I beg to move, That the Bill be now read a Second time.

The purpose of this Bill is to enable the Government to continue to cooperate financially with other Commonwealth Governments and organisations in schemes designed to facilitate emigration to and settlement in Commonwealth countries. The Secretary of State has been empowered, under earlier Acts, to enter into financial agreements subject to a limit of an annual expenditure by Her Majesty's Government of £1·5 million. The provisions in the Acts enabling the Secretary of State to make these financial agreements lapse on 31st May, 1967.

It has long been our belief that the flow of British migrants to other countries of the Commonwealth brings benefits to all concerned and is a source of great strength and unity to the Commonwealth as a whole. Of the 860,000 British migrants who left these shores to settle overseas during the years 1962 to 1965, nearly two-thirds—or over 550,000—found new homes in Australia, Canada and New Zealand. During that same period, British immigrants into those three countries represented more than one-third of the total immigration. The British Government believe that this steady influx helps to strengthen the bonds between our family of nations.

We know that Commonwealth countries remain anxious to attract British settlers who, in addition to their British blood, bring with them a diversity of arts and skills to enhance the economic, social and cultural life of their countries. The Australian Government continue to attach very great important to Britain's participation in the Assisted Passage Scheme for British migrants, Canada's immigration policy results in the greater proportion of her migrants coming from Britain. As for New Zealand, in 1965–66, of the 35,000 immigrants admitted, almost half came from the United Kingdom.

The scale of British financial help for migration has varied over the past 45 years according to economic and social conditions in this country and the receiving countries, and is now limited to a contribution to the United Kingdom-Australian Assisted Passage Scheme, and in addition to support for certain voluntary societies dealing with child migration, the precise terms of this assistance being controlled by the legislation presently under consideration.

The Assisted Passage Scheme to Australia provides subsidised passages for British immigrants from the United Kingdom. The British migrants selected by the Australian Government pay £10 towards their fare in the case of adults, and nothing at all if they are under the age of 19. During the period 1962–65 over 214,000 assisted immigrants have taken advantage of this scheme to leave the United Kingdom and make a new home in Australia. There has been general praise for the efficient way in which the Australian authorities conduct this scheme, which calls for complex administrative arrangements to cover the selection of the migrants and their journey to Australia, and to ensure that they are settled into their new surroundings with the minimum difficulty and delay. Inevitably there are some failures, cases where intending settlers find that they are not ready for this complete change in their way of life, but it is an undeniable fact that the majority of immigrants settle down very happily in their new homes.

The bulk of the cost of this scheme, amounting annually to about £8 million, is borne by the Australian Government. The British Government for their part contribute £150,000 which could really be regarded as a token payment. Nevertheless, this token payment is highly regarded by the Australian Government who see in it the continued interest of this country in the infusion of people of British stock into the Australian social and economic scene and in the maintaining of the close links between Britain and Australia. It is true that this relatively modest financial contribution can have little practical effect on the numbers emigrating, but we are very much aware of the political importance which the Australian Government attach to the assisted passage scheme. We also recognise and value the way in which the Australian Government have been willing to meet our wishes that they should accept as immigrants a fair cross-section of our population, and not seek to recruit only those who are highly skilled and possess professional qualifications.

In addition to this assisted passage scheme, we have agreements, under the Commonwealth Settlement Act, with four voluntary societies in this country, which make arrangements for the migration of children to Australia and for their care and training when they have arrived and settled down there. Over the 45 years during which this policy of helping with child migration, largely by financial contribution, has been followed, circumstances have changed, and improved economic and social conditions in this country as a whole are reflected in the fact that far fewer children are now being sent overseas under child migration schemes than in the past. In fact, none are now going alone, every child being accompanied by one parent.

Of the four societies with which the Government currently have agreements under the Act, the Fairbridge Society is by far the most active and the one with which Her Majesty's Government have most dealings.

The British Government contribute £4 outfit allowance per child and £1 a week towards the maintenance of each child until the age of 16 as long as the child is in the care of the society, and on condition that the Australian State Government also contribute. On the Australian side, the Commonwealth Government pay to the societies an £8 outfit allowance per child, together with a 16s. a week maintenance allowance and the normal family allowance, while the Australian State Governments contribute a maintenance allowance according to varying rates. Children emigrating under this scheme go to one of the Fairbridge Homes in Australia where parents can visit them as frequently and as regularly as they wish. Expenditure under the agreements with the four societies which we assist under the Act is currently running at about £10,000 a year.

The other societies have similar schemes. The aim of all these schemes is not to separate the child permanently from the parent, but rather to ensure that, when circumstances permit, the family can be reunited and can then make a home together.

Emigration clearly has played a decisive part in the development of the Commonwealth in the past. It is less easy to discern, perhaps, the extent of its rôle in the years ahead. In introducing this Bill, the Government once more reaffirm the significance which they attach to the subject, and I am sure that the whole House would agree that the Government should continue their present co-operation with other Commonwealth Governments in the form and spirit I have outlined. I hope, therefore, that the House will give the Bill a Second Reading.

I thank the right hon. Gentleman for the very clear explanation of the Bill which he has given, and may I say that his recent journey to Australia and New Zealand has given to his speech an even greater authority than his speeches always command.

Like him, and as my right hon. Friend the Member for Streatham (Mr. Sandys) said when he introduced the Bill in 1962, I and most of my right hon. and hon. Friends welcome a steady flow of emigrants, but we recognise that it is possible that the flow of emigrants from this country may get out of balance from time to time. It is that which is the basis of the disquiet which the right hon. Gentleman will wholly understand and which we expressed two months ago in the debate on the brain drain. As my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) pointed out on that occasion, if too great a vacuum of skilled manpower were created in this country, it would attract to this country men and women from a number of less developed countries whom those countries can ill afford to lose.

Were it not for that fact, which no one who has visited any of the less developed countries can disregard, I should be the more inclined to be wholly single-minded in my encouragement of migration from this country, especially to countries of the Commonwealth.

We believe that the organisation which we call the State exists not for its own good but for the good of the individuals within it. Certainly it has never been the belief of my party that the State should do for individuals what those individuals can as well or better do for themselves. As we conceive it and as we are frequently reminded in the House in many other contexts, the function of the State is to create conditions in which each individual can realise his full potential and make the most of his natural ability.

If that is our conviction, I find it very difficult to understand why we should place limitations, even mentally, on the free movement of individuals from this country to another. I imagine and hope that we are unlikely ever to erect barriers to keep in Britain those who feel that their future lies elsewhere.

It is certainly true that the collective view which Parliament expresses from time to time, whether that view in comparatively restrictive or relatively liberal can have an influence on countless individual decisions which will be taken in the years ahead. I hope that our view on this matter will become increasingly liberal, because I believe that it is in the liberal direction and not by a philosophy of restriction that this country can continue to exercise its most decisive influence in the years to come.

It is for these reasons that I welcome the Bill, although I do not think that the right hon. Gentleman or anyone else would claim, any more than it was claimed on the occasion of the introduction of the 1962 Bill, that it is a major step towards the further encouragement of migration to the Commonwealth.

As the right hon. Gentleman made plain, the lion's share of the money which is expended annually under the authority of these Acts has for many years found its way into the assisted passage schemes. However admirable those may be—and I concur entirely with what the right hon. Gentleman said about them—the money expended through them does not add to the total of migrants. It is a little unrealistic that we should continue every five years to give Her Majesty's Ministers authority to spend up to £1,500,000 annually when the average for recent years under both Conservative and Socialist Administrations has been around £160,000.

For reasons which I have already given I am not anxious, on these grounds, to reject or even amend the Bill. What I am anxious to see, as soon as the Government feel free to return to their first flush of financial liberality, is that fuller use should be made of the powers that we are about to give them in this legislation.

In the debates of 1962, the right hon. Gentleman who is now Chancellor of the Duchy of Lancaster and my hon. Friend the Member for Surbiton (Mr. Fisher) pressed for fuller statistics to assist the Overseas Migration Board in its work. My hon. Friend the Member for Essex, South-East (Mr. Braine), who replied for the Government on that occasion, explained that the Board's work would be made easier by the sample survey.

I am pleased to find that in the Report published at the end of 1965, Cmnd. 2861, the Board acknowledged that the sample survey represented a considerable improvement on the statistics hitherto available. The Board still believed, however, in paragraph 2,

"that nothing short of a complete count of migrants will provide fully satisfactory statistics"

and it suggested that the sampling system should be re-examined in two or three years' time—that is, at the end of this or next year.

We have the right to ask the Government, particularly in the light of the views expressed by a prominent member of the present Government, for a firm undertaking not only that that examination will be carried out at the end of this or next year, but that, if the Board still thinks it desirable, some way of providing fuller statistics will then be introduced.

I have no doubt that my right hon. and hon. Friends will join me in welcoming the Bill. I hope that they will also join me in pressing the Government as soon as practicable to make as full use of it as possible. The last table in the White Paper, Cmnd. 2861, seems to me to give us all a great deal of food for thought. That is the table which relates to the future total population of the United Kingdom. On those estimates, the 1964 population of 54 million will apparently, at the turn of the century, be very nearly 75 million. Of that 75 million, I hope very much that I shall still be one. If I am one, however, I wonder how it will be possible to move around, particularly if, as is likely, most of the 20 million additional people invest in a motor car.

More seriously, I ask the Secretary of State whether it is his opinion that it will be in Britain or whether it will be scattered throughout the Commonwealth, with its vast opportunities and its continuing need of men and women, that a large proportion of that future 75 million population will have the fullest opportunity to go ahead.

I have no doubt that a great many of that population will continue to go—and I believe that we should encourage them to go—as our countrymen have gone for hundreds of years past, to the four corners of the world. I hope that we shall gradually come to see more clearly that this emigration is not only for their own benefit and that we shall consequently do more than we do now to ease their start in new surroundings.

