficient container port, and I hope that the loading of the containers will not be limited by any artificial constraints so that this has to be done within five miles of the port. That is where a good deal of the trouble has happened. Let us face it, there are widespread thefts in our larger ports. You may say, how can I make these unsubstantiated allegations? I am dealing with facts; I am only interested in facts. A good diplomat w ill tell you that nothing is more devastating than the truth.
I met a man who exports buses to America and he used to send them through Southampton, one of the British Transport Board ports. At Southampton they will not receive goods after 4 o'clock in the afternoon. I have confirmed this to make sure the story is true. The result is that the driver, if he is delayed, has to stay in a hotel or put up somewhere and has all the bother of going along to the docks the next day. The real trouble is that there seems to be no adequate guarding of the vehicles and goods when they are taken over by the port. The port accepts responsibility but, in practice, the tools, spare parts—and, on one occasion, all the seats—were stolen from my friend's bus. He experienced this time after time until he became fed up. Now he has his buses driven to Dover (he exports regularly) and they go across the Channel on the ferry. They are then driven all the way to Antwerp from where they are shipped. At Antwerp vehicles, or any other goods, are received at any time, day or night, and they are kept under guard. There are never any losses and everything goes very well. It is more expensive for my friend, but he says

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there are fewer complaints from his clients. Although insurance covers the losses, my friend says he does better business this way. That does not lead me to think that the British Transport Docks Board are as 100 per cent. efficient as we have been told. I am sure they do their best; I am sure those at the head of the Board are extremely good. I am sure they suffer from ridiculous trade union regulations in the ports and suffer the effects of this harmful legislation which your Lordships have been made to pass. But, my Lords, there it is. That is the situation that we have to face today.
I am not only talking about Southampton. I have a friend who imports shoes. He used to bring the shoes into the Port of London but he found the consignment was never ready on the day that he sent his lorry to collect it. The driver either had to stay somewhere or drive miles back to the Midlands. The next day generally a consignment was ready but always one third had been taken. This is very annoying. I raised this matter with my friends in the insurance business. I said, "This must be a nuisance for you too. Why do you not make a row if nobody else has the guts to do so? "But the insurance industry says that it does not pay them to do it and the port authorities are afraid of strikes. The policy of the insurance industry is that it is better to pay out good claims and get bigger premiums.
This is a burden on British trade; both imports and exports are affected, and we pay unneccessary money on these counts. This is a big disadvantage to us. This is why trade is moving to the little ports. But Parliament has done nothing about it; the trade unions do not care and have done nothing about it at all. I am positively certain Mr. Jack Jones does not like this. I am sure the T and GWU, who are a wonderful union, would do their best to control it if they could. They do not have the same degree of control over these things that American and Swedish Unions have. What control they used to have has been taken away because you and I, my Lords, through the public funds, pay out money for the strikers when they go on strike and they are no longer dependent on their unions for strike money. The result is that the unions have not got control of the situation. Therefore this goes on
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affecting our national trade situation and we have done nothing about it.
This situation is bad for the motor car trade. I can give you many examples where people complain that motor cars arrive abroad with parts missing. A short time ago we had some Dutch boys camping in our garden. They were nice young people playing in a tennis tournament. They were feeding with us one night and they said "We are very sorry our parents cannot buy British cars any more". I said to them that that seemed a bit odd, and asked them why. They said, "Because the cars arrive with parts missing". I said that no doubt they were replaced, and they replied, "Yes, but you have to wait two or three months for the parts to arrive, and it is very annoying". I asked where the parts were stolen, whether it was on the ship and so on. They said the parts were stolen from the port of London. They said, "Everybody tells us the same". Thus one group of our workers take action which damages other workers.
Here is another example. At Hull there has been an unofficial strike for 18 months, "blacking "certain transport belonging to the British Waterways Board. One group of workers again are damaging another. Surely somebody ought to bring order into the chaos from which we suffer. But Hull is another British Transport Docks Board port, and it does not lead me to think that they are quite in control of the situation. I am very interested in labour relations. I have studied them extensively in many countries, and what strikes me about Felixstowe is that they have very good labour relations there with their workers. They have an excellent system. The workers seem to get consulted and they feel they are on to a good thing. I entirely agree with what was said by the noble Lord, Lord George-Brown: my information is the same. The workers in Felixstowe get really good pay in return for hard work and high productivity. This is what happens in Sweden and it is jolly good. Bring them under the general umbrella of the British Transport Docks Board and all the other workers in all the other ports will be at them to see if they cannot whittle down their efficiency and productivity and get them paid the same. There will be a great deal of unpleasantness and jealousy about it.

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I personally believe that we should do very well to leave well alone. There is an old French saying: le mieux, c'est l'ennemi du bien. In other words, the best is very often the enemy of the good. I think we ought to leave well alone. The fact that Felixstowe is a good port means we should stick to it and see if we cannot emulate it elsewhere. What we should be doing is to see how we might reform some of the disgraceful abuses in our other ports, instead of bringing a Feally good port under another general hat. I hope the Select Committee will look at the whole question on the broadest basis and take into consideration the national concerns which underlie this, and that Felixstowe will, in the end, remain with European Ferries.
Viscount MASSEREENE and FERRARD: My Lords, before the noble Lord sits down, I should like to support what he said. I was once a director of a trans-shipping company for a few years. It was in the area of the London Docks, but we tried to avoid using London docks. It was apparent at London Docks, with regard to the meat trade—though we were chiefly carrying grain ourselves—and certainly we were informed that at those docks the dockers expected to take 10 per cent., I think the figure was, of all carcases coming into London Docks as their perks. Speaking from memory of a period of some five or six years ago, I understand that two or three of the dockers were brought before the courts and then the rest of the dockers came out on strike—because these dockers who had been stealing carcases were convicted. The whole position is hopeless.
Lord SHEPHERD: My Lords, is the noble Viscount making an intervention on the basis of "before the noble Lord sits down "? It is the custom in your Lordships' House to use this device in order to elucidate something which a noble Lord has previously said. I hope that the noble Viscount spoke with the intention of putting a question, because we do get into difficulties in your Lordships' House if this device is used as a means of getting ahead of those who are on the batting list.
Viscount MASSEREENE and FERRARD: My Lords, I did not wish to
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put a question. I merely wished to support the noble Lord, Lord Hankey.
Lord HANKEY: My Lords, I willingly accept this as having been said before I sit down. I have much more information on this subject, but I do not want to lengthen my speech. Therefore I shall not add to what I have said. I have a great deal more ammunition for future occasions.
6.34 p.m.
Lord RENWICK: My Lords, it appears that this Private Bill will not bring any lasting benefit to any of the parties concerned or to the employees. It will bring no benefit, immediate or lasting, to our country. It takes advantage of the fact that the Felixstowe Dock and Railway Company was incorporated by a special Act of Parliament and is therefore exempt from the operation of the provisions of the Companies Act 1948. This Act, and subsequent ones, were designed specifically among other things to prevent the total acquisition of a company without the approval of nine-tenths of the shareholders.
Here we have a situation where the British Transport Docks Board, answerable directly to Her Majesty's Government, are acting outside the spirit of the Companies Act. Moreover, this is a measure which, by its timing, took advantage of an economic recession at a time when the mere threat of nationalisation hampered the availability of investment funds from other sources. It is also a measure which has been superseded by events. No longer do the company support the acquisition; no longer can the British Transport Docks Board justify the acquisition; and, most important of all, no longer can the country afford it. For Felixstowe is efficient, thriving and profitable. When I visited it recently with the noble Lord, Lord Brain—whom I should like to congratulate on his maiden speech and to say, incidentally, that I hope your Lordships will forgive me if there are certain similarities between our two speeches, though in fact I think that my own speech will be even shorter than his—I found nothing there, and nor, I believe, did he, to make me think that the company was in need of a rescue operation.
I found instead the true spirit of free enterprise. The whole workforce were combining to provide as quick, efficient

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and competitive a service as is available anywhere in this country to importers, exporters and shippers alike. It was in fact the shop stewards who showed us round "their "docks, pointing out with pride the new extensions to their quays, the new cranes and the equipment which handles containers and helps Felixstowe to cope with all the increasing trade it attracts. It was union men who were boasting of the speed with which they could load cars for export and, as the noble Lord, Lord Brain, said, boasting also that Felixstowe held the world's speed record for turning round a 1,200 container ship. They were proud that Felixstowe, in spite of its geographical position—as far as any port in this country from a major manufacturing area—was attracting for export goods manufactured within a few miles of a major competing publicly-owned port. It is this co-operation between management and unions, and their joint recognition that higher profits are to the advantage of the whole team, that makes Felixstowe competitive not only with the other docks of this country but also with the great modern ports on the mainland of Europe.
This means, as some speakers have already said, that they are helping to reverse the trend, prevalent for many years, of goods bound for Britain being unloaded at Rotterdam or elsewhere in Europe, where the shipper can be confident of few delays. Felixstowe now attracts goods from America which are bound for Europe, and it is justly proud of that fact. Exporters from this country use Felixstowe to avoid financial penalties for late delivery especially to the Middle East. I met an exporter recently who threatened to transfer his manufacturing capacity to France if Felixstowe was nationalised. He employs here at the moment about 400 people.
No wonder the British Transport Docks Board wish to acquire Felixstowe! But, in spite of their assurances that the company should continue as a statutory company operating under its own board, and other assurances related to the future development of port operations, do we really believe that Felixstowe, if nationalised, can maintain the reputation it has built up over the last ten years? The present management do not think so, nor do the Port Users' Association or the shop stewards to whom I talked. Their combined fight to oppose this
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nationalisation, strongly supported by Trinity College, Cambridge, as we have heard from my noble friend Lord Butler, will, I hope, be an example to all other companies who seem destined to face this same threat of nationalisation. I ask that we somehow allow Felixstowe to continue to grow under free enterprise, to be an example of what all other docks in this country could become, given the right management and the right incentives. For that reason, I support the Instruction of my noble friend Lord Gowrie.
6.40 p.m.
The Countess of LOUDOUN: My Lords, I shall be very brief. I spent some time yesterday going around Tilbury Docks—a most enjoyable and informative few hours. I was amazed at the extent of the changes that have occurred there over the last few years due to containerisation, which has of course brought its own problems. It seems to me, with awareness of these problems, and plans for the future already under consideration, that the all-round prospects for these docks are definitely getting brighter, and I believe that that applies to other ports, too. But I think that the Port of London Authority as well as the British Transport Docks Board, already have enough problems to deal with at Tilbury and the other ports under their control, without taking over Felixstowe Docks which are being run extremely efficiently at the moment, and which have a unique record in industrial relations.
I realise that it was rather unfortunate that European Ferries should have come into the picture at such a late date, but not too late, I hope. Competition is good for any business, as it keeps everyone on his toes. I ask your Lordships to take British Caledonian Airways as an example of this. The present uncertainty about the future of Felixstowe must be resolved one way or the other, because it is damaging to all concerned. But perhaps, as the whole matter has aroused such controversy, it would be better to send it to a Select Committee where all the points both for and against could be considered in detail.
6.42 p.m.
The EARL of LINDSEY and ABINGDON: My Lords, coming nineteenth in the list of speakers does not leave me with

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very much more to do than repeat what has already been so aptly put by other noble Lords from all sides of the House. As an infrequent speaker in your Lordships' House, I should just like to say that I have no direct or vested interest in European Ferries, or in what was the Felixstowe Dock and Railway Company. My original reason for wishing to speak in this Second Reading debate was to support my friendship for the son of Gordon Parker, who was responsible for the development of Felixstowe Docks from the early 1950s to what they are today—one of the most efficient and progressive ports not only in the United Kingdom, but in the world.
However, I have since had an opportunity of meeting all the main representatives of those interests most directly concerned with Felixstowe Docks; namely, the chairman of European Ferries, the senior shop steward of the Felixstowe Docks Section of the Transport and General Workers' Union and the Secretary of the Felixstowe Branch of the Transport and General Workers' Union. In addition, I also had the opportunity of meeting the Senior Bursar of Trinity College, Cambridge, and the chairman of the Felixstowe Port Users' Association. I can only repeat what some noble Lords have said before me, that without reservation they are in favour of the present arrangements by which European Ferries would be allowed to continue to run the docks to their best ability, and in the interests of the community as a whole.

