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Commons Chamber

Volume 643: debated on Tuesday 4 July 1961

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House Of Commons

Tuesday, 4th July, 1961

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Private Business

Eyemouth Harbour Order Confirmation

Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Eye-mouth Harbour, presented by Mr. Maclay; and ordered (under Section 7 of the Act) to be considered upon Monday next and to be printed. [Bill 147.]

Oral Answers To Questions

National Finance

Animal Health Regulations (Charollais Bull Semen)


asked the Chancellor of the Exchequer what action he proposes to take against Craig Wheaton-Smith for smuggling Charollais bull semen into this country contrary to the Customs and Animal Health Regulations and causing to be shown at the Bath and West Show a product of this semen; and what steps he proposes to take to stop this sort of smuggling in the future which may be dangerous to the health of farm animals in this country.

Inquiries into the circumstances of the alleged offence are not complete and I cannot anticipate their outcome.

Will my right hon. and learned Friend bear in mind that this man might have cost him a million pounds in compensation to farmers for foot-and-mouth disease if the semen had contained the germ? In the circumstances, will he give an assurance that when his inquiries are complete this American millionaire smuggler will not be allowed to enter this country without being arrested and charged with his crime?

I fully agree with my hon. Friend about the possible serious consequences of an action like this. I think, however, that I had better not comment on what might or might not happen until the inquiries are complete.

Bona Vacantia


asked the Chancellor of the Exchequer what amounts were transferred to the Exchequer as bona vacantia in the last twelve months to the most recent convenient date, and in each of the two preceding years; and what percentage such figures represented of the total estates annually involved.

In 1958, 1959 and 1960 the net value of bona vacantia after meeting all legal claims and ex gratia payments was £289,000, £414,000 and £326,000 respectively. In most cases no applications for ex gratia payments were made. For the minority of estates in which they were, the proportions retained for the Exchequer lay between 56 and 59 per cent. For the whole range of cases the percentage varied between 81 and 86 per cent.

I am much obliged to the right hon. and learned Gentleman, but is not this really getting a very serious grievance? Many of us have cases of this kind where close friends who maintained the deceased for a very long time make applications which have very unsatisfactory results. Will the right hon. and learned Gentleman really look at the question and see whether it is not proper and fit to have a general rule that, on the whole, the estate shall go to those most closely connected, either by blood or by friendship, rather than be forfeited to the Exchequer?


asked the Chancellor of the Exchequer whether he will introduce a procedure for further appeal by friends or relatives who have claimed to participate in bona vacantia.

No, Sir. While applicants are sometimes naturally disappointed, I am satisfied that their requests are carefully and sympathetically considered under the existing practice and arrangements; and I would add that if the hon. Member will send me particulars of any individual case, I will certainly see that they are sympathetically considered.

I am grateful for that Answer, but the point which I am trying to make, if the right hon. and learned Gentleman will consider it, is that at the moment, as far as I am aware, only written representations are possible in the normal cases. In Oldham they are made to the Chancellor of the Duchy of Lancaster and outside Lancashire to the Treasury Solicitor. People are in a difficulty if in matters of great importance to them the only thing they can do is to write a letter and await results.

I should make it clear that my Answer does not include the Duchy of Lancaster. Claims there are dealt with differently. I will look into the point raised by the hon. Gentleman and see that my right hon. Friend the Chancellor of the Duchy of Lancaster is made aware of it.

National Theatre


asked the Chancellor of the Exchequer if he will make a further statement on the future of the National Theatre.

As I told the London County Council deputation which came to see me on 6th June, their offer to meet the capital cost of erecting a National Theatre on the South Bank in excess of £1 million already approved by Parliament in the National Theatre Act, 1949, creates a new situation.

I must, however, make it clear that I would not in any event be prepared to agree to more than the sum of £1 million already approved by Parliament toward capital costs, nor could I agree to increase the sum by way of annual subvention already contemplated in accordance with my statement of 21st March.

Is the right hon. and learned Gentleman aware that we are much gratified that, by implication, he is prepared to meet the guarantee already given by Parliament? Will he do all he can to see that those concerned with this matter concert their plans and their actions so that we can make this dream into a reality?

I think that it is now for those concerned to consider what, I have agreed, is a new situation, and no doubt I shall be communicating to the House the result of any discussions which take place.

War Loan


asked the Chancellor of the Exchequer what steps he is taking to investigate the hardship caused to persons who have invested in War Loans.

I would refer the hon. Member to the Answers which my hon. Friend the Economic Secretary gave to the hon. Member for Leicester, North-West (Sir B. Tanner) on 27th June.

Would not the Chancellor agree that a very large number of people in this country have invested their entire savings in War Loan for patriotic reasons, and has he no morsel of hope or comfort to give them? Are not the Government going to do anything to mitigate the losses which they have sustained?

I am acutely aware of the harship which has occurred in many cases, but I think that it would be wrong of me to raise any false hopes. The best way to help is to maintain the value of sterling abroad and try to change the present balance of payments position. I think that that is the way in which we shall help these people best.

Will not my right hon. and learned Friend look at this matter again? Is not he aware that many people responded to the appeal to their patriotism to invest in War Loan? Is it really fair that they should be penalised, as compared with those who resisted this appeal? Will not he consider dating this stock, if he does nothing else?

A number of very wide aspects of public policy would be involved in such a step.

Ts the Chancellor aware that, quite apart from patriotic appeals in the past, the Financial Secretary, speaking in this year's Budget debate, said that giltedlged investors could look forward with more confidence? As prices have fallen by another four points since then, cannot he offer a little more sympathy to the people concerned?

I have said that I am aware of the hardship involved in many cases. I have every confidence that what my hon. Friend said will be justified in time.

Industry, Rural Wales (Development Assistance)


asked the Chancellor of the Exchequer how many applications were received in the latest convenient period for assistance from the Development Commission for the extension of industrial activities in each of the rural counties of Wales; how many were granted; how many were not taken up; and what was the amount in each case.

Five applications for assistance were received in the year ending 30th June, 1961: two for Radnor and one each for Anglesey, Brecon and Cardigan. Four were approved and one, received last week, is under consideration. One, which had been approved, has not been taken up.

It is not possible to state the amounts of money which will be sanctioned because tenders have not yet been submitted.

Will the Chancellor ask his Department to consider again whether publicity ought to be given about the funds available from the Development Commission so that industrialists may know about this? I understand that this is known to industrialists in Ireland through the Chancellor's colleague in the Board of Trade, but not in Wales through the Development Commission.

I am in complete sympathy with what the hon. Member has said. He is a member of the Mid-Wales Industrial Development Association, which is taking active steps in the matter. I will certainly ask my right hon. Friend the President of the Board of Trade to see that his officials co-operate to the utmost of their capacity. I understand that they are doing so, but I will certainly raise the matter again.

National Gallery (Giorgione Picture)


asked the Chancellor of the Exchequer what price was paid by the Trustees of the National Gallery for the picture Sunset Landscape with St. George and St. Anthony attributed to Giorgione.

This is a matter for the Trustees, and it is their considered policy not to publish the prices which they pay for pictures.

Are not the Trustees dealing with public money? If we knew the figure, should not we be better able to judge whether they had made a good or a bad bargain?

I do not think that it would be very wise for figures with regard to private sales to be made public. We might find that, as a result, more public money was being spent rather than less.

University Places


asked the Chancellor of the Exchequer if he will publish his estimates of the places expected to be available at each university in each of the next five years; which of these places will be for arts studies; and which will be for science studies.

I cannot give figures of the growth of university population over the next five years until the development plans for the universities which the University Grants Committee is now collecting for the quinquennium 1962–67 have been received. The distribution of students between faculties is a matter for the universities themselves. Overall, however, I would expect about two-thirds of the new places would be for science and technology.