I hope that we can also have the vision to understand that in a world which is becoming increasingly interdependent, the massive intermingling of human beings is the surest guarantee of benefit not only to individuals but to countries as well, and also, I believe, to humanity as a whole. I therefore have pleasure in supporting the Bill.

I, too, like my right hon. Friend the Member for Bridlington (Mr. Wood), welcome what the Secretary of State has said in his opening remarks, but I also regret that such a small amount of the money which has been voted by Parliament has been used. This was referred to at considerable length in the debate in 1962. I understand from the Secretary of State that 214,000 people have been assisted—out of a total of over 550,000 who, in five years, have gone to Australia, Canada and New Zealand. It is a small step at least in the right direction.

I also welcome what the Secretary of State has said about no child going without one parent. In past years it has been a bit tough that children of a comparatively young age have gone out on their own to find a comparatively new life in Australia. This has, perhaps, added to the toughness of that great continent, but it is more civilised that children should now be accompanied by at least one parent.

It is difficult to decide what makes people wish to emigrate. In my opinion, money for the passage hardly comes into it. It depends on many considerations, one of which may be the political complexion of the Government in this country. It may be unemployment here or a wish to get different employment overseas. Questions of housing, the education of children, the future of those children and of the children's children in the decades to come, and how the benefits of the Welfare State here compare with what is available overseas—all these influences are very different from the great pioneering spirit of past decades.

I accept that Australia has to commit vast capital expenditure in the way of housing and the well-being of her immigrants, but she is getting, as are the other Dominions in a much lesser way, the benefit of very considerable expenditure in this country in the education, for example, that we in the United Kingdom have given to those immigrants. Most of those immigrants now go to towns whereas in the old days they went much more often to the outback, to that great, vast territory where farms are calculated in square miles rather than in acres.

We do not want to lose our best people, but we must not take up a narrow nationalistic outlook. What is wanted is that the Western way of life in freedom should endure against all the possibilities of autocratic Communism and the quite different kind of faith which is paramount in the territory north of Australia.

I particularly hope, naturally, that the British way of life will find a reflection in Australia—it certainly does today—but it would be wrong to expect Australia to copy entirely the ways of life of Britain any more than her tastes can be considered to be the same as British market tastes. This is something which so often our exporters tend to forget.

The potentialities of Australia are indeed vast. It may be that while droughts and fires continue—and how much one regrets the great fire that ravaged Tasmania not long ago—once we can find an economic way of turning salt water into fresh, that vast heart of Australia will be opened up to many more people. She has vast mineral and agricultural wealth. She has a lovely climate and is a very virile country. Indeed, I often think that the basic strength of Britain, forgetting all the frills, fashions and snobbery of the past, finds a very strong root now in Australia.

It is not, however, easy for some of the older people who emigrate to acclimatise themselves to the Australian scene or to find new jobs. I remember coming across some of my ex-constituents in a hostel in one of the housing camps at Adelaide a few years ago. They must learn new skills and become accustomed to new techniques and a new outlook, and occasionally even to a new type of language. That obviously takes a little time.

The States of the Commonwealth of Australia vary very much, and everything depends on whether the immigrant lands in Perth, with its very attractive climate, almost an island divided from the rest of Australia by a vast desert, yet with a hinterland of great mineral and iron ore wealth; in Adelaide, beautifully laid out, and the driest State of the driest continent, yet with the sprinklers going in every garden and field—more so than in the gardens of my constituency; or, as the bulk do, the immigrant goes to Melbourne or Sydney, or, at the end of the line, to Brisbane, lying on the banks of a great meandering river, and with a lovely tropical climate. There is vast scope for anyone who goes to Australia, which is already almost a little America; if it has more fresh water we may find that the "little" of that phrase is altogether erased.

I am glad that the Secretary of State said that a fair cross-section should be received by Australia, and I believe that that applies not only to the young but to an all-age group. The group will be much happier if they can go out as father and son, and even grandchildren, to that country, where the average age is much lower than it is here. If they can take their friends with them, as has happened in a number of cases, they will be happier still.

In the 1962 debate, suggestions were made that help might be given over housing. I accept that with so many houses needed in this country it is not easy for Her Majesty's Government to offer that help, except possibly on a completely economic basis of investment. Perhaps the Secretary of State could refer to that when he winds up. The Dutch and the Italians have helped, and I do not see why we should not also do so.

Could the Secretary of State also say exactly what countries have benefited from the small expenditure of £160,000 in the past year? Is it not possible for the airlines to produce proper records? I have just been in the Far East, and everywhere I went I had to fill up a form. It took only about one-and-a-half to two minutes, and I cannot see why the airlines going to and from Australia should not be asked to produce such a form to be filled up by their passengers.

Perhaps the Secretary of State will also say what the migration in this direction has been, both of those who had tried to emigrate permanently to the Dominions and those of the next generation who have decided to return to the old country. If we are to consider migration it is important that we should know those facts.

I have one further suggestion. When I had the privilege of going to all the States in Australia and to New Zealand in 1963 I found that a number of university places were not filled—although the universities of the great cities like Sydney and Melbourne are over-full, and there is a waiting list. In this country we have a number of would-be undergraduates who are on the margin of passing into our universities and cannot get a place. Would it not be possible to use some of the money voted by Parliament to allow those young men and women to take up vacancies in universities in Australia and New Zealand? I believe that that would be very good for all three countries.

If the Commonwealth is to mean anything we must co-operate on the functional side. The Bill is a small step to that end. We are only a junior partner in the assisted passages schemes but, as my right hon. Friend the Member for Bridlington said, we are apt to be overpopulated and will become more so.

The decision to emigrate must remain very personal. But if the wish of this country to enter the Common Market of Europe should be denied, I believe that the English-speaking world will have to come together even more than it is at present, and this small Bill will help in a very small way to that end.

As I had the privilege of visiting Australia once again early this year, I support everything my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney) has just said about the opportunities there. I am not sure whether when talking about Australia he had in mind that I was born in Canada, and so was suggesting in a sense that a word might be said on behalf of the Canadians. Anybody who has watched what has been happening in Canada over a number of years cannot fail to have been impressed with the great opportunities there just as there are in Australia.

I am rather sad that so many of those opportunities are going to people who are not of British stock. I have seen many people going to those countries and living a full and prosperous life, and I am fully convinced that migration is good not only for them but also for the receiving country and for the United Kingdom. That was why I was particularly pleased that the Secretary of State for Commonwealth Affairs said that he felt that migration was a source of great strength. A clear statement like that on behalf of Her Majesty's Government is very welcome.

I was not so pleased when he went on to say that what was done under the Bill was now limited to certain things. I should like him to have read with a little more care the first page of the rather attenuated document we are given, headed "Commonwealth Settlement Bill", where it is seen that we are giving the Government an opportunity "to cooperate in … schemes." I hope that he will direct his attention to schemes which will enable him to increase the amount of money which he can spend out of the £1½ million to be spent in each year that we shall vote him today.

As I am a member of the Council of the Fairbridge Society, I thank him on behalf of those who work so hard to achieve its results for what he was good enough to say about its work. That will be greatly appreciated by a number of people.

When the Secretary of State set out the limitations, I wondered whether there are not certain practical things to which he might direct his attention to achieve the object we unanimously support today. Some have already been mentioned. The first is the question of statistics, which was raised in the last debate in 1962, and I remember Lord Alport, as he now is, referring to them in the debate in 1957. It is about time something was done to produce the necessary statistics. That would be one way in which a little of this money might well be spent.

My second suggestion has been mentioned by my right hon. Friend the Member for Bridlington (Mr. Wood). He said that there would be 75 million people in this country at the turn of the century. We know that already we are one of the most heavily populated countries in the world. There are few countries which have a population of more than 570 people to the square mile, as we have. We know the difficulty of getting about on the roads today, and we know, too, that unless something drastic is done it will become more and more difficult as the years go by.

I think that it would be profitable for the Commonwealth Secretary to cooperate with some of his right hon. Friends to see whether he can work out a scheme which would define the optimum population for the United Kingdom. He would then be able to consider how he could dovetail migration in with that figure, and perhaps take more active steps with regard to Commonwealth settlement.

My next point is about a balanced scheme of migration. I was pleased to hear the right hon. Gentleman say that a scheme has been arrived at with regard to those who are going to Australia. I would like him to look a little more keenly into the arrangements being made for balanced migration to see whether he can spend some of his money on encouraging older members of families to go with the young migrants. If some of the older people, who are kept at home largely because of their economic circumstances, were able to go into those communities they would probably live a happier life with their families and they would make a great contribution to the receiving country as well.

My fourth suggestion is concerned with the amount of money which we ate able to invest abroad. It is almost a year since the President of the Board of Trade went to Ottawa and made a speech in which he said:

"Investments have been built up again to an impressive total of £1,100 million."

If somebody wants to invest in the Commonwealth he does not get very much encouragement from the Government, and I think it is something of a dilemma to find the President of the Board of Trade saying how much he welcomes that investment and how proud he is that once again it is £1,100 million, when at the same time people are not given encouragement to go on investing. At the same time if we invest money, it seems right to send men and management with the money so that we have a balanced investment which will bring them greater opportunities and give us a good return over a long period.

In 1913 we managed to send 225,000 people to the Commonwealth, and at that time we were investing 7 per cent. of our net income. In recent years we have never approached anything like 225,000 and we have heard the President of the Board of Trade congratulating us on an investment of about 2 per cent. I think that this is something which the Commonwealth Secretary might consider to see whether there is a way in which he can co-operate in encouraging people to migrate when the money is being invested abroad.

One way in which tremendous successes have been achieved both in Australia and Canada is where whole factories with the workers and equipment have moved, and this again is something which I think the right hon. Gentleman ought to consider.

