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Commons Chamber

Volume 739: debated on Tuesday 24 January 1967

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House Of Commons

Tuesday, 24th January, 1967

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Civil Contingencies Fund 1965–66

Accounts ordered,

of the Civil Contingencies Fund. 1965–66, showing (1) the Receipts and Payments in connection with the Fund in the year ended the 31st day of March, 1966, and (2) the distribution of the Capital of the Fund at the commencement and close of the year; with the Report of the Comptroller and Auditor General thereon.—[Mr. MacDermot.]

Oral Answers To Questions

Technology

Shipbuilding Industry

1.

asked the Minister of Technology what consultation he has had with the Geddes Committee on changes in the outlook for shipbuilding since the Geddes Report was written.

None, Sir. The Geddes Committee was disbanded when it completed its Report. My right hon. Friend is, of course, in contact with the Shipbuilding Industry Board through the Chairman.

Will the Joint Parliamentary Secretary recognise that there have been some changes and that the prospects of home shippers ordering at home are no better than they were—indeed, are perhaps a little worse—and will he also recognise that the Geddes Report is now not entirely up to date?

The main recommendations of the Geddes Report are certainly up to date in respect of, for example, the importance of amalgamations in this industry. As the hon. Gentleman is aware, we will shortly be introducing legislation.

Is my hon. Friend asserting that the shipbuilders, through the Shipbuilding Conference, have never made any representation to the Ministry or to any other Department—perhaps to the Board of Trade—since the Geddes Report was published?

Certainly there have been representations, as my right hon. Friend said last week. Their representations on the subject of home credit facilities are now being considered.

2.

asked the Minister of Technology whether he is aware that British shipbuilding is losing the home market because it is unable to offer credit terms competitive with those available to British owners abroad; and whether he will take immediate steps to extend favourable credit terms to British owners ordering British ships.

4.

asked the Minister of Technology if he will take steps to review and bring the recommendations of the Geddes Committee up to date, in view of the rapidly changing and deteriorating situation facing the British shipbuilding industry.

My right hon. Friend is well aware of the position, but these current difficulties emphasise the need for the industry to press on with its plans for reorganisation on the lines proposed by the Geddes Committee.

Will the hon. Gentleman recognise that the pressure of the Opposition for better credit facilities is very reasonable indeed and that the Treasury is probably again being penny wise and pound foolish in this matter? Will he press his right hon. Friend to stand up to the Treasury in this matter?

We are getting ahead with this question of credit facilities for home owners as rapidly as possible. The hon. Gentleman should realise that the lack of credit facilities is not the whole of this problem. The competitiveness of the industry is of very great importance.

Is my hon. Friend aware that what is needed is a speeding up of the implementation of the Geddes recommendations, that the industry is waiting for this to happen and that we in the North-East are particularly looking forward to this happening?

We have maintained the timetable of the Geddes Committee in every respect and, as I said earlier, legislation will be introduced very shortly.

Would the hon. Gentleman press his right hon. Friend to exercise pressure on the Leader of the House to implement the pledge, given a long time ago, that we would have a proper debate on the shipbuilding industry? That pledge has never been implemented. Is it not time that the Government kept one pledge, if they cannot keep any others?

I am sure that the debate on the Second Reading of the Bill, when it is introduced, will give the hon. Lady an opportunity to speak on this subject.

Would my hon. Friend also press the President of the Board of Trade to try to speed up the machinery of the E.C.G.D. procedure, which is causing serious difficulty to some shipbuilders in obtaining suitable credit terms for export orders?

I hope that my hon. Friend will refer to me any particular case he has in mind where slowness on the part of E.C.G.D. is holding up orders.

10.

asked the Minister of Technology what recommendations contained in the Geddes Report have been implemented.

There is nothing more to report since I answered the Questions by the hon. Members for Dorset, South (Mr. Evelyn King) and Belfast, East (Mr. McMaster) on 17th January last.—[Vol 739, c. 21.]

Is not my right hon. Friend aware that one of the principal recommendations of the Geddes Report was the need for improved credit facilities for British shipbuilders? Is he aware that that is supported not only by Opposition Members, but by many Members on this side of the House? Is he also aware that far too many orders are going abroad, to the detriment of the British shipbuilding industry?

I am very well aware of what my right hon. Friend says. He will, however, be aware that the credit schemes that were included in the Geddes Report were linked to the regrouping. Since the Question refers to the Geddes Report, perhaps I might take the opportunity of reinforcing the need for these shipyards to come together with proposals for the Shipbuilding Industry Board so that we can really strengthen British industry.

Is the Minister aware that unemployment has risen to 8 per cent. in Northern Ireland due to the Westminster Government's economic policy? Which of the Geddes Recommendations will be implemented to help Harland and Wolff, of Belfast?

The hon. and learned Member knows that the future of the British shipbuilding industry and the employment that it can give to those who work in shipyards depend upon creating really strong units. It was upon this that the Geddes Report concentrated. This is central in our policy for the shipbuilding industry and I hope that when the Bill shortly comes before the House it will have the support of both sides.

Owing to the unsatisfactory nature of that reply, I give notice that I will raise this matter on an early occasion.

Machine Tools

5.

asked the Minister of Technology what percentages of machine tools manufactured in Great Britain were numerically controlled in 1965; what are the estimates for 1970; and what steps he is taking to accelerate the conversion from conventional to numerical control.

In the 12 months ending in September, 1966, the proportion was 0·36 per cent. by number, and 2·5 per cent. by value. These proportions are increasing, but it is not possible to make an accurate forecast for 1970. The Department's preproduction order and "trial period" scheme should increase demand.

Would not my hon. Friend agree that there is a very close correlation between the spreading of numerically controlled machine tool manufacture and the whole process of re-equipping and modernising industry? Is he aware that in the United States this is expanding by 10 per cent. to 15 per cent. per year, and that it is estimated that by 1970, 70 per cent. to 80 per cent. of the total will be numerically controlled, and that similar growth is being made in many other industrial countries?

I am aware of the importance of numerically controlled machine tools, both in their production and getting them in use in workshops, and in making sure that engineering design is modified to take advantage of numerically controlled techniques. We are encouraging their use over the whole range of manufacturing.

27.

asked the Minister of Technology what is the percentage change in the recorded value of net new home orders for machine tools during January-November, 1966, compared with the corresponding figure for 1965; what is the percentage change after allowing for inflation during this period; how these changes compare with the targets or forecasts contained in the National Plan; and if he will make a statement.

Recorded orders were 6 per cent. lower in 1966. It is not possible to calculate what exact allowance for higher prices can be made in the value of orders.

The annual rate of growth of output envisaged in the National Plan for the period 1964–70 was 7·8 per cent. As the Machine Tools E.D.C. has reported, the actual growth in output in 1965 was 11·9 per cent.

Is not this decline of 6 per cent. as compared with the promise of steady growth at the rate of 7·8 per cent. an extraordinarily pathetic performance? What does the hon. Gentleman expect may be the pattern to emerge during this year?

I do not think that the hon. Gentleman followed the Answer. The increase in output in 1965 was 11·9 per cent. In the first 11 months of 1966 it was 14 per cent. It is deliveries we have to look at in machine tools as well as orders.

Relations With Universities (Advisory Board)

6.

asked the Minister of Technology if he will give the terms of reference for the recently established Advisory Board on Relations with the Universities.

14.

asked the Minister of Technology whether the Advisory Board on Relations with the Universities which he has set up, under the chairmanship of Dr. S. C. Curran, F.R.S., will make an annual report; and if he will make a statement.