Without going over the statistical ground which has already been covered, there are one or two points which I should like to raise which may be of interest to your Lordships. Though I listened to most of the opening speeches, I do not recall there having been mentioned the fact that when the British Transport Docks Board made their original offer it had not been through the Office of Fair Trading, whereas the offer of European Ferries has been, though it came some time after. Another point of interest is the fact that half the capital raised by the British Transport Docks Board for their port developments at Southampton and elsewhere attracted an interest rate of only 3.61 per cent., whereas the Felixstowe Dock and Railway Company would have had to borrow money at commercial rates
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prevailing at the time, which were in the region of 13 to 16 per cent.
I support the line taken by my noble friend Lord Gowrie from the Front Bench, and agree with his suggestion that this matter should be sent to a Select Committee in order to thresh out this whole issue in greater detail than can be done on the Floor of this House. I should like to be able to comment on the speech of the noble Lord, Lord Goodman, regarding the moral issue, by which I suspect he really means the legal issue, but I shall await the reply of the Lord Chairman and my noble friend Lord Colville from the Front Bench.
6.47 p.m.
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I need hardly remind your Lordships that I have the peculiar disability that I am unable to express any opinion at all about the merits of this Bill, which in any case, as I think your Lordships will agree, have been exhaustively and very ably canvassed by noble Lords on both sides of the House during the course of this debate. But it may be possible for me to help your Lordships with advice about some procedural aspects of the Motions which the House has been discussing, and I shall certainly try to do so to the best of my ability.
I shall deal first, if I may, with the Instruction. The Instruction standing in the name of the noble Earl, Lord Gowrie, focuses attention on a question which occurs in the Petition of European Ferries Limited and the Atlantic Steam Navigation Company Limited; namely, the competitive position of the port of Felixstowe, should the Bill be passed by your Lordships on Second Reading. This aspect of the Bill will therefore fall to be considered by the Select Committee if your Lordships give the Bill a Second Reading, and I can therefore see no procedural objection at all to the House agreeing to this Instruction. In that event, the normal procedure would be for the Select Committee to make a Special Report to the House.
Another important question which has been raised, although I am not aware—certainly, not during the time that I was in the Chamber—that it was raised by your Lordships in the course of the debate

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this afternoon, is whether the House should postpone further consideration of the Bill until the litigation now proceeding has been concluded. This litigation may give rise to important and difficult questions of constitutional propriety, and if my advice were asked I would say that this is a matter that would best be left to the Select Committee when it meets, as it will have the advantage of hearing the question argued by counsel on behalf of the parties.
I should now like to say a few final words about procedure on Second Reading and in Select Committees of the House on Private Bills. As the House will know, it is very rare indeed—though not, of course, unconstitutional, because undoubtedly this is a power which the House can exercise—for a Private Bill to he rejected on Second Reading. I am told by my expert advisers that the last occasion when this happened was in I937 on the North Devon Water Bill. So that for nearly 40 years no Private Bill has been rejected by your Lordships on Second Reading.
I think that the reason for this is that it has always been recognised that a Select Committee, which has the benefit of hearing argument by counsel representing the parties and hearing evidence from witnesses, is in a better position to consider the provisions of the Bill than the House can be, because the views of the opposing parties and witnesses cannot be heard in this Chamber. I think that conflicting evidence such as your Lordships have listened to from a number of speakers in the debate this afternoon can be sorted out more satisfactorily by a Select Committee. However, I would not want to leave any misunderstanding in the minds of your Lordships about the strictly limited scope of the consideration of an opposed Private Bill by a Select Committee.
A Select Committee of the House on a Private Bill is a quasi judicial body, if I may use this rather abstruse but fairly clear term, and can consider only the matters brought before it in the Bill so far as they are relevent to the Petititions against it and any Instruction passed and agreed to by the House. Without the authority of the House it cannot hear evidence other than that tendered by the parties. It is therefore unable to consider matters of
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public policy or morality which are outside the Petitions—matters such as those that the noble Earl, Lord Gowrie, and the noble Lord, Lord Goodman, referred to in their speeches. Matters of this kind can be decided only on the Floor of the House. It would be unfair to the Committee to expect it to do more than this, and it would also be unfair to the House if it was thought that such matters were within the scope of a Select Committee. I think that is all the advice that I am in a position to give to your Lordships.
6.52 p.m.
Viscount COLVILLE of CULROSS: My Lords, had he been in his place I do not suppose that the noble Lord, Lord Goodman, would have considered that I was very much of an authority, either, on matters concerning docks, but perhaps I can speak with some authority about this debate since I have heard all of it and will try to pull together some of the threads. I begin with an advantage that I share, although for not nearly so long, with my noble friend Lord Belstead and also with the noble Lord, Lord Brain, whose maiden speech I, too, enjoyed so much. That is the advantage of living now in East Anglia.
Nobody who lives in East Anglia is unaware of the Felixstowe Dock. It is a corner of the County of Suffolk which is immensely prosperous and which has attracted to it, because of the success of the dock, a large number of other activities and employments. It is a most prosperous, bustling and active place. As my noble friend Lord Belstead said, there are consequent results further afield. I am fairly sure that if it had not been for the dock at Felixstowe, the A45 road from the Midlands would not have been improved along much of its length because it would not have passed the cost benefit tests of the Ministry of Transport and the Department of the Environment. Therefore at least one of the by-products is that Bury St. Edmunds now has a by-pass and the lorries no longer have to go through the narrow, ancient and historic streets of that town.
I suppose it is only a coincidence, but if I am right in thinking that the port of Lowestoft is in the hands of the British Transport Docks Board, that North-East corner of Suffolk is not prosperous. I am not suggesting that this is the fault

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of the British Transport Docks Board, but it is an interesting contrast when one finds that many people there are looking for jobs and that there are long standing complaints about a lack of activity and commercial drive. Even now, when North Sea Gas has a part to play in the prosperity of the rest of the country, it still does not seem to have done the trick at Yarmouth or at Lowestoft. So we are all very well aware of the contrast that I have just ventured to make. It is that background—the prosperity of an important part of the country—that we ought to look at again briefly in this debate.
I agree with my noble friend Lord Gowrie that two main issues have run through the whole of this debate: the first, the matter of morals, or the right morality—so much stressed by the noble Lord, Lord Goodman—the second, what is in the best interests of Felixstowe, so much stressed by the noble Lord, Lord Stow Hill. I should like to say a word in turn about those two main issues.
I quite agree with the noble Baroness, Lady Birk, that it was only the fact that the Bill was needed in order to ratify the agreement that enabled European Ferries to come along with a new takeover bid and acquire the shareholding that they now own. But I am not sure that I follow necessarily the deduction from that which some noble Lords have sought to draw. We cannot, after all, pretend that this was a normal commercial contract, which seemed to be what underlay the speech of the noble Lord, Lord Goodman. After all, neither the British Transport Docks Board nor the company itself are ordinary commercial 'companies. The latter is a statutory company with statutory limitations on what it can do. The British Transport Docks Board, most importantly, are a creature of recent Acts of Parliament and equally have been given limited powers by Parliament. Therefore it seems to me that we go rather beyond what would happen in a normal commercial case. As a result of these statutory situations, we are not dealing with an ordinary company takeover.
It seems to me also that the issues are therefore allowed to be discussed debate such as this. This is not only my view.
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It is the view of the Promoters of the Bill. It is expedient that the powers, duties and obligations of the Board with respect to harbours owned or managed by them should be extended to include the like powers, duties and obligations with respect to the port of Felixstowe. That is the third paragraph of the Preamble to the Bill that we are discussing. A moral issue, perhaps, there is, and this I would concede in the way that the history of this double takeover bid has been brought out, and I think that in the statement of the Promoters of this Bill the noble Earl, the Chairman of Committees, will find a question raising this point. Probably, therefore, it will be a matter for the Select Committee to look at. Certainly it will be within their powers to consider that question.
I am bound to say that even now I do not find altogether clear what is the strict comparison with an ordinary commercial transaction, whether that is really relevant, and, if it is not, what the proper parallel should be. But it is perfectly plain that under the Bill there is no complete adherence in the minds of either the Promoters or the Petitioners to the ordinary Companies Act takeover bid. After all, there is a clause in the agreement itself made between these two parties which envisages that Parliament might make some alterations to the Bill. Indeed, that is one of the subject matters of the court action to which my noble friend Lord Drumalbyn referred.
Perhaps I could say in parenthesis at this stage that I very much hope that the Select Committee will not postpone their consideration of the Bill until the court has reached a decision. My reading of the pleadings in the case discloses extremely difficult points of law that arise under the EEC legislation, and I can easily imagine that the case could go not only to the higher courts here but also to the court in Brussels. The danger of that will be that the agreement will run out, because in any event it lasts only until I6th November of this year. So I would endorse the view that the Select Committee should get on with this, regardless of litigation, although the results will be a little bizarre if, in the end, the plaintiffs win their case before the courts, only to find that it is too late. That is the kind of thing that is built into this Bill. It is recognised by both sides that Parliament might have a say.

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I very much agree with the sentiments of the noble Baroness, Lady Seear, that we in this House and in another place should not act simply as a rubber stamp for some bargain that has been made between two parties, one of whom at least confesses that they have not the power to make that bargain unless Parliament gives it to them. I believe that that is the answer to the noble Lord, Lord Wynne-Jones, who dealt with this matter in his opening speech. Parliament has to give them the power to deal with it and they have to argue their way through Parliament. It is at that point, therefore, that I can most conveniently come to the other point raised by the noble and learned Lord, Lord Stow Hill, about what is in the best interest of Felixstowe, because that is what everybody has really been talking about.
We have heard from a great number of noble Lords, many of whom I think have actually been to see the port installations and talk to all the people who work there, in every sort of capacity. The Board has a number of remarkable attributes: my noble friend Lord Merrivale mentioned some statistical details; the noble Lord Lord George-Brown, mentioned the actual triumphs and successes of the work force, and there have been countless other examples of how satisfactory and successful an organisation—and a combined organisation—this has been.
The noble Baroness said that what we have to do—what the Select Committee, as I anticipate it, will have to do—is to look at the agreement which is (I agree with her) the centre of the Bill to see whether that agreement is in the public interest. I support that reading of it. I do not think we can altogether minimise the broader aspect of it mentioned by my noble friend Lord Gowrie, the question of nationalisation, because whether or not one likes to use the word this will be the taking over of a private company and putting it into the public sector, and I understand that to be nationalisation.
But let us look at it from the point of view put forward by the noble Baroness herself: is it in the public interest that the National Board should take over this dock? I do not think that at this stage in I976 we can afford to doctrinate about this, and that is why I wish to minimise any differences that I have with the noble
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Baroness on this matter. I do not think I care whether or not the Board and its take-over fits into the Government's nationalisation picture and the policy in some Bill that they may or may not have produced. That does not seem to me to be what we ought to be talking about today. What we need to be talking about is the very question raised by the Instruction, the question of competitiveness, and certainly as the noble Earl said it is raised by three of the Petitions, or at any rate two of them, so that would be a matter for the Select Committee to look at.
If I may just add one gloss on this, not only the competitiveness but the level of service, because one can compete on a low and inefficient scale, each competitor being as bad as the other: what seems to me to underlie so many of the speeches that have been made in this House this afternoon are the high standards that are being offered to the public, to the users and to all the markets of the world, to the ship-owners, by Felixstowe. It is the maintenance and indeed the further improvement of those levels of service and standards that I hope the Committee will look at. Not merely will it be competitive with something else which is rather indifferent—if there is such a thing—but it will be able under this new management to enhance and excel its past record.
I believe that in order to deal with that—and that was the point raised by my noble friend Lord Butler of Saffron Walden—they will need to take into account most of the other important factual arguments that have been put forward this afternoon, or indeed, the matters of opinion. They will certainly need to look at the figures mentioned by the noble Lord, Lord Wynne-Jones, about the throughput and the increase in productivity. They certainly ought to look at the point made by my noble friend Lord Lindsey and Abingdon as to the level of interest paid on some of the borrowings by the British Transport Docks Board. It is all very well for the noble Baroness to say that they have been making a surplus: so they have, but as I understand it, they have not been paying commercial rates of interest on a good deal of that money. I think that will need to be examined, and all the figures have been very conveniently set out in the speech made by my honourable friend