The final matter about which I want to say a few words is the subject of universities. This has been touched on by my hon. Friend the Member for Wavertree. Some years ago when I heard that the Commonwealth Scholarship Scheme was being introduced, in my naive way I thought it meant that we would be able to move people around between the different universities in different parts of the Commonwealth. I then discovered that it operated only in respect of people from a country which did not have the necesssary facilities for them there. This meant that virtually nobody from this country was able to benefit from the scheme.

There is one Canadian, Colonel Harold Hemming, who, over a number of years, has arranged annually for about 70 students to go from this country to universities in Canada. If an individual can achieve that kind of success, what might the Commonwealth Secretary do if he were to discuss the matter with his right hon. Friend the Secretary of State for Education and Science to see whether it is possible for the vacancies in Australia, to which my hon. Friend referred, and the opportunities which I know are available in Canada, to be taken up so that there is an increase in the number of our students going to Commonwealth universities? I would like to see at least one student going from this country to each of the universities in Canada and in Australia.

And in New Zealand.

Yes, indeed, and in New Zealand. I think that it would be of great benefit not only to the individuals, but would be a great help to the universities if they had somebody from the United Kingdom with whom they could discuss our problems and our way of life.

One of the things which the Fairbridge Society does, and to which the right hon. Gentleman did not refer, is to arrange for students to go to the University of Western Australia in Perth. There are schemes afoot for the number to be increased. I think that there are definite openings and possibilities for increased migration of those who are able to take advantage of the vacancies in some universities in the Commonwealth.

At the same time, I think that it would do no harm if, with the assistance perhaps of the Secretary of State for Education and Science, the Commonwealth Secretary were to make a survey of the position in technical colleges. There are a number of vacancies in parts of the Commonwealth to which people could go and receive apprentice training. This would enable them to contribute richly to the life of the country to which they went and at the same time would enable them to benefit from the training they received.

Those are five specific ways in which I suggest that the Commonwealth Secretary might on another occasion come to the House and say that he was doing much better than spending only £161,000 out of the £1½ million which we are voting him. I welcome the Bill, and I hope that the fullest use will be made of it.

rose—

Order. The right hon. Gentleman requires the leave of the House to speak again.

I ask for that leave. I am grateful to the hon. Member for Liverpool, Wavertree (Mr. Tilney) for his comments. With regard to migration generally, I take the view that this is, and always must be, a matter of individual choice. I do not think that it is for the Government to encourage or discourage migration from these shores. On the other hand, I think that we should always bear in mind the loss to this country if, having spent a considerable amount of money on training them, people with high skills and qualifications feel that to make full use of their new skills they should leave these shores and go to some other Commonwealth country. Nevertheless, I reiterate that this must be an individual choice. The Government should neither encourage nor discourage.

When one considers this Bill, I think one should realise that it was 45 years ago that it was first proposed that assistance should be provided by the Government of the day for people who, of their own choice, wished to emigrate from this country and to settle in a Commonwealth country. It is true that during certain periods, for instance at the end of the war, movement was rather more rapid, but during the last five years the amount of money spent under the Act has been restricted to about £160,000 to £161,000.

We seek authority, as previous Governments have done, for the sum of £1½ million because there must be a great deal of flexibility. We can never be sure that we shall not need to increase the sums of money when greater numbers of people wish to emigrate. Although, under the scheme, the Australian Assisted Passage Scheme and the four organisations which I have mentioned take up the whole of the £160,000, there is nothing to prevent similar schemes from being assisted under the legislation, and the Government would look sympathetically at any such request. Canada, for instance, has her own scheme of a two-year loan to pay the passage of would-be emigrants. New Zealand also assists. But if there should arise schemes rather like the Australian scheme or like the four organisations I have mentioned, we would sympathetically consider in what way they could be helped.

The hon. Member for Wavertree mentioned the question of housing. As the Bill stands we would not be able to assist in housing because it is clearly laid down in a Section of the 1922 Act that the money should be spent on training and the provision of assisted passages, but not in the provision of accommodation and housing. It is true that Australia is the only country which we are assisting at present. But this need not necessarily always be so.

When one of my predecessors, the right hon. Member for Streatham (Mr. Sandys), was moving a similar Bill, he made it clear, as I have done, that the retaining of a figure greatly in excess of what we are contemplating was important for two reasons: first, presentationally to indicate to Commonwealth countries that we are prepared to assist with these schemes, and, secondly, if new applications are made, to enable us to consider them.

The point was made that emigrants to Australia from this country are spreading into the outback. This is true. I checked on it when I was there. But it is equally true that the tendency earlier was to congregate, naturally, where there was work in the larger towns. But there are indications of, for instance, development in Western Australia and of mining exploitation north of Perth which are extremely important. Since the war, almost half of the emigrants to Australia have gone from this country. I know that the Australians wanted that sort of proportion. I am sure that we do, for the reasons which I gave when I moved the Second Reading.

There has been reference to family emigration. This is a human problem which we have all felt at some time or another. There is no doubt that one thing which prevents emigrants going from this country to any Commonwealth country is being torn away from the older members of the family. While it is largely a matter for the receiving country to decide whom it receives as emigrants, Australia considers the position sympathetically. But, given the approval of the receiving country and the fact that this must be a question of individual choice within the family, this is something which we should encourage.

The question of British investment abroad hardly arises under the Bill. It is a problem which was raised with me when I was in Australia. It had to be pointed out that the voluntary programme of investment does not apply to the new developing countries. It applies to Australia, Canada and New Zealand. The Chancellor of the Exchequer made it absolutely clear when it was introduced that this was a temporary Measure. He mentioned the period of two years. I accept that with additional British investment in Commonwealth countries—in the older Commonwealth as well as in the new Commonwealth countries—there is a need for British firms and British emigrants to go out and take part in these new developments.

I agree that this is a small Bill. It is a continuation of what has been done for a very long time. We are taking powers to continue the provision of the same amount of money, £1½ million, clearly with a view to consideration of other schemes and requests which may be made to us from time to time. Over the 45 years that these emigration-assisted schemes have been in existence the figures of actual expenditure have varied considerably. I am sure that the Government will at all times sympathetically consider any new applications.

Would the right hon. Gentleman say something about the universities, which, after all, are a form of training? Therefore, presumably, university places could be subsidised under the Bill.

Under the Act as it stands, assisted passages are available to students who are going to study in the universities provided that their intention is to settle in the Commonwealth country concerned. That is the existing position.

I beg to move, That the Bill be now read a Second time.

Last spring a conference was called in London by the International Maritime Consultative Organisation, which is a special agency of the United Nations, to study and revise the International Load Lines Convention of 1930. The conference was attended by the representatives of 52 nations, and, in addition, there were eight observers. Both before and during the conference our representatives had the closest consultations with all the shipping interests which might be affected. The conference unanimously approved the new Convention of 1966.

The main purpose of the Bill is to enable the United Kingdom to accept and operate the provisions of that Convention. But it has a second purpose. Last summer the country was shocked by three disasters—the "Darlwyne", the best known; the "Prince of Wales"; and the "Quesada"—which involved considerable and tragic loss of life. In each case the regulations that exist had not been complied with. The courts of inquiry suggested that very much stronger penalties than those in force should in future be imposed as a deterrent. The court of formal investigation to the loss of the "Prince of Wales" said:

"The court considers that severer penalties than those permitted by the Merchant Shipping Acts might act as a deterrent to those who tend to flout the Regulations."

That was the view of the court, it is the view of the Government, and, I think, it will also be the view of this House.

The existing penalties are variable. They depend on the excess of passengers carried and so forth and take no account of the state of the weather. We propose that there should be a maximum penalty on summary conviction of £400, but under Clause 25 and Schedule 1 we add a further proviso that in a particularly serious case, on indictment, the penalties could be unlimited. I believe the House and country will support that view. We have inserted that aspect in the Bill because of the urgency of providing deterrence before the summer comes.

I now turn to the main purpose of the Bill and to the Convention. The Convention in one respect provides some relaxation of the existing rules because technical progress has rather by-passed the 1930 Convention. The Convention proposes, and in the Bill we propose, to make regulations to this effect to allow certain types of ship to have a reduced free board. There are several reasons for this. In recent years there has been a great extension of the use of welding in the construction of ships, which is much safer than the use of rivets. Secondly, in place of the old wooden hatches there are steel hatches which do not need wooden wedges and which are watertight. The size and strength of hulls has also been greatly extended.

For these reasons, we think it reasonable to have some relexation of the rules for large ships and, indeed, for tankers, provided they are up to a required standard of subdivision against flooding. A second change which the Convention proposes is that the load line should depend not on tonnage any longer but on the length of the ship. This is technically a much more effective way of deciding where the load line should be.

A third thing which the Convention puts very strongly is a number of measures for the protection of seamen at sea by setting down a minimum height of guard rails, for example, and insisting on protected gangways and laying down the minimum height for the freeboard of a ship to prevent wash-over and to see that she does not ship more than a limited quantity of water.

Another thing the Convention does is to deal with the stowage of deck cargoes and to make regulations to see that cargoes do not become unshipped in a heavy sea and upset the balance of the ship. Fourthly, the Convention proposes to exempt certain classes of ship which operate in sheltered waters, tugs, dredgers and that kind of thing. Fifthly, it greatly increases, sometimes doubles and sometimes quadruples, the penalties which may be imposed for infringement of the regulations which may be established.

Clause 1 applies the Bill to all ships other than ships of war, fishing vessels and pleasure yachts. Fishing vessels are a very special case. For technical reasons to do with the casting of nets and so forth, they are to have rather different provisions from those for ordinary ships. The stability of fishing vessels is being studied at the moment internationally and it is proposed to have special legislation, if necessary, for them.

Clause 2 gives the Board of Trade powers to make load-line rules and surveys. Clauses 3 to 11 contain mainly revised provisions of the 1932 and 1937 Acts. Clauses 18 to 22 deal with the exemptions. Clause 24 deals with deck cargoes. Clause 25 deals with the increased penalties which I have mentioned for passenger ships and Clause 30 provides for regulations to be made by statutory instrument subject to annulment by this House.

