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

Last week the House debated, and came to a decision on, the Financial Resolution for the introduction of this Bill. The Bill itself simply implements the recommendations of the Select Committee, which, by its decision last week, the House approved.

The Civil List provision we are considering, like all its predecessors, applies only for the remainder of the present reign plus the usual six-months' period to enable new Civil List legislation to be brought in at the beginning of the new reign. The new arrangements modify rather than replace the existing scheme, and so this Bill is mainly in the form of amendment and addition to the existing Civil List Acts. Perhaps, therefore, it would help the House if I were to mention the main changes.

First, there is an increase in the provision for the Civil List itself from £475,000 to £980,000. As my right hon. Friend the Chancellor of the Exchequer explained in the debate last week, these two figures are not directly comparable since they do not cover precisely the same items. To start with, Her Majesty has indicated that she is content to forgo the provision made in the 1952 Act for payments totalling £63,000 to the Privy Purse under Classes I and IV of the 1952 Act.

Then again, provision of up to £25,000 made under Class V of the 1952 Act for contributions towards the expenses of certain members of the Royal Family is being replaced by a separate provision of £60,000 to be paid at the discretion of the Royal Trustees. These changes have made it possible to simplify the provisions under the Act, and the single annual figure of £980,000 is therefore now to cover the salary and expenses of the Royal Household plus the small item of the Royal Bounty, alms and special services.

Secondly, there is the new provision for reports to be made by the Royal Trustees whenever it may be necessary and in any event every 10 years. The Bill does not in any way circumscribe the powers of the Royal Trustees as to the form or content of their report. They will be free to report to Parliament whatever information seems relevant to the question of Civil List provision. They would, for example, be able to submit the sort of income and expenditure figures which were provided to the Select Committee on the Civil List and published in the appendix to its report. The Royal Trustees would, however, be under an obligation to report if at any time it seemed to them that the balance of funds remaining in their hands would be exhausted during the following calendar year.

This provision is to enable the House and the Government of the day to be given sufficient warning of the impending requirement for them to take the necessary steps in presenting the necessary order to the House. The Bill provides for any such order to be effective from the beginning of the calendar year in which it is made, and these two provisions taken together clearly offer some flexibility in the timing of an order while ensuring that the Queen is not again left to finance a deficit from her own resources. The Bill provides that these orders should be subject to the normal negative Resolution procedure.

The remaining provisions of the Bill can be dealt with fairly briefly. It implements the various recommendations of the Select Committee for the increase of annuities now paid to specified members of the Royal Family and the amounts payable to the Queen's children on reaching the age of 18 or on marriage. It deals with certain minor recommendations of the Select Committee as to the statutory limit on the annual increase in Civil List pensions and the payment of transfer values in the cases of Royal' Household employees transferring to other public sector employment. It takes effect, as regards the Civil List itself and the annuities, from 1st January, 1972. As regards the Civil List pensions, which are on a financial year basis, it takes effect from 1st April, 1972.

On all those matters the Bill is simply intended to implement the recommendations of the Select Committee on the Civil List, as confirmed by the House itself in the debate last week on the Financial Resolution, and on that basis I commend the Bill to the House.

Before the right hon. Gentleman sits down—

I have sat down, but perhaps the hon. Gentleman had better ask his question.

may I ask, because last week the right hon. Gentleman was pressed on this matter by a number of my hon. Friends, whether he will deal with the subject of the tax-free income which the Queen enjoys? In winding up the debate last week the right hon. Gentleman did not deal with that. He merely referred to what had been said by his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and all that that right hon. Gentleman said was that because this practice had continued for 200 years it should go on, presumably in perpetuity.

I should like the Leader of the House to explain the principle behind this concession. I repeat that last Tuesday we received no information from him about it. All that we got was what I might call "Weary Willie's winding-up waffle", and it would be helpful if the right hon. Gentleman would give us some information about it now.

I am tempted to reply to the hon. Gentleman's somewhat rude comment—

It is well justified.

but I shall refrain from doing so, and simply say that the provision in the Civil List, as recommended by the Select Committee, was fairly widely accepted in the House last week. The argument was on the method by which it should be provided and the way in which it should be administered in future. If the amount is considered to be a reasonable and proper provision, I do not think the question to which the hon. Gentleman refers, that of taxing the Queen's private money, really comes into the argument.

I shall follow the example of the right hon. Gentleman in at least being extremely brief. In a sense this is a repeat of last week's debate, and on that occasion I said most of what I want to say on this subject, as I imagine most hon. Members did.

On this side of the House there will be no whipping at all on this issue. It will be a free vote. Hon. Members should be encouraged to vote or not to vote as their beliefs and feelings indicate. I think that from a parliamentary point of view that is the appropriate way of approaching this matter.

The more I reflect on the tax position of the Queen's private fortune—this was discussed a good deal in last week's debate, but was not replied to by the right hon. Gentleman, any more than it was this afternoon in response to my hon. Friend the Member for Islington, East (Mr. John D. Grant)—the more I find it difficult to defend what is proposed. We are here making full public provision for the costs of the Monarchy. It is 270 per cent., on a true basis, above that of 1952. It also provides for some margin, and for fairly frequent reviews in the future. That being so, it seems to me to be very difficult to see the case for continuing the special tax exemption.

I am not sure—and here I think it may be that one did not see the issue with total clarity previously—that the vital point is disclosure, though disclosure would certainly be necessary in order to see what had happened since 1952 if we were to continue to support the existing tax arrangements. But if that is objected to on the ground that it would place the Monarchy in the unique position of being asked to tell the House and the country about private resources, something which is not asked of other citizens, then the logical corollary, with the adequate State provision which is now being made, would be to move to a normal tax position, and without a specific exemption there would be no case for special disclosure. If disclosure is objected to, let the thing fall into a normal position.

I cannot congratulate the Government on their handling throughout of this admittedly difficult matter. They have not shown nearly enough respect for public disquiet, which certainly exists, and I doubt whether, from a longer-term point of view, they have really served the interests of the Monarchy. The Government brushed aside much too quickly the scheme put forward by my right hon. Friend the Member for Sowerby (Mr. Houghton), and they have not met—in fact, they have made no attempt to meet—the points that have been made about the special tax exemption. Bearing that in mind, there can be no question of my voting for the special proposals, still less of my urging my hon. Friends to do so.

I do not think anyone could suggest that adequate time has not been given to the discussion of the subject of today's debate. Indeed, when one considers how small the difference between the two parties is, or at any rate seemed to be, it is surprising that we have found enough matter for discussion to occupy 20 meetings of the Select Committee, a full day's debate last week, and what could be a full day's debate today, not to mention the remaining stages of the Bill when we come back after the recess.

For that we have to a great extent to thank the hon. Member for Fife, West (Mr. William Hamilton), who, given the chance—and I am sure that he will be given the chance—could, I think, be counted on to prolong the discussion almost indefinitely. It has been what the hon. Gentleman no doubt regards as his finest hour.

But if we leave the hon. Gentleman out—and even he has not made it absolutely clear, to me at any rate, that he is a genuine, copper-bottomed republican—I think it is fair to say that most right hon. and hon. Members on both sides of the Select Committee and of the House are agreed in supporting the Monarchy, in thinking that we do not want a cut-price Monarchy, and in accepting that after the passage of just on 20 years it is high time that the provision made for the Civil List in 1952 was reviewed.

That is the impression which I had after attending 20 meetings of the Select Committee and the debate last week, but I am not so sure after listening to the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). He seems to have been slightly led astray by the siren voices behind him, but we shall no doubt see what happens when it comes to a vote tonight.

That last aspersion is unworthy of the hon. Gentleman. I attended every meeting of the Select Committee except the last one when the vote was taken. Anybody who was with my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) in the Committee knows that he expressed his disquiet on these matters throughout the Committee's deliberations. My right hon. Friend was not brought to life by my hon. Friend the Member for Islington, East (Mr. John D. Grant), and to say that he has been pushed on by back-bench voices is an unworthy aspersion.

I do not want to become involved—God forbid that I should—in the intricacies of Labour party politics. Having listened with interest to the right hon. Gentleman's interventions in the Select Committee, I quite agree that he did make certain reservations; but I thought that in principle I was right in assuming that he was in favour of the Monarchy and in favour of reviewing the financial position of the Monarch. In any case, he has made his position clear today and might well make it even clearer when it comes to a vote.

The hon. Gentleman is already in slightly deep water and I do not want to push him any deeper. I believe he is leaving the point, but can he tell me of anything I have said this afternoon which I did not express in the Select Committee?

In the Select Committee we were all engaged in probing the problems involved—and quite rightly; and here we owe a debt to the hon. Member for Fife, West. We were investigating the situation, as it was our duty to do. I was a little surprised, though I may have been quite wrong to have been, by what the right hon. Gentleman said just now. But in any case he can make his position clear when it comes to a Division, if there is one, at the end of this debate.

If I may return to my theme, the right hon. Gentleman was kind enough—[Interruption.]

On a point of order, Mr. Deputy Speaker. Further to my right hon. Friend's point, there was a definite slur upon him, because the hon. Gentleman has just said he would make his position clear. My right hon. Friend said definitely that if there was going to be a vote he would not support the Bill, for the reasons he gave; and to imply that he is not making himself clear is a slur upon my right hon. Friend.

I was listening carefully to what the hon. Gentleman said. I do not think it was quite sufficient to cause me to call upon him to withdraw it. There is nothing to prevent hon. Members on the Opposition side asking him to withdraw, but it was not quite sufficiently bad for me to have to intervene.

Surely, there could not possibly be a slur on any member of the Front Bench opposite by suggesting that they were influenced by listening to their back benchers. That is something which one hopes happens with every back bench. I always hope it might happen with my own Front Bench from time to time.

What I was trying to speak about when the hon. Gentleman intervened was that the discussion in the main was not how much money should be provided or whether it should be provided at all but rather the method of provision itself and also, as the right hon. Member for Sowerby (Mr. Houghton) insisted, how the new deal should be presented to the public, and whether this could not better be done by bureaucratising the Royal Household.

I do not want to be out of order by going into this particular question at great length. But, personally, I was not attracted by the proposed solution for two main reasons. Though myself a bureaucrat by training, and perhaps by nature as well, I do not believe in bureaucracy for the sake of bureaucracy. I also suspect that in accordance with Parkinson's Law bureaucracy is liable to escalate and so cost more; and I rather felt that some of the proposals put forward by the right hon. Gentleman would have that effect almost immediately. After all, however loyal we may be we are not trying to increase the cost of the Monarchy. I was glad for my part to observe that in the evidence submitted to the Select Committee there was no trace of Parkinson's Law or its effect, and I do not believe one could have examined any Department of the Crown and come to the conclusion that the same work, or rather considerably more work, was being done by the same number of people for very much the same reward as was being done 20 years before.

But that is past history. What we are concerned with today is whether in principle we should or should not accept the proposals contained in the Bill. That is what we are to vote on if there is to be a vote at the end of this debate. Now the great majority of hon. and right hon. Members opposite have made it more or less clear that they would have preferred the solution proposed by the right hon. Member for Sowerby but that they do not propose to vote against the Bill on Second Reading. But I imagine there still remains the hard core of 27 hon. Members and at least one right hon. Member who voted against the Resolution last week and who presumably today will once again vote against the Bill. It is to the attitude of these hardliners—none of whom, incidentally, voted against their own pay rise yesterday—that I want to address myself. [Interruption.] There is certainly a parallel—[HON. MEMBERS: "No."] If the hon. Gentleman thinks there is no parallel I would like him when he makes his speech, which I shall look forward to hearing, to explain why there is no parallel.

As one of the 27 who went into the Division Lobby, may I make clear that my primary objection to the passing of the Civil List is the moneys that we are paying to hangers-on who certainly do not do anything like the work a Member of Parliament does.

The hon. Gentleman is entitled to his view, but what I find interesting about this particular group of hon. Members is how few of them ever actually declared themselves in favour of a republic. After all, Sir Charles Dilke did so quite openly 100 years ago, as the right hon. Member for Stechford has recorded in his excellent biography. But they have still not made their position clear on what to most of us is an important point. Even the right hon. Member for Coventry, East (Mr. Crossman) was good enough to say he was "an honest-to-god monarchist in a strange sense", whatever that may mean. This is what strikes me as so illogical. If they, or perhaps it is their constituents, believe in the Monarchy, it seems strange to me that they should try to deny the Monarch the wherewithal to do her job, because that, after all, is what they will be doing by voting against the Bill.

As my right hon. Friend the Chancellor of the Exchequer made clear last week, this is not a pay claim—which is what the hon. Member for Fife, West keeps on calling it. The Civil List represents the operating expenses of the performance of public duties by a Head of State which would be at least as great and probably much greater in the case of the president of a republic.

How does the hon. Gentleman know that?

Because I have lived for quite long periods in various republics of all complexions and have studied how the head of state operates and my guess, which is at least as good as the hon. Gentleman's, is that it would cost the same if not more.

Just a guess.

Hon. Gentlemen opposite have tried to draw invidious comparisons between the proposal for an increased Civil List and other current rates of remuneration and expense allowances. It is extraordinary that hon. Members, some of whom have been in the House as long as the hon. Member for Fife, West—who, I think, has been here for just on 20 years—should have happily absorbed a pay increase of 350 per cent. plus further substantial expense allowances over the last 20 years, and yet expect the Head of State to carry on doing, not the same job, but a greatly expanded and extended job on the same operating expenses as in 1952, gaily disregarding the galloping inflation, for which successive Governments may or may not be held responsible, according to one's political views, but for which the Monarch can quite certainly not be held responsible, especially when one stops to think that at least half of the new total—in other words, the whole of what has been the total up to now—is entirely accounted for by the current pay and allowances of the Royal Household.

As to the size of the sum involved, it is, we have been told, less than the cost of running one of our larger embassies. Perhaps hon. Gentlemen opposite think that we should not have large embassies, but most people are agreed that we should, and most Governments keep up large embassies whatever party they belong to. It is less even than the Arts Council's subsidy for Covent Garden Opera, and it is spent, as must have been clear to anyone who served on the Select Committee, with close and constant attention to efficiency and economy. To those of us who feel as I do that the value of the Monarchy to this country is incalculable, this is surely not an unduly large sum. Indeed, I thought the hon. Member for Liverpool, Toxteth (Mr. Crawshaw) put it very well when he said last week that if anyone were to ask him whether the Monarchy was worth £1 million or £5 million, he would say that if the Monarchy cost £10 million it was worth £10 million. I feel just the same way as he does.

I am grateful to the hon. Member for Bute and North Ayrshire (Sir F. Maclean) because I was nervous that by a conspiracy of silence we should be denied an adequate debate this afternoon. I am grateful to the hon. Gentleman for putting a point of view which is felt by a great many hon. Members on the Government benches who do not bother to attend to take part in an important debate. I intend to reply to him—

On a very quick counting of heads, I think there are more hon. Members on the Government side of the House than on the Opposition side.

All I am saying is that I am grateful to the hon. Member for Bute and North Ayrshire for giving us the chance of a debate by making a speech, because when the Lord President sat down he was the only person who rose on the Government side of the House.

We were waiting for the right hon. Member for Coventry, East (Mr. Crossman)—waiting for Godot.

Here we have the hon. Member for Bute and North Ayrshire revealing to us that he wanted to ask what was the position of those of us who will vote against the Bill, and I shall be glad to explain that to him and, through him, to our electors. He did not see how anyone who was not a copper-bottomed republican could vote against the Bill—

The right hon. Gentleman is not quoting what I said. I said that it was not even clear that the hon. Member for Fife, West (Mr. William Hamilton) was a copper-bottomed republican. He may emerge as one when he has spoken today, but he has not yet emerged as one. I did not say that no one but a copper-bottomed republican could vote against the Bill.

I understood the hon. Gentleman to say that he did not understand how someone who believed in the Monarchy could vote against the Bill. He then quoted a passage from the speech I made in the recent debate in which I made it clear that I thought the Monarchy was a useful institution, and he stopped in the middle of the passage.

I will explain why I think it is a good institution. If this is the question which is put up, let us be clear about it. I think the Monarchy is a good institution not because the Monarch is the wealthiest woman in the country but because of the frailty of human nature. We are not all rational. If we were all rational we would all like an elected president. Because we are not rational but emotional creatures it is good for us to have something we can look up to, to admire and respect, and it is safer to have it impotent.

As I think Bagehot explained clearly, there are two different parks of our Constitution, the efficient part and the dignified part. The dignified part is the part which is arranged for us to admire.

rose—

I know the hon. Gentleman has edited Bagehot, and I greatly admire him for it, but he need not interrupt me because so far I have been correct.

I was not interrupting the right hon. Gentleman from the point of view of editing, but I think he will acknowledge that this is a dichotomy which originated in the mind of Bagehot and is not, as hon. Members may feel, his own invention.

I was just saying that this is so, and this famous division between the efficient and dignified elements is what I wish to refer to.

Bagethot said that the Monarch and the House of Lords were part of the dignified element, the part we were supposed to admire because it was just play, just pretence—they were puppets and they were impotent—whereas the real power was elsewhere. I think that the real power has moved from the House of Commons too, and that the House of Commons is now part of the dignified element, along with the Monarchy and the House of Lords. But we are not discussing that point. As for the Commons pay claim, I will come back to it later since the hon. Member for Bute and North Ayrshire raised the issue.

The only mistake which Bagehot made was to believe that the Monarchy was invented by the clever middle class of this country who put up the dignified element as a bogus thing in which people could believe, thinking "We do not believe in it but the vulgar working classes do." This was a great mistake because, on the whole, the working classes believe in it a great deal less than do the middle class. The people who passionately believe in it are the members of the House of Commons and the House of Lords.

Some of them.

Some of them—large numbers of them. I was Lord President for nearly two years, and at that time I had a lot to do with the Monarchy. When I was Lord President and had his jobs to do I used to analyse the value of the Monarchy, and I conceived a considerable respect for the unfortunate people who were born to do this job. I have a respect today for those who are born to this unfortunate job of being permanently and professionally powerless.

I can believe that this institution is a very good thing. I can believe that it is a more effective exhaust for the emotions than is a president of a republic. If it can be kept working successfully, I think there is a great deal to be said for it. It is not an accident that the Scandinavians and the Dutch, as well as ourselves, are very stable democracies and have retained constitutional monarchies of this kind. But it has grave dangers because if one retains a traditional head of state of this kind, the head of state gathers round the court—as Bagehot made clear—the appurtenances of privilege. A democratic monarch must not be a symbol of privilege, but must be a symbol of national unity, a symbol of all classes.

One of the worrying things about the British Monarchy is that through history it has had connections with certain classes, overwhelmingly with the landed gentry and also, now, more and more with the wealthy and moneyed classes. The great danger in our democracy is the separation of the Monarchy and its being encapsulated in the wealthy class that surrounds it. This is very difficult to avoid. One cannot artificially create endless Ladies of the Bedchamber who are ordinary working women and not aristocrats or plutocrats. These are difficult matters, and in fact they would not want it.

It is an interesting thought.

It would be an interesting experiment, but it is difficult to do. This is the concern of this House—or should be our concern—when debating the Second Reading of the Civil List Bill. When we are discussing how much money to pay out of the public coffers to the Monarchy, we are bound to see it in the light of its fulfilling its function as a national symbol, a symbol above all classes, equally shared by all classes.

In this respect the problem of the private wealth of the Monarchy is of obvious importance. If the Monarch's family, by tradition and in fact, is the wealthiest family in the country and if the Monarchy therefore tends to associate with only the wealthy and to have tastes which are shared by the wealthy, it separates itself and fulfils its function less competently from our democratic point of view than it would otherwise do.