I will circulate the terms of reference in the OFFICIAL REPORT.

The Board is still at an early stage of its work and I should like to consider the question of an annual report later.

I am grateful to my right hon. Friend for that Answer. Will he consider the possibility of relating two other aspects of this problem: the financing of research projects and the need for better communications between technological institutes, either now or later?

The terms of reference already include all matters which affect relations between the Ministry of Technology and the universities. The second point raised by my hon. Friend is one of the major jobs which the Ministry was set up to do.

Do the terms of reference include the problem of enabling those who are at present mostly engaged in military science research engaging in civil science research?

Not really, because that comes under a different heading. However, one of the purposes of transferring the Ministry of Aviation to my Department is to make this sort of thing more possible.

Would not the Minister agree that the most important single factor for promoting faster technological growth in relation to the universities is the need to get firms closer to the departments of universities? We have gone beyond the days of vice-chancellors and the C.B.I. having great conferences. Surely this work must be done on the ground, so to speak, with the two sides being brought together.

Certainly, and that is why 59 liaison officers are situated in our technical colleges and universities. We have it in mind that the universities should play a fuller part in the areas of the country in which they operate; and I am glad to hear that this idea carries the support of the hon. Gentleman.

Following is the information:

Terms of reference of the Advisory Board on Relations with the Universities are:
"To consider and report upon proposals for the formation and development of Institutes of Advanced Technology and to keep under review collaboration between the Ministry of Technology and the universities and other higher educational establishments on projects designed to promote technological progress in industry."

Advanced Gas-Cooled Reactors

7.

asked the Minister of Technology what proposals he will make to the nuclear power engineering industry to reorganise the existing consortia system to ensure the advancement of the British advanced gas-cooled and high-temperature reactor systems, with a view to exploiting fully the economic advantages available in domestic application, and the export potential in this field.

8.

asked the Minister of Technology what progress is being made by the Atomic Energy Authority in the export of advanced gas-cooled reactor atomic power stations; and if he will make a statement.

The promotion of A.G.R. exports is handled by the British Nuclear Export Executive, in which the A.E.A. and the three nuclear consortia work together. The A.G.R. is already being considered in one major tender competition and there are a number of further prospects in the offing. I am at this moment considering how best to increase the efficiency of the nuclear industry and promote export business. I am arranging to have talks with the industry.

I thank my right hon. Friend for that reply. Would not he agree that we need a much stronger export organisation to exploit A.G.R. and our world lead in nuclear power, and that such an organisation should have a nationally agreed policy towards existing and anticipated world markets?

That and similar considerations led me to suggest the talks which will shortly be taking place with the industry.

Would my right hon. Friend say whether or not it is correct that it is 18 months since we sold a nuclear reactor? Is he aware that there is now considerable competition from America and that there is great concern that our lead in this field is being whittled away?

I am aware of all those considerations. That is why we are pressing ahead with these discussions. We wish to see how our export effort can be strengthened.

Does the right hon. Gentleman recall that last September the Board of Management of O.E.C.D. high-temperature reactor project "Dragon" announced that, on the information available from the performance of "Dragon" so far, it would be carrying out an assessment of the prospects for a nuclear power station of this type and that the results of that assessment would be available early in 1967? Can the right hon. Gentleman say when this report will be published and whether he considers that high-temperature reactors have a place in the British nuclear power programme?

With respect, a specific O.E.C.D. project, the "Dragon" project, raises a specific question; and there is a later Question on the Order Paper on that subject. However, I have in mind the considerations put by the hon. Gentleman.

While agreeing that this problem is not as easy as the Question might suggest, may I ask whether the right hon. Gentleman would agree that the C.E.G.B., for perfectly sound reasons, has been encouraging the nuclear engineering industry to go for very large stations, whereas at the moment such export orders as do exist appear to be for relatively small stations? What views has the right hon. Gentleman about how we could marry these quite separate needs together for the benefit of our exports?

It is true that the A.G.R. involves considerable capital cost. However, the steam generating heavy water reactor which is going up a Winfrith is of a different kind and may have wider application. Coming along also is the fast reactor. Looking ahead to our export effort, which I hope will be vigorous, we must consider the new possibilities opened up by new reactor systems.

Nuclear-Propelled Merchant Vessel

9.

asked the Minister of Technology if he will make a statement on the progress towards the construction of a British-built prototype nuclear-propelled merchant vessel.

There is nothing that I can add to my right hon. Friend's reply to the hon. Member for Sheffield, Heeley (Mr. Hooley) on 20th December, 1966.— [Vol 738, c. 211.]

In view of the fact that five nations are now building or planning to build nuclear ships, none of which will be economic, can the hon. Gentleman give any information about what is happening in research or forward planning to keep Britain in this race, which is of great importance to us as a maritime nation?

As the hon. Member will realise, the core of this problem is the production of a small reactor suitable for this purpose. The Atomic Energy Authority is keeping its eye on all work that is being done in this respect, but until the industry comes forward with a real risk-sharing project I do not think that the Government can take any action.

Would not my hon. Friend agree that this country has a unique combination of experitise in both nuclear power and shipbuilding? Is it not high time that we took advantage of this fact to exploit this field of technology?

I entirely agree with my hon. Friend that we are leaders in both these fields. Nevertheless, we still have to produce a small reactor which will enable us to build a ship that will operate economically.

Efficiency And Productivity (Consultancy Service)

11.

asked the Minister of Technology if he will take steps to set up a Government consultancy service to assist firms to raise their efficiency and productivity.

My Department's "Business Bureau" is already providing services of this kind, a list of which I am circulating in the OFFICIAL REPORT.

Following the National Productivity Conference the wide range of Government and other advisory services, existing and planned, is being examined in collaboration with the National Economic Development Office, the Confederation of British Industry and the Trades Union Congress.

Would not my right hon. Friend agree that there is need, however, to extend this service? Does he agree that one of the great problems of British industry is the number of medium and small firms with "old-boy" type managements who have no idea how or where they are going? Would my right hon. Friend further agree that the pioneer work done by the D.S.I.R. shows that an outstanding Government service can be provided in this direction at remarkably low cost?

I agree with everything my hon. Friend has said. The fact is that this is being pressed ahead as rapidly as possible. There are 100 qualified people working in the regional liaison offices, 59 industrial liaison officers in the universities and colleges, various specialist national services and procurement advisory services, and £1 million has been put into the Production Engineering Advisory Service which begins within a few weeks. Although I recognise the importance of this matter, it has to be set in the wider context of voluntary and other Government services as well. We are well aware of it.

Does the Minister expect the fall in national productivity, which last month fell by 4½ per cent. to the lowest it has been for two years, to continue? If so, what more can he do to stop this fall?

In so far as the question relates to the general economic situation, it goes beyond the ambit of the Question. I assure the hon. Member, however, that one of the effects of the present difficulties has been to encourage a number of firms to come and seek advice to see whether they could not escape from their own difficulties by raising productivity. This has been very encouraging.

Following is the list:

"Business Bureau"

The services of the Ministry of Technology, which together can be regarded as being a "Business Bureau", fall under three broad headings:

I. Regional Liaison services

Regional Offices

The Department's own regional staff together with Industrial Liaison Officers amount to some 100 qualified people. The Ministry has nine Regional Offices. It is an important function of the Regional Offices to help industry make full and proper use of the advisory and research facilities of the Ministry and the Research Associations. They also serve to co-ordinate the work of the Industrial Liaison Centres.

Industrial Liaison Centres

These centres based on technical colleges and universities and financed for the greater part by the Ministry, each have one or more ILOs who are members of the college staff. They are responsible for maintaining contact with local firms, particularly the smaller ones, and encouraging them to make greater use of existing scientific and technical knowledge and services. There are at present 59 such Centres.

