I beg to move:

That leave be given to bring in a Bill to provide for the election of all members of Regional Economic Planning Councils; and for connected purposes.

This Bill is about democracy—a cause which we all support with our words but constantly mock by our actions. I am a democrat because I believe democracy is the best way of organising and governing society; and because it is the only system of government which truly encourages the development of human personality. As a Liberal, I believe that choice is an instrument of personality and therefore I wish people to have the widest possible choice, and to use it as fully as possible.

In political terms, this means involving all the people as closely as possible in the decision-making process of government. The further we remove these decisions from the people, the more we inhibit the development of human per sonality. Democracy is not a static thing. It must continually develop and we must be always on our guard against encroachment on it.

Nowhere is democracy more threatened in Britain today than in local government, which is fighting for its life. Local initiative is stifled; the trend to national uniformity is gaining ground; central government's desire to control everything is rapacious. As more and more power passes from local government to Whitehall, local apathy sets in. More than half of all county council seats and nearly three-quarters of all rural district seats remain uncontested, and fewer than half the electors even bother to vote in local elections.

As local government appears to be debating more and more about less and less, men and women who could provide first-class local leadership cease to bother. As local government loses more and more of its functions, it is replaced by ad hoc boards appointed by Whitehall. We have the Regional Economic Planning Councils, the Regional Road Construction Units, the Regional Transport Authorities and many others. These bodies do not derive their authority from the people whom their decisions will affect. Grass roots democracy has become a "demockery" and in its place we have "ad hocracy".

This Bill is an attempt to stop the process before it is too late. The Government have introduced machinery for regional economic planning, but this has nothing whatever to do with democracy. It merely extends the frontiers of central government to the regions. How are the members of these councils chosen? What criteria is used? We have been told that "they will be appointed as individuals and not as delegates or representatives of particular interests". We have been told too that "special attention will be given to those areas in each region which have particular economic problems". But the membership of the South-West Regional Economic Planning Council makes nonsense of all this.

Bristol, with a population of 430,000 people, has nine members; Cornwall, with a population of 350,000, has only two. It takes 175,000 Cornishmen to secure a seat on this council but only 48,000 Bristolians. Although I am aware that one Cornishman is equal to three-and-a-half Bristolians any day of the week, nevertheless this makes a mockery of any pretensions the Council has to represent the people of the South-West Region as a whole.

So why not elect them? It is extraordinary that, in a country which calls itself a democracy, this question should have to be answered. Surely it is for those who believe that they should not be elected to say why. Why should a process which is right for the selection of Members of Parliament and, indeed, leaders of political parties, be wrong for the selection of members of these councils?

I believe passionately that democracy is still the best and most efficient sway of organising any branch of government. It is true that in a democracy the votes of the dunderheads and the scoundrels count: but then, in any other system, they generally run the show. The trouble with government by appointment is that those appointed soon forget they are appointed and think themselves anointed. I believe that my Bill will help to strengthen democracy and local government in Britain.

I want people in the regions to be able to make their own decisions and choose their own leaders. I want local government to have far more powers than it now has. Local government should not just be an agency for the central Government. It should take back much of what now festers and stagnates in the pigeon-holes of Whitehall. My aim is to replace centralised bureaucracy by democratic federalism. The Liberal aim is to add one phrase to Lincoln's classic definition of democratic government—

"… government of the people, by the people, for the people …"

Yes, and "government near the people".

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

I rise briefly to call the attention of the House to three matters. First, it will be observed that we are in the somewhat unusual position of having two Reports from the Joint Committee. We had the Third Report and then we had the Special Report. This Bill is, of course, a consolidation Measure which embodies certain Amendments which were proposed in a memorandum from the Lord Chancellor.

After it had considered the Bill and the Amendments, the Joint Committee reported that this was pure consolidation and represented the existing law and it considered that there was no point to which the attention of Parliament should be drawn. It took the view that, as it had already amended the earlier Acts by the procedure under the 1949 Act, this was pure consolidation.

That view was challenged in the Committee by the hon. and learned Member for Buckinghamshire, South (Mr. Ronald Bell), who thought that there should be a reference to the corrections and minor Amendments which had been embodied in this Measure. His view was not shared by the rest of the Committee, who decided against it. Later on, the matter was reconsidered and it was concluded that the hon. and learned Gentleman was right and so we had the Special Report, which reads:

"Your Committee are of the opinion that the Bill as amended consolidates the existing law with such corrections and minor improvements as can properly be authorised under the Consolidation of Enactments (Procedure) Act. 1949. They consider that there is no point to which the attention of Parliament should be drawn."

This is the first time that this point has arisen and therefore I thought that I should bring it to the attention of the House. We should also express our indebtedness to the hon. and learned Member for Buckinghamshire, South for the vigilance he has shown in this matter.

The second matter to which I should refer is the question of byelaws. The position is that, under the Statutory Instruments Act, two procedures are laid down for dealing with Statutory Instruments. There is the negative procedure under Section 5, whereby when an Instrument is laid it comes immediately into effect. Of course, it can be annulled by a vote of either House within a certain period of time. Then there is the other procedure under Section 6, whereby an Instrument is laid in draft and lies on the Table for a certain period during which the matter can be debated and the Instrument can he disapproved by either House. But, of course, the Instrument does not come into force until after the time has elapsed.

But under the existing law we have a somewhat anomalous provision. Section 2 (2) of the Forestry Act, 1927, which provides for the laying of byelaw's, states that before it comes into operation

"…a draft thereof shall be laid before each House of Parliament … and if either House, before the expiration of that period, presents an Address … praying that it shall be annulled, no further proceedings shall be taken thereon …"

One has this unique provision that, although the draft is laid and lies before Parliament in the ordinary way, it will already have come into effect. The Committee dealt specifically with this point and now we are to have the normal procedures under which a byelaw will be laid in draft and will not come into force until the normal number of days has elapsed.

The only other point to which I should draw the attention of the House at this stage is that, in Committee, I shall have to invite the House to accept one or two Amendments as a result of the Ministry of Land and Natural Resources (Dissolution) Order, which was passed with enthusiasm from both sides of the House last week. It will be necessary to move certain Amendments to show which Ministers are responsible for which particular functions. I do not think I need trouble the House at this stage with details of the Amendments.

I gather that it is not in order to say very much on this occasion, but it is not often that we have before the House legislation governing forestry. I believe that it would be in order to query whether it is wise to perpetuate in a Consolidation Measure certain things which are clearly out of date in the old Forestry Acts.

Order. We can debate whether the items the hon. Gentleman refers to should be consolidated in this Measure, but we cannot debate whether they should be perpetuated.

I was going on to argue that it was premature to consolidate certain of the items governing the Forestry Commission which were already out of date and that it would have been preferable to amend them first and get the up-to-date concept of the Forestry Commission before we went on to consolidation, useful though consolidation is. As an example I cite Clause 1(3) which refers to the general duty of the Forestry Commission as being to promote "adequate reserves of growing trees". That relates to the old defence concept that wars would last a long time and that one would require a lot of trees in reserve for war-time needs, as we did in the last two wars.

A further example is given in Clause 2 in which is set out a list of the various persons who are eligible to serve on the Commission. As the House well knows, that is a little out of date now owing to the recent Measures of the Government. I do not wish to labour this point too much, but it is a pity that the opportunity was not taken to restate the law regarding the Commission. This has never been completely done. The Commission has now been in operation for 40 years or more, and the general nature of its work is changing from that of being a planting body to that of a body that has timber coming forward much more rapidly to sell.

I do not have much to say about the other three points raised by the Solicitor-General. Although this is a Consolidation Bill, I hope that at a later stage the various improvements in the Bill, to which the Solicitor-General has referred, will be set out. It is not easy for the House to go through a Bill like this and to itemise the improvements one by one, because it can be done only by reference to the various Statutes which are consolidated.

Regarding the special procedure which is being abolished, there is an advantage in bringing it into line with our normal negative procedure. On the other hand, there must have been special reasons why a procedure of this kind was incorporated in the 1927 Act. I should have thought that in a subject like forestry, which does not promote tremendous public interest, there might still have been some advantage in that. Perhaps we can be told why it was decided to jettison that provision.

I do not think the House will quarrel about the Amendment needed because of the dissolution of the Ministry of Land and Natural Resources. I might say, in passing, without getting out of order, that it is a little disappointing for those who are interested in a minor industry such as this to find it being shot backwards and forwards between one Ministry and another. I hope it will stay with the Ministry of Agriculture now that it has got back there.

The hon. and learned Gentleman the Solicitor-General will recall that about two years ago there was a very interesting Report of the Estimates Committee on the Forestry Commission. Two things were talked about, one relevant to Clause 2 of the Bill, the composition of the Forestry Commission, and the other to the method of accounting by the Commission, which was found to be somwhat lacking in various respects and did not give enough information.

We are now consolidating the previous laws about forestry into this Consolidation Measure. Am I right in thinking, therefore, that the Bill takes no account whatever of what was suggested in the Estimates Committee's Report? Is it felt that the Report on the composition of the Commission and its methods of accounting will need any future legislation? If it does not lead to future legislation, then, as my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) said, it would be very much better if we did not consolidate the forestry laws at the moment, but waited until we could have a new Bill on the subject and then subsequently brought in a Consolidation Measure. I should be grateful if the right hon. and learned Gentleman could answer that point.

We are grateful for the brief explanation which the Solicitor-General gave, but I should like to ask why the Government have chosen this point in time to produce this Consolidation Bill. Is there any connection between this timing and possible negotiations for entering into the European Economic Community, because, clearly, a Consolidation Measure like this would be of great help to us in assessing what, in fact, we are allowed to do in the of Government support for this industry in relation to the E.E.C? Perhaps the right hon. and learned Gentleman can throw a little light on this, and say whether this is perhaps a prelude to the Government's investigation of a levy system to take the place of what we have been used to in the past.

I should also like to ask the hon. and learned Gentleman whether he can confirm that this is, in fact, a purely Consoli- dation Measure, because, when I look at Clause 2, which concerns the constitution, administration, etc., of the Commission, I wonder how it is that something which was apparently put into force about a year ago, in the way of changes to the constitution of the Commission, does not appear in the Bill in the way that it was put forward at that time. Perhaps the right hon. and learned Gentleman can also throw a little light on that point.

Regarding the winding up of the Ministry of Land and Natural Resources, which move, as the hon. and learned Gentleman rightly said, has received more or less unanimous support, the opportunity should perhaps be taken to study very seriously the possibility of substituting a Ministry of Rural Affairs, which would enable all these matters to be covered.

Order. This does not arise on whether we shall consolidate these Measures or not.

I am sorry, Mr. Speaker. That brings me to my conclusion.

The hon. and learned Gentleman the Solicitor-General raised three very important points in connection with this Consolidation Bill. I refer, first, to the Long Title of the Bill, in that it is a Bill to

"… consolidate the Forestry Acts 1919 to 1963 with corrections and improvements. …"

As I understand the procedure, we are obliged to accept the corrections and improvements to the existing law as proposed in the Lord Chancellor's Memorandum to the Joint Committee, and as accepted by the Joint Committee.

It was most important that my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) raised a question at the end of die first Report—it appeared at the end of the first Report of the Joint Committee—about the wording of the Committee's Report to the House.