I would hardly describe myself as an ardent monarchist; I am a rational monarchist. I see us all as weak and frail beings and see the need to have this kind of institution which makes no sense but delights us. In the same way I see that a lot of people need religion for much the same reason, because they need to sustain themselves with some emotional solution.

No.

I would have thought that this was true. But having seen this need—and having seen it in myself as well as in the hon. Gentleman opposite—I try to understand this and try to see how we can improve our Monarchy, or at least how we can stop its getting worse.

What would happen if we were to find our Monarchy becoming wealthier and wealthier and becoming more and more removed by that state from its proper relationship to the community as a whole? Hon. Gentlemen opposite may say that if people are perfect the amount of money they have makes no difference to them. On this score I agree with the New Testament that it does make a difference in that to some extent it corrupts. Modesty would require one to say that people's wealth is something that should be looked at very carefully, and this is what we have been doing in these discussions.

There is another matter which must be borne in mind. If the Monarchy is to be respected it must not conceal unpleasant facts. It must not seek to maintain its privileges by refusing to answer questions which are put to it by the Committee which has been selected by Parliament to see how much money the Monarchy is paid. I repeat what I said on the last occasion, that it was a grave error for the Queen to give instructions to her servants that questions about her private fortune were not to be answered. Whether such questions were relevant is a different matter, and I shall come to that later, but I do not think it is proper, when the Civil List is to be decided and nearly half of a Select Committee's members are convinced that certain questions are highly relevant, to find that the Monarchy is not prepared to answer those questions. I suggest it is highly unwise for Monarchs to behave in this way. I suggest it is a very cowardly thing for Ministers to advise Monarchs to behave in this way. The courageous Minister who cares about the Monarchy would have dissuaded the Queen from the course she adopted on this occasion.

I have some evidence of the effects of what the Queen has done. I live part of my life in this House and the other part in Fleet Street, and I am always struck by the importance newspapers attach to these matters. On the last occasion we discussed what is printed in a small weekly periodical. This time I am wiser and I have with me a great national daily newspaper. Yesterday my eye almost missed a highly relevant piece in the Daily Telegraph which was tucked away on a back page. The Daily Telegraph is a respectable paper—it must say what the Tories want. Its view is that one must print but not in such a way that anybody can read it; its attitude is to put it away in a corner. We now have the facts on record, and I shall read them aloud because I praise the Daily Telegraph for what it has done. It has given us the truth about the effect on public opinion of the Monarch's refusal to answer these questions.

In a Gallup Poll on 8th December two questions were asked. The first was: should there be a pay rise? Some 57 per cent. were in favour of a rise, 37 per cent. were against and 6 per cent. did not know. So just over half those polled said they were in favour.

The second, and key question was: do you think the pay rise proposed by the Select Committee was too high? Some 55 per cent. said it was too high, 2 per cent. said it was not high enough, and 36 per cent. said it was about right. From the Monarchy's point of view this is a very unsatisfactory situation.

Would the right hon. Gentleman not agree that if there were a poll on the pay rise for Members of Parliament there would be an even worse result? Therefore, how meaningful can this be?

I am always grateful for the hon. Gentleman's interventions because they help me along in my speech. I intend to refer to the matter he has raised since I shall also be discussing the relationship between the rise in M.P.s pay and the rise in the emoluments of the Monarchy and the popularity of the two. All I am saying at this point is that whereas six months ago I am sure such a poll would have had a quite different result on the central issues of whether the Monarch should declare the facts asked of her and whether she should pay tax, today public opinion is overwhelmingly on the side of those who are at one time a small minority.

Feelings of this kind do not do the Monarchy any good, and it would have been far better if the Queen had been advised properly and sensibly. It would have been far better if, from the start, the Queen had been told, "These are modern days. You must not go on like this. You have to be sensible about it." When we know that the Prince of Wales is a millionaire 20 times over on his real estate alone, it is no good trying to conceal the fact that the Queen is much wealthier. If we are told that we are not allowed to have the actual figures, we have to guess. As my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) said, it is almost certain that the interest on the Queen's private wealth is at least double what we are giving her. In other words, we are adding to an enormous private fortune.

My first point, therefore, is a simple one. I believe that the Monarchy is an extremely useful institution if it is kept properly in order and within bounds. Keeping it in order is largely a matter of keeping the wealth of the Monarchy within bounds. If we do that, the Monarchy is an excellent institution. I think that it is our job to regard its wealth as important if we believe in the Monarchy. If I were a Republican, I should be all for letting the Queen become wealthier and wealthier. I should be all for letting her be stupid, because I should want to make the Monarchy unpopular. But I do not want that. I want the Monarch to be properly advised. She has been badly advised on this occasion.

It is an outrage that a Select Committee in 1970 should be denied this essential information. But I ask myself whether it is only a denial of disclosure which is wrong, and here I agree with my right hon. Friend the Member for Stechford. I do not think that it should be necessary ever to disclose the Queen's private income. If we knew that she was paying the full rate of tax we should not ask for her private income to be disclosed. That is a simple thought. It is impertinent that someone's private income should be brought out in any discussion of how much that person should be paid by way of expenses. The only reason why it should be brought out is that it is not taxed. If the Queen's income is not taxed, it is highly relevant to our consideration of how much she needs.

Let us be quite clear about it. The reason why I am asking for disclosure is not that there is thought to be a special reason why the Queen's genuinely private income should not be disclosed. The reason is that it has not been required by this House, as it should have been, that the Monarchy should give up its prerogative of having its whole wealth tax-free.

However, that is not the sole reason why this Measure has proved to be so unpopular. There is another reason. It is the Royals. I shall leave it to my hon. Friend the Member for Fife, West (Mr. William Hamilton) to give us more interesting disclosures about the Royals since he is an expert on them. But whereas no one in the country says that the Queen should not be properly paid and that we should not have a good Monarchy, there is a great deal of feeling about the hangers-on and ancillaries.

It is outrageous that we should be asked to vote today not merely sufficient for Prince Philip to do his job but sufficient for him to have money to invest in equities. We are told that in calculating the amount of Philip's salary or emolument enough must be given him for him to look after his old age. He is married to the richest woman in the country, and she is not taxed. One would think that he might just survive in his old age. But we have to allow him sufficient money to invest in equities to provide a spot of enjoyment in his old age. This is privilege, and when each of the Royals is being paid for rather dubious duties plus enough to save, I must begin to compare that with what we do for other people. Certainly we do not do it for Members of Parliament. Lord Boyle did not say that Members of Parliament should be given enough on which to live and enough to save.

We get a pension.

The Civil List covers the pensions of the lower orders. Apparently these people are so high and mighty that they cannot be allocated pensions. I should not mind if 5 per cent. were deducted and we put 10 per cent. in the pool, as happens with an ordinary superannuation scheme. But, no: they must be given enough money to invest and so add to their wealth. That is not democracy. It is totally anachronistic. It is utterly out of date and out of tune with what any of our ordinary citizens want the Monarchy to have.

It would have been just defensible that the Royals should have been allowed to survive if the Queen had said, "Since I am not taxed on my private income, I will pay for the lot." We should then have been able to make an arrangement that if she paid for the lot that section of her private income would not be taxed. I should not object to that. It might be better if the whole thing were pooled and run by the Queen. It would be quite reasonable for that part of the Queen's money going to that cause to be untaxed. However, so long as we are asked to pay for the Royals, I object strongly to the idea of paying not only these fantastic costs but something extra to provide them with an income at the end of their lives.

I come next to the delicate question raised by both the hon. Member for Bute and North Ayrshire and the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) of the relationship between the emoluments of the Royal Family and those of Members of the House of Commons. If there is any relationship, I must point out that it has been created largely by the fact that the Government have chosen to debate these two matters very close together. The Government chose to have the two put together and voted one day after the other and discussed one day after the other.

Were not both on the programme of the last Government when they went out of office 18 months ago?

If there has been a connection between the two, it has been strengthened greatly by what I do not think is a coincidence. It seems to me that the party managers thought it a good idea to put the two together. I suppose they thought that it would influence the House of Commons and make it easier for hon. Members to accept the money for the Royals if their own money were closely connected with it. If they thought that, it was quite infamous. That is political bribery. Let us hope that they did not think that. If they thought that, I am delighted that the people have not been taken in and have not been influenced by what is, if it were true—which it is not—a straight piece of political bribery.

I am afraid that people outside this House will be in no doubt about what is afoot. They have noticed a concatenation of circumstances. They noticed, first of all, that a proposal was made by the Opposition to give a special winter relief to the sick, the unemployed and the old. They noticed that it could not be done. Then they noticed these two matters, one day after the other, being pushed through with as little noise and fuss as possible. It was hoped that the public would not notice. I have always found that the public notices if there is any attempt to make it not notice. The Government's tactics have created more notice and not less. They will discredit the Government more, and not less. This kind of sharp practice does the Government harm. It harms the Monarchy as well. I am sorry it has been done, not so much for the Government as for the Monarch. I do not mind if the Government discredit themselves.

I was grateful when The Times wrote a nice article saying that I ought to remember that this is not the first time that the Queen's private income has been discussed. I was surprised that the right hon. Gentleman did not refer to this article and remind us of Dilke, for Dilke was raising the issue of the private fortune and saying that Queen Victoria saved £850,000 out of her Civil List, tucked it away and invested it. He said it was an outrage. If it was an outrage then, it is much more an outrage now. When Queen Victoria saved this sum there were not the same reasons for having the tax. Since then we have had death duties; since then the rate of accumulation of the untaxed, undutied private fortune has grown enormously. It is infinitely worse now. I am grateful to hon. Members who mentioned Dilke, who was often in advance of his time. I had been thinking of saying a few odd and muffled words and letting the thing go through, but I have been stimulated into seeing the need for an open and frank discussion.

I understand why the Lord President has had to leave us, because he is looking after the Service Committee, but he need not have spent only five minutes on this. Last time he spoke for 20 minutes and said nothing. Now he said nothing in five minutes—even better than last time. It is an insult to the House that when we do not have the chance to discuss such an important issue very often we should hurry it through. Then he said he could not think how we could spend so long on it! There were days with Dilke and Chamberlain when they spent a lot more than a day on this. Those were the days when the House of Commons extended itself.

We have time to reflect, and I hope that others will stand up when I sit down so that the public may know that we are not trying to conceal this, that we are not trying to hush up this matter with a little debate and then push it through, but that we recognise what we are doing. I am against it for the reasons given: because there has not been disclosure, because there is no reform of a Government Department, because a lot of money is being doled out to the Royals, and because it is a thoroughly disappointing Civil List truly out of date.

I hope that we shall get more than 27 votes and that even some Monarchists opposite will join us, because the best thing the Monarch can get from the House today is a message that it agrees with the minority on the Civil List and that next time it will not make the same mistake.

Contrary to the right hon. Member for Coventry, East (Mr. Crossman), I believe that it is a good thing that we should have discussed our pay yesterday and the Monarch's expenses today. It is a salutary experience for everyone. I was struck by a remark of the right hon. Gentleman when he suggested, as some hon. and right hon. Gentlemen opposite do from time to time, including the hon. Member for Fife, West (Mr. William Hamilton), that the Monarchy is in some way responsible for the perpetuation of what hon. Gentlemen opposite regard as the class structure. That is rather out of date and all I would say is that many millions of humble people in this country look upon the Monarchy as part of our character and national life at least as much as does the right hon. Member for Coventry, East.

It is within the power of this nation to decide whether we have a Monarchy, the type of Monarchy we have and the way in which its duties are carried out. I suppose that today those duties are carried out with a great deal of formality, some people might say too much, although it is not nearly as much as in earlier years. While the Monarchy is conducted in that way, we must provide the necessary money. The Monarchy has developed over the centuries and there is no reason why the nation should not develop it further if it wished.

There are other monarchies, in Denmark for example, where it is much less formal. The right hon. Member for Sowerby (Mr. Houghton) asked whether we wanted a Monarchy in a gold coach or on a bicycle. In Denmark it is not unknown for the King to ride on a bicycle. I do not think that has detracted from the dignity and status of the Monarchy. I know Denmark pretty well because I am Chairman of the Anglo-Danish Parliamentary Group. There are some aspects of Denmark's monarchy which I very much like, although it may not be suitable for this country. If hon. Members object to the provision of money for the Monarchy or to the formality attached to it, then they should propose changes in the form of the Monarchy. These arguments and accusations about the Monarch not paying income tax or the extent of her private fortune are irrelevant and should not be discussed.

Many hon. Members look upon Parliament as the upholder of our national liberties. While this is true, it is not the only such institution, because the Monarch is another. Large sections of the nation are animated and inspired far more by the Monarch than by Parliament and the political parties. Sections of the nation regard politicians with contempt. They say they are untruthful, and many are; they say that they are arrogant, puffed up with a sense of their own power, that they often use their privilege in this Chamber to say things they would not say outside for fear of the consequences.

Those sections of the population do not look to the political parties for their inspiration nor do they give their loyalties to the political parties. They look to the Monarch who is in turn buttressed by the Royal Family. For that reason it is necessary to provide money for them as it is necessary to provide money for the Monarch. The Monarchy is a source of strength to the nation. It is a focus for our loyalties, it is a moderating influence on the passions and controversies of national life and a buttress to our liberties. A financial means to enable the Monarchy to function normally must be provided.

In view of the remarks of the hon. Member for Bute and North Ayrshire (Sir F. Maclean) about my hon. Friend the Member for Fife, West (Mr. William Hamilton), perhaps the hon. Gentleman may be interested to know that I returned yesterday from my home in my constituency where, like many hon. Members recently, I have been attending a number of functions connected with the festive season. At all those functions several people said to me, "When you get back to London, tell Hamilton how much we agree with him and thank him for expressing our views on Royal Family finances." On none of those occasions has a single constituent disagreed with my hon. Friend—

Would the hon. Gentleman give way on that one point?

Not at this stage.

I have passed on my thanks to my hon. Friend, but I go further. I express my admiration to him for the work that he has done in this House as a long-standing critic of Royal Family finances over many years. I believe that he has considerable support in the country, not only for what he said in the debate last week, but for what he has said over many years.

My views on this matter are very similar to those of my hon. Friend. I am a Republican of the copper-bottomed variety to which the hon. Member for Bute and North Ayrshire referred. For my part, the whole of the Royal Establishment, from the Queen downwards, could go tomorrow, lock, stock and barrel. But I do not feel that my views reflect those of my constituents or of the country as a whole.

My hon. Friend the Member for Fife, West and I have similar views because we were born and brought up within a few miles of each other in County Durham. I mention that because I have no doubt that the people of the North of England do not hold the Monarchy and the Royal Family in the same esteem as those in the South of England—

That is absolute rubbish. Will the hon. Gentleman give way?

Not just now.

Those of us who ask questions on Royal Family financies, as I have done on a number of occasions since I came to the House last year, are always told that there are more important things to worry about. I accept that—at the moment I am more concerned about the disgraceful unemployment figures in my constituency—but someone at some time has to say something about what is going on with the Royal Family. There was never a more appropriate time than now. After all, we are talking about public money.

In opposing this Bill, I believe that I am expressing the views of the majority of my constituents. I do not know whether I am expressing the majority view of the country, but judging from the poll which my right hon. Friend the Member for Coventry, East (Mr. Cross-man) has produced, I am beginning as a republican to be more optimistic about the situation. I know this from talking to people and from the letters that I receive—I have been well known in my area as a republican for some years—from the wholesale clearance of cinemas when the National Anthem is played and from the kind of article which Peter Jenkins wrote in The Guardian on 7th December, and so on.

The Government are failing to recognise this change. This was demonstrated very clearly in the Chancellor of the Exchequer's speech last week, when he com pared the cost of the Monarchy with the cost of our embassies in Rome and Bonn and the subsidy which is given to the Covent Garden Opera Company. These comparisons miss the point completely. What people complain about is the degree of privilege involved. They are concerned, for example, that a Royal yacht, which would he more properly called a Royal liner, should be built at a cost of £2·15 million and run at an annual cost of £839,000 for a handful of people.

It does the cause of the Monarchy no good at all when people are told, as they were told in 1953 and 1954, that one of the reasons for building the Royal yacht was that it could be converted into a hospital ship in time of war. One of my constituents only yesterday remembered this. People are cynical about such justifications and suspicious that the Select Committee was not permitted, as part of its duties, even to visit the Royal yacht. The same kind of thing can be said about Royal aeroplanes, Royal trains, Royal Palaces, the Royal Household and the rest of the catalogue.

Privileges and waste of this kind do not reflect the mood of the people in 1971. The mood to a growing extent is a combination of apathy and opposition. I predict that the Monarchy, as part of our constitution, will wither away through opposition and sheer lack of support—perhaps sooner than most people think.

I am always astonished when people here and outside say that the Monarchy is much to be preferred to a political presidency. This may be so, but they talk as if it were the only alternative. There is another alternative—a non-political presidency. It would be both suitable and an easily established alternative to a Monarchy.

I believe that this country, more than any other, can produce men and women of integrity, of intelligence, of experience, of assiduity and of dignity by the dozen, people who would be eminently suitable for this kind of position. These qualities and experience would command the respect of ordinary men and women. Certainly, debating the money to be given to such a person would be a much easier task than we have at the moment, when we have to begin by trying to disperse the mystique which surrounds the present Monarchy. I believe, too, that the Queen—or any Monarch—is done a disservice by those who continually tell us how hard she works. This was done in the evidence to the Select Committee. The gentlemen who gave that evidence made it a question of "the lady doth protest too much". The Queen works very hard, but no harder than a miner at the coal face, a teacher, a farmworker or a clerk, while enjoying considerable remuneration and considerable privilege.

Has the hon. Gentleman considered that he himself works harder than a miner at the coal face?

I certainly do not—

Yet you are paid more.

I visit the pits in my constituency regularly, and I do not know how on earth the National Coal Board gets people to work at the coal face, even with the improved conditions of today.

Many people believe that the Queen works hard, and under certain difficulties, but the Government should not overrate the pudding or try to kid all the people all the time.

On some of the things about which I have spoken, I find some difficulty in reconciling my views with what I consider to be the views of my constituents and of the country at large. But if the views of my constituents are a true reflection of what is felt in the country as a whole. I can say to the Government. as my right hon. Friend the Member for Coventry, East, said, with complete confidence and certainty—use this opportunity to get rid of the hangers-on. Even the most fervent Royalists are disturbed about this aspect of the present review.

Last week my hon. Friend the Member for Fife, West gave a typical example when he catalogued the members of the Queen Mother's Household. In a leading article last week The Guardian thought the matter sufficiently important to write:

"It also raises the questions about the entourage of the Court. In a society which is moving away from the old world of courtiers and hangers-on, it would be anomalous if the Queen's tax-free privileges served to prop up the vestiges of an outmoded aristocracy."

The Select Committee's Report should have detailed the number of bodies—the full establishment—and should have said where they were working and who they were. For my part, I say that some of these surplus employees should be included in the Royal Family itself, and I am opposed to all these increases being given to the Queen Mother, the Duke of Edinburgh, Princess Anne, Princess Margaret and the Duke of Gloucester.

If this sort of work must be done—I concede that many hon. Members and many people outside feel that it should be done—let us have only one person on the payroll, the Queen, because to pay £255,000, mostly tax-free, to these other people is nothing short of a scandal.

The biggest defeat which some members of the Select Committee suffered was over their failure to dispel the secrecy which surrounds the Queen's fortune. We do not know the figure, but we can say with safety that it is one of the largest fortunes in the country. It has been made clear that the reason is simply that her income from all sources is tax free. I am utterly opposed to tax-free income of this kind. It would be fairer if, when talking about Royal Family allowances, we used the gross figure, which comes to several million pounds, and not the smaller net figure, which is the one that always appears in the newspapers and on television.