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the Member for Sudbury and Woodbridge on the Third Reading in another place. They will certainly need to look at the whole question of the agreement and the entrenched provisions in Clause 2 of the agreement which is appended to the Bill. This was a point mentioned by my noble friend Lord Drumalbyn, and he was right to do so because there is a great difficulty about this.
Although I entirely respect the motives and the sincerity of the two +parties who sought to build in certain guarantees which would he endorsed by this Bill if it became an Act of Parliament, the problems are two-fold. First, the one mentioned by my noble friend Lord Belstead; that is, the degree of openendedness. The second one is that the agreement deals only with an undertaking between the two parties to the agreement; that is, between the Board and the Felixstowe Company. When the Felixstowe Company becomes a wholly-owned subsidiary of the Board, I want to know who will enforce the undertakings. It seems to me that there will he no outside person to police these at all, and if we are not very careful they will be merely a piece of paper which will not be worth the words that are written upon it or the paper itself. So that is another thing which I suspect the Select Committee will have to look at, because competitiveness may easily not be bolstered up by these arrangements, however sincere they may have been.
Perhaps the two final matters which will be of the greatest advantage and which will arise out of the Select Committee, are these. First, they will undoubtedly be able to deal with a matter which I think the noble Lord, Lord George-Brown, would welcome; that is, the effect of this take-over on the workforce. In many a case of a commercial take-over under the Companies Acts I have heard it said that insufficient account is sometimes taken of the effect on the workforce. I believe that in the case of this take-over we have an admirable opportunity to see what the effect will be on the workforce and whether it will be to their advantage. To that extent, the Parliamentary system may be of great advantage over the one that is more normal under the commercial code. Incidentally, for all I know it may be able to look at some of the malpractices
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in other docks as well which were mentioned by the noble Lord, Lord Hankey.
Above all, my Lords, the advantage that we shall have when this Bill comes back, if it does—and I think it will, but there is a Petition and a general Objection against the preamble—from the Instruction to the Select Committee, is, as the noble Earl the Lord Chairman of Committees has just said, that we shall get a special report from it which I hope will deal with all these matters. If we can prevail upon those of your Lordships who sit on this Committee to make it a thoroughgoing, full, well-reasoned and well documented report, then it will be of the greatest benefit to all of us who have to think about this again. I therefore very much hope that there will be no further dispute and that it will go straight to the Select Committee with this Instruction, and that they will be in some way assisted by the debate we have had this afternoon.
7.9 p.m.
Lord WYNNE-JONES: My Lords, the speech made by the noble Viscount relieves me of a great deal of responsibility because he has made it clear, as others have done, that the House is in agreement that the matter should go to a Select Committee. I should just like to make one or two observations. First, it would be wrong of me not to congratulate the noble Lord, Lord Brain, on his maiden speech. Others have done this, but I feel that for someone to intervene on such a potentially controversial occasion, and to do it so well and so delicately and with such brevity and such lucidity, means that we shall look forward to future speeches from him. With regard to the rest, I could make one or two remarks, but in view of the lateness of the hour I think it is far preferable that we should end in a general feeling of, perhaps, nostalgia for a pleasing debate.
On Question, Bill read 2a, and committed to a Select Committee.
The EARL of GOWRIE: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee to whom it is committed that they shall satisfy themselves that the passing of the Bill would not lead to an

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undesirable reduction in the competitive position of the port of Felixstowe which would be contrary to the public interest.—( The Earl of Gowrie.)
On Question, Motion agreed to.

FAIR EMPLOYMENT (NORTHERN IRELAND) BILL [H.L.]
7.10 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Donaldson of Kingsbridge): My Lords, I beg to move that the Commons Amendments to the Fair Employment (Northern Ireland) Bill be now considered. —(Lord Donaldson of Kingsbridge.)
Moved, That the Commons Amendments be now considered.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill 44 as first printed for the Commons]
[Nos. 1–24.]
Clause 5, page 3, line 40, leave out", the Agency and "and insert" and the Agency, with such organisations appearing to it to be representative of employers, of organisations of workers, and of persons engaged in occupation in Northern Ireland as it thinks fit, and with"
page 4, line 12, leave out from "afforded" to the end of line 13 and insert "shall have such regard to the recommendations contained in the guide as it considers proper in all the circumstances"
Clause 7, page 5, line 21, after "(b)" insert "(i) or"
Clause 8, page 5, line 30, after "(h)" insert "(i)" or
line 34, at end insert—
"( ) An appeal against the removal of a declarant's name from the register under section 7(2)(b)(i) may be made on the ground that in all the circumstances it was unreasonable of the Agency to require the declarant to reaffirm his intention to adhere to the Declaration of Principle and Intent, or to do so after any particular interval or in any particular manner"
line 36, leave out "the appeal" and insert "an appeal under this section "
leave out line 37 and insert—
"( ) Where, on an appeal under this section, the question arises"
line 40, leave out "may have regard" and insert "shall have such regard as it considers proper in all the circumstances"
Clause 9, page 6, line 9, after "names" insert "of employers"
line 23, after "any" insert "employer's"
line 26, leave out "or organisation's"
line 28, leave out "or organisation's"
line 29, leave out "or in any other circumstances"
line 31, leave out "or its"
Clause 12, page 8, line 5, leave out "provide "and insert "afford"
line 6, leave out "to secure" and insert "for promoting"
page 9, line 7, leave out "that class" and insert "any class referred to in paragraph (a)"
Clause 13, page 9, line 21, leave out "provide" and insert "afford"
line 24, leave out from the first "to" to "equality" and insert "ensure that he takes such action for promoting"
page 10, line 9, leave out "provide" and "insert "afford"
line 13, at end insert "but the terms of directions contained in a notice served under subsection (2)(ii) which supersede an undertaking shall be such as, in the opinion of the Agency, are not more onerous than the terms of the undertaking"
Clause 14, page 11, leave out lines 13 and 14 and insert—
"(b) that in all the circumstances the directions are not appropriate for promoting equality of opportunity; or"
line 29, leave out "may have regard" and insert "shall have such regard as it considers proper in all the circumstances"
Clause 15, page 11, line 35, leave out "to ensure" and insert "for promoting".
Lord DONALDSON of KINGS-BRIDGE: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Numbers 1 to 24 en bloc. All these Amendments fall within Part II of the Bill which is concerned with equality of opportunity. These, and the rest of the Commons Amendments to the Bill, which I propose to move in four more blocks, represent the result of the efforts of both Government and other Members in the other place to improve this Bill in detail, and I commend them to your Lordships.
Of these first 24 Amendments, Nos. 9 to 12, 14, 15, 16, 17, 18 to 20, 22 and 24 are drafting or consequential Amendments. Amendment No. 1 obliges the Department of Manpower Services to consult such representatives of employers, of organisations, of workers and persons engaged in occupations as it thinks fit in preparing the guide to good manpower policy and

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practice. Your Lordships will recall that they suggested an improvement on these lines at an earlier stage of the Bill in your Lordships' House. Amendments Nos. 2, 8 and 23 make it mandatory for the Agency and the Appeals Court to have such regard as they think proper to the recommendations of the guide when carrying out their functions. Amendments Nos. 3, 4, 5 and 6 provide for appeal against removal of the name of a declarant from the Register of Equal Opportunity Employers and Organisations. Amendment No. 7 extends the circumstances in which the Appeals Board may have regard to the guide.
Amendment No. 13 limits to cases of conduct by its contractors the obligation on a public authority to inform the Agency
of conduct inconsistent with the declaration of commitment to the principle of equality of opportunity. Amendment No. 21 ensures that if it becomes necessary for the Agency to follow up an undertaking given by an employer to remedy practices which fail to give equality of opportunity with enforceable directions, those directions will not be more onerous than the original undertaking. I beg to move this block of Amendments.
Moved, That this House does agree with the Commons in the said Amendments—(Lord Donaldson of Kingsbridge.)
Lord BELSTEAD: My Lords, in agreeing to these Amendments may I welcome Amendment No. 1. The guide is going to have an important part to play in making this Bill both acceptable and effective. I should like to welcome the Government acceptance of the view expressed in another place that Amendment No. I should be made.
I would say just a word about Amendment No. 5. My noble friends on this side of the House made no secret of the fact that they would have liked to see an Amendment put in the Bill to prohibit quotas, spelt out in specific terms. This argument went on into the Report stage in another place. It strikes me that Amendment No. 5 is about as near as the Bill is going to come to making it clear that quotas are prohibited. We are going to have to be content with that. I realise that the Government are saying that quotas are prohibited. It is just that I am still disappointed that this is not written in
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in specific terms. With that mild note of reservation, I welcome Amendments Nos. 1 to 24.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 25–31]
Clause 24, page 17, line 12, leave out from question "to "does in line 15.
line 22, after "brought "insert "to a court".
Clause 26, page 18, line 31, leave out from third to "to end of line 32 and insert "dispose of the difference disclosed by the complaint."
Clause 27, page 20, line 7, leave out "provide "and insert "afford".
line 8, leave out "secure "and insert "ensure".
Clause 31, page 23, line 6, after second "in "insert "all".
Clause 32, page 24, line 9, after "contravenes "insert ", or has any effect in consequence of a contravention of,".
7.15 p.m.
Lord DONALDSON of KINGSBRIDGE: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 25 to 31 en bloc. These make changes in the provisions of Part III of the Bill which relates to unlawful discrimination. Amendments Nos. 27, 28, 29, 30 and 31 are all technical or drafting Amendments. Amendment No. 25 clarifies Clause 24(4) by omitting some words which, on consideration, were thought to be unnecessary. Amendment No. 26 is designed to ensure that only where a complaint of discrimination may be brought to a court under another enactment is the Fair Employment Agency precluded from investigating that complaint. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Donaldson of Kingsbridge.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 32–40]
Clause 37, page 26, line 18, after "holding "insert", or not holding,"
line 23, after "holding "insert", or not holding"
line 27, after "holding "insert", or not holding,"
line 30, after "to "insert "or to"
line 30, leave out "with "and insert "by"
line 34, after "to "insert "or to"
line 35, leave out "with "and insert "by"
Clause 40, page 28, line 13, leave out from "provision" to the end of line 15 and insert "—

(a) which is contained in an enactment or instrument, and

(b) which has been enacted or made for purposes which are exclusively charitable according to the law of Northern Ireland."

Clause 41, page 28, line 20, leave out "by a person".
Lord DONALDSON of KINGSBRIDGE: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 32 to 40 en bloc. These are concerned with Part V of the Bill which deals with exceptions, and are essentially drafting Amendments. The first three Amendments would ensure that the exceptions include cases where the essential nature of the job requires that the person does not hold a particular religious belief or political opinion. Amendments Nos. 35 and 37 ensure that Clause 37(4) conforms with earlier provisions of the Bill. Amendments Nos. 36 and 38 were introduced because it is more appropriate to speak of "employment by "rather than" with "an employer. Amendments Nos. 39 and 40 make for clarity in drafting. I beg to move that this House doth agree with the Commons in their Amendments Nos. 32 to 40.
Moved, That this House doth agree with the Commons in the said Amendments—(Lord Donaldson of Kingsbridge.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos 41–44]
Clause 54, page 36, line 3, leave out "provide "and insert "afford "
Clause 57, page 42, line 3, after "absence "insert "or supposed absence "
line 4, at end insert—
"( ) In this Act any reference to a person's political opinion does not include an opinion which consists of or includes approval or acceptance of the use of violence for political ends connected with Northern Irish affairs (including the use of violence for the purpose of putting the public or any section of the public in fear)."
line 5, leave out "provide" and insert "afford".
Lord DONALDSON of KINGSBRIDGE: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 41 to 44 en bloc. These are in Part VI of the Bill. Amendments Nos. 41 and 44 are drafting Amendments to bring conformity in the
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use of the word "afford" in the Bill. Amendment No. 42 makes it clear that the definition of religious belief and political opinion include references to a person's supposed religious belief and political opinion and the absence, or supposed absence, of any, or any particular, religious belief or political opinion. Amendment No. 43 introduces a new subsection to the Bill to make it clear that the Bill will not give protection against discrimination to a person whose political opinion consists of, or includes, approval or acceptance of the use of violence for political ends, connected with Northern Ireland affairs.
Moved, That this House doth agree with the Commons in the said Amendments—(Lord Donaldson of Kingsbridge.)
Lord BELSTEAD: My Lords, I would particularly like to welcome Amendment No. 43. In this House noble Lords have expressed reservations, and indeed my noble friend Lord Brookeborough expressed strong reservations that the Bill as drafted could compel employers to take on people who they suspected of involvement in terrorism, or believed would be subject to pressure to become involved in terrorism. It seems to me that Amendment No. 43 goes a long way towards meeting what was a fundamental drawback to the Bill. I am most grateful to the Government for putting it in.
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 45–49]
Schedule 1, page 45, line 20, at end insert—
"Provided that no such appointment shall be for a period exceeding five years in the case of the Chairman and three years in the case of another member."
Schedule 2, page 48, line 23, at end insert—
"Provided that no such appointment shall be for a period exceeding five years."
Schedule 3, page 49, line 25, leave out Schedule 3 and insert—
"DECLARATION OF PRINCIPLE AND INTENT
I/We affirm and declare that it is my/our intent to promote and protect equality of opportunity in employment, according to the letter and spirit of the Fair Employment (Northern Ireland) Act 1976 by every means at my/our disposal, and to co-operate to that end with the Fair Employment Agency for Northern Ireland.
I/We further undertake that I/we will use my/our best endeavours to encourage all persons within the range of my/our influence to commit themselves to the same intent."
Schedule 5, page 52, line 12, leave out "provide" and insert "afford"
line 13, leave out "to secure" and insert "for promoting"
Lord DONALDSON of KINGS-BRIDGE: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 45 to 49. They relate to the Schedules to the Bill. The Amendments to Schedules 1 and 2 to the Bill (numbered 45 and 46) restrict the period for which the chairmen and members of the Fair Employment Agency and Fair Employment Appeals Board may be appointed. Amendment No. 47 has the effect of replacing the original declaration of principle and intent with a new version, shorter and more succinct, and which has wide agreement. Amendments Nos. 48 and 49 are drafting. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Donaldson of Kingsbridge.)
Lord MONSON: My Lords, I would say briefly how much I welcome all the Amendments made in another place, in particular Amendment No. 47, which makes the declaration of intent less pompous and more acceptable generally. If I may back-track slightly, Amendment No. 43 also is extremely important. All the Amendments made in another place improve the Bill greatly.
Lord BELSTEAD: My Lords, we did not have the opportunity previously when the Bill was here to say anything about the chairman of the Agency. I should like to take this opportunity to welcome his appointment, which I am delighted to do, and I am delighted to have the opportunity to do so before this Bill passes into law.
Lord DONALDSON of KINGSBRIDGE: My Lords, I am most grateful for the response noble Lords have given, and particularly for the remarks about the chairman, who seems to me an extremely suitable choice.
On Question, Motion agreed to.