We are precluded from debating a Bill of this sort on its merits. We are precluded from debating the question or the merits of the provisions in the Bill. We are precluded from discussing the Amendments which the Committee is allowed to make according to the procedure under the Act empowering them to do so. Therefore, it is right that the attention of the House should be drawn very definitely, in a Report from the Joint Committee, to the instances where they have authorised and approved Amendments to the existing law; and, indeed, there are one or two important corrections and improvements which they made to the law. I should like to mention them, but I should soon be out of order in doing so.

The procedural point which was raised by my hon. and learned Friend the Member for Buckinghamshire, South before the Committee, and eventually accepted by the Committee, gives the House the opportunity of appreciating that Amendments have been made to the existing law by the Committee, and that they ought to be studied by hon. Members even if they cannot be debated in the House. It was a most valuable point to make and the House must be grateful to my hon. and learned Friend the Member for Buckinghamshire, South for raising it.

The second point which the right hon. and learned Gentleman put before the House was in connection with the power of the Forestry Commission to make byelaws. The Commission has some extraordinarily strong powers to create law. As can be seen from this Bill and from that to which the House has just given a Second Reading and which refers to Forestry Commission powers, the Commission has power to create law by Orders many of which do not come before the House. Those to which the hon. and learned Gentleman referred are byelaws which come before the House and which previously came before the House in a form which was not recognised by the 1946 Act, and it was therefore right in consolidating the law on this subject that it should be brought into line with the 1946 legislation laying down the proper procedure for Statutory Instruments which are subject to Parliamentary approval or disapproval.

My only criticism of this is the way in which this point has been covered by the Bill. I think that I shall be in order in questioning the actual wording of Section 46 (4) which merely states:

"Byelaws under this section shall be made by statutory instrument and a draft of a statutory instrument containing any such byelaws shall he laid before Parliament."

It may be that the 1946 legislation dealing with Statutory Instruments implies into a provision so worded that there may be a Prayer for the annulment of such a Statutory Instrument within 40 days of its being laid before the House, but it would have been a better consolidation of the law to have stated the full law in the subsection and to have said that the draft on a Statutory Instrument shall be laid before Parliament and shall not be made into an Order if, within 40 days of its being laid, either House passes a Motion disapproving of the draft. Anyone reading the Bill as it stands with only those three lines in subsection (4) would say that the procedure was not clear, and it ought to be made fully clear.

I am encouraged to make that suggestion for an Amendment at a later stage because the third comment of the hon. and learned Gentleman was to say that he intended to bring forward Amendments to the Bill at a later stage. I have endeavoured on several occasions to amend consolidation Bills, always with utter failure. I have been able to find only one Amendment which was in order and that was to postpone the date of the operation of the Bill. I shall be delighted to find the procedure by which the hon. and learned Gentleman manages to bring before the Committee and to bring in order any Amendments to the Bill.

These Amendments arise, of course, out of the dissolution of the Ministry of Land and Natural Resources. We have become only too accustomed to the excessive trouble which that Ministry has given to the House, excessive trouble when it was created, all through its career and when it was dissolved.

Order. I think I need say no more. The hon. Gentleman must return to the Bill.

It was the hon. and learned Gentleman who introduced the subject as the reason for the Amendments which he proposes to bring forward. That only shows that it is possible to amend a Consolidation Bill and, secondly, that it is the dissolution of the Ministry of Land and Natural Resources which has produced this extraordinary phenomenon of an Amendment to a Consolidation Bill.

The only sort of Amendment which I have succeeded in even tabling to a Consolidation Bill has been one to postpone the operation of the consolidation. This will be an important matter to consider in connection with this Bill. My hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) called attention to the need for reforming the Commission and questioned whether the law should be consolidated at this time before the House had had an opportunity to consider the reconstitution of the Commission and its powers.

There is a powerful argument for this. Before consolidation of the law relating to the Commission, the House ought to have had the opportunity of considering the law and the powers and the administration of the Commission. My hon. Friend the Member for Galloway (Mr. Brewis) mentioned suggestions by the Estimates Committee strengthening the argument that the composition of the Commission and its form of accounting ought to have been considered before we embarked on a consolidation of the law. I cannot say whether, as my hon. and noble Friend the Member for Edinburgh, North (Earl of Dalkeith) suggested, there is any ulterior motive behind this, any international reason for introducing consolidation at this time, but perhaps the hon. and learned Gentleman can set our minds at rest by giving us an assurance that, having got the law into this neat consolidated form, the Government will not pause, but will use that as a springboard for proposing reforms in the composition and constitution of the Forestry Commission.

By leave of the House; we are all inhibited in a debate of this kind and we cannot go into the merits or into the substance of the law. We are all rather struggling against that disadvantage and I have every sympathy with all those hon. Members who have spoken.

I can tell the hon. Member for Dorset, West (Mr. Wingfield Digby) that although this is a Consolidation Measure, that does not mean that it is the last word. Obviously, I am not in a position this morning to hold out hopes of future legislation in the near future. However—the hon. Member for Crosby (Mr. Graham Page) will recall that we have had this issue raised before—the fact that we are consolidating the law as it exists does not mean there is to be no more reform of the law for a long time. Indeed, if we are to deal with reform of the law affecting this subject, it may be convenient if we put the existing law in this consolidated form.

Because this is a Consolidation Bill, some of the changes which hon. Members have mentioned cannot be made in this Bill. For example, the hon. Member for Dorset, West referred to Clause 1(3) which provides:

"The Commissioners' general duty includes that of promoting the establishment and maintenance in Great Britain of adequate reserves of growing trees."

He pointed out, quite correctly, that that has an historical reason going back a very long way.

It may or may not be outdated, but there is a substantive provision of the law. To have excluded it would have made a very considerable change of the law, and would have been outside the functions of the Joint Committee, which is concerned simply with consolidation and minor corrections and Amendments. I have to give the same reply to the hon. Gentleman the Member for Galloway (Mr. Brewis), who raised certain considerations, which had been brought to the attention of the House, I think that he said two years ago, by the Estimates Committee. Those considerations must await future legislation, as they are not matters which could have been dealt with by this Committee within its somewhat limited functions. I must give the same reply to the hon. Member—

I think that the right hon. and learned Gentleman is missing the point that these reforms have been put into practice, but the law has not yet been changed.

It may be. I do not know precisely what measures the hon. Gentleman has in mind and I have not got the Report of the Estimates Committee before me, but if they involved any considerable change from existing statute law, they would have been outside the purview of the Joint Committee, which is limited to the functions I have mentioned.

The noble Lord the Member for Edinburgh. North (Earl of Dalkeith) went on to ask whether this Measure represented pure consolidation, or consolidation with minor corrections and Amendments. We must take that from the Committee. It has examined these matters with great particularity and has reported that the Bill consolidates the existing law with corrections and minor improvements. We cannot go behind the Committee's findings on that matter.

I return to the observations made by the hon. Gentleman the Member for Crosby. We always look forward to his interventions on these occasions. He referred particularly to Section 46 and to byelaws, pointing out that it is not specifically provided that these byelaws can be annulled by Parliament. I would advise him that that is covered by Section 6 of the 1946 Act, which contemplates legislation of this kind. The point is therefore met, but if the hon. Gentleman cares to put down an Amendment I will certainly consider it.

I quite appreciate that if one reads the 1946 Act with this Section it has that effect, but it has been the practice in recent legislation to spell it out in full in the empowering Clause.

I quite see the hon. Gentleman's point, and I should like to have the opportunity of considering it. Although I am making no promises, I am not ruling out an Amendment at a later stage. The hon. Gentleman should never be discouraged in these matters. I am sure that he never will be and I am sure that, for many years ahead, at any rate during the lifetime of the present Parliament, we shall have a series of Amendments or attempted Amendments to Consolidation Measures coming from the hon. Gentleman the Member for Crosby, and we look forward to those occasions.

I beg to move in page 1, line 12, at the end to insert:

Provided that, for the purpose of encouraging trade with places outside the United Kingdom, nothing in this section shall prevent part thereof being applied to the provision of guarantees up to two years before the shipment of goods overseas.

In moving the Amendment I am conscious of the fact that pre-shipment cover for goods in the process of manufacture is available in a wide majority of cases—it may well be in all cases. In going through the different types of policy involved, I should like the Minister to clarify my own mind, and that of the Committee on a particular grey area which I believe exists.

In the case of a comprehensive guarantee based upon the turnover of an exporting company, E.C.G.D. certainly makes available a policy either from the date of contract or from the time of shipment of the goods. Likewise in the case of two types of specific guarantee, namely, the ordinary policy and the financial guarantee, E.C.G.D., either directly or indirectly, makes cover available. In the first case, that of the ordinary policy, the policy may be made available, on signature of contract and then can be assigned or hypothecated to the bank so that the bank can provide financial cover for work in progress. Similarly, in the case of the financial guarantee granted to the overseas buyer and not to the exporter in this country—the overseas buyer may decide to make payments for work in progress, and again the E.C.G.D. financial guarantee will be indirectly available as cover.

In clarifying this position, I am indebted to the members of E.C.G.D. and to the Minister, who gave me permission to speak to them. It was a matter of some amusement to me that as a member of a business firm I am able to ring up the E.C.G.D. and seek information on any matter that I desire in my own business, and I do so often. But I found to my horror that as a Member of Parliament—and I can understand this—I have to go through the Minister in order to speak to E.C.G.D. I can understand the reasons for this, but it is rather surprising that a Member of Parliament finds it more difficult to elicit facts than the ordinary businessman. The purpose of my Amendment—

On a point of order. I apologise to my hon. Friend for interrupting him, but may I point out that there are no Labour back-benchers in the House to hear this important speech by my hon. Friend?

This is not a point of order.

I am sorry Sir, but if I were able to call a Count, this would have some effect. This is Government business, and there is no one here.

The hon. Member is not raising a valid point of order.

What do we do? This is Government business.

Order. The hon. Member cannot interrupt the speech being made by an hon. Member in order to raise a bogus point of order.

May I raise later this point of order about there being no Labour Members present?

It is not a point of order.

Although it may be out of order, I will try to satisfy my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) by working it in during the course of my speech, also deploring the fact that there are no hon. Members on the Government back benches to listen to this most important matter.

The purpose of my Amendment is to draw out the Minister in the case of the banker's policy, which is the third type of specific cover with which we are involved. Here the E.C.G.D. policy is made available directly to the banks putting up the money. It involves no hypo- thecation of the policy as in the case of the ordinary policy, nor is it granted to the overseas buyer, as in the case of the financial guarantee. The banker's policy becomes available only at the point of acceptance of the goods and it cannot be made available at the time of signature of the contract.

May I give an example of what I have in mind? Take a small or medium-sized company, manufacturing a new type of equipment. It is a leader in export markets, as many such small companies are. Its very success has led to a rapid development of sales in export markets. Indeed, to a conservative banker—with a small "c"—or to the Treasury, this company may be guilty of the deadly sin of over-trading. Nevertheless, there are many small or medium-sized companies which invent new processes, go out abroad to sell them and require all the backing that they can be given. Many of the new processes which have been invented have been introduced by small or medium-sized companies without a great deal of financial strength behind them.

Let us say that this small company obtains a £3 million export order in Brazil and that it requires credit for a term of five years. In such a case, the banker's policy would be the type of specific policy which would normally be issued and I have no doubt that this policy would be made available at the time of shipment of the goods. There is no doubt about that. Although the policy comes into effect at the point of shipment, however, it does not come into effect at the time of acceptance of the goods. In this respect it is different from the comprehensive guarantees.