I believe that any payments which may be necessary to the members of the Royal Family should come out of the Queen's Privy Purse. Do the Government really expect hon. Members, at least those on this side of the House, to agree to a tax-free increase of £500 a week for the Queen Mother, £400 a week for Princess Margaret, and all the rest of the increases? If I supported this sort of nonsense I would be lynched on the streets of Easington.

These increases have not been sufficiently publicised on radio and television and in the newspapers. If they had been, I doubt whether the number of people who took part in the poll would have supported rises of this magnitude, particularly for people in such comfortable circumstances. This demonstrates once again that the Government are completely out of touch with the ordinary men and women who make up this nation.

Of the aspects that disturb me, none disturbs me more than the failure to break through the secrecy surrounding the Royal Family finances. At a time when there is greater need for frankness and clarity, the Government have refused to attempt to reveal the whole story, and in my view those concerned will pay a heavy price for what is being perpetrated.

Apart from the ridiculous increases that are being sought, Parliament is to have less control then ever before. If I interpret matters correctly, we shall never again have this type of Select Committee, and that represents a considerable victory for some people.

This is all part of the determination of a reactionary Government to preserve the essential class structure of this society. The Royal Family and the Monarchy still remain at the core of that class structure, however much they may have responded to changes in the democratic processes in recent decades. But this structure is crumbling. It is receiving support from fewer and fewer people. It is a structure which I shall not support tonight or on any other occasion.

I intend to be brief, and I am tempted to my feet only by the remarks of the hon. Member for Bute and North Ayrshire (Sir F. Maclean), who questioned why the 27 hon. Members who voted against this issue last week did not vote against pay rises for hon. Members and Ministers yesterday.

I tried my best to do so.

I did not, and in my view there are no grounds for such an analogy.

When it comes to deciding whether we should have a queen, a king or a president, I am an agnostic. A president might be cheaper and he might do the job better or not as well as it is being done today by the Queen.

Whatever may be said about our prejudices or about some people being old fashioned, I believe that the overwhelming majority of people in Britain had no objection to the provision which Parliament makes for the Queen being examined periodically, with improvements being made as and when necessary to enable her to do her job well.

However, that aspect is only part of what we are discussing. It is reasonable to assume that if we had a president we would have to make provision for his household and give him the wherewithal to do the job. Here, on the other hand, we are dealing with the household expenses of the Queen, her Consort and a whole series of relatives and their children. It is reasonable to assume that if we had a president he would be responsible for maintaining his wife and kids.

I cannot understand how the hon. Member for Bute and North Ayrshire can say that we are being indecent in not voting against increased salaries for Ministers and hon. Members because we voted against certain aspects of the Civil List.

I did not suggest that the hon. Gentleman and some of his hon. Friends were being indecent. I simply said that they were being illogical.

The inflexion of the hon. Gentleman's voice suggested something more than illogical. In any event, that sort of intervention is pointless. I have no objection to hon. Members making debating points.

I understand that Princess Margaret will, if we approve these provisions, have £700 a week tax-free. Does the hon. Member for Bute and North Ayrshire think that certain of the hangers-on to whom I have referred are doing as much work as hon. Members?

As a number of hon. Members are likely to refer to this so-called tax-free provision to the annuitants, it may be helpful if I make it clear that it is tax-free only to the extent to which it is certified by the Treasury as being wholly, necessarily and exclusively expenditure incurred in the carrying out of the duties for which it is paid.

In that case, I invite the hon. Gentleman to submit to the House the tax returns of these people and to indicate at a subsequent date the amounts which are tax free. We do not have those figures.

The evidence states that Princess Margaret at present gets her income completely tax free. It is regarded as 100 per cent. expenses. The Treasury evidence is that all the annuitants vastly exceed in expenses what they now get, and that is why the Government are suggesting these increases.

My hon. Friend's intervention clears up the point.

Then we have the Duke of Gloucester, and provision is made for the children of the Queen and the Duke of Edinburgh. The Duke of Edinburgh makes many statements. According to The Times of last Saturday, he is very interested in the question of the population explosion. As I understand it, he has four children. It is a bit impudent for anyone who has four children to lecture others on the population explosion. We are making enormous provision in the Bill for the children of the Queen and the Duke of Edinburgh. I quote what the Duke says about the population explosion. When talking about the means by which people can be compelled to have fewer children, he said that there were other possible ways: for example, by manipulation of children's allowances. He continued:

"We now subsidise people to have children. You could argue that it might be possible to tax people for having children. This is not to say that it will stop them, but it makes it more expensive. There is a certain amount to be said for this, because a couple with eight children, it is estimated, costs society £30,000 in 10 years, and this is only for education and family allowances. It does not take into account social security."

I notice that the Duke cites a family with eight children, but that is, by far, out of proportion to anything like the general average of a couple's children in Britain. But, even if there were only four children, the Duke cannot complain that it costs £15,000 for education and tax allowances for a family of four. It is almost obscene for this man to be talking in this way when in the very week that he makes the remark we are making provision for his youngest child to have £20,000 a year at the age of 18 and £50,000 a year tax-free when he marries.

I went to my constituency last weekend, having voted against this Civil List and having made a statement as to why I did so—on the ground that I was opposed to the provisions for all the members of the family and the hangers-on that were part and parcel of the households for which we are making provision. I can understand why I did not have a single reproach. Some people, who I do not believe for a moment are associated with my party in the constituency, approached me, saying how much they agreed with me. But how much more would they agree with me when they read obscene remarks of this kind by the Duke of Edinburgh?

That is the reason why I am opposed to the Bill. I am not opposed to making provision for the Queen to do a job which I think she does very well. There may be a valid reason for arguing that we ought to have a president. I may take that point of view on the hereditary principle, because I am opposed to that principle. I am not opposed to making provision for the Queen, but I am opposed to making additional provision for the Duke of Edinburgh, for his entourage and for all the others included in the Civil List. If the Duke of Edinburgh thinks he ought to have four children, he ought to keep them himself.

There cannot be much doubt that in the country as a whole there is widespread opposition to what the Government are proposing in the Bill. I have been very surprised—indeed, astounded—by the content of my mail in the last two or three weeks. It has been overwhelmingly in favour of my opposition to the payments, in general and in particular, that are contained in the legislation now before us. The opposition has come primarily, though not exclusively, from old-age pensioners. I have had it expressed from Harley Street surgeons, from principals of prestigious colleges in London, from retired high-ranking Army officers—whom one would expect to be on the other side—and from hundreds of people from all over the country; indeed, all over the world.

The vast majority have said that it is time that we woke up and time that the Royal Family woke up; that we are living in a society in which, despite whatever Government is in power, we have vast accretions of vulgar wealth at the top of the pile and unspeakable poverty still at the lower end. The people we are discussing today are at the top and will remain at the top.

I have challenged the Press, if the Press does not believe me about the content of my mail, to come to the House tomorrow morning and open my letters. I will stand by the results found by the Press in my postbag. I very much doubt whether there is one hon. Gentleman opposite who dare say that his postbag goes in the opposite direction. Hon. Members opposite will not be receiving the same volume of mail as I am, for obvious reasons, but if they are they must be under no illusion that ordinary working people in this country will accept the kind of proposals put forward in the report.

It is significant that for the first time in history we did not get a unanimous report from the Select Committee. If my right hon. and hon. Friends were consistent, they would go into the Lobby with us tonight, because in Committee they voted against the proposals that are now in the Bill. But they will not. I understand their reasons for not doing so. But we shall get into the Lobby very many more than 27, because I know that some of my hon. Friends have been under great pressure in their constituencies at the weekend because they were not in the Lobby last week voting against these proposals.

The hon. Member for Bute and North Ayrshire (Sir F. Maclean) wanted me to be, I think, a copper-bottomed republican. Perhaps I should declare what I am. I am not a republican in the sense that I actively campaign for a republic, because I know that that would be a forlorn cause at present. But I am a republican in the sense that if every member of the Royal Family were ditched in the Channel tomorrow I would sleep soundly tomorrow night. Many people take the view that it is cowardly to say these things because these individuals cannot defend themselves. But they can and do. Prince Philip does it. He has attacked the newspapers, and he was perfectly entitled to do so. But he and the rest of them must understand that so long as they are on the public payroll they must come in for criticism in this House, and there is nothing to stop them from replying. In fact, I made the proposal in the Select Committee that they should come before us with their accounts and prove their claim. No accounts were ever presented to us by any of those individuals. We heard their spokesmen, the people who live in grace and favour houses, but no individual came to present his or her claim as it should have been presented.

I agree very much with my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin). I was extremely angry when I read the reports of the Duke of Edinburgh's speech in Edinburgh last weekend on the population explosion. He has a perfect right to say what he said, and with some of what he said I agree. There is a population problem, and it can be dealt with by abortion and various other methods, such as family planning. The Duke of Edinburgh says that it can be solved by manipulation of children's allowances. My God! it is manipulation of children's allowances—his children's allowances—that we are talking about. He said that it might be possible to tax people for having children. We have been paying him for having them ever since he had them, and paying very well, and we are to pay a lot more as a result of the proposals before us.

He added that if a couple were so un-public-spirited as to have eight children they would cost £30,000 in 10 years, and his audience were presumably suitably horrified. But that £30,000 is just £5,000 more than the increase he is asking for and we are giving him in a year, because his income is going up from £40,000 a year to £65,000, untaxed. I qualify that statement, because at present the Duke of Edinburgh is the only member of the Royal Family who is allowed by the Inland Revenue 80 per cent. of his income tax-free. It is rather strange, and I cannot understand why that allowance should be 80 per cent. and the allowance of all the others 100 per cent.

There have been repeated references this afternoon to the comparison between Members' salaries and the Measure before us. The biggest salary we debated yesterday was the £20,000-odd a year for the Prime Minister. I think that the Lord Chancellor gets a bit more, but the biggest salary of a Minister in this House is £20,000-odd, of which I think £5,000 is tax-free. But here we are discussing £95,000 for the Queen Mother, all tax-free; £65,000 a year, 80 per cent. of which up to now has been tax-free, for Prince Philip; £35,000 a year tax-free for Princess Margaret; £45,000 a year tax-free for the Duchess of Gloucester.

Then we go through Prince Philip's children. He talks about the children of other families. Let us have a look at his children. Prince Charles, between 1953 and 1970 had garnered to himself £500,000, and I estimate that come the next 20 years he will have gathered at least £5 million or £6 million, and probably double that. Moreover, although he is not yet married, we are making provision for £60,000 a year for his widow. So Prince Philip should be the last one in the world to talk about penalising people for having children. Princess Anne is now in receipt of £6,000 a year, and it is proposed to give her £15,000 a year, an increase of 150 per cent., and £35,000 on marriage. Even if she marries one of those very wealthy Greek businessmen, she will still get £35,000 out of the British Exchequer.

Then we come to the Princes Andrew and Edward, now aged 11 or 12, or whatever they are. They will each get £20,000 every year from the age of 18 until they marry, when they will get £50,000 a year each. No matter what they do, no matter what their intelligence, no matter what they might or might not be, they will get their £50,000. We are going further. We are making provision for the widows of the younger sons of the Duchess of Gloucester. They will get £20,000 a year.

It is that kind of thing that makes the people angry. They do not understand why we should do this. They say, "All right. If we must have a Head of State, let us have a Queen. We will accept her, but, in heaven's name, why do we make all these provisions?"

The matter goes much further than that. We have considered only the members of the Royal Family, but there are also the minions around the Court, the people living in grace-and-favour houses, the Court officials, the former officials, the hangers-on right down the line, all of whom we are providing for. The tenants of the grace and favour houses are selected by the Queen, but we foot the bill. We foot all the bills for the maintenance for all those houses, and they amount to a considerable sum.

This kind of set-up is so typical of what is wrong with our society. We have massive amount of privilege concentrated in too few hands at the top, and at the bottom we have the great mass of underprivileged people, millions of whom do not know where tomorrow's bread is coming from. Despite the advances we have made in the social services, that is still the case.

I have no fear in my constituency. At the weekend the national Press were up in West Fife, grubbing around trying to find opposition to the Member of Parliament. The Sunday Telegraph and the London Evening News wanted to interview my old-age pensioners in Kelty, the former mining community. By God! I wish they had interviewed them. They would not have known what hit them if they had interviewed those old-age pensioners, who were unanimous in supporting me. I knew that. The constituency is virtually unanimous on the matter. I believe that the mass of ordinary people are appalled that we should be spending their time and money on the proposals before us.

I agree with my hon. Friends who have said that the basic problem is not so much money but our society. The people we are dealing with seem to be insensitive to, and far removed from, the problems of ordinary people. A vast gulf has developed between the underprivileged sections of our community and the people in Buckingham Palace and elsewhere. They simply do not understand, and do not want to understand. My right hon. Friend the Member for Coventry, East (Mr. Crossman) was right to say that they had been extremely badly advised in making the proposals before us and then refusing to disclose to us what wealth they have as a direct result of the privileges they have garnered to themselves over the years. I do not think that we have heard the last of this matter.

If the Leader of the House thinks that he will get the Committee stage of the Bill on part of the Wednesday when we come back he is greatly mistaken, because there will be a mass of Amendments down to it. I shall fight the Bill at every stage. Each of these annuities and the global sun itself will come under the most minute scrutiny by my right hon. and hon. Friends and myself, because they deserve no less and people expect it.

My right hon. Friend the Member for Coventry, East quoted the public opinion poll in the Daily Telegraph yesterday. There was a public opinion poll a few years ago which was published in a book in, I think, 1966. That public opinion poll, even before we had the considerable switch of public opinion which has been evident in the last few months, showed that among the younger people of this country 36 per cent. of those under 44 were Republican in sentiment. The younger generation is treating the Monarchy with either cynicism or contempt or a mixture of both. This House would be ill-advised to ignore the feelings of those people and the millions whom we still keep under-privileged and at the same time preserve those people at the top and their advisers who simply do not understand what is happening.

I, along with a number of other hon. Members, deployed my arguments in favour of the Government's scheme and against that put forward by the right hon. Member for Sowerby (Mr. Houghton) on behalf of the Opposition in the last debate. Therefore, I do not wish to go over those grounds again.

I do not believe that the case put forward in favour of the Government's proposals has been affected by any of the arguments which we have heard today or last week. The scheme is reasonable; it takes account of the realities of the situation. I concede at once that the scheme put forward by the right hon. Member for Sowerby has much to be said for it, but the objections outweigh its possible utility.

I want to devote my few minutes this afternoon to the arguments, if I may so dignify them, put forward by the hon. Member for Fife, West (Mr. William Hamilton) and his supporters, or, if he will allow me to say so, his hangers-on, his fringe, or, if he does not like that, his court, who have been here in force today encouraged by the lead given them on the last occasion.

I do not take the view that institutions in this country should not be criticised. I accept absolutely that the Monarchy should be open to discussion and criticism just as both Houses of Parliament are. I do not argue against that; but I do argue that the criticism of the Monarchy, just as of this House, should be fair and temperate, not unfair and prejudiced.

Why?

Because every citizen of this country, whether he be a member of the Royal Family or not, has a right to his good name. No citizen, whatever his status, should be insulted in this House under the cloak of privilege. That is the answer to the hon. Gentleman.

The hon. Member for Fife, West said that if every member of the Royal Family was ditched in the Channel today he would sleep soundly. The objection to that remark is not that it is about a member of the Royal Family but that such a remark should not be made about any human being.

The hon. Member for Fife, West said that he was not against the institution of the Monarchy at the moment. That may be so, but the contributions which he made both today and in the last debate weaken our institutions; they weaken the Monarchy and this House.

We have heard a lot today about the privileged tax position of the Royal Family. It is important to stress again, as did my hon. Friend the Financial Secretary, that the only tax exemptions which exist as of right are those for the Queen on her income and the Prince of Wales for the revenues from the Duchy of Lancaster and Cornwall. All other members of the Royal Family are in the position of any other citizen in that they have to justify their expenditure if it is to be tax-free. So, if there is to be criticism on this ground by the hon. Member for Fife, West, it must be directed against the tax officials if he thinks that they are allowing expenses which should not be allowed.

The point made that 80 per cent. of the income has in the past been allowed against expenses for tax purposes is an argument for, not against, alterations in the Civil List. But we have no reason to believe that those figures will necessarily be the same with the increases which will be voted if the Bill achieves the support of the House tonight.

In order to get the record straight, may I point out that the certification of the amount of the income to be admitted as tax exemption is made by the Permanent Secretary to the Treasury, not by the Inland Revenue?

I am grateful to the right hon. Gentleman. However, that does not affect the substance of my point. [HON. MEMBERS: "Oh."] The criticism should then be directed against the Permanent Secretary to the Treasury instead of the officials of the Inland Revenue. My point was that the criticism should not be directed against members of the Royal Family. I am grateful for that support.

The Queen's tax position has been mentioned continually during the debate. It is almost an obsession with the right hon. Member for Coventry, East (Mr. Crossman). This point appears again and again not only in his speeches in this House but in the paper which he edits. He is obsessed with the Queen's tax position. I do not know why. It may be something to do with the general philosophy of the Left which is so much concerned with tax. It is an obsession with the right hon. Gentleman, but it has nothing to do with the argument deployed for the Civil List.

Everything.

It may be an important issue, but it is separate. I do not dispute that here is an argument for saying that the Crown should be taxed—I think that it would create a constitutional anomaly, but that does not put an end to the question—but it is nothing to do with this issue about providing the necessary money for the functions which Parliament and the nation expect the Queen to carry out. That is a matter separate from the tax issue.

Another theme deployed by hon. Members opposite has been criticism not of the Queen herself but of her family. We have had various references to members of the Queen's family, nearly all of them uncomplimentary. We have heard of the "hangers-on" and "parasites", which was the word used by the hon. Member for Fife, West. That does not even have the merit of originality. It was used in this House in the year 1910. It is none the worse for that, but the Monarchy survived that criticism as it will survive the criticism made 60 years later. I say to the hon. Gentleman that he got off rather lightly on this occasion because Erskine May records what happened to those who made disrespectful references in the past about members of the Royal Family. It says:

"Members have not only been called to order for such offences, but have been reprimanded, committed to the custody of the Serjeant or even sent to the Tower."

I turn to the question of the Queen Mother. Here I wish to make an important and serious point because she was referred to by the hon. Gentleman in language that was contemptuous and unfair and which caused offence not only inside this House but outside it as well. I will tell him that the reason why the House and, I believe, the country are prepared to be generous to the Queen Mother has nothing to do with the fact that she is "Princess Margaret's old Mum" but because she is the widow of King George VI, who presided over this country at the moment of our greatest peril and gave a lead to the nation which was invaluable in repelling the attacks of our enemies. That is why the Queen Mother is respected and popular. That is why I do not believe that there is a person in this country, apart from the hon. Gentleman, who grudges her a reasonable income.

I turn now to the references to Princess Margaret. The hon. Gentleman's remarks about her are only the latest instalment of a long vendetta that he has waged against her. I remember that in 1966, when she paid her goodwill visit to the United States, she was attacked by the hon. Gentleman, and he has been attacking her ever since her marriage. But his attacks, although he may feel them to be justified, are not supported by any evidence.

I do not wish to go into this matter in detail, but I want to take up one point that the hon. Gentleman mentioned—that the taxpayer had provided £80,000 for Princess Margaret's house in Kensington Palace. That is not strictly accurate. My figures are that £65,000 was provided from the Ministry of Works and that £20,000 was provided from the Queen's Privy Purse, her own private income. What happened to that money is as important as the granting of it. That is what the hon. Gentleman never tells us.

In fact, that wing of Kensington Palace—a very valuable wing to the nation in that it was designed by Wren and by Kent—was saved by this money from destruction. The money was spent on structural repairs to the Palace. Not a penny of it was spent on the internal furnishings, et cetera, of the Palace. So the residuary beneficiaries of the expenditure of that money are not going to be Princess Margaret and her husband, because long after they have left that house it will be of value to the nation, and it is the nation which will be the ultimate beneficiary.