DRAFT WEIGHTS AND MEASURES (SALE OF WINE) ORDER 1976
7.20 p.m.
Lord ORAM Lord ORAM rose to move, That the Draft Weights and Measures (Sale of Wine) Order 1976, laid before the House on 8th June 1976, be approved. The noble Lord said: My Lords, this order supersedes the Sale of Wine Order 1974, which came into operation on 2nd September 1974. That order requires that when wine is sold for consumption on the premises of the seller it shall be sold only by capacity measurements unless it is sold pre-packed in a securely-closed bottle or in a glass in which it is to be drunk. When the 1974 order was made it was generally agreed that it did not go far enough and that it would be desirable to make further progress in this area. In particular it was agreed that it would be desirable to introduce prescribed quantities for wines in carafes and that the seller should make known the quantities available.
This new order, which will revoke the 1974 order, is being proposed under Sections 21(2), 21(3) and 54(4) of the Weights and Measures Act 1963. It requires that such wine shall only be sold in specified quantities; namely, 25, 50, 75 centilitres and 1 litre or 10 fluid ounces or 20 fluid ounces. The House will be aware that under the present Weights and Measures Act 1963 it is necessary to prescribe an imperial range as well as a metric range of sizes because of the provisions of Section 10(10) of that Act. In practice we understand that the great majority of sellers will be using the metric range and ultimately it is our intention to dispense with the imperial range completely if the Weights and Measures Bill which is currently under consideration in your Lordships' House becomes law. The use of the metric range is greatly to he preferred in this case, particularly because the Government will shortly be bringing forward legislation under the European Communities Act to introduce prescribed quantities for bottles of wine based on metric sizes only.
The order under consideration excludes wine sold in securely-closed bottles, and this would, of course, exclude what is called carafe wine sold in this manner. It also excludes the circumstances where a bottle of wine may be decanted on the request of the buyer before being served.

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As I have indicated, it is our intention to introduce prescribed quantities for bottles of wine under different legislation. The order also proposes to require that premises selling wine in carafes or any other open vessel must display a statement in writing showing the quantities in which wine is for sale for consumption on the premises or else that information must be contained in every wine list and menu which indicates that wine is available for consumption on the premises. Notices must he displayed in such a position and manner as to be readily available for inspection by the buyer before a sale is made without him having to make a special request for it.
Finally, it is proposed that the order should come into force on 1st January 1977. This date has been set in order to allow the trade sufficient time to replace existing carafes with suitable sizes and to allow sufficient time for the printing of necessary notices and wine lists. Section 54(2) of the Weights and Measures Act requires us before making such an order under Section 21(2) of the Act to consult with, and consider any representation with respect to the subject matter of the order made to us by, organisations representative of interests affected by the order. These consultations have been carried out. The organisations covered include consumer organisations, and the proposals have received wide support.
Obviously the order will place some additional burden on the trade and it is to their credit that they have accepted the merits of the proposals. Two of the 110 bodies consulted suggested that 33 and 66 centilitres should be included in the proposed range, but after careful consideration we have concluded that the range proposed would best meet the needs of the consumer. In my view, the proposals represent a distinct step forward in consumer protection, admittedly in a limited field; but it is a field in which we have hitherto lagged behind other countries. I commend the proposals to the House.
Moved, That the Draft Weights and Measures (Sale of Wine) Order 1976, laid before the House on 8th June 1976, be approved—(Lord Oram).
Lord ELTON: My Lords, I should like to thank the noble Lord for his very explicit elucidation both of the implications
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of the order and of its origins. I am particularly interested to hear that the deliberations which took place before the order was drafted included some which brought to light the possible advisability of the 33 and the 66 centilitre sizes, which may approximate more closely to the average one person helping and two person helping than the present sizes. But it is the function of the Government to consult; they have consulted and taken a majority view, and one will not cavil at that.
I should like to take this opportunity to ask the noble Lord two questions. One is the degree of exactitude with which the measurement of the decanted wine must be made. if you have a unit which is exactly half a bottle, it is fine if the bottle is full. There is a continental habit of filling bottles one or two or even three centilitres less than full in the litre size; and one then sees the restaurateur or café proprietor faced with either giving short on one, or, if he is very accurate in his judgment, two customers, or opening a bottle for a couple of centilitres, or alternatively risk being taken up by the Weights and Measures Inspectorate. It is not a large problem because it is only going to be one bottle at the end of the day anyway, and most restaurants are open the next day, so it will not spoil. But it is a point one would like to have elucidated because it has a wider bearing, I think we shall find, in the Weights and Measures Bill to which the noble Lord alluded. I would also be interested to know what the state of play is on the new European bottle sizes he tells us are going to come across the Channel and whether those were taken into consideration when the present carafe sizes were arrived at?
Lord RITCHIE-CALDER: My Lords, could I just reassure the noble Lord opposite; the way to cure that problem is for the glassmaker to take his thumb out of the bottom of the bottle.
Lord RAGLAN: My Lords, I thank my noble friend for his clear explanation. But it is not clear enough to me why Section 2(1)(b) says when not prepacked wine should be sold only in these quantities, that is, 25, 50 and 75 centilitres and I litre, and yet over the page it says that when it is sold in the glass from which it is intended to be drunk it does not have to be sold

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in those quantities which are prescribed in the previous paragraph. In other words, it appears to me that the two paragraphs somewhat contradict the purpose of each other, and I wonder why restaurateurs and café proprietors and others have been given what looks to me to be a very big let-out in paragraph (2)(b) under which they apparently can sell wine by any measure they choose.
7.30 p.m.
Lord ORAM: My Lords, I thank those who have commented on this proposed order, and I do not think there is much for me to reply to. There is the point raised by the noble Lord, Lord Elton, about the difficulty, if a bottle is somewhat under a litre, of getting the exact amount in the serving. This arises because wine imported from other countries is usually bottled on the average system—I think we shall be coming to this when we deal with the Weights and Measures Bill—and therefore it is true, as he has pointed out, that some litre bottles may contain only 99 centilitres.
The attempt to link carafe sizes to bottle contents in this way, as the noble Lord did, is, I think, to assume that restaurants will be asked every evening to serve a number of carafes whose total quantity will exactly equal the contents of a whole number of bottles. I think that this is possible, but in practice I think that new bottles are opened, and I do not think it really amounts to a serious case. It was the case put forward by one of the organisations which approached us with regard to the 33 and 66 centilitre suggestion, but it seemed to us that this added more quantities to the list and was perhaps confusing rather than helpful to the consumer. Therefore, it was thought best to stick to the list of quantities contained in the order.
My noble friend Lord Raglan raised the point about the apparent contradiction between Section 2(1)(b) and paragraph (2)(b) on the other side of the Paper. I think that we are going to deal with this in two stages. I agree that at the moment, and indeed under this order, the sale of wine per glass will not be regulated in the same kind of exactitude as the sale of wine in a carafe, but it will be the subject of a future order, and this contradiction, if that is the right word, will be removed.
Lord ELTON: My Lords, if I may speak again with the leave of the House, I should like clarification on the point of the amount of variation, because these are not minimum quantities. If it was a minimum quantity of 25 centilitres the chap could put in a little more and be safe. He is required to sell exactly. Of course he will not be prosecuted for selling over, but is there any breadth below the line? Are we dealing with any sort of average, or approximation, or legislating for minimum quantities without saying so? I hope that this is not splitting hairs. It seems to me that it has a wide application in a whole series of these orders, and in some of them it may be of material interest. If the noble Lord has not got the answer at this stage, perhaps he could let me have it later so that we can have it in mind when we come to later orders in the series.
Lord DRUMALBYN: My Lords, before the noble Lord replies to my noble friend may I ask him a question? I am not altogether certain what the difference is between being pre-packed and not being pre-packed. Does being pre-packed mean in a bottle, and when not pre-packed mean being drawn out of a cask into a carafe? I am not certain what is meant by not being pre-packed. I sympathise with Lord Raglan's point here.
Lord ORAM: My Lords, may I reply first to the point which the noble Lord, Lord Elton, raised. It is a minimum requirement, and the whole of the Weights and Measures Act that is in existence at the moment is on this basis of a minimum requirement. On the pre-packed question raised by the noble Lord, Lord Drumalbyn, wine is pre-packed when it is in any container other than a tightly contained bottle, which is mentioned elsewhere in the order. I think that it is that kind of packaging and the open carafe which are covered by the order.
Lord RAGLAN: My Lords, by the leave of the House may I speak again? I am afraid that my noble friend's explanation both to me and the noble Lord, Lord Drumalbyn, does not make it any clearer. I am sure that the Ministry means well in this but it simply is not clear to me, and I doubt whether it is going to be clear to anyone who reads these regulations.
On Question, Motion agreed to.

U.N. CONFERENCE ON TRADE AND DEVELOPMENT
7.37 p.m.
Lord BROCKWAY Lord BROCKWAY rose to ask Her Majesty's Government what were the conclusions of the United Nations Conference on Trade and Development. The noble Lord said: My Lords, I regret that we are discussing this matter so late in the evening. I originally had this Question on the Order Paper last Thursday and was advised that there was heavy business that day, and it was suggested that I should take it this evening. Unfortunately, before the opportunity had arisen, a very controversial Bill occupied us to this later hour. But I do not apologise for raising this issue. In my view the discussion at this Conference, generally known as UNCTAD, was the most important issue of our time; more important even than disarmament and peace, because I believe that disarmament and peace in the world will depend on the degree of economic co-operation undertaken.
The present structure of the world's economic order was decided at the Bretton Woods Conference 30 years ago. It decided the condition of the exploitation of the natural resources in the colonial territories, the terms of trade between them and the developed world, and the financing of the development. But at the time of the Bretton Woods Conference none of the developing countries had independence, and therefore they were not represented. I do not think that anyone can look at the conclusions which were then reached without saying that they were heavily weighted on the side of the industrial nations and against the interests of the developing countries.
The situation has now changed. The nations of Africa and Asia have become independent, they are politically powerful, they are a majority in the United Nations Assembly; and they are economically powerful, as has been shown during the last few years by the oil producing countries of the Middle East. I do not endorse all that the oil monopoly in the Middle East has done, but it has revealed to the producing countries of the world how they can influence their economic relations with the developed countries.
With extraordinary unanimity, the developing countries have now prepared an integrated plan for a new world economic order. It was initiated by a committee of 77 developing countries. The 77 have become 113, and at the Nairobi UNCTAD there was absolute unanimity among all the developing countries in the demands which they made. This integrated plan is now item number one on the agendas of all international conferences. It was so at the Commonwealth Prime Ministers' Conference, and I pay tribute to the initiative which Sir Harold Wilson took there. It dominated a special session of the United Nations, it dominates GATT, it dominates the OECD and now, as UNCTAD at Nairobi has shown, it dominates that Conference as well. During the next three years the proposals of the developing countries for a New World Economic structure will become the overwhelming issue in all conferences between the developed and underdeveloped nations of the world.
Yet very little is known about these proposals. The media have not described them. I doubt very much whether one in ten of the Members of another place or one in ten of your Lordships knows what are the proposals of the new world economic order. In planning this speech I had intended to outline them; I hope that another opportunity will occur to do so. I refrain from doing so now only because of the necessity for reasonable brevity. However, let me say that they are so comprehensive—beginning at the roots of development, passing through every aspect of trade, concerned with finance and suggesting a new world economic authority—that they could not possibly be discussed fully at the Nairobi Conference; indeed, it would need a new Bretton Woods Conference lasting a year if they were to be discussed adequately.
The two main issues which were discussed at Nairobi were commodities and debts. In accordance with the proposals for the New World Economic Order, the developing countries demanded radical changes in the world community trading structure and a necessity for the prior establishment of an international common fund to stabilise those prices. There were three responses to that proposal. Dr. Kissinger proposed an international resources bank to finance the exploitation