Therefore, if this small or medium-sized company applies to its hank to increase its overdraft limits to finance work in progress, the bank may say, "We are not prepared to increase your overdraft. You do not have the financial strength to bear it". For this reason, this small or medium-sized company, which has a new process and which has already obtained a contract in export markets, cannot get its finance. The bank may well say to the company, "We would be prepared to grant you increased overdraft facilities on the security of your overseas contract, but we wish to be covered against exchange and political risks during the time that the equipment is undergoing the process of manufacture".

We therefore have the situation that in the case of the banker's policy, cover comes into effect only on acceptance of the goods. Acceptance of the goods may be obtained half-way through the process of manufacture. From experience, I know that a small company may start manufacturing a piece of equipment and find that the goods are not accepted by the overseas buyer until a few weeks or months, or even a year, has passed after the process of manufacturing has begun.

The argument against granting a banker's policy in this case is principally that it is not the job of the Export Credits Guarantee Department to cover work in progress, that a company may be over-trading and that if it is not over-trading it can get the finance from its bank. Many small companies may be technically over-trading. Where they actually have an export contract, however, it is necessary for the Government to do all in their power to help the company to finance a contract which it has already obtained.

I will summarise, for the Minister's benefit, the narrow point which I am making, so that there is no mistake. I am referring to the case of a banker's policy only. A banker's policy comes into effect, I understand, only when the goods are actually accepted and not when the contract is signed, as in the case of comprehensive guarantees, as in the case of a financial guarantee, as in the case of an ordinary specific policy. It may be that under Clause 1 the E.C.G.D. now has power to give a banker's policy at the time when the contract is signed. In practice, however, the Department gives a banker's policy not at the time of signature of the contract, but only on acceptance of the goods. It may be that the E.C.G.D. gives an ordinary policy until the banker's policy comes into effect. It may be that an ordinary policy is available during the early processes of manufacture and that the banker's policy comes in later.

However, if this is the case, surely that is a rather confused way of carrying out the business. Would it not be better if the banker's policy came into effect at the time of signature of the contract in the same way that other policies do? I will be interested to hear what the Minister has to say.

On a point of order. May I ask your guidance, Sir Eric? Can you tell me whether, under the Sessional Order under which these morning sittings are held, it is possible to adjourn the House for a while to allow the Government Whip to go round to get in sufficient hon. Members to make their support of these Government Measures, against which it would normally be possible to call a Count, look respectable?

I do not think that the hon. Member is really raising any point of order.

Further to that point of order. I suggest with respect, Sir Eric, that my hon. Friend has raised a perfectly valid point in asking whether the Sessional Order governing morning sittings provides for a limited suspension of business. Cart you kindly give us guidance about this?

On that point, it is open to any hon. Member to move that any particular debate be adjourned.

I would so move, Sir Eric. There is inadequate support on the Government side and I move that the Chairman do report Progress, so that we may get some, even limited, enthusiastic support from the back benches opposite to support the Government, since this is Government business. I so move.

I am not prepared to accept such a Motion.

May I ask your reasons, Sir Eric, why you would not accept this Motion and on what grounds you would accept such a Motion?

It is entirely within the discretion of the Chair to decide whether any dilatory Motion should be accepted at any time.

This is a very technical discussion in which very few hon. Members have expressed an interest. These Amendments were put down on Friday afternoon and I gave undertakings that I would deal with them in the way they had been put down.

The Amendment is unnecessary for the reason, given by the hon. Member for St. Ives (Mr. Nott), that the principal Act gives authority to the Export Credits Guarantee Department to provide for credit cover from the time of the signing of the contract, in cases where this is appropriate, as well as cover from the shipment of the goods. In most cases an exporter can choose whichever form of cover he wants, whether from the time of signing of the contract, which in many cases, as the hon. Member has said, would he long before shipment of the goods, or from the time of shipment of the goods.

There are exceptions to the choice. Obviously, cover would not he given for perishable goods to be shipped some time in the future or for mass-produced goods the model of which will not change and where, obviously, it would be to the disadvantage of the exporter to have that kind of expensive cover extending over a period of time. Generally speaking, however, with minor exceptions of that kind, the exporter can choose which cover he wants. The Amendment suggests that the period should be a guarantee of up to two years before shipment of goods. In the principal Act, there is no time limit. It depends upon the nature of the contract.

The hon. Member for St. Ives, having carefully explained to me and to the House how the present system works and having commended it, then asked me a very technical question—I am not in the business, as the hon. Member is—concerning the special position of a banker's policy and whether this, too, could cover the contract period instead of being, as the hon. Member thinks, confined at present to the shipment of the goods.

11.0 a.m.

The note which I have says that, in practice, the Department's policies help exporters to raise some pre-shipment finance in the two ways that he has mentioned: by hypothecation, as collateral security for overdrafts, or under financial guarantees of credit, to the extent that the exporter can persuade the buyer to draw on the credit for the progress payments.

The extent to which cover should he provided for progress payments is a rather difficult issue, particularly for small firms which may be in danger of over-trading. Such a firm may have signed a nice contract, and it looks as if it will be a prosperous thing for a relatively small firm. If it is trying to get a banker's order operating, there may be a danger of over-trading. Naturally, the Department has to look carefully at that kind of arrangement.

The only thing which I can do, on the special question which the hon. Gentleman has raised, is to go into it with the Department. If there is any evidence of weakness in the Department's operations on this point, with the help of evidence which may be provided to us, we will see what we can do to get rid of it.

As the hon. Gentleman knows, it is the policy of the Department to provide, on good commercial grounds, the best cover which can be made available, particularly matching the credit arrangements which may be made by competitive countries. We will do everything possible, still within the terms of good but flexible commercial policy, to make sure that no weaknesses remain in our operations. I will see whether that one point which the hon. Genleman has raised can be covered in that way.

I repeat that the Amendment is unnecessary, because these powers for the Department are already in the main Act.

I wish to make one brief point which may be regarded as a point of order, and then reinforce what my hon. Friend has said.

The Minister of State said that the Amendment which we are discussing was not put down until Friday. As my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) pointed out, we are still considerably in the dark as to how morning sittings work. Am I wrong in supposing that if the Amendment was put down on Friday it would be "starred"?

I am sorry; it was starred on Friday.

As I recall, these Amendments were put down on Thursday and appeared on Friday's Order Paper. Therefore, they were not starred.

In that event, they were put down a considerable time ago, and we are prepared to accept that the Minister of State made a slip of the tongue. They were starred on Friday but put down before, and therefore they are not starred now. In that case, it is not unreasonable to discuss them on this occasion.

The point which I wish to make, in reinforcing what my hon. Friend the Member for St. Ives (Mr. Nott) said is that, while this is a technical matter, none the less he makes a point of principle which is that it may be that a firm which has obtained an export order is having difficulty in financing it. It may be that it is a new firm and that it is a very important order to it. It may find that it undertakes to fulfil the order, puts work in progress, and then the country from which the order has come imposes restrictions on balance of payments grounds on remittances from that country to this. It may be that a firm, showing enormous initiative, going for export markets and doing everything it can to help the export drive, will find itself in a position where its financial structure is jeopardised and it might even go bankrupt because of government action taken by another country to which it is selling goods.

Therefore, while we accept that the Minister may not want to go into the technicalities, may I ask him if that, in principle, is something which ought to be covered?

If I may reply to that question, as the hon. Gentleman knows, it is not part of E.C.G.D.'s responsibility to provide finance for the production of goods in the general run of commercial and industrial activities. There are other sources of finance and help for that purpose.

There can be the case which the hon. Gentleman has mentioned, where a firm may have got the ordinary financial support which it needs for the production of goods in this country to meet an export order, and then, through no commercial fault of anyone, because there is a lack of foreign exchange or whatever it may be, the order collapses, and the effect goes right back down the line. The firm has to pay for the finance that was raised for the purpose of the production goods. It cannot sell goods, and the order has collapsed. In that very exceptional circumstance, I can see the hon. Gentleman's point very clearly, and I give him the assurance that he asks for.

Having heard that reply and the Minister's assurance that he will look into this technical point, I would be happy to withdraw the Amendment. However, when he mentions the point about over-trading, I emphasise to him that no one suggests that E.C.G.D. should actually finance work in progress. Where work in progress is going on, purely insurance cover should be provided in case political or exchange reasons in the overseas country make the contract null and void. That is the specific point with which we are dealing.

As for the point about over-trading, the Minister must be aware that a vast number of commercial activities are carried on here on the basis of the covenant which a firm contract provides. Very little property development would ever take place if the property companies themselves had to finance on their own credit the erection of a property. Most financing of business takes place on the security of a contract. That is the point with which we are dealing here. If a contract cannot always be lodged as security for an overdraft to finance work in progress because of political or exchange risks from other countries, the E.C.G.D.—and I can understand that this is of total disinterest to any hon. Members opposite—

How can my hon. Friend know that if none of them is here?

As my hon. Friend says, it is impossible to tell. Although exports are always talked about by hon. Members opposite, when it comes to considering the technicalities of exporting, they prefer not to come into the Chamber. However, on the Minister's assurance that he will look at this point, I beg to ask leave to withdraw the Amendment.

I beg to move, in page 1, line 12, at the end to insert:

Provided that, for the purpose of encouraging trade with places outside the United Kingdom, part thereof may be applied in guaranteeing moneys invested in industrial and commercial undertakings overseas.

This Amendment is very much less technical than the previous one, and I should have thought that there would have been a great number of hon. Gentlement opposite wishing to take part in this important debate. It concerns the whole question of overseas aid and whether some means can be found of providing cover for the investment of monies from the private sector into commercial and industrial companies overseas. This is a matter upon which there have been many debates in the past, and I have put down this Amendment purely as a probing Amendment so that we may have an opportunity of discussing it in Committee.

I am aware that it conflicts directly with current Government policy, which is designed to restrict the investment of private capital overseas. However, the so-called voluntary programme on overseas investment in the sterling area has been described by the Government as a temporary one. I am not seeking here to increase the total volume of overseas investment in aid. Rather, I am trying to make it slightly more flexible.

May I say at the outset that I do not want to encourage a large expansion of tied aid, because the United Kingdom's long-term interests call for the encouragement of multilateral trade. Nevertheless, when one looks at our export performance over the last decade and compares its growth with that of America, it is, I think, instructive to examine where our system of export credit differs from that of the Americans, because American exports amount to about 4 per cent. of their output, whereas in our case the figure is over 20 per cent. In one case the percentage is purely marginal. Although the Americans are running a large deficit on their balance of payments, it is purely on capital account, whereas in our case 20 per cent. or more of our output goes in exports, and this is crucial to the future of this country.

I believe that our system of export insurance is as good as any in the world. It has its critics, and its detractors, and no doubt when we discuss the Question, "That the Clause stand part of the Bill", and also my hon. Friend's Amendment, we shall hear certain criticisms of the way in which the Act is being administered, but, taken all in all, I believe that our system is one of the best in the world, and I would not seek to criticise the basic principles on which it operates.

The members of the Export Credits Guarantee Department are always helpful and flexible. I wish that I could say the same for the Board of Trade, because if all the Departments of the Board of Trade operated on as reasonable a basis as the E.C.G.D., a whole host of matters which they administer could be much improved.