In view of the desperate need for scientists and engineers, will the Chancellor say how that estimate compares with the present ratio between science and arts courses, and also whether he is satisfied with the two-thirds proportion, and that the estimates that he is anticipating from the University Grants Committee will come forward early enough not to make it very much more difficult for us in future than it is now?

With regard to the first part of the hon. Member's supplementary question, I could not do that without notice. Broadly speaking, I am satisfied with the proposed balance. I think that the University Grants Committee will report in time.

Is the right hon. and learned Gentleman able to give the figures of men and women concerned, in view of the great difficulty which women are having in getting university places?

I should require notice of that question, but I will let the hon. Member have the information if he requires it.



asked the Chancellor of the Exchequer what assurances he gave to the European central banks and the American Federal Revenue Bank at their meeting in Basle at the beginning of June about reducing Government expenditure in return for sufficient funds to maintain the strength of sterling.

In spite of the very serious nature of the speech which the right hon. and learned Gentleman made to the chambers of commerce, and the warnings he gave about the grave state of our invisible earnings and visible earnings, is he assuring us that he can maintain the strength of sterling without any propping up from abroad?

I think that we can maintain the strength of sterling by the general efforts of the community as a whole.

Is the Chancellor suggesting that sterling is not being very much propped up from abroad at present by the holding of sterling by the European central banks? Although we all welcome this, is it not a fact that the present monthly gold figures are entirely unreal as long as an unknown amount is being held for the support of sterling?

I admit that they are not as precise as before, but what is happening is that some hot money which has been held on private account is now having substituted for it funds held by the central banks.

Goya Picture (Duke Of Wellington)


asked the Chancellor of the Exchequer if the Reviewing Committee on the Export of Works of Art has now informed him of its decision on the application to export Goya's portrait of the Duke of Wellington.


asked the Chancellor of the Exchequer whether he has received a report from the Reviewing Committee on the Export of Works of Art in connection with Goya's portrait of the Duke of Wellington.

Hon. Members will have seen in the Press the announcement that Mr. Wrightsman has offered this portrait to the National Gallery at the price which he paid for it. The National Gallery Trustees are at present considering this offer. The Reviewing Committee on the Export of Works of Art has therefore not yet advised on the case.

Does not the Chancellor agree that this picture combines outstanding artistic merit with uniquely historic importance for this country? I do not expect him to give any specific undertaking in the matter, but does not he agree that it would be most unfortunate if this opportunity to acquire the picture for the nation was lost?

I agree about the merits of the picture. This is an admirable case in which private individuals could show their concern for the retention of works of art in this country by finding the money to pay for it.

I am as anxious as any other hon. Member to keep this work of art within Her Majesty's Dominions, but does my right hon. Friend's jurisdiction extend to Jersey, whence this portrait came?

I do not think that it is a question of my jurisdiction, but it certainly comes within the sphere of authority of my right hon. Friend the President of the Board of Trade.

Stationery Office Publications (Technical And Training College Libraries)


asked the Chancellor of the Exchequer if he will extend the concession at present available to public libraries and university libraries, of being able to buy the publications of Her Majesty's Stationery Office at a discount of 50 per cent., to the libraries of technical colleges and teacher training colleges.

No, Sir. Technical and training college libraries are already receiving substantial assistance from the Exchequer through the ordinary grant system. The concession to university libraries is being brought to an end, and the University Grants Committee has so informed the university authorities. There is therefore no case by analogy for extending the concession to technical college libraries.

Building Controls


asked the Chancellor of the Exchequer, in view of his decision to restrict expenditure in this country, what proposals he has for taking powers to control the building industry.


asked the Chancellor of the Exchequer whether, in view of the continued deficit in the United Kingdom balance of payments and stagnation in industrial output, he will reintroduce building and other controls.


asked the Chancellor of the Exchequer whether he will give an assurance that, in his consideration of methods of reducing expenditure, he will not take any steps to reintroduce building controls.

It is not the present intention of the Government to reintroduce building controls.

Is it not the case that on 22nd June the right hon. and learned Gentleman said that public expenditure was rising too fast, and that some necessary programmes would have to be cut? Would it be fair to do so while still leaving untouched what could, in the circumstances, be called frivolous expenditure on building?

It is not so much a question of cutting programmes; it is a question of restraining the increase in expenditure upon them. The question of the merits of building controls has frequently been debated. The point is whether the reinstitution of a very cumbersome machine, involving of itself a very considerable demand on manpower, is the right way to tackle the problem.

Is it not obvious that if the Government still had these powers in their hands they would be far better able to deal with the present crisis? In particular, is not the absence of control over office building in our great cities distorting a great deal of our employment policy all over the country and leaving all sorts of insoluble problems?

It is a question of pros and cons, and on the whole the cons outweigh the pros in regard to building licences.

May I assure my right hon. and learned Friend that his efforts—[HON. MEMBERS: "Question."] —will my right hon. and learned Friend take note that his efforts to resist these socialistic, bureaucratic controls will be widely welcomed throughout the land?

We shall want a debate on this subject before long, but will the Chancellor at any rate give an assurance that on this occasion the Government will not impose swingeing cuts on essential building within the public sector, especially on local authority building, while leaving uncontrolled relatively frivolous building in the private sector?

The right hon. Gentleman is quite right in saying that these matters are much better debated than dealt with by way of Question and Answer.

Would it not be a sufficient restraint if my right hon. Friend began to tax the profits which are being made free in this area?

Income Tax Law


asked the Chancellor of the Exchequer if he has noted the statement of the Master of the Rolls in a recent case concerning the operation of Schedule D and Schedule E expenses; and what action he proposes to take to deal with the problem.


asked the Chancellor of the Exchequer if his attention has been drawn to the recent statement by the Master of the Rolls in the Court of Appeal to the effect that the Income Tax law, as now enacted, is such as to bring the law into disrepute with consequent detriment to the welfare of society; and what measures he proposes to remedy this situation.


asked the Chancellor of the Exchequer if he will amend the Income Tax law following the comments of the Master of the Rolls in the Court of Appeal on 26th June last.

I will bear the comments in mind when I am considering any relevant change in the Income Tax law.

Is the Chancellor aware that the learned judge referred to Income Tax as

"a sort of game, a battle of ingenuity unrelated to any principle or commonsense or ethical consideration, … extremely bad for respect for the law"
"seriously damaging to its prestige and consequently to the welfare of society"?
Is he aware that on many occasions we on this side of the House, and some of his hon. Friends, have pressed on him the entirely anomalous situation arising from Schedule D and Schedule E expenses but that he has failed to legislate about this? Will he take early action to get rid of this discrimination which the learned judge said was degrading for this country?

I will certainly consider the matter. I agree with the hon. Member that it is desirable that the tax system should be as simple as possible. What the learned judge said is one reason for not embarking on new experiments in taxation, for example, with regard to capital gains.

Does the Chancellor recollect that as long ago as 1936 these anomalies were adversely commented on by the Macmillan Committee appointed by his predecessor, my right hon. Friend the Member for Woodford (Sir W. Churchill)? Does he recollect that the Committee produced a draft of a new Income Tax Statute in comprehensive and lucid terms? Does he not think that the time has come when that might be enacted in place of the present chaotic jumble of archaic enactments, amending laws, judicial decisions and Departmental practices through which the taxpayer has to grope his way?

If my hon. Friend is good enough to read what I said in my Budget speech, he will see that I have considerable sympathy with his point of view but, as I said then, since reaching the Treasury I have become aware that simplification is not quite as simple as it sounds.

Is the Chancellor aware that counsel for the Inland Revenue, the hon. and learned Member for Darwen (Mr. Fletcher-Cooke), who since this case has become a junior Minister, said that had the present case come under Schedule D the result might have been different, and indeed it would have been different? Is he aware that the learned judge, having made these statements, asked counsel to bring this to the attention of the Inland Revenue and that counsel replied in terms which suggested that the Inland Revenue was well aware of the indefensible position? Will the Chancellor take action about it?