On this Bill, which has the complete support of the shipping industry, which to the Government seems sense and which, I understand, may receive the approval of the Opposition, there is no need to go into great detail on Second Reading. We shall be dealing with details in Committee. The Convention will come into force for the United Kingdom, provided the Bill reaches the Statute Book, one year from the date when 15 countries have accepted it, including at least seven countries with 1 million gross tons or more of shipping.

So far nine countries have accepted, including four, the United States, the Soviet Union, Panama and France, with over 1 million gross tons of shipping. I hope that the Bill will have a speedy passage and that the United Kingdom will join those countries and many others so that the Convention can speedily come into force, but we cannot set a date for that in the Bill itself. The provisions of Clause 25 will come into force the moment the Bill reaches the Statute Book. This is a good Bill which is very much wanted by the shipping industry, and I hope that the House will give it a fair wind.

As the Minister of State has said, the Bill implements the Convention which was held in London almost exactly a year ago. The Convention was attended by the representatives of no fewer than 60 nations, of which only nine, perhaps a disappointing number, have so far ratified it. Seven more ratifications are needed.

I am therefore glad that the Government are bringing forward the Bill to make it possible for this country, which is the leading maritime nation, to give a lead in this matter. It is possible that many other countries—smaller maritime nations—are hanging back to see what we do. I am advised that it is the desire of the British shipping industry that the new rules should come into effect as soon as possible. On behalf of the Opposition, I therefore welcome the Bill and advise my hon. Friends to help to secure its early passage.

As the Minister of State said, the Bill succeeds the 1932 Act which put into force the 1930 Convention. I have looked up the debates on the 1932 Bill. I see that it was introduced by the then Mr. Hore Belisha when he was Parliamentary Secretary to the Board of Trade, although he later became better known for other things. I wish the Minister of State the same good fortune.

There are four good reasons why the 1930 Convention needs bringing up to date. Some of these reasons were mentioned by the hon. Gentleman. The first point is welding. It is now the habit to weld ships, whereas in 1930 they were very largely riveted. There is no doubt that good welding adds additional strength to the hull and makes a heavier loading of the ship a safer proposition.

The second big technical advance relates to hatch covers, which have been enormously improved. I am told that the MacGregor type hatch cover is extremely efficient. Therefore, it is fully justified that ships with these hatch covers receive a special bonus under the terms of the Convention. The old type of wooden hatch cover had its faults. Even in very recent years there have been disasters at sea because ships had these old types of covers and they were not, perhaps, fully secured. Hatch covers alone provide a good reason for moving forward.

Thirdly, there is the question of fines. Fines for the overloading of cargo ships need bringing up to date. They are low. I am told that in certain cases it would pay to accept the fine for overloading a ship, because the extra freight earned would be greater than the fine. This is obviously not a desirable state of affairs.

The question of fines in relation to passenger ships is different. These provisions will come into force at a very early date. We all deplore the three disasters to overloaded passenger ships which the Minister of State mentioned. We cannot quarrel with the Government's desire to seek at an early date to do something about increasing the penalties, although we are not entirely happy with the idea of unlimited fines. This is a matter which we may want to look at again. Nevertheless, I am glad that this opportunity is being taken to deal with the question of overloaded passenger ships as well as with the overloading of cargo ships.

A fourth reason why it is necessary to have a new Convention is that things have greatly changed since the 1930 Convention, in that that Convention made no provision for tankers more than 600 feet in length or for any ship more than 750 feet in length. The fact that at present 60 tankers of 200,000 tons are being built in various shipyards throughout the world shows the technical changes which have occurred in shipping since 1930.

There is perhaps a fifth reason why it is desirable for the new Convention to be implemented. This is connected with the seasonal zones. I understand that the new Convention will allow ships which are rounding the Cape of Good Hope or sailing round the south coast of Australia to remain in the summer zone and, therefore, to be more fully laden than they are at present.

I understand that the general effect of the Convention, and therefore of the Bill, will be that tankers and bulk carriers will be allowed to carry more. It is, perhaps, a sad topical reflection that under the Convention the "Torrey Canyon" might have been carrying even more oil than she was. The technical advice I have received is to the effect that this is not a certainty, but it is a possibility. Small ships will in some cases be able to carry less cargo than at present.

However, on balance the British merchant fleet will be able to carry more than at present. The Bill will, therefore, have the effect of increasing the total carrying capacity of the British merchant fleet which, although no longer the largest in the world, is still very large indeed. This will be an advantage to the shipping services which this country provides, with such great advantage to our balance of payments.

I come now to the form of the Bill. The 1932 Act was criticised on the ground that it consisted of no fewer than 54 pages of very great detail setting out exactly the terms of the 1930 Convention. On this occasion the Government have decided to act more by regulation and not to set out in great detail the terms of last year's Convention. Normally the Conservative Opposition, and, indeed, all oppositions, are a little critical of too much government by regulation, but in this case we believe that it is justified and that it is probably the best way of implementing the detailed terms of the Convention, which are exceedingly technical.

I ask the Government for an undertaking that the Board of Trade will consult the shipping industry and the Chamber of Shipping of the United Kingdom in drawing up these rules and regulations. This is an important proviso, because they are technical matters and not matters which are suitable for lengthy debates in the House.

I agree that the Bill is necessary and that it is desirable to get the Convention in force as soon as possible. The Minister of State told us that the Convention will come into force a whole year after the additional six States have ratified, three of which must own more than one million tons of shipping. The sooner this is done the better. We are glad that the Government, as the representatives of the leading maritime nation, are taking a lead in this matter. It stresses the importance of this Convention.

It was announced yesterday that a new Convention will be called by the Government concerning the problems thrown up by the "Torrey Canyon". It may well be that another Convention will at some time consider the problems of radioactive waste in the sea. More and more ships are becoming nuclear-propelled. I think that already on the bottom of the sea there is one submarine which was nuclear-propelled. This is a question which will have to be faced in the long run, even though the adoption of nuclear propulsion by merchant ships does not seem to be making rapid progress as yet.

On behalf of the Opposition I welcome the Convention. I am glad that the Government have acted on it with reasonable speed.

By leave of the House, may I thank the hon. Member for Dorset, West (Mr. Wingfield Digby) for welcoming the Bill and for his very constructive approach to it. I give him an absolute assurance that, when the Board of Trade is framing the regulations, we shall have the closest consultations with all the shipping interests.

I am glad to have the opportunity of raising the case of Able Seaman Michael Goldsworthy, the son of one of my constituents. To me, there is in this case a grave and continuing injustice which, I claim, must now he put right.

I am the last man to snipe at the Navy, for which I have great admiration. In fact, my older brother was called up as a naval cadet during the First World War at the age of 14 and was torpedoed and survived that torpedoing by the age of 14½. Naturally, I was proud of that. We are now 50 years on, however, and we are in peace time, and this is not the time for Nelsonian heroics or for pressgang methods in the British Navy.

My constituent Mr. Goldsworthy, the father of the able seaman, also has an admiration for the Armed Services. It may be his enthusiasm for the Armed Services that has partly led the Navy into this trouble, but I claim that neither father nor son should have been punished for such enthusiasm.

This is not the case of an irresponsible son of an irresponsible father. Far from it. The father is a hard-working patriotic type of man who from his own home runs a small television servicing and rental business, a pay-as-you-view business, which he runs entirely by himself.

In 1960, when aged 15, his son Michael was also fired with enthusiasm for the Navy. To a boy of 15 the advertisements can be grandiloquent and compelling. So both father and son went to the recruiting depôt at Acton. The boy signed on as a boy sailor for three years and nine years thereafter. His father gave his consent.

Both father and son were, I am told, under the impression that the father could purchase his son's discharge at any time, particularly at the age of 18, when his boy service came to an end. Mr. Goldsworthy senior tells me, in fact, that at the recruiting depôt the recruiting officer said, "You can always buy your boy out. It costs more the sooner he comes out." The officer failed to point out, however, that if there was a privilege of discharge, it could be exercised only when the Navy agreed on compassionate grounds, which are seldom agreed to. The net is, therefore, tightly drawn and it is very difficult to get out.

At the age of 17, Michael told his father that he had changed his mind and was not happy in the Navy and did not want to go on. His father went back to the recruiting depot but was told that nothing could be done until the boy was 21, except on strong compassionate grounds, which were not then established, because he was told that the boy had to complete the three years' boy service and then half of the remaining nine years, or an additional 4½ years after completion of his boy service, which would mean his having to serve 7½ years before he could apply to get out of the Navy. That was what his father was told.

In 1965, five years after the boy had signed on—he had been in no trouble up to this stage—he was in H.M.S. "Hardy", a ship lying in Portsmouth Harbour. The boy's story is that he was on duty with another young seaman in the officers' mess. Because of the noise of the Tannoy system, which the officers did not like in the mess, the officers had turned off the Tannoy system. The captain or commander called a muster of the crew through the Tannoy system. The two young seamen did not hear the call. They were arrested and taken before the officer of the day. Although they made their case before the office, Able Seaman Goldsworthy was given nine days' confinement to ship and extra fatigues.

Able Seaman Goldsworthy regarded the punishment as very unjust in the circumstances but he was prepared to take it. This happened on a Friday or Saturday. He asked for the punishment to be changed to a fine or to be deferred until the Monday, which, I understand, is a recognised practice in the Navy. His request for deferment to the Monday, however, was refused.

Unfortunately, his girl friend—he was rising 20 at the time—who was also in the Services, was about to leave for Germany. It was his girl friend's last weekend before she was due to go. Unable to get leave to see her, he jumped ship and thus faced double trouble. The result was that he went on the run in August, 1965. That was his first serious offence during five years in the Navy.