There are two basic differences between the American system and ours. In the first place, the American Export Import Bank actually finances exports as well as insures them. More than 10 per cent. of U.S. exports are financed by Government money, whereas in our case only about 2 per cent. are financed by Government money. But I do not think that this is an important point, because I do not know of any exports where, following the issue of an export credit guarantee, money has not been found to finance that export. That is one difference—the export import bank actually puts up the money.

I am glad to see my hon. Friend the Member for Weston-super-Mare (Mr. Webster) sitting on the bench opposite. It shows that at least our side of the House is interested in this very important issue.

I am not sure whether my hon. Friend is now the hon. Gentleman, but I now have a splendid view of him, and I wish that hon. Members from this side of the House were here to hear his wonderful speech.

I make no pretentions about my speech being a wonderful one, nor would I necessarily encourage my hon. Friend to sit on the benches opposite with the object of looking at me. Nevertheless, I am grateful to him for the encouragement he is giving me in putting this important point to the Committee.

Secondly, and this is where I come to the real reason behind the Amendment—I want to draw the Minister's attention to the Agency for International Development,—A.I.D. as it is known—because it provides a comprehensive system of investment guarantees in the United States. First, it provides a specific political risk guarantee which may be granted to United States companies operating overseas. It enables the investor in the United States to invest money in these United States companies, and at the same time to be covered against inconvertibility or expropriation of his investments. This means that the United States citizen can receive an insurance guarantee to cover the investment of cash, materials, equipment, patents, and all services, in companies overseas. Secondly, there is an extended risk general guarantee, whereby it is possible for a guarantee to be given by A.I.D. to help the development of small independent business enterprises overseas.

At the moment there are many question marks overhanging our aid programme. First, there is the whole question of whether the increase in Government expenditure has grown far too rapidly, in which case I suggest there are some arguments for enabling the private sector to invest money overseas by encouraging them to do so through the receipt of a guarantee against exchange or political risks. If this were done, it would be possible to reduce somewhat Government overseas aid and replace it by aid flowing out of the private sector of the economy under the guarantee of the E.C.G.D., or the Ministry of Overseas Development. This has some bearing on the whole question of Government expenditure and the need for this country to draw savings out of the private sector to replace expenditure which is now coming from the public sector.

11. 15 a.m.

The other point which I should like to make about our overseas aid is that, because this is Government to Government aid, a great deal of it never finds it way through into the pockets of the people of the country concerned. It is salted away in Swiss bank accounts in the case of certain countries overseas, and in many cases it does not benefit the private sector of the countries which we are trying to help.

In conclusion, I suggest first that if the E.C.G.D. or the Ministry of Overseas Development could, in practice, give some kind of investment guarantee, in the way that A.I.D. does in the United States, it would help in reducing the burden of Government aid. I am not referring to the immediate present. I know that our balance of payments problem precludes this at the moment, but it is something to look at in the future.

Secondly, it would draw money out of the private sector into overseas aid, which will now not flow out because of the political and exchange risks concerned. Thirdly, it could bring back to this country a high return in dividends and interest. Many companies overseas are providing a high return and this could bring back much in terms of interest and dividends.

Fourthly, and perhaps most important of all, these companies would, to a large extent, provide a captive market for the export of British goods. This is where the A.I.D. has played such an important part in the United States. It has guaranteed about £500 million worth of overseas investment, and these companies, supported by A.I.D., provide a captive market for American exports. This is something at which we should aim.

If some form of investment guarantee could be incorporated in either Section 1 or Section 2 of the Act, or, alternatively, if the Ministry of Overseas Development could consider some development in this way, I think that it would be constructive. I would, however, prefer such a system to be administered by the E.C.G.D., rather than by the Ministry of Overseas Development, because it has a mass of commercial detail already at its disposal, and it is able to assess commercial risks in oversea countries. It is for this reason that I have tabled the Amendment.

I congratulate the hon. Member for Erith and Crayford (Mr. Wellbeloved) on joining us in this discussion. We have been debating these Amendments for some time, and it is most encouraging to see that a Government back bencher has taken the trouble to join us.

I am moved to make a brief intervention by the eloquence and force of the argument advanced by my hon. Friend the Member for St. Ives (Mr. Nott). I suppose we are all labouring under the disability of imagining that most of the legislation which would be discussed during morning sittings would be non-controversial and largely technical, yet the Amendment is designed to draw out one of the major divisions in this House between the parties concerning the relationship between this country and developing countries. Whereas hon. Members opposite lay great stress upon Government-to-Government overseas aid—the transfer of resources from one set of politicians to another—my hon. Friends and I have always argued the virtues of a free flow of capital resources between this country and developing countries, based primarily upon economic criteria. The purpose of the Amendment is to provide for Government encouragement for the flow of private capital. The Amendment is therefore of major significance, and I hope that the Minister of State, notwithstanding his Socialist principles, will be able to accept it.

Apparently it is still Government policy to discourage the outflow of investment, to the extent that the Prime Minister, in his speech in Swansea a few days ago, again said, almost as a matter of pride, that the Government had succeeded in restraining the outflow of private capital from this country. Yet all commercial history speaks to us of our success as an exporting nation based primarily upon the establishment of United Kingdom overseas companies. I have to make this argument in anticipation of the findings of the inquiry set up by the C.B.I., now being conducted by Professor Reddaway, but I have been in correspondence with Professor Charles Wilson, Regius Professor of History at Cambridge University and a distinguished economic historian, and he has argued that we would never have had success, especially with companies like Unilever's, as major international trading companies which lend great character to the export performance of this country, had they not been able to set up overseas industrial bases.

We have only to look at the dangers that exist in respect of British capital overseas today—during the last few days Tanzania has expropriated private capital—to realise that there are enough hazards for British capital overseas without the prejudice of the British Government. It is the prejudice of the British Government, so clearly underlined in the provisions of the 1965 Finance Act, which my hon. Friend the Member for St. Ives seeks to neutralise to some degree in the Amendment. It would be at least a sort of Monday morning present, to compensate for the almost total indifference and absence of Labour back benchers, if the Minister of State were to accept the Amendment.

It has been a quite interesting though short debate. I will not say that I am out of sympathy with many of the arguments put forward, but the hon. Member for St. Ives (Mr. Nott) is asking for a fundamental change in Government policy which has continued over the years. No post-war Government has adopted a policy of providing guarantees for overseas investments.

Whether the policy should be changed is a matter for debate. I would not question the need for such a debate. This is a very important issue, and I agree with the hon. Member for Oswestry (Mr. Biffen) that it is especially important when political disturbances throughout the world may affect overseas investments—whether from private or Government sources—which have been made not only to help developing countries but to assist our economy. There is always a great deal of self-interest in this kind of activity. I do not question the need for a debate, but it is hardly appropriate to attempt to make this major change in Government policy by way of an Amendment to an amending Bill.

Is it not true that Section 3 of the 1949 Act, which is now administered by the Ministry of Overseas Development, is very much concerned with overseas aid, and that if the Minister is implying that this point is outside the scope of the 1949 Act he is being a little harsh?

The hon. Member has not understood what I have been saying. I said that we cannot make this change in policy by amending an amending Bill. I was going to come on to the amending Bill, which says nothing about Section 3 of the 1949 Act. That Section deals with Government aid and investment overseas—usually Government-to-Government by way of loans, and so on—but because its activities have now been transferred to the Ministry of Overseas Development there is no reference to Section 3 in the Bill.

We have had some discussion about the United States practice. We know that the United States provides investment guarantees for United States investment overseas. This has long been established United States policy. Whether there is anything on those lines which could be useful to us is a matter that we can examine. But even if it were decided that Government guarantees for overseas investment should be introduced it would still be entirely separate from E.C.G.D.'s commercial responsibilities.

Something more is involved than providing commercial insurance for export finance. The Government must be very much involved even if they are covering what the hon. Member for Oswestry wants—a great deal more private investment overseas—because much of this is not commercial cover; it has to be special cover. Sometimes we do not know whether investment from this country will ever be paid back, let alone whether a period of repayment can reasonably be laid down. There are all kinds of qualifications, and risk-taking activities would have to come in. If we had discussions about the need to insure British investment overseas, in my view we would have to arrange it quite distinct from E.C.G.D.'s ordinary commercial activities.

The Minister talks about the difficulty of knowing whether or not investment will ever be paid for. Does he nevertheless agree that the Treasury has recently tried to lay down rules by by saying that any future investment is supposed to pay for itself in the most extraordinary time scale of three years?

I shall not argue about the Treasury's time scale. The hon. Member's intervention gives me my point—that this matter must be arranged outside the ordinary commercial activities of E.C.G.D.

During the course of his most interesting observations the hon. Member for St. Ives went further than the question of ordinary investment overseas; he talked about services provided overseas, such as consultancy services. These can be covered by E.C.G.D. as it is.

The Minister has misunderstood what I was saying. I was only saying that A.I.D. in the United States, when providing investment guarantees, does not insist that it should cover only the investment of cash. It says that it can also cover the investment of services in respect of a United States company operating overseas.

There seems to be some confusion about this. I did not misunderstand what the hon. Gentleman said. I was pointing out that if one is to have the two separated, services from investment, those services can in many cases be covered by the ordinary E.C.G.D. arrangements.

As I pointed out, since this is not the Measure in which to make a change of this kind—an Amendment of Section 2 or 3 of the parent Act would probably be more appropriate for a change of this kind—and since acceptance of the Amendment would mean a complete and fundamental change in Government policy, I ask the hon. Gentleman to withdraw the Amendment, but not to give up probing and questioning Government policy on this issue.

Before commenting on the Amendment, I must draw the attention of the Government to the fact that we are considering an important Bill in a Committee of the whole House. It would seem that if this occurs during morning sittings it will not be possible for the Opposition to obtain a Count or Government quorum. In Standing Committee it would have been possible for my hon. Friends to have ensured that an adequate number of Labour hon. Members were present to hear this important discussion. We therefore appear to be varying our normal procedure, and I hope that that is being noted.

The Minister said that if the Government accepted the Amendment it would involve a complete reversal of Government policy. But that would be the case only if the Government were totally against any form of private investment. My hon. Friend the Member for St. Ives (Mr. Nott) is suggesting a change of emphasis and is anxious to encourage private investment. For the cogent reasons put forward by my hon. Friends in favour of the Amendment, it will be obvious to the Minister that we believe that private investment based on commercial principles may be one of, if not the, most important ways in which aid can be given to developing countries.

In view of the emphasis the Government have placed on the question of aid generally, it is surprising that more hon. Gentlemen opposite have not taken part in this debate. The Bill makes certain changes in aid policy. On Second Reading the Minister stressed that in future responsibility for making Government loans would be transferred from E.C.G.D., the mechanism previously employed, to the Ministry of Overseas Development, although I understand from subsequent correspondence that Section 3 of the parent Act is to be retained. For reasons which I gave on Second Reading, the Government are adopting u debatable policy in this matter, and I will return to this subject on Third Reading.

The principal Act is concerned with aid and provides possible machinery for assisting aid. It is, therefore, reasonable that my hon. Friends should suggest that E.C.G.D. should again be employed to assist our aid programme in the way suggested in the Amendment. For this reason the Government can have no quarrel with the views of my hon. Friend the Member for St. Ives, and I trust that the Minister will take a more enlightened view about this whole matter.