I am glad that the right hon. Gentleman asked that question. What learned counsel said was misreported. He did not say what he was reported as having said.

New Schools (Cost)


asked the Chancellor of the Exchequer what would be the total cost to a local education committee of a school, for which the tender price is £170,000, after interest has been paid for 60 years at 6¼ per cent.

Local authorities customarily borrow over 35 years for school building projects, not 60 as the hon. Member suggests. The repayments of capital and interest on a loan of £170,000 for 35 years at the current Public Works Loan Board interest rate of 6¼ per cent. would amount to £421,000.

Does not the Chancellor think that, instead of talking about cutting local authority projects, such as schools, it would be much better in the interests of education and other social services if the interest rates were cut to a more reasonable level which would not put such a heavy burden on local authorities and the individuals who have to find the money?

No. That would be quite the wrong aproach to the matter. If there is a shortage of capital the greatest possible mistake is to have artificially low rates of interest. If we are to correct the position, then I think that local authorities must pay the market rate—otherwise the position will never be corrected. Of course, one would rather that schools were built out of the savings of local authorities. They would then not have to pay interest rates. But I fully realise that that is not possible. That not being possible, I think that interest should be paid at the current market rate.

Is the Chancellor so myopic that the cannot see the connection between his last Answer and the earlier Answer to the Questions about building controls? Is he not aware that the shortage of capital is largely due to the fact that so much unnecessary and frivolous building is being allowed to go on without any restriction while restrictions are having to be applied by interest rates and in other ways to essential school building?

I do not accept that there is a large amount of unnecessary and frivolous building going on. The idea that office building provides nothing to the nation is quite wrong. There is basically a shortage of capital and I think that to fiddle about with interest rates is the wrong way to deal with the problem.

Kuwait Oil Supplies


asked the Chancellor of the Exchequer what contribution is made to the United Kingdom balance of payments by Kuwait oil supplies; and to what extent British Petroleum, in which Her Majesty's Government is a majority shareholder, has an interest in these supplies.

It is not possible to distinguish the contribution to the balance of payments arising from the oil supplies from any particular country. The British Petroleum Company has an equal share with the Gulf Oil Corporation of America in the Kuwait Oil Company, which in the year ended 31st December, 1960, was responsible for the production of about 80 million tons of crude oil, representing the total output from Kuwait.

Will the Chancellor confirm that the Ruler of Kuwait has invested in British banks in London about £300 million which is his reserve from oil revenues during the last few years? As that large sum of money is evidently readily convertible and could have a dynamic effect on our balance of payments, will the Chancellor make some comment on what is obviously a very vulnerable financial position?

No. I do not think that I should make any comment at all. Nor do I think that I ought without notice to deal with the revenue or funds of the Ruler of Kuwait. If my hon. Friend puts down a Question about the matter I will consider whether it is right and proper for me to answer it.

As about four-fifths of the people in Kuwait are illiterate, how do they apply for shares in British Petroleum?

If the figure mentioned by the hon. Member for Kidderminster (Mr. Nabarro) of £300 million is correct—

No doubt the Chancellor will check it. Would it not be wise to ask the Ruler of Kuwait out of these huge reserves to pay the bill for what is going on?

Invisible Exports


asked the Chancellor of the Exchequer to what extent invisible exports have declined in the twelve months ended 30th June, 1961, compared with the immediately preceding years; for what reason they have declined; what steps he is taking to assist their recovery; and whether he will make a statement.

I will circulate a table in the OFFICIAL REPORT which analyses under the various heads the invisible payments and receipts for the past three years. The growth of Government overseas expenditure has been an important contributory factor to the decline in our net earnings. Ways of reducing this are being considered.

Will the Chancellor bear in mind that I am not the only hon. Member who has very great difficulty in analysing the trends of proceeds and revenue from invisible exports, as the figures are not published in any analytical or palatable form to hon. Members or the general public? Can that deficiency be remedied at an early date in order that hon. Members such as myself who take an intelligent interest in these matters can remain continuously informed?

Invisible Account 1958–60
£ million
195819591960Change 1958–60 (improvement +)
Interest, profits and dividends:
Receipts138153188+ 50
Migrants' funds etc.:
Other invisibles:
Receipts464489514+ 50
Total invisibles:
Receipts2,0662,0422,116+ 50
Total invisibles (net)+ 229+ 120+22-207

Industrial Production


asked the Chancellor of the Exchequer what the percentage increase in industrial productivity has been over the past year.

Between the first quarter of 1960 and the first quarter of 1961 the index of industrial production

which I propose to circulate in the OFFICIAL REPORT.

Is not the Chancellor aware that we raised this question of invisible balances, which at last has been taken seriously, as a matter of great urgency in the debates on 7th February and 18th April and were given no reply at all from the Government Front Bench? Is he aware that he needs to take firm action about Government expenditure in Germany and to give us the true facts about the oil earnings, on which he has withheld all information from the House? Will he look again at the very serious loss of overseas invisible revenue due to British companies keeping their profits overseas under the O.T.C. provisions of the 1957 Finance Act?

These matters and a number of others which are also relevant are being considered by me.

Following is the table:

increased by just under 1 per cent. During the same period the numbers employed in the industries covered by the index increased by nearly 2 per cent., so that production per head fell by about 1 per cent.

Does not the Chancellor agree that these are rather disturbing figures when put alongside the figures for increases in salaries and wages which he gave the House last week? Does it not go to the nub of our economic problem? Can he not suggest means of keeping the two slightly more together?

It is an exceedingly serious problem. It is lamentable that production has not gone up more. I must add one qualification; last year, productivity per man-hour went up a little, but owing to a reduction in the hours worked the net result was a decrease in production.

Will the Chancellor analyse the causes of what he describes as a lamentable performance? Is it not the case that Government policy is by far the most important issue in all this? We know that capital development has gone ahead and that, although there is a shortage of skilled men, nevertheless there are orders for a great many overseas markets. Why does not the Chancellor ally this situation with his own financial policy?

There are many very broad issues here, such as shortage of skilled labour, restrictive practices generally, whether management is up to date and the whole health of our economy. I spoke frankly about that in my Budget Speech.

National Insurance Funds (Securities)


asked the Chancellor of the Exchequer what is the total decline in market values 'between October, 1951, and the end of June, 1961, of the securities held in the National Insurance Fund and National Insurance (Reserve) Fund.

The market value of the securities in the National Insurance Funds in October, 1951, was £1,267 million; the market value of the securities in the Funds on 28th June, 1961 was £1,077 million. These two figures are not strictly comparable, however, due to changes during the period in the amount and composition of the portfolios.

Can the Chancellor give the fall in values of the securities which were actually in that Fund in October, 1951? Is it not rather astonishing, however lie calculates them, that there has apparently been a decline of £200 million in those funds held in trust for the contributors?

There has been a fall quite clearly, just as by 1951 the fall in the "Daltons" held by the Funds was something like £80 million.

Tourists' Motor Cars (Documents)


asked the Chancellor of the Exchequer if he has now further considered the question of abolishing the carnet/tryptyque forms of documentation for private motor cars temporarily imported into the United Kingdom; and if he will make a statement.

Yes, Sir. From a date shortly to be announced these documents will, for an experimental period, no longer be required for tourists' motor cars, except in Northern Ireland. All that will be required instead will be a very simple form giving brief identification details.

Is my right hon. and learned Friend aware that his decision is very welcome and that it will be a considerable encouragement to the tourist trade? Will he watch carefully the effect this remission has on the Continent, where it has been highly successful, and attempt to make it permanent as soon as possible?

I shall bear in mind what my hon. Friend has said. Of course, there are certain problems of evasion of duty and we shall have to watch those.