II. Specialist national services

These are services to users of products and processes common to a wide range of industries. They are organised nationally because they need to draw on centralised scarce resources of manpower or machinery. They are in some cases organised by an independent body and will vary from being wholly financed by the Department to being independent of Government support. The aim will be for these services eventually to become as nearly as possible self-supporting with fees being charged on the basis of cost and the value of the benefit to the individual user. The continuation of a subsidy would need to be justified on the basis that the service conferred wider benefits to the community than those derived by the individual user.

These services include:

Standards

A whole range of inspection, testing and authentication services are being developed. Examples are the British Calibration Service, BSI's Kitemark scheme, and the Burghard scheme for standardising specifications for electronic components. The foundation of these schemes is the work on standards by BSI, which is of course supported by the Ministry.

Procurement Advisory Services

This form of service would only be applicable to the public sector. At present it is limited to the Computer Advisory Service.

Technological Services

There are a number of these specialised services, some independent, some grant aided and some wholly financed by the Department. Under this heading are included the National Computing Centre (to be supported by a Government grant-in-aid for the first few years), and the "Approaching Automation" campaign.
Several of the R.A.'s provide technological services for a wide range of industries. Outstanding examples are the Welding R.A., S.I.R.A., and P.E.R.A. The last named organisation will operate for the Ministry the Production Engineering Advisory Service due to commence in the spring of this year. S.I.R.A. provides a consulting service to industry in general through its SIRAID scheme.

Central Facilities

There are cases when sharing of expensive facilities can produce substantial economies. Examples are the Scottish Research Reactor Centre, N.P.L. Ship Division and wind tunnel facilities and N.E.L. test rigs.

III. Industry services

These are advisory and information services provided for individual industries and dealing with technology, management and industry etc.

Advisory services covering one or more of these fields are an important feature of the 50 R.A.'s (of which 48 receive grants from the Department).

Information and advisory work has always been a major factor of the work of the Ministry's research stations which have a substantial and growing contact with firms. Information and advice are provided without charge although for more substantial investigations a charge will generally be made.

In general the purpose of the Ministry is to act as a catalyst in the development of the closest contact between the Government's establishments, the R.A.'s, the universities and technical colleges, and the firms themselves.

It is intended that these industry services should be reviewed industry by industry and technology by technology with a view to strengthening their impact on industry's problems.

Review of needs for information

The Department is intending to initiate a pilot exercise in the course of the next year to determine the information needs of firms and the ways to supply them.

Hovercraft (Research And Development)

12.

asked the Minister of Technology what plans he has to coordinate and rationalise the activities of the various bodies and groups responsible for the development of air-cushion vehicles, in view of the fact that these bodies and groups are all now within the ambit of his Department.

I am considering the arrangements for the co-ordination of Government research and development in hovercraft. As a first step the National Physical Laboratory will take over responsibility on 1st April for the Hythe Technical Group, a subsidiary body of the National Research Development Corporation. The Hythe Group is the largest Government-financed research and development unit now working in this field and the broad outlines for its future have been agreed. With permission, I will circulate further details of these arrangements in the OFFICIAL REPORT.

I am sure that these arrangements will greatly help to increase the impetus behind hovercraft technology and development.

Does the Minister's reply mean that as from 1st April the National Research Development Corporation will have no responsibility for the development of the hovercraft industry?

No, certainly not. The relationship between N.R.D.C. and Hovercraft Development Ltd. and others in this field will remain. Here, however, was a centre of research which, we felt, should not be limited to one of the developments but should be generally available. I would greatly welcome further proposals for future development of hovercraft from other sources.

When H.D.L. comes under the National Physical Laboratory, will it become a division of the N.P.L. or will it retain the degree of managerial independence which it enjoyed as long as it was a subsidiary of the N.R.D.C., which all would agree had value?

I ought to explain that H.D.L. is not coming under the N.P.L., but the Hythe Technical Unit is. This means that Government research in hovercraft will be available for others who want to move into this field. H.D.L.'s position remains unaffected.

Following are the details:

The Hovercraft Technical Group at Hythe of Hovercraft Development Ltd., a subsidiary body of the National Research Development Corporation, will come under the control of a separate Hovercraft Unit to be set up by the National Physical Laboratory. A section of this unit will be attached to the Inter-Services Hovercraft Trials Unit of the Ministry of Defence. The N.P.L. unit will deal with all forms of hovercraft and with other applications of the air-cushion principle, including hover-trains.
Arrangements for co-ordination between the N.P.L. Hovercraft Unit and other Government R. & D. establishments are under consideration. The co-ordinated Research and Development programmes will cover both civil and military aspects of the work and will be undertaken in close co-operation with N.R.D.C. and the industry.
N.R.D.C. will continue through H.D.L. to manage patent rights for hovercraft and hover-train inventions, including future inventions derived from the work of the Government's own establishments, and to consider applications for licences. It will also be prepared to consider new proposals for financial assistance to industry for the development of hovercraft.

Scientific Manpower (Report)

13.

asked the Minister of Technology what consideration he is giving to the recommendation made in the Interim Report of the Working Group on Manpower Parameters for Scientific Growth, Command Paper No. 3102, that further attention should be given to meeting demand in industry and the schools at least in part by redeployment from other sectors such as Government research establishments.

This recommendation is being taken fully into consideration in reviewing the programmes of work and staff requirements at Government research establishments under my right hon. Friend's control.

Is my hon. Friend aware of the sombre fact that in many secondary schools in Scotland and England, serious teaching for senior pupils in physics and chemistry is slowly grinding to a halt for want of teachers? Will he make special efforts to see that many in research departments for which his Department is responsible and who are, perhaps, over the age of 40 or 45 will be given the opportunity of teaching in grammar and comprehensive schools?

If the current reviews which we are undertaking show that the demand of Government research establishments for qualified manpower might properly be reduced, this could benefit school teaching and industry. My hon. Friend will, however, remember that there are other difficulties. There can be no question of direction of staff and there are difficulties, for example, in the matter of relative salaries.

Research And Development (European Co-Operation)

16.

asked the Minister of Technology what plans he has for further co-operation with European countries in research and development in technological industries.

My right hon. Friends the Prime Minister and the Foreign Secretary, in their discussions with the Governments of the Six about our possible accession to the European Economic Community, are exploring the scope for increased technological collaboration within Europe and best way of doing it.

Is it not vital for our industries and their continual advancement that this co-operation should take place and, more than that, that it is a sort of preparation for our entry into the Common Market? Will the Minister therefore redouble his efforts for his Ministry to see that this co-operation becomes a reality?

As the hon. Member knows, a number of collaborative efforts are already operating between firms in this country and firms on the Continent. There are also certain inter-Governmental collaborative efforts. When I was in Bonn recently talking to Herr Stoltenberg, the Minister for Scientific Research, I discussed with him another aspect of this problem, namely, the possibility of getting computer standardisation so as to make possible a further strengthening of the European computer industry. I think that in these ways the objectives of European industrial strength will be met.

Would not the Minister agree that the prospects of purely technological collaboration are limited unless we get right the commercial, economic and political infrastructure as proposed in the Treaty of Rome?

It certainly has been the experience of my Department, having been set up as a Ministry of Technology, that in two years it has developed into a Ministry of Industry. I suspect that Europe in a sense requires a Ministry of Technology or some equivalent organisation. In so far as that is what the hon. Member is suggesting, I greatly welcome it.