The whole operation of the parent Act and the Measure which is now raising the limits draws a fine line between the question of exports and the question of investment. Once one gives export credit, the impact of that on the balance of payments for exports and investment is very much the same. In both cases one ships goods from this country. That has an adverse effect on our balance of payments until payment for those goods is received. There is really no difference in principle between the export of goods which are purchased by a foreign person on credit and investment in goods shipped to a foreign country. In both cases the initial effect on our balance of payments is adverse. When the remittance is received, either for the export of the goods or the return on the investment, our balance of payments benefits.

On what criteria do, the Government draw the line between exports and investment in overseas countries? We are entitled to a further explanation and I advise my hon. Friend the Member for St. Ives to await that explanation before considering whether or not to withdraw the Amendment.

I understood that morning sittings were designed to enable the whole House to debate, in Committee or otherwise, non-controversial business. My hon. Friend the Member for St. Ives (Mr. Nott) has moved a most important Amendment which the Government have resisted. That action was taken by a Minister who completely lacked support from his back-benchers for at least one-and-a-half hours—that is, until at least, perhaps as a result of my taking the unusual step of sitting on the Government side of the Committee, another Labour hon. Member appeared on the scene. This follows the incident last Friday, when another valuable section of industry and the economy, the small businessman, was being debated and when, apart from one P.P.S. and the Minister, the Opposition had to discuss the issue before otherwise empty Labour benches. Since we were supposed to discuss non-controversial matters during morning sittings, perhaps the House of Commons should now take the view—

Order. It is appropriate for the hon. Member to make incidental references to the value or otherwise of mornings sittings, but he cannot debate the whole question of morning sittings on this Amendment.

I shall try to keep in order, Sir Eric, although, sitting on this side of the Committee, I may find that somewhat difficult to do. It is a matter of grievous wrong that the Minister should have resisted the admirable Amendment moved by my hon. Friend.

I came into the Chamber to receive the acclamation of the hon. Gentleman and his hon. Friends. I have heard nothing from him or his hon. Friends which will long delay my departure.

Not having been present for one and a half hours, the hon. Gentleman obviously has no interest in morning sittings and simply wants everything to be pushed through as though Parliament were a rubber stamp. There was a complete apathy of Government supporters last Friday—

Order. I suggest that the hon. Member addresses himself to the Amendment.

My hon. Friend the Member for St. Ives is proposing something which is valuable to our export effort, yet it has been resisted by the Government. This would appear to be making morning sittings a controversial matter and I would like to know what we can do about it.

Would not the hon. Gentleman agree that that is even more the case since the T.U.C. has this morning indicated in its pre-Budget advice to the Government its wish to see measures taken to make exporting more profitable?

I agree with my hon. Friend. Although I am sitting on this side of the Committee, I hope that he will continue to call me his hon. Friend.

Since the Government are resisting an Amendment which is designed to aid our export effort, I should like to know what procedure my hon. Friend the Member for St. Ives, or any hon. Member who finds himself in this position, can adopt when faced with Government resistance of this kind. I hope that you, Sir Eric, or the Minister will explain how one may obtain redress in these circumstances or press a matter to a Division during morning sittings.

May I have an assurance from my hon. Friend the Member for Weston-super-Mare (Mr. Webster) that when a Division takes place he will come over to this side and vote with us?

As usual, I shall of course judge the matter on its merits. If we can get a more satisfactory answer from the Government we can allow the matter to proceed, but I protest at the lack of support of hon. Members on the Government side in morning sittings.

On a point of order, Sir Eric. Could you give some guidance on this? If the Amendment had been considered in Committee upstairs I would have had no doubt about our definitely dividing on it. As we are in Committee of the whole House, and in a new morning sitting, should not precisely the same guideline apply? Perhaps you can assure me that that is the case?

We are not in Committee upstairs but in Committee of the whole House. Therefore, a morning sitting is governed by the Sessional Order of 14th December, by which if a Motion is challenged it is necessary to defer the Division until the afternoon sitting.

I think I had better intervene here. I discussed the proceedings for this morning's sitting with the hon. Member for Worthing (Mr. Higgins) when I did not know what Amendments would be on the Notice Paper. He assured me that there would be some Amendments and he gave me an idea of their nature. He told me that in the main—I think entirely—they would be probing Amendments. On that assurance, having been given the idea that they were to be probing Amendments, when my hon. Friends asked if there was any controversial business on the Export Guarantees Bill this morning, I said "No". I did not anticipate that on the Amendments to be put down there would be any controversial business whatever. I was given an assurance that there would be no filibustering whatever, in so far as the Opposition Front Bench could give that assurance.

It is perfectly true that I pointed out that an hon. Friend and I were putting down an Amendment which certainly is a probing Amendment. I think it has been selected, or perhaps we could discuss it on the Motion, "That the Clause stand part of the Bill". But I am not in a position, of course, to give a clear undertaking about Amendments put down by my hon. Friends. Still less could I indicate their feeling about morning sittings.

It would be very difficult indeed to find anything politically controversial in this Bill. What I found surprising was the constant change of heart by the Opposition. This was quite unanticipated because never in the past when they were in Government have they been in favour of investment guarantees. This is a new point.

I anticipated a probing Amendment, but if it is suggested that the E.C.G.D. should be used to provide guarantees for investment overseas, that is something we shall have to look at very carefully indeed. I certainly cannot answer the question offhand at such short notice and discuss the whole range of the Government's investment policy, which is a matter for the Chancellor of the Exchequer. I should be glad to take the hon. Member on if I thought that there was to be an Amendment of such a wide-ranging character, but in the circumstances of today I certainly cannot respond to his invitation.

I am sure that the right hon. Gentleman will appreciate that I was raising the points I raised in the sense of probing for answers to see if we could find the criteria which the Government employ in drawing the line between credits given for exports and credits given for investments. I am sure that he will appreciate that the line is rather fine, and it may be that successive Governments have adopted precisely the same criteria. It would be helpful if what these are could be stated. We would then be in a better position to understand the problem.

On a point of order, Sir Eric. If a Division is challenged on a subject in Committee on the Floor of the House, a decision has to be postponed until the end of the sitting. I presume that the House can then not proceed to Report stage because then we would not know what is in and what is out of the Bill. It seems a most confusing position if a Division is challenged now on this Amendment and we are left in doubt as to whether the Amendment has been made or has not been made. It would therefore be impossible to go on to the remaining stages.

I think that the hon. Member has misunderstood the position. If a Division is challenged on this Amendment I shall vacate the Chair and in the House I shall have to be informed of a Motion to report Progress and to ask leave to sit again. The result would be that the Division would be deferred to this afternoon's sitting and the proceedings on the Bill would be adjourned to another day, and at this morning's sitting we would proceed to the Adjourned debate on the Salop (No. 2) Order.

On a point of order, Sir Eric. We are in difficulty. If we were in Committee upstairs some of us would feel it right to vote for the Amendment, but we do not want to create a wrecking procedure. [Hon. MEMBERS: "Oh."] If you called for a vote, as you would, the Question would not go to a Division, you would collect the voices. It seems reasonable that when Amendments which are important are put down, Ministers should not assume that they are important only to the Front Bench on the Opposition side. They can be equally important to the back benches. The Government should have a sufficient number of hon. Members present on their side so that when you collect the voices those on the Government side would be greater than those on this side and there would not have to be a Division. The Government should look after their own business in this connection.

In so far as the hon. Member has raised a valid point of order, the position is that it is my duty to give effect to the Sessional Order passed by the House on 14th December which provides the procedure to be followed in the event of the House or a Committee of the whole House wishing to divide on an Amendment.

It certainly is not my wish to be obstructive in any way. The Amendment was put down when I first thought of it last Thursday as a probing Amendment. Arising from this debate I deprecate, first, the suggestion by the Minister that because my Front Bench did or did not agree with an Amendment I was under some obligation to let it go forward or to withdraw it. I reject that entirely. Because certain of my hon. Friends had a policy in 1952, that does not necessarily mean that we should follow it in 1967. Therefore, I wholly deprecate the suggestion that a backbench Member cannot press an Amendment.

I also deprecate the fact that for three-quarters of an hour or more when we were debating this Amendment there were no back-bench hon. Members of the Government party present. That I find very strange in view of the fact that understood there was an arrangement whereby the Whips put certain pressure on hon. Members to go through the Division Lobbies to vote for morning sittings.

The Bill sets out an increase on the level of guarantees which the E.C.G.D. makes available, and that is something with which we on this side of the Committee are in full accord. For this reason I beg to ask leave to withdraw the Amendment, on the basis that the Minister will bear the Amendment in mind because it could have a most interesting and perhaps beneficial effect on exports.

May I raise a point of order before my hon. Friend gets the leave of the House to withdraw the Amendment? My difficulty is, I think, shared by the Parliamentary Secretary to the Ministry of Housing. If a Division is called on this Amendment, then, as I understand your Ruling, Sir Eric, we proceed to discuss the Salop (No. 2) Order. If, on the other hand, leave is given and my hon. Friend charitably withdraws the Amendment, I take it that we shall continue with a further Amendment and consideration of the Export Guarantees Bill. This could conceivably take a considerable time, and there will be no more time to discuss the Salop (No. 2) Order. The Order will be out of time.

Therefore, my dilemma is that, unless I can get from the Patronage Secretary or one of his aides some guidance and assurance that the Order will be debated either later this morning or on Wednesday, I will be in the embarrassing position of having to challenge the Question that leave of the Committee be given to the withdrawal of the Amendment, as the only way in which I can get the Order debated this morning.

The hon. Member is quite right that, as I have said already, if a Division is challenged on this Amendment, we then proceed immediately to the adjourned debate on the Salop (No. 2) Order. If the Amendment is, with the leave of the Committee, withdrawn, we will then proceed with the rest of the debate on this Bill. It is purely hypothetical whether we shall then reach the adjourned debate on the Salop Order and I cannot help the hon. Member to resolve his dilemma about what to do. In the general interests of the House, perhaps we ought to proceed.

Further to that point of order. I should like this cleared up. I understand that, if a Division is called on this debate, as we are in Committee, the House can resume its sitting. Had we, on the other hand, been sitting as the House of Commons, the adjournment of the whole House would then take place. Am I right in so thinking?

That is a hypothetical question about what we should have done if certain things had arisen. I can only take the situation as it is, on today's Order Paper. Bearing this in mind, I think that we ought to proceed.

Further to that point of order. I cannot follow why it is necessary to adjourn the Committee if a Division is called. Why should we not agree that a Division has been called and then proceed with the next part of the debate in Committee?

Because I am governed by the provisions of the Sessional Order passed on 14th December. If a Division is called in Committee, I then have to adjourn the proceeding in the Committee and the House then proceeds to the next item of business.

Further to that point of Order. I hope, Sir Eric, that you appreciate that I am in a genuine difficulty. I am tempted to challenge the Question that leave should be given for the withdrawal of the Amendment, unless I may have some indication from the Front Bench, through a point of order, that debate on the Salop (No. 2) Order will be preserved, either for later today or on Wednesday. Might I appeal, through you, Sir Eric, for some indication from the Government Front Bench?