Former Indian Civil Servants (Compensation)


asked the Secretary to the Treasury how many officers, forced to retire from the Indian Civil Service when the new Constitution came into force and who received compensation therefor, have, since 1st January, 1954, refunded such compensation on establishment in the Home Civil Service; how many of them have refunded or are refunding the full amount received by instalments; and what is the total sum involved.

I have written to the right hon. Member giving most of the information for which he asks. Twenty-one former members of the Indian and Burma Services who undertook to make refunds of compensation by instalments have completed their repayments since 31st March, 1954, which is the nearest convenient date. In twelve further cases instalments are still being paid; at 31st March, 1961, the outstanding balances totalled approximately £9,000.

Is the hon. Gentleman aware that I have had his letter and am grateful for it? When is this practice to cease, in view of the fact that as far back as 1949 a statement was made from the Dispatch Box on be- half of the Treasury that no more compensation would be taken in this way?

As the right hon. Member is aware, this is a difficult question. I take the view that equity demands that we should continue the present arrangements, which have been applied without exception for many years, but I can assure him that I will of course bear in mind the many points he has made to me. I fully recognise his sincere concern in this subject.

I beg to give notice that I shall raise the matter on the Adjournment at some convenient time.

Trade And Commerce



asked the President of the Board of Trade what steps he has taken to stop the supplies of dumped barley from France, Russia and West Germany.


asked the President of the Board of Trade if he is yet able to make a statement on the application of the National Farmers' Union for antidumping measures against the dumping of barley in the United Kingdom market; and if he will give an assurance that effective measures will be taken before this year's home crop is ready for sale.


asked the President of the Board of Trade whether he will now make a statement on the National Farmers' Union's complaint that barley is being dumped in this country.

I have considered as a matter of special urgency the application submitted by the National Farmers' Unions on 19th June for the imposition of duties under the Customs Duties (Dumping and Subsidies) Act, 1957, on barley imported from certain countries. I am satisfied that imports of barley into this country have been dumped or subsidised, that these imports threaten material injury to United Kingdom producers, and that there is a case for action under the Act. I am discussing the matter urgently with the countries concerned and will make a further statement before the end of the week.

While thanking my right hon. Friend for the statement so far as it goes, may I ask him three supplementary questions? Will he kindly name the countries with whom he has been discussing this question? Will he inform the House if a date has been given by which dumping will cease? Thirdly, will he kindly inform the House what would be the proposed amount of tariff on these dumped barleys which are coming in?

The countries named in the application were Russia, France, America, Western Germany and Australia. I will make a statement before the end of the week. I do not think I should anticipate what it will contain.

Will my right hon. Friend bear in mind the latter part of my Question? It is very important that effective measures should be taken before the home crop of autumn barley is ready for sale. Will he also bear in mind that the quantity of barley dumped this year is over 100 per cent. more than last year's total? The cost to the Exchequer is growing very much in the price guarantee as a result of dumping, and urgent action is required.

I am well aware of the need for urgent action. That is why I shall make a further statement this week.

While we are most grateful that the right hon. Gentleman is to make up his mind more quickly and that he is not to take five months this time as he did last time, may I ask has not the damage done to the taxpayer been in millions of pounds? What is to be done to prevent this arising in future?

I am aware of the injury threatened to producers in this country. I have to do the best I can to protect their position without doing damage, which could be and should be avoided, to our general trading interests in the world.

Will my right hon. Friend look at the whole question of antidumping legislation, because time and again action is taken too late to protect the interests of the farmer and, most particularly, those of the taxpayer? If it is a fact that application has to be made by the industry for this procedure to be put into effect, does he not think that there should be some legislation to enable him to take action without application from outsiders in order to protect taxpayers' interests?

The fact is that the legislation enables me to act only when I have evidence of damage to an industry. It is framed in that way because of our international obligations. We should be rather careful not to act too precipitately because of the great interests of our export trade in various parts of the world. I cannot act under the antidumping legislation without evidence of damage to industry.

Does not the President of the Board of Trade think that the country has got itself into a most absurd position in that the cheaper our food imports are the more we have to pay by way of subsidies—money from the taxpayer? Is it not about time that we looked at the whole question of subsidies for agricultural production?

That is a much wider question. The question raised is that of dumping, which is quite a separate matter from cheap competition.

Steel Company Of Wales (American Coal)


asked the President of the Board of Trade when he expects to make a statement on the application of the Steel Company of Wales to purchase coal from the United States of America.

I have at present nothing to add to the reply which my right hon. Friend the Minister of Power gave on 15th May to my hon. Friend the Member for Kidderminster (Mr. Nabarro).

Can the right hon. Gentleman tell us when he is to give a final answer on this question? Why is he taking so long to make up his mind on a simple issue of principle? Will he give an undertaking that before he accepts any such proposal as the Steel Company of Wales is putting forward he will take into account the injury which the coal industry has suffered over several years purely because of Government policy?

I hope to make a statement before the House rises for the Summer Recess, but the matter is not as simple as the hon. Member appears to think it is.

Since I last asked about this matter, has the right hon. Gentleman had any application from the Steel Company of Wales for the importation of cheap Russian oil to this country?

That is a rather different question. I think the answer is "No", but I would rather see the question on the Order Paper.



asked the President of the Board of Trade, having regard to the fact that the contraction in the mining industry, and shipbuilding and ship-repairing industry has had an important bearing on the migration that has taken place during the past ten years from the North-East, what proposals he now has to bring the kind of industries to the region suitable to the skills of such workers, and other workers, thereby stopping the drift away from the area.


asked the President of the Board of Trade what proposals he has for dealing with the decline of the basic industries in the North-East, especially West Durham, in order to stop migration from that area to more congested areas.


asked the President of the Board of Trade what studies his Department has made during the last ten years into the migration of young people from the North-East.


asked the President of the Board of Trade what steps he is taking to establish new industries in the North-East to assist in stopping the continuing migration of young persons from this area.


asked the President of the Board of Trade if he will make a statement on the action he contemplates to establish new industries in the North-East which will provide jobs for young persons and so arrest the continuing migration from this area.

As my right hon. Friend the Minister of Labour said on 26th June, the Government, through their distribution of industry policy, are encouraging firms to develop in parts of the country where unemployment is relatively high and discouraging firms in already congested areas The number of new jobs at present in prospect in the North-East is 21,000, including 10,000 in the development districts. The projects giving rise to these jobs extend over all the main areas of unemployment in County Durham, including West Durham. They should provide opportunities of suitable work both for the skilled workers now unemployed, and for young persons, and thus help in reducing migration from the area.

Is the right hon. Gentleman aware that, whatever he thinks he is doing, he certainly is not doing enough? It can be seen from the Census Report that the position in the North-East is far from rosy. Will he stop fiddling with the problem and be more precise about the type of industry he intends to induce to go to the North-East? Will he consult his right hon. and learned Friend the Chancellor of the Exchequer and ensure that, if there are to be any economic restrictions such as the payroll tax, the North-East will be excluded from their operation?

That is a fairly wide range of supplementary questions. I have no powers to order firms to go to the North-East, and I am sure that the House would not wish me to have such powers. We discussed that question when the Bill was passing through the House. Within that limitation, we do all we can to encourage firms to go to the North-East and we are making quite considerable progress.

Is the right hon. Gentleman aware that the people of the North-East look upon this as the major failure of the present Government? Is he aware that economic pressure is driving people away from the North-East to where they have never had it so good in the Midlands and the South? Will he do something to keep people in the North-East, where they are anxious to stay? The area has been scheduled under the Local Employment Act. We are told that something is coming in the dim and distant future, but not at present.

I do not think that anyone in the North-East who looked at this matter objectively would share the views of the hon. Member. We have made great progress there, as we have in other districts. My powers under the Local Employment Act are to deal with the problem of local unemployment. They are not to deal with the whole question of migration. The Government have not the power, and in my view should not have the power, to freeze the population in its precise location.