The figures I quoted were given in Written Answers to Parliamentary Questions asked by me. It is the case that we have spent £80,000 of public money on housing Princess Margaret and her family. The facts are on the record. Any hon. Member can check them in HANSARD. I think that I mentioned the Written Answers in my minority report. The fact that Kensington Palace is a palace of historic value is neither here nor there. If and when Princess Margaret gets out of the house, it will be occupied by another grace and favour resident.

That lies in the realm not of fact but of prophecy. We do not know to what use the house will be put in future. What I am anxious to counter is the impression that is created by this kind of wild statement, that somehow this money has been personally lavished on Princess Margaret, and the impression that is being given that the expenses of the house, such as rates, are being borne by the taxpayer. That is why it has been worth my going into some detail.

Another major point made by the hon. Gentleman and by the right hon. Member for Coventry, East is that the Monarchy forms the apex of the class structure and increases snobbery and class distinction. The truth is quite the opposite. The reason is that the highest position in society, when there is an hereditary Monarchy, is no longer open to competition. It is already occupied, so it is taken right out of the struggle for distinction and power and wealth which is what characterises societies. So far from increasing class envy, and so on, the existence of hereditary Monarchy diminishes it.

The second point that the hon. Gentleman and the right hon. Gentleman keep going on about is the Court. It is a useful word for them. They use it as though we had some kind of court in the 18th century manner still in existence. It conjures up all those pictures of flunkeys and women of the bedchamber, about which the hon. Gentleman had some fun the other day. I did not object to that part of his speech. Indeed, I was rather amused, although I did my best not to show that I was laughing at some of his jokes on that point.

But the view of the hon. Gentleman on the Court does not correspond to reality. We have not got a court in the true sense of the word at all. We have not got a court which is the centre of a glittering social life. That exists only in the vivid imagination of the hon. Gentleman. The Court is extremely functional, a very small number of paid officials who work much more efficiently than many bureaucrats in Ministries. We have garden parties which are not the resort of the wealthy and the privileged but which are open, unlike the Ritz Hotel, to everyone on merit. All those who serve in local government or in voluntary services have available to them as one of their rewards an invitation to a Royal garden party. We all know that. Even we are invited and occasionally go. That is the reality. The Court has nothing in common with the vision of wealth and privilege lording it over the rest of the nation which is the picture conjured up by the hon. Gentleman.

The image of the Court is quite different. The atmosphere is different. It is domestic. It is the image of a family. That is the image which the Royal Family projects. I believe that that is extremely important. It is the image of a very happy family life, and at a time not, I think, of moral decline but of great moral uncertainty in the nation it is a real asset to have a Royal Family which helps the morality of the country by the example it sets. That is something that is intangible. How can one measure it against the few thousand pounds which is all that is involved in supporting other members of the Royal Family?

Mention has been made of the people surrounding the Queen. Surely she has a right to choose her own friends. That is a matter of her private life. It cannot be a matter of concern for the House of Commons if the Queen chooses to go racing. That is up to her. It is certainly the sport of kings, but it is very popular with the people as well. I think that the vast majority of people are probably much more interested in racing than they are in the House of Commons.

No wonder.

The hon. Gentleman speaks for himself. The people will be able to judge in due course, if our debates are televised, who is worth watching and who is not.

The right hon. Gentleman was quite inaccurate when he said that instructions had been given by the Queen to her servants not to answer questions about her private income. The right hon. Gentleman got quite indignant about that, as though he were writing a leader in the New Statesman. No instructions in fact were given. The reply of the officials to questions put to them was that they did not know. They do not know the extent of the Queen's private income, any more than I know the extent of the private income of the right hon. Gentleman or he knows mine. That is not within the knowledge of these officials, and it is therefore ridiculous to say that they were acting under instructions from the Palace. These matters come within the purview of the Queen's private life.

I accept that. My point was that the Committee sought information on this point. The Committee did not think it proper to summon the Queen. The Committee sought information via the official. The official who was asked to get the information came back and said that he did not know. I was not being wild in concluding that he did not know because he had not been told by the Queen.

I do not think that that really adds to or subtracts anything from the argument. It is a new point to reproach the Committee for not summoning the Queen.

It was a deliberate attempt to evade an issue. I put it fairly.

I said that the officials had been instructed not to say. The officials, when they went back to the Queen and said that the Committee wished to ask questions about her income, were told to reply that the information was not available. It is no good hedging this around. The Queen refused to have the information presented to the Committee. If, as a result of this snobbistic evasiveness, I am forced to, I may have to spell it out. The hon. Gentleman is trying to cloak the issue and mystify the House. The fact is that the Crown refused the information to the Committee.

I am not trying to cloak the issue or mystify anyone. I am merely reciting the facts of the situation. The fact is that the Palace officials did not have these matters within their knowledge.

Leaving that point aside, even if Her Majesty refused to reveal this information—

She did refuse.

I am conceding half the right hon. Gentleman's case. He must not attack me further. He must allow me to retain some remnant of my own case. I take the view that even if Her Majesty refused to reveal that information she was entitled to do so because that issue is separate from that of whether she should be given enough money to discharge the functions which Parliament and the nation require her to carry out.

I now turn to the last person whom I want to mention, and that is the Duke of Edinburgh, Prince Philip. He has been criticised by the right hon. Member for Coventry, East for drawing a salary on which it was suggested he might be able to save something. The right hon. Gentleman made great play of the money available to the Queen, but the Queen and Prince Philip are different people, and it is very well known in the country that the Duke of Edinburgh does not have any money of his own. Because of his Royal position he is precluded from taking up the kind of salaried occupation which undoubtedly he could command were he not a member of the Royal Family. He devotes a lot of time to his public duties. He carried out more than 800 engagements last year, and it is therefore not unreasonable that he should be paid a reasonable salary for carrying out that important function.

The right hon. Member for Coventry, East was indignant because somebody said that Prince Philip should be able to save somthing out of what he received from the Civil List. That seems to be a reasonable aspiration, and something which commends him to the mass of people, rather than separates him from them, since that is an ambition shared by everyone. People want to save money to put something of their own on one side. That is the point. The Duke of Edinburgh wishes not to be dependent on his wife's money. That is a view taken by most men. He wishes to have something of his own. That is a matter not for condemnation but for commendation.

That is not to say that I agree with everything that Prince Philip says. I was as dismayed as some hon. Gentlemen opposite have professed to be by his speech about family allowances.

And about abortions.

I was coming to that. I was following the ecclesiastical order of precedence, with the most powerful point at the end. I disagreed even more strongly with his remarks on abortion, and it is right that he should be criticised for them. That is in the public forum. The point about the Duke of Edinburgh is that he can speak his mind in public, whereas the Queen cannot. We do not want the Duke of Edinburgh speaking his mind every day, but if the right to speak his mind in public is used sparingly it can be of great service to the Monarchy and of great help to the country.

I hope that my few remarks have helped to dispose of some of the misconceptions which have been disseminated in the House today. That is not to say that it will get rid of the prejudices of some hon. Gentlemen opposite, because their attitude is not rational but emotional, and I reflect on what strange emotions they are. The other day when my hon. Friend the Member for Horsham (Mr. Hordern) made a remark, of which I did not particularly approve, about Senator Kennedy, there was a tremendous uproar from the benches opposite. But what is Senator Kennedy to us? Hon. Gentlemen opposite can sit there with sang froid and listen to attacks on the Royal Family which belong to us, but condemn remarks about Senator Kennedy who is nothing to do with this country. I reflect on the double standards which one so often gets from hon. Gentlemen opposite, from those who can hand it out but can never take it themselves.

I hope that the majority of people in this country whose minds are not prejudiced on this subject will be helped by the debate to make up their minds strictly on the merits of the case. It is undoubtedly true that those merits amply support the proposals in the Bill.

The hon. Member for Chelmsford (Mr. St. John-Stevas) criticised hon. Members on this side of the House for speaking from emotion rather than from the head and with reason, but the fact is that when one talks of the institution of the Monarchy it is only the emotions that are engaged. There can be no completely logical or rational defence of a hereditary monarchy, whether it is one of the absolute variety or a constitutional monarchy.

In so far as the Monarchy plays a rôle in our political lives, it plays that rôle because it is the focal point of feeling, the focal point of almost totally irrational feeling, and I do not use the word "irrational" in a pejorative sense. We are therefore talking about feelings. We are talking about emotion. We are talking about an institution which bases itself on feelings and emotions, and it is right and proper that every institution in the country should be subject to close examination in this Chamber, in the Committee rooms and in public prints, because good institutions survive such examination.

I was not present at the time, but I recall that when the Monarchy might be said to have been at its strongest, when the British Navy patrolled the entire world and when about half of the world's surface was coloured red on children's maps, the Monarchy itself, either directly or indirectly, was subjected both in this House and in the public prints to the most savage barrage of criticism that it has received since the middle of the seventeenth century.

I refer to the attacks that were printed in such journals as Reynolds News about the Prince Consort of the time, possibly the ablest Monarch who ever sat on a British Throne without in fact sitting on a British Throne, who had a salutary effect on British public life during the middle of the nineteenth century. But there were also attacks on Queen Victoria herself, and some of them went far beyond anything that has ever been said by my hon. Friend the Member for Fife, West (Mr. William Hamilton) and certainly far beyond anything printed by my right hon. Friend the Member for Coventry, East (Mr. Crossman), the Editor of the New Statesman. So we must not imagine that a useful if theatrical institution is in any way damaged in its usefulness to the country by the kind of criticism which was expressed in the Select Committee and has been expressed in this House.

I must concede one point: that a monarchy, whether constitutional or otherwise, can really survive only if there is a mystique surrounding it; and the hon. Member for Chelmsford certainly does his best on every possible occasion to add to the mystique which surrounds our existing Monarchy. He does it so well that sometimes I think I am listening to a defence of the House of Stuart instead of the House of Windsor. He must agree, however, that it is the mystique, mystery and magic that surrounds this family that makes it a part of our body politic. But once that family is brought into the arena of public entertainment by the electronic device on which the hon. Gentleman performs so frequently, which we know as the goggle box, the mystique is steadily demolished. It is that kind of erosion of mystique which is really damaging the Royal House rather than legitimate criticisms in this Chamber about the way in which the finances of the Royal House are conducted.

If one wants to examine the Monarchy in its world rôle, as to whether or not it confers prestige on this country, one had better travel around Europe, not as a member of one of these high-powered delegations to Western European Union, the Council of Europe or those other odd bodies of which I am not considered suitable to be a member, but rather as a good citizen of Europe, reading the magazines at railway bookstalls. Those who do so, particularly in France, realise that the Monarchy is treated with conspicuous disrespect and far more scandal is printed, nine-tenths of which is obviously lies. Far more is printed in French illustrated journals about the Royal Family than is printed in a magazine like Confidential in the United States or about this or that ornament of the silver screen.

I believe this kind of thing, which detracts both from the mystique and the prestige of the Monarchy, can be directly related to the decision to bring the Monarchy itself into the arena of public entertainment. Those who advised that course of action, who advised the making of the film which tried to show that the Royal Family was just another ordinary family after all, buying mint humbugs in the village shop and toasting the catch by the riverside, gave very bad advice indeed, because when the mystique goes the magic of the monarchy goes and the rôle that monarchy can play in our constitutional life also begins to erode.

I believe we are talking of an institution which, whatever its value in the past and its potential value in the future, is at the moment suffering a serious erosion in public esteem which has nothing whatever to do with any speeches or observations made by my hon. Friend the Member for Fife, West. I believe that like every other institution, particularly an institution concerned with prestige, it must be closely examined. We examine or try to examine the finances of Concorde, a prestige project. I believe we are equally right both to examine the way in which the Royal House is financed and to make suggestions about alternative methods of financing the Royal functions without being accused, as we have in so many words, of indulging in a form of diluted treason.

I myself theoretically happen to be a republican. I am in a minority, I believe, in the country and in this House. When I took the oath on becoming a Member, I gave that oath to the Head of State and I have observed it; and in defending this House and the Government of the day in foreign parts over foreign broadcasting organisations I have gone as near to the edge of perjury as it is possible for any person to go. I have occasionally defended the Prime Minister. It is not a habit I intend to encourage in this House, but I have done so abroad because he is, after all. the First Minister of the Crown and I feel that having given that oath to the Head of State, I must make as good a case as I possibly can before a foreign audience for the conduct of the Government of the day. As I say, it carries me to the edges of perjury, but I am reluctant to stand accused of perjury in this Chamber.

The alternative suggestion that was put forward by my right hon. Friend the Member for Sowerby (Mr. Houghton) would, I believe, have removed many of the Royal functions from the realm of controversy into which they have been drawn. I repeat what my hon. Friend the Member for Fife, West said in an earlier debate. He was the one member of the Select Committee who actually advocated a pay rise for the Queen herself. Nobody denies that the Queen works hard. Nobody denies that other members of the Royal Family, most notably Princess Alexandra, also work hard and perform such functions as our constitution requires. But equally there is a rising wave of criticism, which one meets as one travels around the country, about the nature of the work done by other members of the Royal Family. I will not go through the list of names. I will certainly not go through the list of addresses.

What concerns me are the frequent occasions when the Royal Family has moved away from its symbolic, dignified rôle—I use the language of Bagehot to catch the hon. Gentleman's attention—and begins to play a quasi-political rôle in relation to this House and to the Members who sit in it. I was reminded of a recent article in the Sunday Times colour supplement by Mr. Nicholas Tomalin who actually forecast a revival of interest in and affection for the Monarchy, although he himself, the last time I saw him, was as good a Radical as I have ever met in the field of journalism. He pointed to an occasion in 1967 when the late Emrys Hughes sought to bring forward a Bill in this House to abolish hereditary titles, and Buckingham Palace made its objections to the then Prime Minister in no uncertain terms.

We debated that Bill and we had a very merry time in doing so. Mr. Emrys Hughes said it would get through the House of Lords since he had enough unemployed miners in his constituency to be temporarily ennobled for the occasion to get it through the other place; and I proclaim my affection for all aristocrats provided that, like Lord Emsworth, they devote themselves to pigs and are opposed to the Common Market.

Although we had a good deal of fun in the course of that debate, very strong objection was registered from Buckingham Palace, which again refused information about private fortunes to a Select Committee of this House. This, again, in the negative sense, is an interference with political processes which have been the prerogative and responsibility of this House ever since the civil war of the 1640s and the final outcome in 1688. That is a form of indirect interference with political processes that belong exclusively and properly to this House and a departure from the mystical, dignified and theatrical rôle that ought to be played by the Royal Family. Again I find myself, without waving the tricolour, completely at one with my hon. Friend the Member for Fife, West.

I do not feel that the argument that certain Royal properties have historic value carries much weight. There are other privately-owned establishments of equal and even greater architectural value to which the same argument could be applied. Why, for instance, do we not make provision in the Civil List for the Duke of Bedford, so that Woburn Abbey can be maintained in the style to which the lions have grown accustomed? Why cannot certain other smaller historic places also be inhabited and the inhabitants enabled to live there on moneys granted from the Civil List?

I believe that those in this House who are ultra-monarchist, by resisting any criticism and resolutely opposing every alternative suggestion for financing the Royal Household, are doing the greatest disservice to the cause which they advocate. If I were a member of the Royal Family—and some people say I have the face for it if not the background—gazing upon the hon. Member for Chelmsford, I would think that with friends like him I should not need enemies like my hon. Friend the Member for Fife, West, because one can overdo it.

The Monarchy has been defended—and this is the best defence that can be put forward for it—as being a source of stability, something stable and unchanging in the middle of a swirling turbulence of social change. A good defence for the Monarchy can be presented in those terms. I recall in 1946 and 1947, when many citizens thought that the then Labour Government were not actually led by Mr. Attlee but by a resurrected Lenin and a resurrected Trotsky, the fact that the King was able to sit in Buckingham Palace gave a certain confidence to people who might otherwise have taken to the hills. I am not talking about the hills of Wales or Scotland but perhaps such hills as exist in South Africa. Rhodesia or other refuges from the Welfare State.

Nevertheless, this defence of the Monarchy begins to erode when we consider some of the arguments that have been presented against the entirely reasonable proposals put forward by my right hon. Friend the Member for Sowerby and various other hon. Members on this side of the House. An adamant refusal to disclose to a Select Committee of this House the exact state of the private finances of the Royal Family is negative interference and it brings the Royal Family into a political arena in which, according to Bagehot—I repeat the name to attract the attention of the hon. Member for Chelmsford—it has no place whatever.

Since it is in that arena, since it now has to be discussed in the same way as we discuss the disposal of any other large amounts of taxpayers' money, although I had not the slightest intention of taking part in this debate I intend to vote with my hon. Friend the Member for Fife, West when the Division is called because those who have impelled us to force this Division have rendered a disservice to the Royal House. In this modern age, if an institution is to be stable in the middle of the swirling turbulence of change its finances should be exposed to the same scrutiny as those of any other great Department of State.

May I say to the hon. Member for Bute and North Ayrshire (Sir F. Maclean), who said that we should all declare ourselves, that I declared myself in the debate last week. My views closely follow those of my hon. Friends the Members for Ilkeston (Mr. Raymond Fletcher) and Fife, West (Mr. William Hamilton) in that I cannot accept the hereditary principle. At the same time I recognise that the abolition of the Monarchy is in no way the issue.

I did not intend to speak again, but I have been stimulated to do so by the attitude of the Leader of the House—I am sorry he is not present—when he suggested that I had been rather rude to him in calling him a weary Willie who had been waffling. I cite as evidence the subsequent remarks of my right hon. Friend the Member for Coventry, East (Mr. Crossman) who pointed out that in our previous debate the Leader of the House spent 20 minutes saying nothing and five minutes this afternoon saying nothing even better. That is why, if I was a little rude to the Leader of the House, I cannot really apologise.

I want to come to the single issue of principle—why the Queen enjoys a tax-free income. The Leader of the House has done a disservice to the House by dodging this issue. He spoke in the recent debate about being described as a slow and ponderous sheepdog, but to me his performance was more like the aimless wandering of a sheep. All he did was to refer us to the speech of his right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who on this point said:

"Historically it has been thought that, as taxes are raised in the name … of the Crown, there would be an element of the ludicrous in imposing them on the wearer of the Crown."—[OFFICIAL REPORT, 14th December. 1971; Vol. 828, c. 318.]

Why would it be ludicrous? We are told that the Queen has to pay selective employment tax, and I imagine that even right hon. Gentlemen on the Government side of the House would not suggest that they are abolishing S.E.T. to suit the Royal Family. If the Queen has to pay that tax, why is it ludicrous for her to pay other taxes?

The right hon. Member for Kingston-upon-Thames went on to say that this had been accepted for 200 years and the substance of his argument was that we should, therefore, go on accepting it. The argument that progress and change cannot be applied here seems a strange one, particularly when it is advanced by someone who is going to an industry which is in need of forward-looking and progressive leadership with not even the ideas of yesterday but rather the ideas of the day before yesterday.

I come back to the central point still hopeful that we shall have an explanation. The only answer we get is that this is a separate issue. Neither I nor any of my hon. Friends believes that it is a separate issue; it is intermingled and intertwined inextricably. If it is a separate issue, how are hon. Members to raise it? What occasion could be more appropriate for raising the question of tax-free income than this debate?

I cannot possibly go along with the Bill and I shall vote tonight as I did last week. The Bill is designed to preserve and enshrine privilege to a degree which is unnecessary and unwanted by a large section of the public, as has been demonstrated. For me it is a thoroughly distasteful Measure.

The debate this afternoon has inevitably been a somewhat anticlimatic occasion following as it does so soon after the debate we had seven days ago.