Hovercraft Technologists (Employment In United States)

17.

asked the Minister of Technology how many leading hovercraft engineers and designers have left British firms and organisations to take up employment with their American competitors; and if he will take steps, by legislation or otherwise, to ensure that British patents and "know-how" are not given to their American competitors by means of a brain drain of this type.

Exact statistics are not available; but I know of six hovercraft technologists who have left this country to work in the U.S.A. during the last four or five years.

An American company already has licences from this country to manufacture hovercraft.

Where Government finance has been used to develop the hovercraft and other ventures, what steps have been taken to ensure that senior engineers, technicians and technologists are bound by contract or agreement not to take part in similar activities in this country or elsewhere? Will the Parliamentary Secretary look into this situation to ensure that when we develop technologies of this type, there are contracts which bind people to Government finance as well as other technological developments?

I will certainly look into what the hon. Member says. I should, however, emphasise that American patents have been granted to us which correspond to the British hovercraft patents and are protected by American law.

Is the Parliamentary Secretary aware that the House has been told by the Prime Minister and other Ministers during the past two years that when the TSR2 contract was cancelled the engineers engaged upon it would go into the export business, but that this simply has not happened? Why do the Government shirk the responsibility of finding out from the firms involved how, when and where these men go when they leave these very important companies?

In this case, we know where these men have gone. I remind the hon. Member, however, that the reason why there is a lack of statistics in this area is because when right hon. Gentlemen opposite were in office they discontinued these statistics.

Steam Generating Heavy Water Reactor

18.

asked the Minister of Technology what consideration he is now giving to the construction of a 300 megawatt steam generating heavy water reactor; what estimate he has made of the capital cost per kilowatt, and the generating cost of each unit of electricity; and what information has already been gained from the steam generating heavy water reactor at Winfrith Heath.

The construction of the prototype S.G.H.W. reactor at Winfrith is on schedule and it should be on power this autumn. Data on it is being prepared, and costs forecast are promising. Discussions with potential customers are in progress.

Can the hon. Gentleman say what is the future for larger units based on information gained so far? Is not this another break through of which we can be proud?

Yes, indeed it is a great achievement of which there is much to be proud. It would, however, be premature to venture cost estimates even for the present reactor until it is actually on steam and the prototype has been proved.

Whisker Technology

19.

asked the Minister of Technology how much Government money was spent last year on whisker chemistry; and whether he will intensify research effort in this field in the future.

Government expenditure last year on whisker technology was approximately £85,000 shared between Ministry of Aviation, the Atomic Energy Authority, and the Science Research Council. The future of these programmes is currently under review.

In thanking my hon. Friend for his reply, may I ask whether, in view of the tremendous future importance of these new types of metal, he will ensure that there is adequate liaison and co-operation between those carrying out work in universities and industry and also in Government establishments?

The Ministry of Technology has had no request from industry for sponsorship of work in this field. It is an expensive field of research and we would be interested in any approaches. As for co-ordination with the universities, there is at present sponsorship amounting to a cost of £5,000, and we would certainly accept that there is scope for expansion here.

Slide Rules (Pamphlet)

20.

asked the Minister of Technology why he advertised in a pamphlet entitled, "The Engineers Day," a large picture of a slide rule obviously of foreign manufacture, when British-made slide rules are freely available.

I wrote fully to the hon. Member on 6th December on this subject and there is really nothing more I can say.

In thanking the Minister for that generous expression of regret, may I ask him to make amends by conceding that excellent British slide rules are made in Weymouth, in Dorset?

Why should my right hon. Friend apologise for buying foreign slide rules? After all, are we not going into the Common Market in the near future?

Except that in this case no foreign slide rule was bought. The designer picked out a group of slide rules for the poster. He did not notice that this was a foreign slide rule; it did not have the name on it. It passed a Committee including a representative of the engineering institutions, who did not notice the fact. As a result of the hon. Member's activity, it has now received wide publicity.

Rootes Motors Ltd (Linwood Factories)

21.

asked the Minister of Technology if he will make a further statement on the effects of the Chrysler takeover on the employment prospects of those now engaged at Rootes' Linwood factories and the additional numbers who may expect to be employed there.

I am informed that Rootes Motors Ltd. plan to increase considerably the output of its Linwood plants. These developments will involve an increase in employment of some 4,000–5,000 phased over about five years.

Is my right hon. Friend aware that, following his statement last Tuesday that employment at Rootes at Linwood would increase by several thousand, a Rootes spokesman stated that those figures were purely speculative? Has my right hon. Friend any comment to make on that?

I am glad to say that I am not answerable for what Rootes say, but my understanding of the expansion plan is that the employment will rise by this amount in the period I have mentioned. The pressings plant, which has been on a four-day week, went on to full time today. The car plant, which has been on a four-day week, went on to full time yesterday. Therefore, employment has already increased.

What is the right hon. Gentleman's understanding of how the Rootes-Chrysler plans for Linwood fit in with its plans for Coventry? Is there to be a similar expansion for Coventry? Is Coventry to run down? Or is it to remain at its present level?

The fact that we were involved in the negotiations with Rootes and Chrysler does not make me answerable for the full development of the plans. The position, as was explained clearly last week, is that there is a Rootes expansion plan and that Linwood, in which the Government have considerable investment of public money, was specifically mentioned. It is the hope that Rootes will grow and develop, and this is one reason why the I.R.C. director has been put on the board.

National Computing Centre

22.

asked the Minister of Technology what steps he is taking to ensure the maximum co-operation between the National Computing Centre at Manchester and the proposed Institute of Computer Sciences and Cybernetics shortly to be established in London.

I have no doubt that the National Computing Centre will seek to co-operate appropriately with all bodies established in fields related to its work.

In view of the Government's decision to attempt to separate science from technology, putting science under the Department of Education and Science and technology under the Minister's Department, will the right hon. Gentleman give an assurance that before this Institute is set up the Government will consult Dr. Rose, who I understand is to be the chairman of the organising body of this new Institute, to see whether he and Professor Black together will advise the Ministers as to the best Ministerial responsibilities, in so far as they exist?

The proposed Institute is an entirely unofficial body. Co-ordination in the official field between the Department of Education and Science and the Ministry of Technology is extremely close over the whole field of computer applications; and through the Computer Board, the National Computing Centre and other advisory bodies there is very effective co-ordination.

Dragon Project

23.

asked the Minister of Technology what action Her Majesty's Government are taking, as Members of the Organisation for Economic Co-operation and Development, to obtain an early decision from those countries which are also members of Euratom that will enable the Dragon Project at Winfrith to be continued until 1970.

The United Kingdom Atomic Energy Authority, as the United Kingdom signatory to the Dragon Agreement, has been active in seeking to extend the Dragon Agreement to 1970. Her Majesty's Government are supporting the Authority by representation through our Embassies in Euratom countries.

Does not the right hon. Gentleman recognise that as long ago as May of last year the chief executive of the Dragon Project, at a lecture in London, said that it was hoped that an early decision would be made on this matter then? We are now well into 1967. What steps is the right hon. Gentleman specifically seeking to take with the Euratom countries to get them to agree to a third five-year plan?

I have described one method I have adopted. I also discussed it when I took the Chair at the Euratom United Kingdom Continuing Committee. I took it up with Herr Stoltenberg in Bonn last week. There is no doubt that it is important, but the hon. Gentleman will have to recognise that, if he is advocating international organisations on a European pattern, the budgetary problems when five Governments are discussing what they will pay over a five-year period may well create serious difficulties for projects of this kind.