Would the right hon. Gentleman get himself out of the pipeline he is in at present?

Is the right hon. Gentleman aware that, despite the 21,000 jobs in prospect, to which reference has been made on a number of occasions, his right hon. Friend the Minister of Labour only recently reported that for the last four weeks there was a number of filled vacancies and that these were the lowest of any region in the country in comparison with figures of unemployment? This has gone on for a considerable period. Does not this fact of itself suggest that there is a very strong case indeed for bringing industries to the North-East?

I agree. There is a strong case, and we are trying to do that. However, I have no powers to compel people to go there, nor would I wish to have such powers.

Does my right hon. Friend agree that, in addition to the constant demands which are made for Government action to bring new industries to the area, recognition should be given to the existing industry there? It has made enormous efforts to retain prosperity in the North-East. Would my right hon. Friend agree that in technical advance and in its excellent labour relations the North-East compares very favourably with any other area in the country?

Yes, I agree. I do my best to bring that fact to the attention of all employers who consult me on location problems.

On a point of order. In view of the very unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible moment.

British Film Fund Agency (Payments)


asked the President of the Board of Trade if his attention has been drawn to the dissatisfaction felt by British film producers at the delays in the payments made by the British Film Fund Agency; and if he will take steps to speed up these payments.

I am satisfied that the British Film Fund Agency carries out its responsibilities efficiently and in general as expeditiously as circumstances allow. Informal talks between the Agency and the film trade associations concerned will shortly take place, and I hope that they will clear up any outstanding points of difficulty.

Will the right hon. Gentleman keep this matter in mind? Is he aware that it is very important for smaller film producers especially to have prompt payments? It appears that the Agency is keeping back a disproportionate amount of its funds, instead of paying them out to producers.

I think that there may have been some misunderstanding here. I hope that the talks to which I have referred will clear the matter up. I will certainly keep it in mind.



asked the Prime Minister whether, in his diplomatic intercourse with other heads of allied Governments, he will consider as a possible solution to the problem of the Soviet zone of Germany the suggestion first put forward in this House by the hon. Member for Hertfordshire, South-West on 12th May, 1960, namely, that it should become a separate state having a reunited Berlin as its capital whose independence and neutrality are guaranteed by the Western Powers and the Union of Soviet Socialist Republics on the Austrian model.

Our policy towards Germany and Berlin remains as stated in the Western Peace Plan which was put forward at the Geneva Conference of Foreign Ministers in 1959, and which remains allied policy.

Does my right hon. Friend recall that Chancellor Adenauer is reported to have said some months ago that

"if we can help them"—
that is, the East Germans—
"to live better and more freely, then that is more important than anything else."?
Does my right hon. Friend agree that this solution, or some such solution as this, would reunite Berlin in freedom, would not impair N.A.T.O. in any way, and would provide a cushion of reassurance between the Soviet Union and Berlin, on the one side, and the Federal Republic of Germany on the other? Would he be prepared to look at this again?

No; because the Western Peace Plan is really a phased programme for German reunification. My hon. Friend's proposal in effect rules out reunification.

Is it true that the proposals on which the Western allies now appear to be standing amount to this, that the Potsdam Agreements are obsolete in every part of Germany except Berlin?

No. The problem confronting us is a difficult and tangled one. It will require a considerable degree of agreement between all the allies. I do not think that it would be in the public interest for me to comment upon what the hon. Gentleman has said; I do not think that it would help to solve our difficulties.

Building Land (Minister's Statement)


asked the Prime Minister whether the statement regarding building land speculation made by the Minister of Housing and Local Government and Minister for Welsh Affairs on 19th June in London represents the policy of Her Majesty's Government.

If the hon. Member is referring to a report in the Daily Mail that day of an interview with my right hon. Friend the Minister of Housing and Local Government, the answer is, "Yes, Sir".

Is the Prime Minister aware that I was referring to the report in the Daily Mail, which discloses no policy whatsoever on the part of the Government? In those circumstances, how can the Prime Minister agree with a nil policy, or is he saying that the one flashing phrase of the Minister of Housing and Local Government

"I am not sitting around doing nothing"
is a declaration of the Government's policy?

No. The hon. Gentleman has completely misrepresented what is in the article. As I understood my right hon. Friend, he reaffirmed our determination not to allow the green belt policy and other important planning objectives to be sacrificed and said that those who were speculating in land in the hope that pressure would be brought to abandon the green belt policy were likely to burn their fingers.

Is the Prime Minister aware that we on this side welcome the warning to speculators against the danger of getting their fingers burned, providing that the warning is backed up by some kind of policy? Is he now telling us that all that the Minister of Housing and Local Government meant was that he would not give way on green belts but would do nothing else to deal with the scandal of land prices?

No. The Minister of Housing and Local Government made some other observations. I was picking out one which I thought particularly apt in view of the misrepresentation of the hon. Member for Pembroke (Mr. Donnelly).

When may we expect from the Government an announcement of their policy in this matter?

If the right hon. Gentleman reads the article he will see that it contains some very valuable statements of policy.

Is not the Prime Minister aware that it is precisely because it contains no content whatever that I asked him when we would have a statement on policy?

The right hon. Gentleman is quite wrong. He is associating himself with the mis-statement made by his hon. Friend below the Gangway.

In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

Immigration From The West Indies (Home Secretary's Statement)


asked the Prime Minister whether the statements made by the Secretary of State for the Home Department on the subject of immigration from the West Indies at a meeting of the Conservative and Unionist Teachers' Association in London on 17th June represents the policy of Her Majesty's Government.

I refer the hon. Member to the Answer I gave to the hon. Member for West Ham, North (Mr. A. Lewis) on 22nd June.

Is the Prime Minister aware that in this case the Home Secretary characteristically let the cat out of the bag? He said that the Government were contemplating legislation to restrict immigration. He used the phrase that this would be based not on colour prejudice alone. Is the Prime Minister aware that this unfortunate phraseology caused widespread offence? Will he repudiate this statement and affirm that the Government have no intention of introducing legislation which is in any way discriminatory or based on colour prejudice?

The Government's position has been made clear in the House on many occasions and I do not see any need to add to it.

Does my right hon. Friend agree that unless the Government tackle the problem soon the flow of immigrants is likely to affect the employment position and hon. Members opposite and the trade unions in particular will be the first people to say, "Let us put a ban on non-British labour"?

That is quite a different question. I am asked in the Question whether I agree with the Home Secretary's statements. I have said that I think they were in conformity with what has been said over and over again in recent months.

If the authentic notes of all these pronunciamentos were recorded on menu cards, would it not be possible to introduce a card-indexing system so that we could become aware of all the future disasters to which the nation has been committed?

If the hon. Gentleman thought that out while he was sitting there, it is quite good. If he thought it out before, it is not really so good.

Common Market


asked the Prime Minister, in view of the need for more public information on the facts relevant to the problem of British membership of the Common Market, if he will now publish a White Paper limited to the relevant statistical and factual information.


asked the Prime Minister whether Her Majesty's Government now intend to issue a White Paper setting out the facts and statistics relevant to consideration of the question of Britain's entry into the Common Market.

I will certainly consider whether a Paper could be pro- duced on the lines suggested. The range of factual information which is relevant to this complex question is very wide. A White Paper which contained only some of the obvious facts could give a very misleading impression. If an attempt were made to widen the scope of the White Paper and to publish detailed information, however factual, over a broader but still necessarily selective field, the result might be taken as carrying implications for our conduct of any negotiations which it might be decided we should undertake.