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of natural resources. The developing countries rejected that because it would mean exploitation by private interests, including the multinational companies, while the developing countries are demanding that they should own their own natural resources. Secondly, France proposed immediate negotiations on an extended list of commodities, with an examination of the utility of a central financial facility such as the common fund. This French proposal was welcomed as an advance by the representatives of the developing nations.
Thirdly, the United States, West Germany, Japan and, I am sorry to say, the United Kingdom insisted on a case-by-case approach on commodities and refused prior consideration of a common fund. It became clear that the industrialised nations were deeply divided. They submitted two papers to the Conference, seven out of nine of the Members of the EEC, the Scandinavian countries and Greece, supporting the proposal of France to which I have referred. The United Kingdom, the United States, Japan and West Germany submitted proposals on the lines to which I have also referred, a much weaker paper. I am not surprised that Dr. Kissinger yesterday in Paris suggested that the West should speak with one voice to the Third World; I hope that it will not be the voice of the United States. I am glad that after Dr. Kissinger's speech, our Foreign Secretary made some reservations.
It is distressing to many of us that at Nairobi a British Labour Government should have sided with the most reactionary elements in that Conference on these issues. The final document accepted by the Conference requested UNCTAD:
"To convene a negotiating conference open to all Members of UNCTAD on a Common Fund not later than March 1977."
Secondly, it agreed:
"To convene in consultation with international organisations concerned preparatory meetings for international negotiation on individual products."
Thirdly, it was agreed:
"That there should be parallel negotiations on the Common Fund and 18 commodities."
These were bauxite, iron ore, manganese, phosphates, copper, tin, rubber, hard fibres, tropical timber, jute, cotton, vegetable oils, coffee, cocoa, sugar, tea,
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bananas and meat. Those represent the greater part of exports from the developing countries. Moreover, these negotiations would encompass such wide ranging objectives as improvement of market access, diversification measures and, very importantly, procedures for regular price reviews taking into account,
"the price of manufactured imports."
These decisions represent a big step towards the integrated programme on commodities which the developing countries have demanded. But there is a snag. There is no compulsion on Governments to attend these negotiating conferences and consultations. The resolution merely says that it is open to them to do so. UNCTAD will call the meetings, but there is at present no promise that the intransigent nations, which unfortunately included the United Kingdom, will attend. If their mood at Nairobi is maintained, it is doubtful whether some will. I ask the Minister now for an assurance that the British Government will be represented at these negotiations and consultations which were forecast in the decisions at Nairobi.
The second great issue is debts, and I must be brief in my reference to them. According to the International Monetary Fund, the developing countries have a balance of payments deficiency of 35 billion dollars, and it is estimated that they have a 10-8 million dollar debt in serving payments in 1975 alone. The developing countries asked for a debt conference to negotiate a settlement and for a moratorium for the least developed countries. I regret to say that the United Kingdom was one of the strongest opponents of those proposals, insisting instead on a case-by-case approach to the nations concerned. The decision of the conference was to urge the international institutions to advise on measures of debt relief by the end of 1976. On this issue, I shall content myself with saying to the Government that Britain, as an ex-imperial Power, has a great responsibility for the economic distress of many of the developing countries. We denied them a balanced economy by insisting that they served primarily our needs with supplies of cheap foods and raw materials. If for nothing else, we should seek to meet them in their present difficulties.
I come to my conclusion. Other issues were discussed at Nairobi, including the

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transfer of technology, access of manufactured goods to developed countries, problems of the least developed nations. However, little of substance was decided on any of these issues. There was no provision to consider the role of multinational companies, but I am glad that the OECD yesterday agreed to a code to govern multinationals. It is depressingly timid and thoroughly inadequate, but it is a beginning on which we can build for the future.
I want to submit to the Government that the insistence on a case-by-case approach to the developing countries is no longer realistic. There is the amazing unity among the developing countries which I have described and, today, decisions are generally being reached on a regional and group basis rather than just with national Governments. Comecon among the Communist countries, the European Community, the projected Western Summit on Economy, the appeal for a common front to the Third World made by Dr. Kissinger—all these indicate that we are now passing to group negotiations rather than case-by-case discussions with separate countries. There is a unity among the developing countries which will demand this.
Indeed, when the British Government, with their three allies at Nairobi, declined to accept a common fund, the developing countries replied, "We will do it our selves". Half the money necessary for a common fund to maintain prices has already been pledged. Are we really going to move to a position where there is to be this opposition between the industrialised and the developing countries, or are we to move towards co-operation?
Sridath Ramphal, the very able general secretary of the Commonwealth Secretariat, has just said,
"Nothing is more misguided than a belief in the developed world that fundamental restructuring, if postponed long enough, may be deferred altogether."
It will not be deferred. In these coming years it will be the principal issue at all international conferences, and I beg our Government, as the discussions take place, to seek agreement with the developing world so that there may be unity between North and South. The danger is of disunity, of the present conflict between East and West becoming a conflict
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between North and South. My hope after over 70 years in the Labour movement would be that a Labour Government today would seek to make their contribution towards that economic co-operation and the peace that would follow.
7.57 p.m.
Lord ELTON: My Lords, it is always difficult to follow the noble Lord, Lord Brockway, who has the gift of combining passion with lucidity at a level which is rarely equalled by anybody in this House. I was surprised for once to discover that I can follow him for some distance down the path he has taken—a greater distance than I have been accustomed to find myself following him in the past.
At the time when I was growing from adolescence to manhood, the world, which had been divided between the Axis powers and our allies when I was a child, realigned itself for a new and more subterraneous struggle. I came rapidly to accept, as did most of us in those days, that it was divided roughly into an Eastern and a Western hemisphere. They met upon the central German plain. On the one hand were repressive Communist regimes existing in a hierarchy of which the apex was Moscow and presenting a threatening front to the West, and on the other was an association of democratic countries of which the centre of gravity very rapidly moved to Washington and which presented a defensive posture to the East. The distinction between the two camps lay in their political systems and aspirations. Since then, the arrangement has again been re-shuffled and re-settled. The Eastern bloc is no longer a monolithic whole and tensions between Moscow and Peking are often at an acute level. Even the debate in Nairobi could be used as a platform for their ideological differences. In Western Europe itself, there is a Communist element of considerable force, as we have seen confirmed in the results of this weekend's General Election in Italy.
It is not only the case that the old, starkly simple, division between the East and the West has become more complex and less precise; it is also the case that this division is no longer the only world division of great consequence, as the noble Lord, Lord Brockway, has so eloquently said. There is another which will overtake it in importance within a

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generation, and with implications as potentially disastrous, if we do not now begin to take action upon it. This division is between those countries which have sufficient resources to maintain their populations in modest comfort and those which do not. In many of the latter the means do not always exist simply to keep all their population alive all the time. This division is not between the East and the West; it is between the North and the South; and it is a matter of very great significance indeed that the natural place for China is in the Southern half of that dichotomy. It is an odd, and a very important, reflection indeed, that in terms of material wealth both the Russians and the Americans are among the "haves ", while the Chinese are closest to the "have nots". In very general terms you can now say, in addition, that the countries in which you do not find people starving to death lie in the North, and the countries where you may, and in fact from time to time do, find them starving to death, are in the South. Those are the extremes, but there are levels of poverty short of actual starvation which are still unacceptable.
At the outset of our considerations we must, I think, accept that there is a very strong moral obligation upon us, as members of what we repeatedly claim to be a society informed by Christian principles, not to disregard the poor. That argument might be sufficient alone to move most of us at least to the theory, if not to the practice, of compassion, and most of us have by now received enough evidence through the media to know that there are very large areas of quite unacceptable poverty in other parts of the world. But the world, though it is shrinking, it still a big place, and altruism is apt to be shortsighted. Self interest, on the other hand, is not, and if we put on that pair of spectacles for a moment we shall at once see that, as happens with such striking frequency in this life, our moral duty and our own self interest counsel the same intervention.
It is not merely a matter of considering that securely enduring growth in the industrial countries cannot be built upon a world economy of which the near bankruptcy of the producing countries is a dominant or a recurrent feature. Some might even argue that it is possible to build on such loose foundations.
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It is a matter rather of counting heads and judging motives and allegiances. Whether expressed by Lenin or by Mao Tse-tung, it is the final objective of the Communist system to establish itself world-wide in place of existing regimes, including our own; and it is the right and proper objective of every country to secure for its own people the right and the means to survive, and to survive in something better than conditions under which that survival is from year to year in doubt. If it ever appears to these impoverished countries that we, the Group B countries, are sitting upon our wealth and denying to them the means of survival, we implant in them a very bitter spirit of resentment and we place a very real and compelling instrument in the hands of those who would unite them to overthrow the institutions of the free world.
Your Lordships have discussed the question of nuclear proliferation. If we think in terms of decades rather than years the day is not at all far off when a group of nations recruited on those principles, armed with those resources, and informed with a political philosophy entirely hostile to our own, could be a far more immediate and deadly threat to world peace than anything the cold war between the East and West has yet produced, and there would be the added spectre of a moral justification if it arose from our own intransigence. That is the context in which we should be looking at the efforts which Her Majesty's Government have contributed to the conclusion of UNCTAD at Nairobi.
When they got there what did they find? They found the less developed countries, numbering 113, with a united policy worked out in advance and actually published in advance, as well as the Manila Declaration. And what about the developed countries? Not only had they not concerted an approach to the problem with any of the Group of 77, they had not even concerted a policy among themselves; and the noble Lord, Lord Brockway, pointed out sharply that within Europe itself there was no unanimity.
My Lords, it is almost impossible not to quote from the leading article in the Financial Times which followed the conclusion of the conference, and which sums this up in a nutshell:

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"The issues were known well in advance. They had been discussed at countless previous meetings, including the seventh special session of the United Nations last September which ended in a surprising measure of agreement and was to have set the guidelines for future negotiations.
"Since then there have been talks in the OECD and the European Community as well as other less formal groupings. Yet the Western countries arrived in Nairobi without even the semblance of a joint position. Not even the EEC could speak as one, let alone the Europeans and the Americans."
The central debate turned, predictably because of this démarche of the 77, upon the question of commodities. It was therefore an interesting exercise to pick through the reports in the Financial Times the same day's news on the commodity front. On the 17th, on page 16, they alluded to the speech of our Secretary to the Board of Trade, saying that he had taken a sober line, stressing the difficulties of falling in with the demands already tabled by the developing countries; and on page 17 there were two headlines—
"London coffee prices soar to new records".
"Tin prices reach new peaks".
On the 8th, when the Americans had produced the idea of an international resources bank, like a rabbit out of a hat, the 77 had pronounced themselves cool upon it, and M. Fourcade had preferred a central fund, the Tin Council had raised the ceiling price by 100 dollars Malaysian and coffee futures were at a record high. On 11th May we learned that Brazil's coffee harvest was down from 28 million to 72 million bags—a staggering drop—and that, combined with the Angolan fall from 32 million to just over half a million 66 kilobags, amounts to an impending world shortage. The result of this is that the workers in Brazil—57 per cent. of whom are on a minimum wage, including those producing coffee—can now not afford to drink the stuff that they produce and they are drinking on a large scale an ersatz product of roasted barley; not, I take it, beer which would account perhaps for its popularity for other reasons.
On the day that Mr. Chou Hua Min launched his diatribe against Russia, not without some justification, Japan opted against the common fund, and the day after that coffee futures rose a further £42.5."Cotton demand ", we were told "outstrips forecast yields." Two days later there followed news of a voluntary
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freeze on speculative zinc trading on the London Metal Exchange.
One cannot therefore fail to look with some sympathy at the first aim pronounced in the resolution of the integrated programme for commodities. It might put it in perspective if I gave your Lordships a paragraph from the second McIntyre Report of the Commonwealth experts who have been working on commodities, as your Lordships' know:
"The prices of the principal commodity exports of the developing countries (excluding fuel) have fallen sharply since the peak period of March-April 1974, and although prices rallied to some extent in the latter half of 1975, estimates by the UNCTAD Secretariat show a fall of 17 per cent. in 1975. If these prices are deflated by the UN index of prices of manufacturers, the real fall is estimated at 30 per cent.; and a comparison of available data on the import prices of developing countries shows that this index greatly understates the real fall."
My Lords, therefore there must be some sympathy with demands to equalise supply and demand as reflected in price. The avoidance of excessive price fluctuations is a prime aim of the document. It must be to the advantage of both producer and consumer to be able to predict at least the extremes within which these fluctuations can occur and to narrow the gap between them. Eighty per cent. of foreign exchange earnings of poor countries, after all, come from exporting raw materials.
The situation is this. The Group of 77 brought to the conference a prepared position; the B Group countries did not, nor did Europe. This amounts to both a political and a diplomatic defeat in the first instance for the Common Market and, in the second, for the United Kingdom. The United Kingdom and Germany were in fact participants in the disagreement. I would not say that one must lay the blame totally at the doorsteps of this country or of Germany because there are two sides to the argument. But the fact is that the prime objective was to reach an agreement, and it was not reached.
It is my contention, therefore, that our delegation should have arrived at Nairobi prepared; and if they had reservations, as have we, about the efficiency of a common fund, they should have sought not to damn but to modify it. After all, though there was an impressive superficial unity among the Group of 77, Sr. Alfonso Arias Schreiber of Peru pointed out in the last few days of the conference that the