Hovertrains (Development)

24.

asked the Minister of Technology if he will make a report upon the development work being carried out by Hovercraft Development Limited, of Hythe, upon the hovertrain.

Hovercraft Development Ltd. has been continuing experimental work on the hovertrain and is in discussion with the Railways Board.

Does the Parliamentary Secretary recognise that the French are going ahead with M. Jean Bertin's aerotrain and are having a 10 kilometre trial on it and that ours is technically on paper superior? Could we get a move on in doing an experiment with British Railways, because this offers tremendous prospects for inter-provincial passenger travel?

I am aware of the interesting work going on in France on this matter. A joint study is now being undertaken with the Ministry of Transport on future prospects for hovertrains in this country.

Would the Parliamentary Secretary confirm that this work is among the work being taken over by the National Physical Laboratory on 1st April?

Defence Projects (Scientists And Engineers)

25.

asked the Minister of Technology what administrative arrangements he has made in conjunction with the Secretary of State for Defence to redeploy within, or to release from, the public service qualified scientists and engineers who are no longer required on defence projects, including those employed by the Atomic Energy Authority.

We are dealing with this problem by continuing collaboration with other Government Departments and the United Kingdom Atomic Energy Authority.

Will the Parliamentary Secretary give the House an undertaking that at some point in the Department's studies it will give some solid information to the House?

I can now inform the hon. Gentleman that, as a result of reductions in the defence programme, several hundred qualified scientists and engineers have been released from the Atomic Energy Authority since 1962. The hon. Gentleman will find some information on this subject in the recent Report of the Willis Jackson Committee.

Television Rental Charges

26.

asked the Minister of Technology on what grounds he allowed Granada T.V. Rentals to adjust their agreements with customers in such a way as in effect to increase prices and if he will now make a statement on television rental charges.

This company has made no approach to my Department regarding these adjustments to its charges. I have, however, arranged for enquiries to be made.

My right hon. Friend the First Secretary of State and Secretary of State for Economic Affairs and I have agreed that, in view of the widespread public interest in this subject, it would be appropriate for a general examination of the structure of costs and charges in the industry to be undertaken by the National Board for Prices and Incomes.

Is my right hon. Friend aware that there will be considerable satisfaction with that Answer and we await the outcome of the investigations?

I am grateful to my hon. Friend for saying this. There have been a number of letters about it. Some difficulties have arisen because charges which were raised before 20th July came up only when individual rental arrangements became due for renewal and, therefore, not all the cases which have been brought to my attention have indicated a rise in charges since July.

The Minister says that he has not been approached by this company. Will he none the less confirm that at law there is absolutely no requirement whatever on this company to have informed the Government of its proposal to increase charges?

That is perfectly correct, but since a Question was tabled about it I explained that I had not been approached by this company but was making inquiries. There is no confusion at all about the legal position here.

When my right hon. Friend is undertaking this study, will he also make a study of the type of literature which is being issued by television rental companies to their customers about increased prices? I am sure that he will agree that this amounts to little less than political propaganda and that some of the figures are very doubtful indeed.

I am not making this inquiry. My right hon. Friend the First Secretary of State and I are referring it to the National Board for Prices and Incomes. Those increases in rental which have come to our attention have always been below that which would have been justified by the taxation changes which were permitted.

National Finance

Bates V Commissioners Of Inland Revenue

28.

asked the Chancellor of the Exchequer, in view of the observations of the House of Lords in the case of Bates and the Commissioners of Inland Revenue on 8th December, 1966, what steps he will take to correct the apparent injustice of the present law.

The observations to which the hon. Member refers are being considered.

Does not the Chancellor think that this is something of a scandal? Fifteen years ago attention was drawn by the House of Lords to the unsatisfactory state of the law. In those 15 years, nothing has been done.

I am not prepared to accept the hon. Gentleman's strictures, but it is perhaps better that I reserve comment until our consideration of those observations is completed.

While the Financial Secretary is considering this case, would he also consider whether he should publish the basis upon which the Inland Revenue has been invoking these Sections and the basis on which it has left them alone? He will recollect that it has not invoked Sections 408 and 411 on all occasions.

Again, I do not accept what the hon. Lady says. There are different interpretations of this Section which have been advocated by various people, and the Inland Revenue has never sought to interpret the Section in the way in which some people have suggested it can and should be and criticised the Section consequently.

Portland Beach (Removal Of Pebbles)

29.

asked the Chancellor of the Exchequer if he will give a direction to the Crown Commissioners to bring to a speedy end that contract which enables pebbles to be removed from Portland beach.

Is renewal of the contract under discussion, as apparently it has not yet been renewed? If so, will the hon. and learned Gentleman take steps to see that it is not renewed and bear in mind that there is real danger to coastal defences and to people's houses in that area? The Crown Commissioners have not checked in the past on the amount of pebbles removed or on the place from which they are being removed.

The Crown Commissioners are anxious to see that sea defences are not put at risk. They have asked the local authority for its views. They are awaiting them before deciding whether to permit further removals.

Overseas Expenditure

30.

asked the Chancellor of the Exchequer what progress he has made with his plans for reduction of Government spending across the exchanges by £100 million; and whether this reduction will now be achieved during the current financial year.

31.

asked the Chancellor of the Exchequer if he will now give details of the £100 million reduction in Government overseas expenditure for 1966–67 announced by the Prime Minister on 20th July last; and if he will make a statement.

41.

asked the Chancellor of the Exchequer what progress has been achieved in effecting the reduction of £100 million in Government overseas expenditure in 1966–67, announced on 20th July last.

I would refer the hon. Members to the reply given by my right hon. Friend the Secretary of State for Defence on 18th January.—[Vol. 739, c. 398–400.]

Does the Chancellor recall that these cuts were described six months ago as a firm programme? Why are they still completely in the dark? Can he tell us whether he now anticipates that there will be any increase or any reduction in the rate of current Government expenditure across the exchanges in 1966–67 by comparison with 1965–66?

No, Sir. I am not ready to give an answer to the second part of the question. As to the first part, my right hon. Friend the Secretary of State for Defence said that it was proposed to give a progress report on this matter when the White Paper is published in a few weeks' time.

Could the Chancellor confirm the Prime Minister's assurance last July that this £100 million cut in overseas expenditure would consist of new cuts and not be related back to last year's Defence Review and other items announced or envisaged before the review of 20th July?

That is a very detailed question. Broadly, these are new cuts. As in the case of some of the difficult negotiations now going on, there is no doubt that the cuts resulting from the discussions which are taking place and which are made public will have a profound effect on the economy of certain countries and must be carried out with care and the minimum of dislocation.

Does the Chancellor accept the view of Mr. Fred Catherwood that heavy overseas expenditure has been a major cause of the slow economic growth of this country since the war? Will he give the House an assurance that he will work towards a defence budget of not more than £1,750 million at 1964 prices in 1970, as this is in accordance with current Labour Party policy?

I cannot answer a question about the 1970 defence programme this afternoon, even if it was my responsibility. As to the first part of the question, quite clearly Government expenditure overseas is very heavy and has been growing. This Government have restrained it and in due course will cut it back, and it must have a hampering effect on growth. I would not attribute the—I will not say "total failure", because that would give the wrong impression—I would not attribute the slow rate of growth of this country purely to that.

Is the saving intended to include the saving from United States spending on U.S. Forces transferred from France? If it is, as it was originally intended that by 1969–70 the saving of £100 million would have been there anyway, what is the corresponding increase that there will be in defence expenditure?

I think that the hon. Gentleman had better put that Question down or wait for the progress report which is coming in about three weeks' time.