While I am deeply grateful to my right hon. Friend for his reply, I should like to ask him two supplementary questions. In view of the confusion and doubt, and even suspicion in the public mind—as well, indeed, as in this House—does he not think that it would be wise for some sort of objective statement, or a White Paper, to be published, setting out the short-term and long-term possible advantages and the short-term and long-term possible disadvantages to us if we joined the Common Market? Secondly, in his own judgment, does my right hon. Friend think that it will be possible to bring our Commonwealth friends, our partners in Europe and our farmers into this Common Market and yet retain the broad conception of European integration?

I quite see the object and value of producing some kind of document, and I have been trying to start work on it. There is the quite separate question which I undertook to consider, and which I hope to be able to meet, which was merely to give information of the measures taken by the parties to the Treaty of Rome in implementation of its Articles on common organisation and institutions. If we could obtain that, it would be possible to produce a factual, objective statement on them, but I still have a little doubt. I still find it difficult to reconcile this with the real purpose of a White Paper. Giving the arguments for and against is not quite the function of a public document published by the Government as such. If I can help, I will do so, but I think that hon. Members will see the difficulty. If the Government were asked to produce a White Paper for or against a much-debated policy, are the facts and the kind of objective statements really suitable to a Government White Paper? That is my difficulty, and that only.

One appreciates the Prime Minister's difficulty, but does not he realise that until a Paper is published that does give the facts for and against, the country is being asked to buy a pig in a poke and that unless the Commonwealth countries now being visited by Her Majesty's salesmen are also informed of the profit or loss to them, they, too, are being asked to buy a pig in a poke?

I think that the very phrase the right hon. Gentleman uses illustrates just the difficulty. He says that we must publish a White Paper about the facts and arguments, but that is just the one thing one cannot do about an argument.

Would the Prime Minister explain more clearly why he would be so embarrassed in a future negotiation if he published the facts and statistics on which the negotiation must necessarily be based? Is the Common Market the kind of game where it is really necessary for each player to hold the cards as close to his face as all that?

Well, there are some differences between holding the cards very close to one's chest and putting them all, before any negotiation starts, face downwards—[HON. MEMBERS: "Upwards."]—on the table.

Would not my right hon. Friend agree that though publishing arguments is, of course, dangerous, there is room for some simplification of the main documents? The Treaty of Rome is pretty tough reading. Could not my right hon. Friend produce a Treaty of Rome "told to the children"?

Of course, if it is valuable merely to summarise existing documents, that is one thing, but that was not what I was asked for.

Central Africa (Defence Arrangements)


asked the Minister what consultations he has had with the Prime Minister of the Federation of Central Africa regarding joint arrangements for defence in Africa.

Consultations with the Federal authorities are naturally close and continuous.

Is the Prime Minister aware that the Federal Defence Ministry has announced joint military exercises with the South African Air Forces? Is not that a very serious step to take with what is now a foreign country without full consultation with Her Majesty's Government? Would not the Prime Minister try to use his persuasive powers with Sir Roy Welensky, and tell him that this kind of policy will isolate him still further from world opinion?

That is another question, but, with regard to our own arrangements with the Federal Government, we naturally have close consultation, and I should like to express my gratitude to the Federal Government for their help in a recent crisis in which we now find ourselves.

Would the right hon. Gentleman answer the specific point of whether Her Majesty's Government were consulted about these new defence arrangements between the Federal Government and the South African Government?

Portugal (Supply Of Arms)


asked the Prime Minister whether he will make it a condition that, when arms are supplied to Portugal under North Atlantic Treaty Organisation arrangements, they will not be used in Portuguese territories overseas.


asked the Prime Minister if he will make it a condition of supplies of military equipment to Portugal under North Atlantic Treaty Organisation requirements that such equipment should not be used in Portuguese overseas territories.

In considering applications for the export of arms to Portugal, we shall have regard to the nature and quantity of equipment in relation to her reasonable requirements as a N.A.T.O. ally. This has been explained to the Portuguese Government, and I do not think that formal conditions about the use of any military equipment that may be exported are necessary or appropriate.

Is the Prime Minister alive to the grave indignation felt in this country at the thought that we are supplying arms to Portugal, either directly or through the North Atlantic Treaty Organisation, which are being used to crush the people of Angola? Will he take steps to stop this trade immediately, and will he indicate to the Portuguese Government our disgust at and disapproval of what is being done? Is the right hon. Gentleman aware that making excuses that it is not our responsibility is just a washing of his hands, like Pilate in the past, and saying that we are innocent of these things when we are guilty?

As I said to the House some days ago, the position is that no licences for the export of arms or ammunition are, in fact, being made in respect of Angola or Mozambique. That does not affect certain large deliveries of equipment that are only suitable for Portugal in her place as a N.A.T.O. ally.

How can the right hon. Gentleman possibly distinguish between armaments supplied for N.A.T.O. purposes and armaments that could be used in Angola? Is he not aware that at this moment armaments supplied for N.A.T.O., including the napalm bomb, are being used by the Portuguese Government in Angola? Is it not the case that Portugal itself is the base of the policy in Angola, and that if Portugal is built up, its policy in Angola is also being supported?

As regards the supplies of weapons that may have been supplied in the past, I do not know. All I know is that as regards licences in the last few weeks, or even longer, we have been applying this rule. I do not, for instance, see how to continue work in a British shipyard on two frigates that were sold some months ago and cannot be delivered for some time, can assist or play any part in the rather tragic events now going on in Angola.

Can the Prime Minister explain what is the point of putting an embargo on the export of arms to Angola when arms can go freely to Portugal and be sent from there to Angola?

In giving these export licences, such is the great width and variety of arms that are likely to be asked for that I think that it is quite possible to operate this policy effectively.

The right hon. Gentleman has not answered the question. What we are concerned with is this. If, in fact, the Government have out off the supply of arms to Angola, as they have done, it is presumably because they think it against our interests that they should go there. Since it is perfectly possible for the arms to go from Portugal to Angola, does he not think that the Government should take the logical step of putting an embargo on the export of arms to Portugal?

No, Sir. I think that there are certain arms that it is right for us to be ready to continue to sell to Portugal for N.A.T.O. purposes.

Would it not be better to discriminate between the different kinds of arms being sent to Portugal, instead of simply imposing an embargo on the export of arms to Angola and doing nothing about the export of arms to Portugal?

Any licences for Angola are obviously likely to be asked for because the arms would be useful to Angola.

Has my right hon. Friend seen a letter in The Times of this morning in which it is suggested that this vendetta against Portugal is quite out of proportion?

We deeply regret, of course—and this is a very large question—the situation that has developed there, but I do not honestly' think—and the House, on reflection, I think will agree—that to try to cut off Portugal from membership of the N.A.T.O. alliance at this time would help in any influence that we may have on them.

On a point of order, Mr. Speaker. I beg to give notice that, in view of the very unsatisfactory reply of the Prime Minister, I will seek to raise this matter on the Adjournment at the earliest opportunity.

Questions To Ministers

On a point of order, Mr. Speaker. Question No. 50 deals with a matter about which the Minister of Defence has already complained in this House about not being consulted over the visit of the Second Squadron of the Home Fleet to Lisbon. In view of the public importance of this matter, may I ask whether the Prime Minister has asked your permission to answer this Question, in fairness to his colleague?

Orders Of The Day

Finance Bill

Order read for resuming adjourned debate on Amendment proposed [3rd July] on consideration of the Bill, as amended (in the Committee and on recommittal):

Clause 8—(Surcharges Or Rebates Of Amounts Due For Revenue Duties)

Which Amendment was, in page 6, line 8, after "subsection", insert:

"shall not be made before the end of a period of three months commencing on the date of the passing of this Act and".—[Mr. Houghton.]

Question again proposed, That those words be there inserted in the Bill.

3.30 p.m.

I think that it would be helpful for the House to discuss with this Amendment the Amendment to Clause 27, in the name of the hon. Member for Huyton (Mr. H. Wilson), in page 21, line 21, to leave out "with" and to insert "three months after".