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differences are not just between the developed and the developing nations but between the conservatives and the progressives within the two groups.
Therefore, my Lords, there is room for diplomatic manoeuvre. Our delegation had the example of our experience of Stabex to draw upon. They could also have built up the good will of the Third World instead of dissipating it almost entirely; and we had the example, not only of the Netherlands and of Norway, who pioneered a view with which we do not concur, but also that of France, which, with great skill appears to have put in a compromise bid, avoided the odium which we have incurred and to be signing the same document. Even the Secretary-General of the Commonwealth expressed disappointment at the role we had played. When the document finally emerged, not from the conference hall, be it noted, but from the Nairobi Hilton, it was to have attached to it an explanatory memorandum from our own United Kingdom delegation, of which the central paragraph reads:
"We understand the feeling among developing countries that a common fund is an essential element in that programme. We think it realistic however that the resolution notes that there are differences of view on the objectives and modalities of a common fund, and provides for further preparation prior to negotiations on a fund. "
So even in going into talks we are not committing ourselves to negotiations.
My Lords, that paragraph is open to a number of interpretations, and it must have been drafted with exceeding care. It is open to the Government in fact to proceed in an open-handed or at least an open-minded way, and I hope that they will do so. One does not need to subscribe to the totality of the philosophy of a common fund in order to do that. Otherwise, we look as if we are endorsing the translation of the UNCTAD actonym as, "Until next conference, try and delay". I would not wish to belittle what has been done by this country in the past. Mr. Dell, in his introductory speech, recited figures which were quite creditable to us in the guise of aid figures, both in the gross and as a percentage; but I think it is quite clear from this debate, quite clear from Press commentary and quite clear from conversations outside the Chamber that aid is not what is wanted.
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The developing countries want something more secure and something to which they themselves can contribute, and to which, in fact, a lot of them are already pledged to contribute on a scale which makes us look niggardly at present.
Turning (because it is late, and I do not wish to extend my remarks unacceptably) briefly to debt, I do not follow the noble Lord, Lord Brockway, there because, in my admittedly narrow and not expert opinion, problems of debt are better resolved by debt re-scheduling clubs set up to meet the circumstances of the individual country than by some great waiver across the board which can in fact only invite further indebtedness. I believe that much can be done about alleviating the terms of indebtedness. I do not think it is possible to write a debt off entirely without finally undermining the whole financial system of trade; but it is possible to be humane, and it is possible to be humane intelligently. This, I think, we should do, but not en masse; I think it must be done in the groups.
On technology, here I must tell your Lordships that there is a mountain of evidence to be digested for this debate. Really, one could almost wish it had waited six months. But, on technology, I would merely say this. It is a very delicate situation. One must realise that there are people in this country who see that if we export our expertise we are in fact also exporting our own earning power. On the other hand, the multinational company is in a position either to keep to itself or to disseminate its earning skills, and where those skills depend upon a back-up from a country which is not the manufacturing country but only houses the subsidiary, then there is justice in considering ways in which technological skills can be transferred. I wonder whether, now that the OECD has come out, as it did last night, with an agreement on the behaviour of multinationals in various fields, there are not precedents within this document itself (which will be given a trial run for three years, as I understand) which could be used usefully in applying the behaviour of multinationals in the technological field as well as the fiscal field in developing countries.
My Lords, I should like again, as I did at the time of the Statement, to welcome

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the extension of the GSP, which I think buys time, but time is valuable. I hope that the result of this debate, if it is read in another place, will be to effect the conversion, not necessarily to the whole idea of the common fund but to the principle of co-operative development in the undeveloped countries, of Mr. Judd, who pronounced himself at Nairobi as a good agnostic open to conversion. I think that is our function.
It always sounds slightly absurd and theatrical, in the advance of great events, to say that great events are coming because so often they do not, but I think that in the perspective of time great events are moving in this field, as the noble Lord, Lord Brockway, has said; and it is our children who will not thank us if, for misguided motives, we are less than generous or less than far-sighted in our dealing with what we have come to call the Third World. If I may revert to what I said in opening, there is a mass of world population uncommitted and underfed. There are rival ideologies standing on either side of it. One is ours, the other is not. What we are doing, if we are less than efficient and generous in our dealings now, is recruiting for the other side.
8.17 p.m.
Lord BANKS: My Lords, I think we would all be agreed that the relationship between the nations of the rich North and the nations of the poor South is a matter of vital consequence for the future harmony of the world, and we must be grateful to the noble Lord, Lord Brockway, for giving us a chance to broaden out the brief exchange which we had when the noble Lord, Lord Oram, repeated the Statement made in another place about the UNCTAD Conference on the 8th June. I said then that we on these Benches were glad that the Conference had not ended in failure and disagreement, but that I was not sure how much we could say it had been a success. In the interim, I have been confirmed in the view that the success was certainly only partial.
It was clear well before the Conference that commodities would he the central issue, and the UNCTAD had prepared plans for a common fund, as we have been hearing, for buffer stocks and for an overall framework within which individual
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commodities could he dealt with case by case. The object was, first, to iron out fluctuations in demand; and, secondly, to see that reasonable prices were obtained, in certain cases by pushing up prices—in other words, by securing a transfer of resources, and, of course, the example of what had happened with regard to oil was there. Then, thirdly, once prices were at an appropriate level, the intention was that they should be indexed to the cost of imported manufactured goods from the industrialised countries, so that the prices for commodities would not be eroded by inflation in the industrialised countries. This plan, as the noble Lord, Lord Brockway, has said, was endorsed by the Group of 77, now encompassing some 113 developing nations, at their meeting in Manila.
As the noble Lord, Lord Elton, has said, the industrialised countries had no coherent alternative strategy. In the words of one commentator, they were divided and fractious. The United States, West Germany, Japan and the United Kingdom emerged as the hardliners opposing the concept of the common fund and arguing that there should be a case-by-case consideration only of each individual commodity and that this would be the only efficient way in which to arrange things. But Mr. Cora, Secretary-General of UNCTAD, had already dealt with the case-by-case argument in an interview he gave in Europa in April of this year. He said then:
"I think there has been some misunderstanding. There has been a false juxtaposition between the UNCTAD approach which has been described as comprehensive and the case-by-case approach. UNCTAD also want a case-by-case approach but it has to be brought under a common umbrella. What we do not want is to deal with commodities in a fragmented, isolated way and to repeat the experience of the past."
He went on to say:
"After the Santiago Conference in 1972, there was a decision to hold intensive consultations on 14 commodities on a case-by-case or product-byproduct basis. Nothing came out of it. We do not want to repeat that experience and to get into another round of futile, frustating negotiations on individual products."
The Western objections to the common fund concept and the general framework within which individual commodities would be dealt with case by case, seemed to be based first on the argument that it would distort the free market economy; but it is possible to support the principle

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of the free market economy and yet to accept modifications of it in practice in certain particulars. It is difficult for a country which is a party to the Common Agricultural Fund to argue that in all circumstances the pure doctrine of Adam Smith must be applied without any modification whatsoever. Although, even so, it is possible that the Stabex arrangement which is incorporated in the Lomè Convention and which guarantees earnings and not prices, could be used in the case of some of the commodities just as it is being used within the more limited field of the countries who are parties to that Convention.
Then it is argued that all developing countries would not benefit from a plan of the kind which I have outlined. This would he because some of them have no raw materials to sell and yet require to import raw materials; and therefore they would be faced themselves with higher prices. But it is notable that at the Conference these very nations supported strongly the concept of the common fund and the argument that there should be special consideration for any poor nation which would suffer as a consequence of the implementation of the plan. Then it is argued that it would be inefficient to have the common fund because if the money was known to be there centrally it would be spent in any event whether or not it was required. But it seems to me since there is bound to be a transfer of resources, that it would be better to see in a global amount exactly how much was involved and how much was being applied. The Western countries that had raised the objections that I have mentioned a minute ago, were perhaps, some of them, for some ultimate form of co-ordination once the case-by-case method was being employed. But I think there is a strong case for saying that if you have the central fund you know precisely what is the overall amount being involved in the whole object.
Then there is the argument put forward by the noble Lord, Lord Robbins, when we had this brief exchange about the UNCTAD Conference the week before last, when he said we had to be on our guard against policies which might result in a pronounced turn in the terms of trade of this country at a time when we could ill afford it. Of course, in our present predicament we have to bear that very
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much in mind; we cannot ignore it. Half of our raw materials come from the Third World. Yet is it not true that there has to be some turn in the terms of trade, that this is implicit in the whole exercise? Would it not be much better that that turn in the terms of trade should be carried out on an agreed basis, an agreed, limited and controlled basis, rather than in the abrupt, crude and disruptive way in which it happened with respect to oil.
The threat of an increase in the price of oil, if there was not agreement in Nairobi, was one of the factors influencing the Conference, as well as the possibility that there might be continuing confrontation and hostility in the North-South dialogue when it was resumed in Paris. As the noble Lord, Lord Brockway, said, Dr. Kissinger's plan for a resources bank to invest mainly private enterprise funds in the exploitation of raw materials in the developing countries was narrowly defeated. I think that part of the reason for that was that many people felt that it was no use producing more if this only led to depressed prices. I think that the hostility to the common fund caused a reaction against the idea of the resources bank; but I would hope that that idea might not be lost sight of and might be introduced eventually alongside a form of the common fund. In the event, as your Lordships know, the Conference agreed that steps should be taken towards the negotiating of a common fund for the financing of buffer stocks and a detailed timetable was agreed for these negotiations and for negotiations on, I think, 19 individual products.
Sixteen industrial countries welcomed the resolution and I think it worth while mentioning them. They were: Austria, Belgium, Canada, Denmark, Finland, Greece, the Irish Republic, Italy, Luxembourg, Norway, the Netherlands, Portugal, Spain, Switzerland, Sweden, and Turkey. They welcomed the resolution. In a separate statement, France said that she, too, agreed with the terms of the resolution. The U.S.A., Britain, West Germany and Japan felt under no obligation to take part in a negotiating conference. They clearly remained hostile to the concept of the common fund. That is why I said earlier that success was only partial. Important industrial nations did not agree with the main decision of the Conference. The industrial nations