Paymaster-General

Ql.

asked the Prime Minister if he will now give the Paymaster-General further Departmental responsibilities about which he will answer in the House.

The First Secretary of State and Secretary of State for Economic Affairs
(Mr. Michael Stewart)

I have been asked to reply.

Not at present, Sir.

Would not the First Secretary agree that it is really getting rather unsatisfactory that a Minister should be answerable to Parliament for nothing and that Parliament should not be told anything about what he does? Would he consult with the Prime Minister and perhaps ask him if he might tell us a little more about this intriguing Minister?

Parliament has been told a great deal about this. I should add that my right hon. Friend the Prime Minister regrets very much that he is not able to answer the hon. Gentleman personally today, but, if the hon. Gentleman would like to table a further Question on a date which would enable the Prime Minister to reply in person, he would be delighted to do so.

Rhodesia

Q2.

asked the Prime Minister what official correspondence he has had with Mr. Smith; and if he will make a statement on the Rhodesian situation.

I have been asked to reply.

My right hon. Friend the Prime Minister has had no correspondence with Mr. Smith since the talks on H.M.S. "Tiger" and I have nothing to add to the Answer he gave on 19th January to Questions about Rhodesia.—[Vol. 739, c. 648.]

As it is now clear that mandatory sanctions, without the cooperation of South Africa and Portugal, will not bring down the Smith Government in the short-term, anyhow, can the right hon. Gentleman say what is the Government's policy with regard to the extension of sanctions to Rhodesia's neighbours and what effect that would have on our economy, for which he is largely responsible?

I do not accept the first premise of that supplementary question. The remainder of it is therefore hypothetical in the highest degree.

May I ask my right hon. Friend whether the Governor is being used for correspondence or oral conversations between the Prime Minister and Mr. Smith?

There has been no correspondence with Mr. Smith since the talks on H.M.S. "Tiger", and, indeed, all previous contacts were under the aegis of the Governor. It is possible at any time for a lawful régime in Rhodesia, if there were a return to legality, to get into touch with this Government.

Questions were raised with the First Secretary last week about the activities of the World Health Organisation in Rhodesia. It now appears that that organisation had projects being planned before U.D.I. to deal with malaria control and mother and child care. There was also the question of a medical fellowship at the university. These projects were abandoned at the insistence of the British Government, apparently. Can the First Secretary confirm that that is the case and, if it is, can he not look at the position again? As the British Government are in any case supporting the University of Rhodesia, quite rightly, surely projects of this kind ought to be able to go ahead?

It is not the case that these projects have been abandoned at the insistence of the British Government. Before the illegal declaration of independence, the World Health Organisation proposed to send a malaria eradication team to Rhodesia. After the illegal declaration of independence, the organisation consulted Her Majesty's Government, who said that the team should proceed, and Parliament was so informed. It was at the end of last year that we learned that the World Health Organisation itself had decided that it could not let the team proceed because it saw difficulties about the negotiation of privileges and immunities for its members. That means that, in general, the policy of Her Majesty's Government is that the World Health Organisation should be able to carry out its function, but the fact that there is an unlawful régime in Rhodesia makes it difficult for it to do so. It is there that the responsibility lies.

I am grateful to the First Secretary for making the first point. Can he also confirm that, from the point of view of the British Government, there is no objection to the World Health Organisation going ahead with these projects?

There is no objection from our point of view. The organisation itself, unfortunately, has found that the existence of an illegal régime makes it very difficult for it to do so.

Vietnam

Q7.

asked the Prime Minister if he will seek to meet the President of the United States of America to discuss the war in Vietnam.

Q13.

asked the Prime Minister whether he will take steps to meet the President of the United States as soon as possible to discuss the developments in the war in Vietnam.

Q14.

asked the Prime Minister what representations he has made to President Johnson about the bombing of civilians in Hanoi by American military aircraft.

I have been asked to reply.

We have maintained close contact with the United States Government at all levels and on all aspects of the recent situation in Vietnam. My right hon. Friend does not think a special meeting is necessary at present.

Would not my right hon. Friend agree that recent visitors and correspondents in North Vietnam have reported a completely different state of affairs about how the war started and is progressing than the usual American stories? Would the Government now consider supporting publicly the request of the Secretary-General of the United Nations that American bombing should stop as the first essential step to getting peace and negotiations going?

I would remind my hon. Friend, as my right hon. Friend the Foreign Secretary made quite clear, that we supported the three points made by the Secretary-General of the United Nations together; that we deplore all the slaughter that is going on in Vietnam, but that it is neither useful nor possible to make a condemnation of one part of this matter alone.

Is my right hon. Friend aware that the Government's persistent refusal to take any new initiatives over the bombing in particular increasingly makes the Prime Minister's declaration of dissociation last August look like a grizzly charade? The Governments of New Zealand and Australia have troops committed in Vietnam, whatever I and some of my hon. Friends think about it. Can my right hon. Friend tell the House what they think about the escalation of bombing? They may have more influence, because at least they are supporting the Americans with their lives and not with their mouths.

I do not think that it would be proper for me to answer for the Governments of Australia and New Zealand. I think that the position taken by Her Majesty's Government on the earlier bombing episode was made quite clear. As my right hon. Friend the Foreign Secretary said, there is no need to restate that position. We have repeatedly, on a great many occasions, made attempts to get the fighting stopped, and it will not be possible to get the result that everyone wants to See—an end to the slaughter—unless there is a conference and an agreement all round to stop the fighting.

How can my right hon. Friend talk about stopping the war when he is supporting the policy of the United States in carrying on that war and in bombing women and children in Hanoi? Would he not rather now support the demand of the universities of Great Britain to withdraw our support from the United States and act as mediator in stopping the war instead?

I saw the appeal to which my hon. Friend refers. It advances the proposition that, if this country were to criticise the policy of the United States in the way that they wish, it would help us in acting as mediator. But we have to notice that a great many different countries and parties, many of whom have strongly condemned the United States, have tried to act as mediators, and have been as much rebuffed as we have.

Has the right hon. Gentleman ever attempted to check on the proportion of questions put from his own side critical of the Americans on this issue compared with those critical of Hanoi? Would it not be about 99 to 1 per cent.?

Is my right hon. Friend aware that a growing number of Americans are agreeing with the kind of questions put on this side of the House? Will he look again at the claim, made by him today and by the Foreign Secretary a few days ago—that the Government support U Thant's proposals? To many of us, the Government seem to misrepresent them. Will he publish in the OFFICIAL REPORT the proposals put by U Thant so that we may see that these demand support for unconditional and unqualified cessation of American bombing?

There is no doubt about what the proposals are. The point of difference between my hon. Friend and the Government is that the Government take the view that these proposals have to be taken together. We do not share the view that a unilateral condemnation of American action will be helpful or promote peace.

Is the right hon. Gentleman aware that President Johnson has said that the participation of the P.L.A. would not be an insuperable obstacle to the holding of a peace conference? Will the right hon. Gentleman therefore advise the Foreign Secretary that, in any future peace initiative, he should include the P.L.A. as a necessary participant in peace talks?

In what my right hon. Friend the Foreign Secretary said last week, he showed himself cognisant of this point. I think that it is now generally agreed that, if there were willingness on behalf of Hanoi to go to a conference at all, the point mentioned by the hon. Gentleman would not present an obstacle.

Would not my right hon. Friend agree that any peace settlement in Vietnam would have to have the prior approval of the Chinese Government? Does he think it realistic in present circumstances to press for this in view of the conditions inside China?