I think that it would be for the convenience of the House to discuss these two Amendments together, although they relate to different regulators, the one relating to the taxation regulator and the second relating to the payroll tax—but the point at issue is the same in both cases: to delay their use until three months after the Finance Bill has become law.

The Amendment was moved last night formally by my hon. Friend the Member for Sowerby (Mr. Houghton) and its purpose will, I think, be clear to the House. We are seeking to ensure that in respect of both the first economic regulator, relating to surcharges on indirect taxation, and the second in relation to the payroll tax, the Chancellor shall not have power to introduce these measures for a fixed period after the Finance Bill has become law.

I do not know how far it would be in order for me to go into the merits or demerits of the regulators. In any case, I do not propose to do so this afternoon, because my hon. Friends and I made it clear during our debates in committee that we were fundamentally opposed to the payroll tax right along the line and we voted against it. Therefore, our Amendment today, which is designed to provide that the payroll tax, at any rate, cannot be introduced during a period of three months, must not be taken as implying acquiescence for the principle of the payroll tax.

The payroll tax is a bad tax. My hon. Friends and I have drawn attention on several occasions to its unfair incidence as between industries—those which use a good deal of labour and little capital and those which are capital intensive and make less call on the country's labour reserves. We believe that it is particularly invidious, anomalous and unfair as between the essential services. There is an Amendment on the Notice Paper relating to local authorities, but I do not think that it will be selected on the ground that it is out of order. It is precisely because we knew that it would be out of order that we did not table the Amendment.

I am not sure, but I think that the right hon. Gentleman may himself be going out of order now. The question involved in this Amendment is, aye or no, the point of time at which the regulator shall be enforced.

Yes, Mr. Speaker, but I thought that it would be in order for me briefly to refer, on this question of three months, to whether this would have a serious effect on such things as local authorities, hospitals or other essential services, the problems of which we raised as early as the Budget debate on 18th April. It was, in fact, our first reaction to the Chancellor's proposals.

It will be quite clear to the House that hon. Members on this side are utterly opposed to the payroll tax. I know that a number of hon. Gentlemen opposite are equally opposed to it. It is my own private view that it is doubtful whether we shall ever see this tax in operation. I believe that it was introduced in a fit of misguided enthusiasm by the Chancellor at Budget time. Obviously, there was a terrible row between the right hon. Gentleman and the Minister of National Insurance concerning the use of National Insurance as a tax gatherer and I think that the Chancellor will probably bow to the inevitable, but that he will not do so to the extent of taking the provision out of the Bill.

Therefore, we shall have a lot of support from hon. Gentlemen opposite for our proposal that for at least three months after the Finance Bill has become law the Chancellor shall not be free to introduce this taxation. I urge hon. Members to realise that if we carry it as long as October and November and the Chancellor cannot introduce the payroll tax until then—after the period of seasonal pressure on sterling—then, conscious of the fact that he has given the pledge that he will scrap the present arrangement next April, it will hardly be worth his while to introduce it for two or three months

Thus, the second of the two Amendments is obviously one which will be highly acceptable to a number of hon. Gentlemen opposite; those who wish to move on this matter, but who show a reluctance to strike so far as this question is concerned. I propose, therefore, having made it clear that my hon. Friends and I are fundamentally in opposition to the tax, to concentrate most of my remarks on this Amendment on the problems of the surcharge on indirect taxation.

We have already made plain our feelings about this matter. We welcome the fact that the Chancellor has, at any rate in his Budget speech and in the framing of the Bill, come to the conclusion that, in general, the monetary mechanism on which his predecessors showed such dangerous overreliance is too much of a blunt instrument. The present Chancellor is prepared to introduce fiscal regulators to supplement the monetary weapon, though to judge from his answers at Question Time today he still sounds an utterly convinced supporter of high interest rates, despite all the damage that they do.

We have expressed our concern about the surcharge on indirect taxation. While welcoming the Chancellor's decision to rely rather less on the monetary weapon, my hon. Friends and I have expressed concern about the lack of parliamentary control over the operation of an instrument which enables the right hon. and learned Gentleman to introduce £200 million of taxation by the stroke of the pen. I will not pursue this matter further now because there is another Amendment which relates to the period during which the Chancellor must secure parliamentary ratification for any action he takes in respect of either or both regulators.

It cannot have escaped the notice of hon. Members that if the right hon. and learned Gentleman does introduce this surcharge on indirect taxation he will be raising the cost of living. There can be no doubt about that. I hope that the Chancellor will be able to give an authoritative figure this afternoon as to the extent to which the cost of living would be raised if he invoked the regulator. It is widely believed in the City, the financial Press, the trade union movement, industry, commerce finance and distribution that the Chancellor is only waiting to hear of the Royal Assent to the Bill to introduce this regulator within a matter of days and to get Parliamentary ratification before we adjourn for the Summer Recess.

This is widely believed to be the case. If the Chancellor were to do this, after a period in which the cost-of-living index has risen some four points in just over a year, when the Chancellor himself is so deeply concerned about the wage and prices spiral, obviously we must consider the wisdom of giving the Chancellor a power like this, because there would be an immediate increase in the cost of living.

I do not think that the House will be in any doubt that even if the Chancellor does this as a temporary measure, it will find its way into the whole structure of costs and prices; and even if he were to remove the surcharge in six, nine or twelve months' time we should never see prices fall again as a result. Every time that prices have been raised as a result of any fiscal or other measure, they have become ossified permanently so far as the economic situation is concerned. [Interruption.] I see that I have support from both sides of the House.

It is a nice word. I expect that we shall hear it from the hon. Member on a future occasion.

We are, therefore, facing the danger of the Chancellor taking this action immediately. I want to make it plain that if the Chancellor does not defer the operation of this provision he will not get any acquiescence from us. We shall oppose any action of this kind, not only the payroll regulator but any other regulator.

I have given one reason for our opposition to this provision, namely, that it would of itself impart an additional twist to the inflationary spiral. We know that the Chancellor has about him Ministers who cling to the philosophy of economics which I once dignified with the title of "Boyle's Law." The name, I think, has stuck ever since. It is interesting to recall that the present Chancellor enunciated during the Budget debates something that he called "Lloyd's Law", which has not really caught the popular imagination to the some extent. It seems to have been forgotten. I doubt whether many hon. Members know what "Lloyd's Law" is: "Boyle's Law" we certainly understand.

I remember that when the present Home Secretary was succeeded by the present Prime Minister as Chancellor I went so far—and I have always regretted my choice of words—as to describe the Financial Secretary as Treasury Rasputin who seemed capable of convincing Chancellors, on widely different views, of the merits of the proposal that the right way to bring the cost of living down was to put prices up. That was obvious to us a fundamental tenet of the hon. Gentleman's philosophy as long ago as 1955–56. It is obvious that Rasputin has converted yet another czar. The present Chancellor, in accepting this regulator, shows that he thinks the Financial Secretary is right—

I am bound to say in defence of my hon. Friend the Financial Secretary that the late Sir Stafford Cripps and the present Leader of the Opposition did precisely the same thing and were equally wrong.

I would be prepared to handy words with the hon. Gentleman, but I do not know what particular action of theirs he had in mind. I do not remember either of them saying that the right way to bring the cost of living clown is to put prices up.

Both right hon. Gentlemen to whom I have referred, in times of inflation, severely increased taxation in the hope that it would stem inflation, and it had exactly the reverse effect, as some of us knew it would.

Yes, I remember, particularly in the case of my right hon. Friend the Leader of the Opposition in the Budget of 1951. It was admittedly controversial at the time. I do not think that any of us would disagree, though, that at the time when a war was going on in Korea and costs were rising it would have been dangerous to have failed to have a really marked disinflationary Budget. But that is not the issue under the present Chancellor's Budget. There has not been much debate about the size of the present surplus.