Is this not a matter which the Leader of the House should be brought here to deal with? This matter affects all the Shropshire Members, myself included. We understand that the praying time cannot be continued beyond next Wednesday. If we cannot have some guarantee about time, my hon. Friend would have to take a course of action which he would not otherwise wish to take, to protect his own interests.

The hon. Member will appreciate that it is not a matter for me to give any such assurance. All hon. Members must be free to exercise their own judgment of what they should do.

Further to that point of order. Everything said by my hon. Friend the Member for Oswestry (Mr. Biffen) applies with even greater force to me. I hope to catch the eye of the Chair on the Order which follows the Salop Order—the Gloucester Order, on which also time is running out. As it seems unlikely that the Gloucester Order will be reached, even if the Salop Order starts in the next two or three minutes, how am I placed?

Is it not possible—I know that this is not a point of order—for somebody from the Front Bench to give some indication and for someone to find out where the Leader of the House is? Does the Leader of the House know about these morning sittings? Would he be able to come along occasionally?

Further to that point of order. I would point out that no hon. Member on this side has held up the proceedings to prevent these two important Orders being discussed.

Further to that point of order. You will recall, Sir Eric, that, at business time last Thursday, I was particularly concerned about this Order and raised the matter with the Leader of the House. He then gave the assurance that he wished the Order to be debated. Would not the representative on the Front Bench now confirm that what the right hon. Gentleman said is true, because it has a great bearing on this?

Is it not a fact that this Salop Order is a matter of great principle which could affect many other local authorities in due course and that the great increase in delegated legislation makes this very important? Cannot the Leader of the House be sent for to assist the House? Is he even in London? Can his P.P.S. come here to assist us? We must have some protection for the rights of our constituents.

These are matters of great importance and I should have thought that we would have made more progress if we got on with one or other of the items of business.

Is it your pleasure that the Amendment be withdrawn?

No.

resumed the Chair and The CHAIRMAN OF WAYS AND MEANS reported, That the Committee had made Progress and asked leave to sit again.

Pursuant to the Sessional Order of 14th December, the Division on the Amendment proposed by the hon. Member for St. Ives (Mr. Nott) is deferred until this afternoon's sitting and will take place, pursuant to the Sessional Order, at the time when a member of the Government shall have signified to the Chair his intention to move, "That this House do now adjourn".

As has already been mentioned this morning, this Order is a Measure of great importance not only to Shropshire Members but also to all those interested in their local government affairs. It makes decisions which could create large precedents. It is deplorable that, on a matter of this importance, only one Labour back bencher should have come to listen to the debate. There are, after all, apart from all the Ministers which the Prime Minister has created, about 250 back benchers who are supposed to support Government policy, yet only one has turned up this morning. Although he doubtless represents a very respectable constituency, I do not believe that it is anywhere near Shropshire.

It is even more deplorable that we should not have with us a single member of the Liberal Party. It is even more so, considering that at 10 a.m. the Liberals were here in force to give rather synthetic applause to a Bill directly concerned with local government. So we on the Conservative benches are left to bring to the notice of the House and of the Parliamentary Secretary the important matters with which the Order deals.

Before the debate was adjourned on Wednesday, I raised a number of points of detail before going on to the main question of principle. I referred to a specific matter which has become of great importance in my constituency. This relates to the provisions of paragraphs 57 and 59, which have to do with local government officers. The Order is to reorganise local government boundaries and authorities, and it is surely no part of the intention of those who frame Orders such as this, nor of the sponsoring council—Shropshire County Council in this case—nor of Parliament that we should, as a result of anything we are doing under a local government Order, do personal injury to any local government official. But I bring to the notice of the House what has actually happened under the Order which preceded this one—the Salop (No. 1) Order.

The Parliamentary Secretary knows the details. It concerns a local government official with many years service and an unblemished record. I have a letter from the gentleman explaining his present position as a result of the first Order. He says:

"I am now out of work without any source of income and it appears my pension has also gone."

This situation has arisen in spite of the efforts of many people. The Minister himself has, I know, done his best to protect the interests of this individual, as have the county council and his Member of Parliament.

It has been said by some people that the official in question may, in certain circumstances, have been unwise. It has been alleged that a certain council may in certain respects have been unreasonable. But what is quite clear is that throughout no one has acted in any way illegally. Nevertheless, this is the result, and I ask the Parliamentary Secretary two questions which should be faced before the House agrees to pass the Salop (No. 2) Order.

First, seeing that this situation is ultimately the responsibility of Parliament, can some special measure be introduced to give this individual officer his rights? Secondly, before we pass this Order, can we have an assurance that paragraphs 57 and 59 are drafted in such a way that this sort of thing cannot happen again? I do not pretend to be expert on the details but I suspect that the root of the difficulty is in paragraph 57(5) where occurs the phrase,

"… duties reasonably comparable to those in which he was engaged …"

It seems that that is the phrase which has given rise to the case I have referred to. I would like the hon. Gentleman's assurance that, under this Order, we shall not have a repetition of what I can only call this disgraceful case.

Will my hon. Friend also add to that the important principle, in seeking an assurance from the Parliamentary Secretary, that if this Order is passed the principle enshrined therein will not then be translated to the adjoining county of Worcestershire and that the same depredations will not occur in the ancient borough of Evesham, where all this Parliamentary nonsense began?

I hope that the Parliamentary Secretary has taken note of what my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has said, because, much as we regret what has happened in Shropshire, we would hate to think that the same thing could happen to local government officers in Worcestershire or any other counties which may be involved.

The Parliamentary Secretary will know that the main objections to the Order have come from the smaller boroughs, of which I have three in my constituency—Bishop's Castle, Ludlow and Bridgnorth. Before saying anything else, I pay tribute to the record of achievements of these boroughs and the councillors and local government officers who have administered their affairs in the past. Even in very recent times, they have all proved that they are entirely capable of administering their boroughs in the spirit of the times.

A civic society has recently been formed in Bishop's Castle and it has gone to immense trouble to preserve the character of this very beautiful borough by street improvements and the prevention of eyesores and the general objective is to keep what might be called Bishop's Castle's "Character".

In the borough of Ludlow, I was invited a few months ago to the opening of a group of houses at the bottom of Corve Street, dating from the 15th or 16th century, which had been in a very derelict condition. Thanks to the initiative of the borough, the houses were purchased by the borough and repaired, beautified and made habitable for four families. That is an excellent example of what a small borough can do.

This is no less the case in Bridgnorth, which is nearer the industrial areas of the West Midlands. It has shown a most worthy initiative in adapting itself to the needs of the modern age. We have had complete clearance schemes of some of the poorer houses in the town, space made for car parks and so on. In fact, we have in these three boroughs administrations of the highest quality.

My hon. Friend the Member for Oswestry (Mr. Biffen), moving this Motion last Wednesday, referred to the prospects of the borough of Oswestry, pointing out that it already had a population in excess of 10,000 and was likely to grow further. It is precisely the same with Bridgnorth, which is situated within easy access of the great industrial areas of the West Midlands and is growing at a high rate. Unless artificially checked, this growth will inevitably continue, which is one reason why this is a very poor occasion to decide to abolish its borough status.

The three boroughs I have mentioned have formally asked that this Order be opposed. The same request has not come to me from the three rural districts that I represent. But it is remarkable that the same request has come to me from the urban district council, part of which lies within my constituency. That should be put on record.

What is it really that Parliament is facing in connection with this review? My hon. Friend the Member for Oswestry has already stated the problem. This county review was undertaken under the Local Government Act, 1958, and under terms of reference which were certainly relevant to the problems and conditions of that time. The review was carried out with great conscientiousness by the Salop County Council and by the review panel which we appointed—I say "we" because I myself happen to be a member of the Council.

The review was, naturally, a painful process. I do not think that the visits of the reviewing panel were relished by the small boroughs who knew the fate that was likely to be in store for them. Although I was not present myself, I can picture some of those embarrassing mornings on which by question, answer and discussion is was made fairly clear what might be in the minds of the reviewing panel, and then they were taken out to lunch by their prospective victims. We know that sort of thing has to happen. At any rate, it all came back to us in the county council, where it met with a lot of opposition. Nevertheless, it was passed by the Salop County Council, and it came to the Minister. We assumed that it would go through. I will not say that the small boroughs had been converted to this, but to some degree they had been resigned to it.

The whole thing has been changed by the statement of the Minister of Housing and Local Government that we are to have a Royal Commission. The more one looks at the situation as it is today, the sillier it seems to go through with the Salop (No. 2) Order.

The Salop (No. 1) Order, apart from the specific case to which I have referred, did not do any actual damage. It drew into one area what was then designated the Dawley new town area. It is true that the Government, by giving consideration to enlarging that new town, has again thrown doubt on the wisdom of putting through that Order, but the Order has not done any actual harm.

When we look at this new Order, the situation surely is very different, because Shropshire is facing the prospect, when the Royal Commission reports, of having not one major reorganisation but two major reorganisations—and this may also be the fate of Worcestershire, the county of my hon. Friend the Member for Worcestershire, South, and, I understand, Cornwall and possibly one or two other counties.

Assuming that the Minister accepts any of the evidence given by the local government authorities, can the Government really say how the proposed Shropshire reorganisation will "tier in". In local government we talk about the first tier, the second tier, and so on. How do the Government visualise these rural district councils, which are being created under the Salop (No. 2) Order, entering into any acceptable scheme of local government reorganisation?

Are areas, varying from the borough of Shrewsbury, with 50,000 inhabitants, to the rural district of Clun and Bishop's Castle, with 10,000 inhabitants, to be under the same tier authority? Will there be a tier below them? What tier is it visualised will be above them? If the tier above them is to be not larger than the present county of Salop, is it visualised that these are the right sizes for the lower tiers? Has the Minister taken into account the fact that some parishes have parish councils and others have not? These questions are all important, and we should have answers to them before the Order is passed.

My hon. Friend the Member for Oswestry asked two very pertinent questions. The first concerned economics. It has been argued all through that by reorganising local government in this way we can get a more economical form of local government. Does the Minister really accept this? Is he really prepared to say that by merging these councils, as is proposed, local government will become any cheaper?

The second argument that is put forward in favour of re-organisation of this kind is that the councils will get better officials because they will have larger areas and will therefore be able to pay bigger salaries. Is this argument sustainable? Let us consider again the case of Clun and Bishop's Castle. We already had a rural district of Clun, with a population of 8,000 or 9,000 inhabitants. Under this Order we have added to it the borough of Bishop's Castle with some 1,200 inhabitants, so the total population comes to just over 10,000. Is it really suggested by the Minister that the addition of 1,200 ratepayers will make all the difference between getting better officials to look after this new area? Is it really suggested that the administration will be more economical?

The argument against the proposal, which has not been sufficiently stressed, is, of course, that of local interest. I was appalled this morning to see the Members of the Liberal Party turning up solemnly to bring in a Bill in favour of democratic elections for regional areas. I observe that they have already lost all interest in local government, because none of them is here. I am glad that we have one Labour back bencher with us this morning. No doubt he is waiting for the Adjournment. It might put the hon. Gentleman out of his misery if I assure him that we will keep this debate going until 12.30.

The point about democratic interest is that to keep the interest of people we need to keep local government small. I read in the rural district's monthly journal a rather interesting analysis of recent local government elections. A correspondent had worked out that the average vote figure in the boroughs and urban districts in recent years was 41·6 per cent., of the electors. I should like to cite once again the case of Bishop's Castle, which is, after all, England's smallest borough. In the last borough election over 80 per cent. of the voters turned out. That reflects considerable credit on the borough and proves what I have said, that it is by keeping local governments small that we keep democratic interest. Has sufficient regard been paid to that, and is it proposed to bring that into consideration with the second reorganisation which, apparently, we have to face?