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were divided; the European Economic Community was divided, in contrast to the proposals of M. Tindemans in his report that they should always present a united front to the rest of the world. The United Kingdom had been classified as a hardliner and, in fact, was described as the "UNCTAD snail of Europe". Mr. Richard Norman Taylor writing in the Gaurdian on 3rd June said:
"Britain's attitude led to deep resentment among representatives of the developing countries".
In conclusion, I should like to ask the noble Lord who is to reply for the Government these questions. Do the Government intend to attend the negotiating conference? Do the Government intend to contribute to the common fund and to participate in its operations? What plans have the Government to recapture the spirit of Sir Harold Wilson's initiative at the Commonwealth Conference at Jamaica last year to which the noble Lord, Lord Brockway referred? In short, what positive ideas have the Government for solving the very difficult problem of the economic relationship between the rich nations and the poor nations of the world?
8.30 P.m.
Lord RITCHIE-CALDER: My Lords, I rise to follow the admirable speeches that we have had. I want especially to thank the noble Lord, Lord Elton, for having spelt out clearly what is our embarrassment on this side of the House, and also my noble friend Lord Brockway for giving us this opportunity of discussing this subject. He went back to Bretton Woods. I go back further. I go back to raw materials and the Atlantic Charter. Most of us have forgotten that. It was 4th August 1941 when Roosevelt and Churchill pledged—Clause 4 of the Atlantic Charter—that all nations, great and small, victor or vanquished, should have access to trade and raw materials necessary for their economic development. It is ironic, looking back now, because they could do it. Between them they possessed most of what they were talking about.
However, the fact is that the British Empire—which represented a large part of that promise—is now divided up into the territories that we now call the less-developed countries. They are the people
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who now command the commodities which Roosevelt and Churchill were prepared to dispose of—in this case with the best intentions. We are no longer in a position to dispose of them. We are on the wrong side of the line. We are dependent now for these resources on the people whom we used to command. They are now in a position to deny us them. That is true of the United States as it is of Great Britain.
What distresses me is I have an awful sense of deja-vu. Thirty years ago in Geneva we were discussing what was a common fund and buffer stock situation. In this case, it was in relation to food and Sir John Boyd-Orr's plan which raised in every essential issue the matter we are discussing tonight. Eroding this away was the British delegation, although Ministers made the proper speeches. My noble friend Lady Summerskill, who spoke for the British delegation at the beginning, said she sat at the feet of Sir John Boyd-Orr and followed him in all that he wanted. Going through the lobbies, in the Palais des Nations the British Delegation consisted of no Ministers. They were entirely civil servants. A friend of mine made the remark about them: "There go the PUKES". This was a new word in circulation in Geneva—I had been away for a week—and it meant, "The poor U.K.". It had started off as the "PUs "the "Poor Under-Secretaries" because by this time they were leading the delegation and were being hammered.
This is the kind of thing that I do not understand. I cannot understand what happens in half the conferences that I attend in which I know the principles of my Party and my Government. I see the whole thing going to blazes in every case. It has gone to blazes in every conference I have been at for the past 10 or 15 years. I do not understand what we are doing. We have the right instincts, we make the right noises and then when we get into conference we deny everything that we are supposed to stand for. The speeches in Nairobi said the right things. All right rhetoric! When we come to the challenge, what do we do? We finish up, as has been pointed out, with Japan, the USA and West Germany against what was in fact our world of the Commonwealth, the people we should have understood. This is total betrayal. I listen to it, I see it happening and I cannot understand the reason for this or

279
any basis on which this could possibly happen.
The facts are plain: the New Economic Order is as much part of our living world as anything is ever going to be. My noble friend Lord Brockway pointed out that this is an issue; it may sound like rhetoric, but they are trying to spell it out and break it down. Every time we draw their attention to our vulnerable areas, when we oppose them, that is when we are packing in the trouble. It is happening all the time. The 77 Group or the 113 Group, whatever it is, are not a solid bloc; they are amenable as the noble Lord, Lord Elton, pointed out, in the sense that they are people who can be convinced one way or the other as to where the depth of real principles may lie. Are we to let them down, as we are doing now, and have done it in one conference after another? The tragedy of Santiago —of which Nairobi was the follow-up conference—I do not know how we survived that as a nation; why we did not cover ourselves in sackcloth and ashes. Nairobi was not a total tragedy, but we must know what it meant when we start to spell out what our attitude to the common fund is, to debts, to technological exchange and so forth. Let us be clear: they know what they are after and we do not.
Of course, there should be a common fund—not a Dr. Kissinger fund; it is not going to be that kind of a fund. It is at least somewhere where people can turn, particularly the poorest of the poor who have little to offer in exchange. Secondly, the buffer stocks. How can anyone argue in the world today that we should not have buffer stocks, that we should not have some way of counter-balancing the fluctuations in times of collapsing commodity market situations, when we know we are going to need the materials?
As a result of the Atlantic Charter, the British Association for the Advancement of Science held a conference—an international conference—in London in I94I. There, under Stafford Cripps, our President (he was brought in not because he was a politician but because he happened to be a scientist at one time), we threshed out the commodities and the raw materials which the Atlantic Charter was supposed to cover. Look at it today! I went over them the other day; most of them have
280
little relevance because the raw materials have changed their nature. At that time uranium was not mentioned. At that time the emphasis was on manganese because we were making armour plate. All the things which are now in one way or another becoming significant, in those days were not named.
Materials determine the history of the world. Who has a critical commodity or has not got it determines history. We have now such a situation that if we do not face up to it—and time is not on our side—we are going to be sunk. It is not just pointing to the warning example of OPEC; it is the fact that we will be forgotten in all our requirements and needs because the countries we are spurning are the people who presently will dictate what we will get or not get. Do not think they have not learned that lesson. Some may be the poorest of the poor and have nothing, but others can hold us one way and another to ransom. How can we in moral terms—because this is a moral issue, as has been stressed—deal with this?
It is an issue of peace and war, as my noble friend Lord Brockway pointed out, because in what happens in the evolution of this history we are facing possible disaster. There will certainly be continuing friction between North and South. Why cannot we understand? Who writes these briefs? Who makes these situations? How do they get us out on a limb from which we cannot climb back?—because, as has been pointed out, there was room for negotiation in this forum. The 77 or the 113 had prepared, as we had not, their plan of campaign and their strategy but they were not intractable, in that sense, until they found themselves being opposed and resisted on the simplest and most manifest terms. I went to the Seventh Special Conference of the United Nations. At that time I was enormously comforted. I was encouraged because the 77 (or the 113) of the developing countries were talking sense. There was no invective; there was none of the old violent rhetoric. They had come down to cases and were talking adult sense. We have put them back in the kindergarten.
8.41 p.m.
Lord ORAM: My Lords, one of the remarks made by the noble Lord, Lord

281
Elton, was that it might have been better had there been a six months' gap between the Conference at Nairobi and this debate. I rather feel it would have been a good thing if there had been a gap before the summing-up speech that I am embarking on following this debate, because so many complex issues have been so interestingly raised that it is not easy to give a rounded reply, as I would wish. However, I am sure we all join in our appreciation of my noble friend Lord Brockway in giving us this quick, short opportunity for dealing, at least in outline, with the problem that we have all agreed is absolutely fundamental to the welfare and the continuing peace of the world. We can always rely on my noble friend to take this kind of opportunity whenever the interests of the Third World arc involved, and he does so in a splendid way.
The noble Lord, Lord Elton, began with a most interesting survey of the general world situation in respect of world poverty, and I hope he will not expect me to follow that, because there is a great deal in respect of the actual Conference at Nariobi that I wish to deal with. But the noble Lord made one general point with which I entirely agree. He gave example of the enormous fluctuations in commodity prices, and said that we must all therefore have the utmost sympathy with those who see their livelihoods dependent upon these fluctuations and that we ought to strive to do what we can about them. I do assure the noble Lord, Lord Elton, and my noble friend Lord Brockway, together with other noble Lords who have spoken on this theme, that there is no difference between them and the Government as regards the importance of that problem and the need to overcome it. There is no difference between us on that. There is, however, as has emerged at Nairobi and also during this debate, a great difference concerning the methods by which that highly difficult problem should be tackled.
When I repeated on the 8th June the Statement that the Secretary of State for Trade was making in another place, I ventured to express my personal anxieties about polarisation, not only within UNCTAD but within other world fora, which is characterised by the so-called Group of 77 or Group B countries, and so on. A number of noble Lords have expressed disappointment this evening that there was no unanimity of the
282
polarisation among the developed countries at UNCTAD. I know what they mean: perhaps the case could have been made more effectively and put forward in a better way had there not been differences between the developed countries. But I would make this plea, that this wish for unanimity within groups should not be overdone, as I believe it has tended to be. I do not think we want confrontation in world fora. We want to build bridges between groups and, as the noble Lord, Lord Elton, pointed out, it seemed that although there was an apparent unanimity on many issues within the 77 there were underlying differences there as well.
There is another tendency at UNCTAD and at other United Nations gatherings which I personally feel anxious about. That is the tendency, before a conference is convened, to raise certain general targets expressed in very general terms, almost as symbols. Then, when the conference takes place, everything is tested by the adherence or otherwise to that symbolic target. I believe that this is an undesirable tendency in these matters.
At the UNCTAD Conference we are considering, I believe there was something of that character in the target which earlier had been raised about an integrated approach to commodity questions. Even the common fund tended to take on that aspect, of being a touchstone or a symbol of success, without necessarily the recognition early enough of the differences in points of view about such symbols. I am not saying it is not a good thing to have these. At least the conferences would have provided objectives so that we might set our eyes on the stars for guidance; but someone also has to look at the ground under our feet and to point out the possible pitfalls and the possible snares. I think this is really the difference in approach on this question of the common fund, on the one hand, and the so-called case-by-case approach, on the other hand.
The noble Lord, Lord Banks, gave an interesting quotation from the Secretary General of UNCTAD concerning UNCTAD III, in which he said there had in effect been case-by-case conclusions, but that nothing had come of them. I think there is an important difference in this matter if we compare UNCTAD IV with UNCTAD III. Those who advocated,

283
as we did, the case-by-case approach also advocated a timetable and that is where UNCTAD IV differs from UNCTAD III. If, as has emerged, you have a case-by-case approach, to set the timetable of your Conference in March 1977 and to say that negotiations should be concluded by the end of 1978, and so on, makes a very big difference, or so it seems to me, in considering these commodity problems.
As I have said, someone has to look at the paths rather than at the stars, and I think my right honourable friend the Secretary of State was doing that in his opening speech. He would admit, as I would, that having done that he paid the price by a distinctly unfriendly Press and public reaction to what he said. But I urge upon my noble friend Lord Brockway that it is unfair, having regard to the whole picture—some of which I hope to convey in a moment—to characterise the role of the United Kingdom delegation as having been entirely reactionary. Indeed, if one reads the opening speech of my right honourable friend the Secretary of State for Trade, and with the benefit of hindsight now that the Conference is done, one can see a number of passages in it which turn out to have been wise pointers to the conclusions which the Conference ultimately reached by consensus.
In his speech, Mr. Dell stressed the need for concrete work by the Conference on the very difficult problems before it, and he expressed our willingness to participate in certain practical conclusions. I am glad to say that on a wide range of issues—indeed, on the great majority of agenda items—the Conference came to decisions that reflected the spirit of constructive compromise for which we had hoped in a 'range of areas; for example, on trade, technology and special measures for the least developed. Real, if unspectacular, progress was made in furthering agreement on measures and policies to assist the development of the Third World, and we should not allow the highly charged atmosphere surrounding one or two issues—which I agree were important and vital, but which dominated the scene—to obscure the workmanlike debate that characterised much of the Conference's work.
May I now turn in a little more detail to the question of commodities. The feeling has been expressed that the Government's
284
stance at the UNCTAD Conference was unduly negative, and that the opportunity was thereby lost to achieve progress in a number of important areas. I do not accept this criticism. On commodities, the delegation went to Nairobi with the aim of gaining international acceptance for those principles and practical proposals set out in Sir Harold Wilson's Kingston initiatives. My noble friend Lord Brockway has, I think, paid tribute, if not today then certainly earlier, to those initiatives—
Lord BROCKWAY Lord BROCKWAY: And today.
Lord ORAM: and I hope he will recognise that within the resolution on commodities that was adopted by UNCTAD there is a considerable input from the Kingston Conference, which was an important contribution from our delegation. Leaving aside the issue of the common fund, on which there were obviously many differences of view, that aim was substantially achieved. As I have said, the Kingston principles are to a large extent embodied in the objectives section of the Nairobi commodities resolution. In addition, UNCTAD has set in motion precisely the kind of urgent programme of work on individual commodities advocated by my right honourable friend Sir Harold Wilson. Eighteen commodities have initially been selected for discussion and possible negotiation within—I stress this again—a tight timetable, and other commodities may be added to the list subsequently. It is now up to the producers and consumers participating in these discussions to show their will to make progress towards mutually beneficial arrangements.
A number of noble Lords have made the point that the question of commodities was the central issue before the Conference. The Conference adopted by consensus a resolution establishing an integrated programme for commodities. The main elements in this programme are a series of preparatory meetings, followed where appropriate by negotiations on particular commodities of export interest to developing countries; and preparatory meetings on a common fund, to be followed by a negotiating conference on such a fund. As my right honourable friend the Secretary of State for Trade indicated in the Statement that he made on 8th June, the United Kingdom Government very