There are obviously a great many difficulties obstructing a settlement in Vietnam, not least the one my hon. Friend has mentioned. But the first step in a settlement must be a start of negotiations or talks of some kind. The offer which my right hon. Friend the Foreign Secretary made to facilitate such a conference or, if that seems a possible way to do it, to recall the Geneva Conference, still stands. It is not any unwillingness on the part of the British Government or indeed on the part of the United States Government that prevents talks starting.

Are the Government considering giving any assistance to the Australian and New Zealand forces in Vietnam at present?

This question has been asked and answered many times. It is not the intention of the Government to send troops to Vietnam. It is known that civilian help of certain kinds is being given and this is being continued.

European Economic Community

Q8.

asked the Prime Minister whether he will make a statement on his recent exchanges with other European leaders about Great Britain's entry into Europe.

Q9.

asked the Prime Minister if he will now give further details of the series of high-level talks he is having with European Governments about Britain's possible entry into the European Economic Community.

I have been asked to reply.

As regards my right hon. Friend's discussions with the Italian Government, I would refer my hon. Friends to the Answers he gave to Questions on 19th January.—[Vol. 739, c. 643–7.]—As regards the further visits he is making, together with my right hon. Friend the Foreign Secretary, to other European Heads of Government, I would ask my hon. Friends to await the reports which will be made to the House in due course.

While realising that discussions are at a very delicate and sensitive stage at this moment, may I ask my right hon. Friend whether he can give an idea as to the date on which we can expect a statement along these lines?

The dates on which the various visits are to be held are known. My right hon. Friends the Prime Minister and the Foreign Secretary will do the best they can to keep the House informed after the visits.

Would my right hon. Friend accept that no doubt all right hon. and hon. Members welcome the cordial reception given to the Prime Minister's speech in Strasbourg yesterday? On a particular passage in that speech, can my right hon. Friend say to what extent these high-level talks are being used as a means of sounding out West European leaders on ways of extending and developing contacts, especially in trade and other ways, with East European countries?

I am sure that the House will agree with what my hon. Friend said about the Prime Minister's Strasbourg speech. Relations between West and East Europe are, of course, one of the topics that comes into this question but I do not think that I should go further than that at present.

Civil Service (Fulton Committee)

Q10.

asked the Prime Minister what is his policy regarding the implementation of the proposals for the reform of the Civil Service made to the Fulton Committee by the Executive of the Labour Party.

I have been asked to reply.

The Government's policy on all these matters will be formed in the light of the Committee's report which my right hon. Friend hopes to receive at about the end of the year.

Is my right hon. Friend aware that evidence submitted by the National Executive of the Labour Party contains a grave accusation against civil servants which is much resented, because the Prime Minister and some of his Cabinet colleagues are members of the National Executive. Will my right hon. Friend ask the Prime Minister to dissociate himself and his colleagues from the offensive suggestion that civil servants often deliberately conceal their activities from Ministers?

I think that my right hon. Friend the Member for Vauxhall (Mr. Strauss) is overstating the case, but in fact the Prime Minister made it clear in a television interview recently that he did not share the view that was put forward in that evidence.

Has the right hon. Gentleman the First Secretary read the comments of civil servants about the Leader of the House as reported in the Sunday Telegraph.

I sometimes think that those who claim to know the views of unnamed civil servants are really the equivalent of the astrology columns one finds in the less pretentious newspapers.

Interest Rates (Discussions)

The following Question stood upon the Order Paper:

50.

To ask Mr. Chancellor of the Exchequer, if he will make a statement on the outcome of the meeting of Finance Ministers at Chequers from 21st January to 22nd January and also on the basis on which invitations were extended, explaining in particular why an invitation was not extended to the official responsible for interest rate policy in the United States of America the Chairman of the United States Federal Reserve Bank.

With permission, Mr. Speaker, I would like now to reply to Question No. 50.

My discussions with the Ministers concerned with financial policy in the United States, France, Germany and Italy showed that there is a general desire to see interest rates in some of the leading centres reduced. Circumstances in the five countries vary considerably and there are also differences in the nature of the responsibilities of the Ministers in this particular matter. However, there was agreement that within these limits we should co-operate in such a way as to achieve our objectives. This was a small and informal meeting of Ministers. Meetings of Central Bank governors are held fairly frequently.

Is the right hon. Gentleman aware that I was unaware that he was going to answer this Question at the end of Question Time? Apart from that, is he also aware that the Chairman of the Federal Reserve Bank in New York was first informed of this meeting, apparently, in the newspapers, although he is the official in charge of American interest rate policy? Does the Chancellor really think that this is the best way to get the right sort of climate in reducing interest rates internationally.

I am sorry if the hon. Gentleman was not informed that I was to answer this Question at the end of Question Time. But I must say that when I was a young Member of the House it was regarded as one's duty to be present at Question Time if one had put down a Question. [HON. MEMBERS: "He was here."] If he was here, then he has no complaint, has he?

As to the rest of his supplementary question, it is not my obligation to inform the governors of the Central Banks of other countries, and I certainly do not feel that I should do so. Indeed, there would be complaint if I did.

Can my right hon. Friend say whether, in the course of the discussions with his opposite numbers, the question of an increase in the price of gold was raised and its relation to international liquidity? Has he considered the possibility that if some people get their own way in relation to an increase in the price of gold it would have a detrimental effect on those who suffer from very low fixed incomes?

The last sentence of the communiqué said that no other question was dealt with at the meeting. That means no questions other than the question of interest rates, so I do not think the rest of my right hon. Friend's supplementary question arises.

Is the Chancellor aware that right hon. and hon. Members on both sides of the House will wish him well in attempting to get low interest rates, especially for industry? But will he bear in mind the other aspect, that in industry today liquidity is improving but production is going down, and that a mere reduction in interest rates will not solve our problems?

There are a number of aspects of the problem of getting the growth in the economy which is essential, and this is one step to securing that end. But it is not the only step.

Will my right hon. Friend accept that we on this side welcome any initiative to reduce interest rates, whether informal or official?

I am obliged to my hon. Friend. I think that that is the view taken generally not only by this country but by the other countries concerned.

As there have been many different interpretations of the significance of the talks, would the right hon. Gentleman agree that it would be unwise to expect any dramatic results from a meeting at which the representatives could commit neither their Governments nor the Central Banks? What influence, if any, have these talks had on his own decision about interest rates here?

I think the hon. Lady would be the most surprised person in this House if I gave an answer to the last part of her question. As to the first part—the Ministers were, of course, in a position to commit their own Governments but, as I made it clear in my Answer and as the communiqué pointed out, the relationships between Central Banks and Governments in various countries differ. It was for that reason that the communiqué was carefully phrased. As to whether anything dramatic can happen—what I would hope to see would be a steady downward progress, undramatic, from the very high level of interest rates reached last autumn.

Since only six months ago the Chancellor and the Prime Minister were saying that putting up these interest rates to such a high level would solve all our problems, what has happened in the last six months to bring about this change?

I would be deeply interested if my hon. Friend would send me the quotation that he is referring to.

Would not the Chancellor agree that one of the best ways to reduce interest rates to the Government would be to exclude Government stocks from Capital Gains Tax?

Is my right hon. Friend really saying that a change in the price of gold would have no effect on interest rates?

I was not aware that that was the question put. The question put was related to Governmen bonds, as I understood it.

Is the right hon. Gentleman aware that what he says he hopes to achieve can probably best be achieved through a substantial increase in the formation and supply of capital, by which the whole range of Government policy is substantially affected?

There are two factors making up the level of interest rates. One is the domestic side of the economy and the other is the possibility of international competition for money. It was with the latter aspect of the matter that we were concerned on Saturday and Sunday and on which there was general agreement about the path we should follow.