The right hon. Member for Coventry, East (Mr. Crossman) accused us of trying to conceal the issue. If that was our intention we have set about it in a strange way. I remind the right hon. Gentleman that we have before us the first Select Committee report in which has been published as an appendix almost the whole of the oral evidence. This debate and the debate which took place last Tuesday have on that account been a good deal more relevant and more informed than have been similar debates on previous occasions.

In replying to the debate, which I intend to do relatively briefly, I should like to answer some of the points which have been raised. It might be helpful to remind the House of the main innovations and changes embodied in the Bill. A study of the history of the Royal finances shows that there has been a continuous process of change over the centuries and it would greatly surprise me if the Bill represented the end of that process. Nevertheless it embodies some major innovations and improvements and it is right we should recognise what they are.

The most important innovation in Clauses 5 and 6 is the provision for review and report and the new power of the Treasury to increase the sums specified in the Bill by order. One of the documents put before the Select Committee was a memorandum by the Chancellor of the Exchequer, which is set out in Appendix I to the evidence, in which the suggestion was made that provision should be made for the Civil List by a fixed sum plus annual grants-in-aid paid in supplementation of the fixed sum to take account of the increases in cost. It was recognised that some new provision was necessary simply to provide for the effects of inflation. Between 1952 and 1971 prices in the Civil List type of expenditure have increased by just over 4 per cent. a year and in the last two years by 11 per cent. per year.

In the event the proposal of my right hon. Friend did not commend itself to the Select Committee, mainly because it would have involved an annual scrutiny of Civil List expenditure and annual action by Parliament, and in the Committee's words it was undesirable

"to undermine the basic principle on which, on all previous occasions, Civil List provision had been made."

So we have what is, in a sense, a compromise of a combination of the 1952 formula—involving a fixed sum, too large in the earlier years but too small for the later years and intended to be averaged—plus the provision of a review by the Royal Trustees and for report to Parliament at least every 10 years.

Then there is power—I ask the House to note that the phrase in the Clause is "The Treasury may"—to increase the sums in the Bill. The Bill follows exactly the Select Committee's recommendations and reconciles the two needs. It avoids annual exposure, which most hon. Members would regard as undesirable, while at the same time making provision for inflation. I recognise that it does not achieve the objectives sought by the right hon. Member for Sowerby (Mr. Houghton), but those were rejected last week by the House with a convincing majority of 37 votes—and, so far as I can see, the only Liberal who voted registered his vote with the Opposition. It can be commended to the House as a reasonable and practicable compromise which meets the requirements of the situation.

The second major change is the fact that on this occasion there is no provision for the Privy Purse. In the Gracious Message Her Majesty indicated that she was content to forgo the provision made by Parliament for her Privy Purse. Thus, the effect is to abolish the provision of £63,000 in Class I and Class IV of the Civil List.

The third change refers to the contributions to the expenses of those members of the Royal Family who are not in receipt of specific annuities. In the 1952 Act the Queen's Civil List expenditure under Class V included provision of up to £25,000. Under this Bill the provision is taken out of the Queen's List and instead there is specific provision of £60,000 payable to the Royal Trustees for the same purpose.

There is quite a list of members of the Royal Family whose expenses of their duties pertaining to the Royal Family are helped by contribution under this head. It includes the Duke and Duchess of Kent and Princess Alexandra. I emphasise that these sums are paid in reimbursement of expenses actually incurred and further details are set out in Statement IV attached to the Select Committee's report.

The fourth change is a consequence of the last two I have mentioned, namely, that as a result of taking these items out of the Queen's Civil List the Committee was able to recommend a single annual figure for the Queen's Civil List to cover salaries and expenses of the Royal Household, Royal Bounty, alms and special services.

The fifth change is where provision is now to be made for widows of younger sons of Monarchs, including provision for the Duchess of Gloucester should she survive the Duke. This reflects the difficulties experienced by the Princes Marina following the death of the late Duke of Kent. Those are the main innovations in the Bill.

The other main purpose is to increase the individual amounts provided for the Queen's Civil List and for the direct annuitants. I remind the House that the annuities are prima facie taxable but under Section 191 of the Income Tax Act, 1970, the Treasury, as with a number of other public offices, has power to specify an amount deductible as expenses under exactly the same rules as apply to ordinary taxpayers. That money should be "wholly, exclusively and necessarily" incurred in the performance of the duties.

There is some suggestion that because this was done by a distinguished civil servant, the Permanent Secretary to the Treasury, somehow this was not as thoroughly or as rigorously examined as would have happened if it had been done by the Inland Revenue. I regard that as an unworthy suggestion. The fact is that the Treasury has used its powers in three cases to exempt the whole amount, in other cases 80 per cent. and in another case almost 90 per cent. It will, of course, be open to any annuitant to approach the Treasury for a review of the sums so exempted.

Some hon. Members, including the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), raised the question of Her Majesty's private wealth. My hon. Friend the Member for Chelmsford (Mr. St. John-Stevas) put the matter succinctly and correctly by saying that this is not relevant to the provision made in the Bill. Nobody doubts that the sums which have been paid under the Civil List since 1952 have been expended properly on public purposes of the Monarchy. There has never been any argument that the increased cost, for which provision is sought to be made in the Bill, will equally be spent on the proper provision of the functions of the Monarchy. What the Queen may have outside that is quite irrelevant to the provision that we make in this House. As my hon. Friend the hon. Member for Bute and North Ayrshire (Sir F. Maclean) said, those who vote against the Bill will be denying the Monarchy the wherewithal to do the job.

Is the hon. Gentleman saying that it is irrelevant if the Queen's capital increases by £5 million or perhaps £10 million during her reign. Is not this relevant? It is, after all, tax-free.

I am saying that it is irrelevant to the provision we make under the Bill for the performance of the Royal functions. The hon. Member for Easing-ton (Mr. Dormand) and others of his hon. Friends said that what was being provided for the Queen was all right but they objected to what was being provided for the other members of the Royal Family; and there were the usual derogatory phrases about the hangers-on, parasites and all the rest of it. I do not see how anybody who has studied the Select Committee report could possibly hold that view.

Paragraph 18 of the report makes it very clear that the public duties that are performed by members of the Royal Family are substantial and are increasing. It says:

"The support given to Her Majesty in this way includes the carrying out of engagements which in some cases run into many hundreds a year and which in total amounted to over 1,600 in 1970."

What engagements are carried out by the younger sons of the Royal Family who have not yet reached the age of 18 but for whom provision is made?

They do not get annuities until they are 18. However, as the hon. Gentleman will recognise and as I can confirm, having been present at a number of functions attended by Princess Anne, they begin to attend public functions at or even before the age of 18.

Perhaps I might refer hon. Members to Annex III, where in 20 pages are listed overseas engagements undertaken by the Royal Family, a very large number of them by members other than the Queen. It is a monstrous calumny to suggest that the sums paid to these other members of the Royal Family are totally without justification.

The hon. Gentleman will recall that my right hon. Friend the Member for Birmingham, Stechford (Mr, Roy Jenkins) and I both suggested that if there were a case for any payment being made to the Royals, it should be paid out of the untaxed private fortune of the Queen and not met by the taxpayer. The hon. Gentleman has not yet replied to that suggestion.

I am sorry if I have not replied to it. I thought that I had been justifying the provision of money in the Bill for duties carried out by the Monarchy. I do not understand why it is suggested that these people, who are very much in demand by organisations and bodies throughout the world and who bring with them some of the reflected aura of the Monarch herself, should have their necessary expenses met by the Queen out of her private fortune.

My hon. Friend the Member for Bute and North Ayrshire made a very valid point when he referred to the efficiency audits which have been carried out on the Civil List. The figures are shown in Appendix 5 on page 93 of the report. In 1953 the members of the staff of the Royal Household numbered 530. By 1970, despite a greatly increased programme, they had been reduced to 458—a reduction of 72 or 13½ per cent.

The hon. Member for Easington, like the hon. Member for Ilkeston (Mr. Raymond Fletcher), described himself as a copper-bottomed republican. I have more respect for those who describe themselves as republicans than for those who claim to be Royalists but who indulge in ill-disposed sniping at the Monarchy.

The hon. Gentleman suggested that we should never again have a Select Committee. He is quite wrong. As my right hon. Friend the Leader of the House said today, the provision made by the Bill lasts for the present reign plus six months beyond and it will be for Parliament then to decide how the new provisions should be made and to decide what procedure to follow. In the meantime we shall have reports from the Royal Trustees and, if the then Government decide, an order which will be debatable in the House.

The hon. Gentleman also said that the suggestion about the Royal yacht being used in time of war as a hospital ship was somehow bogus. I refer him to pages 100 to 102 of the report, where the Committee was given a great deal of evidence about the Royal yacht. In paragraph 14, we read:

"The Britannia has the speed and special facilities which would ease her conversion to become a hospital ship in time of war. The ship is designed to fill this rôle and an approved Naval Staff Requirement is in existence which covers the conversion to accommodate about 200 casualties at an advance base."

This is a short but essential Bill. It is essential because, if we wish to retain the Monarchy—and there is no evidence of any substantial body of opinion which shares the Republican views of some hon. Members opposite—if we wish to maintain what the Select Committee called

"the scale and style of Royal occasions and appearances"—

and again there is no widespread evidence of a desire that this should not happen—then, if we are to will the ends, we must be ready to will the means. The Bill provides for the means in strict accordance with the recommendations of the Select Committee. As such, I commend it to right hon. and hon. Members in the hope that it will be given a Second Reading.

Before the hon. Gentleman sits down, may I point out the considerable discrimination between the sexes? Can the hon. Gentleman explain why the Select Committee came to the conclusion in paragraph 33 of its report that the younger sons at age 18 and before marriage should receive £20,000 but that daughters at age

The Committee gave no reasons for discriminating, and I am not empowered to speak on its behalf. Those were the provisions considered appropriate, presumably on the basis that the expenditure of daughters is, on the whole. probably less than the expenditure expected to be borne by sons.

We shall have an opportunity to debate the individual figures in Committee. The hon. Member for Fife, West (Mr. William Hamilton) has given ample warning that that is what he intends to do. For the moment we are debating the principle of the Civil List and the Bill is based strictly on the Recommendations of the Select Committee. I hope that the House will give it a Second Reading.

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

All parts of the House are agreed to the need for efficient ports. If we cannot get our goods quickly and efficiently on and off ships, this country cannot hope to prosper. Today with the realignment of international currencies and the imminence of British entry into the Common Market and the prospect of a revival of our own economic activity, we may well be crossing the threshold to a period of trade expansion. As this happens the amount of goods passing through our ports is likely to grow substantially, making it all the more important to put our ports industry on to a sound financial footing. The Bill is designed to do this. The reasons for it can be stated simply.

The constitutions and financing methods of many of our ports are out of date. Their earnings are too low. Some hon. Members lay the blame for this on poor managements, others on industrial strife. To both these causes must be added the problems of obsolescence and rapid changes in technology and trade patterns. Excessive reliance on short-term borrowing has also meant that some ports have had to meet, or roll over, their maturing debt in unfavourable market conditions.

Faced with this situation, my right hon. Friend's policy is not one of caution or of directing nationalisation. Nor is it one of subsidy. It is reform and reinvigoration, based on self-reliance and a keen regard for reality. To this end he has strengthened the National Ports Council so that in collaboration with port authorities it can play an active part in establishing realistic financial targets and strengthening managements. For their part the ports themselves must put their own house in order. They have raised their charges to reflect more nearly the cost of doing business. They need also to mount a vigorous attack on costs, to rationalise existing facilities and to realise assets that are no longer required.

I am glad to say that this more realistic policy has produced a welcome turn in the tide. All the indications are that the 1971 results, for nearly all the major ports, will show a substantial improvement over 1970. Confidence is reviving. Here and there too the House will have noticed an improvement in labour relations. The Bill is designed to keep up and extend the momentum of reviving confidence in our ports. It gives effect to the proposals set out in the White Paper "Financial Policy for Ports" published at the end of September and is thus an integral part of the Government's programme for strengthening port management and finances.

Clause 1 is the basic enabling Clause. It enables my right hon. Friend to make loans to harbour authorities with sound financial prospects to assist them in refinancing capital debt. These loans will be made only if we are satisfied that the loan is justified having regard to the financial prospects of the port authority concerned.

Hon. Members may wonder whether a situation is likely to arise in practice where a port with sound financial prospects is nevertheless unable to raise money for debt refinancing on the market. The short answer is that this has already happened in two cases. Even when a port's long-term prospects are satisfactory temporary market factors may produce this situation, so there is no doubt that the Bill meets a real need.

What are those two examples?

I will be glad to tell my hon. Friend, but perhaps he will allow me to come to them at an appropriate point.

Clause 1 provides for the National Ports Council to be consulted in all cases. The council will carry out a thorough analysis of the applicant authority's forecasts of traffic, revenue and cash flow; its plans for development and rationalisation; its charging, cost reduction and depreciation policies; its debt refinancing plans; and its proposals for improvements in board and management structures.

The council will recommend a loan only if it is satisfied that the authority's financial prospects appear to be sound or that there is a reasonable expectation of their being made so by modifications to existing plans which the council will agree with the authority. It will also recommend conditions to be attached to any loan, together with provisions for the subsequent monitoring of that port's performance by the council.

The terms of the loans will be designed to encourage port authorities to continue to borrow on the market wherever they can; or, where they do borrow from the Government, to seek alternative sources of finance as soon as possible. The loans will normally be on a long-term basis but at interest rates commencing some two percentage points above the Government's lending rate and they will rise progressively.

Such terms should result in strict financial disciplines and improved earnings, which in turn should encourage the market to resume lending on an appropriate long-term basis. Improvements on these lines should pave the way for the introduction of private equity capital which would further stimulate competitive and commercial attitudes.

Clause 2 applies in relation to the new loans the existing powers of the National Ports Council under the 1964 Act to obtain the necessary information to enable it to carry out its functions. These powers are subject to the appropriate restrictions as to disclosure of information.

Clause 3 relates to any loans made before the Bill is passed. The White Paper said that any such loans would be made from the Contingencies Fund. Clause 3 therefore provides for the Secretary of State to reimburse the Contingencies Fund from the moneys that the Bill will provide from the National Loans Fund.

The House will wish to know that loans have already been made to the Clyde Port Authority and the Forth Ports Authority—these are the two cases I mentioned—to cover debts to be paid between 11th November and the end of the present year. About £5 million has been agreed for the Clyde and up to about £3·5 million for the Forth. I am sure that hon. Members representing these areas will welcome these sums.

What rate of interest has been charged on this money and what does the ominous phrase "rise progressively" mean? How will it be progressively increased in these two cases?

These loans have been made, as I said, from the Contingencies Fund and the Bill will enable the Secretary of State to repay from the National Loans Fund. Therefore, these loans are covered on that principle and the Bill provides for their repayment. On the point about the interest rates, I will obtain that information for the right hon. Gentleman and I will let him know before the House gives up the Bill tonight.

These loans are repayable over 10 years and are initially subject to a rate of interest 2 per cent. higher than the current Government lending rate. That answers in part the question of the right hon. Member for Sheffield, Park (Mr. Mulley) and there is provision for subsequent changes in the light of events.

What is the current Government lending rate, so that we may be clear about it?

I will have to obtain that information because it varies from time to time, but I will certainly let the hon. Gentleman know during the evening. The point is that interest charges will be 2 per cent. over the going rate with provision for them to increase progressively after the first two years. There are also provisions entitling the authorities to repay loans earlier if they want to.

If the rate of interest is high and is subject to increases as the years go by, there is much greater incentive to port managements to put their houses in order, to obtain better results and, therefore, to create the confidence which will allow them to go to the commercial market and strengthen their finances in that way.

How does the hon. Gentleman arrive at the magic figure of 2 per cent? Is it plucked out of the air? Has he been advised by the market that this will provide incentive? Why not 1 per cent.?

The hon. Gentleman may ask why any figure was chosen. This is the judgment which the Government have formed on the best available advice as to what figure would place upon the ports a financial discipline encouraging them to put their houses in order rapidly so as to be able to borrow at the lower market rate and get out from under the higher rates of interest which the Government will be charging for their loans.

Clause 4 sets a limit on the aggregate amount of loans that can be made to harbour authorities for debt repayment purposes under the Bill and for capital development purposes under Section 11 of the Harbours Act, 1964. The limit set in Clause 4 is £200 million, with provision for an increase to £300 million with the consent of the House. The present limit for loans under the 1964 Act is £75 million, with provision for an increase to £125 million by Resolution of the House. It seemed to us that it would be for the convenience of the House if Clause 4 of the present Bill were to set a limit covering not only the new loans under the Bill but also the up-to-date requirements for loans under the 1964 Act for a reasonable period ahead.

The figures in Clause 4 take into account information at present available about port authority plans for development over the next five years and the amounts of capital debt due for renewal in the same period. Figures of this kind can only be broad estimates at this stage, particularly since we hope to restore full reliance by the port authorities on the market for their refinancing. For this reason it is desirable to avoid separate limits for the two different types of loan. The House will, of course, have the opportunity to review matters should its consent be sought to increase the limit from £200 million to £300 million.

I believe that hon. Members on both sides will accept the aims of the Bill. It would have been very satisfying if there were no need to provide loans for this purpose. As the need exists, however—although I hope on a limited scale—it would not be right to withhold it and thus jeopardise progress towards stability and self-sufficiency in the ports industry.

We seem to have heard nothing about other than Scottish ports. Does my hon. Friend intend to explain which ports are taking advantage of this facility so that we may know exactly where we stand? I do not want to hear only about Scotland. What is happening in England?

I am always glad to oblige my hon. Friend. The Bill provides a lending facility which will be operated by my right hon. Friend which will make money available on the terms I have outlined to any port covered by the Bill. My hon. Friend may have one or several ports in mind. It will be up to them to make application to the National Ports Council and explain their case.

I thank my hon. Friend for that reply. I want to know whether Scotland has already impounded some of this money, as it were, and whether no other ports have made application.

I explained that after the publication of the White Paper the two ports I mentioned sought assistance. They were provided with assistance from the Contingencies Fund. Under Clause 3, the Bill provides powers for that money to be repaid to the National Loans Fund. Thus, those two Scottish ports will pay that money to that National Loans Fund.

It is perfectly open to all other ports—except those in the British Transport docks sector which obtain their money in a different way—to come forward for loans under these powers. It will, of course, be for the National Ports Council to advise whether such loans should be made available.

It is largely because the Bill is not in my view a matter of contention between the two sides of the House that I confidently invite hon. Members to give it a Second Reading.

The whole House is grateful to the Under-Secretary for his careful explanation of the Bill, and I congratulate him on the way in which he presented it—like a Christmas present from a generous Government to the ports industry.

The hon. Gentleman said that extra money was being made available by the Government by way of loans and that the Bill contained powers which did not exist at present to make loans. Simply because, in a sense, the Measure provides an additional, if limited, facility, I cannot advise my hon. Friends to vote against it.

However, the hon. Gentleman did not, except in passing, relate the top of the iceberg—the pleasant idea of making more loans available—to the five-sixths of the Government's ports policy below the surface which is wholly detrimental to the future and proper development of our ports.

As the Explanatory and Financial Memorandum to the Bill explains:

"This Bill gives effect to the proposals set out in the White Paper Financial Policy for Ports' (Cmnd. 4794)."

The Minister made only a passing reference to that. In agreeing to this Second Reading, I wish to make it clear on behalf of my hon. Friends that we are not, in so doing, giving any sort of support whatever to Cmnd. 4794.

In my judgment, this is the worst kind of political pamphleteering. It is wholly inappropriate to the real and difficult problems of the ports industry, and, following the tradition of political pamphleteering, it sets up an Aunt Sally in paragraph I only to knock it down in paragraph 2. It shows no appreciation of, on the one hand, the real problems which are faced by the ports industry and, on the other, the important part this industry has to play in our economic survival. The existence of efficient ports is obviously important now. They will be even more important if, as I imagine, the Government go through with their plans to take us into the European Economic Community.