285
much welcome the proposed programme of action on individual commodities.
The products selected as the subject for early discussions were chosen by the developing countries themselves in their Manila declaration and programme of action. My noble friend Lord Brockway spelled it all out and I need not do so again. But he and the noble Lord, Lord Banks, asked me whether it is the intention of Her Majesty's Government to participate in this preparatory work. We will, of course, participate fully and constructively in the discussions on the eighteen individual products, and in the preparatory meetings on a common fund. We hope that these meetings will provide the opportunity for a full discussion on the role and function of a common fund, thus enabling participants in the negotiating countries to take informed decisions.
I believe the noble Lord, Lord Banks, wanted me to go further and asked whether we would establish ourselves on the point about making a contribution. This will depend upon the preparatory work that is done between now and the Conference, and certainly it is too early for me to make any commitment in response to the noble Lord. But in terms of participating willingly in the work that is forecast, I can give a positive answer.
As to the common fund, which has been at the centre of much of this debate, the word "agnostic" has been attributed to my honourable friend Frank Judd. Frankly, we remain agnostic about this common fund. Of course, we do not underestimate the importance attached by developing countries to the concept of a common fund which, as I have said, they see almost as a symbol of a political commitment towards the restructuring of commodity trade, though we believe that our own commitment has been clearly and repeatedly expressed without the need for such symbols. But we continue to question the claimed objective benefits which a single common fund would provide, and doubt whether the case for such a fund can be effectively evaluated before the financial needs of individual commodity agreements can be more clearly foreseen. In the end, we come back to a case-by-case approach. The resolution adopted in Nairobi recognised that there are important differences of view on the objectives and modalities of such a fund, and these
286
differences of view exist among the developing countries no less than among the industrialised nations. As I have said, we hope that the preparatory meetings on the common fund will explore the whole question objectively and in detail to permit an informed decision to be made in due course.
Since a number of noble Lords have raised it, may I deal with the question of the so-called disarray or divisions on this question of commodities in the common fund within the delegations of the developed countries. In a conference dealing with matters of great political importance and technical complexity, it is only to be expected that divergent views will be expressed. If they exist, I believe it is best that they should be expressed. But the extent of the differences at Nairobi should, I suggest, not be exaggerated nor allowed to obscure the very closely shared approach of developed countries on nearly all issues. While, on commodities, there were differences of opinion, these were confined to the question of the common fund.
After commodities, the question of the indebtedness of developing countries was one of the most important topics at UNCTAD IV. It was a point very much stressed by my noble friend Lord Brockway, and it was gratifying to Her Majesty's Government that it was possible to arrive at a resolution which commanded the support of developing and developed countries alike and was adopted by consensus. I suggest to your Lordships that this is another matter regarding which Mr. Dell's speech can usefully be re-read. One passage in his speech is particularly helpful.
The resolution avoids the earlier proposals regarding generalised measures for debt relief and for an international debt conference, both of which we regard as ill-judged. Instead—I think that the noble Lord, Lord Elton, expressed his concurrence in the main with the Government's view on this subject—the developed countries have pledged themselves to give quick and constructive consideration to individual requests by developing countries which suffer from debt service difficulties; in particular, the least developed and most seriously affected developing countries. The agreement reached is wholly consistent with the view of Her

287
Majesty's Government that debt situations must be dealt with—I do not apologise for using the phrase again—case by case as they arise. The reason for this is that individual circumstances are too complex and widely differing for generalised solutions to be appropriate. As I have said, however, the developed countries have shown their willingness to approach individual cases in a sympathetic manner and, in fact, this is current practice and policy. May I stress that the British delegation took a prominent part in bringing about the compromise on this question.
Two noble Lords—I think the noble Lord, Lord Elton, and my noble friend Lord Brockway—raised questions concerning multinational corporations and made particular reference to a more recent conference than UNCTAD IV; namely, that which took place yesterday in Paris. In response to their reference to this more recent development, I wish to say that the OECD code is a set of voluntary guidelines which cover policies on investment, employment, use of local resources, et cetera, and which are concerned principally with multinational corporation activities in the territories of OECD Member States. We accept them fully and regard them as a useful model for the universal code of conduct for multinational enterprises to be negotiated in the United Nations Commission on Trans-national Corporations. We fully support the work on multinationals in this body, which is recognised as the main United Nations focus of activity on this subject.
In this connection there was a reference to technology. The OECD code contains provisions on technology that could provide a useful input to the work of drafting a code of conduct on the transfer of technology by an UNCTAD group of experts. We are in favour of voluntary guidelines for Governments and enterprises. Provided that agreements are freely negotiated between buyer and seller, we regard the export of technology as a matter of mutual benefit—for us a useful source of foreign exchange earnings and for recipients a way to acquire technology.
I think that I have touched upon most of the important issues that were raised in the debate. I am conscious that we had
288
a most interesting contribution from my noble friend Lord Ritchie-Calder upon which I have not commented. I am not really anxious or able to do so because my noble friend draws on such a history and on such an experience of scientific matters within the United Nations that it is extremely difficult to follow him. However, his contribution helped to round off what I hope your Lordships will agree has been a useful exchange on a subject of great importance, upon which it has emerged that there arc important differences. Nevertheless, the area of these differences is surely important in itself. For this reason, I repeat what I said at the outset; that is, that we are most grateful to my noble friend Lord Brockway for having given us this opportunity.
Lord BROCKWAY: My Lords, before the Minister sits down, may I ask him this question. All of us greatly welcome the statement that he has made; that is, that the United Kingdom will participate in the coming conferences and consultations which were left open at Nairobi. Is he able to say whether the United Kingdom's allies at Nairobi, the United States of America, West Germany and Japan, have reached a similar decision? Is there any information about that?
Lord ORAM: My Lords, I have no doubt that a certain amount of information exists, but neither in my notes nor in my head. If I can find out, I will certainly communicate with my noble friend.

RIVER MEDWAY (FLOOD RELIEF) BILL
Examiners Certificate that no further Standing Order is applicable: Ordered to lie on the Table.
GREAT NORTHERN LONDON CEMETERY BILL [H.L.]
Reported from the Unopposed Bill Committee with Amendments.
BRITISH TRANSPORT DOCKS BILL
Brought from the Commons: read 1a, and referred to the Examiners.
WRITTEN ANSWERS

  INDIAN SUB-CONTINENT: DEPENDANTS' ENTRY CERTIFICATES INTO UK
  Lord AVEBURY Lord AVEBURY asked Her Majesty's Government:
  Whether they will give, for each of the months from June 1974 onwards and for each of the countries of the Indian sub-continent, the number of applications made for entry certificates from dependants of persons already settled in the United Kingdom, and the number granted, refused and withdrawn respectively in each of those months.
  The MINISTER of STATE, FOREIGN

  PAKISTAN

  ENTRY CERTIFICATE APPLICATIONS FROM DEPENDANTS FOR SETTLEMENT

  RECEIVED

  GRANTED

  REFUSED

  1974

  1975

  1976

  1974

  1975

  1976

  1974

  1975

  1976

  JANUARY

  841

  1,559

  587

  983

  153

  126

  FEBRUARY

  730

  1,430

  560

  425

  121

  133

  MARCH

  593

  1,435

  494

  1,013

  93

  152

  APRIL

  1,052

  1,782

  530

  794

  128

  135

  MAY

  959

  1,319

  765

  862

  103

  194

  JUNE

  720

  1,089

  295

  585

  113

  127

  JULY

  690

  1,098

  315

  686

  91

  177

  AUGUST

  615

  1,003

  282

  629

  96

  117

  SEPTEMBER

  769

  1,098

  318

  630

  158

  127

  OCTOBER

  643

  962

  380

  828

  121

  155

  NOVEMBER

  675

  832

  453

  878

  146

  125

  DECEMBER

  499

  993

  452

  962

  115

  110

  TOTAL

  4,611

  11,250

  7,525

  2,495

  8,134

  4,077

  840

  1,536

  740

  No figures are available for applications which are withdrawn. Experience shows these are very small.

  BANGLADESH

  ENTRY CERTIFICATE APPLICATIONS FOR SETTLEMENT

  RECEIVED

  GRANTED

  REFUSED

  1974

  1975

  1976

  1974

  1975

  1976

  1974

  1975

  1976

  JANUARY

  675

  414

  145

  377

  25

  72

  FEBRUARY

  897

  668

  195

  390

  25

  66

  MARCH

  1,011

  1,135

  294

  349

  26

  128

  APRIL

  729

  865

  379

  369

  50

  144

  MAY

  651

  585

  426

  345

  20

  56

  JUNE

  558

  513

  70

  502

  61

  46

  JULY

  534

  1,392

  84

  508

  58

  65

  AUGUST

  423

  111

  84

  407

  56

  39

  SEPTEMBER

  729

  196

  109

  502

  6

  61

  OCTOBER

  618

  1,776

  75

  393

  18

  63

  NOVEMBER

  846

  951

  80

  356

  34

  74

  DECEMBER

  468

  759

  70

  399

  7

  82

  TOTAL

  4,176

  9,661

  3,667

  572

  4,506

  1,830

  240

  576

  466

  The figures include both dependants and a small number of others applying for settlement. Figures for withdrawals are not shown separately but average about six per month.

  and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): Precise and comparable figures are not available in all cases because the method of recording applications and decisions varies from post to post and has been amended from time to time during the period covered by the Question. In some cases where only applications are recorded (and not the number of individuals covered by each application) a multiplying factor has been used in order to arrive at a reasonable estimate of the number of individuals involved. The following tables show the latest numbers as estimated by the posts concerned. Two tables are shown for India because, prior to January 1975, the Deputy High Commission at Bombay did not record dependants' applications separately.

  NEW DELHI

  ENTRY CERTIFICATE APPLICATIONS FROM DEPENDANTS FOR SETTLEMENT

  RECEIVED

  GRANTED

  REFUSED

  1974

  1975

  1976

  1974

  1975

  1976

  1974

  1975

  1976

  JANUARY

  730

  85

  291

  417

  38

  39

  FEBRUARY

  435

  287

  322

  361

  55

  32

  MARCH

  475

  220

  363

  353

  53

  67

  APRIL

  292

  340

  452

  344

  44

  14

  MAY

  317

  295

  249

  329

  28

  30

  JUNE

  525

  260

  172

  423

  40

  29

  JULY

  380

  197

  265

  358

  41

  83

  AUGUST

  902

  267

  205

  370

  44

  45

  SEPTEMBER

  872

  122

  208

  353

  53

  68

  OCTOBER

  602

  215

  221

  457

  69

  29

  NOVEMBER

  892

  92

  167

  337

  45

  52

  DECEMBER

  545

  55

  233

  393

  36

  43

  TOTAL

  4,718

  3,457

  1,227

  1,471

  4,368

  1,804

  328

  567

  182

  Figures for applications which are withdrawn are not available.

  BOMBAY

  ENTRY CERTIFICATE APPLCATIONS FROM DEPENDANTS FOR SETTLEMENT

  RECEIVED

  GRANTED

  REFUSED

  1974

  1975

  1976

  1974

  1975

  1976

  1974

  1975

  1976

  JANUARY

  963

  612

  291

  172

  38

  16

  FEBRUARY

  1,071

  519

  416

  294

  35

  48

  MARCH

  822

  618

  332

  277

  44

  50

  APRIL

  1,011

  465

  452

  278

  44

  42

  MAY

  1,086

  546

  366

  350

  33

  45

  JUNE

  867

  304

  28

  JULY

  831

  316

  28

  AUGUST

  669

  252

  38

  SEPTEMBER

  594

  259

  29

  OCTOBER

  693

  278

  34

  NOVEMBER

  471

  239

  26

  DECEMBER

  603

  223

  28

  TOTAL

  9,681

  2,760

  3,728

  1,371

  405

  201

  Figures for applications which are withdrawn are not available.

  CERVICAL CANCER: SCREENING CAMPAIGNS
  Baroness FISHER of REDNAL Baroness FISHER of REDNAL asked Her Majesty's Government:
  What progress has been made on mass screening campaigns for cervical cancer.
  Lord WELLS-PESTELL: Screening for cervical cancer is available to all women who wish to he tested but special emphasis is placed on screening those who are at highest risk—women aged 35 and over and younger women who have had three or more pregnancies. There has been a steady increase in the number of tests carried out from 229,000 in 1964 to nearly 2,500,000 in 1974 and it is particularly hoped that more women of the older age group will respond. The
  292
  Health Education Council co-operates closely with health authorities and voluntary bodies in educating women about the need for screening.

  NHS PHARMACEUTICAL PRODUCTS
  Baroness FISHER of REDNAL Baroness FISHER of REDNAL asked Her Majesty's Government:
  What are the procedures for checking side-effects and ineffectiveness of pharmaceutical products used by the National Health Service.
  Lord WELLS-PESTELL: All new medicinal products marketed for use in the National Health Service require a product licence. Such licences are only

  293
  issued when full information on the quality, safety and efficacy, which would include the results of animal studies as well as reports of clinical studies in patients, has been examined to the satisfaction of the Committee on Safety of Medicines. Products already on the market are being systematically reviewed by the Committee on Review of Medicines.
  An additional safeguard is the continuous monitoring of all medicinal products by the Committee on Safety of Medicines by its adverse reaction reporting system. It is a condition of any product licence that the holder shall report any adverse
  294
  reactions coming to his notice. In addition, specially commissioned epidemiological studies are carried out on certain products and the Department of Health and Social Security maintains close links on questions of safety and efficacy with other drug regulatory authorities and the World Health Organisation. If any significant problem arises, appropriate action is taken to inform doctors of it and if necessary the product is withdrawn from the market.
  House adjourned at eight minutes past nine o'clock.