If the Government have second thoughts—and there appears to have been a certain amount of second thoughts about another local government Order, and it is not clear what the Government want to do about all this—we have to face the factual question of what alternative there is, because, obviously, these arrangements have already advanced a considerable distance. A possible alternative to putting through this Order now is to try to organise what might be called a local government holding operation by which there would be, when necessary, a joint administration of rural district councils and boroughs.

If the Minister pooh-poohs that and says that it is not possible, my answer is that it is possible and has been happening in the small borough of Bishop's Castle and the rural district of Clun for two or three years. The same clerk has been looking after the borough and the rural district. Thanks to the excellent abilities of the official in question, this arrangement has worked very well and very happily and there seems to be no reason why it should not be continued. If it can be done in the one case, why can it not be arranged, with the aid of the Ministry, in the two other cases, which are the outstanding cases in my constituency, and possibly also in Oswestry? I put that forward as a practical suggestion. I hope that my hon. Friend the Member for Worcestershire, South will tell us about one of the proposed local government areas in his constituency.

As I understand the position, it would be strictly out of order for me to talk about the ancient borough of Evesham under the Salop (No. 2) Order. I should like your guidance, Mr. Deputy Speaker, but that is my interpretation. Although I have a very powerful case for Evesham, I shall have to repose in patience for a long while until a Parliamentary opportunity occurs for me to talk about it in order. If I followed the suggestion of my hon. Friend the Member for Ludlow (Mr. More), I might be tempted to stray from the path of good order and incur the wrath of the Chair for talking about Evesham, Worcestershire, whereas the Order relates only to Shropshire. Having made my point, I resume my seat.

The hon. Gentleman is perfectly correct.

Thank you, Sir.

I know my hon. Friend sufficiently well to know that he would never stray outside the paths of strict order in this or any other discussion. However, I think that it is a fact that in his county there is a proposed rural district which would have a population of much less than that of Clun and Bishop's Castle. Faced with this prospect, the Minister might sharpen his attitude towards this proposal and consider whether it is sensible to allow the Salop Order to go through and to set a precedent. If the Government agree to this Order, they will have to agree to everything which comes from every county. Unless a line is drawn somewhere, it will be impossible to guarantee that we do not have extraordinary absurdities in our local government.

An elaborate and detailed answer is required to this Prayer. The case of the official which has arisen under the Salop (No. 1) Order is a matter which touches almost the honour of Parliament and we should not let this Order go through until that has been satisfactorily cleared up.

I owe it to the hon. Member for Oswestry (Mr. Biffen) to take this opportunity to answer some of the points which have been made, especially as the opportunity for praying against this Order will cease on Wednesday. We have had a fairly long discussion of it and I shall reply as succinctly as I can.

I can tell the hon. Member for Ludlow (Mr. More) that paragraph 57, which deals with staff, is the normal form. That to which he referred was a special case and does not arise on this Order. The gentleman concerned was able to go to arbitration and he lost on arbitration.

My hon. Friend the Member for The Wrekin (Mr. Fowler) asked about elections. I am advised that the procedure for elections under this Order was approved and agreed by everyone concerned. It is for a county to make any alterations in arrangements for areas and representation.

We left the market under the control of the borough because we thought that the borough would prefer that. If, with his great influence in the area, the hon. Member for Oswestry thinks that it is wise to advise the borough to surrender the market to the rural district, we would not interfere. We left the market with the borough because we were trying to be helpful and not to interfere with something in which the borough had a long and ancient interest. Certainly we would want to meet whatever was required.

The issue arises because the market is administered under Corporation Acts and not under the Food and Drugs Act. That is the heart of the difficulty. I cannot understand the Parliamentary Secretary's gratuitous reference to my influence in the district. This is a matter of the law.

We have not had any representations from the district or the borough to alter the arrangement. We included this provision out of an anxiety to be helpful.

When he moved the Prayer, the hon. Member for Oswestry spoke of Ministerial intransigence. Again I underline that it is not Ministerial intransigence. This is not the Minister's invention, but is a proposal put forward by an elected local council, the county council, which is not only responsible for it, but which acts on the advice of a circular sent round by the Conservative Government in 1962. That circular said:

"The Minister thinks it right to indicate at this stage that he will not be prepared to endorse recommendations which in his opinion have given too little weight to the importance of securing districts of sufficient size in population and resources to be fully effective".

Those were the instructions given to the county council by the last Govern- ment and the county council prepared the scheme under that guidance.

Not only was the scheme subsequently examined by my right hon. Friend, but an inquiry looked carefully into the problems of Oswestry and reached the same conclusions which the county council had reached—that the distinction between the borough and the rural district was expensive and did not reflect a great separation of interests and that the two would be better coming together. In the words of the county council:

"All things considered, we have come to the conclusion that this is a case when it would not only be uneconomic to maintain two separate administrations serving concentric areas but against best interests of the whole area."

That was the view taken by the people on the spot. It was the view taken by the impartial inspector and it is the view taken by two of my right hon. Friends who have looked at the matter. For those reasons, I hope that the House will not accept the Prayer.

rose in his place and claimed to move, That the Question be now put.

I am unable to accept the Closure.

I wish to address the House for a very few moments only. I was going to speak a little earlier, but I will try to say now what I intended to say then, although clearly I am out of time. I would like to thank the Minister for having placed the maps about which we had some discussion last week at our disposal. He will be happy to know that I have used them and found them of considerable interest.

The Question is,

That an humble Address be presented to Her Majesty, praying that the Salop (No. 2.) Order 1966 (S.I., 1966, No. 1529), dated 6th December 1966, a copy of which was laid before this House on 12th December, be annulled.

On a point of order. May we be quite clear about this? Is it essential for you to put the Question as we reach half-past Twelve? Under our new procedure, are you not at liberty to adjourn the debate on a Prayer of this sort, as it has already been adjourned once before? We are all a little doubtful about morning procedure and this does seem a little peculiar.

The position is that unless there has not been adequate time for debate the Chair must put the Question. The House has discussed this for an hour and a quarter; it is a Prayer and, therefore, I am proposing to put the Question.

On a point of order, this is an Order affecting not only Shropshire Members, but other Members. With respect, I would point out that the hon. Member for Shrewsbury (Sir J. Langford-Holt) has not been called to speak in this debate.

That is not necessary to the ending of the debate. The Question is—

I apologise for interrupting again, but this Order affects my constituency. It affects four constituencies, the Members for three of which have been called. I am now on my feet and you have said that adequate time has been given to the discussion of the Order. May I put it to you, with all humility, that adequate time under those circumstances cannot have been given?

The normal maximum time for praying is an hour and a half. The Chair on this occasion is deciding that, as an hour and a quarter has been given, the Question must be put.

Object.

Opinion as to the decision of the Question being challenged, the Proceedings stood deferred pursuant to Order (Sittings of the House (Morning Sittings)).

Lancaster is regarded as a natural growth point in the north of the County of Lancastershire but it is not about this excellent long-term prospect that I wish to speak this morning. Instead I want to draw attention to a rather serious, immediate problem which is now facing Lancaster as a result of the decision made 10 days ago by the firm of Nairn-Williamson to lay off 1,550 men.

Williamson's were always the Lancaster half of this firm but some years ago it amalgamated with Nairn a traditionally Scottish-based firm. For Lancaster this is not just another company. For many years Lancaster revolved around Williamson's. At the moment, 8 per cent. of all people employed in Lancaster work at Williamson's. Of those in manufacturing industries in the area, the figure is higher than 20 per cent. If we exclude textiles the figure is as high as 35 per cent.

It may be asked why I bring this matter up in the House, since firms are always doing this kind of thing. On this occasion it must be brought up in the House because a Government Department is involved and that is the Board of Trade. The firm of Nairn-Williamson has decided to rationalise its production and to concentrate the bulk of it at Kirkcaldy, a development area. It is enabled and helped to do this by the wise policy pursued by the Government of giving development grants.

Let me say straight away that no one in Lancaster would want anything other than full employment for the people of Kirkcaldy. The only major worry for us is if that full employment comes about at our expense. There is a grievance in Lancaster and it is one of lack of consultation. Nairn-Williamson and the Board of Trade knew about this decision some months ago. No one in Lancaster was told, although I believe that people in Kirkcaldy were informed. The first I knew was when the local Press—and all praise to them, they get a lot of criticism—told me about this on the telephone. They told me that they had been informed that they ought to keep it a secret for over 12 hours.

Nairn-Williamson has landed itself in its present mess through bad management, out-dated methods and failure to diversify. I would ask my right hon. Friend, since public money is involved in the future of Nairn-Williamson, because it has development grants, what safeguards he has sought to see that, not only in Lancaster but also in Kirkcaldy, the firm does not repeat its present disastrous record, and to ensure that in a few years' time there will not be the same difficulties for employment in both areas.

If 1,500 people became unemployed in Lancaster our rate of unemployment would go up to 7 per cent. It has been said that unemployment in Lancaster could not be 7 per cent. and this is probably right; no doubt things will happen. But, because we think that things will happen, it is no good saying that there will not be 7 per cent. unemployed, and sitting back and forgetting about it. The only reason why there will not be 7 per cent. unemployment will be if someone does something to stop it happening.

I have also heard it suggested that something like 700 new jobs will appear in the city in the next year or two. One rather exaggerated estimate put the figure at 1,000 jobs—I do not know where this came from. The estimates seem to be based on a somewhat hypothetical expansion of existing firms. I want to draw attention to five points which must be considered against this projected expansion. First, the existing unemployment of 1,500 men must have a multiplier effect in causing secondary unemployment in the area. The concept of the multiplier is pretty sophisticated, but I was interested, talking to local tradespeople in Lancaster, to find that, whether or not they had an economics degree, they all knew of the danger to their businesses which this unemployment might cause.

Secondly, there is certain, in the next year or two, to be expansion of the population in Lancaster—that is to say, there will be more school leavers looking for jobs than people retiring. In other words, there will be extra people and not fewer on the labour market.

Thirdly, in a town such as Lancaster, with old, traditional industries, many having been taken over by bigger concerns, there is always the danger, some would say the promise, of further rationalisation. There are rumours about some of the firms remaining in the city. I hope that if any of these come to anything, at least this time there will be consultations in advance.

Fourthly, while the management of the next biggest firm in Lancaster, Storey Bros., is quite excellent—it is diversified and is a superb firm—the prosperity of the area cannot be safely linked to the sale of one product—Contact.

Fifthly, many of the people who will be unemployed as a result of this decision will be clerical workers. We have recently had the problem in the area of the close-down of the Morecambe branch of the Post Office Savings Department, which also affects the unemployment position in Lancaster. This has to be taken into account. There is very little opportunity in the area for this kind of work. It is believed by people in the area that if no positive action is taken, unemployment will certainly rise over the next two or three years to 5 per cent.