I trust that the Minister will convey to his right hon. Friend the need to look again at some of the administrative proposals in Cmnd. 4794. To begin with, I see no justification whatever for this idea of a penal rate of interest. Most ports are public authorities of one kind or another. We have the statutory trust corporations for large ports like London and Mersey, a number of others which are local authority ports like Bristol, and a number of ports in the nationalised sector including some important ones like Hull and Tyneside. Even where, as in Manchester, it is a private enterprise port, there is no doubt that Manchester would not have made the achievements it has without the solid support for many years of Manchester City Council.

I therefore see no justification for charging 2 per cent. above the Government rate. What charge has been made in the two instances given by the Under-Secretary? This is where we come to the ominous phrase in the White Paper to which I drew attention:

"and the rate will be increased progressively over the life of the loan".

This is totally unacceptable. It represents a penal rate on what is, after all, an important public service; namely, the provision of efficient port facilities.

I appreciate the philosophy behind this. It is that the ports should go out to raise money on the market and that if each year they must pay more, they will be more encouraged to go to the market. But the Under-Secretary did not tell us how, through this action of the Government, the credit standing and credibility of a great many public trust corporations will not be eroded, if not destroyed. Consider, for example, the rigid behaviour of the Government in the crisis that occurred on the Mersey, when many stockholders were not repaid on the due dates and had to suffer a substantial reduction in their capital holdings.

It is, therefore, unlikely that there will be a great flood of support, particularly from small investors, for the loans that ports will have to seek if they are to avoid paying large premiums for every year they borrow under the Bill. As far as I understand the Measure, there is no proposal requiring these high rates of interest to be charged, and this is an aspect which, along with many others, we intend to examine in Committee.

There is nothing objectionable about the Bill as drafted. It is the hidden policy, the administration, behind it that poses serious questions in our minds. We think about the way in which the Mersey Board was treated. We think of this concept of a penal rate of interest. Above all, we think of the Government decision, announced some time ago, not to make grants available for modernisation projects in the ports.

I understand that the Government intend to fulfil the commitments and undertaking already in existence, but that, for example, any decision made in respect of Bristol will result in the Government making a song and dance about why the then Labour Government did not encourage Bristol to go for a big expansion of its port facilities. Indeed, hon. Gentlemen opposite have gone as far as sending one of their spokesmen there to stir things up. As I understand it now, Bristol has decided again that it will not get any grant. Am I right in that understanding, and that no grant will be given? The only possibility for finance, if it cannot be obtained from the market—and that will be difficult because of the Mersey Board—is to resort to loans at these very high rates of interest.

The Secretary of State for the Environment was talking in his White Paper about a lot of small businesses. That could make some kind of rough economic sense. The hon. Gentleman did his best when talking about putting houses in order and standing on one's own feet, and that kind of claptrap. But that will not do here. We know that this came out at the time when shoooting "lame ducks" was a favourite occupation of Ministers. Probably there was a little private competition between the Minister for Transport Industries and his right hon. Friend the Secretary of State for Trade and Industry to see who could shoot the most lame ducks in the shortest time. But now the Trade and Industry Department is going in the opposite direction, and has people looking around for lame ducks to which to give medical or appropriate treatement.

This very crude exercise in political propaganda as represented by the financial policy for ports will not do. I regret that we have not had the opportunity, despite the fanfare about how long and hard the Government were thinking about ports, of a discussion about the kind of policy, organisation and structure for ports that we need. We have had to do it rather belatedly in the current Session on the Second Reading of a Bill which, by itself, is not one to which we take strong objection, but we are worried about the whole philosophy behind the White Paper and what this may be doing to the development of the ports industry.

How does the kind of support we are now offering to our ports under this new doctrine compare with what our competitors in Europe will be offering to their ports? I am fairly certain that none of the European ports is being offered the present of borrowing money at 2 per cent. above the rate at which their government can borrow it, with a hidden clause of unknown but progressively higher interest charges every year over ten years. It could be a rate of 12 per cent. above the going rate of interest at the end of that period. Yet we shall have to compete with those European ports.

It is true that while we want to encourage competition between our ports for the goods coming in and out of Britain, and the European ports are not competing with us in that sense, a lot of merchandise comes to Europe in bulk and has to be broken down. Because this Bill is an open invitation to ports to raise their charges to the very highest level, the charges will determine whether, for example, a cargo goes to Rotterdam to be broken down and distributed around or comes to a British port. This has also a bearing on, perhaps, a decision of an American company whether to set up an additional plant. The hon. Gentleman seems to be very amused, but I assure him that this is a very serious aspect of the whole question. We need this kind of investment, and all the investment we can get. This is the basic problem at present. This may affect the decision of, perhaps, an American company on whether to invest in Britain or somewhere else in the Common Market.

The day has gone when any British firm can hope to sell goods on the basis of f.o.b. and let the buyers worry about carriage insurance, freight and so on. That is not on. We must now quote c.i.f. terms. Any increase in the cost of our port facilities will be added to the price of British goods which have to compete with others in Europe and around the world. It will be serious if we find that we are penalising our ports by the high charges which they have to make to provide the extra facilities that I would hope our export trade would demand, when other countries are making it much easier by way of grants, favourable loans, and so on. We have to look at this in the context not only of our entry into the Common Market but of our whole economic life.

It is important that ports should be efficient and that broadly, taking one year with another, they should pay their way. But we shall not have the right kind of port system or be doing the right thing for the development of our economic system if we go along with this paltry doctrine here, which might have made sense at a Tory rally 20 or 30 years ago but will not wash today. I hope that between now and the Committee stage there will be some hard thinking in the Department so that we can come out with a ports policy more in line with the needs of Britain.

The Bill provides an additional facility but it does not take away any of the existing powers of Ministers. Our complaint is that the Minister refuses to use the powers that he has to make grants and loans at reasonable rates and is substituting this instead. We shall not be dividing the House, but it would be wrong if I did not express the very strong concern felt on this side of the House about the trend of the Government's ports policy.

The right hon. Member for Sheffield, Park (Mr. Mulley) referred to a Christmas present of £300 million, but surely the festive spirit has evaded him since he first rose to speak.

It is almost two years ago to the day, on 18th December, 1969, when the right hon. Gentleman was putting forward proposals for an entirely different way of handling the ports. He and I, although we represent constituencies in the same city, have diametrically opposed views on how to handle this situation. May I placate him somewhat, as it is the festive season, by assuring him that if he had come to the House with a request that we should have a £200 million bill for loans, and certainly if it had been a £200 million grant with a provision to raise it to £300 million, I for one would have questioned it.

I must not give the impression, however, that I oppose the Bill. I do not. In the circumstances the Bill is necessary, and I welcome the fact that it has been introduced at this time. I also welcome the response of the right hon. Gentleman in advising us that his right hon. and hon. Friends will not divide the House against it.

Much has happened in the last 10 years. There were the Rochdale Report and the 1964 Act setting up the National Ports Council. Even before the Act could be properly implemented the right hon. Gentleman's Government had a diametrically opposed view on how to handle the ports situation. During the last five years, as an inlander and because of the proposals to look into the ports and the Ports Bill, I have had occasion to visit many ports. One port management I visited said words to the effect "Owners may come, owners may go; Governments may come, Governments may go; but we go on managing the ports for ever".

One has to see the point of view of management on the dock front, because so much that is done in London and in Parliament seems so remote to these people. Two to three years ago many who were running our ports favoured nationalisation as a solution to their problems. It enabled local managements to escape from the responsibilities of management. Some of us have had the opportunity of meeting the Director-General, Mr. Maurice Gifford, and the new Chairman, Mr. Philip Chappell. Some of us have had an opportunity of visiting further ports in the last year. My right hon. Friend has imposed a new sense of purpose. He has brought in new management to the individual docks, harbours and ports. How right were the words of the White Paper, Cmnd. 4794:

"For many years the ports of Great Britain have been regarded as a service to be made available without adequate regard to costs, profitability or long-term financial health."!

The Government have introduced a sense of purpose and urgency that the country should welcome.

The introduction of a Bill such as we are debating is an occasion to ask how the British ports are doing. I have had drawn to my attention the excellent Digest of Port Statistics 1971, which has an addendum giving a digest of the performance of the various ports. Some of them have done extremely well hut, for instance, the British Transport Docks Board has made a net deficit of £1·6 million, Southampton's; deficit being £900,000 and Newport's nearly £500,000. Hull made a substantial loss. The Port of London Authority has been in deficit, and the Mersey Docks and Harbours Board has made a substantial deficit, of about £3 million. This is the type of information we should take note of. What steps have been and should be taken to improve their performance?

There is another section dealing with capital expenditure which is very informative. The hours worked and the wages are reviewed in Section II of this report.

Does the hon. Gentleman want to make the case for extending to the public sector the same Shylock attitude, the same harsh disciplines, as we find in the Bill? Is that the thin end of his wedge, to give incentives? If not, why is he making that comparison?

Did the hon. Gentleman intervene just because I mentioned Hull? I have looked at the list of ports and pointed to those that are in deficit. Others are in surplus. I could read out the list. I said that legislation of the type we are considering is the occasion to ask, "How are our ports doing, what information is made available to us and where does Parliament come in?" I do not see the purpose of the hon. Gentleman's intervention.

If the hon. Gentleman does not, some others on this side of the House do. In quoting the statistics, is the hon. Gentleman making the point that, because certain ports are not doing as well as he thinks they should, they should be subject to the same severe disciplines that we have just been told are in paragraph 8 of the White Paper, and should only be given money at two points above the market rate? I could not understand why the hon. Gentleman picked ports out in that way.

I am sure that if the hon. Gentleman wants to make his point later he can. I am asking how our ports are doing and saying that this is a time to take note of what is happening.

I referred to the average rate of capital expenditure, and the right hon. Member for Sheffield, Park has spoken about grants under Section 12 of the 1964 Act. It is reasonable to ask to what extent grants under that Act are expected to continue.

During the Committee stage of the Ports Bill in 1969 and early 1970 we were concerned with foreign competition. A report of the National Ports Council then gave a comparison of costs of continental and United Kingdom ports. The main conclusion was:

"From our investigations we have reached the conclusion that the four Continental ports we studied have a major advantage over the three U.K. ports. They receive massive financial aid from central or local government, who regard the ports as a vital part of their overall economy rather than as commercial enterprises in their own right."

It has rightly been said that we must be careful to see that by raising prices for port services for goods going from this country to our export markets, or for imports, we do not put our ports out of business, losing the trade to the continental ports. Therefore, any trustee of the taxpayers' money wants to know how our ports are doing compared with continental ports and to what extent the continental ports continue to have the subsidy referred to by the National Ports Council.

The debate provides an opportunity for hon. Members to find out more about the activities of the National Ports Council. There are schemes for massive investment in our ports. As an industrial and trading nation, we are anxious that they should be the most efficient not only in Europe but in the world.

I readily accept that there is a new spirit and purpose in the management of our individual docks and harbours, which hon. Members are bound to welcome. I readily accept the necessity for the Bill, and I am glad that both sides of the House are supporting the proposals put forward by my right hon. Friend.

The Under-Secretary of State said that this was a very important Bill, and very few hon. Members will disagree with that part of his statement. The Bill is all the more necessary as, after the welshing of the Mersey Docks and Harbours Board, port authorities wishing to borrow money on the open market find it extremely difficult. In so far as the Bill provides at least for some Government loans to be made available to repay capital debt, it is worth while having it on the Statute Book.

What disturbs me very much is the limited scope of the Bill, which shows clearly that the Government have no ports policy whatsoever, other than to try to inveigle private capital into the docks and harbours, hoping that that will be an incentive to make them a bit more efficient and competitive. I often feel that the statement that harbours and ports should be competitive is a bit unreal. I do not see how certain ports can be competitive if "competitive" means that they should attract more traffic. Certain ports, docks and harbours are totally dependent on the general trade of the country. My own authority, Aberdeen, gets the trade that comes to the North-East. It does not get trade from the Atlantic destined for the west of Scotland, because it would be nonsensical for shipowners to take their cargo all the way through the Pentland Firth, down the coast to Aberdeen and then by rail to Glasgow, when it can go to the Clyde. That is a simple example of how certain ports are totally dependent on the hinterland, their geographical position and the industrial life surrounding their area.

I am particularly concerned that the Bill seems to confirm that there will be no more grants for local harbours—full stop; that is the end of the matter. Whether or not Section 12 of the 1964 Act remains on the Statute Book, the Minister has made it perfectly clear that no grants are to be available. There is certainly nothing in the hon. Gentleman's speech tonight to suggest that we shall get grants in the future.

It is significant that on 30th July, in a Written Answer, the Minister for Transport Industries said:

"The Government have decided that the port modernisation grants scheme is no longer necessary or appropriate."—[OFFICIAL REPORT, 30th July, 1971; Vol. 822, c. 198]

No evidence has been adduced why this decision should be taken. No evidence has been presented which suggests that modernisation grants are no longer necessary or appropriate. What evidence has the Minister got that these grants are not appropriate or necessary? The Government must look carefully at the ports situation.

The Minister may be aware that the Aberdeen Harbour Board—perhaps I should have given advance notice that I wished to raise the particular problems facing the board—is faced with a £1 million or Eli million programme to shore up the quayside and make the harbour tidal. The Minister has said in a letter to me:

"You will recollect that I informed the House on 30th July this year that the grant scheme was to end from that date."

Again, no evidence has been adduced why the grant scheme should end. It is harbours like Aberdeen which need grants rather than loan assistance. It is difficult for a port like Aberdeen to show how it can provide more jobs by carrying out improvements. One has to know its precise position and trading difficulties. One cannot attract new industry to the ports. Therefore, this is the kind of scheme which should have some help.

It appears that the Government have no idea what they will do in certain of these areas. The Secretary of State for Scotland made an announcement from which he later had to recant. He did not do so personally; he sent a civil servant to do that job. The Minister does not seem to be aware of what is happening either. I requested him to reconsider the position about grants when we were discussing preliminary plans for Aberdeen harbour. He was most unhelpful. Certainly his letter is full of verbiage about the plans proving to make the harbour a viable concern. In his letter he says that the improvements appear to be relevant to the discovery of North Sea oil and he expects the oil companies to be at the base of any expansion programme because they should be charged proper rates so that harbour board can proceed with confidence.

Yet the Secretary of State for Scotland, welcoming the announcement about North Sea oil and the plans of British Petroleum to proceed, is reported in the following terms according to the Press and Journal of Friday, 17th December

"Welcoming the announcement last night, Scottish Secretary Mr. Gordon Campbell said: 'I am delighted to hear of B.P.'s momentous decision. This is a massive investment in Scotland's future. It provides immediate opportunity for Scottish firms to participate in the opening up of the North Sea oilfield and a continuing base for expansion.… For their part the Government, including the public authorities concerned, are taking the needs of this new development into account in their provision of supporting services, including housing, roads and port improvements.'

Later, a Scottish Office spokesman emphasised that Mr. Campbell's reference to 'port improvements' did not apply to Aberdeen's proposed £1 million harbour expansion. He said: The improvements proposed by the Aberdeen Harbour Board are not related to the B.P. find. The Board and the Department of the Environment have discussed the proposals in a preliminary way and the Scottish Office have been involved."

The Government are completely uninterested in what is happening to the smaller ports. They may be interested in some kind of financial killing which some of their friends might make by investing money in the larger ports of London, Merseyside, and so on—this may be the idea; I do not know—but they do not seem to be concerned about the smaller ports which are facing severe difficulties. I am advised that soundings in the market have made it clear that the market is not interested in coming into ports and harbours at this time.

I turn now to the curious doctrine of 2 per cent. above the current Government lending rate and its being increased progressively. It seems odd to suggest that it would help the ports to go to the open market, because the market is likely to say: "If you are able to pay 4 per cent. above the going rate to the Government, why are you not prepared to pay the same rate of interest, or marginally less, to us?" In other words, the market might be encouraged to be avaricious rather than to help. After all, the market has to try to get as good a return as it can.

I hope that all is not lost. Will the Minister tell me what authority the Government have for saying that grants will not be paid? The 1964 Act simply states "the Government may, with the approval of the Treasury", and so on. I know that "may" is permissive. They can presumably stop payment or refuse to give a grant in the same way as they may decide to give a grant. My fear is that by repealing the Harbours (Amendment) Act, 1970, which makes reference to Section 13 of the initial Act, the passage of this Bill will make it impossible for the Government to make grants available even if they are persuaded to change their minds. I know that the chamber of commerce, the harbour board, the town council and all concerned in the City of Aberdeen are trying to get the Government to change their minds about grants. If the Bill goes through in this form I do not think they will be allowed to make a grant. Will the Minister tell us whether this is so so that we can table Amendments to try to get him to change his mind?

If the only power left, with the repeal of the 1970 Act, is to make loans, should point out that the Bill is silent about the rate of interest. The Minister has announced an administrative figure which he can vary up or down at will according to whether he regards the policy as working or not. If he thinks that interest at 2 per cent. is too penal, he can presumably reduce it to 1 per cent. to relieve local difficulties. But, as the Bill is silent about interest, will it be possible for the Minister to make loans at rates of interest lower than the current lending rate to help local authorities which are in difficulty or are having to finance a programme for which it is difficult to forecast precisely what the revenue will be? Will it be possible to make a loan with a deferred interest payment; that is, to give one, two or even five years' grace free of interest and then apply interest?

If we are to have a ports policy of any kind it must be flexible. There is no point in passing Bills through the House which are totally rigid in application, because the Minister may have to come to the House and say, "Though I have much sympathy with the policy, I am tied by Statute and it will require enabling legislation to change it."

I hope that the Minister will be able to dispel the widespread feeling in the North-East of Scotland that the Aberdeen Harbour Board has not been given much encouragement and that the Government's treatment of it has been shabby. I hope he will give every encouragement to go ahead with a proposal which will benefit not only the Aberdeen Harbour Board but the commercial interests of the whole of the North-East of Scotland. It is unfair that the harbour board should be asked to put a charge on rates applicable only to particular commercial interests to pay for a development which will benefit the whole of the North-East of Scotland.

I am not intervening to put a constituency point. Part of Shoreham harbour is in my constituency, but I am happy to say that it is a prosperous harbour which manages its own affairs extremely well and is not in any particular current difficulty. But I will give a word of encouragement to the hon. Member for Aberdeen, North (Mr. Robert Hughes), who spoke of Aberdeen competing with the Clyde. Harvey's Bristol sherry, which he might think would come from Spain to Bristol, actually comes to the Port of Shoreham and then goes by road to Bristol. Such can be the competition which one port offers another.

In the last Session I was a member of the Select Committee which dealt with the Mersey Docks and Harbours Bill before it became an Act. In that capacity I learned quite a lot about the Mersey Docks and Harbour Board. I had to make up my mind, as we all did, whether that board was malingering as a lame duck, whether it was a lame duck suffering from a self-inflicted wound, or whatever was the trouble. At the end of the day the Bill became an Act which gave power to the board to write off part of the loans which had been made to it by bond holders. It also had power to issue equity to such people.

The Select Commitee was very concerned about this and made a special report to the House. I will quote one paragraph from it:

"Your Committee are concerned that a private Bill should raise such a matter as the remission of debt by Act of Parliament. Having listened with great care to the detailed evidence they have found, on a division, that the Preamble is proved, having regard to the circumstances, which they do not believe could ever be repeated in exactly the same way. In view of this, this Bill should not be regarded as a precedent."

I shall return to that last statement later in my speech.

Against that background, I ask whether this Bill will permit advances to be made by the Government to help with the repayment by the Mersey Docks Company of the debts which are still outstanding but which may be written off or written down at the end of the moratorium period. Does the Bill give the Government power to do that? If it does, is it the Government's intention to do it?