In the five months which followed, the father heard nothing from the son until his return home in January, 1966, when the boy was very run down, depressed, hungry and penniless and came back home. Mr. Goldsworthy senior, who had been in constant touch with the naval police at Kennington, telephoned them as soon as the boy came back. The naval police came and took Able Seaman Goldsworthy away from his home the same evening. He was reported as being arrested at home. While that may be technically correct, the boy gave himself up voluntarily at the suggestion of his father.

He received 42 days' detention in Her Majesty's detention quarters, where life is pretty tough and everything is done at the double. He maintains that he was allowed two cigarettes a day but that the chief petty officer who issued the cigarettes ran down the line throwing them at the detainees and that if a detainee did not catch a cigarette, it was stamped into the ground.

After that 42 days' detention, one would have thought that he had been sufficiently punished. On returning to H.M.S. "Vernon", however, Michael says that he found that all his kit had been sold. He was therefore in debt to the extent of approximately £100. Regular deductions were made from his pay, leaving him only 10s. a week, a state of affairs which was likely to last for a year. He requested that the stoppages be limited to £5 a month, leaving him with £2 a week for his own expenses, but his request was refused. He was, therefore, left with only 10s. a week, half of which had to be spent on cleaning equipment, leaving him with only 5s. a week, so that he could scarcely smoke, drink or enjoy any pocket money for a year. This in addition to his detention seems to me to be a very grave punishment.

By that time, the boy had, I am sorry to say, come to detest the Navy. He got a week's leave in August, 1966, and decided not to return to his ship. He is now somewhere in hiding. He is certainly not at home. He is now 21 years of age, rising 22.

One important aspect of the case is that, on the first absence without leave, his father conscientiously kept in touch with the naval police and the welfare authorities, and he said that he was told by the naval police that if his son gave himself up he would be sympathetically treated and would probably get a compassionate discharge. The Minister will remember that Mr. Goldsworthy persuaded the boy of the necessity to return to his ship and informed the police of his son's return.

Now, however, the father feels that he was badly let down, and this is why he is not inclined to help in his son's second desertion from the Navy. The further point should be made that, during the whole of the boy's first absence from his ship, no one visited the father or mother to investigate the case, and, in fact, no one from the Navy has been to investigate the case at home even up to now.

There are certain sad factors connected with the family in general which, in my view, qualify for the boy's release on compassionate and medical grounds. The compassionate grounds are as follows. Mr. Goldsworthy's health is deteriorating. There is no doubt about that. He has, in his own words, been driven "scatty" by this case. He has had to attend the West Middlesex Hospital for psychiatric treatment, and he holds medical certificates of his mental state which have been submitted to the Navy. He badly wants help with his very demanding business, in which he works about 12 hours a day.

I visited the family in their home. There is no doubt that the boy's mother is on the edge of a nervous breakdown. There is a boy of 12 at home who is so upset by the house having been searched by the police that he is afraid to go out of it if he sees a policeman within sight of his home. Moreover, Mr. and Mrs. Goldsworthy have a mongol girl child aged 5 who needs constant nursing and attendance, and one of the parents always has to be at home to look after the child. I claim, therefore, that the compassionate grounds for the boy to return home to his parents in this sad position are more than sufficient.

I have had correspondence with the Ministry ever since August. At the end of February, I put a full statement of the whole case before the Under-Secretary of State, and he asked me for a fortnight in which it could be investigated. I said that I would put down a Question on 15th March, which I did, to which the hon. Gentleman replied:

"I am unable to consider the case for this man's discharge on compassionate, or any other grounds, while he remains in desertion".—[OFFICIAL REPORT, 15th March, 1967; Vol. 743, c. 111.]

In my view, this matter cannot be allowed to drift on. It must be brought to a head. The Navy always says that it cannot discuss the case while the boy is a deserter. Whenever there is a strike, every employer always says that he will not negotiate until there is a return to work, yet the employer always has to negotiate. Why should not the Admiralty make a start now?

I ask the Under-Secretary of State to consider the adverse publicity which the case has created. One journalist interested in it told me that the Admiralty has bought itself £10,000 worth of adverse publicity over this one case alone. I for one would very much like to see it brought to an end.

I put it to the Minister that, in the first place, the boy is, obviously, no good to the Navy now and he should have his discharge. If the Navy feels that he must be punished, I would urge the boy even then to give himself up if he can feel that there will be a certain reasonable punishment, say, not more than two months, and he can have his discharge thereafter. But I must have that understanding. I do not think it fair that he and his father should be let down a second time.

This case illustrates some general principles. One cannot bind a boy of 15 for 12 years. One of my own sons, a hard-working and conscientious boy, has changed his job three times in 10 years, and on each occasion everyone agreed that it was reasonable for him to find a job which suited him better. I do not feel that one can hold a boy, against his will, with only a possible chance of discharge on extremely compassionate grounds, after 7½ years, to which the Navy itself must agree.

As a result of this case, I have received a large number of letters of support from all over the country testifying to the unfairness of the whole procedure. Letters have come from others of my constituents testifying to the good character of the Goldsworthy family, and letters have come from people in other parts of the country quoting similar cases happening to their own boys or boys in the neighbourhood.

In my view, boys of 15 who sign on should be given a choice, first, not after three months, when they have hardly had time to sample the Service, but after six months. Then they should have a further option at the end of their boy's service, after three years, when they are 18, and a final choice at 21.

Here is the opinion given by an eminent lawyer on agreements of this kind into which lads enter at the age of 15. This lawyer said:

"I have no doubt that if this was a contract to which the Infants Relief Act 1874 applied"—

that Act applies to all ordinary contracts made with children—

"such a contract, by reason of the length of time that the infant binds himself to one master and by reason of the fact that the master can vary the terms of service at will and also its general unilateral character, would be held to be unenforceable against the infant. Furthermore, the infant would have the opportunity of repudiating the contract within a reasonable time of his attaining his majority".

That is what I would like the Navy to permit these boys to do. By driving them to desert, to get out of the Service, as has happened, the Navy is driving them to a life of crime. How else can they live while on the run? I feel that the Navy is driving some of our finest young men, I am sorry to say, into being shirkers and rotters.

I want the Minister to say that this boy Michael Goldsworthy is, in the changed circumstances, of no use to the Navy, and that his family is suffering from severe medical disabilities which provide compassionate grounds for his case to be sympathetically considered, and he should now be granted a discharge on compassionate grounds. I want the Minister to give me a firm undertaking that he will be treated reasonably and, in that event, I will make my best endeavours to get the boy to give himself up to the Navy so that, in due course and in the appropriate time, he can receive his discharge.

The case which my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) has raised is typical of an important and difficult problem for the Services. The hon. Lady the Member for Eton and Slough (Miss Lestor) raised the matter in its wider context recently in the House.

My hon. Friend has said that the Navy has earned itself £10,000 worth of adverse publicity. I heard the case discussed twice on the radio this morning, and I think that the adverse publicity which the Royal Navy, in which I had the honour to serve, will acquire out of it will far exceed the value of this boy or, indeed, all the boys who are in service with the Navy today.

I have read the reply by the hon. Gentleman the Minister of Defence for Administration to the Adjournment debate raised by the hon. Lady the Member for Eton and Slough on 13th March, and I must say that, although it shows a lively awareness of Service requirements, it shows no appreciation whatever of the principles involved. For example, the hon. Gentleman said:

"I cannot accept the claim that people are not aware when committing themselves to an apprenticeship that the period of service for which they are signing commences only at the age of 18".—[OFFICIAL REPORT, 13th March, 1967; Vol. 743, c. 187.]

I am not a lawyer, but I have always understood that there has long been a principle of civil law in this country applying to contracts entered into by young people. The hon. Lady quoted Halsbury's Laws of England in her speech on 13th March, and Halsbury's Laws of England, as you know well, Mr. Deputy Speaker, is not just a chapter in Bertrand Russell's autobiography. It is one of the solid bases on which the law of the land stands. Halsbury's Laws of England states that

"An infant is of immature intelligence and discretion."

That is in absolute conflict with what the Minister said.

A second principle is involved, of which the case is typical. We have always held in the House that the civil law is paramount. That is what the Parkes case was about. There is a further possibility of legal action pending there, but when the Parkes case came to this House it was the idea that the Service Departments were overriding the civil court which above all made us angry.

That is what is happening here, and what the Services are still doing. Someone of 15 is legally an infant. He cannot sign a contract, drive a car or motorcycle, cannot vote and cannot marry, but he can sign away his life for the next 12 years. That is astonishing.

I know that there is an opportunity for the boy, infant, or whatever one calls him, to reconsider his position after three months, but that period is ludicrous for a boy who has joined up at 15½. One appreciates that the Service has its problems and requirements, but that is not the way to do things.

I hope that the hon. Gentleman will tell us that the inquiry will soon be completed. I implore him to use whatever pressure and power he has to see that the whole system concerning the personal rights of infants entering the Services is changed.

I am grateful to the hon. Member for Twickenham (Mr. Gresham Cooke) for introducing this subject, and I pay tribute to the restrained way in which he dealt with the matter and the way in which he has pursued it over the months in the cause of his constituents.

It may be useful if I "recap" briefly the history of the whole case, and I want to draw attention to a number of statements which are not correct. Able Seaman Goldsworthy formally joined the Navy on 6th September, 1960, at the age of 15 years and two months. He served until 28th August, 1965, when he deserted at the age of 20 years and two months. He was recovered from desertion on 11th January, 1966, and was awarded 42 days' detention. He returned to duty on 11th February and served until 23rd May, 1966, when he began his present period of desertion.

The first question we should clarify is whether he was misled on joining. I did not interrupt the hon. Member for Shrewsbury (Sir J. Langford-Holt), although I was tempted to do so. The idea that a boy of 15 signs himself away is totally false. In this case, Michael Goldsworthy went with his father to the Acton Recruiting Office in July, 1960, and both signed the normal initial forms completed by candidates for entry. I do not want to read it out. The hon. Member for Twickenham has a facsimile copy of the forms that were signed. There is a form signed by the boy with his father present. There is also a form signed by the father, and a further form signed by the boy's headmaster. There is no question of small print here. It was clearly stated and clearly understood—by the father and headmaster at least, if not all three—what they were signing.