3.45 p.m.

The issue is that in the autumn Budget of 1955, and in successive Budgets, and more particularly In the Chancellor's regulator, he has got this idea that one can cream off inflationary purchasing power by putting prices up, particularly on essentials, and that if that happens people will have less money to spend not only on essentials, but on other things. It is the old argument. We had it night after night in the autumn Budget in 1955, that if we tax clothes pegs, babies' baths and things like that—

The right hon. Gentleman has been so good and helpful that I regret having to interrupt him, but really I think that he is a very long way from the issue which arises on these Amendments. If I were to indulge the right hon. Gentleman, I should blackmail myself into indulging others.

Of course, I accept what you say Mr. Speaker. I should point out that the acceptance of these Amendments will result directly in preventing for three months the Chancellor imposing a tax on babies' baths, clothes pegs, clothes-line posts and other things.

And beer, tobacco and other items. We are debating whether the Chancellor should be given a taxing power over all these commodities. Those commodities are within the ambit of this Clause, although, naturally, I do not wish to trespass too far on your generosity, Mr. Speaker.

The right hon. Gentleman is arguing that the Chancellor should not be entrusted with this power immedi- ately. I follow the argument that the power is wide-ranging, but its significance here is only whether he should have the power immediately or after three months.

Yes. Perhaps I can conclude that part of the argument by saying that the Rasputin argument here is one that implies that by taxing essentials people will have less money to spend on other things. That is what lies behind these two Clauses, and we are now considering whether the Chancellor should have this power immediately the Finance Bill becomes law, or at a period three months thereafter.

I have mentioned one danger about this provision. If our Amendment is not accepted, the Chancellor will have the power this summer to give an additional twist to the inflationary spiral. Even the Financial Secretary will agree that the first result will be to push up prices. It will be quite impossible for the Chancellor to go to the trade unions and talk about wage restraint, and so on, when he himself, by his own action, is putting up prices, not temporarily, not for the duration of the period in which the surcharge is in force but permanently because of the ossificatory element in our economic structure, which has been so warmly seized upon by the hon. Member for Kidderminster (Mr. Nabarro). That is one argument.

Now I come to my second argument. Here, there is a very important question of relations between the Executive and the Legislature. This House has always been extremely jealous about giving taxing powers to a Chancellor, however respected the Chancellor might be. I think our predecessors in this House, a hundred or even fifty or twenty years ago, would be shocked at the thought that in a Bill of this kind we could give power to the Chancellor to increase £400 million or £500 million worth of taxation by a stroke of the pen without Parliamentary approval except that which comes afterwards—what I understand, in terms of the General Agreement on Tariffs and Trade, is called approval a posteriori, which means that you can give the Chancellor a kick in the pants afterwards but you cannot do it in advance.

This is a very serious power that we are conferring on the Chancellor and it is right to decide whether he should have it immediately the Bill becomes law. We are ratifying a miscalculation on the part of the Chancellor by giving him this power. If the Chancellor had thought in April, when he introduced this Budget, that the inflationary-deflationary situation—the balance of the economy—was such that he would need another £200 million or £400 million worth of taxation in July, he should have told us so in April. If not, I think that he would be guilty of very bad faith so far as the House is concerned, and I personally acquit him of that charge.

I do not think that in April, when the Chancellor introduced this power, he intended, immediately the Finance Bill became law, to impose this surcharge and this payroll tax. I do not think that he intended to do that. If he had wanted another £400 million of taxation, I think that, difficult though it would be with that kind of Budget, he would have come honestly to the House and said so in his Budget speech. I am sure that the right hon. and learned Gentleman will tell us that when he replies to the debate.

We now have a situation where, if I am right, the Chancellor intends to use at any rate one of the regulators, and already, on 4th July, only two and a half months after the Budget, the Chancellor has miscalculated grievously and he has to come along and say so. Within three months of the Budget —that is about the time that the Finance Bill becomes law—the Chancellor has to put his miscalculations right by introducing what is, in effect, a summer Budget.

There are three differences between this miscalculation and the miscalculation of the Home Secretary. One is that this was not made to influence an election. The second, of course, is that, whereas the Home Secretary's mistake required an autumn Budget, this would be a summer Budget. The third is that whereas an autumn Budget or any other kind of Budget requires full-dress debates in Parliament, right through the night, Ways and Means Resolutions, a Finance Bill, Second Reading, Committee stage, Report stage and Third Reading, the instrument which the Chancellor is here taking power to exercise requires none of that trouble and none of that, if I may say so, relative humiliation for a Chancellor who has miscalculated.

We should be extremely careful about giving a Chancellor power immediately the Finance Bill is passed to put right a miscalculation of the previous April. I hope that the right hon. and learned Gentleman does not misunderstand what I am saying. I do not think that he misled the House in April. I do not think that he then thought that, as early as July, he would be using this power. He thought that he might probbaly want it at some time in the year. We have not voted against giving him the power for future years to use whenever it seems appropriate, subject to Parliamentary approval. But there is a difference about its operation in the first year because, if he uses it immediately, this means either bad faith—of which I am only too ready to acquit him—or complete miscalculation. If he makes a miscalculation of that kind and if he finds, three months after the Budget, that he needs all this additional revenue, he ought to come along with a second Finance Bill. After all, the Home Secretary did not run away from it. He would probably have been Prime Minister today if it had not been for the disaster of his autumn Budget. That, I think, was really what finished the right hon. Gentleman from that point of view.

I trust that the House and the Chancellor will accept the strength of the case I am trying to put. If the Chancellor has miscalculated—there is every sign that he has, and we shall know within a very few weeks, if he imposes the regulator—why should not he, like any other Chancellor, have to face an autumn Budget? The future is another matter. Parliament is, rightly or wrongly, giving him a power for the future—wrongly, in the view of some of my hon. Friends—but I do not think it is right that the power should be given to him immediately.

It is very difficult for us this afternoon to pursue all the arguments which might occur to one on this Amendment, because the Chancellor has not yet announced his intention of imposing the regulators. I do not think that he can. He cannot do it at once because of his inability to carry out his intention until the Bill becomes law and because of the uncertainty which would be caused in trade and industry. But he should know that there is already very great uncertainty in trade and industry. Already, one hears of people talking about speeding up their purchasing because they think that they will have to pay increased Purchase Tax on their purchases in two or three months. This is very harmful and the reverse of disinflationary. The Chancellor is worried about inflationary demand at this time.

What are the powers which the Chancellor has the operation of which we seek to defer for at any rate three months? First, there is the power to increase Purchase Tax. I think that the House will recognise that that power already inheres in the Chancellor's armoury as a result of legislation introduced years ago by the Labour Government. Secondly, there is the Beer Duty. If the Amendment I have moved is rejected, the Chancellor will be able, two or three weeks from now, to increase the Beer Duty by 10 per cent. In other words, he could go a very long way to reverse, without any specific parliamentary approval, the pre-election tax hand-out of his predecessor, now Lord Amory, which, of course, was designed to influence the General Election of 1959. The 2d. was knocked off beer just before the election, and now the Chancellor can put most of it back.

I am coming to that.

The Chancellor can now put it back. I know that he cannot put the whole 2d. back because the brewers themselves have put 1d. back—2d. in some cases. Thus, one result will be that, without any parliamentary approval at all, the price of beer will be above the pre-election figure. No doubt, hon. Members opposite—I do not know whether they made a lot of it in their speeches—were not too sorry to hope for a few votes coming to them as a result of the popularity of the then Chancellor in the public houses.

I come now to cigarettes. There was, of course, no pre-election cut in the tax on cigarettes as there was on beer, but it is a fact that, immediately after the election, the Government increased the tax on cigarettes. If I remember aright, the hon. Member for Kidderminster joined us in the Lobby, or we joined him—there will always be theological argument about who joined whom—against that.