This is very important because there may be various policies for the ports, but at least people who have lent money to a port would expect to receive fairly even-handed treatment within a short space of time from the same Government. I looked at the figures quoted by my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn). I am not an accountant. I looked at what is entitled Table 200 and tried to compare as best I can the position of the Mersey Docks and Harbour Board in 1970 with the position of the Forth Ports Authority, which is one of the two mentioned by my hon. Friend the Under-Secretary of State, and also with the Milford Haven Conservancy Board.

The Mersey Docks and Harbour Board had a deficit in 1970 of over £3 million but—and a mere deficit alone does not prove anything—its deficit was about one-seventh of its revenue. The deficit of the Forth Ports Authority was £567,000, about one-sixth of its revenue. The deficit of the Milford Haven Conservancy Board was about one-twelfth of its revenue.

Another column in Table 200 deals with the net interest charge, which is very important. I compared net interest charged to the revenue, because this is dead money; it is an overhead which has to go out. In the case of the Mersey Docks and Harbour Board the net interest charge was about one-fifth of its revenue; in the case of the Forth Ports Authority it was about one-quarter of the revenue; in the case of the Milford Haven Conservancy Board it was about four-fifths of the revenue, so that practically the whole revenue went in interest charges.

It may be contended that the Mersey Docks and Harbour Board was in a different position from that of any of the other boards or authorities which may receive advances under the Bill. If that is so, it must be made clear in detail that will stand up to professional scrutiny. If the Mersey bond holders, who were affected by the Act of Parliament which remitted the debt of the Mersey Docks and Harbour Board to them, are to receive different treatment from that accorded to their opposite numbers on the Forth or the Clyde, or elsewhere, we have to be very clear that the circumstances on the Mersey were substantially different from the circumstances in these other authorities.

I do not believe that that case has yet been made. It may be made later but I hope that it will be made out early, because the Mersey bond holders were not simply those large City institutions which, for some reason or other, are supposed to be able to stand the writing-off of large amounts due to them—exactly why, I do not know. They were in many cases small people who put their money into what they thought—and they may not have been as prudent as possible in doing so—was a gilt-edged security.

Another Private Bill has just been passed by the examiners. This is the Milford Haven Docks Bill. The Select Committee which considered the Mersey Docks and Harbour Bill said, I remind the House, that

"this Bill should not be regarded as a precedent."

We all know what happens to precedents. Already this Session we have the Milford Haven Docks Bill. It does not exactly follow the pattern of the Mersey Docks and Harbour Act. It does not provide for the writing-off of debt but it certainly provides for a moratorium on interest by Act of Parliament. I would be grateful if my hon. Friend the Under-Secretary of State would comment upon the Milford Haven Docks Bill and also on the effect upon the Milford Haven authority of this Bill.

I will roll all this together. What is the right policy for financing our docks? There can be argument about that, but when we have made up our minds as to what that policy is we must apply it even-handedly. The writing off of the Mersey Docks and Harbour Board's debt has not yet been done because under the Act it was not to happen until the end of the moratorium period of three years' duration. We must make up our minds what is the right policy and then apply it even-handedly. The White Paper says, as my hon. Friend reminded us:

"In normal circumstances there is no reason why viable ports should not continue to refinance debt as they traditionally have done—on the market: but if a basically viable port is unable to do so, loans will be made available by the Government for this purpose."

I think there is a non sequitur there, at least on the surface, because if it is viable I judge that the market would be a good place for that to be decided.

Paragraph 5 says:

"Substantial short-term borrowing has exposed some ports to the problem of having to refinance debt in unfavourable market conditions".

I do not know how those market conditions are likely to be more unfavourable than the proposed 2 per cent. over the lending rate with rises thereafter. It may be a good formula. It may be exactly what the doctor ordered. I am not contesting that, but what I am inquiring about is how, if boards were able to pay that rate of interest, they would not be able to raise money on the market.

The hon. Gentleman has given a great deal of attention to this matter, especially in the context of Mersey. Does he not agree that the unfortunate consequence of the Mersey affair—although the House mitigated the Government's original thoughts set out in their first version of the Mersey Bill—is that it will become progressively more difficult for public authorities of this kind to raise money because they will no longer be able to give the gilt-edged impression which, rightly or wrongly they were -able to give before?

If they did it wrongly, it is proper that that situation should have ended and I do not want to rake over that position.

Annex 2 of the White Paper contains, in paragraph 1, the four criteria by which the National Ports Council will examine an authority's finances. I believe that a comparison of the finances of the Mersey authority and other authorities which may benefit under the Bill must be carried out with great thoroughness and published in full if it is not to be thought that we in this House have meted out with one hand in the last Session certain treatment to Mersey bond holders and we are now, in the next Session of the same Parliament, meting out entirely different treatment to those who have lent money to other authorities.

What is sauce for the goose must surely be sauce for the gander, and I await my hon. Friend's reply with a great deal of interest. Perhaps it may be possible for me to have an opportunity, if necessary, further to press the matter in Committee where, from the inquiries that I have made and the advice that I have received, I believe that I shall be able to do so, having read the Money Resolution as well as the Bill.

The longer I listen to the debate, the more I find this a bizarre Bill; but then we have a bizarre Government, so what can we expect?

I follow the argument advanced by the hon. Member for Hove (Mr. Maddan) and I am in tune with it. Paragraph 8 of the White Paper states:

"Such loans will, however be made only to those port authorities who satisfy the National Ports Council that their financial prospects are sound."

I am not a financier and I have never worked in the City, but I once bought a house on a mortgage. It seems bizarre that a harbour authority should go to the Government for a loan on which the rate of interest is 2 per cent. above the market rate. If its financial prospects are sound, and that fact is verified by the National Ports Council, surely a harbour authority could get the money on the market at a better rate. I find this proposal rather unusual and I hope that the Minister will tell us exactly why the Government have put it forward. What is the philosophy behind this kind of, shall we say, step-by-step Government.

I intervene mainly because of the comments of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn). Unfortunately, at least for him, the hon. Gentleman mentioned the port of Hull. I must, without being churlish, give the Bill a welcome, though the Minister will gather that it is a most guarded welcome. It would be churlish not to welcome the possibility of £300 million, or a substantial chunk of that sum, being spent on developments to make our ports better able to compete with Rotterdam, Hamburg and other foreign ports.

I begin to shudder when I hear phrases such as "the Bill is not meant to cushion" as though the Minister is playing snooker. I visualise lame ducks hobbling to market and I begin to look at the Bill with a jaundiced eye, particularly when I see in the White Paper in paragraph 8 such words as "carry out a stringent analysis", in paragraph 9 reference to "strict financial disciplines and the reference in paragraph 10(b) to the rate of interest being 2 per cent. over the market rate, because that could rise. It could go up to 3 per cent., 4 per cent. or even 5 per cent. over the life of a loan. That seems uncanny and unusual in the matter of lending money. It looks as though the Government are acting like a penny-pinching firm of accountants and intend to exact their pound of flesh.

I suggest that the Government should consider what previous Governments have done about Public works and development in the past through the medium of the Public Works Loan Board. I am prepared to argue that we should consider what happens in Sweden. There is there a farm bank for development loans in agriculture. Instead of charging a rate of interest 2 per cent. about the market rate, the bank provides loans on favourable terms to enable developments to be carried out. I should have thought that the State existed not to kick lame ducks but to help, in this instance, port authorities such as Aberdeen and others which needed help. The Government are carrying out their programme in the sacred name of City market ethics. I hope that Aberdeen will receive the help that it needs and will not have applied to it these strict financial disciplines.

As I said earlier, the hon. Member for Hallam referred to Hull. No doubt when I intervened I put my point rather clumsily, but perhaps I may try again to justify my attitude. When I hear the Minister, or anyone else talking about financial disciplines and about the financial analysis of ports and then going on to say that certain ports in the public sector such as Hull, Immingham, Goole and Grimsby do not do as well—

I hope that the hon. Gentleman will read HANSARD carefully tomorrow. I looked at the list of ports. The top part of the list referred to ports under the British Docks Board and Hull is one of them. The hon. Gentleman and I represent Yorkshire constituencies. I assure him that, being a Yorkshireman, I am as interested in the success of this port as he is, and I have visited it. The hon. Gentleman is making a mistake in taking a point on this issue. I was reading from a list published in the report. The report is "The Digest of Port Statistics" and I happened to cite the information made available in the context of how the ports are doing. The hon. Member is raising a point that is really irrelevant.

The hon. Gentleman must expect me, as a suspicious Opposition Member examining a bizarre Bill like this, having listened to the Minister and then finding one of his back benchers giving a list of the ports which are not doing well, to begin to think.

Here I put to the Minister a question called up from the vasty deep by the hon. Gentleman sitting behind him. Does he believe that these ports need the disciplines which he says they do—otherwise we would not have the Bill—and will he apply this same test, this same analysis and determination to the public sector, which I take it is not included in the financial provisions of the Bill, meaning those ports of the British Docks Board? My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) may well weigh in later with all his knowledge and expertise on matters concerning the Bill.

All I am saying is that as a Member for the City of Hull I would like the Minister to be quite clear when he speaks later and to state that he has no intention whatever of applying this kind of attitude or test to those ports that were mentioned earlier as not doing so well. I know what the present Government have done in other areas like the Clyde, and I do not want them in any way to start looking at the State sector in the way they are tending to do here.

I do not want to intervene too much, but I could have quoted the Manchester figures which are much better. This would have brought up unpleasant memories of two years ago when Manchester was one of the ports which definitely wanted to remain in the private sector. Surely we should welcome the trend that is taking place and the support for the concept of equity participation. The hon. Member has also brought in a most important factor, that of interest payments. I apologise for listing these ports that are now in deficit first. The hon. Member is too suspicious. I could have started with Manchester and referred to the profit that has been made, but that might have antagonised him.

I accept that, but I listened to the Minister earlier when he talked about certain ports which may not be doing well at the moment and therefore need short term help but which in the long term are viable with good prospects. Although it has been said that Hull is not doing as well as it was—and I accept that—it has enormous potential and no Yorkshire Member of Parliament should ever think anything else. This Humber estuary has a long-term potential second to none, once we get our approaches from the west with the two motorways and get the bridge over the Humber. We are facing the North Sea and the middle of Europe and have an economic future second to none. We on the Humber all accept this, and I hope that the Minister will tell me later that his attitude of mind or philosophy as embodied in the Bill in no way applies to the State sector to which our Humberside ports belong.

I am sure that my hon. Friend on the Front Bench came this evening expecting to glow in the reflected gratitude of the Opposition for bringing forward this magnificent Christmas present at such a time. I suggest to the Opposition that they have been less than generous. He has come forward with a package which no matter how we look at it means £200 million with the possibility of £300 million. Surely on both sides of the House we must welcome this as another step towards strengthening port management and certainly the financial side of running our ports.

I am sorry to intervene so early in the hon. Gentleman's speech, but the Minister is giving nothing whatsoever to the ports except the right to borrow, and they then have to repay those borrowings at 2 per cent. above the current lending rate. They are not getting anything very spectacular in that.

Facilities are being provided for them to borrow at 2 per cent. over the Government lending rate. That is in the Bill, and no one is denying it. It is all very well saying that the bank will provide one with a facility at 2 or 3 per cent. over the lending rate if there is no money available. The Government are at long last making £200 million to £300 million available to ports not covered by the British Transport Docks Board.

Coming to the hon. Gentleman's point, the White Paper goes on to say:

"The terms of such loans will be designed to encourage port authorities to continue to borrow on the market where they can (or, where they do borrow from the Government, to seek alternative sources of finance as soon as possible). They should also result in strict financial disciplines which, together with improved earnings, will encourage the market to resume lending to ports on an appropriate long-term basis."

This may be a viable proposition. It may be that the market is ready to lend to dock boards and harbour boards throughout the country, but I would hazard a guess that if there are poor figures in the financial structure of any board going to the market it will have to rely on the Government rate of 2 per cent. over the lending rate until it can prove it is viable.

The only doubt in my mind—I am sure my hon. Friend is quite aware of this—is that the loan will increase progressively over its life. If the life of the loan is 10 years and it is increasing progressively, I am sure my hon. Friends would like information to be given to the boards on exactly how much they will be committing themselves to.

My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) mentioned the British Transport Docks Board and Southampton, and on the Opposition side there was much discussion about Hull—which is apparently the finest port in the United Kingdom. That statement of course, is complete nonsense since the finest port in the United Kingdom is Southampton, and so it will remain for a very long time.

We at Southampton would not like to go to the market to borrow at this time. According to the statistics, in 1971 we lost £0·9 million. We have installed an integrated port communications system which gives supplementary radar information. This is coupled with a Honeywell computer and gives absolutely up-to-the-minute information on every movement throughout the port. That accounts for £250,000 of the £0·9 million.

Southampton is attracting, and will attract in the future, shipping lines that are using container ships. Are hon. Members aware that 1,000 ft. of jetty costs £5 million and uses 25 acres of land? In Southampton we are building another 6,000 or 7,000 additional feet of petty. If ports are to be modernised, they will need the whole of this £300 million. In Southampton we have brought in Devlin phase 2, and the port is now working for 22 hours of each day. This to some extent justified the £0·9 million deficit. This involved purchasing extremely costly equipment, and the port must have spare mechanical capacity to use on ships with tight schedules. The port is turning round 1.4 container ships every day with just two berths available.

The statistics show that £17½ million has been spent in Southampton. Hon. Members will understand why at this stage there is a loss, but next year and for many years to come we look forward to a very profitable balance sheet.

In the context of the Common Market, Hull is looking to the future, as we are in Southampton. We hope that the Common Market will bring all that we shall ever want, but much depends on the labour force. The strike record in Southampton is excellent, with over 12 months of unbroken service to the shipping companies. There are few ports that can say that, and by "ports" I mean ports, not fishing villages and so on. Ports sometimes seem to include practically anywhere which has a jetty, but in speaking of the losses incurred in modernisation we must think of deep sea ports.

In the future there will be a great deal of modernisation in our western docks extension, and I am sure my hon. Friend has noted my Question on the Order Paper. We look forward to the approval of this by my right hon. Friend. Although Southampton cannot share in the benefits arising from the Bill, I welcome the measure, as I hope other hon. Members will.

My hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) referred to me as being an expert but I hesitate to comment on the Bill, particularly as it is primarily concerned with finance and I am certainly no financial expert, although I have had experience of the problems facing the ports industry as my specialist field is shipping.

My constituency of Hull has the third largest port in the country and is facing many problems arising from the investment which has to be undertaken to enable the port to change over to the new tempo of trade. The Humber ports and many of the eastern ports are having to face similar problems, particularly in view of our entry into the Common Market.

The policy embodied in the Bill is the philosophy of the present Government and is contrary to the policy which was followed by the Labour Government. We have to decide how to encourage future potential growth in the ports. In my area the port is an important source of employment and in the ancillary industries which service it, and we have a great interest in the policies pursued by Governments to encourage the growth of the port industries.

The Bill embodies the policy mooted in the White Paper "Financial Policy for Ports", Cmnd. 4794, and is committed to the market philosophy of introducing financial disciplines by means of which it is hoped to encourage growth. This has to be taken in conjunction with the ever-prominent selfish profit motive that will encourage people to pursue it and thereby bring about the growth that we all desire, while the central authority would hope to co-ordinate policy through the National Ports Council and would play the rôle of guiding, assisting and advising ports.

The Bill will go further in that it will attempt to impose financial stringency in analysing whether a port should be assisted by refinancing capital debts incurred by investment in certain projects. It is obvious that this sort of philosophy has failed. The Rochdale Report pointed this out in 1962 and called for a much stronger central co-ordinating authority. The recent example of the Mersey Docks and Harbours Board again points to a failure of this policy.

The Minister for Transport Industries has blamed amateur management for causing these problems and for reflecting such a poor profit record which has not attracted any private capital and has chosen to apportion blame for the lack of aggressive development in our ports. The provisions of the Bill seem to follow the same line by suggesting that if financial stringency is applied, growth and profit will follow.

My hon. Friend the Member for Kingston-upon-Hull, West spoke of a 2 per cent. penalty. What may well happen is that in raising capital the industry will have to go cap in hand to the Government for refinancing capital debt. I hope that we get a reply on this point tonight.

There is sufficient evidence to show that the Government policy on ports and their development runs counter to the policy adopted by our major port competitors in Europe. I refer particularly to the competition which the Humber ports and East Coast ports in general face from such places as Rotterdam and Hamburg, which have aggressive development policies. Those continental ports receive subsidies and they have become a gateway to the thriving economic markets of other countries. No obstacle is placed in their way and they have been given an impetus to achieve full economic growth.

Another point to be borne in mind is that a policy involving financial stringency will place a further burden on our exports as port charges rise to meet extra debt charges. This in its turn will create further economic problems.

I should like to quote from a Press notice issued by the Department of the Environment on 22nd June in which the Minister dealt with ports policy. He said:

"The crucial test by which a port's future will be determined is the service which it offers to shipowners and users. A shipowner is not nowadays tied to a particular port. He is like a housewife choosing the shop which gives him the best value, free to go to the port that suits him best."

We have heard a great deal about shopping around in other respects and it is now being applied to one of our basic industries. That is the idea, and I hope to bring out the importance of it later in my speech because it imposes severe penalties on certain port authorities.

Is the hon. Gentleman suggesting that shipowners should be tied to specific ports?

That is an important point. If the hon. Gentleman will be patient I shall deal with it, because I hope that he will address himself to it. I say that because I think it is clear that the policy embodied in the Government's White Paper fails to meet the problems of our ports.

The difficulties of the Humber ports are those faced by any port competing with continental ports or, for that matter, with ports on other parts of our coastline. For that reason I hope I shall be permitted to spend a few minutes drawing attention to the financial problems of Hull which are in no way assisted by the policy set out in the White Paper.

We should like a good deal more information about investment decisions and the capital involved in them. I made the mistake of thinking that this Bill was to be introduced after the recess. However, it having made its appearance earlier, I hope that there will be an opportunity in Committee for hon. Members to deal with these matters in more detail.

The growth of Hull is important, not only for Yorkshire but for the country as a whole. It has tremendous potential, but it badly needs investment. It is for that reason that I stress the importance of the financial policies pursued by the Government. In my view some kind of maritime industrial development programme must be considered and requires massive investment.

Hull has seen a rapid decline in traffic in coal, timber and raw materials. This has been due partly to the fact that Commonwealth countries are now processing their own materials. Another contributory factor has been bad management decisions. I agree with the Minister for Transport Industries that the ports industry has suffered to a large extent from amateur management. That criticism cannot be confined to the ports industry, of course. In my view it is true of much of our industry, from Rolls-Royce downwards. The fact remains, however, that management decisions involving the removal of railway facilities from our docks have encouraged the reduction in traffic. When there is a reduction in traffic there is a corresponding reduction in the income from charges, and this gives rise to serious problems for ports like those in the Humber area.

If a port wants to grow and develop the new techniques which are necessary if it is to face the growing competition from European ports, an enormous amount of capital investment is required. I agree with the hon. Member for Southampton, Test (Mr. James Hill) that the massive capital required by a growing port cannot possibly be recovered in the short time that Parliament expects of the industry. Financial criteria are placed on port authorities which have to raise capital by means of charges, and that in itself compounds their problems. When charges are increased, there is more reluctance to use the port and, as a result, traffic begins to fall.