I was trying to conclude my speech by 12 o'clock, or I could have gone on longer on the subject. I realise that the boy does not sign on his own and that parents are involved. There are endless reasons why parents might want him to join—the hon. Member for Eton and Slough (Miss Lestor) previously talked about broken homes, which are an obvious reason why parents should be parted from their sons. But nobody has the right to sign for anybody in a civilian capacity, and there should not be the right to do it for the Services.

I shall return to the general later; I am now dealing with the particular. I raised the matter only because people might have gained from the hon. Gentleman's speech the notion of boys going off on their own in a fit of rage because they were punished by their father and signing up with the father having nothing to do with it. That is not the case. Father, boy and headmaster signed the form, and understood what it was about. On the form are the words:

"I acknowledge that I am bound to serve until the end of my engagement and I understand that earlier discharge is permitted only in exceptional circumstances."

There was no question of trying to mislead, so there was no question of press-ganging. They were aware what they were doing.

The completion of the initial forms was done in July, 1960. It did not bind the candidate to serve in the Royal Navy. Not until he joins his training establishment and has been given a few days to adjust and settle in is a candidate required to complete the form of engagement committing him to a particular period of service. The normal practice is for the captain of the training establishment to see each candidate during his first week to explain the form to him. Until he signs that form of engagement the candidate can change his mind about joining the Royal Navy and return home free of all commitment.

In this case, Michael Goldsworthy joined the Naval establishment in September, and therefore father and son had two months after the signing the initial form to think, "Is this the right and proper thing to do? Were we bulldozed into something? Can we now have second thoughts?" After joining the training establishment he still had in his first week the possibility of saying, free of parental influence, "I shall leave and not sign the engagement form."

The sort of second thoughts about which the Minister speaks are like those one has in a hire-purchase agreement, but the right to them does not appear on the front of the form, which says:

"I, … understand that I am joining the Royal Navy as a Junior 2nd class for service as a SEAMAN, or COMMUNICATION RATING for a period of Twelve years' Total Service: …"

We are talking of the particular case, he signed the form on 20th July and it was not until September that he joined the training establishment, so that the father and son had between six weeks and two months to think again whether they would go through with it.

My point is that that right to think again, if it exists, does not appear on the form.

Of course it does not appear on the form. We are talking of the particular case of Michael Goldsworthy. That is the subject of the debate. He signed the form on 20th July and did not join the training establishment until September.

I am quoting from his form. I have a facsimile.

I am aware that the hon. Member has a facsimile. I am stating what actually happened. He did not immediately join the training establishment and had a further period to think again if necessary. That shows that in this case there can he no suggestion of press-ganging or bulldozing anybody into a decision, or his being bounced into something.

Having gone to the training establishment, he could have decided in his first week, and away from parental influences, that he did not want to sign the engagement form. If he had found in his early period of training in the first training establishment that he did not like it, or the captain found that he was not fitting in, he could have been discharged.

The hon. Member was right to say that the first signs of unhappiness came at the age of 17. He then told his father that he would like to leave the Navy. It is true that Mr. Goldsworthy made inquiries from the recruiting officer, who correctly advised him that apart from the possibility of discharge on compassionate ground there was no prospect of release until Michael was 21. I do not want to go into details of the incident which led to his desertion.

The charge may well have been trivial and he may well have been tried and sentenced and accepted his sentence, but asked for it to be postponed, his request being refused. I cannot go into the merits of why when a sentence is passed it is not carried out immediately. It was a disciplinary act. As for the idea that one could go away and start a sentence on Monday—these sentences are often designed to give a salutary lesson and that is why it happened straight away.

It is true that his father behaved most properly and that when the son arrived at home his father contacted the military police and that the rating was taken in charge. It is true that he was sentenced to 42 days' detention and discharged back to duty in February. So far as I can gather from the records, it is true that he might have been advised by one of the military policemen who took him into custody that there was a possibility of compassionate discharge. Clearly, no one would suppose that a military policeman taking someone into custody could be firm or absolute about that; he was giving no more than his opinion.

I have looked into what has been said about the cigarette issue. There is no substance in the allegation that cigarettes are thrown at detainees and stamped into the ground if not caught. In detention there is a system by which everyone does things at the double. If it is thought that that is purely and simply in detention quarters, I should say that I am told that officer training at Dartmouth in the first term includes doing everything at the double. It is part of the process of "making a man". I have not been through it myself and I cannot comment on its efficacy or worth-whileness, but it is common practice. I am also told that the idea of the staff at detention quarters deliberately grinding cigarettes into the ground when they are dropped is completely foreign to the attitude of the staff, who are carefully chosen men. I have had inquiries made into those questions and I am told that that does not happen.

The hon. Member has been completely misled about the sale of kit and pay. Naval discipline provides that a deserter's kit is sold. This is normal practice once a man has been in desertion for a month. The precise financial situation of Able Seaman Goldsworthy was that on his first desertion in August, 1965, he had a credit balance of £9 4s. 6d., which remained on the books as a credit. On his recovery, this sum was still to his credit and he returned to full pay on his release from detention on 11th February, 1966. The charge incurred for the replacement of kit deficiencies amounted to £18 1s. 1d.

On arrival at H.M.S. "Vernon", after he had completed his spell in detention, he was £35 in credit. He continued to receive full pay until the date of his second desertion, receiving in that time £117, an average of approximately £8 a week. I do not know how there arose the idea that he had to live on 5s. a week. I have given the facts which I asked for from the cashier and which are provided on the basis of the man's pay statements. I raise that matter because the hon. Member for Twickenham has been misled about those facts.

The hon. Gentleman also spoke of no one having visited the house. There have been contradictory statements. The son is afraid of going out because of police pestering, it is said. The police who are "pestering" are the police who have called at the house and they are the naval police. The hon. Gentleman says that no one has visited the house, but the naval police have, because they intend to arrest this man, or to encourage him to give himself up.

As for the welfare department of the Navy visiting the house, as a matter of custom when someone is in desertion the naval welfare people do not visit the house concerned. Clearly, until such a person gives himself up, one cannot see what the compassionate grounds or circumstances are, as I explained to the hon. Gentleman in reply to a Question of his in March.

The naval police go to the house only for the purpose of searching. They go in a hostile way. No one has been to discuss the case with the parents.

It has been made clear to the parents that there is no possibility of the case being discussed until Able Seaman Goldsworthy gives himself up.

I want now to refer to the legal situation. I hope that the hon. Gentleman is not suggesting that a bargain should be struck in terms of dealing with this man, or promising what will happen if he gives himself up. This is not just a matter of bending naval regulations. It is not a matter of Navy policy alone. Hon. Members will be aware that in 1966 the House passed the Armed Forces Act which amended previous regulations and which in Section 18(2,c) said

"knowing any such person to have committed such an offence"—

that is, desertion—

"procures or persuades or assists him to remain a deserter, absentee without leave or improperly absent from his ship or place of duty, or assists in his rescue from custody …".

That Act imposes a penalty on those who aid or abet a deserter. This is not a matter of my making regulations or of the Navy making regulations; this is what the House decided last year in the Armed Forces Act.

Does the hon. Gentleman realise that by implication he is saying that the Navy now intends to, or should, take action against the B.B.C.?

I want to draw the attention of hon. Members and of the Press and of others to the fact that anyone who aids or abets a deserter is in breach not of naval law, but of law established by Act of Parliament. I cannot make it any clearer than that. The law of desertion is enacted by Parliament which has prescribed punishments for the offence.

A warrant is out for the arrest of this rating. Public policy requires that the law should be observed and enforced by bringing him to trial. It is a matter of serious concern that Able Seaman Goldsworthy, who has been defying the law, has been in contact with and received encouragement from many persons who might be expected to uphold the law.

I now turn to the subject of compassion. Soon after his first absence, Able Seaman Goldsworthy applied for a compassionate discharge on the grounds of his father's health and the wish to relieve him from the running of the family business. Mr. Goldsworthy was asked to obtain a report from his doctor and the naval welfare organisation made inquiries about the family's general circumstances. However, at that time it was felt that the rating's presence at home was not vital and compassion, therefore, did not arise. Since his second desertion, I have seen further medical reports and the hon. Member for Twickenham has been kind enough to inform me of his own visits to his constituent and of his deteriorating health. This will, clearly, be taken into consideration.

I now turn to the future. When he is arrested or surrenders to the police or the naval authorities, Able Seaman Goldsworthy must stand trial for his offence. He will appear before the Commodore, Royal Naval Barracks, Portsmouth, who will decide whether he should be tried summarily or be court martialled. Clearly, the longer he stays in desertion, the more severe is his penalty. After he has been tried and a verdict given, then the question of his release on compassionate grounds can be examined once more. I cannot forecast what the outcome of that would be, but I can say that, in the light of the information which the hon. Member for Twickenham has given and in the light of our knowledge and of the further knowledge which we hope we will acquire, we shall have far stronger grounds on compassionate reasons than anything we have had up to now.

If I may now turn briefly to the broadcast raised by the hon. Gentleman the Member for Shrewsbury (Sir J. Langford-Holt), I wish to make it clear to the House that this case is not typical. There may well be instances of people who are unhappy in the Forces, and there are equally, instances every day of people successfully applying for discharge on compassionate grounds. The idea that we are somehow in the Nelson days, press-ganging people into the Navy and keeping them there, is utterly false.