Lancaster could be called a grey area. It is not an area which has enough natural features of its own to attract industry without specific help from the Government. On the other hand, it is not, fortunately, an area which has suffered much from unemployment in the past. Consequently, the Board of Trade did not designate it a development area. We have a brand new industrial estate at Whiteland, yet this estate is virtually empty. One of the reasons why it seems to be empty is that Lancaster is in competition with developing areas to gain industry; and that industry, reasonably enough, if it must go to the further points of the country, would rather go to a development area where it can get a 40 per cent. grant than come to Lancaster and get only a 20 per cent. grant.

I am asking this morning for a number of assurances from the Board of Trade. First, I should like the Department seriously to look at the problem of the grey areas. I recognise that the development area policy is new; I also accept that it is essentially a good policy. I further recognise that practically every non-development area would like to be a development area.

Essentially, however, in talking about development areas, what we have to do is to move industry from the West Midlands, from the South, from the over-employed and developed areas to the under-developed areas. There is, however, a suspicion that the policy which is pursued may have the untoward effect of shifting industry, not from Birmingham, Coventry or London, but rather from the Lancasters in the country. I should like the Board of Trade at least to say that it will look at this problem.

Secondly, despite the fact that the Board of Trade must have been inundated with requests for areas to be made development areas, I hope nevertheless that it will bear in mind the possibility of revising speedily the existing frontiers. In Lancaster we have the absurdity that 30 or 40 miles to the north little villages like Arnside, for example, have been made development areas. Lancaster has not.

Moreover, bearing in mind what has just happened, a special factor is that Lancaster and Morecambe together—I think that the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis), whom I see in his place on the benches opposite, will associate himself with me in these remarks—are quite certain, unless action is taken, to have an unemployment level sufficient to justify making the whole area a development area. When the times comes for revising existing frontiers, I hope that the Board of Trade will consider this.

Thirdly, I should like the Department to be quite certain that adequate retraining centre accommodation is available for the workers who are being laid off by Nairn-Williamson who may wish to be retrained for other jobs. Virtually every proposal for bringing industry to the area and every suggestion of natural expansion means that some workers must change their jobs. Unless this is made easy for them, there will still be great social problems.

Fourthly, in Lancaster we should very much like regional officials to help push Lancaster's case for new industry with potentially interested entrepreneurs. I know that there are difficulties and that the Board of Trade does not have power to tell a firm to go to Lancaster or even to guarantee that it will be in its best interests to do so. There are, however, such things as winks and nods. Perhaps my right hon. Friend the Minister of State cannot talk about them this morning, but I hope that when firms plan with the Board of Trade where they shall expand their activities and the areas to which they should move, the Department will be aware that a community which previously had a high level of employment is about to get relatively high unemployment, that we have an industrial estate available and that we have a reasonably trained and good labour force. I hope that the Board of Trade will be able to help in this direction.

Finally, I hope above all that the Board of Trade will feel free to follow a liberal and speedy policy with the granting of industrial development certificates—not only liberal to the extent of being fairly free in granting them for such firms as are attracted to the area, but speedy so that there will not be difficulties and the possibility that en route Lancaster will lose firms that were scheduled to it.

I have put forward a strong case because Lancaster must have a strong case put for it. The firm in question is not simply any firm. It has been a firm which, not always for the good, has dominated the past history of Lancaster. The threat of 1,500 men losing their jobs has caused widespread dismay and concern in the city. We are not out to win debating points; the debate we willingly concede. What Lancaster wants is the promise that its problems will be looked at and that it will be helped. Nobody in Lancaster is attacking or blaming in any way the Board of Trade because of its development policy, nor are we jealous of Kirkcaldy's good fortune. The only thing I say is that now that these things have happened and Lancaster's future prosperity is endangered, now that this has become a life-and-death issue for the city, I hope that the Board of Trade will do everything in its power to help redeem the situation.

I shall be brief in adding my support to the comments of the hon. Member for Lancaster (Mr. Henig) because I do not wish to limit the time available for the Minister of State, Board of Trade to make his reply. The hon. Member for Lancaster has referred to the effect on the unemployment level in his constituency of the withdrawal of 1,500 jobs. Many of these people employed by that firm live in my constituency, and in the Morecambe area the unemployment figure is already 5-3 per cent. It will, therefore, certainly go to 7 per cent. or more, as mentioned by the hon. Member, if alternative work is not drawn into the area.

What worries me and the point which 1 wish particularly to put to the Minister of State is that we may well have a situation in which, because of the lengthy notice which is quite rightly and reasonably given of redundancy, we must see the beginning of a drift away from the Lancaster area such as has happened in many other areas of Lancashire. That is particularly undesirable in this area because the Lancashire County Council and the North-West Regional Planning Board are looking to the Lancaster-Morecambe area as one of considerable and early expansion.

I draw the Minister's attention to Section 15(3) of the Industrial Development Act, 1966, which I debated with him in Committee for some time. Referring to development area designation, it states:

"and in exercising their powers under that subsection the Board shall have regard to all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies."

In adding my support to what the hon. Member for Lancaster has said, I would say only that any drift away from this area and any falling off of employment opportunities would generally be accepted by all concerned as being directly opposed to regional policy for the North-West.

I will be extremely brief so that my right hon. Friend the Minister of State, Board of Trade, may give an adequate reply to the case put by my hon. Friend the Member for Lancaster (Mr. Henig). Another point of view should be expressed at this stage, and that is the viewpoint of the development areas. I know that the development area discussion in this case concerns Scotland, but the same principle applies in Wales.

The outlook for many of these parts of the country should be borne in mind. It was prophesied last week, for example, that in the Rhondda unemployment could conceivably rise to as much as 10 per cent. Therefore, when my hon. Friend the Member for Lancaster speaks of killing a town or city with an unemployment figure of 5 per cent., he should bear in mind that many areas have for a long time, not just for months, struggled with figures far higher. The outlook for these areas is not only of fewer jobs for adults, but of fewer apprenticeships for the young.

My hon. Friend made the point that the population might be encouraged to move. I know that some economists would argue that way, but it must be borne in mind that people who happen to be in one of those development areas, and in one of the most hard-hit parts of areas such as the Rhondda—I do not know about Kirkcaldy—are not able to sell their homes. A man is faced with the problem of having to move from an area in which he cannot get rid of his home, into another area where, because it is an alleged growth point, house prices will be high.

However, I would support my hon. Friend's idea of "grey" areas. I have argued on many occasions in the House that there should be a two-tier system, thereby singling out bad areas like the Rhondda and ensuring that they get extra aid.

To begin with, I wish to say how much I sympathise with the very natural concern which has been expressed by my hon. Friend the Member for Lancaster (Mr. Henig) about the closure of what is admitted to be the biggest single firm in his constituency. However, it is not a complete closure. What Nairn-Williamson has decided to do is to rationalise its business. As my hon. Friend has said, the firm has other sections, and the decision which it has taken, after a great deal of consideration, is that all smooth floor covering and building products will be centred on Kirkcaldy, the tufted carpet production will go to Batley, and all pile fabric production will remain at Lancaster. It is not therefore a complete rundown.

The first thing that will happen is of advantage to us, in that the building of a new factory in Kirkcaldy will give employment there to an extra 700 people, where it is very greatly needed because of the circumstances in that part of Fife. I will not disguise the fact that we welcome that additional employment in the area.

My hon. Friend said that the firm should have given more information to its employees, and he also suggested that the Board of Trade should have done so. That raises a very difficult problem for the Board of Trade, because we are involved in discussions with firms all over the country about their development plans and projects. I can assure my hon. Friend that a large proportion of the discussions are with firms which want to expand in the Birmingham conurbation and in the South-East. They know very well that they will be refused out of hand or will have very great difficulty in getting industrial development certificates in those parts of the country. As a result, we go into further discussions about where the developments which they want should take place. All those discussions must be confidential. Quite objviously, the Board of Trade cannot have discussions with firms if the information given to the Board of Trade is then made public.

What we do is to urge them to have the fullest consultation possible with their employees in order to give them, either directly or through trade union representatives, as much notice as possible to make sure that workpeople are not taken by surprise and that arrangements can be worked out to look after the interests of those who will be affected. The vast majority of firms in the country accept that and carry it out.

The scheme of Nairn-Williamson is part of a process of rationalisation to increase efficiency, and therefore it is to be welcomed. But I recognise that, in its bringing about some reduction of employment in Lancaster, my hon. Friend's constituents cannot look at that kind of rationalisation with anything like enthusiasm. I can well understand their concern.

The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis) made the very pertinent point about giving long-term notice. However, that cuts both ways. We do not want long-term notice, which is in the interests of employees, to encourage emigration from Lancaster itself.

In the few minutes available to me, I want to deal first of all with the local situation and what we intend to do to try to help. Board of Trade experience has shown that, where an area is faced with this kind of problem, which is by no means unique, the area itself has quite a capacity for absorbing the people who are thrown out of work. Industrial development will be going on, because it is an area where people are available for work. We shall do our best to encourage that.

I hesitate to say very much about jobs in prospect. As hon. Members know, I am always chary about making promises for the future, because so many things can happen which upset them. However, there is some new industrial building going on, and there are jobs in prospect in a number of existing buildings which have been taken over by manufacturing firms in both Lancaster and Morecambe. In addition, the expansion of Lancaster University will lead to further employment opportunities for some skilled and semi-skilled men. If the proposed nuclear power station at Heysham goes ahead, that will require construction workers. When it starts production, it will provide employment for about 500 people, three-quarters of whom are to be recruited locally, I understand.

My hon. Friend raised the question of industrial development certificates. I think that he and the hon. Member for Morecambe and Lonsdale should know that the Board of Trade has never refused a certificate for Lancaster or Morecambe When I looked up the figures, I found that in the three years 1964, 1965 and 1966, 24 industrial development certificates were issued in those areas to employ approximately 800 people, over 500 of whom were men.

As to the future, I can assure my hon. Friend that any applications for industrial certificates in the area will be carefully considered, whether they be from existing industry or from a newcomer to the area. Subject always to the overriding needs of the development areas, our attitude will be very sympathetic to any application that is suited to the resources of the area. We try to operate a flexible policy, and we can help.

My hon. Friend said that he would like the area to be scheduled as a development area. This completes the circuit. We started off at Bridlington. We have gone all the way down the east coast. We have gone along the whole of the south coast considering which places must be left out. We have gone up the Bristol Channel. We have had Barry, Rhyl and Prestatyn, and then Blackpool and Fleetwood all making applications to be scheduled as development areas. That situation arises because seaside resorts and adjacent towns have a peculiar problem.

My hon. Friend will not expect me to say that we intend to schedule any of the places round the coast which have asked for development area status. The point which he has raised, which was repeated by my hon. Friend the Member for Swansea, West (Mr. Alan Williams), was that areas like seaside towns that have peculiar difficulties about employment and industrial development should be put in between the help given to a development area and the 25 per cent. help by way of investment grants which is given in other areas. The suggestion, in other words, is that we schedule "grey" areas and give them help which comes between those two provisions.

We are prepared to consider that, but we cannot do it until we have brought down the rate of unemployment in the development areas. That is our basic task. The resources available for industrial development must be provided until we have conquered the unemployment in places like the Rhondda and elsewhere. After that, we must look at these "grey" areas.

In the meantime, 1 assure both my hon. Friend the Member for Lancaster and the hon. Member for Morecambe and Lonsdale that we will do all that we possibly can to see that industrial development in their part of Lancaster continues and we will undertake to help people thrown out of work to find jobs quickly by means of training and retraining.