The problem of a port area like the Humber is that it has to raise capital. The flow of traffic is important for this reason, and here I deal with the Under-Secretary's question to me. He asked me whether I was suggesting that shipowners should be restricted to certain ports; in other words, whether a shipowner should be told which port he should use. People will go where the services are cheapest. This raises a problem because millions of pounds have been involved in building big port complexes and this money has to be recouped. The small ports, such as Scarborough, Flixborough, Whitby and Selby, situated on river estuaries, attract vessels bringing in timber and earn themselves "pin" money. Of course it is much cheaper at the smaller ports because the labour is cheaper and capital charges are nowhere near as large as at a large port. Container work is done off the dock estate. As a result, the traffic is syphoned away from the major ports and the ports authority has to recover debt and interest charges from a decreasing amount of traffic.

This is not the way to deal with the problem and ensure that our major ports attract the main traffic. It is a silly policy which will operate eventually to the detriment of all ports. The Government's policy will not solve this problem because the only answer is strong central control by the ports authority.

This is an important Bill for port development. When such a Bill involving new arrangements for dealing with loans and port restructuring is laid before the House it is obvious that many people connected with ports have been in touch with the Government. Are the people who will be mainly concerned once the Bill becomes law in support of the Minister? Do they believe that this is the right way in which to develop competitiveness in the ports and to get rid of many of the ancient practices? Hon. Members get all sorts of representations on Bills like this because of their political philosophy or their interest in development. This Bill seems thoroughly satisfactory.

May I help the hon. Lady? The issue which concerns the ports is that instead of having a grant from public funds they will have to borrow, and at very high interest rates.

The right hon. Gentleman may say that, but I do not share his point of view. I want the ports to be competitive, something which has never interested the Labour Party. Many industrial losses resulting from their Administration have caused us a lot of trouble. It is kind of the right hon. Gentleman to try to help me, but he is not helping me because I do not share his financial approach.

I have been in the House a long time and have often heard the hon. Lady argue eloquently for Government aid for her area. I am surprised that she is not asking for a continuation of that aid for the Port of Tynemouth.

That may be, but I am a very flexible person and I judge everything on its merits. There is no reason why I should not support the Bill.

Every time I sail through Rotterdam I wonder how our ports will ever compete. I am glad that my Government are making the ports as up-to-date and modern as Rotterdam, so far as that is possible. My opinion of Rotterdam may be that of an amateur, but amateurs sometimes sec more than the professionals.

Surely an amateur like the hon. Lady or me must know that much more help than anything in the Bill is given to Rotterdam. The Dutch do not have a Bill like this.

I could not agree more. For development, with which the Labour Government were singularly unconcerned, one must have a sound economy and money available. They had all sorts of ideas but did not know how to pay for them. My Government's ideas might not be quite so all-embracing but at least they provide a sound financial basis on which to operate. Will our ports benefit and become competitive as a result of this Measure? That is the important question.

A lot has been said about Hull and ports in Scotland. I want to talk about the Tyne because we are losing out at present and it is clear to those who live and take an interest in my part of the world that the Tyne is declining whereas the Tees is building up, and this does not suit me at all.

Incidentally, in the old days, when the body which looked after this areas was the Tyne Improvement Commission, before nationalisation, it was much nicer to me and to my ideas than has been the case under nationalisation. I hope that when I next lunch with those people, particularly as private enterprise has come into the matter now, they will be nicer than they were obliged to be under the disciplines of the Labour Government.

Will the Tyne be able to develop under this and other legislation so that it can stand on its own feet and employ the numbers of people who used to earn their living on the Tyne? In other words, shall we be able to reorganise and become a competitive port once again?

I was recently in Europe with the hon. Member for Kingston upon Hull, West (Mr. James Johnson) and met people who were very knowledgeable about ports. Although we were there dealing with the probation service and similar matters I suppose it was unavoidable that the subject of ports would crop up. They told me that our system of cranes was deplorable and that the cranes we used in our ports were not capable of lifting very much.

What action does the Minister intend to take to stimulate port authorities into making us as competitive, if not as large, as Rotterdam? Are we to have the cranes and other modern equipment we need?

I agree that our ports need modernising. Is the hon. Lady aware that Conservative market criteria are hard to apply when ports must first ensure that they are capable of attracting sufficient traffic and, second, that there is a sufficient return on the investment? The trouble today is that under the policies of the Conservative Party the ports are having to compete against each other and all sorts of other things.

I have faith in this Government and I am beyond the partisan arguments of hon. Gentlemen opposite.

My main point in rising is to ask whether our ports will be able to become competitive. I hope that they can, so that when I sail through them I can feel as proud as the Dutch feel about Rotterdam. I wish our ports luck in the future. I hope that they go ahead to greater things so that when we enter the E.E.C. they will be in a position to share in the trade which is desperately our due.

I intervene only briefly. I start by apologising for being absent during the opening of the debate. I was detained at a meeting and was unable to be present. But as this matter affects directly my constituency, or could do so, it is obviously of very considerable importance to me, as it is to the hon. Member for Tynemouth (Dame Irene Ward). I was a bit astounded at the hon. Lady's comments because she has fought vigorously for her constituency in the past. No one would doubt that. Here we have a Bill which does nothing to help us on the Tyne. If anything, on the face of it, it would appear to make matters more difficult. As the hon. Lady has been a doughty fighter in the past, it is surprising that she should have given up the struggle now.

The hon. Gentleman need not bother about me. I know exactly what I am doing, and what I am doing for the Tyne. On the whole, the Conservative policy will serve our area better than that of the Socialists.

We have been told that faith moves mountains, but I am doubtful whether it will succeed on this occasion. But I associate myself with the hon. Lady in her questions to the Minister as to what precisely would be the relevance of the Bill to our area. Only a few days ago I was raising matters in the House at a late hour of morning about the situation on the Tyne. We have had to face a situation on the Tyne—one of the safest harbours, if not the safest, in the North-East of England—of a decline in the major trade of coal over the years, and this had not yet been replaced by an adequate alternative trade.

The tragedy for some of us, and for my own port of Tyne Dock, is that, after building up the iron ore trade and installing a great deal of equipment for it of a relatively very modern character, we now find that that trade is almost inevitably moving down to the Tees and will be lost, with a further loss of work for men in the area added to the dreadful proportion of over 15 per cent. of men unemployed in my constituency.

A free market.

This is a very serious position. Therefore, naturally and rightly, the Tyne Port Authority is concerned with attracting new trade to replace the trade it has lost. In order to do that, it must concern itself with the facilities available. I hope that the comments of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who is naturally concerned about his constituency, do not suggest that there are not other major port areas, such as the Tyne, which have a very important part to play in the future.

To get the record absolutely straight, in illustrating the Humber I said that it was illustrative of a number of problems in a number of port areas. I am sure that it affects a number of areas.

My hon. Friend is right, and I appreciate fully the problem he has raised about some of the smallest of the ports fighting for a limited amount of traffic, especially in timber, and the implications of this for any port attempting to invest in modern facilities in a big way.

An area like the Tyne is always faced with a challenge. On the Tyne we are told that we have to prove that there is traffic to justify investment in the modern equipment required. We have a circular argument: how can we hope to attract the traffic to replace what we are losing unless we have the courage to undertake that first investment?

One of the important criteria in considering the Bill, at any rate for us on the Tyne, is whether it offers us any hope of helping to carry out that new investment. I do not see that it does. If the Minister can tell us that it will make new facilities available, we shall be delighted to hear it, but we very much doubt whether that will be so.

We also have the tragedy that big reclamation undertakings are being started on the Tyne, including the reclamation of the Jarrow Slake, a huge area, in the hope of making facilities and sites available for new industrial development, but there will be no grants for that work either. If it had been a local authority development, they might have been available, but it is a port authority development. The Bill does nothing to alter that situation. I admit that it is a situation of long standing.

I very much fear that the Bill, which has had a pretty tepid welcome in the House, will not help us on the Tyne at all. If it does not give us the opportunity to help ourselves and modernise our own facilities, when will the Minister bring forward new proposals that will enable us to do so?

With permission, I should like to reply to the debate.

It is interesting that the House should have spent the larger part of today's Sitting debating with some intensity a matter of a million pounds or so to be added to the Civil List whereas when we come to a Bill disposing of £200 million or £300 million of additional lending facilities—

May I get the record straight? We are not giving an extra £200 million but are raising the lending limit to that figure. There is already a limit of £125 million.

The right hon. Gentleman is right, but I was just drawing attention to the curious paradox that there has been a great deal of oratory on an expenditure of £1 million, whereas tonight when we are dealing with much more substantial sums the House, I regret to say, is comparatively empty.

The debate has ranged very widely. The hon. Member for Kingston upon Hull, West (Mr. James Johnson) referred to the Government's policy as that of a Shylock. That is a curious description. We are making available to the ports industry some £200 million of loans, yet he repeated that it is a matter of penny-pinching, typical of Shylock.

If the Government lend £200 million at 2 per cent. per annum to start with—and we do not know what it will be later on—they are making a cool £4 million a year, and that is quite nice for anyone.

If the right hon. Gentleman felt in a generous mood, would he be prepared to lend in the circumstances of some of our ports? That is the crucial point.

I should make it clear at the beginning that the Bill does not apply to British Transport Docks Board ports. A number of hon. Members have referred to the problems of the British Transport Docks Board. However, I cannot deal with them, because they are not contained within the Bill. There is no question of the British Transport Docks Board either asking for or being given loans under these proposals.

The Bill is not designed to provide for the development of new works. It is designed to finance the renewal of existing capital debt. Therefore, many of the questions which have been put to me are irrelevant to the Bill. However, I will deal with each of those points when I can.

The Bill is necessary because many of our ports have got into debt and are finding difficulty in refinancing that debt when some of it matures. The House will have many and various views why our ports are in debt. Some hon. Members will put most of the blame on managements; others will put most of the blame on the unions. I think that we must accept that, whatever the measure of blame between those two groups, there are a number of secular and technological changes in the nature of the ports industry and in the quality, character and direction of our trade which have created new situations. Therefore, we must look at the problem as a whole.

The uncertainty under which ports have had to operate, in part due to the proposals of the Labour Party to nationalise them and the change of policy brought in by this Government has made it the more difficult for ports to refinance maturing bonds when they have become due. The Bill is necessary to deal with the problem of refinancing capital debt; it does not deal specifically with anything else.

I will deal with the particular points which have been raised in the debate. My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) asked about consultations. We have had the most detailed consultations, in particular with the National Ports Council, which will be an essential element in carrying out this policy. We have every confidence that it will assist us in doing so. My hon. Friend particularly asked, as did the hon. Member for South Shields (Mr. Blenkinsop), about the effect on the Tyne ports. If the Tyne ports have capital debt—I am advised that they have—it is open to them to apply, via the National Ports Council, to the Government for financial support in refinancing their debt. But I should also make it plain that the Government hope that many of our ports will be capable of refinancing their debts in the market, as many of them prefer and intend to do. Therefore, I should be wrong in forecasting that the Tyne ports will need the Bill. It is a matter for their judgment.

I was asked about the current rates of interest and the amounts which would be chargeable. The Government's lending rate is currently 6¼ per cent. With 2 per cent. added, the rate payable on a loan of this kind would be 8¼ per cent. That is a good deal lower than the rate which was chargeable only a few years ago when Bank Rate in this country was substantially higher than it is today. It does not lie in the mouths of hon. Gentlemen opposite to talk about exorbitant interest rates when, as a result of the reduced Bank Rate which this Government have brought about, the total interest which will be chargeable, including the additional 2 per cent., will still be lower than that chargeable under the Labour Government.

Surely the pertinent point is how the rates of interest compare with those of our competitors. At a time when rates are generally coming down, surely this is a fairly disastrous position.

I made the important point that the rate for loans will be 8¼ per cent. even including the 2 per cent. chargeable under the Bill. The rates for loans that have already been made to the two ports I mentioned range from 8 to 8⅜ per cent.

I was asked what increases there are likely to be after two years. There is no fixed amount. It will be flexible. It will depend upon the market situation, as it is bound to do, for if ports find it easier to go to the market for their money, plainly they will not be coming to the Government. Whatever the policy of the Opposition may be, it is the policy of the Government that the ports should be, as far as they can, encouraged to get their money from the market. Over a period of time, it may be that tile increase would be about ½ per cent. every one or two years, but I cannot give figures now. I can only say that we shall be flexible.

I was asked why there was to be a 2 per cent. premium over the Government's lending rate. We fixed this figure to provide a reasonable incentive to go to the market. We want to make sure that Government loans are not a soft option. The market rate itself will also be higher than the Government's lending rate. No one suggests that on the market one can obtain rates at exactly the rate set by the Government. It is wrong to say that there is a penalty of a full 2 per cent. over what it would cost to go to the market. It is the Government rate plus 2 per cent., and that might be very different from what the market would charge.

I was also asked about port modernisation grants. This grants scheme was ended by my right hon. Friend on 30th July for good and proper reasons. The Bill does not have any effect on new development schemes. It deals only with the renewal of existing capital debt, and, therefore, a debate about grants under the ports modernisation scheme is irrelevant to the purposes of the Bill.

This point should be clarified. I understand that it was a purely administrative decision by the Minister not to pay grants. The power to do so remains. When the Minister made his announcement, we thought this Bill might deal with the point but I understand it does not.

My right hon. Friend ended the scheme because it was not doing any good. Despite the assistance given under the previous Government, there is no evidence that the 20 per cent. grant rate led to any significant increase in or acceleration of major capital developments by ports authorities. I make it clear that when I say that it was not doing any good I am referring to the refinancing of debt. That at least it was not assisting.

The House wants to be clear about this. Is the hon. Gentleman saying specifically that nothing in this Bill affects the Government's administrative power to introduce grants if they so desire?

My right hon. Friend decided that he would no longer make available ports modernisation grants because it was the policy of the Government not to pay investment grants but to turn over to a new system. It would have been inappropriate to have continued ports modernisation grants while discontinuing grants to industry. That is the short answer. For the future, I cannot tell.

I come now to the position of Aberdeen. It is not a fishery harbour for the purposes of the Bill, and, therefore, would be eligible for loans for debt renewal if the port were to apply and were to meet the necessary conditions. What the hon. Member for Aberdeen, North (Mr. Robert Hughes) was talking about was new development, not about money for re-financing. I understand that the Commissioners of Aberdeen Harbour want a grant. They can, of course, have a loan under the Harbours Act, if approved, at the normal Government lending rate, but this Bill, I repeat, deals with re-financing. The hon. Gentleman asked whether interest rates could be lower than the Government lending rate. There is nothing in the Bill to stop this but it would be contrary to Government policy to go in for selectively lower rates.

Bristol will not get a grant for the West Dock scheme because it is too late to qualify. Borrowing for the West Dock scheme is not covered by the Bill because the loans are only for debt renewal and not for new development.

My hon. Friend the Member for Hove (Mr. Maddan) raised the question of Mersey. This, as he properly recognised, is a complex issue, and one to which we might return in Committee, but my short answer to the point that he raised is that the Mersey Docks and Harbour Board was plainly not viable, and, therefore, its position its different from that of the ports that will be covered by the Bill. This policy covers those ports which are viable, or which can quickly be made so to attract the finance which the Government are making available. Mersey was not viable. It was insolvent. There therefore has to be a capital reorganisation scheme under the recent Act to which my hon. Friend contributed so much. That capital reconstruction scheme is necessary simply because the board was not viable This fact alone would have made it ineligible for loans under the Bill.

Would my hon. Friend ask the National Ports Council to publish figures which would make the point that Mersey was less viable than the Forth ports authority and perhaps Milford Haven, which are to receive benefit?

I shall be glad to ask the council for any figures that will throw light on any point that my hon. Friend wishes to illuminate. The Bill covers those ports which are viable, or which can quickly be made so under arrangements which the council will discuss with them. We were, and still are, faced with the fact that the Mersey Docks and Harbour Board was not viable, that it was insolvent, and in the fact that a capital reconstruction scheme has to be undertaken there is proof positive that it was not viable and was not solvent.

My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn), as always, has done a great deal of homework on this issue, and he asked one crucial question: how are the ports doing? The short answer is that the ports are doing better now because confidence is returning and because my right hon. Friend's policies are commercially realistic and put the emphasis where it should be; namely, on persuading and, indeed, encouraging ports to return to equity financing by way of the market, which can make a far better judgment of the viability and commercial competence of the ports.

I am glad to say to my hon. Friend that, as regards Mersey, the chairman, Mr. Cuckney, to whom the whole House can pay tribute for what he has done at that port, says in his annual report:

"I am cautiously optimistic … I think it is gratifying to have some evidence that the unpalatable measures we have had to take so far have been justified in that we are beginning to create the base on which to establish a thriving and profitable port even though that will take a few years to achieve in full."

The short answer to my hon. Friend is that confidence is returning, and that the ports are doing better.

I turn finally, to the general points raised by the right hon. Gentleman. He suggested that the policy of grants to the ports which he administered under the previous Administration was a better approach. We on this side of the House disagree. His policy is that of the soft option. The right hon. Gentleman wants to provide grants, or he wants to provide loans at specially favoured rates. But all the evidence is that the policy of soft options does not produce more efficient ports. On the contrary, the evidence is that those previous policies have landed our ports in increasing difficulty and in debts which they are unable to re-finance on the market.

Our policy is different. It is not a policy of subsidy. It is not a policy of nationalisation. It is a policy of commercial realism and financial discipline, and I believe that to be right. Our policy is founded on encouraging ports to go to equity financing and will help them over the difficult period when they need to re-finance some of the debt that has been incurred.

One question raised was: how could we be sure that money would become available from the market as and when ports wish to get out from under the rates of interest that would be charged? How can we be sure they will attract money from the market? I believe the answers are these: first of all, with more confidence, with greater trade, with better financial disciplines and better managements, ports will achieve better results and higher profits; and it is the higher profits and better results that themselves are the best advertisement for a port going to the market. There is no joy to be won in the market for the port which makes losses. Our concern is with ports that make profits. We believe that those are in the best interests of the country.

May I ask the Minister to address his attention to the point I was developing that, as he points out, this leads to refinancing of capital debt and in that sense it is not only the British Transport Docks ports which face problems? There are other authorities to which this Bill applies which are facing the same problem with some ports siphoning off trade, which will increase the problems for the larger ports which will have greater capital debt problems than smaller ones.

Clearly, the hon. Gentleman likes the soft option and dislikes competition, and once again I can say that that is the divide between the two sides of the House. I can set his mind at rest to this extent: fishery harbours, which include many of the smaller ports to which he referred, will not be eligible under the Bill. I do not for one moment regard it as desirable in principle that shipowners should be placed under the constraint that they must go to certain harbours and not others. I believe it is in the general interests of trade in this country that they should have the widest possible choice in the harbours which they use.

The hon. Gentleman has referred to fishery harbours. Will he make clear that the Government still give grants to fishery harbours, certainly in Scotland?

Of course I will make that clear. The right hon. Gentleman who has not ventured to appear in this House until a few moments ago has now come here and stood up at the Front Bench on what is plainly a political fishing expedition for which I give him no credit at all.

There are encouraging signs of progress in the ports industry as a whole. In the past year there has been substantial progress. I hope the hon. Gentleman will welcome this since he represents a port. There has been substantial progress toward improving the revenue position of the industry. Much closer attention has been given to costs and improvements in financial and commercial methods. I believe these are the fruits of the freedom and encouragement that we have given the industry to act on a commercial basis. They are also products of the impetus given by the new National Ports Council and its wider terms of reference. It is because we want to keep up the momentum that this Bill is necessary. It will help the ports to pay their own way.

Since the hon. Gentleman picked me out for special mention as being a Member for a port that has been discussed tonight, and since I was missing from the Chamber for a few moments, may I ask him whether during that time he gave any answer to the question I asked earlier, whether or not this was the beginning of a Government policy towards the State sector, a policy of giving loans on these iniquitous terms?

I had sat down, but I will set the hon. Gentleman's mind at rest. I said several times that British Transport Docks Board ports are not included or covered within this Bill.