Nevertheless, we have recognised, the Minister of Defence for Administration and myself, that this whole matter should be looked at again. The hon. Member will be aware that last year we introduced a break point after three months for juniors. He will be aware that the Minister of Defence for Administration, in reply to the hon. Gentleman the Member for Surbiton (Mr. Fisher), said:

"I shall announce the outcome of my investigations when they are completed."—[OFFICIAL REPORT, 6th March, 1967; Vol. 742, c. 214.]

In an Adjournment debate the Minister said:

"… but I cannot say how long they—"

the investigations—

"will take, for they involve long-term considerations."—[OFFICIAL REPORT, 13th March, 1967; Vol. 743, c. 185.]

Again, on 15th March, I made it clear when I said:

"I cannot promise that there will be an answer in a matter of weeks, but there is a degree of urgency."—[OFFICIAL REPORT, 15th March, 1967; Vol. 743, c. 586.]

I am seized with this whole question, and whatever we do we must weigh up the two sides, that is to say, the needs in terms of manpower and the whole question of people in the Navy who are unhappy and who cannot do a good job. We are probably doing some harm to morale within the Navy.

I recognise this and these are the things that we will be dealing with in this investigation. I would ask the House to be patient about this. I have noted the comments of the hon. Member on the legal aspect of this and I am aware of his own legal background. I would not like to tread into this aspect without some advice, but I will certainly look into the points raised, and see that they are introduced as a factor to the Committee which is reviewing the system.

I urge, as strongly as I am able, that Able Seaman Goldsworthy should now give himself up and that those who may have influence with him should advise him to do so. In the long run this is in his own interests; it is in the interests of his father and his business, and his whole family. It is in the interests of all hon. Members and others, who have been campaigning on his behalf.

May I say that I am very much obliged to the Minister for going so fully into this case. I will think over very carefully what he has said and will discuss the matter with the father. I will not say any more than that.

I wish to raise the question of the damaging effects of the Selective Employment Tax on the pattern of employment, upon the pattern of industry and the cost of living as it affects the ordinary person. I do it now to reinforce the many letters which have been sent to the Chancellor in the hope that this House can influence him before his Budget proposals are announced.

I am very much aware that once the Chancellor has announced his Budget proposals he is in something of a difficult situation, involving a loss of prestige in withdrawing proposals made or which he is making. I thought it wise to raise this now before the Budget. I appreciate very much the appearance of the Financial Secretary to the Treasury on the Government Front Bench. I realise that he is inhibited from saying very much, because the Chancellor is at present in what I think is known as his "broody" period, during which time he cannot leak out the Chancellor's proposals.

I hope that he will note and ponder the matters which are drawn to his attention this morning. I base my remarks on three factors—common sense, a recent E.D.C. report, and a survey that I have carried out in my constituency, in Basingstoke and Andover. I believe this to be the largest private survey carried out anywhere in the United Kingdom on the effect of S.E.T. Over 500 firms were contacted and asked how S.E.T. affected their business.

It has been a major task analysing the replies. I do not suggest that this gives a statistically balanced sample of the entire United Kingdom, but it does give a comprehensive cross-section of the distributive trades in two towns and will, therefore, be a very helpful guide as to what is happening on the ground. Some firms dealt with S.E.T. in several ways. I can only assure the Financial Secretary that my analysis is statistically as fair a picture of the results of S.E.T. as I can get from the replies.

I will give the bare statistics before going any further. Three per cent. of the firms reduced the service to their customers, almost all by cutting out a delivery service. A total of 5 per cent. reduced the number that they employed, or changed the type of person in their employment from part-time to full-time. A further 9 per cent., all shopkeepers, reduced their standard of living.

These are small shopkeepers who have previously been employing someone part time and who either could not afford to do without the part-time worker and are financially worse off or who had to work longer hours because they dismissed a part-time worker. The picture here is of the smaller firm where the proprietor appears to be working very long hours, certainly in excess of what would be approved by any trade union and for less per hour than would be approved by any trade union. Some 22 per cent., a very large proportion, cut back on the modernisation and expansion proposals which they had for their businesses and 52 per cent. simply increased their prices to customers.

The E.D.C. report specialised on the question of the pattern of employment. It is as well to have the thing in context and to recognise that the E.D.C. report concerned itself solely with three things, whether there were changes in employment policy, what was the cost of S.E.T., and what changes had occurred in the numbers employed during the period under review. The report attracted 40 organisations representing 330,000 workers in the distributive trades and it used replies from 33. One is fascinated to know what happened to the remaining replies—perhaps they were quite unprintable. The E.D.C. records show some rather startling results of S.E.T., particularly startling if the Financial Secretary and his colleagues will cast their minds back to the reasons given for introducing the tax. It was supposed to get people out of employment in the distributive trades and into the productive trades, to transfer people, or encourage the transference into our manufacturing industry and the like. I can quote numerous Government Front Bench speeches indicating this.

What has happened is that there has been a reduction in the numbers of part-time employees and an increase in the numbers of full-time employees. In other words, people have been getting rid of two part-timers who would be of little value in manufacturing industry and taking on full-time workers because the Selective Employment Tax is the same for both of them and it is, therefore, more economic to have a full-time worker rather than two part-time workers. One of the results thrown up by the E.D.C. report is a direct contradiction of the effects which the Chancellor of the Exchequer planned.

My survey in my constituency shows that the tax has had one main effect. Part-time workers have been sacked. It is fair to say that some of them have not been replaced by full-time workers. Some of them are women, but mainly they are old-age pensioners who take a part-time job. This is a particularly unfortunate effect of the tax.

I suggest—and I hope that the Chancellor will give serious consideration to this—that the tax for part-time employees should be at a pro rata rate or half the rate of the tax payable for full-time workers. It is perfectly possible to do this by altering the stamp. I also suggest that we end the nonsense of the firms which pay in and receive back. The administrative costs of this operation are totally unnecessary and something which, I should have thought, the Chancellor of the Exchequer would wish to dispense with as soon as possible in the interests of efficient administration of the economy. I believe that firms should simply pay at reduced rates.

My second major point concerns the damaging effect of the tax on the pattern of industry. The E.D.C. report draws attention to transport and warehouse workers doing the same work. Some of their employers get the premium. It is paid for those transport and warehouse workers who work for a manufacturer. Some of them pay in and get it back—those who are working purely for transport concerns. Some pay the full levy per employee because their warehouse happens to be that of a wholesaler.

It is totally illogical that a product stored and distributed by a manufacturer should be treated totally differently when it is handled by a distributor. Many businesses have been built up on providing specialist distributor services. A manufacturer who wants supplies of paper does not go to every mill in the country and ask for a sample of paper. He goes to a paper wholesaler who produces samples of this or that quality, or this or that shade. He goes through them and selects what he wants and then orders it from the mill. The service provided by the specialist wholesaler-distributor is valuable for industry, whether export industry or home industry.

Take the question of buying new machinery, electrical equipment or the 1,001 other things which are needed in a factory or articles used for manufacture for export. Again, one does not go to every factory for every item. One goes to someone whose job it is to collect the items together, to warehouse them and supply them when they are wanted. This is a valuable part of the efficient working of our trade and industry.

Now it pays a manufacturer to set up his own distribution network in addition to, or in replacement of, the specialist wholesaler. The Financial Secretary may shake his head, but I have examples of this which I can give him. If he likes, I will send some of the papers to him. It is an unnecessary and wasteful duplication of national resources that manufacturers are encouraged to extend and even to set up distribution networks for their products when there are already in existence wholesalers who specialise in this work.

I give another example of the oddity of this tax. This is something of which I was not aware before it was drawn to my attention, and no doubt the Financial Secretary is not aware of it. An industrial photographer does not go to weddings and funerals to take photographs. He specialises in taking photographs which are used in manufacturing departments of modern technological industry—things like printed circuits in the radio and electrical industry. If he works for a manufacturer, the manufacturer receives a contribution from the Government. If he works for himself and does work for several manufacturers, which is more efficient, the tax has to be paid on the employees in the firm. A nonsense is being created, a distortion in the economy.

Apart from the distortions in the industrial economy—and there are thousands of them—there are many personal and human problems. There are organisations in my constituency doing charitable work, mainly in healing. They are not registered charities and therefore cannot get the benefits of being one which were wrung out of the Chancellor of the Exchequer during the Budget debates last year. Therefore, they have to pay the tax. I should have thought that there was a strong case, reinforced by the other examples which I have given, for flexibility in the system so that different rates of tax might be charged and so that there might be discretion in the hands of the Ministry of Labour or the Ministry of Social Security locally about what should be paid by individual people.

There is the nonsense concerning hotel proprietors who earn valuable foreign exchange for this country and who have to pay the tax on their employees. Their money is being used to subsidise manufacturers, regardless of whether they help the export trade or not. They subsidise the manufacturer of Christmas decorations, of coloured candles and of children's toys. Here I refer to the Prime Minister's famous remarks about the "candy-floss" economy. He is the man who for the first time in this country's history has subsidised the manufacturer of candy floss. Yet the hotel industry, which earns valuable foreign exchange for this country, is penalised.

To return to my survey, 22 per cent. of the people have saved on the money they are putting by for expansion, modernisation, new equipment, replacing road vehicles and meeting the technological age. Taking the longer-term view, I should have thought that it was essential that more money should be put by for expansion, modernisation, modern and safer road vehicles and new equipment. The Government's action is a recipe for utility and austerity in years to come.

I come finally to the effect of the tax on the cost of living of ordinary people. My survey shows that 52 per cent. simply passed on the increase. Some of the letters which I have received from people, particularly in the retail trade, are such that I could not read them in Parliamentary language. Suffice it to say that 52 per cent. have passed on the tax in one form or another, and this at a time when a freeze is being enforced. It is quite clear from my survey that the Government's intentions have in large measure—

The hon. Member has said that 52 per cent. have passed on the tax. Can he say what percentage has been passed on to the consumer in those cases?