On a point of order, Mr. Speaker. As I pointed out to the Chancellor, I received no prior notice that this Question would be answered at the end of Question Time, although it so happened that I was present when he answered it. Had I not been present, this Question could not presumably have been asked. How is it that a Minister can answer a Question in these circumstances? What is the position?

The question of whether an hon. Member is informed by the right hon. Gentleman is not a matter of order but a matter of courtesy. On the other point of order—if the right hon. Gentleman had sought to answer the Question at the end of Question Time and the hon. Member had not been here the Question could not have been answered.

Further to that point of order, Mr. Speaker. Because there might be some implied reflection in what you said about lack of courtesy, may I draw your attention to the fact that we made very rapid progress in Questions today? This was an Oral Question and might well have been reached if the Prime Minister's Questions had been finished. In those circumstances would you regard it as the duty of a Minister to leave his seat when the Prime Minister's Questions are on and go and tell another Member whom he sees walking out of the Chamber that he should stay?

I assure the right hon. Gentleman that in what I said I meant no reproof at all. All I was stating was that the Chair can rule on questions of order but that on questions of courtesy it cannot.

Should not the Chancellor of the Exchequer know perfectly well, because of the number of Questions down to the Prime Minister today, that his was hardly likely to be reached? Is it not more than likely, since this is the second week running that he has appeared at the Box alongside the First Secretary, that he has taken the opportunity just to make sure that his place of No. 3 in the Government order is maintained?

Could you clarify what you said, Mr. Speaker, because is it not a fact that if there is a Question on the Order Paper, whether for Oral or Written Answer, the Minister can always take that Question and answer it?

I am advised by the Clerk that there is some doubt about the Ruling I gave about the hypothetical circumstance in which a Minister decides to answer a Question at the end of Question Time and the hon. Member is not there to put it. I will give a firm Ruling on that tomorrow.

So that we may have this matter clarified, Mr. Speaker, would you bear in mind, when giving consideration to it, the obvious difficulty that the Minister might have answered the Question before he realised that the hon. Member was not present? Would you further consider what the position is if an hon. Member, thinking that his Question has not been reached for Oral Answer, withdraws it by going to the Clerk at 3.30 and perhaps leaves the Chamber? In those circumstances, whatever your Ruling on the first matter, would it be in order for the Minister to answer the Question?

I shall give consideration to every point, including that which the hon. and learned Member raised.

Would you also bear in mind, Mr. Speaker, that I did not rise until you called me? I therefore assume that if any information was given to the Table about the Question being withdrawn you would not have called me.

If the Chancellor of the Exchequer had wished to be certain of answering the Question today, could he not easily have given you notice earlier today that he wished to answer it, whether it was reached or not? Was it not therefore an unnecessary discourtesy to my hon. Friend that he was not given any warning that the Question would he answered in any case?

The hon. Gentleman has merely stated forcibly the point which is before the House and on which I promised to rule a little more formally tomorrow.

Malta (Reduction Of Forces)

With permission, Mr. Speaker, I wish to make a statement on my recent visit to Malta in connection with the proposed reductions of our forces there.

It was stated in last year's Defence White Paper (Command 2901) that we proposed to enter into consultations with the Government of Malta, in accordance with Article 6 of the Defence Agreement, for a reduction of British forces there in the next few years. My noble Friend Lord Beswick initiated these consultations in Malta last August when he put forward proposals for reducing our forces to Defence Review levels by the end of 1968. In the light of the strong reactions of the Malta Government and of subsequent representations made in London by the Maltese Prime Minister, Her Majesty's Government concluded that the proposals should be modified in order to reduce their impact on the Maltese economy, principally by deferring the withdrawal of British Army units for two years until 1970.

The revised proposals envisage the withdrawal of Her Majesty's ships based on Malta and the disbandment of a second R.A.F. squadron during the current year, the ending of British responsibility for the Royal Malta Artillery during 1968, and the withdrawal of both British infantry battalions in 1970. At the end of the run-down one R.A.F. squadron would remain and a range of defence facilities would be retained. As a consequence of these reductions, British defence expenditure in Malta would by 1970 fall by about a half from its present level of £.12½ million a year. The number of British Servicemen would be reduced from the present level of about 4,300 by about two-thirds by the end of 1970.

I visited Malta from 12th to 17th January to continue our consultations and to present these revised proposals to the Malta Government. I had a series of meetings with the Prime Minister and his advisers and also had discussions with leaders and representatives of many sections of Maltese opinion. I explained that the reduction of our forces in Malta was part of a worldwide redeployment of our defence effort, the object of which was to secure the most efficient use of the resources available to us. It would make a significant contribution to worldwide economies which we are determined to make, without in our view affecting our ability—or our determination—to fulfil our obligation under the Defence Agreement for the defence of Malta itself.

We recognised that the run-down of our forces would create serious problems for Malta, particularly during the early years. It was in order to lessen the impact on the Malta economy and in response to representations made by the Malta Government that we were now proposing to phase the run-down over four years instead of two. These revisions meant, for example, that in 1969–70 the level of employment would be more than 2,000 higher and service expenditure in Malta more than £3 million higher than under our previous proposals. These changes, which were not justified on purely defence grounds, represented a considerable sacrifice of savings in defence expenditure which we could otherwise have achieved. I also referred to the exceptionally high level of aid, running at about £18 per head a year which, despite cuts elsewhere, we were continuing to provide for Malta. I offered our co-operation in measures to alleviate the consequences of our run-down.

The Government of Malta stressed the serious economic difficulties and heavy unemployment which they contended even our revised proposals would cause for Malta, particularly during the first two years. They also maintained that with our revised force levels we should be unable to honour effectively our obligations to assist in the defence of Malta under the Defence Agreement. They claimed that we were in breach of the Agreement in failing to consult them properly on these matters in advance. Many other expressions of disquiet at the economic effects of the run-down were made to me.

A summary of the views of each side is contained in the joint communiqué, copies of which I have placed in the Library. I undertook to report the reactions of the Malta Government to Her Majesty's Government but discouraged expectations of further changes in our proposals. After considering my report, Her Majesty's Government have con- firmed, with regret, that they cannot offer any further changes in their proposals for the run-down and must now proceed to put these into effect. I have so informed Dr. Borg Olivier in a personal message.

While Her Majesty's Government do not deny that even the revised proposals will cause difficulties for the Maltese economy, we believe that these will be only temporary. In the longer run, Malta's economic prospects are good; industry and tourism are expanding and the dockyard is a valuable asset. I hope that our aid can help Malta to surmount these short-term problems and lay the foundations for future prosperity in the island.

I cannot conclude without a warm personal tribute to the Maltese Prime Minister and his colleagues who received me with unfailing courtesy despite the difficult mission we had come to perform. One cannot visit Malta without being conscious of the great good will which exists there for Britain and I have every hope that this good will, which is born of over 150 years of close association in peace and war, will survive the present difficulties.

These are serious problems both for our defence expenditure and our obligations to the people of Malta. The Opposition would wish to have an opportunity to discuss them in greater depth than can be done in response to a statement after Questions.

In the meantime, may I ask three questions? First, does not this setback to the economy of Malta come at a critical time in the expansion of Malta's industry and tourism? Secondly, the right hon. Gentleman referred to the revised proposals providing more employment than the original proposals, but can he tell us what is the estimate of what level of unemployment will be reached in Malta at its peak under the revised proposals? Thirdly, can he say what savings these proposals will bring, first, in the total defence budget of the United Kingdom and, secondly, in the balance of payments of the sterling area as a whole?