I am grateful to the hon. Member for his intervention. In the survey which I have carried out in my constituency, I asked how the firms were treating the Selective Employment Tax. I have no statistical information about whether they have passed it on in full or in part. Some firms say that they have passed it on only in part, for reasons mainly of competition, particularly in the grocery trade. They could not raise their prices higher because, for example, there was a competitor on the other side of the road. Some firms have passed on the tax in part and some have cut down on their employees. Basically, 52 per cent. appear to have made straight increases in price by which they have tried as fairly as possible to pass on what the tax costs them.

The Government's overall intention appears to have been to apply a wage freeze and to operate the Selective Employment Tax, coupled with increases in vehicle licence duty, petrol tax and the like, which have had the effect of forcing up prices. One does not need to be an economist, a financier or a Chancellor of the Exchequer to understand simply what is happening.

We have a situation in which wages are pegged but prices are not merely rising but are being forced up by the action of the Government with the S.E.T., which, they specifically said when introducing their prices and incomes legislation, was one of the things which employers were entitled to pass on to consumers. My survey shows that over half of them have done so.

Therefore, in direct contradiction to all that the Government said at the General Election, when golden opportunities were held out for the people, we find that the practical effect of what they are doing has been to peg wages and to force up prices. To force up prices when wages are pegged means only one thing: a lower standard of living.

The difference between the S.E.T. and any other tax, however, is that that lower standard of living does not affect those who are best able to pay. It does not affect those who are wealthiest or who have the biggest wage increase. It bears hardest on those who are least able to afford it, the old, the sick, the part-timers and people on fixed incomes. It hurts the weakest most. If that is the practical result of the Government's policies, the sooner that the Selective Employment Tax is not merely amended, as I have invited the Treasury to amend it, but swept away altogether, the better it will be for the country.

In listening to the peroration of the hon. Member for Basingstoke (Mr. David Mitchell), I wondered whether he would care to pass on those sentiments to those of his hon. Friends—I am not sure that he is not one of them—who keep urging us to reduce the rate of direct taxation and increase the rate of indirect taxation. People who use that argument sometimes forget the considerations to which the hon. Member has just referred in his peroration.

The hon. Member courteously acknowledged at the beginning of his remarks that I am liable to be singularly uncommunicative in replying to the points which he has raised. As he appreciates, in the classical words of Mr. Baldwin, my lips are sealed at a time like this. The hon. Member has, however, raised some wider observations concerning the Selective Employment Tax to which I am inclined to reply.

I have listened with intense interest to the information which the hon. Member has given concerning the survey which he has conducted in his constituency. I would be most interested to see a fuller report on it if he has one. It is an interesting example of the effect in a fairly representative town of the way in which employers have tackled the problems with which they have been confronted as a result of this tax.

If a new tax is introduced, particularly in a sphere in which people have, perhaps, had a lighter tax burden than others previously, they will find themselves confronted with problems and may even smart under a sense of what appears to them to be injustice. In our view, however, as we have said throughout, we were correcting an imbalance in the tax system in that the weight of indirect taxes fell much more heavily upon the manufacturing sector than upon the service industries. Be that as it may, what we are concerned with here is how firms have dealt with the tax.

I was interested to see what a relatively small percentage—5 per cent.—came within the category of employers reducing the number of people employed or changing employees from part time to full time. The hon. Member suggested that changes from part-time to full-time employment meant getting rid of two part-timers and employing instead a new full-time employee. Our information is that it by no means always, or necessarily even in the majority of cases, happens that way. The evidence is that many employers have persuaded hitherto part-time employees to work full-time.

I would be interested to know—not necessarily now, but at some time if the hon. Member has the figures from his survey—how many dismissals have resulted of either part-time or full-time employees, but preferably of both, and the actual figures of dismissals as opposed to a shift among the same employees from part-time to full-time employment.

We are, of course, aware of the comments that have been made, including the comments of the E.D.C. Report to which the hon. Member has referred, about the effect of the tax on part-time employment. The hon. Member said that 22 per cent. of firms have cut back on modernisation and expansion and such things as replacement of road vehicles. I do not in any way challenge his efforts to make a dispassionate report of the results of his survey.

What I wonder is the extent to which any action of that kind which has been taken is really the effect of the S.E.T. and how much is the effect of the July measures. It may be a combination of both. In so far as it is a combination of both, naturally the firms would, in answer to the survey, say that this was the way in which they had dealt with the effect of it. I make that comment only to say that I would not accept that as a permanent feature of the tax this would be a representative figure of the way in which firms would deal with it.

In his closing remarks particularly, the hon. Gentleman criticised the tax as having the result that 52 per cent. of employers increased their prices to customers. In fact, the main object and first purpose of the tax was to raise additional revenue in order to reduce demand. May I correct at once the heresy which was repeated again by the hon. Gentleman that the first and main purpose of the tax was to transfer workers from the service sector to the manufacturing sector. It was not. That was the third purpose of the tax, and in a different form. It was not to transfer workers, but, in the long term, to shift the balance from employment in service industries to employment in manufacturing industries, and we said that we anticipated that that would come about as a result of recruitment policy rather than the transfer of employees from one sector to the other.

The main and first purpose was to raise a substantial body of taxation and do it in a way which would not impose yet further burdens on those sectors which are at the moment bearing the main brunt of taxation.

If this was achieved and had the effect of reducing demand, it was anticipated from the start that a substantial proportion of it must be passed on in increased prices. As the hon. Gentleman acknowledged, it was recognised in the policy statements on prices and incomes, that it was one of the grounds upon which it would be legitimate to increase prices. However, it is an interesting reflection that it is about 50 per cent. of people who have reacted to the tax in that way.

If the hon. and learned Gentleman says that the main purpose of the tax was to raise a substantial sum of money—I think that the expression he used was "a major increase"—in taxation in the Budget last year, how can he square that with the assurances given a few weeks before the Budget, when the Chancellor of the Exchequer, the hon. and learned Gentleman and his colleagues were appealing for support in the country, and when the Chancellor said that he had no intention of making major increases in taxation in his Budget, to contradict things which the Conservatives were saying were likely to happen if a Labour Government were elected? There is a complete contradiction between the grounds on which his party was elected and the explanation that he has just given.

The hon. Gentleman is picking me up on the word "major". I do not want to quarrel with him about words in that definition.

The amount involved for this tax is approximately £200 million in a full year. The effect in the first year was greater because of what has been called the "forced loan" aspect and the delay in the repayment of premiums. It has been recognised all along that this is a substantial sum and, although there was a quarrel about the timing, no one quarrelled about the judgment of the amount which needed to be raised in last year's Budget to reduce the pressure of demand. If it was not to be done in this way, the alternative would have been to increase other and existing taxes which already weigh heavily upon people in other sectors.

I find considerable support and comfort in the figures which the hon. Gentleman has given as to the effect of the tax. It shows that it has had the effect that a certain amount has been passed on in prices but that, as we always said would be the case, there are other ways in which employers seek to cushion the effect of the tax, absorb it and meet it other than by increases in prices.

The hon. Gentleman touched on a number of other familiar points in this connection. He referred to the administrative costs involved in the premium payments or rebates and suggested that it would be much cheaper and simpler to introduce new National Insurance stamps. I can assure him that that is not the case. From an administrative point of view, the machinery which has been adopted is a much simpler one, and it is a remarkably cheap tax to collect. If one compares it with any of the other main taxes—and I gave the figures recently in answer to a Written Question—the cost of collection is lower than that of the average Customs and Excise tax, which, in turn, is very much lower than the cost of collecting the Inland Revenue taxes such as Income Tax and Corporation Tax. Although it may be a nuisance for employers to be taxed and repaid in this way, it is not right to say that it is administratively a laborious and expensive machinery.

The hon. Gentleman looks perplexed. The reason for it is that there is an existing machinery for collecting stamps for National Insurance purposes with verifiable categories. I am sure that the hon. Member for Finchley (Mrs. Thatcher), with her experience, will know that to add to the multiplicity of categories for the purpose of stamp collection would create tremendous problems within her former Ministry. It was found much simpler to graft on machinery to that which the Ministry of Labour has with its Standard of Industrial Classifications to make premium payments and refunds in the neutral sector rather than trying to do it through the machinery of the National Insurance stamp.

The hon. Gentleman referred to the criticism which is often made about the position of transport and warehouse workers whose employment gives liability to tax in some sectors, to refund in others and to premiums in the manufacturing sector. He said that this is anomalous and illogical. However, it depends on one's viewpoint. One of the purposes of the tax is deliberately to make a selective discrimination as between the manufacturing sector and the service sector. Once the number of qualifying employees is satisfied to bring an employer within the relevant sector, there is no reason why the employers of transport and warehouse workers should not be relieved from liability just as are employers of office workers and others who might themselves be non-qualifying workers.

The hon. Gentleman says that this has many distorting effects and that it now pays manufacturers to set up their own distribution machinery instead of using hauliers. The effect of the tax in relation to that would be purely marginal, however. It may be that it is profitable in the interests of the employer to set up his own distribution machinery. If so, he will do so. But I should have thought that the amount of the 7s. 6d. premium would be a very small factor to take into account in making a decision whether or not to embark on having one's own transport fleet.

The hon. Gentleman referred to difficulties of people who are doing beneficial work of a quasi-charitable nature and who do not succeed in qualifying as charities. There are some borderline cases both ways which one might like to see dealt with differently. During our debates some of my hon. Friends were criticising the effect of this tax on establishments like Eton and other public schools. What it amounts to is saying that present legal definitions of charities, which date back to the times of Queen Elizabeth I, are not satisfactory in the modern age. I would not quarrel with that, but it is not something which can be dealt with by the Chancellor of the Exchequer in a Finance Bill.

Other people have given thought and attention to the problem, but I am not aware that anyone has yet come up with a very satisfactory alternative way of drawing a line between what are and what are not charities. From a fiscal point of view, registered charities are a definable class with which we can treat. We could not possibly take on board the problem of having to decide which other worthy bodies should be treated as charities—